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The Banker's Algorithm is a resource allocation and deadlock avoidance algorithm used in operating systems. It ensures that resources are allocated only if the system can stay in a safe state, meaning all processes can complete without causing deadlock. The algorithm checks if the requested resources can be granted by calculating a "safe sequence," where each process can obtain its maximum required resources and release them after completion. If such a sequence exists, the system is considered safe. Otherwise, the request is denied to avoid entering an unsafe state.