Banking Payal(b) Ludhiana

Prepared By: Name: Neetu Soni Designation: Maths Mistress School Name: Govt. Sen. Sec. School, Payal Qualification: B.A., M.Ed. M.Sc.( Maths ) (doing) N.E.T.(cleared)

Assisted By: Name: Inderjeet Kaur Designation: Computer Faculty (Teacher Trainer) Qualification : M.C.A.

CONTENTS:-

BANKING

SLIDE NO.

Introduction Present System Of Banks

4,5 6

How Does Bank Work?

7

FlowChart depicting types of Deposits Types Of Deposits in Detail Computation Of Interest On S.B A/C Excercise References

8 9,10 11,12 13 14

Project On: BANKING INTRO: It was a time when people used to produce as much as he needed for a day or two. Later with the development of civilization he used to think for future and planned to store for the bad times. There was ‘BARTER SYSTEM’ in the older time but it was not so convenient and logical ’How can a one kg.groudnuts equals 1 kg cashewnut ? ’ Slowly man reaiized this truth and this system shifted to ‘MONEY SYSTEM’ & people started saving money for their future needs. Later on this resulted into need for keeping money at safe places.Then the rich & powerful persons of those days who had the credibility & also means to defend themselves keep the savings of other peoples & also charge some money for that .

GRADUALLY they realized that a part of money that was deposited with them could also be used to lend others because not all depositers come for withdrawl of money at the same time . This VERY IDEA resulted into the Process Of Utilisation Of The Deposited Money For The Purpose Of Lending . After some time these money lenders instead of charging money from the depositers , started paying some money to them . As interest for the deposits and charging interest at higher rate from the borrowers. Thus making PROFITS , utilizing the deposits of the common man . Ultimately this led to the Coming of the ‘ INSTITUTION OF BANKING’

PRESENT SYSTEM OF BANKS :With the passage of time there are no. of refinements in the institutions of banking giving it the present form as we see today . Banks are institutions when those who have some saving keep their money into the form of deposits and those who need money can borrow on payment of interest with certain conditions that assure recovery of that borrowed money .

HOW DOES BANK WORK ?

**

**

RECEIVING MONEY from depositers.

**

LENDING MONEY on demand.

TRANSFERRING MONEY from one place to other.

**

RECEIVING PAYMENTS for public utility services such as telephone bills etc.

**

RENTING SAFE DEPOSITS , LOCKERS for the safe custody of valuable things.

**

HELPING TRAVELLERS ’N’ TOURISTS by providing them cheques ‘n’foreign currency. **

FACILITY FOR E-BANKING.

Here is a flow chart depicting various types of deposits

**** TYPES OF DEPOSITS

** (1) SAVING BANK ACCOUNT

** ( 2) CURRENT ACCOUNT

** (3) FIXED DEPOSITS

** (4 ) RECURRING DEPOSITS

Now we shall discuss it in detail

• SAVING BANK ACCOUNT

2. CURRENT ACCOUNT

TYPES OF DEPOSITS This acct. is most popular saving schemes offered by the Bank. Any person can open an acct.in the bank with a small amt. of money . Money can be withdrawn with withdrawl form or by cheque.Interest for a particular month is computed on the min. balance b/w the 10th day n the last day of the month. It is mostly useful to businessmen who have to do a no. of transactions daily due to the nature of work.for eg. There is a no restrictions on the amt.or on the no. of withdrawls in this acct. as in S.B. Acct.

3. FIXED DEPOSITS

4.RECURRING DEPOSIT ACCT.

Money is deposited for a fixed period. Money can be withdrawn after the expiry of the fixed period which is specified at the time of opening the acct. AS the DURATION IS MORE INTEREST RATE INCREASES.

A DEPOSITORS CHOOSES A SPECIFIED AMOUNT. every month for a fixed period chosen normallya multiple of 5 or 10 n deposit that amt by him in the beginning.After the maturity period lumpsum amt. is paid to depositors.

** COMPUTATION OF INTEREST ON SAVING BANK ACCOUNT There are some KEY WORDS which should be kept in mind while computing interest rate on Saving Bank Acct. Given

Date of transaction

Amt. deposited

Amt.withdrawn

balance

2-04-1993

500.00

NIL

500.00

9-04-1993

50.00

NIL

550.00

1.First make a chart as per the enteries in the pass book if not Given. 2.The interest will be charged on the min. amt. which is in the account on 11 th day of month or on the any last transaction at the end of month. Here interest will be charged on 550 as on 11 th date min balance. 3. If some month is skipped then as per the last transaction of last month is taken up for interest. 4.After calculating the total amt. for the time period upto when the acct. is to be closed we will use the formula to calculate the interest i.e.

I = P*R*T/ 100*12 AS 12 is put up in denominator coz interest for a month is to be calculated. IN NUTSHELL we can say that banks PLAY AN IMP. ROLE in man’s life. So students must know to calculate interest so that the could not be befooled by others.

There is a multiple choice exercise to check whether the students have understood the topic or not? 1.On which date of the month Interest will be charged ? (a)12th jan 07 (b) 5th jan 07 (c)6th jan 07 (d)11th jan 07 2. If 40 rs. Is withdrawn from the balance 500 & 80 rs. Is deposited. pick out right amt. in balance? (a)540 (b)550 (c) 580 (d) 560 3. 1/12 is put up in p*r*1/12*100 depiciting: (a)1 year time (b) monthly time (c) Per annum (d) quartely

REFERENCES:• Edition, 2006 Published by N.C.E.R.T. New Delhi • Previous knowledge of Project Worker.