Money plays an important role in modern economies by serving as a medium of exchange. In India, the Reserve Bank of India authorizes and regulates currency and oversees formal lending through banks and cooperatives. However, many poor households must rely on informal lenders due to lack of access to formal credit. Self-help groups help address this by providing small loans and other support to their members. Expanding access to affordable formal loans and increasing self-help group programs could help reduce dependence on the costly informal credit sector.
Medium of exchange and money developed to overcome the limitations of barter systems. Money takes the form of coins, currency notes, and bank deposits. Banks act as intermediaries between depositors and borrowers, lending out most deposits while keeping a small reserve. Formal credit sources include banks and cooperatives, while informal sources are money lenders, merchants, and relatives. Self-help groups help the poor access credit at reasonable rates by pooling savings and guaranteeing each other's loans.
This presentation tells you about the various aspects of money and also the credit i.e,loan business of the banks and the people in the formal and the informal sectors.
CBSE NCERT SOCIAL SCIENCE HISTORY GEOGRAPHY ECONOMICS POLITICAL SCIENCE CLASS 10 CHAPTER money and credit barter system modern form of noney formal and informal sectors of credit collateral terms of credit
The document provides information about loans and advances at Adarsh Cooperative Bank Udaipur. It discusses the different types of loans offered, including home loans, personal loans, and plot loans. It outlines the eligibility criteria, loan amounts, tenure and process for obtaining a plot loan. Key requirements for a plot loan application include documents proving identity, address, income and ownership of the land. The bank protects customer information and can terminate services if confidentiality is breached.
Comparative Study of Loans and Advances of Commercial Banks.docxNoaman Akbar
This document discusses loans and advances provided by commercial banks. It begins by introducing the important role of banks in economic development and defines key terms like loans, advances, borrowing and lending. It then discusses the main differences between loans and advances - loans must be paid back over a set period of time according to an agreed schedule, while advances can be repaid in full within a year. The objectives are to find the key differences between loans and advances and discuss their advantages and disadvantages. The study will focus on two commercial banks over five years to analyze their loan amounts, interest rates, and procedures.
1. Money and credit are essential features of modern economies that facilitate transactions and economic activity. Banks accept deposits from the public and use most of the funds to extend loans to meet demand for credit.
2. A barter system relies on double coincidence of wants where both parties have goods the other wants, while modern currency functions as a widely accepted medium of exchange backed by legal status.
3. Self-help groups organize the rural and urban poor, particularly women, into small collectives that pool savings, provide loans to members, and address various social issues through regular meetings. They help overcome lack of collateral and provide affordable credit.
The document discusses different aspects of money and credit. It explains that money acts as a medium of exchange that facilitates transactions between parties. It also discusses different forms of money like currency and different types of credit like formal credit from banks and cooperative societies versus informal credit from money lenders. The informal credit sector typically charges very high interest rates and can often lead borrowers into debt traps.
This document summarizes a study on personal installment loan services provided by local and foreign commercial banks and NGOs in Bangladesh in 2015. It finds that personal installment loans have grown popular among medium-low income customers. Foreign banks and NGOs generally provide more prompt service than local banks, though NGOs charge higher fees. Foreign banks and NGOs also tend to be more technologically advanced than local banks and NGOs in designing personal loan products. The study highlights differences in total amounts disbursed, outstanding loans, and customer numbers between banks and NGOs.
Medium of exchange and money developed to overcome the limitations of barter systems. Money takes the form of coins, currency notes, and bank deposits. Banks act as intermediaries between depositors and borrowers, lending out most deposits while keeping a small reserve. Formal credit sources include banks and cooperatives, while informal sources are money lenders, merchants, and relatives. Self-help groups help the poor access credit at reasonable rates by pooling savings and guaranteeing each other's loans.
This presentation tells you about the various aspects of money and also the credit i.e,loan business of the banks and the people in the formal and the informal sectors.
CBSE NCERT SOCIAL SCIENCE HISTORY GEOGRAPHY ECONOMICS POLITICAL SCIENCE CLASS 10 CHAPTER money and credit barter system modern form of noney formal and informal sectors of credit collateral terms of credit
The document provides information about loans and advances at Adarsh Cooperative Bank Udaipur. It discusses the different types of loans offered, including home loans, personal loans, and plot loans. It outlines the eligibility criteria, loan amounts, tenure and process for obtaining a plot loan. Key requirements for a plot loan application include documents proving identity, address, income and ownership of the land. The bank protects customer information and can terminate services if confidentiality is breached.
