Discuss the major products & services provided and rendered by commercial banks? NRB, NBL, RBB, ADBL & Private Bank
Ans : 1. Acceptance of Deposits;
a) Deposits involve deposits by customers in various schemes for pre-defined periods. b) Deposits such as term deposits, savings bank deposits, current account deposits, recurring deposit, saving-cum-term deposit and various others innovative products
2. Granting of Advances:
a) Advances constitute a major source of lending by commercial banks
b) The type of advances such as cash credit, overdrafts, purchase/ discounting of bills, term loans, etc.
3. Remittances:
a) Remittances involve transfer of funds from one place to another.
b) Drafts are issued by one branch of the Bank and are payable by another branch of the Bank The drafts are handed over to the applicant c) Electronic Funds Transfer is the mode of remittance which facilitates almost instantaneous transfer of funds between two centers electronically.
4. Collections:
a) Collections involve collecting proceeds on be of the customer
b) Customers can lodge various instruments such as cheques, drafts, pay orders, travelers cheques, dividend and interest warrant tax refund orders, etc. drawn in their favor and the trade bills drawn by them on their buyers with their Bank for collection of the amount from the drawee (the bank or the drawee of bill)
c) Banks also collect instruments issued by post offices, like national savings certificates, postal orders, etc.
5. Clearing:
a) Clearing involves collecting instruments on behalf of customers of bank b) The instruments mentioned above may be payable locally or at an outside center.
c) Clearing house settles the inter-Bank transactions among the local participating member banks Generally, post offices are also members of the house.
d) There may be separate clearing houses for MICR (Magnetic Ink Character Recognition) and non-MICR instruments.
6. Letters of Credit and Guarantees: A Letter of Credit (LC) is an undertaking by a bank to the payee (the supplier of goods and/ or services) to pay to him, on behalf of the applicant (the buyer) any amount up to the limit specified in the LC, provided the terms and conditions mentioned in the LC are complied with.
7. Credit Cards:
a) The processing of applications for issuance of credit cards is usually entrusted to a separate division at the central office of a bank. b) Most credit cards issued by banks are linked to one of the international credit card networks like VISA, Master, Amex or RuPay
8. Debit Cards:
a) Debit cards are generally issued to account holder by the central office of the bank
b) Debit cards are networked with an inter-bank network. When a debit card is used for a transaction, the amount is immediately deducted from the customer's account balance
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