Tuesday, May 24, 2011

Commercial Bank

What Does Commercial Bank Mean?
A financial institution that provides services such as a accepting deposits and giving business loans.



Commercial banking activites are different than those of investment banking, which include underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients




Privately owned financial institution which (1) acceptsdemand and time deposits, (2) makes loans to individualsand organizations, and (3) provides services such asdocumentary collectionsinternational bankingtradefinancing. Since a large proportion of a commercial bank'sdeposits is payable on demand, it prefers to make short-term loans instead of the long-term ones (which are handled by organizations such development finance companies and home mortgage companies).