Role of Commercial Banks in the Economic Development of a Country:- An Indian Perspective

Abstract

India is not only the world’s largest independent democracy, but also an emerging economic giant. Without a sound and effective banking system, no country can have a healthy economy. Banks play a vital role in the economic development of a country. The Banking sector acts as a backbone of modern business. A well organized banking system is necessity for the economic development of a country. Banks being fundamental components of financial system are the most effective way to generate the credit flow of money in markets. The banking is one of the most essential and important parts of the human life. In current faster lifestyle peoples may not do proper transitions without developing the proper bank network. The banking System in India is dominated by nationalized banks. The performance of the banking sector is more closely linked to the economy than perhaps that of any other sector. At the same time banking industry like many other financial services face a rapidly changing market, new technologies, economic fears, nasty competition and especially more customers demands. The central objective of the study is to empirically investigate a role of Indian banks in capital formation and economic growth. Research is based upon the secondary data which provide the findings on commercial banks and how it is helpful in economic development.