Banking

What is Banking?

Banking is the practice of managing money and other financial resources. It involves accepting deposits, making loans, investing, and providing other financial services to individuals, organizations, and businesses.

Moreover, banking is about connecting customers with their money - helping them grow their wealth safely or use it when necessary - while also playing an essential role in keeping the global economy balanced. Modern banking has changed dramatically over time due to advances in technology such as mobile banking applications allowing customers quick access to their accounts on-the-go.

Who regulates banks?

The banking sector is regulated by the Reserve Bank of India (RBI), which was established in 1935 as per the provisions of the Reserve Bank of India Act, 1934. The RBI acts as a central bank and is both a regulator and supervisor of the banking industry in India.

The primary objective of the RBI is to maintain price stability and ensure that financial institutions operate in a safe, sound, and stable manner. It is also responsible for formulating monetary policy, managing foreign exchange reserves, issuing currency and regulating inter-bank transactions.

In addition, it regulates all commercial banks such as private sector banks, public sector banks and foreign banks operating in India. Furthermore, it also supervises state cooperative banks and urban cooperative banks.

What are the different types of banking?

The four main types of banking prevalent in India are Central Bank, Cooperative Banks, Commercial Banks and Regional Rural Banks (RRB).

• The Central Bank is the apex body responsible for regulating the monetary policy of the country.
• Cooperative Banks are owned by their members who have pooled together their resources to form the bank. These banks grant both secured and unsecured loans with low interest rates to promote entrepreneurship among its members.
• Commercial Banks provide banking services to individuals, businesses, corporations and government organizations alike.
• Regional Rural Banks (RRBs) were created in 1975 to provide dedicated banking services in rural areas to ensure economic development in those regions by providing credit at reasonable rates.

What are the different types of bank accounts?

The different types can be divided into the following broad categories: savings accounts, current accounts, fixed deposit accounts, and recurring deposit accounts.

Savings Accounts: Savings accounts are for individuals who wish to save their money for a rainy day or for future use.

Current Accounts: Current accounts are mainly used by businesses and organizations as they offer more flexibility with higher withdrawal limits than savings accounts.

Fixed Deposit Accounts: Fixed deposit accounts allow individuals and businesses to invest a lump sum amount of money at a fixed rate of return over an agreed period of time.

Recurring Deposit Accounts: Recurring deposit (RD) offers customers the ability to save small amounts every month at a slightly higher rate than what would be earned from a regular saving or current account.

What are the requirements for opening a bank account?

Opening a bank account requires a person to provide certain documents such as valid Photo ID and Address Proof. The most commonly accepted proofs include a PAN card, Aadhar or UID card, Voter Id card and Passport. A copy of any of these documents is typically enough to open an account in most Indian banks.

In addition, customers need to submit two recent passport-sized photographs along with the application form. For minors below 18 years of age, they need to provide proof of birth or school leaving certificate as an identity proof.

What is a direct deposit?

A direct deposit is a secure, automated electronic transaction from a bank or employer that deposits money directly into your account. This type of payment method eliminates the need for a paper check, allowing funds to be deposited quickly and securely without the hassle of waiting for it to arrive in the mail. Direct deposits are more reliable and efficient than paper checks, as there is no risk of them being lost or stolen.

How to generate EVC through net banking?

Electronic Verification Code (EVC) is a unique code that is used to verify the identity of a taxpayer while filing their income tax returns online. To generate EVC through net banking, you will need to follow these steps:

1. Login to your net banking account.
2. Go to the "Online Tax Filing" section or the "e-Services" section, depending on the bank you are using.
3. Select the option to generate EVC.
4. Enter the required information, such as your PAN (Permanent Account Number) and the tax assessment year.
5. Click on the "Generate EVC" button.
6. You will receive the EVC on your registered mobile number or email address.
7. Use this EVC to verify your identity and complete the process of filing your income tax returns online.

Note: The steps to generate EVC through net banking may vary depending on the bank you are using. It is recommended that you check with your bank for detailed instructions.

Can an NRI open a Bank account in India?

Yes, an Non-Resident Indian (NRI) can open a bank account in India. NRIs are allowed to open various types of bank accounts in India, such as savings accounts, current accounts, and fixed deposit accounts. However, there are certain rules and regulations that NRIs need to follow while opening a bank account in India.

What are the requirements to open an NRI bank account in India?

To open a bank account in India, an NRI will need to provide certain documents, such as their passport, overseas address proof, and proof of Indian origin. They will also need to provide a copy of their visa and work permit, if applicable. Some banks may also require NRIs to provide a local reference or a relative's reference in India.

How to stop a cheque payment?

There are two ways to stop a cheque payment: by canceling the payment or by submitting a stop payment order. Canceling the payment requires you to contact the drawee bank and ask them to cancel the cheque while submitting a stop payment order requires you to submit an application requesting for your cheque payment to be stopped.

In both cases, certain documents must be submitted in order for the request to be accepted. For cancelling the payment, you must provide proof that you are the drawer of the cheque and all details associated with it (including date of issue, name of payee, amount stated on cheque) as well as provide any other relevant information required by the bank.

Whereas for submitting a stop payment order, you must submit a properly filled out Stop Payment Order Form along with identity proof and any other related documents that may be requested.

What are the annual charges of a debit card?

In India, the annual charges of debit cards vary depending on the type of card and issuing bank. Generally, most debit cards come with no annual fee whatsoever. However, those that do carry a fee usually cost anywhere roughly upto Rs 500/- per year.

How to check the account statement?

The easiest way to do this is by signing into your online banking account if your bank offers one. Once you log in, you will be able to view current and past transactions as well as recent deposits and withdrawals.

If you don't have an online banking account, or prefer to get a physical copy of your statement, you can contact the customer service desk of your bank and request for a statement. They will mail you the statement immediately or within days after your request, which includes all financial activity in the last month or so.

Alternatively, most banks allow their customers to download their statements directly from their website in PDF format. This is usually available under the “statements” section of their websites. This method requires less manual effort than requesting a mailed paper statement but may require more clicks on a webpage before getting access to the document itself.