Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 12 Functions of Commercial Banks Notes
→ In these days banks compete with each other to attract customers by adding facilities to these deposit accounts.
→ Current Deposits account is suitable for business institutions.
→ Fixed deposit period can be 1 month to 10 years. Fixed deposit is also called Term deposit.
→ Overdraft is a credit facility extended mostly to current account holding business community customers.
→ Loan is provided by banks to students for studying undergraduate or professional courses.
→ Customers pledge their gold jewels and obtain loans from banks.
→ According to Negotiable Instruments Act 1881, “cheque is a’ bill of exchange drawn on a specified banker payable on demand”.
→ Banks act as executors of will of the customers and implement their will after their death.
→ Valuable documents, jewels, etc. can be kept safely in a vault provided by bank for a rent. These vaults room is called ‘Strong Room”.
→ Competition in the banking industry has reduced their profits.
→ A commercial bank or its subsidiary merchant bank may offer services like project counselling, underwriting, etc. required for starting a company. It is called merchant banking.
→ Retail Banking refers to mass market banking which reaches out to large number of individual end customers.
→ Housing finance is provided against, the security of immovable property of land and buildings.
→ Mutual Fund is a financial intermediary that pools the savings of investors for collective investment in diversified portfolio securities in the capital market and money market.
→ Factoring is a continuing arrangement between a financial intermediary (factor) and a business concern (client) whereby the factor purchase the clients’ accounts receivable.
→ ECS was launched by the RBI in 1995.
→ ‘CORE’ stands for ‘Centralized Online Real time Exchange’.
→ Internet banking refers to performing banking operations through internet, using computers and mobile phone.
→ IMPS was launched by the National Payments Corporation of India in November 2010.
→ Debit Cards is more useful in purchase of goods and services anywhere in India, if the shop maintains a swiping machine facility.
→ Banks transfer funds from surplus areas and make them available in scarce districts or areas for the formation and operation of business institutions.
→ Banks have established customer relationship with all public and business institutions through the network of branches.
→’ Banks open foreign branches or establish correspondent relationship with banks in foreign countries to help exporters.