These days, there are millions of transactions happening every day between two persons or parties whether it is business transactions or personal or repaying debt, cheques play a vital role when it comes to monetary transactions. Cheques not only facilitate monetary transactions between two parties/ persons but also it ensures the safety, security and minimises the risk of default during business deals.
Bank deposits simply refer to placing your money into banks or financial institutions for convenience, saving and safeguarding your money from theft and other risks of losses. To deposit your funds in a bank, you need to open a bank account in any commercial or other types of bank.
Also, the bank provides some interest against your balance amount at a certain rate called an interest rate. The interest rate varies from bank to bank and time to time and also depends upon the types of bank accounts you hold.
In this lesson, we will discuss some key difference between investment banking and merchant banking services. Although, unlike commercial banks, both investment banks and merchant banks are engaged in specialized financial services to business corporations, yet there are some critical differences lies in their offered services, however, there is one similarity between both that is none of the banks provide their services to the general public.
Hence, let us discuss the key differences between investment banking and merchant banking.
There has been always a misconception that both commercial banks and merchant banks are similar and offer identical services. Therefore, in this article, we will discuss what is the difference between commercial banks and merchant banks.
Commercial banks are those financial institutions whose primary function is accepting deposits and granting loans/ advance to individuals, trade and businesses. In addition, commercial banks also provide various other financial services to their customers.
Although Commercial banks and cooperative banks are included under the category of scheduled banks, yet there is the key difference between commercial and cooperative bank. The main objective of commercial banks is to make profits, however, cooperative banks function on the principle of cooperation, self-help or mutual help of its members such as farmers, small scale businesses, street vendors etc especially in rural, semi-urban or urban locale.
Therefore, in this lesson, we will discuss the key difference between cooperative banks and commercial banks. But before we go-ahead let us understand the basic structure of the banking system in India.