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    Mind Map Money and Credit

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    Moin Ahmed
    Money has evolved from ancient barter systems to modern currency and banking. There are two main activities of the modern banking system: accepting deposits from customers and providing loans (credit) to borrowers. Credit has both formal and informal sectors, with the formal sector like banks and cooperatives providing regulated loans at lower interest rates often requiring collateral. The informal credit sector like money lenders charges higher interest rates without oversight, allowing potential exploitation of borrowers.

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    Mind Map Money and Credit

    Uploaded by

    Moin Ahmed
    15K views1 page
    Money has evolved from ancient barter systems to modern currency and banking. There are two main activities of the modern banking system: accepting deposits from customers and providing loans (credit) to borrowers. Credit has both formal and informal sectors, with the formal sector like banks and cooperatives providing regulated loans at lower interest rates often requiring collateral. The informal credit sector like money lenders charges higher interest rates without oversight, allowing potential exploitation of borrowers.

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    mind map class 10 eco cbse

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    Money has evolved from ancient barter systems to modern currency and banking. There are two main activities of the modern banking system: accepting deposits from customers and providing loans (credit) to borrowers. Credit has both formal and informal sectors, with the formal sector like banks and cooperatives providing regulated loans at lower interest rates often requiring collateral. The informal credit sector like money lenders charges higher interest rates without oversight, allowing potential exploitation of borrowers.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15K views1 page

    Mind Map Money and Credit

    Uploaded by

    Moin Ahmed
    Money has evolved from ancient barter systems to modern currency and banking. There are two main activities of the modern banking system: accepting deposits from customers and providing loans (credit) to borrowers. Credit has both formal and informal sectors, with the formal sector like banks and cooperatives providing regulated loans at lower interest rates often requiring collateral. The informal credit sector like money lenders charges higher interest rates without oversight, allowing potential exploitation of borrowers.

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    MIND

    Money and Credit

    Medium of Exchange

    Ancient form of Money Medeival form Modern form of Money


    of Money

    Money
    Barter System
    Exchange of goods Cattle, grains,
    for goods silver, gold
    Currency notes Demand
    and coins deposits
    Limitations with banks
    Lack of double (cheque)
    coincidence of wants Authorised by the
    Reserve Bank of India

    Sources of Credit
    Two main activities of Modern Banking System

    Formal Sector Credit Informal Sector Credit


    Accepting Deposits Giving Loans
    Types Types
    Banks lend money to people Banks, Cooperatives Money lenders, traders,
    People deposit money
    employers, relatives
    in back accounts
    Charge interest on the loans (credit) Features
    Banks provide interest Charge low/nominal rate Features
    on that money of interest, take collateral Charge high rate of interest,
    This is main source of
    collateral not necessary
    income for the banks
    People can withdraw Supervision
    money with cheques They are borrowers Tight control by RBI, Supervision
    no exploitation No supervision so
    They are depositors exploitation of borrowers

    Credit (loans)

    Self Help Groups


    Components of Credit

    Consists of 15-20 members

    Terms of Credit Members save per month


    Collateral
    Includes rate Asset like land,
    of interest, Group take loans collectively
    livestock given
    duration of credit, as guarantee.
    mode of payment Collateral not needed to take loans

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