Banks are the key contributors towards the well being of the economic system as a whole, without banks there cannot be any economic activity possible as banks are one of major pillars of smooth economic activity, given below are some of the functions of a bank –
- Banks makes possible transfer of consumption to future by accepting deposits from the public, imagine if there was no banking system then you have to either store your money in your house or spend on goods and services immediately after receiving the money.
- It helps in creating entrepreneurs because talented individuals do not always have the money with them to execute their plans and for them banks by providing loans can to them helps them in carrying out their dream.
- It enables individuals and companies to transfer money from one place to another without any hassles and within short period of time, a person can transfer money from one place to anywhere in world within 1 or 2 days.
- It also provides various facilities like merchant banking, ATM, personalized banking and so on to the customers.
- It also helps in maintaining the flow of funds from household in the form saving to companies in the form of loans and thus stimulating the overall economic activity of a country.
- It also helps people in paying money later for current consumption by providing credit cards and letter of credit facilities to its customers.