Commercial bank

A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products that is operated as a business for profit.

It can also refer to a bank, or a division of a large bank, which deals with corporations or large/middle-sized business to differentiate it from a retail bank and an investment bank.

Origin of the term

The name bank derives from the Italian word banco "desk/bench", used during the Renaissance era by Florentine bankers, who used to carry out their transactions on a desk covered by a green tablecloth.[1] However, traces of banking activity can be found even in ancient times.

In the United States the term commercial bank was often used to distinguish it from an investment bank due to differences in bank regulation. After the Great Depression, through the Glass–Steagall Act, the U.S. Congress required that commercial banks only engage in banking activities, whereas investment banks were limited to capital market activities. This separation was mostly repealed in 1999 by the Gramm–Leach–Bliley Act.


The general role of commercial banks is to provide financial services to general public and business, ensuring economic and social stability and sustainable growth of the economy.

In this respect, credit creation is the most significant function of commercial banks. While sanctioning a loan to a customer, they do not provide cash to the borrower. Instead, they open a deposit account from which the borrower can withdraw. In other words, while sanctioning a loan, they automatically create deposits.

Primary functions

  • Commercial banks accept various types of deposits from public especially from its clients, including saving account deposits, recurring account deposits, and fixed deposits. These deposits are returned whenever the customer demands it or after a certain time period.
  • Commercial banks provide loans and advances of various forms, including an overdraft facility, cash credit, bill discounting, money at call etc. They also give demand and term loans to all types of clients against proper security.


In most countries commercial banks are heavily regulated and this is typically done by a countries central bank. They will impose a number of conditions on the banks that they regulate such as keeping bank reserves and to maintain minimum capital requirements.

Services by product

Commercial banks generally provide a number of services to its clients, these can be split into core banking services such as deposits and loans and other services which are related to payment systems and other financial services.

Core products and services

Other functions

Along with core products and services, commercial banks perform several secondary functions. The secondary functions of commercial banks can be divided into agency functions and utility functions.

Agency functions include:

  • To collect and clear cheques, dividends and interest warrant
  • To make payments of rent, insurance premium
  • To deal in foreign exchange transactions
  • To purchase and sell securities
  • To act as trustee, attorney, correspondent and executor
  • To accept tax proceeds and tax returns

Utility functions include:

See also


  1. ^ de Albuquerque, Martim (1855). Notes and Queries. London: George Bell. p. 431.

Further reading

  • Brunner, Allan D.; Decressin, Jörg; Hardy, Daniel C. L.; Kudela, Beata (2004-06-21). "Germany's Three-Pillar Banking System: Cross-Country Perspectives in Europe". International Monetary Fund. ISBN 1-58906-348-1. ISSN 0251-6365. Abstract
  • Khambata, Dara (1996). The practice of multinational banking: macro-policy issues and key international concepts (2nd ed.). New York: Quorum Books. p. 320. ISBN 978-0-89930-971-2.
  • Commercial Banks directory and guidelines Commercial Banks
Abu Dhabi Commercial Bank

Abu Dhabi Commercial Bank (Arabic: بنك أبوظبي التجاري‎) (ADX: ADCB), commonly called ADCB, is a bank in the United Arab Emirates.

Abu Dhabi Commercial Bank (ADCB) was formed in 1985 as a public shareholding company with limited liability, following the mergers between Emirates Commercial Bank, Federal Commercial Bank and Khaleej Commercial Bank, which was established in 1975. The Government of Abu Dhabi through the Abu Dhabi Investment Council (ADIC) holds 62.52% of ADCB shares; the remainder is held by other institutions and individuals. ADCB is the third largest bank in the UAE in terms of balance sheet size and offers a full range of commercial and retail banking services to its customers. Additionally, it offers financial markets products in its local currency and USD to select customers to help them hedge market and credit risks associated with the banking services provided to them.

As at 30 September 2018, it employs over 5000 people from around 80 nationalities, serving retail and corporate clients. Aside from 56 branches in the UAE, it has 2 branch offices in India and 1 branch in Jersey. It also operates out of representative offices in Singapore and London.

In January 2019, a 3 bank merger was announced between ADCB, UNB (Union National Bank) and Al Hilal Bank. The combined bank will continue to operate as ADCB although Al Hill Bank will operate as a standalone Islamic bank consolidated under the new group entity. Al Hilal will primarily focus on the domestic retail sector and invest heavily in transforming itself into a digital led product offering aimed at appealing to the local UAE population. ADCB Group will continue to be the third largest bank in the UAE and will become fifth largest in the region with approximately 1 million customers.

