Tag: owned fund and borrowed fund

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Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Interest rate, collateral and documentation requirement and the mode of repayment together comprise, what is called the _____.

  1. security papers

  2. terms of credit

  3. credit

  4. all of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Terms of credit includes:  

Interest rates,

Collateral (security),

Documentation related to lending money and

The mode of repayment.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

85% of the loans taken by poor households in the rural areas are from ___.

  1. cooperatives

  2. local bank

  3. government bank

  4. informal sources
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Majority of the people in rural areas depend on informal sources for loans.

Informal sources include landlords and rich farmers.

 The main reasons behind this are:

1. The number of banks in rural remote areas is low.

2. Bank loans require proper documents and collateral (security). Absence of collateral is one of the major reasons which prevents the poor from getting bank loans.

3. Informal lenders like landlords, know the borrower personally and hence, are often willing to give a loan without a security.

 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The high rate of interest on borrowing _____.

  1. increase the repayment ability.

  2. increase the debt burden.

  3. increase the easy accessibility to lenders.

  4. increases easy repayment options
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
  • Money borrowed on higher rates of interest will usually increase the debt burden.
  • Informal sources of credit charges higher rates of interest. 
  • Due to higher rate of interest the informal sources of credit are exploitative in nature.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The District Central Co-operative Banks are in direct touch with _____.

  1. reserve bank of india

  2. state cooperative banks

  3. land development banks

  4. central government
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The central co-operative banks are the federations of primary credit societies in a district.
The central co-operative banks are
of two types.
The state co-operative bank acts as a watchdog of co-operative banks operating in the state.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The interest charged by the bank from its borrowers is _____  then the interest it pays to its depositors. 

  1. the same

  2. higher

  3. lower

  4. unspecified
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The interest charged by the bank from its borrowers is higher than the interest it pays to its depositors.
The difference between the interest paid by the bank to its depositors and interest paid by the borrowers to the bank is the income of the bank.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Paper currency was started in India in _____.

  1. 1862

  2. 1542

  3. 1601

  4. 1880
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • In 1861-62, the British rulers introduced its first paper money: ₹10 notes in 1864, ₹5 notes in 1872, ₹10,000 notes in 1899, ₹100 notes in 1900, 50-rupee notes in 1905, 500-rupee notes in 1907 and 1000-rupee notes in 1909.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

In obtaining a home loan , which of the following might be considered as collateral?

  1. Original sale deed of the property

  2. Documents to indicate the borrower's bank deposits

  3. Other assets owned by the borrower

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The following securities might be considered as collateral:

  1. Original sale deed of the property.
  2. Documents to indicate the borrower's banks deposits.
  3. Other assets owned by the borrower.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

People deposit their money in the banks as _____ .

  1. money deposited in the banks are safe

  2. it earns interest

  3. both (1) and (2)

  4. money can not be withdrawn as and when
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

People deposit their money in the banks as it earns interest and money deposited in the banks are secured.
Money can be withdrawn any time by the customer on demand.