Private property developers should not decide how a city should grow: PM Modi
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NEW DELHI: Prime Minister Narendra Modi said on Thursday that his government is "committed to safeguarding the rights of the consumers at all times".
Talking about problems people face when buying a house in urban India, PM Modi said that the "image of builders is very negative today in India".
Hitting out at private builders, the PM said, "private property developers should not decide how a city should grow. It should be decided by residents and city leadership."
The PM said that the government will get a law to address problems of home-buyers in the country.
"Every person dreams of having his or her own home. It is not merely about a roof and four walls; it is beyond that," the PM said.
The PM was speaking at the launch of 3 mega schemes aimed at transforming urban India, including the much talked about smart cities proposal, with a whopping Rs 4 lakh crore kitty having been lined up for the projects.
AMRUT will cover 500 cities with a population of above one lakh each.
Speaking at the occasion, the PM said that "we are on the right path." "If there would be legal problems then we will find solutions," the PM said.
NEW DELHI: Prime Minister Narendra Modi said on Thursday that his government is "committed to safeguarding the rights of the consumers at all times". Talking about problems people face when buying a house in urban India, PM Modi said that the "image of builders is very negative today in India".
Hitting out at private builders, the PM said, "private property developers should not decide how a city should grow. It should be decided by residents and city leadership."
The PM said that the government will get a law to address problems of home-buyers in the country.
"Every person dreams of having his or her own home. It is not merely about a roof and four walls; it is beyond that," the PM said.
The PM was speaking at the launch of 3 mega schemes aimed at transforming urban India, including the much talked about smart cities proposal, with a whopping Rs 4 lakh crore kitty having been lined up for the projects.
AMRUT will cover 500 cities with a population of above one lakh each.
Speaking at the occasion, the PM said that "we are on the right path." "If there would be legal problems then we will find solutions," the PM said.
India to provide $1 billion for quake-hit Nepal's reconstruction: Sushma Swaraj
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KATHMANDU: External affairs minister Sushma Swaraj on Thursday announced that India would provide an assistance of $1 billion for quake-hit Nepal's reconstruction.
The external affairs minister announced India's assistance package in Kathmandu during the international conference on Nepal's reconstruction being organised by the Nepalese government to raise funds for carrying out rebuilding of areas devastated by the massive earthquake of April 25 that left nearly 9,000 people dead.
India's total assistance to Nepal over the next five years now stands at $2 billion, Swaraj said.
"Let us take inspiration from ancient philosophy of Yoga and join hands to create a more resilient Nepal," Sushma Swaraj said.
Sushma Swaraj is on a two-day visit to Nepal.
On Wednesday, Swaraj called on Nepal Prime Minister Sushil Koirala and conveyed to him that India will stand shoulder-to-shoulder with the quake-battered country in its massive reconstruction efforts and ensure "quickest" recovery.
Swaraj said under the leadership of Prime Minster Narendra Modi, India took the lead in responding "spontaneously", to provide relief and extend support in rescue operations following the quake as there was an "outpouring of instantaneous empathy and support" from all sections of Indian society to people of Nepal.
"I am glad to see that in spite of the tragedy, the people of Nepal have displayed a steely determination to rebuild their country. India will continue to stand together with the people and Government of Nepal in the quickest recovery and reconstruction," she said.
KATHMANDU: External affairs minister Sushma Swaraj on Thursday announced that India would provide an assistance of $1 billion for quake-hit Nepal's reconstruction.The external affairs minister announced India's assistance package in Kathmandu during the international conference on Nepal's reconstruction being organised by the Nepalese government to raise funds for carrying out rebuilding of areas devastated by the massive earthquake of April 25 that left nearly 9,000 people dead.
India's total assistance to Nepal over the next five years now stands at $2 billion, Swaraj said.
"Let us take inspiration from ancient philosophy of Yoga and join hands to create a more resilient Nepal," Sushma Swaraj said.
Sushma Swaraj is on a two-day visit to Nepal.
On Wednesday, Swaraj called on Nepal Prime Minister Sushil Koirala and conveyed to him that India will stand shoulder-to-shoulder with the quake-battered country in its massive reconstruction efforts and ensure "quickest" recovery.
