The commercial bank is a type of bank that offers services including accepting deposits, making business loans, and offering basic investment products. It is operated as a business. The commercial banks offer good benefits for organizations and businesses to meet their unique needs.
Whether it is a small or large business, having an account in a commercial bank becomes a must for everyone to maintain financial statements. The commercial banks offer an array of benefits to the customers to make their experience good with a bank. When it comes to commercial banks, people often get confused about the role and functionality of the commercial bank. It is a must to know everything about a bank before register your bank account with the respective bank to make a better experience.
What is a commercial bank?
A Commercial Bank is a type of financial institution that offers loans, accepts deposits, and provides different financial products to the clients including saving accounts and certification of deposit and more. The commercial bank has similar responsibilities as compared to other financial institutions. They make funds by the interest of loans and deliver services to the clients.
What are the major functions of commercial banks?
1. Accepting deposits:
The commercial banks like Stanbic bank Zimbabwe accept deposit from the clients. Accepting deposits is one of the major functions of the banks. They charge a commission for keeping money for people. Now, the banks start offering the amount of interest to the depositors who keep their money with the bank. The commercial bank mainly accepts three types of deposits including savings deposit, current account deposit and fixed deposits for the clients.
2. Credit creation:
The credit creation is also an important function of a commercial bank. The bank allows customers to windrow the cash from the bank according to their personal needs by using their checkbook. They keep the funds available in the bank for the users to provide instant cash from their accounts. They create a deposit account for the borrowers, which allow them to get the money in cash by using their checkbook.
3. Credit facilities:
Providing excellent credit facilities is also a major task for commercial banks. The commercial banks are responsible for generating different types of loans for the customers to deliver satisfying financial support to the clients. The bank offers short term and long term loans to the clients on a specific interest rate. It allows people to get instant financial help directly to the bank, which they can return in small installments.
4. Fund security:
Along with providing advanced banking features like Online Banking to the clients, the bank also plays a responsibility to keep the funds secure for the clients. They offer a small amount of interest to the depositors along with offering excellent security for the funds. It ensures everyone that their money is in secure hands, which they can windrow whenever they need to fulfill their financial needs and requirements.
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