different types of banks in india and their functions pdf Friday, May 7, 2021 9:06:15 AM

Different Types Of Banks In India And Their Functions Pdf

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A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalized a system known as fractional reserve banking , under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity , banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords. Banking in its modern sense evolved in the fourteenth century in the prosperous cities of Renaissance Italy but in many ways functioned as a continuation of ideas and concepts of credit and lending that had their roots in the ancient world.

Banking in India- Types of Banks

Knowledge sharing is one of the most important aspects of humanity. Without knowledge and information, one cannot think, cannot process and cannot get work done. This section is a place for you to read, write information on various aspects of Human life. Get to know about articles related to sports, computer and technology and about the latest news going on around in the world. Get to know about what is going on in the world of sports and politics about your sports.

We are here to help you in gathering information and share our experience for the job seeking candidates searching for tips on the internet. Definition: A savings account is an account provided by a bank for individuals to save money and earn interest on the cash held in the account. A savings account can be used to save money for specific expenses or for longer-term undefined goals, all while earning interest on the money in the account.

The 'saving account' is generally opened in bank by salaried persons or by the persons who have a fixed regular income. This facility is also given to students, senior citizens, pensioners, and so on. The saving account holder is allowed to withdraw money from the account as and when required. The interest which is given on saving accounts is sometime attractive, but often nominal. The interest rates vary as per the amount of money deposited lying in the saving bank account, scheme opted, and its maturity range.

It is also subject to current trend of banking policies in a country. The main objective of saving account is to promote savings.

There is no restriction on the number and amount of deposits. Withdrawals are allowed subject to certain restrictions. The money can be withdrawn either by cheque or withdrawal slip of the respective bank. The rate of interest payable is very nominal on saving accounts.

Saving account is of continuing nature. There is no maximum period of holding. A minimum amount has to be kept on saving account to keep it functioning. Electronic clearing System ECS or E-Banking are available to pay electricity bill, telephone bill and other routine household expenses. Generally, equated monthly installments EMI for housing loan, personal loan, car loan, etc. Saving account encourages savings habit among salary earners and others who have fixed income.

It enables the depositor to earn income by way of saving bank interest. Saving account helps the depositor to make payment by way of issuing cheques. It shows income of a salaried and other person earned during the year. Saving account passbook acts as an identity and residential proof of the account holder. It provides a facility such as Electronic fund transfer EFT to other people's accounts. It helps to do online shopping via facility like internet banking. It aids to keep records of all online transactions carried on by the account holder.

It provides immediate funds as and when required through ATM. The bank offers number of services to the saving account holders. Definition: Current bank account is opened by businessmen who have a higher number of regular transactions with the bank.

It includes deposits, withdrawals, and contra transactions. It is also known as Demand Deposit Account. Current account can be opened in co-operative bank and commercial bank.

In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. Cheques received from customers can be deposited in this account for collection. In India, current account can be opened by depositing Rs. The customers are allowed to withdraw the amount with cheques, and they usually do not get any interest. Generally, current account holders do not get any interest on their balance lying in current account with the bank.

It needs a higher minimum balance to be maintained as compared to the savings account. Penalty is charged if minimum balance is not maintained in the current account.

It charges interest on the short-term funds borrowed from the bank. It is of a continuing nature as there is no fixed period to hold a current account.

It does not promote saving habits with its account holders. The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly. There is also no restriction on the number and amount of withdrawals made, as long as the current account holder has funds in his bank account.

Generally, bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts. Current account is mainly opened for businessmen such as proprietors, partnership firms, public and private companies, trust, association of persons, etc. It enables businessmen to carry out their business transactions properly and promptly. The businessmen can withdraw from their current accounts without any limit, subject to banking cash transaction tax, if any levied by the government.

Home branch is that location where one opens his bank account. There are no restrictions on deposits made in the current account opened in a home branch of a bank.

However, the current account holder can deposit the cash from any other branch of a bank other than the home branch by paying a nominal charge as applicable.

It helps businessmen to make a direct payment to their creditors by issuing cheques, demand-drafts or pay-orders, etc. It enables a bank to collect money on behalf of its customers and credits the same in their customers' current accounts.

