Modern commercial banks are doing lots of thing and creating new new products for its customers to satisfy their needs. The following services offered and provided by modern commercial banks to customers or public:
1. Accepting Deposit
Accepting deposit from savers or account holders is the primary function
of bank. Banks accept deposit from those who can save money, but cannot
utilize in profitable sectors. People prefer to deposit their savings
in a bank because by doing so, they earn interest.
2. Giving Loans
Banks are profit oriented business organizations. So they have to
advance loan to public and generate interest from them as profit. After
keeping certain cash reserves, banks provide short-term, medium-term and
long-term loans to needy borrowers.
3. Bill Of Exchange Discounting
Bill of exchange is a negotiable instrument, which is accepted by the
debtor, drawn upon him/her by the creditor and agrees to pay the amount
mentioned on maturity. Discounting bill of exchange is another function
of modern commercial bank. Under this, banks purchase bill of exchange
from holder in discount after making some marginal deduction in the form
of commission. The banks pay the deducted value to the holders when
traders discount it into bank.
4. Payment of Cheques
Banks provide cheque pads to the account holders. Account holders can
draw cheque upon bank to pay money. Banks pay for cheques of customers
after formal verification and official procedures. .
5. Remittance
Remittance is a system, through which cash fund is transferred from one
place to another. Banks provide the facilities of remittance to the
customers and earn some service charge.
6. Collection And Payment Of Credit Instruments
In modern business, different types of credit instruments such as bill
of exchange, promissory notes, cheques etc. are used. Banks deal with
such instruments. Modern banks collect and pay different types of credit
instruments as the representative of the customers.
7. Foreign Currency Exchange
Banks deal with foreign currencies. As the requirement of customers,
banks exchange foreign currencies with local currencies, which is
essential to settle down the dues in the international trade.
8. Consultancy
Modern commercial banks are large organizations. They can expand their
function to consultancy business. In this function, banks hire
financial, legal and market experts, who provide advices to customers in
regarding investment, industry, trade, income, tax etc.
9. Bank Guarantee
Customers are provided the facility of bank guarantee by modern
commercial banks. When customers have to deposit certain fund in
governmental offices or courts for specific purpose, bank can present
itself as the guarantee for the customer, instead of depositing fund by
customers.