Home » Importance of Banks

Importance of Banks

Introduction About Banks:

Banking Institutions collects funds in different forms like current account, savings account, fixed deposits, recurring deposits etc., from people. This lumpsum amount of funds can be utilized by the banks to give loans and advances to the public.

The banks cannot utilize the current account deposits for giving loans and advances to the people.Because, the depositer can demand money at any time without prior intimation.

The money collected through savings account can be used to give short term loans to the public and also provides some interest to the customers also upon theirs deposits in  savings account.

Banks use amount in fixed deposits and recurring deposits for giving medium term and long term loans to the public.

Apart from these, The banks give call loans to needy public but this is for very short period.

Importance of Banks in Today’s Economic Growth :

Banking System occupies major role in the economy of our country. Banking Institution accepts deposits and dispenses loans and provides various money transactions to fulfill the financial needs of the citizens.

As we all know the developments and reach of the banking facilities at various places and at present most of the people have bank accounts.

Long ago, only few people in metro cities have connections with bank to avail banking services. But now banking services are available even at the remote corners of the country. This is one of the main factors of growth of the Indian economy.