Question

State the utility Function of banks

Answer 1

Utility functions of the Banks :
(1) Providing safe deposit vaults to the customers for keeping their valuables like gold ornaments, securities, valuable documents, etc. in safe custody.
(2) Issuing Letter of Credit to the clients for making payment in international trade transactions.
(3) Dealing in foreign exchange and assisting in the Completion of formalities in foreign trade transactions.
(4) Providing the facility of withdrawing cash anytime through ATM (Automated Teller Machine). Issuing credit cards to their customers. Issuing debit cards to their customers for buying goods and services.
(5) Acting as a referee for the financial position and business standing of their customers Bank also draft financial position status report by considering frequency of banking transactions of its clients.
(6) Underwriting for shares and debentures issued by companies providing consultancy services in the matter of issuing of shares, taxation, etc, to the companies.
(7) Issuing travelers’ cheques to the tourists.
(8) Performing functions like RTGS (Real Time Gross Settlement), a system generally employed for large value interbank funds transfer, NEFT (National Electronic Funds
Transfer), NACH (National Automated Clearing House), and ECS (Electronic Clearing Service).