Introduction
Banks play an important role in the financial systems of a country and end up influencing the businesses operating in that economy or country. Getting a clear understanding of how banks affect the financial systems of a country is, for this reason, of paramount importance. This is because the process of channeling savings into income generating activities through business is important in the growth and development of a country’s economy. This paper is going to describe how the banking system of a country can impact the different companies operating there by using countries with fluctuating exchange rate as case studies, with a main focus on developing countries (Berger, 2005, p.68).

Literature review
The exchange rate can be defined as the price at which one currency can be exchanged for another one at a given period. The price/value of a currency can be determined by two factors:
The government through the central bank determines and maintains the official exchange rate
The private foreign exchange markets through the demand and supply of particular currencies as compared to others (Berger, 2005, p.89).
Developing countries mostly have fluctuating exchange rates, which are mainly governed by forex markets. The banking system in these countries also greatly impact companies operating there through:
Acting as measures set to monitor and ensure that companies effectively us the resources that have been allocated to them
Playing a significant part in sharing risk in such an economy through diversification and smoothing fluctuations in a company over time
Providing funding for companies thus enabling them and the economy to grow (Berger, 2005, p.91).
Kenya and South Africa are examples of two developing countries whose companies have been affected by the banking systems in the respective countries.

Case study: impact of bank systems on companies in developing countries
Kenya is an example of a country with fluctuating exchange rates and one which the banking system has had a great impact on the companies based and operating in Kenya. For example, Electronic banking in Kenya has had a major impact in both the corporates and SMEs based in this country. E-banking has reduced the cost of carrying out transactions for both the banks and the companies. This leads to the banks having more money to borrow and the companies no longer need to physically visit the bank branches to be able to carry out transactions. The companies especially SMEs are now able to provide round the clock services to their customers instead of wasting time queuing at the bank. They can now apply for loans and carry out other banking transactions online. Time is one of the most important resources for a business, a company that is able to save time ends up saving money that can be used in the development of the business (Sanya & Gaertner, 2012, p.173).

E-banking has also led to the growth and development of e-commerce a relatively new venture in the developing countries. Online businesses have grown and taken root, not only within the borders of a specific country but across borders without physical movement thanks to changes in the banking systems (Sanya & Gaertner, 2012, p.175).

South Africa is another example of a country with a fluctuating exchange rate. One day the value of the Rand might be 8 R exchanging for 1 USD and the next day 11 R exchanging for 1 USD. This fluctuating exchange rate is due to banks partaking in risks that end up affecting trade in this country (Sanya & Gaertner, 2012, p.176).

Conclusion
As stated earlier, bank systems have a major impact on the financial systems of a country and its companies. It is. therefore, critical for banks to be prevented from partaking risks by profit retention during good outcomes to be able to bail out the government during crises (Rocha & Rvai, 2005, p. 104).