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Class 10 Geography Chapter 5 Important Questions and Answers Money and Economy
Kerala Syllabus Class 10 Social Science Geography Chapter 5 Money and Economy Important Questions
Money and Economy Class 10 Important Questions
Question 1.
What facilitates the exchange of goods and services?
Answer:
Money
Question 2.
What is meant by the ‘medium of exchange’ function of money?
Answer:
Money is used to buy and sell goods and services.
Question 3.
What is the velocity of circulation of money?
Answer:
The number of times a unit of money is exchanged in a given period of time is known as the velocity of circulation of money.
Question 4.
How does an increase in the velocity of circulation of money affect the economy?
Answer:
It indicates acceleration in economic growth.
Question 5.
Which institutions play a major role in facilitating money transactions and regulating economic activities?
Answer:
Banks and Financial institutions
Question 6.
Which is the central bank of India?
Answer:
RBI
Question 7.
In which year was the Reserve Bank of India established?
Answer:
1935
Question 8.
Where was the headquarters of RBI shifted to in 1937?
Answer:
Mumbai
Question 9.
In which year was the RBI nationalized?
Answer:
1949
Question 10.
Where are the coins and one rupee notes printed in India?
Answer:
Ministry of Finance
Question 11.
What is the term for Ml and M2 combined?
Answer:
Narrow money
Question 12.
What happens when the reserve ratio decreases?
Answer:
Credit increases
Question 13.
Which bank controls the credit and money supply in India?
Answer:
RBI
Question 14.
When was the most recent demonetization implemented in India?
Answer:
2016
Question 15.
What policy is related to taxation and government spending?
Answer:
Fiscal policy
Question 16.
Which bank is an example of a cooperative bank in Kerala?
Answer:
Kerala Bank
Question 17.
In which year were 14 banks nationalized in India?
Answer:
1969
Question 18.
Who developed the UPI payment system?
Answer:
NPCI
Question 19.
The kudumbasree is an example of: (MODEL 2022)
a) Insurance company
b) Microfinance
c) Mutual fund institution
d) NBFCs
Answer:
b) Microfinance
Question 20.
Name any three general functions of Money.
Answer:
- Medium of exchange
- Measure of value
- Store of value
Question 21.
Printing and Issuing Currency is one of the major functions of the Reserve Bank of India. Explain.
Answer:
As per the Reserve Bank of India Act 1934, only the Reserve Bank of India has the power to print and issue all currencies except coins and one-rupee notes. The coins and one-rupee notes are printed and issued by the Ministry of Finance, Government of India. The Reserve Bank of India is responsible for designing, incorporating the security features, printing, and distributing the currency. Currency notes are printed at the Government of India’s printing presses at Nasik (Maharashtra) and Dewas (Madhya Pradesh). It is also printed at two presses at Mysore (Karnataka) and Salboni (West Bengal) by Bharatiya Reserve Bank Note Mudran Limited (BRBNML), owned by RBI. Coins are minted at the Government of India’s mints at Mumbai, Hyderabad, Kolkata and Noida. Based on the government’s instructions, the Reserve Bank of India can withdraw the currency notes in circulation. This is known as demonetization.
Question 22.
Define Repo Rate and Reserve Repo Rate.
Answer:
Repo Rate: The rate of interest charged by the Reserve Bank of India on the loans taken by commercial banks from the RBI.
Reverse Repo Rate: The rate of interest given by the Reserve Bank of India on the deposits by the commercial banks.
Question 23.
How are commercial banks and cooperative banks different, and give an example of a cooperative bank?
Answer:
Banks can be broadly classified into commercial banks and cooperative banks. While the operations of commercial banks are controlled by shareholders, the ownership of cooperative banks is vested with the members of the cooperative societies. Kerala Bank is an example of a cooperative bank.
Question 24.
Name three services provided by commercial banks to the public.
