By synthesizing two recent literature, namely, the inflation targeting (IT)-inflation and inflation-finance linkages, this paper explores whether the adoption of IT exerts any significant impacts on financial (banking) development. By implementing a variety of propensity score matching approaches to data on 74 countries over the 1980-2008 period, the empirical results strongly indicate that, overall, IT countries enjoy higher levels of development in the banking sectors. However, IT appears to have distinct effects in different groups of countries. While the effect of IT in promoting banking development is statistically significant and economically large in developing countries, the effect seems to be negligible in industrial countries.