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Importance of Banks in the Development of A Country

Updated on July 31, 2017
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Irshad completed B.A in Economics. He has special interest in dealing with Money and Banking

Banks are dealing with many macro economic indicators. So they can largely influence the economic matters of a country
Banks are dealing with many macro economic indicators. So they can largely influence the economic matters of a country

Banks are one of the most important parts of any country. In this modern time money and its necessity is very important. A developed financial system of the country can ensure scope for attaining economic development. A modern bank provides valuable services to a country. To attain development there should be a good developed financial system to support not only the economic but also the society. So, a modern bank plays a vital role in the socio economic matters of the country. Some of the important role of banks in the development of a country is briefly mentioned below.

I- Promote Saving Habits among People

Bank attracts depositors by introducing attractive deposit schemes and providing rewards or return in the form of interest. Banks providing different kinds of deposit schemes to its customers. It enables to create banking habits or saving habits among people.

II- Capital Formation and Promoting of Industries

Capital is one of the most important parts of any business or industry. It is the lifeblood of business. Banks are helpful to increase capital formation by collecting deposits from depositors and converting these deposits in to loans and advances to industries.

III- Easiness of Trade and Commerce Functions

In this modern era trade and commerce plays vital role between any countries. So, the money transaction should be user friendly. A modern bank helps its customers to sent funds to anywhere and receive funds from anywhere of the world. A well developed banking system provides various attractive services like mobile banking, internet banking, debit cards, credit cards etc. These kinds of services fasten and easing the transactions. So, bank helps to develop trade and commerce.

IV- Generate Employment Opportunities

Since a bank promotes industry and investment, they automatically generate employment opportunity. So, a bank enables an economy to generate employment opportunity.

V- Promote Agricultural Development

Agricultural sector is one of the integral parts of any economy. Food self sufficiency is the major challenge and goal of any country. Modern banks promotes agricultural sector by providing loans and advances with low rate of interest compared to other loans and advances schemes.

VI- Implementation of Monetary Policy

Monetary policy is an important policy of any government. The major aim of monetary policy is to stabilize financial system of the country from the dangerous of inflation, deflation, crisis etc. Banks are helpful to implement policies relating to monetary matters successfully.

VII- Balanced Development

Modern banks are spreading its operations throughout the world. We can see number of big banks like Citi bank, Baroda bank etc. It helps a country to spread banking activities in rural and semi urban areas. With the spreading of banking operations around the country, they help to attain balanced development by promoting rural areas.

Modern bank plays vital role in the social- economic development of the country. A developed banking system enables the country to attain balanced development without any special consideration of rich and poor, cities and rural areas etc.

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      Rupinder 2 days ago

      Very useful

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      Khushi 2 months ago

      This article help me in writing project

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      captain wils 3 months ago

      this is very easy thanks for this

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      Daphne Kamanga 5 months ago

      Very useful, many thnx

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      Fatou 10 months ago

      Thank u very much may God bless u

    • profile image

      Atishay 10 months ago

      thank u very much. May God bless u.

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      Abdul malik pk 10 months ago

      I appreciate your work and it was

      too usefull for students.

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      ☺mehshar 19 months ago

      Thank u so much

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      Mahmoud 19 months ago

      Thanks alot

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      Author

      IRSHAD CV 20 months ago from India, Kerala

      Thanks for reading and posting your comments

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      Chidinma Nebe 20 months ago

      Very useful. Thanks.

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      david 23 months ago

      thanks, your article was very useful for my project work

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      navika 23 months ago

      Thanks ...very helpful for my project

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      sreeshma 2 years ago

      Thank you this was very useful

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      mehaboob Nadaf 2 years ago

      this is very useful for middle income country people to improve the banking system

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      ram agrawal 2 years ago

      this was very useful

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      gabriel 2 years ago

      very useful, thanks a lot

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      mp simbi 2 years ago

      Very useful and relevant to all those studying banking and social science

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      vishvajeet 2 years ago

      Thax bro it is very useful me

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      Rupali 2 years ago

      Its very useful me for my project......thanks.......very much.....

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      Author

      IRSHAD CV 2 years ago from India, Kerala

      Thanks for sharing your view

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      Sunil 2 years ago

      It's nice helpful to my project

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      Author

      IRSHAD CV 2 years ago from India, Kerala

      Thanks for reading

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      Hiya Chatterjee 2 years ago

      Thanks , was useful

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      swetha 3 years ago

      good article ...i like it very much