What are the institutional financial sources? Explain with examples.

Financial institutions, otherwise known as banking institutions, are corporations which supply services as intermediaries of financial markets. Broadly, there are three major types of financial institutions. Financial institutions in most countries operate in a heavily synchronized environment because they are critical parts of countries' economies, due to economies' confidence in them to grow the money supply via fractional reserve lending. Regulatory structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability.

One of the major sources of the financial institution is commercial banks. It is one of the formal sources of credit. Commercial banks make up a significant role for the source of credit. The banks accept deposit from the households who have excess money advance loans to the households who are in need of it. It is one of the easiest ways of getting a loan for the households.