The document discusses the concepts of money, credit, and the banking system, explaining the transition from a barter system to the use of money as a medium of exchange. It highlights the roles of banks, types of credit, and the differences between formal and informal lending, as well as the benefits of self-help groups for the poor. Additionally, it mentions the Grameen Bank in Bangladesh as a model for providing small loans to impoverished individuals.

1. Grade- 10 – Economics
Chapter- 3- Money and
Credit
BY; NAVYA RAI

2. Money
• Money is any good that is widely used
and accepted in transactions involving
the transfer of goods and services from
one person to another.
• Any circulating medium of exchange,
including coins, paper money, and
demand deposits.
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3. Barter System
• Goods are exchanged without use of
money.
• Double Coincidence of wants : In
exchange of goods both parties have to
agree to sell and buy each others
commodities.
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4. Limitations of Barter System
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Lack of Double Coincidence of Wants
Lack of Common Measure of Value
Lack of Store of Value
Lack of Standard of Deferred
Payment

5. Money As A Medium Of Exchange
• In an economy where money is in use,
money by providing the crucial
intermediate step eliminates the need
for double coincidence of wants.
• Money acts as an intermediate in the
exchange process, it is called a medium
of exchange.
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6. Roles of Money
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7. Early Coins of India
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Coins of Alupas
Hindu Coin of
Medieval India
Coins of Kushan
Dynasty

8. Modern Forms of Money
Currency
Bank Deposits
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9. Why Modern Currency is accepted
as medium of exchange?
• It is accepted as medium of exchange
because the currency is authorised by
the government of the country.
• In India Reserve Bank of India issues
currency notes on behalf of the central
government.
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10. Various Types Of Bank Deposits
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Savings Deposit
Recurring Deposit
Current Deposit
Fixed Deposit

11. Cheque
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• A cheque is a paper instructing the bank to
pay a specific amount from the person’s
account to the person in whose name the
cheque has been issued.

12. Loan Activities of Bank
• Banks in India these days hold
about 15% of their deposits as cash.
• Bank use the major portion of the
deposits to extend loans.
• Difference between the interest
rates is the main source of income
for banks.
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13. Credit
• Credit refers to an agreement in
which the lender supplies the
borrower with money, goods or
services in return for the promise of
future payment.
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14. Two
Different
Credit
Situations
Positive
Situation
(improve)
Negative
Situation
(Debt
trap)
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15. NAVYA RAI
Terms
of
Credit
Collateral
Document-
ation
Interest
Rate
The mode
of
repayment

16. NAVYA RAI

17. Difference between Formal
and Informal Credit
Formal sector loans:
• (i) Loans from banks
and cooperatives.
• (ii) Under
supervision of the
Reserve Bank of
India.
• (iii) Reasonable rates
of interest.
Informal sector loans:
• (i) Loans from
moneylenders,
relatives, friend,
traders, etc.
• (ii) No supervision of
any institution.
• (iii) Very high rates
of interest.
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18. Loans Taken by Urban households
in 2003
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19. Role of
RBI
Issues
Currency
Foreign
exchange
Managem
ent
Superviso
r of other
Banks
Bankers
bank
Monetary
Policy
Banker to
the
Governme
nt
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20. Self- Help Groups for the Poor
Poor households are still
dependent on informal sources
of credit because of the
following reasons:
1. Banks are not present
everywhere in rural India.
2. Even if banks are present,
getting a loan from a bank is
much more difficult as it
requires proper documents
and collateral.
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21. Self Help Groups
• To overcome these problems, people created Self
Help Groups (SHGs).
• SHG are small groups of poor people which
promote small savings among their members.
• A typical SHG has 15-20 members, usually
belonging to one neighbourhood, who meet and
save regularly.
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22. Advantages of Self Help Group (SHG)
1. It helps borrowers to overcome the problem of
lack of collateral.
2. People can get timely loans for a variety of
purposes and at a reasonable interest rate.
3. SHGs are the building blocks of organisation of
the rural poor.
4. It helps women to become financially self-
reliant.
5. The regular meetings of the group provide a
platform to discuss and act on a variety of
social issues such as health, nutrition,
domestic violence, etc.
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23. Grameen Bank of Bangladesh
• Grameen Bank,
Bangladeshi bank founded
by economist Muhammad
Yunus as a means of
providing small loans to
poor individuals.
• In 2006 Grameen and
Yunus were awarded the
Nobel Prize for Peace.
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24. Thank You
By : Navya Rai
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