Importance or Advantages of Bank

Contents

Importance or Advantages of Bank

Advantages of banks can be discussed as under :

1. Proper Utilisation of Scattered Money Bank collects money from those who have spare money. Small savings of the people forms a huge capital. Bank lends the same to persons who requires the same for business, trade and industry. Thus the business, trade, industry as well as society are benefitted.

2. Helpful in Making Payment – Bank provides cheques facilities to the customers. With the help of cheque making payment becomes easy. Cheques and bank drafts are helpful in remittance of money at low cost.

Encouragement to Economy – People save money to earn interest. It creates economic nature.

4. Safety and Precious Things – Bank provides safety to the wealth and precious things of the customers by providing locker facility. Locker holder can kept his jewellery, documents etc. in the locker.

5. Helpful to the Government – The Bank helps the Government in of Wealth the following ways:-

Realisation of taxes and revenue.
By selling government bonds,
By collecting donations from the public in times of emergency for the Government.
By making government payments,
By investing in government securities.

6. Helpful in Development of Plans – People deposit their savings in the bank. Bank invest this money in development schemes.

7. Stability in Prices – Inflation and deflation bring instability in the prices. Banks regulate the money and credit and prevent fluctuations in the prices.

8. Capital Formation – Bank helps in capital formation in the nation. This capital is invested in the trade and industry. It increases national income.

9. Functions as an Agent – Bank also functions as an agent towards their customers.

10. Various Services to Customers – Banks provide various types of services to customers such as –