Other Characters

Definition of a Bank

A bank is both a financial intermediary and a corporate entity. It is a financial intermediary, because it:

  • serves as a financial go-between, taking in deposits from those who save and making loans with those deposits to qualified borrowers;
  • fosters economic development; and
  • acts as a community’s economic engine.

A bank is a corporate entity because it is:

  • formed by shareholders;
  • governed by a banking charter, articles of association, by-laws or similar documents; and
  • governed by a board of directors, elected by shareholders to protect their interests, who are ultimately responsible for the conduct of the bank’s affairs.