Answer:
- Credit Card, Debit Card
- ATM Services
- Locker Facility
Question 25.
When was KSFE established, and what services does it offer to the people of Kerala?
Answer:
KSFE is a non-banking financial company in Kerala. It was established in 1969 to provide financial services to the people of Kerala. It provides various services like gold loans, personal loans, business loans, vehicle loans, housing loans, microfmance and chits, through its various branches. KSFE has a strong presence in Kerala through its network of branches and the strong support of its customers.
Question 26.
Define Credit Deposit Ratio
Answer:
Credit Deposit Ratio measures the proportion of a bank’s deposits that are used for loans. It is monitored by the RBI. A high credit deposit ratio indicates that banks have lent out a large portion of the deposits they have received. A low credit deposit ratio indicates that banks are lending out a smaller portion of the deposits they have received.
Question 27.
Explain the General functions of Money.
Answer:
a) Medium of Exchange
b) Measure of value
c) Store of Value
d) Means of Deferred Payments
a) Medium of Exchange: Goods and services can be sold for money, and the money can be used to purchase the goods and services that are needed. For example, labour can be supplied and its reward can be received in the form of money. The same money can be used to purchase goods and services. In this way money is crucial for making countless transactions in the economy.
b) Measure of value: The value of all goods can be expressed in monetary terms. In the barter system, it was not easy to compare the value of one good with the value of another. Money made it easy to compare the values of two goods. The value of a good is the price that is assigned to it in the transaction process. Just as the value of good is measured in monetary terms, the value of money can also be expressed in terms of other goods. The value of money is its purchasing power. When the price of goods increases, the purchasing power of money will decrease, and when the price of goods decreases, the purchasing power of money will increase. Changes in the purchasing power of money are keenly felt when there is inflation or deflation in the economy.
c) Store of Value: When money became something that was acceptable to everyone, it had become possible to store the value of any good in the form of money. This was not possible in the barter system. Through this it is possible to convert the value of goods, including that of perishable items, into money or asset and it can be used in the future.
d) Means of Deferred Payments: In the modem times many business activities are carried out with ease because of the advantage of settling the financial transactions at a later date. Both buyers and sellers generally agree that the cash settlement of the transactions of goods and services can be cleared later. It is possible to measure the value of borrowing and lending in the form of money. This is very helpful for short and longterm business transactions.
Question 28.
RBI uses quantitative and qualitative measures to control credit. Elucidate the statement.
Answer:
a) Printing and Issuing Currency: As per the Reserve Bank of India Act 1934, only the Reserve Bank of India has the power to print and issue all currencies except coins and one rupee notes. The coins and one rupee notes are printed and issued by the Ministry of Finance, Government of India. The Reserve Bank of India is responsible for designing, incorporating the security features, printing, and distributing the currency. Currency notes are printed at the Government of India’s printing presses at Nasik (Maharashtra) and Dewas (Madhya Pradesh). It is also printed at two presses at Mysore (Karnataka) and Salboni (West Bengal) by Bharatiya Reserve Bank Note Mudran Limited (BRBNML), owned by RBI. Coins are minted at the Government of India’s mints at Mumbai, Hyderabad, Kolkata and Noida. Based on the government’s instructions, the Reserve Bank of India can withdraw the currency notes in circulation. This is known as demonetization.
b) Bankers’ Bank: The Reserve Bank acts as the bankers’ bank. It provides emergency loans to banks in the times of crisis, maintains the reserves of banks, and helps to settle transactions between banks.
