The financial sector reforms and the reforms of banking sector are a part of the economic reforms. The banking sector holds the central position in the global economy. In this modern world of money and finance, the importance of banks in the economy of any country is vital.
A strong banking industry is crucial for the up grooming and growth of any country. Banks are involved in all type of activities from the mobilization to distribution of the public finance also from the purchase of the car to the financial assistance to the individual and business projects. Mehmood, The role of banking sector in the success, prosperity and development of any country cannot be over looked. Banks and other financial institutions are a key resource and reserves of capital funds which are essential for the local investments and contribute to the economic growth to a large extent of every country.
Banks play an important role in the enhancement of investments in the country and also support the expansion of the business of all levels including small and large enterprises. Banks through their services ensure the smooth operations and expansion of the economic activities which in turn generate wealth by increasing the production.
Commercial banks are the most portentous financial intermediaries and depending upon the policies of the place where they located, they greatly help in minimizing the rate of unemployment in a way by inciting more people to become entrepreneur and should employee others. Today, the banks are working together with the government, to identify the growth demanding sectors of the economy like agriculture and make them potential enough by providing the finance.
Pakistan banking sector has witnessed an outstanding and unique development in recent years. This sector has shown an excellent profitability and diversified public credit. Another achievement is well maintained system risk. In Pakistan growing per capita income, development of middle income group and increase in relative wealth are presenting new demand and opportunities to the retail banking industry. This includes a central bank, various commercial banks and specialized agencies.
In , the country had no notable banking network but by , it succeeded in developing a prosperous banking industry. Mehmood, The banking sector in every country, Including Pakistan is subject to many internal and external forces. Technological changes are considered to have most far reaching impact on the banking sector. Technology, particularly the internet is the key operator of internal changes. Within this sector the external changes have attracted many new entrants and also maximize the customer influence.
Internal changes have been greatly amplified by the internet. The internet is causing the major delivery changes and the combination of these forces internal and external will bring about a major mutate the banking sector. Under the current scenario of business world and with the development of the information technology and globalization of the market place, Internet and the World Wide Web have become essential instruments to survive.
Products and services have promptly shifted to digital form and are now being delivered by the internet. Electronic services basically administer two key hall marks; information efficiency and transaction efficiency.
It is also a fact that electronic services aids in the development of trust and relation with the customers. So, all enterprises are focusing on this regard. Technologically facilitated services actually means that the type of service delivery which have the aptitude of benefiting the customer, employee and the management alike.
Service quality is one of the major factors that determines the success and prosperity of the electronic banking. There are several competitive advantages linked with the reception of the technology in the service sector. Information technology is progressively becoming inestimable and dominant tool driving the development, aids in growth and promote competition and strengthens the competition.
There are many examples of information technology application associated with banking sector that assist in building new markets and fuel the economy for example, automated teller machine ATMs. Technology adoption has led to the community efficiency which results in reduction of cost, improvement of service quality and enhances the added value to the customer. There is a direct and positive impact of technology on the service quality of every sector especially the banking sector.
Today, the banks, to remain in the competitive position are facilitating their customers with the technology based services according to their demand. The diffusion of IT has led to a drastic transformation of the product user relationship due to the improved services being provided by the banking sector. The product service innovations which took place due to the dissemination of information technology in service sector have a great impact on demand and employment.
But only those of them are banks that also accept chequable deposits them. All others are non-bank financial institutions. Banks are said to be department stores of financial services as they render a wide variety of such services to their customers. The range of these services differs from bank to bank, depending mainly on the size and type of banks.
So far we have highlighted only two of them, because, in combination, they are the necessary services which a bank as a bank must perform. They are also the two most important functions of a bank. We sum up briefly below the main services which banks in India generally perform. This should help appreciate the role which banks play in the economic life of the country.
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The range of these services differs from bank to bank, depending mainly on the size and type of banks. So far we have highlighted only two of them, because, in combination, they are the necessary services which a bank as a bank must perform. Database of FREE banking essays - We have thousands of free essays across a wide range of subject areas. Sample banking essays!
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