CREDIT CREATION BY COMMERCIAL BANK

Central bank is the first source of money supply in the form of currency in circulation. The Reserve Bank of Indian is the note issuing authority of the country. The RBI ensures availability of currency to meet the transaction needs of the economy. The Total Volume of money in the economy should be adequate to facilitate the various types of economic activities such as production, distribution and consumption.




The commercial banks are the second most important sources of money supply. The money that commercial banks supply is called credit money.

The process of 'Credit Creation' begins with banks lending money out of primary deposits. Primary deposits are those deposits which are deposited in banks. In fact banks cannot lend the entire primary deposits as they are required to maintain a certain proportion of primary deposits in the form of reserves with the RBI under RBI & Banking Regulation Act. After maintaining the required reserves, the bank can lend the remaining portion of primary deposits. Here bank's lend the money and the process of credit creation starts.


Suppose there are a number of Commercial Banks in the Banking System – Bank 1, Bank 2, Bank 3, & So on.



To begin with let us suppose that an individual "A" makes a deposit of Rs. 100 in bank 1. Bank "1" is required to maintain a Cash Reserve Requirement of 5% (Prevailing Rate) which is decided by the RBI's Monetary Policy from the deposits made by 'A'. Bank "1" is required to maintain a cash reserve of Rs. 5 (5% of 100). The bank has now lendable funds of Rs. 95(100 – 5). Let the Bank "1" lend Rs. 95 to a borrower; say B. the method of lending is the same that is bank 1 opens an account in the name of the borrower cheque for the loan amount.
 
 




Courtacy: Amir panwar

Post Bank of India

Indian postal department is planning to start a bank, to be tentatively called the Post Bank of India. With a network of over 1.55 lakh post offices, the department already provides various financial services including a post office savings bank (POSB), postal life insurance, pension payments and money transfer services.


According to unconfirmed reports, Indian postal department is proposing a capital investment of Rs 1,000 crore for the bank. It will be set up as a subsidiary with the postal department holding a 51% stake in it. It also intends to rope in major public sector banks like the State Bank of India to pick up a 25% stake in the new venture . Of the remaining equity, 5% will be offered to employees of India Post and the rest will be offered to the public.

The first floating ATM in kerala

ATMs float too. But for the country's first ever floating ATM, the commissioning of three bridges linking the islands in the Ernakulam backwaters with the mainland late last year has turned out to be a setback. When the ATM was launched by State Bank of India on February 10, 2004, on a jangar owned by the Kerala State Inland Navigation Corporation (KSINC) at the city's busiest ferry, it was found to be a viable proposition as the vessel used to carry around 5,000 passengers everyday from Ernakulam to the Vypeen Islands in 30 trips. But the situation has changed after the Goshree bridges were opened to road traffic. The number of passengers and vehicles using the ferry has dropped substantially, forcing the KSINC to move the jangar to other locations to make its ferry operations viable. According to SBI sources, on average, there were 75 transactions every day. After the bridges were opened to traffic, the transactions dropped to below 50. The KSINC has now proposed to ply the jangar with the ATM from Fort Kochi to some other destinations and the bank has, in principle, agreed to the proposal, the sources told eWorld. The bank had invested about Rs 6 lakh to set up the ATM. The cost of maintenance, electricity etc, are also borne by the bank, while the KSINC does not charge anything for carrying the ATM. However, bank sources anticipate that there will be more users of the ATM as the tourists cruising in the backwaters using the KSINC's vessels avail themselves of this facility. The jangar will be docked at suitable locations to promote use of the ATM, they say. The ATM was supplied by NCR Corporation. The connectivity has been provided by Reliance Infocomm using CDMA technology.

World's stock exchanges

Almost all countries have stock exchanges to trade and considered as the reflecter of national development.Some stock exchanges all over the world is listed below; United States New York Stock Exchange, Japan Tokyo Stock Exchange, United States NASDAQ, Europe Euronext, United Kingdom London Stock Exchange, China Shanghai Stock Exchange, Hong Kong Hong Kong Stock Exchange, Canada Toronto Stock Exchange, Spain BME Spanish Exchanges, Brazil BM&F Bovespa, India Bombay Stock Exchange, Germany Deutsche Börse, Australia Australian Securities Exchange, India National Stock Exchange of India, Switzerland SIX Swiss Exchange, China Shenzhen Stock Exchange, South Korea Korea Exchange, Nordic Countries NASDAQ OMX Nordic Exchange, South Africa JSE Limited, Taiwan Taiwan Stock Exchange,

World's cheapest tablet 'Akash ' Developed in India

India recently developed world's cheapest tablet pc in the world.It is purely indian product which is aimed to promote computer literacy.

