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 __________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