Kinds of money, functions of money, Supply of money along with inflation. Banking with commercial functions of banking , Central Bank and its functions have been presented in the slides.
Money was not used in early history as exchanges were done through bartering. Definitions of money include anything widely accepted for payments or that acts as a medium of exchange, store of value, and unit of account. Money serves four main functions: medium of exchange, store of value, unit of account, and deferred payment. The money supply is the total amount of money available in an economy and is composed of currency and demand deposits. It is determined by the monetary base and money multiplier. Money supply measurements include M0, M1, M2, M3, and M4. Inflation is a sustained increase in the general price level and can be caused by an increase in the money supply, decrease in goods supply
The document provides an overview of the money supply and the Federal Reserve System in the United States. It defines different measures of money including M1, M2 and discusses how banks create money through fractional reserve banking. It then explains the role of the Federal Reserve in controlling the money supply through tools like required reserve ratios, open market operations, and interest rates.
This document provides an overview of money and banking concepts including:
1. The definition and functions of money as a medium of exchange, store of value, and measure of value.
2. The roles of central banks in managing monetary policy and commercial banks in accepting deposits and issuing loans.
3. Types of bank accounts, loans, and payment methods like cash, checks, and debit/credit cards.
The document provides an overview of money markets, including key definitions and concepts. Money markets are a segment of the financial market where short-term, highly liquid financial instruments are traded. They allow participants to borrow and lend for short periods ranging from a few days to under a year. Common money market instruments include treasury bills, commercial paper, certificates of deposit, and banker's acceptances, which are all very short-term, safe investments. Money markets serve important functions like financing trade and industry while also providing investment opportunities.
Central banks play a key role in maintaining financial and economic stability within a country. They regulate other banks, control inflation, and formulate economic policies. Central banks have two main functions: as the government's bank and as the banker's bank. As the government's bank, central banks issue currency, control credit levels, manage foreign exchange and public debt, and develop other financial institutions. As the banker's bank, central banks serve as the lender of last resort, facilitate check clearing between banks, set reserve requirements, and provide advisory services to other banks. There are various methods for central banks to issue currency, with the proportional reserve system now being the most widely adopted internationally.
Credit Creation With Modern and Fresh Look.This PPt tells about the method of Credit Creation.I think this will help you a lot.I have made possible to enhance the look this will increase your impression in front of your classmates,business partners and your seniors.Thanks :-)
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
The document provides an overview of a commercial bank's balance sheet. It explains that the balance sheet shows a bank's assets on the right side and liabilities on the left side, and that assets must equal liabilities plus capital. Major assets include cash, balances with other banks, loans and investments. Major liabilities include deposits from customers, borrowings from other banks, and capital from shareholders. The balance sheet gives an overall picture of the bank's financial position and performance.
Money was not used in early history as exchanges were done through bartering. Definitions of money include anything widely accepted for payments or that acts as a medium of exchange, store of value, and unit of account. Money serves four main functions: medium of exchange, store of value, unit of account, and deferred payment. The money supply is the total amount of money available in an economy and is composed of currency and demand deposits. It is determined by the monetary base and money multiplier. Money supply measurements include M0, M1, M2, M3, and M4. Inflation is a sustained increase in the general price level and can be caused by an increase in the money supply, decrease in goods supply
The document provides an overview of the money supply and the Federal Reserve System in the United States. It defines different measures of money including M1, M2 and discusses how banks create money through fractional reserve banking. It then explains the role of the Federal Reserve in controlling the money supply through tools like required reserve ratios, open market operations, and interest rates.
This document provides an overview of money and banking concepts including:
1. The definition and functions of money as a medium of exchange, store of value, and measure of value.
2. The roles of central banks in managing monetary policy and commercial banks in accepting deposits and issuing loans.
3. Types of bank accounts, loans, and payment methods like cash, checks, and debit/credit cards.
The document provides an overview of money markets, including key definitions and concepts. Money markets are a segment of the financial market where short-term, highly liquid financial instruments are traded. They allow participants to borrow and lend for short periods ranging from a few days to under a year. Common money market instruments include treasury bills, commercial paper, certificates of deposit, and banker's acceptances, which are all very short-term, safe investments. Money markets serve important functions like financing trade and industry while also providing investment opportunities.
Central banks play a key role in maintaining financial and economic stability within a country. They regulate other banks, control inflation, and formulate economic policies. Central banks have two main functions: as the government's bank and as the banker's bank. As the government's bank, central banks issue currency, control credit levels, manage foreign exchange and public debt, and develop other financial institutions. As the banker's bank, central banks serve as the lender of last resort, facilitate check clearing between banks, set reserve requirements, and provide advisory services to other banks. There are various methods for central banks to issue currency, with the proportional reserve system now being the most widely adopted internationally.
Credit Creation With Modern and Fresh Look.This PPt tells about the method of Credit Creation.I think this will help you a lot.I have made possible to enhance the look this will increase your impression in front of your classmates,business partners and your seniors.Thanks :-)
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
The document provides an overview of a commercial bank's balance sheet. It explains that the balance sheet shows a bank's assets on the right side and liabilities on the left side, and that assets must equal liabilities plus capital. Major assets include cash, balances with other banks, loans and investments. Major liabilities include deposits from customers, borrowings from other banks, and capital from shareholders. The balance sheet gives an overall picture of the bank's financial position and performance.
A financial market is a market in which peopletrade financial securities, commodities, and value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural products.
