What is Commercial Bank?

A commercial bank is a kind of financial institution that carries all the operations related to
deposit and withdrawal of money for the general public, providing loans for investment, and other
such activities. These banks are profit-making institutions and do business only to make a profit.
The two primary characteristics of a commercial bank are lending and borrowing. The bank
receives the deposits and gives money to various projects to earn interest (profit). The rate of
interest that a bank offers to the depositors is known as the borrowing rate, while the rate at
which a bank lends money is known as the lending rate.
Related link: Banking and its Type

Function of Commercial Bank:

The functions of commercial banks are classified into two main divisions.
(a) Primary functions 
 Accepts deposit : The bank takes deposits in the form of saving, current, and fixed deposits.
The surplus balances collected from the firm and individuals are lent to the temporary
requirements of the commercial transactions.
Provides loan and advances : Another critical function of this bank is to offer loans and
advances to theentrepreneurs and business people, and collect interest. For every bank, it is the
primary source of making profits. In this process, a bank retains a small number of deposits as a
reserve and offers (lends) the remaining amount to the borrowers in demand loans, overdraft,
cash credit, short-run loans, and more such banks.
Credit cash: When a customer is provided with credit or loan, they are not provided with liquid
cash. First, a bank account is opened for the customer and then the money is transferred to the
account. This process allows the bank to create money.
(b) Secondary functions 
 Discounting bills of exchange: It is a written agreement acknowledging the amount of money
to be paid against the goods purchased at a given point of time in the future. The amount can
also be cleared before the quoted time through a discounting method of a commercial bank.
Overdraft facility: It is an advance given to a customer by keeping the current account to
overdraw up to the given limit.
 Purchasing and selling of the securities: The bank offers you with the facility of selling and
buying the securities.
Locker facilities: A bank provides locker facilities to the customers to keep their valuables or
documents safely. The banks charge a minimum of an annual fee for this service.
Paying and gathering the credit : It uses different instruments like a promissory note, cheques,
and bill of exchange.

Types of Commercial Banks:

There are three different types of commercial banks.
 Private bank –: It is a type of commercial banks where private individuals and businesses own
a majority of the share capital. All private banks are recorded as companies with limited liability.
Such as  Housing Development Finance Corporation (HDFC) Bank, Industrial Credit and
Investment Corporation of India (ICICI) Bank, Yes Bank, and more such banks.
 Public bank –: It is a type of bank that is nationalised, and the government holds a significant
stake.  For example, Bank of Baroda, State Bank of India (SBI), Dena Bank, Corporation Bank,
and Punjab National Bank.
Foreign bank –: These banks are established in foreign countries and have branches in other
countries. For instance, American Express Bank, Hong Kong and Shanghai Banking Corporation
(HSBC), Standard & Chartered Bank, Citibank, and more such banks.

Examples of Commercial Banks

Few examples of commercial banks in India are as follows:
    1. State Bank of India (SBI)
    2. Housing Development Finance Corporation (HDFC) Bank
    3. Industrial Credit and Investment Corporation of India (ICICI) Bank
    4. Dena Bank
    5. Corporation Bank
https://byjus.com/commerce/functions-of-commercial-banks/

Commercial Bank

Definition: Commercial Bank can be described as a financial institution,

that offers basic investment products like a savings account, current
account, etc to the individuals and corporates. Along with that, it provides a
range of financial services to the general public such as accepting deposits,
granting loans and advances to the customers.

It is a profit making company, which pays interest at a low rate to the

depositors and charges higher rate of interest to the borrowers and in this
way, the bank earns the profit.

Commercial Bank

Definition: Commercial Bank can be described as a financial institution,

that offers basic investment products like a savings account, current
account, etc to the individuals and corporates. Along with that, it provides a
range of financial services to the general public such as accepting deposits,
granting loans and advances to the customers.

It is a profit making company, which pays interest at a low rate to the

depositors and charges higher rate of interest to the borrowers and in this
way, the bank earns the profit.

