Question

Which is the agency function of a commercial bank?

• A. To give loan
• B. Buying and selling of securities
• C. To provide locker
• D. To accept deposits

Hint:

Agency functions mean services banks perform on behalf of customers, like collection of cheques, payment of bills, and securities trading.

Answer 1

The Correct Option is B

Step 1: Understanding bank functions.
Commercial banks perform two types of functions: (1) Primary (accepting deposits, lending loans) and (2) Secondary (agency and utility functions). Agency functions include acting on behalf of customers.
Step 2: Analyzing the options.
(A) To give loan: This is a primary function, not an agency function.
(B) Buying and selling of securities: Correct — banks act as agents for customers in securities transactions.
(C) To provide locker: This is a utility function, not an agency function.
(D) To accept deposits: This is a primary function, not agency.
Step 3: Conclusion.
Thus, the agency function of a commercial bank is Buying and selling of securities.