Banking has become one of the most important tools for the success of any country. It has become the backbone of the growing economy. The banking sector was always deemed to be one of the most vital sectors for the economy to be able to function. Its importance as the “lifeblood” of economic activity, in collecting deposits and providing credits to states and people, households and businesses are indisputable.
Banks are the backbone of the Indian economy. They play a great role in sustaining India’s economic development. India’s Banking System has no longer confined to only the metropolitans but has reached even to the remote corners of the country. They are major lenders to borrowers looking for investment in various projects. They are a source of credit to governments.
Banks indirectly regulate money in the economy. Banks help people earn on savings, makes domestic /international payments easy. It helps in building up India’s Forex reserves, which is an indication of a country’s economic health. Makes government subsidies, incentives for poor a reality.
Banking over the years, in India, has seen lots of ups and downs. Today due to the liberalization of the economy, all sectors are becoming more and more competitive. Banking is no different. The banking sector has seen a lot of transformation in the past post-liberalization period, it has become very important for the bank to give services best to their capabilities. If the customers are not satisfied with the services provided by the bank, they will transfer their accounts to some other bank. The result is a loss of revenue for the bank and the loss of goodwill.
Professionalism is getting a keyword in the banking sector. People now expect the privatized banks to become more and more professional rather that of earlier years where the staff has no sympathy or understanding for the time and value of the customer. People today demand more working hours, more services to be provided at no extra cost or minimum cost. This has led to a more professional attitude by the banking people.
In all economic systems, banks have a leading role in planning and implementing fiscal policy. The difference lies in prioritizing goals and their way of achievement. Based on the neo-liberal model, achieving greater profits by using all means is an end in itself, while in the socialistic systems bank operations also aim at improving the economy in general and at satisfying social needs.
J C Kanwar