A channel bank is the foundation for all digital telecommunication transmissions. It is the part of a carrier -multiplex terminal that multiplexes a group of channels into a higher bit-rate digital channel and demultiplexes these aggregates back into individual channels. A channel bank changes analog voice and data signals into a digital format. It is called a "bank" because it can contain enough processing power to convert a bank of up to 24 individual channels to a digital format, and then back to analog again. The 24 channels comprise a T1 circuit.
A channel bank can also multiplex a group of channels into a higher bandwidth analog channel.