Difference Between Central Bank and Commercial Banks in

India
In any country’s financial sector, banks play a crucial role in the overall
economic development, by mobilizing savings of individuals and entities.
They act as an intermediary amidst depositor and borrower. Besides
lending money, banks provide various other value added services, that
help in the smooth functioning of the economy. The Central bank, as the
name suggest is the apex body, that regulates the entire banking system of
the economy.
The Central bank is not exactly same as a commercial bank, which is the
financial institution that provides banking services to individuals and
firms. There is a big difference between central bank and commercial bank
in India, in the sense that the former is the top financial institution in the
country, whereas the latter is an agent of the Central Bank.
Comparison Chart
BASIS FOR
CENTRAL COMMERCI
COMPARISO
BANK AL BANK
N

Meaning The bank The

which looks establishment,
after the which provides
monetary banking
system of the services to the
country is public is known
known as as Commercial
Central Bank. Bank.

What is it? It is a banker It is the banker

to the banks to the citizens
and the of the nation.
government of
the country.

Governing Reserve Bank Banking

Statute of India Act, Regulation Act,
1934. 1949.

Ownership Public Public or

 BASIS FOR
CENTRAL COMMERCI
COMPARISO
BANK AL BANK
N

Private

Profit motive It does not It exist for

exist for making profit
making profit for its owners.
for its owners

Monetary It is the No such

Authority supreme authority.
monetary
authority with
wide powers.

Objective Public welfare Earning Profits

and economic
development.

Money supply Ultimate No such

source of function is
money supply performed by it.
in the
economy.

Right to print Yes No

and issue
currency notes

Deals with Banks and General Public

Governments

How many Only one Many

banks are there?