BANK ESSAY 2 (400 WORDS)

BANK ESSAY 2 (400 WORDS)

Introduction

A bank is an institution that accepts money deposits from the public and provides funds on credit to individuals as well as firms. These are the primary functions of a bank but not the only functions. They provide various other services to its customers such as locker facility, transfer of funds, issuance of drafts and portfolio management to name a few. 

Importance of Banks

Banks are important for the individuals as well as the development of the country’s economy. Here is why these institutions are of importance:

1. Provides Safety and Security

Money kept at home is not safe. It is prone to burglary. When you keep your money in the bank, it is the bank’s responsibility to safeguard it. You do not have to worry about its security.

2. Encourages Saving Habits

Banks offer various schemes from time to time to encourage saving habits in people. The money put in the bank is not only saved but also grows. You have the option of withdrawing it any time you want.

3. Eases Trade and Commerce

Banks promote trade within the country by providing loans and advances to the traders. It also eases the process of trading between different countries. They provide easy money transaction options to smoothen the process. It is easy to send and receive funds from anywhere with the advancement in the banking system.

4. Promotes Agricultural Sector

Agricultural sector is an important part of the economy. There are special banks that provide loans to the farmers at low interest to promote agricultural activities. Banks thus aid in promoting the agricultural sector.

5. Aids in Development of Industries

Banks accept deposits from individuals and businesses and provide loads to the industries. They thus aid in the development of various industries in this way. The loan can be repaid in easy instalments.

6. Provides Employment Opportunities

Banks provide loans for the growth and development of the agricultural and industrial sectors. As these sectors expand, a number of employment opportunities are created for the public.

Conclusion

Banks are an important part of any country. The modern banking services have helped in easing the process of trade, development of industries and other activities that help in the development of the country’s economy. Banks and other financial institutions that promote the growth of businesses and safeguard the money and other valuable assets of individuals are certainly play an integral role in the development of a country’s economy.