c) Controls the supply of money and credit: When the supply of money increases and the production of goods and services does not increase proportionately, there arises a situation where there are fewer goods and services and more money in the economy. This causes the prices of goods and services to rise. An increase in the general price level of goods and services is known as inflation. Inflation in India is measured using the Consumer Price Index (CPI), which is prepared by the National Statistical Office under the Ministry of Statistics and Programme Implementation (MOSPI). If inflation increases in the economy without any control, it causes a decrease in the purchasing power of money. It adversely affects economic growth and production. Therefore, inflation must be controlled. One of the reasons behind inflation is the increase in the quantity of money supply. The total amount of money in an economy is the total amount of money held by the public and money held by banks and nonbanking financial institutions. The Reserve Bank sees the total amount of money in our economy in the form of M1, M2, M3 and M4,
M1 = Coins and currency notes held by the public and the savings deposits in commercial banks
M2 = M1 + savings deposits in post office savings banks
M3 = M1 + net fixed deposits in commercial banks
M4 = M3 + total deposits in post offices (excluding National Savings Certificates)
where M1 and M2 are known as narrow money and M3 and M4 are known as broad money.
Uncontrolled lending by banks leads to the increase in the money supply in the economy and also inflation. This needs to be controlled. RBI uses quantitative and qualitative measures to control credit.
Inflation is controlled by changing bank rates and changing the reserve ratio, by RBI. The important bank rates are the repo rate and the reverse repo.
For example when inflation increases unchecked, RBI increases repo rate and reverse repo rate. When RBI increases these rates, the commercial banks also change these rates. When these rates are increased, the money available with the commercial banks for lending fall because at a higher rate of interest the commercial banks will take less loans from RBI and deposit more in the RBI. In the same way the loan taken by the public will also be less. So the money available in the economy also would be less. When the rate of interest is high, people will prefer to save more money rather than spend, because the reward for not consuming is greater. The money held by the public Rows to commercial banks and from there to the Reserve Bank. The amount of money in the economy decreases and the inflation comes under control.
- Reserve Bank of India controls the credit and supply of money by changing the Cash Reserve Ratio (CRR).
- This is the amount of money the banks must keep as reserves with the Reserve Bank out of the money they receive as deposits.
- When the reserve ratio decreases, the amount of money available with banks to lend increases and the availability of credit increases. This increases the money available with the people.
- However, when the reserve ratio increases, amount of money available with banks to lend will decrease. This reduces the availability of credit and reduces the amount of money people have.
Repo Rate: The rate of interest charged by the Reserve Bank of India on the loans taken by commercial banks from the RBI.
Reverse Repo Rate: The rate of interest given by the Reserve Bank of India on the deposits by the commercial banks.
d) Acts as the government’s bank: The Reserve Bank of India is responsible for maintaining government accounts, providing banking services, and implementing financial management. It also advises the government on matters such as fiscal and monetary policy.
e) Custodian of foreign exchange reserves: The foreign exchange reserves of our economy are the sum total of foreign currencies and gold reserves. RBI is the custodian of all these.
f) Publication of Reports: RBI publishes various reports at different periods such as Banking Trends in India, Monetary Policy Reports, Consumer Surveys, RBI Bulletin and Statistical Supplements.
Question 29.
Explain some of the payment systems that have emerged in the banking sector as a result of technology.
Answer:
Technology is helpful in increasing the speed of transactions. With the advent of mobile banking and online banking, customers have been able to access various banking services using smartphones and computers. Online banking is a system where bank transactions are available through the internet. Banking services that were available only at certain times and days are now available 365 days a year, anywhere in the world, due to the intervention of technology. Some of the payment systems that have emerged in the banking sector as a result of technology :
- National Electronic Fund Transfer System (NEFT)
This is a system introduced by the Reserve Bank of India to make bank transactions between account holders easier and faster. Funds are transferred using the Indian Financial System Code (IFSC).
- Real Time Gross Settlement (RTGS)
RTGS is a system introduced by the RBI to transfer large amounts of money between account holders. The feature of this is that transactions can be completed in a very short time.
- Core Banking
Core banking is a system that enables an account holder of a bank to carry out financial transactions from any of its branches. There is no need to go to the specific branch where the customer holds the account for the bank transactions. It is convenient for the customers.
