Question

What is the role of banks in the development of a country ?

Answer 1

The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment.

A sound banking system mobilizes the small and scattered savings of the community, and makes them available for investment in productive enterprises.

The banking system plays an important role in the modern economic world. Banks collect the savings of the individuals and lend them out to business- people and manufacturers. Bank loans facilitate commerce.

Manufacturers borrow from banks the money needed for the purchase of raw materials and to meet other requirements such as working capital. It is safe to keep money in banks. Interest is also earned thereby. Thus, the desire to save is stimu­lated and the volume of savings increases. The savings can be utilised to produce new capital assets

Answer 2

Answer: Banks plays a vital role in the development of country as they provides loan to peoples for their development considered as country's development. They also help in the cashless transaction which is beneficial for country development.

Explanation: