this is the prentation for Functions of commercial banks for knowledge purpose. in this we include definition, types of commercial banks & all the functions which a bank perform.

1. FUNCTIONS OF
COMMERCIAL BANKS
PRESENTED BY -
VIPUL GANGWAR

2. DEFINITION OF A COMMERCIAL BANK
“Commercial banks are the institutions that make short
term loans to business and in the process create
money”

3. TYPES OF COMMERCIAL BANKS
DEPOSIT BANKS
INDUSTRIAL BANKS
SAVINGS BANKS
EXCHANGE BANKS
AGRICULTURAL BANKS
MISCELLANEOUS BANKS

4. FUNCTIONS OF COMMERCIAL
BANKS

5. PRIMARY FUNCTIONS
• Acceptance of deposits
• Advancing loans
• Creation of credit
• Clearing of cheques
• Financing foreign trade
• Remittance of funds

6. 1. ACCEPTANCE OF DEPOSITS
It is the most important function of commercial
banks.
They accept deposits in several forms
according to requirement of different sections
of the society.

7. KINDS OF DEPOSITS
Current account deposits or Demand
deposits.
Fixed deposits or time deposits.
Savings deposits.

8. 2. ADVANCING OF LOANS
This is second primary function of a commercial bank is to make loans
and advances to all types of persons ,particularly to businessmen and
entrepreneurs.
Types of loans
Cash credit
Demand loans
Short-term loans

9. 3. CREATION OF CREDIT
• Credit creation is most significant function of commercial
banks. While sanctioning a loan to a customer, they do not
provide cash to the borrower. Instead, they open a deposit
account from which the borrower can withdraw.

10. 4. CLEARING OF CHEQUES
•It is a process of moving a cheque from the bank in
which it was deposited to the bank on which it was
drawn, and the movement of the money in he
opposite direction. This process is called the
clearing cycle.

11. SECONDARY FUNCTIONS
AGENCY FUNCTIONS
Banks act as a agent to their customers in
different ways:-

12. 1. COLLECTION AND PAYMENT OF
VARIOUS ITEMS
Banks collect cheques, rent, interest etc. on behalf of
their customers and also make payment of taxes,
insurance premium etc. on their behalf.

13. 2. PURCHASE AND SALE OF
SECURITIES
Banks normally are more knowledgeable with
regard to stock and share business. As such they
buy, sell and keep in safe custody the securities
on behalf of their customers.

14. 3. LETTER OF REFERENCES
Banks also give information about economic position
of their customers to domestic and foreign traders and
likewise provide information about economic position
of domestic and foreign traders to their customers.

15. GENERAL UTILITY SERVICES
1.Locker facilities
Banks provide locker facilities to their customers.
People can keep their gold or silver jewellery or other
important documents in these lockers.

16. 2. TRAVELLER’S CHEQUE AND LETTERS
OF CREDIT
•Banks issue traveller’s cheque and letters of credit
to their customers so that they may be spared from
the risk of carrying cash during their journey.

17. CONCLUSION
In modern world, banks are to be
considered not merely as dealers in money
but also the leaders in economic
development.

18. Thank you..!!

19. Any queries?