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Question
Which of the following are the agency functions of commercial banks?
Options
Transfer of funds
Collection of funds
Banks collect insurance premiums, dividends, interest on debentures, etc.
All of the above
MCQ
Solution
All of the above
Explanation:
Agency functions
Commercial banks undertake a variety of agency duties, the primary goal of which is to receive deposits and provide loans. Their responsibilities include:
- Transfer of funds:
Banks facilitate the transfer of funds from one location to another by mail transfers, demand draughts, and other means. - Collection of funds
Banks also collect cash on behalf of their customers through bills, checks, and other means. - Insurance premiums, dividends, and debenture interest are all collected by banks.
- Banks assist accountholders with the tax payment procedure.
- Banks can also act as trustees or executors.
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