Discuss the role of foreign commercial banks in economic development of your country.

Positive roles

• Provide employment opportunities to local people.
• Provide training and skilling in the banking sector.
• They are sources of government revenue through taxes
• They create competitions and increase efficiency in the banking sector
• Encourage foreign trade and relationships by providing credit
• Encourage capital in flow and foreign investment.
• Tend to increase the level of saving by mobilizing from rural and urban population
• Introduce technology and innovations in the banking sector to compete with international banks in developed world
• Encouraging Right Type of Industries by extending loans to right investments/persons
• Fuller Utilization of Resources. Savings pooled by the banks are utilized to a greater extent for development purposes of various regions in the country. It ensures fuller utilization of resources.
• Channelizing the Funds to Productive Investment. Banks invest the savings mobilized by them for productive purposes.
• Creation of Credit. Banks create credit for the purpose of providing more funds for development projects

Negative roles

• Most of their business activities are usually concentrated in urban areas with no significant benefits in rural areas
• They are usually associated with foreign investor who are associated with excessive capital outflow
• Low employment prospects due to their preference in foreign manpower or capital intensive technologies
• High competitiveness suffocates indigenous banks
• They tend to prefer large deposits
• Lower the multiplier effect in the country since they repatriate their profits and incomes.