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Banking on idle resources

Vinod C. Dixit, Ahmedabad

This refers to the thought-provoking article The role of economists in the banking industry by A. Vasudevan (Business Line, November 25). The economic development of a country depends more on real factors such as industrial development, modernisation of agriculture, organisation of internal trade and expansion of foreign trade, especially exports, and less on the monetary factors contributed by banking.

It is true that India is a poor country with very low income levels. Yet there are huge amounts of investible funds lying idle. If banks can offer handsome interest on savings, people can be induced to direct their savings from the wasteful activities to banks. A number of economists have also confirmed that the capital available in India for investment is surprisingly and inexplicably large. The entire banking machinery has now been geared to speed the country's economic development. Our economists sho uld take more positive steps to ensure that the real benefits of an organised banking industry percolates.