OMTEX CLASSES: Commercial Bank provides many general utility services.

Commercial Bank provides many general utility services.

I do agree with the statement because commercial bank performs the following general utility functions.

General Functions/General Utility Services: The commercial banks also provide following general utility services to the general public.

1)      Safe Deposit Vault:
Safe deposit vault facility is available to the general public to enable them to keep there valuables, such as shares, gold, silver ornaments etc. There is a separate section in the bank, where lockers are provided in various sizes at payment of a fixed rent.

2)      Remittance of funds/Transfer of money:
An important function performed by commercial bank is remittance of funds, banks remit money from one place to another or even from one country to another. This facility is more useful to traders. Remittance of funds is done by telegraphic transfer, mail transfer, demand draft etc.

3)      Letters of credit:
The commercial banks issue letters of credit to enable the traders to buy goods on credit. A letter of credit is a document or order by a banker in one place, authorizing some other banker in some other place, to honour the drafts or cheques of the person whose name appears in the document. The amount is chargeable to the issues of the letter of credit.
A bank's letter of credit helps a businessman, because of the better credit standing of a bank compared with his personal credit.

4)      Reference/Status Report:
The commercial bank also gives confidential reports on third party about its financial standing, mode and frequency of payments etc.

5)      Underwriter/Underwriting
The commercial bank also acts as an underwriter for issue of shares and debentures of any public and private limited company.
The banks guarantee the purchase of certain proportion of shares, if not sold in the market.

6)      Dealings in foreign exchange:
By keeping separate foreign exchange department, bank deals in foreign exchange. Commercial bank offer services for converting one currency into another. Banks make profit in foreign exchange transactions. In India, Reserve Bank of India has a, strict control on this function.

7)      ATM facility, credit card, debit card:
It is an electronic delivery system. It is a convenient method of withdrawing money from bank without going to the bank through automated/ automatic teller machines. It enables people to do their banking transactions at any hour of the day.

Credit card is a plastic card issued by bank to its customers. It facilitates the card holders to use it for purchase on credit or draw cash.
Debit card can be used for the purchase of goods and services. The amount gets debited from the debit card holders account automatically.

8)      Compilation of statistics/Publishing information:

Some banks, publish business and financial information relating to trade, commerce and industry. Some bank also publish bulletins or journals on research, on economic and commercial matter

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