Money and banking. Social studies. Economics.

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Money and banking: 

👉Important points:

• In a barter system, goods are directly exchanged for each other without the use of money.
• In exchange of some goods problem has been raised through barter system.
• Thanks the barter system gradually was replaced by the metal coins.
• Overtime, people preferred square and attractive metals as medium of exchange copper, bronze, silver and gold are durable, can be divided into parts and be carried around.
• Minting coins of standard size, weight and purity from the royal mint is started under the supervision of kings.
• In the Roman period "Besant" a gold coin was the standard currency and in the mauryan period "Pana" silver coin was a standard currency.
• The banker in India such as Jagat Seth of Bengal, Shah of Patna, Aranji nathji of Surat, Chettiars of Madras enjoyed such wealth and reputation that their receipts- paper money called hundis.
• In 1606, Amsterdam verse images trading centre in Europe. Here, there were 846 silver and gold coins recognised by the government that could be accepted for the exchange.
• Banking is a business activity where money deposits are collected from the public and these deposits can be transferred from one person to another.
• Deposits refer to the money that people keep in the banks. There are different types of deposits.
• Nowadays checks are widely used for making payments or receiving money.
• In the present system all banks and most of the branches are linked by computers. All deposit holder accounts and their signatures can be accessed by the branches anywhere.
• In most banks human and manual counters are being replaced by the automated teller mission ATM.
• Banking activity is being done with computers with internet and other electronic means of communications which is called as electronic banking or internet banking.
• In just a few clicks one can access their account and transfer funds,pay bills etc., People with hectic schedule prefer internet banking.
• A fixed deposit for a term deposit cannot be withdrawn from the bank for a fixed period of time.
• Banks give loans to people. people will pay back these loans with interest. banks also give loan to government and address and interest.
• Different people can obtain loans for different requirements under some rules and conditions of the bank.

Important concepts to remember:

1. Trading without money
2. Paper money and emergence of banks
3. Cash deposits
4. Savings deposits or savings accounts
5. Exchange with money
6. Banking
7. Internet banking
8. Small account
9. Evolution of money
10. Modern banks, commercial banks
11. Loans.

Keywords to understand:

Barter: Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, success money.

Forms of money: money is any object or record that is generally accepted as payment for goods and services and repayment of debit in a given socio economic context or country. Money is in various forms. They are metal coins, paper currency, check, credit and debit cards.

Deposits: deposits refer to the money that people keep in the banks. There are different types of deposits

Savings: saving is income not spent or deferred consumption. Methods of saving include putting money aside in a bank or pension plan.

Loan: in finance loan is ab evidenced by a note which specifies among other things the principal amount interest rate and date of repayment.

Interest: interest is a fee paid by a borrower or assets to the owner as a form of compensation for the use of the assets.

Cheque: a cheque is a document that orders a repayment of money from a bank account.

Mint house: mint house is a workshop where the coins are made.

ATM: ATM means automatic teller mission it is used to draw money deposited in the bank by customers. It search the customer 24 hours in a day.

Clearing Bank: one of the banks works as a clearing Bank where all the bank have an account. The payments and receipts between banks are done by this clearing Bank.

Textbook questions and answers:

1. Can there be any difficulties or disadvantages in keeping money in a bank? think and write.

Ans: We no that keeping our savings in a bank is a good activity there is no any difficulty or disadvantages in such activity there is a safety and security to our money in a bank and also we are paid some interest to our savings.

2. In what ways have chicks made exchange of money more convenient?

Ans: usually ships are issued to the account holders by the banks. Account holders use these checks for their own needs or to make payments others through cheques. By using these checks account holders can make payment of different types without cash. Taken organised a financial activities without any difficulty by using cheques. They need not to go to bank and withdraw cash to make payment whenever it is necessary they just issue cheque to pay the amount to any individual or any form.

3. Only a part of the total deposits is kept as cash in the bank safe. Why is this so and how does this benefit the bank?

