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Questions
Write about any three general utility functions of Commercial Bank.
Give two general utility functions of commercial banks.
Solution
- Issuing credit instruments: Customers receive letters of credit, drafts, and travellers' checks from banks. People can transfer money from one location to another without having to carry cash.
- Underwriting capital issues: Companies' shares and debentures are underwritten by banks.
- Valuables are kept safe: For safekeeping, banks accept jewellery, documents, and other valuables. They have safe deposit vaults where these items can be kept.
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