commerce | Aster Classes

Chapter 6, Institutes Supporting Business, ocm, fyjc, 11th std, commerce, maharashtra board,

Select the correct Option and rewrite the sentence.

1.Small Industrial Development Bank of India (SIDBI) was established in ___________
Options
  1. 1989
  2. 1990
  3. 1991

2.SIDBI was established under the Small Industrial Development Bank of India. Act, ___________

Options
  • 1988
  • 1992
  • 1996
3.___________ is Principal Financial Institution for Promotion, the Micro, Small and Medium Enterprise (MSME) sector 1n India.
Options
  • NABARD
  • KVIC
  • SIDBI
4.___________Came into existence on July 12, 1982
Options
  • NABARD
  • KVIC
  • SIDBI
5.A Committee to Review the Arrangements For Institutional Credit for Agriculture and Rural Development (CRAFICARD) was constituted under the Chairmanship of _________
Options
  • Kothari
  • Shivaraman
  • Rangarajan
6.All India khadi and village Industries Board was set up in the year _____________
Options
  • 1953
  • 1949
  • 1948
7. In April ___________ KVIC was established.
Options
  • 1955
  • 1953
  • 1957

Match the pairs.

Group ‘A’Group ‘B’
A) SIDBI1) 1944
B) NABARD2) 1990
C) World Bank3) 1988
D) Grameen Bank4) 1983
E) KVIC5) 1982
 6) 1957
 7) 1932
 8) 1956
 9) 1912
 10) 1960

SOLUTION

Group ‘A’Group ‘B’
A) SIDBI2) 1990
B) NABARD5) 1982
C) World Bank1) 1944
D) Grameen Bank4) 1983
E) KVIC6) 1957

Give one word/phrase/term:

1.Life blood of business.

SOLUTION

Finance

2.Principal Financial institution of promotion of the Micro, Small and Medium Enterprise (MSME) sector in India.

SOLUTION

SOLUTION

SIDBI

4.Wholly owned subsidiary of IDBI was set up in July 1999, is providing venture capital.

SOLUTION

SIDBI venture capital Ltd. (SVCL)

                                                                                                   

5.A digital initiative by SIDBI launched on March, 17th, 2016

SOLUTION

SIDBI startup Mitra

6.The apex institution for agricultural finance.

SOLUTION

NABARD

7.The Bangladeshi economist, known as the Father of Micro-finance.

SOLUTION

Dr. Muhammad Yunus

8.An international organization dedicated to providing finance, advice, and research to developing nations.

SOLUTION

world Bank

State True or False.

1.Small Industrial Development Bank was established on 2nd April, 1990.

Options
  • True
  • False

2.SIDBI has its head office at Mumbai.

Options
  • True
  • False

3.SIDBI is not working towards sustainable development of MSME’s in India.

Options
  • True
  • False

4.SIDBI, Startup Mitra scheme is launched on March 17, 2016.

Options
  • True
  • False

5.NABARD came into existence on July 12, 1982.

Options
  • True
  • False

6.The NABARD has been recognised as the apex institution for financing large scale industries.

Options
  • True
  • False

7.KVIC is actively working for planning, promotion and production of Khadi as well as in setting up of village and rural industries of India.

Options
  • True
  • False

8.Dr. Muhammad Yunus is known as the ‘Father of Rural Banking.

Options
  • True
  • False

9.Self Help Group is a large group of homogeneous individuals.

Options
  • True
  • False

Complete the sentence.

1.The lifeblood of a business is_______

SOLUTION

The lifeblood of a business is finance.

2.Micro, Small and Medium Enterprises (MSMEs) are focused domains for _________.

SOLUTION

Micro, Small, and Medium Enterprises (MSMEs) are focused domains for SIDBI.

3.SIDBI takes structural initiatives to resolve the financial and nonfinancial hurdles of ____________

SOLUTION

SIDBI takes structural initiatives to resolve the financial and nonfinancial hurdles of MSMEs

4.SIDBI is established to provide short-term and long-term finance to ________.

SOLUTION

SIDBI is established to provide short-term and long-term finance to MSMEs.

 5.‘SIDBI Startup Mitra’ launched on __________.

SOLUTION

‘SIDBI Startup Mitra’ launched on March 17th, 2016.

6.‘To improve the accessibility of credit and handholding services to MSMEs, SIDBI has launched the __________.

SOLUTION

To improve the accessibility of credit and handholding services to MSMEs, SIDBI has launched the Udyami Mitra.

7.NABARD came into existence on __________.

SOLUTION

NABARD came into existence on July 12th, 1982.

8.Khadi and Village Industries Commission was set up in __________.

SOLUTION

Khadi and Village Industries Commission was set up in 1953.

9.A statutory body of Khadi and Village. Industries Commission (KVIC) was created with a special Act of _______

SOLUTION

A statutory body of Khadi and Village. Industries Commission (KVIC) was created with a special Act of Parliament

10.The Grameen Bank in Bangladesh was set up in ________

SOLUTION

The Grameen Bank in Bangladesh was set up in October 1983.

11.The father of Micro finance is _______

SOLUTION

The father of Micro finance is Dr. Muhammad Yunus.

12.The World Bank came into existence on the __________

SOLUTION

The World Bank came into existence on the 1944 Bretton Woods Conference.

13.The headquarter of the World Bank is in____________

SOLUTION

The headquarter of the World Bank is in Washington D.C.

