Tag: functions of commerical banks

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Questions Related to functions of commerical banks

Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions

State the following statement is True or False:
Request of secretary to the bank not to make the payment of cheque is known as stop payment.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Request of secretary to the bank not to make the payment of cheque is known as stop payment- this is a true statement. This request is made in order to stop the payment of the cheque so that misuse of  the cheque is prevented. This request is to be made by the customer who issued the cheeque.

Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions
Joint Stock Company opens a saving account.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
(i) Bank is a financial institution.
(ii) It helps a company. in solving the difficulties of money. 
(iii) It also provides number of services to the Joint Stock Company. 
(iv) Joint Stock Company mostly deals, with the Commercial Banks / Co-operative Bank. 
(v) The company receives number of cheques, demand drafts to be encashed and also number of cheques for payment. 
(vi) The Joint Stock Company takes help of banks for short term credit facilities and long term financial assistance.
(vii) For all this, it has to open a current account with the bank. 
(viii) To encourage saving habit among people, a bank allows depositors to open saving account. 
(ix) In such type of account, the depositor can withdraw money only two times in a week. 
(x) Trading or business concerns, firms or Joint Stock Company should not open saving account.
Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions

State with reasons whether the following statements are True or False.
In cash credit, customers account is credited by a bank with the sanctioned amount.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Cash credit is a facility given to current account holder of the bank, to withdraw money even when there is no credit balance. 

There is a limit fixed to the borrowing. The interest on this facility is charged on the running balance and not on the borrowing limit.

Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions
Stop payment letter is usually made to prevent the misuse of the cheque when the cheque is _______.

  1. lost

  2. issued

  3. credit

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stop payment letter is usually made to prevent the misuse of the cheque when the cheque is lost. A customer who issued the cheque can write a stop payment letter. This stop payment letter is used to issue in order to stop the misuse of the lost cheque.

Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions

State the following statement is True or False:
Pay-in-slip is commonly called as a deposit-slip.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Pay-in-slip is also called as a deposit slip. When a person deposits cheque or cash into a bank account, pay-in=slip is filled in. It has the details viz account number, amount, date, etc. Depositor need not be account holder.

Multiple choice business organisation and correspondence functions of commerical banks other services and modern trends in banking sector types of banks diversified banking functions
_________ account is suitable for salaried people.

  1. Current

  2. Saving

  3. Over draft

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Salary Account opened with a bank is a form of savings account. It is generally as 'Zero balance' account. It encourages savings among salaried people.

Current account is opened by business entities who have numerous transactions.
Overdraft is a facility given by the bank to the account-holders (basically current account holders).