This document discusses the functions and definitions of money. It notes that money serves as a medium of exchange, unit of account, and store of value. Money in India includes rupees and is measured by different monetary aggregates (M1, M2, M3, M4) that include currency in circulation and various types of bank deposits. Commercial banks play an important role in the economy by creating credit and encouraging savings, which supports economic development.

1. General economics
MONEY
AND
BANKING

2. WHAT IS MONEY ?
WHAT WE USE TO PAY FOR THING IS KNOWN IS MONEY.
(IN INDIA – RUPEES , ENGLAND – POUND , AMERICA-
DOLLAR)
THERE IS THREE FUNCTION OF MONEY .
I. SERVED AS MEDIUM OF EXCHANGE
II. SERVED AS A COMMON MEASURE OF VALUE AND
III. SERVED AS A STORE OF VALUES , WAS TERMED AS MONEY .

3. STATIC SENCE MONEY SERVES
1. As a medium of exchange :- mean of payment .
2. As a unit of account :- its act as a means of calculating the
relative prices of goods and services.
3. As standard of deferred payment :- debts and future
transaction can settled.
4. As store of value
5. Direct economics trends
6. As encouragement to division of labour
7. Smoothens transformation of savings into investments

4. MONEY STOCK IN INDIA !
M1 = currency with public (coins , notes ,currency , demand deposits, other
deposit with RBI In publics )narrow money .
M2 = M1 + post office saving deposits.(time deposit with bank + certificate of
deposit issued by bank + terms deposits maturing within a year excluding
FCNR (B) deposits .
M3 = M1 + time deposit of the public with bank called BROAD MONEY.(term
deposits with the bank with the maturity period (1 year ) + call / term
borrowing of the banking systems ).
M4 = M3 + total post office deposits .
(M4 HAS BEEN EXCLUDE FROM SCHEME OF MONETARY AGGREGATES )

5. Commercial bank .
the capacity to add to the total supply of money by means of credit creations .
Role of commercial banks
The economics development depends upon the rate of savings .
Before nationalization I 1969 , the commercial banks in India neglected socialy