State the difference between a commercial bank and a central bank.

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Q. State the difference between a commercial bank and a central bank.

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2020Subjective· 2mImportance★★★★★

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Commercial banks serve the public for profit; the central bank (RBI) is the apex, government-owned regulator of the whole banking and monetary system.

Basis	Commercial Bank	Central Bank (RBI)
Meaning/position	An ordinary bank that deals directly with the public	The apex/topmost bank that controls the entire banking system
Ownership	May be public or private sector	Owned and controlled by the government
Main objective	To earn profit	To work for economic stability and public welfare, not profit
Note issue	Cannot issue currency notes	Has the sole right to issue currency notes
Dealings	Deals directly with the general public	Deals mainly with the government and other banks, not the public directly
Number	Many commercial banks exist	Only one central bank in a country

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set MARCH1 markMCQ
$Q. What is the name of Apex Bank of India?$
(a) UBI
(b) PNB
(c) SBI
(d) RBI
›Reveal solutionSolution

The apex bank of India is the Reserve Bank of India (RBI) — option (d).

The RBI, established in 1935, is the central (apex) bank of India. Being the topmost monetary authority, it stands at the head of the country's banking structure and performs functions no ordinary bank does: sole authority to issue currency notes, banker to the Government, banker's bank and lender of last resort, custodian of foreign-exchange reserves, and con …

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CBSE 2026Set MARCH1 mark
$Q. Give the full form of RTGS.$
›Reveal solutionSolution

Full form of RTGS = Real Time Gross Settlement.

RTGS (Real Time Gross Settlement) is an electronic fund-transfer system operated under the RBI, in which money is transferred from one bank to another on a 'real time' and 'gross' basis — that is, each transaction is settled individually a …

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CBSE 2025Set MARCH1 markMCQ
$Q. Who is the custodian of India's reserves of foreign currencies?$
(a) Foreign ministry of Government of India
(b) N.S.S.O.
(c) R.B.I.
(d) Finance ministry of Government of India
›Reveal solutionSolution

The Reserve Bank of India (R.B.I.) is the custodian of India's foreign-currency reserves — option (c).

One of the important functions of the RBI as India's central bank is to act as the custodian of the country's foreign-exchange reserves. It keeps and manages the nation's reserves of foreign currencies and gold, and controls the buying and selling of foreign exchange to maintain external stability …

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CBSE 2022Set MARCH1 markMCQ
$Q. In which year was RBI nationalized?$
(a) (A) 1949
(b) (B) 1969
(c) (C) 1935
(d) (D) 1955
›Reveal solutionSolution

The correct option is (A) 1949, the year the RBI was nationalised.

The Reserve Bank of India was established in 1935 as the country's central bank under the RBI Act, 1934. After independence, to bring monetary policy fully under public control, the government nationalised the RBI in 1949 (with effect from 1 January 1949). The year 1969 relates to the nationalisation of maj …

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Q.State the difference between a commercial bank and a central bank.

Concept understanding — Functions of the Reserve Bank of India

Q.State the difference between a commercial bank and a central bank.

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