Swaraj said under the leadership of Prime Minster Narendra Modi, India took the lead in responding "spontaneously", to provide relief and extend support in rescue operations following the quake as there was an "outpouring of instantaneous empathy and support" from all sections of Indian society to people of Nepal.
"I am glad to see that in spite of the tragedy, the people of Nepal have displayed a steely determination to rebuild their country. India will continue to stand together with the people and Government of Nepal in the quickest recovery and reconstruction," she said.
AAP protests at HRD minister Smriti Irani's residence
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NEW DELHI: Over 500 AAP workers staged a protest outside human resource development minister Smriti Irani's residence on Thursday, demanding her resignation for allegedly misleading poll authorities about her educational qualifications, police said.
The workers gathered outside Irani's residence around 11am and while staging a demonstration also demanded her immediate arrest.
After a Delhi Court on Wednesday admitted a petition challenging the academic qualifications of Irani, the Aam Aadmi Party demanded that the action meted out against former Delhi law minister Jitendra Singh Tomar should be applicable to her as well.
"She (Irani) should be arrested without any delay and she must also resign as a minister," one of the workers said.
"There was no delay in the arrest of Tomar, why is there a delay in her case?" he asked.
Following the heavy protests, security forces were deployed and barricades mounted outside the minister's residence.
"We have deputed police personnel and barricades have been mounted to maintain law and order," Deputy commissioner of police Vijay Singh told IANS.
"We have also stationed water cannons outside the minister's house as a precautionary measures."
NEW DELHI: Over 500 AAP workers staged a protest outside human resource development minister Smriti Irani's residence on Thursday, demanding her resignation for allegedly misleading poll authorities about her educational qualifications, police said. The workers gathered outside Irani's residence around 11am and while staging a demonstration also demanded her immediate arrest.
After a Delhi Court on Wednesday admitted a petition challenging the academic qualifications of Irani, the Aam Aadmi Party demanded that the action meted out against former Delhi law minister Jitendra Singh Tomar should be applicable to her as well.
"She (Irani) should be arrested without any delay and she must also resign as a minister," one of the workers said.
"There was no delay in the arrest of Tomar, why is there a delay in her case?" he asked.
Following the heavy protests, security forces were deployed and barricades mounted outside the minister's residence.
"We have deputed police personnel and barricades have been mounted to maintain law and order," Deputy commissioner of police Vijay Singh told IANS.
"We have also stationed water cannons outside the minister's house as a precautionary measures."
Emergency was India's darkest period: PM Modi
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NEW DELHI: On the occasion of the 40th anniversary of the Emergency on Thursday, Prime Minister Narendra Modi took to Twitter and said a vibrant liberal democracy is the key to progress.
"Let us do everything possible to further strengthen our democratic ideals and ethos," he added.
The PM described the Emergency as India's darkest period, when the then political leadership trampled over the democracy.
We mark 40 years of one of India's darkest periods- the Emergency, when the then political leadership trampled over our democracy.
He said inspired by the call of Jayaprakash Narayan, several men and women across India selflessly immersed themselves in the movement to safeguard the democracy.
"Emergency, however, brings back many memories. As youngsters, we learnt a lot during the anti-Emergency movement," he wrote on the micro-blogging site.
"Emergency was a great opportunity to work with a wide spectrum of leaders and organisations fighting for the same goal- return of democracy," he tweeted.
NEW DELHI: On the occasion of the 40th anniversary of the Emergency on Thursday, Prime Minister Narendra Modi took to Twitter and said a vibrant liberal democracy is the key to progress."Let us do everything possible to further strengthen our democratic ideals and ethos," he added.
The PM described the Emergency as India's darkest period, when the then political leadership trampled over the democracy.
We mark 40 years of one of India's darkest periods- the Emergency, when the then political leadership trampled over our democracy.
He said inspired by the call of Jayaprakash Narayan, several men and women across India selflessly immersed themselves in the movement to safeguard the democracy.
"Emergency, however, brings back many memories. As youngsters, we learnt a lot during the anti-Emergency movement," he wrote on the micro-blogging site.
"Emergency was a great opportunity to work with a wide spectrum of leaders and organisations fighting for the same goal- return of democracy," he tweeted.
