Role of financial institutions in the economy from "summary" of Oswaal NCERT One For All for UPSC & State PSC's Indian Economy Classes-9 to 12 (Old & New NCERT Edition) (For 2023 Exam) by Oswaal Editorial Board
Financial institutions play a crucial role in the economy by providing various financial services that are essential for the functioning and growth of businesses and individuals. These institutions include banks, insurance companies, mutual funds, and other entities that deal with financial transactions and services. One of the primary functions of financial institutions is to mobilize savings from individuals and channel them into productive investments. Banks, for example, collect deposits from savers and lend them to borrowers, such as businesses and households, who need capital to finance their operations or purchase goods and services. Financial institutions also play a key role in facilitating the smooth functioning of the payment system. They provide various payment services, such as electronic fund transfers, credit and debit ca...
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