Askari Bank

Askari Bank Ltd (Urdu: عسکری بینک‎) (formerly Askari Commercial Bank) is a commercial and retail bank in Pakistan and is owned by Fauji Foundation.It was founded on October 9, 1991, as a Public Limited Company. On June 21, 2013, the bank was acquired by Fauji Group. The Bank is listed on the Pakistan Stock Exchange (PSX) and was also listed on the stock exchanges of Karachi, Lahore and Islamabad before their merger to form the single unified Pakistan Stock Exchange (PSX). The bank acquired its license (License No. BL-7) under s.27 of Banking Companies Ordinance, 1962 from State Bank of Pakistan on 13 February 1992. The license was issued by Mr. Saeed Haider Bhatti.

Bank of Wales

The Bank of Wales (Welsh: Banc Cymru) is a trading name used by Bank of Scotland plc, a subsidiary of Lloyds Banking Group.


CTBC Bank (Chinese: 中國信託商業銀行; pinyin: Zhōngguó Xìntuō Shāngyè Yínháng) is amongst the largest privately owned banks in Taiwan.

Commercial Bank of Africa (Uganda)

The Commercial Bank of Africa (Uganda) (CBAU) is a commercial bank in Uganda. The bank opened in 2014, following the issuance of a commercial banking license by the Bank of Uganda, the central bank and the national banking regulator. The bank is a member of the Commercial Bank of Africa Group (CBA Group), headquartered in Nairobi, Kenya.CBAU serves the banking needs of individuals and businesses in Uganda. It focuses on meeting the banking needs of large corporations, diplomatic missions, non-governmental organizations, and high net-worth private clients. The parent company raised KES:1.5 billion from its shareholders to finance CBAU.

Commercial Bank of Ceylon

Commercial Bank of Ceylon PLC (CBC) is one of the leading commercial banks in Sri Lanka with 266 branches and 830 ATMs. The bank has operations in Bangladesh, Maldives and soon to open in Myanmar.

It has been rated as the Best Bank in Sri Lanka by "Global Finance" for the 14th consecutive year and also as the Bank of the Year by "The Banker" Magazine on seven occasions.

Commercial Bank of India

The Commercial Bank of India, also known as Exchange Bank was a bank which was established in Bombay Presidency (now Mumbai), in 1845 of the British Raj period. The bank failed in the crash of 1866, after successfully operating for 20 years. The bank had eight branches, exclusive of the head office at Bombay, viz: London, Calcutta, Hong Kong, Foochow, Shanghai, Hankow, Yokohama and Singapore, with an agency for the purchase of bullion at San Francisco. Commercial Bank of India then was winded up as directed by the Master of the Rolls, under the corresponding section of the Companies Act of England, where the company was registered under the Indian law and was not registered in England, but was carrying on business in England.

Industrial and Commercial Bank of China

Industrial and Commercial Bank of China Limited (abb. ICBC) is a Chinese multinational banking company. It is the largest bank in China, and the largest bank in the world by total assets, deposits, loans, number of customers and number of employees. It is one of China's "Big Four" state-owned commercial banks (the other three being the Bank of China, Agricultural Bank of China, and China Construction Bank). It was founded as a limited company on January 1, 1984. As of December 2017, it had assets worth US$4.009 trillion. Generally considered the largest financial institution and public company in the world by assets; it is the first Chinese bank to achieve such a feat. It ranks number 1 in The Banker's Top 1000 World Banks ranking, and first on the Forbes Global 2000 list of the world's biggest public companies.

KCB Bank Kenya Limited

KCB Bank Kenya Limited is a financial services provider headquartered in Nairobi, Kenya. It is licensed as a commercial bank, by the Central Bank of Kenya, the national banking regulator. The bank has also been running Agency banking model.

KCB Bank Uganda Limited

KCB Bank Uganda Limited (KCB Bank Uganda), is a commercial bank in Uganda. It is licensed by the Bank of Uganda, the central bank and national banking regulator.

Kenya Commercial Bank S.C.

Kenya Commercial Bank Sports Club, commonly known as KCB, is a Kenyan multi-sport club based in Nairobi currently playing in the Kenyan Premier League.

Korea Football Association

The Korea Football Association (Hangul: 대한축구협회; Hanja: 大韓蹴球協會, Daehan Chukgu Hyeophoe) is the governing body of football in South Korea. Park Seung-bin was the very first President of the KFA, charged with the task of promoting and spreading organised football in the Korea. The budget for 2011 was ₩103,123,529,503.

MCB Bank Limited

MCB Bank Limited (formerly Muslim Commercial Bank) was incorporated by the Adamjee Group on July 9, 1947. The bank was established to provide banking facilities to the business community of South Asia. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake in the bank. The president of the bank is Imran Maqbool.

