Features of Commercial Bank

Features of Commercial Bank

Commercial bank: The bank which deals with money and money’s worth with a view to earning a profit is known as a commercial bank. A commercial bank is a dealer in capital or more properly a dealer in money. It is an intermediate party between the borrower and the lender. He borrows from one party and lends to another and the difference between the terms at which he borrows and those at which he lends from the source of his profit.

Some scholar’s views are given below:

“Commercial banks are those which accept the deposits of public and grant short term loans” – M.N. Mishra.

“Commercial bank is an intermediate profit-making institution” – AssotosNath.

“A banker is one who in the ordinary course of business honors checks drawn upon him by persons for and for whom he receives money on current account.” – Dr. H.L. Heart.


  1. The main objective of a commercial bank is to earn the profit.
  2. Commercial hank collects deposits from people through a different type of account.
  3. It acts as an intermediary between money and capital.
  4. They are members of the money market.
  5. They are owned by private individuals or collections of private individuals acting as shareholders.
  6. Commercial hank borrows from one party and lends to another and the difference between the terms he earns a profit.
  7. The two most particular elements of a business bank are getting and loaning, i.e., acknowledgment of stores and loaning of cash to tasks to gain Interest (benefit)
  8. They are regulated by government institutions and they must follow all applicable laws.

So, we can say that the bank which receives deposits and lends money to others with a view to earning is called the commercial bank.