From simple corporate bonds, and government securities to derivatives, credit default swaps, and mortgaged back securities this seminar from Saunders Learning Group covers all of the details of fixed income investing. Contact at us 316-680-6482 or floyd@floydsaunders.com to arrange a seminar today.
International banking involves financial transactions that cross national borders. It emerged as a distinct industry in the 1970s as most banks began expanding beyond their domestic markets. An international bank provides services like accounts and loans to foreign clients, including individuals and companies. It occupies an important role in the global economy by facilitating international banking activities through access to capital, technology, and networks. International banking offers advantages like lower costs, knowledge of foreign markets, prestige, regulatory benefits, and opportunities for growth and risk reduction through diversification. Services provided include trade financing, foreign exchange, investment banking, personal and business banking, and corporate services.
Banking and management of financial institutionsOnline
The document discusses various aspects of commercial bank financial management, including analyzing a bank's balance sheet with assets like loans and reserves on the left and liabilities like deposits on the right, how banks engage in asset transformation by borrowing short-term via deposits and lending long-term, and the goals of liquidity, asset, liability, and capital management to maximize profits while minimizing risks.
The document discusses the role and functions of central banks. It begins by explaining that a central bank acts as the leader of the money market in a country, supervising commercial banks and financial institutions. As a bank of issue, it is the sole issuer of currency and maintains close ties to the government.
It then contrasts central banks with commercial banks, noting that central banks do not aim to generate profits but rather control the banking system and support economic policy. Central banks are generally government organizations. The document proceeds to outline various functions of central banks, including acting as a bank of last resort, managing foreign exchange reserves, implementing monetary policy, and using various tools like bank rates, open market operations, and cash reserve ratios to influence
Money serves several essential economic functions according to the document. It acts as a medium of exchange, replacing bartering, allowing goods and services to be traded. Money also serves as a unit of account, allowing prices of goods and services to be denominated in a standard unit. Additionally, money acts as a store of value, allowing purchasing power to be saved and transferred over time. The document discusses different definitions and classifications of money, including definitions based on what constitutes money, whether it is currency in circulation or includes other assets, and classifications based on the nature and legality of various forms of money.
DFHI was formed in 1988 as a subsidiary of SBI to develop the Indian money market and provide liquidity to money market instruments. It commenced operations with Rs. 200 crores in paid-up capital contributed by RBI, public sector banks, and financial institutions. DFHI's main objectives are to increase transactions in the money market and facilitate short-term liquidity management. It deals in government securities, treasury bills, certificates of deposit, commercial papers, and various call/notice money market instruments. DFHI plays an important role in discounting, purchasing, and selling these instruments to promote secondary market activity and improve money market liquidity.
Banks play several key roles in financial markets:
1) They perform maturity transformation by collecting short-term deposits and investing in long-term assets, allowing risk sharing but also exposing them to liquidity risk.
2) Banks help solve informational problems through delegated monitoring of borrowers.
3) In some countries, banks act as outside monitors of large corporations through equity ownership, solving agency problems where market mechanisms are weak.
4) While enabling risk sharing, banks' interlinkages can also spread financial shocks through contagion effects.
The document discusses various definitions and concepts related to money:
1. It outlines traditional, Friedman's, and Gurley-Shaw definitions of money which increasingly broaden the scope of money to include near-money assets.
2. It describes the three main functions of money as a medium of exchange, unit of account, and store of value.
3. Theories of neutrality and non-neutrality of money are discussed in relation to prices, interest rates, and economic output in the short and long run.
4. Quantity theories of money like Fisher's equation and the Cambridge cash balance approach link the money supply to the price level and value of money through demand for real cash balances
History of money and types with features. SamiuR RahmaN
This document discusses the history and functions of money. It begins by outlining the evolution of money from early bartering systems to modern digital currencies. Some of the milestones mentioned include the use of shells as early as 1200 BC, the development of coinage around 600 BC, the introduction of paper money in China in the 9th century, and more recent innovations like credit cards and digital payment systems.
The document then examines different types of money such as commodity money, metallic money, paper money, bank credit, and electronic money. It also outlines the key functions of money as a medium of exchange, unit of value, standard for deferred payments, store of value, and basis for the credit system. Finally, the document
The document discusses the evolution of money from barter systems to modern forms. It begins by describing barter systems and their limitations, then moves to commodity money like precious metals. It describes how goldsmith receipts evolved into paper money and different types of paper currency. Later forms of money discussed include bank money, plastic money, and different central banking approaches to currency issuance like commodity backing and reserve requirements. The document provides an overview of the development of money from early barter to modern monetary systems.
Money refers to anything that is generally accepted as payment. It functions as a medium of exchange, unit of account, and store of value. Money includes currency, deposits, and other liquid assets. The money supply has evolved from commodity money to various forms like paper currency, checks, and electronic payments. Measuring the money supply includes aggregates like M1, M2, and M3 that capture currencies and increasingly liquid assets.
Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system.
INTERNATIONAL ARBITRAGE & INTEREST RATE PARITYICAB
1) International arbitrage involves capitalizing on price discrepancies between currencies in different locations without taking on risk. Locational arbitrage occurs when a currency can be bought cheaper in one location and immediately sold at a higher price elsewhere.
2) Triangular arbitrage exploits temporary differences between cross-exchange rates of three currencies. Covered interest arbitrage takes advantage of interest rate differentials between countries while hedging against exchange rate risk.
