Write about the functioning of Krishak Cooperative society.
Krishak Cooperative functions in a village not very far away from Sonpur. It has 2300 farmers as members. The Cooperative accepts deposits from its members. Using the deposit as collateral, the Cooperative obtains a large loan from the bank. The loan amount received from the bank is used as funds to provide loans to the members.
Once the members repay the loans the amount is repaid to the bank and a fresh loan is taken from the bank. The Cooperative provides loans to its members for the purchase of agricultural implements, loans for cultivation and agricultural trade, fishery loans, loans for construction of houses and for a variety of other expenses.
In situations with high risks, credit might create further problems for the borrower. Explain.
Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
(a) Why might banks be unwilling to lend to small farmers?
(b) What are the other sources from which the small farmers can borrow?
(c) Explain with an example how the terms of credit can be unfavourable for the small farmer.
(d) Suggest some ways by which small farmers can get cheap credit.
How does money solve the problem of double coincidence of wants? Explain with an example of your own.
In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?
In what ways does the Reserve Bank of India supervise the functioning of banks? Why is this necessary?