Question

The commercial banks do not perform any agency function.

• A. True
• B. False

Answer 1

The correct option is B False

False.

A commercial bank is a financial institution which accepts deposit from people and offers secured loan for the purpose of consumption or investment by charging specified rate of interest on it. Commercial banks also perform agency function for its customers by providing them the following basic facilities:

• 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.