Question

1. What is the role of banks in promoting the flow of funds?

2. What is the role of banks in promoting the financial system’s efficient operation and development?

Answer 1

Answer(1): Banks- Banks are the financial institutions that accept deposits and lend money. They provide multiple financial services and products.

Role of banks in promoting the flow of funds- Banks make the transfer of funds easy and fast, you can pay the bills, transfer money from one account to another account through net banking in no time. You can send money internationally also. Banks' services save time and money of people. Banks process the large payment of Corporates, in very less time. Banks provide variety of fund options through debit, credit card, net banking and PayPal etc.

Answer(2): Role of banks in promoting the financial system’s efficient operation and development- There are following points:

1. Banks work as mediator in financial system, they borrow money from those who have it in abundance and lend money to those, who need it.
2. Banks contribute in the growth of economy.
3. Banks provide loan to Companies who invest money nationally and internationally and increase the production, companies create jobs and employment increases in the country so banks mobilize the funds efficiently.
4. Banks make the pay in and pay out system in financial markets very smoothly and safely.
5. Banks provide secure and safe service to their clients so as to motivate them using banks' products.