NIOS Class 10 Business Studies Chapter 9 Banking Service

NIOS Class 10 Business Studies Chapter 9 Banking Service Solutions to each chapter is provided in the list so that you can easily browse throughout different chapters NIOS Class 10 Business Studies Chapter 9 Banking Service Notes and select need one. NIOS Class 10 Business Studies Chapter 9 Banking Service Question Answers Download PDF. NIOS Study Material of Class 10 Business Studies Notes Paper 215.

NIOS Class 10 Business Studies Chapter 9 Banking Service

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Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 10 Business Studies Chapter 9 Banking Service Solutions, NIOS Secondary Course Business Studies Solutions for All Chapter, You can practice these here.

Banking Service

Chapter: 9

NIOS TEXTBOOK QUESTIONS ANSWERS

Intext Questions 9.1

Fill in the blanks with suitable word (s): 

(i) A Bank accepts deposits from people and ________ money to those who need it for various purposes. 

Ans:- Lends.

(ii) Banks act as ________ between people having surplus money and those borrowing money. 

Ans:- Intermediary / middleman.

(iii) Banking facilitates business activities and is considered as an important auxiliary to ___________. 

Ans:- Co-operative Bank.

(iv) Banks facilitate payment through _________ instead of currency. 

Ans:- Central Bank.

(v) A ___________ advances money out of his own private wealth and generally does not accept deposits from others.

Ans:- Moneylender.

Intext Questions 9.2

Identify the type of Bank being talked about in each of the following statements: 

(i) The commercial Bank where the majority of share capital is held by the private individual. 

Ans:- Private Sector Bank.

(ii) The Bank that provides assistance and guidance for export of products abroad. 

Ans:- EXIM Bank.

(iii) The Bank formed by a group of people to serve their common interest. 

Ans:- Co-operative Bank.

(iv) The Bank that issues currency notes. 

Ans:- Central Bank.

(v) The commercial Bank where the Government holds majority stake.

Ans:- Public Sector Bank.

Intext Questions 9.3

Which of the following statements are True and which are false? 

(i) Loans and advances are both granted by banks to customers for a long period of time. 

Ans:- False. 

(ii) Banks keep customers jewellery and important documents safe with them.

Ans:- True.

(iii) Banks grant loans to students for their studies at reasonable interest rate. 

Ans:- True.

(iv) Discounting of bills of exchange is done by banks free of cost. 

Ans:- False.

(v) Through overdraft, a customer can withdraw more money than the amount available in his/her bank account.

Ans:- True.

Intext Questions 9.4

1. Which of the following statements are true and which are false? 

(i) Deposits made in savings bank account serve to meet present as well as future needs. 

Ans:- True. 

(ii) A fixed amount is required to be deposited in a Fixed Deposit Account every month. 

Ans:- False.

(iii) The rate of interest on deposits made in a Recurring Deposit Account is relatively higher than on savings bank deposits. 

Ans:- True.

(iv) Current Deposit Account can be opened only by businessmen, not by an educational institutions. 

Ans:- False.

(v) Home Construction Saving Deposit Account is a type of recurring deposit account. 

Ans:- True.

(vi) The rate of interest allowed on fixed deposit depends on the length of the period for which the deposit is made.

Ans:- True.

(vii) In the case of savings bank account withdrawal of money is allowed only by the account-holder. 

Ans:- False.

(viii) Banks do not pay interest on the balance of current deposit account. 

Ans:- True.

II. Fill in the blanks with suitable word. 

(i) Savings Bank Account can be opened with a ____________ amount of deposit. 

Ans:- Nominal.

(ii) A fixed Deposit Account carries interest at a rate, which is ____________ than that on savings bank account. 

Ans:- Higher.

(iii) Overdraft facility is allowed to holders of __________ deposit account. 

Ans:- Current Account.

(iv) Money can be withdrawn from current account by issuing ____________. 

Ans:- Cheque.

(v) The rate of interest allowed on the balance of recurring deposit account is ________ than the rate allowed on fixed deposit account.

Ans:- Same.

Intext Questions 9.5

I. Which of the following statements are true and which are false? 

(i) Pay-in-slip is required to be used while opening a savings bank account. 

Ans:- True.

(ii) Withdrawal form cannot be used by an account-holder if he/she uses cheques for withdrawing cash from savings bank account. 

Ans:- True.

(iii) A savings bank account-holder cannot introduce another person at the time of opening a savings bank account. 

Ans:- False.

(iv) The Pass Book must be presented by the account-holder for entering deposits and withdrawals by the bank. 

Ans:- False.