14.Dr. Muhammad Yunus jointly won the Noble Prize in __________.

Dr. Muhammad Yunus jointly won the Noble Prize in 2006.

1.Select the correct option.

AB
SIDBI__________
Options
  • 1953
  • 1944
  • 2nd April 1980
  • Oct. 1983
  • 12 July 1982

2.Select the correct option.

AB
_______NABARD
Options
  • 1953
  • 1944
  • 2nd April 1980
  • Oct. 1983
  • 12 July 1982

3.Select the correct option.

AB
KVIC_________
Options
  • 1953
  • 1944
  • 2nd April 1980
  • Oct. 1983
  • 12 July 1982

4.Select the correct option.

AB
________World bank
Options
  • 1953
  • 1944
  • 2nd April 1980
  • Oct. 1983
  • 12 July 1982

5.select the correct option.

AB
Grameen bank_________
Options
  • 1953
  • 1944
  • 2nd April 1980
  • Oct. 1983
  • 12 July 1982

Answer in one sentence.

1.What is SIDBI?

SOLUTION

SIDBI is the Small Industrial Development Bank of India, which takes initiative to resolve the financial and nonfinancial hurdles of MSMEs.

2.What do you mean by NABARD?

SOLUTION

NABARD is a National Bank for Agriculture and Rural Development, which was formed with an objective to provide and regulate credit and other facilities for the development of agriculture, small scale industries, cottage village industries, handicraft, and other rural crafts and allied economic activities.

3.What is meant by Grameen Bank?

SOLUTION

The bank which gives small loans to landless poor women to promote self-employment is called Grameen Bank.

4.What is SHG?

SOLUTION

SHG is a small group of homogeneous individuals who come together with the objective of creating a common fund through savings and meet members’ emergency needs by providing collateral-free loans.

5.What do you mean by World Bank?

SOLUTION

The World Bank is an international organization dedicated to providing finance, advice, and research to developing nations.

6.What is MSME’s?

SOLUTION

MSME’S are Micro, Small, and Medium Enterprises, which play an important role in promoting entrepreneurship among women and economically weaker section in the country.

7.What is Udyami Mitra?

SOLUTION

‘Udyami Mitra’ is the digital portal launched by SIDBI, to improve the accessibility of credit and handholding services to MSMEs.

Correct the underlined word and rewrite the following sentence.

1.SIDBI is established to provide only long -term finance to the MSME’s.

SOLUTION

SIDBI is established to provide short-term and long term finance to the MSME’s.
2.The NABARD has been recognised as the apex institution for Industrial finance.

SOLUTION

The NABARD has been recognised as the apex institution for Agricultural finance.
3.Khadi was a symbol and the spirit of self-reliance in post-independence India.

SOLUTION

Khadi was a symbol and the spirit self-reliance of pre-independence India.
4.Self-help groups are based on the fundamental principle of to earn profit.

SOLUTION

Self-help groups are based on the fundamental principle of ‘helping each other’ and “unity is strength”.
5.World Bank provides high interest loan.

SOLUTION

World Bank provides low interest loan.

Explain the following term/concept.

1.Udyami Mitra.

SOLUTION

  1. This is the portal launched by SIDBI to improve the accessibility of credit and handholding services to MSME’s.
  2. Under this portal, entrepreneurs can apply for a loan without physically visiting any bank branches.
  3. The entrepreneurs can select and apply for preferred banks.
  4. They can select a suitable branch, track their application status, and avail multiple loan benefits.

2.KVIC.

SOLUTION

  1. KVIC was established to take over the work from All India Khadi and Village Industries Board.
  2. KVIC is working for planning, promotion, and production of Khadi and setting up of village and rural industries in India.
  3. It gives emphasis on utilizing the locally available raw materials and human skills to generate non-farm employment opportunities in rural areas.

3.World Bank.

SOLUTION

  1. The World Bank is an international organization formed to provide finance, advice, and research to developing nations.
  2. It was created at the 1944 Bretton Woods Conference along with the International Monetary Fund (IMF)
  3. The headquarter of the World Bank is in Washington DC.
  4. It provides financial as well as technical assistance to the member countries of the world.
  5. It comprises two institutions namely the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

4.Self Help-Groups.

SOLUTION

  1. Self Help Group (SHG) is a voluntary association.
  2. It is a small homogeneous group of people who come together with the objective of creating a common fund through small savings and meet members’ emergency needs by providing collateral-free loans at a reasonable rate.
  3. Many SHG is linked to banking institutions for getting micro-credit.
  4. All decisions are taken collectively by SHG members.

5.Collateral Free Loan.

SOLUTION

  1. Collateral free loans are SHGs small loans provided to poor individuals for undertaking Self-employment projects.
  2. Loans are given on the principle of mutual trust and either minimum or no documentation.
  3. The rate of interest generally charged are higher than the interest charged by banks.
  4. It saves the poor individuals from the clutches of local money lenders.

1.Study the following case/situation and express your opinion.

Anand completed his MB A and wants to start a Small Scale Industry. H e is good at using technology. He has a very good business idea in mind and looking for a lender or investor.
  1. Who is promoter or businessman in this case?
  2. W h at is the full form of SSI?
  3. Suggest digital ways to find lenders or investors for this initiative.

