Table of ContentsDepositsLoans and AdvancesSecondary/Non-Banking FunctionsModern commercial banks perform a variety of functions. They continually turn the wheels of commerce, trade and industry. The main functions of a commercial bank are: Say no to plagiarism. Get Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayPrimary or Banking FunctionsSecondary or Non-Banking Functions.Subsidiary ActivitiesPrimary/Banking Functions: Commercial banks have two important banking functions. One is to accept deposits and the other is to advance loans. Deposits One of the main functions of a bank is to accept deposits from the public. Deposits are accepted by banks in various forms: Current account deposits: Current accounts are usually opened by businessmen who carry out a number of regular transactions with the bank, both deposits and withdrawals. No interest is paid on current deposits. Banks may even charge interest for providing this facility. Savings account deposits: Savings accounts are opened by employees and other people with lower incomes. There are no restrictions on the number and amount of deposits. Withdrawals are subject to certain restrictions. It earns interest but less than term deposits. Fixed account deposits: Fixed account deposits are term deposits. The money in this account is deposited for a certain fixed period of time varying from 15 days to several years. A high interest rate is paid on these deposits. Recurring Account Deposits: Under a recurring deposit, a specified amount is regularly deposited by the account holder, on an internal basis generally on a monthly basis. This is to form the habit of making small savings among the people. At the end of the maturity period, the account holder receives a substantial amount. The interest on this type of deposit is almost equal to that of fixed deposits. Loans and Advances Banks not only raise money but also lend to their creditworthy customers to minimize their profits. Loans and advances are provided to: Business and Commerce: Commercial banks provide short-term loans to commercial and commercial activities in the following forms: Overdraft Cash Credit Invoice Discounting Call Cash Direct Loans Loans to Agricultural Banks Giant Credit in the short term for agriculture at a lower interest rate. Loans are provided for irrigation, purchase of equipment, inputs, livestock, etc. Loans to Industries: Banks provide secured loans to small and medium industries to meet their working capital requirements. The period can range from one to five years. This can be an overdraft or cash credit. Foreign Trade Loans: Loans are provided to export and port in the form of direct loans, invoice discounting, deferred payment guarantee, etc. Here the interest rate is low. Consumer Credit/Personal Bars: Provide household credit of a limited amount to purchase consumer durable goods like televisions, refrigerators, washing machine, etc. This consumer credit is repayable in several installments. Under a 20-point program, the scope of consumer credit has been extended to also cover expenses related to marriage, funeral, etc. Miscellaneous Advances: Banks also provide advances such as packaging credits to exporters, purchased or discounted export invoices, import financing, financing. to workers.