1. Under RBI guidelines, interest on Savings Bank Accounts is calculated on:
The average monthly balance.
The daily closing balance.
The minimum balance between the 10th and the last day of the month.
The minimum balance in the quarter.
Explanation:
Since 2010, RBI has mandated that interest on savings accounts must be calculated on a daily product basis (Daily Closing Balance) and credited at quarterly or shorter intervals.
2. If a term deposit matures on a Sunday or a holiday, the bank pays interest for:
The holiday period as well, till the actual date of payment (next working day).
Only up to the maturity date.
The holiday period as well, calculated up to the preceding working day.
No interest for holidays.
Explanation:
As per RBI/IBA rules, if a deposit matures on a non-business day, interest is paid for the intervening holidays/Sunday at the contracted rate until the next working day.
3. To avoid TDS deduction on interest income from Fixed Deposits, a customer below 60 years of age must submit:
Form 15G
Form 26AS
Form 16
Form 15H
Explanation:
Form 15G is for individuals below 60 years (and HUFs) declaring that their total income is below the taxable limit. Form 15H is for Senior Citizens (60+).
4. The "Capital Gains Account Scheme" (CGAS) is used for:
Trading in shares.
Salary credits.
Receiving foreign remittances.
Parking unutilized capital gains to claim tax exemption under Sec 54 until the new asset is purchased.
Explanation:
If a taxpayer cannot invest capital gains in a new house/bond before the tax filing due date, they can deposit it in a CGAS account to defer tax liability.
5. In a Basic Savings Bank Deposit Account (BSBDA), the bank cannot charge for:
Non-maintenance of minimum balance.
International Debit Card.
SMS alerts.
Issue of Cheque Book beyond free limit.
Explanation:
The core feature of BSBDA is that it is a zero-balance account. Banks are strictly prohibited from levying charges for non-maintenance of minimum balance.
6. Can a "Small Account" (BSBDA-Small) be used to receive foreign remittances?
Yes, if the remitter is a relative.
Yes, up to ?50,000.
Yes, freely.
No, foreign remittances cannot be credited to Small Accounts.
Explanation:
Since Small Accounts are opened without complete KYC (simplified measures), they are restricted from receiving foreign remittances to prevent money laundering risks.
7. In a Joint Account (Either or Survivor), if one holder dies, can the survivor change the nomination?
No, nomination once made is final.
Only with the consent of the deceased's legal heirs.
Yes, the survivor becomes the sole owner and can change the nomination.
Only with a court order.
Explanation:
Upon death of one joint holder, the title vests in the survivor. The survivor can cancel the old nomination and make a new one in their own name.
8. RBI allows banks to offer differential interest rates on Term Deposits. However, which deposits CANNOT have a "No Premature Withdrawal" clause?
Deposits of ?15 Lakh and below (Retail deposits).
Deposits above ?1 Crore.
Deposits of Senior Citizens.
NRE Deposits.
Explanation:
RBI mandates that for retail term deposits (up to ?15 Lakh, later revised to ?1 Crore in some contexts, but strictly for small retail), banks must allow premature withdrawal. Non-callable deposits are allowed only for bulk deposits.
9. Which of the following transactions is PROHIBITED in a "Small Account" (BSBDA-Small)?
Transfer from another domestic bank account.
ATM withdrawal.
Credit of Foreign Remittance.
Deposit of cash.
Explanation:
Due to relaxed KYC norms, Small Accounts are considered high risk for money laundering. Hence, crediting foreign remittances directly into these accounts is prohibited until full KYC is completed.
10. Is a Hindu Undivided Family (HUF) eligible to open a Senior Citizen Savings Scheme (SCSS) account?
Yes, if all coparceners are Senior Citizens.
Yes, if the Karta is a Senior Citizen.
No, HUFs are not eligible.
Yes, with RBI permission.
Explanation:
SCSS accounts can only be opened by an "Individual" who has attained the age of 60 years. HUFs and NRIs are explicitly excluded from SCSS.