7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 1/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 2/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 3/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 4/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 5/13

• It helps in increasing economic activities of theborrowers.

• If credit is made available to the poor people on

reasonable terms and conditions, they can improve

their economic condition.• Credit may increase the activities in the secondary

sector i.e. , manufacturing sector .

• With credit people could set up new industries or trade

in goods. Thus, it plays a crucial role in country’s

development.

NECESSITY OF CREDIT

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 6/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 7/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 8/13

CASE STUDY-1

AGRICULTURAL LOAN• Ram is an illiterate agricultural labourer in a village. Due to

seasonality of work, he is jobless and needs credit to meethis daily expenses. Expenses on sudden illness or functions

in the family are also met through loans. He asks for credit

from a large trader. The trader agrees him to give the credit

of ₹ 5000 but the rate of interest is 6% per month! Ramworks very hard but it is very difficult for him to pay the loan

at such a high rate of interest. His family financial condition

has become bad to worse. It is likely, that he has to live his

whole life in debt.

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 9/13

CASE STUDY-2

FESTIVAL SEASON

• Judder is a middle class man who decides to take credit

from a bank to open a cracker shop as it is Diwali time.

He goes to the bank and after a long process of

documentation in the bank, he gets a credit of ₹ 40000

at a very low rate of interest of 5% per annum. By theend of the month he obtains a profit of ₹ 12000. He is

able to pay back the loan and making a good profit for

himself. He can now invest money in the bank for his

family.

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 10/13

CONCLUSIONS

• From the above case studies, It can be concluded that

credit has both negative and positive effects on a person

as seen judder got profited but Ram got trapped in debt.

• The effect of credit on a person also depends on the

formal and informal sources of credit as informal sources

e.g. moneylenders, traders etc give credit but at a very

high rate of interest whereas formal sources e.g. banks,

cooperative societies etc give credit at a very low rate of

interest.

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 11/13

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 12/13

Video clip <banking in India>

7/27/2019 Bank and Its Services .

http://slidepdf.com/reader/full/bank-and-its-services- 13/13