Commercial banks are financial businesses in the private sector. Their main activities are accepting deposits from customers and providing loans.

These banks help the economy by acting as a bridge between people who save money and people who need to borrow it. They earn profits from the difference between the interest they pay to savers and the interest they charge to borrowers.

They also increase the amount of available money through a process called credit creation. They do this by using a reserve ratio system, which allows them to lend out a portion of the money they hold in deposits.