Commercial banks are profit-seeking institutions that accept deposits from the public and lend money to individuals and businesses. They are regulated under the Banking Regulation Act of 1949 and their operations are overseen by the Reserve Bank of India. Commercial banks play an important role in the economic development of India by generating employment, promoting capital formation and business, and channeling funds, including financing to the government. Their primary functions are accepting deposits and advancing loans, while secondary functions include locker facilities, overdraft facilities, discounting bills, and transferring funds.

2. What is Commercial Bank?
 Commercial Banks are those profit seeking institutions
which accept deposits from general public and advance
money to individuals like household, entrepreneurs,
businessmen etc. with the prime objective of earning
profit in the form of interest, commission etc.
 Commercial banks are regulated under the Banking
Regulation Act 1949.The operations of all banks are
regulated by the Reserve Bank of India, which is the
central bank and supreme financial authority in India.
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3. Types of Commercial Banks -
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Types Of
Banks
Non-
Scheduled
Bank
Scheduled
Bank
Commercial
Bank
Private Bank
Public Bank Foreign Bank
Regional
Rural Bank
Co-operative
Bank

4. Functions of Commercial Banks -
Primary Functions
• Accepting Deposits
• Advancing Loans
Secondary Functions
• Locker Facility
• Overdraft Facility
• Discounting of Bills
• Transferring Funds
• Electronic Banking
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5. Role of Commercial Banks in Economic
Development of India -
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 Employment generation
 Capital formation
 Credit creation
 Channelizing funds
 Banks promotes business
 Finance to government

6. Commercial Banks in India -
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7. Multiple Choice Questions -
1. State Bank of India is an example of?
a) Foreign bank
b) Private bank
c) Public bank
d) Rural bank
2. Banking sector comes under which of the following sectors?
a) Service sector
b) Manufacturing sector
c) Industrial sector
d) Agricultural sector
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8. Multiple Choice Questions -
3. The number of nationalized banks in India?
a) 10
b) 11
c) 15
d) 12
4. Commercial banks are regulated under which Act?
a) Negotiable Instrument Act, 1881
b) Banking Regulation Act , 1949
c) Reserve Bank of India Act, 1934
d) Regional Rural Banks Act, 1976
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9. Multiple Choice Questions -
5. Which of the following is the function of a commercial bank?
a) Transferring Funds
b) Advancing Loans
c) Discounting of Bills
d) All of the above
6. What is the main objective of a commercial bank?
a) To earn profit
b) To serve the society
c) To issue loans
d) To get maximum customers
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10. Multiple Choice Questions -
7. With whom does the ownership of Public sector banks rest?
a) Government of India
b) Jointly with Government of India and share-holders from the public
c) Jointly with Government of India and State Bank of India
d) Jointly with Government of India and Reserve Bank of India
8. Which Bank provides credit to small and marginal farmers,
agricultural labours, etc?
a) Foreign Bank
b) Private Bank
c) Regional Rural Bank
d) Public Bank
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11. Multiple Choice Questions -
9. Present Governor of RBI?
a) Shaktikanta Das
b) Urjit Patel
c) Gita Gopinath
d) Piyush Goyal
10. At which of the following cities is the Head Office of Reserve
Bank Of India located?
a) Dehradun
b) Kolkata
c) New Delhi
d) Mumbai
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12. MCQ Answers -
1. c
2. a
3. d
4. b
5. d
6. a
7. a
8. c
9. a
10. d
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