Functions of Commercial Banks Quiz

Overdraft Facilities = Allows drawing over the account limit Fixed Deposits = Time deposits that cannot be withdrawn early Interest on credit balance = Allowed on this account Advancing Loans = Making loans to all types of persons

Encourages thrift or savings = Fixed Deposits Making loans against personal security = Advancing Loans Allowing withdrawal over account limit = Overdraft Facilities Attracts depositors for safety and interest = Fixed Deposits

Withdrawal restrictions = Fixed Deposits Higher interest rate for borrowing against account = Fixed Deposits Encourages specified amount withdrawal = Overdraft Facilities Accepted between three months and ten years = Fixed Deposits

<p>Primary function of making loans = Advancing Loans Primary function of allowing overdrafts = Overdraft Facilities Primary function of attracting depositors with interest = Fixed Deposits Makes loans to businessmen and entrepreneurs = Advancing Loans</p> Signup and view all the answers

<p>Current Deposits = Demand deposits with no interest allowed Savings Deposits = Meant for professional men and middle class people Fixed Deposits = Deposits that have a restriction on withdrawal amount Term Deposits = Deposits made by businessmen and industrialists</p> Signup and view all the answers

<p>Acceptance of Deposits = Main function involving three types of deposits Advancing Loans = Function related to providing financial support Creation of Credit = Function that helps in expanding financial activities Promote Cheques Facilities = Function facilitating payment transfers through cheques</p> Signup and view all the answers

<p>Can be withdrawn at any time with no interest = Current Deposits Meant for small savings with withdrawal restrictions = Savings Deposits Requires leaving a minimum balance with the bank = Current Deposits Popular among businessmen and industrialists = Current Deposits</p> Signup and view all the answers

<p>Current Deposits = Businessmen and industrialists Savings Deposits = Professional men and middle class people Fixed Deposits = Individuals looking to deposit a fixed amount for a specific term Term Deposits = People aiming to save small amounts regularly</p> Signup and view all the answers

<p>Making large payments through banks = Acceptance of Deposits Providing financial support to customers = Advancing Loans Expanding financial activities of the bank = Creation of Credit Facilitating payment transfers using cheques = Promote Cheques Facilities</p> Signup and view all the answers

<p>Can be opened without any introduction = Savings Deposits Restrictions on maximum withdrawal limits = Savings Deposits Requirement to keep a certain undrawn balance with the bank = Current Deposits Use of cheques for withdrawal purposes = Current Deposits</p> Signup and view all the answers

<p>Agency Services = Includes collection and payment of credit instruments like cheques and bills of exchange General Utility Services = Provides facilities to remit funds from one place to another for customers Purchase and Sale of Securities = Involves buying and selling securities like shares, stocks, bonds, debentures on behalf of customers Income-tax Consultancy = Offers assistance in preparing income tax returns and obtaining refunds for customers</p> Signup and view all the answers

<p>Collection and Payment of Credit Instruments = Involves collecting and paying cheques, bills of exchange, and promissory notes on behalf of customers Collection of Dividends on Shares = Involves collecting dividends and interest on shares and debentures for customers Purchase and Sale of Securities = Involves buying and selling shares, stocks, bonds, debentures for customers Income-tax Consultancy = Includes preparing income tax returns and assisting in getting income tax refunds for customers</p> Signup and view all the answers

<p>Cheques = Primary method for settling debts instead of using cash Bills of Exchange = Credit instruments collected and paid by banks on behalf of customers Shares and Debentures = Securities bought and sold by banks for customers Promissory Notes = Credit instruments handled by banks during collection and payment processes</p> Signup and view all the answers

<p>Agency Services = Of immense value to the people at large General Utility Services = Facilitates remittance of funds from one place to another for customers Purchase and Sale of Securities = Helps customers in trading various financial instruments Income-tax Consultancy = Assists customers in tax return preparation and refund procedures</p> Signup and view all the answers

