Commercial banks

Commercial banks


A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products.

Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to individual members of the public (retail banking).

Commercial bank

A financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit. The traditional commercial bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and ATMs. However, some commercial banks do not have any physical branches and require consumers to complete all transactions by phone or Internet. In exchange, they generally pay higher interest rates on investments and deposits, and charge lower fees.

Commercial banking activities are different than those of investment banking, which include underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.

Commercial bank being the financial institution performs diverse types of functions. It satisfies the financial needs of the sectors such as agriculture, industry, trade, communication, etc. That means they play very significant role in a process of economic social needs. The functions performed by banks are changing according to change in time and recently they are becoming customer centric and widening their functions. Generally the functions of commercial banks are divided into two categories viz. primary functions and the secondary functions

Primary Functions of Commercial Banks:

Accepting Deposits, Making Advances, Credit creation.

Secondary Functions of Commercial Banks:

The secondary functions of commercial banks can be divided into agency functions and utility functions.

    Agency Functions : Various agency functions of commercial banks are
        To collect and clear cheque, dividends and interest warrant.
        To make payment of rent, insurance premium, etc.
        To deal in foreign exchange transactions.
        To purchase and sell securities.
        To act as trusty, attorney, correspondent and executor.
        To accept tax proceeds and tax returns.

  General Utility Functions : The general utility functions of the commercial banks include
        To provide safety locker facility to customers.
        To provide money transfer facility.
        To issue traveller's cheque.
        To act as referees.
        To accept various bills for payment e.g phone bills, gas bills, water bills...
        To provide merchant banking facility.
        To provide various cards such as credit cards, debit cards, Smart cards...

Bank - General Information

The banks are specialized financial institutions, which, with the permission and supervision of the National Bank, providing certain financial services. To be able to provide a safe and stable operation at all times fulfill the obligations to creditors, banks must dispose of money, capital, the amount of which should not fall below the level specified by law.

These financial institutions are earning, on the one hand, the difference in interest rates paid by banks on money they collect (through savings or the issuance of securities, for example), and interest rates that customers pay on loans (loans) received by the bank, on the other hand, and the collection of fees for the various services they provide.
Banks operate through its affiliates, or territorial organizational units.

A bank used by citizens, legal persons, primarily as:

     Deposit transactions, or receive money (dinars or foreign currency) in savings, on which the bank pays interest to the clients;
     credit transactions in which the bank provides the customer loans, a bank customer, the return rate on the loan, and the interest is paid;
     Opening dinar or foreign currency account at the bank's clients come from a variety of payment sources (wages, pensions, royalties, alimony ...) is that he can raise money or perform non-cash payments (bank charges a certain amount for account maintenance, and in some cases payment of a commission to cash or non-cash payments);
     issuance and maintenance of payment cards (debit and credit), with which the client performs cashless payment and raises money from ATMs; using a credit card bank clients using pre-approved loan and pay the interest;
     Exchange transactions.

In addition, the Bank carried out a series of other jobs, which often do not have direct connections with the public (the issuance of securities, broker-dealer transactions, issuance of guarantees and so on).

Choice Bank

Level of interest rates and fees and other operating conditions vary considerably from bank to bank. You'll choose - depends on the type of services that you need. A bank can have the most favorable conditions for the savings, the other for maintaining current accounts, and the third for housing loans.

Nothing's stopping you to use the services of banks, each what is the best for you, but you should know that the services are often offered in packages (certain credit facilities, for example, often apply only to persons who have a current account with the bank ), and you will, if the need arises to make money from one bank to another reproach, may have to pay such a fee would be the advantage of doing business with multiple banks melt.

Banks are changing requirements, depending on the market situation, so it is important to stay in touch and all the carefully calculated. It would not be hurt even to someone who has already used the services of the bank you want to know ask what his experience.

Of importance can be seemingly trivial factors such as distance from the branch of your apartment or workplace, or her working time.

Today, most banks offer some electronic banking services (the ability to doing a few transactions through the Internet), so this should be taken into account.

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