2. › A Commercial Bank is a profit-seeking business firm,
dealing in money and credit.
› "A banking company means any company which transacts
the business of banking . Banking means accepting for the
purpose of lending of investment of deposits of money
from the public, payable on demand or other wise and
withdraw able by cheque, draft or otherwise.“
› Indian Banking Company Act, 1949
7. ›While sanctioning a loan to a customer, a bank
does not provide cash to the borrower Instead
it opens a deposit account from where the
borrower can withdraw. In other words while
sanctioning a loan a bank automatically
creates deposits. This is known as a credit
creation from commercial bank.