How do people start banks?

The process of starting a bank varies from state to state, but, in general, here’s how it goes:

1. A group of individuals decides to start a bank. Their first step is to apply for a charter from
   their state banking commission.* The charter sets out the rules for how they must operate
   their bank.


2. The banking commission reviews the application to make sure it is complete and then
   schedules a hearing.


3. The commission looks at the financial condition and the character of the applicants.


4. After that, the banking commission will either approve the application or deny it.


5. If approved, the group that applied to start the bank will then have a certain amount of
   time to raise the necessary capital, put together a full management team, and obtain federal
   deposit insurance.


6. When that’s done, the group will notify the banking commission, which will then review
   the list of proposed investors. If the commission has no objection to the list, if the bank is
   insured, and if an acceptable management team is in place, the commission will issue its final approval and the bank may
   open for business.

The United States has a dual banking system. People who want to start a bank can choose
to apply for either a state charter or a charter from the federal government.

Source from : http://www.bos.frb.org