Qoit -T Money| & Backing Barker System Cornmadiity Fox COmenedity Le-| >| 20] i “Money is asbat soSory does" - Naka ' Aaything asic ‘is CSmeoaoly Acceptedas | Median OF exchange, Unit OF valae, Store FL Value and standard of defewed Payment 1s knsesn Os Maney. 25 Fanctions OF Money at —— IE Camlin. Prirncay Function Leain Faneliod as ese need MESHey AS _ A median oF exchange Foy gauds & Seawvices On basis SF it's valae ip Qoy-to-Aay life —|(Mediam of Exchange Foy Parchasing goods G sewhees coe Heed £9 pay sash in exchange. nit OF Value + Secandary Fagction Laftea Primoay Beeds , Sash maybe Stored as Seposir /saviings and Maney Can be bowewed Antil Pater repayment =| Store OF Value Money can be Stored for a lang Lone =>| Standard SF Adefewed payment E Maney has Alality Fn Fakaxe payment: [Genrency denominations OF CBank ste) __ Nilieente nau auc. lenaenn As promisary AStE. Given RB\ governor: aa ae Qeveross —> Shakkikbant bas Cas) 1 3 j i . . : ; amin Ea_|Legal Achigikisn Sf maney Why ne increase the Faith OP Todian Koren) | balck. a A. prarsissany Hots is A Gorvittea Promise tf FQ) Somesne. é Legal tenders qaslity SPQ enone “Money is eshak dbe laew § Says \t 1s" Maney asic bas the psson ta Arschang. q Acbt | Fiat mMancy Cordes of Qevernox) = T saves, SS Maney an the Qidex Chiat) F the govt | oy ae Uited \egal Lender Cesins) Csins have’ Sapasity Gp to F loag Oey Tegel AW India. | Money oabich can be Accepted apta a edn teal MA, Ama ligne: " o=- Qo\imited \egat Lender Goamengy sates) | Money with Capacity Qbhave eas §S_ Accepted as notes: + (Maney Sbhiah can be Sccepead apa Ray Orrcert CamiinNeon: \eaal Rea mency, % ll This also called Fiduciary monty ss \tis } Accepted As Maney SH basis OF wast: ; —s| Money erithout the Sign Sy prSeiss Sr ee Qaverne: Sy RB) ‘ @, eq: Cheque 5 Bah og m 2? Funckenal AeNnitian D0} ik explains pew, Fanctions oF npSAcy Medharn Sf exchancgt 4 oh Amit fF Volae (2 il - A standard of deferied payment A store Of valac: Bue 35 Noaxoas & Braad cancept e: =z |Namace + xelatea to mediara BF exchange |Thase Conrency cumeh axe Accepted os TOEAIGN | SF exchange M= c+ DD. ec Sarxency AW cireatlakiso wh «|Demand Aeposit — Maney canbe esithdracay SQ demand. Cliqaid cash), 7M GaP Maney sapply Camlin— | Broad: related ta store Of Valae Fanckian Shared in the Form of deposit Fixed /Lime Acpasit. Can aoly be SHEA uy, QFkex A pened Sf Avene M=ctop+s0+ID E Savings Aepasit —7SD Viene, “Acposit an ee Money and Nea Mansy ——— - | Near money: Close Substitute SF mone, Anydhing bic C20 toe easily CSnverted \nis | mancy - Eq. Qala, cheque bs. Money Supply" = = —|Tora\ stock OF maney 19 Sacalahan in a0 econ] TL Aso ples stock SF tHancy At a specific paint no) OF tiene. i : — Components Conresey An civealaiso . | Demand Depssit \ Ad W= S*DBD Coy narnces Fososy 6Snct j { es a Sale : rah ais dis : jeamiin aoe \Except | AN Sthe Aenaminakien SP notes \ssued by RB. CaPkey 1935) Measares S¥ Maney supply RBI qve 4 medsares of Maney Supply = Mi, Mo, M3ayM4 IMA] + o0+00 C > Cantveny DD Dermand aepesits 3 ae Op Sthea deposits - Ma its like Viqaid cast Nees money} a..