Important Banking Awareness Questions for Customers

Full forms and Banking Terms explained

1. MICR code consists of how many digits?
Ans: 9 digits.
(First three digits denotes city, next three digits
representing the bank and the last three digits
representing the bank branch)

2. What is the minimum limit in RTGS system?
Ans: 2 lakhs (there is no upper limit in RTGS)

3. What is full form of CTS?
Ans: Cheque Truncation System

4. Under which service, customers may access their
bank account and perform basic transactions from
any of the member branch offices.
Ans: Core Banking Solution (CBS)

5. Exchange of cash flow in different currency is
known as:
Ans: Currency Swap

6. Assets or loans which stop performing after 90
days is known as:
Ans: Non Performing Asset (NPA)

7. Who controls the Monetary Policy in India?
Ans: RBI (Reserve Bank of India)

8. Which card is
issued by NPCI (National Payments Corporation of
India)?
Ans: RuPay Card

9. Definition of Current Account deficit:
Ans: A measurement of a country's trade in which
the value of goods and services it imports exceeds
the value of goods and services it exports.

10. Full form IFSC –
Ans: Indian Financial System Code

11. Commercial paper can be issued for a maximum
period of:
Ans: 365 days or 1 year.

12. The Mutual funds in India follow accounting
standards laid by:
Ans: SEBI (Securities and Exchange Board of India)

13. Minimum amount for Certificate of Deposit has
been fixed at:
Ans: Rs. 1 Lakh

14. AML is a term mainly used in the financial and
legal industries. Expand the term AML:
Ans: Anti Money Laundering

15. PIN is a number allocated to an individual and
used to validate electronic transactions. Expand
PIN:
Ans: Personal Identification Number

16. What is Repo rate?
Ans: It is the rate is the rate at which RBI lends
money to the commercial banks.

17. What is Stale Cheque?
Ans: A cheque which is presented to a bank after 3
months from date of issue is considered as stale
cheque and will often not be honored for cash or
deposit at a bank.

18. What is Bancassurance?
Ans: The selling of life assurance and other
insurance products and services by banking
institutions.
19. The objective of KYC guidelines is to prevent
banks from being used, intentionally or
unintentionally, by criminal elements for money
laundering or terrorist financing activities. What is
the full form of KYC?
Ans: Know Your Customer (KYC)

20. Know Your Customer (KYC) guidelines are
issued under:
Ans: Section 35A of the Banking Regulation Act,
1949

21. In BSBDA (Basic Savings Bank Deposit Account)
the credits in a financial year does not exceed
rupees:
Ans: Rs. 1 lakh

22. In BSBDA (Basic Savings Bank Deposit Account)
the balance at any point of time does not exceed
rupees:
Ans: Rs. 50,000

23. In BSBDA (Basic Savings Bank Deposit Account)
the withdrawals and transfers in a month does not
exceed rupees:
Ans: Rs. 10,000

24. At which rate RBI give loans to commercial
banks?
Ans: Repo rate

25. Full form of CASA:
Ans: Current Account Saving Account

26. In what denominations Commercial Paper (CP)
can be issued?
Ans: Rs. 5 lakh

27. What is the minimum denomination of Treasury
bills to issue in India?
Ans: Rs. 25,000

28. Who cannot issue Certificate of Deposit (CD)?
Ans: Regional Rural Banks (RRBs) and Local Area
Banks (LABs)

29. Expand ASBA:
Ans: Application Supported by Blocked Amount

30. Depositor Education and Awareness Fund
(DEAF) is maintained with:
Ans: RBI

31. Cash Reserve Ratio (CRR) is the amount of
funds that the banks have to keep with:
Ans: Central Bank (RBI)

32. What is the maximum amount per transaction
NEFT limit for cash-based remittances to Nepal?
Ans: Rs. 50,000

33. What does CAR stands for?
Ans: Capital Adequacy Ratio

34. IFSC code consists of _____ alpha numeric
code.
Ans: 11 digits
(The IFSC is an 11 digit alpha numeric code, with
the first four digits identifying the bank, fifth is
numeric (kept 0) and the last six digits represent
the bank branch.)

