Question

Distinguish between Central Bank and Commercial Banks.

Answer 1

Central Bank	Commercial Banks
1. This is Banker’s Bank. This controls all the banking functions of the country.	1. Commercial Bank is a part of the banking function and is controlled by Central Bank.
2. Its motive is not to earn profit but to provide banking facilities.	2. Its motive is to earn profits.
3. Its works as Government’s banker, so the government provides many special facilities to the bank.	3. They work as the bankers of the general public and the Government does not provide any special facilities to them.
4. It has the monopoly of Note Issue.	4. They do not have the power of issuing the notes.
5. It grants loans to other banks of the country if they are in need of it.	5. They get loan from Central Bank when they are in need of it.
6. It manages the government’s reserve and provides security.	6. They do not have any relation with government reserves.