Journal Press India^®

Author Details ( * ) denotes Corresponding author

In the modern economic world, the banking system plays a major role. Banks accumulate the individual's savings and lend them to businesses and suppliers. Bank loans make trade and business simpler hence Companies derive money from banks to buy raw materialsto fulfil companies ‘necessities, such as working capital. Money in banks can be kept secure, and interest is received. This generates saving habits in individuals as well as industries. The funds can be used to create fresh investments. The banks thus, perform an essential role in building new capital (or wealth formation) in a nation and hence, banks participate in the development process. Banks additionally coordinate the sale of shares and debentures of companies. Thus, companies and producers may, with the help of banks to get the necessary finance to procure fixed capital. However, these Banks are known as industrial banks, which finance and provide long-term loans to manufacturers in developing new companies and new industrial enterprises, which will generate money from banking institutions. However, additional money is needed for trade transactions as business increases. Banks perform an important role as merchants of money in an emerging financial system. The banking structure makes national and foreign trading simpler. Hence, almost many businesses are made on credit that banks provide on behalf of their clients with references and guarantees that enable sellers to supply products based on credit. This is especially relevant as companies set up in various countries in foreign to make a trade; are most often unaware of each other. Trade is also funded by granting loans via banks in various ways like discount bills of exchange. Foreign exchange transactions (swap between currencies) are also made by banks. Finally, banks serve as counsellors, consultants and representatives for companies and sectors. The analysis's main objective is to evaluate better or assess the financial development status of commercial banking in India. It also shows how credit affects GDP and India's growth rate. This paper explains further the history of commercial banks, types of commercial banks and their role in the sector's growth. Finally, the paper signifies  the role of banking institutions in industrial growth.

Keywords

commercial banks, Reserve Bank of India, Investment, development, Finance.

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