Question

Explain the agency functions of commercial banks.

Answer 1

Commercial banks provide certain services to their customers in return of some commission, these are called as agency functions. Some of them are:

1:Collection of cheques, bills and drafts .

2:Payment of interest, instalments of loans, insurance premium etc.

3:Purchase and sale of securities

4:Collection of interest, dividend etc.

5:Transfer of funds through demand drafts, mail transfer etc.

6:Purchase and sale of foreign exchange.