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 DEFINITION OF A
BANK.

TYPES
OF
COMMERCIAL
BANKS.

FUNCTIONSOF
COMMERCIAL
BANKS.

CONCLUSION.

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A bank is like a pool into which the flow of
savings, the idle surplus money of households
and from which loans are given on interest to
individuals and others who need them for
investment or productive uses.

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 “A Bank is a financial institution which accepts
money from the public for the purpose of
lending or investment repayable on demand or
otherwise withdrawable by cheques, drafts or
order or otherwise.”

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 Commercial banks play an important and active
role in the economic development of a country.
 If the banking system in a country is effective,
efficient and disciplined it brings about a rapid
growth in the various sectors of the economy.
 The following is the significance of commercial
banks in the economic development of a country.
 1. Banks promote capital formation
 2. Investment in new enterprises
 3. Promotion of trade and industry
 4. Development of agriculture
 5. Balanced development of different regions
 6. Influencing economy activity
 7. Implementation of Monetary policy
 8. Monetization of the economy
 9. Export promotion cells
DEPOSIT BANKS
INDUSTRIAL BANKS
SAVINGS BANKS
EXCHANGE BANKS
AGRICULTURAL BANKS
MISCELLANEOUS BANKS

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 Commercial banks have to perform a variety of
functions which are common to both developed and
developing countries. These are known as ‘General
Banking’ functions of the commercial banks. The
modern banks perform a variety of functions. These
can be broadly divided into two categories:

 (a) Primary functions.

 (b) Secondary functions.

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 1. Acceptance of
deposits.
 2. Advancing loans.
 3. Creation of credit.
 4. Clearing of
cheques.
 5. Financing foreign
trade.
 6. Remittance of
funds.

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 Agency
 1.
Services.

2.General Utility
Services.

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 The commercial banks are now not confined to
local banking.
 They are fast changing into global banking i.e,
understanding the global customer, using latest
information technology, competing in the open
market with high technology system, changing
from domestic banking to investment banking
etc.
 The commercial bank are now considered the
nerve system of all economic development in the
country.
 What is virtual banking?

 Providing the banking services through extensive use of information

technology without direct recourse to the bank by the customer is called
virtual banking.

 The origin of virtual banking can be traced to the 1970,s with the
installation of ATM’s.

 The principal types of virtual banking services include automated teller

machines (ATM’s), phone banking and most recently internet banking.

 With the increasing use of internet banking there is greater reliance now
on information technology and the decrease of physical bank branches
to deliver the banking services to the customer.
 Have been called upon to
help achieve certain socio-
economic objectives laid
down by the state.
 Used to sub-serve the
national policy objectives of
reducing inequalities of
income and wealth, removal
of poverty and elimination
of unemployment in the
country.
 In the modern world, banks
are to be considered not
merely as dealers in money
but also the leaders in
economic development.
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 SlideShare

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