Credit which is available at reasonable interest rate plays a crucial role in the country’s development. The requirement for loans is in a huge number for various economic activities. The credit boosts the business and helps people to meet the regular expenses of production. This opens up opportunitRead more
Credit which is available at reasonable interest rate plays a crucial role in the country’s development. The requirement for loans is in a huge number for various economic activities. The credit boosts the business and helps people to meet the regular expenses of production. This opens up opportunities in the market for people looking to setup a small business. Credit helps in expansion of one’s business, farmers can grow a variety of crops, procure equipment for farming, send their children for higher education etc. Students get a loan without collateral for higher education which again leads to the development of the nation. In this way, credit plays a vital role in the development of a country.
Reserve Bank of India is the central bank of the country and works as a watchdog. It is the supervising authority over other banks across the country. The Reserve Bank of India supervises the functions of banks in a number of ways: RBI checks that the bank actually maintains a minimum cash balanceRead more
Reserve Bank of India is the central bank of the country and works as a watchdog. It is the supervising authority over other banks across the country. The Reserve Bank of India supervises the functions of banks in a number of ways:
RBI checks that the bank actually maintains a minimum cash balance out of the deposit they receive. Currently this is 15%.
RBI observes that the banks give loans not just to profit making businesses and traders but also to small cultivators, small scale industries, small borrowers etc. It also ensures protection of small depositors.
It ensures high quality corporate governance in banks.
Undertakes annual onsite inspection to access financial health and regulate performance of banks.
The commercial banks have to provide information to the RBI on how much they are lending, to whom, at what interest rate etc.
This is necessary to ensure equality in the economy of the country and protect especially small depositors, farmers, small scale industries, small borrowers etc. Further, RBI monitoring ensures that banks lend loans within their prescribed capacity. Lending more loans leads to crises and Great Depression of 1930 is an example of such a crises situation.
The banks might not be willing to lend certain borrowers due to the following reasons: Banks have their own rules and regulation which require proper documents and collateral as security against loans. Upon failure to meet these requirements, loans cannot be granted. Small farmer requiring crop loRead more
The banks might not be willing to lend certain borrowers due to the following reasons:
Banks have their own rules and regulation which require proper documents and collateral as security against loans. Upon failure to meet these requirements, loans cannot be granted. Small farmer requiring crop loan usually don’t have adequate documents. Repayment of the loan is dependent on crop production which is highly volatile and depends on external factors like monsoons etc.
• The bank will not lend money to borrowers who have not repaid previous loans.
• The banks go through the research and development of a business and might not be willing to lend those entrepreneurs who are going to invest in the business with high risks.
• One of the principle objectives of a bank is to earn more profits after meeting a number of expenses. For this the bank needs to ensure that the money they lend is returned timely and doesn’t become a debt.
We need to expand formal sources of credit in India due to: • Eliminate informal sources of credit as they usually charge a high rate of interest and act as a debt trap for the borrower. • Providing cheap and affordable credit can aid country’s development. Still only half of the total credit needsRead more
We need to expand formal sources of credit in India due to:
• Eliminate informal sources of credit as they usually charge a high rate of interest and act as a debt trap for the borrower.
• Providing cheap and affordable credit can aid country’s development. Still only half of the total credit needs of the rural people are met by the formal sector.
• Banks and co-operatives should increase their lending, particularly, in rural areas. Without banks help, rural borrowers are majorly dependent on informal sources like moneylenders and middlemen who charge them a high rate of interests.
• Easily available credit can fulfil variety of needs of the people and would generate higher incomes. They will be able to grow crops, do business, set up small scale industries etc.
The following words are written on the top of a 10 rupee note: Reserve Bank of India Guaranteed by the Central Government of India I promise to pay the bearer the sum of Ten Rupee A 10-rupee note is a legal tender and used as medium of exchange because it is authorized by the government of India. InRead more
The following words are written on the top of a 10 rupee note:
Reserve Bank of India
Guaranteed by the Central Government of India
I promise to pay the bearer the sum of Ten Rupee
A 10-rupee note is a legal tender and used as medium of exchange because it is authorized by the government of India. In India, Reserve Bank of India holds the power to issues currency notes on behalf of the central government. The statement indicates that the currency is authorized or guaranteed by the Central Government. The Indian law has legalized the use of rupee to make payment and cannot be refused in setting transaction in India. As a promise written on a promissory note, the RBI promises the bearer to pay the given sum of money.
Analyse the role of credit for development.
