Which of the following is an example of a Financial Institution?

• A. A bank
• B. A video service provider
• C. A shipping company
• D. A retail store

Answer: (A)

What counts as a financial institution is entities whose main purpose is to provide financial services. A bank fits this definition because its core activities are accepting deposits, making loans, and offering payment services that move money within the economy. Those functions—taking funds from savers, lending to individuals and businesses, and enabling transactions—are the defining roles of a financial institution.

The other options are not financial institutions because they focus on non-financial lines of work: a video service provider delivers media content; a shipping company moves goods and handles logistics; a retail store sells goods to customers. They may process payments or offer some financing as a service, but that is not their primary function, so they aren’t classified as financial institutions.