A commercial bank is a financial institution which accepts deposits, makes business loans, and offers related services. Commercial banking is usually associated with business banking. Commercial banks offer a wide range of services including deposit accounts, such as checking, savings, and time deposit. Usually the commercial banks are supposed to deal with deposits and loans from corporations or large businesses while the normal banks deal with retail banking and provide financial services to common customers. Commercial banks also offer services to individuals, businesses, and not-for-profit organizations.

The term commercial bank is, therefore, used for a normal bank. A commercial bank is, however, different from investment bank because the latter limits itself primarily to the capital markets.

Sometimes the banks divide their functions. The division of the bank that deals with deposits and loans from corporations and large business is called commercial banking.

A commercial bank collects deposits from the general public and businesses in form of checkable deposits, savings deposits and fixed term or time deposits. It provides loans both to the general consumers and the business companies. It also buys corporate bonds and government bonds. While the deposits in the bank are its liabilities, the loans and bonds given to the customers are its assets.

Commercial banks also

• Engage in Internet banking, transfer the payments telegraphically and do electronic funds transfer at point of sale—EFTPOS.

• Issue bank drafts and bank cheques.

• Lend money through overdrafts, installment loans.

• Provide safe deposit boxes for safekeeping of documents and precious jewelry.

• Exchange currencies.

• Provide sale, distribution and brokerage services with or without advice of insurance, unit trusts and similar other financial products that constitute financial supermarket.
  
  
• Some comercial banks will provide bad credit banking options for those with adverse credit histories.

Secured loansA secured loan is one that is given when a borrower pledges some asset such as car, house etc as collateral.
Mortgage loans A mortgage loan is a very common loan, which is mostly obtained to purchase real estate. When a bank grants this loan, it secures a lien on the title of the house or the property. The lien continues until the mortgage is paid off completely. If the borrower defaults on repayment of loan, the bank repossesses the house and sells it to recover the loan amount.
Unsecured loans The banks also give unsecured loans. An unsecured loan is one which does not require a borrower to pledge any asset as collateral. Unsecured loans include overdrafts, corporate bonds and credit card loans.