Banking refers to the system and activities involved in accepting deposits from the public, extending credit, and providing various financial services. It encompasses a wide range of institutions, such as commercial banks, investment banks, credit unions, and savings and loan associations, which operate within regulatory frameworks.
The primary functions of banking include safeguarding deposits, facilitating payments and transactions, granting loans to individuals and businesses, and offering various financial products such as savings accounts, mortgages, and investment services. Banking is essential for economic stability and growth, as it mobilizes savings to fund investments and facilitates the flow of money within the economy.
Moreover, banking can also refer to the broader industry and regulatory environment that governs these activities, including central banking, which manages a country’s currency, money supply, and interest rates. The banking sector plays a crucial role in financial intermediation, risk management, and providing services that support both personal and commercial finance.