Different Between Central bank and commercial bank

Hello friends, in today's article, we are going to talk about Central Bank and Commercial Bank, like what is Central Bank and Commercial Bank, what is the difference between Central Bank and Commercial Bank, etc. going to talk. This article is going to describe them in detail. After this article, hardly you will need to read any other article. So definitely read the article till the end. So let's start.

Different Between Central bank and commercial bank

      Not only in our country India, but in every country there is a Central Bank and a Commercial Bank. About which you would already know. If we talk about our country India, our central bank is Reserve Bank of India (Reserve Bank of India) and if we talk about commercial banks, then SBI Bank, ICICI Bank, HDFC Bank, Union Bank, Indian Bank, etc. in which nowadays everyone will have an account in one or the other bank. So let's know about the difference between Central Bank and Commercial Bank and what are these banks.

What is Central Bank ?

       Every country has a supreme bank which regulates all the banks and banking system without any profit. Controls the country's economy. Along with this, it helps the government to connect with the banks of the world. And controls the country's currency system and prints notes and many other things are done by this bank and it is called the central bank.

        The central bank of our country India is RBI (Reserve Bank Of India). About which you must be well aware, for which Hilton Young Committee recommended in 1926 and Banking Act was enacted in 1934, after that RBI was established in 1935 and it was nationalized in 1949.

What is Commercial Bank?

        Commercial Bank is such a financial institution which works for depositing and lending money to the people for the purpose of earning profit, as well as provides many other facilities to its customers. Commercial Bank, which is also called commercial bank, business bank or business bank. SBI Bank, Indian Bank, Union Bank, ICICI Bank, HDFC Bank, Vijaya Bank etc. are examples of commercial banks.

Difference between Central Bank and Commercial Bank

•   The Central Bank of the country is completely owned by the government of that country and the Central Bank works on the guidelines of the government. Whereas a commercial bank is a privately owned private bank or a government-owned bank.
• No citizen can open an account in the Central Bank and cannot deposit or withdraw money and the general public cannot take a Central Bank loan. But general public can open their account in commercial bank, can deposit and withdraw money, can also take loan and can also take advantage of many other facilities.
•   The main objective of the country's central bank is to maintain the country's economy and promote social welfare. On the other hand, the main objective of a commercial bank is to make profits only.
• The Central Bank can borrow from the Central Bank of another country and can take loans from big institutions like IMF, World Bank, etc., while the Commercial Bank can take any kind of transaction from the Central Bank of another country. Can't give, if they want a loan, then they have to take a loan from the Central Bank of their own country.
• The Central Bank is the supreme bank of any country, which gets the right to print notes of its country, while this right is not available to any commercial bank. Yes, in some countries like America, this right has been given to some other special banks which can print notes.
• Only the banks and the government have accounts in the Central Bank, the general public's account is not opened in the Central Bank. While the general public can easily open their account in a commercial bank.
• The commercial bank provides loans to the public when they need a loan, and if a commercial bank goes to the need of a loan, the central bank gives it.
• Along with issuing or canceling the license of banks or providing loans to banks, various types of work, monitoring of commercial banks, etc. are done by the Central Bank under its supervision. While the Central Bank is operated by the government.

What is the importance of Central Bank?

       The central bank of any country plays an important role in the management, operation, supervision, regulation and development of the banking and financial structure for the systematic operation of its country's economy. The central bank controls the currency in the country. Just as a king is needed to run a state, in the same way a central bank is needed to control the country's banking system and the country's currency etc.

What is the importance of Commercial Bank?

     In earlier times, when there were no banks, the exchange system was prevalent, but there was no measure of it and there was difficulty in doing transactions, but since the banking system has come, the solution to all these problems has been solved. Transaction, transfer of currency, keeping your money safe, debit card, credit card, net banking, loan etc. facility to any person is done by Commercial Bank only. Simply put, life without bank in today's time. It would be impossible to handle.

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