Central bank is bankers bank.it can issue notes, currency, and issue deposits to the government. It does not issue loans to public, it creates the credit.
Where as commercial bank accept deposits from public, issues loans to public and issues credit
Central banks are responsible for managing the monetary policies of the government or states with which they are associated. The most important role of any central bank is to maintain stability of the money supply and financial markets. Central banks can influence current interest rates with their actions, and in times of financial crisis, can act as a "lender of last resort" to commercial banks.
Commercial banks are for-profit, private or public companies, which make a profit on the difference between interest rates paid to, and earned from, businesses and individuals.
A Central Bank refers to the government-bank for a country. In the United States, we have the Federal Reserve System (aka the "Fed") which is slightly different, but serves essentially the same function. The Fed controls the money supply and is responsible for setting policies that can affect the rate of inflation and interest rates. The Fed also provides loans to major banks. The higher the interest rate it charges the less banks will tend to borrow, tightening the money supply and driving up interest rates for businesses and consumers. A commercial bank is generally a bank involved in loans and depository services (among other things) for businesses. The term has been stretched over the years to the point that it could mean just about any bank that provides business banking services. Hope this helps.
Functions of central bank are: -setting monetary policy & ensuring price stability -currency issue & mgt of international reserves -providing sound financial sytem & banker to the government commercial bank-accept deposit from public and provide lending services
Central banks regulates all financial institutions, including commercial banks. Commercial banks accepts deposits and withdrawals, grant loans and other money matters.
Central bank gives loans to scheduled banks and State co-operative banks and also it gives advances to the Central and State Governments for not more than 90 days.Whereas Commercial bank lends money to commerce, trade and industry.
The major responsibility of central bank is to provide sound money to the economy. Sound money is when the nominal side of economy corresponds to its real side. Commercial banks however are involve in the process of creating more and more money using the base money.. If you want to know in detail do inform me coz I've learn all this in my ongoing semester.....
A central bank issue legal tender and it create credit to commercial backs commercial banks accepts deposits and withdrawals, grant loans and other money matters
