COMMERCIAL BANK

A commercial bank (or business bank) is a type of financial institution and intermediary. It is a bank that
provides transactional, savings, and money market accounts and that accepts time deposits. Commercial
banking may also be seen as distinct from retail banking, which involves the provision of financial services
direct to consumers. Many banks offer both commercial and retail banking services.

Activities of Commercial Banks:

1. Processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or other means.
2. Issuing bank drafts and bank cheques.
3. Accepting money on term deposit.
4. Lending money by overdraft, installment loan, or other means.
5. Providing documentary and standby letter of credit, performance bonds, securities.
6. Safekeeping of documents and other items in safe deposit boxes.
7. Cash management and treasury.

Types of Loans Granted by Commercial Banks:

1. Secured Loan: A secured loan is a loan in which the borrower pledges some asset (e.g. a car or
property) as collateral for the loan, which then becomes a secured debt owed to the creditor who
gives the loan. The debt is thus secured against the collateral.
2. Mortgage Loan: A mortgage loan is a very common type of debt instrument, used to purchase
real estate. Under this arrangement, the money is used to purchase the property. Commercial banks,
however, are given security - a lien on the title to the house - until the mortgage is paid off in full.
If the borrower defaults on the loan, the bank would have the legal right to repossess the house and
sell it, to recover sums owing to it.
3. Unsecured Loan: Unsecured loans are monetary loans that are not secured against the borrower’s
assets (i.e., no collateral is involved). These may be available from financial institutions under
many different guises or marketing packages:
i. Bank Overdrafts: An overdraft occurs when money is withdrawn from a bank account
and the available balance goes below zero. In this situation the account is said to be
"overdrawn".
ii. Corporate Bonds: A corporate bond is a bond issued by a corporation. It is a bond that
a corporation issues to raise money in order to expand its business.
iii. Credit card debt, credit facilities or lines of credit, personal loans.

Services of Commercial banks:

 Current Account: Generally, this sort of account opens for business purpose. Customers can withdraw
money once or more against their deposit. No interest can be paid to the customers in this account. Against
this account loan facility can be ensured. Usually one can open this account with taka 500. All the banks
follow almost the same rules for opening current account.
 Savings Account: Usually customers open this sort of account at a low interest for only security. This is
also an initiative to create people's savings tendency. Generally, this account is to be opened at taka 100.
Interest is to be paid in June and December after every six months. If money is withdrawn twice a week
or more than taka 10,000 is withdrawn (if 25% more compared to total deposit) then interest is not paid.
This account guarantees loan. Almost all the banks follow the same rules in the field of savings account,
except foreign banks for varying deposit. On an average, all the banks give around six percent interest.
 Some Banks render special services to the customers attracting other banks:
1. Internet Banking: Customers need an Internet access service. As an Internet Banking customer,
he will be given a specific user ID and a confident password. The customer can then view his
account balances online. It is the industry-standard method used to protect communications over
the Internet. To ensure that customers' personal data cannot be accessed by anyone but them, all
reporting information has been secured using Version and Secure Sockets Layer (SSL).
2. Home Banking: Home banking frees customers of visiting branches and most transactions will be
automated to enable them to check their account activities transfer fund and to open L/C sitting in
their own desk with the help of a PC and a telephone.
3. Electronic Banking Services for Windows (EBSW): EBSW provides a full range of reporting
capabilities, and a comprehensive range of transaction initiation options. The customers will be
able to process all payments as well as initiate L/Cs and amendments, through EBSW. They will
be able to view the balances of all accounts, whether with Standard Chartered or with any other
banks using SWIFT. Additionally, transactions may be approved by remote authorization even if
the approver is out of station.
4. Automated Teller Machine (ATM): Automated Teller Machine (ATM), a new concept in modern
banking, has already been introduced to facilitate subscribers 24-hour cash access through a plastic
card. The network of ATM installations will be adequately extended to enable customers to non-
branch banking beyond banking.
5. Tele Banking: Tele Banking allows customers to get access into their respective banking
information 24 hours a day. Subscribers can update themselves by making a phone call. They can
transfer any amount of deposit to other accounts irrespective of location either from home or office.

SWIFT: Swift is a bank owned non-profit co-operative based in Belgium servicing the financial community
worldwide. It ensures secure messaging having a global reach of 6,495 Banks and Financial Institutions in
178 countries, 24 hours a day. SWIFT global network carries an average 4 million message daily and estimated
average value of payment messages is USD 2 trillion. Swift is a highly secured messaging network enables
Banks to send and receive Fund Transfer, L/C related and other free format messages to and from any banks
active in the network. Having SWIFT facility, Bank will be able to serve its customers more profitable by
providing L/C, Payment and other messages efficiently and with utmost security. Especially it will be of great
help for our clients dealing with Imports, Exports and Remittances etc.
General Banking: Banks perform this function in two ways- taking deposits from various areas in different
forms and lending that accumulated amount of money to the potential investors in other different forms. It is
the starting point of all the banking operating. General Banking department aids in taking deposits and
simultaneously provides some ancillaries services. It is the department, which provides day-to-day services to
the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring
cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since bank in confined to
provide the service everyday general banking is also known as Retail Banking.
General Products are:

1. Current Deposit: Interest Rate 0.00%

2. Savings Deposits: Interest Rate 6.00%
3. Short Term Deposits
4. Fixed Deposits