What Are Commercial And Central Banks?

Commercial bank:
Commercial bank receives deposits and advance loans to promote business and commerce. Their important functions include making payment against check, advancing loans and overdrafts, issuing Letters of credit, discounting bills of exchange, transferring of money (by TT. Bank drafts. Pay order.)

Businessmen and salaried persons are provided the facility of operating bank accounts. They settle their accounts by issuing cheques. The bank not only facilitates trade but also helps agriculture to some extents. Those commercial banks that become the member of the central bank are known as scheduled banks. The following are the famous commercial banks in Pakistan.

United Bank, Habib Bank, Muslim Commercial Bank, National Bank of Pakistan, Allied Bank Limited. In additions, New commercial banks are coming up in the private sector.
Central Bank: It is the bank which is responsible for the financial and economics stability of the country .it offer services to the state and banking industry.

As a banker to the state in monopolies the issue of issue of currency notes manages public debts and acts as a custodian of foreign exchange and national reserves. As a banker to the scheduled banks it rediscounts their bills of Exchange, clear their copies cheques drawn on each other, and regulars their activities Every country has its own central bank.