Commercial Bank A commercial bank is a type of financial intermediary and a type of bank. Commercial banks are also known as merchant banks. After the Great Depression, the U.S. Congress demanded that banks conduct banking activities, while investment banks were limited to activities in the capital market. As it was not necessary that the two types of banks were owned by different owners, according to U.S. law, some use the term “commercial bank” to refer to a bank or a division of a bank deposits and loans administered mostly corporations or big business. In other jurisdictions, the strict separation of investment banking and commercial banking never applied. Commercial banks can also be viewed separately from retail banks, which comply with the provision of financial services directly to consumers. Many banks offer retail banking services to both as commercial banks.