Commercial Banks Finance The Industrial Sector - 947 Words

There is acute shortage of capital and led People lack initiative and enterprise. Means of transport are undeveloped and Industry is also depressed. Keeping this in view, commercial banks play a major role by lending hand in overcoming these obstacles and promoting economic development Promoting Banks Capital Formation: Engaged in raising financial resources and encourage savings by offering various types of incentives and benefits to the investors. They expand branches of the banks in urban and rural areas and mobilize savings even at far of places. Investment in New Initiatives: Entrepreneurs generally vacillate to invest in risky areas. Therefore, banks provide short-term and long term loans to entrepreneurs and investors†¦show more content†¦This has led to increased demand for industrial goods and expansion of industry. The commercial banks help the large agricultural sector in developing countries in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide agricultural credit. They provide finance directly to agriculturists for the marketing of their produce, for the modernisation and mechanisation of their farms, for providing irrigation facilities, for developing land, etc. They also provide financial assistance for animal husbandry, dairy farming, sheep breeding, poultry farming, pisci-culture and horticulture. The small and marginal farmers and landless agricultural workers, artisans and petty shopkeepers in rural areas are provided financial assistance through the regional rural banks in India. These regional rural banks operate under a commercial bank. Thus the commercial banks meet the credit requirements of all types of rural people. Balanced Development of Different Regions: Commercial banks involve in providing support to the developing regions of a country by obtaining sufficient deposits or funds from the developed regions within the same country. This leads to the industrialists and small business men in the developing regions in accessing the funds which will cater their business need to achieve desired goals. Influencing Economic Activity: Two major activities availability of Credit and theShow MoreRelatedRole of Commercial Bank in Economic Development in India1737 Words   |  7 Pagesdevelopment. Commercial banks have played a critical role in the economic development of a country. Now a day’s commercial banks are important not just from the point of view of economic growth, but also financial stability. In emerging economies, commercial banks are special for three important reasons. First, they take a leading role in developing other financial intermediaries and markets. Second, due to the absence of well-developed equity and bond markets, the corporate sector depends heavilyRead MoreReview Of Previous Empirical Literature1557 Words   |  7 Pagesfinancial system of Bangladesh is comprised of three broad split sectors: 1. 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