Professional Documents
Culture Documents
Banking is as old as Human race: Banking industry is the driving force to any nation. It
helps in shaping the life of human race may be some time merely by Exchange (which
was called barter system), or by transaction or by facilitating advances.
Source of employment & GDP growth : There is a consensus among economists
that development of the financial system contributes to economic growth. Financial
development creates enabling conditions for growth through either a supply-leading
(financial development spurs growth) or a demand-following. It is this industry which
continuously works to secure financial stability, facilitate international trade, promote
employment, & reduce poverty around the world.
Hedge from risk: Whether it is natural calamity or man-made calamity banks mitigate
the after effect of the destruction by providing financial support to the victims to stand –up
& lead a peaceful life again.
Diversified services: Banking industry offer services from CASA to insurance, to loan,
to investment.
Connecting People: With the advent of new age technological advancement Banks
have made the life of the common man easier. People can transact on real time basis in
many places.
Changing from mere savings & loan facilitator role: Top priorities of banks now days
include regulatory compliance, improving asset quality, enhancing customer centricity,
focusing on digital convergence, and tackling competition from non-banks. Banks are
therefore making business and technology investments to change their business models.
1. Recession: It is one of the major threats to the financial system of the nation.
Traumatic shock of Economic crises & collapse of the several businesses can
affect the banks and vice-versa.
2. Stability of the system: Failure of some weak banks has often threatened the
stability of the system.
3. Competition: Competition from NBFC’s (Non-banking financial companies) like
insurance companies & mutual fund companies can affect the business of Banks.