Q.Explain the General Utility Functions of a commercial bank.

General Utility Functions are the range of standing facilities a bank offers to any customer, distinct from acting on a specific customer instruction. …

A commercial bank's General Utility Functions include:

1. Safe deposit lockers for safekeeping valuables and important documents, for an annual rental.
2. Issue of demand drafts, traveller's cheques and gift cards, letting customers remit or carry money without physically transporting cash.
3. Letters of credit, particularly in foreign trade, where the bank guarantees payment to an exporter once agreed shipping/trade documents are presented, reducing risk for both importer and exporter.
4. Underwriting of shares and debentures, where the bank agrees, for a commission, to subscribe to any part of an issue the public does not fully take up, assuring the issuing company that the full amount will be raised.
5. Providing credit information about customers to other banks/businesses, useful in assessing creditworthiness.
6. Merchant banking and advisory services, including advice on mergers, project financing and investment.
7. ATM and digital/mobile banking services, letting customers withdraw cash, check balances and transfer funds without visiting a branch. …

Mixing in Agency Functions (like collecting a cheque or paying a bill on standing instruction) as though they were General Utility Functions — the two secondary categories are distinguished by whether the bank is acting …