The role of bank in economic development - part two

                THE ROLE OF BANK IN ECONOMIC DEVELOPMENT – PART TWO

The commercial banks assist the traders engaged in international trade. They give advice to the customers engaged in export and import trade which includes reports on economic conditions abroad, trade restrictions in the overseas markets and information on the economic status.

There are also collection and negotiation of foreign bills which are the most important instruments of payment in international trade. The banks negotiate documents of the foreign exchange bills for their customers. The documentary credit provides a better method of payment. Such operations are extremely important for the customers trading abroad. The purchase and sale of foreign currencies take place on the spot basis.

Capital is treated as the backbone of economy. Shortage of capital means underdevelopment. Commercial banks in Pakistan are providing sufficient amount of capital to the various sectors of the economy.

Commercial banks mobilize savings which are in smaller amounts and are scattered all over the country. In a developing country like Pakistan where there is a shortage of capital, the utility of banks is more important because they increase the rate of capital accumulation by increasing savings and investment. Major projects of economic welfare are completed with the help of commercial banks.

Commercial banks advance loans to agriculturists, industrialists, traders, businessmen which in turn provide an increase in national output, employment and per capital income. In short commercial banks play a very important role in the development of the country.

Here...Alas Mrose...the original contents by www.sensualityface.com or www.fairyage.com / describe with the help of B. Com part I & II