01. What are the functions of any bank? – The bank accepts deposits from the public and lends loans to the public. Acceptance of deposits and lending loans are called as the primary functions. The secondary functions are – selling gold coins, selling insurance products and selling mutual fund products. Apart from the above, the banks open demat accounts
02. What do you know by demand deposits? – Current account and savings accounts are called as demand deposits. Current account is opened for business purpose carrying no interest and savings deposit is opened for the purpose of saving the money and it carries interest. The interest is at present decided by respective banks.
03. What do you know by KYC guidelines? – KYC means Know your customer guidelines. According to KYC, the bank demands address proof and identity proof from the public when they open accounts with the bank. For address proof, copes of ration card, voter ID card, AATHAAR card, telephone bill etc are obtained. For identity proof, copies of identity card issued by the employers, voter ID card, driving licence, AATHAAR card etc. are obtained.
04. What do you know by term deposits? – Fixed deposits, recurring deposits and reinvestment deposits are called as term deposits since these deposits are opened for specific period. The minimum period for which the term deposit is opened – 7 days and the maximum period: 10 years. Interest is paid according to the period of deposit. Interest is decided by respective banks only.
05. What do you know by fixed deposit? – Fixed deposits are opened for minimum period of seven days and maximum period of ten years. Interest is paid according to the period of deposit. In this scheme, a lumpsum amount is deposited for a fixed period and interest earned is obtained from the bank on quarterly basis. In case the customer demands, interest is paid by the bank on monthly, fortnightly basis.
06. What do you mean by recurring deposit? – According to this scheme, the customer can remit monthly or quarterly fixed amount for a fixed period. For example, an amount of Rs. 1000/- can be deposited for 60 months and interest is paid to the depositor according to the period of deposit along with the principal amount on maturity of deposit.
07. What do you know by reinvestment deposit? – Reinvestment scheme is nothing but fixed deposit. Instead of getting the interest on fixed amount on monthly or quarterly basis, the customer get the interest on maturity along with principal amount. Since interest is reinvested, the customer is eligible to get interest for interest.
08. What do you know by PAN number? – When more than Rs. 50000/- is invested in deposit accounts, the customer has to mention the PAN number.
09. Whether deposits can be opened in the name of minor? – Yes, deposits can be opened in the name of minors. The accounts are opened in the name of minor duly represented by father and mother and they are called as natural guardians. When the minor is a student and aged more than ten years, he can operate the account himself. For this purpose, he should produce a certificate from the headmaster or principal of the school where he is studying.
10. Whether minor is eligible for loans – Loans should not be granted to minors
11. What do you know by PIN number? – PIN number is a four digit number used when the customer operates automated teller machines.
12. What do you know by bank nationalization? – As much as fourteen banks owned by private entrepreneurs were nationalized on 19.7.1969 so that they can serve better for the society. During the second phase, six banks were nationalized on 15.4.1980. At present there are twenty public sector banks including IDBI bank.
13. What do you know by foreign bank? – Foreign banks have their headquarters in a foreign country; however, they have branches in India.
14. What do you know private sector banks? – At present there are fourteen old private sector banks in our country and seven new private sector banks namely; Axis bank Limited, Development Credit Bank Limited, HDFC Bank Limited, ICICI Bank Limited, Indus Ind bank Limited, Kotak Mahindra Bank Limited and Yes bank Limited. According to the revised norms fixed by Reserve Bank of India, the new private sector banks should have a minimum capital base of Rs. 100 crore.
15. What do you know by central bank? Central bank is the bank which governs other banks in the country. In our country RBI is the central bank. It has its headquarters at Mumbai and the following are the functions of RBI namely – currency note issue, banker to the banks, financial adviser to the government, custodian of cash reserves of banks, lender of the last resort and controller of credits etc.
16. What do you know by ssue of currency notes in the country? In our country, up to one rupee note and coins, Government of India undertakes to issue and currency notes valuing more than one rupee are issued by Reserve Bank of India.
17. What do you know by scheduled commercial banks? – The public sector banks, SBI and its subsidiaries, all private sector banks, foreign banks and Regional rural banks are called as scheduled commercial banks. They should have been included in the second schedule of RBI act 1934; got licence for conducting banking business as per Banking Regulation act, 1949 and should have been incorporated either as per companies act or cooperative act.
