This paper reviews the two most important papers of contemporary banking theories: Contemporary Banking Theory (Bhattacharya et al 1993) and Theories of the Banking Firm: A Review of the Literature (Swank 1996), which focus on dealing with the question of why banks exist, and how the banks behavior. These two papers have valuable practical implications for the management of the retail banks, especially the theories of the risk management, the portfolio models, liquidity and maturity transformations, etc. This essay discussed the implications of the theories of retail banking and the developments of the retail banking.