A commercial bank is a bank that: (2024)

FAQs

What is commercial bank answers? ›

A commercial bank is a financial institution that provides services like loans, certificates of deposits, savings bank accounts bank overdrafts, etc. to its customers. These institutions make money by lending loans to individuals and earning interest on loans.

Commercial banks exist as the financial institution for deposits and loans. The main objective of commercial banks is to maximize their profit.

Definition. Commercial banking is a type of banking that provides services for businesses, government agencies, and institutions like colleges and universities to help them grow and profit. Commercial banks make money mainly by loaning money to businesses and earning back interest and fees from these loans.

Commercial bank. financial institution that offers checking accounts, demand deposits, business and personal loans, savings vehicles and a variety of other related financial services.

The commercial bank definition describes a financial institution tasked with accepting customer deposits for safekeeping purposes, granting loans to individuals and businesses at an interest rate, and providing basic financial products and services like certificates of deposits and savings accounts.

Final answer: True statements about commercial banks include that they make loans using their depositors' funds, they seek to make a profit by charging interest on loans, and they are more responsible to their depositors than their borrowers.

Although banks do many things, their primary role is to take in funds—called deposits—from those with money, pool them, and lend them to those who need funds. Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money).

A commercial bank is an easy and flexible source of accepting and withdrawing money. These are the economical source of funds as it manages deposits and withdrawals at a low cost and involves no hidden cost. It generally provides the loan against some security.

Commercial banks insured by the FDIC. These institutions are regulated by one of the three Federal commercial bank regulators (FDIC, Federal Reserve Board or Office of the Comptroller of the Currency).

Commercial banks are also called 'Joint stock banks' because they are organised in a manner similar to joint stock companies.

What type of bank is a commercial bank? ›

Commercial Banks

A financial institution that engages in various financial services, such as accepting deposits and making loans.

While commercial banks mostly specialize in short-term business credit, they also make consumer loans and mortgages, and have a broad range of financial powers.

Deposits are the liability for the banks. Thus reserves and loans are the financial assets for the banking industries. Therefore, option c. is the correct answer.

In-depth commercial banking interview questions

What types of loans do commercial banks offer? How might you evaluate the creditworthiness of a company? State three issues facing commercial banks today and offer potential solutions. How do you analyze a set of financial statements?

Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with $2.6 trillion in assets and operations worldwide.

Another benefit of working at a commercial bank is meeting and interacting with people. In a customer-facing role, for example, you can communicate with patrons when they visit the bank to make deposits or open new accounts. Knowing that you're helping people can make your banking role more fulfilling.