DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Md. Qadeer Rehman
Designation : HEAD OF SECTION
Branch : D.C.C.P.
Institute : K D R Govt, Polytechnic,
Wanaparthy.
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Banking
Duration : 50 mts
Sub topic : Functions of commercial Banks
Teaching Aids : P.P.T, animations
CCP104.142 TO 143 1
Objectives
On completion of this you would be
able to:
 Define commercial Bank
 The functions of commercial banks

CCP104.142 TO 143 2
Recap:

 The bank and its definition

 The banking organization

 The lead bank

 Various banks

CCP104.142 TO 143 3
Commercial bank
A commercial bank is an organization which helps
all business transaction by giving loans and
advances

 A commercial bank is a merchant bank with an

aim to help the trade

CCP104.142 TO 143 4
Commercial bank

A commercial bank is a mercantile bank

existed to help the traders to trading
activities

 A majority of banks which exist in and

around us are commercial banks to earn
profit by giving loans

CCP104.142 TO 143 5
Functions of Commercial Bank:

 Primary functions
 Subsidiary functions

CCP104.142 TO 143 6
Primary functions:
 Receiving deposits
 Granting deposits

Receiving deposits Granting loans

Fixed deposits Cash

Current Over draft

Cash credit

Letter of credit

CCP104.142 TO 143 7
Subsidiary functions:

 Agency services
 General services

CCP104.142 TO 143 8
Subsidiary functions:
Agency services General functions
Acting as correspondents Underwriting
Purchase sales of Locker facilities
industrial securities
Payment on behalf of Supply foreign
customers exchange
Collection of cheques/ Referee
bills/DDs on behalf
customers purchase of
visa
Any other delegated Collection of
assignments information
Collection of bills
CCP104.142 TO 143 9
Primary functions:

 Accepting of deposits
 Issue of loans / advances

CCP104.142 TO 143 10
Subsidiary functions
The bank acts as a correspondent and get all the
information for its customers
 Pays as trustees
 Purchase of industrial securities from stock
exchange/open markets
 Purchase of visa on request for its customers
 Any other assignment on behalf of its
customers

CCP104.142 TO 143 11
Subsidiary functions

 Issue of letter of credit

 Collection of cheques / DDs and bills
 Issue of overdrafts to its customers

CCP104.142 TO 143 12
Summary
We have discussed about:

 Definition of commercial bank

 The functions of commercial bank
 The primary functions
 The subsidiary functions

CCP104.142 TO 143 13
Assignment

2. Explain the definition of a commercial of a

commercial bank in six sentences

4. Explain in eight sentences about the

primary functions of a commercial banks

6. The subsidiary functions of a commercial

bank in eight sentences

CCP104.142 TO 143 14
Quiz:

1.The commercial bank grants loans and

advances to

d) Develop foreign trade

e) To boost export and import trade in the
country
f) To certain category of trade
g) To all the trading activities of traders

CCP104.142 TO 143 15
Quiz

2.The primary functions of a commercial

bank are

d) Accepting of deposits from customers

only
e) Giving interest on all deposits only
f) Collection of bills cheques issue of letter
of credits and over drafts
g) All the above.

CCP104.142 TO 143 16
Quiz:

3.The subsidiary functions of a commercial

bank are

d) Purchase of industrial securities from

stock exchange and open market
operations
e) Issue of loans and advances to industrial
units
f) Issue receipts for fixed deposits and term
deposits
g) Issue of letter of credit

CCP104.142 TO 143 17
Frequently asked questions
1. Explain in six sentences the definition
of commercial bank.

3. Describe in eight sentences about the

functions of commercial banks.

5. Write any four subsidiary functions of

commercial banks.

7. Write in four sentences the primary

functions commercial.

CCP104.142 TO 143 18
Frequently asked questions

5. Explain in four sentences the followings

a. Commercial bank
b. Commercial bank
c. Bank manager
d. Collection of bills
e. Purchase industrial securities

CCP104.142 TO 143 19