Difference Wiki

Commercial Bank vs. Small Finance Bank: What's the Difference?

Edited by Huma Saeed || By Sawaira Riaz || Published on December 6, 2023
Commercial banks offer financial services to the public for profit, while development banks provide funding for economic development projects.

Key Differences

Commercial banks primarily deal with deposits and loans for individuals and businesses. Development banks focus on financing large-scale infrastructure and development projects.
Sawaira Riaz
Dec 06, 2023
The main aim of commercial banks is to earn profit through interest and service fees. In contrast, development banks aim to support economic growth and development, often with governmental backing.
Sawaira Riaz
Dec 06, 2023
Commercial banks offer services like savings accounts, credit cards, and mortgages. Development banks provide long-term capital for national projects, such as energy or transportation infrastructure.
Huma Saeed
Dec 06, 2023
Commercial banks cater to the day-to-day financial needs of the public and businesses. Development banks often work in partnership with governments and international organizations for larger societal benefits.
Harlon Moss
Dec 06, 2023
The clientele of commercial banks usually includes individuals, small businesses, and corporations. Development banks, on the other hand, deal with government entities, large corporations, and sometimes international projects.
Aimie Carlson
Dec 06, 2023
ADVERTISEMENT

Comparison Chart

Primary Focus

Providing banking services for profit
Funding economic and infrastructure projects
Sawaira Riaz
Dec 06, 2023

Main Services

Deposits, loans, credit cards, mortgages
Long-term financing, project funding
Sawaira Riaz
Dec 06, 2023

Target Clients

Individuals, small businesses, corporations
Governments, large projects, international aid
Huma Saeed
Dec 06, 2023

Profit Objective

High profit orientation
Developmental and societal growth focus
Sawaira Riaz
Dec 06, 2023

Example

A local bank offering checking accounts
A bank funding a national highway project
Aimie Carlson
Dec 06, 2023
ADVERTISEMENT

Commercial Bank and Small Finance Bank Definitions

Commercial Bank

Commercial banks provide everyday financial services to the public and businesses.
A commercial bank issued a mortgage for my new home purchase.
Sawaira Riaz
Nov 24, 2023

Small Finance Bank

Development banks often work with governmental and international organizations.
Our country's development bank collaborated with the UN for sustainable projects.
Sawaira Riaz
Nov 24, 2023

Commercial Bank

Commercial banks operate in a competitive market environment.
I chose my commercial bank based on their excellent customer service.
Sawaira Riaz
Nov 24, 2023

Small Finance Bank

A development bank provides funding for large-scale development projects.
The development bank financed a new renewable energy project in our region.
Huma Saeed
Nov 24, 2023

Commercial Bank

Commercial banks aim to make profits through various banking services.
My commercial bank charges a fee for international transactions.
Huma Saeed
Nov 24, 2023

Small Finance Bank

Development banks provide long-term capital for societal and economic progress.
The development bank played a crucial role in funding the new public hospital.
Janet White
Nov 24, 2023

Commercial Bank

Commercial banks are key players in the consumer banking industry.
The commercial bank offered me a competitive interest rate on my deposit.
Sawaira Riaz
Nov 24, 2023

Small Finance Bank

Development banks may prioritize social and economic benefits over profit.
The development bank initiated a program to support small rural businesses.
Sawaira Riaz
Nov 24, 2023

Commercial Bank

A commercial bank is a financial institution offering deposit and loan services.
People often go to a commercial bank to open savings accounts.
Sawaira Riaz
Nov 24, 2023

Small Finance Bank

Development banks focus on economic growth and infrastructure development.
A national development bank supported the construction of the new highway.
Sawaira Riaz
Nov 24, 2023

FAQs

How do commercial banks make money?

Through interest on loans, service charges, and fees.
Sawaira Riaz
Dec 06, 2023

What’s the main goal of a development bank?

To support economic growth and infrastructure development.
Janet White
Dec 06, 2023

What is a development bank?

An institution that provides funding for large-scale development and infrastructure projects.
Huma Saeed
Dec 06, 2023

What is a commercial bank?

A financial institution offering services like loans and deposits for profit.
Sawaira Riaz
Dec 06, 2023

Can individuals open accounts in development banks?

Generally, no, as they focus on large projects and governmental needs.
Sawaira Riaz
Dec 06, 2023

Do commercial banks fund large infrastructure projects?

Typically, they don’t, as this is the role of development banks.
Sawaira Riaz
Dec 06, 2023

How do development banks impact the economy?

By financing projects that stimulate economic growth and development.
Aimie Carlson
Dec 06, 2023

Do development banks offer personal loans or mortgages?

Usually not, as they focus on larger development projects.
Sawaira Riaz
Dec 06, 2023

Are commercial bank deposits insured?

In many countries, they are insured up to a certain limit.
Sawaira Riaz
Dec 06, 2023

Do commercial banks offer investment services?

Yes, many offer services like wealth management and investment advice.
Janet White
Dec 06, 2023

What are examples of development bank projects?

Infrastructure projects like roads, bridges, and energy plants.
Sawaira Riaz
Dec 06, 2023

Are interest rates different between these two types of banks?

Yes, development banks often have lower rates for project financing.
Aimie Carlson
Dec 06, 2023

Can businesses get loans from development banks?

If they are involved in relevant large-scale projects, yes.
Janet White
Dec 06, 2023

Do commercial banks contribute to societal development?

Indirectly, by supporting businesses and individuals financially.
Sawaira Riaz
Dec 06, 2023

Are development banks usually government-owned?

Many are, or they operate with significant governmental support.
Sawaira Riaz
Dec 06, 2023

What is the role of commercial banks in the economy?

They facilitate day-to-day financial transactions and lending.
Sawaira Riaz
Dec 06, 2023

How do development banks select projects to fund?

Based on developmental impact, feasibility, and strategic importance.
Harlon Moss
Dec 06, 2023

Do development banks offer checking or savings accounts?

No, these are typical services of commercial banks.
Aimie Carlson
Dec 06, 2023

Can a commercial bank also function as a development bank?

Typically, these functions are separate due to differing objectives and scale of operations.
Harlon Moss
Dec 06, 2023

What is the significance of development banks in underdeveloped countries?

They play a crucial role in funding infrastructure and development to stimulate growth.
Aimie Carlson
Dec 06, 2023
About Author
Written by
Sawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

Trending Comparisons

Popular Comparisons

New Comparisons