In this way, they promote the development of agriculture, trade and industry.
The serious capital deficiency in under-developed countries is reflected in the small amount of capital equipment per worker and in limited knowledge, training and scientific advance.
These are serious handicaps in economic development and here the banks can play a useful role: The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment.
Pakistan has witnessed in recent years a growing trend toward branchless banking, which is actually a distribution channel strategy used to deliver financial services without relying on bank branches.
It can also be used as a separate channel strategy that entirely forgoes bank branches.
A robust banking sector is a healthy sign for the economy of a country.
It is this sector that plays the role of financial intermediation between savers and investors, which actually determine the rate of economic growth.
The report said that strong demand from textile and cement sectors had improved gross advances to private sector by 7.3 percent on a quarterly basis and 16.4 percent on a yearly basis despite retirement of credit in chemical and pharmaceutical sectors.
February 28 report of Moody’s on the banking system’s outlook, says, 9.2 percent of gross advances of the country’s banking industry are non-performing loans (NPLs).
The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment.
A sound banking system mobilizes the small and scattered savings of the community, and makes them available for investment in productive enterprises.