CBSE Sample and NCERT In-text Questions - Money and Credit - Class 10 PDF Download

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• Fill in the date of withdrawal on the top right corner
• Fill in the amount in number and in words.
• Write the name of the person, on whose name your withdrawing. So write your full name, Salim....
• Do the signature
• Check account number, in some cheques its already written in some you have to fill it in.
• Check all the details
• In some banks you need to do two signatures at the back side of the cheque as well

• These can be withdrawn from the bank whenever it is required.
• They are widely accepted as a means of payment, along with the currency or a cheque instead of cash.

NCERT In-text Questions

• Failure of crop due to either poor rainfall (climate problem) or attack on the crop by pests. Pesticides will reduce or eliminate the attack by pests and good rainfall will eliminate the risk due to climate.
• Here the role of money lenders is important because they charge high interest rates and also will take away part of Swapna's land if she defaults on loan repayment when her crop fails. This will reduce her earning power even further in the future.

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• Lenders ask for collateral while lending, as a security for the loans they give to the borrower. They keep it as an asset until the loan is repaid. 
• Collateral is an asset or form of physical wealth that the borrower owns like house, livestock, vehicle etc. It is against these assets that the banks provide loans to the borrower. The collateral serves as a security measure for the lender.

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• Village moneylender
• Traders
• Landowner as moneylender
• Commercial banks
• Krishak co-operative society

• Arun has 7 acres of land compared to 1.5 acres land of Shyamal.
• Arun received bank loans at an interest rate of only 8.5% per annum. On the other hand Shyamal has received loan at an interest rate of 36% per annum which is much higher than Arun’s.
• Arun has to repay loan anytime in the next three years while Shyamal will have to repay within 3-4 months.
• Shyamal received loan under the condition that he will sell the crop to the trader at a lower price than the market price while there no such condition with Arun.  

• People having some collateral with them.
• People who have organised themselves into a cooperative society.
• The person who can fulfill the bank’s formalities at the time of loan borrowing.

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Question.19: What are the differences between formal and informal sources of credit?
Answer: The various differences between formal and informal sources of credit are shown in the following table:

• Credit should be available at reasonable rates for all as other wise it will not be useful for the borrower. Higher cost of borrowing means a larger part of the earnings of the borrowers is used to repay the loans. Credit given at high interest rate can sometimes result into the amount to be repaid is greater than the income of the borrower. This could lead to increasing debt and debt-trap as we saw for Rama in Sonpur.
• Credit is a crucial element in economic activities. It has a major role in the development of the country as it helps people in setting up their business, in increasing their earnings and social status. Therefore, cheap and affordable credit is crucial for the country’s development.   

• Most of the formal sources of credit will be cheap compared to informal sources. Even though banks advance the loans with cheaper interest rate poor households are not able to avail that loan due to terms of credit and formalities. 
• The requirement of collateral for taking loans from institutional sources makes it impossible for the poor to take loans from banks and other institutions. Thus they have to rely on other informal sources. 
• Rural poor are not aware of the banking system because of the lack of education and awareness. Therefore they are forced to acquire a loan from the informal sources. Most of the people in rural areas don't have access to native bankers and other financial institution, this increases the share of informal sources of credit among the poor households.