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:

• Collection and payment of cheques, bills and promissory notes on behalf of the customer, crediting or debiting the customer's account as the transaction is completed.
• Collection of dividends, interest and other income due to the customer on shares, debentures and other investments, credited directly to the customer's account.
• Payment of insurance premiums, rent, subscriptions and other periodic bills, as per the customer's standing instructions, so the customer does not have to remember and personally make each payment.
• Purchase and sale of securities (shares, bonds, government securities) on the stock exchange, on the customer's instructions, acting purely as the customer's agent (not on its own account). …