Can You Discuss The Role Of Commercial Banks In The Economy?


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SidrA Tasneem Profile
SidrA Tasneem answered
Banks plays  major roles in the economy. There are some as under:
issue of money, by mean of banknotes and cheques. These claims on banks can act as money because they can be bought/sold and redeemed on demand.
Settlement and netting of payments : Banks act both as collection agent and paying officer on behalf of their customers.
credit intermediation : Banks borrow and lend back on their own account as intermediary.
maturity transformation :banks borrow on demand liability and short term liability, but provide more long term loans.

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