This study investigates the impact of banking development on economic growth volatility in developing countries over the period 2004–2019, using a panel quantile approach. By examining different facets of banking development, our findings indicate a negative effect of banking sector depth, access, and quality on economic growth volatility. Banking development significantly reduces economic growth instability across different quantiles of economic growth volatility. Nevertheless, banking efficiency increases economic volatility. This study provides valuable insights to financial regulatory authorities in making decisions related to banking development-economic instability nexus.