Answer:
Commercial Bank:
A Commercial Bank is a financial
institution that provides various financial services, such as accepting
deposits and issuing loans. Commercial
bank customers can take advantage of a range of investment products
that commercial banks offer
like savings accounts and certificates of deposit.
Services of
Commercial Bank:
1.
Accepting Deposit
Accepting deposit
from savers or account holders is the primary function of bank. Banks accept
deposit from those who can save money, but cannot utilize in profitable sectors.
People prefer to deposit their savings in a bank because by doing so, they earn
interest.
2.
Advancing Of Loans
Banks are profit
oriented business organizations. So, they have to advance loan to public and
generate interest from them as profit. After keeping certain cash reserves,
banks provide short-term, medium-term and long-term loans to needy
borrowers.
3.
Discounting Of Bill Of Exchange
Discounting bill
of exchange is another function of modern commercial bank. Under this, banks
purchase bill of exchange from holder in discount after making some marginal
deduction in the form of commission. The banks pay the deducted value to the
holders when traders discount it into bank.
4.
Cheque Payment
Banks provide Cheque
pads to the account holders. Account holders can draw Cheque upon bank to pay
money. Banks pay for cheques of customers after formal verification and
official procedures. .
5.
Remittance
Remittance is a
system, through which cash fund is transferred from one place to another. Banks
provide the facilities of remittance to the customers and earn some service
charge.
6.
Collection And Payment Of Credit Instruments
In modern
business, different types of credit instruments such as bill of exchange,
promissory notes, cheques etc. are used. Banks deal with such instruments.
Modern banks collect and pay different types of credit instruments as the
representative of the customers.
7.
Foreign Currency Exchange
Banks deal with
foreign currencies. As the requirement of customers, banks exchange foreign
currencies with local currencies, which is essential to settle down the dues in
the international trade.
8.
Consultancy
Modern commercial
banks are large organizations. They can expand their function to consultancy
business. In this function, banks hire financial, legal and market experts, who
provide advices to customers in regarding investment, industry, trade, income,
tax etc.
9.
Bank Guarantee
Customers are
provided the facility of bank guarantee by modern commercial banks. When
customers have to deposit certain fund in governmental offices or courts for
specific purpose, bank can present itself as the guarantee for the customer,
instead of depositing fund by customers.
Departments of
Commercial bank:
To begin, a bank is
structured like any other business that provides services to its customers. It
consists of the front office and the back office.
Front Office of a Bank:
Employees who are
involved in external activities with
customers who transact business with a bank.
Back Office of a Bank:
Employees who perform internal activities to affect the operational functions of
a bank. Some activities include interaction with customers, some do not.
Types
of departments of Front and back office department
1.
Saving
bank
2. Current account
3. Fixed deposit
4. Remittances
5. Clearing
6. Staff salary
7. Pension payment
8. Security department
9. Stationery department
10. Loan section
Loan
department may be have separate departments such as
1. Retail loan
2. Housing loan
3. MSME
4. Government sponsored
schemes loan processing center
5. Agricultural finance department
6. Gold loan department
7. Foreign exchange –
deposits/ remittances/loans/guarantees etc.
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