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Questions and Answers
What is the main function of a commercial bank?
What is the main function of a commercial bank?
Which type of deposit allows individuals to earn interest and avoid the risk of theft?
Which type of deposit allows individuals to earn interest and avoid the risk of theft?
What is the function of accepting deposits in a bank?
What is the function of accepting deposits in a bank?
What is discounting of bills?
What is discounting of bills?
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What is the focus of the Personal Banking Services Department?
What is the focus of the Personal Banking Services Department?
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Why do ordinary or clean loans typically have lower interest rates?
Why do ordinary or clean loans typically have lower interest rates?
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What does the Investment and Financial Planning Department help clients achieve?
What does the Investment and Financial Planning Department help clients achieve?
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Which account type requires money to be deposited for a fixed period and cannot be withdrawn early?
Which account type requires money to be deposited for a fixed period and cannot be withdrawn early?
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What type of loan allows the bank to make payments exceeding the available balance, resulting in a negative bank balance?
What type of loan allows the bank to make payments exceeding the available balance, resulting in a negative bank balance?
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What is required for an ordinary or clean loan to be considered low risk for the lender?
What is required for an ordinary or clean loan to be considered low risk for the lender?
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What is the primary purpose of discounting of bills?
What is the primary purpose of discounting of bills?
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Which department focuses on providing bank account management and financing for companies and institutions?
Which department focuses on providing bank account management and financing for companies and institutions?
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What type of loans does the Credit and Loan Department handle?
What type of loans does the Credit and Loan Department handle?
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Which type of loans typically have lower interest rates?
Which type of loans typically have lower interest rates?
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What is the function of the Personal Banking Services Department?
What is the function of the Personal Banking Services Department?
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Study Notes
Bank Deposits and Loans Summary
- The bank accepts three types of deposits: fixed deposits, current deposits, and savings deposits.
- Fixed Deposit Accounts require money to be deposited for a fixed period and cannot be withdrawn early. The longer the period, the higher the interest rate.
- Current Deposit Accounts are for traders and businessmen who make frequent payments and do not earn interest. They have to pay incidental charges to the bank.
- Savings Deposit Accounts aim to encourage small savings and have restrictions on withdrawals. They offer a low-interest rate compared to fixed deposits.
- Cash Credit Accounts allow the bank to make payments exceeding the available balance, resulting in a negative bank balance.
- Overdraft occurs when a purchase or check exceeds the available balance, resulting in a negative account balance.
- An ordinary or clean loan is considered low risk for the lender and typically requires a good credit history, stable income, and collateral.
- Cash credit and overdraft are types of loans and advances provided by the bank.
- Cash credit allows payments exceeding the available balance, while overdraft results in a negative balance in the account.
- An ordinary or clean loan is low-risk for the lender and requires a good credit history, stable income, and collateral.
- These loans typically require the borrower to have a history of repaying debts on time, a stable and reliable income, and pledged collateral.
- In the event of default, the lender can seize the collateral and sell it to recoup their losses.
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Description
Test your knowledge of bank deposits and loans with this informative quiz. Explore different types of deposits such as fixed, current, and savings, and understand the features and limitations of each. Learn about cash credit accounts, overdrafts, and various types of loans, including their requirements and risks for both lenders and borrowers.
