📚 Class 10 Economics – Chapter 3
💰 Money and Credit
🔹 Money as a Medium of Exchange (विनिमय का माध्यम)
- Money acts as an intermediate (मध्यस्थ) in the exchange process.
- A person holding money can easily exchange it for goods or services.
- That’s why money is called a medium of exchange (विनिमय का माध्यम).
🔹 Modern Forms of Money (आधुनिक मुद्रा के रूप)
- Earlier: Grains & cattle were used as money.
- Later: Metallic coins (gold, silver, copper).
- Now: Currency (paper notes & coins) + Bank deposits = modern forms of money.
🔹 Currency (मुद्रा)
- Issued by Reserve Bank of India on behalf of Central Govt.
- No individual/organisation can issue currency.
- The Rupee is accepted as a legal medium of exchange across India.
🔹 Deposits in Banks (बैंक में जमा धन)
- People deposit money in banks by opening accounts.
- Banks pay interest (ब्याज) on deposits.
- Deposits can be withdrawn anytime → called Demand Deposits.
- Payments can be made through Cheques (written instruction to bank).
🔹 Loan Activities of Banks (बैंकों की ऋण गतिविधियाँ)
- Banks keep only about 15% deposits as cash (for daily withdrawals).
- Remaining amount is used for loans.
- Banks charge higher interest on loans than they pay on deposits.
- The difference = main income of banks.
🔹 Two Credit Situations (दो ऋण परिस्थितियाँ)
1️⃣ Festive Season (Salim’s Case):
- Credit helped him to buy raw materials → finish production → increase earnings.
- Result → Beneficial (better off).
2️⃣ Crop Failure (Swapna’s Case):
- Couldn’t repay loan → had to sell land → debt-trap.
- Result → Harmful (worse off).
👉 Credit can be helpful or harmful depending on the situation & support.
🔹 Terms of Credit (ऋण की शर्तें)
Every loan has:
- Interest Rate (ब्याज दर)
- Collateral (संपार्श्विक / सुरक्षा) = asset kept as security
- Documentation (दस्तावेज़)
- Mode of Repayment (भुगतान की विधि)
👉 These together are called Terms of Credit (ऋण की शर्तें).
🔹 Formal & Informal Credit (औपचारिक व अनौपचारिक ऋण)
✅ Formal Sector → Banks & Cooperatives (regulated by RBI).
❌ Informal Sector → Moneylenders, traders, relatives (no regulation).
- Formal sector provides only half of rural credit needs.
- Poor people depend on informal sources → face exploitation.
🔹 Need for More Formal Credit (औपचारिक ऋण की आवश्यकता)
- Banks & co-operatives should expand in rural areas.
- Cheaper loans must reach poor people.
- Reduces dependence on moneylenders.
🔹 Self Help Groups (SHGs) (स्वयं सहायता समूह)
- Small groups of 15-20 poor people (usually women).
- Members save money & give small loans to each other.
- Later, banks also give loans to SHGs without collateral.
Advantages of SHGs:
- No need for collateral.
- Easy & timely loans at low interest.
- Promotes women empowerment (महिला सशक्तिकरण).
- Platform for discussing social issues (health, education, domestic violence).
✅ Exam Tip:
- Focus on difference between formal & informal credit.
- SHGs are always an important question.
- Learn two credit situations (Salim & Swapna) as short examples.
