Class 10 Social Science II: Chapter 09 Financial Institutions and Services - Questions and Answers
Study Notes for Class 10th Social Science II ധനകാര്യാപനങ്ങളും സേവനങ്ങളും | Text Books Solution Geography (English Medium) Social Science II: Chapter 09 Financial Institutions and Services
SCERT Solutions for Class 10 Geography Chapterwise
Class 10 Social Science II Questions and Answers
Chapter 09 Financial Institutions and Services
1. Reserve Bank of India
-The Reserve Bank of India is the apex bank of India.
-It was established in 1935.
-Its headquarters is in Mumbai.
2. Functions of Reserve Bank of India
-Printing of currency.
-Controlling credit.
-Banker to government.
-Banker's bank.
3. How does the Reserve Bank print notes?
-All currencies except the one rupee note are printed by the Reserve Bank of India.
-The one rupee note and its subsidiary coins are issued by the Central Finance Department.
-The gold or foreign exchange reserves that hold the fixed value of the note hold as security.
4. Specify how the Reserve Bank controls credit
-Control of credit is one of the main functions of the Reserve Bank.
-This is made possible by bringing about changes in the rate of interest.
-As the rate of interest increases, the volume of loans decreases.
-When interest rates fall, the number of debt increases.
-The Reserve Bank of India increases the money supply in the Indian economy through the distribution of printed currency and through credit creation.
5. How does the Reserve Bank of India act as a Banker to the government?
-Another function of the Reserve Bank of India is to serve as the banker to the central and state governments.
-As a banker to the government, the Reserve Bank of India accepts deposits from the government, sanctions loans and renders other banking services to them.
-The Reserve Bank of India does not charge any fees for these services.
6. How does the Reserve Bank of India act as a Banker's bank?
-The Reserve Bank is the apex bank of all banks.
-To advise and assist all banks in their operations is a function of the Reserve Bank.
-It acts as a last resort to all banks in their financial matters.
7. Why Reserve Bank of India is known as the apex bank in India
-The Reserve Bank controls all other banks.
-It controls and gives the necessary directions and advice to the financial institutions in the country
-So Reserve Bank of India is known as the apex bank in Indian financial institutions
-Financial institutions are those institutions where financial transactions like deposits, loans etc. take place.
8. Banks
-Banks are institutions that accept deposits from the public and grant loans to the needy subject to conditions.
-They operate on the basis of the general guidelines and conditions set by the Reserve Bank of India.
-The bank pays interest on deposits from individuals, institutions and the government.
-Bank levies interest on loans to individuals, institutions and the government.
-The rate of interest on loans will be higher than the rate of interest given for deposits.
-The difference between these interests is the main revenue of the banks.
9. Growth of banks in India
-The Bank of Hindustan established in 1770 is India's first modern bank.
-The growth of the banking sector since then can be divided into three phases.
First phase
-The first phase stretches from 1770 to the nationalisation of banks in 1969.
-In this phase, the presidency banks, (Bank of Bengal, Bank of Bombay, and Bank of Madras) were established by the British East India Company.
-The operation and the growth of banks were slow during this phase.
Second phase
-The second phase stretching from 1969 to 1990, witnessed a speedy development of banks.
-The view that banks should operate with the aim of social progress led to the nationalisation of 14 banks in 1969 and six banks in 1980.
-In 1993, the nationalised bank, New Bank of India was merged with the Punjab National Bank.
-As a result, there are only 19 nationalised banks in India.
Third phase.
-In the third phase, stretching from 1991 onwards, banks started rendering services, other than their basic functions.
-There were several banking reforms that helped in quick and time-saving services, ease of procedure, etc.
-Introduction of Automated Teller Machines (ATM), credit card, phone banking, net banking, core banking, etc. are the results of the third phase of development.
-The private banks which received licenses during this period introduced new and innovative functions at a much quicker pace.
-Such banks are known as new generation banks.
-The banking sector has undergone many changes by merging public sector banks.
-State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and Bhartiya Mahila Bank merged with State Bank of India on April 1, 2017.
10. How are banks categorized based on performance?
-Commercial banks,
-Cooperative banks,
-Development banks,
-Specialised banks.
11. Commercial Banks Important Information
-Commercial banks are the oldest banks and have many branches.
