Difference Between Commercial Bank And Merchant Bank
The major dissimilarities or difference between commercial bank and merchant bank can be pointed out as follows:
1. Introduction
Commercial Bank: A financial institution that provides various banking services to the individuals and firms such as collection of deposit, providing debit and credit cards, granting loans etc.
Merchant Bank: Financial institution that deals with international trade and serves large business firms as a financial consultant.
2. Useful For
Commercial Bank: It is useful for individuals and small business firms
Merchant Bank: It is useful for large corporate firms engaged in international trade.
3. Risk Involved
Commercial Bank: It is less riskier than merchant bank
Merchant Bank: It involves higher degree of risk than commercial bank
4. Governed By
Commercial Bank: It is governed by the Banking Act.
Merchant Bank: It is governed and regulated by SEBL
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5. Services Offered
Commercial Bank: Collecting deposits, advancing of loan, payment of check, providing remittance service, foreign currency exchange etc.
Merchant Bank: Underwriting, loan syndication, trade financing, portfolio management etc.
6. What Is It?
Commercial Bank: It is a retail banking
Merchant Bank: Professional service which include consultancy and financing services.
Commercial Bank Vs Merchant Bank (Comparison Chart)
I hope this post is helpful to understand the difference between commercial bank and merchant bank and to make comparison between them.
Basis For Difference
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Commercial Bank
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Merchant Bank
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Introduction
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Financial institution that provides services like accepting deposit, granting loans etc to the account holders.
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Financial institution which concerned with international trade and serves as financial consultant
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Useful For
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Individual and small business forms
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Large corporate firms
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Risk Involved
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Less
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High
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Governed By
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Banking Act
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SEBL
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Services
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Collecting deposit, loan advancement, remittance service etc.
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Loan syndication, underwriting, trade financing etc.
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It Is
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Retail banking
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Professional service
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I hope this post is helpful to understand the difference between commercial bank and merchant bank and to make comparison between them.