3) Interest rate parity exists when the forward exchange rate offsets the interest rate advantage of one country over another, eliminating riskless profits from covered interest arbitrage. This equalizes returns between countries.
The document provides an introduction to international finance. It discusses that international finance is different than domestic finance due to foreign exchange and political risks, market imperfections, and expanded opportunity sets when operating globally. Effective international financial management requires controlling risks, managing imperfections, and maximizing opportunities while pursuing the goal of shareholder wealth maximization. Globalization trends like increased trade liberalization, financial market integration, and the emergence of the Euro as a global currency have further integrated the world economy.
The foreign exchange market is the largest financial market in the world, with over $4 trillion traded daily. It allows currencies to be exchanged between countries, facilitating international trade and investment. The market involves commercial banks, central banks, brokers, and other entities buying and selling currencies constantly. The most heavily traded currencies are the US dollar, euro, Japanese yen, British pound, and Australian dollar. Participants trade in spot markets for immediate exchange or forward markets for future delivery. Factors like economic performance, interest rates, trade balances, and political events influence exchange rates between currencies.
A bond issued in a country or currency other than that of the investor or broker. They include Eurobonds, which are issued in a foreign currency, foreign bonds, which are issued by a foreign government or corporation in the domestic market, and global bonds, which are issued in both domestic and international markets.
Retail banking provides financial services to individual consumers rather than businesses. Services include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit. Retail banks offer loans for personal, home, vehicle, education, and farm equipment purposes. They also provide services like bill payment, electronic funds transfer, travelers cheques, foreign currency exchange, NRI bank accounts, distribution channels like branches and ATMs, and demat account operations.
A fantastic PPT on a very important and scoring topic. A quick and easy explanation of the chapter Money & Banking. It has got all the material information required to enhance one's knowledge about the topic. Excellent and interesting facts. HAPPY LEARNING !!
The document provides information about foreign exchange rates, including definitions and concepts. It includes:
1) Definitions of key foreign exchange terms like spot exchange rate, forward exchange rate, and floating exchange rate system.
2) Details about where most foreign exchange occurs (banks in London, New York, and Tokyo), who trades currency (banks), and what drives demand for foreign exchange (purchases abroad).
3) A brief overview of currency trading, exchange rate risk, hedging, speculation, and forward contracts.
Money takes many forms and serves several important functions in modern societies. It acts as a medium of exchange, unit of account, and store of value. Common forms of money today include currency and bank deposits. Credit is a way for one party to provide resources to another party who does not pay back immediately but arranges to repay the resources later, possibly with interest. Banks play an important role by accepting deposits from customers and loaning out a portion of those deposits to earn interest while maintaining enough on hand to satisfy customer needs.
A financial market is a market in which peopletrade financial securities, commodities, and value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural products.
From simple corporate bonds, and government securities to derivatives, credit default swaps, and mortgaged back securities this seminar from Saunders Learning Group covers all of the details of fixed income investing. Contact at us 316-680-6482 or floyd@floydsaunders.com to arrange a seminar today.
International banking involves financial transactions that cross national borders. It emerged as a distinct industry in the 1970s as most banks began expanding beyond their domestic markets. An international bank provides services like accounts and loans to foreign clients, including individuals and companies. It occupies an important role in the global economy by facilitating international banking activities through access to capital, technology, and networks. International banking offers advantages like lower costs, knowledge of foreign markets, prestige, regulatory benefits, and opportunities for growth and risk reduction through diversification. Services provided include trade financing, foreign exchange, investment banking, personal and business banking, and corporate services.
Banking and management of financial institutionsOnline
The document discusses various aspects of commercial bank financial management, including analyzing a bank's balance sheet with assets like loans and reserves on the left and liabilities like deposits on the right, how banks engage in asset transformation by borrowing short-term via deposits and lending long-term, and the goals of liquidity, asset, liability, and capital management to maximize profits while minimizing risks.
The document discusses the role and functions of central banks. It begins by explaining that a central bank acts as the leader of the money market in a country, supervising commercial banks and financial institutions. As a bank of issue, it is the sole issuer of currency and maintains close ties to the government.
It then contrasts central banks with commercial banks, noting that central banks do not aim to generate profits but rather control the banking system and support economic policy. Central banks are generally government organizations. The document proceeds to outline various functions of central banks, including acting as a bank of last resort, managing foreign exchange reserves, implementing monetary policy, and using various tools like bank rates, open market operations, and cash reserve ratios to influence
Money serves several essential economic functions according to the document. It acts as a medium of exchange, replacing bartering, allowing goods and services to be traded. Money also serves as a unit of account, allowing prices of goods and services to be denominated in a standard unit. Additionally, money acts as a store of value, allowing purchasing power to be saved and transferred over time. The document discusses different definitions and classifications of money, including definitions based on what constitutes money, whether it is currency in circulation or includes other assets, and classifications based on the nature and legality of various forms of money.
DFHI was formed in 1988 as a subsidiary of SBI to develop the Indian money market and provide liquidity to money market instruments. It commenced operations with Rs. 200 crores in paid-up capital contributed by RBI, public sector banks, and financial institutions. DFHI's main objectives are to increase transactions in the money market and facilitate short-term liquidity management. It deals in government securities, treasury bills, certificates of deposit, commercial papers, and various call/notice money market instruments. DFHI plays an important role in discounting, purchasing, and selling these instruments to promote secondary market activity and improve money market liquidity.
