How banks play an important role in Indian economy?

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THE banks play an important role in the economy of the country:

*Banks help people to save their money in safe custody. To save their money, people deposit their money with banks.

*Banks give interest on the money deposited by the people. Thus, they add to the income of the family.

*Many families survive on the bank interest.

*Banks provide loans to people for a variety of purposes.

*Banks charge low interest rate.

*Credit provided by banks is crucial for the country’s growth and economy.

*Banks boost the industrial sector by providing cheap loans.

*They are the backbone of the country’s trade.

Banks employ a large number of people and as such they solve the employment to some extent.

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Banks play an important role in developing the economy of India by the following ways:
1) Banks keep the money of the people in its safe custody.
2) Banks give interest on the deposited money to the people.
3) Banks mediate between those who have surplus money and those who are in need of money.
4) Banks provide the loan to a large number of people at low-interest rate.
5) Banks promote agricultural and industrial sector by providing loans.
6) They also provide funds to different organizations.

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Banks play an important role in developing the economy of India by the following ways: 1) Banks keep the money of the people in its safe custody. ... 4) Banks provide the loan to a large number of people at low-interest rate. 5) Banks promote agricultural and industrial sector by providing loans...

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Answer: banks play an important role in economy of India in the following ways:

>Banks keep only a small proportion of their deposits as cash with themselves.

> banks mediate between those who have surplus amount of money and those who don't have or in need of.

> the difference between what is charged from borrowers and what is paid to depositors is their main source of income.

> they give loans to large number of people at low interest rate and is very organised.

> it doesn't cheat or try to fool anyone by giving fake promises and finding people more liable to deposit or take loans thus increasing the income and increase in Indian economy.

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Role of Banks in Indian Economy

Banks play a crucial role in the Indian economy. They are the backbone of the financial system and serve as intermediaries between savers and borrowers. The following are the ways in which banks contribute to the Indian economy:

1. Mobilizing Savings

Banks encourage people to save their money by offering various saving schemes like fixed deposits, recurring deposits, etc. The money deposited by the public is then used to lend to businesses or individuals who need funds. This helps in channelizing savings into productive investments.

2. Providing Credit

Banks provide loans and credit to individuals and businesses to start new ventures or expand existing ones. They play a critical role in providing credit to small businesses and entrepreneurs who may not have access to other sources of funding. This helps in promoting economic growth and job creation.

3. Payment and Settlements

Banks facilitate transactions between individuals and businesses by providing various payment and settlement services. They also provide electronic fund transfer, credit and debit card services, and online banking facilities. This helps in promoting a cashless economy and reducing the cost of transactions.

4. Foreign Exchange

Banks play a crucial role in facilitating international trade and commerce. They provide services like foreign exchange, letters of credit, and trade finance to importers and exporters. This helps in promoting exports and earning foreign exchange for the country.

5. Financial Inclusion

Banks play a critical role in promoting financial inclusion by providing banking services to people in rural and remote areas. They also offer financial literacy programs and other services to promote financial literacy and inclusion.

In conclusion, banks play a crucial role in the Indian economy by mobilizing savings, providing credit, facilitating payments and settlements, promoting international trade, and promoting financial inclusion. They are essential for promoting economic growth and development in the country.

Answer

Banks play an important role in developing the economy of India by the following ways:
1) Banks keep the money of the people in its safe custody.
2) Banks give interest on the deposited money to the people.
3) Banks mediate between those who have surplus money and those who are in need of money.
4) Banks provide the loan to a large number of people at low interest.
5) Banks promote agriculture and industrial sector by providing loans.
6) They also provide funds to different organisations.
7) It discounts bills of exchange.
8) it finances foreign trade.
9) it perform general utility services like issue of Travellers cheque and gift cheques, locker facility etc.
10) it creates credit through loans.

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As they provide Credit at cheaper rates to people.they also help in saving money

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Thanks

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They provide cheap and affordable credit to the poor people which is essential for country's development. They provide a safe way of depositing and saving money to the people.  They help reduce poverty by providing employment opportunities to the people

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