Commercial Banks issue Credit Cards
Commercial Banks are financial institutions that provide various banking services to individuals and businesses. One of the services they offer is issuing credit cards to customers. Here's why commercial banks issue credit cards:

1. Customer Relationship:
Commercial banks have established relationships with their customers through savings accounts, loans, and other financial products. By offering credit cards, banks can further deepen their relationship with customers and provide them with a convenient payment method.

2. Revenue Generation:
Credit cards generate revenue for commercial banks through interest charges, annual fees, and transaction fees. This helps banks diversify their income streams and improve their financial performance.

3. Risk Management:
Banks assess the creditworthiness of customers before issuing credit cards to manage the risk of default. They set credit limits based on the customer's financial situation and monitor card usage to minimize potential losses.

4. Branding and Marketing:
Credit cards are often co-branded with financial institutions, allowing banks to enhance their brand visibility and attract new customers. Banks also use credit card promotions and rewards programs to market their services and retain existing customers.

5. Regulatory Compliance:
Commercial banks issuing credit cards must comply with regulations set by the central bank and other financial authorities. These regulations ensure consumer protection, fair lending practices, and data security in the credit card industry.
In conclusion, commercial banks play a crucial role in issuing credit cards to consumers and businesses. By understanding the benefits and responsibilities associated with credit card issuance, banks can effectively manage risks, generate revenue, and build lasting relationships with customers.