What is Development Bank/ Banking? Define with its features
Posted by Ripon Abu Hasnat on Monday, March 23, 2015 | 0 comments
Definition of Development Bank/
Banking
A
development bank is a multipurpose financial institution with a broad
developmental objective. It is defined as a financial concern which is
concerned with providing financial assistance to business concerns. The
financial assistance is provided in the form of loans, underwriting shares and
debentures, investment and guarantee activities. It also performs promotional
activities in a variety of ways. It renders several services like discovery of
investment projects, preparation of project reports, management services etc.
Thus, development banks provide capital, technology and entrepreneurship.
Development banks are considered to be the backbone of financial market.
Industrial development depends on active role played by the development banks.
What
are the Features of Development Bank/ Banking?
Following
are the main characteristic features of a development bank:
(a) It is a specialized financial
institution.
(b) It provides medium and long-term finance
to business units.
(c) Unlike commercial banks. It does not accept
deposits from the public.
(d) It is not just a term-lending
institution. It is a multi-purpose financial institution.
(e) It is essentially a development-oriented
bank. Its primary object is to promote economic development by promoting
investment and entrepreneurial activity in a developing economy. It encourages
new and small entrepreneurs and seeks balanced regional growth.
(f) It provides financial assistance not only
to the private sector but also to the public sector undertakings.
(g) It aims at promoting the saving and
investment habit in the community.
(h) It does not compete with the normal
channels of finance, i.e., finance already made available by the banks and
other conventional financial institutions. Its major role is of a gap-filler,
i.e., to fill up the deficiencies of the existing financial facilities.
(i) Its motive is to serve public interest
rather than to make profits. It works in the general interest of the nation.
You can subscribe by e-mail to receive news updates and breaking stories.
0 comments for "What is Development Bank/ Banking? Define with its features"
Leave a reply