Money and Credit

Look at a 10 rupee note. What is written on top? Can you explain this statement?

• "Reserve Bank of India” and “Guaranteed by the Government” are written on top.

• Medium of exchange

• authorized or guaranteed by the State Government

• Reserve Bank issues this note

1. Majority of the credit needs of the (a)   households are met from informal sources.

In an SHG most of the decisions regarding savings and loan activities are taken by

• Bank

• Members

• Non governmental organisations

• Cooperative societies

Formal sources of credit do not include

• Banks

• Coopratives

• Non governmental organisations

• Only 1&2

Banks provide a higher rate of interest on which one of the following accounts

• Savings account

• Current account

• Fixed deposit for long time

• Fixed deposit for short term

……. help borrowers overcome the problem
of lack of collateral and also they are the building blocks of organization of the rural poor.

• Banks

• Co-operatives

• Government

• SHGs

Organisation which supervises the credit activities of lenders in the informal sector.

• RBI

• Central Government

• State Government

• No organisation

Terms of credit does not include

• Collateral

• Interest rate

• Cheque

• Mode of repayment

Swapna is unable to repay the moneylender and she is caught in debt. She has to sell a part of the land to pay off the debt. This situation is an example of

• Debt- insecurity

• Debt - loss

• Debt - trap

• Debt - condition

Banks use the major portion of the deposits to

• Keep as a reserve so that people may withdraw

• Meet their routine expenses

• Extend loans

• Meet renovation of bank