Commercial banks are like lenders. Generally, they provide their own money to support businesses as against investment banking. This difference between commercial and investment banking is preserved by fundamental banking laws since the 1930s.
Commercial bankers are generally less aggressive and risk reluctant. Also, commercial banks employees do not get lucrative salaries and an elevated status as compared to investment banks employees.
While lending money, commercial banks cautiously scrutinize the borrowers, as a huge amount of money is invested in the company by such banks . So it is important for them that these companies run efficiently, so that the companies can repay the money. In commercial banking, the borrower's business failure can harm the bottom line of the commercial bank.
Commercial bankers earn money due to their legal contract to obtain deposits from consumers and businesses. In order to achieve the assurance of these depositors, commercial banks propose guarantees on these deposits for amounts up to $100,000 which are sponsored by the government. Commercial banks obey the numerous rules and regulations led by the government.
Most of these rules and regulations or guidelines were set up in the Glass-Steagall Act of 1933. These rules and regulations were meant to divide the functions of the investment and commercial banks. According to Glass-Steagall law, there is a restriction on the sale of bonds and stocks.