Banking Awareness

1. Interest payable on savings bank accounts is?

(a) not regulated by RBI
(b) regulated by Sate Governments
(c) regulated by Central Government
(d) regulated by RBI   

(e) regulated by Finance Minister

2.Fixed deposits and recurring deposits are?

(a) repayable after an agreed period
(b) repayable on demand
(c) not repayable
(d) repayable after death of depositors
(e) repayable on demand or after an agreed period as per bank’s choice

3.Insurance cover for bank deposits in our country is provided by?

(a)SBI

(b)Govt of India

(c)GIC

(d)LIC

(e)DICGC(Depostit Insurance and Credit Gurantee Corporation)

About DICGC:(estb-1961)

   

• DICGC is a subsidiary of RBI.
• It was established on 1961 under Deposit Insurance and Credit Gurantee Corportation Act 1961.
• At present Banks are compulsorily required to get their deposits insured from Deposit Insurance and Credit Guarantee Corporation (DICGC).   However, DICGC at present insures deposits only upto Rs.1 lakh.   Thus, deposits in banks upto Rs.1 lakhs are safe and secure from the default by the bank.  The type of deposits insured by DICGC are savings, fixed, current and recurring deposits.  However, it needs to be noted that deposits kept in different branches of a bank will be bunched together for the purpose of insurance cover.  (However, deposits with different banks are insured separately).   Thus, we can say that through this scheme, each depositor is assured of getting upto Rs.1 lac, including the principal and interest amount, if ever your bank goes bust.  This scheme is applicable to all banks in including, foreign banks, cooperative banks and regional rural banks.

   4.what is money laundering?

          (a).Conversion of assets into cash

          (b).Conversion of money which is illegally obtained

          (c).Conversion of cash into gold

          (d).Conversion of gold into cash

          (e).Conversion of gold with foreign currency

        

          About Money Laundering:The process of creating the appearance that large amounts of             money obtained from serious crimes, such as drug trafficking or terrorist activity, 

        originated from a legitimate source.

               

   5.Reserves which can act as a liquidity buffer for commercial banks

      during crisis times are?

        (a).CAR    (b).CRR   (c).CAR and CRR   (d).CRR and SLR

                                                                                                                                                          About CRR(Cash Reserve Ratio): CRR means Cash Reserve Ratio.  Banks in India are required to             hold a certain proportion of their deposits in the form of  cash.  However, actually Banks  don’t           hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) /               currency chests, which is considered as  equivlanet to holding cash with themselves.. This                   minimum ratio (that is the part of the total deposits  to be held as cash) is stipulated by the RBI           and is known as the CRR or  Cash Reserve Ratio.  Thus, When a bank’s deposits increase by Rs100,         and if the cash reserve ratio is 9%, the banks will have to hold additional Rs 9 with  RBI and Bank           will be able to use only Rs 91 for investments and lending / credit purpose. Therefore,  higher               the  ratio (i.e. CRR), the lower is the amount that banks will be able to  use for lending and                   investment.  This power of RBI to reduce the lendable amount by increasing the CRR,  makes it             an instrument in the hands of a central bank through which it can control the amount that banks         lend.  Thus, it is a tool used by RBI to control liquidity in the banking system.

      About SLR(Statutory Liquidity Ratio):  SLR stands for Statutory Liquidity Ratio. This term is used         by bankers and indicates  the minimum percentage of deposits that the bank has to maintain in form of           gold, cash or other approved securities.  Thus, we can say that it is ratio of cash and some other                   approved securities to liabilities (deposits) It regulates the credit growth in India.