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Banks are among the most important financial institutions. The way in which a bank is organized and operates is determined by its objectives. The first and the most important function of a central bank is to accept responsibility for advising the government on the making of the country`s financial policy, and then to see that it is carried out. The aim of commercial banks is to earn profit. Over the years banks have developed organizational forms, or structures, designed to perform these various roles and to supply the services their customers demand. A commercial bank which provides the` same range of services year after year is less likely to be successful. Successful competing in the constantly changing global business environment requires market-driven strategies that are responsive to customers` needs and wants. Executives who do not recognize the change`s occurring in the vast array of markets for products and services will not be able to cope with the unprecedented competitive pressure in the market place. To improve competitive advantages they are drastically altering their business and marketing strategies which may include downsizing, repositioning, market segmentation, altering the business portfolio, pricing, promotion and strategic alliances between companies. With the global increase in the number of competitors banks face in their major markets, more and more banking firms have become market-driven and more alert to the changing service demands of their customers and also to the challenges posed by bank and nonbank competitors. This trend forced bank managers to become more concerned with service marketing activities and with profitability and growth. Banks are usually organized to follow their functions and supply the services as efficiently as possible. Moreover, as larger banks generally offer more services, a bank`s size is also a significant factor in determining how banks are organized.

According to the text, the aims of a central bank and commercial banks are …

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