Comparative Study of Loans and Advances of Commercial Banks.docxNoaman Akbar
This document discusses loans and advances provided by commercial banks. It begins by introducing the important role of banks in economic development and defines key terms like loans, advances, borrowing and lending. It then discusses the main differences between loans and advances - loans must be paid back over a set period of time according to an agreed schedule, while advances can be repaid in full within a year. The objectives are to find the key differences between loans and advances and discuss their advantages and disadvantages. The study will focus on two commercial banks over five years to analyze their loan amounts, interest rates, and procedures.
1. Money and credit are essential features of modern economies that facilitate transactions and economic activity. Banks accept deposits from the public and use most of the funds to extend loans to meet demand for credit.
2. A barter system relies on double coincidence of wants where both parties have goods the other wants, while modern currency functions as a widely accepted medium of exchange backed by legal status.
3. Self-help groups organize the rural and urban poor, particularly women, into small collectives that pool savings, provide loans to members, and address various social issues through regular meetings. They help overcome lack of collateral and provide affordable credit.
The document discusses different aspects of money and credit. It explains that money acts as a medium of exchange that facilitates transactions between parties. It also discusses different forms of money like currency and different types of credit like formal credit from banks and cooperative societies versus informal credit from money lenders. The informal credit sector typically charges very high interest rates and can often lead borrowers into debt traps.
This document summarizes a study on personal installment loan services provided by local and foreign commercial banks and NGOs in Bangladesh in 2015. It finds that personal installment loans have grown popular among medium-low income customers. Foreign banks and NGOs generally provide more prompt service than local banks, though NGOs charge higher fees. Foreign banks and NGOs also tend to be more technologically advanced than local banks and NGOs in designing personal loan products. The study highlights differences in total amounts disbursed, outstanding loans, and customer numbers between banks and NGOs.
This document summarizes a study on personal installment loan services provided by local and foreign commercial banks and NGOs in Bangladesh in 2015. It finds that personal installment loans have grown popular among medium-low income customers. Foreign banks and NGOs generally provide more prompt service than local banks regarding loan facilities, terms, and conditions, though NGOs charge higher fees. Foreign banks and NGOs also have more advanced technology and customer service than local banks. The study highlights differences in personal loan features between banks and NGOs, as well as total amounts disbursed, outstanding, and customers served by each.
1. The document discusses various topics related to money including its history, modern forms like currency and bank deposits, its functions as a medium of exchange, credit and loans.
2. It notes that modern currency is fiat money authorized by governments and not backed by precious metals, while bank deposits also serve as money since they can be used to directly settle payments via checks.
3. Credit is discussed in the context of both positive impacts like helping businesses meet costs, as well as potential debt traps especially for poor farmers who may not be able to repay loans if crops fail.
The document discusses formal and informal sources of credit in India. It notes that the Reserve Bank of India supervises formal lenders like banks and cooperatives, while informal lenders like moneylenders are not regulated and can charge high interest rates. Poor households in urban and rural areas rely more heavily on informal loans, while richer households use formal credit. Expanding access to affordable formal sector loans could help reduce dependence on expensive informal loans and increase incomes and development.
This document provides a training manual for the "Economic and Financial Literacy Agents in Factories" program. The manual covers topics related to money and banking, the banker-customer relationship, banking functions, and the role of agent banking. It is intended for individuals who have completed basic economic and financial literacy training and want to work as agent bankers. The manual includes modules that define key concepts, objectives, discussion questions, and essential points about various banking topics and the responsibilities of agent bankers.
Money and credit are important topics in economics. The document discusses the history of money from barter systems to modern forms of currency and banking. It also examines the role of credit, comparing formal sources like banks and cooperatives to informal sources like money lenders. While formal credit can provide loans at reasonable rates, many poor households rely on high-interest informal lenders due to lack of access or collateral. To address this, self-help groups were formed to help the poor access small loans and savings opportunities.
The document discusses various aspects of credit and money in India, including:
1) It describes how the barter system worked and how the introduction of money eliminated the need for double coincidence of wants. Money acts as a medium of exchange.
2) It discusses different modern forms of money including currency and bank deposits. Demand deposits function similarly to money since payments can be made by check.
3) Banks provide credit by lending out most of the deposits they receive. However, rural farmers often rely on expensive informal credit since formal credit does not meet all credit needs.
