What Are the Different Types of Banks in Egypt?

Banks act as the middleman for those who want to invest or save up their money. In exchange for depositing their money in the bank clients receive an interest fee. The money deposited in the bank is in turn invested by the bank through loans to other businesses or in investment opportunities, as well as loans to those who do not have ready cash at hand for a specific purpose. The borrower pays back the original sum of the loan in addition to an extra percentage. This percentage is decided upon through several factors such as the loan amount and duration.

 Banks are divided into different categories according to the nature of the field they operate within, in addition to performing the usual financial operations we are familiar with.

What’s the difference between regular banks and the Agricultural Bank of Egypt or Nasser Social Bank?

Central Banks:

These banks are the pillar of a country’s economy. Their main goal is to achieve economic balance not profit like other banks. The Central Bank decides the interest rates on loans and deposits. It is also the official money printing authority.

Commercial Banks:

These banks offer banking services and products to the general public such as investing their clients’ money (in the form of certificates of deposit, time deposits, or saving accounts) in financing businesses, projects, and loans. Commercial banks can also provide non-banking services such as participating in economic projects and offering financial consultations to their customers.

Investment Banks:

This type of banks deals primarily with investors and companies through handling their stocks and bonds. The bank may help a company issue shares or stocks in an IPO or offer long term loans for big projects as an investment.

Specialized Banks:

They are banks that perform banking transactions but their main purpose is to finance and develop a certain sector of the economy. The banks offer loans with low interest rates and facilitate loan repayments for projects in this sector. These banks include real estate and development banks, agricultural banks, and industrial banks.

Islamic Banks:

Simply put Islamic banks operate within the framework of Islamic Sharīʿah laws. For example when it comes to loans and deposits Islamic banks impose a variable interest rate not a fixed one like other banks. Banking transactions also have different names such as “al morabha”, “al modarba”, and “al tawreeq”.