Wholesale Banking vs Commercial Banking: Difference and Comparison

The banking sector helps countries to maintain stability and sustainability in its economy. The banking industry offers different loans and opportunities to end-users, organizations, and governments to grow their business and earn profit.

At the same time, they also create policies to minimize the risks to the businesses. The banking system comes in different forms: retail banking, wholesale banking, commercial banking, and corporate banking. Commercial banking is one of the subsets of the wholesale banking system.

Key Takeaways

  1. Wholesale banking deals with large clients such as corporations, financial institutions, and governments, while commercial banking deals with individuals and small to medium-sized businesses.
  2. Wholesale banking provides underwriting, trading, and asset management services, while commercial banking focuses on deposit-taking, lending, and other retail banking services.
  3. Wholesale banking services are offered to clients with high net worth, while commercial banking services are offered to clients with lower net worth.

Wholesale Banking vs Commercial Banking 

Wholesale banking provides financial services to major customers, including governmental organizations and multinational enterprises. While commercial banking provides services to small to medium-sized businesses and individuals. It offers lending, deposit-taking, and other consumer banking services.

Wholesale Banking vs Commercial Banking

The wholesale banking system offers services only to large corporations under the name of a corporation and not to a person.


Banking Quiz

Test your knowledge about topics related to banking

1 / 10

What is the name of the type of account where you deposit money regularly and earn interest on the balance?

2 / 10

Treasury Bills (or T–Bills) are issued by government to _____ money.

3 / 10

Retail Banking means 

4 / 10

What is the main purpose of money transfer?

5 / 10

Which banks do not accept deposits?

6 / 10

What is the name of the type of mortgage where the loan balance decreases over time as the borrower makes payments?

7 / 10

What does ACH stand for?

8 / 10

A credit report is

9 / 10

Replacement of an existing loan with another loan is known as

10 / 10

What is the primary function of a commercial bank?

Your score is


The services offered are cash management, advisory, support companies to merge and acquire other corporate companies, building trust among corporates, and other services. It offers services to commercial and corporate banks also.

The commercial banking system offers services to its customers like deposits, short-term and long-term loans, and agency services like ATMs, merchant banking, transferring money, and other assets. Customers can open current, savings, or fixed accounts per their requirements.

Customers need not have strong financial statements to avail of commercial banking services.

Comparison Table

Parameters of ComparisonWholesale BankingCommercial Banking  
Definition      Wholesale banking offers financial services to large corporations like the government and private and public companies with strong financial statements.Commercial banking offers financial services to small corporate and individuals even though they do not have strong financial statements.
Functions  Some functions are mergers and acquisitions, consulting services, underwriting, cash management, and security to the deposited amount.Some services are credit creation, deposits and withdrawals using cheques or debit or credit cards, loans against personal assets, trading, facilitating security lockers, and others.
Customer segmentLarge corporations, financial institutes, and government bodies are the customers of wholesale banks.Individual customers and small companies are the customers of commercial banks.
Example  SBI, CBI, Bank of Baroda, ICICI, and others.SBI, Kotak Mahindra banks, axis bank, bank of Baroda, and others.
Disadvantages  Customers must deposit a large amount, and the processing fees are higher.Account creation and maintenance are expensive to customers.

What is Wholesale Banking?

Wholesale banking is a complete banking system that offers services to its customers through different channels. Wholesale banking operates in the local and international markets.

It offers products to its customers like international trading, currency exchange services, trust services, consulting services, agency services, and practices lending and borrowing from other banks.

Wholesale banking is sometimes termed corporate or commercial banking. Still, corporate banking and commercial banking are the subparts of wholesale banking that offer financial services to different groups of customers.

As a whole, the customers of wholesale banking are government bodies and public and private corporations, especially those with significant capital. In wholesale banking, customers create corporate accounts under the organisation’s name and not on the individual board member of the company.

Wholesale banking imposes low operational fees but higher processing fees. It adds security to the customer’s assets and strives to maintain good customer relationships.

Wholesale banking provides a higher return on investments to its customers and supports them in the development and growth of the business.

wholesale banking

What is Commercial Banking?

Commercial banking is one of the channels in the wholesale banking system that offers financial services to small public and private corporations and individual customers.

For example, SBI is wholesale banking that offers services to large corporations, individual customers, and small and medium-sized businesses. It handles different channels to provide necessary services to its customers.

SBI comes under commercial banks, corporate banks, and also wholesale banks.

The commercial banking system sells deposits, loans, security lockers, trading finance, and other services similar to wholesale banking but as per the customer’s income statement.

A commercial bank customer needs not have to maintain a higher amount in the account but must maintain a minimum amount to keep the account active. The bank charges fees for its services from the customers, extra fees for night services, and higher withdrawals.

Commercial banking is a more profitable banking system than other banking systems.

commercial banking

Main Differences Between Wholesale Banking and Commercial Banking 

  1. Customers of the wholesale banking system are banking institutes, government offices, and large private corporations. Customers of the commercial banking system are individual customers and small public and private sector companies.
  2. Creating a commercial account is expensive. In contrast, creating an account in wholesale banking is less expensive.
  3. The functions of wholesale banking are to provide consulting services among customers of the bank and facilitate mergers and auditions among its customers. In contrast, commercial banking functions are general functions like depositing and offering different loans to customers.
  4. Wholesale banking customers should submit strong and legal financial statements to avail of the services, whereas customers of commercial banking should keep their assets like gold or any other asset in the bank to avail of loans and other services.
  5. Wholesale banking customers fear exploitation, high-interest rates, and risks of transactions of large amounts. On the other hand, commercial banking charges different fees to process different amounts.                            
  1. https://www.sciencedirect.com/science/article/pii/S1574004816000100
  2. https://www.indianjournals.com/ijor.aspx?target=ijor:ijemr&volume=4&issue=1&article=006
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