Banks play several key roles in financial markets:
1) They perform maturity transformation by collecting short-term deposits and investing in long-term assets, allowing risk sharing but also exposing them to liquidity risk.
2) Banks help solve informational problems through delegated monitoring of borrowers.
3) In some countries, banks act as outside monitors of large corporations through equity ownership, solving agency problems where market mechanisms are weak.
4) While enabling risk sharing, banks' interlinkages can also spread financial shocks through contagion effects.
The document discusses various definitions and concepts related to money:
1. It outlines traditional, Friedman's, and Gurley-Shaw definitions of money which increasingly broaden the scope of money to include near-money assets.
2. It describes the three main functions of money as a medium of exchange, unit of account, and store of value.
3. Theories of neutrality and non-neutrality of money are discussed in relation to prices, interest rates, and economic output in the short and long run.
4. Quantity theories of money like Fisher's equation and the Cambridge cash balance approach link the money supply to the price level and value of money through demand for real cash balances
History of money and types with features. SamiuR RahmaN
This document discusses the history and functions of money. It begins by outlining the evolution of money from early bartering systems to modern digital currencies. Some of the milestones mentioned include the use of shells as early as 1200 BC, the development of coinage around 600 BC, the introduction of paper money in China in the 9th century, and more recent innovations like credit cards and digital payment systems.
The document then examines different types of money such as commodity money, metallic money, paper money, bank credit, and electronic money. It also outlines the key functions of money as a medium of exchange, unit of value, standard for deferred payments, store of value, and basis for the credit system. Finally, the document
The document discusses the evolution of money from barter systems to modern forms. It begins by describing barter systems and their limitations, then moves to commodity money like precious metals. It describes how goldsmith receipts evolved into paper money and different types of paper currency. Later forms of money discussed include bank money, plastic money, and different central banking approaches to currency issuance like commodity backing and reserve requirements. The document provides an overview of the development of money from early barter to modern monetary systems.
Money refers to anything that is generally accepted as payment. It functions as a medium of exchange, unit of account, and store of value. Money includes currency, deposits, and other liquid assets. The money supply has evolved from commodity money to various forms like paper currency, checks, and electronic payments. Measuring the money supply includes aggregates like M1, M2, and M3 that capture currencies and increasingly liquid assets.
Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system.
INTERNATIONAL ARBITRAGE & INTEREST RATE PARITYICAB
1) International arbitrage involves capitalizing on price discrepancies between currencies in different locations without taking on risk. Locational arbitrage occurs when a currency can be bought cheaper in one location and immediately sold at a higher price elsewhere.
2) Triangular arbitrage exploits temporary differences between cross-exchange rates of three currencies. Covered interest arbitrage takes advantage of interest rate differentials between countries while hedging against exchange rate risk.
3) Interest rate parity exists when the forward exchange rate offsets the interest rate advantage of one country over another, eliminating riskless profits from covered interest arbitrage. This equalizes returns between countries.
The document provides an introduction to international finance. It discusses that international finance is different than domestic finance due to foreign exchange and political risks, market imperfections, and expanded opportunity sets when operating globally. Effective international financial management requires controlling risks, managing imperfections, and maximizing opportunities while pursuing the goal of shareholder wealth maximization. Globalization trends like increased trade liberalization, financial market integration, and the emergence of the Euro as a global currency have further integrated the world economy.
The foreign exchange market is the largest financial market in the world, with over $4 trillion traded daily. It allows currencies to be exchanged between countries, facilitating international trade and investment. The market involves commercial banks, central banks, brokers, and other entities buying and selling currencies constantly. The most heavily traded currencies are the US dollar, euro, Japanese yen, British pound, and Australian dollar. Participants trade in spot markets for immediate exchange or forward markets for future delivery. Factors like economic performance, interest rates, trade balances, and political events influence exchange rates between currencies.
A bond issued in a country or currency other than that of the investor or broker. They include Eurobonds, which are issued in a foreign currency, foreign bonds, which are issued by a foreign government or corporation in the domestic market, and global bonds, which are issued in both domestic and international markets.
Retail banking provides financial services to individual consumers rather than businesses. Services include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit. Retail banks offer loans for personal, home, vehicle, education, and farm equipment purposes. They also provide services like bill payment, electronic funds transfer, travelers cheques, foreign currency exchange, NRI bank accounts, distribution channels like branches and ATMs, and demat account operations.
A fantastic PPT on a very important and scoring topic. A quick and easy explanation of the chapter Money & Banking. It has got all the material information required to enhance one's knowledge about the topic. Excellent and interesting facts. HAPPY LEARNING !!
The document provides information about foreign exchange rates, including definitions and concepts. It includes:
1) Definitions of key foreign exchange terms like spot exchange rate, forward exchange rate, and floating exchange rate system.
2) Details about where most foreign exchange occurs (banks in London, New York, and Tokyo), who trades currency (banks), and what drives demand for foreign exchange (purchases abroad).
3) A brief overview of currency trading, exchange rate risk, hedging, speculation, and forward contracts.
Money takes many forms and serves several important functions in modern societies. It acts as a medium of exchange, unit of account, and store of value. Common forms of money today include currency and bank deposits. Credit is a way for one party to provide resources to another party who does not pay back immediately but arranges to repay the resources later, possibly with interest. Banks play an important role by accepting deposits from customers and loaning out a portion of those deposits to earn interest while maintaining enough on hand to satisfy customer needs.
