Concept of Commercial Banks

Commercial banks are those financial institutions, which deal in accepting deposit of the persons and institutions and in giving loans against securities. These banks also provide technical and administrative assistance to industries. The main purpose of priority sector investment scheme is to uplift the back ward sector of the economy. It has power to create money and destroy money, with in limits, through the use of loans and demand deposit. Thus

commercial banks are the hearts of the financial system. They hold the deposits of general public, government establishment and business units.