Quick Answer: What Are The Differences Between Commercial Bank And Development Bank?

Main source of funds in case of development bank is borrowing, grants, sell of securities etc.


Commercial banks main objective is profit whereas development bank main objective is social profit that is to provide different kinds of service to people.

Commercial banks are better for career growth.

What are development banks How are they different from the commercial banks?

Commercial banks are generally set up as companies under the Companies Act. Development banks are usually set up under the special Act passed by the Government. Commercial banks accept deposits from the public through different types of accounts.

What is the difference between universal bank and commercial bank?

The universal banks provide all the facilities whereas a commercial bank only extends lending services by accepting deposits. It has a limited facility and offers loan and investment products. Commercial banks offer limited services and perform a function that they are designed for.

What is meant by development bank?

Development bank, national or regional financial institution designed to provide medium- and long-term capital for productive investment, often accompanied by technical assistance, in poor countries.

How does finance company differ from commercial bank?

Finance companies make a profit by borrowing money at a rate lower than the rate at which they lend. This is similar to a commercial bank, with the primary difference being the source of funds, principally deposits for a bank and money and capital market borrowing for a finance company.

What do you mean by commercial bank?

A commercial bank is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit. They generally finance trade and commerce with short-term loans.

What is the difference between micro finance bank and commercial bank?

Difference in scale of business and target customers

The scale of operations of commercial banks is not limited to households. On the other hand, MFIs’ disburse loans of small amounts to poor households to invest in their small business or for personal use. The basic purpose of MFIs’ is to enable financial inclusion.

What is difference between investment bank and commercial bank?

The main difference between investment banking and commercial banking is that investment banking typically deals with purchasing and selling bonds and stocks for companies, and also helping them issue IPOs, while commercial banks primarily deal with deposits or loans for companies or individuals.

How are banks classified?

There are two broad categories under which banks are classified in India- SCHEDULED AND NON-SCHEDULED BANKS. The scheduled banks include COMMERCIAL BANKS AND COOPERATIVE BANKS. The commercial banks include REGIONAL RURAL BANKS, SMALL FINANCE BANK, FOREIGN BANKS, PRIVATE SECTOR BANKS, and PUBLIC SECTOR BANKS.

What is the difference between bank and banking?

The main difference between other companies and banks is that, other companies are trading goods and services for money, but in the case of bank the trading item itself is MONEY, instead of tangible goods or intangible services. All the activities carried out by a bank is called banking.

What are the types of development banks?


  • the African Development Bank (AfDB)
  • the Asian Development Bank (ADB)
  • the European Investment Bank (EIB)
  • the Inter-American Development Bank (IDB)
  • the North American Development Bank (NADBank)
  • the World Bank.

What is a development bank example?

Agricultural Development Banks : It includes, for example, National Bank for Agriculture & Rural Development (NABARD). Export-Import Development Banks : It includes, for example, Export-Import Bank of India (EXIM Bank). Housing Development Banks : It includes, for example, National Housing Bank (NHB).

What is the role of development banks?

Over time, development banks assume investment bank functions as well. Development banks give priority to financing projects that yield substantial economic, social and environmental benefits. They also provide technical assistance to improve the quality and reduce the risks of projects.

What are the three types of finance companies and how do they differ from commercial banks?

The three types of finance companies are (1) sales finance institutions, (2) personal credit institutions, and (3) business credit institutions. Sales finance companies specialize in making loans to customers of a particular retailer or manufacturer. An example is General Motors Acceptance Corporation.

What are the 4 types of financial institutions?

The major categories of financial institutions include central banks, retail and commercial banks, internet banks, credit unions, savings, and loans associations, investment banks, investment companies, brokerage firms, insurance companies, and mortgage companies.

What is the difference between banks and non banking financial institutions?

While banks and non-banking financial companies (NBFC) both are key financial intermediaries, that offer almost similar services to the customers. The major difference between NBFC and bank is that unlike banks, an NBFC cannot issue self-drawn cheques and demand drafts.