Banking systems are institutions that manage money, providing services such as accepting deposits, offering loans, and facilitating transactions. They play a crucial role in the economy by ensuring the flow of money and credit, which helps businesses and individuals meet their financial needs. These systems can be categorized into different types, including commercial banks, investment banks, and credit unions. Each type serves specific functions, such as commercial banks focusing on everyday banking services, while investment banks assist with capital raising and financial advisory. Overall, banking systems are essential for economic stability and growth.