Saturday, 22 November 2014

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Know Your Banking - General Banking
Remittances       
  1. Although Cheque and Bank draft are negotiable instruments and serve as means of payment, a draft cannot be issued by a customer

    Correct Answer : True

    A cheque is issued by a customer and a draft is issued by a bank. A Cheque is an instruction in writing given by the account holder to his bank for payment of money from his account. A banker's draft (or demand draft) is a payment order issued by one branch of a bank upon other branch, instructing the drawee branch to pay the specified sum of money to the specified person or to his order
2.      If a demand draft is lost by the purchaser of the draft , he will not be able to get the money from the bank

Correct Answer : False

A customer is entitled to issuance of a duplicate Draft in place of the lost instrument and the same will be subject to:
l  Intimation by the customer to the Bank about loss of draft
l  Confirmation from the branch on which the draft is drawn that payment not already effected
l  execution of indemnity signed by both the payee and the purchaser in the prescribed form duly stamped
l  payment of service charges for issuance of such duplicate drafts.
  1. The purchaser of the demand draft must be an account holder of the bank.

    Correct Answer :  False

    A demand draft can be purchased by any body from a branch. Having an account in the branch is not a necessary condition for the issue of the draft. The account holder of a branch may pay a lesser remittance charge for purchasing a demand draft than the purchaser who remits cash for purchase of a demand draft.


  1. Demand draft is paid only after a week of date of issuance.

    Correct Answer : False

    As the name indicates, a demand draft is payable on demand.
  2. Demand draft once purchased can not be cancelled.

    Correct Answer : False

    Demand drafts can be cancelled by the purchaser till it is encashed by payment of cancellation of charges.
  3. The payment of demand draft cannot be stopped by the purchaser

    Correct Answer : True

    Purchaser of a DD has no authority to stop/countermand its payment after has been delivered to the payee. However, the Bank shall exercise caution if the purchaser of a DD reports loss or theft of the instrument, if the payment has not already been made. The information about the loss of DD has to be made in writing at the branch where the DD was purchased.
7.      Once a demand draft is lost, the purchaser can get a duplicate subject to certain conditions and payment of charges.

Correct Answer : True

A customer is entitled to issuance of a duplicate Draft in place of the lost instrument and the same will be subject to:
l  intimation to the Bank
l  DD has not been paid and is still outstanding
l  The purchaser of the DD has to execute an indemnity signed by her/him and the payee in the prescribed form duly stamped
l  Payment of appropriate service charges for issuance of such duplicate drafts.
  1. Payee of the demand draft can get a duplicate demand draft if the original is lost.

    Correct Answer : True

    If the demand draft is lost at the hands of the payee, he may ask for a duplicate draft subject to observation of formalities by banks.
  2. For housing loans, the bank pays the cost of stamp fees.

    Correct Answer : True

    In all loans the stamp and document cost is payable by the borrower. However banks may include the cost of stamp/stamp duty in the loan amount.
  3. Mutilated currency notes can be exchanged only at private sector banks.

    Correct Answer : False

    A mutilated currency note is a cut note in which a portion may be missing or which is composed of pieces. Certain type of mutilated notes can be exchanged at all branches of banks while some others can be exchanged only at the currency chest branches of public sector banks.
  4. Bank recovers charges when the customer purchases travellers cheques.

    Correct Answer : False

    Travellers cheques are issued at par.

Know Your Banking - General Banking
Loans

12.  A guarantor is not liable for the loan amount in the event of default by the borrower.

Correct Answer : False

A guarantee is an undertaking given by the guarantor (the person who stands guarantee) to the bank, assuring repayment of a loan amount and payment of interest in the event of default by the borrower. The guarantors' liability is 100% and he/she is as much liable as the borrower in the eyes of the bank, as far as the bank loan is concerned.
13.  If you already have a house, banks do not sanction housing loans.

 Correct Answer : False

Initially, banks granted home loan for family/own residence only. Nowadays, however banks now grant home loans even when the applicant has more than one house or flat/apartment. As such there is no general restriction on the number of houses owned by an individual. The only stipulation is that the home loan funds should not be used for commercial purposes. It is also seen that some banks stipulate a higher rate of interest for the second loan.
14.  Banks give housing loan only for houses which are ready for possession.

