Questions and Answers
What is the minimum period for a Term Deposit to earn interest?
What feature distinguishes the Basic Savings Bank Deposit Account (BSBDA) from regular savings accounts?
What is the maximum number of withdrawals permitted in a month for a BSBD Account?
What must a customer declare before opening a BSBD account?
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What should be ensured regarding penal charges for non-maintenance of minimum balance?
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What interest rate applies to the balance in a Current account after the death of the depositor?
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Which group of individuals is typically not allowed to open a Current account?
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What is the condition for banks to open current accounts for borrowers whose aggregate exposure is ₹5 crore or more?
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What type of accounts may non-lending banks open for borrowers?
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How quickly must funds deposited in collection accounts be remitted to the CC/OD account?
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Study Notes
Charges on Non-Maintenance of Minimum Balance
- Charges are a fixed percentage of the difference between actual balance and agreed minimum balance.
- Penal charges must be reasonable and aligned with service costs.
- Savings account balance should not become negative solely due to non-maintenance charges.
Basic Savings Bank Deposit Account (BSBDA)
- Fully KYC compliant with no minimum balance requirement.
- Unlimited deposits allowed with no maximum balance limit.
- Maximum of four withdrawals permitted per month, including ATM withdrawals.
- Free ATM or ATM-cum-Debit Card issuance.
- Additional services like cheque books may be offered at the bank's discretion.
- BSBDA account holders cannot open other savings accounts at the same bank and must close existing accounts within 30 days of opening a BSBDA.
- A declaration is required to confirm no existing BSBDA in other banks.
Term Deposits
- Minimum term for interest payment is 7 days; maximum is 10 years.
- Special cases for minors and court orders allow for terms exceeding 10 years.
- Interest on deceased account holder's current account balance is paid at the savings rate post-death.
- Current accounts can't be opened for minors and illiterate individuals generally cannot have cheque books.
RBI Guidelines for Current Accounts and CC/OD Accounts
- As of April 19, 2022, guidelines govern current account openings for borrowers.
- If aggregate bank exposure is less than ₹5 crore, current accounts can be opened with an undertaking for future reporting.
- If exposure is ₹5 crore or more, accounts may be opened with banks having a minimum of 10% exposure; otherwise, the bank with the highest exposure may open the account.
- Non-lending banks cannot open current or collection accounts, and funds must be remitted within two working days from collection accounts to CC/OD accounts.
Review of Accounts
- Banks must conduct annual reviews for accounts inactive for over a year.
- Account holders must be notified of inactivity; failure to operate the account within the next year could lead to inoperative classification.
- Only customer-initiated transactions count towards determining account activity status.
- Banks may set thresholds for settling claims related to missing persons to ease transactions.
Revised Instructions on Safe Deposit Locker/Safe Custody Facility
- From January 1, 2022, revised guidelines for safe deposit lockers were issued under RBI regulations.
- Locker hirers must be KYC compliant; banks may take action against illegal storage.
- Inventory of locker contents must be prepared in the presence of independent witnesses and bank officers.
- Access to contents for survivors/nominating parties is facilitated without insisting on legal documents, unless discrepancies exist.
- A policy should ensure access for legal heirs if a nomination isn't provided.
- Lost keys must be reported immediately, and the hirer incurs costs for opening the locker and lock replacement.
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Description
Explore the key features and regulations of various banking accounts, including Charges for Non-Maintenance of Minimum Balance, Basic Savings Bank Deposit Accounts (BSBDA), and Term Deposits. This quiz will help you understand the fundamental aspects of banking services and the specific conditions related to each account type.
