Differences Between A Central Bank And Commercial Banks
Differences Between A Central Bank And Commercial Banks – Central bank and commercial banks are one of the Main part of Any Economy Financial System . Central Bank perform a Role Of Bankers to All Banks . This is very important topic for Any Exams Which are conducted In india.
If you Doing MBA, BBA, BBM, Or Preparing for Any Competitive Exams .
This topic is Asked in Every Exam. IBPS PO, IBPS RRB And IBPS Clerk Exams also Cover this Topic In Syllabus.
|Central bank||Commercial Bank|
|The central bank is the apex institution of the monetary and banking structure of the country||The commercial bank is one of the organs of the money market.|
|The central bank is a no-profit institution which implements the economic policies of the government||But the commercial bank is a profit-making institution.|
|The central bank is owned by the government||whereas the commercial bank is owned by shareholders.|
|The central bank is a banker to the government and does not engage itself in ordinary banking activities||The commercial bank is a banker to the general public.|
|The central bank has the monopoly of note issue||while the commercial bank can issue only cheques|
|The central bank is the banker’s bank. As such, it grants accommodation to commercial banks in the form of rediscount facilities, keeps their cash reserves, and clears their balances.||the commercial bank advances loans to and accepts deposits from the public.|
|The central bank controls credit in accordance with the needs of business and economy.||The commercial bank creates credit to meet the requirements of business.|
|The central bank helps in establishing financial institutions so as to strengthen money and capital markets in a country.||On the other hand, the commercial bank helps industry by underwriting shares and debentures, and agriculture by meeting its financial requirements through cooperative or individually.|
|The chief executive of the central bank is designated as “Governor”||whereas the chief executive of a commercial bank is called ‘Chairman’.|
|The central bank is the custodian of the foreign currency reserves of the country||the commercial bank is the dealer of foreign currencies|
|Every country has only one central bank with its offices at important centres of the country||On the other hand, there are many commercial banks with hundreds of branches within and outside the country.|