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How is a Commercial Bank Different from a Central Bank? - ICSE Class 10 - Economics

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Question

How is a commercial bank different from a central bank?

Solution

Differences between Commercial Bank and Central Bank:

Central Bank Commercial Bank
The central bank is the apex bank and is also known as the bank of all the banks. A commercial bank functions under the control of the central bank.
It focuses on social welfare. It focuses on profit maximisation.
It does not accept deposits. It accepts deposits from the public and provides loans to individuals and households.
It issues currency. It has no authority to issue currency
It is an advisor to the government on monetary issues. It is not an advisor.
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