📘 42 – Bank & Bank Deposits

🔹 Bank & Banking

Banking Regulation Act, 1949 की धारा 5(b) के अनुसार बैंक जनता से जमा स्वीकार कर उधार या निवेश करता है।
बैंकिंग का मुख्य कार्य जमा स्वीकार करना और चेक/ड्राफ्ट द्वारा भुगतान करना है।
बैंकिंग व्यवसाय में Repayable on demand या otherwise जमा शामिल होती है।

🔹 Banker

Negotiable Instruments Act, 1881 की धारा 3 में Banker की परिभाषा दी गई है।
Post Office Savings Bank भी Banker की श्रेणी में आता है।
Bill of Exchange Act, 1882 के अनुसार बैंकिंग करने वाला कोई भी निकाय Banker है।

🔹 Banking Company

Banking Regulation Act, 1949 की धारा 5(c) में Banking Company की परिभाषा दी गई है।
Banking Company जनता से जमा स्वीकार कर उधार या निवेश करती है।
Banking Company में जमा Cheque, Draft या Order द्वारा निकासी योग्य होती है।

🔹 Licensing of Banks

BR Act की धारा 22 के अनुसार RBI लाइसेंस के बिना बैंकिंग नहीं की जा सकती।
जहां जमा स्वीकार या ऋण दिया जाता है वह बैंक की Branch कहलाती है।
Minimum Balance पर Penal Charges कमी के अनुपात में लगते हैं।

🔹 Bank Customer

Bank Customer की परिभाषा किसी अधिनियम में नहीं दी गई है।
Customer वह है जिसका बैंक से Account या Business Relationship हो।
KYC के अनुसार जिसके behalf पर खाता है वह भी Customer है।

🔹 Types of Bank Customer

Existing Customer का बैंक से Contractual Relationship होता है।
Walk-in Customer तकनीकी रूप से ग्राहक नहीं होता।
Prospective Customer वह है जिसने AOF जमा कर दिया हो।
Core Banking में ग्राहक पूरे बैंक का ग्राहक होता है, शाखा का नहीं।

🔹 Types of Deposits

बैंक जमा के मुख्य प्रकार – Savings, Current और Term Deposit हैं।
Bulk Deposit SCB के लिए ₹3 करोड़ और RRB के लिए ₹1 करोड़ से ऊपर होता है।

🔹 Savings Bank Account

Savings Account में ब्याज Daily Balance पर गणना होता है।
Savings Account पर ब्याज कम से कम Quarterly क्रेडिट होता है।
₹1 लाख तक समान ROI लागू होता है।
₹10,000 तक का ब्याज Section 80TTA में Tax Free है।
Government Departments के नाम SB Account नहीं खोला जाता।

🔹 Current Account

Current Account पर कोई ब्याज नहीं मिलता।
यह व्यापारियों और संस्थाओं के लिए उपयुक्त होता है।
Deceased Account में भुगतान तक Savings Rate से ब्याज मिलता है।
₹5 करोड़ से अधिक Exposure पर Current Account नियम लागू होते हैं।

🔹 Fixed Deposit (FD)

FD अवधि सामान्यतः 7 दिन से 10 वर्ष तक होती है।
7 दिन से पहले FD तोड़ने पर ब्याज नहीं मिलता।
₹1 करोड़ तक की FD में Premature Withdrawal की सुविधा होती है।
Mature FD Unclaimed होने पर Savings Rate या Contracted Rate में जो कम हो वही मिलेगा।

🔹 Recurring Deposit (RD)

RD में हर माह निश्चित राशि जमा की जाती है।
RD एक प्रकार का Term Deposit है।
Premature Closure पर वास्तविक अवधि की दर से ब्याज मिलता है।

🔹 Interest on Holiday Maturity

FD अगर Holiday को Mature हो तो अगले Working Day तक ब्याज मिलता है।
RD में ब्याज Maturity Value पर दिया जाता है।

🔹 Inoperative / Dormant Account

2 वर्ष तक कोई Transaction न होने पर खाता Dormant कहलाता है।
Dormant Account में भी Savings Interest मिलता है।
01-01-2024 से Digital KYC भी Valid Transaction है।

