BANKING AFFAIRS

Detailed explanation-1: -If we look at Sec 5(b) of the Banking Regulation Act, we would notice that the bank’s business is accepting deposits for lending. Thus, the relationship arising out of these two main activities is known as General Relationship.

Detailed explanation-2: -A commercial bank accepts deposits in the form of current, saving and fixed deposits. It collects the surplus balance of the individuals and firms and finances the temporary needs of commercial transactions. The first task is, therefore, the collecting of the savings of the public.

Detailed explanation-3: -Functions of Commercial Banks:-Primary functions include accepting deposits, granting loans, advances, cash, credit, overdraft and discounting of bills.-Secondary functions include issuing letter of credit, undertaking safe custody of valuables, providing consumer finance, educational loans, etc.

Detailed explanation-4: -Answer: The primary functions of a commercial bank are accepting deposits and also lending funds. Deposits are savings, current, or time deposits. Also, a commercial bank lends funds to its customers in the form of loans and advances, cash credit, overdraft and discounting of bills, etc.