The role of banking services in India

Banks are to the economy what heart is to the human body. They cycle necessary capital through the whole and they are barely noticed until pressure, necessity, or crises Hendwrith Smith. A bank is an organization authorized by the government for accepting deposits, lending loans, and other financial services. There are basically two types of banks in India i.e. private sector banks and public sector banks. These banks are regulated by the apex bank of India named RBI ( Reserve Bank of India). The banking system is responsible for running the economy of the nation.

Banking sectors are responsible for providing financial assistance to the general public. There are lakhs of individuals who show interest to pursue a career in bank jobs. The private sector banks appoint employees based on qualification and interview whereas public sector banks recruit by conducting exams such as IBPS PO, SBI Clerk, IBPS Clerk, SBI PO, etc. Those who are preparing for IBPS PO can approach a recognized institute that provides the Best Coaching for Bank PO in Delhi. Before becoming a part of the Banking sector, you should be well acquainted with the nitty-gritty of this industry. The types of services provided by the banks include regulating deposits & loans and availing financial products to the general public.

The role of banking services in regulating the economy of India is explained as follows:

To encourage saving habits
Banks perform functions such as accepting deposits and giving interest on the deposited amount. This encourages the general public to save a little portion of their savings and deposit in banks. Moreover, the deposited amount with the banks is further used for providing loans to the general public. This is how banks circulate money in the economy.

Plays role of an intermediary
Banks play the role of an intermediary between the people having excess money and business organizations who need funds. This is how the business institutes are provided with loans and banks lend loans by charging interest on the amount lent. Thus, the banking organizations earn profit by the way of interest they charge on loans. This has also encouraged various business houses to expand their business and improve their overall performance.

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Efficiency in regulating business transactions
Every business organization runs on money and there are continuous withdrawals and deposits of cash in banks. Banks regulate this function by accepting cheques. Furthermore, they avail of overdraft facilities to various business organizations. Overdraft means to withdraw excess money than actually deposited. Banks charge interest on the excess amount withdrawn by the account holder.

Regulates transaction of import-export
There are countless transactions regarding import and export in India. The Reserve Bank of India is responsible for regulating foreign exchange matters as per the FEMA act. It also provides important guidelines to be followed by exporters while dealing with export goods with any authorized dealer.

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Aids national development
There are a variety of banks that support the agricultural sector and small-scale industries of India such as NABARD and other public sector banks. The agricultural sector is availed of loans for buying farm machinery, purchasing land, storage purposes, and running day-to-day operations. Furthermore, banks provide loans to small-scale industries for encouraging them to enhance their business activities. The government has launched various loan schemes such as PMMY (Pradhan Mantri Mudra Yojna), SMILE ( SIDBI Make in India Loan for Enterprises), CGSMSE ( Credit Guarantee Scheme for Micro and Small Enterprises).

Wealth management
Along with other financial services provided by the banks, they also offer investment services such as wealth management. This allows their customers to manage their finances for long-term growth in wealth. There are a variety of private sector banks that provide a comprehensive suite for wealth management in India such as ICICI Bank, Kotak Mahindra Bank, etc.

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Conclusion
The role of the banking sector in India is elaborated on in the points mentioned above. From this, we can easily conclude that the banking sector of India is efficacious in running the Indian Economy. Furthermore, digitalization in the banking industry has improved their services and client dealing.