Role of indian banks in the economy

The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment. A sound banking system mobilizes the small and scattered savings of the community, and makes them available for investment in productive enterprises. In any plan of economic development, capital occupies a position of strategic importance.

Role of indian banks in the economy

One of the major considerations that led to the nationalization of the fourteen major commercial banks of India in was the fact that banks, in general, had been negligent of the vital priority sectors of the economy, viz.

Role of development banks in the Indian economy

A handful of people were able to exploit the bank finance to serve their own individual interests and convenience. Very often, they used bank funds for the hoarding of essential articles and for specialization, thus nurturing anti-social elements. Nationalization brought about a major policy shift in the working of these banks.

Still we cannot under-estimate the importance of banking and the monetary mechanism. One of the most important problems of a developing economy is that of capital formation.

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There is a good deal of difference between hoarding and saving and the people in the countryside have to be made to realize the difference. This can be easily done by banks. They can undertake to educate the rural populace and thus mobilize their savings. Only we need exploiting this idle capital.

Who else can exploit it, if not banks? Both in rural and urban areas, huge amounts of money are wasted on celebrations like marriages and births. Promoting attractive deposit schemes needs some very active work on the part of the banks, but it can certainly mobilize a large amount of saving for capital formation.

The Government of India has now undertaken a large number of projects for the economic reconstruction of the country. Banks can generate an adequate volume of credit and conduct it along useful productive channels.

One of the major considerations that led to the nationalization of the fourteen major commercial banks of India in was the fact that banks, in general, had been negligent of the vital priority sectors of the economy, viz., agriculture and small-scale industries. Role of Banks in Indian Economy Macroeconomics Research Paper Prepared by: Sourabh Kumar SahaPGDM: Calcutta Business School, West Bengal, IndiaEmail: [email protected] Abstract: Banks play an important role in development of Indian economy. After liberalization, thebanking industry under went major changes. Role Of Banks in Indian Economy management in India reflects one of the major qualitative changes brought about by the institutions. CONCLUSION: The banking system in India has undergone significant changes during last 16 years/5(22).

If the banks undertake to help these groups, they will also be making a significant contribution to our economy. It will also help in removing the economic imbalance of the various sections of our society.

They have started looking after the needs of the small farmer and the new entrepreneur. It is earnestly hoped that the Government will take some more positive steps to ensure that the real benefits of an organized banking system percolate down to the poor illiterate masses of India.India is on the march; far reaching socio-economic changes are taking place and Indian banks should come forward to play this role in the process.

The role of banks has been important, but it is going to be even more important in the future.

Role of indian banks in the economy

Role of Banks in Indian Economy Macroeconomics Research Paper Prepared by: Sourabh Kumar SahaPGDM: Calcutta Business School, West Bengal, IndiaEmail: [email protected] Abstract: Banks play an important role in development of Indian economy.

After liberalization, thebanking industry under went major changes.

One Reply to “Role of development banks in the Indian economy”

Role of Banks in Indian Economy. Macroeconomics Research Paper Prepared by: Sourabh Kumar Saha PGDM: Calcutta Business School, West Bengal, India Email: [email protected] Abstract: Banks play an important role in development of Indian economy.

After liberalization, the banking industry under went major changes/5(29). The economic reforms initiated by the Government of India about two decades ago have changed the landscape of several sectors of the Indian economy. The Indian banking sector is no exception. In the moderns economic system, banks play a very important role in economic development.

Commercial banks, which is an important part of the financial system of the country, perform the following important functions: Firstly: Commercial banks are encouraging people to save.

role of commercial banks in the economic development of india 1 role of commercial banks in the economic development of india 1bandlamudi kalpana, 2 taidala vasantaha rao 1research scholar, department of commerce and business adminastraion, acharya nagarjuna university, guntur, ap.

Role of Banks in the Development of Indian Economy