*Money & BankingBUILDING ECONOMICSSUBMITTED TO :AR. ANUBHAV MITTALSUBMITTED BY :RAHUL VYASB.ARCH. VI SEM. III YEARSOA, AGI, JAIPUR

*In the beginning of trading system there is only barter, a relationship between two people each of whom has something which the other wants; for E.g. If a hunter could exchange animal skins with a farmer for grain, or a fisherman could exchange decorative seashells for a polished stone axe with a hunter.

But this system needs the double coincident relationship of both people. And due to which treading is very difficult. For e.g. if the hunter need grains in exchange of animal skin but the farmer doesn't need the animal skin in exchange of grains he need a pair of shoes for him so in this situat5ion the trade is not possible.History (Barter System)

*Meaning of Money & its TypesMoney (money supply)anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept. Money supply is the total amount of money available in the economy. (stock)Wealththe total collection of pieces of property that serve to store value (stock)Incomeflow of earnings per unit of time (flow)

Generally the classification of money is based on the material that is being used for the purpose. According to the material used, the money can be classified as:1. Metallic MoneyFull Bodied CoinFull bodied coin is the one, the face value of which is equal to the quantity of metal used in it. In this case the face value of the coins is equal to its intrinsic value.Token CoinsA token coin or money is the one whose face value is higher than the value of the metal contained in it. It is usually as a subsidiary unit or coin. In token coin the face value is higher than the intrinsic value.

*Types of Money2. Paper moneyRepresentative Paper Money When the paper money is backed by an exactly equal amount of in gold or silver kept in reserve by the issuing authority it is known as representative money. Such notes could be exchanged for coins when needed and did nothing more then to represent coins.Convertible Paper MoneyThe currency notes which can be exchanged for full bodied or standard coins is called convertible money. Its value is backed by a proportionate reserve of some precious metal and the confidence in the word of eh issuing authority. It is also called fiduciary money.Inconvertible Paper MoneyThe currency notes that cannot be converted in full-bodied coins. The issuing authority gives no promise for its conversion. It can also be called fiat money.

*Types of Money3. Bank or Credit money Bank money consist of demand deposit, which is drawn by cheques. A deposit is like any other medium of exchange and being payable, on demand, serves as a standard of value or unit of an account as it is convertible into standard of value i.e. money or crash at fixed terms. In the words of J.M. Keynes.

Bank money is simply an acknowledgment of a private debt expressed in the money of account which is used by passing from one hand to another as an alternative of money to settle transactions.

*CoinsThe primary social goals for a welfare evaluation of the operation of an economic system might be maximum freedom of choice for individual distribution of income, and optimum standards of living for all individuals as determined by their preferences and restricted only by available resources and technology. It is obvious that the goals of a welfare economy can be achieved only in a money economy.

Money helps the producers and the consumers to spend their resources with some degree of rationality. In the it is amedium of exchange for trade. It can be a medium of exchange because it has a clear value that is trusted by everyone. Money is also away to store value for the future.

*Functions of MoneyMedium of Exchangepromotes economic efficiency by minimizing the time spent in exchanging goods and services. Facilitates specialization and division of labor. A good medium of exchangeMust be easily standardizedMust be widely acceptedMust be divisibleMust be easy to carryMust not deteriorate quicklyUnit of Accountused to measure value in the economy: assets, goods, services.Store of Valueused to save purchasing power; allows intertemporal substitution of income most liquid of all assets but High inflation diminishes its store of value function.

*Evolution of the Payments SystemCommodity Money: Gold, Silver, other precious metals, certain stones, Cigarettes, etc.Representative money that is backed 100 % by precious metals (bank notes )Fiat Money: No consumption or investment use: intrinsically useless pieces of paper.ChecksElectronic Payments: EFTs, wire transfers. E-money: Debit cards (POS), etc.

*Definitions of MoneyFrom most liquid (narrow) to the least liquid (broad), M0, M1, M2, M2Y, M3..M0 = paper currency and coinsM1 = M0+ Checking Accounts+ Traveler ChecksM2 = M1 + Savings AccountsM2Y = M2 + Forex Accounts

*Banking can be defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. However, with the passage of time, the activities covered by banking business have widened and now various other services are also offered by banks.

Bank In simple words, we can say that Bank is a financial institution that undertakes the banking activity ie.it accepts deposits and then lends the same to earn certain profit.Banking CompanyAny company, which transacts the business of banking defined above is termed as Banking companyBanking SystemBanking systems can be defined as a mechanism through which the money supply of the country is created and controlled.

Banking

*Working of BankTrust is the most important element for a bank to survive. People keep money in a bank only when they trust that it will be given back to them as and when they demand the same on at least on the date of maturity in case the same has been given in the shape of fixed deposits. Of course, there are other reasons also for which people prefer to keep money in a bank rather than keep at home in their own safe. They can earn some extra money when the money is kept in saving or fixed deposits. Moreover, they can make payment by issuance of cheque and need not carry money for their day to day needs.

Cost IndicesThePlanning Commission,Government of India, jointly with the Indian construction industry has set up Construction Industry Development Council (CIDC)to take up activities for the development of the Indian construction industry.

CIDC has been publishing the Construction Cost Indices since 1998. Construction Cost Indices monitor variations in overall cost of construction for various types of projects such as buildings, roads, bridges, railway construction, dams, power plants, industrial structures including factories etc.This is done because each sector has a unique pattern of consumption of inputs. The data is collected across the nation. The data pertains to construction materials, oil, fuel and lubricants, wages and salaries.

*CreditIt essentially involves borrowing money by a prior agreement with a bank or financial organization to pay it back at a later date. How much you can borrow, and the repayment conditions within which you must pay it back, may be determined by your credit history and your individual circumstances.

Credit CardCredit cards are a type of credit that allow users to borrow money from a bank or credit card issuing company to purchase goods and services or to withdraw cash. There are countless credit card types, and various forms of charge cards, store cards, rewards cards and balance transfer cards available. Here at aqua we offer three different types of credit cards The Classic, Reward and Advance cards to suit your individual financial needs.

Bank LoanOther types of credit include loans, which can be paid off in monthly installments over a particular period. Mortgages are a type of credit often used to purchase property. They are secured against a property and are usually paid off in monthly payments over an extended period of time.

*CreditOverdraftsOverdraft facilities are another type of credit that, because of a pre-arranged agreement authorized by your bank, allow you to withdraw money after the bank account balance reaches zero. An overdraft has a limit depending on your account history and needs. They are helpful in providing a safety net to cover short-term arrears and to compensate for a temporary lack of cash flow. Be aware that overdrafts incur interest and, depending on your agreement, may include an administration fee or monthly payment charges.

Higher Purchase & Personal LoansOther types of credit include: a higher purchase agreement is a mechanism for borrowing money in order to purchase goods. Once the purchase is paid off you then rightly own it, but if you don't make regular payments, creditors can ask you to return the goods. Personal loans allow you to borrow an agreed amount and pay it back with interest over a fixed period of time.

*Bibliographywww.unhabitat.org

www.timesofindia.com

www.academia.com

www.Indianeconomic.com

www.worldeco.com

*Thank You

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