Difference between Central Bank and Commercial Bank

Commercial bank and central bank both the banks help to regulate cash in an economy. The number of commercial bank is more than one in a country while the central bank is only one in a country. Bank performs the general function of accepting deposits and lending money to general public but there is a slight difference between central bank and commercial bank. Let’s find out the basic difference between central bank and commercial bank.

Point of difference	Central bank	Commercial bank
What is Commercial bank and Central bank?	It is an apex financial institution which formulates the monetary policy and regulates the work of commercial bank.	It is financial institutions which accepts deposits, lending money to general public and follow the rules formulated by central bank.
Which bank provides the basic function of bank?	Central bank performs the basic function of bank. It accepts deposits from central and state government And lends money to commercial banks.	Commercial bank provides the basic function of bank that is accepting deposits and lending money to organisations or individuals.
Which bank has a right to issues notes?	Central bank has a right to issue notes.	Commercial bank does not have a right to issue notes.
Which bank provides the services to public or banking system?	Central bank provides services to banking system or commercial banks and scheduled bank. So that they can perform their function smoothly.	Commercial bank provides services to general public like accepting deposits in various forms like saving account, current account and locker facility. And lending money in the form of personal loan, auto loan, home loan, education loan etc.
Which bank performs the function of custodian of foreign currencies?	Central bank performs the custodian of foreign currencies.	Commercial bank can perform such function as a agent after getting approval of central bank
Which bank performs the function of “banker of bank”?	Central bank performs the function of banker of bank. It means the central bank provides the bank services to commercial bank.	Commercial bank does not perform such function for central bank.
Which bank decides the interest rate and credit limit of bank?	Central bank decides the bank interest rate and control the credit limit of commercial bank.	No such function is performing by commercial bank.
Which banks keep CRR as deposits?	Central bank keeps CRR (cash reserve ratio) deposits by commercial bank. It helps the commercial bank to run the daily function smoothly.	Commercial bank deposits some percentage of deposits to central bank. It does not keep such reserve itself.
What is the quantity of central bank and commercial bank in a country?	There is only one central bank governed by government and register under Reserve Bank of India act 1934.	There are more than one commercial bank in a country and it register under Banking regulation act 1949.
Examples of Central bank and commercial bank	Central banks are: Reserve bank of India (India) Bank of England (united Kingdom) Reserve Bank of Australia (Australia)	Commercial banks are: State Bank of India, Indian Overseas Bank, Citibank and Canara bank , Union Bank etc in India.