Commercial banking is a specific form of banking which deals with the deposits in personal accounts and the process of lending money to people through loans. This is the type of bank which is most commonly interacted and associated with by the population in the country. The commercial banking operations pertain to personal banking, loan processing, leasing as well as retail banking facilities. The specific term Commercial bank was coined to differentiate the function of this aspect of banking as different form investment banking. The commercial bank is considered usually to a financial subsidiary.
This aspect of the bank is also known as the trading bank because people usually set up their accounts in such financial institutions, conduct their daily banking transactions through this intermediary and also set an application for a loan with this bank. In the American Banking system the commercial banks are the types of bank that are most abundant in terms of availability. Most of the member banks operate as commercial banks.