This document provides an overview of commercial banking. It begins by defining commercial banks as financial institutions that accept deposits from the public and provide loans for investment, with the aim of earning profit. It describes their primary functions as accepting deposits and advancing loans through various products and services. It also discusses secondary functions like agency services, utility services, fund transfers, and their role in credit creation. The document then covers types of commercial banks, significance, money multiplier, challenges, and shifts in the industry. It concludes by presenting a case study on Punjab National Bank covering its non-performing assets, 2018 fraud scandal, regulatory response, and recommendations.
The document provides an overview of the monetary system, including:
1) It defines money as a medium of exchange used to purchase goods and services, as officially issued coins, notes, and currency.
2) It outlines the three main functions of money: as a medium of exchange, a unit of account, and a store of value.
3) It describes the different kinds of money like metallic, paper, and private bank money as well as types like commodity, fiat, and fiduciary money.
This document defines key concepts related to money, money supply, and banking in India. It discusses that money supply refers to the total stock of money held by the public at a given time, and includes currency and demand deposits. The central bank of India, called the Reserve Bank of India (RBI), acts as the banker, lender of last resort, and regulator of other commercial banks. It controls money supply through various instruments like bank rate, cash reserve ratio, and open market operations. Commercial banks accept deposits and provide loans, creating money through demand deposits, while the RBI issues currency and oversees the banking system.
The document provides an overview of the evolution of money and the monetary system in India. It discusses the development from barter systems to various forms of money like commodity money, metallic money, paper money, and digital money. It describes the functions of money as a medium of exchange, store of value, and standard of deferred payments. It also discusses key concepts like the money supply and its components, sources of money supply, the role of the central bank (Reserve Bank of India) and commercial banks in money creation through credit. It provides definitions of legal tender money and different measures of money supply used in India.
The document discusses several key concepts related to macroeconomic policy including:
1) The functions and supply of money, including different types of monetary aggregates (M1, M2, M3).
2) The roles and tools of central banks in conducting monetary policy, including open market operations and reserve requirements.
3) How monetary policy is transmitted through interest rates and aggregate demand to impact output and prices.
4) Fiscal policy tools like government spending and taxation and how they can be used in a discretionary manner for stabilization.
5) The multiplier effect whereby an initial change in spending is magnified in its impact on aggregate demand and output.
Corporate Banking is responsible for managing relationships with major corporate and institutional clients by delivering a comprehensive range of financial products and services. This involves working closely with specialists across treasury, capital markets, transaction banking, and other areas. Corporate Banking is also responsible for originating and managing credit and lending products.
The document discusses various topics related to money and banking, including:
1. The evolution of different forms of money such as commodity money, metallic money, paper money, and bank money. It also discusses the inconveniences of barter systems and how money addressed these issues.
2. The key functions of money as a medium of exchange, store of value, and unit of account. It also discusses different types and classifications of money.
3. The role of commercial banks in the money creation process through credit extension and how the money multiplier works. It provides an example to illustrate how initial deposits can be leveraged through loans and secondary deposits to expand the money supply.
The document discusses financial markets and money market instruments. It defines a financial market as a market for creating and exchanging financial assets. It also defines the money market as a market for short-term funds dealing in monetary assets with maturity of less than one year. Some key money market instruments discussed include treasury bills, commercial paper, certificates of deposit, and commercial bills.
1) A commercial bill is a document arising from a genuine trade transaction where goods are sold on credit. It contains a written order from the seller to the buyer, directing the buyer to pay a specified sum to a specified person after a set time period.
2) There are different types of bills, including demand bills (payable at sight), usince bills (payable after a time period), clean bills (without documents), and documentary bills (accompanied by documents of title). Bills can also be classified as inland (drawn within India) or foreign (drawn outside India).
3) The bill market consists of the discount market, where banks discount bills, and the acceptance market, where banks accept
- Banks act as financial intermediaries that accept deposits from savers and lend funds to borrowers. The main types of banks are central banks, commercial banks, and development banks.
- Commercial banks solicit deposits and use those funds to issue loans. Their main objective is profit-making. They accept various types of deposits like demand deposits, savings accounts, and fixed/time deposits.
- In addition to deposit and lending functions, commercial banks facilitate payments through instruments like checks, transfer funds, provide agency services, and offer other financial services. They also engage in credit creation by lending out deposits received, thereby expanding the money supply.
The document provides an overview of financial management. It defines financial management as planning and controlling a company's finances to achieve its objectives in the most cost effective way. It discusses various short term and long term sources of finance, traditional and modern approaches to financial management, and key concepts like time value of money, risk-return tradeoff, and types of interest rates. It also provides a brief introduction to the Indian capital market and its primary and secondary segments.
This document provides an overview of the financial services industry and related concepts. It discusses:
1. The key players in the industry including lenders, intermediaries, borrowers, and markets.
2. Different types of securities and how they work.
3. How companies can raise capital through various financial instruments like equity, bonds, and bank loans.
4. Key terms related to banking like balance sheets, capital ratios, and liquidity ratios.
The document discusses various types of bank income, including interest income (fund-based income) and non-interest income (non-fund based income). It notes that interest income is generated from the spread between interest banks earn on loans and pay on deposits. The main components of interest income are income from lending money and investments. Non-interest income includes fees from services like remittances, trading commissions, and wealth management. As net interest margins have declined, banks have increasingly focused on fee-based non-interest income to diversify their revenue streams and reduce risk.
This document discusses commercial banks and non-banking financial institutions. It defines commercial banks as financial institutions that accept deposits and provide loans. It describes their key functions like accepting deposits, providing loans, credit creation, fund transfers, and overdraft facilities. It also discusses recent trends in commercial banking like electronic payment services. The document then defines non-banking financial institutions and describes their role in mobilizing resources and providing long-term financing to support economic development.
Cash and marketable securities managementNikhil Soares
Cash management and marketable securities are key areas of working capital management. Cash is held for transactional, precautionary and speculative motives to meet routine payments and unexpected needs. The objectives of cash management are to meet payment schedules while minimizing idle cash balances. Factors determining cash needs include synchronizing cash inflows and outflows, costs of shortfalls, and excess cash balances. Marketable securities alternatives that provide liquidity include treasury bills, commercial paper, certificates of deposit, bankers' acceptances, money market funds and intercorporate deposits.
Commercial banks accept deposits from the public, make funds available to those who need them through various loans, help facilitate money transfers, and engage in credit creation. They perform traditional banking functions like accepting deposits, advancing loans, and providing checking services. Commercial banks also serve as intermediaries by facilitating payments, collecting instruments, purchasing and selling securities, and providing other agency services for customers.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
2. Meaning
• Money, in simple terms, is a medium of exchange. It is instrumental in
the exchange of goods and/or services.
• Further, money is the most liquid assets among all our assets. It also has
general acceptability as a means of payment along with its liquid nature.
• Usually, a country’s Central Bank or Government creates and issues
money. Also called cash money, this is a legal tender and hence there is a
legal compulsion on citizens to accept it.
3. Kinds of Money
• The 4 different types of money as classified by economists are commercial
money, fiduciary money, fiat money, and commodity money.
• Commodity money
• Money whose value comes from a commodity of which it is made is known as
commodity money.
• Commercial money
• The portion of a currency which is made of book money – debt generated by
commercial banks is known as commercial bank money.
• Fiat money
• A government-issued currency that is not backed by a commodity such as gold
is known as Fiat Money
• Fiduciary money
• Payment on the basis of trust but not on the basis of any order of the
government is known as fiduciary money.
4. Functions of Money
• Primary functions of money
• The primary function of money includes money as a medium of exchange and money as a
measure of value.
(a) As a medium of exchange, it refers to a function of money in which money is considered a
mode of exchanging goods. This function of money solved the main problem of the barter system
which was a double coincidence of wants.
(b) As a measure of value, it refers to a function of money that helps in determining the value of
goods and services. Money is taken as the common denominator while measuring the value of
goods and services in monetary terms.
5. • Secondary functions of money
• The secondary function of money includes money as a store of value and money as a standard of
deferred payment.
(a) As a store of value, it refers to the function of money that helps individuals in storing their
wealth in the form of money. Therefore, money acts as an asset that sustains value over a period of
Time.
(b) As a standard of deferred payment, it refers to one of the most important functions of money.
Deferred payments refer to payments made on loans, salaries, pensions, insurance premiums,
interests, and rents. The necessary condition for deferred payment is that the amount of repaid money
should be the same as it was at the time of purchase of the good. Since all the goods and services can
be expressed in terms of money, it makes future payments easy and functional.
6. Contingent functions of money
(a) Distribution of national income: Money helps in the optimum distribution of national income
among
different factors of production by generating factor incomes like rent, interest, wage, and profit.
(b) Basis of credit creation: Credit creation by commercial banks is not possible without money money
as a store of value has encouraged savings by people in the form of demand deposits in the banks which
are used by commercial banks to create credit.
(c) Maximization of satisfaction: Money helps consumers and producers in maximizing their
satisfaction by measuring the value of everything in terms of money. A consumer derives maximum
satisfaction by equating the price (expressed in terms of money) of each commodity with its marginal
utility (satisfaction). Similarly, a producer maximizes his satisfaction (profit) by equating the marginal
productivity of a factor with a price of such factor.
7. (d) Increases productivity of assets: Money increases the
productivity of capital as it is the most liquid asset and can
be put to alternative uses. Due to liquidity of money, capital
can be easily transferred from less productive uses to more
productive uses.
8. Supply of Money
Reserve Money (M0): Other names include High-Powered Money, Financial Base, Base Money,
etc. M0 is calculated as follows: Money in circulation + Bankers' deposits + Other deposits with RBI.
It is the economic foundation's currency.
Narrow Money (M1): M1 equals money in circulation plus demand deposits in the banking
system (current and savings accounts) plus additional deposits with the RBI.
Narrow Money (M2): Post Office Savings, Bank Savings Deposits added to M1 equals M2.
Broad Money (M3): M3 equals M1 plus time deposits made with banks.
Broad Money (M4): M4 is equal to M3 plus any deposits made at post office savings banks.
M4 = M3 + Total Deposits with Post Office
As the total deposits with the post office are negligible there is not much difference between M3
and M4
9. Inflation
Inflation is referred to as the
situation when the price level of
goods and services rise, which leads
to decrease in the purchasing power
in the economy or in other words
decreases the buying power of the
money.
10. Demand pull and cost push inflation
Demand pull inflation
• Inflation that occurs due to an increase in
aggregate demand is referred to as
demand-pull inflation.
Increase in Aggregate demand.