China bails out Pakistan on terror financing at FATF
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NEW DELHI: China has again stood by Pakistan on terror, asking India to back off at the Financial Action Task Force meet at Brisbane where New Delhi had strongly raised non-compliance by Islamabad on freezing assets of Lashkar-e-Taiba and its affiliates.
The opposition at FATF came even as India strongly raised China's obstructive position at the UN Sanctions Committee where New Delhi has protested the release of 26/11 accused Zaki-ur-Rehman Lakhvi as a violation of UN resolution 1267 on Al Qaeda and its affiliates.
At the FATF meeting, which took place earlier this week, saw India and the US act in tandem with the latter being quite vocal on Pakistan's lack of seriousness at cracking down on LeT's assets and it fundraising efforts.
China, however, felt that Pakistan was doing all it could and had been submitting reports to the Asia Pacific Group (APG) on Money Laundering that collaborates closely with the FATF.
India had found the report inadequate on details as it just lists unnamed accounts without enough veracity regarding their origins and how that had impacted the group's functioning. India, on the other hand, had provided evidence of Falah-i-Insaniyat, a Let-JuD front, that has been openly raising funds. Also, raised in detail were the activities of LeT head Hafiz Mohammed Saeed, whose rallies have only added to the group's financial support base.
While backing Pakistan's case, China also objected to India raising the issue at the FATF on the grounds that Pakistan was not member of the grouping. Interestingly, Australia also supported the Chinese line on this. But unlike the UN, where China can put a 'technical hold' on any such matter as a permanent member of the UN security Council, the discussion at Brisbane veered towards a consensus position that the issue will now be referred to the APG for further deliberation and then brought back to the FATF.
NEW DELHI: China has again stood by Pakistan on terror, asking India to back off at the Financial Action Task Force meet at Brisbane where New Delhi had strongly raised non-compliance by Islamabad on freezing assets of Lashkar-e-Taiba and its affiliates.The opposition at FATF came even as India strongly raised China's obstructive position at the UN Sanctions Committee where New Delhi has protested the release of 26/11 accused Zaki-ur-Rehman Lakhvi as a violation of UN resolution 1267 on Al Qaeda and its affiliates.
At the FATF meeting, which took place earlier this week, saw India and the US act in tandem with the latter being quite vocal on Pakistan's lack of seriousness at cracking down on LeT's assets and it fundraising efforts.
China, however, felt that Pakistan was doing all it could and had been submitting reports to the Asia Pacific Group (APG) on Money Laundering that collaborates closely with the FATF.
India had found the report inadequate on details as it just lists unnamed accounts without enough veracity regarding their origins and how that had impacted the group's functioning. India, on the other hand, had provided evidence of Falah-i-Insaniyat, a Let-JuD front, that has been openly raising funds. Also, raised in detail were the activities of LeT head Hafiz Mohammed Saeed, whose rallies have only added to the group's financial support base.
While backing Pakistan's case, China also objected to India raising the issue at the FATF on the grounds that Pakistan was not member of the grouping. Interestingly, Australia also supported the Chinese line on this. But unlike the UN, where China can put a 'technical hold' on any such matter as a permanent member of the UN security Council, the discussion at Brisbane veered towards a consensus position that the issue will now be referred to the APG for further deliberation and then brought back to the FATF.
Delhi University cutoffs get absurd, soar beyond 100%!
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NEW DELHI: The steadily rising Delhi University cutoffs for undergraduate courses reached absurd levels in the first list announced on Wednesday, where the eligibility bar set for certain categories of student went beyond 100%.
For instance, a candidate without Economics in class XII would need to have scored 100.75% in the best-of-four (BO4) subjects to secure a seat in Economics at Shri Ram College of Commerce or Hans Raj. Similarly, at Lady Shri Ram College, an aspirant needs to have an aggregate score of 100.5% to get into the Psychology (H) course.
While a cursory glance at the first cutoff does not show any 100% cutoffs, the hidden additional criteria means that an Economics aspirant in SRCC, Hindu, Hans Raj, Kirori Mal, Ramjas, LSR and Miranda House would need 100% and above marks in BO4 if the student did not study the subject in class XII.