 Correct Answer :  False

Housing loans are granted/ sanctioned for construction, repairs and renovation also. Normally, housing loans can be availed for the following purposes. Purchase/ Construction of new House/ Flat
l  Purchase of an existing House/ Flat
l  Purchase of a plot of land for construction of House and construction of a house there on
l  Extension/ repair/ renovation/ alteration of an existing House/ Flat
l  Purchase of Furnishings and Consumer Durables as a part of the cost of house
l  Change (Takeover) of an existing loan from other Banks/ Housing Finance Companies
4       Banks give housing loans only for joint account holders.

 Correct Answer : False

Housing loans are granted to single holder also. However it is recommended that the loans are taken in joint names and house are registered in joint names.
5. For getting a loan for ready-made house/apartment/flat, banks insist on valuation report from their approved valuers.

 Correct Answer : True

Since, bank finance forms a portion of the value of the property, valuation reports are important. Valuation report from an engineer/valuer on the panel of the bank is normally insisted with the following details
Date of valuation......................
Name of the valuer......................
(who should be in the panel of the financing institution)
Value of the property as per valuer's report:
Estimated cost of construction / repair:
Whether the property is in encumbered:

Valuation report may not be insisted if the flat is acquired from Housing Board, State Development Authority/Bodies/Local Improvement Trust :
l  Only salaried persons can get housing loans.

 Correct Answer : False

Loan can be availed by any individual whether she/he is salaried, businessmen, professionals or self-employed. Age of the person and residual years of service/profession/business are important criteria, as the banks would like the loan to be repaid while the individual is able to earn and repay.
l  Generally, banks insist that the home/house purchased with the bank loan or financed by the bank is mortgaged to the bank as security for the loan.

 Correct Answer : True

A simple registered mortgage or equitable mortgage of the property acquired out of the loan is taken as security. This is the primary security for the loan. Where the loan is for 'home improvement' or other purposes, a mortgage is created on the house, as a collateral
l  Banks insist on the insurance of the house purchased through housing loan.

 Correct Answer : True

Property is insured for full market value and full term of the loan against normal insurable risks, with bank clause. The insurance premium is charged to the borrower (borrower's cost). Insurance is a risk mitigation strategy. In the event of loss of insured property, the insurance company pays the insured amount to the bank. In the case of home loans, insurance cover is stipulated for periods matching the loan tenure.
l  Some tax benefits are available for payment of interest and principal for housing loans

 Correct Answer : True

Under the Income Tax Act, borrowers can claim exemption on the repayment of principal of housing loan upto Rs.1.00 lac and on the interest portion upto Rs.1.5 lacs,. subject to the conditions under the Act
l  Longer the period of repayment for housing loan, larger will be the EMI.

 Correct Answer : False

The following example will give a comparative analysis
Option A )
Option B
Loan Amount Rs.1,00,000
Loan Amount Rs. 1,00,000
Interest 12%
Interest 12%
Tenure 60 months
Tenure 120 months
EMI Rs 2,230
EMI Rs.1,440
l  Credit checks allow prospective loan providing bank to see the borrower's entire credit record.

 Correct Answer : True

The borrowers' credit worthiness is ascertained through credit check only.
l  Banks do not sanction loans for overseas education

 Correct Answer : False

Banks grant loans for studying in India or abroad. The loan granted for education in foreign universities and colleges may include travel and living expenses also.
l  Repayment of Education loan generally commences after the completion of education.

 Correct Answer : True

Repayment starts six months or one year, as would be indicated by the bank, after completion of the course or immediately after employment whichever is earlier.
l  Banks give loans only for the purchase of new cars.

 Correct Answer : False

Loans for purchase of car can be availed to purchase second hand cars also.
l  Borrower does not have to contribute any margin in a loan for purchase of car.

 Correct Answer : False

Banks insist on the borrower meeting a portion of the cost. This margin could range from 10% to 25%.
l  Repayment of car loan commence one year after the purchase of car through loan.

 Correct Answer : False

Repayment commences immediately following the month of availment of loan.
l  Banks do not permit prepayment of housing/car loans.

 Correct Answer : False

Banks do permit pre-payment of housing and car loans. There could be certain repayment charges or changes in the rate of interest on full or part pre payment.
l  Banks generally do not recover processing fees for car loans.

 Correct Answer : False

Processing charges are recovered separately from the borrower.
l  Banks give overdrafts and loans to everyone who opens an account.

 Correct Answer : False

A loan is granted to borrowers on certain eligibility criterion. Therefore, every account holder may not be eligible to avail a loan from the bank. Overdraft is not an automatic entitlement on opening the account. This is sanctioned after proper credit appraisal process.
l  Indian Nationals who have secured admission to professional / technical courses through Entrance test / selection process in India / abroad can avail of educational loan.

