Difference Between Commercial Bank and Merchant Bank
Commercial banks offer checking and savings accounts for individuals and businesses, issue debit and credit cards along with a host of retail banking services.
They additionally supply loans to people and little businesses and earn through the interest levied on such credit.
Commercial banks might also give certificates of deposit and saving schemes geared toward retail customers.
The primary function of a commercial bank is taking deposits and granting loans, but it also serves the customers by providing services like:
- Disbursement of payments
- Collection funds
- Providing working capital finance
- Safeguarding valuables
- Purchasing and selling securities
- Bank overdraft
- Cash credit
- Discounting bill of exchange
Merchant banks give money services for company entities together with trade finance and an entire vary of international money activities.
They usually cater to mid-sized corporations and can assist with underwriting of securities, raising venture capital and offer a host of trade advisory services depending on the specific needs of their clients.
They primarily earn through the fee procured their consultatory services.
It is also engaged in activities associated with the promotion and development of industrial projects such as:
- Loan syndication
- Portfolio management
- Underwriting of capital issues
- Project counselling
- Issue management
- Advisory services on mergers acquisitions and takeovers.
- Corporate restructuring
- Acceptance of bills
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