35. When money is lent or borrowed for one day or
on overnight basis it is known as:
Ans: Call Money

36. When money is lent or borrowed for between 2
days and 14 days it is known as:
Ans: Notice money

37. When money is lent or borrowed for a period of
more than 14 days, it is known as:
Ans: Term money

38. Treasury Bills and Certificate of Deposit are
considered as the ____instruments.
Ans: negotiable money market

39. Commercial Paper (CP) is an unsecured money
market instrument issued in the form of a _____.
Ans: Promissory note.

40. What is the upper limit in Public Provident Fund
(PPF)?
Ans: Rs. 1.5 lakhs

41. As per RBI guidelines, with effect from April
1, 2012, the validity period of Cheques, Demand
Drafts, Pay Orders and Banker's Cheques is _____.
Ans: 3 months

42. What is the time limit for an asset or loan to
be declared as Non-Performing Asset?
Ans: 90 days

43. Deposit Insurance and Credit Guarantee
Corporation (DICGC) does not cover:
Ans: Primary co-operative societies

44. RBI measure to liquidate the market:
Ans: Repo rate.

45. Full form of EFT:
Ans: Electronic Fund Transfer

46. Fastest mode of transaction:
Ans: RTGS

47. Alphanumeric code on cheque is known as:
Ans: Indian Financial System Code (IFSC)

48. Bank pays interest on savings account?
Ans: Daily Basis

49. What is the loan limit for education under
priority sector for studies abroad?
Ans: Rs. 20 lakh
(Loans to individuals for educational purposes
including vocational courses upto Rs.10 lakh for
studies in India and Rs. 20 lakh for studies abroad
are included under priority sector.)

50. RuPay Card is an Indian version of credit/
debit card is launched by which organization:
Ans: NPCI (National Payments Corporation of India)

51. Fixed Deposit (FD)Account may be opened for a
minimum period of:
Ans: 7 days

52. What is the minimum amount required to open
a Fixed Deposit (FD)?
Ans: Rs.1000

53. The Banks has converted all ‘no - frills'
accounts’ into:
Ans: Basic Savings Bank Deposit Accounts

54. 'Pradhan Mantri Jan Dhan Yojana' is a Scheme
for:
Ans: Financial inclusion

55. How much overdraft facility to be provided in
'Pradhan Mantri Jan Dhan Yojana' scheme?
Ans: Rs. 5,000

56. In CBS, C stands for:
Ans: Core

57. In CRAR, A stands for:
Ans: Assets (Capital to Risk Weighted Assets Ratio)

58. IMPS - Immediate Payment Service is an
interbank electronic instant mobile money transfer
service through mobile phones in India, the facility
is provided by:
Ans: NPCI (National Payment Corporation of India)

59. The Central Bank of India has adopted new
measure of inflation:
Ans: Consumer Price Index (CPI)

60. When a cheque is torn into two or more pieces
and presented for payment, such a cheque is
called:
Ans: mutilated cheque

61. How much fee charged to file a complaint
under Banking Ombudsman? Ans: Banking
Ombudsman does not charge any fee

62. Who is the appellate authority in Banking
Ombusdsman?
Ans Deputy Governor of RBI 63. If any customer is
not satisfied by the decision of Banking
Ombudsman, customer can appeal against the
award before the appellate authority within how
many days from the date of receipt?
Ans 30 days

64. ATMs or Cash Dispensing machine which are
owned and operated by Non-Banking Financial
Companies are called:
Ans: White Label ATMs.

65. RBI gave in-principle for Banking license to:
Ans: IDFC and Bandhan

66. Minimum capital requirement for new banks in
private sector is:
Ans: Rs. 500 crore

67. A Non-Banking Financial Company (NBFC) is a
company registered under the:
Ans: Companies Act, 1956

68. Minimum capital requirement for Non-Banking
Financial Company (NBFC) is:
Ans: Rs. 500 crore

69. The NBFCs are allowed to accept/renew public
deposits for a minimum period of:
Ans: 12 months ( and maximum period of 60
months)

70. A NBFCs cannot offer interest rates higher
than the ceiling rate prescribed by RBI? What is
the present ceiling?
Ans: 12.5 per cent per annum

71. Minimum capital requirement for Foreign banks
that want to set up operations in India is:
Ans: Rs. 500 crore

72. What is the minimum paid-up capital
requirement of both small banks and payments
banks in India?
Ans: Rs. 100 crore

Why you should not laminate property papers for Bank Loan

Forwarded as received.......

Please read till the end : 👇
CAUTION : Laminating Property Documents & Other Certificates
 
Most of us are tempted to get the documents laminated so as to preserve them.

"We had our property documents laminated for their safe keeping. This was years ago.
Recently we tried for a bank loan by mortgaging the property docs. At the final stage of verification of original documents, the Bank Lawyer flatly refused even to look at the documents saying that they are laminated. The reason being that, since they are laminated, the original documents cannot be differentiated from the colour photocopies. Appears, it was a hard learned truth as the Bank was duped by the colour photocopies of the original documents, duly laminated and presented.

We were asked to get the documents de-laminated ! else forego the loan.

The concept of de-laminating was something like "OMG, Is it possible ?" to us. We started searching those who can de - laminate documents.

The internet gave us the address of one at Lahore in Pakistan. That apart,  we got another person in Bangalore who quoted Rs 3500 per document, with 20 documents on hand, we were looking at cool 70 K for de -lamination. We were about to be robbed.

