Banking In The Economy: A Case Study

What is banking and what is the role of banking in an economy? (Rajesh Goyal, 2014) Banking can be termed as the business activity of accepting and safeguarding money owned by other people and entities, and then lending out this money in order to yield a profit. However, as time elapse, the actions covered by banking business have grown and now a range of other services are also offered by banks. Banking industry has always been beneficial for the whole economy. In other words, banking activity encourages investments by accepting money from their clients and lending it to borrowers. This surely allows the country to develop. In the absence of banking business, savings would sit inoperative at homes, the borrowers would not be in a position to create investments.

What is a bank? Banks are easy to hate, but they remain among the largest and most powerful companies on Earth. (Liyan Chen.2015)

Institutions that match up savers and borrowers help ensure that economies function smoothly. (Jeanne Gobat, 2012)

Such statements already gives us an idea of how vital a bank is. To better understand the concept of banking, one has to have a knowledge of what is a bank, its origin and how it functions. This has been explained by many writers.

According to Mike Parker and Demand

This definition is a suitable working one as it includes not only basic services such as bank account statements and funds transfer but also electronic payment options as well as information based financial services (e.g. alerts on account limit or account balance, access to stock broking). It can be compared with the definition found in (Kiesnoski, 2000) where mobile banking is referred to as the “ability to bank virtually anytime,