Question

Distinguish between the Central Bank and the Commercial Bank.

Explain five differences between a Central Bank and a Commercial Bank. 

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

Differentiate between central bank and commercial bank.

Answer 1

Sr. No.	Basis of Distinction	Central Bank	Commercial Bank
1.	Position or status	It is the apex institution of a country's banking system.	It is one of the banks in the country.
2.	Ownership	It is owned by the Government.	It is generally owned by the shareholders.
3.	Aim	Its aim is to serve the country's interest.	Its aim is to earn profit.
4.	Number	There is only one central bank in a country.	There are several commercial banks in the country.
5.	Main client	It is a banker to the Government.	It is a banker to the general public.
6.	Issue of notes	It has the monopoly over the issue of notes.	It cannot issue notes.
7.	Relationship with other banks	It controls all other banks.	It functions under the control of the central bank.
8.	Designation of the Chief Executive	Its chief is called "Governor''.	Its chief executive is called "Chairman".
9.	Loans	The central bank provides loans and advances to banks and other financial institutions.	The commercial bank grants loans and advances to businessmen, industries and people.