Such absurdity is not restricted to Economics. Stream change students applying for BCom (H) in LSR and Ramjas, Political Science in Hindu, Kirori Mal and LSR and History in Hindu too would need 100% and above marks, thanks to 2.5 percentage points penalty.
That's not all. Cutoffs reached 100% for BSc (H) Computer Science at the College of Vocational Studies (95-100%) and at I P College (97-100%), the perfect score being demanded of science students who did not have computer science at the plus-two level.
While high cutoffs are no longer a surprise, DU colleges have taken the 'play it safe' policy to a completely new high. First, with no idea for which college the applicants are intending to come for admission, and now from this year the additional criteria of penalty clauses, colleges too have their arguments to support this trend.
LSR has set the Psychology (H) cutoff at 98% - high considering a limited number of schools offer the subject at the senior secondary level. However, aspirants who haven't studied the subject in school would need 100.5% in BO4 to get in.
Justifying the cutoffs, Kanika K Ahuja, LSR's media coordinator and psychology teacher, said 39 applicants who had Psychology in school and secured 98% or above had applied for the course. The number was far greater than seats on offer for the course.
"Some of them may go to Economics or History or some other subject. But we won't know until they do," said Ahuja.
"Anyone who hasn't studied Economics will not get admission on the basis of first cutoff, but we had no choice. Everything is unknown to us - where they want to study and what? At the same time numbers are very high. Only in the second and third list will we have a better idea," said Hans Raj principal V K Kawatra, adding that setting the cutoffs was "very very difficult" with the new policy on additional eligibility criteria.
Last year, on a single percentage point, over a 100 aspirants turned up for admission in colleges like Miranda House, Gargi College and College of Vocational Studies. "We are going to play a patient game this year. There is nothing worse than an overcrowded classroom. There is no clarity in data so there is definitely going to a cautious first list," said Pratibha Jolly, principal of Miranda House.
For instance, a candidate without Economics in class XII would need to have scored 100.75% in the best-of-four (BO4) subjects to secure a seat in Economics at Shri Ram College of Commerce or Hans Raj. Similarly, at Lady Shri Ram College, an aspirant needs to have an aggregate score of 100.5% to get into the Psychology (H) course.
While a cursory glance at the first cutoff does not show any 100% cutoffs, the hidden additional criteria means that an Economics aspirant in SRCC, Hindu, Hans Raj, Kirori Mal, Ramjas, LSR and Miranda House would need 100% and above marks in BO4 if the student did not study the subject in class XII.
Such absurdity is not restricted to Economics. Stream change students applying for BCom (H) in LSR and Ramjas, Political Science in Hindu, Kirori Mal and LSR and History in Hindu too would need 100% and above marks, thanks to 2.5 percentage points penalty.
That's not all. Cutoffs reached 100% for BSc (H) Computer Science at the College of Vocational Studies (95-100%) and at I P College (97-100%), the perfect score being demanded of science students who did not have computer science at the plus-two level.
While high cutoffs are no longer a surprise, DU colleges have taken the 'play it safe' policy to a completely new high. First, with no idea for which college the applicants are intending to come for admission, and now from this year the additional criteria of penalty clauses, colleges too have their arguments to support this trend.
LSR has set the Psychology (H) cutoff at 98% - high considering a limited number of schools offer the subject at the senior secondary level. However, aspirants who haven't studied the subject in school would need 100.5% in BO4 to get in.
Justifying the cutoffs, Kanika K Ahuja, LSR's media coordinator and psychology teacher, said 39 applicants who had Psychology in school and secured 98% or above had applied for the course. The number was far greater than seats on offer for the course.
"Some of them may go to Economics or History or some other subject. But we won't know until they do," said Ahuja.
"Anyone who hasn't studied Economics will not get admission on the basis of first cutoff, but we had no choice. Everything is unknown to us - where they want to study and what? At the same time numbers are very high. Only in the second and third list will we have a better idea," said Hans Raj principal V K Kawatra, adding that setting the cutoffs was "very very difficult" with the new policy on additional eligibility criteria.
