Money and Banking

Paper Code: 
24DECO 511C
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

1. To define the concepts of demand and supply of money.

2. To comprehend the causes and measures of controlling inflation and deflation.

3. To acquaint the students with the working of commercial banks and central bank.

 

Course Outcomes: 

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24DECO 511C

Money and Banking

(Theory)

Students will:

CO79: examine the various aspects related to money, inflation and deflation.

CO80: analyze different approaches to demand for and supply of money and different quantity theories of money.

CO81: analyze working of commercial banks and cooperative banks.

CO82: analyze the working of central bank and monetary policy

CO83: explore the working of Development banking Financial Institutions of India.

CO84: contribute effectively in course-specific interaction

 

Approach in teaching: Interactive Lectures, Discussion, Case studies

 

Learning activities for the students:

Presentations, Assignments and Group discussions

Class activity, Assignments and Semester end examinations

 

18.00
Unit I: 
Money & Change in Value of Money
  • Barter economy, evolution of money, monetary standards
  • Definition, classification and functions of money;
  • Change in Value of money Inflation - definition, types; causes, effects and measures to control;
  • Trade-off between inflation and unemployment;
  • Deflation; meaning and effects
  • Inflation versus Deflation.

 

18.00
Unit II: 
Quantity Theory of Money
  • Demand for Money – Classical & Keynesian Approaches
  • Measurement of money supply (narrowly defined, broadly defined & RBI’s measures)
  • H theory of money supply
  • Quantity Theory of Money-
  • Cash Transactions approach – Fisher’s Equation of Exchange, criticisms
  • Cash Balance approach – Marshall, Pigou, Robertson, Keynes’ equations
  • Superiority of Cash balance approach over Cash transactions approach.
  • Keynesian approach

 

18.00
Unit III: 
Commercial Banks and Cooperative Banks
  • Commercial Banks - functions
  • The process of credit creation; Purpose & Limitations
  • Liabilities and assets of banks;
  • Role of commercial banks in economic development
  • Cooperative Banks – features, types & structure and problems

 

18.00
Unit IV: 
Central Bank
  • Central Bank -functions;Instruments of credit control – quantitative & qualitative
  • Role of central bank in economic development
  • Relationship between Central Bank and commercial banks
  • RBI-organization and promotional role.
  • Monetary policy: objectives

 

18.00
Unit V: 
Development Banking & Financial Institutions of India
  • Organizational structure of financial institutions; IFCI, SFCs, IDBI, SIDBI – role & functions.
  • Mutual Funds – concept and types; UTI & money market mutual funds; Insurance Companies – LIC & GIC – role & functions; Miscellaneous nonbanking financial intermediaries – loan companies, investment companies, hire purchase finance, lease finance, housing finance

 

Essential Readings: 
  1. Gupta, S.B., Monetary Economics- -Institutions,Theory& Policy. S. Chand & Co. 2013.
  2. Seth, M.L., Monetary Economics, LaxmiNarainAgrawal, 2020.

 

References: 

Suggested Readings:

  1. Sundaram, K.P.M., Money, Banking, & International Trade. Sultan Chand & Company, 2010.
  2. Rangarajan, C. Indian Economics: Essays on Money and Finance, UBS Publishers, 1999.
  3. Mithani, D.M., Money, Banking, International Trade & Public Finance. Himalayan Publishers, 2012.

e-Resources:

Journals:

 

Academic Session: 
2024-25
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