(a) Commercial bank is a financial institution which deals in money i.e. borrowing and lending of money. It performs the functions of accepting deposits from the general public and giving loans for investing to them with the aim of earning profit. 

The three methods adopted by commercial banks to mobilise funds from the public are as under: 

1. Cash Credit: In cash credit, the bank advances a ‘cash loan’ upto a specified limit to the customer against a bond or other security. A borrower is required F to open a current account and bank allows the borrowers to withdraw upto the full amount of the loan. The interest is charged only on the amount actually utilized by the borrower and not on the loan sanctioned. 

2. Loans: A loan is granted against some kind of security of assets or personal security of the borrower and the interest is charged on the full amount sanctioned as loan, irrespective of the fact whether full amount or part of it has been used. In case of loans, the borrower is provided with the facility to repay the loan in installment or as a lump-sum. 

3. Overdraft: The overdraft facility is allowed to the depositor maintaining a current account with the bank. According to this facility, a borrower is allowed to withdraw more amount than what he has deposited. The excess amount so withdrawn has to be repaid to the bank in a short period and that too with interest. The rate of interest is usually charged more than that charged in case of loans. However, the overdraft facility is given only against security of some assets or on personal security of the customer. 

(b) Advantages of division of labour: 

1. Reduction in Cost of Production: The specialised worker with the help of machines, produces, more quantity of goods in less time and with minimum wastage. This reduces the cost of production thereby resulting in more profits to the producer. 

2. Improvement in Quality: As the worker acquires greater skill in performing the work, the quality of the commodity produced is better. Quality product leads to increment in overall turnover and net profit of the producer. 

3. Increase in Production: With the division of labour, the workers become more skilled and efficient. They acquire higher speed in work which ultimately results in more production quantitatively and qualitatively. 

4. Economy of Large Scale Production: With the help of the division of labour, the commodities are being produced on large scale and in an efficient and quick way. This results in all kinds of interned and external economies for the production units. As such the cost of production is reduced and simultaneously, the quality of manufactured goods is improved. This ultimately yields more profit to the producer. 

5. Utilisation and Employment of Unskilled Labour: Due to simplification and bifurcation of complex processes into several small tasks, even the less skilled workers can be employed to perform these tasks. This reduces the cost of production on account of lower wages of an unskilled or semi-skilled worker. In addition, this increases overall employment in the country.