Explain the agency function of commercial banks.
The commercial banks perform various agency functions with the primary purpose of acceptance of deposits and granting of loans. Their functions include:
- Transfer of funds- The banks provide an easy flow of funds from place to place via mail transfers, demand drafts etc.
- Collection of funds- The banks also collect funds on behalf of their customers through bills, cheques etc.
- Collection- Banks also collect insurance premiums, dividends, interest on debentures etc.
- Assistance- Banks assist in the process of tax payment by the account holders.
- Role of trustee- Commercial banks also play the roles of trustees or executors.
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Solution Explain the Agency Function of Commercial Banks. Concept: Commercial Banks.