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(d) Recurring deposit

The largest commercial bank of India is SBI.

These services can be broadly classified into agency services and general utility services.

I. Agency Functions: Banks act as agents of customers and provide certain services.

They are called Agency Functions which are as follows:

1. Transfer of Funds: Banks issue demand drafts, bankers cheques, travelers’ cheques, ete. and help in transfer of funds from one place to another.

2. Periodic Payment of Premiums, Rent, etc.: After instruction from the customers, banks undertake the monthly payment of insurance premium, rent, telephone bills, etc. from the accounts of customers.

3. Collection and Payment of Cheques: On behalf of customers bank collect the cheques deposited into the accounts of customers from other banks and deposit cash in the customers’ accounts.

4. Acting as Executors, Trustees and Attorneys: Banks act as executors of will of the customers and implement their will after their death.

5. Conduct Share Market transactions: A Demat account should be opened with Depository Participant and that demat account should be linked with savings bank account by the customer.

6. Preparation of Income Tax Return: Banks prepare the annual income tax return on behalf of the customers and provide income tax related advice to them.

7. Dealing in Foreign 

Exchange: Banks buy and sell foreign currencies on behalf of customers.

8. Acting as Correspondent: Banks act as correspondent of customers and receive travel ticket, passport, etc.

II. General Utility Functions: 

1. Issue of Demand Drafts and Bankers’ Cheques 

2. Accepting Bills of Exchange on behalf of Customers 

3. Safety Lockers 

4. Letters of Credit 

5. Travellers Cheques 

6. Gift Cheques 

7. Reference Service

ATM (Automated Teller Machine) card. A customer can withdraw money any time, anywhere in India from the ATM machine using the ATM card given by his / her bank.

The primary functions of a commercial bank are of three types. They are:

1. Accepting Deposits 

2. Granting Loans and Advances 

3. Creation of Credit

1. Accepting Deposits : The basic deposit accounts offered by commercial banks are listed below. Broadly deposit accounts can be classified into demand deposits and time deposits.

A. Demand Deposits : These deposits are repayable on demand on any day. This consists of savings deposits and current deposits.

a. Savings Deposits: General public deposit their savings into this account. This account can be opened in one individual’s name or more than one name.

b. Current Deposits: This account is suitable for business institutions. Individuals too can open this account. A higher minimum balance should be kept in this account.

B. Time Deposits: These include fixed deposits and recurring deposits which are repayable after a period.

a. Fixed Deposits (FD): Certain amount is deposited for a fixed period for a fixed rate of interest. b. Recurring Deposits (RD): Certain sum is deposited into the account every month for one year or five years or the agreed period. Interest rate is more than savings deposits and almost equal to fixed deposits.

Granting Loans and Advances : The second primary functions of commercial banks is lending money in order to earn interest income.

A. Advances 

a. Overdraft: It is a credit facility extended mostly to current account holding business community customers.

b. Cash Credit: It is a secured credit facility given mostly to business institutions. Stock in hand, raw materials, other tangible assets, etc. are provided as collateral.

c. Discounting of Bills: Business customers approach banks to discount the commercial bills of exchanges and provide money.

B. Loans: 

Short term and medium term loans are provided by commercial banks against eligible collaterals to business concerns.

a. Housing Loan 

b. Consumer Loans 

c. Vehicle Loans 

d. Educational Loan 

e. Jewel Loan

3. Creation of Credit : Apart from the currency money issued by the RBI, the credit money in circulation created by commercial banks influence economic activities of a country to a large extent. Credit money of commercial banks is far greater in volume than the currency money.

National Electronic Fund Transfer (NEFT) was launched by the RBI in 2005. Under this electronic funds transfer system, bulk transfer of transactions are settled in batches during specific timings across India. Individuals and institutions which maintain accounts with a NEFT enabled bank branch are eligible for using NEFT

Correct Answer is: (c) 2 lakh

ATM card is also called debit card. This card is more useful in purchase of goods and services anywhere in India if the shop maintains a swiping machine facility.

Now a days smart card is used for day to day purposes. 

1. Strong device security. 

2. Biometrics

Banks issue credit cards to customers and other eligible persons. With this card, the holder can purchase goods and services on credit at any shop in India.

Electronic Clearing Service (ECS) was launched by the RBI in 1995. It is an electronic method of fund transfer from a bank to another bank.

Competition in the banking industry has reduced their profits. Therefore the commercial banks started identifying and offering new and diversified financial services. They are purely other than banking services. Providing all such banking and other financial services is also called universal banking. Such services are as follows: Bank Assurance, Merchant Banking, Retail Banking (Personal Banking), Housing Finance, Mutual Fund, Venture Capital Fund, Factoring.

(d) All of the above

First step we ask his registered phone number in the bank. If he has given phone number, we can get onetime password though the registered phone number and get new password easily. Second step, he can get the password with the mobile in the ATM also. He has to insert the debit card in ATM machine. It will ask the password. If he has forgotten the password, it will ask the phone number. If he types the phone number, he can get new password from the bank through his mobile number.

