JAIIB · PPB

A OPERATIONAL ASPECTS OF DEPOSIT ACCOUNTS

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.

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Q

What is the minimum number of witnesses required when a bank opens a deposit account for an illiterate person?

A

Two witnesses are required when opening a deposit account for an illiterate person, and the account holder's thumb impression must be obtained in their presence.

Q

What is the minimum balance requirement typically mandated by banks for a savings account in urban branches?

A

Banks set their own minimum balance; RBI prescribes no uniform amount.

Q

What is the meaning of 'KYC' in the context of opening a bank account?

A

KYC stands for Know Your Customer, a regulatory requirement under RBI guidelines that mandates banks to verify the identity and address of customers before opening accounts.

Q

What is the term for a deposit account where the balance earns interest and withdrawals are restricted?

A

Savings Bank Account restricts withdrawals and pays interest.

Q

Which RBI master direction governs the KYC norms for opening deposit accounts in India?

A

The RBI Master Direction on Know Your Customer (KYC) Direction, 2016 (updated periodically) governs KYC norms for opening deposit accounts in India.

Q

Under what circumstance can a bank refuse to open a deposit account for a customer?

A

Banks may refuse if KYC documents are incomplete or risk is high.

Q

What is an Officially Valid Document (OVD) for KYC purposes?

A

An OVD is a document accepted as proof of identity and address, including passport, driving licence, Voter ID, Aadhaar, NREGA job card, or any document notified by the Central Government.

Q

What is meant by 'credit balance' in a deposit account?

A

Credit balance means the customer has funds available in the account.

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