What is Commercial Bank?

Question

Define Commercial Bank and Explain the  Primary Functions of a Commercial Bank?

Answer 1

A commercial Bank is that financial Institutions which accept deposit form the people and offers loans for the purpose of Consumption or Investment.

Function of a Commercial Bank :

Two important functions of a Commercial Bank are:-

(i) Accepting Deposits: A Commercial Bank accepts deposits from the public. People can deposit their cash balances as cheque able deposits or non-chequeable deposits.

(ii) Advancing Loans:- A bank advances loans both for productive purposes as well as Consumption purpose. By advancing loans through demand deposits, commercial banks contribute to the supply for money in the economy