Money and Credit Test - 6

A self-help group is a village-based financial intermediary committee usually composed of 10–20 local women or men. Most self-help groups are located in India, though SHGs can be found in other countries, especially in South Asia and Southeast Asia. In these groups the members of the group pool their savings and the members can take small loans from the group itself to meet their needs.

Demonetisation is a process under which the government of a country declares the currency being used in the country as invalid and people have to surrender that currency, then the government issues new valid currency. It is done to ambush black market. In India the first demonetisation took place in january 1946.

Demonetisation refers to the withdrawal of currency from circulation.  It encourages people for digital transactions. Digital transactions were promoted to reduce the requirement of cash for transactions. Digital transactions started by using bank to bank transfer through the internet or mobile phones, checques, ATM cards, credit cards, and point of sale (POS) swipe machines at shops.

Demonetisation was done to promote digital transactions and control corruption. It was also done to ambush black market.

Credit refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.Credit also refers to an accounting entry that either decreases assets or increases liabilities and equity on the company's balance sheet.

Reserve Bank of India issues currency on behalf of central government of India and also oversees the working of all the banks in India. It was established in the year 1935.

Money may be defined as anything which is generally accepted by the people in exchange of goods and services or in repayment of debts. Money acts as a medium of exchange since it acts a medium in the process of exchange of goods.

People deposit money in the banks because people’s money is safe with the bank and it earns an amount as interest. People also have the provision to withdraw the money as and when required.

A demand deposit consists of funds held in an account from which deposited funds can be withdrawn on demand in the form of cash as well as in the form of cheque which instructs the bank to pay a specific amount from the persons account to the person in whose name the cheque has been issued.

A cheque is a paper which instructs the bank to pay a specific amount from the persons account to the person in whose name the cheque has been issued.The person writing the cheque, known as the drawer, has a transaction banking account (often called a current, cheque, chequing or checking account) where their money is held.