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Keynes (1930) and Pesek and Saving (1967) argued that commercial banks are central to a macro economy as they act as financial intermediaries between savers and investors.6.3 Banks in India have traditionally been the main source of credit for various sectors of the economy.Not only is lending the primary source of banks’ income, but it provides financing for productive activity throughout the economy.Historically, understanding the role performed by the commercial banks in the economy has had its roots in macroeconomic theory.

The graph expresses the annual evolution of the frequency of use of the word «self-liquidating» during the past 500 years. It is called by this name because the premium itself pays for its cost or nearly all its cost.

In order for journal article authors to get access to their work on Cambridge Core, they will now receive an email with two codes: one for them to access their article and another for them to share with others who may also wish to access.

Each group will then need to register on Cambridge Core (only once) and enter the code in 'My Content'. Please contact [email protected] details of your article (article title, journal title, journal volume and issue) to receive your new access code for this article.

Prior to the initiation of financial sector reforms in the early 1990s, lending by banks was tightly regulated and banks were expected to align their lending operations to plan priorities.

Bank lending was the principal focus of monetary policy under the credit planning approach adopted in 1967-68.




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