Q.(a) Explain the role of Commercial Banks in economic development.

(a) Commercial banks drive development by mobilising savings and channelling credit to productive sectors. (b) The standard deviation of the given eight values is about 4.18.

(a) Role of Commercial Banks in Economic Development:

1. Mobilising savings: Banks collect scattered small savings of the public through various deposit schemes and make them available for productive use.
2. Capital formation: By converting savings into investment, banks promote capital formation, which is the key to economic growth.
3. Financing agriculture: They provide short- and medium-term credit to farmers for seeds, fertilisers, equipment and irrigation, especially through priority-sector lending.
4. Financing industry and trade: Banks provide working capital and term loans to industries and finance both internal and foreign trade.
5. Balanced regional development: By opening branches in backward and rural areas, banks spread credit and reduce regional disparities.
6. Implementing monetary policy: Banks help the central bank regulate money supply and credit, promoting price stability and growth.
7. Encouraging entrepreneurship and employment: Credit to new entrepreneurs and small businesses creates output and employment.

Thus commercial banks act as the nerve centre of a developing economy.

(b) Standard Deviation of 14, 22, 9, 15, 20, 17, 12, 11:

Number of items (n) = 8

Step 1 — Mean:

Sum = 14 + 22 + 9 + 15 + 20 + 17 + 12 + 11 = 120

Mean = 120 / 8 = 15

Step 2 — Deviations from mean (x - 15) and their squares: