3.Commercial banks are widely known as a source of debt financing for businesses.

They generally
provide lines of credit, term loans, and revolving loans. Traditionally, commercial banks are cash flow
lenders and view collateral as a secondary source of repayment; however, from experience, bankers'
actions do not always evidence this thinking. Focus is placed on lending to borrowers that have
durability and predictability of cash flows.

4. Commercial Banks: All commercial banks including branches of foreign banks functioning in India,
local area banks and regional rural banks are insured by the DICGC.

Cooperative Banks: All State, Central and Primary cooperative banks, also called urban cooperative
banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act
empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State /
Union Territory to wind up a cooperative bank or to supersede its committee of management and
requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a
co-operative bank without prior sanction in writing from the Reserve Bank are covered under the
Deposit Insurance System. At present all co-operative banks other than those from the States of
Meghalaya, and the Union Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli are
covered under the deposit insurance system of DICGC.

5. Commercial banks offer a wide range of corporate financial services that address the specific
needs of private enterprise. They provide deposit, loan and trading facilities but will not service
investment activities in financial markets.

Commercial banks can be described as a type of financial intermediary. In the US, the term is used to refer
to any banking organization or division that deals with the deposits and loans of business organizations.

The term commercial bank is used to differentiate these banks from investment banks, which are primarily
engaged in the financial markets. Commercial banks are also differentiated from retail banks that cater to
individual clients only. In non English-speaking countries the term commercial bank is used interchangeably
with the term trading bank.

Commercial banks play a number of roles in the financial stability and cash flow of a countries private
sector. They process payments through a variety of means including telegraphic transfer, internet banking
and electronic funds transfers. Commercial banks issue bank checks and drafts, as well as accept money on
term deposits.

Commercial banks also act as moneylenders, by way of installment loans and overdrafts. Loan options
include secured loans, unsecured loans, and mortgage loans. A secured loan is one where the borrower
provides a certain property or asset as collateral against the loan. The main condition of these loans is that if
the loan remains unpaid, the bank has the right to use the property in any way they like to realize the
outstanding amount. Unsecured loans have no collateral and therefore command higher interest rates.
There are a variety of unsecured loans available today and these include credit cars, credit facilities such as
a lines of credit, corporate bonds, and bank overdrafts.

Mortgage loans that are provided by commercial banks are similar to secured loans but are used specifically
to buy real estate property for commercial purposes. In most of these cases, the banks hold a lien on the
title to the particular property purchased with the loan. If the borrower is unable to pay the loan back, the
bank leverages this item against the loan to generate funds or recover the principal.

Commercial banks provide a number of import financial and trading documents such as letters of credit,
performance bonds, standby letters of credit, security underwriting commitments and various other types of
balance sheet guarantees. They also take responsibility for safeguarding such documents and other
valuables by providing safe deposit boxes.

Currency exchange functions and the provision of unit trusts and commercial insurance are typically
provided by the relevant departments in larger commercial banks.

6. A commercial bank will also offer a wide range of savings programs for customers. Along with
standard savings accounts, the commercial bank may also offer interest bearing checking accounts,
certificates of deposit, and other savings strategies that are considered to provide a small but consistent
return in exchange for doing business with the bank.

8. The ability of the bank to borrow money reliably and economically is crucial, which is why confidence
in the bank's creditworthiness is important to its liquidity. This means that the bank needs to maintain
adequate capitalisation and to effectively control its exposures to risk in order to continue its
operations. If creditors doubt the bank's assets are worth more than its liabilities, all demand creditors
have an incentive to demand payment immediately, a situation known as a run on the bank

OTHER SERVICES:

 Asset Products
Asset products are another service that commercial banks provide.
Called asset products because they represent the primary assets of the banks, these products
normally take the form of personal and business loans, mortgages, auto loans and credit cards.
Asset products also have a variety or rates and terms, and the interest revenue in them is the
main way that commercial banks earn profits.

Electronic Banking
 Electronic banking services provided by commercial banks include the maintenance and
expansion of 24-hour ATM networks, wire transfers and banking websites that allow consumers
and business to obtain account information, open new accounts, order checks, transfer funds
between accounts and make bill payments. The added convenience these websites offer has
proven to be a great benefit to bank customers.

Other Services
 Commercial banks also provide other services to businesses and consumers for which they
earn various fees. These include investment advisory services, corporate finance consulting,
custodial services for estates and trusts, safekeeping of securities and other valuable items, and
money transfer services

core banking

Core Banking system or CBS is one of the recent developments in the field of banking, and has proved
to be very useful. It is a facility provided by banks in which a person, having an account in one
branch, can operate his account, in another branch. This has become possible, because each account
holder is given a specialised, computerised and unique account number. In simple terms, CBS is a
type of banking, in which a person, who opens a bank account in a particular branch of a bank, will be
a customer of the bank, rather than being a customer of a particular branch. Therefore, he can
transact anywhere, at any time.

ECS is a mode of electronic funds transfer for transactions that are repetitive and periodic in nature. ECS
is used by institutions for making bulk payment of amounts towards distribution of dividend, interest,
salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues,
cess / tax collections, loan instalment repayments, periodic investments in mutual funds, etc. Essentially,
ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa using
the services of a ECS Centre at a ECS location

Letter of Credit  L/c also known as Documentary Credit is a widely used term to make payment secure
in domestic and international trade. The document is issued by a financial organization at the buyer
request. Buyer also provide the necessary instructions in preparing the document.

A key principle underlying letter of credit (L/C) is that banks deal only in documents and not in goods.
The decision to pay under a letter of credit will be based entirely on whether the documents presented
to the bank appear on their face to be in accordance with the terms and conditions of the letter of
credit.