Question

Answer the following question in short:
What are the agency functions of banks?

Answer 1

The agency functions of commercial banks can be defined as the functions in which these banks act as an agent to their customers. The following are the agency functions of commercial banks:
a. They collect cheques, dividends and interest on behalf of the customers and credit the amount in their accounts.
b. They pay rent, insurance, premium, etc., on behalf of customers and deduct the amount from their accounts
c. They buy and sell foreign exchange.
d. They buy and sell different securities like shares and debentures.
e. They receive travel tickets and letters and book vehicles on behalf of their customers.
f. They act as a trustee, executor of will, attorney, etc.
g. They help the customers in filing tax returns.
h. They provide the facility of bank draft that helps in remitting money from place to another.
i. They act as an underwriter on behalf of a company.
j. They provide the facility of dematerialised accounts to people dealing in shares and debentures.