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Roles Of A Commercial Bank In Economic Development

HI guys, we talk about the Roles Of A Commercial Bank In Economic Development of the country. Commercial Banks have always played an important position in the country’s economy. They play a decisive role in the development of the industry and trade.

Roles Of A Commercial Bank In Economic Development

Roles Of A Commercial Bank In Economic Development of the Country

  • Bank promote capital formation

The commercial banks play an important role in raising the financial resources. They encourage saving by giving the various type of incentives to the savers.

  • Investment in new enterprises

Businessman generally hesitates to invest their money in risky enterprises. The commercial bank generally provides the short and medium-term loan to the entrepreneur to invest in new enterprises and adopt a new method of production.

  • Promotion of trade and industry

With the growth in the commercial banking in 19th and 20th centuries, there is the vast expansion in trade and industry. The use of bank draft, cheque, bill of exchange, credit cards etc. has revolutionized both national and international trade.

  • Development of agriculture

Roles Of A Commercial Bank is now providing credit for the development of agriculture and small scale industries in rural areas.

  • Balance development of different regions

The commercial banks play an important role in achieving the balanced development of the different region of the country.

  • influencing economic activity

The bank can also influence the economic activities of the country through its influence on

  1. availability of credit
  2. rate of interest
  • Implementation of monetary policy

The central bank of the country control and regulates the volume of credit through the active cooperation of the banking system in the country.

  • Monetization of the economy

The commercial banks by opening branches in the rural and backward area are reducing the exchange of goods through barter.

  • Export promotion cell

In order to increase the export of the country, the commercial bank has established export promotion cell.

For More information visit Wikipedia

You can also read about 5 Types Of Company + Origin and Definition

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