Kerala State Syllabus 10th Standard Social Science Notes Chapter 9 Financial Institutions and Services
You have seen the currency notes used in India. Do you know the institution that has the legal right to issue these notes? Look at this picture.
You can see this on all the notes used in India. This is the symbol of the Reserve Bank of India which has the sole legal right to issue currency notes in India. Let us learn about the Reserve Bank of India and the other financial institutions and their services in this unit.
→ Reserve Bank of India : Reserve Bank is the Central Bank of India. It was established in 193 5. Its headquarters is in Mumbai. It is the apex bank which controls all the other banks in India.
→ Financial Institutions : The institutions where financial transactions like deposits and loans take place.
→ Banks : Banks are those institutions which accept deposits from the public and grant loans to the needy subject to conditions.
→ Commercial Banks : The banks which accept deposits and lend money for commercial purposes, industrial and agricultural purposes.
→ Regional Rural Banks : The banks established in 1975 to provide banking services in the rural areas in different states.
→ Savings deposit: A scheme that helps the public to deposit their savings. It helps to promote saving habit. It offers low rate of interest.
→ Fixed deposit: A scheme for depositing money for a specific period of time by individuals and institutions. It gives high rate of interest.
→ Current deposit : A scheme that allows depositors to deposit and withdraw money many times in a day. It is meant for traders and industrialists and does not offer any interest.
→ Recurring deposit : A scheme of depositing money at fixed intervals for a fixed period.
→ Cash credit: Loans given to individuals and institutions by banks on the basis of collateral securities like physical assets, gold, salary certificate, etc. .
→ Overdraft : Facility given to permanent and reliable customers to withdraw money over and above the credit balance.
→ Electronic banking: A method of banking that carries out transactions through net banking and tele banking.
→ Core banking: (Centralised Online Real Time Electronic (CORE) banking is a facility under which all the branches of the banks are brought under a central server to enable transaction from one bank to another.
→ Development banks : Banks that provide long term credit for agricultural, industrial and commercial purposes.
→ Specialized banks : The institutions that provide financial help for the development of certain specific sectors.
→ NABARD : National Bank for Agriculture and Rural Development is the apex bank operating for agricultural and rural development.
→ Bharatiya Mahila Bank: The financial institution started in 2013, exclusively for women and lending predominantly to women. Its slogan, was “Women empowerment is India’s empowerment”. Merged with SBI in 2017.
→ Payment Banks : Banks that have been established to help low income groups, small scale industrialists and migrant labourers.
→ MUDRA Bank: Micro Units Development and Refinance Agency Bank is a bank for providing short term loans to small scale entrepreneurs and micro finances.
→ Non – banking Financial Institutions : The institutions which operate in the financial sector but not rendering all the banking services.
→ Micro Finance : A system that extends financial services to low income groups for self employment activities.
Kerala Syllabus 10th Standard Social Science Notes