Role of commercial banks and non-banking financial companies in Indian economy
Sadhanashukla, Dr. CP Gujar
The canvas of financial system in India portrays a picture of players of different hues and diverse opportunities to commercial banks both in public and private sector, foreign banks, public sector financial institute, regional rural banks, Non- banking financial institutions (NBFC’s), co-operative, NGO/ trust purveying micro credit etc. all working within a broad & sturdy framework of the regulators. Banks and NBFC’s play a vital role in the economic development of a country and are assisting in meeting the diverse financial needs of the economy. They accumulate the idle savings of the people and make them available for investment. In doing so banks & NBFC’s have influenced the direction of saving and investment of the customers and the resultant capital formation has become essential for India’s economic growth and development. They also create new demand deposits in the process of granting loans and purchasing investment securities. A well-organized banking system is the need of the day. At present there are 151 banks with 109811 branches and 12375 NBFC’c in India. If the banking system in a country is effective, efficient and disciplined; it brings about a rapid growth in the various sectors of the economy. As we know that the Agriculture, small and medium enterprise (SME) sector and growing micro finance are the major area of economy of any country like India. Research is based upon the secondary data which provide the findings on commercial banks & NBFC’s and how it helpful in economic development. So this research will helpful in finding out that how commercial banks and NBFC’s are helpful in credit flowing, employment generations in India and how it will contribute in development of Indian economy.