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.

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The role of bank in economic development - part one

                THE ROLE OF BANK IN ECONOMIC DEVELOPMENT – PART ONE

•  Commercial banks play an important role in the economic stability of a country.
•  Banks provide funds to everyone to increase economic activities in the country.
•  Pakistani banks have to keep their statuary balances with the State Bank of Pakistan.
•  Besides deposit collection, banks offer a wide range of services.
•  Banks assist the traders in international trade.
•  Banks collect and negotiate the foreign bills.
•  They provide sufficient amount of capital to various sectors.
•  In developing countries like Pakistan, the utility of banks is more then important.

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The issue of too much currency “INFLATION”-part two

                             The issue of too much currency “INFLATION” – part two

Natural calamities can cause inflation. If the production of a country is affected by floods or famine etc. Its ultimately result is inflation and there will be an increase in price.

War is another important cause of inflation. The war always creates inflation in the economy of a country for example; Pakistan was making progress by leaps and bounds before indo-Pakistan war 1965. After that war the economy of Pakistan was badly affected and in 1971 indo-Pakistan war brought the worst setback for the people of Pakistan. As a result it found no other way except to devalue its currency to rebuild the economy. Then the flood in 1973 spread destruction in all over the Punjab and Sindh and took thousands of lives. Besides, the sharp increase in oil price proved as worst for the economy as the 1971 war. As a result of all this the prices increased sharply. The balance of payments came to the lowest limit. The currency was once again devalued and the result of it was rise in prices.

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The issue of too much currency “INFLATION”-part one

                          The issue of too much currency “INFLATION” – part one

• Inflation describes a typical situation when the demand for goods and services exceeds to the available supply.
• Ordinarily inflation means a general rise in the price.
• The whole world is facing this problem.
• A sudden increase in the circulation of money also describes inflation.
• Natural calamities like floods and famines can cause inflation.
• Pakistan has faced these situations in 1965 and 1971 due to wars and in 1973, worst floods were the main cause of inflation.
• Standard of living,international circumstances and political crisis may cause inflation.
• To overcome this problem is a difficult task but economists suggest some remedies.

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