Question

What are subsidiary functions of a commercial bank?

Answer 1

1. Agency Functions: A commercial bank acts as an agent of its customers by performing various services on their behalf. These include:

• Collection of cheques, bills, dividends, interest, etc.
• Payment of insurance premiums, rents, and taxes on behalf of customers.
• Buying and selling of securities.
• Acting as a trustee, executor, or representative of clients.

2. General Utility Functions: A commercial bank provides various useful services to the public. These include:

• Providing safe deposit lockers for valuables.
• Issuing traveller’s cheques, credit cards, and debit cards.
• Dealing in foreign exchange.
• Providing financial advice and information to customers.
• Underwriting of shares and debentures.