What is considered a primary bank?

A primary bank is often referred to as a commercial bank, which serves the general public and offers a wide range of banking services, including accepting deposits, providing loans, and facilitating payment services. Commercial banks are essential financial institutions for individuals and businesses, providing the foundation for personal and business banking needs.

They are characterized by their focus on serving the everyday financial requirements of consumers and enterprises, making them an integral part of the economy. Their operations typically extend to providing checking and savings accounts, mortgages, personal loans, and business financing, thereby supporting both consumer spending and business investment.

In contrast, investment banks primarily deal with underwriting and assisting in the sale of securities to raise capital, focusing on larger clients rather than the general public. Central banks manage national monetary policy and oversee the banking system but do not serve individual consumers directly. Merchant banks specialize in international finance and trade, often providing services to corporations but typically do not cater to the general populace in the same way commercial banks do.