Commercial banks determine
the economics of the stability of a country. They fulfill the financial needs
of various sectors. In fact, capital is the basis of commerce and industry. A
well-established banking system provides funds to all economic sectors
including small businessmen, industrialists, contractors, farmers, cultivators,
importers, exporters and traders. The banks act as a middleman to make the
commercial transaction possible without any delay. At present hundreds of
branches are providing banking services to people of the country. In addition
to collecting deposits and making advances, banks offer a wide range of
services to their customers. Undertaking stock exchange transactions on behalf
of their customers is another activity of the commercial banks. They forward
the orders of their customers to stock exchange brokers who try to earn a
profit for the stock owners. The commercial banks also provide necessary help
to the traders busy in international trade. They help the customers doing
export and import trade. Banks also collect and negotiate 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 is surely a better method of payment. Such operations are
extremely important for the customers involved in foreign trading. Banks
provide the facility of purchase and sale of foreign currencies on the spot.
In any country, capital is
considered the backbone of the economy. The shortage of capital means
underdevelopment. Commercial banks provide a sufficient amount of capital to
the various sectors of the economy. Banks move small savings through the
country. The utility of banks is more important in a developing country like
Pakistan where there is a shortage of capital. Commercial banks provide loans
to agriculture, industrialists, traders and businessmen. As a result, they
provide an increase in national output, employment and per capita income.
In the
recent past, information technology brought a tremendous revolution in the
world. It was quite natural that Banks would take advantage from the latest
facilities provide through computers. Banks established their network through
computers and linked up all the branches with one another. They started
providing the facility of online banking. Moreover, the customers are being
provided the ATM facility. Now utility bills can be paid through a mechanism
provided by banks. Now it has become quite convenient for the customers to
benefit themselves from the latest technology. The manual system of maintaining
accounts is replaced by the computer system. In short commercial banks play a
very important role in the development of the country
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