🔹 Unclaimed Deposits

10 वर्ष से अधिक Unclaimed राशि DEA Fund (RBI) में ट्रांसफर होती है।
UDGAM Portal से Unclaimed Deposit की जानकारी मिलती है।
DEAF पर ब्याज दर 3% Simple Interest है।
UDRN एक Unique Reference Number होता है।

🔹 Deceased Depositor Account

मृत्यु से पहले Mature FD पर Maturity तक Contracted Rate मिलता है।
Premature Claim पर कोई Penalty नहीं लगती।
Overdue FD पर बैंक की Policy के अनुसार ब्याज मिलता है।

🔹 Exam Important Points

Dormant Account की अवधि – 2 वर्ष
Banker की परिभाषा – NI Act
Banking Company – BR Act
Unclaimed Deposit Portal – UDGAM
FD में सबसे अधिक ब्याज मिलता है।

INTRODUCTION Class 1- Bank & Bank Deposits

═══════════════════════════════════

This chapter includes -

Bank , Banking companies
Banker , Customer Definition
Types of Bank Deposits
Inoperative/Dormant accs
Interest on accs
Unclaimed deposits

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Definition of bank

Definition of bank - As per Section 5(b) of the Banking Regulation Act, 1949 , "banking" means the accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, and withdraw-able by cheque, draft, order or otherwise.

"banking business" means the business of either or both of the following:

receiving from the general public money on current, deposit, savings or other similar account repayable on demand or with a period of call or notice of less than that period;
paying or collecting cheques drawn by or paid in by customers.

Definition of banker

» Banker - Section 3 in The Negotiable Instruments Act, 1881 Interpretation clause.—In this Act— "banker" includes any person acting as a banker and any post office savings bank

» "Banker" sec 2 bill of exchange act 1882 - "Banker" includes a body of persons whether incorporated or not who carry on the business of banking.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Definition of banking company

Definitions of banking company. - a financial institution that accepts deposits and channels the money into lending activities.

» According to Sec. 5(C) of the Banking Regulation Act, 1949, a banking company means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawn by Cheque, Draft, Order, or otherwise.

a) Accepting deposits from public b) Lends the money c) Invest the money d) repayable on demand

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Licensing of Banking Companies

Licensing of Banking Companies:-

According to Sec. 22 BR act, no company shall carry on banking business in India unless it holds a license issued by the Reserve Bank of India.

» "branch" or "branch office", in relation to a banking company, means any branch or branch office, whether called a pay office or sub-pay office or by any other name, at which deposits are received, cheques cashed or moneys lent, and for the purposes of section 35 includes any place of business where any other form of business referred to in sub-section (1) of section 6 is transacted.

» The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Definition of bank customer

» Definition of a bank customer — The Term customer has not defined by any act. A customer is a person who has an account with a bank or has a relationship with the banker even though he has no account with the bank.

» Categories of bank customer - Banks open accounts for different types of customers like an individual, partnership firm, Trusts, companies, etc. While opening the accounts the banker has to keep in mind the various legal aspects involved in opening and conducting those accounts and also practices followed in conducting those accounts.

For the purpose of KYC policy, a 'Customer' is defined as:

a person or entity that maintains an account and/or has a business relationship with the bank;
one on whose behalf the account is maintained

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Type of bank customer

Existing customer — who maintain account relationship with bank (account relationship is a contractual relationship)
Former customer — who had relationship with bank
Walk in customer — technically not are customer but availing bank facilities such as purchasing a draft , enhancing a cheque.
Prospective/potential customer — who intend to have account relationship with bank, such as handed over the Duly signed AOF to bank and bank has accepted the AOF even though no account actually has been opened by bank in its books or record

The term customer in "core banking solution" is broad as now he is the customer of BANK not of a particular branch. However In the event of arising any cause of action the customer is required to approach base branch.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Type of bank Deposits

» Types of Deposits

On the basis of purpose they serve, bank deposit accounts may be classified as follows:

Savings Bank Account
Current Deposit Account(Demand deposits)
Term/Fixed/Recurring Deposit

» Bulk Deposits — i. Single rupee term deposit of Rs 3 Crore and above for SCB & Small finance bank. ii. Single rupee term deposit of Rs 1 Crore and above for RRB & LAB

═══════════════════════════════════

Like, Share & Subscribe - Truegyan Type of bank Deposits

1.Savings Bank Account -

As the name suggests this type of account is suitable for people who have a definite income and are looking to save money. For example, the people who get salaries or the people who work as laborers. This type of account can be opened with a minimum initial deposit that varies from bank to bank. Money can be deposited at any time in this account.

