What is a bank charter?

1. A bank charter is an operating licence issued to a bank by a government. 2. A commercial bank is required to hold one before it can do business at all. 3. Commercial banks are corporations owned by individuals or by other corporations, and the charter is what lets that corporation operate as a bank. 4. Deposit insurance and reserve rules apply to a bank once it is chartered, so they follow the licence rather than being it. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.3 U.S. Financial Institutions_