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What is the different between commercial bank and central bank?

Originally Posted by Olamike4real

What is the different between commercial bank and central bank?

Difference between commercial bank and central bank?

Commercial Bank

• A commercial bank occupies a subordinate position in the banking structure of a country.
• It is a profit oriented financial institution.
• It cannot print currency notes.
• It can be owned by the government or it may be privately owned.
• Individuals and institutions are the account holders of these banks.
• It can provide short term and medium term loans to the individuals and industries.

Central Bank

• There can be only one central bank for the entire economy.
• It is a non-profit making financial institution.
• The central bank has the monopoly power to issue currency notes from Rs.2 and above.
• It is owned by the central government.
• All commercial banks and the government are the account holders of this bank.
• It can provide loans to schedule banks and financial institutions.

While Central Bank is itself a Government Bank, Commercial bank may and may not be the government bank.


With Regards
ravik1214

Hi,
the main differences in commercial bank and central bank are-
1.commercial bank provide loan while central bank doesn't provide any loan.
2.write now only central bank has power to print currency note while commercial bank has no power to print currency note.
thanks.

COMMERCIAL BANK:-

This bank involves in commercial business transaction,

This is absolutely profit oriented financial istitution,

This may be owned by either Govt. or private istitutions,

This has got no power to print currency notes,

Individuals, Companies, Firms can open account in these banks,

This can provide term loans to individuls, Institutions, Companies.

CENTRAL BANK:-

A Central Bank is the single bank in an entire Country and governed by Central Govt.,

This bank can print and issue currency notes as and when required,

This bank provides loans to other commercial banks in the Country,

All commercial banks and the Govt. are the account holder of this bank.

How many bank do we have in nigeria

explain one way customer may benefit from each services of commercial bank

what are the similarities between commercial bank amd central bankPlease type your question or comment here and then click Submit.

WHY IS IT IMPRACTICAL FOR COMMERCIAL BANKS TO PERFORM CENTRAL BANK FUNCTIONS

Does a central bank prints notes and mint coins which are legal tender and destroy torn notes and warn out coins