Indian Banking and Insurance System Quiz

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Questions and Answers

What is the definition of 'banking' as per Section 5(b) of the Banking Regulation Act, 1949?

  • Providing credit and debit services to the public
  • Engaging in financial transactions with the public
  • Accepting deposits from the public for lending or investment purposes (correct)
  • Granting loans and accepting deposits from the public

What are 'Demand Liabilities' for a bank?

  • Liabilities arising from investments and lending activities
  • Liabilities payable after a specific time period, such as fixed deposits and recurring deposits
  • Liabilities related to the bank's operational expenses
  • Liabilities payable on demand, such as current deposits and demand drafts (correct)

What are 'Time Liabilities' for a bank?

  • Liabilities arising from long-term investments
  • Liabilities related to the bank's capital adequacy
  • Liabilities payable on demand, such as current deposits and demand drafts
  • Liabilities payable after a specific time period, such as fixed deposits and recurring deposits (correct)

What are 'Banking Companies' as per the text?

<p>Companies engaged in the banking business (A)</p> Signup and view all the answers

What is the definition of 'banking' as per Section 5(b) of the Banking Regulation Act, 1949?

<p>Accepting, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheques, draft, and order or otherwise.</p> Signup and view all the answers

What is the significance of NDTL (Net Demand and Time Liabilities) for a bank?

<p>It helps in understanding the bank's demand and time-based obligations (A)</p> Signup and view all the answers

What are Demand Liabilities for a bank?

<p>Liabilities which the bank has to pay on demand, including current deposits, demand liabilities portion of savings bank deposits, margins held against letters of credit/guarantees, balances in overdue fixed deposits, cash certificates and cumulative/recurring deposits, outstanding Telegraphic Transfers (TTs), Mail Transfer (MTs), Demand Drafts (DDs), unclaimed deposits, credit balances in the Cash Credit account, and deposits held as security for advances which are payable on demand.</p> Signup and view all the answers

What are Time Liabilities for a bank?

<p>Liabilities which the bank has to pay after a specific time period.</p> Signup and view all the answers

What is the significance of Banking Companies?

<p>Banking companies are significant as they are engaged in the banking business, granting loans/credit/debit, and accepting deposits, playing a crucial role in the financial system of the country.</p> Signup and view all the answers

Define NDTL (Net Demand and Time Liabilities) and its significance for a bank.

<p>NDTL refers to the net of demand and time liabilities. It is significant for a bank as it represents the amount that the bank owes to its customers. It is used as a measure of the liquidity and stability of a bank.</p> Signup and view all the answers

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