Question

How do banks play an important role in the economy of India? Explain.(All India-2017 (Compartment))

Answer 1

Banks play an important role in developing the economy of India by the following ways:

1) Banks keep the money of the people in its safe custody.

2) Banks give interest on the deposited money to the people.

3) Banks mediate between those who have surplus money and those who are in need of money.

4) Banks provide the loan to a large number of people at low-interest rate.

5) Banks promote agricultural and industrial sector by providing loans.

6) They also provide funds to different organization's.