Essay: Importance of Bank in the Daily Life of a Citizen
Bankers play a very important role in the economic life of a nation. The health of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but their borrowing, lending and related activities facilitate the process of production, distribution, exchange and consumption of wealth. In this way they become very effective partners is the process of economic development. Today modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the people for the investment purposes. If there would be no banks then a great portion of a capital of the country would remain idle. We see financial institution role to progress as supporting and stimulating economic, social and environmental life. They create value by providing products and services that help people to improve their lives and fuel economic growth.
How banks become part of our daily life:
A single day of economic life couldn't function without banks. By attracting savings and granting credit, banks are the oil for the wheels that keep the economy of our nation turning. Without banks we'd have to pay for everything with cash, which we'd have to save somewhere. That's obviously very risky. Banks and financial institutions have become an integral part of every citizen. Our daily economic life has become easier by the blessing of banking system. The main functions of bank mentioned below connect us with their service and activities.
1. Banks are where people can safely deposit their savings, which banks then pay interest on. lf there were no banks, people would have to store and protect their savings themselves, which would involve major risks. Savers can generally withdraw their savings at any time; the total amount of money held by a bank doesn't fluctuate much because they have many customers. This scale helps banks cover risks. A bank lends money to a lot of people and companies. If some are unable to repay their loans, the bank can absorb these losses and savers won't be affected.
2. Banks are largely responsible for the payments system. Electronic payments are becoming more important as people use less cash. This means that banks are processing more card payments, transfers, direct debit, etc. every day. ATM, credit card, debit card, master card are examples of new payment system which popularity is growing up. Now people can purchase online ticket, do online shopping, perform e-business etc via these banking instruments.
3. Bank issue loans to both people and companies. Without banks, it would be very hard for people to buy a home or stat business, or for companies to make investments. In Bangladesh banks are providing various types of loan such as home loan, car loan, salary loan, marriage loan, SME loan etc. To take these loans there are a lot of customers in our country. Now there are 59 commercial banks in Bangladesh which all together have 11 crore direct clients including mobile bankig clients. That indicates more than 68% people have bank accounts. lf only the adult population is taken into account, nearly 90 percent people have bank accounts. There are around 9,000 bank branches along with about 18,000 branches of NGO-MFIs, 1,200 thousand post offices and 183,000 co-operative outlets totaling about 2.1 lakh branches/outlets for the economically active population- generating at least one financial service point per 270 people.
4. Most of banks are now providing mobile banking services which have connected all types of people. Even those who are living at remote area can easily make transaction instantly. By the end of October 2019 total registerd clients of mobile banking were nearly 7.74 crore people. Moreover it was just started since 2011. Now daily transaction has crossed Tk 1,218 crore through this service. Citizen of Bangladesh who are in abroad are now able to send Tk 1,218 crore by this banking channel.
5. Corporate social responsibility [CSR], in recent times, has become an integral part of business. The contribution of banks in this regard is of paramount importance considering their unique position in the economy. CSR practices by banks not only improve their own standards but also affect the socially responsible behaviors of other businesses. Banks have come ahead in tree plantation, scholarship for students, aid to reduce poverty etc. which all are examples of CSR and a lot of people are receiving these privileges from banks.
So, a bank as a matter of fact is just like a heart in the economic life and the capital provided by it is like blood in it. As long as blood is in circulation, the organs will remain sound and healthy. If the bIood is not supplied to any organ then that part would become useless. To secure customers financial futures, to support people when making life-changing decisions, in the processes of transactions quickly, accurately and easily, and to empower customers to have greater insight into their finances, there has no alternative of banking in our citizen life.
[Contributor: Abu Hanifa Noman]
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