Central bank and commercial banks are one of the key parts of any financial system. Central Bank performs a role of Bankers to All Banks.
CENTRAL BANK
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COMMERCIAL BANK |
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The central bank is the apex institution of the financial and banking structure of the nation
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It is one of the structures of the money market.
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Wholly owned by the government
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Owned by share holders
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It is a no-profit organization which implements the financial policies of the government
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It is a profit making organization
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It has the monopoly of note issue
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It is a banker to the government and does not involve itself in normal banking activities
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It is a banker to public
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It grants space to commercial banks in the form of rediscount facilities, keeps their cash reserves, and clears their balances
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It gives loans to and accepts deposits from the public
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The control of credits in accordance with the needs of business & economy is done by this bank.
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Credit is created to meet the business requirements
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It helps to establish financial organization so as to strengthen money & capital markets in a country
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It helps industry by guaranteeing shares & debentures, & agriculture by meeting its monetary requirements through cooperative or individually
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The chief of this bank is designated as “GOVERNOR”
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The chief of this bank is called as “CHAIRMAN”
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This bank is the guardian of the foreign currency reserves of the country
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It is the dealer of foreign currencies
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Each country will be having only one central bank with its offices at major centers of the country
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There are several commercial banks with hundreds of branches within and outside the country
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