The document defines money and different types of money like currency, demand deposits and time deposits. It discusses depository institutions like banks and credit unions and non-depository institutions. It explains how banks create money through lending and how they operate. It describes the central banking system and tools used by central banks like reserve requirements, discount rate and open market operations. It mentions changes in the financial industry like deregulation, interstate banking and impact of electronic technologies. It provides an overview of international banking, exchange rates, government influences on exchange rates and role of institutions like the World Bank and IMF.

2. MONEY
• Any object that is portable, divisible, durable
and stable and that serves as medium of
exchange, a store of value and a unit of
account.
• M1 (CURRENCY /Cash/Demand Deposits)
• M2 (Include M1/ Time Deposits)
• Plastic Money

3. FINANCIAL INSTITUTIONS
Depository institution Non-depository institution
1.Banks; 1.Development banks;
2.Saving associations; 2.State banks;
3.Loan associations; 3.Insurance companies;
4.Credit unions; 4.Investment banks;
5.Credit societies; 5.Brokerage houses;

4. HOW BANK CREATE MONEY ?
Financial activities of a conventional bank
LEND LEND
DEPOSITORS BANK CUSTOMERS
INTEREST INTEREST

5. CENTRAL Reserve System
• Central Bank of the country , which acts as a
government bank, serves member commercial
banks and controls the nation’s money supply.
• The Government’s Bank.
• The Banker’s Bank.
• Check Clearing.

6. TOOLS Of CENTRAL BANK
• Reserve requirements.
• Discount Rate controlling.
• Open market Operations.
• Selective Credit Controls.

7. CHANGES IN FINANCIAL INDUSTRY
1. Deregulation
2. Interstate Banking
3. The Impact of Electronic Technologies
 Debit Card
Smart Card
E Banking

9. International Banking & Finance
• It is an organization that invests directly in
private companies and makes or guarantees
loans to private investors.
• It is affiliated t the World Bank and is part of
the World Bank Group Abbreviation.
Exchange Rate:
• Rate at which one currency exchanges against
other currency.

10. International Trade
• The business of buying ad selling commodities
beyond national borders.
Government Influences on Exchange Rates:
• A nation’s economic authorities take action to
correct its balance of payments condition.
Typically they will devalue or revalue the
nation’s currency.

11. International Bank Structure
• The World Bank & The IMF
To promote the stability of exchange rates
To provide temporary, short term loans to
member countries
To encourage members to cooperate on
International monetary issue.
To encourage development of a system for
international payments.