-These banks, which play a major role in the country's financial activities.
-They accept deposits from the public and grant loans to trade, industry, agriculture etc., subject to certain conditions.
-Commercial Banks can be divided into Public Sector Commercial Banks and Private Commercial Banks.
12. Public sector commercial banks
-Public sector commercial banks are owned by the government.
-Their functions are controlled by the Reserve Bank.
-State Bank of India, nationalised banks and regional rural banks together constitute public sector commercial banks
13. Private Indian commercial banks
-Private commercial banks can be divided into two
-Private Indian Commercial Banks
-Private Foreign Commercial Banks
-Both are owned by private individuals.
-They operate under the control of the Reserve Bank of India.
-Private foreign commercial banks are those banks that have registered in India but have headquarters in a foreign country.
14. The function of Commercial Banks
-Accepting deposits,
-Providing loans,
-Provide other facilities,
-Providing other services.
15. Deposits received by commercial banks
-Savings Deposit,
-Current Deposit,
-Fixed Deposit,
-Recurring Deposit.
Savings Deposit
-This scheme helps the public to deposit their savings.
-Banks provide a low-interest rate for such deposits.
-The depositor can withdraw the money from the deposit, subject to restrictions.
-Different banks have adopted different regulations regarding the number of times and the amount of money that can be withdrawn during a particular time period.
-The details of the amount deposited and withdrawn are stated in the passbook provided by the bank.
Current Deposit
-This deposit facilitates depositing and withdrawing money many times in a day.
-These deposits are used mainly by traders and industrialists.
-This type of deposit does not receive any interest.
Fixed Deposit
-Fixed deposits are ideal for depositing money in banks by individuals and institutions for a specific period of time.
-The interest rate is calculated on the basis of the time period for which the money is deposited.
-If the amount is withdrawn before the maturity of deposits, then the interest
rate will be lower.
Recurring deposits
-Recurring deposits receive a specific amount every month for a specified period of time.
-The interest rate of recurring deposits will be higher than that of saving deposits but less than that of fixed deposits.
-The interest rate will be less if the deposits are withdrawn before the maturity date.
16. Loans provided by commercial banks
-The amount of money accepted as a deposit from the public is granted as loans by the banks.
-The interest rate of loans will be higher than the interest rate of deposits.
-There will be differences in the interest rate depending on the duration of the loan, its purpose, etc.
-Normally, bank loans are provided by accepting collateral.
17. The collateral that the banks accept to provide loans.
• Physical assets - gold, property documents, etc.
• Fixed deposit certificates
18. Loans issued by commercial banks.
-Cash Credit.
-Overdrafts are loans provided by commercial banks.
19. What is Cash credit?
-The loans given to individuals and institutions by accepting collaterals are called cash credit.
20. What are the purposes for which banks provide cash credit to the public?
• Agricultural purposes
• Industrial purposes
• Constructing houses
• Purchasing vehicles
• Purchasing home appliances
21. What is an overdraft?
-This is an opportunity for a customer to withdraw money over and above the balance in his/her account.
-This facility is provided to individuals who have frequent transactions with the bank.
-Generally, this opportunity is provided to individuals who maintain current deposits.
-The bank will charge interest on the additional withdrawal amount.
22. Facilities provided by commercial banks
-Locker facility
-Demand Draft
-Mail Transfer
-Telegraphic Transfer
-ATM facility
-Credit Card facility
-Locker Facility
-Majority of the banks provide locker facilities to individuals and institutions for keeping their valuable assets (gold, property documents, etc.).
-One key of the locker will be with the owner and the other will be with the bank.
-The locker can be opened only when both keys are jointly used.
-A certain amount is charged for availing of this facility.
23. Demand draft
-Demand draft is the facility provided by the banks to send money from one place to another.
-It is not necessary to have an account for this
24. Mail transfer
-Banks provide an opportunity to transfer money from anywhere in the world either to one's own account or to someone else's account.
-This service is called mail transfer.
25. Telegraphic transfer
-Telegraphic transfer is the mechanism that can transfer money through a message.
-It is faster than mail transfer.
26. ATM facility
-The facility to withdraw money any time without going to the bank is made possible through Automated Teller Machine (ATM).
-Today majority of the banks have this facility.
