Bank

Bank is a financial institution that accepts deposits and makes loans, acting as an intermediary between financial institutions. Banks may also provide services such as insurance, wealth management, currency exchange, etc. In most countries, banks are regulated by the central bank of the country. Central banks are mostly responsible for currency stability, controlling inflation, monetary policy, and overseeing money supply. Some of the world’s central banks are U.S. Federal Reserve Bank, Reserve Bank of India, Bank of England, and People’s Bank of China.

There are two primary types of banks: commercial bank and investment bank.

Commercial bank - A commercial bank is a financial institution whose main businesses are deposit taking and loan issuing. Apart from these primary activities they provide other services which include private banking, custody and guarantees, cash management and trade finance, etc. They usually make profit by charging higher rate of interest from borrowers than they pay to their depositors. State bank of India, Bank of America Corporation, HSBC are a few examples of commercial banks.

Investment bank - An investment bank is a financial intermediary whose main business is securities underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and acquisition (M&A), asset management and securities trading. Goldman Sachs, JP Morgan Chase, Morgan Stanley are a few examples of investment Banks.