The function that distinguishes commercial banks from the central bank is that the former

Step 1: Analyze the question The question asks which function is peculiar to commercial banks (the "former") and sets them apart from the central bank.

Step 2: Review the concepts

Central bank functions (e.g., the Central Bank of Nigeria):

• Banker to the government and to other banks
• Lender of last resort to commercial banks
• Manages the public debt (services government debt)
• Controls the money supply and implements monetary policy
• Regulates foreign exchange and manages external reserves
• Issues currency (sole note issuer)

Commercial bank functions:

• Accept deposits from the general public (savings, current and fixed accounts)
• Give loans and overdrafts to individuals and businesses
• Provide ordinary banking services such as cheques, transfers, and ATM services

Step 3: Test each option

• A. Lender of last resort: This is a central bank function, not a commercial bank one. ✗
• B. Accepts deposits from the public: Commercial banks do this as their core business. The central bank does not deal directly with the general public. ✓
• C. Services the public debt: The central bank handles this as the government's agent. ✗
• D. Regulates foreign exchange: The central bank does this. ✗

Step 4: Answer The function that distinguishes commercial banks from the central bank is that they accept deposits from the public, which is option B.

Exam tip: When a question asks you to separate commercial banks from the central bank, remember that the central bank is the "bank for banks and the government", so it controls, regulates, and lends as a last resort. Commercial banks are the ones that deal directly with the public, taking their deposits and giving them loans.