Commercial Applications
Commercial banks act as trustees and executors for their customers. This is a/an …………… function of Commercial bank.
- General utility
- Agency
- Marketing
- Public Relations
Answer
Agency
Reason — As an agent of its customers, a commercial bank performs several functions including (a) collecting receipts, (b) making payments, (c) buying and selling securities, and (d) acting as trustees and executors and transferring funds. Hence, acting as trustees and executors is classified under Agency Functions of commercial banks. (General utility functions include issuing letters of credit, underwriting, safe custody of valuables and providing credit information.)
Related Questions
With reference to Savings Deposit Account, which statement is correct?
- Depositors need to deposit a specific amount every month.
- There are restrictions on number of withdrawals in a week.
- Overdraft facility is available.
- There are restrictions on the number of deposits that can be made in a week.
Which of these is NOT a function of Central bank?
- Controlling credit
- Credit creation
- Providing Clearing house facility
- Maintenance of Exchange rate
A demand draft is preferable to a cheque. Justify either for or against.
Explain in brief moral suasion as a tool of credit control.