2015-07-14
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1) A country cannot make commercial and industrial progress without a well organised banking system.
2) Loans may be granted only for long period by bank.
3) Primary activity of commercial banks includes accepting deposits and lending money.
4) Difference of interest allowed to public on deposits and charged on loan is the main source of income of banks.
5) A loan cannot be repaid in lump sum by the borrower.
6) Loans are generally granted against the security of certain assets.
7) Services rendered by banks to the general public constitute the main function of banks.
8) Bank charges some amount for the services rendered.
9) Banks generally grant long-term loans to industries..
10) Banks grant loans to students for their studies at reasonable interest rate.
11) Through overdraft, a customer can withdraw more money than the amount in his/her bank account.
D. Fill in the blanks with suitable words.
1) There are four important ways of lending money by banks. They are…
2) Bank loans can be divided into two categories… and …
3) When the loan is repayable on demand or at a very short notice, the loan is known as …
4) If the loan granted by a bank is on long-term or medium-term, the loan is called …
5) … is a flexible system of lending under which the borrower has the option to withdraw the funds as and when required.
6) …is an agreement with the bank by which a current account holder is allowed to withdraw over and above the amount in his account.
E. Find the answers to the following:
1) Explain the Primary functions of banks.
2) Explain the Secondary functions of banks.
3) Describe the functions of modern commercial banks.
4) Explain the methods of granting loan by bank.
5) What do you mean by bank overdraft? Explain the procedure for granting overdraft by bank.
6) Differentiate between loans and advances.
7) Explain cash credit facility allowed by banks to customers.
8) Explain in brief the agency functions of a commercial bank.
9) Differentiate between Primary and Secondary functions rendered by bank.
10) Describe briefly the various modes of acceptance of deposits by banks.
F. Find the words with their opposites.
| spend variable withdraw borrow default purchase |
| deposit lend save sell |
