The Commercial Bank

The commercial banks now do not only deal in their original functions which characterized them, but rather embrace multifarious functions that had been attributed to other types of banks. A bank of almost any type (provided it operates lawful boundaries) relegates the commercial bank’s functions to a department within the omnibus organization. Hence, a savings department, a trust department, and other such departments may be housed in commercial bank. Similarly, a trust company may also departmentalize its function to include a “commercial banking department” the process of departmentalization is the “rule of the day,” or what is actually being resorted to in the banking circles today.

Nonetheless, it must be borne in mind that whether the setup is dedicated purely to commercial banking functions or relegated to a “commercial banking department” in a bigger institution, such major functions are distinctly classified as “dealing in credit” Hence, the connotation becomes evident that a commercial bank is credit institution.