A municipal bank is a specialized financial institution owned, operated, or heavily chartered by a local government entity, city, or municipality to serve the public interest and community development goals rather than private shareholder profits. Historically, municipal banks were established to provide accessible, low-cost banking services to local residents, support small businesses, finance affordable housing initiatives, and fund critical public infrastructure projects without relying entirely on major commercial banking conglomerates. By keeping public deposits within the local economy, these institutions help stimulate regional economic growth, foster financial inclusion for underserved populations, and ensure that community capital is reinvested directly into local public works, municipal services, and sustainable regional development programs.