Question

Answer the following question.
Explain in brief the agency function of commercial bank.

Answer 1

Commercial bank is a financial institution that\performs agency function for its customers by providing them the following basic facilities at an agreed bank charge depending on the nature of the activity:

• They collect bills, draft, cheques, etc.
• They pay the insurance premium, rent, loan installments, etc.
• They work as a representative of a customer for purchasing or redeeming different types of securities in the stock exchange.
• They also prepare income tax returns, claim tax refunds, etc. on behalf of the customers.