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Questions and Answers
What is a primary benefit of e-banking for customers?
What is a primary benefit of e-banking for customers?
How does e-banking contribute to financial discipline?
How does e-banking contribute to financial discipline?
What does insurance primarily provide in terms of risk?
What does insurance primarily provide in terms of risk?
In the context of insurance, what does 'utmost good faith' refer to?
In the context of insurance, what does 'utmost good faith' refer to?
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What advantage does e-banking provide banks?
What advantage does e-banking provide banks?
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What role does pooling premiums have in insurance?
What role does pooling premiums have in insurance?
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Which of the following is NOT a function of insurance?
Which of the following is NOT a function of insurance?
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How does insurance assist in capital formation?
How does insurance assist in capital formation?
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What is the primary function of a commercial bank?
What is the primary function of a commercial bank?
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Which type of bank focuses more on social objectives than on profitability?
Which type of bank focuses more on social objectives than on profitability?
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What is a significant service provided by banks to facilitate the transfer of funds?
What is a significant service provided by banks to facilitate the transfer of funds?
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What is a key characteristic of Private Sector Banks?
What is a key characteristic of Private Sector Banks?
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What type of loans and advances are commonly provided by banks?
What type of loans and advances are commonly provided by banks?
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Which of the following is NOT an allied service provided by banks?
Which of the following is NOT an allied service provided by banks?
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What is the main aim of cooperative banks?
What is the main aim of cooperative banks?
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What distinguishes specialized banks from other types of banks?
What distinguishes specialized banks from other types of banks?
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Which type of account is primarily intended for individuals looking to save money and earn interest?
Which type of account is primarily intended for individuals looking to save money and earn interest?
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What characterizes a Current Account?
What characterizes a Current Account?
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What is a key feature of a Fixed Deposit Account?
What is a key feature of a Fixed Deposit Account?
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Which of the following statements is correct regarding Savings Accounts?
Which of the following statements is correct regarding Savings Accounts?
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In what way is a Recurring Deposit Account structured?
In what way is a Recurring Deposit Account structured?
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Which banking concept primarily focuses on the acceptance of deposits for the purpose of lending or investment?
Which banking concept primarily focuses on the acceptance of deposits for the purpose of lending or investment?
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Which account type is often described as 'Demand deposit'?
Which account type is often described as 'Demand deposit'?
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What is typically the minimum initial deposit requirement for a Savings Account?
What is typically the minimum initial deposit requirement for a Savings Account?
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What should the insured do in the event of a loss to minimize the damage according to the Principle of Mitigation of Loss?
What should the insured do in the event of a loss to minimize the damage according to the Principle of Mitigation of Loss?
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Under the Principle of Cause Proxima, compensation is denied if a loss occurs due to which of the following?
Under the Principle of Cause Proxima, compensation is denied if a loss occurs due to which of the following?
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What happens to the Rs.10,000 received from selling half burnt goods after full compensation has been granted?
What happens to the Rs.10,000 received from selling half burnt goods after full compensation has been granted?
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Which transaction reflects the main purpose of a debit card?
Which transaction reflects the main purpose of a debit card?
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What is the main distinction between debit and credit cards?
What is the main distinction between debit and credit cards?
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In the context of marine insurance, under which condition would compensation be granted for spoiled wheat?
In the context of marine insurance, under which condition would compensation be granted for spoiled wheat?
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What is the primary risk addressed by fire insurance policies?
What is the primary risk addressed by fire insurance policies?
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Which of the following statements is true regarding credit cards?
Which of the following statements is true regarding credit cards?
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What is the maximum policy amount based on?
What is the maximum policy amount based on?
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In which of the following scenarios is the element of risk considered certain?
In which of the following scenarios is the element of risk considered certain?
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What service ensures safe delivery of mail through registration?
What service ensures safe delivery of mail through registration?
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What does the sender receive as proof of posting in the Registered Post service?
What does the sender receive as proof of posting in the Registered Post service?
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Which of the following is a financial facility provided by the postal department?
