Essay on the Importance of Banking

By | January 1, 2019

“Fair and constructive banking goes a long way towards improving the economic health of the nation.”

Banking is now. an essential (basic) part of our economic system. Modern trade and commerce would almost be impossible without the availability of suitable banking services. First of all, banking promotes savings. All manner of people, from the ordinary labourers and workers to the rich landowners and businesspeople, can keep their money safely in banks and savings centres. Their money increases with time in different sorts of savings accounts like the Profit and Loss Account and the fixed deposits. So they try to save in order to put more and more of their money in these accounts and deposits. They can also store their valuables in the lockers of the banks.[the_ad id=”17141″]

Secondly, banking promotes investment. Banks easily invest the money they get in industry, agriculture and trade. They either invest it directly or advance loans to other investors. Industrialists get loans from banks to set up new factories. Agriculturists get loans to our farm machinery, lands, etc. Traders borrow from banks in order to expand their business.

Thirdly, it is mostly through banks that foreign trade is carried on. Whether we export or import, it is through the banks that money is transferred from one country to another. For example, bills of exchange and letters of credit are the regular ways banks use to transfer money.

Even the UN has the World Bank that is like a big deposit for all the member countries. They can borrow from it according to their needs. But unwise borrowing and wasteful spending by countries like ours leads to heavy debts and economic distress. Internationally we have not benefited from the World Bank.

Let our leaders and economic planners find ways of returning our loans, and putting the country on the road to economic recovery and advancements. Let us have a modern, effective but simple banking system for our progress and prosperity (success in the economic field).

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