a) The interest is calculated on basis of the daily balance in the account. b) A minimum balance has to be maintained in the account as prescribed by the bank. c) interest credited at least once in a quarter. d) A uniform Rol shall be set on balance upto Rs 1 lakh irrespective of the amount in the account within this limit. e) Differential Rol may be provided for any end of day saving balance exceeding rs 1 lakh. f) Interest paid upto rs 10000 is exempt under sec 80TTA of income tax act.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

1.Savings Bank Account -

» Scheduled commercial banks shall not Open a savings deposit account in the name of : Government departments / bodies depending upon budgetary allocations for performance of their functions / Municipal Corporations or Municipal Committees / Panchayat Samitis / State Housing Boards / Water and Sewerage / Drainage Boards / State Text Book Publishing Corporations / Societies / Metropolitan Development Authority / State / District Level Housing Co-operative Societies, etc. or any political party or any trading/business or professional concern, whether such concern is a proprietary or a partnership firm or a company or an association.

» SB Accounts may be opened in the name of Individuals (Resident or Non-Non-Resident) :- Associations, Societies, educational institutions and Hindu Undivided Family (HUF) and Trusts,Primary co-op society which is being financed by the bank, Khadi & Village Industries Board, Agriculture Produce Marketing Committee, Societies registered under the Societies Registration Act, Government Departments/bodies/agencies in respect of grants/subsidies released for implementation of various programmes /schemes. Development of women and children in the rural area (DWCRA), Self Help Group (SHG) registered or unregistered, Farmers Club- Vikas Volunteer Vahini (VVV), Any other institution permitted by RBI from time to time

═══════════════════════════════════

Like, Share & Subscribe - Truegyan Type of bank Deposits

2. Current Deposit Account

= Businessmen, companies, and institutions such as schools, colleges, and hospitals have to make payment through their bank accounts. Since there are restrictions on the number of withdrawals from a savings bank account, that type of account is not suitable for them. They need to have an account from which withdrawal can be made any number of times.

= Banks open a current account for them. Like a savings bank account, this account also requires a certain minimum amount of deposit while opening the account. On this deposit, the bank does not pay any interest on the balances. Rather the account holder pays a certain amount each year as an operational charge. banks should make reference to CIBIL/CRILC to ensure that entity does not have any borrowing arrangements and not in defaulters list.

» No interest paid on current account.

» However the balance lying in deceased individual or sole proprietorship acc attract interest applicable on savings acc till the date of repayment to claimaint from the date of death.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

2. Current Deposit Account

Opening of Current Accounts for borrowers availing Cash Credit/ Overdraft Facilities from the Banking System

» For borrowers, where the aggregate exposure of the banking system is less than ₹ 5 crore, banks can open current accounts without any restrictions placed vide this circular subject to obtaining an undertaking from such customers that they (the borrowers) shall inform the bank(s), if and when the credit facilities availed by them from the banking system becomes ₹ 5 crore or more.

Where the aggregate exposure of the banking system is ₹ 5 crore or more but less than ₹ 50 crore:

» Borrowers can open current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10 per cent of the aggregate exposure of the banking system to that borrower. In case none of the lenders has at least 10 per cent of the aggregate exposure, the bank having the highest exposure among CC/OD providing banks may open current accounts.

Where aggregate exposure of the banking system is ₹ 50 crore or more:

» Banks shall be required to put in place an escrow mechanism. Borrowers shall be free to choose any lending bank as their escrow managing bank. All lending banks should be part of the escrow agreement. The terms and conditions of the agreement may be decided mutually by lending banks and the borrower.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan Type of bank Deposits

3. Fixed Deposit Account

» Some bank customers may like to put away money for a longer time. Such deposits offer a higher interest rate. If money is deposited in a savings bank account, banks allow a lower rate of interest. Therefore, money is deposited in a fixed deposit account to earn interest at a higher rate.

» This period of deposit may range from 7 days to 10 years. The interest on a fixed deposit account can be withdrawn at certain intervals of time. At the end of the period, the deposit may be withdrawn or renewed for a further period. The FD mey be callable or non-collable basis. Banks also grant a loan on the security of the fixed deposit receipt.

