Question

Mention an important difference between a Commercial Bank and the Central Bank.

State three differences between a Commercial bank and a Central bank.

Mention two ways in which commercial banks differ from the central bank.

Distinguish between the Central Bank and a Commercial Bank.

Explain clearly four differences between a central bank and a commercial bank.

Answer 1

The central bank is the apex bank and is also known as a bank of all the banks. While a commercial bank functions under the control of the central bank.

Answer 2

S. No.	Basis	Commercial Bank	Central Bank
1.	Meaning	It just operates under the guidelines of the central bank.	Central bank is an apex institution of the monetary and banking structure of the country.
2.	Object	Its main objective is to earn profit.	Its main objective is to promote social welfare.
3.	Ownership	Commercial banks may be both privately owned or government owned institutions.	Central bank is generally a government owned institution.
4.	Note-issue	Commercial banks do not have such rights.	It has got the monopoly right of note-issue.
5.	Banker	Commercial bank is a banker only of the general public. It has direct public dealing.	It is a banker of the government. It is also the banker of the commercial banks. It does not have direct public dealing.
6.	Number	There are a number of commercial banks in every country with a large number of branches all over the country and also even abroad.	There can be only one central bank with a few offices in a country.
7.	Credit	It creates credit.	It controls credit.