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d. Serving with Agency Functions
A commercial bank performs a number of agency services like payment to the
creditors, water and electricity bills, subscriptions, insurance premium, etc. and collection
from debtors receiving dividends, interest and commission, etc. on behalf of the clients
as per outstanding instructions. It charges a certain commission for serving with such
agency functions.

e. Remits Money
Remittance of money is another important function of development bank. It issues
bank draft, letter of credit, telegraphic transfer (TT), credit cards, etc. remittance of money
from one place to another place.

Points to Remember

Development Function Banking functions
i. Establishment of industries, promotion and i. Grants loan
research of technology
ii. Helps industrial organizations ii. Accepts Deposit
iii. Identifies priority sector iii. Purchases and sales of shares and debentures
iv. Maintains proper environment for investment vi. Serving with agency functions
v. Analysis of product v. Remits money

Micro-finance Bittya Sanstha Ltd.

Micro-finance is termed as the financial services
rendered to the deprived groups of the people and
small entrepreneurs in savings, credit, remittance,
rural insurance, etc. to help them in developing self-
employment opportunities and various income
generating activities. Small size of loan, group savings,
small-scale entrepreneurs, diversified utilization and
simple and flexible terms and conditions on credit Micro-finance Bittya Sanstha Ltd.
(without collateral) are the determining characteristics
of its definition. Based on institutions involved, micro- finance sector can be classified into
two groups: i. formal (Government and NRB) and ii. semi-formal.
Nepal has an experience of about four decades in micro-finance. Although many
programmes have been implemented for poverty alleviation in Nepal, only micro- finance
programmes are seen as pro-poor and rural based. The modern Micro-finance movement
started from 1995 AD in Nepal. Micro-finance has been particularly recognized as an
effective development intervention for basic three reasons:

The services provided through micro-finance can be targeted specifically to the poor
and poorest of the poor,
These services can make a significant contribution to the socio-economic status of the
targeted community, and

76 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 77