Ten Organizational Design Models to align structure and operations to busines...
Money and credit by Yatharth
1.
2. Money serves several
different functions in a
modern economy. In this
lesson, you‘have learn
about how money is a
medium of exchange and
how it works in our
economy.
3.
4. Barter is a system of
exchange by
which goods or services are
directly exchanged for other
goods or services without
using a medium of exchange,
such as money. These type
was done mostly before the
invention of money in the
form of paper currency or
coin
5. . Lack of Double Coincidence of Wants:
Barter transactions can be possible only
when two persons desiring exchange of
commodities should have such commodities
which are mutually needed by each other
. Lack of Double Coincidence of Wants:
Barter transactions can be possible only
when two persons desiring exchange of
commodities should have such commodities
which are mutually needed by each other
For example if a person is haveing a cow that
how could he exchange it with cloths or food
grain
6. . Lack of a Common Measure of Value:
The biggest problem in the barter exchange was
the lack of common measure of value i.e., there
was no such commodity in lieu of which all
commodities could be bought and sold. In such a
situation, while facilitating the exchange of a
commodity its value was to be expressed in all
commodities, such as one yard cloth is equal to
½ kilogram of potato etc.
. Lack of Store of Value:
In a barter economy, the store of value could be
done only in the form of commodities. However,
we all know that commodities are perishable and
they cannot be kept for a long time in the store.
Because of this difficulty, the accumulation of
capital or store of value was very difficult
7. A medium of exchange is an intermediary
used in trade to avoid the inconveniences of
a pure barter system.Because with the
disadvantages of the bater system it was very
difficult for the socity to grow with.
8.
9. Value common assets
Constant utility
Low cost of preservation
Transportability
Divisibility
High market value in relation to volume and
weight
Recognisability
Resistance to counterfeiting
10. In the modern monetary
systems, there are three
forms of money in actual
use: (i)Metallic Money,
(ii) Paper Money,
(iii) Deposit Money.
11. Metallic Money:
Metallic money refers to coins made out of
various metals like gold, silver, bronze,
nickel, etc. A coin is a piece of metal of a
given size, shape, weight and fineness
whose value is certified by the State.
12. In the modern India paper money is used as the
mode of exchange
In India the Reserve Bank Of India issues the
currency notes on the behalf of the govt.
The law legalises the use of rupees as a medium
of payment that cant be refused in setting a
transaction in the all over the India . No
individual can legally refuses to take a payment
in the form of paper money issued by the RBC
13. Deposit money is the money which are
deposited in the bank
Credit money refers to money that
constitutes future claims of a valuable item
against an entity.
The holder of the money can use it to
purchase goods and services; when the holder
wants to, he or she can redeem it to get the
item by which it is backed.
Credit money is made of a material that has
low intrinsic value compared to the value it
represents when exchanged
14. Money placed into a banking institution for
safekeeping.
Bank deposits are made to deposit accounts at a
banking institution, such as savings accounts,
checking accounts and money market accounts.
The account holder has the right to withdraw any
deposited funds, as set forth in the terms and
conditions of the account.
The "deposit" itself is a liability owed by the bank to
the depositor (the person or entity that made the
deposit), and refers to this liability rather than to the
actual funds that are deposited.
15.
16. As we know the banks have a great deposits but
bank keep only a small proportion of there deposits
as cash with themselves
For example in India 15%of there deposits are in the
form of cash in there hands
What about the other??
Bank make use of the other 85% deposits to meet
the loan requirements of the people
Bank charges a high amount of interest from the
people for the loan
And gives a little less to the depositors
So the money between the both sides is the income
of the bank
17. A cheque is a document that orders a bank
to pay money from an account. The person
writing the cheque, the drawer, has
a transaction banking account where their
money is held. The drawer writes the various
details including the monetary amount, date,
and a payee on the cheque, and signs it,
ordering their bank, known as the drawee, to
pay that person or company the amount of
money stated.
18. There are two types of
credits:
Formal measure
Informal measure
19.
20. A large number of transaction in our day to day
activities involves credit in one or the other
way
IN the villages farmers usually take crop loan
at the beginning of the season and repay the
loan after harvest .
Repayment of the loan is crucially depended
on the income of the farming
Sometime the failure of the crop made loan
repayment impossible sometimes the farmers
has to even sell there a part of land to repay
the payment or to work for the money leader
in his farm
21. A situation in which
a debt is difficult or impossible to repay
, typically because
high interestpayments prevent repayme
nt of the principal:a
new personal bankruptcy law aims to h
elp individuals free themselves from
the debt trapcountries
like Greece and Portugal are already ca
ught in a debt trap
22. The reserve bank of india supervision the
functioning of formal sourse of loans.
The RBI monitors the banks is actually
maintaining cash balance.
The RBI sees that the banks give loans not
just to profit making businesses and
traders but also to small cultivation small
scale industries to small borrowers etc.
Periodically banks have to submit
information to the RBI on how much they
are lending to whom at what intereest
rate etc
23.
24. Collector in an assent that the barrow owns
and use this as a guaranty to the Leander
until the loan is repaid
Interest rate collateral and documentation
requirement and the mode of repayment
together comprise what is called terns of
credit
The terms of credit vary substantially from
one credit arrangement to another
They may vary depending one the nature of
the lender and the borrower
25.
26.
27. Self-help groups, also known as mutual
help, mutual aid, or support groups, are
groups of people who provide mutual
support for each other. In a self-help
group, the members share a common
problem, often a common disease or
addiction. Their mutual goal is to help
each other to deal with, if possible to heal
or to recover from, this problem.