Banks can act as agent of lending by means of loan, overdraft and discounting bill of exchange. Commercial banks act as agent of lending through the following ways: 1) Loan: Through loan, money is lent out to customers at an agreed rate of interest for a specific period of time. In this case, the borrower’s current account will be credited by the amount of the loan. At the same time, a loan account for the amount will be opened. The customer is required to have collateral security before he can be given loan. The customer will pay interest on the full amount he has borrowed.   2) Overdraft: Overdraft is…