Banks provide funds for business as well as personal needs of
individuals. They play a significant role in the economy of a nation. Let us
know about the role of banking:
1. It encourages savings habit amongst people
and thereby makes funds available for productive use.
2. It acts as an intermediary between people
having surplus money and those requiring money for various business activities.
3. It facilitates business transactions
through receipts and payments by cheques instead of currency.
4. It provides loans and advances to
businessmen for short term and long-term purposes.
5. It also facilitates import export
transactions.
6. It helps in national development by
providing credit to farmers, small-scale industries and self-employed people as
well as to large business houses which lead to balanced economic development in
the country.
7. It helps in raising the standard of living
of people in general by providing loans for purchase of consumer durable goods,
houses, automobiles, etc.
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