SOLUTION

  1. A person who gets the idea of starting the business enterprise is called a promoter or businessman. In the above case, Anand is a promoter or businessman.
  2. The full form of SSI is Small Scale Industry.
  3. SIDBI has started Digital initiatives/Digital ways to find lenders or investors. For this initiative I can suggest the following ways:
    (a) SIDBI Startup Mitra: It brings together all stakeholders, start-up entrepreneurs, incubators, investors, industry bodies, mentors and advisors, and banks on one platform. It helps in the financing and development of new entrepreneurs.
    (b) Udyami Mitra: This is a portal launched by SIDBI to improve the accessibility of credit and handholding services to MSMEs. Under this portal, entrepreneurs can apply for a loan without physically visiting any bank branches. The entrepreneurs can select and apply for preferred banks, they can select a suitable branch, track their application status, and avail multiple loan benefits.

Answer in brief.

1.State any four features of NABARD.

SOLUTION

Features of NABARD:

  1. Apex Bank: NABARD acts as an apex bank for meeting the credit needs of all types of financial institutions working 1n the field of agricultural and rural development. It works to frame policies and guidelines for rural financial institutions in India. It provides credit facilities to institutes working in agricultural finance.
  2. Refinancing Facilities: It provides refinancing facilities to State Co-operative Banks (SCBs), Land Development Banks (LDBs), Regional Rural Banks (RRBs), and other approved financial institutions for financing rural economic activities. It also provides short-term, medium-term, and long term credit to these institutes.
  3. Provides Credit for Rural Development: It takes initiatives in the development and promotion of different activities in rural areas by providing funds to State governments. It also provides refinancing for the Upliftment of weaker sections of the society. It also works on the improvement of small and minor irrigation by way of promoting agricultural activities.
  4. Financing Rural Industries: It provides refinancing facilities to small scale industries and other village and cottage industries. It provides loans to commercial and co-operative banks to promote rural employment. It organizes skill and entrepreneurship development programs to promote an entrepreneurial culture among rural youth and encourage them to start enterprises in rural areas.

2.State four objectives of KVIC.

SOLUTION

Objectives of KVIC:

  1. Development of Khadi and Other Village Industries: KVIC is actively working for planning, promotion and production of khadi as well as in setting up of village and rural industries in India. It identifies the potential for the development of rural industries and undertakes the valuable task of promoting and developing locally operating village enterprises.
  2. Special Objective: KVIC has a special objective of providing employment. It gives emphasis on utilizing the locally available raw materials and human skills to generate non-farm employment opportunities in rural areas. It plays the role of co-ordinator with other agencies engaged in rural development.
  3. Economic Objective: KVIC is actively working for planning, promotion and production of khadi as well as in setting up of village and rural industries in India. KVIC receives funds from the Ministry of MSMEs for the effective implementation of various programs and schemes. It helps in producing saleable articles that help the economic development of the country.
  4. Wider Objective: It has a wider objective of creating self-reliance amongst the poor and building up of a strong rural community spirit.

3.Write any four features of the World Bank.

SOLUTION

Features of World Bank:
  1. Organization and Structure: The organization of the bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee, and the President and other staff members. All the powers of the bank are vested in the Board of Governors which is the supreme policy-making body of the bank. The board consists of one Governor and an Alternate Governor appointed for five years by each member country. The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan, and India. The rest of the 15 members are elected by the remaining countries.
  2. Goals: The World Bank Group has two goals to be achieved by 2030.
    (a) To end extreme poverty by decreasing the percentage of people living on less than 1.90 dollars a day to no more than 3%.
    (b) To promote shared prosperity by fostering the income growth of the bottom 40% for every country.
  1. Innovative Knowledge Sharing: World Bank offers support to developing countries through policy, advice, research and analysis, and technical assistance. Analytical works of the World Bank often help developing countries. It also helps in the capacity development of developing countries. World Bank also sponsors, hosts, or participates in many conferences and forums on issues of development.
  2. Social Development: Social Development focuses on the need to “put people first” in the development process. The World Bank work with governments, communities, civil societies, the private sector, and the marginalized for the cause of social development. Social Development promotes economic growth and leads to a higher quality of life. ‘

4.Describe any two features of Self Help Groups.

SOLUTION

Features of Self Help Groups:
  1. Democratic Set up: SHG is a group of the members, for the members and by the members. Every member of the group actively participates in the functioning of SHGs. Members are responsible for their own future by organizing themselves into SHGs. They elect or select leaders for the proper functioning of the group. The leader is responsible for holding regular meetings and maintaining records and accounts of the group.
  2. Collateral Free Loan: SHGs provide small loans to poor individuals for undertaking self-employment projects. Loans are given on the principle of mutual trust and either minimum or no documentation. Generally, the rate of interest is higher than the interest charged by banks. It saves the poor individuals from the clutches of local money lenders. The repayment of loans is ensured timely as all members of the group are responsible for collecting repayment amounts from the members who borrowed the loan.

5.Describe any two features of SIDBI.

SOLUTION

Features of SIDBI:
  1. Financial Institute for Promotion of MSMEs: SIDBI is established to provide short term and long term finance to the MSMEs. It is the principal financial institution for micro, small, and medium sector units. It also coordinates the functions of institutions engaged in financing MSME’s. It provides refinance to Banking and Non-Banking Financial Companies to increase the supply of credit to MSMEs.
  2. Advisory Function: SIDBI also works as an advisor and mentor of MSMEs. It helps MSMEs in expanding marketing channels for the products both in domestic as well as international markets. It also initiates steps for modernization and technological upgradation of current units.

Justify the following statement.

1.SIDBI acts as an institute for the promotion of MSMEs

SOLUTION

  1. There are many efforts taken by SIDBI to emerge as a brand which is customer friendly towards MSME’s.
  2. It .facilitates and strengthens credit flow to MSME’s.
  3. It identifies financial and developmental gaps in the MSME’s and takes efforts to resolve the same.
  4. SIDBI has dedicated its resources to the evolution of a vibrant ecosystem. SIDBI has taken Steps for technological upgradation and modernization of existing MSME’S
  5. Thus, we can say that SIDBI acts as an institute for promotion of MSME’s.

2.SIDBI provides different types of financial and non-financial services through its subsidiaries.

SOLUTION

The following are the subsidiaries of SIDBI that provides financial and non-financial services:
  1. SIDBI Venture Capital Ltd. provides venture capital to emerging sectors, such as life sciences, biotechnology, pharmaceuticals, engineering, and information technology.
  2. Credit Guarantee Fund Trust for Micro and Small Enterprises is a trust to implement the Credit Guarantee Scheme through which credit faculties are extended without third party guarantee on collateral security by eligible lending banks/financial institutions.
  3. SME Rating Agency of India Ltd. was set up by SIDBI, Dum & Bradstreet Information Services India Pvt. Ltd. and several public, private and foreign sector banks as an MSME. It is a dedicated third-party rating agency and prov1de comprehensive, transparent, and reliable ratings and risk profiling.
  4. India SME Technology Services Limited is a platform where MSME’s can tap global opportunities for acquiring new emerging technologies and establish business collaborations.
  5. India SME Asset Reconstruction Company Ltd. is an asset reconstruction company. It acquires non-performing assets and tries to resolve them through its innovative mechanisms. It especially focuses on the non-performing assets of the MSME sector.
  6. Micro Units Development and Refinance Agency is established for ‘funding the unfunded’ micro-enterprises in the country.
  7. Thus, SIDBI provides different types of financial and non-financial services through its subsidiaries.

3.The NABARD has been recognized as the apex institution for agricultural finance.

SOLUTION

  1. India is an agricultural country.
  2. Agriculture and its allied activities act as the main source of livelihood for most of the rural population of India.
  3. The government of India is aware of the need of boosting institutional credit in rural economies.
  4. The RBI constituted a Committee to review the arrangements for Institutional Credit for Agricultural and Rural Development under the Chairmanship of Shri B. Sivaram, to take a review of agricultural credit in India.
  5. The recommendation of the Committee was accepted and National Bank for Agriculture and Rural Development came into existence on July 12, 1982, under the special Act of the Parliament, with the objective of providing credit and other facilities for the development of agriculture.
  6. Thus, we can say the NABARD has been recognized as an apex institution for agricultural finance.

4.KVIC plays an important role in the development of entrepreneurship.

SOLUTION

  1. Entrepreneurship Development is one of the major functions of KVIC.
  2. KVIC helps to provide additional livelihood avenues to the village communities.
  3. KVIC generate self-employment opportunities through establishment of micro-enterprises by organizing traditional artisans and unemployed youth. It increases the earning capacity as well as prevents migration.
  4. KVIC actively participates in many international trade exhibitions for popularising its products in international markets.
  5. Thus, we can say that KVIC plays an important role in the development of entrepreneurship.

5.Mutual Trust is the soul of SHG.

SOLUTION

  1. Most of the Indian villagers are facing challenges such as poverty, illiteracy, lack of skills, health care, etc.
  2. There is a need for group efforts to solve these problems.
  3. The basic philosophy of forming SHGs is to overcome individual shortcomings and weaknesses with collective efforts.
  4. Through mutual trust, thousands of poor and marginalized individuals are building their lives, their families, and their society.
  5. Thus, we can say mutual trust is the soul of SHG.

6.SHGS plays an important role in the empowerment of women.

SOLUTION

  1. The empowerment of women through SHG’s would lead to benefits not only to the individual women but also for the family and community as a whole.]
  2. The SHGs empower women and train them to take an active part in the socio-economic progress of the nation.
  3. SHG develops saving habits among women.
  4. It enhances the status of women as they participate, lead, make decisions, and get benefited through collective efforts Thus, we can say that SHG’s play an important role in 1n the empowerment of women.

7.World Bank plays a vital role in social development.

SOLUTION

  1. The World Bank work with governments, communities, civil societies, private sectors, and the marginalized ‘ for the cause of social development.
  2. Social development promotes economic growth and leads to a higher quality of life.
  3. The World Bank’s work on social development brings voices of the poor and vulnerable to the development process.
  4. World Bank is also undertaking timely social risk analysis, including poverty and social impact analysis.
  5. Thus, the World Bank plays a vital role in social development.

Attempt the following.

1.State the different forms of finance provided by SIDBI.

SOLUTION

SIDBI offers the following finance facilities to its customers:
  1. Direct Finance: SIDBI offers direct financing to the MSMEs through financing Working Capital, Term Loan, Foreign Currency Loan, Equity Support, Energy Saving Schemes, etc.
  2. Indirect Finance: SIDBI offers indirect assistance by providing refinance to banks, State Level Financial Institutions, etc. with an extensive branch network across the country.
  3. Micro Finance: SIDBI offers micro-finance to small businessmen and entrepreneurs for establishing their business.

