Role Of Commercial Banks In Economic Development Of Country

Involvement in development planning. Banks play an important role in capital formation which is essential for the economic development of a country.

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role of commercial banks in economic development of country

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Increase in employment a countrys economic prosperity depends on the development of trade commerce industry agriculture transport and communication etc.

Role of commercial banks in economic development of country. By providing funds to government for development programs the commercial banks share the government for economic stability. Dear colleagues and friends from rg the role of commercial banks in achieving economic development in both highly developed and developing countries can be large. They play a decisive role in the development of the industry and trade.

Role of commercial banks in economic development. At the same time banks should refrain from giving credit to speculators and hoarders. Schumpeter says it is the banking system which serves as a key agent along with the entrepreneur in the process of economic development.

The commercial banks help the economic development of a country by faithfully following the monetary policy of the central bank. In fact the banks in such an economy are to implement the credit policy of controlled expansion of bank credit as in india. In fact the central bank depends upon the commercial banks for the success of its policy of monetary management in keeping with requirements of a developing economy.

They are acting not only as the custodian of the wealth of the country but also as resources of the country which are necessary for the economic development of a nation. An additional point of role of banks is more availability of funds. Whether it is big or small.

Commercial banks cannot keep themselves aloof from the countrys development planning. Various economists have different views about the role of commercial banks in economic development. Poor population has poor resources for the economic development in poor countries like pakistan.

The activities like inventions and innovations research and development and initiatives effectiveness in responding to challenges are impossible due to insufficiency of funds in these countries. Commercial banks have always played an important position in the countrys economy. They mobilize the small savings of the people scattered over a wide area through their network of branches all over the country and make it available for productive purposes.

Every country needs the services of financial institutions for accelerating the pace of developmentcommercial banks have played a critical role in the economic development of a countrynow a days commercial banks are important not just from the point of view of economic growth but also financial stability. In emerging economies commercial banks are special for three important reasons.

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