<p>Agency Services = Performing functions on behalf of customers for convenience General Utility Services = Enhancing accessibility by providing fund remittance services across branches Income-tax Consultancy = Supporting customers in tax matters for financial planning Collection of Dividends on Shares = Ensuring dividends are collected and credited to customer accounts accurately</p> Signup and view all the answers

<p>Shares = Represent ownership in a company and offer dividend payouts Bonds = Debt securities issued by corporations or governments for borrowing purposes Debentures = Long-term debt instruments with fixed interest rates issued by corporations Stocks = Equity investments representing partial ownership in a company</p> Signup and view all the answers

<p>Locker Facility = Facility for safekeeping valuables like gold, silver, and important documents Traveler’s Cheques and Credit Cards = Issued to customers to facilitate travel without carrying large amounts of cash Letter of Credit = Certifies the creditworthiness of customers and is useful in foreign trade Collection of Statistics = Involves gathering information on trade, commerce, industries, and publishing journals on economic matters</p> Signup and view all the answers

<p>Execution of Standing Orders = Executing periodic payments like subscriptions, rents, insurance premiums on behalf of customers Acts as Trustee and Executor = Preserving and executing customers' wills after their death General Utility Services = Providing various services like locker facilities, traveler's cheques, credit cards, and letters of credit Credit Creation = Important function involving the creation of credit by commercial banks</p> Signup and view all the answers

<p>Providing Locker Facility = Safe custody of valuables for customers Issuing Traveler’s Cheques and Credit Cards = Helping customers travel without carrying cash Issuing Letter of Credit = Certifying creditworthiness for customers in foreign trade Collecting Statistics = Gathering important information on trade, commerce, industries, money, and banking</p> Signup and view all the answers

<p>Locker Facility = Safekeeping valuables like shares and debentures Traveler’s Cheques and Credit Cards = Reducing risk of theft or loss of money during travels Letter of Credit = Useful in certifying creditworthiness for foreign trade transactions Collection of Statistics = Provides valuable journals and bulletins on economic and financial matters</p> Signup and view all the answers

<p>Execution of Standing Orders = Ensures timely payment execution for customers' periodic expenses Acts as Trustee and Executor = Preserves and executes customers' wills post their demise General Utility Services = Diverse services like locker facilities, traveler's cheques, credit cards, and letters of credit for customer convenience Credit Creation = Key function involving the generation of credit by commercial banks</p> Signup and view all the answers

<p>Money at call and short notice = Used for 'Window Dressing' in banks Bills Discounted = Consist of short term bills like bills of exchange and treasury bills Investments = Includes profit yielding assets like government and non-government securities Loans and Advances = Most profitable asset to the bank but least liquid</p> Signup and view all the answers

<p>Bills for Collection = Appears on both sides of the balance sheet Acceptances and Endorsements = Appears as a contra item on both sides of the balance sheet Money at call and short notice = Constitutes the 'third line of defense' to the bank Loans and Advances = Very survival of the bank depends on the income earned from advancing loans</p> Signup and view all the answers

<p>Window Dressing = Desirable adjustments in the balance sheet Rediscounting bills = Allows banks to easily obtain additional funds Profit yielding assets = Part of investments in government and non-government securities Contra item on balance sheet = Seen in Acceptances and Endorsements</p> Signup and view all the answers

<p>Investments = Yields profit but may not be very liquid Loans and Advances = Highly profitable but least liquid asset Bills Discounted = Highly negotiable and self-liquidating bills Money at call and short notice = Used for desirable adjustments but not very liquid</p> Signup and view all the answers

<p>Bills for Collection = Appears on both sides of balance sheet for banks Acceptances and Endorsements = Acts as a contra item in bank balance sheets Investments = Represents total profit yielding assets of the bank Loans and Advances = Critical for earning income but may lack liquidity</p> Signup and view all the answers

<p>Money at call and short notice = 'Third line of defense' for banks Bills Discounted = Investment in short term highly negotiable bills Acceptances and Endorsements = Appears as a contra item in balance sheets Window Dressing = 'Desirable adjustments' made by using certain assets</p> Signup and view all the answers