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What is a commercial bank? - Commerce

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What is a commercial bank?

What is meant by the term commercial bank

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Solution

  1. A commercial bank is a profit-driven business that deals in money and credit. This is a financial institution that accepts public deposits and holds them in safe custody.
  2. Additionally, it provides credit to those in need by advancing money from deposits. It serves as a reason for saving in the economy.
  3. A bank serves as an account for household savings and interest-bearing loans for commercial and productive purposes.
  4. The Banking Companies Act of India defines Bank as “A Bank is a financial institution which accepts money from the public for the purpose of lending or investment repayable on demand or otherwise withdrawable by cheques, drafts or orders or otherwise.”
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Chapter 14: Banks: Commercial Bank and Central Bank - TEST YOURSELF QUESTIONS [Page 273]

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