Functions of Bank – Short Notes for JAIIB Exam | Oliveboard

The Indian Institute of Banking and Finance conducts JAIIB/DBF exams twice a year. For bank personnel, taking this test is a great chance to progress their careers. The JAIIB test is designed to verify that applicants have a thorough grasp of bank functions. Learners may read brief notes on one of the most significant subjects of bank notes functioning in this eBook.

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What’s there in Functions of Bank eBook?

Table of Content
What is a Bank?
Primary Functions of a Bank
Other Functions
Banker Customer Relationship
KYC/CFT/AML Norms
Banker’s Special Relationship
Do’s and don’ts of banks under Garnishee order
Banking Ombudsman & COPRA
Negotiable Instruments

Sneak-Peak into the free Functions of Bank JAIIB eBook

What is a Bank?

A bank is a legal entity that takes deposits that can be withdrawn at any time. Banks are financial entities that assist the public in managing their finances. People deposit their savings with banks with the confidence that they will be able to retrieve money when needed.

Banks accept deposits from both the general public and the corporate community, and they provide depositors with two guarantees:

  1. Deposit security
  2. Withdrawal of the deposit as needed

Banks pay interest on deposits, which is a tremendous incentive for depositors because it adds to the original deposit amount. This encourages citizens to save money. The bank also makes loans based on deposits, contributing to the country’s economic progress and the general public’s well-being. With this stature, it becomes important to understand the major functions of a bank.

Primary Functions of Bank

The main purpose of banks is to keep people’s money safe and to provide loans to those who need them. People put money in banks, which the banks then use to provide loans to them. Aside from these basic roles, banks also execute a variety of other tasks.

Increased financial competition, technical developments, and a variety of other factors all led to the rise of products and services.

The concept of money’s temporal value is well-known among the general public; they are now aware of their money’s future potential. Individuals now have a variety of alternative investment alternatives in addition to maintaining a savings account for the purpose of investing. One of the main reasons why banks can no longer operate is because of this.

Other Functions

Other functions that the bank performs, which are known as ancillary services, are as follows-

  • Fund Transfer (RTGS/NEFT)
  • Merchant Banking
  • Factoring
  • Bank drafts
  • Traveller’s Cheque
  • Retail banking
  • Bank Assurance/Guarantee
  • Internet Banking
  • Insurance
  • Mobile Banking
  • Bank Cards
  • Mutual Funds
  • Foreign Exchange/Forex services
  • Custodial Services

Banking Ombudsman & COPRA

Consumer Protection Act (COPRA)

  • District Forum- up to Rs. 20 Lakh
  • State Commission- Above Rs. 20 Lakh to Rs. 1 Crore
  • Central Commission- Above Rs. 1 crore

Banking Ombudsman Scheme

  • Resolution of complaints relating to services rendered by banks
  • Compensation amounts arising directly out of act or Rs. 10 Lakhs, whichever is lower
  • In the case of credit cards- Not exceeding Rs. 1 Lakhs

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