Contribution of public sector banks in socio economic development

Abstract

The banking sector in the India plays an important role in the growth of an economy. The Banking sector is an indispensable financial service sector supporting development plans through channelizing funds for productive purpose, intermediating flow of funds from surplus to deficit units and fuels economic growth. The efficiency of the banking system, thus determines the pace of development of the economy. Similar to any other business enterprise, the efficiency of a bank is evaluated based on profitability and quality of assets it possesses. But unlike other commercial ventures, Indian banking has social commitments integrated into its operations. Banking sector channelizes the money of people having surplus toward savings along with good amount of return and reciprocally advances to those having need for some venture on interest. The health of an economy largely depends upon a healthy Banking system, which in turn depends upon a sound asset structure. newline Finance is the elixir that plays a magnificent role in an economy for the smooth as well as efficient functioning of the different activities of the society. It is like blood for every form of activities. Finance is at the core of socio-economic growth or development of any region. Finance is necessary for survival and growth of country. It is back bone of every economy. The principal objective of Indian planning had been the attainment of growth with social justice and equity. Finance which acts as a catalytic agent, is a great necessity. Finance system is considered to be the nerve centre of trade, commerce and business in a country. It plays a vital role in distributing money for development of trade, industry and commerce. The success of economic development depends essentially on the extent of mobilization of resources and investment and on the operational efficiency and economic discipline displayed by the various segments of the economy. newline Financial system of a country plays a very important role in functioning of economy by allowing transfer of resources fr