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Questions
Distinguish between the following.
Commercial Bank and Central Bank.
Give any one difference between Commercial bank and Central Bank.
Solution
| Commercial bank | Central Bank | |
| Meaning | A commercial bank is a bank which accepts deposits from the public for the purpose of lending. It also performs secondary functions. | The Central Bank (RBI) regulates money supply in the country. It also acts as a banker to the Government and to the other banks. |
| Examples | Bank of Baroda, Dena Bank, SBI, Central Bank of India etc., are commercial banks. | Reserve Bank of India is the Central Bank in India. |
| Printing of Currency | The commercial bank cannot print currency notes and coins. | The RBI has the power to print currency notes in India. (Except 1 Rs. Notes) |
| Acceptance of Deposits | The commercial bank accepts deposits from the public. | The RBI does not accept deposits from the public. |
| Provision of Loans | The commercial bank provides loans to the industry and to the public. | The RBI provides loans to scheduled banks and financial institutions. |
| Ownership | It can be owned by private and /or Government agencies. | It is owned and controlled by the Government of India. |
Notes
Students should refer to the answer according to their questions.
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