Granting loans and advance:

The most profitable function of commercial banks is extending credits to worthy borrowers charging interest rate higher than the rate they pay on deposits. Short - term credit facilities are extended to customers using special loan account or in the form of overdraft using current account. It may also take the form of loan syndication whereby two or more banks agree to finance a large project.

Acting as agents of payment:

Commercial banks' customers keep current accounts from which they can draw for settlement of debt and for payments for goods and services. They also transfer funds on behalf of their customers through collection of standing orders and direct debiting.