1. BANK LIABILITY PRODUCTS

2. contents Savings A/c Current A/c Modes of operation Term Deposit
NRE/NRO/FCNR
SAFE DEPOSIT

3. Asset and liability
In households, we store our excess money with banks 9ref next fig.). Sometime one of us might need money which we might not have. We then approach a bank for borrowing money. Thus for lending us money bank charges some additional percentage of money along with the principal amount. Banks don’t have their own money and so they lend from the deposited money. The money deposited which lies with the bank earns another interest, paid from the borrowers interest expense. Therefore the deposited money is the banks liability as interest is paid on that sum to the depositor. On the other hand the loaned out money becomes the asset for the bank and earns interest.

4. Your / Depositors money
HOW BANKS CREATE MONEY
Bank
Borrowers loan
Loan interest
Deposit interest
Your / Depositors money
ASSET
LIABILITY

5. Types of liability Demand liabilities are repayable on demand.
Savings bank, current are examples Of demand liability.
Time liabilities are liabilities which are repayable after a specified period. Term deposits are such.

6. Minor account ACCOUNTS FOR SAVINGS Age above 10yrs
Account to be opened with association of a guardian
School ID required
Operation needs to be done by the guardian till minor attain 13 yrs of age

7. Joint Account HUF Account opened by two people or more
Operation as either equally, or survivor, former, both jointly
Bank doesn't have right to set-off
Stop payment can be made by any of the holders
HUF
The primary holder is the karta
HUF special PAN card is required for a/c opening
While the karta is supreme the major male coparceners are also allowed to operate

8. Partnership firm a/c: Limited Companies: Trust Account
This a/c is opened to share profits of a business done by all or any one of them.
All partners need to operate account jointly
Demise of a partner will bring to closure
Limited Companies:
Can open a/c as a legal entity in form of public, private or govt.
Authorized signatories are critical here
Death of any opening member does not lead to stopping operations
Trust Account
The trust deed needs to be examined to understand the powers of the trustees
Insolvency of a member of the trust is not insolvency of the trust itself
All members need to operate jointly

9. Opening account of co-operative societies
The account should be opened with the signatures of three persons ie: presidents/ secretary / treasury where in presidents sig. is essential.
Fund can be with any bank approved by the registrar
Accounts for govt. and public bodies
The main functions are: paying, receiving, collecting, and remitting money on behalf of the govt. dept
There are no overdraft facicliities

10. HOW INTEREST IN SAVINGS IN ACCOUNT IS CALCULATED
Prevailing rate of interest:
The rate of interest at present is 3.5%.
Interest calculation method:
Savings bank accounts are low cost running accounts opened for saving purpose. In savings bank a/c interest is calculated on monthly products. Product is the amount on which interest is calculated. In SB a/c, product for a particular month is the minimum balance between 10th and last day of the month. The formula for calculating interest is:
Product X Rate of Interest
= INTEREST
12 X 100

11. Transfer of account should be followed with given request
Mode of operation
An Account may be operated in the names of an individual in his/her own name or two or more persons in their joint names
 Bank may send relevant material through courier or post from time to time to the mailing address furnished by the Customer
The Customer is / are expected to examine the entries in the Account statement on receipt, 
The Customer shall maintain the Account with a minimum balance as prescribed by Bank
Customers who attain the age of 60 years are required to declare so to avail the benefits offered
Transfer of account should be followed with given request
All account details should be safely maintained by the customer

12. ACCOUNT OPERATING INSTRUMENTS
Checks and drafts
Debit and credit cards
Phone and internet banking
ECS, standing instruction
MT,TT,TC

13. CURRENT ACCOUNT DEPOSITS
Opened for business purpose.
May be required to maintain a minimum balance
No interest is paid.
It needs a higher minimum balance to be maintained as compared to the savings account.
No restriction for withdrawals.
Charges are collected for cheque book.

14. Dormant accounts
Banks may classify an Account as an inactive if there are no customer-induced transactions for 12 months in the Account. Dormant if there are no customer-induced transactions for 24 months in the account.
Customer induced transactions includes: Transactions through cheque,Cash or cheque deposit.Withdrawal or deposit through ATM.Transaction through internet.Transaction by standing instruction, ECS and EFT.Inward/Outward bill.Mandate for crediting interest earned on Fixed deposit to Savings Bank Account.

15. Difference between current & sb
Current account
Business purpose
Charges collected for cheque book
Higher minimum balance charges
Folio charges are applied
Savings account
Saving purpose
Charges not collected for cheque book
Lower minimum balance charges
No folio charges

16. Term deposits
Deposits repayable after expiry of a fixed period say from 07 days to 120 months are classified as term deposits. Term Deposits are also called FDs and are repayable after the expiry of the specified term varying from 7 days to 120 months. FDs are repayable only after the specified term; therefore they are not as liquid as savings deposits. Therefore, the rate of interest paid on FDs is higher than the rate of interest on savings deposits.
The period is agreed upon by the Bank and the customer at the time of deposit and may be varied by mutual consent. The rate of interest is left to the banks discretion. Banks fix rates based on their operational costs, however based on guidelines from RBI.
There is no restriction to accept deposits in odd amounts. Accounts can be opened in the name of individuals, joint names, business units like partnership firms, corporate (Private and Public) societies, trust, clubs etc.

17. Term deposits available
Short term Fixed term
Standard fixed products
Reinvestment deposit
Deposit can be kept up to 120 months.
Compound interest. Principal and interest paid on maturity.
Recurring deposit
Fixed amount is deposited with monthly frequency. Penalty is charged for defaulted installment.
TDS not applicable on interest earned.
Flexi Fixed deposit
Should be linked with operative account.
Automatic sweep in & sweep out facility.

18. NRE/NRO/FCNR deposit

19. Safe Deposit Lockers
It is a facility provided by banks to their customers for safe keeping of valuables , documents etc. A locker rent charge is to be paid by the locker owner and there are two keys available one of which will be with the banker the other with the owner. RBI permits banks to take actions against non payment of rent or locker remaining un-operational for a considerable period of time. RBI also instruct banks to open lockers classifying the risk profile of the customer based on KYC. There may be more than one owner for joint lockers owners.

20. Locker rents