Chain banking refers to the system where one or few individuals control two or more banking companies which are independently chartered or by the same group of persons through purchases of shares of such banks. Individuals secure enough stocks to get the controlling interest in the banking corporations involved.
The main difference between the two systems is that in case of group banking, the affairs of the group are controlled by holding company, whereas in case of chain banking system has more or less the same advantages and disadvantages of the group banking system.