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
Correct answer
Explanation
The correct answer is B, it requires no minimum balance to be kept. The Basic Savings Bank Deposit Account replaced the earlier no-frills account as the vehicle of financial inclusion. It can be opened by any person who satisfies the KYC rules, needs no minimum balance, and comes with a free ATM or debit card and a fixed number of free withdrawals every month, and the bank cannot charge a penalty for a low balance. A holder of such an account may not keep another savings account in the same bank.
Option A is wrong because the interest rate is the same as on an ordinary savings account in that bank. Option C is wrong because there is no age restriction; the account is open to all, and the Jan Dhan accounts are of this type. Option D is wrong because no overdraft comes automatically, though a small overdraft is allowed to eligible Jan Dhan account holders after satisfactory operation.
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
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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
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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
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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 →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
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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 →Deposits in a bank in India are insured by the DICGC up to what amount for each depositor in each bank?
- A.Rupees one lakh
- B.Rupees two lakh
- C.Rupees five lakh
- D.Rupees ten lakh
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The Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the Reserve Bank of India set up in 1978, insures deposits in commercial banks, regional rural banks, local area banks, payments and small finance banks and cooperative banks.
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