Types of Commercial Bank

 Commercial banks are classified into two categories i.e. scheduled
commercial banks and non-scheduled commercial banks. Further,
scheduled commercial banks are further classified into three types:

 Private Bank: When the private individuals own more than 51% of
the share capital, then that banking company is a private one. However,
these banks are publicly listed companies in a recognized exchange.
 Public Bank: When the Government holds more than 51% of the
share capital of a publicly listed banking company, then that bank is called
as Public sector bank.
 Foreign Bank: Banks set up in foreign countries, and operate their
branches in the home country are called as foreign banks.
Non-scheduled commercial banks refer to the banks which are not covered
in the Reserve Bank of India’s second schedule. The paid-up capital of
such banks is not more than Rs. 5 lakhs.

https://businessjargons.com/commercial-bank.html

HDFC Bank Limited is an Indian banking and financial services company, headquartered in
Mumbai, Maharashtra. HDFC Bank is India’s largest private sector bank by assets and by market
capitalisation as of April 2021. It is the third largest company by market capitalisation on the
Indian stock exchanges

https://en.wikipedia.org/wiki/HDFC_Bank

Opening a Savings Account is a simple task that may take, at best, an hour, sometimes even 15
minutes. Most banks usually have similar procedures, so it is fairly easy to open a Savings
Account.
You can do this in two ways:

 Apply in person, at the bank. This way, you can get assistance from the bank’s
employees, who are designated for this purpose.
 Apply online. Yes, it is true, you can open a Savings Account All you really need is your
mobile number, to initiate the process. In fact, the procedure does not vary much. You simply
upload your form and documents online, instead of going to the bank yourself. Also, some banks
offer to send their executives to collect your documents, at the address you provide them with.
Whichever of the two you pick the procedure is pretty much the same. There will be minor
differences here and there, but documents required to be submitted to complete this process are
going to be the same.

Here is a quick run-down on how to open a Savings Account:

 Once you have applied to open a Savings Account, you will be asked to present certain
documents:
 Identity Proof (driver’s license, passport etc.)
 Address Proof (driver’s license, passport etc.)
 PAN card
 Or, Form 16, which is a certificate issued by the applicant’s employer, asserting that TDS
has been deducted from your salary. This is needed here if the applicant does not have a PAN
card.
 Two of the latest passport-sized photographs
 You must then fill out the application form. A bank executive can be contacted for
assistance in this matter. Applicants are urged to fill out all fields in the form, in order to avoid
rejection. This can be done either at the bank’s branch of choice, or even online.
 Once this is done, you must submit the form as well as the required documents at the
branch of choice.
 Now, you simply have to allow the bank executives some time to verify your documents
and your form.
 Once, the verification is complete, you will be required to make an initial deposit,
depending upon the minimum amount requirement for the account. In doing so, you become an
account holder. In case of zero balance Savings Account however, there is no deposit required.
 After the deposit has been made, the bank executives will hand over the debit card and
relevant documents regarding the account, to you, the new account holder.

https://www.hdfcbank.com/personal/resources/learning-centre/save/how-to-
open-a-savings-account

types of savings acct offered!

Specialé Gold and Specialé Platinum

Savings Max Account
Women's Savings Account
Regular Savings Account
DigiSave Youth Account
Senior Citizen's Account
Kids Advantage Account
Institutional Savings Account
Saving Farmers Account
And so on…
Savings Accounts usually come with certain advantages which makes a perfect investment
choice. They also come with additional features that make them more suitable for certain
purposes. Here is a list of features of Savings Account to help you understand why a Savings
Account might be just what you need:
 Easy Transactions 
You can use your Savings Account to send and receive payments. This can be done by
either NetBanking, or through your Debit/ATM Card. This feature cuts down the dependency on
cash for all transactions, especially when it comes to payment of bills.

