Discuss any two agency functions of Commercial Banks.

As an agent of its customers, a commercial bank performs several functions. Two important agency functions are:

1. Collecting Receipts — On behalf of customers, commercial banks collect amounts of cheques, bills of exchange, promissory notes and hundies. They also collect interest, dividend, rent and pension as per the instructions of customers and credit the amounts to their accounts. This saves customers the trouble of personally going to receive payments and ensures timely collection.

2. Making Payments — On the instructions of customers, banks make payments of various dues such as loan instalments, interest, rent, insurance premium, taxes, electricity bills, telephone bills, etc., on behalf of account holders. This is a great convenience for customers as bills are paid on time without their personal involvement, and the bank issues a record of payments made.