The functions of commercial banks are determined by their nature. They mainly have four basic functions:

1. Credit intermediary function

Credit intermediary is a commercial bank The most basic functions of a bank that best reflect the characteristics of its business activities. The essence of this function is to collect all kinds of idle money in society into the bank through the bank's liability business, and then invest it in various economic sectors through the asset business; commercial banks serve as lenders of monetary capital and The intermediary or representative of the borrower realizes the financing of capital, and obtains interest income from the difference between the cost of absorbing funds, interest income from loans, and investment income, forming bank profits. Commercial banks became "big merchants" buying and selling "capital goods". Commercial banks realize the accommodation between capital surplus and shortage through the function of credit intermediary, which does not change the ownership of monetary capital, but only changes the right to use monetary capital.

2. Payment intermediary function

In addition to serving as credit intermediaries and financing monetary capital, commercial banks also perform the functions of money management. Through the transfer of deposits to accounts, make payments on behalf of customers, and on the basis of deposits, cash cash for customers, etc., and become currency custodians, cashiers and payment agents for industrial and commercial enterprises, groups and individuals. With commercial banks as the center, a payment chain and creditor-debt relationship with no beginning or end in the economic process are formed.

3. Credit creation function

Commercial banks have a credit creation function based on their credit intermediary functions and payment intermediary functions. A commercial bank is a bank that can absorb various deposits and issue loans using the various deposits it absorbs. On the basis of check circulation and transfer settlement, loans are derived into deposits. In such deposits, cash is not withdrawn or is not fully withdrawn. On the basis of this, the capital sources of commercial banks are increased, and finally, in the entire banking system, derivative deposits are formed that are several times the original deposits. Commerce For a long time, commercial banks have been the only institutions among various financial institutions that can accept demand deposits and open check deposit accounts. On this basis, transfers and check circulation have emerged. Commercial banks create and shrink demand deposits through their own credit activities. If there is not enough demand for loans and the deposits cannot be loaned out, there is no creation, because deposits are distributed only when there are loans; on the contrary, if the loans are returned, they will shrink accordingly. Derivative deposits. The degree of contraction corresponds to the degree of derivation. Therefore, for commercial banks, deposit-taking plays a very important role in their operations.

4. Financial services function

With the development of the economy, the business operating environment of industrial and commercial enterprises has become increasingly complex, and the business competition among banks has become increasingly fierce. , relatively well-informed, especially the widespread use of computers in banking business, which enables them to provide information services to customers, consulting services, "decision support" for enterprises and other services have emerged, and industrial and commercial enterprise production and circulation majors The development of the economy also requires that many monetary businesses that originally belonged to the enterprise itself be transferred to banks to handle on their behalf, such as paying wages and paying other expenses on their behalf. Personal consumption has also evolved from simple money and goods transactions to transfer settlement. Modern social life has put forward financial service requirements for commercial banks from many aspects. Under the strong business competition, commercial banks are also constantly exploring service areas. Through the development of financial services business, they further promote the expansion of asset and liability businesses, and combine asset and liability businesses with financial services to open up new business areas. In modern economic life, financial services have become an important function of commercial banks.

5. Regulating the economic function

Regulating the economy means that commercial banks use their credit intermediary activities to adjust for the shortage of funds in various sectors of society, and at the same time, in line with the central bank’s monetary policy and other countries’ macro policies. Under the guidance, adjustments to the economic structure, consumption ratio, investment, industrial structure and other aspects will be realized. In addition, commercial banks can also adjust the country's balance of payments through their financing activities in the international market.

Because of its wide range of functions, commercial banks have a significant impact on the entire social and economic activities, and they occupy a special and important position in the entire financial system and even the national economy.

With the development of the market economy and the integration of the global economy, today's commercial banks have highlighted the development trend of functional diversification.