- Universal Payment Interface (UPI)
UPI is a payment system developed by the National Payments Corporation of India (NPCI). It enables real¬time money transfers between bank accounts. Users can connect their various bank accounts through a mobile application and make simple and secure transactions. Some of the popular UPI apps are Google Pay, Paytm, Phone Pay, BIM UPI, and Amazon Pay.
The use of cyber technology can help deliver personalized services and reduce costs, but it also poses significant challenges to security.
Question 30.
What are the different types of Deposits?
Answer:
a) Accepting Deposits
Various types of deposit accounts offered to the public by commercial banks are:
Savings Deposit: This is a deposit that instills the habit of saving in individuals and allows them to withdraw money according to their needs. The depositor has the opportunity to withdraw money from such deposits, subject to restrictions. The number of times money can be withdrawn within a period and the limit on the amount that can be withdrawn varies from bank to bank. Banks often offer low interest rates on savings deposits.
Current Deposit: A current account is an account intended for business transactions. There is no limit to the number of transactions that can be made from such accounts in a single day. Banks do not pay interest on the money in this account. Overdraft facility is provided for this account. An overdraft is a system that allows you to withdraw more than the amount in the current account within a predetermined limit.
Term Deposit or Fixed Deposit Account: Money that is not needed to be withdrawn immediately can be deposited in such accounts. Banks pay more interest on such deposits than on money in a savings bank account. If money is withdrawn from these deposits before the maturity period, the interest rate received by the depositors may be reduced. The interest can be withdrawn upon maturity along with the deposits, or at various periods determined by the depositor.
Recurring Deposits: Recurring deposits are deposits of a fixed amount of money at regular intervals for a specific period of time. Such deposits earn higher interest rates than savings deposits. However, they are lower than the interest rates on fixed deposits. At the end of the tenure, the accumulated amount can be withdrawn along with interest.
Question 31.
Match column A with column B.
| A |
B |
| Fiscal policy |
Supply of money and the rate of interest |
| M2 |
Taxation and government spending |
| Monetary policy |
M1 + savings deposits in commercial banks |
| Narrow money |
M3 and M4 |
| Broad money |
M1 and M2 |
Answer:
| A |
B |
| Fiscal policy |
Taxation and government spending |
| M2 |
M1 + savings deposits in commercial banks |
| Monetary policy |
Supply of money and the rate of interest |
| Narrow money |
M1 and M2 |
| Broad money |
M3 and M4 |
Question 32.
The main functions of commercial banks are to accept deposits from the public and to provide loans.
What are the other functions of Commercial banks?
Answer:
Commercial banks are licensed by the RBI to provide banking services and are included in the Second Schedule of the RBI Act, 1934. Public sector banks, private sector banks, small finance banks, payment banks, specialized banks, regional rural banks, and foreign banks are some examples of commercial banks.
Eg: NABARD,SBI,Canara Bank
Commercial banks that were allowed to operate in India after the financial reforms of the 1990s are known as new generation banks.
Eg: Axis Bank, Mahindra Bank, Yes Bank and Indus Bank.
Functions of Commercial Banks
The main functions of commercial banks are to accept deposits from the public and to provide loans. Banks act as a safe haven for savings. They are able to convert the money deposited in banks into various types of loans and make them available to entrepreneurs.
a) Accepting Deposits
Various types of deposit accounts offered to the public by commercial banks are:
Savings Deposit: This is a deposit that instills the habit of saving in individuals and allows them to withdraw money according to their needs. The depositor has the opportunity to withdraw money from such deposits, subject to restrictions. The number of times money can be withdrawn within a period and the limit on the amount that can be withdrawn varies from bank to bank. Banks often offer low interest rates on savings deposits.
Current Deposit: A current account is an account intended for business transactions. There is no limit to the number of transactions that can be made from such accounts in a single day. Banks do not pay interest on the money in this account. Overdraft facility is provided for this account. An overdraft is a system that allows you to withdraw more than the amount in the current account within a predetermined limit.