 Correct Answer : True

Education loans are available for studies abroad also and the loan amount is upto a maximum of Rs.15.00 to Rs.20.00 lacs
l  Second educational loan is never sanctioned by the banks.

 Correct Answer : False

Normally, a borrower is eligible for a second educational loan after liquidation of the earlier loan to the satisfaction of the financing bank.
l  Travel expenses are not included while working out educational loan amount.

 Correct Answer : True

The loan component normally consists of tuition fees, cost of books, boarding and hostel expenses only. However, separate loan is granted by some banks for travel expenses in respect of foreign studies.


Know Your Banking - General Banking
Credit Cards
  1. Having an account with the card issuing bank is a must for applying for credit card of the bank.

    Correct Answer : False

    Maintenance of an account in the bank which has issued the card is not a pre requisite for applying for a credit card. Having an account with the card issuing bank is essential for debit cards.
Credit cards allows certain credit period to the user to make payments to the bank in respect of purchases/payments made with the card whereas in case of debit cards the card holders account is debited/charged immediately.

Correct Answer : True

Debit Card is a direct account access card. (Amount transacted gets debited immediately). The amount transacted in debit card will be restricted to the extent of the amount of balance standing to the credit of the card user's account. On the other hand, a credit card offers a normal credit period (with out any interest) and also credit at predetermined rates of interest if the amounts are paid partially or in installments.




FINANCIAL EDUCATION
Deposits
  1. If we place money with the bank in Fixed Deposit for a specific period, it can be withdrawn only at the time of maturity and not before maturity

    Correct Answer : False

    Many banks allow prepayment of fixed deposits, at their discretion, to accommodate customers request for meeting emergent expenses

    Unlike other fixed-term savings instruments like NSC, KVP etc which have a lock-in period before which money cannot be drawn, the advantage of a fixed deposit with a bank is that it can be withdrawn anytime before maturity. Depending on bank's rules, this will be subject to penal charges for premature closure.

    Also the bank will not pay the agreed rate of interest but pay a rate of interest applicable for the actual period for which the money was in deposit with the bank less penal rate ranging from 0.50% to 1.00% p.a . In case of cumulative or reinvestment deposits, the bank will pay back the deposit amount and the accrued interest at the revised rate of interest. If the depositor has been drawing interest regularly at a higher rate then the excess of interest over the actual interest payable will be adjusted against the deposit amount.

  1. Ration Card and Driving License can be produced by customers as documents to open an account with a bank under 'Know Your Customer(KYC)'Norms.

     Correct Answer : True

    Both Driving License and Ration Card are normally sufficient to establish both the identity and the correct address of the applicant respectively. Similarly, banks accept any one of the documents given under List I to establish the identity of the new customer and those under List II help banks verify /establish the applicant's present address.
List 1 (for identification)
List 2( for address)
Passport
Telephone bill
PAN Card
Bank Account statement
Driving License
Ration Card
Employer's identity card(subject to banks satisfaction)
Credit Card Statement
Letter from a recognized public authority or public servant verifying the identity (subject to bank's satisfaction)
Electricity bill
Letter from employer/another bank( Subject to banks satisfaction)
 
Voter's identity card.
 
17.   An individual person of any age can open and operate his savings bank account.

Correct Answer :  False

Reason. Only a person who has completed 18 years age can operate a bank/savings account. This is because the banker-customer relationship is contractual and only a person who is competent to contract can open a deposit account with a bank branch of her/his choice and convenience. For entering into a valid contract, a person has to be major (18 years of age or above) and of sound mind.

However, Savings or fixed deposit accounts for the benefit of minor child can also be opened and operated by the father/ mother/ guardian in one of the following modes ( child will operate the account only on attaining the majority) :
l  In the single name of the child through the father / mother/ guardian, or
l  In the joint names of the father/ mother/ guardian and the child (payable to either or survivor)
There are instances when banks also allow minor children above a specified age, say 10 years or above, to open savings account in their single name and also operate the account. These accounts come with certain limitations as regards withdrawals and are intended to encourage savings habit amongst children.

