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
The main objective of a central bank is to promote the welfare of country ; COMMERCIAL BANK;;;;the main aim is to earn maximum profit
The role of commercial banks
Centarl bank does not accept deposit from customers while commercial bank does.
I want to know the functions of a commercial banks
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 central bank is only one in a country while commercial banks are so many within a country
Only one central bank exist in a country while different commercial bank exist withing a country.
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.....
Ls the central bank,audit of commercial banks appropriate or inappropriate? Discuss
Central bank control the money flow in the system
on the other hand commercial bank only established for profit motive
Explain th two methods of national income measurement?
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
There is creation of credit in a central bank while no credit creations are available in a commercial bank
Central bank is the lender of last resort
while commercial banks dependent on central bank.