-Now Automated Teller Machines of some banks provide the opportunity to deposit and withdraw money.
-For this, banks provide ATM debit cards.
27. What is the information included in an ATM card?
-Card number
-The name of the bank
-Bank's Emblem
-Duration of the card
-Chip
-CCV number.
28. What are the precautions to follow when using an ATM card?
-Make sure that there is no one at the counter.
-Do not share the ATM Personal Identification Number (PIN).
-Assure the balance amount on receiving the receipt of money withdrawal.
-Do not carelessly throw away the receipt.
-Block the card immediately if the ATM card is lost.
29. Credit card facility.-Banks provide credit card facility which helps in purchasing products without having to keep money in a person.
-Credit card is also a plastic card.
-Using this, goods and services can be purchased even without having sufficient cash in one's account.
-The money has to be remitted to the bank later within a specific period.
30. Other services provided by commercial banks
-Services like the payment of insurance premium, telephone and electricity bills, and rendering services like mobile recharging, booking journey tickets, etc.
-Some of the transactions of the government which were once operated only through the treasuries are now done through banks.
-Service pension is also disbursed through banks.
31. Modern trends in the banking sector
-Electronic Banking and
-Core Banking is the modern trend in banking.
32. What is Electronic Banking? (E-Banking)
-Electronic banking is a method by which all transactions can be carried out through net banking and telebanking.
-Any time banking,
-Anywhere banking,
-Net banking,
-Mobile phone banking, etc. are part of electronic banking.
-For this, the assistance of the bank employees is not required.
-Bank account and net banking facility alone are required for this.
33. Benefits (merits) of Net Banking?
-Money can be sent and bills can be paid anywhere in the world from home
-Saves time
-Low service charge
34. What is Core banking (Centralised Online Real-time Exchange Banking)?
-Core banking is the facility that is arranged in such a way that the branches of all banks are brought under a central server so that banking services from one bank to another is made possible.
-Core banking is the facility that is arranged in such a way that the branches of all banks are brought under a central server so that banking services from one bank to another is made possible.
35. Advantages of Core banking
-As a result, ATM, debit card, credit card, net banking, Telebanking, mobile banking, etc have been brought together.
-Transactions have become simple.
-By using this facility, an individual can send money from his bank account to his friend's account elsewhere.
36. Co-operative Banks
-Co-operation, self-help and mutual help are the working principles of cooperative banks.
-The main aim of cooperative banks is to provide monetary help to common people especially the villagers.
-Provide loans to the public.
-Protect the villagers from private money lenders
-Provide loans at a low-interest rate
-Encourage saving habits among people - these are all the main aims of cooperative banks.
-Farmers, artisans, small scale entrepreneurs, etc. chiefly avail the services of cooperative banks.
37. Different levels of cooperative banks.
State Cooperative banks
-Apex body in the state cooperative sector
-Provides financial assistance to district cooperative banks and primary cooperative banks.
District Cooperative banks
-Operate at district centres
-Provide assistance and guidance to primary co-operative banks.
Primary Cooperative banks
-Function in villages
-Area of functioning is limited
-Encourage saving habits in villagers
-Provide loans to villagers at a low-interest rate
38. Development banks - features and functions
-Development banks provide long term loans for various needs such as the modernisation of industries.
-Now, these banks provide loans to agriculture and trade sectors.
-Work as an agent that helps in the development of different sectors (agriculture, industry, trade, ...).
-Provides loans for construction of houses, small scale industry, and basic infrastructure development.
-The Industrial Finance Corporation of India (IFCI) is a development bank in India.
39. Specialised Banks
-Specialised banks provide financial help for the development of certain specific sectors.
-They provide help to start new enterprises.
40. Specialised banks and their feature
EXIM Bank of India (Export-Import Bank of India)
-Provides loans for exporting and importing products.
-Provides instructions to individuals who come into this sector.
Small Industries Development Bank of India ( SIDBI)
-Provides help to establish new small scale industries and to modernise existing industries.
-Aim is to vitalize village industries.
National Bank for Agricultural and Rural Development (NABARD)
-Apex bank in India functions for the Rural Development (NABARD) development of villages and agriculture.
-Unites all the banks which operate for the development of villages.
-Provides financial assistance to agriculture, handicraft, small scale industries, etc.