18. What do you know by commercial banks? – Commercial banks are banks which function for profit and the following banks are included under the category of commercial banks by RBI – State Bank and its subsidiaries, all nationalized banks including IDBI bank, all private sector banks and foreign banks. The cooperative banks and regional rural banks are not treated as commercial banks.
19. What do you know by cheque book? Cheque books are issued when the customer is having current account, savings deposit account or overdraft account. Cheque books are issued for the purpose of withdrawal of money from the account. Cheques are not issued in the case of term deposits namely; fixed deposit, reinvestment deposit and recurring deposit. In the case of term deposits, the customers are issued with deposit receipts mentioning therein the details of deposits.
20. What do you know by minimum balance? – When a customer is maintaining current account and savings account, he should maintain minimum balance in the account. The minimum balance is prescribed by the respective banks. When the amount falls below the minimum balance during any day, penal charges are levied in the account.
21. What do you know by automated teller machines? – Automated teller machines are used for the purpose of allowing the customer to withdraw money twentyfour hours a day using ATMs. The following services are available through automated teller machines namely – cash withdrawal, balance enquiry, mini statement upto last ten entries, pin number change, mobile recharge, e-ticketing, transfer of funds etc.
22. What do you know by TDS? TDS is called as tax deducted at source. When a customer having a fixed deposit account or reinvestment deposit account earns interest amount more than Rs. 10000/- tax is deducted at source from the account according to income tax laws prevalent in the country.
23. What do you know by core banking solution? According to core banking solutions, all branches of the bank are interconnected through a common serve and a customer can transact the business in his account from anywhere in the country.
24. What do you know by real time gross settlement? _ According to RTGS, a customer can send money more than Rs. 200000/- from his account to any other account of another person having his account with the branch of the same bank or any other bank. For example, a customer having an account with Canara Bank, Kellys branch at Chennai can transfer to the account of his father with State Bank of India, Canning Street, Kolkatta. Banks charge normal service charges for remittance facility.
25. What do you know by either or survivor? – When more than one individual opens an account it is called a joint account. Since the account is opened jointly by more than one person, the account holders should specify the conditions for operation of the account to the banker. In the case of E or S account, anyone of the customers can operate the account individually. In the case of joint accounts, all accountholders should operate the accounts jointly.
26. What do you know safe deposit locker? – It is a facility provided by the bank for safekeeping the valuable articles. Lockers are available in different sizes and according to the size of the locker, charges are collected for the lockers. The lockers are operated by the locker holder and the banker and for this purpose, the customer is given one key and the banker is having the master key for the entire unit.
27. What do you know by nomination facility in the account? Nomination facility is available in the case of deposit accounts namely; current account, savings account, fixed deposit, reinvestment deposit account and recurring deposit account. The customer nominates a person for the account to receive money on the death of the depositor.
28. What do you know by safe custody service? – According to the scheme for safe custody service, customers can safe keep their valuables with the banker for nominal service charges. The valuables are kept in sealed packets or bundles and handed over to the banker and the banker on receipt of the packet or bundle, produces a receipt and when the customer is in need of the packet or bundle, he has to produce the receipt to the banker.
29. What do you know by proprietorship account? When a customer maintains an account in his personal name, it is called as individual account and when he opens an account in the name of a firm owned by him, it is called as proprietorship account. For example, Balaji conducting a printing press can open an account in the name of Balaji Printing services and this is a proprietorship account and he is called as proprietor.
30. What do you know by partnership account? When more than one person joins together to conduct a business, it is called as a partnership firm and the partners invest their capital either equally or according the terms as agreed between the partners. The rules and regulations of the business are recorded in partnership deed.
31. What do you mean by crossing of the cheque? – When two parallel transverse lines are drawn on the face of the cheque, it is called as crossing. When two simple transverse lines are drawn, it is called as general crossing and when the name of a banker is mentioned between the two lines, it is called as special crossing.
32. What is the purpose of crossing of the cheque? – Cheques are crossed so that they can be encashed through accounts. This is to avoid fraudulent encashment of the cheques by miscreants.
33. What do you know by order cheque? Normally the cheques are payable to the person mentioned in the cheque or to the bearer. In the case of uncrossed bearer cheque, the bearer can get payment of the cheque from the bank counter. When the words “bearer” are cancelled, the cheque is treated as order cheque and for encashing an order cheque, the customer has to prove his identity to the banker.