At last we could find some one at Mysore who agreed for Rs 500 per paper. We rushed to Mysore from Bangalore, got them done. The whole experience has left us with lot of knowledge.

We have a lesson here. Pl do not laminate the original property documents. The Banks will not touch them. No loans can be taken on them. Even the buyers would hesitate at the time of sales. Further, Please be careful while receiving such laminated documents in a transaction. Whilst browsing, I have also come across where the people have run into Visa problems while submitting the laminated mark sheets, degree certificates."

Do pass it to other friends too.....

How to claim Interest Subsidy in Education loans from Banks

According to vidya scheme by Central government one can claim Interest Subsidy by submitting two documents at the branch where you have availed education loan

First know your eligibility for availing Interest Subsidy:

1. Your family income should be less than Rs. 450000.
2. Loan period should be in moratorium which means course should not have finished.

Moratorium period is course period + 1 year if the student have not got the job or course period + 6 months if the student has got the job within 6 months of completing the course.

3. Course should be in India and technical course which means from university recognized by UGC or Indian Government. Students studying abroad are not eligible.

Documents required to be submitted at the branch once during the tenure of the loan or validity of the documents.

1. Agreement executed with Rs. 200 e-stamp paper executed between you and bank

2. Income certificate given by Tahsildar should be submitted in original to the loan branch

All the formats for above documents are available at all branches which you need to execute with concerned authorities.

Best Saving Bank Account Product in India

People often try to find out which bank they should opt out for opening Saving Bank Account because everybody doesn't enjoy Salary Account.

One should look for following services or features in Saving Bank Account :

1. Time taken to open an account - Most of the Banks have their mechanism and this is the information vary from branch to branch.

2. Minimum Balance and Penalty - This is where SBI CANARA BANK PNB beat Private Banks which has strict minimum balance and huge penalties condition

SBI charges Rs. 50 per month whereas HDFC can cut upto Rs. 300 exclusive of taxes.

3. Net Banking - Most PSU banks you have to apply for net banking separately whereas Private gives Net Banking along with account opening which can be frustrated

4. Charges in Non Home Branch - Private Banks take lot of charges if you are doing transaction in different branch even SBI has started taken charges but bank like CANARA BANK does it with no charges.

OUR RECOMMENDATION : CANARA BANK 

1. Quick Opening

2. No Charges at NON HOME BRANCH 

3. GOOD NETBANKING feature which you can start yourself no need to visit branch

4. Min Balance : 1000 & Penalty of Rs. 30 per month for not maintaining minimum balance

How to identify Bank name in CIBIL report & How one can improve his CIBIL Score?

Understanding CIBIL as Banker or Applicant

How customer can improve his CIBIL Score?

After extracting CIBIL report of any Applicant/Borrower/Guarantor ,there are number of loan accounts/ credit card/same accounts in borrower as well as guarantor’s capacity/Gurantor‘s detail as Joint holders/ same account multiple times is reflected.

In some accounts there are showing some overdue amount, settled/write off status .

When we ask/seeking clarification from applicant for these, applicant says that he/she don’t know about this or don’t know the bank/financial institution details.

For these accounts applicant has to request to CIBIL for informing lender’s detail.

Now you may also get the details of the same without writing to CIBIL.  For these problem, CIBIL has provided , “SELF SERVICE PORTAL” free of cost on home page of website www.cibil.com,
Process to be followed:

1. Click on 1st Option i.e. "Identify the lender name and loan account number of an account on your credit report"

2. Enter the CONTROL NUMBER of CIBIL report extracted/provided by bank, enter captcha image & click on submit.

3. Provide your personal & Identification details in the next page as mentioned in the CIBIL report provided by the Bank & click on submit.

4. Thereafter provide the account details as specified in your report & click on "Submit".

5. A message will be displayed informing details of your account & enquiries requested has been emailed on the email Id provided in the online application form.

AFTER GETTING THIS INFORMATION, APPLICANT PROCEEDS FOR RESOLVING THE ISSUE.

Regards

Latest Income Tax Rules India at a Glance 2015

A TO Z OF INCOME TAX PROVISIONS AT A GLANCE:

1. Detailed information of Income Tax is available on www.incometaxindia.gov.in

2. As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.

3. Salaried person must obtain Form 16 from his Employer Every Year.

4. Income Tax Return should be filed by considering Form 16 and other Income.

5. Transport Allowance is exempt up to Rs.1,600 per month.

6. 30% Standard deduction is available on Income from House Property.

7. Income to be considered as deemed let out on second House property.

8. For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.

9. Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs.150,000/-.

10. Tax Audit is compulsory if sales turnover exceeds Rs.1 crore in case of business.

11. Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.

