UNIVERSITY OF PETROLEUM & ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

B.B.A.- LL.B.(Hons.)
SEMESTER VIII
ACADEMIC YEAR: 2012-17
SESSIONS: JANUARY-MAY
ABSTRACT AND SYNOPSIS ON FUNCTIONS OF COMMERCIAL
BANKS

FOR
Banking and Insurance Law
Under the Supervision of: Dr. K.B. Asthana

NAME: SURABHI LIMAYE

SAP NO:

500022480

ROLL NO:

R760212065

ABSTRACT
A Commercial bank is a type of bank or a financial institution that provides services such as
accepting deposits, making business loans, and offering basic investment products. "Commercial
bank" can also refer to a bank, or a division of a large bank, which more specifically deals with
deposit and loan services provided to corporations or large/middle-sized business - as opposed to
individual members of the public/small business - Retail banking, or Merchant banks. The
general role of commercial banks is to provide financial services to general public and business,
ensuring economic and social stability and sustainable growth of the economy.
The functions of commercial banks are basically divided into two types: Primary and
Secondary Functions. Primary functions consist of mainly collection of deposits and making
loans or advances which further includes loan to a person or to a firm against some collateral
security; cash credit (loan in installments against certain security); overdraft facilities (i.e.
allowing the customers to withdraw more money than what their deposits permit); and loan by
discounting bills of exchange. The Secondary functions consist of mainly agency services and
general utility services which further include safeguarding money and valuables, transferring
money, merchant banking, automatic teller machines, travelers cheque and credit cards etc. In
developing countries like India commercial banks perform certain promotional (developmental)
activities. For example, nationalized banks in India provide credit to the top priority sectors of
the economy such as agriculture, and small-scale and cottage industries. In this way commercial
banks help to promote the socio-economic development of the country.
The modern bank thus, carries out several functions. It provides safe custody for those savers
who want to put their savings with it and earns an income also, offers facilities to the busy
businessmen or professional as the cheque facility, thus making the flow of payments and
receipts easier while at the same time acting as the custodian of their funds. It also provides
finance for the needy ones by allowing overdraft and loan facilities by creating credit . This
project will show, with reference to the Indian experience, a descriptive about the growth and
development of commercial banks as well the functions of commercial banks. The project would
adapt an analytical approach with examples of various other similar case laws.

Key Words Commercial Banks, Primary Functions, Secondary Functions

SYNOPSIS
STATEMENT OF PROBLEM The project deals with two main issues. The first is to analyze
the concept of Commercial Banks and the general growth and development of the same. The
second is to analyze the functions of these Commercial Banks.
OBJECTIVE OF THE RESEARCH The main objective behind the research is to give a
detailed account and analysis of the concept of Commercial Banks, their significance as well the
functions of the same in light of Banking Law.
IDENTIFICATION OF ISSUES

Concept of Commercial Banks

Functions of the Commercial Banks

RESEARCH QUESTION
What are the functions of these Commercial Banks and what significance these functions have in
light of India?
HYPOTHESIS
The modern bank thus, carries out several functions. It provides safe custody for those savers
who want to put their savings with it and earns an income also, offers facilities to the busy
businessmen or professional as the cheque facility, thus making the flow of payments and
receipts easier while at the same time acting as the custodian of their funds. It also provides
finance for the needy ones by allowing overdraft and loan facilities by creating credit.
RESEARCH METHODOLOGY ADOPTED

Qualitative Analysis It aims to analyze the basic concept of the Commercial Banks.
Descriptive Analysis It aims to describe in detail the concepts involved, the events
leading to the emergence of the Commercial Banks in India and the functions of the
same.

SURVEY OF EXISTING LITERATURE

ONLINE SOURCES

http://www.yourarticlelibrary.com/banking/commercial-banks-types-and-functions-ofcommercial-banks-of-india/23496/

http://www.importantindia.com/12392/functions-of-commercial-banks-in-india/

http://www.yourarticlelibrary.com/banking/commercial-banks/commercial-banksprimary-and-secondary-functions-of-commercial-banks/30321/

https://en.wikipedia.org/wiki/Commercial_bank#Role

BOOKS

ICSI, Banking and Insurance Law and Practice, Taxmann