Question

Distinguish between. Commerical bank and central bank. (5 points each)​

Answer 1

Answer:

Central Bank is the banker to banks, government, and financial institution, whereas Commercial Bank is the banker to the citizens. The Central Bank is the supreme monetary authority of the country. ... On the contrary, the commercial bank does not perform such function

Explanation:

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Answer 2

Answer:

The difference between the central bank and the commercial bank are as follows:

1. Central bank has the power to regulate money supply. Therefore, it is known as a regulator.

Commercial bank has the power to facilitate the changes. Therefore, it is known as facilitator.

2. The main motive of the central bank is the welfare of the economy whereas the main motive of commercial bank is profit maximization.

3. Central bank lends money to commercial banks and government whereas Commercial banks only lends money to the public.

4. Central bank has the power to increase or decrease the amount of credit creation whereas commercial bank has the power of credit creation.

5. Central bank has the authority to issue currency of all denominations including notes and coins whereas commercial bank has the authority to issue only one unit coin and note.