2.State the role of SIDBI in sustainable development.

SOLUTION

Role of SIDBI in sustainable development:
  1. SIDBI helps MSMEs in the creation of economic wealth while preventing the ecological wealth of the country. It promotes the culture of energy-efficient and sustainable finance. It takes initiative to enhance awareness of the benefits of climate control amongst MSMEs.
  2. It focuses on lending schemes, promoting investments in clean production, and energy-efficient technologies. It helps to reduce the emission of greenhouse gases to contribute to a reduction in pollution.

3.Explain the role of NABARD in financing rural industries.

SOLUTION

Role of NABARD in financing rural industries:
  1. It plays an important role in providing refinance to small scale industries and other village and cottage industries.
  2. It provides loans to commercial and co-operative banks to promote rural employment.
  3. It organizes skill and entrepreneurship development programmes to promote an entrepreneurial culture among rural youth and encourage them to start enterprises in rural areas.

4.Explain the objectives of KVIC.

SOLUTION

Objectives of KVIC are:
  1. The objectives of KVIC are broadly classified into three. i.e. social objective, economic objectives, and wider objective.
  2. Through social objectives, KVIC aims at providing employment to the rural unemployed.
  3. Through economic objective, it tries to produce saleable articles which will give promotion to KVIC products.
  4. Through a wider objective, it attempts to create self-refinance amongst the poor and building a strong rural community spirit.

5.Explain the role of KVIC in employment generation.

SOLUTION

Role of KVIC in employment generation:
  1. Due to the massive population growth agricultural sector is losing its ability to generate additional employment in rural areas.
  2. It is necessary to create employment opportunities for the fast increasing workforce in rural areas.
  3. Khadi and village industries are labour intensive in nature.
  4. The KVIC is established with the broader objective to promote non-farm employment opportunities in rural areas.
  5. It also concentrates on the betterment of rural artisans and socio-economic weaker section of the society.

6.Explain in detail the democratic setup in SHGs.

SOLUTION

Democratic set up in SHGs:
  1. SHG is a group of the members, for the members, and by the members.
  2. It is the group that reflects people’s real participation in the process of development.
  3. Every member of the group actively participates in the functioning of SHGs.
  4. Members are responsible for their own future by organizing themselves into SHGs.
  5. They elect or select leaders for the proper functioning of the group.
  6. The leader is responsible for holding regular meetings and maintaining records and accounts of the group.

7.Explain organizational structure of World Bank.

SOLUTION

Organizational Structure of the World Bank:

  1. The organization of the bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee, and the President and other staff members.
  2. Board of Governors is the supreme policy-making body of the bank.
  3. The board consists of one Governor and one Alternate Governor appointed for 5 years by each member country.
  4. The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six largest Shareholders, namely USA, UK, Germany, France, Japan, and India. The rest 15 members are elected by the remaining countries.

Answer the following:

1.Write important features of SIDBI.

SOLUTION

Important features of SIDBI are as follows:

  1. Sustainable Development: SIDBI is working towards the sustainable development of MSMEs in India. It helps MSMEs in the creation of economic wealth while preventing the ecological wealth of the country. It promotes a culture of energy-efficient and sustainable finance. It helps to reduce the emission of greenhouse gases to contribute to a reduction in pollution.
  2. Nodal/Implementing Agency: SIDBI has been assigned the role of nodal agency by the Government of India. It helps in implementing various subsidy schemes for MSMEs. These schemes help in up-gradation, modernization, and expansion of the business.
  3. Financial Institute for Promotion of MSMEs: SIDBI is established to provide short term and long term finance to the MSMEs. It provides refinance to Banking and Non-banking Financial Companies to increase the supply of credit to MSMEs. SIDBI cater to the specific needs of Indian MSMEs that are not fulfilled through traditional sources of finance.
  4. Advisory Function: SIDBI also works as an advisor and mentor for MSMEs. It helps MSMEs in expanding marketing channels for the products both in the domestic as well as international markets. It also initiates steps for modernization and technological up-gradation of current units.
  5. Forms Of Finance: SIDBI offers the following facilities to its customers:
    (a) Direct Finance,
    (b) Indirect Finance,
    (c) Micro Finance
  6. Digital Initiatives:
    (a) SIDBI Startup Mitra: It brings together all stakeholders, start-up entrepreneurs, incubators, investors, industry bodies, mentors and advisors, and banks at one platform. It helps in financing and development of new entrepreneurs It also works as a knowledge partner for State and Central Government.
    (b) Udyami Mitra: This is the portal launched by SIDBI to improve the accessibility of credit and handholding services to MSME’s. Under this portal, entrepreneurs can apply for a loan without physically visiting any bank branches. The entrepreneurs can select and apply for preferred banks, they can select a suitable branch, track their application status an avail multiple loan benefits.
  7. Achievement of National Goals: SIDBI helps in poverty alleviation and employment generation by financing MSMEs. It promotes entrepreneurship and fosters competitiveness in the MSME sector. It promotes entrepreneurship among women and the economically weaker sections of society.
  8. Services of MSMEs: SIDBI provides different types of financial and non-financial services through its associates and subsidiaries. These associates and subsidiaries are as follows:
  • SIDBI Ventures Capital Ltd.
  • Credit Guarantee Fund Trust for Micro and Small Enterprises.
  • SME Rating Agency of India Ltd.
  • India SME Technology Services Limited
  • India SME Asset Reconstruction Company Ltd.
  • Micro Units Development & Refinance Agency

2.Write important features of NABARD.

