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 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.
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 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 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.