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

Answer Details

The question asks which function distinguishes commercial banks ("the former") from the central bank. To answer this, you need to identify which activity is performed by commercial banks but not by the central bank.

Accepting deposits from the public is the core business of commercial banks. They operate current accounts, savings accounts, and fixed deposit accounts for individuals and businesses. The central bank does not provide these retail banking services to the general public; it deals primarily with the government and other banks.

The remaining options describe functions of the central bank:

• Servicing the public debt - the central bank manages government borrowing, issues government securities, and handles debt repayment on behalf of the government.
• Regulating foreign exchange - the central bank controls the country's foreign exchange reserves and manages the exchange rate.
• Acting as a lender of last resort (likely intended by "leader of last resort") - the central bank provides emergency lending to commercial banks facing liquidity crises.

Since accepting deposits from the public is a commercial bank function that the central bank does not perform, it is the distinguishing feature.