1. MONEY AND CREDIT
MADE BY – ROHAN & VISHESH
CLASS – X ‘A’
ROLL NO – 18 & 50
2. DEFINATIONS
Money: It means anything chosen by a
common consent as a medium of exchange.
Credit: It refers to the activity of borrowing
and lending money between two parties.
Barter System: The system by which one
commodity is exchanged for another without
use of money.
Collateral: It is an asset that the borrower
owns (such as land , building, vehicles,
livestock, deposits with bank) and uses this as
a guarantee to a lender until the loan is repaid.
3. Landlords: They are the people who own farm
land in villages on which poor farmers cultivate
the crops.
Chit Fund: It is the process where money is
collected from specified number of persons
under an agreement for specified number of
years & repaid after the expiry of agreement.
Credit Money: The money whose money value is
greater than the commodity value of the
material from which the money is made is known
as credit money.
4. Landlords: They are the people who own farm
land in villages on which poor farmers cultivate
the crops.
Chit Fund: It is the process where money is
collected from specified number of persons
under an agreement for specified number of
years & repaid after the expiry of agreement.
Credit Money: The money whose money value is
greater than the commodity value of the
material from which the money is made is known
as credit money.
5. BANKING
Bank: An institution which accepts deposits from
public for the purpose of lending & investment.
Banking: The activity of deposit, withdrawal of
money and other related monetary activities.
Cheque: It is an unconditional written
instructions made by the account holder to the
bank to pay the specified amount to the drawer
of the cheque or to any other person as per
instruction.
Saving: It is the part of the income which is over
& above the consumption requirements.
6. Debit Card: The card issued to the bank account
holders against their bank balance to facilitate &
simplified the payment, withdrawal & transfer of
money anytime, anywhere through the
computer is known as debit card.
Credit Card: The card issued to selected
customers to unable them to make payment of
credit bills up to the specified limit any time
anywhere through computer is known as credit
card.
Bank Rate: The rate at which the central bank
lends funds as the “lend of last resort” to a
commercial bank against approved securities or
eligible bills of exchange is known as bank rate.
7. Automated Teller Machines (ATMs): It is a free
standing self-service terminal performing 6O%
of tellers job quickly & at lesser cost.
Crossing of the Cheque: Drawing two parallel
lines on the left side on the top of a cheque is
called crossing of the cheque.
Cash Reserve Ratio (CRR): It is a minimum cash
which a commercial bank needs to keep with
itself as per the regulation the RBI.
8. INDIAN BANK
Reserve Bank of India (RBI): It is the central of
India which controls the monetary policy of the
economy. It was established on 1st April 1935 as a
share holder bank.
Indian Monetary System: The system of
managing demand & supply of money by the
Reserve Bank of India (RBI) is known as Indian
Monetary System.
Formal Institutions: They are the institutions
which are regulated by rules & regulations laid
down by the government/RBI.
9. Informal Institutions: These institutions are self
managed & they are out of the reach of RBI
regulation due to their un-organized structure &
way of working.
Private Finance Companies: These are the
private own finance companies which extends
loans to a particular class of borrowers like
government employees, multinational
companies employee etc.
10. SELF-HELP GROUPS
Self-Help Groups basically save money
of his own member can take loan from
itself to meet their needs. The group
charge very nominal interest rate of
these loans. It saving regular, group
becomes eligible to avail loan from the
bank & loan is sanctioned in the name of
group & is meant to create self-employment
opportunities for the
members.
11. Why might banks be unwilling to
lend to small farmers?
Banks might not be willing to lend
some farmers because they don’t
have collateral as security to deposit
in the bank. Some farmers are not in
the position of paying loan. Some
farmers are already caught in the
hand of the debt, so the bank don’t
want to gave them further loan.
12. How does the use of money make it
easier to exchange things?
Money provides better exchange facilities to
eliminate the problem of barter system. In case
of barter system there was the problem of
double coincides of wants.
For example- it is no longer necessary to the
shoe manufacturer to look for a farmer. For
exchange of goods with each other. All he has to
do is to find a buyer for his shoe. After selling the
shoes in the market he can buy the wheat &other
items. Therefore, money act as an intermediate
in the exchange process.