» No interest Shall be paid where premature withdrawals of FDR takes place before 7 days.

» Provided that all term deposits accepted from individuals (held singly or jointly) for amount of Rupees one crore and below shall have premature-withdrawal-facility.(previously 15 lakh)

» If a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan Type of bank Deposits

» Recurring Deposit Account

» While opening the account a person has to agree to deposit a fixed amount once in a month for a certain period. The total deposit along with the interest therein is payable on maturity. However, the depositor can also be allowed to close the account before its maturity and get back the money along with the interest till that period.

» The account can be opened by a person individually, or jointly with another, or by the guardian in the name of a minor. The rate of interest allowed on the deposits is higher than that on a savings bank deposit but lower than the rate allowed on a fixed deposit for the same period.

» "Term Deposit" means an interest-bearing deposit received by the bank for a fixed period and shall also include deposits such as Recurring/ Cumulative/ Annuity / Reinvestment deposits and Cash Certificates.

» On premature withdrawal facility Interest shall be paid at the rate applicable to the amount and period for which the deposit remained with the bank and not at the contracted rate.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

PAYMENT OF INTEREST ON TERM DEPOSIT MATURING ON SUNDAY/ HOLIDAY/ NON-BUSINESS WORKING DAY -

» In respect of a term deposit maturing for payment on a Sunday or a holiday or a non-business working day, a bank shall pay interest till the next working day at the originally contracted rate, -

on the maturity value in the case of reinvestment deposits and recurring deposits, and
on the original principal amount in the case of ordinary term deposit on the basis of 365 days in a year.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

INOPERATIVE/ DORMANT ACCOUNTS

» UNCLAIMED DEPOSITS AND INOPERATIVE / DORMANT ACCOUNTS :-

Banks should play a more pro-active role in finding the where abouts of the account holders whose accounts have remained inoperative/Dormant.

(i) A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years. For the purpose of classifying an account as 'inoperative' both the type of transactions i.e. debit as well as credit transactions induced at the instance of customers as well as third party should be considered.

(ii) Interest on savings bank accounts should be credited on regular basis whether the account is operative or not. If a Fixed Deposit Receipt matures and proceeds are unpaid, the amount left unclaimed with the bank will attract savings bank rate of interest.

✓ In accordance with the revised RBI guidelines on Inoperative Accounts/Unclaimed deposits in Banks dated 01.01.2024, KYC updation done in face-to-face physical mode or through digital channels such as internet banking or mobile banking application of the bank is now treated as valid customer induced non-financial transaction.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Unclaimed Deposits

» A bank shall transfer to the DEA Fund (the Fund), the amounts becoming due in each calendar month (i.e., proceeds of the inoperative accounts and balances remaining unclaimed for 10 years or more).

» The window for submitting claim (by banks) from the Fund shall be kept open in e-Kuber system during the first 10 working days of every month.

» Unclaimed Deposit Reference Number (UDRN)- It is a unique number generated through Core Banking Solution (CBS) and assigned to each unclaimed account/ deposit transferred to DEA Fund of RBI.

» RBI portal - UDGAM refers to Unclaimed Deposits-Gateway to Access inforMation

Interest on DEAF Amount

✓ From May 11, 2021 onwards - 3 % per annum (simple interest)

✓ RBI instructions are issued in exercise of powers conferred under Sections 26A and 35A of the Banking Regulation Act, 1949, and are applicable to all the banks covered under the DEA Fund Scheme, viz., Commercial Banks (including RRBs, LABs, SFBs and PBs) and all Co-operative Banks.

═══════════════════════════════════

Like, Share & Subscribe - Truegyan

Deceased Depositor's Account

Interest Payable On Term Deposit In Deceased Depositor's Account :-

A. In the event of the death of the depositor before the date of maturity of the deposit and amount of the deposit is claimed after the date of maturity, the Bank shall pay interest at the contracted rate till the date of maturity. After date of maturity, interest will be paid at the rate of interest applicable to savings deposit as on the date of payment for the period for which the deposit remained with the Bank beyond the date of maturity.

B. If the amount of deposit is claimed before the date of maturity, interest at the rate applicable to the period for which the deposit has remained with the bank will be paid without any penalty.

C. However, in the case of death of the depositor after the date of maturity of the overdue deposit, the bank shall pay interest as per Bank's policy on overdue deposit.

═══════════════════════════════════