It enables the current account holder to obtain overdraft short-term borrowing facility. The creditors of the account holder can get credit-worthiness information of the account holder through inter-bank connection.

It facilitates the industrial progress of the country. Without its help, businessmen would face difficulties in running their businesses. It has the facilities of Internet-banking and mobile-banking to carry out important business transactions with ease and quickly. It also provides various other advantages benefits such as:. Periodical monthly, quarterly or yearly e-mail or download of bank statements in various formats like '.

XLS', '. TXT', '. PDF', etc. Recurring deposit account is generally opened for a purpose to be served at a future date. Generally opened to finance pre-planned future purposes like, wedding expenses of daughter, purchase of costly items like land, luxury car, refrigerator or air conditioner, etc. Recurring deposit account is opened by those who want to save regularly for a certain period of time and earn a higher interest rate.

In recurring deposit account certain fixed amount is accepted every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period. The main objective of recurring deposit account is to develop regular savings habit among the public.

In India, minimum amount that can be deposited is Rs. The period of deposit is minimum six months and maximum ten years. No withdrawals are allowed. However, the bank may allow to close the account before the maturity period. The bank provides the loan facility. Recurring deposit encourages regular savings habit among the people. Recurring deposit account holder can get a loan facility.

The bank can utilise such funds for lending to businessmen. The bank may also invest such funds in profitable areas. The account which is opened for a particular fixed period time by depositing particular amount money is known as Fixed Term Deposit Account.

The term 'fixed deposit' means that the deposit is fixed and is repayable only after a specific period is over. Under fixed deposit account, money is deposited for a fixed period say six months, one year, five years or even ten years. The money deposited in this account can not be withdrawn before the expiry of period. The rate of interest paid for fixed deposit vary changes according to amount, period and from bank to bank.

The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their surplus funds extra money.

The amount can be deposited only once. For further such deposits, separate accounts need to be opened. The period of fixed deposits range between 15 days to 10 years.

A high interest rate is paid on fixed deposits. The rate of interest may vary as per amount, period and from bank to bank. Withdrawals are not allowed. However, in case of emergency, banks allow to close the fixed account prior to maturity date. The depositor is given a fixed deposit receipt, which depositor has to produce at the time of maturity.

Banking Structure in India PDF – Revised 15-May-2018

Explanation of the Banking Structure in India :. It commenced its operations on 1 April during the British Rule in accordance with the provisions of the Reserve Bank of India Act, and in it was nationalized. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in The Central Office is where the Governor sits and where policies are formulated. This act along with the Companies Act, which was amended in , were meant to provide a framework for the supervision of banking firms in India.

Knowledge sharing is one of the most important aspects of humanity. Without knowledge and information, one cannot think, cannot process and cannot get work done. This section is a place for you to read, write information on various aspects of Human life. Get to know about articles related to sports, computer and technology and about the latest news going on around in the world. Get to know about what is going on in the world of sports and politics about your sports. We are here to help you in gathering information and share our experience for the job seeking candidates searching for tips on the internet. Definition: A savings account is an account provided by a bank for individuals to save money and earn interest on the cash held in the account.

Broadly, banks are classified either into commercial banks or as central bank. Scheduled banks have been included in the second schedule of the Reserve Bank, and fulfils the following three criteria:. Now, We shall first look into Central Bank first. The central bank has the primary function of regulating commercial banks and other economic activities in the economy. It is the apex bank who controls all other banks by regulating and supervising their activities. Now, lets talk about Commercial banks. These are those banks which provide banking services to people with a profit motive.

7 Important Types Of Banks – Discussed!

These banks play the most important role in modern economic organisation. Their business mainly consists of receiving deposits, giving loans and financing the trade of a country. They provide short-term credit, i.

A unit bank is independent and does not have any connecting banks - branches - in other areas.

Banking has been a significant part of our lives for a very long time. And in recent times, with the advancement of technology, there has been a revolution in the banking system. The majority of the Indian population relies on banks for the smooth functioning of their transactional activities.

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