Term Deposit or Fixed Deposit Account: Money that is not needed to be withdrawn immediately can be deposited in such accounts. Banks pay more interest on such deposits than on money in a savings bank account. If money is withdrawn from these deposits before the maturity period, the interest rate received by the depositors may be reduced. The interest can be withdrawn upon maturity along with the deposits, or at various periods determined by the depositor.
Recurring Deposits: Recurring deposits are deposits of a fixed amount of money at regular intervals for a specific period of time. Such deposits earn higher interest rates than savings deposits. However, they are lower than the interest rates on fixed deposits. At the end of the tenure, the accumulated amount can be withdrawn along with interest.
b) Lending Loans
It is the Commercial banks that provide various loans to individuals and institutions for various financial activities. Commercial banks act as intermediaries between depositors and borrowers. Banks keep a portion of the deposits received as reserves and lend the rest to entrepreneurs. Commercial banks charge interest on the various loans they provide to their customers. The interest rate charged to borrowers is higher than the interest rate paid to depositors. The difference between the interest paid to depositors and the interest charged from borrowers is the income of banks. This is known as the spread. Banks provide loans by accepting various collaterals. They accept gold, land documents, salary certificates, etc. as collateral.
c) Other functions Providing various services.
Commercial banks provide various banking services to the public.
- Credit Card, Debit Card
- ATM Services
- Locker Facility
Question 33.
Why is credit important for entrepreneurs? Explain the difference between formal and informal sources of credit in India.
Answer:
Entrepreneurs need money to start new ventures, to expand existing ventures and to enable firms to adopt new technologies. A large percentage of this comes from banks and non-banking financial institutions. Credit can be considered as the main source for the financing of development activities. Sources of credit in India can be classified into formal and informal sources of credit. Formal sources of credit are the organised, institutionalized and regulated systems. Informal sources of credit are the unorganised and non-institutionalised systems. The mutual coexistence and operational success of both are necessary for the growth of the economy.
Question 34.
How do government initiatives aimed at financial inclusion contribute to inclusive economic growth? Mention the steps taken by the government to extend banking services to the rural and marginalised population.
Answer:
Financial inclusion and inclusive economic growth accelerate when banking services reach the common man, the rural population and the marginalised people.Government has taken various steps for this.
a) Nationalization of Banks
In order to bring the functioning of banks to different parts of the country and to more people, 14 banks were nationalized in 1969 and 6 banks, in 1980. The main objectives of bank nationalization are:
- To expand banking facilities in rural areas
- To provide credit to farmers at lower rates
- To ensure equitable distribution of credit
- To prevent the concentration of economic power in a few people.
b) Co-operative Banking Systems : Co-operative banks play a crucial role in activating the rural economy by providing banking facilities to villagers and ordinary farmers. They operate on the principles of cooperation, self-help and mutual assistance. The objectives of co-operative banks are to inculcate the habit of saving among the villagers, to protect the common people from private money lenders, and to provide low-cost loans to farmers and small businessmen.
c) Microfinance: Microfinance aims to provide financial services to low-income individuals, families, and businesses who do not have access to conventional banking services. Poverty alleviation, empowerment of women and the marginalized, promotion of entrepreneurship and ensuring job creation, and improvement of quality of life are all goals set by micro finance. The Grameen Bank, founded by Professor Muhammad Yunus in Bangladesh in 1983, is a good example of microfinance. Kudumbashree in Kerala works on the concept of microfinance. The work done by Kudumbashree in Kerala for poverty alleviation and women empowerment has repeatedly attracted world attention. These systems work by accepting small deposits through Neighborhood Groups and Self Help Groups (NHGS, SHGS) and by providing loans as per the need.
d) Jan Dhan Account: The Prime Minister Jan Dhan Account is a scheme to open an account for all those w ho do not have a bank account in the country. Its aim is to bring all the people of the country under the ambit of banking services. Zero minimum balance account is the special feature of this scheme. It also aims to provide financial services to the low-income group, promote financial literacy and inculcate the banking habit.
