Importance Of Commercial Banking

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1.8 IMPORTANCE OF BANKING: Banking has greater importance in the economic development & also in the Development of different fields. Banks are playing a crucial role in the development importance of banking is as Follows. 1. Banks help in the formations of capital 2. Banks play an important role in mobilizing the saving of people 3. It directs the flow of funds into productive channels 4. It provides finance to the government 5. It provides safety and security to the surplus money of the deposits 6. It provides convenient & economical means of transfer of funds from One place to another 7. It increase utility of funds in backward region 1.9 Functions of Bank: The Bank acts as an agent of the Reserve Bank of India and performs the following functions: 1.…show more content…
Subsequently, Punjab National Bank was established in 1894. • Swadeshi movement, which began in 1906, encouraged the formation of a number of Commercial banks. • The Banking companies Act was passed in February 1949, which was subsequently amended to read as banking Regulation Act, 1949. • Commercial banks mobilize saving in urban areas and make them available to large and small industrial and trading units mainly for working capital requirements. • Commercial banking system in India consisted of 298 scheduled commercial banks (Including foreign banks). • Of the scheduled commercial banks, 224 are in public sector of which 196 are regional rural banks (RRBs) and this account for about 77.9% of the deposits of all scheduled commercial banks. • Commercial banks are broadly classified into nationalized or public sector banks and private sector banks, with a few foreign banks. The Public sector banks account for more than 92% of the entire banking business in India- Occupying a dominant position in the commercial another 20 banks are the Public sector banks. • Oudh Commercial Bank was the first complete Commercial Bank of

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