Banking Services and Operations

A bank which acts as a banker to other banks is known as central bank.

The Registrar and Transfer Agent (RTA) is responsible for all administrative functions related to unit issuance, redemption, and record-keeping for mutual funds. RTAs maintain investor records, process transactions, and handle KYC compliance. Custodians safekeep securities, trustees oversee fund operations, and bankers handle banking transactions - none of these handle unit issuance/redemption.

Banks do not pay interest on current accounts because the funds of these accounts are not used for lending purpose.

Consumer durable loan is provided by banks for purchase of white goods.

A commercial bank cannot issue currency. It's the function of RBI.

Social shopping is a method of commerce where shoppers' friends become involved in the shopping experience.

Yes, this is the full form of ATM.

No-Frills Accounts (Basic Savings Bank Deposit Accounts) are specifically designed for individuals from weaker sections and low-income groups. This includes agricultural labourers, students, and unorganised sector workers. A small firm is a business entity, not an individual, and therefore cannot open a No-Frills Account.

 Operational Risk is associated with the failure of internal processes of a bank or business organisation. Operational risk is the risk that is not inherent in financial, systematic or market-wide risk.

A bank account is treated as a personal account because the bank is considered a legal entity/artificial person. Under the three traditional types of accounts (Personal, Real, Nominal), bank accounts fall under personal accounts as they represent a relationship with a person (the bank). While banks deal in money, the account itself represents the person, not the asset.

Paper Gold refers to Special Drawing Rights (SDRs) created by the IMF. SDRs are international reserve assets that supplement member countries' official reserves. They're called paper gold because they provide liquidity similar to gold without being physical assets.

The Call Money Market is a segment of the money market where financial institutions borrow and lend funds for very short periods, typically overnight or up to 14 days. Primary Dealers and Mutual Funds participate to manage their daily liquidity requirements. Banks are the most active participants, but other institutions like insurance companies and development financial institutions also engage in this market to optimize their short-term cash flows. All the listed entities are legitimate participants in the Call Money Market.

In banking, 'spread' refers to the difference between interest income earned on assets (loans, advances, investments, and balances with RBI) and interest expense paid on liabilities (deposits). This represents the bank's net interest margin or profit from its core lending operations. Option D correctly captures this comprehensive definition including all interest-bearing assets.

'Minimise' means 'to reduce'.

Money laundering is the process of making illegally-gained proceeds appear legal by passing them through a complex sequence of banking transfers or commercial transactions. The definition correctly captures the essence of this criminal activity.