ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Commercial banks ensure liquidity by taking the funds that their customers deposit in their accounts and lending them out to others. Commercial banks play a role in the creation of credit, which leads to an increase in production, employment, and consumer spending, thereby boosting the economy.

Detailed explanation-2: -Location: Commercial banks are located in most of the locations. Discounts: Commercial banks offer services to the customer at discounted rates. Product offerings: Commercial banks offer more product offerings to the customers in the form of loans, credit cards, fixed deposits, recurring deposits, mutual funds etc.

Detailed explanation-3: -Bank accounts are cheaper You can deposit and cash your checks at the institution where you have a bank account for free. Paying bills: Without a bank account, you probably rely on check cashing outlets, telephone bill pay or money orders-all of which have attached fees-to pay your bills.

Detailed explanation-4: -Commercial banks are essential for the economy because they create liquidity in the market and create capital besides providing their customers with essential services. Banks make sure liquidity in the market by lending out loans from the deposits of their customers.

Detailed explanation-5: -They act as guardians of the country’s wealth and resources and enable capital to move to productive assets at the appropriate time. Commercial banks play a specially crucial role in India since they fuel the country’s economic growth while also giving significant insights into financial processes.