Role Of Banking In An Economy

Role Of Banking In An Economy

Banking is the business activity which involves the acceptance and safeguarding of finances of other individuals and governmental bodies. After this the accepted finance is lent out to the people in need of money with the motive of earning profit. Even then, with the changing era, the various activities that are undertaken by a bank has immensely broadened.A bank plays a crucial role in our daily lives. It performs financial availability of funds by pooling advances by clients. Few traders in Kolkata (Calcutta) in the year 1839 established the first bank of India which was known as “Union Bank”.Today there are various kinds of services that are also offered by many banks. The various services offered by all the banks these days are:

  • Issuing debit and credit cards
  • providing safe custody of valuable items like a lockers
  • Providing ATM services as well.as the online transferring of funds throughout the world.

San Francisco Banking offers all the services.

Role Of Banking In An Economy

The banking business is a blessing In disguise for the entire economy of the world. By just doing the simple chore of accepting deposits and lending money, it has benefited the economy in a wondrous way. If these banks would not have been there, there would be nobody to accept deposits from the surplus money holders. Also, in the absence of surplus money holders, the people who are in dire need of money would not have got money to invest in their business or any other activities.

Any kind of company, which performs the transaction and business of banking is reckoned to be a banking company. They all follow a specific banking system to run these banks smoothly. These banking systems are generally the entire mechanism through which our entire economy runs, through which the money inflow and outflow is conducted.A bank survives basically on trust and belief. People keep their hard earned income with the possession of banks only because of their trust on banks and the belief that their money would be in safe hands.

They hand their money to the banking institutions because they expect it to benefit them in some way or the other. They know that whenever they are in need of their money, the bank will refund it at their demand. The facility that the banks provides now a days (like money transfer and e-banking) has made life very easy for the general public as they are able to perform various banking functions, sitting in the confines of their homes.