Distinguished between central bank and commercial …

Central Bank

Commercial Bank

(i) Central Bank functions as the apex bank of the country. It is a bank of all the banks.

(i) Commerdal banks functions according to the rules and regudations stipulated by the central bank.

(ii) The central bank designs and controls all instruments of monetary policy of the country.

ii) Commercial banks only executes the monetary policy as directed by the central bank.

(iii) Central bank is the sole authority of note issuing.

(iii) Commerdal banks contribute to the flow of money only by a way of credit creation.

(iv) Central bank does not deal directly with the general public.

(iv) Commercial banks deal directly with the public.

(v) Central bank does not accept any deposits or advance loans.

(v) Commercial banks accept deposits and advance loans.

vi) The central bank focuses on social welfare.

(vi) The commercial bank focuses on profit maximisation.