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Role Of Bank In Growth Of Indian Economy

563 words - 3 pages

ROLE OF BANK IN INDIAN ECONOMIC GROWTH

TOWARDS THE BEGINNING OF TWENTIETH CENTURY,WITH THE ONSET OF MODERN INDUSTRY IN THE COUNTRY,THE NEED FOR GOVERNMENT REGULATED BANKING SYSTEM WAS FELT.SO IN 1969,INDIAN GOVERNMENTR TOOK THE HISTORIC DECISION TO NATIONALISE 14 BIGGEST PRIVATE COMMERCIAL BANKS.THE NEW GENERATION PRIVATE BANKS HAVE NOW ESTABLISHED THEMSELVES IN THE SYSTEM AND HAVE SET NEW STANDARDS OF SERVICES AND EFFICIECY.
WHILE IT IS QUITE EVIDENT THAT INCLUSIVE GROWTH IS IMPERATIVE FOR ACHIEVING THE EQUITY OBJECTIVE,WHAT IS PERHAPS,NOT SO OBVIOUS IS WHY INCLUSIVE GROWTH IS NOW CONSIDERED ESSENTIAL EVEN TO SUSTAIN THE GROWTH MOMENTUM.
IN MANY OF THE EMERGING MARKET ECONOMICS,THE MAJOR OF THE CHUNK POPULATION IS IN RURAL AREAS.SIGNIFICANT INCREASE IN DEMAND FOR MANUFACTURING AND SERVICESSECTORS HAS TO COME FROM RURAL ...view middle of the document...

FIRST AND FOREMOST IS IN THE FORM OF CATERING TO THE NEEDS OF CREDIT FOR ALL THE SECTIONS OF SOCIETY.AN EFFICIENT BANKING SYSTEM MUST CATER TO THE NEEDS OF HIGH END INVESTORS BY MAKING AVAILABLE HIGH AMOUNT OF CAPITAL FOR BIG PROJECTS IN INDUSTRIAL,INFRASTRUCTURE AND SERVICE SECTORS.AT THE SAME TIME ,SMALL AND MEDIUM VENTURES MUST ALSO HAVE CREDIT AVAILABLE TO THEM FOR NEW INVESTMENT AND EXPANSION OF EXISTING UNITS.
CREDIT AVAILABILITY FOR INFRASTRUCTURE SECTOR IS ALSO EXTREMELY IMPORTANT.THE SUCCESS OF ANY FINANCIAL SYSTEM CAN BE FATHOM BY FINDING OUT THE AVAILABILITY OF RELIABLE AND ADEQUATE CREDIT FOR INFRASTRUCTURE PROJECTS.
THE BANKS AND FINANCIAL INSTITUTIONS ALSO CATER TO ANOTHER IMPORTANT NEED OF THE SOCIETY i.e.MOPING UP SMALL SAVING AT REASONABLE RATES WITH SEVERAL OPTIONS.THE COMMON MAN HAS THE OPTION TO PARK HIS SAVINGS UNDER FEW ALTERNATIVES,INCLUDING DEPOSITS IN THE FORM OF SAVING ACCOUNTS,RECURRING DEPOSITSAND TIME DEPOSITS.
IN ADDITION TO THIS BANKS AND FINANCIAL INSTITUTIONS ALSO PERFORM CERTAIN NEW AGE FUNCTIONS WHICH COULD NOT BE THOUGHT OF A COUPLE OF DECADE AGO i.e. THE FACILITY OF INTERNET BANKING WHICH ENABLES THE CUSTOMER TO OPERATE HIS BANK A/C WITHOUT ACTUALLY VISITING THE BRANCH PREMISES.THE FACILITY OF ATM AND DEBIT/CREDIT CARDS HAS REVOLUTIONALISED THE CHOICES AVAILABLE WITH THE CUSTOMER.
WHILE THE COMMERCIAL BANKS CATER TO THE BANKING NEEDS OF THE PEOPLE IN THE CITIES AND TOWN,THERE IS ANOTHER CATEGORY OF BANK TO LOOK AFTER CREDIT AND BANKING NEEDS PEOPLE LIVING IN RURAL AREAS,PARTICULARLY THE FARMERS.REGIONAL RURAL BANKS(RRBS)HAVE BEEN SPONSORED BY MANY COMMERCIAL BANKS IN SEVERAL STATES.
THE RAPID URBANISATION ,THE URBAN POOR NEEDS SEPARATE FOCUS.SIGNIFICANT INVESTMENTS WILL BE REQUIRED IN HOUSING,WATER AND SANITATION,LIGHTNING AND POWER,EDUCATION AND HEALTHFACILITIES ETC.WITH APPROPRIATE REGULATORY AND POLICY FRAMEWORKS,BANK CAN PLAY A VERY IMPORTANT ROLE IN ACHIEVING ALL ROUND INCLUSIVE GROWTH .THE ROLE OF BANKS HAVE BEEN IMPORTANT,BUT IT IS GOING TO BE EVEN MORE IMPORTANT IN THE FUTURE.

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