Question

Give two agency functions of commercial banks.

Mention two/three agency functions of a Commercial Bank.

Explain briefly five agency functions of a commercial bank.

Answer 1

1. Collecting Receipts: Banks collect consumer payments such as cheques, bills, promissory notes, and hundreds. They earn interest, dividends, and rent based on customer instructions.
2. Making Payments: Banks fulfill customer orders by paying loan instalments, interest, rent, insurance premiums, and taxes on their behalf.
3. Purchase and Sale of Securities: Banks purchase and sell securities on behalf of their customers, including shares, debentures, bonds, and government securities. 
4. Acting as Trustees and Executors: Commercial banks serve as Trustees and Executors for their customers. They also represent their customers at other banks.
5. Transfer of Funds: Banks offer remittance services, allowing consumers to move payments both domestically and internationally.