UNIT-1 BANKING TRANSACTION | SSLC SOCIAL SCIENCE NOTES ENGLISH MEDIUM | 10TH SOCIAL SCIENCE PASSING PACKAGE ENGLISH MEDIUM |

UNIT-1 

BANKING TRANSACTION

● Banks are developed 200 years ago the term of bank related to

financial transactions

● The term bank is derived from Italian word and French word. Italian

word Banco , French word Banque . It means money exchange

table

● The company which transact the business with Finance is called

Bank. It accepts deposits lends money saves customers money.

● The services of bank is called banking

Characteristics:

● Dealing with money

● Individual/ firm/ company

● Acceptance of deposits

● Lending loans

● Payment and withdrawal

● Agency and utility services

● Profit and service oriented

● Ever increasing functions

● Connecting link between depositor and borrower

● Banking business

● Name identity

Functions of bank:

● Accepting deposits from public and others

● Lending money to public and institutions

● Transferring money from place to place

● Collecting money on cheque, draft and bills

● Discounting of bills

● Hiring safe deposit locker

● Conducting foreign exchange transaction

● Keeping valuable materials in custody

● Issue of letters of credit and guarantee

● Conducting government transactions centre and state

Relationship between bankers and customers:

1. General relationship. Primary relation is debtor and creditor.

Subsidiary relation is Trustee and beneficiary. Agent and principal

relation.

2. Special relationship. Obligations to honour cheques. Obligation to

maintain secrecy of accounts.

Services offered by bank:

1. Debit Card and Credit Cards

2. Personal loans

3. Home and vehicle loans

4. Mutual funds

5. Safe deposit lockers

6. Trust services

7. Signature guarantee

8. E- Banking

Banking transactions:

● Any sort of activity involving in money exchange then and account

is viewed as bank transaction

● All the banking transactions in India are controlled by Reserve

Bank of India that's why it is called mother of banks or bankers

Bank.

Postal Bank of India and its services:

● Post office savings bank

● It issues national saving certificate

● Kisan Vikas Patra

● Monthly recurring deposits

● Postal life insurance and Pension Payment

● Money transfer

● Promoting a capital investment of thousand crores.

Types of bank:

1. Central Bank or RBI

2. Commercial banks

3. Industrial Development Banks

4. Land Development Banks

5. Indigenous banks

Types of bank accounts:

1. Savings bank account

2. Current account

3. Recurring deposit account

4. Term of fixed deposit account.

Savings bank account:

● Generally opened by salaried persons

● This facility is given to students senior citizens and pensioners

● This type of accounts are open to encourage people to save

money

● There is no restrictions on deposition of money

● Money can be withdrawn either by cheque or withdrawal slip

Current account:

● It is opened by Businessman who have a large number of

transactions

● Amount can be deposited or withdrawal any number of times

● Banks do not give any interest on deposits

● Banks collect service charge on such amount.

Recurring deposit:

● Generally it is open for a purpose to be saved for future

● Deposits are made regularly on monthly basis for wedding, land

And car purchase

● After the period is over amount is repaid with interest.

Fixed deposit account:

● Account is opened for a fixed period by depositing the money

● The deposit amount cannot be withdrawn before expiry date

● The rate of interest is both depending on the term of deposit.

Procedures to open a bank account:

● Decide the type of account which you want to open

● Approach the bank of your choice

● Fill up the bank account form or proposal form

● Give reference for opening new account

● Submit the form duly filled

● Verification by the office

● Initial deposit.

Advantages of opening bank account:

● Bank account facilitate safe custody of money

● It helps in making of payments

● It helps in collection of money

● Account holders get advances and loans

● Bank account helps in smooth financial transaction

● Account holder can get safe deposit locker facility.