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COMMERCIAL BANK

A commercial bank is a type of bank which raises funds by collecting deposits in form of saving and current accounts as well as having term deposits. It makes money by giving loans to Corporate and consumers. Commercial banks offer services to individuals; they are primarily concerned with receiving deposits and lending to businesses.

A commercial bank is a privately owned bank that provides a wide range of financial services both to the general public and to firms. The principal activities are operating cheque current accounts, receiving deposits, taking in and paying out notes and coin, and making loans. Additional services include trustee and executor facilities, the supply of foreign currency, the purchase and sale of securities, insurance, a credit- card system, and personal pensions. They also compete with the finance houses and merchant banks by providing venture capital and with building societies by providing mortgages. The number of commercial banks has gradually reduced following a series of mergers.

Functions of commercial banks
Commercial bank engages in the following activities:
• processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or other means
• issuing bank drafts and bank cheques
• accepting money on term deposit
• lending money by overdraft, installment loan, or other means
• providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures
• safekeeping of documents and other items in safe deposit boxes
• sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a “financial supermarket”
• Traditionally, large commercial banks also underwrite bonds, and make markets in currency, interest rates, and credit-related securities, but today large commercial banks usually have an investment bank arm that is involved in the mentioned activities.

Commercial Bank is here to assist you with meeting your financial needs. It can provide quick responses to almost every financing request. It offers a wide variety of financing options, including:
• Lines of Credit
• Real Estate Financing
• Equipment Financing
• Operating Loans
• Letters of Credit
Commercial Bank is the bank of choice when it comes to providing commercial banking services.

Kinds of Commercial Bank Loans

1. Secured Loan - You need to put up an asset as collateral for this loan such as a car or any real estate that you possess.
2. Mortgage Loan - A mortgage commercial bank loan is a very common kind of debt instrument, used to buy real estate properties. Until you repay the mortgage amount, the commercial bank is given security in the form of a lien on the house title. If you are not able to repay the loan amount, the commercial bank has the legal right to sell the house to recover the loan amount.
3. Unsecured Loan - Unsecured commercial bank loans are loans that are not secured against your assets. This means you do not need to put any collateral when availing unsecured commercial bank loans.
4. Stated Income Commercial Bank Loan - Stated income commercial bank loans are ideally suited for people who do not show high income on their tax returns. Stated income commercial bank loans give you an opportunity to state personal as well as business income. However, the documentation level varies from one bank to the next. These kinds of loans can be quite useful to businesses with a cash component, as it gives them a fixed rate financing for long term.