Secondary Functions of Commercial Banks - Banking Awareness for IBPS

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We've already discussed about the Primary Functions of Commercial Banks (you can read that post here). Now we shall discuss the secondary functions of Commercial Banks.

Secondary functions of Commercial Banks

Besides the primary functions of Accepting deposits and Lending money, banks perform a number of other functions which are called secondary functions. Those functions are.....

1. Issuing letters of credit, travelers cheques, circular notes etc.
2. Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers;
3. Providing customers with facilities of foreign exchange.
4. Transferring money from one place to another; and from one branch to another branch of the bank.
5. Standing guarantee on behalf of its customers, for making payments for purchase of goods, machinery, vehicles etc.
6. Collecting and supplying business information;
7. Issuing demand drafts and pay orders; and,
8. Providing reports on the credit worthiness of customers.

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