Why are transactions made in money? Explain with suitable examples.

5

(a)

What are the various sources of credit in rural areas? Which one of them is the most convenient source of credit? Why is it most convenient? Give two reasons.

5

(a)

Mention four characteristics each of the formal and informal sources of credit in India.

5

(a)

How does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?

5

(a)

Describe four features of Self-Help Group (SHG)

5

(a)

Answers the following questions:
(a) Why are banks unwilling to lend loans to small farmers?
(b) Besides banks, what are the other sources of credit from the farmers can borrow?
(c) Explain how terms of credit can be unfavourable for the small farmers.
(d) From where can small farmers get cheap loans?

5

(a)

Define central bank. Mention its functions.

5

(a)

Mention any three points of distinction between formal sector loan and informal sector loan.

5

(a)

Differentiate between formal sector credit and informal sector credit.

5

(a)

Mention any three points of distinction between formal sector loans and informal sector loans.

5

(a)

Why is it necessary for the banks and cooperatives to increase their lending facilities in rural areas? Explain.

5

(a)

Describe the vital and positive role of credit with examples.

5

(a)