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BANKING theory and practice, Exercises of Banking and Finance

Annamalai UniversityBanking and Finance

Banking short notes banking practice

Typology: Exercises

2020/2021

Available from 03/20/2023

Krishnadasan
Krishnadasan 🇮🇳

2 documents

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Definition of Banking
Section 5(b) of the Banking companies Act,1949 defines banking as “accepting for the Pu f lending or
investment of deposits of Money received from the public ,repayable on Demand withdrawable by
cheque , draft, order or Otherwise”.
Banking Regulation act,1949
The banking regulation act, 1949 is a legislation in India that regulates all banking Firms in India. Passed
as the banking companies Act 1949,it came into force from 16 march 1949 and changed to banking
regulation act 1949 from 1 march 1966.it is applicable in Jammu and Kashmir from 1956.initially, the Law
was applicable only to banking companies. But, 1965 it was amended to make it Applicable to cooperative
banks and to Introduce other changes.
Development of Indian Banking
* General bank of India set up 1786-followed by bank of Hindustan and Bengal bank
* East India company established bank of Bengal 1809
* then Bombay bank 1840.
* Bank of madras 1843.
* All three banks amalgamated in 1920 -imperial bank established.
* Punjab national bank ltd-1894 for Indian.
* RBI in 1935.
* 1955,14 comm. Bank nationalized.
* 1980 banking reforms carried out.
* 1991 ATM.
Significant or primary Elements Of Bank
All banks need to carry out two significant essential roles
To be specific:
1. Accepting of deposits
2. Granting of loans and advances
Accepting of Deposits:
An extremely fundamental yet significant capability of all the business Banks is assembling public
assets, giving safe guardianship Of investment funds and premium on the investment funds to
investors. Bank acknowledges various kinds of stores from general society.
Such as:
1. Savings deposit:
Empowers saving propensities
Among the general population. It is appropriate for compensation and pay Workers. The pace of
interest is low. There is no limitation on the number and measure of withdrawals. The record for
saving stores can be opened in a solitary name or in joint names. The contributors simply have to
keep up with least equilibrium which fluctuates across various banks. Likewise, Bank gives ATM
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Definition of Banking Section 5(b) of the Banking companies Act,1949 defines banking as “accepting for the Pu f lending or investment of deposits of Money received from the public ,repayable on Demand withdrawable by cheque , draft, order or Otherwise”. Banking Regulation act, The banking regulation act, 1949 is a legislation in India that regulates all banking Firms in India. Passed as the banking companies Act 1949,it came into force from 16 march 1949 and changed to banking regulation act 1949 from 1 march 1966.it is applicable in Jammu and Kashmir from 1956.initially, the Law was applicable only to banking companies. But, 1965 it was amended to make it Applicable to cooperative banks and to Introduce other changes. Development of Indian Banking

  • General bank of India set up 1786-followed by bank of Hindustan and Bengal bank
  • East India company established bank of Bengal 1809
  • then Bombay bank 1840.
  • Bank of madras 1843.
  • All three banks amalgamated in 1920 - imperial bank established.
  • Punjab national bank ltd-1894 for Indian.
  • RBI in 1935.
  • 1955,14 comm. Bank nationalized.
  • 1980 banking reforms carried out.
  • 1991 ATM. Significant or primary Elements Of Bank All banks need to carry out two significant essential roles To be specific:
  1. Accepting of deposits
  2. Granting of loans and advances Accepting of Deposits: An extremely fundamental yet significant capability of all the business Banks is assembling public assets, giving safe guardianship Of investment funds and premium on the investment funds to investors. Bank acknowledges various kinds of stores from general society. Such as:
  3. Savings deposit: Empowers saving propensities Among the general population. It is appropriate for compensation and pay Workers. The pace of interest is low. There is no limitation on the number and measure of withdrawals. The record for saving stores can be opened in a solitary name or in joint names. The contributors simply have to keep up with least equilibrium which fluctuates across various banks. Likewise, Bank gives ATM

cum charge card, really take a look at book, and Web banking office. Applicants can be aware about the Sorts of Actually looks at in the connected page.

  1. Fixed deposits: Otherwise called Term deposit. Cash is kept for a proper residency. No Withdrawal cash during this period permitted. In case contributors pull out before development, banks demand a punishment for untimely withdrawal. As a bump total sum is paid at one time for a specific period, the pace of interest is high yet differs with the time of store.
  2. Recurring deposits: A specific amount of cash is kept in the bank at a normal span. Cash can be removed solely after the expiry of a certain that is all. A higher pace of interest is paid on repeating stores as it gives an advantage of compounded Pace of interest and empowers investors to gather a enormous amount of cash. This kind of record is worked by salaried people and negligible dealers.
  3. Current deposits: Are opened by financial specialists. The record holders get overdraft office on this Account. These stores go about as a transient credit to Address earnest issues. Bank charges an exorbitant premium Rate alongside the charges for overdraft office in Request to keep a save for obscure requests For the overdraft. Giving of Credits and Advances The stores acknowledged from general public are used by the Banks to propel credits to the organizations and People to meet their vulnerabilities. Bank charges a Higher pace of interest on credits and advances than what It pays on stores. The contrast between the loaning Loan cost and loan fee for stores is bank benefit. Bank offers the following kinds of Credits and Advances: 1. Bank OD: This facility for current record holders. It permits holders to pull out cash whenever more than accessible in bank balance yet up to as far as possible. An overdraft office is allowed against guarantee security. The interest for overdraft is paid exclusively on the acquired sum for the period for which the advance is taken.
  4. Cash Credits: A short term loan facility up to a specific limit fixed in advance. Banks allow the customer to take a loan against a mortgage of certain property (tangible assets and / guarantees). Cash credit is given to any type of account holders and also to those who do not have an account with a bank. Interest is charged on the amount withdrawn in excess of the limit. Through cash credit, a larger amount of loan is sanctioned than that of overdraft for a longer period.
  5. Discounting bill of exchange: It is a kind of transient credit, where the dealer limits the bill from the bank for certain expenses. The bank progresses cash by limiting or buying the bills of