Provides emergency loans to commercial banks. 2. Commercial & Retail Banks
The apex body that regulates the entire system (e.g., the Federal Reserve in the US or the RBI in India). Controls the money supply and inflation. banking system
Back to Basics: What Is a Bank? - International Monetary Fund Provides emergency loans to commercial banks
Focus on individual consumers (checking/savings accounts, personal loans). Controls the money supply and inflation
These are the front-facing institutions that interact with the public and businesses.
Focus on business services (working capital, trade finance).
The banking system is a complex network of institutions designed to manage the flow of money, provide credit, and ensure financial stability within an economy. It acts as a bridge between those who have extra funds (depositors) and those who need them (borrowers). 🏛️ Core Components of the Banking System