Find Out The Different Types Of Banks That Exist

Find Out The Different Types Of Banks That Exist

Banking is the act of accepting deposits, giving loans, and facilitating payment. This can be done by either starting a bank by depositing money into the bank or working for an already established bank. Each country has its banking system with branches to provide easy access. Branches are typically located in major urban areas like airports, shopping malls, and business centers. These five common types of banking appear in most countries with a developed financial system.

  1. COMMERCIAL BANKING

Commercial banks accept deposits from the general public and use them to make investments in housing and businesses. They can also distribute these investments to the people in the form of loans. Commercial banks are often thought of as traditional banks because they have been around for a very long time and have been an essential part of most countries’ financial systems for centuries.

  1. INVESTMENT BANKING

Investment banks do not have a responsibility to protect the interests of depositors but instead come from a tradition of underwriting and issuing securities. In modern times, investment banks can provide other services such as mergers and acquisitions, stock exchanges, and other financial products related to the issue and trading of securities.

  1. MERCHANT BANKING

In contrast to commercial banks, merchant banks initially worked directly with businesses to finance specific projects or ventures. However, in the modern-day, they usually focus more on providing investment management services for wealthy clients and institutions. Sometimes they also work closely with governments to help them raise capital by issuing securities.

  1. INVESTMENT BANKING

Investment banks do not have a responsibility to protect the interests of depositors but instead come from a tradition of underwriting and issuing securities. In modern times, investment banks can provide other services such as mergers and acquisitions, stock exchanges, and other financial products related to the issue and trading of securities.

  1. MORTGAGE BANKING

Mortgage banks originated when individuals who wanted to borrow money would work directly with a landowner or an investor to get the financing they needed. Mortgage banks changed this by putting loans on the market, which allowed more people to get mortgages than possible if each bank had to make the loans themselves. Mortgage banks also provide additional services like home and personal loans and asset management services for institutions and businesses.