4) Expanding access to formal credit through banks and cooperatives is important to reduce reliance on expensive informal loans and help increase
This document summarizes key concepts related to banking and credit systems. It begins by explaining the challenges of the barter system and how the introduction of money solved issues like the double coincidence of wants. It then discusses how banks act as intermediaries between depositors and borrowers, taking in deposits and lending out a portion at higher interest rates. The document outlines the credit system of banks, including different types of loans, terms of credit like interest rates and collateral, and the role of the Reserve Bank of India in regulating the banking system. It also discusses the importance of access to affordable credit for development and the role of self-help groups and microcredit programs in rural areas.
The document is a student's project on loan syndication. It includes a declaration by the student that the information submitted is true and original. It also includes a certificate from the student's project guide. The acknowledgements section thanks various individuals who provided guidance and support. The index lists the contents of the project, which covers topics such as the meaning of loan syndication, the syndication process, reasons for syndicated lending, and the role of parties involved. It also includes an overview of ICICI Bank and its syndication services.
Microfinance provides financial services to low-income clients who lack access to traditional banking. It addresses the financial needs of the poor for lifecycle events, emergencies, opportunities, and sending money. Common services include microcredit (small loans), microsavings, and insurance. Loans are typically made through group lending models with joint liability to reduce costs. Major microfinance models include JLG, SHG-bank linkage, and peer-to-peer lending. The microfinance industry has grown significantly but still only reaches 20% of those who could benefit from its services.
The PowerPoint presentation on general banking and finance provides a comprehensive overview of the fundamental concepts and key aspects within the banking and finance industry. The presentation aims to equip the audience with a broad understanding of the roles and functions of banks and financial institutions, the importance of financial systems in driving economic growth, and the various financial products and services offered to individuals and businesses. It delves into topics such as deposit and lending activities, investment management, risk assessment and mitigation, and regulatory frameworks governing the industry. The presentation serves as an essential resource for anyone seeking a solid foundation in the field of banking and finance.
Detailed presentation on education loan system in India- eligibility criteria, application process, rate of interest charged and repayment options. Advantages and disadvantages of borrowing loan.
Short term loans are essentially cash advances that are given to people in times of immediate need of cash and that is one of the main reasons why these loans are becoming increasingly popular.
The document appears to be a student project report on the workings of the UMA Co-operative Bank Ltd. It includes details such as the student's name and program of study, an introduction to co-operative banks in India and their structure, an overview of UMA Bank including financial details, descriptions of various bank accounts and loan types offered, and explanations of processes like RTGS and NEFT transactions. The document contains detailed information on the operations and services provided by UMA Bank to its members.
This document provides an overview of microfinance in India. It discusses the current state of microfinance access in India and various microfinance models used, including Grameen Bank, self-help groups, and organizations like SAKHI and NABARD. It also covers topics like interest rates, debt relief programs, strengths and weaknesses of microfinance, and the future potential for microfinance to help alleviate poverty in India.
Organization study of credit co-operative society Gokuacc1
This document provides an overview and analysis of Sri Nagendra Credit Co-operative Society Ltd. It begins with an executive summary of the organization's objectives and the author's experience during a 4-week internship. It then includes a McKinsey 7S analysis and SWOT analysis of the organization. The next sections provide details on the banking industry, types of banks, and regulation. Finally, it gives the organizational profile of Sri Nagendra Credit Co-operative Society Ltd, including its address, business hours, founding, and growth.
Microfinance provides financial services to small businesses and entrepreneurs who lack access to traditional banking. It can include microcredit (small loans), savings, insurance, and money transfers. While microcredit helps the poor borrow to save and accumulate assets, it often charges high interest rates of 30-70% due to the high transaction costs of small loans. Some microfinance programs instead focus on "saving up" by having collectors regularly collect small savings amounts from clients. Overall, microfinance aims to help the poor raise incomes, build assets, and withstand financial shocks through accessible financial services.
This document summarizes a study on personal installment loan services provided by local and foreign commercial banks and NGOs in Bangladesh in 2015. It finds that personal installment loans have grown popular among medium-low income customers. Foreign banks and NGOs generally provide more prompt service than local banks regarding loan facilities, terms, and conditions, though NGOs charge higher fees. Foreign banks and NGOs also have more advanced technology and customer service than local banks. The study highlights differences in personal loan features between banks and NGOs, as well as total amounts disbursed, outstanding, and customers served by each.