Last year, on a single percentage point, over a 100 aspirants turned up for admission in colleges like Miranda House, Gargi College and College of Vocational Studies. "We are going to play a patient game this year. There is nothing worse than an overcrowded classroom. There is no clarity in data so there is definitely going to a cautious first list," said Pratibha Jolly, principal of Miranda House.
Fat pay cheques: Here is why IIT coaches are better off than Duncan Fletcher
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NEW DELHI: The number of teachers drawing Rs 1 croreplus salaries at institutes offering coaching for entrance exams to Indian Institutes of Technology is growing at a fast clip as these centres fight a fierce war for top talent. "We have six crorepati faculty members," says Modali Venkat Hari Kishan, manager, Bansal Classes, a training institute based in Kota, Rajasthan.
"But every staffer is here with us only till they get the next best offer. Poaching is rampant," he adds, underlying the furious competition for good teachers in hubs such as Kota and Delhi.
Even two years ago, only a handful of teachers were in the one crore-plus salary bracket. "Today, there are at least 15-20 people getting one crore-plus salaries in Kota alone. Then, there are other hubs such as Mumbai, Delhi, Kanpur and Patna, where the faculty would be getting even more," says Sonal Rajora, a faculty member at Allen Career institute.
"Now, there are also a handful of teachers who earn Rs 2 crore," says another industry source. There have also been instances of Rs 3-crore salaries, adds another senior faculty member with two decades of experience, requesting not to be identified.
Sources estimate there are about 2,000 faculty — 600 with IIT degrees — employed by coaching institutes of some repute. "At least 300-400 will be earning salaries in the Rs 60 lakh to Rs 1.5 crore range," estimates Ashish Arora, consultant at Allen Career Institute.
Industry sources say the salary of a good faculty can easily go past the Rs 1 crore mark in just 2-5 years.In stark contrast, salaries of IIT faculty start at Rs 10-11 lakh per annum for professors and Rs 25 lakh per annum for deans. "We have faculty members with 10+ years of experience who draw Rs 1.5-2 crore salaries," says Bansal Classes' Modali Venkat Hari Kishan.
The institute recruits teachers thrice a year. Teacher salaries often rise 3-4 times within 8-10 months of joining. "Average annual salary hikes at coaching institutes swing from 10% to 50%; exceptional performers get 100% raises," says RL Trikha, director, FIITJEE Delhi, another such institute.
"Kota is the mecca of IIT coaching. Some institutes in Kota are paying salaries of Rs 1 crore," says Pramod Maheshwari, founder director and CEO, Career Point, one of the few such coaching institutes that are listed on the stock market.
"There is always shortage of good teaching talent. Salaries have grown almost 5-7 times over the past decade," he adds. Career Point made a net profit of Rs 5.82 crore last year.
Over 13 lakh students registered for the IIT Joint Entrance Examinations (JEE) this year, of which nearly 1.3 lakh are estimated to have signed up for coaching with institutes charging upwards ofRs 1 lakh each as tuition fees alone. Institutes often cram students into classrooms with teacher-tostudent ratios vacillating between 1:40 to 1:100 or even 1:150.
Institutes want their highly paid faculty to teach as many students as possible. The industry has managed to woo new talent, but the demand for faculty is rising faster.
"Some of our top students have come back to us to teach because there are competitive salaries in teaching itself," says Maheshwari of Career Point.
New entrepreneurs also set up shop quite frequently. Two IITians in Delhi, Aditya Singhal and Nishant Sinha, for instance, have set up an online coaching class for JEE aspirants. They have a range of ex-IITians on board to help teach students.
NEW DELHI: The number of teachers drawing Rs 1 croreplus salaries at institutes offering coaching for entrance exams to Indian Institutes of Technology is growing at a fast clip as these centres fight a fierce war for top talent. "We have six crorepati faculty members," says Modali Venkat Hari Kishan, manager, Bansal Classes, a training institute based in Kota, Rajasthan."But every staffer is here with us only till they get the next best offer. Poaching is rampant," he adds, underlying the furious competition for good teachers in hubs such as Kota and Delhi.
