answer to research questions.docx - How do commercial banks contribute to economic growth Thus the commercial banks contribute much to the growth of a

answer to research questions.docx - How do commercial banks...

This preview shows page 1 - 2 out of 2 pages.

How do commercial banks contribute to economic growth Thus the commercial banks contribute much to the growth of a developing economy by granting loans to agriculture, trade and industry, by helping in physical and human capital formation and by following the monetary policy of the country. Role of Commercial banks in an economy The general role of commercial banks is to provide financial services to general public and business, ensuring economic and social stability and sustainable growth of the economy . In this respect, credit creation is the most significant function of commercial banks . Do the Commercial Banks invest in productive sectors of the economy? As per the policy, commercial banks are required to invest 25 per cent of their total loan portfolio in the productive sector : 10 per cent in agriculture, five per cent each in hydropower and tourism and the rest in other sectors . ... Before the credit crunch set in, the loan-to-value
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes