The functions of nationalized banks are as follows -.
a) Accepting deposits; and
b) Granting loans and advances;
These are Issuing letters of credit, traveler’s cheques, circular notes etc.
• Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers;
• Providing customers with facilities of foreign exchange.
• Transferring money from one place to another; and from one branch to another branch of the bank.
• Standing guarantee on behalf of its customers, for making payments for purchase of goods, machinery, vehicles etc.
• Collecting and supplying business information;
• Issuing demand drafts and pay orders; and,
• Providing reports on the credit worthiness of customers
• . Collection and Payment of Cheques
• Standing Instruction
• Acting as correspondence
• Collecting of bills- electricity, gas, WASA, telephone etc.
• Purchase and Sales of stocks/ share-act as a banker to issue
• Safe Custody- bailee
• Remittance facilities –DD, TT, MT and PO
• Advisory services
• Providing Credit reports
• Opening L/C
• Demand in ForEx/ Travers Cheque only Authorized Dealer branches
• Complete service in Foreign Trade
• Other Services: Debit Card, Credit Card, On-line banking SMS banking
• Creation of Credit: a multiplier effect, Deposit creates credit and credit creates deposits – derivative deposit.
i)Collection of bills, drafts etc.
ii)Collection of interest, dividends etc. on the behalf of the customers.
iii)Payment of interests, installment of loans, insurance premium etc.
iv)Purchase and sale of securities.
v)Banks also executes the will of their customers after their deaths.
Industries and agriculture flourish due to these banks.
These banks mobilize the savings of people that results in capital formation.