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Banking GK: Banking Function and Business: Part-2

1.

Which among the following is / are types of Deposit accounts?
1. CASA account
2. Salary Account
3. Recurring Account
Select the correct option from the codes given below:
[A]Only 1 & 2
[B]Only 2 & 3
[C]Only 1 & 3
[D]1, 2 & 3

1, 2 & 3
A deposit account is a savings account, current account or any other type of bank account that allows money to be deposited and withdrawn by the account holder.

2.

In which of the following types of accounts, fixed amount has to deposit over a fixed interval of time?
[A]Saving account
[B]Current account
[C]Recurring Deposit account
[D]Term Deposit

Recurring Deposit account
The account in which the fixed amount has to deposit over a fixed interval of time is called recurring deposit account.

3.

Which among the following is / are examples of Recurring deposit?
1. Home safe account
2. Sickness deposit account
3. Home construction deposit scheme
Select the correct option from the codes given below:
[A]Only 1 & 2
[B]Only 2 & 3
[C]Only 1 & 3
[D]1, 2 & 3

1, 2 & 3
The account in which the fixed amount has to deposit over a fixed interval of time is called recurring deposit account.

4.

Which among the following is / are correct statements about Demand Deposits?
1. Money in demand deposits is liquid
2. All demand deposits earn interest
3. Ownership of demand deposits can be transferred using a cheque
Which among the above is / are correct statements?
[A]Only 1 & 2
[B]Only 2 & 3
[C]Only 1 & 3
[D]1, 2 & 3

Only 1 & 3
The money as demand deposit is liquid and can be encashed at any time. The ownership of demand deposits can be transferred from one person to another via cheques or electronic transfers. There is no fixed term to maturity for Demand Deposits. The demand deposits may or may not pay interest to the depositor. For example, while we get an interest on savings accounts; no interest is paid on current accounts.

5.

Which among the following is not a feature of Saving Accounts?
[A]Preferred by individuals savers
[B]Usually low scale transactions
[C]Earns interest
[D]Has overdraft facility

Has overdraft facility
The basic objective of a Savings Bank Account is to enable the customer save his / her liquid assets and also earn money on that saving. The Savings banks Accounts are preferred by individuals and provide liquidity for private and small businesses sometimes. Saving Accounts have no overdraft facility.

6.

Which among the following is opened in Foreign Currency Only?
[A]NRO Account
[B]NR(E)RA Account
[C]FCNR Account
[D]None of them

FCNR Account
Foreign Currency Non-Resident Account Bank or FCNR (B) was first introduced in 1993. While NRERA Account is a rupee account and the depositor is exposed to the Currency rates risk; FCNR is opened in foreign currency only. Currently, FCNR Account can be opened in six designated currencies viz. US Dollar (USD), Great Britain Pound (GBP), Euro (EUR), Japanese Yen (JPY), Canadian Dollar (CAD) and Australian Dollar (AUD).

7.

Deposits made in which among the following does not come under Deposit Insurance Scheme?
[A]Regional Rural Banks
[B]Private Banks
[C]Non-scheduled Commercial Banks
[D]Primary Agricultural Credit Societies (PACS)

Primary Agricultural Credit Societies (PACS)
The following are not covered under deposit insurance scheme:
1.Primary Agricultural Credit Societies (PACS)
2.Cooperative banks from Meghalaya
3.Cooperative Banks from Union Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli.
All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.

8.

The funds set aside by the banks as fraction to the loans to cover up losses is called __?
[A]Provisioning Coverage Ratio (PCR)
[B]Capital Adequacy Ratio (CAR)
[C]Loan to Coverage Ratio
[D]Cash Reserve Ratio

Provisioning Coverage Ratio (PCR)
For every loan given out, the banks to keep aside some extra funds to cover up losses if something goes wrong with those loans. This is called provisioning. Provisioning Coverage Ratio (PCR) refers to the funds to be set aside by the banks as fraction to the loans.

9.

What is the maximum amount insured under deposit insurance?
[A]Rs. 1 Lakh
[B]Rs. 2 Lakh
[C]Rs. 5 Lakh
[D]Rs. 10 Lakh

Rs. 1 Lakh
Maximum amount insured under deposit insurance scheme in India per depositor insured is Rs. 1 Lakh including Principal and Interest.

10.

Which among the following come under Priority Sector Loans?
1. Agriculture and Allied Activities
2. Education Loans
3. Retail Trade Loan
Select the correct option from the codes given below:
[A]Only 1 & 2
[B]Only 2 & 3
[C]Only 1 & 3
[D]1, 2 & 3

1, 2 & 3
As per Reserve Bank of India, Priority sector includes the following: Agriculture and Allied Activities , Small scale industries; Small road and water transport operators; Small Traders; Small self employment business ; education loans; Small Consumption loan for weaker sections; MicroCredit; Loan to small software companies etc.

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