5. Thus , commercial
bank is defined as
an institution
which accepts
deposits and
disburses loan to
individuals,
organisations as
well as
businesses.
6. They serve as the
backbone of the entire
economy because no
industry can operate
without funds, and
commercial banks
successfully portray the
role of the middleman
between lenders and the
seekers.
7. Receive deposits
Disburse payments
Collections
Invest fund in securities for a return
safeguard money
Maintain and service savings and checking
accounts of its depositers
Maintain custodial accounts
Lend money
8. Commercial banks are probably the largest
source of financing for private capital
investments .
Banks are regulated by fedral and state laws .
Commercial banks are also monitored by the
fedral reserve system .
9. Two primary services of a commercial bank.
These two are the primary services of a
commercial bank :
10.
11. Accepting deposits and Advancing loans can be
termed as Primary functions of bank, while the
secondary functions of the bank include
(1) Agency Services
(2) General Utility Services.
12. One of the most important function of the
Commercial Banks is to accept deposits. The
bank typically accepts deposits in 3 forms-
(a) Current Account
(b) Savings Accounts
(c) Fixed or Term deposits.
13. Indians still park
their savings in
fixed deposit
accounts, despite
high tax rates, due
to the inherent
safety associated
with these deposits.
14. It is mandatory for commercial banks have to
keep a certain portion of their deposits as legal
reserves.
The balance is used to make loans to the
borrowers. Individuals and firms can borrow
this money for various purposes
15. Individuals and firms can borrow this money
for various purposes such as
Home
Working
capital for
business
Vehicle
Education
Personal
needs
17. Loan to an individual or a firm against a
collateral security;
Cash credit (loan in instalments against
certain security);
Overdraft facilities for business , which
means customers can withdraw more money
than what their deposits permit
Discounting bills of exchange
18. Commercial banks play a great role in the
economy.
The more the savings of individuals and
companies that are channelized through banks,
the more available resources the bank has for
lending to the economy.
19. The Indian economy is on the cusp of a major
growth due various policies and
developments in the recent past.
The Indian economy is on the
cusp of a major growth due
various policies and
developments in the recent
past.
20. Increased spending on infrastructure
Series of reforms
Prompt implementation of projects
21. It is quite evident that these rapidly growing
businesses will turn to banks for their mounting
credit needs and this will lead to a robust growth in
the banking sector of the country.