18.  Banks do not permit joint savings accounts.

Correct Answer : False

Reason: Banks permit opening of accounts by joint holders. A joint account is one that is opened in the names of more than one individual and all the account holders have signed on the account opening form. In joint accounts, mode of operation has to be authorized by all the account holders on the account opening form itself. These instructions can, if need be subsequently revised by a letter signed by all of them. The mode of operation in joint account of, say, two individuals, can be any of the following:
l  Jointly by both the account holders
l  Either or Survivor
l  Former or Survivor.
If an account is opened by more than two individuals the operative instructions can be (a) jointly by all holders or (b) Any one or survivor

  1. While opening a new account banks insist on the first deposit (credit into the account) in the form of cash.

    Correct Answer : True

    The first/initial deposit in a new deposit account has to be cash only. Otherwise, the banker will not get protection under Negotiable Instruments Act for collection/payment of a cheque.


  1. Photograph of the customer is an important requirement to open a savings account.

    Correct Answer : True

    As per RBI guidelines, all banks are required to obtain photographs of all depositors w.e.f.1-1-94. Under KYC norms, all banks invariably insist on photographs of account holders. Photographs are useful in identification of customers.
  2.  
Banks do not ask for proof of residence while opening a savings bank account.

Correct Answer : False

Under KYC norms, customers are required to produce proof of identity and residence. Banks have to satisfy themselves and confirm to KYC norms by obtaining specified documentary evidences. One of the main objectives for KYC procedure is to prevent misuse of the banking system for money laundering and financing of terrorist activities The rationale of seeking identity / residence proof or introduction of an individual desiring to open a bank account is as follows:
l  It establishes the identity with the residence address of the customer for future correspondence by the bank.
l  It prevents 'benami'or fictitious depositors opening bank accounts, as such accounts are prohibited by RBI/ taxation authorities.
l  It prevents misuse of cheque facility (by issuing cheques in favour of third parties far in excess of the balance in the account) or other fraudulent practices by the customer, which may cause pecuniary loss to the members of the public, apart from the embarrassment to the banker of such a customer.
l  It protects the bank under Negotiable Instruments Act, 1881. By taking introduction of a customer while opening an account, the bank is deemed to have acted "in good faith and without negligence". Without obtaining such introduction, the bank incurs the risk of being held liable for 'negligence' by a court of law in a legal suit brought by third parties who have suffered loss as a result of fraudulent act of such a customer.


  1. Minors can open current account with banks

    Correct Answer : False

    Minors (persons of less than 18 years of age) cannot open and or operate a current account. This is because the current account is primarily meant for managing business transactions. Under Indian Minority Act (Section 3) a minor is a person who has not completed 18 years of age. A minor is not competent to enter into a contract.However, minors are allowed to open savings bank or fixed deposit accounts subject to certain conditions.

  1. Primary Agricultural Credit Societies are allowed to open savings bank account.

    Correct Answer : False

    A co-operative society is an association registered under the provisions of the Co- operative Societies Act and is not a commercial bank within the meaning of Banking Regulation Act. As such they cannot offer savings bank accounts to their customers. There are, however, instances in a few States where the Primary Agriculture Credit Societies offer savings accounts to their members. These accounts have certain restrictions in the operations and use of cheque facility.

  1. There are no restrictions on the number of credits in a saving bank account.

    Correct Answer : True

    As the name indicates, savings bank accounts are meant for individuals and very small businesses to keep their savings for meeting their future monetary needs. Banks give interest on these accounts with a view to encourage saving habits. Generally there are no restrictions on the number of credits in the account. However it would be preferable if monies are deposited only once a day.


  1. There are no restrictions on the number of withdrawals in a saving bank account.

    Correct Answer : False

    Banks indicate certain restrictions on the number of withdrawals per month/ quarter, amount of withdrawal per day, minimum balance to be maintained in the account on all days, etc. Banks may also stipulate/levy a fee/penalty if these conditions are violated. These rules vary from banks to banks. The rationale of these restrictions is that the savings bank account should not be used like a current account or for business transactions, as it is primarily intended for attracting and accumulating savings.

  1. Banks have a rule that savings bank account holder should keep specified minimum balance in the account.

    Correct Answer : True

    In the case of savings deposit account, where the customer is extended facilities, such as, ATM Card, cheque, bill payment etc banks stipulate a minimum balance to be maintained. The amount of minimum balance to be maintained in savings/current account could range from Rs 500/- to Rs.10,000/-. If the amount in the account falls below the prescribed minimum balance, banks usually levy a fee, usually once in a quarter. Savings accounts without minimum balance may not offer all the facilities. Under 'No-Frill' account banks may also offer zero balance accounts.


  1. A person having a savings bank account does not need a separate introduction to open Term deposit account in the same bank.

