All about Money and Banking | Economics

Checkout Tan Print's Economics for NTA CUET (UG) 2022 which intends to cater to the principal needs of all the students preparing for the Common University Entrance Test (CUET) at the Undergraduate Level in the Economics Domain. This book contains the practice material in a highly student-friendly and thorough manner.

1. A Quick Review

• • Money is a commodity accepted by general consent as a medium of economic exchange.
  • Money is an economic unit that functions as a generally recognized medium of exchange for transactional purposes in an economy.
  • A currency has to be derived from the Latin word “currere” which means “to run” or “to flow”.
  • Money has been derived from the Roman word “monere” which means “to warn” in Latin.
  • Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet.
  • One well-known form of digital money is the cryptocurrency Bitcoin.
  • Digital money can also represent fiat currencies, such as dollars or euros.
  • Digital money is exchanged using technologies such as smartphones, credit cards, and online cryptocurrency exchanges.
  • Reserve Bank is the Central Bank of India.
  • RBI was nationalised in 1949.
  • The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
  • A commercial bank is a financial institution that accepts deposits, offers checking and savings account services, and makes loans.
  • As of October 2020, there were 34 private and public banks licensed in India.
  • The biggest public bank was the State Bank of India and the biggest private bank was the HDFC bank.