The banking institutions form a very important component of any financial system. The institutions together form the sector which plays a very important role due to the reasons as cited below.
a. It is an intermediary that encourages the habit of savings among the people.
b. People can save their money and put them in banks in order to receive interest and also to keep their money safe.
c. It acts as a link between those having surplus money and those who need money.
d. Banks support the transactions of a trade by providing various means of credit and facilities like loans.
e. They provide support to the agricultural sector by providing such loans to farmers.
f. They provide financial assistance to individuals that help them to buy assets which otherwise they would not be able to buy.
g. The sector helps to create demand for various asset classes h. It helps in international transactions that involve cross currencies by helping to convert from one currency to another.
For citing this article use:
- Dipak, K. (2019). A study on lending trends of scheduled commercial banks in India with special reference to priority sector.