Question

Explain the secondary or subsidiary functions of commercial bank.

Answer 1

The secondary functions of a commercial bank are as follows:

Bank as an Agent

A bank acts as an agent to its customers for various services like:

• Collecting bills, draft, cheques, etc.
• Paying the insurance premium, rent, loan installments, etc.
• Working as a representative of a customer for purchasing or redeeming securities, etc. in the stock exchange.
• Acting as an executor, administrator, or trustee of the estate of a customer
• Also, preparing income tax returns, claiming tax refunds, etc.

General Utility Services

There are several general utility services that commercial banks offer like:

• Issuing traveler cheques
• Offering locker facilities for keeping valuables in safe custody
• Also, issuing debit cards and credit cards, etc.