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A commercial bank is a financial institution that provides a wide range of financial services such as accepting the deposit, advancing loans with the sole aim of making a profit.

It can also be defined as an institution whose job includes the provision of public services, accepting deposits from the public and granting loans to individuals and businesses.

Commercials banks are mostly brick-and-mortar banks that have many branches, Automated Teller machines (ATMs), separate safe deposits boxes, and money vaults.

Commercial banks also provide a wide range of payment services to their customer as such as ATMs, Electronic Funds Transfer at the point of sale (EFTPOS), telegraphic transfer and payments via debit/credit cards

Common examples of commercial banks are JP morgan chase & co of the USA, the First Bank of Nigeria, the Bank of Maharashtra of India, the State bank of India, Ecobank Nigeria Plc, Barclay's bank of the UK.


1. They accept deposits from the general public and these deposits are usually in three forms: current deposits, savings deposits and fixed deposits

2. They provide loans and other credit facilities to all types of a person particularly businesspeople and investors. However, such loans are made against security pledged by the borrowers

3.. They process all kinds of payment with the help of online banking, telegraphic transfer and debit cards

4. They print cheques and encourage people to use them

5. They provide finances for home and foreign trade by discounting bills of exchange

6. By virtue of their numerous branches located domestically and internationally, Commercial banks offer their customers a convenient means to transmit funds from one location to another 

7. They collect and pay various credit instruments  such as cheques and promissory notes on behalf of their customers

8. They undertake safe custody of important documents and other valuable items of their customer

9. They collect dividends and interest on their customers' shares and deposit them in their accounts

10. They execute various standing orders such as Tv subscriptions, insurance. etc on behalf of their customers.

11. Commercial banks also purchase securities on behalf of their customers. They may purchase shares, stocks, bonds on behalf of their customers

12. They issue traveller cheques. This helps their customers travel without the fear of theft or loss of money.

13. Commercial banks also mobilize saving savings for capital formation through their network of branch banking


Commercial banks may be classified based on their network of branches into different types based on their structure. the following are the common classification of commercial banks

1. Unit banks: These are commercial banks that operate in a single banking office. That is, they have no branches and every operation of the bank are done inside a single office.

2. Branch banks: These are commercial banks that operate through a wide network of branch offices. 

They are commercial banks that, for the convenience of their customers, provide banking services in locations other than the bank's main office.

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