A deposit that remains unclaimed for ten years is transferred to which fund?
- A.Consolidated Fund of India
- B.Depositor Education and Awareness Fund
- C.National Investment Fund
- D.Financial Inclusion Fund
Correct answer
Explanation
The correct answer is B, Depositor Education and Awareness Fund. Under the Banking Regulation Act as amended, a bank must transfer to this fund, maintained by the Reserve Bank of India, any deposit that has not been operated or claimed for ten years. The money is used for education and awareness of depositors, but the right of the depositor is not lost: the depositor or the legal heir may claim the amount from the bank at any time afterwards, with interest, and the bank then recovers it from the fund.
Option A, the Consolidated Fund of India, is the government's main account into which its revenues flow and has no connection with unclaimed deposits. Option C, the National Investment Fund, holds the proceeds of disinvestment of public sector undertakings. Option D, the Financial Inclusion Fund, is maintained with NABARD for developmental work in unbanked areas, which makes it a plausible but wrong option.
Read the full article: Bank Accounts, Deposits and KYC Rules for Exams
Practice Questions
View allWhich type of bank account pays no interest to the holder but allows an overdraft facility and an unlimited number of transactions?
- A.Savings deposit account
- B.Current account
- C.Recurring deposit account
- D.Fixed deposit account
Show answer
A current account is meant for traders, firms and companies that need to receive and pay money many times a day.
Read the full explanation →The KYC norms that banks in India follow are framed mainly under which law?
- A.Banking Regulation Act, 1949
- B.Prevention of Money Laundering Act, 2002
- C.Negotiable Instruments Act, 1881
- D.Foreign Exchange Management Act, 1999
Show answer
Know Your Customer rules exist to stop the banking system being used to launder the proceeds of crime or to finance terrorism.
Read the full explanation →Which of the following is NOT an officially valid document for completing KYC at a bank?
- A.Passport
- B.PAN card
- C.Voter identity card issued by the Election Commission
- D.Driving licence
Show answer
The list of officially valid documents in the KYC rules is closed and contains the passport, the driving licence, proof of possession of an Aadhaar number, the voter identity card issued by the Election Commission, a job card issued under MGNREGA and signed by an officer of the state government…
Read the full explanation →What is the chief feature of a Basic Savings Bank Deposit Account?
- A.It pays a higher rate of interest than other savings accounts
- B.It requires no minimum balance to be kept
- C.It can be opened only by senior citizens
- D.It allows an unlimited overdraft
Show answer
The Basic Savings Bank Deposit Account replaced the earlier no-frills account as the vehicle of financial inclusion.
Read the full explanation →How often must KYC records of a high risk customer be updated under the Reserve Bank's KYC Direction?
- A.Once in two years
- B.Once in five years
- C.Once in eight years
- D.Once in ten years
Show answer
Banks classify customers as low, medium or high risk when the account is opened, on the basis of identity, social and financial standing and the nature of the expected business.
Read the full explanation →