Introduction to Modern Bank:
A modern bank is a financial institution that provides a wide range of financial services to individuals, businesses, and governments. It plays a crucial role in the economy by mobilizing savings and channeling them into productive investments. In the Indian banking system, commercial banks are the major players. They are regulated by the Reserve Bank of India (RBI) and operate under the guidelines provided by the Indian financial system.

Functions of Commercial Banks in Indian Banking System:
Commercial banks in the Indian banking system perform various functions that are vital for the smooth functioning of the economy. These functions can be broadly categorized into the following:

1. Accepting Deposits:
Commercial banks act as custodians of public money and accept deposits from individuals, firms, and organizations. They offer various types of deposit accounts such as savings accounts, current accounts, fixed deposits, recurring deposits, etc. These deposits can be withdrawn by the depositors as and when required.

2. Advancing Loans and Credit:
One of the primary functions of commercial banks is to provide loans and credit facilities to individuals and businesses. Banks provide short-term, medium-term, and long-term loans for various purposes such as personal loans, home loans, business loans, agricultural loans, etc. They also extend credit in the form of overdrafts, cash credits, and trade financing.

3. Payment and Settlement:
Commercial banks facilitate the transfer of funds through various payment mechanisms. They issue checks, demand drafts, and electronic payment instruments such as debit cards, credit cards, and mobile wallets. Banks also provide online banking services, enabling customers to make transactions and payments electronically.

4. Foreign Exchange Services:
Commercial banks play a crucial role in facilitating foreign trade by offering foreign exchange services. They provide facilities for buying, selling, and remitting foreign currencies. Banks also assist in hedging foreign exchange risks and provide advice on foreign exchange transactions.

5. Investment and Treasury Management:
Commercial banks invest their surplus funds in various financial instruments such as government securities, corporate bonds, stocks, and mutual funds. They also manage their own treasury operations, including foreign exchange trading, money market operations, and asset-liability management.

6. Other Ancillary Services:
Apart from the core functions, commercial banks offer a range of ancillary services such as safe deposit lockers, wealth management, insurance products, investment advisory, and online banking services. These services add value to customers and enhance the overall banking experience.

Conclusion:
Modern banks, especially commercial banks, perform multiple functions that are crucial for the smooth functioning of the Indian banking system and the overall economy. They act as intermediaries between savers and borrowers, facilitate payments and settlements, provide credit to individuals and businesses, and offer a wide range of financial services. Their role in mobilizing savings, allocating capital, and promoting economic growth cannot be overstated.