The functions of modern commercial banks are as diverse as the functions of a government. As the government has presence everywhere, so is the case with commercial banks. They are also distinct by their presence in all the spheres of life-economic, social and financial. It is well known that the earliest banks started by safe custody, remittance, currency exchange and lending and/or investment.
As the days went by, banks assumed the names of commercial banks and multiplied their functional areas. Lending activity was at one time followed by deposit taking activity. Subsequently, bill collection, bill discounting, foreign exchange business, guarantee business, making payment on behalf of customers, acting as banker to the issue and undertaking public issue of shares, providing specialized services to the customers and so on were added to as their functions.
Later part of the twentieth century, however, witnessed unprecedented improvement/changes in the banking industry. Introduction of new technology, namely, fax, telex, computer, e-mail and other equipment based on information technology (IT) etc. changed the whole scenario of banking around the world. Dozens of IT related products were added to the list of functions of commercial banks. As a result, it is observed that the commercial banks' services today cover practically all the segments of the economy and society.
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