Explain the importance of banks in modern economy

1.	Explain the importance of banks in modern economy
Answer» The banks play an important role in the creation of new capital in a country and thus help the growth process. Bank arrange for the sale of shares and debentures. There are banks known as industrial banks, which assists the formation of new companies. They give long term loans to manufactures. The banking system can creat money. Bank money can be increased quickly. The banking system facilitates internal and international trade. A large part of Trade is done as credit, bank provide reference and guarantees as behalf of customers on the basis of which sellers can supply goods on credit. This is particularly important in international trade.

Answer»

The banks play an important role in the creation of new capital in a country and thus help the growth process.

Bank arrange for the sale of shares and debentures.
There are banks known as industrial banks, which assists the formation of new companies.
They give long term loans to manufactures.
The banking system can creat money.
Bank money can be increased quickly.
The banking system facilitates internal and international trade. A large part of Trade is done as credit, bank provide reference and guarantees as behalf of customers on the basis of which sellers can supply goods on credit.
This is particularly important in international trade.

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Explain the importance of banks in modern economy

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