SOLUTION

Important features of NABARD are as follows:

  1. Financing Rural Industries: It plays an important role in providing refinance for small scale industries and other village and cottage industries. It provides loans to commercial and co-operative banks to promote rural employment. It organizes skill and entrepreneurship development programs to promote an entrepreneurial culture among rural youth and encourage them to start enterprises in rural areas.
  2. Assistance to Financial Institutes: It plays an important role in preparing and developing action plans for Co-operative Banks and Regional Rural Banks. It also monitors the implementation of the developmental action plans of these banks. It provides financial assistance to co-operative banks for building improved Management Information System, computerization of operations, and development of human resources.
  3. Refinancing Facilities: It provides refinancing facilities to State Co-operative Banks (SCBs), Land Development Banks (LDBs), Regional Rural Banks (RRBs), and other approved financial institutions for financing rural economic activities. It also provides short-term, medium-term, and long term credit to these institutes.
  4. Credit for Rural Development: It takes initiative in the development and promotion of different activities in rural areas by providing funds to the State government. It also works on the improvement of small and minor irrigation by way of promoting agricultural activities.
  5. Apex Bank: NABARD acts as an apex bank for meeting the credit needs of all types of financial institutions working in the field of agricultural and rural development. It works to frame policies and guidelines for rural financial institutions in India. It provides credit facilities to institutes working in agricultural finance.
  6. Recommendations to Reserve Bank of India: It provides recommendations to Reserve Bank of India: on the issue of licenses to Co-operative Banks, the opening of new branches by State Co-operative Banks and Regional Rural Banks.
  7. Development of Nation: It plays an important role m the Improvement of storage facilities for agricultural commodities by promoting the development of warehousing facilities. It also promotes the export of agricultural commodities. It plays a key role in the sustainable development of the country through the Green, Blue, and White revolution.
  8. Supervision of Financial Institutes Engaged in Agricultural Finance: It undertakes inspection of Regional Rural Banks and Co-operative Banks as per the guidelines of Banking Regulation Act,1949. It can also undertake an inspection of State 00operative Agriculture and Rural Development Banks and apex non-credit co-operative societies on a voluntary basis.

3.Write important features of SHGs.

SOLUTION

Important features of SHGs are as follows:

  1. Formation: It is generally formed by NGOs or team of the government. It is an informal group. It is recognized by the government and does not require any formal registration, SHGs have well-defined rules and by-laws, hold regular meetings, and maintain records.
  2. Membership: As per the National Urban Livelihood Mission at least 5 members are required. It is difficult to manage a bigger group and members cannot actively participate from one family only one person can become a member so that more families can participate. Mixed groups are generally not preferred.
  3. Entrepreneurship Development: The poor individuals in rural areas face scarcity of capital and managerial skills. SHGs provide them capital at a low-interest rate which gives them the opportunity to start micro-enterprise. These micro-enterprises use untapped manpower in the area which generates employment opportunities in rural areas.
  4. Collateral Free Loan: SHGs provide small loans to poor individuals for undertaking self-employment projects. Loans are given on the principle of mutual trust and either minimum or no documentation is required to get a loan. The rate of interest differs from group to group and it is a little higher than the interest charged by banks. It ensures timely repayment of loans as all members of the group are responsible for collecting repayment amount from the members who borrowed the loan.
  5. Democratic Setup: SHG is a group of members, for the members and by the members. It is the group that reflects people’s real participation in the process of development. Members elect or select leaders for the proper functioning of the group. The leader is responsible for holding regular meetings and maintaining records and accounts of the group.
  6. Empowerment of Women: SHG is an emerging tool for the socio-economic development of women all over the world. SHGs are working effectively in promoting women entrepreneurs. SHGs empower women by providing their knowledge, finance, and opportunities.
  7. Saving Habits: The SHG encourages small saving habits at regular intervals among its members. The Self Help Group inculcates the thrift and savings habit among the members of each group.
  8. Mutual trust: Most of the Indian villages are facing challenges such as poverty, illiteracy, lack of skills, health care, etc. The basic philosophy of forming SHGs is to overcome individual shortcomings and weaknesses with collective efforts. Through mutual trust, thousands of the poor and marginalized individuals are building their lives, their families, and their society.

4.Write important features of KVIC.