Answer: a bank is a business enterprise it has to pay interest to its depositors pay salary to its employees, has to buy and maintain equipment, parent and bear all the cost of running a bank and also make profit. So how does it earn revenue? To get revenue banks used to give loans to people. People will pay back discounts with interest the interest earned on loans given by the bank is the source of revenue so only a part of total deposits is kept as cash in the bank safe and remaining should be led to the people or government or others to earn revenue.

4. If many loans are written off the days 12 hours or not required to pay back the money how will this affect the working of the bank?

Answer: nowadays government write off the agricultural loans given by the nationalised banks rural banks and cooperative banks. This means the farmers who borrowed the money from the above bank for agricultural purpose are not required to repay the loan amount from the above banks for agricultural purposes are not required to repay the loan amount. This will affect the working of the bank in a negative way. Because of this banks are fell down into the losses. If the total loan amount which was written off by the government is given to the banks it will be benefit to banks otherwise Bank get losses and effect badly on bank's working.

5. Read the paragraph under the heading types of loans and answer the following question: what sort of loans are more common in your area?

Answer: The following sort of loans are more in our area, they are:

1. Home loans
2. Vehicle loans
3. Agricultural loans
4. Gold loans
5. Personal loans
6. Business loans
7. Industrial loans
8. Educational loans
9. Loans for SHGs
10. Marriage loans
11. Loans against property
12. Mortgage loans.

6. Suppose this year the rainfall is poor and the crop yield is only half as much as was originally expected. Some people argue that if this happens the farmer should be asked to pay back only half the amount they have taken as loans. However, other people say that the full amount should be repaid keeping in view the next year's crop. In your opinion what should the bank do and why?

Answer: if engineering support we can say that here as draught year. In this the property is less than what was originally expected. In some parts of country sufferers more by draught and very less yield is taken place in agricultural crops, farmers could not able to repay the loan amount. So in this situation the total loan amount should be written off by the government. In case of partially drought strike areas, it is better to write off at least half of the total loan amount. It gives encouragement to farmers to cultivate in next year.

7. People have to pay higher interest on loans than the interest they receive on the fixed deposit for the same time period. why do you think this is so?

Answer: Usually the rate of interest paid by the banks to their fixed deposits is less than the rate of interest received by banks from the borrowers are the different types of loans. So people have to pay a higher interest on loan that the interest they receive on a fixed deposit for the same time period. It is like this because the bank should reach number of expenses such as pay salary to its employees, has to buy and maintain equipment, parent and bear all the cost of running a bank and also make profit. Suppose the rate of interest on laws are not more than the rates of interest on all deposits in the banks banks definitely get losses and they may be locked out.

8. Do you feel that the loans taken from SGHs are helpful to the members? how?

ANSWER: The members in SHGs get loans from banks on very low rate of interest to the SHGs loans. These loans are very help full to the members. The women, who are members in SHGs utilising these loan amount to establish productive activities such as running cottage industries, involving in government building, and sanctioned some contract works, running retail shops and so on. By doing this activities for women try to come out from the poverty. And also these SHG loan providing empowerment for women particularly in the rural areas.

About "Reserve bank of India":

The Central Bank India is called reserve Bank of India was established share holders bank on April 1st 1935 after independence the nationalist government decided to initiate the process of planned economic development. It was felt that the state on Central Bank was better suited to the requirements of the country. Thanks the RBI was nationalised on January 1st 1949. RBI head office is in Mumbai and it has seven branches in Kolkata, New Delhi, Bangalore, Nagpur, Chennai ,Hyderabad and Patna. Reserve Bank of India set the rules and regulations to the other banks and supervisors them. It also acts as government bank and banker's Bank. It controls money circulation and issue of currency notes. RBI fixes the different bank rates such as bank rate repo and reverse repo rates, SLR and CRR rates and so on. There is a governor for RBI tomorrow and supervisors its activities. At present Sri. D. Subba Rao is the governor of RBI.