Advertisement

Secondary Function of Commercial Bank?

                              
Introduction: -In addition to the primary functions of accepting deposits and granting loans and advances, banks performs a number of other functions which are called secondary functions. They are the following two types.

A.      Agency Functions: - Agency functions includes the following:


1.       Collection of Cheques, dividends and Interests: -As an agent the bank collects cheques, drafts, promissory notes, interests, dividend, etc., on behalf of its customers and credits the amount to their accounts.

2.       Payment of rent, insurance premiums, etc: -The bank makes the payment such as rent, insurance premiums, subscriptions, etc on standing instructions until further notice. Till the order is revoked the bank will continue to make payments regularly by debiting the consumer's account.

3.       Dealing in foreign exchange: -As an agent, the commercial bank purchases and sells foreign exchange for customers as per RBI Exchange Control Regulations.

4.       Purchase and Sales of Securities: -Commercial banks undertake the purchase and sale of different securities such as shares, debentures, bonds, etc on behalf of their customer. They run a separate 'Portfolio Management Scheme' for their big customers.

5.       Acts as trustee, executor of will, attorney, etc: -The bank acts as executives of will, trustees and attorneys. It is safe to appoint a bank as a trustee than to appoint an individual. Acting as attorneys of their customers, they receive payments and sign transfer deeds for the properties of the customers.

6.       Acts as Correspondent: -The commercial banks act as a correspondent of their customers. Small bank even get travel tickets, book vehicles, receive letters, etc., on behalf of their customers.

7.       Preparation of Income Tax Returns: -They prepare income tax returns and provide advises on tax matters for their customers. For this purpose, they employ (use) tax experts and make their services available to their customers.

8.       Bank Drafts: -A Bank draft is a financial instrument with the help of which money can be remitted from one place to another. Anyone can obtain a bank draft after depositing the amount in the bank. It is less risky for a creditor.

9.        Underwriting of Shares: -Underwriting services include guarantee by the bank to the company. In case the company shares are not sold, the bank will take the responsibility of the unsold shares. Bank charges commission for this service.

10. Demat Account: -Demat account facility has been introduced by commercial banks to facilitate the customers who are shareholders

B.      Utility Functions: - Utility functions of the bank includes the following:


1.       Safe deposit vault/lockers: -Safety of valuables like jewels, documents, etc is provided by commercial banks by way of safe deposit vaults or lockers. 'Lockers' are small receptacles (cabinets) which are fitted in steel racks and kept inside "strong rooms' known as vaults.

2.       Traveler's Cheques: -Traveler's Cheques are used by domestic travelers as well as by international travelers. Bank issues travelers cheques to help carry money safely while travelling within India or abroad. Thus, the customers can travel without fear, theft or loss of money.

3.       Letter of Credit (L/C): -Letter of Credit is a payment document provided by the buyer's banker in favour of the seller. This document guarantees payment to the seller upon presentation of documents mentioned in the Letter of Credit evidencing dispatch of goods to the buyer.

4.       Provides Trade Information: -The commercial bank collects information on business and financial conditions etc for their customers which help them to plan their strategy. Trade information service is very useful for those customers going for business with companies outside the country.


5.       Gift Cheques: - The commercial banks offer Gift cheque facilities to the general public. These cheques receive a wider acceptance in India. Under this system by paying equivalent amount one can buy gift cheque for presentation on occasions like wedding, birthday, etc.

