Saturday, June 14, 2008

Commercial Role of Banks

Wider commercial role

However the commercial role of banks is wider than banking, and includes:

  • issue of banknotes (promissory notes issued by a banker and payable to bearer on demand)
  • processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means
  • issuing bank drafts and bank cheques
  • accepting money on term deposit
  • lending money by way of overdraft, installment loan or otherwise
  • providing documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures
  • safekeeping of documents and other items in safe deposit boxes
  • currency exchange
  • sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a 'financial supermarket'

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