 Payment of Bills
These days, banks offer payment facilities such as BillPay with Savings Accounts. This enables
 account holders to make payments for utilities such as electricity, water and phone recharges
directly from their account.
 Debit Card
Banks provide Savings Account holders with ATM/Debit Card not just for accessing the
account through the ATM, but also for making payments, whether at the merchant’s
store, or through an online payment gateway.
 Savings interest rates
With every Savings Account, banks offer an interest rate enabling your idle money to
grow over time.
https://byjus.com/questions/explain-the-agency-functions-of-commercial-
banks/

Secondary Functions of Bank

Like Primary Functions of Bank, the secondary functions are also classified into two parts:

1. Agency functions
2. Utility Functions

Agency Functions of Bank

Agency Services: There are some facilities provided by the commercial

banks in which they act as an agent of the customers. 
Transfer of Funds: Transfering of funds from one branch/place to another. 
Periodic Collections: Collecting dividend, salary, pension, and similar periodic collections on
the clients’ behalf. 
Periodic Payments: Making periodic payments of rents, electricity bills, etc on behalf of the
client.
Collection of Cheques: Like collecting money from the bills of exchanges, the bank collects the
money of the cheques through the clearing section of its customers.
Portfolio Management: Banks manage the portfolio of their clients. It undertakes the activity to
purchase and sell the shares and debentures of the clients and debits or credits the account.
Other Agency Functions: Under this bank act as a representative of its clients for other
institutions. It acts as an executor, trustee, administrators, advisers, etc. of the client.

o Collection and payment of rent, interest and dividend.

o Collection and payment of cheques and bills.
o Buying and selling securities.
o Payment of insurance premium and subscriptions.

Utility Functions of Bank

General Utility Services: Commercial banks provide general utility

services to the customers and charges a fee for the same. It covers
services like:
  Issuing letters of credit, traveller’s cheque, etc.
 Undertaking safe custody of valuables, important documents, and securities by providing
safe deposit vaults or lockers.
 Providing customers with facilities of foreign exchange dealings
 Underwriting of shares and debentures
 Dealing in foreign exchanges
 Social Welfare programmes
 Project reports
 Safekeeping of valuables, documents etc, in locker or vault.
 ATM card, credit card and debit card facility.
 Issue of demand draft, pay order and traveller’s cheque.
 Internet and mobile banking
 Sale of application forms of competitive exams.

 Standing guarantee on behalf of its customers, etc.
https://byjus.com/govt-exams/functions-of-bank/

https://www.hdfcbank.com

FUNCTIONS OF HDFC BANK

 MONEY TRANSFER
o NEFT (Available 24 * 7)
o UPI (Instant Mobile Money Transfer)
o IMPS (Immediate Payment 24 * 7)
o RTGS (Available 24 * 7)
o RemitNow (Foreign Outward Remittance)
o Remittance (International Money Transfers )
o Visa CardPay
 CARDS
o Millennia Cards
o Credit Cards
o Commercial Credit Cards
o Debit Cards
o Prepaid Cards
o Forex Cards
 BILL PAYMENTS
o Electricity Bill Payment
o Mobile Post-Paid
o Insurance Premium
o Telephone-Landline
o Gas
o Water
o Magazine Subscriptions
o HDFC Bank Credit Card Bill
o Other Bank Credit Card Bill
o Mutual Fund Instalment
o Rent Payment
o Club Membership
 RECHARGE
o Broadband & Data Card
o Mobile Pre-Paid Recharge
o DTH Recharge
 CCOUNTS
o Savings Accounts
o Salary Accounts
o Current Accounts
o Rural Accounts
o Public Provident Fund
o Sukanya Samridhi Account
o Demat Accounts
 DEPOSITS
o Fixed Deposit
o Non Withdrawal Deposits
o Recurring Deposit
o My Passion Fund