SOLUTION

Important features of KVIC are as follows:

  1. Research and Development: To face the challenge of globalisation, KVIC has introduced a number of new products range like khadi denim Jeans to cater to the need of the market. The KVIC undertakes training of sales staff for the effective marketing of the products. KVIC is taking several steps to set standards of quality to ensure the genuineness of the khadi products. KVIC signed a Memorandum of Understanding with the National Institute of Design to provide design support, services in packaging, marketing, communication, publicity, disseminating materials, and other design-related activities.
  2. Other Functions: The KVIC is charged with the planning, promotion, organization, and implementation of programs for the development of Khadi and other village industries in the rural area. It organizes a training programme for artisans engaged in Khadi and Village Industries.
  3. Marketing Promotion: In order to attract the younger generation, the KVIC is holding exhibitions, seminars, lectures in universities and colleges to disseminate knowledge of KVIC products. KVIC has also launched a massive marketing development plan to generate interest, awareness, and attraction amongst masses.
  4. Financial Assistance: It finances the projects for rural industrialization and also provides for margin money by way of subsidy. There are provisions for a higher rate of subsidies in the case of beneficiaries of the weaker section, tribal areas, and backward regions. KVIC also provides financial assistance to institutions and individuals for the development and operation of the Khadi and Village industries.
  5. Rural Development: The Khadi and Village Industries plays an important role in the development of the Indian economy, particularly in the development of rural areas. KVIC facilitates the proper utilization of natural resources in rural India for generating income for the rural masses.
  6. Employment Generation: Due to the increasing workforce, it is necessary to create employment opportunities. KVIC is labour intensive in nature. The broader objective of KVIC is to promote non-farm employment opportunities in rural areas.
  7. Entrepreneurship Development: KVIC helps to provide additional livelihood avenues to the village communities. KVIC generate self-employment opportunities through establishment of micro-enterprises by organizing traditional artisans and unemployed youth.

5.Write important features of the World Bank.

SOLUTION

Important features of the World Bank are as follows:

  1. Organisation and Structure: The organization of the bank consists of the Board of Governors, the Board of Executive Directors, and the Advisory Committee, the Loan Committee and the President and other staff members. Board of Governors is the supreme policy-making body of the bank. The board consists of one Governor and one Alternate Governor appointed for 5 years by each member country. The Board of Executive Directors consists of 21 members, 6 of them are appointed by the six largest shareholders, namely USA, UK, Germany, France, Japan, and India. The rest 15 members are elected by the remaining countries.
  2. Innovation and Entrepreneurship: Innovation and Entrepreneurship help in higher productivity which leads to increased economic growth. It helps in the creation of employment to eradicate poverty. Young and growth-oriented companies contribute to employment growth. They help in enhancing competitiveness and productivity by introducing new products, developing novel business models, and opening new markets. The World Bank brings global experience, knowledge, research, and investments to help client countries develop effective innovation and entrepreneurship ecosystems, such as policies, strategies, regulations, and institutions that foster investments and jobs.
  3. Financial Products and Services: World Bank provides low-interest loans, zero to low-interest credits, and grants .to developing countries. It supports in areas such as education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management.
  4. Innovative Knowledge Sharing: World Bank sponsors, hosts, or participates in many conferences and forums on issues of development. It also collaborates with partners on many developing issues. It also takes effort to provide access to the best global expertise to the developing countries.
  5. Goals: The World Bank Group has set 2 goals to be achieved by 2030.
    (a) End extreme poverty by decreasing the percentage of people living on less than 1.90 dollars a day to no more than 3%.
    (b) Promote shared prosperity by fostering the income growth of the bottom 40% of every country.
  6. Social Development: Social Development focuses on the need to ‘put people first’ in the development process. The World Bank’s work on social development brings voices of the poor and vulnerable to development processes. World Bank is also understanding timely social risk analysis, including poverty and social impact analysis.

                   

Chapter 3: Journal

Answer in One Sentence:

1.What is Journal ?

SOLUTION

A journal is a book prepared to classify or sort out transactions in a form convenient for their subsequent entry in the ledger.

2.What is Narration?

SOLUTION

Narration is a brief explanation about the transaction.

3.What is GST?

SOLUTION

GST means Goods and Service Tax. GST is one nation, one tax, one market.

4.In which year GST was imposed by the Central Government of India?

SOLUTION

GST was imposed by the Central Government of India in the year 2017 (1st July 2017).

5.What is meant by simple entry ?

SOLUTION

For a transaction, entry in which only two accounts are affected, one account is debited and the other account is credited, is known as simple entry.

6.What is the meaning of Combined Entry?

SOLUTION

A journal entry which contains more than one debit or more than one credit or both effects of a transaction is known as a combined/compound journal entry.

7.Which account is debited, when rent is paid by debit card?

SOLUTION

When rent is paid by debit card, Rent A/c is debited.

8.Which discount is not recorded in the books of account?

SOLUTION

Trade discount is not recorded in the books of account.

9.In which order monthly transactions are recorded in a journal?

SOLUTION

In the order of their occurrence, monthly transactions are recorded in a journal.

10.Which account is credited, when goods are sold on credit?

SOLUTION

When goods are sold on credit, Sales account is credited.

Give one word/term or phrase for the following statement:

1.A book of prime entry.

SOLUTION

Journal

2.The tax imposed by Central Government on Goods and Services

SOLUTION

GST Goods and Service Tax

3.Brief explanation of an entry.

SOLUTION

Narration

4.The process of recording transactions in the Journal.

SOLUTION

Journalising

5.The French word from which the word Journal is derived.

SOLUTION

JOUR

6.Concession given for immediate payment.

SOLUTION

Cash discount

7.Entry in which more than one accounts are to debited or credited.

SOLUTION

Combined/Compound Journal Entry

8.Anything taken by proprietor from business for his private use.

SOLUTION

Drawings

9.Tax payable to the Government on purchase of goods.

SOLUTION

Input CGST and Input SGST or Input Tax

10.Page number of the ledger.

SOLUTION

Ledger Folio

Select the most appropriate alternative from the alternatives given below and rewrite the statement.

