• A commercial bank is a retail bank that provides financial services to its customers, such as accepting savings deposits and approving bank loans or mortgages

• Functions Of Commercial Banks

  • Accepting Deposits -: Commercial banks accept deposits from their customers, including private individuals, businesses and governments.

  • Making Advance -: Commercial banks provide advances (loans) to their customers. These advances include overdrafts (a banking service that allows approved customers to withdraw more money than they actually have in their account) and mortgages (long-term secured loans for the purchase of assets such as commercial and residential property).

  • Credit Creation -:This describes the process by which banks increase the money supply in an economy by making money available to borrowers. Credit allows the borrower (or debtor) to gain purchasing power (money) by promising to pay the lender (or creditor) at a future time.

Secondary Functions Of Central Banks

• Collecting and clearing cheques on behalf of their clients.

• Offering additional financial services such as tax advice, foreign exchange dealings and the buying and selling of shares.

• Providing safety deposit boxes for customers to safeguard highly valued possessions, including jewellery and important documents such as wills.