Even two years ago, only a handful of teachers were in the one crore-plus salary bracket. "Today, there are at least 15-20 people getting one crore-plus salaries in Kota alone. Then, there are other hubs such as Mumbai, Delhi, Kanpur and Patna, where the faculty would be getting even more," says Sonal Rajora, a faculty member at Allen Career institute.
"Now, there are also a handful of teachers who earn Rs 2 crore," says another industry source. There have also been instances of Rs 3-crore salaries, adds another senior faculty member with two decades of experience, requesting not to be identified.
Sources estimate there are about 2,000 faculty — 600 with IIT degrees — employed by coaching institutes of some repute. "At least 300-400 will be earning salaries in the Rs 60 lakh to Rs 1.5 crore range," estimates Ashish Arora, consultant at Allen Career Institute.
Industry sources say the salary of a good faculty can easily go past the Rs 1 crore mark in just 2-5 years.In stark contrast, salaries of IIT faculty start at Rs 10-11 lakh per annum for professors and Rs 25 lakh per annum for deans. "We have faculty members with 10+ years of experience who draw Rs 1.5-2 crore salaries," says Bansal Classes' Modali Venkat Hari Kishan.
The institute recruits teachers thrice a year. Teacher salaries often rise 3-4 times within 8-10 months of joining. "Average annual salary hikes at coaching institutes swing from 10% to 50%; exceptional performers get 100% raises," says RL Trikha, director, FIITJEE Delhi, another such institute.
"Kota is the mecca of IIT coaching. Some institutes in Kota are paying salaries of Rs 1 crore," says Pramod Maheshwari, founder director and CEO, Career Point, one of the few such coaching institutes that are listed on the stock market.
"There is always shortage of good teaching talent. Salaries have grown almost 5-7 times over the past decade," he adds. Career Point made a net profit of Rs 5.82 crore last year.
Over 13 lakh students registered for the IIT Joint Entrance Examinations (JEE) this year, of which nearly 1.3 lakh are estimated to have signed up for coaching with institutes charging upwards ofRs 1 lakh each as tuition fees alone. Institutes often cram students into classrooms with teacher-tostudent ratios vacillating between 1:40 to 1:100 or even 1:150.
Institutes want their highly paid faculty to teach as many students as possible. The industry has managed to woo new talent, but the demand for faculty is rising faster.
"Some of our top students have come back to us to teach because there are competitive salaries in teaching itself," says Maheshwari of Career Point.
New entrepreneurs also set up shop quite frequently. Two IITians in Delhi, Aditya Singhal and Nishant Sinha, for instance, have set up an online coaching class for JEE aspirants. They have a range of ex-IITians on board to help teach students.
Primary and Secondary Functions of Commercial Banks
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A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products. On day to day functioning it discharge many functions broadly classified as Primary and Secondary Functions mentioned below.
I. Primary Functions
1) Accepting Deposits
2) Advancing Loans
II. Secondary Functions
1) Overdraft Facility
2) Discounting Bills of Exchange
3) Agency Functions
4) General Utility Functions
Primary Functions
1. Accepting Deposits:
It is one of the most important function of commercial banks. The commercial banks accept the deposits at lower rates and provide the loans. They accept deposits in several forms according to requirements of different sections of the society.
The main kinds of deposits are:
i) Current Account Deposits or Demand Deposits:
These deposits refer to those deposits which are repayable by the banks on demand.
★ Such deposits are generally maintained by businessmen with the intention of making transactions with such deposits. The business men usually deposit from their excess cash balances and withdraw when they need.
★ They can be drawn upon by a cheque without any restriction.
★ Banks do not pay any interest on these accounts. Rather, banks impose service charges for running these accounts.
ii) Fixed Deposits or Time Deposits:
Fixed deposits refer to those deposits, in which the amount is deposited with the bank for a fixed period of time.
★ Such deposits do not enjoy cheque-able facility.
★ These deposits carry a high rate of interest.
iii) Saving Deposits:
These deposits combine features of both current account deposits and fixed deposits.
★ The depositors are given cheque facility to withdraw money from their account. But, some restrictions are imposed on number and amount of withdrawals, in order to discourage frequent use of saving deposits.
★ They carry a rate of interest which is less than interest rate on fixed deposits. It must be noted that Current Account deposits and saving deposits are chequable deposits, whereas, fixed deposit is a non-chequable deposit.
