Role Of Banks - An English Essay

THE ROLE OF BANKS

Special Thanks To Aلi Sheiخ

Commercial banks determines the economic stability of a country. They fulfill financial needs of the various sectors. In fact, capital is the basis of commerce and industry. A well-established banking system provides funds to all economic sectors including small businessmen, industrialists, contractors, farmers, cultivators, importers, exporters and traders. The banks act as middleman to make commercial transactions possible without any delay.

At present hundreds of branches are providing banking service to the people of their country. In addition to collecting deposits and making advances, banks offer a widening range of services to their customers. Undertaking stock exchange transactions on behalf of their customers is another activity of the commercial banks. They forward the orders of their customers to stock exchange brokers who try to earn a profit for the stock owners.

The commercial banks also provide necessary help to the traders busy in international trading. They help the customers doing export and import trade. Banks also collect and d negotiate foreign bills which are the most important instruments of payment in international trade. The banks negotiate documents of the foreign exchange bills of their customers. The documentary credit is surely a better method of payment. Such operations are extremely important for the customers involved in foreign trading. Banks provide the facility of purchase and sale of foreign currencies on the spot.

In any country, capital is considered the backbone of economy. Shortage of capital means underdevelopment. Commercial banks provide sufficient amount of capital to the various sectors of the economy. Banks move small savings throughout the country. The utility of bank is more important in a developing country like Pakistan where there is a shortage of capitals. Commercial banks provide loans to agriculturists, industrialists, traders and businessmen. As a result they provide an increase national output, employments and per capita income.

In recent past, information technology brought a tremendous revolution in the world. It was quite natural that Bank would take advantage from the latest facilities provided through computers. Banks established their network through computers and linked up all the branches with one another. They started providing the facility of online banking. Moreover the customers are being provided the ATM facility. Now utility bills can be paid through a mechanism provided by banks. It has become quite convenient for the customers to benefit themselves from the latest technology. Manual system of maintaining accounts is replaced by the computer system. In short commercial banks play a very important role in the development of the country.