Commercial Bank

A PRESENTATION ON BY GROUP 6

 Amrutha    

Preetam Gautam Aggarwal Komal D Padmini Gowda Stalin Mohanty

 Introduction  Evolution  Functions  Services  Roles  Current scenario  Conclusion

 A

business organization which deals in money; it borrows and lends money. In the process of borrowing and lending of money it makes profit.

 A division of a bank primarily

dealing with deposits and loans from corporations or businesses.

 Modern banking in India is said to

be developed during the British era.

 In

the first half of the 19th century, the British East India Company established three banks – -The Bank of Bengal in 1806 -The Bank of Bombay in 1840 -The Bank of Madras in 1843

 But in the course of time these

three banks were amalgamated to a new bank called Imperial Bank and later it was taken over by the State Bank of India in 1955.

 Allahabad Bank was the first fully

Indian owned bank. Followed by other banks like Punjab National Bank, Bank of India, Canara Bank and Indian Bank.

What are the functions of commercial bank???

1. Accepting of deposits 

Current deposit Account - money deposited in the account is for very short period. – high rate of interest – term deposit – matures at a definite period.



Fixed deposit - withdraw money at any time – no interest -



Savings deposit Account – some restrictions. – minimum amount of money – interest rate is low.

6.

Granting of loans and advances



Loans



Advances

-

Making ordinary loans

-

Cash credit – popular with Indian businessman

-

Overdraft – draft in excess of credit balance – for the reliable customer.

-

Investment of funds – surplus fund in government securities.

-

Promote use of cheques

-

Agency functions of the banktransfer of funds collecting consumer funds purchase and sales of share income tax consultant

-

Purchase and sale of foreign exchange

-

Safe custody of valuable items of the public.

Issuing letters of credit, travelers cheques, circular notes etc. 12.

Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers.

14.

Providing customers with facilities of foreign exchange.

16.

Transferring money from one place to another; and from one branch to another branch of the bank.

1. Standing guarantee on behalf of its

customers, for making payments for purchase of goods, machinery, vehicles etc.

3. Collecting

information.

and

supplying

business

5. Issuing demand drafts and pay orders. 7. Providing

reports on worthiness of customers.

the

credit

Cash Credit Overdraft Discounting of

bills

 Acting as an investment advisor  Collection and payments of cheque, bills of

exchange, promissory notes etc.  Collection of dividends, interest and rent etc.  Purchase and sale of shares and securities

 Payment of rent, interest, insurance

premiums, subscriptions etc.  Acting as trustee, executor, administrator  Acting as a custodian.  Acting as agents for other banks at home and abroad

 Banker’s Drafts and Letters of Credit  Circular Notes, Traveler’s Cheque.  Safe custody of valuables  Night safes  Referee as to the Respectability and Financial

Status of Customer  Credit cards

    

Debit and ATM cards Electronic Funds Transfer (EFT) Service Online banking Mobile banking Information and other Services



Need for a sound banking system



Capital formation – rate of saving is low in underdeveloped economy due to poverty. – potential cant be realize due to poor commercial bank facility – to make money available for entrepreneur sound banking system is rtequired.



Finance for priority sector



Innovation – innovation can be done through bank credit by entrepreneur.



Monetization – underdeveloped economy monetization due to large non monetized sector.



Micro finance



Provision for long term finance



Cheap money policy to stimulate economic activity

 Network Expansion  Growth of deposits and credits  Foreign Businesses of Indian Banks  Rural banking  Technological Infrastructure  Increased Funding to SME’s

Banks are back bone for the economic development of any country. A planned banking system is indispensable for economic growth and development of the country.