Primary Functions and Secondary Functions of Commercial Banks

Primary Functions of Commercial Banks:

• Deposits from public in savings account, current account, fixed deposits, recurring deposits, deposits from NRIs.
• Lending money to the public for their various purposes like personal loans, housing loans, vehicular loans, etc.
• Providing overdraft facility to the credit card holders and under any schemes by the government like in Pradhan Mantri Jan Dhan Yojana Scheme.

Secondary Functions or Para banking Activities of the Commercial Banks:

• Issue debit, credit and prepaid cards.
• Issue Letter of Credit and Bank Guarantee.
• Collect amounts through cheques and other instruments.
• Sale and purchase of shares and debentures.
• Act as investment bank for Initial Public Offering (IPO) by a private company.
• Help in anti-money laundering through KYC process.
• Become an intermediary between its customers and other institutions, like payment of insurance premium, payment of various bills, direct benefit transfer (DBT) scheme of government, etc.
• Provide facilities such as Electronic Clearing Service, transfer of funds domestically and internationally, locker facilities, foreign exchange, etc.

With the advances in technology, the commercial banks are also making advancement and providing the citizens of India with the best facilities and they are also easing the lives of people by providing many good facilities.