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Banks Are Caterers For The Economy Of A Country

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Banks are caterers for the economy in a Country. From the start ofbanking two thousand years ago in Babylonia till the present date, a country 's monetary and fiscal matters are controlled through banking. Banking system is one of the many institutions that impinges on any economy and affects its performance for the better or the worse. In what measure a given banking system contributes to economic development depends upon the governing policy of the Government. As a rule, banking systems are adapted to the structure and needs of the particular economy they exist in. Indian economic policy has been founded on the philosophy of the economic growth with social justice. The banking sector plays a magnificent role in an economy for the…show more content…
In addition, the labor policies of the public sector where employees salaries and promotions are not linked to their job performance has also led to a steady decline in the efficiency, quality of customer services and work culture in the banks. In added some areas of concern in the form of increasing non-performing assets, declining profitability and efficiency, which were threatening the viability of commercial banks. In the light of this facets of banking, the Ghosh committee in 1985, Vaghul group in 1987 and Narasimham Committee in 1991 were appointed to improve the productivity, profitability and efficiency of the financial sector in general and baking sector in particular. Commercial banks have played a vital role in giving direction to economic development by catering the financial requirement of trade and industry in the country. By encouraging thrift among the people, commercial banks have fastened the process of capital formation. Banks draw the community savings into the organized sector which can then be allotted among the different economic activities according to the priorities laid down by planning authorities in the country. ‘The banks are not only the safe deposit vaults for these savings, but taking the banking system as a whole, they also create deposits in the process of their lending operations. However, the important function of a banker is the
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