The deposits received from the public are the main

deposit from the public. The deposits received from the public are the main
source of money for commercial bank. The bank will use these deposits to
provide loans to investors, purchase fixed properties, purchase stock, and make
other investment.
a) Current deposits
b) Saving deposits
c) Fixed deposits
2. To provide loans and advance
The provision of loans through current accounts, overdraft facilities, and bill of
exchange discount are the most profitable activities of commercial bank.
Commercial bank provides loans by crediting an amount of money into the
customer’s current account. A fairly high interest rate will be charged on the
loan amount.
Commercial bank will also provide overdraft loans by allowing customers to
withdraw a sum of money exceeding the balance in their current amount. The
commercial bank will determine the maximum overdraft amount that the
customer can withdraw. Interest will charged on the amount of overdraft
withdraw, and not the total overdraft amount that is approved.
Commercial banks will also provide loans by discounting bills of exchange
owned by customers. Commercial bank will provide a cash advance to
customer and will receive a commercial from the discounted bills of exchange.
The commercial banks will receive payment from the bill drawer when the bill
reaches its maturity period.
3. To make and receive payments
Commercial banks will receive payment on behalf of current account holder to
order parties that produce cheques written by the current account holder.
Commercial banks also receive payment on behalf of current account holder
from other parties by clearing cheques deposited into the customer’s current
account.
4. To issue traveler’s cheques and bank drafts
Commercial bank sells traveler’s cheques to customers that travel overseas.
Commercial bank also provide bank draft for customer who wish to make
payment guaranteed by the bank.
5. To conduct investment activities

6. To provide other services