Role and working of the securitisation progress in the present context of banking industry

Abstract

newline Banking constitutes one of the most decisive factors in shaping nation s financial stability as well as in furthering the economic progress. Banking in modern times is indispensable for economic progress. Banking Institutions serve the community in numerous ways. The two basic functions of commercial banks are: mobilization of the savings of the people and disbursement of credit according to socio-economic priorities, thus accelerating the pace of economic development in the desired direction. The most immediate connotation of the term Banking business conveys primarily about a two-dimensional objectives: accepting deposits from the public and utilizing them for lending to the ultimate borrowers. Banks performs major functions like lending and borrowing ie banks accepts deposits from the public and it utilizes them for lending to the ultimate borrowers. Therefore, it is required that banks should deploy such funds meticulously. Funds of the banks are utilized by them for the loan assets and investments.it is essential to the banks that deploying the funds for loans and advances there should be adherence to the lending principles which are based upon the concepts of Safety, Liquidity, Purpose, Diversity, Security and Profitability. 1 newlineThe economic progress of a nation and development of banking is invariably interrelated. The Banking sector is an indispensable financial service sector supporting development plans through channelizing funds for productive purpose. Commercial Banks mainly function to contribute for: newlineand#61623; Capital formation to accelerate the tempo of economic development by managing the rate of saving. newlineand#61623; The development of the industrial sector by providing short-term, medium-term and long-term loans to industry, to secure labour and other factors of production.