NCERT Class 10 Economics Chapter 3: Money and Credit (CRR, SLR & Repo Rate) | English | CBSE

Dr. Manishika Jain in this lecture NCERT Class 10 Economics Chapter 3: Money and credit discusses Money versus Barter
Barter System – Double coincidence of wants
Money – eliminates double coincidence of wants; Medium of EXCHANGE

Forms of Money
Currency: Paper notes and coins – authorized by Govt. (India – RBI)
Deposit with Banks – to earn interest for extra money; demand deposit (withdrawn on demand) – Cheque rather than Cash
Depositor vs. Borrower
Bank hold 15% of total deposit as cash
B/w surplus & those who need
Extend loans
Higher interest rate on loan
Diff. = INCOME for bank
Credit (Loan) Situation
Lender supplies the borrower in return for promise of future payment
For industry, housing, crop production
Can push borrower in further credit (crop failure)
Terms of Credit
Interest + Principal = Repayment
Collateral: asset that the borrower owns and uses this as a guarantee to a lender until the loan is repaid
Interest rate + collateral + documentation + mode of repayment = Terms of Credit
Formal Sector Credit
Formal sector loan – bank & cooperative – 90% rich household
Informal sector loan - moneylenders, traders, employers, relatives and friends – not supervised & charge any amount (usually higher) – 85% poor households
Formal – Supervised by RBI – Looks into
Cash maintained by banks
Loan not only to profit making businesses but others
High borrowing cost implies most money goes in loan repayment
Need for cheap & affordable credit
50% rural credit needs by formal sector
Self-Help Groups
Organize rural poor in groups and collect money
Members take loan from group
Group charges interest
If group is regular in saving – can take bank loans
Loan given in name of group – self employment opportunities
Overcome problem of collaterals
Grameen bank (Bangladesh) – 1970s – 6 million borrowers in 40,000 villages

Concepts discussed are:
Repo rate
reverse repo rate
CRR
SLR
Bank Rate

Money versus Barter @0:14
Barter System @1:06
Money @1:58
Forms of Money @2:48
Currency @3:37
Deposit with Banks @4:40
Depositor vs. Borrower @5:55
Credit (Loan) Situation @9:02
Terms of Credit @11:53
Collateral @12:18
Formal Sector Credit @16:43
Self – Help Groups @18:32
Cash Reserve Ratio (CRR) @22:51
Statutory Liquidity Ratio (SLR) @23:42
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