Commercial Banks

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A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. They earn money from the difference …

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The three main types of deposits are: 1. Current Deposits (Demand Deposits) - Can be withdrawn anytime using cheques, no interest paid 2. Savings Deposits - Low interest rate, limited withdrawals allo…

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Current Account: Used by businessmen for daily transactions, no interest paid, overdraft facility available, unlimited transactions. Savings Account: Used by households and salaried persons, low inter…

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An overdraft facility allows a current account holder to withdraw more money than the balance available in their account, up to an agreed limit. For example, if someone has ₹1,000 in their account but…

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The three main categories of functions are: 1. Primary Functions - Accepting deposits and advancing loans 2. Agency Functions - Acting on behalf of customers 3. General Utility Functions - Providing a…

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Cash Credit is a type of loan where the borrower can withdraw money up to a certain limit against the security of current assets like stocks and bills receivable. Interest is charged only on the amoun…

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When a holder of a bill of exchange needs immediate money, the bank provides cash by discounting the bill. The bank credits the bill amount to the holder's account after deducting interest for the rem…

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Four agency functions are: 1. Collection and payment of credit instruments (insurance premiums, pensions, dividends) 2. Purchase and sale of securities on behalf of customers 3. Acting as trustee and …