General utility services of Commercial Banks

1. RBI allows certain branches to undertake foreign exchange

transactions. They are called authorized dealers. The bank
purchases and sells foreign currency at the rate prescribed by RBI.
2. The bank enables foreign trade by issuing letter of credit on behalf
of the importer. It is a letter of guarantee and that enables the
importer to purchase goods.
Letter of credit has been in existence for many years. It is in fact the
most important single document in the international trade. Simply
stated, a letter of credit is an undertaking by a banker in the
importer’s country to pay or to arrange to pay specified
merchandise, provided that the exporter satisfies certain stipulated
conditions.
Through the instrument of letter of credit, the promise to pay
usually made by the overseas buyer is substituted by the promise to
pay by the banker. It is only this feature of the letter of credit, which
gives the exporter greater security.

A letter of credit is a written undertaking given by a bank to the

seller of the goods at the request of the importer of the goods, to
meet the bill of exchange drawn by the seller in accordance with the
terms of the undertaking providing the documents of title to goods
prescribed by the buyer are tendered on presentment of the bill of
exchange for payment.
3. In the case of foreign trade or domestic trade, bankers accept bills
on behalf of customers and make payment on the due date on these
bills. Later on, they collect from the customers.
4. In order to promote capital market and to encourage issue of
sharesboth in the primary market and secondary market, the banker
acts as an underwriter for certain companies. This will enable the
companies to sell their shares. Banks underwrite the issue of shares
and debentures of joint stock companies. For this service, banks
receive commission from the companies. This enables companies to
get adequate capital for their business.
5. The bank provides safe custody of valuables by providing safe
deposit vaults. The customers can keep their valuables such as
jewels, silver ornaments, important documents and share and
debenture certificates safely. However, the bank will not give any
guarantee for the safety of valuables. The relationship here is only
that of a tenant and owner. And the banker as owner, collects rent
for the safe deposit vault. Here the banker acts only as the custodian
of the valuables belonging to the customers. These lockers are made
available on half yearly or annual rental basis.
6. The income tax assessees can pay their income tax through
banks notified by RBI.
7. In order to know the credit worthiness of certain customers,
the banks may act as referee. Any third party can approach the bank
to know about the genuineness of customers.
8. In view of the development of technology, the bank is in a better
position to provide various data which are in general interest.
9. The banks help companies to mobilize funds in foreign
market through the sale of global deposit receipt.
10. Banks undertake factoring and leasing finance by which trade
bills of customers are given finance.
11. Issuing Travelers’ Cheques: Banks issue travellers’ cheques to
help their customers by avoiding carrying money while traveling
within India and abroad. With this facility, people need not carry
cash with them during their travel and travel, in and out of India
without the fear of theft or loss of money.
12. Acting as Referees: Banks are also acting as referees and provide
information as to the financial standing, business reputation and
respectability of their customers on enquiries made by third parties.
Banks provide this service only on the acceptance of the customers.
This function helps businessmen to obtain prompt and accurate
information as to financial standing of the people with whom they
are dealing.
13. Giving Trade Information: Commercial banks collect trade
information from different places within the country and also from
foreign countries and inform customers about the feasibility of
entering into such trade.
14. Providing ATM Facility: “ATM” means “Automating Teller
Machine”. It is also known as “Any Time Money”. Now-a-days,
almost all the banks have ATM facility. Even small banks, which do
not have their own ATM entering into tie up with big bankers and
provide ATM facility to their customers. Under this facility,
customer can withdraw money 24 hours a day. Deposits to accounts
can also be made with this facility. Banks issue magnetic card for
carrying any banking operation with this machine.
15. Issuing Credit Cards: Banks issue credit cards to their customers
to enable them to purchase goods and obtain services on credit
basis from certain specified retail and service establishments up to a
limit and also to withdraw cash up to a specified limit through ATM,
24 hours a day including Sunday. Banks pay amount for the
purchase made by the customers by using credit cards. Before the
expiry of the period fixed by the banks for payment by customers for
the credit purchases made by them say 30 days, customers should
repay the money. Banks normally collect a nominal service charge
on the amount of each credit transaction.
If the customer failed to pay the money before the specified period,
banker will charge a certain percentage of interest as agreed
between the banker and customer. Some banks allow the customers
to repay the credit availed in installments also. As per this
arrangement, customer need not pay the full amount of credit
purchase in a lump sum. They can spread the amount over a fixed
period say 20 months and pay in installments also. However, until
the amount is fully paid, customer has to pay interest on the balance
of amount unpaid.

Besides, customers can also draw cash from ATM up to a certain

limit prescribed by the Bank, which can be either repaid in lump
sum or in a particular number of installments. Banks charge a
prescribed rate of interest on the cash drawn by the customers.
Customers are given with secret code numbers to avail this facility
by means of ATM.

