What Is The Importance Of The Banks?

Bankers play very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but their borrowing, lending and related activities facilitate the process of production, distribution, exchange and consumption of wealth. In this way they become very effective partners in the process of economic development. Today modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the people for the investment purposes. If there would be no banks then a great portion of a capital of the country would remain idle.

A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless, so if the finance is not provided to Agricultural sector or industrial sector, it will be destroyed. Loan facility provided by banks works as an incentive to the producer to increase the production. Many difficulties in the international payments have been over come and volume of transactions has been increased. Cheques, drafts bills of exchange and letters of credit are very important instruments of the banks. The banks collect these instruments drawn on banks in other cities or countries and proceeds according to the accounts of the customer's concerns.

Well your asking the importance of back bone of the economy of any country.Personally am also doing masters in Banking and Finance.I believe banks can make an economy strong and they are just in economy as there is back bone in human body.Japan a very good example had stagnant economy and the growth in short time it started was with help of very good banking structure.

Banladesh another example where micro finance a new sector emerged and held its ground beautifully plus gave such a boost to economy that changed live and standard of living over there.Yes pioneer Muhammad yunas played a big role in developing and making it a success but yet it was banks which helped bangladesh to bring poverty level down.

Be it developed economies or underdeveloped banks play vital role.Modern banks are playing lots of new roles and making life of common consumer as well as business men easy.

Modern Banks now do investing, lending, brokerage, real estate, borrowing, advisory and many many functions in a very systematic manner giving the community lives in countries a new and advanced and obviously a very better look.

In all If we look at banking industry's history it has improved lives of all segments of society as well as supported economies at large.Hope your satisfied with my answer. If you still feel like knowing more about importance of banks don't hesitate asking me on this site in detail.

Importance of banks in our modern life?

What's the importance of banks in the financial system

Project on importance of bank ?