Write a short note on the functions of commercial banks.
The functions of commercial banks are divided into two categories.
(i) Primary functions,
(ii) Secondary function.
Primary functions include accepting deposits and lending money. Loans given by banks are: Short- term loans and long-term loans. Banks grant short-term loan to its customers by way of cash credit, overdraft discounting of bills.
Bank accepts deposits from the public and their customers in the form of current deposit, saving deposit, fixed deposit and under other deposit scheme. Bank grant loans to customers as demand loans and term loan.
The auxiliary services of banks are agency services and general utility services. Agency services are rendered as agent of customers whereas general utility services are rendered to the general public.
