What is the difference between Commercial Bank and Development Bank? - ProProfs Discuss
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What is the difference between Commercial Bank and Development Bank?

Asked by Lynn , Last updated: Jan 10, 2021

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K. Myers

K. Myers

K. Myers
K. Myers, Blogger, Chicago

Answered Jul 12, 2020

Commercial banks are financial institutions that take deposits from the public that are repayable on demand. These banks also allow people to borrow money, which is repayable on demand. The primary purpose of a commercial bank is obtaining a profit through interest earned by lending at a high-interest rate.

Commercial banks are financial institutions that take deposits from the public that are repayable
Commercial banks are organized into public sector banks, private sector banks, and foreign banks. Development banks are financial institutions that supply long term capital to valuable sectors, often for infrastructure, managerial and technical assistance. These banks are the most commonly used instruments of funding and assistance for projects that require a long term. Support in developing countries is of interest because they entail higher capital costs but also are essential for providing ideal circumstances for improvement.

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