Objectives Of Commercial Banking
We generally mean commercial banks by the word ‘bank’. Commercial banking system has come through a lot of modernization and specialization through ages. Usually commercial banks collect money from people that are surplus after meeting their essential requirements and lend it to the borrowers. A commercial bank is a profit oriented organization that makes profit by making deposit, transaction and lending of money. So ‘The type of organizations which make transaction of money or service exchangeable through money, are called commercial bank.’
10.1 Objectives of Commercial Banks
Although commercial banks are mainly established for making profit, they have some other objectives. Objectives of commercial banks are discussed below:
1) Making Profit : Commercial banks are established with the fundamental objective of making profit.
2) Medium of Exchange: Commercial banks introduce cheques, bills of exchange etc. as mediums of exchange.
3) Capital Formation: Collecting surplus money from the people and formation of capital is one of the main objectives of commercial banks.
4) Welfare of People: Public welfare is an indirect objective of commercial banks. 5) Assisting in Regulation of Loans: Participating and assisting the central bank in formation of loan policy and loan regulation is one of the objectives of commercial banks.
6) Assisting in Planning and Implementation: Another purpose of commercial banks is to assist the central bank in
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