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In India, commercial banks are regulated by ‘Indian Banking Companies Act, 1949’.

Central bank creates credit by issuing paper currency.

Following are the limitations of credit creation by banks :

1. Level of development of banks : The countries in which the level of development of banking services is not adequate, credit-creation facility is also limited there.

2. The attitude of public : The banking habit of people also has a direct impact on capacity of credit creation.

3. Monetary policy of central bank : Liberal monetary policy encourages credit creation in a country.

4. Level of development in business and industry : Those countries which have attained higher level of industrial development, the banking transactions in these countries are higher, and thus, they have high creation capacity.

In economics, credit means the capacity of advancing loans.

1. Working as a trustee.
2. Sale and purchase of securities or financial facilities for the customers.

Correct answer is (b) Europe

According to Findlay Shirras “Banker, is an individual, firm or company who has place for business where the money or currency is deposited, and through this deposited money or currency, the function of credit is performed and the deposited money is paid either by draft, cheque or through an order”.
According to Crowther, “A banker is a dealer in debt of his own and other people The banker’s business is then to take the debts of other people, to offer his own in exchange and thereby to create money”.

Professor Holm.

Credit creation is a situation in which bank gives more loans to consumers and businesses, with the result that the amount of money in circulation increases.

14 banks were nationalised in the beginning in india.

(d) All of these

With the use of credit card, payments can be made any time and any where without the use of cash.

(b) Central bank

An account with a bank from which money may be withdrawn without notice, typically an active account catering for frequent deposits and withdawal by cheque.

An overdraft is a facility given by the bank to the companies to withdraw money “more” than the balance available in their respective accounts.

(a) payment to be done in future

Correct answer is (b) Holin K

Pay-in-slip books used for depositing cash and cheques in the bank. The book consists of 10, 20 or 30 slips. The slip has two parts-original and counterfoil. The details of cash or cheque are entered in the slip as well as in the counterfoil and are sent to the bank. The clerk concerned checks the details and accepts the cash or cheque. Then he stamps the counterfoil and puts his signature on it. The original part of pay in slip remains with the bank. Generally, different pay in slips is used for depositing cheques and cash. They are different in colour.

Cash credit is a type of short-term loan provided to companies by the bank, to fulfil their working capital requirement.

(d) Control of credit

(b) Decreases

Cheque Book: Bank provides a Cheque Book to every holder of Current Account. The number of forms in a cheque book varies from 10 to 100. The cheque book has two parts— counterfoil, which remains with the account holder and forms, which are issued for payments or for withdrawing money from the bank. All the details are filled in the form is given for withdrawing or in settlement of some dues. Cheque book is an important document and it should be kept properly. In case it is lost, the bank should be intimated immediately.

In India, the term ‘Commercial Banks’ refers to these banks which have been established under the provisions of Indian Companies Act, 1913. Sometimes, these banks are referred to as Joint Stock Banks. Commercial Banks as the banks which finance the trade and industry of the country by arranging short term credit facilities

(c) Bank Autograph Book

Advantages of Bank Nationalization: 

1. The utilisation of Bank Credit in National Interest: If the banks are allowed to be operated by private individuals, then the bank credit shall not be used in the interests of the nation. On the contrary, the bank credit will be utilised in the interests of those individuals who control the banks.

2. Business Fluctuations can be Checked: As is well known, a capitalist economy is all the time afflicted by business fluctuations. The slump and the boom follow each other at regular intervals. These fluctuations (UPBoardSolutions.com) cause untold harm to the economy of the country. The government can keep effective control, only if the banks are fully nationalised.

3. Inter-bank Competition can be Ended: There is at present going on wasteful competition among Indian banks which benefit no one. If all the banks are nationalised, this wasteful competition will automatically come to an end.

4. The utilisation of Bank Profits in National Interest: If the banks operate under private management, the profits will surely be utilised in the interests of those individuals who manage and control the banks. If, on the contrary, the banks are nationalised, their profits will be utilised in the national interest.

5. Development of Specialised Banks: There is at present acute shortage of agricultural, industrial and Indian foreign exchange banks in the country. If the entire banking industry is nationalised, the government will surely take steps to develop specialised banking institutions in the. country.

6. Improvement in Efficiency: The government banks in view of their vast resources are able to attract competent, trained and experienced staff more effectively than the private banks. Consequently, the level of operational efficiency is bound to be higher in government banks in comparison to private banks.

7. Balanced Growth of Banks: At present, the private banks operate only in those areas where they get good business, hence, generally all the banks are in towns and big cities. With the nationalisation of banks, the government will open the branches in those areas which do not have banking facilities. In this way, by nationalising the banks, they would have balanced growth.

8. Curb on Corruptions: Many businessmen violate the foreign exchange rules with the consent of the banks. They increase the value of the export invoice and decrease the value of the import invoice. Many banks give loan to their directors on the nominal rate of interest. Sometimes these banks provide indirect benefits to their directors, such as— foreign tours on bank expenses, free accommodation etc. All these malpractices can be abolished by nationalising the banks.

9. Abolition of Foreign Banks: The foreign banks held a dominant position in the Indian banking system. They almost controlled the foreign exchange business of the country as well as they competed with the Indian banks. These foreign banks used our capital for the welfare of their country and not for ours. They also remitted a large portion of their profits to their respective countries. All these problems could be solved by the nationalisation of banks.

10. Economic Growth of the Country: By nationalising the banks, the full banking structure will function for the benefit of the country. The same has been proved by the State Bank and Reserve Bank. They functioned in the national interest after they were nationalised. Both the banks provided credit facilities in rural areas, and now, the deposits received by the nationalised banks are being used  for the economic growth of the country.