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WhataretheFunctionsofBanks?Diagram
ThefunctionsofbanksarebrieflyhighlightedinfollowingDiagramorChart.
TheKhyber HotelNewPrince
HimalayanResort... Inn
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Thesefunctionsofbanksareexplainedinfollowingparagraphsofthisarticle.
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A.PrimaryFunctionsofBanks Viewnow Viewnow
The primary functions of a bank are also known as banking functions. They
arethemainfunctionsofabank.
Theseprimaryfunctionsofbanksareexplainedbelow.
NEWARTICLES FEATURED
1.AcceptingDeposits
TopInventionsandDiscoveries
a.SavingDeposits byScientistsAtoZListScience
HowtoImproveHuman
Thistypeofdepositsencouragessavinghabitamongthepublic.Therateof Relations?
interest is low. At present it is about 4% p.a. Withdrawals of deposits are
HowToPrepareForSuccessful
allowed subject to certain restrictions. This account is suitable to salary and
JobInterviews?BestInterviewTips
wageearners.Thisaccountcanbeopenedinsinglenameorinjointnames.
HowToSummarizePassage?
SummarizationSkillsTechniques
b.FixedDeposits BasicPrinciplesofInsurance
ExamplesofInsurancePrinciples
Lumpsumamountisdepositedatonetimeforaspecificperiod.Higherrateof
interestispaid,whichvarieswiththeperiodofdeposit.Withdrawalsarenot IndianMoneyMarketFeatures,
DrawbacksandRecentReforms
allowedbeforetheexpiryoftheperiod.Thosewhohavesurplusfundsgofor
fixeddeposit. ConceptofMarketingResearch
(MR)MarketingResearchProcess
c.CurrentDeposits
Authority,Responsibilityand
2.GrantingofLoansandAdvances AccountabilityInManagement
Thebankadvancesloanstothebusinesscommunityandothermembersof PrincipleofDelegationof
the public. The rate charged is higher than what it pays on deposits. The AuthorityImportanceofDelegation
differenceintheinterestrates(lendingrateandthedepositrate)isitsprofit. OrganisationOrganizational
FINANCE StructureOrganisationalChart
Thetypesofbankloansandadvancesare:
DecentralisationAdvantages
WhatisFinance?Meaning andLimitationsofDecentralization
1.Overdraft DefinitionFeaturesofFinance
ManagerialLeadershipLeader
2.CashCredits WhatisFinancialPlanning? QualitiesLeadershipTheories
MeaningTypesofFinancialPlans
3.Loans HumanResourceManagement
WhatisFinancialManagement? HumanResourceDevelopment
4.DiscountingofBillofExchange
MeaningDefinitionScopeArticles
MotivationMotivationalFactors
WhatisCorporateFinance? IncentivesTheoriesofMotivation
a.Overdraft MeaningWhatitIncludes?
Maslow'sHierarchyofNeeds
TheTheoryofHumanMotivation
This type of advances are given to current account holders. No separate
accountismaintained.Allentriesaremadeinthecurrentaccount.Acertain FrederickHerzberg'sTwoFactor
amount is sanctioned as overdraft which can be withdrawn within a certain BANKING TheoryMotivationHygiene
Factors
period of time say three months or so. Interest is charged on actual amount
withdrawn. An overdraft facility is granted against a collateral security. It is DouglasMcGregor'sTheoryX
WhatisaBank?Introduction,
andTheoryYEmployee
sanctionedtobusinessmanandfirms. DefinitionandFeaturesofBank
Motivation
DifferentTypesofBanksWhat
DavidMcClelland'sAchievement
areVariousKindsofBanks?
b.CashCredits Motivation,ManifestNeedTheory
CommercialBanksDefinitions,
MarketingMixand4P'sofThe
Theclientisallowedcashcredituptoaspecificlimitfixedinadvance.Itcanbe PrimarySecondaryFunctions
MarketingManagementArticle
given to current account holders as well as to others who do not have an
BalanceSheetofCommercial
account with bank. Separate cash credit account is maintained. Interest is WhatisMarketSegmentation?
BankLiabilitiesandAssets
ImportanceInModernMarketing
chargedontheamountwithdrawninexcessoflimit.Thecashcreditisgiven
HowtoOpenBankAccount?7
against the security of tangible assets and / or guarantees. The advance is 5m'sofadvertisingand
StepsToOpenBankAccount
givenforalongerperiodandalargeramountofloanissanctionedthanthat advantagesofadvertising
WhataretheAdvantagesof
ofoverdraft. QualityControlTotalQuality
OpeningBankAccount?
ManagementTQMQualityCircles
SavingAccountBankMeaning,
c.Loans FeaturesandAdvantagesofIt
FixedDepositAccountofBank
It is normally for short term say a period of one year or medium term say a Meaning,Features,Advantages NEWCOMMENTS
period of five years. Nowadays, banks do lend money for long term.
WhatisCurrentBankAccount?
Repaymentofmoneycanbeintheformofinstallmentsspreadoveraperiod ItsFeaturesandAdvantages thanksforthevaluable
of time or in a lumpsum amount. Interest is charged on the actual amount information.Iwasnotget...
RecurringDepositAccountIn
sanctioned, whether withdrawn or not. The rate of interest may be slightly
BankMeaningandFeatures Veryimpressivematerial.Itwas
lowerthanwhatischargedonoverdraftsandcashcredits.Loansarenormally
reallyperfectan...
securedagainsttangibleassetsofthecompany. WhatisaCheque?Definition
KindsandTypesofCheques Yougavethepropermeaning
andimportanceofInte...
