Therefore velocity cannot be calculated within the country. When tax is collected in the form of money only then the government can use it for the development projects. Scarcity of money will keep people always working hard to earn more money in order to meet requirements of life. A -Termination by Customer. Money banking finance book for bcom part 1 Archives. Q # 18: define monetary policy? I really enjoyed the way it was delivered and the was the Prof explained the concept. · currency principles.
Commercial Bank: These banks are profit seeking institutions. The person who has kept his account with bank can ask for overdraft and the bank can grant him overdraft. A period of good trade is followed by a period of bad business conditions. Banks also provide services of hajj to his customers and public. Bcom part 1 banking and finance notes pdf download. The individuals, partnership, limited companies are the account holders. It included deposits, government bonds, printed bonds etc. Bank money is the form of cheques, bills of exchange, a promissory notes is not legal tender money.
The exchange of goods is possible if the wants of two parties coincide. The main disadvantages of equity financing of a business are as follows. TERMINATION OR DISHONOR OF CHEQUE. Negative effects or demerits: Unequal distribution of loans: The pre-nationalization model of banking structure will develop.
B) Making Loans and Advance or Employment of funds: Bank also advances loans to business, traders and exporters. Many of such branches working at loss. Following are the main objectives of monetary policy. The gold and silver coins of old times are examples of full bodied coins. And the central bank are legal tender money. Bcom Part 1 Money Banking And Finance Notes. · Deposits which are. Cheque book in safe custody; It is the duty of the customer to keep the cheque book in safe custody. Tendency of increasing population: Increase in population causes increase in demand when demand goes up the price rise. An increase in wages of individuals increases the income and on the other hand it causes an increase in the cost of production.
Payment of foreign loans/ interest: When a country wants to repay loans and interests the demand for foreign currency increases which reduces the value of home currency. In Performa invoice all details about the contract regarding name of product, its type, quality brand, name, color etc are all stated specially. Collection of dividends: The bank provides very useful services in the collection of dividends on behalf of the customers. It accepts the saving of the people and then these deposits are advanced to other people. After regular working hours the banks offer evening banking services. Cordial relationship between Banker & Customer: Sometimes the banker is in a position to established cordial relation with this customer by providing reliable and confidential information about the general standing of the people. If the demand for foreign exchange increases the rate of exchange increases & similarly if demand for foreign exchange decreases then rate of exchange falls. "Any person may become a customer as soon as he opens an account with the bank. Businessmen are not free from risks. Bcom part 1 banking and finance notes blog. Another problem is that the amount of storage and collection charges may be more than the amount of the tax collected. While before nationalization it was not possible. Modern money cannot be understood separately from modern finance, nor can modern. Causes of privatization: - The nationalization banks were working under the political pressure. Go On, Share & Help your Friend.
"the general principles of central bank is that it should act only in public interest for the welfare. Low level of employment: During this stage employment level also decrease due to fall in investment and production. Besides the primary and secondary functions, professor Kinley has also given following four contingent functions. There is no inconvenience of testing the exactness of the money material. Recession: This phase starts after the phase of boom. GENERAL RELATIONSHIP: Debtors & Creditors: 1 When customer deposits his money with the bank: The bank becomes the debtor of the customer and customer becomes the creditors of the bank. Export promotion cell: In order to boost the exports of the country, the banks have established export promotion cell. Q#3: What are the forms/types/kinds of money? Perhaps such expenses were more than Rs. Financial accounting bcom notes. Limited funds: In case of owners financing only the business firm cannot get sufficient amount of capital in time of need for introduction of innovation and modernization of business. Tax collection: The taxes are collected for the economic development.
Banker fears: The banker fears that he would be harmful to him. Business finance is the flow of capital and credit that makes business possible. 21. idle funds utilization: The idle funds of individuals and firms get utilized through banks. The leader and supervisor of all the commercial banks of a country is called Central Bank. The hard labor devotion and intellectual were useless. Protection to reserves: Q # 19: Define Banker and Customer? Bills of exchange: A bill of exchange is an order by the drawer to the drawee to pay a sum of money to the drawer or to any other party. The result was concentration of wealth in few hands.
Investment and saving: Money has made it possible and extremely easy to invest and save. "A bank collects money from those who have it spare or who are saving it out of their incomes. Recruitment: The appointment of banking staff will be made through competitive examinations to be held under the supervision of. He is an intermediary party. Garnishee order: If a company is winding up the order of the court, the banker then cannot honour the cheques of the customer. But if barter trade increases the use of money decreases. Agricultural Bank: This bank provides financial assistance to agriculture sector. Different authors have defined it in the following words. Parties Involved in a Letter of Credit: There are 4 parties involved in a letter of credit.
The face value of such money is more than the value of the paper. It acts as a standard of value. Latest news on banking, finance, money, loans, insurance, currency, NBFCs, interest rates, RBI, micro finance, Government Finances, Public Financing, Bank. · Exchange control: The central bank manages foreign exchange transactions and enforces exchange control regulations. Inconvenience of small denominators: Paper issue is not for small monetary denominators such as 1, 10, 25, 50 paisa and even for Rs. Insanity of a customer: If an insanity of a customer is established, the bank will close his account. · To create confidence and eliminate worries. Not free form interest: Debt financing is not free form interest businessman has to pay interest on this type of debts. "A bank, which control credit. The credit policy is prepared by the state bank for commercial bank and issues instruction from time to time. 100. it has this value because it has been declared as legal money by the government, so it is generally accepted as a medium of exchange. Inconvertible/Fiat money: Inconvertible or fiat money is one that we have in our pocket and use in daily business. Commodities are traded through importer and exporter.
Increase efficiency of banks: Thus due to the privatization of banks, the efficiency of banking system increase. Closed account: An old customer can issue a cheque against the closed account. I will repeat here a lot of pitfalls and questions that go far beyond the scope of this work. According to Coulborn: "Inflation means too much money chasing too few goods".