The group has a presence in the business sectors of the country such as banking, textile, cement, and insurance. Mian Muhammad Mansha is chairman of both the group and MCB. The bank has established an Islamic Banking unit to offer Shariah-compliant products and services, with dedicated Islamic banking branches in six cities

In 2005, the management of the bank abbreviated its name from Muslim Commercial Bank Limited to MCB Bank Limited to explore international markets; they were facing resistance due to the word Muslim especially from Western Countries to avail license. In 2008 the head office of MCB was shifted from Karachi to Lahore in a newly constructed building, namely MCB House located at Sharea Ghous-ul-Azam, commonly known as Jail Road.

MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other three being Hubco, PTCL and Chakwal cement; they all have been delisted) to list on the London Stock Exchange when it raised US$150 million global depositary receipts.


Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be considered as money.

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private". Counterfeit money can cause good money to lose its value.

The money supply of a country consists of currency (banknotes and coins) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of broad money in developed countries.

OTP Bank

OTP Bank Group is one of the largest independent financial services providers in Central and Eastern Europe with full range of banking services for private individuals and corporate clients. OTP Group comprise large subsidiaries, granting services in the field of insurance, real estate, factoring, leasing and asset management, investment and pension funds. The bank is serving clients in 9 countries, namely Hungary, Slovakia, Bulgaria, Serbia, Romania, Croatia, Ukraine, Montenegro and Russia. In 2019, OTP Bank entered into an agreement to purchase MobiasBanca of Moldova.

Nowadays OTP Groups' more than 36,000 employees are serving 13 million clients in over 1,500 branches and through electronic channels on all the markets of the bank. OTP is still the largest commercial bank in Hungary with over 25% market share.OTP Group started its activity in 1949 when OTP Bank was founded as a state savings and commercial bank. OTP stands for Országos Takarék Pénztár (National Savings Bank) which indicates the origin purpose of establishment of the bank.

The bank went public in 1995, and the share of the state in the bank capital decreased to one preferential gold share, which also eliminated shortly thereafter. Currently most of the banks' shares are owned by private and institutional investors, which ensures stable ownership structure of the company. OTP has a high free float shareholder structure, the free float ratio reaches the 68,61%. The rest is held by one of the Forbes billionaire Megdet Rahimkulov in 8,88%, Hungarian MOL Group in 8,57%, French Groupama in 8,30% and American Lazard in 5,64%.

Oudh Commercial Bank

Oudh Commercial Bank or Awadh Commercial Bank was an Indian bank established in 1881 in Faizabad and operated until 1958 when it failed. It was the first commercial bank in India having limited liability and an entirely Indian board of directors. It was a small bank that had no branches and that served only local needs.

Portuguese Commercial Bank

Portuguese Commercial Bank (Portuguese: Banco Comercial Português (BCP)), is a Portuguese bank that was founded in 1985 and is the largest private bank in the country. BCP is a member of the Euronext 100 stock index and its current chief executive officer is Miguel Maya Dias Pinheiro. BCP is based in Porto, but its operations are headquartered in Oeiras, Greater Lisbon. It operates a branch brand dubbed and restyled in 2004 as Millennium BCP as well as Banque BCP and ActivoBank.

It has nearly 4.3 million customers throughout the world and over 695 branches in Portugal. It was ranked at number 1,623 in the 2017.

Retail banking

Retail banking, also known as consumer banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks, which are often described as wholesale banking. Banking services which are regarded as retail include provision of savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards. Retail banking is also distinguished from investment banking or commercial banking. It may also refer to a division or department of a bank which deals with individual customers.

In the U.S., the term commercial bank is used for a normal bank to distinguish it from an investment bank. After the Great Depression, the Glass–Steagall Act restricted normal banks to banking activities, and investment banks were limited to engaging capital market activities. That distinction was repealed in the 1990s. Commercial bank can also refer to a bank or a division of a bank that deals mostly with deposits and loans from corporations or large businesses, as opposed to individual members of the public (retail banking).

UCO Bank

UCO Bank, formerly United Commercial Bank, established in 1943 in Kolkata, is a major government-owned commercial bank of India. During FY 2013-14, its total business was ₹ 4.55 lakh crore. Based on 2014 data, it is ranked 1860 on Forbes Global 2000 List. UCO Bank was ranked 294th among India's most trusted brands according to the Brand Trust Report 2014, a study conducted by Trust Research Advisory. It was a rise of 796 ranks considering it was listed at the 1090th position among India's most trusted brands in the Brand trust Report 2013. As of 30 March 2017 the bank had 4,000 plus service units 49 zonal offices spread all over India. It also has two overseas branches in Singapore and Hong Kong. UCO Bank's headquarters is on BTM Sarani, Kolkata.

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