A Central Bank is the apex bank which controls the entire banking system of a country. It has the sole authority to issue notes in that country. It also acts as a banker to the government and controls the supply of money in the country.
A commercial bank is a financial institution that provides services such as accepting deposits, giving business loans, mortgage lending, and basic investment products such as savings accounts and certificates of deposit.
Following are some important differences between the Central Bank and Commercial Bank.
Differences between the Central Bank and Commercial 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.|
|Focuses on social welfare.||Focuses on profit maximization.|
|Does not accept deposits.||Accepts deposits from the public and provides loans to individuals and households.|
|Issues currency.||Has no authority to issue currency.|
|An advisor to the government on monetary issues.||Commercial Bank is not an advisor.|
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