Secret code number will be informed to the cardholder very secretly

and he/she also will be asked not to disclose the.same to others. In
other words, the cardholder has to keep it secretly. This is to
prevent the unauthorized use of card by anybody. So it is the duty of
the customers not to disclose the secret code numbers to anybody.
Master Card, Visa Card, BOB Card are some examples of credit
card.

16. Issuing Gift Cheques: Some banks issue cheques of various

denominations to be used on auspicious occasions. These cheques
are known as gift cheques.
17. Advising on Financial Matters: Commercial banks also advice
their customers on financial matters as to expansion,
modernization, diversification etc.
Agency functions of commercial banks
Agency Services or Agency functions of commercial banks are
elaborated in detail below

1. Collection of Cheques, Dividends, Interests etc.: Collecting cheques,

drafts, bill of exchange, dividends, interests etc. on behalf of its
customers and credit the amount in their account is one of the most
important agency services rendered by the banks. Banker accepts
standing instructions from the customers and arranges to collect
dividend, interest, pension, salaries, bills etc. on behalf of his
customers.
2. Payment of Subscription, Rent, Insurance Premium etc.: Banks
undertake the payment of subscriptions, rent, insurance premium
etc. on behalf of the customers and debit the account with the
amount. It accepts the standing instructions of the customer and
arranges for.the payment of such expenses on their behalf. It
charges a small amount by way of commission for these services.
3. Conduct of Stock Exchange Transactions: Banks purchase and sell
various securities such as shares, debentures, bonds etc. of joint
stock companies both private and Government on behalf of their
customers.
4. Acting as Executor, Trustees, Attorneys etc.: Banks act as
executors of will, trustees, attorneys and administrators. As an
executor it preserves the “Wills” of the customers and executes
them after their death. As a trustee, it takes care of the funds of the
customers. As an attorney, it signs transfer forms and documents on
behalf of the customer.
5. Preparation of Income Tax Returns: Banks prepare income tax
returns for their customers through their tax service departments.
6. Conducting Foreign Exchange Transactions: Commercial banks
purchase and sell foreign exchange for their customers.
7. Banker acts as an agent to the customer. When a customer
deposits cheques, drafts, bills or any other promissory notes, the
banker collects them and on realization credits the account of the
customer. For this activity, the banker is given commission. Banks
also act as a correspondent, representative of their customers. Some
banks may even get the travelers’ tickets, passport etc. for their
customers.
8. As the customer has to pay certain periodical payments such as
monthly, quarterly, half yearly, the banker is informed by a standing
instruction. Thus, club subscription, insurance premium, road tax,
electricity charges and telephone bills of the customers are paid by
the bank after debiting the customers’ account.
9. As the customer may be a shareholder or debenture holder of
companies, he will be receiving dividend warrants and interest
warrants, which will be deposited by the customer in the bank. The
bank will collect the same and credit it to the account of respective
customers.
10. When customers are left with huge amount of money in their
account, they can be invested in company securities for capital
appreciation or for getting a good return. The banker will be able
to advise customers about various investment opportunities as he has
the services of experts.
10. When customers die suddenly leaving behind minor children,
the court may appoint the banker to act as executor of will.
Similarly, in the case of certain companies, the bank may act as
trustee for their property in the interest of creditors of the company.
12. In certain business transactions, payments are made with the
help of banks by transferring funds to different centres. In the
present days, these transfers could be made within few hours
through electronic media. We have electronic transferwith the help
of computers.
13. In the case of foreign transactions or even domestic
transactions, the banks will undertake collection of funds on behalf of
customers.
14. Salary disbursement: In a huge factory, employing thousands of
persons, salary disbursement can be done through bank branches.
The salary of the employee will be credited to his individual account
every month and he can either make cheque payment or even
withdraw cash.
15. On the basis of the credit worthiness of the customer, banks issue
credit card. The purchases made by customers by using the credit
card are being settled by the banker and later on the banker collects
the amount from the customer. In rural areas, the farmers are given
green cards by which they are enabled to purchase agricultural
inputs on credit. They will repay amount to the bank after the
harvest.
Allahabad Bank
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 Allahabad Bank

Type Public

Traded as BSE: 532480,

NSE: ALBK

Industry Banking, Financial services

Founded 24 April 1865; 153 years ago

in Allahabad

Headquarters Kolkata

India

Number of locations 3,503 branches (Mar-2018)[1]

Key people S. S. Mallikarjuna Rao

(MD & CEO)[2]

 Finance and insurance

Services
 Consumer banking
 Corporate banking

Revenue ₹19,051 crore(US$2.7 billion)(2018)[3]

Operating income ₹3,438 crore(US$480 million)(2018)[3]

Net income ₹-4,674 crore (US$−650 million)(2018)[3]

Total assets ₹236,460.23 crore(US$33 billion)

