The Importance Of The Banking Industry

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The banking industry plays a vital role in an economic growth and the stability of a country. The industry focuses on the in and out flow of the money. This industry is well known for financial dealings, investing, borrowing, and storing money. The banking industry plays a pivotal role in providing capitals whereby the financial intermediaries would be channeling the fund to companies or institutions that is in dire need of funds to expand their business.
The soundness of a country’s economy is having a close proximity towards its banking system. An astonishing amount of research having been conducted has shown a result where a highly profitable banking sector is important in dictating the economic growth.
Without the channel of fund that …show more content…

It is important for banks to be sustainable in terms of their profitability performance as it acts as an indicator of success of the management and it is also one of the attractive sights that investors would look for. The changes in profitability would have a direct relationship towards the economic progress because the profits earned would be linked towards the investments and savings decision of companies. The reasons beings for this would be because a rise in profits would enhance the cash flow position of companies and offers greater flexibility in the source of finance for corporate investments. Easier access to finance encourages more noteworthy investments which enhance productivity, competitiveness, and employment.
The main conclusion here would be that there is possibly a direct relationship between the internal determinants of the banking sector and the profitability. While there is an extensive amount of research that has been conducted amongst the Islamic banking, very few updated ones are conducted towards the conventional banking in …show more content…

The drive for excellence in the banking industry is a matter of priority that given the well being of this industry integral to the growth and development in Malaysian economy. The latest advancement in technology and globalization together with financial sector liberalization have created many challenges for banking industry in Malaysia where it has increased the Malaysian government to progressively liberalize the banking industry. Failure to do so will jeopardize the country’s economy to participate in the global economy. Therefore, in order to catch up, the Financial Sector Masterplan (FSMP) was created to design a new financial landscape that are more competitive and market driven.
The bank industry plays an important role in the development of a progressive and inclusive financial sector which entails preserving the core foundations of financial stability to ensure the effectiveness and efficiency of financial intermediaries which leads to economic growth and development in Malaysia. Bank industry is able promote monetary and financial stability conducive to the sustainable growth of the Malaysian

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