Question

1. What are "Self Help Groups"? How are they emerg
uself Help Groups"? How are they emerging as an important source of
credit? Explain.
2. Explain the functions of commercial banks.​

Answer 1

Answer:

self help groups are a group of 15 to 20 poor villagers who regularly pool money at regular intervals. when one member is need of money, he takes loan with low interest form the money that has been collected by the group.

banks do not give loans to people without collateral. these villagers cannot avail loan from the bank easily. so,SHG helps the rural people to be self reliant. if the savings are regular then they are legible to avail loan from the bank. this is also the reason why they are becoming popular.

The primary functions of a commercial bank are as follows:

1. Accepting Deposits

Commercial banks accept deposits from people, businesses, and other entities in the form of:

Savings deposits – The commercial bank accepts small deposits, from households or persons, in order to encourage savings in the economy.

Time deposits – The bank accepts deposits for a fixed time and carries a higher rate of interest as compared to savings deposits.

Current deposits – These accounts do not offer any interest. Further, most current accounts offer overdrafts up to a pre-specified limit. The bank, therefore, undertakes the obligation of paying all cheques against deposits subject to the availability of sufficient funds in the account.

Browse more Topics under Money And Banking

Functions of Money and its Demand

Supply of Money

Instruments of Monetary Policy and the Reserve Bank of India

2. Lending of Funds

Another important activity is lending funds to customers in the form of loans and advances, cash credit, overdraft and discounting of bills, etc.

Loans are advances that a bank extends to his customers with or without security for a specified time and at an agreed rate of interest. Further, the bank credits the loan amount in the customers’ account which he withdraws as per his needs.

l hope you like this answer.

please mark it brainliest.