Economy Class Module 2- Class 2 - 16/ 02/ 2022
Non Performing Assets ( NPA) It is a loan or an advance for which the principal or interest amount remained overdue for a period of 90 days. Types of NPA Standard assets: Borrower fails to make repayment regularly and on time. Substandard: Borrower fails to make repayment for a term less than or equal to 12 months Doubtful: Borrower fails to make repayment for a period of more than 12 months Loss Assets: Repayment uncollectable by Banks Causes of NPA: 1) Willful defaults eg: Kingfisher Airlines 2) Industrial crisis 3) Le…
Economy Module-2 Class 1 - 01/02/2022
Banking A bank is a type of a financial intermediary which intermediates between a saver( depositor) and a borrower. It's primary liabilities are deposits and primary assets are loans. Banks are controlled by RBI( through RBI Act 1934) and governed by Banks Regulation Act ( BRA) 1949. Whenever a depositor deposits a certain amount of money in a bank for a certain interest rate , the bank lends the money in the form of a loan to a borrower for a certain percentage of interest rate. Classification of Banks Public Se…
Economy Class-11- 06/ 10 / 2021 LEO club of CEG
Banking : Money and Monetary Policy Base rate and MCLR: It is the rate below which banks can't lend to anyone except at rare cases approved by RBI. Factors considered while calculating the base rate: 1)Average cost funds: Interest given to deposits 2)Operation Cost 3)Negative carry in CRR 4)Profit margin Factors considered while calculating MCLR(Marginal Cost of Fund Based Lending Rate): 1)Marginal Cost of funds : Interest given to deposits, Repo rate, rate of return on capital( profit margin) 2) Operating Cost 3) Negative ca…
Economy Class-10 - 29/ 09/2021
Economy Quantitative Measures of RBI to control Liquidity 1)Bank Rate: Banks and Financial institutions borrow a long-term loan from RBI without any collateral for a particular interest rate. This interest rate is called Bank Rate. 2)Repo Rate: Banks and Financial institutions borrow a short-term loan from RBI using Government Security Bonds as a collateral at a certain interest rate. This interest rate is called Repo rate . 3)Reverse Repo rate: RBI borrows a short term loan from banks and financial institutions using Government…
Economy Class-9-20/09/2021
CREDIT CONTROL MEASURES (OR) TOOLS We will look into some of the Quantitative and Qualitative tools: Quantitative Tools 1. Bank rate 1) Introduced in 1949. 2) It is the interest rate at which RBI lends to its clients for long term (here long term means more than year). 3)If we increase the bank rate, the money supply in the economic system decreases. And also if we decrease the bank rate, the money supply in the economic system increases. 2. Cash Reserve Ratio (CRR) 1) Here bank has to keep a certain amount …
Economy: Class-8 - 13/09/2021
Money and monetary policy: Money - accepted as a means of exchange and at the same time acts as a measure and store of value. Evolution: Barter system: Exchange of goods for other goods without any medium of exchange. E.g., If A has shoes (who needs rice) and B has rice (who needs shoes), both can exchange required goods. Disadvantage: "Double coincidence of wants" - in the above scenario, if A needs rice but doesn't have shoes, the transaction cannot happen. Metallic standard: Face value equals intrinsic value (while currency n…
Economy Class 7 - 06/09/2021
Economy Producer Price Index: It is the measure of the average change in selling prices received by domestic producers for their output over some time. It includes both goods and services and excludes transport, trade margin, taxes that the producer has to pay. It does not include imported products. In India, PPI is not in practice. Measures to control Inflation : Monetary Policy Committee: It was formed in the year 2015 based on an agreement between RBI and the Government of India. It aims to maintain inflation at an optimum lev…
Economics - Class 3 - 19.07.2021
ECONOMICS – NATIONAL INCOME Today’s class began with one of the most interesting topics to be known in economics – “National Income”. · The service sector, Industrial sector and Agricultural sectors contribute to the National income of India. · Indian economy- complex structure. What makes a country rich or poor? · A country can’t be termed “Wealthy” if it’s merely resource-rich. · The more effective a country utilizes it’s resources, the more rich it is. · A country’s standard of l…
Economics - Class 2 - 30.06.2021
We started with a revision of last class topic. Types of economy based on government policies: · Capitalism · Socialism · Mixed Economy Socialism: The concept was introduced by Karl Marx, a German philosopher, through his book “Das Kapital or Capital: A Critique of Political Economy. Features: · Social justice is the objective. · More government influences. · Government involved in Production Distribution and consumption of goods and services. · Examples of sociali…