Third step : He can ask the branch manager, who will guide him properly and help him get the new password.

Electronic Clearing Services (ECS) was launched by the RBI in 1995.

Two schemes operating in rural areas for providing employment which were consolidated into Jawahar Rojgar Yojana are:

1. National Rural Employment Program. 

2. Rural Landless Employment Guarantee Program.

Under the Integrated Rural Development Programme, there was a provision of subsidy by the government for purchasing milch cattle (Cow, Buffalo, Sheep, Goat), bullock-cart, sewing machines, hand looms, etc.

The programs that were integrated into the Watershed Development Plan are: 

1. Drought Prone Area Development Program. 

2. Desert area Development Program. 

3. Integrated Wasteland Development Program.

Poverty is a geographical and social dimension. Poverty means lack of development, insufficient development and backwardness. According to the director of United Nations Organisation, Lord Boyd Orr. “Every one who gets less then 2100 calories in urban areas and 2400 calories in rural area is poor.”

A brief description of the programs related to poverty alleviation is given further:

1. Training of Rural Youth for Self – Employment (TRYSEM): This training program was started on 15 August 1979. It was merged in Swarna Jayanti Gram Swarojgar Yojana on 1st April 1999. 

2. Integrated Rural Development Program (IRDP): This program was started in 1978 – 79. The plan was started to provide employment in rural areas. It was also merged in Swarna Jayanti Gram Swarojgar Yojana on 1st April 1999. It is a plan to provide subsidy to poor families to purchase dairy cattle and for other minor works. 

3 Jawahar Rojgar Yojana: This plan was started in 1989 – 90. It was a plan to provide employment in rural regions. On 1st April 1999, it was renamed as Jawahar Gram Samriddhi Yojana. 

4. Development of women and children in Rural areas: This plan was also merged into Swarna Jayanti Gram Swarojgar Yojana on 1st April 1999.

5 District Poverty Initiative Project (DPIP): This plan was implemented to attach the rural poor people with non – government – organisations (NGOs) and to empower them in a significant manner. 

6. Pradhan Mantri Awas Yojana: It was a plan for providing better houses to poor families, widows and martyr’s families. 

7. Natioanl Rural Health Mission (NRHM): This mission was started with an objective to provide health and medical – related facilities to the rural population.

8. Ganga Kalyan Yojana: Under this plan, loan on minimum interest rate is provided for installing tube wells and pumping sets to small and marginal farmers. 

9 National Social Help Program: Under this program, there is a provision of providing grant under old – age pension, national family benefit plan, National labor – room benefit plan. 

10. Annapurna Yojana: Under this plan, senior citizens are provided food grains every month. 

11 Antyodaya Yojana: Under this plan, through public distribution system, BPL families are provided 25 kg of wheat at Rs.2 per kg and rice at Rs.3 per kg.

12. Swarna Jayanti Gram Swarojgar Yojana: It is a developmental intiative program, which provides sustainable income to the poorest of the poor people living in rural and urban areas. 

13. Sampurna Gramin Rojgar yojana: It was a scheme launched by the government of India to attain major objectives of providing gainful employment for the rural poor. 

14. Kam Ke Badle Anaaj Yojana (Food for work program): This scheme was started in 150 most backward regions with the objective to provide 100 days work to every poor family with some cash amount, 5kg of food grains per day given as wages.

Besides above schemes, several other programs are also operating in the country for removing poverty: 

1. Prime – Minister Sadak Yojana. 

2. Watershed Development Program. 

3. 20 point programme.

4. National Rural Livelihood Mission. 

5. Pradhan Mantri Jan Dhan Yojana.

Besides, the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was introduced by the Indian Government to reduce rural poverty, through 100 days of guaranteed employment per capita per year.

(c) Finance Ministry

To spread the message of Satnam.

Correct option is (b) developing

1. Departmental organisations are run by the Government. 

2. Departmental organisations are financed through annual budget of Government. 

3. Revenues of departmental organisation is directly paid to Government treasury. 

4. Departmental organisation has no separate existence from Government. 

5. The staff of enterprises is treated equally with other civil servants. 

6. Thus, there is direct control of Government on departmental organisation.

Chaitanya Mahaprabhu

Correct option is (b) Wealth

Some of the superstitions prevalent in our society:

• Accidentally breaking a glass item.
• Thirteenth day of the month as unlucky.
• Not buying iron item such as vehicle on Saturday.
• Cat crossing someone’s way.
• Considering auspicious time and date (muhurat) for good deeds.
• Taking a patient to a saint or hermit for cure rather than to a doctor.

(i) False. Average product will increase only when marginal product is greater than average product whether MP is rising or falling.

(ii) False. AfC = TFC/Output. TFC is constant and positive. So with an increase in output AFC will fall but can never he zero.

(iii) True. Under diminishing returns MP falls. TP increases till MP is positive.

