Types of Deposit Accounts in Retail Banking

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Questions and Answers

Who is the party that delivers the goods to another in a bailment relationship?

Bailor

In a bailment relationship, who is the party to whom the goods are delivered?

Bailee

Who becomes the Hypothecator when a customer hypothecates movable property with a banker?

Bailor

In a trustee and beneficiary relationship, who holds the property for the beneficiary?

Trustee Signup and view all the answers

When a customer invests in securities, what role does the banker play?

Advisor Signup and view all the answers

If a customer deposits valuables with a banker for safe custody, what role does the banker take on?

Trustee Signup and view all the answers

What type of services are included in the category of Fees based products?

Selling Insurance Police Signup and view all the answers

Which service is NOT listed under Value Added services?

Issue of Drafts Signup and view all the answers

Which of the following services is categorized under Miscellaneous services?

Renting out Lockers Signup and view all the answers

Who are Wholesale Banking services primarily offered to?

Government agencies and pension funds Signup and view all the answers

Which service is NOT provided under Wholesale Banking services?

Net banking facilities Signup and view all the answers

In which category of services would you find the purchase/sale of shares/bonds in the Stock Market on behalf of customers?

Miscellaneous services Signup and view all the answers

What are the required documents for opening a bank account for a sole proprietorship?

IEC, Utility bills, and CST/VAT certificate Signup and view all the answers

Which document is NOT mentioned as a requirement for opening a bank account for a sole proprietorship?

Registration by Indian Medical Council Signup and view all the answers

What type of bank account documentation could be accepted in lieu of an income tax return acknowledgment?

Complete Income Tax return duly authenticated Signup and view all the answers

Which licensing document is NOT mentioned in the text as acceptable for opening a bank account for a sole proprietorship?

License by the Indian Medical Council Signup and view all the answers

Which utility bills can be used as identity documents for opening a bank account?

Electricity, water, and landline telephone bills Signup and view all the answers

Which organization's Certificate of Practice is accepted as a valid identity document for opening a bank account?

Institute of Chartered Accountants of India Signup and view all the answers

Which type of deposit accounts are Current accounts and Savings accounts classified as?

Automatic Sweep Deposits Signup and view all the answers

Which type of deposit accounts are Recurring Deposit accounts and Fixed Deposit accounts classified as?

Power Saving Deposits Signup and view all the answers

What was the fixed interest rate on Saving Bank Accounts till 24/10/2011?

4% Signup and view all the answers

What is the term used for accounts that do not have any minimum balance requirement?

No-Frill Accounts Signup and view all the answers

Which banks are now free to decide the interest rates on Saving Bank Accounts?

RBI Signup and view all the answers

What do some private banks like Kodak Bank and Yes Bank pay on Saving Bank Accounts deposits?

6% - 7% Signup and view all the answers

What is one of the objectives of the Prevention of Money Laundering?

To prevent criminal elements from using the banking system for Money laundering activities. Signup and view all the answers

What is one way in which banks can better manage risks according to the text?

By knowing and understanding customers and their financial dealings better. Signup and view all the answers

When was the FATF formed?

1989 Signup and view all the answers

What is one primary function of the FATF regarding money laundering?

Monitoring members’ progress in implementing anti-money laundering measures. Signup and view all the answers

In what year did the Parliament of India pass the Prevention of Money Laundering Act?

2002 Signup and view all the answers

What is one key aspect of money laundering enforcement as per the text?

Developing and promoting an international response to combat money laundering. Signup and view all the answers

Study Notes

Bailment and Bailor-Bailee Relationship

Bailment is a contract where one party delivers goods to another to be held in trust for a specific period and returned when the purpose is over.
The party delivering the goods is the Bailor, and the party holding the goods is the Bailee.
Example: A customer giving a sealed box to a bank for safe keeping, where the customer is the Bailor and the bank is the Bailee.

Hypothecator and Hypothecatee

When a customer hypothecates movable property or assets with a banker to get a loan, the customer becomes the Hypothecator, and the banker is the Hypothecatee.

Trustee and Beneficiary

A trustee holds property for the beneficiary, and the profit earned from the property belongs to the beneficiary.
Example: When a customer deposits securities or valuables with a banker for safe custody, the banker becomes a trustee, and the customer remains the beneficiary, with ownership remaining with the customer.

Advisor and Client

When a customer invests in securities, the banker acts as an Advisor, taking maximum care and caution in giving advice.
The banker is the Advisor, and the customer is the Client.

Fee-Based Products and Services

List of Fee-Based Products: selling insurance policies, selling mutual fund units, investment advisory services, and wealth management services.
List of Value-Added Services: safe deposit lockers, depository services, and banc assurance products.
Miscellaneous Services: issue of drafts, offering electronic remittances facilities, collecting cheques, renting out lockers, safe custody services, and more.

Wholesale Banking Services

Wholesale banking services are offered to government agencies, pension funds, and other institutional customers and to corporations with strong balance sheets and sound income statements.
Services include cash management, equipment leasing, large-sum loans, loan syndication, merchant banking, and trust services.

Demand Deposits Accounts

Types of Demand Deposits accounts: current accounts and savings accounts.
Features: provide cheque facilities, flexibility for depositors, and some banks offer interest rates between 6% and 7% on such deposits.

Prevention of Money Laundering

Objectives: prevent criminal elements from using the banking system, enable banks to know customers and their financial dealings better, put in place controls for detection and reporting of suspicious activities, comply with applicable laws and regulatory guidelines, and ensure staff are trained in Know Your Customer (KYC) / Anti-Money Laundering (AML) procedures.

Money Laundering Enforcement

The Financial Action Task Force (FATF) is an intergovernmental body that develops and promotes an international response to combat money laundering.
FATF's primary functions: monitoring members' progress, reviewing and reporting on laundering trends, and promoting the adoption of FATF anti-money laundering standards globally.

Money Laundering in India

The Prevention of Money Laundering Act, 2002 was passed by the Parliament of India to combat money laundering.

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