Commercial banks accept deposits from
customers in from customers in fixed, saving and current account and provide
credit under the headings of cash credit, overdraft, loan and discounting bills
of exchanged.
Secondary functions
Secondary function is also known as
agency function which comprises collection of credit instruments, income
receiving and payment, purchase and sale of securities, trustee and attorney
and remittance of money.
Contingent functions
The contingent functions of
commercial bank are also known as incidental or general utility functions which
comprises safety of valuable goods, such as gold, diamond and valuable
document, issues the credits instrument such as letter of credit traveler
cheques etc .
Capital market
Capital market is a mechanism through
which long term funds are loaned and borrowed in trade, commerce and industrial
sector. Long term securities such as bonds, shares and debentures are traded in
capital market. Generally, capital market provides loan facility to the
business sector for more than one year.
Money market
Money market is a mechanism through
which short term funds are loaned and borrowed in trade, commerce and
industrial sector. IT refer to the
activities of financial institutions to meet the demand and supply of money for the specified
period.
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