Essay-Banking system is the backbone of economic growth SSC CGL Tier 3 I SSC CHSL Tier 2
A banking system is a group or network of institutions that provide financial services for us. These institutions are responsible for operating a payment system, providing loans, taking deposits, and helping with investments.
The health of any economy is directly related to the financial status of its banking system. The Indian Banking System is regulated by the Reserve Bank of India, which was set up in 1935 under the Reserve Bank of India Act,1934, and nationalized in 1949.
Banking System is called the backbone of any economy for a variety of reasons. Firstly, it plays a vital role in economic development by mobilizing resources and allocating them better. It also keeps the cash flowing in the economy. Secondly, it provides financial resources to an individual, corporation, government, or a sector in need. That helps in developing large infrastructure in the country and provide better facilities to the people. Thirdly, it employs a large number of people, thus contributing to employment generation. Fourthly, it helps in tackling the problem of black money…