Kerala SCERT Class 10 Social Science 2 Chapter 9 Financial Institutions and Services Question Answer Solution Here. Kerala Board Class 10 Students can find Here 9th Chapter Financial Institutions and Services Notes provide by our Teacher. Important Question Answer from Chapter 9 Financial Institutions and Services.
- Board- Kerala Board.
- Class – 10.
- Subject – Social Science Part 2
- Chapter – 9.
- Chapter Name – Financial Institutions and Services.
- Topic – Question Answer Solution.
(1). Which finance Department issued the one rupee note and its subsidiary coins?
Answer:
The Central Finance Department issued the one rupee note and its subsidiary coins.
(2). What is the main function of the Reserve Bank?
Answer:
The main function of the Reserve Bank of India is to control credit.
(3). Who serve as the banker to the centre and state government?
Answer:
The Reserve Bank of India serve as the banker to the centre and state government.
(4). Which are the functions of the Reserve Bank of India?
Answer:
Printing of currency, control credit, banker to government and banker to the bank are the functions of Reserve Bank of India.
(5). Explain how the Reserve Bank of India controlling credit?
Answer:
The Reserve Bank of India increases the money supply in the Indian economy through the distribution of printed currency and through credit creation and control of credit made possible by changing interest rate. As interest rates increases, volume of loans decreases and vice versa.
(6). How becomes the Reserve Bank of India banker to the government? How it works?
Answer:
The Reserve Bank of India becomes banker to the government because its another function to Reserve bank of India is to serve as the banker to the centre and state government and as a banker to the government the Reserve Bank of India accepts deposits from the government, sanctions loans and renders other banking service to them. The Reserve Bank of India does not charging any fees for these services.
(7). Which bank is the apex bank of all banks?
Answer:
The Reserve Bank is the apex bank of all banks.
(8). Who called as financial institution?
Answer:
Financial institutions are those institutions where finance transactions like deposits, loans etc. takes place.
(9). Which are the non-banking financial institutions?
Answer:
Mutual fund institutions, insurance companies, non banking financial companies are the non banking financial institutions.
(10). What are the functions of bank?
Answer:
Banks are institutions that accept deposits from the public and provide necessary loans on terms. They operate on the basis of general guidelines and conditions established by the Central Bank of India. It is shown in the figure that interest is paid on approved deposits. At the same time it is clear that interest is charged on the loans granted. Interest rates on loans will be higher than interest on deposits. The difference between these interests is the main income of the banks.
(11). Which is India’s first modern bank?
Answer:
The Bank of Hindustan established in 1770 is India’s first modern bank.
(12). What is the first phase of banking sector about?
Answer:
The first phase began in 1770 for banking in 1969. In this context, the British East India Company established its board of directors: Bank of Bengal, Bombay Bank and Madras Bank. The bank’s performance and growth are not slow at the moment.
(13). What role second phase played in growth of banking sector?
Answer:
In the second stage, from 1969 to 1990, the bank developed rapidly. The idea of a bank that should work for social development led to 14 banks in 1969 and six in 1980. In 1993, the Bank of India joined the New Bank of Punjab. As a result, there are only 19 country banks in India.
(14). Write a note on the third phase of banking sector.
Answer:
The third phase is from 1991 to the present, banks have been operating in conjunction with their activities. There are a number of banking reforms that have helped save security and time, simplify procedures, and so on. Introduction of Automated Teller Machines (ATM), credit card, phone banking, net banking, core banking, etc. are the results of the third phase of development.
(15). Which banks are known as New Generation banks?
Answer:
There were some private banks that got license of banking in the third phase. These banks introduced new, innovative functions which are quicker than the traditional banking system. These banks are known as New Generation Banks.
(16). What is the significance of commercial banks?
Answer:
Commercial banks are the oldest and having many branches. These banks plays vital role in the financial activities of the country. These banks accept deposits from the public; these banks grant loans for trading, industries, agriculture etc. with some terms and conditions.
(17). Why RRB established?
Answer:
RRB stands for Regional Rural Banks. These banks were established in 1975. The objective of these banks was to provide banking service to different states in India. These banks help small farmers, agricultural labourers, small entrepreneurs, etc. by providing them loans.
(18). Who owns public sector commercial banks?
Answer:
The government of India owns public sector commercial banks.
(19). Which banks are associated with SBI?
Answer:
A reserve bank oversees their operations. The Reserve Bank of India and its affiliated banks, nationalized banks and regional land banks are public commercial banks combined. Indian private commercial banks and foreign private commercial banks are privately owned. They also operate under the supervision of the Reserve Bank of India. Private commercial banks are headquartered in India and are headquartered abroad.
(20). Note down the functions of commercial banks.
Answer:
Following functions commercial banks executes.
(i) Accepting deposit: One important aspect of banks is deposit. Commercial bank accepts deposits. There are different types of deposits like saving deposit, current deposit, fixed deposit and recurring deposit.
(ii) Providing loans: Banks accept the money and use it to grant loans to public. Different types of loans available in the banks for individuals and for institutions also. Interest rate on loan is higher than the interest rate deposit and the difference of the interest rate is depends on the requirement of the loan.
(iii) Other facilities: In addition to basic operations, banks provide other facilities and services to the public. Most banks provide private and institutional storage lockers for storing valuable assets (gold, asset documents, etc.). One locker key is with the owner and the other is in the bank. The cabinet can only be opened when both keys are used. Bank charges for such services. Demand draft is the facility offered by banks to send money from one place to another and having bank account to use this facility is not necessary.
(21). Write a note on different type of deposit?
Answer:
Let’s see different type of deposits
(i) Savings Deposit: This system helps the public to deposit their savings. Banks offer low interest rates on such deposits. The depositor can withdraw money from the deposit with restrictions. Different banks have introduced different provisions on the duration and the amount of money available during a given period. Details of the amount deposited and withdrawn will be indicated in the passbook provided by the bank.
(ii) Current Deposit: This facility is for the account holders who deposit and withdraw money many times in one day. Business men, industrialists and traders use this type of account. Interest is not applicable for this type of deposits.
(iii) Fixed Deposit: This fund is ideal for investing in the money of private banks and corporations for a period of time. Interest is calculated based on the time duration invested. The amount is withdrawn only after the end of the specified period; a specified interest rate will be given. But if the money is withdrawn before the maturity of the deposit, the interest rate will be reduced.
(iv) Recurring Deposit: Recurring deposit receive a certain amount of money each month for a specified period. The interest rate on the upcoming deposit is higher than that of the depositors, but lower than that on the savings. The interest rate is small if the deposit is withdrawn before maturity.
(22). What is loan?
Answer:
Banks accept the money and use it to grant loans to public. Different types of loans available in the banks for individuals and for institutions also. Bank accepts collateral for granting loan. As collateral physical assets like gold, property documents, etc. are used. Fixed deposit certificates and salary certificates also used as collateral. Banks provide loan for agriculture, industries, home loan, vehicles and to purchase home appliances.
(23). What caution should be taken while using ATM card?
Answer:
Following caution should be taken while using ATM card
(i) It is necessary to make sure there is no other person at the ATM counter.
(ii) ATM personal identification number should not be shared with anyone.
(iii) After transaction it is always good to make sure the balance amount on the receipt.
(iv) Receipt having information regarding account number or card number hence the receipt should not be thrown away carelessly.
(24). Which are the modern trends in banking sector?
Answer:
Modern trends in banking sector are as follow
(i) Electronic banking: Also known as E-banking makes available banking service with computerisation and ATM facility. Transaction can be done using net banking and tele banking in this type of banking. This method saves time, also having low service charge and money can be transferred and bill can be paid from home.
(ii) CORE banking: CORE stands for Centralised Online Real-Time Exchange Banking. In this banking system all banks are connected to each other and it is possible to send or transfer money from one bank to another. Taking a one step ahead ATM, debit, credit cards, net banking, tele banking, mobile banking etc are brought together in this method.
(25). How cooperative banks works?
Answer:
Cooperative banks are established for co-operation. The principles of cooperative bank are Self help and mutual help. Cooperative banks help with money for common people facing same type of problems, especially villagers. Farmers, artisans, small scale entrepreneurs, etc. avail service from cooperative banks.
(26). What are the aims of cooperative banks?
Answer:
Cooperative banks have following aims
(i) To provide loan for public.
(ii) Save villager from the money lenders.
(iii) Make loan available on low interest rate.
(iv) Promote habit of saving among people.
(27). How many levels of cooperative banks?
Answer:
There are three levels of cooperative banks State cooperatives, District cooperatives and Primary cooperative banks.
(28). What is Development bank?
Answer:
These development banks operate in financial sector. Development bank provides long term loans for many requirements like to update industries. Nowadays these banks are made loan available for agriculture and trade arena.
(29). What are the features of Development bank?
Answer:
The features of Development bank are as follow
(i) Development banks works like agent who help for the development for different sectors like agriculture, industry, trade etc.
(ii) Development banks provide loan for house construction, small scale industries and basic level infrastructure development.
(30). Which banks are known as specialised banks?
Answer:
Specialised banks provide financial help for the development of certain specific sectors. They provide financial assistance to start new business.
(31). Which new banks emerged in the banking sector?
Answer:
In banking sector new banks are emerged with some specific aim. Mahila banks, Payment banks, Micro Units Development and Refinance Agency (MUDRA) Bank are some of the new bank in banking sector.
(32). What is Bharathiya Mahila Bank.
Answer:
Bharathiya Mahila Bank was established in November 2013. The motto of the bank is “women’s empowerment is India’s empowerment”. The bank currently has branches in various states. Although the bank receives deposit from all, it mainly offers loans to women. Bank assist with financial support to low income groups, small industrialists and migrated employees. They do not offer all type of banking services.
(33). What are the features of Bharathiya Mahila Bank?
Answer:
Following features of Bharathiya Mahila Bank
(i) Bharathiya Mahila Bank accepts deposits upto only one lack rupees from individuals.
(ii) Bharathiya Mahila Bank provides interest on deposits as specified by the Reserve Bank of India.
(iii) Bharathiya Mahila Bank do not provide loans.
(iv) Bharathiya Mahila Bank charge a specific fees as commission for bank transactions.
(v) Bharathiya Mahila Bank provides only debit cards.
(34). Which are the non banking financial institutions?
Answer:
Non banking financial institutions are financial institutions but they do not perform all the functions that bank perform. These financial institutions do basic functions like accepting deposits, lending loans etc. where some services like money withdrawal, money transfer, lockers are not provided.
(35). Write a note on Non banking financial companies.
Answer:
These are non-bank financial institutions supervised by the Reserve Bank of India. They are registered under the Companies Act of 1936 and perform the basic functions of the banks. The main services of such banks are:
- Provide a down payment loan
- Offer a loan to build a house
- Get a gold loan
- Offers loans based on fixed deposits
- Run Chitty
- Kerala State Financial Company (KSFE) is the largest non-financial corporation operating in Kerala.
(36). What is Mutual fund institution?
Answer:
Mutual funds are a form of investment. The average person cannot always invest directly in the stock market. This limit can be exceeded for investment funds. Money is raised by various investors and invested in stock exchanges, bonds, and so on. Its profit or loss is shared among investors. Such bodies operate in both the private and public sectors. Public sector entities include the Indian Trust Unit (UTI), the Life Insurance Corporation Investment Fund (LIC MF), the SBI Investment Fund, and so on.
(37). Write a note on Insurance Companies.
Answer:
Insurance companies are institutions that provide financial protection for people’s lives and assets. They guarantee social security and personal well-being. India’s first insurance company was established in Kolkata in 1818. Today, insurance companies operate in the public and private sectors. An important insurance company in India that seeks to protect people’s lives and health is the Life Insurance Corporation (LIC) of India. There are also non-life insurance companies in India that protect people from damage caused by accidents, natural disasters, etc. The insurance company and the four related companies are non-life insurance companies operating in the public sector.
(38). Explain Microfinance.
Answer:
Microfinance aims to provide a variety of financial services, including microcredit to common people. This will help encourage savings habits in poor groups and seek self-employment. Kudumbasree and men’s self-service groups in Kerala are examples of this. The men / women in a region come together and form small groups, usually no more than 20 members. Banks also provide these groups with low-interest loans. The working capital of these groups is the amount members receive and loans provided by banks at low interest rates. This amount is used as a loan to the necessary members. Small units are now running with this capital and with the help of local self-management. The poor can be protected from local lenders through the activities of self-help groups.