BONDS & SECURITIES
o Savings Bonds
o Sec-54 EC Capital Gains Bonds
o Inflation Indexed National Savings Securities-Cumulative(IINSS-C)
o Sovereign Gold Bonds
 MUTUAL FUNDS
o INVESTNOW (BY HDFC SECURITIES LTD)
o EQUITIES AND DERIVATIVES
o IPO APPLICATION THROUGH ASBA
 POPULAR LOANS
 FlexiPay: Buy Now, Pay Later
 Home Loan
 Personal Loan
 Business Loan
 Two Wheeler Loan
 EasyEMI Consumer Loan
 Super Bike Loan
 Educational Loan
 Pre-Owned Car Loan
 Rural Loan
 New Car Loan
 LIFE
o Protect Life (Term)
o Secure Childrens Future
o Protect Life And Grow Wealth
o Protect Life And Plan For Retirement
 HEALTH & ACCIDENT
o Mediclaim
o Critical Illness
o Personal Accident
o Super Top-Up (Health)
 VEHICLE
o Private Car Insurance
o Two Wheeler Insurance
 o Commercial Vehicle Insurance

Deposit Account

Savings Account

HDFC Bank offers 11 types of savings accounts to serve the financial needs of students,
entrepreneurs, salaried employees, or senior citizens. From regular to premium savings
account, one can manage the money efficiently. Read More

Current Account
HDFC Bank offers 18 types of current accounts to serve the needs of different
businesses. Current accounts largely deal with liquid deposits does not limit the number
of transactions in a day and easily allows for the withdrawal of funds.

Loan

Home Loan

HDFC Bank offers 3 types of home loans for its customers at attractive interest rates.
Customers can opt for automated repayment and the EMIs will be directly repaid from
HDFC Bank Savings Account. Read More

Personal Loan
 HDFC Bank offers a personal loan to its customers at attractive interest rates, low
processing fees, & simplified documentation. Customers can also avail pre-approved
loan in 10 seconds and others can get a loan in 4 hours. Read More

Loan against Property

HDFC Bank customers can pledge their property to meet the personal or business goals
with 4 types of loan against property. Customers can get up to 65% of one’s property’s
value, attractive interest rates, and hassle-free processing. Read More

Car Loan

HDFC Bank helps to finance the dream of buying a new car for its customers with up to
100% funding. Customers can opt for 3 types of car loans as per their requirement with 7
year loan tenure, quick disbursal, and processing. Read More

Education Loan

HDFC Bank offers 3 types of education loan to its customers studying across leading
institutions in India & overseas to fulfill their career goals & aspirations. Customers can
also avail tax benefits u/s 80 (E) of Income Tax Act, 1961. Read More

Gold Loan
HDFC Bank offers gold loan with a minimum loan amount of Rs. 25,000 to its customers
at a flexible interest rate, minimal documentation & secure storage. Customers can get
the funds instantly & repay at their own convenience. Read More

Business Loan

HDFC Bank offers business loan to its customers of up to Rs. 50 lakh to fulfill their
unique business. It comes with easy documentation, attractive interest rates, overdraft
facility, and flexible tenures. Read More

Investment

Fixed Deposit

HDFC Bank offers fixed deposit schemes with high returns to its customers for investing
money. It also provides preferential interest rates (0.50% additional) to senior
citizens. Read More

Recurring Deposit
HDFC Bank offers a recurring deposit with a minimum deposit as small as Rs. 1,000 or
up to Rs. 14.99 per month and with a minimum tenure of 6 months up to a maximum
tenure of 10 years.

Cards

Credit Card
 HDFC Bank offers various types of credit cards to fulfill the needs of its customers. The
card offers attractive reward points, exclusive travel benefits, dining privileges, and many
more. Read More

Debit Card

HDFC Bank offers a wide range of debit cards to cater to the needs of its customers.
The cards provide various offers, discounts, and cashback on shopping, traveling,
dining, etc. Read More

Banking

Balance Enquiry

HDFC Bank account holders can check their account balance via Netbanking, Mobile
Banking, Missed Call, SMS, Passbook, ATM & Customer Care Number. Read More

Mini Statement

HDFC Bank customers can avail their mini statement using Net Banking, Phone
Banking, SMS, Passbook, ATM and also by contacting the 24X7 customer care
number. Read More
 Net Banking

HDFC Bank customers can avail Net Banking using which they can check their account
balance, book fixed & recurring deposits, transfer funds, download bank statement up to
5 years, etc. Read More

https://www.paisabazaar.com/hdfc-bank/