1. The document discusses various topics related to money including its history, modern forms like currency and bank deposits, its functions as a medium of exchange, credit and loans.
2. It notes that modern currency is fiat money authorized by governments and not backed by precious metals, while bank deposits also serve as money since they can be used to directly settle payments via checks.
3. Credit is discussed in the context of both positive impacts like helping businesses meet costs, as well as potential debt traps especially for poor farmers who may not be able to repay loans if crops fail.
The document discusses formal and informal sources of credit in India. It notes that the Reserve Bank of India supervises formal lenders like banks and cooperatives, while informal lenders like moneylenders are not regulated and can charge high interest rates. Poor households in urban and rural areas rely more heavily on informal loans, while richer households use formal credit. Expanding access to affordable formal sector loans could help reduce dependence on expensive informal loans and increase incomes and development.
This document provides a training manual for the "Economic and Financial Literacy Agents in Factories" program. The manual covers topics related to money and banking, the banker-customer relationship, banking functions, and the role of agent banking. It is intended for individuals who have completed basic economic and financial literacy training and want to work as agent bankers. The manual includes modules that define key concepts, objectives, discussion questions, and essential points about various banking topics and the responsibilities of agent bankers.
Money and credit are important topics in economics. The document discusses the history of money from barter systems to modern forms of currency and banking. It also examines the role of credit, comparing formal sources like banks and cooperatives to informal sources like money lenders. While formal credit can provide loans at reasonable rates, many poor households rely on high-interest informal lenders due to lack of access or collateral. To address this, self-help groups were formed to help the poor access small loans and savings opportunities.
The document discusses various aspects of credit and money in India, including:
1) It describes how the barter system worked and how the introduction of money eliminated the need for double coincidence of wants. Money acts as a medium of exchange.
2) It discusses different modern forms of money including currency and bank deposits. Demand deposits function similarly to money since payments can be made by check.
3) Banks provide credit by lending out most of the deposits they receive. However, rural farmers often rely on expensive informal credit since formal credit does not meet all credit needs.
4) Expanding access to formal credit through banks and cooperatives is important to reduce reliance on expensive informal loans and help increase
This document summarizes key concepts related to banking and credit systems. It begins by explaining the challenges of the barter system and how the introduction of money solved issues like the double coincidence of wants. It then discusses how banks act as intermediaries between depositors and borrowers, taking in deposits and lending out a portion at higher interest rates. The document outlines the credit system of banks, including different types of loans, terms of credit like interest rates and collateral, and the role of the Reserve Bank of India in regulating the banking system. It also discusses the importance of access to affordable credit for development and the role of self-help groups and microcredit programs in rural areas.
The document is a student's project on loan syndication. It includes a declaration by the student that the information submitted is true and original. It also includes a certificate from the student's project guide. The acknowledgements section thanks various individuals who provided guidance and support. The index lists the contents of the project, which covers topics such as the meaning of loan syndication, the syndication process, reasons for syndicated lending, and the role of parties involved. It also includes an overview of ICICI Bank and its syndication services.
Microfinance provides financial services to low-income clients who lack access to traditional banking. It addresses the financial needs of the poor for lifecycle events, emergencies, opportunities, and sending money. Common services include microcredit (small loans), microsavings, and insurance. Loans are typically made through group lending models with joint liability to reduce costs. Major microfinance models include JLG, SHG-bank linkage, and peer-to-peer lending. The microfinance industry has grown significantly but still only reaches 20% of those who could benefit from its services.
The PowerPoint presentation on general banking and finance provides a comprehensive overview of the fundamental concepts and key aspects within the banking and finance industry. The presentation aims to equip the audience with a broad understanding of the roles and functions of banks and financial institutions, the importance of financial systems in driving economic growth, and the various financial products and services offered to individuals and businesses. It delves into topics such as deposit and lending activities, investment management, risk assessment and mitigation, and regulatory frameworks governing the industry. The presentation serves as an essential resource for anyone seeking a solid foundation in the field of banking and finance.
Detailed presentation on education loan system in India- eligibility criteria, application process, rate of interest charged and repayment options. Advantages and disadvantages of borrowing loan.
Short term loans are essentially cash advances that are given to people in times of immediate need of cash and that is one of the main reasons why these loans are becoming increasingly popular.
The document appears to be a student project report on the workings of the UMA Co-operative Bank Ltd. It includes details such as the student's name and program of study, an introduction to co-operative banks in India and their structure, an overview of UMA Bank including financial details, descriptions of various bank accounts and loan types offered, and explanations of processes like RTGS and NEFT transactions. The document contains detailed information on the operations and services provided by UMA Bank to its members.
