Comparative Study of Commercial Banks and Co-Operative Banks

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The robust macroeconomic environment continued to underpin the financial performance of Indian banks during 2004-05, with major bank groups successfully weathering the impact of an upturn in interest cycle. The demand for credit was broad-based during 2004-05 with agriculture and industry joining the housing and retail sectors to drive up the demand for credit. A sharp increase in net interest income mitigated to a large extent the impact of a sharp decline in non-interest income mainly on account of decline in trading profits. Banks continued to earn sizeable profits albeit somewhat lower than last year. Asset quality of scheduled commercial banks improved
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Such deposits may be repayable on demand or otherwise and with drawable by cheque, draft order or otherwise. Thus a bank must perform two basic and essential functions:
(i) acceptance of deposits and
(ii) lending or investment of such deposits.
The deposits may be repayable on demand or a for a period of time as agreed by the banker and the Customer. In terms of the definition, the banker can accept deposits of money and Not Anything Further accepting deposits form frolic unapplied that a banker accepts deposits form anyone who offers money for such purpose Accepting of deposits for lending and investments have been the original functions of banking but gradually there functions were extended and others were added from time to time and presently banks perform a number of economic activities which may affect all walks of economic life.

Significance of Banks

The importance of a bank to modern economy, so as to enable them to develop, can be stated as follow:

(i) The banks collect the savings of those people who can save and allocate them to those who need it. These savings would have remained idle due to ignorance of the people and due to the fact that they were in scattered and oddly small quantities. But banks collect them and divide them in the portions as required by the different investors.

(ii) Banks preserve the financial resources of the country and it is expected of them that they allocate them
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