A World without Banks - A Study on the Commercial Banks around the world

Tania Islam – 1304051Tazkeer Azeez Chaudhuri – 1304061

Salsabil Rahman- 1304115

“a bank is a financial institution where you can borrow money only if you can prove you don’t need it.”

Introduction

Banking sector is reckoned as the hub and barometer of the financial system

Banking is the pillar of the economy

on quantifying the costs of banking sector crises in terms of real output losses.

on understanding links between banking sector characteristics and long term growth

Literature Review

A broad literature exists surrounding the analysis of banking sector effects in an economy while very few studies appear to include an analysis on a world without banking relating to the importance of the banks.

First category of the studies

Second category of the studies

To know the history of banking – how banks came in the world.

To know the problems and benefits people in the past faced due to having no banking system.

To find out the impact of banks on our lives

To figure out the advantages and disadvantages of banks

To know how banks contribute to the development of nations.

To deduce how our lives would be without banks.

Objectives

Population and Sample

For the completion of this term paper the date collected was completely based on secondary data.

Methodology

Analysis

History

Barter Trade Currency Safe Keeping Loans Bank of

England

Problems faced before banks existed

Difficulty in money circulation process

No safe place to deposit money

Less industries

Problems in foreign trade

Loans

Why do we need Banks

Accelerating the Rate of Capital FormationProvision of Finance and CreditInnovationsFacilitate in the Implementation Monetary PolicyFinancing Consumer ActivitiesFinancing Employment Generating ActivitiesDevelopment of AgriculturePromote Industrial DevelopmentFulfillment of Socio-economic Objectives

Imagine a world without Banks

First we need to figure out the problems

For the rich by the rich

Imagine a world without Banks

Central Government

government bonds

how functionally efficient

Leakage occurs

Findings

If banks are not regulated properly, it will have a negative impact in the economy of the world. Monetary policy and bank depend on each other for their operations.

To imagine a world without banks there needs to be collective government and a very efficient substitute mechanism of banks.

A country should control its banks, if it’s the other way round the world is in trouble.

The urban informal sector and rural sector are hugely untapped

further research should be conducted

Recommendations

The monetary policies should implement regulations for banks, that would be helpful for both the customers and banks

govt. should encourage banks to provide loans to productive sectors

Conclusion

It is quite evident that a world without banks, even if it is possible, should not be pursued upon due to all the good that it brings; rather it is important that the sector is emphasized upon even more, with innovations and promotion of efficiency to an enhanced extent for the greater good!