COMPARISON BETWEEN CENTRAL BANK AND COMMERCIAL BANK

Central Bank

Commercial Bank

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.

2

Its primary aim is general public welfare.

2

Its primary aim is to make profit.

3

It has the sole monopoly right to issue currency notes.

3

A commercial bank is statutorily denied function of issuing notes.

4

It cannot deal with the public.

4

It directly deals with the public and business firms.

5

It acts as a banker to the government.

5

It has no such responsibility towards the state.

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.

7

It is custodian of Nation’s Gold and Foreign Exchange Reserve.

7

It does not perform such function.