Question

State any three points of distinction between the Central Bank and Commercial Banks.

Answer 1

$\begin{array}{cc}\text{Central Bank}& \text{Commercial Banks}\\ \text{(i) Central Bank is the apex bank of the}& \text{(i) Commercial banks function under}\\ \text{country.}& \text{the Central Bank according to the rules}\\ & \text{and regulations stipulated by it.}\\ \text{(ii) Central Bank adds to the money}& \text{(ii) Commercial banks add to money}\\ \text{supply by printing new currency.}& \text{supply by creating demand deposits.}\\ \text{(iii) Central Bank does not perform ordinary}& \text{(iii) Commercial banks do ordinary}\\ \text{banking activities with the general}& \text{banking activities of accepting deposit}\\ \text{public but engages only with the other}& \text{and giving loans to the general}\\ \text{banks.}& \text{public}\end{array}$