What is a capacitor bank and why is it used?

To improve the power factor and thereby efficiency of AC power applied to an inductive load.
For maximum power, voltage and current must be in phase, with their peaks coincident.
In a factory, with a lot of motors, the motors use coils and present an inductive load, so voltage and current get out of phase, voltage leads.

A bank of capacitors… so you have a bunch of capacitors all stored together in the middle of a circuit that act as a sort of “battery” in laymens terms. In other words when the circuit is complete the bank is charged, and will hold a charge for a specific amount of time depending on the size of the bank, which can be used later or be left to dissipate.

A capacitor bank is a grouping of several identical capacitors interconnected in parallel or in series with one another. These groups of capacitors are typically used to correct or counteract undesirable characteristics, such as power factor lag or phase shifts inherent in alternating current (AC) electrical power supplies. Capacitor banks may also be used in direct current (DC) power supplies to increase stored energy and improve the ripple current capacity of the power supply.
Single capacitors are electrical or electronic components which store electrical energy. Capacitors consist of two conductors that are separated by an insulating material or dielectric. When an electrical current is passed through the conductor pair, a static electric field develops in the dielectric which represents the stored energy. Unlike batteries, this stored energy is not maintained indefinitely, as the dielectric allows for a certain amount of current leakage which results in the gradual dissipation of the stored energy.