PDF FILE TO YOUR EMAIL IMMEDIATELY PURCHASE NOTES & PAPER SOLUTION. @ Rs. 50/- each (GST extra)

SUBJECTS

HINDI ENTIRE PAPER SOLUTION

MARATHI PAPER SOLUTION

SSC MATHS I PAPER SOLUTION

SSC MATHS II PAPER SOLUTION

SSC SCIENCE I PAPER SOLUTION

SSC SCIENCE II PAPER SOLUTION

SSC ENGLISH PAPER SOLUTION

SSC & HSC ENGLISH WRITING SKILL

HSC ACCOUNTS NOTES

HSC OCM NOTES

HSC ECONOMICS NOTES

HSC SECRETARIAL PRACTICE NOTES

2019 Board Paper Solution

HSC ENGLISH SET A 2019 21st February, 2019

HSC ENGLISH SET B 2019 21st February, 2019

HSC ENGLISH SET C 2019 21st February, 2019

HSC ENGLISH SET D 2019 21st February, 2019

SECRETARIAL PRACTICE (S.P) 2019 25th February, 2019

HSC XII PHYSICS 2019 25th February, 2019

CHEMISTRY XII HSC SOLUTION 27th, February, 2019

OCM PAPER SOLUTION 2019 27th, February, 2019

HSC MATHS PAPER SOLUTION COMMERCE, 2nd March, 2019

HSC MATHS PAPER SOLUTION SCIENCE 2nd, March, 2019

SSC ENGLISH STD 10 5TH MARCH, 2019.

HSC XII ACCOUNTS 2019 6th March, 2019

HSC XII BIOLOGY 2019 6TH March, 2019

HSC XII ECONOMICS 9Th March 2019

SSC Maths I March 2019 Solution 10th Standard11th, March, 2019

SSC MATHS II MARCH 2019 SOLUTION 10TH STD.13th March, 2019

SSC SCIENCE I MARCH 2019 SOLUTION 10TH STD. 15th March, 2019.

SSC SCIENCE II MARCH 2019 SOLUTION 10TH STD. 18th March, 2019.

SSC SOCIAL SCIENCE I MARCH 2019 SOLUTION20th March, 2019

SSC SOCIAL SCIENCE II MARCH 2019 SOLUTION, 22nd March, 2019

XII CBSE - BOARD - MARCH - 2019 ENGLISH - QP + SOLUTIONS, 2nd March, 2019

HSC Maharashtra Board Papers 2020

(Std 12th English Medium)

HSC ECONOMICS MARCH 2020

HSC OCM MARCH 2020

HSC ACCOUNTS MARCH 2020

HSC S.P. MARCH 2020

HSC ENGLISH MARCH 2020

HSC HINDI MARCH 2020

HSC MARATHI MARCH 2020

HSC MATHS MARCH 2020


SSC Maharashtra Board Papers 2020

(Std 10th English Medium)

English MARCH 2020

HindI MARCH 2020

Hindi (Composite) MARCH 2020

Marathi MARCH 2020

Mathematics (Paper 1) MARCH 2020

Mathematics (Paper 2) MARCH 2020

Sanskrit MARCH 2020

Sanskrit (Composite) MARCH 2020

Science (Paper 1) MARCH 2020

Science (Paper 2)

Geography Model Set 1 2020-2021


MUST REMEMBER THINGS on the day of Exam

Are you prepared? for English Grammar in Board Exam.

Paper Presentation In Board Exam

How to Score Good Marks in SSC Board Exams

Tips To Score More Than 90% Marks In 12th Board Exam

How to write English exams?

How to prepare for board exam when less time is left

How to memorise what you learn for board exam

No. 1 Simple Hack, you can try out, in preparing for Board Exam

How to Study for CBSE Class 10 Board Exams Subject Wise Tips?

JEE Main 2020 Registration Process – Exam Pattern & Important Dates


NEET UG 2020 Registration Process Exam Pattern & Important Dates

How can One Prepare for two Competitive Exams at the same time?

8 Proven Tips to Handle Anxiety before Exams!

BUY FROM PLAY STORE

DOWNLOAD OUR APP

HOW TO PURCHASE OUR NOTES?

S.P. Important Questions For Board Exam 2022

O.C.M. Important Questions for Board Exam. 2022

Economics Important Questions for Board Exam 2022

Chemistry Important Question Bank for board exam 2022

Physics – Section I- Important Question Bank for Maharashtra Board HSC Examination

Physics – Section II – Science- Important Question Bank for Maharashtra Board HSC 2022 Examination

Important-formula



THANKS