Credit which is available at reasonable interest rate plays a crucial role in the country’s development. The requirement for loans is in a huge number for various economic activities. The credit boosts the business and helps people to meet the regular expenses of production. This opens up opportunitRead more
Credit which is available at reasonable interest rate plays a crucial role in the country’s development. The requirement for loans is in a huge number for various economic activities. The credit boosts the business and helps people to meet the regular expenses of production. This opens up opportunities in the market for people looking to setup a small business. Credit helps in expansion of one’s business, farmers can grow a variety of crops, procure equipment for farming, send their children for higher education etc. Students get a loan without collateral for higher education which again leads to the development of the nation. In this way, credit plays a vital role in the development of a country.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?
Reserve Bank of India is the central bank of the country and works as a watchdog. It is the supervising authority over other banks across the country. The Reserve Bank of India supervises the functions of banks in a number of ways: RBI checks that the bank actually maintains a minimum cash balanceRead more
Reserve Bank of India is the central bank of the country and works as a watchdog. It is the supervising authority over other banks across the country. The Reserve Bank of India supervises the functions of banks in a number of ways:
RBI checks that the bank actually maintains a minimum cash balance out of the deposit they receive. Currently this is 15%.
RBI observes that the banks give loans not just to profit making businesses and traders but also to small cultivators, small scale industries, small borrowers etc. It also ensures protection of small depositors.
It ensures high quality corporate governance in banks.
Undertakes annual onsite inspection to access financial health and regulate performance of banks.
The commercial banks have to provide information to the RBI on how much they are lending, to whom, at what interest rate etc.
This is necessary to ensure equality in the economy of the country and protect especially small depositors, farmers, small scale industries, small borrowers etc. Further, RBI monitoring ensures that banks lend loans within their prescribed capacity. Lending more loans leads to crises and Great Depression of 1930 is an example of such a crises situation.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
What are the reasons why the banks might not be willing to lend to certain borrowers?
The banks might not be willing to lend certain borrowers due to the following reasons: Banks have their own rules and regulation which require proper documents and collateral as security against loans. Upon failure to meet these requirements, loans cannot be granted. Small farmer requiring crop loRead more
The banks might not be willing to lend certain borrowers due to the following reasons:
Banks have their own rules and regulation which require proper documents and collateral as security against loans. Upon failure to meet these requirements, loans cannot be granted. Small farmer requiring crop loan usually don’t have adequate documents. Repayment of the loan is dependent on crop production which is highly volatile and depends on external factors like monsoons etc.
• The bank will not lend money to borrowers who have not repaid previous loans.
• The banks go through the research and development of a business and might not be willing to lend those entrepreneurs who are going to invest in the business with high risks.
• One of the principle objectives of a bank is to earn more profits after meeting a number of expenses. For this the bank needs to ensure that the money they lend is returned timely and doesn’t become a debt.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Why do we need to expand formal sources of credit in India?
We need to expand formal sources of credit in India due to: • Eliminate informal sources of credit as they usually charge a high rate of interest and act as a debt trap for the borrower. • Providing cheap and affordable credit can aid country’s development. Still only half of the total credit needsRead more
We need to expand formal sources of credit in India due to:
• Eliminate informal sources of credit as they usually charge a high rate of interest and act as a debt trap for the borrower.
• Providing cheap and affordable credit can aid country’s development. Still only half of the total credit needs of the rural people are met by the formal sector.
• Banks and co-operatives should increase their lending, particularly, in rural areas. Without banks help, rural borrowers are majorly dependent on informal sources like moneylenders and middlemen who charge them a high rate of interests.
• Easily available credit can fulfil variety of needs of the people and would generate higher incomes. They will be able to grow crops, do business, set up small scale industries etc.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/
Look at a 10 rupee note. What is written on top? Can you explain this statement?
The following words are written on the top of a 10 rupee note: Reserve Bank of India Guaranteed by the Central Government of India I promise to pay the bearer the sum of Ten Rupee A 10-rupee note is a legal tender and used as medium of exchange because it is authorized by the government of India. InRead more
The following words are written on the top of a 10 rupee note:
Reserve Bank of India
Guaranteed by the Central Government of India
I promise to pay the bearer the sum of Ten Rupee
A 10-rupee note is a legal tender and used as medium of exchange because it is authorized by the government of India. In India, Reserve Bank of India holds the power to issues currency notes on behalf of the central government. The statement indicates that the currency is authorized or guaranteed by the Central Government. The Indian law has legalized the use of rupee to make payment and cannot be refused in setting transaction in India. As a promise written on a promissory note, the RBI promises the bearer to pay the given sum of money.
For more answers visit to website:
See lesshttps://www.tiwariacademy.com/ncert-solutions/class-10/social-science/