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    Commercial Bank PDF

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    Commercial banks are financial institutions that accept deposits, provide business loans, and offer investment products. They play an important role in meeting the short and medium-term financial needs of industries. Commercial banks are categorized as public sector banks, private sector banks, or foreign banks depending on their ownership and operation. The primary functions of commercial banks include accepting deposits, collecting interest, paying expenses, and transferring funds.

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    Commercial Bank PDF

    Uploaded by

    Tanha
    388 views13 pages
    Commercial banks are financial institutions that accept deposits, provide business loans, and offer investment products. They play an important role in meeting the short and medium-term financial needs of industries. Commercial banks are categorized as public sector banks, private sector banks, or foreign banks depending on their ownership and operation. The primary functions of commercial banks include accepting deposits, collecting interest, paying expenses, and transferring funds.

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    Commercial banks are financial institutions that accept deposits, provide business loans, and offer investment products. They play an important role in meeting the short and medium-term financial needs of industries. Commercial banks are categorized as public sector banks, private sector banks, or foreign banks depending on their ownership and operation. The primary functions of commercial banks include accepting deposits, collecting interest, paying expenses, and transferring funds.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    388 views13 pages

    Commercial Bank PDF

    Uploaded by

    Tanha
    Commercial banks are financial institutions that accept deposits, provide business loans, and offer investment products. They play an important role in meeting the short and medium-term financial needs of industries. Commercial banks are categorized as public sector banks, private sector banks, or foreign banks depending on their ownership and operation. The primary functions of commercial banks include accepting deposits, collecting interest, paying expenses, and transferring funds.

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    of 13

    Commercial Bank

    Md. Shariful Haque, PhD


    Associate Professor, DEB
    IIUC
    Commercial Bank

    Commercial bank Definition: A Commercial bank is


    a type of Bank / Financial Institution that provides
    services such as accepting deposits, making
    business loans, and offering basic investment
    products.
    CBS-Functions & Types

    Commercial banks are the most important components of


    the whole banking system.

    A commercial bank is a profit-based financial institution that


    grants loans, accepts deposits, and offers other financial
    services, such as overdraft facilities and electronic transfer
    of funds.
    CBS-Functions & Types
    Commercial banks play a significant role in fulfilling the short-term
    and medium- term financial requirements of industries. They do
    not provide, long-term credit, so that liquidity of assets should be
    maintained. The funds of commercial banks belong to the general
    public and are withdrawn at a short notice; therefore, commercial
    banks prefers to provide credit for a short period of time backed
    by tangible and easily marketable securities. Commercial banks,
    while providing loans to businesses, consider various factors, such
    as nature and size of business, financial status and profitability of
    the business, and its ability to repay loans.
    CBS-Functions & Types
    Commercial banks are of three types, which
    are as follows:
    (a)Public Sector Banks
    (b)Private Sector Banks
    (c)Foreign Banks
    CBS-Functions & Types
    Public Sector Banks:
    Refer to a type of commercial banks that are nationalized by
    the government of a country. In public sector banks, the
    major stake is held by the government. In India, public
    sector banks operate under the guidelines of Reserve Bank
    of India (RBI), which is the central bank. Some of the Indian
    public sector banks are State Bank of India (SBI), Corporation
    Bank, Bank of Baroda, Dena Bank, and Punjab National Bank.
    CBS-Functions & Types
    Private Sector Banks:
    Refer to a kind of commercial banks in which major part of
    share capital is held by private businesses and individuals.
    These banks are registered as companies with limited
    liability. Some of the Indian private sector banks are Vysya
    Bank, Industrial Credit and Investment Corporation of India
    (ICICI) Bank, and Housing Development Finance Corporation
    (HDFC) Bank.
    CBS-Functions & Types
    Foreign Banks:
    Refer to commercial banks that are headquartered in a
    foreign country, but operate branches in different countries.
    Some of the foreign banks operating in India are Hong Kong
    and Shanghai Banking Corporation (HSBC), Citibank,
    American Express Bank, Standard & Chartered Bank, and
    Grindlay’s Bank. In India, since financial reforms of 1991,
    there is a rapid increase in the number of foreign banks.
    Commercial banks mark significant importance in the
    economic development of a country as well as serving the
    financial requirements of the general public.
    CBS-Functions & Types
    Functions of Commercial Banks:
    Commercial banks are institutions that conduct business
    for profit motive by accepting public deposits for various
    investment purposes.
    The functions of commercial banks are broadly classified
    into primary functions and secondary functions, which are
    shown in Figure-1:
    CBS-Functions & Types
    CBS-Functions & Types

    The functions of commercial banks (as shown in


    Figure-1) are discussed as follows:
    (a) Primary Functions
    (b) Secondary Functions
    (c) Other Functions
    CBS-Functions & Types

    Refer to the basic functions of commercial banks


    that include the following:
    (i) Accepting Deposits
    (ii) Collecting Income
    (iii)Paying Expenses
    (iv) Transferring Funds
    CBS-Functions & Types

    Please visit the following sites:


    https://www.economicsdiscussion.net/banks/commercial-
    bank-definition-function-credit-creation-and-significances/

    https://www.islamibankbd.com/prodServices/prodServices
    .php

    http://bankinfobd.com/banks

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