WhatareFeaturesofCheques?
d.DiscountingofBillofExchange MainCharacteristicsofChecks thankusomuch
The bank can advance money by discounting or by purchasing bills of WhatisCrossingofCheque? Greatarticle.Thankyouso
DifferentTypesofCheckCrossing much!Helpedmealot...
exchangebothdomesticandforeignbills.Thebankpaysthebillamountto
thedrawerorthebeneficiaryofthebillbydeductingusualdiscountcharges. AutomatedTellerMachine(ATM)
Onmaturity,thebillispresentedtothedraweeoracceptorofthebillandthe TheAdvantagesofATMMachine
amountiscollected. EBankingOnlineBanking
MainAdvantagesofEBanking
B.SecondaryFunctionsofBanks PrinciplesofGoodLending
EveryBankerFollowsLoans
The bank performs a number of secondary functions, also called as non DifferentFormsofAdvancesby
bankingfunctions. CommercialBanksLoanTypes
DutiesandResponsibilitiesof
Theseimportantsecondaryfunctionsofbanksareexplainedbelow.
ComputerOperatorinBank
NationalisationofBanksinIndia
1.AgencyFunctions IntroductionObjectivesDemerits
NarasimhamCommitteeReportI
Thebankactsasanagentofitscustomers.Thebankperformsanumberof
1991II1998Recommendations
agencyfunctionswhichincludes:
NewEconomicReformsofthe
BankingSectorInIndiaBrief
1.TransferofFunds
2.CollectionofCheques FunctionsofReserveBankof
India(RBI)CreditPolicyofRBI
3.PeriodicPayments
4.PortfolioManagement
5.PeriodicCollections CATEGORY
6.OtherAgencyFunctions
AdministrativeLaw
a.TransferofFunds Advertising
Banking
The bank transfer funds from one branch to another or from one place to
another. BusinessDevelopment
CommunicationSkills
b.CollectionofCheques DistinguishBetween
The bank collects the money of the cheques through clearing section of its Economics
customers.Thebankalsocollectsmoneyofthebillsofexchange. Education
Finance
c.PeriodicPayments IndustrialPsychology
On standing instructions of the client, the bank makes periodic payments in KalyanCity
respectofelectricitybills,rent,etc. Management
MarketingResearch
d.PortfolioManagement Photos
Thebanksalsoundertakestopurchaseandsellthesharesanddebentures ProductionPlanning
on behalf of the clients and accordingly debits or credits the account. This Snakes
facilityiscalledportfoliomanagement.
e.PeriodicCollections
The bank collects salary, pension, dividend and such other periodic
collectionsonbehalfoftheclient.
f.OtherAgencyFunctions
2.GeneralUtilityFunctions
Thebankalsoperformsgeneralutilityfunctions,suchas:
1.IssueofDrafts,LetterofCredits,etc.
2.LockerFacility
3.UnderwritingofShares
4.DealinginForeignExchange
5.ProjectReports
6.SocialWelfareProgrammes
7.OtherUtilityFunctions
a.IssueofDraftsandLetterofCredits
Banks issue drafts for transferring money from one place to another. It also
issues letter of credit, especially in case of, import trade. It also issues
travellers'cheques.
b.LockerFacility
Thebankprovidesalockerfacilityforthesafecustodyofvaluabledocuments,
goldornamentsandothervaluables.
c.UnderwritingofShares
The bank underwrites shares and debentures through its merchant banking
division.
d.DealinginForeignExchange
ThecommercialbanksareallowedbyRBItodealinforeignexchange.
e.ProjectReports
The bank may also undertake to prepare project reports on behalf of its
clients.
f.SocialWelfareProgrammes
Itundertakessocialwelfareprogrammes,suchasadultliteracyprogrammes,
publicwelfarecampaigns,etc.
g.OtherUtilityFunctions
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4Comments:
Anonymoussaid...
January7,2014at2:40PM
Thankstotheauthor.Reallyuseful.Everythingexplainedindetail.If
possiblecanyouprovidetheexactdifferencebetweencashcreditand
overdraft?
AnilKumarVarmasaid...
January8,2014at4:18PM
Wow..!,
It'sReallyUsefulforthecandidateswhowantstosettlethemselvesinthe
BankingIndustry
Thanks'alotforsuchawonderfulmaterial..
GauravAkranisaid...
March22,2014at12:25AM
DifferencebetweenCashCreditandOverdraft:
Cashcreditisalongtermborrowingandonaregularbasis.
Overdraftisatemporaryborrowingandisusuallyforaveryshortperiod.
Cashcreditneedsopeningofaseparateaccountwithbank,namelycash
creditaccount.
Overdraftfacilitiesmaybeavailableinthesamecurrentaccountheldwith
thebank.
Cashcreditisgivenagainsttangiblesecuritieslikethevalueofstock(raw
material),workinprogressorfinishedgoods.
OverdraftisgivenagainstpapersecuritieslikeBillReceivables,Bonds,
Certificates,etc.
RateofInterestoncashcreditfacilityishigher.
Rateofinterestonoverdraftfacilityisrelativelylower.
Anonymoussaid...
June9,2014at8:59AM
EXCELLENT!ITISJUTAFANTASTICJOBTHANKYOUEVERYONE
INVOLVEDHEREEXPLAININGDETAILSABOUTTHEFUNCTIONSOF
BANKALLTHINGAREVERYHELPFULTONEWACCOUNTHOLDERS
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