Friday, November 17, 2017

What do you mean by term deposits?



·         Fixed deposits, recurring deposits and reinvestment deposits are called as term deposits since these deposits are opened for a specific period
·         The minimum period for which the term deposit can be opened is 7 days and the maximum period is 10 years.
·         Interest is paid according to the period of deposit. Interest is decided by the respective banks only.
·         Reserve Bank of India has no control over the interest payable in term deposits by the banks

What do you mean by KYC guidelines?



·         KYC means “Know Your Customer” guidelines. According to the guidelines issued by RBI, banks insist certain documents
·         KYC as an antimoney laundering tool and the main purpose of KYC is to permit genuine public open accounts with the banks.
·         According to KYC guidelines, the bank demands address proof and identity proof from the public when they open deposit accounts with the bank.
·         For address proof copies of anyone of the following namely;  Driving licence,  Voter ID card, AATHAAR card, Passport etc. are obtained.
·         For identity proof, copies of identity cards issued by the employers, voter ID card, driving licence, AATHAAR card, PAN Card etc. are obtained by the bankers.

What do you know by demand deposits?




·         Current deposit account and savings deposit account are called as demand deposits. In the case of demand deposits, money can be deposited at any time and at the same time it can be withdrawn from the account using cheques or debit cards.
·         Current and savings accounts are collectively called as CASA accounts in the case of fully computerized bank branches.
·         Current account is opened for business purposes carrying no interest
·         Savings account is opened for the purpose of saving the personal money and it carries interest. The interest is at present decided by respective banks and RBI is not exercising any control over such rates.
·         Interest earned in savings deposit account for more than Rs. 10000.00 is taxable  according to Income Tax guidelines as at present.

How many subsidiary banks of State Bank of India are available in our country as at present?

As on 01.04.2017, there are no subsidary banks for State Bank of India]
The subsidiaries of State Bank of India were established during different period
Initially there were eight subsidiary banks for SBI as mentioned below:
- State Bank of Hyderabad
- State Bank of Mysore
- State Bank of Saurashtra
- State Bank of Bikaneer
- State Bank of Jaipur
- State Bank of Indore
- State Bank of Patiala
- State Bank of Travancore

The following subsidary banks merged with SBI earlier
- State Bank of Saurashtra
- State Bank of Indore

The following subsidiary banks merged together and they had formed as a single bank
- State Bank of Bikaneer and Jaipur

The following five subsidiary banks merged with SBI as on 01.04.2017 along with Bharathiya Mahila Bank
- State Bank of Hyderabad
- State Bank of Mysore
- State Bank of Bikaneer and Jaipur
- State Bank of Pariala
- State Bank of Travancore

As on date only SBI exists

02. Which are called as public sector banks in our country?

The commercial banks which are owned by Government of India are known as public sector banks
In the case of such banks, the government shareholding will not be less than 51 percent of the total shareholdings
The public sector banks in our country can be classified into three categories
- State Bank of India
- Nationalised banks comprising of twenty banks
- Regional Rural Banks 

What are the functions of any bank?





·     The basic function of any bank is to accept deposits from the public for the purpose of lending loans to the public and invest the amount in securities.

·         Acceptance of deposits and lending loans are called as the primary functions of any bank
·         The secondary functions at present are – selling gold coins, insurance products and mutual fund products. Apart from the above  the banks open demat accounts and undertake remittance services namely; issue of demand drafts, online remittance facilities  like RTGS and NEFT etc., 

·    The banks also provide safe deposit locker facilities and safe custody services to the customer 

Nowadays on account of introduction of core banking solution in commercial banks in India, a large number of secondary functions are carried out by the banks in India
The following are some examples:
Real time gross settlement
National electronic funds transfer
RTGS and NEFT are online remittance facilities and a customer can send money from his account with one branch of one bank to the account of another person with another branch of the same bank or some other bank.