In: Finance
Explain the major differences between commercial banks and savings and loan associations (S&Ls).
Answer-
There are commercial banks and savings banks. The essential distinction is the manner in which each is managed, which decides the kind of banking items they offer. The expression "bank" appears to be tradable today given that there are commercial banks and savings banks, which are additionally called savings and loans. Commercial banks and savings and loans issue loans to purchasers for contracts, vehicles, individual loans and Visas. Both commercial banks and S&Ls additionally make loans to organizations and government offices. These institutions work under a government contract, a state sanction or both.
Commercial banks and S&Ls both give banking and advance products to consumers. Notwithstanding, there are significant differences. Commercial banks, also called public banks, will in general focus on business customers. These customers are seeking billions of dollars in loans for construction projects, expansion plans, acquisitions and different events. Huge numbers of their clients are huge corporations and governments. Various commercial banks also offer investment banking services. Also, a key contrast between savings banks and credit unions is that credit unions are not for benefit monetary cooperatives, but rather they offer the same types of banking products found at all other budgetary institutions.