Difference between financial institutions and banks
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Financial Institutions
Basically, the term encompasses several economic setups which provide financial services to its members or clients. This includes various deposit-taking institutions, such as banks and credit unions, as well as non-banking institutions, such as insurance companies, investment funds, brokers, etc. Most of these institutions are regulated by the government. The most important function of these financial institutions is to channelize funds between lenders and borrowers indirectly.
Banks
A bank is a deposit-taking financial institution. As with most of the other institutions listed above, even banks acts as financial intermediaries. Basically, banks allow consumers to deposit money in savings accounts and lend the same money in form of various loans. They are among the most strictly regulated financial institutions in the economy. While the basic concept of banking is more or less same in all the countries, certain restrictions may differ from one country to another.
Basically, the term encompasses several economic setups which provide financial services to its members or clients. This includes various deposit-taking institutions, such as banks and credit unions, as well as non-banking institutions, such as insurance companies, investment funds, brokers, etc. Most of these institutions are regulated by the government. The most important function of these financial institutions is to channelize funds between lenders and borrowers indirectly.
Banks
A bank is a deposit-taking financial institution. As with most of the other institutions listed above, even banks acts as financial intermediaries. Basically, banks allow consumers to deposit money in savings accounts and lend the same money in form of various loans. They are among the most strictly regulated financial institutions in the economy. While the basic concept of banking is more or less same in all the countries, certain restrictions may differ from one country to another.
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