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CHAPTER 2CHAPTER 2
Commercial Commercial BanksBanks
Primary Primary FunctionFunction
ss Receiving Receiving
DepositsDeposits Lending to Lending to
PublicPublic InvestmenInvestmen
t t Creation of Creation of
creditcredit
Receiving DepositsReceiving Deposits
Demand Deposits:Demand Deposits:
-Current Account-Current Account
-Savings Bank Account-Savings Bank Account
-Auto- Sweep Facility-Auto- Sweep Facility
Time Deposits:Time Deposits:
-Fixed Deposit-Fixed Deposit
-Cash Certificate-Cash Certificate
-Recurring deposit-Recurring deposit
Lending to PublicLending to Public
OverdraftOverdraft LoansLoans
Cash CreditCash Credit Discounting Bills Discounting Bills
of Exchangeof Exchange
InvestmentInvestment
Treasury BillsTreasury Bills Government BondsGovernment Bonds Bonds of Public Sector UnitsBonds of Public Sector Units Money Market InstrumentsMoney Market Instruments Corporate SecuritiesCorporate Securities Equity of RRBs and Co-Equity of RRBs and Co-
operativesoperatives SLR & Other Requirements SLR & Other Requirements
Creation of CreditCreation of Credit
Process of crediting the account Process of crediting the account of the customer for the loan of the customer for the loan sanctionedsanctioned
Act of drawing cheques on the Act of drawing cheques on the accounts accounts
Recipient or payee depositing the Recipient or payee depositing the cheque into his accountcheque into his account
Secondary Functions- Secondary Functions- Agency ServicesAgency Services Collection of Collection of
Income & Income & InstrumentsInstruments
PaymentsPayments Purchase & Sale of Purchase & Sale of
SecuritiesSecurities Investment Investment
CounsellingCounselling Remittance of Remittance of
FundsFunds
Depository Depository ParticipationParticipation
Safe-Custody Safe-Custody FacilitiesFacilities
Tax ComplianceTax Compliance Merchant Merchant
BankingBanking Factoring Factoring
ServicesServices
General Utility General Utility ServicesServices Trustee, Attorney Trustee, Attorney
& Administrator& Administrator Safe Deposit Safe Deposit
LockersLockers Travellers’ Travellers’
ChequesCheques Acting As Acting As
RefereesReferees Letters of CreditLetters of Credit
UnderwritingUnderwriting Lease financingLease financing PublicationPublication Performance Performance
GuaranteeGuarantee Dealing in Dealing in
Foreign Foreign ExchangeExchange
Changing Role of Changing Role of Commercial BanksCommercial Banks
Housing FinanceHousing Finance Sale of Mutual Sale of Mutual
Fund UnitsFund Units BancassuranceBancassurance Issue of Credit Issue of Credit
Cards/Smart Cards/Smart CardsCards
Issue of Issue of ATM/Debit CardsATM/Debit Cards
Electronic Electronic Transfer of Transfer of Funds: National Funds: National level numbering level numbering of accounts, of accounts, MICR cheques,At MICR cheques,At Par Cheques, Par Cheques, mobile banking & mobile banking & Internet BankingInternet Banking
Electronic BankingElectronic Banking
ATMsATMs Tele-bankingTele-banking Any-time BankingAny-time Banking Any-where Any-where
bankingbanking Shared Payment Shared Payment
Network SystemNetwork System
RTGSRTGS Online PaymentOnline Payment Mobile BankingMobile Banking Internet BankingInternet Banking
THANK YOUTHANK YOU