MONEY & BANKING . Prepared by:- Krupa dave (130460116006) Manju chufal(130460116018) .

Money . .

Definition:- A medium of exchange developed to pay or accept any goods or service, is termed as money. * Money is standard for whole company. * It is either in form of coins or cash. * Level of money with a person indicates the wealth of the person. .

FUNCTIONS OF MONEY Medium of Exchange Unit of Account Store of Value It acts as standard of deferred payment

Types of money Commercial money 2. Commodity money 3. Fiat money 4. Fiduciary money

+ = THE DEMAND FOR MONEY Transactions Demand, Dt Asset Demand, Da Total demand for money, Dm Rate of interest, i (percent) Amount of money demanded (billions of dollars) Dt 10 7.5 5 2.5 0 50 100 150 200 250 300 Rate of interest, i (percent) Amount of money demanded (billions of dollars) 10 7.5 5 2.5 Da Rate of interest, i (percent) Amount of money demanded (billions of dollars) 0 50 100 150 200 250 300 10 7.5 5 2.5 Dm 0 50 100 150 200 250 300

FED Functions & the Money Supply Issuing Currency Setting Reserve Requirements & Holding Reserves Lending Money to Banks & Thrif Providing for Check Collection Acting as Fiscal Agent Supervising Banks Controlling the Money Supply

FED Functions & the Money Supply Federal Reserve Independence Recent Developments Relative Decline of Banks and Thrifts Financial Services Industry Consolidation Among Banks and Thrifts Convergence of Services Provided by Financial Institutions Globalization of Financial Markets Electronic Transactions

Banking

Meaning of banking People need money for day to day life as well as to meet future expenses such as higher education of children, marriage of children, house building and even in old age. In general terms, the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. However, with the passage of time, the activities covered by banking business have widened and now various other services are also offered by banks.  The banking services these days include issuance of debit and credit cards, providing safe custody of valuable items, lockers, ATM services and online transfer of funds across the country / world.

What is a bank ?  Define a Bank ? In simple words, we can say that Bank is a financial institution that undertakes the banking activity ie.it accepts deposits and then lends the same to earn certain profit. What is a Banking Company ? Any company, which transacts the business of banking defined above is termed as Banking company What is Banking System ? Banking systems can be defined as a mechanism through which the money supply of the country is created and controlled. 

Types of banking Central bank of india Commercial banks Development banks Co-operative banks Specialized banks

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