This document provides an overview of microfinance in India. It discusses the current state of microfinance access in India and various microfinance models used, including Grameen Bank, self-help groups, and organizations like SAKHI and NABARD. It also covers topics like interest rates, debt relief programs, strengths and weaknesses of microfinance, and the future potential for microfinance to help alleviate poverty in India.
Organization study of credit co-operative society Gokuacc1
This document provides an overview and analysis of Sri Nagendra Credit Co-operative Society Ltd. It begins with an executive summary of the organization's objectives and the author's experience during a 4-week internship. It then includes a McKinsey 7S analysis and SWOT analysis of the organization. The next sections provide details on the banking industry, types of banks, and regulation. Finally, it gives the organizational profile of Sri Nagendra Credit Co-operative Society Ltd, including its address, business hours, founding, and growth.
Microfinance provides financial services to small businesses and entrepreneurs who lack access to traditional banking. It can include microcredit (small loans), savings, insurance, and money transfers. While microcredit helps the poor borrow to save and accumulate assets, it often charges high interest rates of 30-70% due to the high transaction costs of small loans. Some microfinance programs instead focus on "saving up" by having collectors regularly collect small savings amounts from clients. Overall, microfinance aims to help the poor raise incomes, build assets, and withstand financial shocks through accessible financial services.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
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আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
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LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
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Money_and_credit_ppt_.pdf
1. Class 10th - Economics - Money and Credit
Money and Credit
Importance of money in everyday life.
Goods are being bought and sold with the
use of money. In some of these transactions,
services are being exchanged with money.
For some, there might not be any actual
transfer of money taking place now but
a promise to pay money later.
Money Credit
Introduction -
2. In the absence of money we would have to rely on the double coincidence of wants.
The transaction in absence of money is known as Barter system.
A system where goods are directly exchanged without the exchange of money.
Class 10th - Economics - Money and Credit
Money
What a person desires to sell is exactly
what the other wishes to buy.
Introduction -
3. Economy with money Eliminate the need for double coincidence of wants.
Acts acts an intermediate in the exchange process.
∴ Money as a medium of exchange.
Class 10th - Economics - Money and Credit
Money as a medium of exchange
Explain
Money
Introduction -
4. ● Modern form of money (paper notes and currency)
● Modern currency is not made of precious metal
such as gold, silver and copper.
● Unlike grain and cattle, they are neither of
everyday use.
● The modern currency is without any use of its own.
Then why it is accepted as medium of exchange?
➔ Because it is authorised by the government of the country.
Class 10th - Economics - Money and Credit
Modern Forms of Money -
Currency
Issue
Fiat value, No intrinsic value
5. ● The Reserve Bank of India issues currency notes
on behalf of the central government.
● No other individual or organisation is allowed to
issue currency.
● No individual in India can legally refuse a
payment made in rupees.
Class 10th - Economics - Money and Credit
Authorised by the government of the country
Modern Forms of Money -
6. ● Deposits with banks people have Also a type of money.
People deposit it with bank (Bank account).
● Banks pay an amount as interest on the deposits.
● People’s money is safe.
● People also have the provision to withdraw the money as
and when they require.
➔ Can be withdrawn on demand
Class 10th - Economics - Money and Credit
Modern Forms of Money -
Deposits with Banks
Questions
Extra cash क्यों?
Demand deposits
7. ● Banks keep a small proportion of their deposits as cash with themselves.
● पैसों का करता क्या है बैंक?
■ Banks make use of the deposits to meet the loan requirements of the people.
■ Banks mediate between those who have surplus funds (the depositors) and those
who are in need of these funds (the borrowers).
■ Banks charge a higher interest rate on loans than what they offer on deposits.
■ The difference between what is charged from borrowers and what is paid to
depositors is their main source of income.
Class 10th - Economics - Money and Credit
Loan Activities of Banks -
Loan activities of Banks - On ground
8. Helped him
● Helps him to meet the ongoing
expenses of production, complete
production on time, and thereby
increase his earnings.
● Credit therefore plays a vital and
positive role in this situation.
Class 10th - Economics - Money and Credit
Two different Credit Situations -
Story of Salim Story of Swapna
Credit Pushed her in debt trap
● The failure of the crop made loan
repayment impossible.
