State the differences between Central Bank and Commercial Bank.
Difference between Central Bank and Commercial Bank
| Points | Central Bank | Commercial Bank |
|---|---|---|
| 1. Objective | The main objective of the central bank is to work for the economic development of the country. | The main objective of a commercial bank is to earn profit. |
| 2. Banker | The Central Bank is the banker of various commercial banks. | Commercial banks are bankers of various depositors. |
| 3. Printing notes | The Central Bank can print currency notes. | Commercial banks cannot print currency notes. |
| 4. Providing loans | The Central Bank acts as banker to the government and provides loans to the government. | Commercial banks are bankers of various depositors and provide loans to them. |
| 5. Accepting deposits | Central Bank does not accept deposits from the public. | Commercial banks accept deposits directly from the public. |
| 6. Providing loans to public | Central Bank does not give loans directly to the public. | Commercial banks provide loans directly to depositors. |
| 7. Maintaining the stability of FOREX rate | The Central Bank maintains the country’s foreign exchange reserves and is responsible for maintaining the stability of the foreign exchange rate. | Commercial banks are never responsible for maintaining the stability of foreign currency exchange rates. |
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