Importance or role of modern bank or commercial bank

The importance of commercial bank is as follows:
1. Capital formation: Capital and its supply is one of the most important factors in economic development. It is well known that banks by acting as financial intermediaries between the savers and the borrowers play a very important role in its formation. People having surplus cash or savings generally do no know how to invest it. Here the banks step in and collect the surplus from them which in turn encourage them to save more.
2. Providing loan: Commercial bank provide short term loan to the businessman. It also provides mid term and long term loan in safe and profitable sector. This loan plays an important role in the economic development of the country.
3. Investment: In any country for the economic development investment is an important thing. Commercial bank invests money in the profitable sector or business which develops the new business.
4. Creating medium of exchange: Commercial bank does not issue notes but as the medium of exchange it also issue cheque, draft, bill of exchange etc. For this reason the economic transaction are increasing & development also increases.

Principles of modern bank or commercial bank

A successful and ideal modern bank follows some principles in order to ensure smooth running of banking business. To cope up with the prevailing competition, to provide better services to the clients and to gain competitive advantages commercial banks or modern banks have to be careful about their services. These are referred as principles.

Other qualities related with a good bank

a)      Foreign exchange: bank provides many facilities towards foreign exchange. To do business with foreign country a bank must be needed to complete the responsibilities.

b)      Publicity: Well development bank is known as efficient bank. A bank can make a good image in client’s mind by providing financial statement, communication etc in timely.

c)      Goodwill: Goodwill of the bank attracts the people to deal with the bank. It can be gained easily by providing facilities.

Qualities related services of a good bank

a)      Security: bank provides security of the deposited money or valuable assts. A bank known as good if it collects more deposits or assets of the clients. If the bank fails to return the assets of the client in specified time, their reputation will be decreased.

b)      Advice and council: bank provides advice to do well in the financial area by investing huge amount of money. Good bank shows the way how an entrepreneur can get success by minimum resources.

c)      Providing other facilities: Bank provides other facilities towards clients such as- collecting of bills, collecting of bonus, provident fund and collecting electricity bill, water bill etc.

Qualities related with efficiency of a good bank

a)      Total deposit: naturally the bank which attracts the public can collect deposit and can run its business smoothly. Huge amount of deposits indicates a bright sign of a good bank.

b)      Liquidity: The bank which can pay on demand is an efficient bank. For that reason bank should keep necessary cash in its locker to fulfill the demand of the client, side by side bank should lend money for earning its profit.

c)      Investment: Two issues should be considered in measuring the qualities of a bank. Such as- I) Amount of investment II) area of investment. Bank should invest this money on rising business but not in dull business take like transportation, power sector etc.

Qualities related with function of a good bank

a)      Uses of technology: For testing the efficiency of the bank a client must consider the technology used by the bank.

b)      Providing current and latest information: a good bank always tries to provide correct and latest information to the client and concern authority.

c)      Economy: a good bank tries to perform its activities economically. It reduces all sorts of unnecessary expenditures.

Qualities related with staff of a good bank

a)      Manner of employees: Employees should behave well with their clients.

b)      Maintenance of secrecy: the employees must be very careful to maintain the secrecy about bank and the client as well. They don’t disclose any information without legal requirements.

c)      Efficient management: the bank which performed their activities within minimum time that is more preferable to the clients.

Qualities related with organization of a good bank

a)      Origin of the bank: It indicates who are the initiators or entrepreneurs of the bank and their background relates to banking business and goodwill in the business communication as well as prior success in the area.

b)      Location of the bank: A bank must be located near to its customers. Specially, commercial and industrial bank should be located in commercial place.

Qualities of a good bank

Now a day there are various types of bank. Each and every bank tries to provide various services towards its client. For this reason at the time of opening a bank account, a client examines some features of that bank which are called the qualities or attributes of that bank.

We can discuss the qualities of a good bank from the six view points. These are

Role of ancestors in the development modern banking: Money-lender

Moneylenders have a great contribution on the development of modern banking. The factors influenced moneylenders to join with the banking business are as follows-
1. As moneylenders were rich, everyone trusted them.
2. They had a power of influencing and /convincing anyone.
3. They took the deposited money and provided loan to poor people.