Q.4 (2) Central Bank and Commercial Bank
Best answer
Answer:
| Points | Central Bank | Commercial Bank |
|---|---|---|
| 1. Meaning | It is the apex bank of the country that controls and regulates the banking and monetary system, e.g. the Reserve Bank of India. | It is a bank that accepts deposits from the public and gives loans to earn profit, e.g. SBI, HDFC Bank. |
| 2. Objective | Its objective is public welfare, monetary stability and economic development, not profit. | Its main objective is to earn profit. |
| 3. Ownership | It is generally owned by the government. | It may be owned by the government, private sector or foreign parties. |
| 4. Dealing with public | It does not deal directly with the general public. | It deals directly with the general public. |
| 5. Note issue | It has the sole right of issuing currency notes. | It cannot issue currency notes. |
| 6. Role | It is banker to the government and banker’s bank, and lender of last resort. | It is banker to the public, businessmen and industries. |
| 7. Number | There is only one central bank in a country. | There are many commercial banks in a country. |
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