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