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4. Banking in India

Banking plays a crucial role in the financial system of India, providing essential services such as mobilizing savings and facilitating credit for economic activities. The chapter explores the meaning and functions of money, different types of banks including commercial and central banks, and methods of credit control, including notable historical events like demonetisation aimed at curbing black money and promoting digital transactions.

Sections

  • 4

    Banking In India

    This section provides an overview of the banking system in India, elucidating the roles of commercial banks and the Reserve Bank of India in the economy.

    Learning Practice

  • 4.1

    Introduction

    This section introduces the fundamental role of banking in India's financial system, emphasizing its importance in mobilizing savings and providing credit.

    Learning Practice

  • 4.2

    Money – Meaning And Functions

    This section explains the meaning of money and its vital functions within an economic framework.

    Learning Practice

  • 4.2.1

    Meaning Of Money

    Money is a universally accepted medium of exchange that has replaced barter and streamlined trade.

    Learning Practice

  • 4.2.2

    Functions Of Money

    This section outlines the four primary functions of money within an economy, emphasizing its roles in facilitating trade, measuring value, storing value, and enabling deferred payments.

    Learning Practice

  • 4.3

    Commercial Banks

    Commercial banks are essential financial institutions that accept deposits and provide loans to the public.

    Learning Practice

  • 4.3.1

    Functions Of Commercial Banks

    Commercial banks perform essential functions such as accepting deposits and lending money, facilitating economic activities and financial transactions.

    Learning Practice

  • 4.3.2

    Importance

    Commercial banks are vital for promoting savings, providing credit, supporting trade, and fostering economic growth.

    Learning Practice

  • 4.4

    Central Bank – Reserve Bank Of India (Rbi)

    The Reserve Bank of India (RBI) serves as India's central bank, overseeing monetary policy and financial stability.

    Learning Practice

  • 4.4.1

    Meaning

    This section defines the concept of a central bank and specifically outlines the role of the Reserve Bank of India as the apex financial institution in India.

    Learning Practice

  • 4.4.2

    Functions Of The Central Bank

    The central bank plays a critical role in the economy by issuing currency, controlling credit, and maintaining financial stability.

    Learning Practice

  • 4.5

    Credit Control By Rbi

    This section focuses on the methods used by the Reserve Bank of India (RBI) to control credit in the economy.

    Learning Practice

  • 4.5.1

    Quantitative Methods

    Quantitative methods are tools used by the Reserve Bank of India to manage credit in the economy.

    Learning Practice

  • 4.5.2

    Qualitative Methods

    Qualitative methods of credit control by the RBI rely on persuasion and regulation rather than quantitative measures.

    Learning Practice

  • 4.6

    Demonetisation

    Demonetisation refers to the withdrawal of the legal tender status of currency, significantly affecting economic dynamics.

    Learning Practice

References

e4.pdf

Class Notes

Memorization

What we have learnt

  • Banks mobilize savings and ...
  • Commercial banks accept dep...
  • The Reserve Bank of India (...

Final Test

Revision Tests

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