[Ma = Mat Savings deposit asith post Sifee CRS + |Nawaos Maney >-|[Ma = Ma t Nek dime deposit Rixed deposit) Lt 1s byoad rooney s ok 4. [M4 = Mat Total depacits caith PS Commeacial banks exclading ee TNakional savings Sevkificates | vi : y Broad THINS " NSS Dovesting 19 NSS \eads to tax rcdacting CamlinVd ab ch, Mal: Neon Money LLMs M4]. Broad Meaney Lhecaase SY oe Min) ST tisne Aeposit] Ma. Most Vaid cash Ma. Least lhquid cas Demand For Maney 410 Wyansackiss parpose Aemand SF MSacy For Wansackao ik rekts| | Lo insame.- 2 Om C1) =F CY) | Posi Live selatian: When income incieases | Lvansackian iNeeases. Pre Cackianary Poupass Le some cash held as \yqad cashia i = Emergency POIPSs¢- = = Brey a Gy ia Ey Pas itive relation» When ihesmwe increases | — ene WWevedse SX PrecVakionaay mastive Pope! 25 Specalative Parpases Gipvestrnentd , im ooe . Taney SXPecking Fakaxe ret") — Re SD CD) : Sete yelakion: When rate Sf Inter ext ie CamiinBanking ae ons 4 According ko Basking Companies Ack , 1949 5 i Buavica ee Abc accepting of deposits of Money From we pablic , yepayable In 5 demand 0 : Otherwise, And asikhdvawable by cheques, Axofts, | Order Ox Gtherwise!. | a w|Maro 2 fanctions 4. | Accepting deposit Rom public Different types OF Accounts: + |Carrent Account Deposit Withdawn by check oo Aemand CNs joker! - | Saving Account Deposit Cless inkerest) - [Fixed Accoant Deposit Depesits for 9 Yxed kero Chyqp Jokevest xt) —3| Coramersial banks charge alah atk of inked On loans ANd loos Interest tate So depsits _ 2. Advancing loans: Texm \oags, Bank oe Term loans: [oans sepad in xeqalar ae Over Adsek pened OF Lene Cinclades Salis sec anity) ‘ i : 2 2 : i ad aeee Bate: eae advance Qven by commensal bank \Wacsing Customer ta Sverdrvaw his carent ACCQaHe UPS AQreed liemit: « [SME-loans Qiven ithoat Callateral Security to small & mediam enterprses. => 12 pablic hanks io Tndia. Eg - SBI, Canara Bank, CB), Pasa National Bank ete | io] Private Banks NCA J HOES, Fedeva Bank South Indian Bank 24 National Bank . |Gedit Creation Tunchon OF Cammecdal Banke Uigh pocaered money —> Money created by RG! W=crxR Maney > Money deposit Cdd) by cara cial Rank 3 M= CrdO 5 Rank Money > KGrency Ww Circulation | demand oo > Hous Commercial Banks create edit? _ SS eri) Deposit, = LAR Clegal Reserwe Ratis pricey Acposit) TRaction of deposits De sit one by \eoenly Kept in Foun oP Sastores, ; ; Poxcseaves) 4 Camiinbli lll al F jdalelsFeige « Doto Q TP initial Aepasit of co commercial baoks is 5996 | [aad vesewe var YALIG Is 257% whats the snSney [ [ereated by bank by bank) banking system? C [Total mong ereQhian = Trikial, Aepasik x x ae “ERE = BOS RA a5/ = BOO XNSG = 3,200 fo i Q_|F the money ) eaked yy Ane banking syskeno, sz 15 FIQOS apd Lhe prirocry Aeposit ts F 250 Calculate ERR. He a A o| WStA) emaney Greakion= Anikialdepasik x v TR ISSO = 259 x 1 LRR LRR=188O 250 = 9-25 = 25% ae zs «(00SResewe Rank of India eRe) RR\ is the Apex OF all banking Systens A Treg | Fon chans @W- ssae OF Notes Miners Reserve Systen5 WUaontity As Wserve. Eg: India = min Aaaca = BSex. Foreign xesesve a Tndia Ltd CsPMciL) ct Categories + Printing Press Andia Secarity Bess Cask) Seca by prinking Press Ayderatbaa) Every country /ecanamy keep ceitoin | = NSex: Qld & other \qaid assets Secanity Printing and Minting Coxrparation | Sernency Note Press CNosik) F il Bank note Press CBeasac) 4 mints Cesin Pressing toil) ydexabad Be Noida) S Indian Govt Print Crambar kalkaia 3g 7 amin oyPeas wee