2. Advancing of Loans:
The deposits received by banks are not allowed to remain idle. So, after keeping certain cash reserves, the balance is given to needy borrowers and interest is charged from them, which is the main source of income for these banks.
Different types of loans and advances made by Commercial banks are:
i) Cash Credit: The Cash credit refers to a loan given to the borrower against his current assets like shares, stocks, bonds, etc. A credit limit is sanctioned and the amount is credited in his account. The borrower may withdraw any amount within his credit limit and interest is charged on the amount actually withdrawn.
ii) Demand Loans: Demand loans refer to those loans which can be recalled on demand by the bank at any time. The entire sum of demand loan is credited to the account and interest is payable on the entire sum.
iii) Short-term Loans: They are given as personal loans against some collateral security. The money is credited to the account of borrower and the borrower can withdraw money from his account and interest is payable on the entire sum of loan granted.
Secondary Functions
1. Overdraft Facility:
It refers to a facility in which a customer is allowed to overdraw his current account up to an agreed limit. This facility is generally given to respectable and reliable customers for a short period. Customers have to pay interest to the bank on the amount overdrawn by them.
2. Discounting Bills of Exchange:
It refers to a facility in which holder of a bill of exchange can get the bill discounted with bank before
the maturity. After deducting the commission, bank pays the balance to the holder. On maturity, bank gets its payment from the party which had accepted the bill.
3. Agency Functions:
Commercial banks also perform certain agency functions for their customers. For these services, banks charge some commission from their clients.
Some of the agency functions are:
i) Transfer of Funds:
Banks provide the facility of economical and easy remittance of funds from place-to-place with the help of instruments like demand drafts, mail transfers, etc.
ii) Collection and Payment of Various Bill Payments:
Commercial banks collect cheques, bills, interest, dividends, subscriptions, rents and other periodical receipts on behalf of their customers and also make payments of taxes, insurance premium, etc. on standing instructions of their clients.
iii) Purchase and Sale of Foreign Exchange:
Some commercial banks are authorized by the central bank to deal in foreign exchange. They buy and sell foreign exchange on behalf of their customers and help in promoting international trade.
iv) Purchase and Sale of Securities:
Commercial banks buy and sell stocks and shares of private companies as well as government securities on behalf of their customers.
v) Income Tax Consultancy:
They also give advice to their customers on matters relating to income tax and even prepare their income
tax returns.
vi) Trustee and Executor:
Commercial banks preserve the wills of their customers as trustees and execute them after their death as executors.
4. General Utility Functions:
Commercial banks render some general utility services like:
i) Locker Facility:
Commercial banks provide facility of safety vaults or lockers to keep valuable articles of customers in safe custody.
ii) Traveller's Cheques:
Commercial banks issue traveler's cheques to their customers to avoid risk of taking cash during their journey.
iii) Letter of Credit:
Commercial banks issue letters of credit to their customers to certify their creditworthiness.
iv) Underwriting Securities:
Commercial banks also undertake the task of underwriting securities. As public has full faith in the creditworthiness of banks, public do not hesitate in buying the securities underwritten by banks.
v) Collection of Statistics:
Banks collect and publish statistics relating to trade, commerce and industry. Hence, they advice customers on financial matters. Commercial banks receive deposits from the public and use these deposits to give loans. However, loans offered are many times more than the deposits received by banks. This function of banks is known as 'Money Creation'.
I. Primary Functions
1) Accepting Deposits
2) Advancing Loans
II. Secondary Functions
1) Overdraft Facility
2) Discounting Bills of Exchange
3) Agency Functions
4) General Utility Functions
Primary Functions
1. Accepting Deposits:
It is one of the most important function of commercial banks. The commercial banks accept the deposits at lower rates and provide the loans. They accept deposits in several forms according to requirements of different sections of the society.
The main kinds of deposits are:
i) Current Account Deposits or Demand Deposits:
These deposits refer to those deposits which are repayable by the banks on demand.
★ Such deposits are generally maintained by businessmen with the intention of making transactions with such deposits. The business men usually deposit from their excess cash balances and withdraw when they need.
★ They can be drawn upon by a cheque without any restriction.
