Question

Define Commercial banks and its functions.

07 May 2025
Answer :
Word Count : 1123

Commercial banks play a pivotal role in the financial system by providing a wide array of services to individuals, businesses, and the government. They are institutions that offer various financial products such as savings and checking accounts, loans, and other credit-related services. Their primary function is to act as intermediaries between depositors who provide capital and borrowers who seek funds for various purposes. Commercial banks contribute significantly to the growth of the economy by facilitating the efficient movement of money, credit, and investment.

### Definition of Commercial Banks

A commercial bank is a financial institution that offers a range of services to both individuals and businesses. It primarily accepts deposits from customers and extends loans or credit to borrowers. The main aim of commercial banks is to earn profit by charging interest on loans and providing other financial services like wealth management, foreign exchange, and trade financing. These banks cater to a diverse customer base, ranging from small businesses to large corporations, as well as individual consumers.

In addition to the core banking functions, commercial banks are involved in investment banking, securities trading, and risk management services. ______ ___ _________ ________ ________ _____ _____ ______ _________ ______.
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