Professional Documents
Culture Documents
2205.
1. Define the terms Bank, Banker and Banking. Distinguish between
brunch banking and unit banking.
Ans:
Bank:
J.C.Wood: Bank is the lender of money and loan.
Prof Sayers: A bank is the institutions whose debts are commonly accepted in
settlement of other people debt.
R.P.Kent: A bank is an institution the principle function of which is to collect the
unutilized money of the people and to lend it to others.
Banker:
Dr. Hart: A Banker is one who in the ordinary course of his business honors
cheque drawn upon him persons from and for whom he received money on
current accounts.
H.P. Sheldon: The function of receiving money from his customers and repaying
it by honoring their cheque as and when required is the function above all other
functions which distinguishes a banking business from any other kind of business.
Banking:
Indian company Act 1949, Section-5(1): Banking means the accepting, for the
purpose of lending or invests of deposits or money from public, repayable on
demand or otherwise, and withdraw able by cheque, draft, order or otherwise.
Oxford Dictionary Of Finance and Banking: Banking means the activities
undertaken by banks, this includes personal banking (non- business customers),
and commercial banking ( small and medium- sized business customers), and
corporate banking ( large international and multinational corporations).
Distinguishes between unit banking and brunch banking:
Area Of
Unit Bank.
Brach Bank.
Difference.
1. Definition.
In the unit banking system, the
Brunch banking is a system where
banking operations are carried
the banking business is carried on
through a single office and
by single bank with a network of
confined to a particular area.
branches throughout the length
and breadth of the country.
2. Formation
Formation procedures are smile
Formation procedures are
procedures.
and easy.
competently complex are lengthy.
3. Origin
United States Of America is the
United Kingdom is the origin of
Introduction.
origin of united banks.
branch banks.
4. Ownership
It is organized as sole
It is operated all over the world.
proprietorship, partnership or
private limited company.
5. Scope of
One particular office and limited
Different reasons of the country as
operation.
area.
well as foreign country.
6. Overhead
Administrative and other
Overhead expenditure is
Banking.
2205.
expenditure
Deposit banking.
Investment Banking.
Merchant banking.
Mixed banking.
Banking.
2205.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
Capital formation.
Industrial and Agricultural development.
Consortium financing.
Infrastructure development.
Services sector financing.
Import and export financing.
Export trade financing.
Internal trade financing.
Financing agricultural and rural development.
Remittance of fund.
Spread of Banking Habit.
Employment generation.
Credit creation.
Entrepreneurship.
Banking.
2205.
A merchant bank may be considered as an institution which, depending upon the
regulatory environment in the country of operation, concentrates its operations on all or
most of the following activities:
Banking.
2205.
Ans:
Central bank controls the money market and the banking system of a country. Central
bank is the only bank which issue note and reserves the foreign exchange.
Commercial banks of a country make profits by giving loans. But when the bank is
unable to collect the loan then bank faces the money crisis. In this situation when
commercial bank fails to collect money it goes to the central bank. The central bank acts
as the lender of last resorts.
According to Gordon and NatarajanWhen commercial banks are not able to secure financial accommodation from other
sources, then as a last resort, they can approach the central bank for necessary facilities.
According to HawtreyThis essential duty of the central bank as the lender of last resort is to make good storage
of each among the competitive banks.
According to S.VarshneyThe central bank assumes the responsibility of meeting directly or indirectly all
reasonable demands for accommodation by commercial banks in times of difficulties and
crisis.
Commercial Bank.
Central Bank.
Banking.
2205.
Differences.
1. Formation.
2. Ownership
3. Objective
4. Number
5. Brunch
6. Representative.
7. Control
8. Credit control
9. Note issue
Banking.
2205.
13. Define Customer.
Ans:
The term customer of a bank is not defined by law. Ordinarily, a person who has an
account in a bank is considered its customer.
- According to Sir John Paget:
To constitute a customer there must be some recognizable course or habit of dealing in
the nature of regular banking business.
- According to Dr. Hart:
A customer is one who has an account with a banker or for whom a banker habitually
undertakes to act as such.
Broadly speaking, a customer is a person who has the habit of restoring to the same place
or person to do person to do business.
14. What are the features of a banker right of general lien?
Ans:
i.
The banker possesses the right of general lien on all the goods and securities
entrusted to him in his capacity as a banker and in the absence of a contract
inconsistent with the right of lien.
ii.
A bankers lien is tantamount to an implied pledge.
iii.
The right of lien is conferred upon the banker by the contract act.
iv.
The right of lien can be exercised on goods or other securities standing in the
name of the borrower only and not jointly with others.
v.
The banker can exercise his right of lien on the securities remaining in his
possession after the loan.
15. Particular lien vs. General lien.
Ans:
Particular lien:
A particular lien can be exercised by craftsman or a person who has spent his time, labor
and money on the goods retained.
General Lien:
A general lien is applicable in respect of all amounts due from the debtor to the creditor.
16. Give a brief occasions bank is justified in disclosing the state of his customers
account.
Ans:
i.
Disclosure of information required by law:
- Under income tax act.
- Under the companies act.
- By order of the court under the bankers book evidence act.
- Under the reserve bank of India.
- Under the baking regulation act.
- Under the gift tax act.
- Disclosure to police.
Banking.
2205.
ii.
Banking.
2205.
v.
vi.
vii.
viii.
ix.
Transaction profile.
Verification of documents.
Specimen signature.
Opening the account.
Pay-in-slip.