Money and Banking

The ratio of the total increase in deposits to the initial deposit in the banking system.

The percentage of deposits that banks are required to keep as reserves.

The process by which the money supply expands through lending and re-depositing of funds in banks.

The most liquid form of money; physical cash (currency) and demand deposits.

M1 + saving deposits with post office saving bank.

M1 + net time deposits with the bank.

M3 + total deposits with the post office saving bank excluding national savings certificates.

The apex body controlling and regulating the country's banking and monetary system.

A currency system where the central bank is obligated to hold assets, like gold or foreign securities, equal in value to the currency it issues.

The central bank ensures that all banknotes in circulation have the same design and value, preventing counterfeiting and maintaining public trust.

The central bank has sole authority to issue currency, allowing for effective monitoring and prevention of inflation or currency manipulation.

The central bank manages the government's finances, maintaining accounts, handling payments, and providing loans.

Commercial banks are required by the central bank to keep a portion of their deposits as reserves, ensuring the stability of the banking system.

When commercial banks face financial difficulties, the central bank acts as a lender to ensure their stability and prevent a financial crisis.

The central bank influences the amount of money in circulation and credit availability to control economic activity, such as inflation or recession.

The central bank manages the country's foreign currency reserves to maintain the exchange rate and support the country's international trade.

The interest rate at which the Central Bank lends money to commercial banks.

The buying and selling of government securities by the Central Bank to influence money supply.

The percentage of deposits that commercial banks must hold with the Central Bank.

The percentage of deposits that commercial banks must keep as liquid assets.

The difference between the loan amount and the value of the security offered as collateral.

The Central Bank's use of persuasion and pressure to influence commercial banks.

The Central Bank's strategy to restrict credit for specific purposes or sectors.

The Central Bank uses monetary policy tools like bank rate, open market operations, CRR, SLR, margin requirements, moral suasion, and selective credit controls to manage inflation.

A situation where the demand for goods and services exceeds the available supply, leading to price increases.

A situation where the demand for goods and services is lower than the available supply, leading to price decreases.

The percentage of deposits that banks are required to keep as reserves.

The initial amount of money deposited into a bank that starts the process of money creation through lending.

The total amount of money held by all banks in the system, including the initial deposit and subsequent deposits created through lending.

The buying and selling of government securities by the central bank to influence money supply.

Money serves as a medium of exchange, a unit of value for goods and services, a means to store value, and a standard for deferred payments.

Money makes it easier to buy and sell goods and services without the need for barter, eliminating the double coincidence of wants.

Money provides a common unit to express the value of goods and services, making price comparisons straightforward.

Money allows us to save wealth and use it later because its value generally remains stable over time.

Money allows for loans, mortgages, and other credit transactions where payments are made later, thanks to its stable value and general acceptability.

The total amount of money circulating in an economy at a specific point in time, measured in terms of M1, M2, M3, and M4.

Barter systems face challenges such as the double coincidence of wants, difficulty in measuring value, and inefficiencies in storing and transferring value.

Money acts as a medium of exchange, measure of value, store of value, and standard of deferred payments, eliminating the challenges faced by barter systems.