Commercial Banking: Forms And Functions Of A Commercial Bank

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Literature Review
1. Commercial Banking
A commercial bank is financial institution that is sanctioned by law used to get cash from organization and people and loan cash to then commercial bank are public used to serve individuals and business. A commercial bank is the type of bank that people most use. (Gaurau Akrani 2010) commercial banks are an association which regularly plays out certain budgetary exchanges it implement the twin task accepting deposits from public members and make credit to people who meet from the society. The liabilities of a bank increase when it accepts deposit and by this way it becomes a debtor; furthermore more commercial bank assets increase when it makes advance no it this way it become a creditor. Banking transactions are socially and legally approved. The banks are responsible in preserving the deposit or its …show more content…

Commercial bank functions are divided into two categories the primary function and the secondary functions. o Primary functions
Accepting deposits-accepting deposits is the most important function of a commercial bank, the deposit are accepted according to the requirement of different sections in the society and as we mention previously we has different kinds of deposits for example current account or demand deposits, fixed deposits or demand deposits and saving deposits.
Advancing of loans-the received deposits by the bank are not allowed to remain inactive, therefore after keeping certain cash reserve, the balance is given to a borrower who need it and the interest will be charged from them which will be the main source of income to the bank. For example we have different types of loans made by a commercial bank; cash credit, demand loan short term function. o Secondary

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