What is a Commercial Bank?

Kishan Thakkar K

As a result of digitalization, business models and processes are being transformed, a pivotal moment is brewing for banks. The top-rated commercial banks in India are thriving in today’s dynamic economic environment by shifting from providing financial services to providing financial assistance.

Among the top five economies in the world, India has one of the fastest-growing economies of the 21st century. Its robust banking network is one of the biggest reasons for this growth. 

Indian commercial banks have the most extensive branch networks in the world, according to the IMF (International Monetary Fund) and RBI (Reserve Bank of India) data. In India, there are presently more than 1.3 lakh branch offices, with an almost equal number of urban and rural branches (38 percent in urban areas, 34 percent in rural areas, and 28 percent in semi-urban areas).

What is a Commercial Bank?

Commercial banks issue loans, accept deposits, and offer basic financial products such as savings accounts and certificates of deposit to businesses, as opposed to retail banks that offer similar financial products to individuals. Banks make money primarily by providing customers with loans and charging interest.

The bank’s funds are gathered from the money deposited by its customers in savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs). The depositors earn interest from the bank’s deposits.

Commercial banks offer loans such as personal loans, motor vehicle loans, mortgages, and business loans. However, they charge less interest to depositors than to borrowers.

Biggest Commercial Bank in India

SBI is the largest commercial bank in India. It is a public sector bank and has its headquarters in Mumbai, Maharashtra. It has 57 regional offices and 16 regional hubs located in almost every major city in the country.

Different Types of Commercial Banks in India

Commercial banks in India can be divided into three categories:

1. Public Sector Banks

2. Private Sector Banks

3. Foreign Banks

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