Rise in aggregate demand
• The beginning of price inflation
• Monetary factors and real factors
• Occurs in most economies of the world.
Cost-push inflation
• Inflation that results from a decline in aggregate
supply due to external factors is referred to as
cost-push inflation.
• In cost-push inflation the aggregate demand
remains the same.
• Rise in price of inputs like raw materials, labor,
etc.
• The idea that inflation is difficult to stop, once it
has started
• Caused by business groups of society who
respond to rise in costs of the product
• Cost push inflation is not that relevant in current
times.
12. Functions of commercial banks
• A commercial bank is a kind of financial institution that carries all the operations
related to the deposit and withdrawal of money for the general public, providing loans
for investment, and other such activities. These banks are profit-making institutions
and do business only to make a profit.
• A) Primary functions
Accepts deposits: The bank takes deposits in the form of savings, current, and
fixed deposits. The surplus balances collected from the firm and individuals are lent to
the temporary requirements of the commercial transactions.
Provides loans and advances: Another critical function of this bank is to offer loans
and advances to entrepreneurs and business people, and collect interest. For every bank,
it is the primary source of making profits. In this process, a bank retains a small number
of deposits as a reserve and offers (lends) the remaining amount to the borrowers in
demand loans, overdrafts, cash credit, short-run loans, and more such banks.
Credit cash: When a customer is provided with credit or a loan, they are not provided
with liquid cash. First, a bank account is opened for the customer and then the money is
transferred to the account. This process allows the bank to create money.
13. • Secondary functions
• Discounting bills of exchange: It is a written agreement
acknowledging the amount of money to be paid against the goods
purchased at a given point in time in the future. The amount can also be
cleared before the quoted time through a discounting method of a
commercial bank.
Overdraft facility: It is an advance given to a customer by keeping the
current account to overdraw up to the given limit.
Purchasing and selling securities: The bank offers you the facility of
selling and buying the securities.
Locker facilities: A bank provides locker facilities to the customers to
keep their valuables or documents safely. The banks charge a minimum of
an annual fee for this service.
Paying and gathering the credit: It uses different instruments like
14. Credit creation process
• The process of credit creation is considered one of the most important functions performed by a commercial
bank.
The central bank of a country is responsible for ensuring the supply of money in the economy by circulating the
currency. It also ensures that for fulfilling all the transactions, there should be an appropriate currency in the
system.
This process cannot be implemented by the central bank alone. For this, they require the help of commercial
banks and their reserves.
Commercial banks perform the function of credit creation in an economy. Therefore, the money that is created
by commercial banks is known as credit money.
This is achieved by commercial banks in the form of purchasing securities and providing loans. Commercial
banks facilitate the loans by utilizing the deposits that are obtained from the public.
There are restrictions on the amount of money that can provide credits from the total deposits that a bank
obtains from the public.
As per the rule, commercial banks need to maintain a certain portion of the public deposits as reserves with the
central bank that will be used for meeting the immediate cash requirements of the depositors.
15. Limitations of credit creation process
Cash amount present in the bank
The higher the number of deposits made by the public, the higher credit creation
from commercial banks can be seen. However, there is a certain limit on the
amount of cash that can be held by the banks at a time.
This limit is determined by the central bank, as the central bank may contract or
expand this limit by selling or purchasing securities.
Cash reserve ratio or CRR
It refers to the amount of money in the form of reserve that needs to be kept with
the central banks by the commercial banks. This amount is used for meeting the
cash requirements of the users. Any fall in the CRR will lead to more credit
creation.
16. Excess reserve
This takes place when a country faces recession, at that time the banks find it
conducive in maintaining reserves in place of lending that leads to less credit
creation
Prevalent business conditions
If an economy is witnessing a depression, then the businesses will not be seeking
credit that leads to contraction of credit creation. Whereas, if a nation is
prospering, then the businesses will seek new funds in the form of credit from
the banks that would lead to credit creation.
18. Functions of the Central Bank
The functions of a central bank can be discussed as follows:
1. Currency regulator or bank of issue
2. Bank to the government
3. Custodian of Cash reserves
4. Custodian of International Currency
5. Lender of last resort
6. Clearing house for transfer and settlement
7. Controller of credit
8. Protecting depositors’ interests
19. • Custodian of Cash reserves: It is a practice of the commercial banks of a country to
keep a part of their cash balances in the form of deposits with the central bank.
Commercial banks can draw that balance when the requirement for cash is high and
pay back the same when there is less requirement for cash.
• It is for this reason that the central bank is regarded as the banker’s bank. The central
bank also plays an important role in the credit creation policy of commercial banks.
• Custodian of International currency: An important function of the central bank is to
maintain a minimum balance of foreign currency. The purpose of maintaining such a
balance is to manage sudden or emergency requirements of foreign reserves and also
to overcome any adverse deficits of the balance of payments.
• Lender of last resort: The central bank acts as a lender of last resort by providing
money to its member banks in times of cash crunch. It performs this function by
providing loans against securities, treasury bills and also by rediscounting bills.
20. • Clearing house for transfer and settlement: Central bank acts as a
clearing house of the commercial banks and helps in the settling of
• mutual indebtedness of the commercial banks. In a clearing house, the
representatives of different banks meet and settle the interbank
payments.
• Controller of credit: Central banks also function as the controller of
credit in the economy. It happens that commercial banks create a lot of
credit in the economy which increases inflation. The central bank
controls the way credit creation by commercial banks is done by
engaging in open market operations.
