Role of Banking in India

Topics: Bank, Central bank, Money Pages: 2 (907 words) Published: July 1, 2014
Banking system plays a very significant role in the economy of a country. It is central to a nation’s economy as it caters to the needs of credit for all the sections of the society. Money-lending in one form or the other has evolved along with the history of mankind. Even in the ancient times, there are references to the money-lenders, in the form of sahukars and zamindars who lend money by mortgaging the land property of the borrowers. Towards the beginning of the 20 century, with the onset of modern industry in our country, the need for government-regulated banking system was felt. The British government began to pay attention towards the need for an organized banking sector in the country and the Reserve Bank of India was set up to regulate the formal banking sector in the country. Ever since they were nationalized in 1969, banks have been playing a major role in the socio-economic life of the country. The have to act not only as purveyors of credit, but also as harbingers of social and economic development through a variety of enterprises, many of which may tiny and yet capable of generating productive energies. India is not only the world’s largest independent democracy, but also an emerging economic giant. Without a sound and effective banking system, no country can have a health economy. For the past three decades, India’s banking system has several outstanding achievements to its credit. It is no longer confined to only the metropolitans, but have reached even to the remote corners of the country. This is one of the reasons of India’s growth process. Agriculture in India has a significant history and it is demographically the broadest economic sector and plays a significant role in the overall socio-economic fabric of India. Finance in agriculture is an important as development of technologies. A dynamic and growing agricultural sector needs adequate finance through banks to accelerate overall growth. Most of the credit-related schemes of the government...
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