A commercial bank is a type of financial institution by law to accept deposits from businesses and individuals and lend money to them, offers checking account services, makes business, personal and mortgage loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses. A commercial bank is where most people do their banking because A commercial bank is almost certainly the type of bank you think of when you think about a bank, as opposed to an investment bank.
Banks are regulated by federal and state laws depending on how they are organized and the services they provide. Commercial banks are also monitored through the Federal Reserve System.
A commercial bank is a financial organization which performs the features of accepting deposits from the majority and giving loans for funding with the intention of earning a profit.
In reality, commercial banks, as their name suggests, ax-earnings-searching for establishments, i.e., they do banking business to gain earnings.
They generally finance trade and commerce with brief-time period loans. They price high fee of interest from the debtors but pay a good deal with much less charge of interest to their depositors with the end result that the distinction between the 2 prices of interest becomes the main supply of earnings of the banks. maximum of the Indian joint stock Banks is industrial Banks which includes Punjab national bank, Allahabad Bank, Canara Bank, Andhra Bank, Bank of Baroda, etc.
AIMS AND OBJECTIVES :
The project aims to understand how a commercial bank works.What functions a commercial bank carries out in their day to day working environment.
- To visit a local commercial bank
- To understand their workflow
- To understand how the work is distributed among the employees of a commercial bank
- To learn how a commercial bank organizes their functions
- To learn the benefits appointed
- To find out what types of accounts they provide for businesses and individuals
- To learn about cheques, withdrawing, and depositing limits of individual in corporate banks
METHOD AND METHODOLOGY :
In this project, we are going to learn about a corporate bank works by collecting data by actually visiting a branch of a corporate bank in town.
Primary data is data gathered for the first time by the researcher. It is the raw form of data and thoroughly studied and hence a helpful tool for secondary data. Here the method used for collection of primary data is visit to actual place.
I will be using more of an actual visit to the corporate bank branch to collect the data for this project.The primary source of data is through visiting the corporate bank and observing their work environment, learning their work, Types of things their employees do and observing number of services provided by them
DETAIL REPORT OF PROJECT :
Refer to the basic functions of commercial banks that include the following:
Implies that commercial banks are mainly dependent on public deposits.
There are two types of deposits, which are discussed as follows:
(1) Demand Deposits:
Refer to kind of deposits that can be easily withdrawn by individuals without any prior notice to the bank. In other words, the owners of these deposits are allowed to withdraw money anytime by simply writing a check. These deposits are the part of money supply as they are used as a means for the payment of goods and services as well as debts. Receiving these deposits is the main function of commercial banks.
(2) Time Deposits:
Refer to deposits that are for certain period of time. Banks pay higher interest on time deposits. These deposits can be withdrawn only after a specific time period is completed by providing a written notice to the bank.
(3) Advancing Loans:
Refers to one of the important functions of commercial banks. The public deposits are used by commercial banks for the purpose of granting loans to individuals and businesses. Commercial banks grant loans in the form of overdraft, cash credit, and discounting bills of exchange.
Refer to crucial functions of commercial banks. The secondary functions can be classified into three heads, namely, agency functions, general utility functions, and other functions.
These functions are explained as follows:
(1) Agency Functions:
Implies that commercial banks act as agents of customers by performing various functions, which are as follows:
(i) Collecting Checks:
Refer to one of the important functions of commercial banks. The banks collect checks and bills of exchange on the behalf of their customers through clearing house facilities provided by the central bank.
(ii) Collecting Income:
Constitute another major function of commercial banks. Commercial banks collect dividends, pension, salaries, rents, and interests on investments on behalf of their customers. A credit voucher is sent to customers for information when any income is collected by the bank.
(iii) Paying Expenses:
Implies that commercial banks make the payments of various obligations of customers, such as telephone bills, insurance premium, school fees, and rents. Similar to credit voucher, a debit voucher is sent to customers for information when expenses are paid by the bank.
BIBLIOGRAPHY / REFERENCE :
- Times of India Newspaper.