41. New banks emerged in the banking sector with certain specific aims.
-Mahila banks
-Payment banks
-Micro Units Development and Refinance Agency(MUDRA) Bank
42. Bharathiya Manilla Bank
-Bharathiya Mahila Bank was started in November 2013.
-The slogan of this bank is ' Women empowerment is India's empowerment.
-Today, this bank has branches in various states.
-Though the bank accepts deposits from all, it provides loans mainly to women.
-Mahila Bank has now merged with SBI
43. Payment banks (On 19 August 2015)
-Payment banks have been established to help low-income groups, small scale industrialists and migrated employees.
-They do not provide all facilities provided by banks
44. Features of Payment Banks.
-Accept deposits up to only one lakh rupees from individuals.
-Provide interest on deposits as specified by the Reserve Bank of India.
-Do not provide loans.
-Charge a specific fee as commission for bank transactions.
-Only debit cards will be provided.
45. MUDRA Bank Launched by Prime Minister on 8 April 2015
-A recently introduced bank for providing short term loans is MUDRA Bank.
-Mudra Bank provides financial help to small scale entrepreneurs and micro finances.
46. Non-Banking Financial Institutions? Features?
-These institutions work in the financial sector but do not perform all the functions of a bank.
Features or Functions
-Accepting deposits,
-Lending loans
-Whereas some services like withdrawal of cash by cheque, mail transfer, lockers are not provided.
47. Which are the non-bank financial institutions in India?
-Non-Banking Financial Companies
-Mutual Fund Institutions
-Insurance companies
48. Non-Banking Financial Companies
-These are non-banking financial institutions that operate under the supervision of the Reserve Bank of India.
-They are registered under the Company Act, 1936 and carry out the basic functions of the banks.
49. Main services provided by non-bank finance companies
-Provide loans for hire purchases.
-Provide loan for construction of house.
-Provide gold loan.
-Provide loans on the basis of fixed deposits.
-Running chitty.
-Kerala State Financial Enterprises (KSFE) is the major non-banking financial company operating in Kerala.
50. Mutual Fund Institutions
-Mutual fund is a mode of investment.
-Common man is not always able to invest in the share market directly.
-This limitation can be overcome through a mutual fund.
-Money is collected from various investors and is invested in share markets, debentures, etc.
-The profit or loss from this is distributed among the investors.
-Such institutions operate in both private and public sectors.
51. Mutual Fund institutions working in the public sector in India.
-Unit Trust of India (UTI),
-Life Insurance Corporation Mutual Fund (LIC MF),
-SBI mutual fund.
52. Insurance companies
-Insurance companies are institutions that provide financial protection to individuals' life and wealth.
-They assure social security and personal welfare.
-The first insurance company of India was established in Kolkata in 1818.
-Today, insurance companies operate in the public and private sectors.
-A major institution in India working for the protection of an individual's life and health is the
53. Life Insurance Corporation of India (LIC).
-Non-life insurance companies that protect individuals from loss due to accidents, natural calamities etc. also operate in India.
-The General Insurance Company and four related companies are the non-life insurance companies operating in the public sector.
They are:-
-New India Assurance Company Limited
-United India Insurance Company Limited.
-Original Insurance Company Limited.
-National Insurance Company Limited.
54. Microfinance
-The aim of microfinance is to provide different financial services including micro-credit to common people.
-This helps in encouraging saving habits among the low-income groups in the society and to seek self-employment.
-The Kudumbasree and men self-help groups operating in Kerala and are examples of this.
55. Major goals of microfinance.
-Helps in collective development by mobilising money from individuals.
-Helps to increase the standard of living of the poor.
-Encourages saving habits.
-Makes use of the individual potential for group development.
-Provides loans to members in need.
-Starts small scale enterprises.
* Social Science II Textbook (pdf) - Click here
👉 Quiz
PSC Solved Question Papers ---> Click here
PSC TODAY's EXAM RESULTS ---> Click here
PSC EXAM PROGRAMME -> Click here
CURRENT AFFAIRS QUESTIONS -> Click here
PSC Degree Level Questions & Answers - Click here
PSC 10th, +2 Level Questions & Answers - Click here
PSC SHORTLISTS -> Click here
PSC RANK LISTS -> Click here
0 Comments