Features Of Tablet PC Aakash is powered by Google Android 2.2 OS, a leading OS which runs on over 50% of the smart phones. ۞ It has a big 7 inch display and touch screen. ۞ Access to thousands of educational & Learning content available for free and created by using open source software from Sakshat Portal and other websites. ۞ It comes with a bunch of preloaded apps, Additional apps can be downloaded from the dedicated store coming soon. ۞ Aakash can play and view wide verity of multimedia contents. ۞ The graphic accelerated processor enables Aakash to play HD videos. ۞ The tablet is developed and fully made in India by Datawind. ۞ Allows video conferencing and cellular on unsubsidized tablet pcs.

Expansions related to business and commerce

NEFT – NATIONAL ELECTRONIC FUND TRANSFER


RTGS - REAL TIME GROSS SETTLEMENT


ATM -AUTOMATED TELLER MACHINE


PLASTIC CARD- CREDIT CARD


AGMARK-AGRICULTURAL MARK


ISI -INDIAN STANDARD INDUSTRIES


UTI - UNIT TRUST OF INDIA


IFCI – INDUSTRIAL FINANCIAL CORPORATION OF INDIA


IDBI – INDUSTRIAL DEVELOPMENT BANK OF INDIA


SFC - STATE FINANCIAL CORPORATION


ICICI – INDUSTRIAL CREDIT INVESTMENT CORPORATION OF INDIA


NMTA –NATIONAL ASSOCIATION OF MARKETING TEACHERS OF AMERICA


ASCI - ADVERTISING STANDARDS COUNCIL OF INDIA


SWOT – STRENGTH WEAKNESS OPPORTUNITIES AND THREATS


AMA – AMERICAN MARKETING ASSOCIATION


DFI - DEVELOPMENTAL FINANCIAL INSTITUTION


SMS –SHORT MESSAGE SERVICE


SIM – SUBSCRIBER IDNTITY MODULE


EXIM- EXPORT AND IMPORT


SIDBI – SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA


SEBI – SECURITIES AND EXCHANGE BOARD OF INDIA


IRDA – INSURANCE REGULATORY DEVELOPMENT AUTHORITY OF INDIA


RBI – RESERVE BANK OF INDIA


SAIL – STEEL AUTHORITY OF INDIA LTD


STC – STATE TRADING CORPORATION


HMT – HINDUSTHAN MACINE TOOLS


CAG – COMPTROLLER AND AUDITOR GENERAL OF INDIA


RD – REASEARCH AND DEVELOPMENT


AMC –ASSET MANAGEMENT COPANY


NAV – NET ASSET VALUE


RCTF –RISK CAPITAL AND TECHNOLOGY FINANCE CORPORATION


EFTS – ELECTRONIC FUND TRANSFER SYSTEM


CBS – CORE BANKING SOLUTIONS


PIN – PERSONAL IDENTITY NUMBER


MICR –MAGNETIC INK CHARACTER RECOGNITION


IFSC CODE- INDIAN FINANCIAL SYSTEM CODE


PODSCORB –PLANNING, ORGANISING, DIRECTING, STAFFING, COORDINATING, REPORTING AND BUDGETTING


FAX – FASCIMILE


E –MAIL – ELECTRONIC MAIL


AIDCAM – ATTENTION, INTEREST, DESIRE.CONVICTION, ACTION, MORE SALES

Brics Bank Instead of World Bank

The leaders of BRICS (Brazil, Russia, India, China and South Africa) who held a closed door meeting that overran the allotted time, weighed the consequences of setting up a “BRICS Bank” and opted for a more contemplative approach by asking their Finance Ministers to examine its feasibility and report back at the next summit in Russia. Sources said the leaders agreed that the bank should in no way emerge as a competitor to the World Bank and the IMF but provide funds for projects that do not find favour with these institutions.