2.2 Banking: Meaning and Types

Meaning: banking is financial intermediation — accepting deposits (the liability side) and making loans (the asset side): maturity transformation (borrowing short, lending long) + risk transformation + liquidity provision, with trust as the plant and machinery (a bank is a promise standing on confidence — the run's anatomy: when depositors all want out at once, the strongest bank falls; hence deposit insurance and the lender of last resort). Types (theclassification):• Central banks (the state's bank and banks' bank — 2.3A);• Commercial banks (the full-service private intermediaries — 2.3B);• Development banks (long-term project finance — infrastructure and industry's lenders);• Finance companies (narrower licence: hire purchase, consumer finance);• Microfinance institutions (the Grameen-model small-loan sector — Nepal's "D-class" licensees: financial inclusion's frontier, over-indebtedness's cautionary file — ECO-I 4.5.4's cooperative cousins);• Cooperative savings-and-credit societies (SACCOs) (member-owned credit — the third pillar's financial wing, the sector's scandals as the governance lesson — ECO-I 4.5.4).