presentation on money and banking (commercial bank)

A presentation on

Commercial Bank

Submitted to : Md. Masud RanaLecturer Department of Business AdministrationZ.H. Sikder University of

Science of Technology

“The Avengers”Name ID

1. Sarif Ahamed Sawon 1202160342. Md. Sourav Hossain 1202160373. Azaaz Munshi 1202160864. Sagor Chandra Podder 1202160175. Tithi Debnath 1202160966. Jannatul Ferdows 1202160207. Razib Hassan 1302160098. Mizanur Rahman 1202160029. Javed Kaysar 120216019

Bank

: Bank is a financial intermediary institution which deals in loans and advances”— Cairn Cross.

The objectives of a commercial

bank

1. To establish as an institution for maximizing profits and

to conduct overall economic activities.

2. To collect savings or idle money from the public at a lower rate of interests and lend these public money at a higher rate of interests.

3. To create propensity of savings amongst the people.

4. To extend services to the customers.

5. To motivate people for investing money with a view to bringing solvency in them.

6. To create money against money as an alternative for enhancing supply of

money.

7. To maintain economic stability by means of controlling money market.

8. To assist the Govt. for trade& business and socio-economic development.

The

func

tions

of

com

mer

cial b

ank

General FunctionsPublic Utility Functions

Agency Functions

Gene

ral

Func

tions

1. Receiving Deposits2. Accommodation of loans

and advances3. Creation of Loan Deposits4. Creation of medium of exchange5. Contribution in foreign

trade6. Formation of capital

7. Creation of Investment

Environment

1. R

ecei

ving

Depo

sits The first and foremost

function of commercial bank is to receive or collect deposits from the public in different forms of accounts.

2. A

ccom

mod

atio

n of

lo

ans a

nd a

dvan

ces: Commercial Bank

attaches much importance to providing loans and advances at a higher rates than the deposit rates and thus earns profits on it.

3. C

reat

ion

of

Loan

Dep

osits

The borrower may not withdraw the full amount at a time. The residual amount i.e. balance left in the account creates loan deposits.

4. C

reat

ion

of

med

ium

of e

xcha

nge:

Commercial Bank creates medium of exchange by issuing cheques.

5. Co

ntrib

ution

in

foreig

n tra

de: Commercial Bank plays

a vital role in expediting foreign exchange and foreign trade business.

6. Fo

rmat

ion o

f ca

pita

l:

Commercial Bank extends financial assistance for the formation of capital in the trade, commerce and industry in the country which expedites its economic development.

7. C

reat

ion

of

Inve

stm

ent

Envir

onm

ent: Commercial Bank plays

a significant role in creating investment environments in the country.

Publ

ic Ut

ility

Func

tions

:

1. Remittance of Money2. Help in trade and commerce3. Safe custody of

valuables 4. Act as a Referee & an Adviser5. Help people travel

abroad6. Collect utility service bills

1. R

emitt

ance

of

Mone

y:

Remittance of money to the public from one place to another is one of the functions of commercial bank.

2. H

elp

in tr

ade

and

com

mer

ce:

Commercial Bank helps expand trade and commerce.

3.Sa

fe cu

stod

y of

va

luab

les

Commercial bank introduce “locker” service.

4. A

ct a

s a R

efer

ee

& an

Adv

iser:

Commercial Bank acts as a referee and an adviser.

5. H

elp

peop

le

trave

l abr

oad:

 Commercial Bank helps customers in traveling abroad.

6. C

olle

ct u

tility

se

rvice

bills

:As a social commitment, Commercial Bank

collects utility service bills.

Agen

cy

Func

tion:

1.Collection and Payment2.Purchase and sale of

shares and securities3.Maintenance of

secrecy4.Act as a trustee5.Economic develop

and welfare activities

Collection and Payment

Commercial Bank collect and

payment cheque, insurance

premium, pension, salary etc.

on behalf of their client.

Agency Function

Purchase and sale of shares

and securitiesCommercial bank has the

responsibility of purchasing

and sale of shares and

securities of their

customer.

Agency Function

Maintenance of

secrecyMaintenance of secrecy is

one of the most important

functions of commercial

bank.

Agency Function

Act as a Trustee

Commercial Bank acts as a

trustee on behalf of the

customer.

Agency Function

Economic develop and

welfare

 Commercial Bank

contributes much for the

welfare and economic

development of the

country.

Agency Function

Loan

App

rova

ls One disadvantage of using a large, commercial bank can

easily be seen if you're trying to get a loan.

Rigi

d

Stan

dard

s Another downside of using commercial banks is that they have very rigid standards more often than not.

Secu

rity One of the biggest

concerns that a person has with their bank is whether or not their money is insured.

High

Inte

rest

ra

teCommercial bank charge high interest rate for customer loan.

Reco

mm

enda

tio n “Loan Approvals should be easier process”

Commercial Bank should follow simple rules.

Commercial Bank should provide security for customers

Commercial bank should minimize interest rates.

THE END