IMPORTANCE OF BANKING.
Banks play very important role in the economic life of a nation. The growth of the
economy is dependent upon the soundness of its banking system. Although banks so not
create new wealth but borrow, exchange and consume. These make generation of wealth.
In this way. They become most effective partners in the development of that country. To
encourage the habit of saving and to mobilize these savings is its basic purpose. Banks
deposit surplus from the public and then advances the surpluses in the form of loans to the
industrialists, agriculturists, businessmen and unemployed people under different schemes
so that they setup their own business. Thus banks help in capital formation
if there are no banks, and then there would be concentration of wealth in few hands great
portion of wealth of a country would be idle. In the fewer developing countries rate of
saving is very low and due to this rate of investment and rate of growth is very low. We
can take hank just like a heart in the economic structure and capital provided by it is like
blood in it. As long as the blood is in circulation, the organs will remain sound and healthy.
If the blood is not provided to any organ then the organ would become useless. So if the
finance is not provided to agriculture sector or to industrial sector, it wills he destroyed.
Loan facility provided by bank works as an incentive to the producer to increase
production. Banks provide transfer of payment facility, which is cheaper, quicker and safe.
Many difficulties in the international payment have been overcome and volume of
transactions has been increased. These facilities are very much helpful for the development
of trade and commerce.
EVOLUTION OF BANKING IN INDO PAK SUB-CONTINENT:
The Indian society was quite familiar with the banking, right for the beginning. There is
also sufficient evidence to show that during 51h century people were accustomed to use
1-lounds as a credit investment. Loans were given to the people against personal and other
Securities such as ornaments, goods and other immovable properties.
TYPES OF BANK:
Following is the list of various types of banks: