Application Form: The bank will provide an application form if it found that document is correct. The depositors can withdraw the money deposited in the current account any time. Money banking finance book for bcom part 1 Archives. In the whole process the bank earns money. No Change in Volume of Trade: It is assumed that volume of trade does not change. Further different coins and notes should be of different color and size in order to avoid of any confusion.
The cost of transferring paper money is quite low and it can be transferred in a very short time period. The future payments can be stated in terms of money. Capital movement: A country where the capital inflow rate is very high the value of home currency increases but if there is increase in capital out flow then demand for foreign currency increases due to which value of home currency also decreases. They receive car advance, house building finance and also entitled to provident fund. This inflation is called wage spiral inflation. A period of good trade is followed by a period of bad business conditions. These cells provide information and guidance to the exporters. How rate of exchange is determined. He is an intermediate partly between the borrower and the lender. Bcom Part 1 Money Banking And Finance Notes. This results in low level of imports and demand for foreign currency decreases and value of home currency increases. Near money: A type of money which can easily be converted into money. Central bank has the sole right of note issue. Relatives of bankers: The bank owners provided key posts to their relatives.
Restriction on recruitment. Saves the firms from dissolution: Credit financing helps the business to take over the financial difficulties and thus saves it from dissolution. Transfer of wealth: The barter system does not help to transfer wealth from one place to another. Non-aggressive management: A firm not using debt showing non-aggressive management. Payment of more income tax: When businessman uses owner's funds only he has to pay more income taxes to the government, as share of profit paid to the owner is not deductible for income tax purpose. Many small producers were unable to get loan facility. Bcom part 1 banking and finance notes 6th. The interest is charged from the customers on the overdrawn amount. Educational loans: In. Clearance of Goods: Now the importer has in his possession the bill of lading means of which he can get the goods clear through the clearing agent. Demand pull inflation. Commercial banks hold reserves with central bank, so that it could help them in difficulties. He borrows from one party and lends to another.
Expansion in credit: The credit expansion also creates inflation. There is no record for checking the correct opinion. An increase in wages of individuals increases the income and on the other hand it causes an increase in the cost of production. When tax is collected in the form of goods it is very difficult for the government to spend such goods for development projects. Money and banking pdf notes. Banks collect small saving which becomes a huge amount. Low interest: The interest charges on debt are low than the rate of return. Bcom part 1 banking and finance notes ominous shift. Climate for capital formation: Capital formation depends upon the level of investment and savings.
According to Coulborn: "Inflation means too much money chasing too few goods". Robertson says it "optional money". There is no need to find a person who is need of a thing which you have in surplus. ON THE BASIS OF OWNERSHIP. Cost pushes inflation: Cost push inflation occurs where there is an increase in the prices due to increase in cost of production.
Ease of specialization: In barter system specialization is not possible because everyone tries for self sufficiency. · Lender of last resort: Whenever the commercial banks are in any financial problem, they take loan from the central bank at interest. Stability in life: The firm is in a position to control over the financial problems and emergencies by debt financing. Bcom part 1 banking and finance notes class 9. No change in velocity of money: Velocity of circulation means that one unit of money how many times passes in different hands. Features of privatization.
These things no doubt are costly but overall printing cost is quite low. Running or day to day expenses. Decreasing prices: During this stage the general price level starts to decline as a result the profit of businessmen also decreases. I think it is clear that if someone writes to me – "hello", then I, like many others, will most likely answer – "hello. Running inflation: A general rise in price level upto 8% to 10% p. a. is called running inflation. After the completion of all the form. According to Pigue: "Inflation exists when money income is expanding more than in proportion to income earning activities". Transfer of wealth: Money also serves as a mean of transferring value from place to place. In the case of deposits, the depositors cannot withdraw his amount beyond a specific limit fixed by the rules of the bank.
Inflation has been defined in different ways by different economists; some of the definitions are as under: Definitions: "Inflation is nothing more than a sharp upward movement in the price level". Habit of drawing cheques: If he is habit of drawing cheques without sufficient fund in the account, the bank may close his account. Some of the definitions are as under: According to Ely: Any thing that passes freely from hand to hand as a medium of exchange and is generally received in final discharge of debts. On the basis of Causes. The terms and conditions of the sales are also stated in it. Saving Bank: These banks collect saving of the people. Concentration in quality production: The owner can concentrate in the production and products as he ahs not tension of interest.
It included deposits, government bonds, printed bonds etc. Deposit Account or time deposit: In the case of fixed deposit, depositors place their money in the bank for a specific period i. months to years or more. Please rate us 5 star and get featured on our Fans page. The central bank cannot be closed up even if working at loss. Deduction of zakat is made on this type of account. Due to this problem trade under barter system was very limited.
Political interference: The political interference will be eliminated. It has reduced unemployment on one hand and increased the transport facility on the other hand. Unemployment: This theory assumed that there is a full employment but it is not possible in real life. The main types of loans guaranteed by the bankers are: 1. Supply of money can be increased or decreased according to the needs of the economy. As a result of such projects the income of the people increases but there is no increase in the output of the goods.
So proper control and regulation of credit is necessary for the economic stability of a country.