Experts have designed these Class 7 SST Notes Chapter 8 Banks and the Magic of Finance Class 7 Notes for effective learning.
Class 7 Banks and the Magic of Finance Notes
Banks and the Magic of Finance Notes Class 7
Class 7 SST Chapter 8 Banks and the Magic of Finance Notes
→ Financial infrastructure includes banks, payment systems, stock markets, insurance companies, and post offices, helping money flow smoothly in the economy.
→ Banks allow people to save, withdraw, and borrow money by opening a bank account.
→ Deposits are kept safely in banks and earn interest; banks use these deposits to give loans.
→ Different accounts serve different needs: savings accounts, current accounts, and fixed deposits.
→ Interest helps savings grow; compounding makes money increase faster over time.
→ Keeping financial records like passbooks helps track income, expenses, and account balance and acts as proof in case of disputes.
→ Banks give loans to individuals and businesses for various needs and charge interest on these loans.
a Schemes like the Jan Dhan Yojana helped millions open bank accounts, enabling direct benefit transfers.
→ Post offices offer savings schemes like NSC. Kisan Vikas Patra. and Sukanya Samriddhi and are widely accessible in rural areas.
→ Institutions like IFCI and NABARD support industry, agriculture, and rural development through loans and funding.
→ The Reserve Bank of India (RBI) regulates banks, ensures financial stability, prints currency, and sets benchmark interest rates.
→ Payment modes include withdrawal slips, ATMs, debit cards, internet banking, mobile banking, and digital systems like UPI.
→ Cheques allow payments from one account to another but are slower than electronic transfers.
→ Debit cards allow ATM withdrawals and payments at shops using POS machines.
→ Internet and mobile banking enable faster, convenient, and paperless transactions.
→ UPI allows instant, secure, and 24^7 money transfers using QR codes, phone numbers, or UPI IDs.
→ The stock market is where shares of companies are bought and sold; buying a share means owning part of a company.
→ Share prices rise and fall based on company performance, economic conditions, government policies, and global events.
→ Digital fraud happens through fake calls, messages, and requests for personal information like OTPs or PINs.
→ People should never share sensitive banking details and must report fraud immediately to helpline 1930 or the cybercrime portal.
→ Bank: A financial institution that collects money from people in the form of deposits and gives money to people or borrowers as loans.
→ Deposits: Money placed in a bank account that can be withdrawn according to the bank’s rules and usually earns interest.
→ Quarterly: Something that happens four times in a year. once every three months.
→ Interest: Extra amount charged for borrowing money or the extra amount earned when lending or saving money. usually shown as a percentage.
→ Debit : Process of taking money out of a bank account.
→ Credit : The process of adding or receiving money into a bank account.
→ Loan : An amount of money borrowed from banks or financial institutions that must be repaid later along with interest.
→ Benchmark : The base or standard interest rate fixed by the RBI for lending money to commercial banks. interest rate
→ Payment system : A mechanism that helps in clearing and settling financial transactions, allowing people, businesses, and organisations to transfer money to one another.
→ PIN : A secret numeric code (usually between 4 to 6 digits) used for identity verification and security, especially during financial transactions through ATMs or debit cards.
→ Share : A share is a unit of ownership in a company, representing a small portion of its capital stock, which entitles the owner to part of the company’s profits.
→ Investment : The act of putting money or resources into assets with the expectation that their value will increase over time.
→ Stock exchange : A marketplace where financial securities such as stocks and shares are bought and sold.
→ Economic shocks : A sudden and unexpected events that cause major changes in a country’s economy affecting how people earn, spend, and save money. These may be caused by natural disasters, wars, pandemics, changes in government policies, or sudden changes in the prices of important goods.
→ Tax rules : The regulations set by the government regarding the taxes that individuals and businesses must pay on their income, profits, goods, services, and transactions.
→ OTP : A unique temporary code made of letters or numbers used for verifying identity or authorising a transaction.