UNIT 7-BANK_AW PDF

CHAPTER 7: WHAT IS BANK SYNOPSIS Origin of Bank: Banking started in the temples of Babylonia before 2000 BC followed by Greeks, Jews and Italians. The first banking institute in India was Bank of Bengal. The government of India started I...

CHAPTER 7: WHAT IS BANK SYNOPSIS Origin of Bank: Banking started in the temples of Babylonia before 2000 BC followed by Greeks, Jews and Italians. The first banking institute in India was Bank of Bengal. The government of India started Imperial Bank of India in 1921 and later in 1955 it was renamed as the State Bank of India which is currently the largest bank in India in terms of deposit values and number of branches. What is Bank? What does it do? Bank is a place where someone can deposit money for saving and safe keeping and withdraw it when necessary. The person who deposits his money in the bank is called Depositor or an Account Holder. A depositor receives interest in return for depositing his money in the bank. The amount which the Bank pays to the depositor over and above his available savings with the bank is called Loan. The person who takes loan from the bank is called a borrower (in our case he is also the account holder with the bank). The Borrower must pay the bank interest for the amount borrowed; this interest is divided into fixed instalments called as Equated Monthly Instalments (EMI). To open a bank account required documents like 1. account opening form, 2. copies of address proof, 3. photograph etc is required Bank allottees and Unique account number to its member along with documents like pay-in-slip, cheque book, passbook, internet logins. Bank Account holder’s documents: 1. Passbook: The details regarding all the payments made/received from and into the account are recorded in the passbook. 2.ATM Card /Debit Card: ATM card is issued by the bank for deposit, withdrawal, to know the available balance etc, which helps the individual to withdraw and deposit money anytime without visiting the bank. 3.Cheque Book: Chequebook is an instrument used for banking transaction.it contains cheque leaves which are used for making payments and withdrawals. The account holder needs to validate the cheque with his signature without which the cheque is considered as invalid. Types of Bank Account: 1. Saving Bank Account: Saving bank account are opened to inculcate the saving habits of the individual. Usually the salaried individual, retirees, housewife’s holds saving bank account. Saving account might sometime have restriction for the number of deposits and the amount of withdrawal. Deposits made in a saving bank account earn interest. 2. Current Account: This account is usually opened by businessmen, companies as they get the benefit of overdraw (withdraw more than available balance), more number of deposits and higher amount of withdrawal. Available balance in this account don’t earn interest. 3.Fixed Deposit: The depositor invests a lumpsum amount for a predetermined period with the bank once the period is over the depositor will receive the lumpsum amount and the interest on the same. The rate of interest on a fixed deposit account is more than that of a savings account. 4. Recurring Deposits: Investment in Recurring Deposits are made for a regular interval for a period like every month or every quarter and at the end of the period they receive the predefined amount which includes the amount paid and the interest along with it. Other Services provided by Bank: The most important service provided by bank is Investment in different form. Apart from that bank also accepts payment of telephone bills and many other taxes. Automated Teller Machine (ATM) ATM permits account holder to carry out banking activities after the banking hours. The ATM operates with the ATM card and a PIN. PIN stands for Personal Identification Number which is a 4-digit number and must be kept safe and secret by the customer in order to safeguard your account from fraudulent activities. Electronic Banking: This is a facility where an account holder has the benefit to perform all the banking activities sitting at his home through Internet. This saves time for the account holder and space for the banks. Advantages of Internet Banking 1. Checking Bank Balances. 2. Checking the banking transactions. 3. Bill Payment like Electricity bill, telephone bill payment. 4.Money transfer form one account to other. 5.Request to send cheque book to your registered address. A. MUTIPLE CHOICE QUESTIONS: 1. EMI stands for _____________. a) Equal Monthly Instalment b) Equal Monthly Investment c) Equated Monthly Instalment d) Equated Monetary Instalment 2. The Imperial Bank of India was renamed as __________________. a) State Bank of India b) Bank of Baroda c) HDFC d) The Central Bank of India. 3. PIN stands for _______________. a) Private Identification Number b) Personal Indication Number c) Personal Identification Number d) Private Indication Number 4. ________________ is gaining popularity as computer usage is spreading in the country. a) Banks b) Financial Institutions c) Electronic Banking d) Entertainment. B Very Short Answer Questions VSA (1 Mark) Level 1 What is bank? U 2 What is Loan? MD 3 What is the use of withdrawal slip? U 4 What are the details mentioned in the Passbook? H 5 What is the use of Cheque Book? C C Short Answer Questions SA (2/ 3Marks) Level 1 Differentiate between fixed deposit and recurring deposit account U 2 Write a short note on e-banking. MD 3 How can you withdraw cash from the bank? H 4 Differentiate between pay in slip and withdrawal slip U 5 Who is an account holder? MD D Long Answer Questions LSA (5 Marks) Level 1 How to open a Bank Account? MD 2 What are the details to be filled in a Cheque to make it valid? U 3 What are the different types of Bank Account? Discuss them in brief. H