Money and Credit Class 10 PDF - Economics Ch 3

The NCERT Class 10 Economics Book PDF Chapter 3 Money and Credit brings together every definition, case study and credit term that the CBSE Class 10 Social Science board paper actually tests.

The chapter sits in Understanding Economic Development and runs to about 16 printed pages in the 2026-27 reprint, with the Salim and Swapna credit stories, two pie-chart graphs and the Grameen Bank example.

• Board Weightage: 5 to 6 marks in the Class 10 Social Science (Economics unit) paper, usually one short answer plus one source-based question on credit
• What's Inside: money as a medium of exchange, modern forms of money, loan activities of banks, terms of credit, formal and informal credit, Self-Help Groups and Grameen Bank

This NCERT class 10 economics book pdf chapter 3 Money and Credit is the original NCERT print, hosted unmodified by Collegedunia, mapped to the 2026-27 syllabus and checked against the last five years of CBSE board papers.

What the Money and Credit Class 10 Chapter 3 PDF Covers

The chapter opens by asking why we use money, then explains modern forms of money, how banks lend, and what makes credit help or hurt a borrower. It ends with how the poor get loans through Self-Help Groups and the Grameen Bank.

• Money: double coincidence of wants, currency and demand deposits, cheque payments
• Credit: the Salim and Swapna stories, plus the four terms of credit
• Credit sources: formal lenders (banks, cooperatives) versus informal lenders (moneylenders, traders), and how the RBI supervises the formal sector
• Help for the poor: Self-Help Groups and the Grameen Bank case study

Money as a Medium of Exchange and the Double Coincidence of Wants

Why do we trade in money instead of swapping goods directly? Money removes a hard condition called the double coincidence of wants. This is the most common opening question of the chapter.

• Barter system: goods are swapped directly, so a shoe maker must find a wheat farmer who also wants shoes.
• Double coincidence of wants: what one person wants to sell is exactly what the other wants to buy.
• Money as a medium of exchange: the shoe maker can sell shoes for money and then buy wheat from anyone.

So money removes the need for a double coincidence of wants, a favourite three-mark board question.

Money and Credit Class 10 Explained in Simple Language

Source: Magnet Brains on YouTube

Modern Forms of Money: Currency and Demand Deposits in Chapter 3

Modern money is no longer made of gold or grain. The chapter splits it into two forms, both linked to the banking system.

• Currency: paper notes and coins. In India only the Reserve Bank of India issues currency notes on behalf of the central government, and no one can refuse a payment in rupees.
• Demand deposits: money in bank accounts, withdrawn on demand and earning interest.
• Cheque payments: a cheque tells the bank to pay a set amount from the payer's account, so payments settle without cash.

So currency and demand deposits together make up modern money, both depending on the banking system.

Loan Activities of Banks and How Banks Earn Income

Banks hold only a small share of deposits as cash and lend out the rest. This mediation between depositors and borrowers is the engine of the chapter.

• Banks in India keep only about 5 per cent of deposits as cash, ready for depositors who withdraw.
• The major portion of deposits is given out as loans.
• Banks charge more interest on loans than they pay on deposits. This difference is the main source of bank income.

So the gap between interest charged and interest paid is the bank's main income.

Two Credit Situations: Salim's Festival Order and Swapna's Debt-Trap

Credit means a loan: the lender gives money or goods against a promise of future payment. The chapter uses two stories to show credit can help in one case and hurt in another, the most-asked part of the chapter.

So whether credit helps depends on the risk in the situation. Credit in a risky situation can push a borrower into a debt-trap, as it did for Swapna.

Terms of Credit: Interest Rate, Collateral, Documentation and Repayment

Every loan agreement sets out four conditions called the terms of credit, which change from one lender to another. This is a frequent 3-mark question.

• Interest rate: the extra amount the borrower pays on top of the principal.
• Collateral: an asset (land, building, vehicle, deposits) given as a guarantee until the loan is repaid. If the borrower fails to repay, the lender can sell it.
• Documentation: papers like salary or employment records the lender asks for before lending.
• Mode of repayment: how the loan is paid back, such as monthly instalments.

Tip: Absence of collateral is the main reason the poor are kept out of bank loans, which leads into the next section.

Formal and Informal Sources of Credit in India

Loans come from two groups of lenders. Graph 1 shows how much credit each source gives rural households, and why the formal sector is cheaper and safer. This split is the spine of the second half.

From Graph 1, commercial banks give 51 per cent and cooperatives 10 per cent of rural credit, while moneylenders give about 23 per cent. The RBI checks that banks keep the minimum cash balance and lend to small borrowers too. The formal sector still meets only about half the credit needs of rural households.

Self-Help Groups and the Grameen Bank: Credit for the Poor

The poor often cannot get bank loans because they have no collateral and no proper papers. The chapter shows two ways to give them cheap credit instead of depending on moneylenders.

• Self-Help Groups (SHGs): 15 to 20 members, usually women, who meet and save regularly and take small loans from the pooled savings at a fair rate.
• SHGs and banks: after saving for a year or two, the group becomes eligible for a bank loan even without collateral, because the group is responsible for repayment.
• Grameen Bank of Bangladesh: started by Professor Muhammad Yunus, it lends to poor women and proved they are reliable borrowers.

So SHGs help poor women borrow without collateral and become self-reliant, which is why the chapter calls affordable credit crucial for development.

Class 10 Economics Chapter 3 Exam Weightage and Question Trends

Money and Credit is one of the most scoring chapters in the Economics unit, appearing in nearly every paper over the last five cycles, mostly as a short answer plus a source-based question.

Credit terms, the two credit situations and the formal-informal split cover most of the marks. Revise the comparison tables first.

Common Mistakes Students Make in the Money and Credit Chapter

Key Features of the Official NCERT Class 10 Economics Book PDF

• Reprint Edition: 2026-27, aligned to the current CBSE syllabus
• Publisher: NCERT, New Delhi
• Book: Understanding Economic Development, Class 10 Economics
• File Type: searchable text PDF, mobile-readable and print-ready

Related Resources for Money and Credit Class 10

NCERT Book PDF for Class 10 Economics: All Chapters

All five chapters of Understanding Economic Development are available on Collegedunia. Use the table below to download any chapter PDF directly.