● She had to sell part of the land to repay
the loan.
Credit
Analyse
Whether credit would be useful or not, therefore, depends on the risks in the situation
and whether there is some support, in case of loss.
9. ➔ Interest rate, collateral and documentation requirement, and the mode of repayment
together comprise what is called the terms of credit.
Class 10th - Economics - Money and Credit
Terms of Credit -
What is terms of credit?
DO CO MO Internet
10. ➔ Terms of credit may vary depending on the nature of the lender and the borrower.
Class 10th - Economics - Money and Credit
Terms of Credit -
Interest Rate
Borrower must pay to
the lender along with
the repayment of the
principal.
Collateral
Collateral is an asset that
the borrower owns (such
as land, building, vehicle,
livestocks, deposits with
banks) and uses this as a
guarantee to a lender
until the loan is repaid.
Documentation
requirement
Paperwork
Mode of
Payment
Installment/
Lump Sum Cash/
Gold/ Property
11. Loans from banks and cooperatives.
The Reserve Bank of India supervises the
functioning of formal sources of loans.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
Formal sector loans Informal sector loans
How?
Moneylenders, traders, employers,
relatives and friends, etc.
There is no organisation which supervises
the credit activities of lenders in the
informal sector.
Why?
12. ● The RBI monitors the banks in actually maintaining cash balance.
● The RBI sees that the banks give loans not just to profit-making
businesses and traders but also to small cultivators, small scale
industries, etc.
● Periodically, banks have to submit information to the RBI on how
much they are lending, to whom, at what interest rate, etc.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
How reserve bank in India supervises the functioning of
formal sources of loans?
13. No organisation which supervise it
Cost of borrowing
Large part of the earnings of the borrowers is used to repay the loan.
➔ People who might wish to start an enterprise by borrowing may not do so because of the
high cost of borrowing.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
Credit activities in Informal sector
● Interest rate is high.
● Lender use unfair means to get their
money back.
Interest rate
Debt trap
14. What can done to improve the situation in informal sector?
➔ Banks and cooperative societies need to lend more.
Cheap and affordable credit is crucial for the country’s development.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
Why?
15. ● Majority of poor household gets loans from informal sector.
● Majority of rich household gets loan from formal sector.
What’s the problem?
➔ The formal sector still meets only about half of the total credit needs of the rural people.
➔ The remaining credit needs are met from informal sources. Most loans from informal
lenders carry a very high interest rate and do little to increase the income of the borrowers.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
Formal and Informal credit : Who gets what?
Solution
16. ● Thus, it is necessary that banks and cooperatives increase their lending particularly in the
rural areas, so that the dependence on informal sources of credit reduces.
● Secondly, while formal sector loans need to expand, it is also necessary that everyone
receives these loans.
Class 10th - Economics - Money and Credit
Formal Sector Credit in India -
Solution
17. ➔ Poor households Depends on informal sector
● Banks are not present everywhere in rural India. Absence of collateral
● Getting a loan from a bank is much more difficult than taking a loan from informal sources.
● Absence of collateral is one of the major reasons which prevents, informal lenders know the
borrowers personally and hence are often willing to give a loan without collateral.
∴ Organising people into SHG (self help group) is necessary.
Class 10th - Economics - Money and Credit
Self-Help Groups for the Poor -
Why?
Problems
18. ● Self Help Groups (SHGs) are small groups of poor people. The members of an SHG face
similar problems. They help each other, to solve their problems. SHGs promote small
savings among their members
Pool fund to help their members.
● Members can take small loans from the group itself to meet their needs.
● The group charges interest on these loans but this is still less than what the moneylender
charges.
● After a year or two, if the group is regular in savings, it becomes eligible for availing loan
from the bank.
● Empowerment of members (decision taking power, accountability).
● Provide a platform to discuss and act on a variety of social issues such as health, nutrition,
domestic violence, etc.
Class 10th - Economics - Money and Credit
Self-Help Groups for the Poor -
What is self help group?
19. ● It was started by Professor Muhammad Yunus, the founder of
Grameen Bank, and recipient of 2006 Nobel Prize for Peace.
● Started in the 1970s as a small project, Grameen Bank in 2018
had over 9 million members in about 81,600 villages spread
across Bangladesh.
● Almost all of the borrowers are women and belong to poorest
sections of the society.
Class 10th - Economics - Money and Credit
Self-Help Groups for the Poor -
Grameen bank of Bangladesh
Professor Muhammad Yunus