Commercial banks have primary functions of receiving deposits, lending to the public, and making investments. They receive demand and time deposits, provide overdrafts, loans, and cash credits for lending. For investments, they purchase treasury bills, government bonds, corporate securities, and more. Banks create credit by sanctioning loans and allowing customers to withdraw funds via check.

1. CHAPTER
2
Commercial Banks

2. Primary
Function
s
 Receiving
Deposits
 Lending to
Public
 Investment
 Creation of
credit

3. Receiving Deposits
 Demand Deposits:  Time Deposits:
-Current Account -Fixed Deposit
-Savings Bank -Cash Certificate
Account -Recurring deposit

4. Lending to Public
 Cash Credit
 Overdraft  Discounting Bills of
 Loans Exchange

5. Investment
 Treasury Bills
 Government Bonds
 Bonds of Public Sector Units
 Money Market Instruments
 Corporate Securities
 Equity of RRBs and Co-
operatives

6. Creation of Credit
 Process of crediting the account of the
customer for the loan sanctioned
 Act of drawing cheques on the
accounts
 Recipient or payee depositing the
cheque into his account

7. Secondary Functions-
Agency Services
 Collection of  Depository
Income & Participation
Instruments  Safe-Custody
 Payments Facilities
 Purchase & Sale of  Tax Compliance
Securities  Merchant Banking
 Investment  Factoring Services
Counselling
 Remittance of
Funds

8. General Utility Services
 Trustee, Attorney &  Underwriting
Administrator  Lease financing
 Safe Deposit  Publication
Lockers  Performance
 Travellers’ Cheques Guarantee
 Acting As Referees  Dealing in Foreign
 Letters of Credit Exchange

9. Changing Role of Commercial
Banks
 Housing Finance  Electronic Transfer
 Sale of Mutual of Funds: National
Fund Units level numbering of
 Bancassurance accounts, MICR
cheques,At Par
 Issue of Credit Cheques, mobile
Cards/Smart Cards banking & Internet
 Issue of ATM/Debit Banking
Cards

10. Electronic Banking
 ATMs  RTGS
 Tele-banking  Online Payment
 Any-time Banking  Mobile Banking
 Any-where banking  Internet Banking
 Shared Payment
Network System

11. THANK YOU