Commercial Bank - The Role of Commercial Banks

The Role of Commercial Banks

Commercial banks engage in the following activities:

  • processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or other means
  • issuing bank drafts and bank cheques
  • accepting money on term deposit
  • lending money by overdraft, installment loan, or other means
  • providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures
  • safekeeping of documents and other items in safe deposit boxes
  • sales, distribution or brokerage, with or without advice, of: insurance, unit trusts and similar financial products as a “financial supermarket”
  • cash management and treasury
  • merchant banking and private equity financing
  • traditionally, large commercial banks also underwrite bonds, and make markets in currency, interest rates, and credit-related securities, but today large commercial banks usually have an investment bank arm that is involved in the mentioned activities.

Read more about this topic:  Commercial Bank

Famous quotes containing the words role, commercial and/or banks:

    The role of the writer is not simply to arrange Being according to his own lights; he must also serve as a medium to Being and remain open to its often unfathomable dictates. This is the only way the work can transcend its creator and radiate its meaning further than the author himself can see or perceive.
    Václav Havel (b. 1936)

    I do seriously believe that if we can measure among the States the benefits resulting from the preservation of the Union, the rebellious States have the larger share. It destroyed an institution that was their destruction. It opened the way for a commercial life that, if they will only embrace it and face the light, means to them a development that shall rival the best attainments of the greatest of our States.
    Benjamin Harrison (1833–1901)

    Three million of such stones would be needed before the work was done. Three million stones of an average weight of 5,000 pounds, every stone cut precisely to fit into its destined place in the great pyramid. From the quarries they pulled the stones across the desert to the banks of the Nile. Never in the history of the world had so great a task been performed. Their faith gave them strength, and their joy gave them song.
    William Faulkner (1897–1962)