34. What do you know by shares? – For the purpose of building fixed capital, joint stock companies are authorized to issue shares to the public. Shares can be issued in the form of ordinary shares or preference shares. Ordinary shareholders are entitled to vote during the annual general body meeting and they do not have any predetermined dividend amounts and in the case of preference shareholders, they are paid dividend according to predetermined rates.
35. Debentures: It is a sort of loan document. Those who advance loans to the company are called debenture holders. Predetermined rate of interest is paid to the debenture holder, whether the corporation earns profit or suffers loss.
36. What do you know by SEBI? It is the principal regulator in the capital market in the country – both the primary and secondary segments. It has also been conferred the powers to regulate the mutual funds and venture capital funds in the country.
37. What do you know by call money? It is an important segment of the Indian Money Market. Under call money market, funds are transacted on overnight basis and under notice money market, funds are transacted for the period between 2 days and 14 days. Banks borrow in this market, in order to fill the gaps or temporary mismatches in funds; to meet the cash reserve ratio and statutory liquidity ratio and to meet sudden demand for funds arising out of large outflows. Banks, primary dealers, development finance institutions, insurance companies and select mutual funds are participants in this market.
38. What do you mean by Treasury bill ?: They are money market instruments to finance the short term requirements of the Government of India. There are different types of treasury bills based on the maturity period and utility of the issuance like, adhoc treasury bills, three months, six months and 12 months treasury bills etc.
39. What do you know by call money? – Call or notice money is an amount borrowed or lent on demand for a very short period. If the period is greater than one day and upto 14 days, it is called as notice money; otherwise the amount is known as call money. Cooperative banks, commercial banks and primary dealers are allowed to borrow and lend in this market for adjusting their cash reserve requirements.
40. What do you know by certificate of deposits? – It is a negotiable short term promissory note in nature. It is issued at a discount to the face value, the discount rate being negotiated between the issuer and the investor.
41. What do you know by commercial paper? – Commercial papers are negotiable short term unsecured promissory notes with fixed maturities, issued by well rated organizations. These are generally sold on discount basis. Organisations can issue commercial papers either directly or through banks or merchant banks called as dealers.
42. What do you know by primary market? – Primary market deals with new securities – it can be otherwise called as new shares issued to the public. The new offerings by the companies are made through an initial public offer or rights issue of shares to the existing shareholders
43. What do you know by secondary market/stock market? – It is the market for buying and selling securities of the existing companies. Under this, securities are traded and being initially offered to the public in the primary market and/or listed on the stock exchange. The secondary market dealings are done through the share brokers in the stock markets situated in various cities in the country.
44. What do you know by the term called as savings bank ? – It is a financial institution whose primary purpose is to accept savings deposits. It may also perform some other functions. These banks are much helpful for salaried people and low income groups. The deposits collected from customers are invested in bonds, securities etc.
45. What do you know by commercial banks? – It is an institution which accepts deposits, makes business loans and offers related services. The commercial banks also allow for a variety of deposit accounts, such as checking, savings and time deposits. Their main purpose is to make a profit. Commercial banks apart from acceptance of deposits and lending loans provide services like collection of cheques and bills of exchanges, remittance of money from one place to another place etc.
46. What do you know by industrial banks and development banks? – They are development banks engaged in promotion and development of industry. SIDBI is a development bank engaged in helping industries in getting loans from public sector and other banks. NABARD caters to the needs of agriculture and National Housing Bank is meant for helping housing development. EXIM bank helps for import and export development in the country.
47. What do you know by indigenous banks? – Indigenous banks mean money lenders and sahukars. They collect deposits from the general public and grant loans to the needy persons out of their own funds as well from deposits. They are much popular in villages and small towns.
48. What are the different types of loans provided by banks? – cash credits, overdrafts, loans and advances, discounting of the bill of exchange and investment in government securities. Cash credits are loans granted against stock of goods. Overdrafts are clean loans granted in current accounts. The other loans are housing loans, educational loans, consumer loans, gold loans and other agricultural loans and industrial loans.
49. What do you know by debit card?- They are cards issued by the banks on current and savings accounts. Using debit cards the customers can withdraw funds using automated teller machines or they can purchase goods through point of sale terminals situated at textile shops, petrol pumps, hotels and other outlets.
50. What do you know by credit card? – Credit cards are post paid cards whereas the debit cards on the other hand is a prepaid card with some stored value. Every time, a person uses this card, the internet banking house gets money transferred to its account from the bank of the buyer.