Page 13 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes
United Personal Loan Scheme for Pensioners
United Tour & Travel Credit Scheme
United Bank of India Educational Loans

United Bank Of India educational loans are also available. Maximum loan limit for studying
in India is ` 7.5 lakhs. The loan limit for studying abroad is ` 15 lakhs.

Source: http://business.mapsofindia.com/banks-in-india/united-bank-of-india-loans.html
1.3.2 Secondary Functions

Besides the primary functions of accepting deposits and lending money, banks perform a number
of other functions which are called secondary functions. These are as follows:
(a) Issuing letters of credit, travellers’ cheques, circular notes etc;

(b) Undertaking safe custody of valuables, important documents, and securities by providing
safe deposit vaults or lockers;
(c) Providing customers with facilities of foreign exchange;

(d) Transferring money from one place to another; and from one branch to another branch of
the bank;
(e) Standing guarantee on behalf of its customers, for making payments for purchase of
goods, machinery, vehicles etc;
(f) Collecting and supplying business information;
(g) Issuing demand drafts and pay orders; and

(h) Providing reports on the credit worthiness of customers.

Self Assessment

State whether the following statements are true or false:
7. Loans may be granted only for long periods by banks.
8. Primary activity of commercial banks includes accepting deposits and lending money.

9. Difference of interest allowed to public on deposits and charged on loan is the main source
of income of banks.

1.4 Agency Functions and General Utility Functions

You have already learnt that the primary activities of commercial banks include acceptance of
deposits from the public and lending money to businessmen and other members of society.
Besides these two main activities, commercial banks also render a number of ancillary services.
These services supplement the main activities of the banks. They are essentially non-banking in
nature and broadly fall under two categories:

1. Agency services, and
2. General utility services.

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