Overview of Commercial Bank
A commercial bank is a kind of banking institution. It may also be described as a kind of financial intermediary, which means that it acts as a medium through which the individual borrowers get money from the lenders.
A commercial bank is called so in order to differentiate it from those banks that specialize in investment services. In some countries outside North America where English is spoken, a commercial bank is referred to as a trading bank.
A commercial bank is also different from a retail banking entity. The commercial banks cater to the major business corporations. On the other hand, the retail banks provide banking services to mostly individual consumers.
Activities of a Commercial Bank
The various business entities are the biggest clients of the commercial banks.
Following are some other activities that are executed by a commercial bank:
Generating money by accumulating deposits from the general clients and the business entities
Performs the role of an intermediary in the context of securities. It acts as the medium between the issuing party and the investors
Using check deposits, time or term deposits and savings deposits for the purpose of raising money
Helping in mergers
Giving loans to individual customers and business firms
Helping with restructuring of corporate bodies
Purchasing debt securities like government bonds and corporate bonds
Providing brokerage services on behalf of the institutional customers
Financial Obligations of Commercial Bank
The deposits could be described as the basic monetary liabilities of any commercial bank.
Basic Assets of Commercial Bank
The basic assets of any commercial bank are the bonds and loans.
Famous Commercial Banks
Some of the well-known commercial banks of the world are as follows:
ABN AMRO Holding
Banco Do Brasil
Agricultural Bank of China
Bank of America Corp
Bank of Nova Scotia
Bank of China
Canadian Imperial Bank of Commerce
China Construction Bank
Australia & Newzealand Banking
Last Updated on : 1st July 2013