Bank is a lawful organisation, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business houses that need it.
Role of Banking :-
Banks provide funds for business as well as personal needs of individuals. They play a significant role in the economy of a nation. Let us know about the role of banking.
It encourages savings habit amongst people and thereby makes funds available for productive use.
It acts as an intermediary between people having surplus money and those requiring money for various business activities.
It facilitates business transactions through receipts and payments by cheques instead of currency.
It provides loans and advances to businessmen for short term and long-term purposes.
It also facilitates import-export transactions.
It helps in national development by providing credit to farmers, small-scale industries and self-employed people as well as to large business houses which lead to balanced economic development in the country.
It helps in raising the standard of living of people in general by providing loans for purchase of consumer durable goods, houses, automobiles, etc.