Commercial Applications
Central bank is owned by the while commercial bank is owned by .
- Shareholders, shareholders
- Government, shareholders
- Shareholders, government
- None of these
Answer
Government, shareholders
Reason — As per the differences between a Central Bank and a Commercial Bank, the central bank is owned by the Government (its aim is to serve the country's interest, not to earn profit). A commercial bank, on the other hand, is generally owned by shareholders and its aim is to earn profit.
Related Questions
A bank draft is always dishonoured if there are insufficient funds in the drawer's account at the time of encashment.
- True
- False
If the central bank decides to promote economic growth by lowering the bank rate, which of the following is a likely consequence for commercial banks?
- They will increase interest rates on loans to maintain profitability.
- They will decrease their lending activity to reduce risks.
- They will expand their lending activities due to lower borrowing costs.
- They will raise the Cash Reserve Ratio to align with central bank policies.
Assertion (A): Commercial banks primarily engage in profit-oriented activities.
Reason (R): Commercial banks have the authority to set monetary policies, establish reserve requirements, and conduct financial stability assessments to ensure the sound functioning of the banking system.
- A is true but R is false
- A is false but R is true
- Both A and R are true and R explains A
- Both A and R are true but R does not explain A
Which of the following is/are the function(s) of central bank?
- Banker's bank
- Provides overdraft facility to the public.
- Receive deposits from the public and business firms
- Provide short-term and medium-term loans to customers