    Correct Answer : True

    Introduction is needed only at the time of opening the first account with the bank.
  2. There is no limit/restriction on the period for which a term deposit can be kept in the bank.

    Correct Answer : False

    Term deposits cannot be placed for periods less than 7 days. However, there are no legal/regulatory conditions about the longest period for which a term deposit can be accepted by a bank. In practice it is seen that a term deposit can be kept for a minimum period of 7 days and a maximum period of 120 months only.
  3. The rate of interest offered by the bank on term deposit is generally higher than that offered in the saving bank account.

    Correct Answer : True

    Interest is the compensation that the lender/investor receives for temporarily giving up the ability to spend money. In the case of Term/fixed Deposits, generally, the rate of interest is higher if (a) the amount deposited is higher and/or (b) the monies are kept for a longer term.

    Term deposits typically offer more interest rate than savings bank deposits because term deposits are for specific period before which money cannot be withdrawn. Hence money deposited for longer terms will have a higher interest rate as depositors have to be compensated for parting with their funds for longer periods.

    In the case of savings bank deposits, the balance in the account can be drawn any time by the depositor. The amount deposited/balance can vary from day to day. Therefore it is not possible for the banks to offer a rate of interest on par with fixed deposits. It is only to encourage savings habit that banks offer interest on the minimum balance outstanding in the savings account between 11th day and the last day of the month.
  4. Nomination facility is available for term deposit accounts.

    Correct Answer : True

    A valid nomination ensures that in the event of death of the sole depositor or all depositors, the amount lying in the account will be returned to the nominee without any further legal formality.

    Nomination facility is available in the case of joint accounts also.
  5. Banks cannot pay monthly interest on fixed deposits.

    Correct Answer : False

    Interest earned in the deposits can be paid by the bank in stipulated periodicity. Thus, banks offer Fixed Deposit schemes where interest is paid /credited monthly to customers.
  6. Current accounts offer higher interest rates than savings accounts.

    Correct Answer : False

    Current Accounts do not offer interest on the balance maintained in the account.
  7. There is a minimum amount, as per each banks policy, below which fixed deposit accounts may not be opened.

    Correct Answer : True

    The minimum amount may range from Rs.1000 to Rs.10000 and different banks have different minimum limits in this regard.
  8. A senior citizen cannot open a deposit account jointly with non senior citizen.

    Correct Answer : False

    A senior citizen can open a deposit account jointly with any other person including a non senior citizen and yet avail of higher concessional interest rate. As per extant polices the interest accrues to the first named person in a deposit. However, she/he has to declare that the money deposited belongs to her/him.
  9. Senior citizens are paid a higher rate of interest on their deposit accounts.

    Correct Answer : True

    The Reserve Bank of India has permitted banks to offer higher rates of interest on deposits of senior citizens. Accordingly, banks have allowed additional interest of 0.5% on fixed deposits over and above the rate applicable for deposits by others for that term.
  10. Proof of age is not required for senior citizens opening a bank account.

    Correct Answer : False

    Proof of age is required to avail of additional interest rate.
  11. A cheque is an order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the cheque.

    Correct Answer : True

    As per Negotiable Instruments Act, a cheque is an unconditional order directing the bank to pay a certain amount of money to the person named in the cheque. Cheque has to be specific and clear and not ambiguous or conditional. This means that a cheque can not be issued with conditions such as " Pay Rajan if he passes the SSC examination'
  12. A bound book of cheques with stubs is the depositor's record of the checking account

    Correct Answer : True
    Stubs serve as a record to the customer as to the details of payment, viz., name of the payee, amount of cheque, when issued,etc.
  13. A deposit or a paying-in slip is a blank form listing the details of coin, currency, or cheques to be deposited and the amount of deposit (it accompanies a deposit)

    Correct Answer : True
  14. A payee is the person or business to whom a cheque is written

    Correct Answer : False

    Generally a cheque is drawn in the name of the payee to whom money is to be paid by the bank. However, in the case of a bearer cheque, the holder of the cheque becomes the payee and the person named in the cheque by the drawer may not be the payee. In the case of an order cheque, if it is endorsed, the endorsee becomes the payee.
  15. Cheques written in pencil are not acceptable.

    Correct Answer : True

    Cheques are to be written in ink only to avoid easy alteration .Writing in pencil is not acceptable as it can be easily altered. If alteration is made in the cheque, such alteration needs to be authenticated by the signature of the drawer; else, cheque will be dishonored.
  16. The person who signs a cheque is called the drawer

    Correct Answer : True

    The person who signs the cheque (maker of the instrument) is called the drawer.
  17. The bank on which the cheque is written is the drawee.

