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The Banker's Algorithm is a critical deadlock avoidance method in operating systems, designed to facilitate resource allocation without causing deadlock. It operates by maintaining information about the maximum resources. Each process may require, the current allocated resources and the available resources in the system. The algorithm checks each resource request to determine, if granting it would leave the system in a safe state, meaning that there is always a sequence in which all processes can complete their execution without getting stuck due to resource unavailability. Each process must specify its maximum demand for each resource type before it starts execution. When a process requests additional resources, the algorithm checks if granting the request will keep the system in a safe state. If so, the resources are allocated otherwise the process must wait until its request can be safely fulfilled.