Commercial banking is the most important part of modern banking set up. These days, the function of commercial banks are confined not only to advancing loans to the public and accepting their deposits, their contribution in accelerating the rate of economic development in under-developed and developing countries like that of India is very effective. Not only is that, banking highly effective and useful in the fulfillment of various socio-economic objectives of the Government.
Commercial banking in India occupies an important place in the banking set-up of the country, these days.
Upto, 1969, the operation and functioning of commercial banks in India was confined only to medium and large sized towns and economically rich people.
Agriculture, small scale and cottage industries and rural areas were generally neglected by these banks. With the nationalisation of commercial banks in 1969, now these priority sectors have started getting attention, with the result they get more credit and more branches of these banks are being opened in rural areas also.
Now these banks are becoming effective and useful in the accomplishment of various socio-economic objectives of the country. The situation in almost all developing countries resembles the Indian situation where banks have started playing an important role.