12. If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.

13. The Due Date for Tax Audit and income Tax Return is 30th September.

14. Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 2014-15.

15. Accurate Stock Valuation should be done on 31st of March.

16. Cash payment should not be made to a person in single day exceeding Rs.20,000.

17. Cash Payment limit for Transporters is Rs.35,000/-.

18. Loans, deposits and Immovable Properties transactions should
not be carried out above Rs.20,000 in cash.

19. Business loss can be carried forward to Next 8 Years.

20.  Tax Audit applicable assesses should deduct TDS on particular transactions.

21. TDS should be made on the date of Credit or Payment basis of whichever is earlier.

22. TDS payment should be made on or before 7th day of Next Month.

23. TDS Returns are to be filed Quarterly.

24. TDS returns can be revised any number of times.

25. TDS should be deducted and paid if applicable.

26. If TDS is not deducted then deduction of 30% of Expenditure
is not allowed.

27. Late filling of TDS return attracts late filing fees of Rs.200 per day.

28. Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.

29. Generally Long Term Capital Gains is taxable @ 20%

30. STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.

31. Short Term Capital Gain is Taxable @ 15% if STT is paid.

32. Capital Gain on Immovable Properties is chargeable at Stamp
Duty Value or Selling Price whichever is higher.

33. Dividend received from domestic company is exempt from Tax.

34. Agricultural Income is exempt from Tax.

35. Gifts received form stranger of an Amount exceeding Rs.50,000 is taxable.

36. Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.

37. Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1,50,000.

38. Deduction of Medical Insurance Premium is available up to Rs. 25,000.

39. Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.

40. Deduction limit of Interest earned on Saving Accnt is up to Rs.10, 000.

41. Income earned by a Minor child is clubbed in the hands of Parents.

42.  Every Taxpayer should verify his Form 26AS.

43. Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.

44. Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.

45. Basic Exemption Limit for individuals for FY2015-16 is Rs.2,50,000.

46. Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs.3,00,000.

47. Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs.5,00,000.

48. Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.

49. 12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.

50. Income Tax Return should be filed if Income exceeds Basic Exemption Limit.

51. 30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.

52. For Companies – Minimum Alternate Tax and for other Assesses
– Alternate Minimum Tax rate is 18.5%.

53. Details of all Bank Accounts have to be given in Income Tax return.

54. Passport number is required to be given in Income Tax return.

55. Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.

56. If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs.2,000/- is available in Tax.

57. Aadhar Card No. is required to be mentioned in Income Tax return.

58. E-filling of return is compulsory if income exceeds Rs. 5 lakhs.

59. In Income Tax, E-filling of return can be done for Previous 2 Years only.

60. PAN Card is essential for Taxpayer and it should not be used as Id Proof.

61. From FY 2014-15 Depreciation is to be calculated as per New Companies Act.

62. Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs.20 Crores.

Hope you will find it useful.

How to avail Education Loan from Banks & Documents Required

To avail education loan is easy especially if your requirement amount is below 4 lacs.

Following are the details regarding security which is common to every bank and no bank can change it as it is set by RBI to ensure good service to citizens. Please ref

https://rbi.org.in/scripts/NotificationUser.aspx?Id=369Security

Particular	Security
Upto Rs. 4 lacs loan amount	Only Parent/ Guardian as co-borrower
Above Rs. 4 lacs to Rs. 7.50 lacs loan amount	Parent/ Guardian as co-borrower and Collateral security in the form of suitable third party guarantee*. *Third Party Guarantee can be replaced with Parent/Guardian as co-borrower provided the Gross Annual Income of Parent/Guardian (co-borrower) as given in latest Income Tax Return is 3 times of the loan amount.
Above Rs. 7.50 lacs loan amount	Parent/ Guardian as co-borrower and tangible collateral security

In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Documents Required (List is common to every bank including private banks)

• Original Letter of admission

• Completely filled in Loan Application Form

• 2 passport size photographs

• Original Statement of cost of study which is FEES STRUCTURE given by college

• PAN Card of the student and Parent/ Guardian not mandatory for student in most of the bank 

• AADHAR Card of the student and Parent/ Guardian

• Proof of identity (Driving Licence/Passport/Aadhar/ any photo identity)

• Proof of residence (Driving Licence/Passport/Electricity bill/Telephone bill)

• Student/Co-borrower/ guarantor's bank account statement for last 6 months

• IT return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee) or Income certificate given by STATE government to poor people whose children want to pursue higher education

• Brief statement of assets & liabilities of Parent/ Guardian/ other co-borrower

• Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/ other co-borrower

For people who doesn't earn above 4 lacs can avail interest subsidy from government time to time.

Every bank need to process or reject education loan in 15 days as time line set by most of the banks and closely monitored by RBI.