Exercises · Q11
Q.Distinguish between the agency functions and general utility services of a commercial bank.
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Start your 14-day free trial to unlock the full solution →| Basis | Agency functions | General utility services |
|---|---|---|
| Who it's for | A specific customer, on that customer's own instruction | The public generally, whether or not they hold an account |
| Bank's role | Acts as the customer's agent | Acts as a service provider to any member of the public |
| Examples | Collecting cheques/dividends, transferring funds, buying/selling securities, acting as trustee, paying standing instructions | Safe deposit lockers, letters of credit and travellers' cheques, underwriting share issues, trade/credit information, foreign exchange dealing |
| Basis of liability | Bank is answerable to that one customer for correctly carrying out the instruction | Bank offers the service on standard terms to whoever uses it |
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