ae Dole : | Paper nil) Secarity Paper saill Chloshiqabad) Mysoxe , Salbsni 7 printing Press Garreny ) bat handled by R&Lsabsidiay — Bharatiya Resewe Bank Note Madsan CBRRBNM) Qs Banker ts the govt (2 Agent, Adviser to govt Sn/econamic, banking » Yinancial matters. Give laan to gov OS Banker's Bank 2 j As apex SF banking, ashen Bank Faces Ai icalties they can baweu maney Ham AR) Gy depasit sarplas Fand ip RB) 9 implement Fines ete Custodian of Foreign sesewe - a RBI maintains /cantiols Foveign resewes by Sellia AWQH Carvrency 19 market OH &x cess Aemandaad parch Asing Ferdign Conency fom Market Qn Sxcess Sapply “Os|Sthe Reais are \ike parchase pSe\ing SV Qov¥ Secoitics Camlin SeasCn Contraller OF credit, CRBYD Greater oF medik > Commercial Banks RBI ack As COntraller QP Ged in se Of Handling oF bill OF secoriky AL Os epee] In IMF, Calleck info Sa Fnanad Secumlty inFlanonary CWhen Smoney Sapply 15 gh) «| AcFlaxianary CWhen maney sapply is less of SVEAAKIN Using 2 mMeSsares S Qaapkitative Qaaltative Quantitative Bank sate - The vate at cubis Central Back Qive leans 49 Casomercial banks / Charges { fo Vending Funds t& Cammercial bagks Long Lexon purpose Carsent valac SF bank wate = 4.15% Credit ® In case of inflation RB) Aelibenately [Secrease the Jending Capacity SP each commercial bank. comin Hoos RBI ase bank vate ag a teal te cents =ft BR ae caster ; A Crmong ss Pes lending capacity = Meo, \otevest os\ jocxease & ISan amount coill de Eq,- loos acs —>as/ ECO \e Aone, IMPlakisnary Sitakian RBI incxease Bank wale In Aides to reduce THSaey SVpply Orble Increasing BR im makes Crecthk Costher Gecreasing lending Capacity. Deflatias —» 1 BR —> TP lending capacty Cea —> Trane Sapply SMS Capen market Qperations) BRI paschase & sale SF gavt: scarily \) Speg Market Hoos RB ase it as tool? Toflatios —> RBI sale qavt secariky astich esl) Veduce | parchasing Power aang publ Sod § vedace poancy supply in economy. z SAcess roescy Supply Slows Wom warkck ie! | DePlation > RBI parahass Qavaamenk seconly INCVEASs PUrchasing power ASA wsoey SAVp\y Ig eeSaamy. ; | ; : : : g CominPe VR R lax ‘bie Resewe Ratio) CRR SLR a GRR CCash Resewe Ratio) every Cam mercial Book Is fegally/ Cocopal sory kept kaka a cevlap 7s Af q Latal Aepasit As weserve Wp tbe Vorm SIS | Cansenk Cosh vesewe —7 47/2 l SLR Gstatatay Liquidity Ratio) Ip the fois SF liqaid Assets _ Carnent SLR > l8% fs) Hoos 1k is Gsed as tal ® Teflation —> CRRT Goble TCR , 1990 Aroguot t }\ ending cape BF Commercial bank Les they have to 50 less acmaunt OF loan Compared As resen\"| Eg 1899 =307¢ 325% DeVlation —> CRRY — lending eapeaty! SF Cammenal bagkssincvease money Se?![inflaties ZAR - |AeFlation —> SLRY Repo nate d 2 The sate at ashich BBY provides loans AD Carmerrial bank Fax Short peried Ks a teal? 2 Repo xate —> f Ss Japlation —s Preps sate —> V lending capacity SE Cammeraal banks >> Wi Maasy Supply z Conrent Repo sake’ => 47° 5.| Revers Repo rake ao a The take SY imterest paid by RB) Sp CSromnenal Bank's Acpasits Cexcess- Reposit by CSenenesaal bank > -|Dansg Tetlatas — Treverse seperate | =) lesaing Capacity > | Money sapply es «| Banks AeSosit IN AB vather SOI Ben - [Deflation —S Y xeverwse sens vate > Nerdy] Cagadty — > Th Nancy supply > NIsq macnn ac Mandtany policy of RBI a po 7 : 2 : ‘ ‘Camlin