How does the banking habit of people lead to an improvement in the availability of credit?

1. Most of the households in India are not included in the banking system of the country.

2. A few of them are because of the lack of banking facilities in their vicinity while others are not aware of the benefits that they might receive if they actively participate in the banking system of the country.

3. Many families do not have their bank account. They prefer to keep their savings in their households.

4. Another very common feature observed in India is that most of the families prefer to keep their jewelry and other assets not in the bank locker but for their household.

5. Accordingly, their savings remained as idle cash balance at home.

6. If they develop a banking habit it will greatly help to improve the credit facility of the country.

7. They can open a zero balance account with minimum possible formalities.

8. The bank will convert the savings into investment by providing loans to investors.

9. Unproductive savings will become productive savings if people are willing to develop a banking habit.

10. It will help to speed up the process of growth and development in the banking sector.