    Correct Answer : True

    The cheque leaf contains the name of the bank and branch on whom it is drawn.The name of the bank where the drawer/customer maintains account is called drawee bank
  18. A joint account is one which is opened and operated by at least three and maximum twelve persons

    Correct Answer : False

    A joint account will have a minimum of two persons and maximum number is unlimited.
  19. Commercial banks do not accept the standing instructions from deposit account hollers.

    Correct Answer : False

    Savings Bank Account Holders can issue standing instructions to the branch for payment of LIC Premium every month or similar periodical payment.Similarly; Fixed deposit account holders can also issue standing instruction for payment of periodical interest to specified persons.
  20. Banks issue bearer demand draft where payment can be obtained on the bank's counter.

    Correct Answer : False

    A demand draft is a payment order issued by one branch of a bank upon another branch, instructing the drawee branch to pay the specified sum of money to the specified person or to his order. A demand draft is always drawn, payable to order.
  21. For customers, banks collect the checks drawn on other banks also

    Correct Answer : True

    Banks is obliged to collect the cheques drawn on other banks and they act as an agent on behalf of their customers.
  22. Bill pay facility is extended to current account customers only

    Correct Answer : False

    Bills such as electricity bills, taxes, telephone/mobile bills can be paid through the banks by giving standing instructions to the banks for the same. The bills payment facility is extended to savings bank account holders as well as current account holders by most of the banks. If a customer selects auto pay for a biller, the bills up to the limit specified by him/her will be automatically paid without reference to him/her , subject to availability of funds in the account
  23. Cheque becomes stale after one year from the date of issue.

    Correct Answer : False

    As per the established customs and practice, a cheque becomes stale after six months from its date of issue. A stale cheque can not be paid by the bank unless it is revalidated by the drawer. However, the validity period of cheque can be increased or decreased by expressly writing the same on the cheque, e.g., cheques issued by LIC are generally valid for 3 months and they are expressly stated on the face of the cheque.
  24. There is no expiry date for travellers' cheques.

    Correct Answer : True

    Travellers' cheques, on issue are not dated. Therefore, there is no specific validity date for travellers' cheques and they are valid till encashment .However, once the travellers' cheque is dated by the purchaser /holder, it is valid for six months from the date written on the face of the traveller's cheque.
51.   Cheque is a comparatively better mode of payment than cash.

Correct Answer : True

Payment by a cheque ensures the following:
·       Money reaches the true beneficiary
·       It serves as a documentary evidence of receipt of money by the beneficiary
·       In case of loss of cheque, no monetary loss is incurred.
·       It does not involve handling of cash which is risky from safety point of view
  1. If the balance in Savings Bank Account falls below the minimum level stipulated by banks, banks levy penalty.

    Correct Answer : True

    In the case of savings deposit account, where the customer is extended benefits such as ATM Card, Cheque book facility etc banks stipulate a minimum balance to be maintained. At the same time some banks permit their customers to maintain zero balance or a small balance in their account. In the case of former the minimum balance to be maintained in savings/current account could range from Rs 500 to Rs.10000. If the amount in the account falls below the prescribed minimum balance, banks levy a fee, usually once in a quarter. Savings accounts with out minimum balance may not have all the facilities and are usually called 'no frills account'.


  1. An account ,once opened with a branch ,can not be shifted to any branch located in a differtent place?

    Correct Answer : False

    A bank account can be freely transferred from one branch of a bank to another branch of a bank without any charges. The account number, cheque book and other details will change on the occasion of a transfer.
  2. Nomination is very important in the case of bank deposit

    Correct Answer : True

    The effect of a valid nomination is that in the event of death of the sole depositor or all depositors, the amount lying in the account will be paid to the nominee on production of a death certificate and without further legal formality. In the absence of nomination , the legal heirs of the deceased depositor have to submit documentary evidence such as death certificate, legal heirship certificate etc to claim the amount lying in the deceased depositors account.
A minor can open a savings account to be operated by himself

Correct Answer : True

Generally, accounts can be opened in the name of minors operated by Father and/or Guardian .Many banks allow deposit accounts with limited facilities for school students who are less than 18 years of age, with the idea of 'catching them young' or for inculcating saving/ banking habit among them. Such accounts are opened for students who are 10 years of age or above without cheque book facility. These accounts have some conditions for operation in the account
SREERAAMM

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