DEFINITION of 'Industrial Bank'

A financial institution with a limited scope of services. Industrial banks sell certificates that are labeled as investment shares and also accept customer deposits. They then invest the proceeds in installment loans for consumers and small businesses. These banks are also known as Morris banks or industrial loan companies.

BREAKING DOWN 'Industrial Bank'

Industrial banks differ from commercial lenders because they accept deposits. They also differ from commercial banks because they do not offer checking accounts. Furthermore, the loans offered by industrial banks are often secured by a third party who acts as guarantor for the loan.

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