Which of the following is a financial facility provided by the postal department?
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What is a characteristic of Parcel Post services?
What is a characteristic of Parcel Post services?
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What happens if a Registered Post article is lost or damaged?
What happens if a Registered Post article is lost or damaged?
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How are postal charges determined for Parcel Post?
How are postal charges determined for Parcel Post?
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Study Notes
Goods vs Services
- Goods can be separated from the provider, services cannot.
- Goods can be standardized, maintaining quality is difficult for services.
- Goods are physical objects, services are an activity or process.
Types of Bank Accounts
- Savings Account: Meant for saving income and earning interest, requires a minimum deposit, no limit on deposits, limited withdrawals, low interest rates.
- Current Account: Used by businesses for frequent transactions, no limit on deposits and withdrawals, no interest earned, service charges apply.
- Fixed Deposit Account: Deposits for a specific period, high interest rates, lump-sum deposit, repayable after set period.
- Recurring Deposit Account: Regular savings for a set period, earns higher interest rates.
Benefits of E-Banking
- Financial Discipline: Recording all transactions improves financial management.
- Unlimited Access: 24/7 access to banking services beyond branch hours.
- Less Risk: Reduced need to carry cash enhances security.
Benefits of E-Banking for Banks
- Competitive Advantage: A competitive edge in the market.
- Unlimited Network: Not limited by physical branches, accessible from any connected device.
- Reduced Branch Load: Centralized databases minimize workload on branches.
Insurance
- An agreement between two parties where the insurer (insurance company) compensates the insured (policyholder) for loss in exchange for a premium.
Functions of Insurance
- Certainty of Payment: Provides certainty of compensation for loss, although the risk itself is uncertain.
- Protection: Protects against financial losses due to uncertain events, like fire or natural disasters.
- Risk Sharing: Premiums from multiple policyholders create a pool to cover losses for anyone in the group.
- Capital Formation: Premiums are invested in the economy, contributing to capital formation.
Principles of Insurance
- Utmost Good Faith: Both parties are obligated to be truthful and transparent.
- Principle of Cause Proxima: The cause of loss must be related to the insured event for compensation.
- Principle of Mitigation of Loss: The insured must minimize further loss, even after the event occurs.
Types of Digital Payment
- Debit Cards: Access to an account for cash withdrawals and payments, linked to the account balance.
- Credit Cards: Used for buying goods and services on credit, based on the user's creditworthiness, payment later.
Functions of Commercial Banks
- Acceptance of Deposits: Taking in deposits from customers in various types of accounts.
- Lending of Funds: Providing loans and advances using deposits.
- Remittance of Funds: Facilitating money transfers between locations.
- Allied Services: Providing various services such as bill payment, locker facilities, underwriting, security trading, and insurance premium payments.
Types of Banks
-
Commercial Banks: Operate under the Banking Regulation Act, focus on accepting deposits and lending.
- Public Sector Banks: Government has a majority stake, prioritize social objectives.
- Private Sector Banks: Owned, managed, and controlled privately, operate under market forces.
- Cooperative Banks: Governed by state cooperative societies Act, aim for affordable loans for members, significant in agricultural financing.
- Specialized Banks: Established for specific needs, like industrial development banks.
Postal Services
- Financial Facilities: Provides savings schemes like PPF, Kisan Vikas Patra, and National Saving Certificates. Also offers banking features, like monthly income plans, recurring deposits, and money orders.
Postal Certificate (UPC)
- A certificate issued by the post office upon payment of a fee, providing proof of mailing.
Registered Post
- Registered by the post office for safe delivery, a receipt is issued to the sender, provides tracking throughout the delivery process, compensation available in case of loss or damage.
Parcel Post
- Service for sending heavier, larger packages, less expensive than regular mail, typically slower delivery, charges vary based on weight and size.
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Description
This quiz explores the differences between goods and services, types of bank accounts, and the advantages of e-banking. Test your understanding of these foundational financial concepts and enhance your financial literacy.
