Question

collect few samples of the modern forms of money and role of banking in indian

Answer 1

In the modern monetary systems, there are three forms of money in actual use: (i) Metallic Money, (ii) Paper Money, and (iii) Credit Money. The first two kinds of money are in the form of currency money and the last one is credit or bank money. Metallic Money: Metallic money refers to coins made out of various metals like gold, silver, bronze, nickel, etc. A coin is a piece of metal of a given size, shape, weight and fineness whose value is certified by the State. Paper Money: Paper money consists of currency notes issued by the State Treasury or the Central Bank of the country. In India, one rupee notes are issued by the Minister of Finance of the Government of India, while all other currency notes of higher denominations are issued by the Reserve Bank of India. Credit Money: In modern economic societies, with the development of banking activity, along with paper money, another form of convertible money has developed in the form of credit money or bank money. Bank demand deposits, withdrawal by issuing cheques, have started functioning as money, and cheques are now conventionally accepted as a mode of payment by the business community in general.