Commercial Banks-B.V.Raghunandan

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a study of commercial banking with reference to India

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Commercial Banks-B.V.Raghunandan

  1. 1. CHAPTER 2 Commercial Banks
  2. 2. Primary Functions <ul><li>Receiving Deposits </li></ul><ul><li>Lending to Public </li></ul><ul><li>Investment </li></ul><ul><li>Creation of credit </li></ul>
  3. 3. Receiving Deposits <ul><li>Demand Deposits: </li></ul><ul><li>-Current Account </li></ul><ul><li>-Savings Bank Account </li></ul><ul><li>-Auto- Sweep Facility </li></ul><ul><li>Time Deposits: </li></ul><ul><li>-Fixed Deposit </li></ul><ul><li>-Cash Certificate </li></ul><ul><li>-Recurring deposit </li></ul>
  4. 4. Lending to Public <ul><li>Overdraft </li></ul><ul><li>Loans </li></ul><ul><li>Cash Credit </li></ul><ul><li>Discounting Bills of Exchange </li></ul>
  5. 5. Investment <ul><li>Treasury Bills </li></ul><ul><li>Government Bonds </li></ul><ul><li>Bonds of Public Sector Units </li></ul><ul><li>Money Market Instruments </li></ul><ul><li>Corporate Securities </li></ul><ul><li>Equity of RRBs and Co-operatives </li></ul><ul><li>SLR & Other Requirements </li></ul>
  6. 6. Creation of Credit <ul><li>Process of crediting the account of the customer for the loan sanctioned </li></ul><ul><li>Act of drawing cheques on the accounts </li></ul><ul><li>Recipient or payee depositing the cheque into his account </li></ul>
  7. 7. Secondary Functions- Agency Services <ul><li>Collection of Income & Instruments </li></ul><ul><li>Payments </li></ul><ul><li>Purchase & Sale of Securities </li></ul><ul><li>Investment Counselling </li></ul><ul><li>Remittance of Funds </li></ul><ul><li>Depository Participation </li></ul><ul><li>Safe-Custody Facilities </li></ul><ul><li>Tax Compliance </li></ul><ul><li>Merchant Banking </li></ul><ul><li>Factoring Services </li></ul>
  8. 8. General Utility Services <ul><li>Trustee, Attorney & Administrator </li></ul><ul><li>Safe Deposit Lockers </li></ul><ul><li>Travellers’ Cheques </li></ul><ul><li>Acting As Referees </li></ul><ul><li>Letters of Credit </li></ul><ul><li>Underwriting </li></ul><ul><li>Lease financing </li></ul><ul><li>Publication </li></ul><ul><li>Performance Guarantee </li></ul><ul><li>Dealing in Foreign Exchange </li></ul>
  9. 9. Changing Role of Commercial Banks <ul><li>Housing Finance </li></ul><ul><li>Sale of Mutual Fund Units </li></ul><ul><li>Bancassurance </li></ul><ul><li>Issue of Credit Cards/Smart Cards </li></ul><ul><li>Issue of ATM/Debit Cards </li></ul><ul><li>Electronic Transfer of Funds: National level numbering of accounts, MICR cheques,At Par Cheques, mobile banking & Internet Banking </li></ul>
  10. 10. Electronic Banking <ul><li>ATMs </li></ul><ul><li>Tele-banking </li></ul><ul><li>Any-time Banking </li></ul><ul><li>Any-where banking </li></ul><ul><li>Shared Payment Network System </li></ul><ul><li>RTGS </li></ul><ul><li>Online Payment </li></ul><ul><li>Mobile Banking </li></ul><ul><li>Internet Banking </li></ul>

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