Class: 8th

Lesson: 5
Bank and Banking Activities

Let us check our knowledge about banks:

1. Banks that are included in the second schedule of the RBI of India Act, 1934 are known as:-
a) Scheduled Banks b) Non-Scheduled Banks
c) Commercial Banks d) Development Banks
Ans: Scheduled Banks
2.___________ handle all kinds of banking business, generally financing trade and commerce.
a) Scheduled Banks b) Non-Scheduled Banks
c) Commercial Banks d) Development Banks
Ans.Commercial Banks
3._______________were assigned the critical role of delivering agriculture and rural credit.
a) Co-operative Banks b) Commercial Banks
c) Regional Rural Banks d) Development Banks
Ans: Regional Rural Banks
4.____________banks are owned and controlled by the government.
a) Public Sector b) Private Sector
c) Central d) Exchange
Ans. Public Sector
5. _______________are foreign-in origin and have their head offices in the country of origin.
a) American Banks b) Foreign Banks
c) Domestic Banks d) State Banks
Ans. Foreign Banks
Let us check our knowledge about cheque:
1. A_______________ is a document that orders a payment of money from a bank account.
a) Demand Draft b) Fixed Deposit
c) Cheque d) Debit Card
Ans. Cheque
2. The______________helps route the cheque to where the funds exist.
a) MICR Code b) IFSC Code
c) Account number d) Cheque number
Ans. MICR Code
3. The_____________ is an 11-character code for identifying the bank and branch in which an
account is held.
a) MICR Code b) IFSC Code
c) Account number d) Cheque number
Ans. IFSC Code
Let us check our knowledge about Bank accounts:
Answer the following questions:
(i) Name the different types of bank accounts.
Ans:- Banks generally have four types of accounts:
1. Current Account
2. Savings Account
3. Recurring Deposit Account
4. Fixed Deposit Account
(ii) Name the account opened by a business to run the business on a daily basis.
Ans. Current Account
(iii) Name the most popular deposit account for individuals.
Ans. Savings Account
(iv) Name a benefit of a savings bank account over a current account.
Ans. The benefit of a savings bank account over a current account is that money in a saving
bank account earns interest.
(v) Opening a recurring deposit account is suitable for certain types of people. Explain this.
Ans. Recurring Deposit Accounts are popularly known as RD accounts. They are opened by
people who want to save regularly for a certain period and earn a higher interest rate than the
Savings account offers. These account are opened for a special purpose such as college
education or to buy a car or to save for the future.
(vi) Why is one type of a bank account called a fixed deposit account?
Ans. Because they are opened for a particular fixed period (time) by depositing a particular
amount (money). The period for fixed deposits ranges between 7 days and 10 years. The
money deposited in this account cannot be withdrawn before the fixed period expires.
(vii) At what age a minor can get his/her account opened in a bank and of what type?
Ans. According to Reserve Bank of India rules, minors above the age of ten years can open
savings accounts in banks.
Which choice of the following words is correct?
(1) Which account should one open to run a business?
a) Current Account b) Recurring Deposit Account
c) Savings Bank Account d) Fixed Deposit
Ans. Current Account
(ii) A________________ encourages people to save money and deposit their savings.
a) Current Account b) Recurring Deposit Account
c) Savings Bank Account d) Fixed Deposit
Ans. Savings Bank Account
(iii) A___________is opened by those who wants to save regularly for a certain period of time.
a) Current Account b) Recurring Deposit Account
c) Savings Bank Account d) Fixed Deposit
Ans. Recurring Deposit Account
(iv) The account that is opened for a particular fixed period by depositing a particular amount
is known as__________________ .
a) Recurring Deposit Account b) Fixed Deposit Account
c) Current Account d) Savings Account
Ans. Fixed Deposit Account
(v) The rate of interest paid for fixed deposit_______________.
a) Varies according to the period and amount
b) Is same in all banks
c) Differs from bank to bank
d) Both (a) and (c)
Ans. Both (a) and (c)
Let us check our knowledge about New Banking Techniques.
(1) What is RTGS?
Ans. Real Time Gross Settlement (RTGS) is a system through which electronic instructions can
be given to transfer funds, from the account of a customer in one bank to the account of a
customer of another bank. As the name suggests, funds transfer between banks takes place on
a 'real time' basis. Therefore, money can reach the beneficiary instantaneously and the
beneficiary's bank has the responsibility to credit the beneficiary's account within two hours
from the time the transaction is initiated.
(ii)What is NEFT ?
Ans. National Electronic Funds Transfer or NEFT is a system whereby anyone who wants to
make payment to another person / company can approach his bank and give instructions/
authorisation to transfer funds directly from his account to the bank account of the receiver /
beneficiary.
(iii) What is Internet banking?
Ans. Internet banking allows individuals to carry out banking activities from anywhere and at
any time via the Internet without visiting a bank branch. Through online banking, individuals
can access their account information anytime and perform all kinds of routine transaction such
as money transfers, balance inquiries and bill payments.
(iv) What is Mobile banking?
Ans. Mobile banking refers to the use of a cellular device to perform banking activities such as
monitoring account balances, transferring money and paying bills. Like online banking a
customer needs to register with the bank to avail of mobile banking facilities. Until recently
most of the mobile banking facilities were offered via SMS and were known as SMS banking.
(iv) List the various details that should be furnished to the bank at the time of requesting for
RTGS facility.
Ans. The following details should be given to the bank while doing RTGS:-
1. Receiver’s Name
2. Bank Account number
3. Account Type
4. Bank Name
5. City and Branch Name
(v) What is the minimum amount that can be transferred through RTGS ?
Ans. At least two lakhs
(vi) What is the minimum amount that can be transferred through NEFT ?
Ans. There is no minimum or maximum limit for transferring money through NEFT.
(vii) What are the other names for Internet banking ?
Ans. Internet banking is also known as e-banking, web banking, virtual banking etc.
(viii) What is the difference between RTGS and NEFT?
Ans:- RTGS: RTGS is a payment system for large amounts in which money is transferred
instantly in which the minimum amount at the time of transaction is two lakhs.
NEFT: There is no minimum or maximum limit of transferring amount through NEFT. It may
take up to 30 minutes for the money to reach the system.

Prepared by: Ranjit Kaur (S.S. Mistress) Vetted By: Neha Kansal (S.S. Mistress)
G.S.S.S.Smart School Tibber Gurdaspur SOE Landhe Ke Moga.