Primary Functions of Commercial Banks

Commercial banks have core responsibilities that define their primary role in the financial system. These functions are essential for their operation and impact the economy significantly.

Key Primary Functions Identified:

• Accepting Deposits (A): This is a foundational activity where banks gather funds from the public, providing a source for their lending operations.
• Discounting Trade Bills (C): Banks provide short-term finance by purchasing or advancing money against bills of exchange, facilitating business liquidity.
• Financing Foreign Trade (D): This involves providing essential financial services for international trade, such as issuing letters of credit and handling foreign exchange.

Secondary Functions Identified:

Other services, while important, are generally considered secondary functions:

• Agency Services (B): Includes acting on behalf of customers (e.g., collecting checks, paying bills).
• General Utility Service (E): Encompasses services like locker facilities and issuing drafts.

Conclusion

The primary functions are centered around deposit-taking and lending/financing activities crucial for commerce. Therefore, Accepting Deposits (A), Discounting Trade Bills (C), and Financing Foreign Trade (D) are the key primary functions listed.

The correct option combining these primary functions is A, C, and D only.