Is lithium battery the best rechargeable battery for power banks?

A power bank is one of the parameters used to determine what type of battery to use. there are several other parameters that must enter in. Without knowing your choice for the other parameters or the application, it is impossible to answer your question. A Li battery is a good choice for many applications, but not all.

Here is a partial list of parameters that influence a decision for the best battery for your application: Weight to power ratio; longevity as to time; recharge cycles, how long will it hold a charge; operating temperature; temperature changes; Temperature extremes, available charging current, total weight; cost; physical size/bulk; atmospheric pressure; high current or low current drain; voltage regulation for discharge, ventilation.