Money and Credit Test - 5

Besides in the form of paper notes and coins people hold money in the form of deposits with banks. Here, the money of people is much more safe and secure. Further people can earn interest on the deposited money.

A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been made.

Banks is a formal sector of credit and these are supervised by Reserve Bank of India(RBI). The other three are the informal sources of credit. 

Grameen Bank of Bangladesh was founded in october 1983. It is one of the biggest success stories in reaching the poor to meet their credit needs at reasonable rates.

Gold is a precious metal and modern form of currency is not made of precious metals like gold. Cheques, demand drafts and debit cards are modern forms of money. 

Barter exchange is the exchange of goods for goods without any exact measurement and it requires double coincidence of wants. Before the use of currency, barter system was prevalent everywhere. 

A cooperative bank is a formal credit sector which provides loan at cheap and reasonable rates and is properly governed by government bodies. The other three are the informal sources of credit. 

Professor Muhammad Yunus is the founder of Grameen Bank of Bangladesh which provides loan to poor at cheap rates. This bank was founded in october 1983. 

Earlier barter system was prevalent, where goods were exchanged for goods. But now with the help of money goods can be purchased with the help of money which makes the process of exchange of good more smoother.

A fixed deposit account is opened to keep the money for a specific time and the holder is allowed to withdraw the sum after end of that particular time on a particular date. It is different from demand deposits which are payable on demand.