Importance of Banks - Lecture notes 1 PDF

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Summary

Importance of BanksBankers play very important role in the economic developmentis closely related to the growth and soundness of its banking system. Although banks create no new of the nation. The health of the economy wealth but their fund collection, lending and related distribution, exchange and ...

Description

Importance of Banks Bankers play very important role in the economic development of the nation. The health of the economy is closely related to the growth and soundness of its banking system. Although banks create no new wealth but their fund collection, 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.

1. Banks mobilise small, scattered and idle savings of the people, and make them available for productive purposes

2. By offering attractive interests, Banks promote the habit of thrift and savings

3. By accepting savings, Banks provide safety and security to the surplus money

4. Banks provide convenient and economical means of payments

5. Banks provide convenient and economical means of transfer of funds

6. Banks facilitate the movement of funds from unused regions to useful regions

7. Banking help trade, commerce, industry and agriculture by meeting their financial requirements

8. Banking connect saving people and investing people. 9. Through their control over the supply of money, Banks influence the economic activities, employment, income level and price level in the economy....