(iv) False. This is because in a situation of diminishing returns to a factor marginal product tends to fall. Falling MP implies that total product should be increasing, though at a diminishing rate. TP will increase till MP remains positive.

Behaviour of the marginal product in the Law of Variable Proportions: Law of variable proportions states that when total output or production of a commodity is increased by adding units of a variable input, while the quantities of other inputs are held constant, then MP of the variable factor initially rises and then falls after reaching a certain level of employment of the variable factor.

Causes are as follows:

(i) MP rises: Because when the variable input is increased, efficient utilization of the fixed inputs takes place due to specialization. This raises efficiency of the variable input.

(ii) MP faffs but is positive: Because beyond a point, increasing variable inputs Puts Pressure on fixed inputs leading to decline in efficiency.

(iii) MP continues to fall and is negative: Because there are so much pressures of the variable input on the fixed inputs that total product starts declining.

(1) False 

(2) False 

(3) False 

(4) True

Monopoly

KSEB

Indian Railway

Monopolistic competition

Soap industry

Toothpaste industry

KSEB – Monopoly

Reliance – Communication Ltd. Oligopoly

(iii) Monopoly

(iii) Monopoly

(c) Monopsony

1. Monopoly 

2. Monopolistic competition

Oligopoly. Under such markets, the price is supposed to be rigid. The reason is that here the firms are interdependent. The actions of every firm will be determined by the actions and reactions of every other rm. If one firm increases the price none other follows. The customers of that firm may switch to other rms. The firm which increased the price may feel a fall in revenue and profit. 

On the other hand, if one firm reduces the price everyone else will follow. All firm’s revenue and profit fall. So firms under oligopoly will always try to keep their price rigid.

1. Soap industry 

2. Toothpaste industry.

A market structure where the number of firms is large, there is free entry and exit of firms, but the goods produced by them are not homogeneous such a market structure is called monopolistic competition. 

Its features are as following:

1. There are large number of buyers and sellers. 

2. There is free entry and exist in long run. 

3. There is product differentiation.

The monopolist produces less and charges a higher price compared to perfect competition. It is found in the industry where there is large number of sellers, selling differentiated but close substitute products. Monopolistic competition in a commodity market arises due to the commodity being nonhomogeneous.

The important forms of non-competitive markets also: 

1. Monopoly 

2. Monopolistic competition 

3. Oligopoly

1. Monopoly: 

A monopoly is a market situation in which there is a single seller of the commodity and no close substitutes of the commodity are available. The single seller can influence the price by varying his sales.

2. Monopolistic Competition: 

Monopolistic competition is a market situation in which both the monopolistic element and the competitive elements are present. Its basic features are large number of buyers and sellers in the market and existence of differentiated products.

3. Oligopoly: 

Oligopoly is market situation in between monopolistic competition and monopoly. In this market form, there are only a few sellers of the commodity and each seller has a substantial share in the market.

When TR is maximum, MR becomes zero. When TR reduces, MR becomes negative.

TR = AR x quantity

MR = TR_n - TR_n-1

1.

2. Equilibrium price is Rs. 19 and quantity is 6.

3. At equilibrium 

TR= 114

TC = 109 

Total profit = 5

If the market of a particular commodity consists of more than one seller but the number of sellers is few, the market structure is termed oligopoly. The special case of oligopoly where there are exactly two sellers is termed duopoly. We shall explain the different ways in which the oligopoly firms may behave.

• Firstly duopoly firms may collude together and decide not to compete with each other and maximize total profits of the two firms together. In such a case the two firms would behave like a single monopoly firm that has two different factories producing the commodity.
• Secondly, take the case of a duopoly where each of the two firms decide how much quantity to produce by maximizing its own profit assuming that the other firm would not change the quantity that it is supplying. We can examine the impact using a simple example where both the firms have zero cost.
• Thirdly, some economists argue that oligopoly market structure makes the market price of the commodity rigid, i.e., the market price does not move freely in response to changes in demand.

1. A firm, if it is under monopoly, will produce when its MR = MC and will charge a price which is equal to AR. It produces oq level of output and charges a price op. But if it is in perfect competition if the market would 

2. Confirmed to monopoly perfect competition would charge higher prices and produce less quantity. It is argued that the monopoly firms benefit themselves at the cost of consumers. The monopolist may get a profit even in tire long run and the consumers pay more and get less quantity.

But it is another argument. The profit made by the monopolist would be used for research and development and it may be useful for society in the long run in terms of new technology and new products. Moreover, due to the economies of scale the cost of the monopolist may be much lower than the cost of a firm under perfect competition.

When the demand curve is elastic, the value of Marginal Revenue (MR) is zero.

Whenever the MR is positive the price elasticity of AR (Demand Curve) is greater than one, that is elastic. When the MR is zero the price elasticity of AR (Demand Curve) is 1, that is unitary elastic. When the MR is negative the price elasticity of demand curve is less than one, that inelastic.

• Better customer service. 
• Less time consumed in transactions.