• market operations or bringing about a change in the CRR to control the
process of credit creation by commercial banks.
• Protecting depositors’ interests: Central bank also needs to keep an
eye on the functioning of the commercial banks in order to protect the
interests of depositors.
21. Regulatory role of the Central Bank - RBI
• The RBI, as a regulator, supervises the entire financial system. Thus, it restores public trust, protects interest rates, and
provides positive banking alternatives.
• Here is a breakdown of the role of RBI as a regulator in maintaining the country’s financial stability:
• Reserve Bank of India provides the license to the banks
• After this license, they have the authority to regulate their bank in India
• Foreign banks also have to take permission from the RBI to establish their branch in India
• RBI provides approval to the different operations like policy formulation, implementation of Prudential Norms, Basel – II
and III frameworks, validation of quantitative models on Credit, and so forth
• So, all the banks running currently in India must have permission from RBI first to modify their operational process
• RBI also decides the salary packages of Whole-Time Directors and Part-Time Chairpersons of Private Sector Banks and
Chief Executive Officers of Foreign Banks operating in India
• RBI also handles all the issues of Indian banks. Issues related to the liquidation of banking companies, customer service
policy issues, Anti-Money Laundering, Combating Financing of Terrorism, and so forth
• It handles all types of issues and provides appropriate guidance to resolve them
22. • the function of the RBI as a regulator of the money market is to regulate and
manage the country’s foreign exchange.
• It is in charge of the country’s currency and gold reserves.
• The foreign exchange rate reflects the demand for and supply of foreign
exchange resulting from trade and capital transactions on any given day.
• RBI works as a regulator of the money market. It also regulates the Financial
Markets Department (FMD). It also checks and regulates all the functions
which are done under the foreign exchange market. It facilitates this foreign
regulation by selling and buying foreign currency, which helps in reducing the
volatility during the time of excess demand for foreign currency in the market.
24. • SLR is the minimum percentage of deposits that a commercial bank has
to maintain in the form of liquid cash, gold or other securities. It is
basically the reserve requirement that banks are expected to keep
before offering credit to customers. The SLR is fixed by the RBI and is a
form of control over credit growth in India.
• The government uses the SLR to regulate inflation and fuel growth.
Increasing the SLR will control inflation in the economy while
decreasing the statutory liquidity rate will cause growth in the economy.
The SLR was prescribed by Section 24 (2A) of Banking Regulation Act,
1949.
25. Cash Reserve Ratio
• Cash Reserve Ratio or CRR is the minimum amount as specified by the
Central Bank, to be maintained by the Commercial banks of the public
deposits with the Central Bank.
26. Repo Rate
• Repo rate is the rate at which the central bank of a country (Reserve Bank of
India in case of India) lends money to commercial banks in the event of any
shortfall of funds. Repo rate is used by monetary authorities to control
inflation.
• In the event of inflation, central banks increase repo rate as this acts as a
disincentive for banks to borrow from the central bank. This ultimately reduces
the money supply in the economy and thus helps in arresting inflation.
• The central bank takes the contrary position in the event of a fall in inflationary
pressures. Repo and reverse repo rates form a part of the liquidity adjustment
facility.
27. Reverse Repo Rate
• Reverse Repo Rate is defined as the rate at which the Reserve Bank of
India (RBI) borrows money from banks for the short term. It is an
important monetary policy tool employed by the RBI to maintain
liquidity and check inflation in the economy. The Reverse Repo Rate
helps the RBI get money from the banks when it needs. In return, the
RBI offers attractive interest rates to them. The banks also voluntarily
park excess funds with the central bank as it provides them with an
opportunity to earn higher interest on surplus money. The Reverse Repo
Rate is decided by the Monetary Policy Committee (MPC), headed by the
RBI Governor.
28. Open Market Operations
• Open market operations are carried out by the central bank in association with commercial
banks. For conducting such operations, there is no involvement of the public.
• Government bonds are mostly bought by commercial banks, financial institutions high-net-
worth individuals, and large business corporations. All these entities maintain accounts with the
bank, and whenever these entities purchase bonds, the amount gets transferred to the central
bank.
• Thus, it can be said that open market operations have an impact on the deposits and reserves of
the bank and also plays a role in their ability to provide credit. When a central bank wants to
reduce the availability of money to the public, it will sell government bonds and securities with
the help of commercial banks.
• This step reduces the money supply in the economy and restricts banks to offer credit to
individuals. It impacts both the supply and demand of credit.
29. Qualitative methods of credit control
• Qualitative Methods of credit control refers to the monetary policy by the central bank which includes those
instruments that focus on the selected sectors of the economy to control and regulate the money supply. It
includes:
• A. Margin Requirement:
• Margin requirement refers to the difference between the current value of the security offered for the loan
(called collateral) and the value of the loan granted. It is a qualitative method of credit control adopted by the
central bank in order to stabilize the economy from inflation or deflation.
• B. Rationing of Credit:
• Rationing of credit refers to the fixation of credit quotas for different business activities which is introduced
when the flow of credit is to be checked particularly for speculative activities in the economy.
• Moral Suasion:
• Moral suasion refers to the persuasion and pressure which the central bank exerts on the member banks in
order to follow its directives. These are generally not ignored by the member banks as it comes directly from
the upper authority. The banks are advised to restrict the flow of credit during inflation and be liberal in
lending during deflation.