State six points of distinction between central bank and commercial bank.
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COMPARISON BETWEEN CENTRAL BANK AND COMMERCIAL BANK |
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Central Bank |
Commercial Bank |
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1 |
It is the apex bank in the money market of a country. |
1 |
It is merely a unit in the banking structure of the country. |
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2 |
Its primary aim is general public welfare. |
2 |
Its primary aim is to make profit. |
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3 |
It has the sole monopoly right to issue currency notes. |
3 |
A commercial bank is statutorily denied function of issuing notes. |
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4 |
It cannot deal with the public. |
4 |
It directly deals with the public and business firms. |
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5 |
It acts as a banker to the government. |
5 |
It has no such responsibility towards the state. |
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6 |
It decides its monetary policy to realise economic stability and full employment in the country. |
6 |
It plays a supplementary role and is quite often regulated by the Central Bank. |
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7 |
It is custodian of Nation’s Gold and Foreign Exchange Reserve. |
7 |
It does not perform such function. |