★ Banks do not pay any interest on these accounts. Rather, banks impose service charges for running these accounts.
ii) Fixed Deposits or Time Deposits:
Fixed deposits refer to those deposits, in which the amount is deposited with the bank for a fixed period of time.
★ Such deposits do not enjoy cheque-able facility.
★ These deposits carry a high rate of interest.
iii) Saving Deposits:
These deposits combine features of both current account deposits and fixed deposits.
★ The depositors are given cheque facility to withdraw money from their account. But, some restrictions are imposed on number and amount of withdrawals, in order to discourage frequent use of saving deposits.
★ They carry a rate of interest which is less than interest rate on fixed deposits. It must be noted that Current Account deposits and saving deposits are chequable deposits, whereas, fixed deposit is a non-chequable deposit.
2. Advancing of Loans:
The deposits received by banks are not allowed to remain idle. So, after keeping certain cash reserves, the balance is given to needy borrowers and interest is charged from them, which is the main source of income for these banks.
Different types of loans and advances made by Commercial banks are:
i) Cash Credit: The Cash credit refers to a loan given to the borrower against his current assets like shares, stocks, bonds, etc. A credit limit is sanctioned and the amount is credited in his account. The borrower may withdraw any amount within his credit limit and interest is charged on the amount actually withdrawn.
ii) Demand Loans: Demand loans refer to those loans which can be recalled on demand by the bank at any time. The entire sum of demand loan is credited to the account and interest is payable on the entire sum.
iii) Short-term Loans: They are given as personal loans against some collateral security. The money is credited to the account of borrower and the borrower can withdraw money from his account and interest is payable on the entire sum of loan granted.
Secondary Functions
1. Overdraft Facility:
It refers to a facility in which a customer is allowed to overdraw his current account up to an agreed limit. This facility is generally given to respectable and reliable customers for a short period. Customers have to pay interest to the bank on the amount overdrawn by them.
2. Discounting Bills of Exchange:
It refers to a facility in which holder of a bill of exchange can get the bill discounted with bank before
the maturity. After deducting the commission, bank pays the balance to the holder. On maturity, bank gets its payment from the party which had accepted the bill.
3. Agency Functions:
Commercial banks also perform certain agency functions for their customers. For these services, banks charge some commission from their clients.
Some of the agency functions are:
i) Transfer of Funds:
Banks provide the facility of economical and easy remittance of funds from place-to-place with the help of instruments like demand drafts, mail transfers, etc.
ii) Collection and Payment of Various Bill Payments:
Commercial banks collect cheques, bills, interest, dividends, subscriptions, rents and other periodical receipts on behalf of their customers and also make payments of taxes, insurance premium, etc. on standing instructions of their clients.
iii) Purchase and Sale of Foreign Exchange:
Some commercial banks are authorized by the central bank to deal in foreign exchange. They buy and sell foreign exchange on behalf of their customers and help in promoting international trade.
iv) Purchase and Sale of Securities:
Commercial banks buy and sell stocks and shares of private companies as well as government securities on behalf of their customers.
v) Income Tax Consultancy:
They also give advice to their customers on matters relating to income tax and even prepare their income
tax returns.
vi) Trustee and Executor:
Commercial banks preserve the wills of their customers as trustees and execute them after their death as executors.
4. General Utility Functions:
Commercial banks render some general utility services like:
i) Locker Facility:
Commercial banks provide facility of safety vaults or lockers to keep valuable articles of customers in safe custody.
ii) Traveller's Cheques:
Commercial banks issue traveler's cheques to their customers to avoid risk of taking cash during their journey.
iii) Letter of Credit:
Commercial banks issue letters of credit to their customers to certify their creditworthiness.
iv) Underwriting Securities:
Commercial banks also undertake the task of underwriting securities. As public has full faith in the creditworthiness of banks, public do not hesitate in buying the securities underwritten by banks.
v) Collection of Statistics:
Banks collect and publish statistics relating to trade, commerce and industry. Hence, they advice customers on financial matters. Commercial banks receive deposits from the public and use these deposits to give loans. However, loans offered are many times more than the deposits received by banks. This function of banks is known as 'Money Creation'.
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