(2016)[3]

Number of  23,944 (2017)[4]

 employees  23,771 (March 2016)[5]

Capital ratio 8.69%[6]

Website allahabadbank.in

Allahabad Bank is a nationalised bank with its headquarters in Kolkata, India. It is the oldest
joint stock bank in India. On 24 April 2014, the bank entered into its 150th year of establishment.
It was founded in Allahabad in 1865.[7]
As of 31 March 2018, Allahabad Bank had over 3245 branches across India.[1] The bank did a
total business of INR 3.8 trillion during the FY 2017-18.[8]
The bank's market capitalisation in June 2018 was US$573 million and it ranked #1,882 on
the Forbes Global 2000 list.[9]
History of Allahabad Bank

Contents

 119th century
 220th century
 321st century
 4Listings and shareholding
 5Employees
 6See also
 7References
 8External links

19th century[edit]

A 1989 stamp dedicated to the 125th anniversary of Allahabad Bank

On 24 April 1865, a group of Europeans founded Allahabad Bank in Allahabad. By the end of the
19th century it had branches at Jhansi, Kanpur, Lucknow, Bareilly, Nainital, Calcutta, and Delhi.

20th century[edit]
In the early 20th century, with the start of Swadeshi movement, Allahabad Bank witnessed a
spurt in deposits. In 1920, P & O Banking Corporation acquired Allahabad Bank with a bid price
of ₹436 (US$6.10) per share. In 1923 the bank moved its head office and the registered office to
Calcutta for reasons of both operational convenience and business opportunities. Then in
1927 Chartered Bank of India, Australia and China (Chartered Bank) acquired P&O Bank.
However, Chartered Bank continued to operate Allahabad Bank as a separate entity.
Allahabad Bank opened a branch in Rangoon (Yangon). At some point Chartered Bank
amalgamated Allahabad Bank's branch in Rangoon with its own.[10] In 1963 the revolutionary
government in Burma nationalized the Chartered Bank's operations there, which became
People's Bank No. 2.[11]
On 19 July 1969, the Indian Government nationalised Allahabad Bank, together with 13 other
banks.
In October 1989, Allahabad Bank acquired United Industrial Bank, a Calcutta-based bank that
had been established in 1940 and that brought with it 145 branches. Two years later, Allahabad
Bank established AllBank Finance Ltd, a wholly owned Merchant Bankingsubsidiary.

21st century[edit]
The government's ownership of Allahabad Bank shrank in October 2002 after the bank engaged
in an Initial Public Offering (IPO) of ₹100 million (US$1.4 million) of shares, each with a face
value ₹ 10. The IPO reduced the Government's shareholding to 71.16%. Then in April 2005 the
bank conducted a second public offering of ₹ 100 million of shares, each with a face value ₹ 10
and selling at a premium of ₹ 72. This offering reduced the Government's ownership to 55.23%.
In June 2006 the bank opened its first office outside India when it opened a representative office
in Shenzen, Mainland China. In February 2007, Allahabad Bank opened its first overseas branch,
in Hong Kong. In March, the bank's business crossed the ₹ 10 million mark.

Listings and shareholding[edit]

Allahabad Bank's equity shares are listed on Bombay Stock Exchange and the National Stock
Exchange of India.

Shareholders (as on 31 March 2014)[12] Shareholding

Promoter Group (Government of India) 64.80%

Indian FIs/MFs 16.60%

Foreign Institutional Investors (FII) 03.20%

Resident Indians 08.80%

Others 06.60%

Total 100.0%
Allahabad Bank Head Office at Kolkata

Employees[edit]
As on 31 March 2013, the bank had 22,557 employees, out of which 3,293 were women
(15%).[8] Out of the total employees, 51% were officers, 30% were clerks and remaining 19%
were subordinate staff.[8] The bank recruited 1,950 employees (1,421 Officers, 390 Clerks and
139 subordinate staff) during the same financial year.[8] The company incurred INR 20 billion on
employee benefit expenses during the same financial year.[8]
Employee productivity: During the FY 2013–14, the business per employee was INR
13.50 crores and it earned a net profit of INR 4.77 lakhs per employee.[8]
The bank is now operating in the following States/UTs

 Andaman And Nicobar Island

 Andhra Pradesh
 Arunachal Pradesh
 Assam
 Bihar
 Chandigarh
 Chhattisgarh
 Delhi
 Goa
 Gujarat
 Haryana
 Himachal Pradesh
 Jammu And Kashmir
 Jharkhand
 Karnataka
 Kerala
 Madhya Pradesh
 Maharashtra
 Manipur
 Meghalaya
 Nagaland
 Odisha
 Puducherry
 Punjab
 Rajasthan
 Sikkim
 Tamil Nadu
 Telangana
 Tripura
 Uttar Pradesh
 Uttarakhand