Commerce · Class 11 Commerce
Ch 12Functions of Commercial Banks — Class 11 Commerce, concept-first.
The two previous chapters studied the Reserve Bank of India, the apex regulator, and the different types of banks operating in India. This chapter turns to the actual day-to-day work an ordinary commercial bank does for its customers — the specific functions that make a bank useful to households, traders and industry a…
Key concepts
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Meaning and Classification of Bank Functions
A commercial bank's functions split into Primary Functions (accepting deposits and lending — the core of banking) and Secondary Functions, further divided into Agency Functions (acting on a customer's specific instructio…
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Classification of Bank Functions
The two previous chapters studied the Reserve Bank of India, the apex regulator, and the different types of banks operating in India.
Primary Functions — Accepting Deposits
Accepting deposits from the public is the most basic function of a commercial bank — it is the raw material a bank uses for all its other activities.
Primary Functions — Lending Money
Accepting deposits is only half of a bank's core function — a bank then lends out a large part of those deposits (keeping a prudent reserve, per RBI's cash reserve and liquidity rules) to earn interes…
Secondary Functions — Agency Functions
Beyond accepting deposits and lending, a commercial bank also acts as an agent for its customers, carrying out specific instructions on their behalf in return for a fee/commission:
Secondary Functions — General Utility Functions
A bank also offers a range of general utility services available to any customer as a facility, rather than as an agent acting on a specific customer instruction:
Exercises
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Long Answer Questions
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Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1In India RuPay card services were launched in : (a) March 2014 (b) March 2013 (c) March 2010 (d) March 2012Preview
- Q2Briefly explain the term credit card.Preview
- Q3What is pledge ?Preview
- Q4What do you mean by ATM?Preview
- Q5(a) Explain in detail the granting of different kinds of loans by the commercial banks. OR (b) Explain the procedure for Registration of a P…Preview
- Q6The primary functions of a Commercial Bank does not include ______. (a) Transfer of Funds (b) Accepting Deposits (c) Creation of Credit (d)…Preview
- Q7Minimum how much amount can be transferred through RTGS ? (a) Rs. 2 Lakhs (b) Any amount (c) Rs. 5 Lakhs (d) Rs. 50,000Preview
- Q8What is Clean Loan ?Preview
- Q9Explain National Electronic Funds Transfer.Preview
- Q10What is Pledge ?Preview
- Q11Write a short note on Debit Card.Preview
- Q12Minimum how much amount can be transferred through RTGS? (a) Any amount (b) 50,000 (c) 2 lakh (d) 5 lakhPreview
- Q13What is Pledge?Preview
More questions
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- Q1Which type of bank deposit account is best suited to a business needing to make frequent deposits and withdrawals, and usually earns little…Free
- Q2Under Cash Credit, interest is charged on: (a) the full sanctioned limit, always (b) only the amount actually withdrawn/outstanding (c) a fi…Preview
- Q3A bank issuing a Letter of Credit on behalf of an importer, guaranteeing payment to the exporter once trade documents are presented, is perf…Preview