Commercial Applications
"Banking is a relationship-oriented industry." Give two reasons either for or against.
Answer
For the statement — Banking is indeed a relationship-oriented industry.
Reasons:
Based on mutual trust — Banking is based on mutual trust between a bank and its customers. Depositors entrust their savings to the bank with the confidence that the bank will keep their money safe and pay it back when demanded. Borrowers, on the other hand, are trusted by the bank to repay the loans on time.
Direct interaction with bank representatives — A borrower or depositor of a bank directly interacts with the representative or employee of the bank. The personal relationship and good service provided by bank staff play a major role in retaining customers and acquiring new ones.
Related Questions
Give one difference between central bank and commercial bank.
With the help of an example, explain the clearing house functions of RBI.
State any difference between cash credit and overdraft.
OR
Distinguish between Overdraft and Cash Credit.
Central Bank is the "lender of the last resort". Justify either for or against.