Answer:
Any institution which accepts deposits from the public withdraw able by cheques and advances loans of various sorts is called a bank.
Commercial Bank: It is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit.
Functions of Commercial Banks.
(a) It accepts/collects the deposits from its customers. It can be in the form of saving account deposits, current account deposits, fixed term deposits.
(b) It gives loans and advances.
(c) It provides overdraft facility.
(d) It discounts bills of exchange.
(e) It provides agency functions like transfer of funds, collection of funds, payments of various items, purchase and sale of shares and securities, acts as trustee, etc.
(f) It finances foreign trade.
(g) It perform general utility services like issue of traveler?s cheques and gift cheques, locker facility, etc.
(h) It creates credit through loans.
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