- Digital currency has been the latest trend in financial transactions.
- The government is also promoting Aadhaar based payment system, e-wallet and National Finance
Switch to reduce the use of physical currencies and increase the use of digital currencies, thus moving towards a cashless economy.
Money plays a vital role in enabling the economic activities of production, consumption and distribution. As money turned digital, the number and magnitude of the transactions also increased. New currencies are emerging, keeping in with the changes in the world order. Money channelled into the market for consumption goes directly to producers and distributors while money set aside for saving goes to the entrepreneurs as loans through banks and non-banking financial institutions. Banks and non-banking financial institutions play a significant role in accelerating economic growth rate by promoting transactions. The proliferation and use of technology has promoted cashless transactions and succeeded in bringing those remote areas that have higher to no access to banks into the banking network.
Kerala Bank
The history of Kerala Bank starts with the registration of Thiruvananthapuram Central Co-operative Bank in 1915 through the Travancore co-operative society regulation act of His Highness Sree Moolam Thirunal in 1914. It started functioning as a bank on 18 January 1916. It was included in the Second Schedule of the Reserve Bank of India Act in July 1966. In 2019, the thirteen district cooperative banks of Kerala were merged into the Kerala State Co-operative Bank and became known as Kerala Bank. Kerala Bank operates in all 14 districts of Kerala with 823 branches. The main objectives of Kerala Bank are to provide better banking services, ensure financial inclusion and to accelerate the economic development of the state. Social commitment, rural development and providing support to the marginalized community are also the objectives of the bank. 40% of the bank’s shares are held by the Government of Kerala, 30% by District Co-operative Bank and 30% by others. Kerala Bank provides many banking services to its beneficiaries. This includes accepting deposits, providing loans and making other monetary transactions. The bank provides many facilities to its customers with ATM services across Kerala, modern banking technology and digital platform.
Question 35.
What are the main functions of the Reserve Bank of India in regulating and managing the country’s financial system.
Answer:
a) Printing and Issuing Currency: As per the Reserve Bank of India Act 1934, only the Reserve Bank of India has the power to print and issue all currencies except coins and one rupee notes. The coins and one rupee notes are printed and issued by the Ministry of Finance, Government of India. The Reserve Bank of India is responsible for designing, incorporating the security features, printing, and distributing the currency. Currency notes are printed at the Government of India’s printing presses at Nasik (Maharashtra) and Dewas (Madhya Pradesh). It is also printed at two presses at Mysore (Karnataka) and Salboni (West Bengal) by Bharatiya Reserve Bank Note Mudran Limited (BRBNML), owned by RBI. Coins are minted at the Government of India’s mints at Mumbai, Hyderabad, Kolkata and Noida. Based on the government’s instructions, the Reserve Bank of India can withdraw the currency notes in circulation. This is known as demonetization.
b) Bankers’ Bank: The Reserve Bank acts as the bankers’ bank. It provides emergency loans to banks in the times of crisis, maintains the reserves of banks, and helps to settle transactions between banks.
c) Controls the supply of money and credit: When the supply of money increases and the production of goods and services does not increase proportionately, there arises a situation where there are fewer goods and services and more money in the economy. This causes the prices of goods and services to rise. An increase in the general price level of goods and services is known as inflation. Inflation in India is measured using the Consumer Price Index (CPI), which is prepared by the National Statistical Office under the Ministry of Statistics and Programme Implementation (MOSPI). If inflation increases in the economy without any control, it causes a decrease in the purchasing power of money. It adversely affects economic growth and production. Therefore, inflation must be controlled. One of the reasons behind inflation is the increase in the quantity of money supply.The total amount of money in an economy is the total amount of money held by the public and money held by banks and non-banking financial institutions.
d) Acts as the government’s bank: The Reserve Bank of India is responsible for maintaining government accounts, providing banking services, and implementing financial management. It also advises the government on matters such as fiscal and monetary policy.
e) Custodian of foreign exchange reserves: The foreign exchange reserves of our economy are the sum total of foreign currencies and gold reserves. RBI is the custodian of all these.
f) Publication of Reports: RBI publishes various reports at different periods such as Banking Trends in India, Monetary Policy Reports, Consumer Surveys, RBI Bulletin and Statistical Supplements.