1._________ means explanation of the transactions recorded in the Journal.

  • Narration
  • Journalising
  • posting
  • Casting

2._________ discount is not recorded in the books of accounts.

  • Trade
  • Cash
  • GST
  • VAT

3.Recording of transaction in Journal is called ______.

  • posting
  • journalising
  • narration
  • prime entry

4.Every Journal entry require ______.

  • casting
  • posting
  • narration
  • journalising

5.The ______ column of the Journal is not recorded at the time of journalising

  • date
  • particulars
  • ledger folio
  • amount

6.Goods sold on credit should be debited to _________.

  • purchase A/c
  • customer A/c
  • sales A/c
  • cash A/c

7.Wages paid for installation of Machinery should be debited to _________

  • wages A/c
  • machinery A/c
  • cash A/c
  • Installation A/c

8.The commission paid to the agent should be debited to _________

  • drawing A/c
  • cash A/c
  • commission A/c
  • Agent A/c

9.Loan taken from Dena Bank should be credited to ________

  • Capital A/c
  • Dena Bank A/c
  • Cash A/c
  • Dena Bank Loan A/c

10.Purchase of animals for cash should be debited to ________

  • Live stock A/c
  • Goods A/c
  • Cash A/c
  • Bank A/c

State whether the following statement is True or False with reasons.

1.Narration is not required for each and every entry.

Options
  • True
  • False

SOLUTION

This statement is False.

Narration is nothing but brief explanation of entry/transaction, based on that one Can pass journal entry. Therefore, narration is required for each and every entry.

2.A journal voucher is must for all transactions recorded in the journal.

Options
  • True
  • False

SOLUTION

This statement is True.

Journal voucher is basic/original voucher on the basis of which the transactions should be journalised in journal book, so we can say that journal voucher is must for all transactions recorded in the journal.

3.Cash discount allowed should be debited to discount A/c.

Options
  • True
  • False

SOLUTION

This statement is True.

Cash discount allowed is an expense for the business and every expense should be debited. Therefore cash discount allowed should be debited to Discount A/c.

4.Journal is a book of prime entry.

Options
  • True
  • False

SOLUTION

This statement is True.

For every financial transaction, initially, an entity is recorded in the book known as ‘Journal’. Therefore, we can say that journal is a book of prime entry

5.Trade discount is recorded in the books of accounts.

Options
  • True
  • False

SOLUTION

This statement is False. 

Trade discount is a general discount, allowed on catalog price or on the price list price. For increasing the sale or to give sufficient margin to retailers, generally trade discount is allowed. Therefore, the trade discount is not to be recorded in the books of accounts.

6.Goods lost by theft is debited to goods A/c.

Options
  • True
  • False

SOLUTION

This statement is False. 

As per Real A/c rule, debit what comes in and credit what goes out. Here, goods lost by theft means goods goes out. Therefore, goods lost by theft is to be credited to Goods A/c.

7.If rent is paid to landlord, landlord’s A/c should be debited.

Options
  • True
  • False

SOLUTION

This statement is False. 

Rent paid is an expense and Rent paid A/c should be debited, not Landlord A/c be debited.

8.Book Keeping records monetary and non-monetory transactions

Options in
  • True
  • False

SOLUTION

This statement is False. 

In the books of accounts, only financial transactions are to be recorded. Means non-monetary transactions are not be recorded.

9.Drawings made by the proprietor increases his capital

Options
  • True
  • False

SOLUTION

This statement is False. 

Drawings means, anything withdrawn by proprietor in the form of cash, goods, assets or services from the business for personal use. And it decreases the capital of proprietor.

10.GST paid on purchase of goods Input tax A/c should be debited.

Options
  • True
  • False

SOLUTION

This statement is True.

When goods are purchased, any tax payable on it is an expense for the business. Therefore, we can say that when GST is paid. Input Tax should be debited.

Fill in the blank:

SOLUTION

1.The first book of original entry is the Journal

2.The process of recording transaction into journal is called Journalising.

3.An explanation of the transaction recorded in the journal narration.

4. Trade discount is not recorded in the books of accounts.

5.There are three parties to a cheque

6.The crossed cheque is more safe than other cheques as it cannot be encashed on the counter of the bank.

7.Cash discount is concession allowed for bulk purchase of goods or for immediate payment.

8.Every Journal Entry requires voucher.

9.Cash discount is always recorded in the books of accounts. 

10.Voucher is the document on the basis of which the entry is recorded in journal.

1.Prepare specimen of Tax Invoice

SOLUTION

2.Prepare specimen of Receipt

SOLUTION

3.Prepare specimen of Crossed cheque

solution

4.Prepare specimen of Cash voucher.

SOLUTION

Correct the following statement and rewrite the statement:

1.All business transactions are recorded in the Journal.

SOLUTION

Only monetary transactions are recorded in the Journal.

2.Cash discount is not recorded in the books of accounts

SOLUTION

Cash discount is recorded in the books of accounts

3.Journal is a book of Secondary entry.

SOLUTION

Journal is a book of Prime entry

4.GST is imposed by the Government of India from 1st July 2018.

SOLUTION

GST is imposed by the Government of India from 1st July, 2017.

5.Machinery purchased by the Proprietor decreases his capital

SOLUTION

Machinery purchased by the proprietor increases his Capital

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