The agency functions of commercial banks: Earlier we have learned about the primary functions of commercial banks, now we will know about the Agency Functions of Commercial Banks. The commercial bank provides different kinds of service such as general service, developmental services, agency services, and other services. So agency services are one kind of them. Now go ahead and read more about agency functions of commercial banks.
Agency Functions of Commercial Banks
Agency functions have been classified by difference services. In order to meet the current growing demand, commercial banks perform their functions by establishing a branch at home and abroad. So these functions would be required to run their banking business. After all, you should learn what those agency services. As well as you can learn the best Characteristics of Commercial Bank. Now, Go ahead following the step by step.
Collection and Payment of Money Agency Function
Commercial banks make different transactions on the behalf of the clientele. This bank repays the bills payable on behalf of the client, pay interest, loan interest, insurance premium, rent, etc. Again, on behalf of this client, earning interest, investment, payable bills, checks, pension, etc. for the salary investing.
Sale and Purchase of Share and Securities Agency Function
This bank purchases shares and securities of different companies as per the client’s orders. Once again, the bank’s clientele sells shares in the market at its stated prices. However, in both cases, this bank earns a certain amount of commission from the client. So it’s called sale and purchase of share and securities agency functions of commercial banks.
Under Writing Agency Function
Underwrite banking of the commercial bank is like an investment bank. The commercial banks are also responsible for the sale of new companies or existing companies. This makes it easy for companies to collect capital. In this case, the commercial banks get a certain amount of compensation and the fee is received from those companies. As a result, underwriting agency function is the best service of commercial banks.
Maintaining Secrecy Agency Function
Maintaining secrecy is one of the best agency functions of commercial banks. Protecting the privacy of the client’s account is one of the important functions of the bank. The commercial bank does not disclose any information regarding the client’s account to any person other than a client or a responsible representative. Only famous for the privacy of the accounts is famous for many prominent bank deposits in the world. The responsibility of any general bank to protect the privacy of the normal transaction is the essential responsibility of the bank.
Counseling Agency Function
Commercial banks provide advice on various issues to their customers. The businessman offers much valuable advice on the matters related to their business, income tax, investment. This bank offers various advice on the prospects of entrepreneurship and trade in the country, which brings benefits to different groups. As well as the entrepreneur would be benefited through counseling agency functions of commercial banks.
Agency in Trade & Commerce Function
This is the last agency functions of commercial banks. It’s agency in trade & commerce function. The Commercial banks represent the business or client’s business trade and as a representative, this bank helps keep the business dynamic by settling various types of commercial transactions of the customer.
In the above discussion, it is seen that commercial banks are continuing their activities as a medium of the present economy. Presently, the demand for financial transactions has increased greatly due to the globalization of trade, and the activities of the commercial banks have greatly increased in order to facilitate these transactions.