Question 36.
What can generally be called money?
Answer:
Anything accepted in the exchange of goods and services can generally be called money.
Question 37.
Write any two functions of Money.
Answer:
Measure of value, Measure of value
Question 38.
How does money strengthen the economy?
Answer:
Money stimulates the economic activities of production, distribution and consumption and strengthens the economy by making the transactions faster.
Question 39.
When and where was the Reserve Bank of India established, and when was its headquarters shifted? Answer:
The Reserve Bank of India was established on 1 April 1935 in Kolkata under the Reserve Bank of India Act, 1934. Its headquarters were shifted to Mumbai in 1937.
Question 40.
What are the main functions of the central bank in an economy?
Answer:
The central bank regulates and coordinates the activities of banks and non-banking financial institutions in the economy.
Question 41.
M2 = ………………………. + savings deposits in post office savings banks.
Answer:
M1
Question 42.
Define Fiscal policy.
Answer:
Fiscal policy is the policy regarding taxation and government spending.
Question 43.
How are commercial banks and cooperative banks different in terms of ownership?
Answer:
Commercial banks are controlled by shareholders, while cooperative banks are owned by the members of cooperative societies.
Question 44.
Write one example for cooperative bank.
Answer:
Kerala Bank
Question 45.
Define new generation banks, and can you name a few?
Answer:
Commercial banks that were allowed to operate in India after the financial reforms of the 1990s are known as new generation banks. Eg: Axis Bank, Mahindra Bank, Yes Bank and Indus Bank.
Question 46.
Name any two facilities offered by commercial banks to Public.
Answer:
Credit Card, Debit Card, ATM Services.
Question 47.
What is the purpose of the NEFT and RTGS systems introduced by the RBI?
Answer:
NEFT is designed to make bank transactions between account holders easier and faster using the IFSC code, While RTGS is a system introduced by the RBI to transfer large amounts of money between account holders.
Question 48.
What is UPI and how does it benefit users?
Answer:
UPI is a payment system developed by the National Payments Corporation of India (NPCI).Users can connect their various bank accounts through a mobile application and make simple and secure transactions.
Question 49.
How has technology improved access to banking services for customers?
Answer:
Technology has improved access to banking services through mobile and online banking, allowing customers to perform transactions anytime, anywhere, 365 days a year using smartphones and computers.
Question 50.
Why is credit important for entrepreneurs and economic development?
Answer:
Credit is important for entrepreneurs as it provides the necessary funds to start new ventures, expand existing ones, and adopt new technologies. It is considered a main source for financing development activities and contributes to economic growth.
Question 51.
What does the Credit Deposit Ratio measure?
Answer:
Credit Deposit Ratio measures the proportion of a bank’s deposits that are used for loans.
Question 52.
Write any two formal sources of credit.
Answer:
Banks, Self-Help Groups
Question 53.
What were the main objectives of bank nationalization in India?
Answer:
To expand banking facilities in rural areas, to provide credit to farmers at lower rates etc.
Question 54.
What, is the aim of microfinance, and name two examples of microfinance institutions?
Answer:
Microfinance aims to provide financial services to low-income individuals, families, and businesses who do not have access to conventional banking services. Examples include the Grameen Bank in Bangladesh and Kudumbashree in Kerala.
Question 55.
…………………… has been the latest trend in financial transactions.
Answer:
Digital currency