(v) Application form for opening a savings bank account is available free of charge. 

Ans:- True.

(vi) To make payment to a third party by cheque, the name of the party must be mentioned on the cheque. 

Ans:- True.

(vii) Cheque Book is issued by the bank only on the request made by an account-holder. 

Ans:- True.

(viii) A Pass Book is issued by the bank immediately after opening of the savings bank account. 

Ans:- True.

II. Fill in the blanks with appropriate words: 

(i) Counterfoil of the pay-in-slip is returned to the ________________ by the bank. 

Ans:- Depositor.

(ii) The right-hand part of the pay-in-slip is called the ________.

Ans:- Foil.

(iii) A cheque needs to be attached to the ________ of the pay-in slip before depositing. 

Ans:- Foil.

(iv) Before payment of a cheque, the signature of the account-holder is verified with the ___________ .

Ans:- Specimen signature.

(v) The Teller system helps quick ___________ of cash by account holders. 

Ans:- Withdrawal.

(vi) Deposit of cash into savings bank account can be made at the ___________ counter.

Ans:- Bank.

Intext Questions 9.6

I. Match the statement in column A with the word(s) / terms in column B:

Ans:-

II. 

(i) Which of the following is not a function of Central Bank? 

(a) Guiding and regulating the Banking System of a country. 

(b) Acts essentially as Government Banker. 

(c) Deals with the General Public. 

(d) Maintains deposit accounts of all other Banks. 

Ans:- (c) Deals with the General Public.

(ii) Which of the following is not a commercial Bank? 

(a) State Banke of India. 

(b) Reserve Bank of India. 

(c) ICICI Bank. 

(d) Punjab National Bank. 

Ans:- (b) Reserve Bank of India.

(iii) Which of the following is not a type of advance provided by Commercial Bank? 

(a) Cash Credit. 

(b) Overdraft. 

(c) Collecting and Supplying Business Information. 

(d) Discounting of Bills. 

Ans:- (c) Collecting and Supplying Business Information.

(iv) Fixed Deposit Account facility is availed by: 

(a) Businessman. 

(b) Salaried people. 

(c) People want to save money for long period. 

(d) Who want to get the interest on monthly basis. 

Ans:- (b) Salaried people.

(v) Which is not a valid document to withdraw the money from the Bank? 

(a) Cheque. 

(b) Withdrawal form. 

(c) Personal Identity Card. 

(d) ATM Card.

Ans:- (c) Personal Identity Card.

1. Define the term ‘Bank’.

Ans:- “Bank is a lawful organisation, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business houses that need it.”

2. What is meant by ‘Banking’?

Ans:- Banking is the business of protecting money for others. Banks lend this money, generating interest that creates profits for the bank and its customers. A bank is a financial institution licensed to accept deposits and make loans. But they may also perform other financial services.

3. Give two examples each of 

(a) Private Sector Commercial Banks. and 

(b) Foreign Banks, in India.

Ans:- The two examples of Private Sector Commercial Banks are: The Jammu and Kashmir Bank Ltd, and ICICI Bank Ltd.

The two examples of Foreign Banks in India, are: Standard & Chartered Bank and Grindlays Bank, etc.

4. What facility is provided by credit cards to a bank’s customers?

Ans:- A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual’s credit rating.credit cards are used to make payments for purchase, so that the individual does not have to carry cash. Banks allow a certain credit period to the credit cardholder to make payment of the credit amount.

5. What is meant by cash credit?

Ans:- Cash credit is an arrangement whereby the bank allows the borrower to draw an amount up to a specified limit. The amount is credited to the account of the customer. The customer can withdraw this amount as and when he requires. Interest is charged on the amount actually withdrawn. Cash Credit is granted as per terms and conditions agreed with the customers.

6. What function does ‘Development Bank’ perform?

Ans:- The functions of Development bank are as follow:

(i) To promote and develop small – scale industries.

(ii) To finance the development of the housing sector.

(iii) To help agriculture and rural development.

(iv) To provide funds to the manufacturing activity that produces goods which are perfect substitutes for exciting imports and also for export.

(v) To provide funds for the industrial sector for the growth of traditional commodity sectors such as textiles, sugar, jute, cement, steel etc.

7. Explain the role of banking in about 100 words.

Ans:-  Banks provide funds for the business and play a vital role in the development of a nation. 

Role of banking are discussed below: 

(i) It encourages saving habits amongst people and thereby makes funds available for productive use. 

(ii) It acts as an intermediary between people having surplus money and those requiring money for various business activities. 

(iii) It facilitates business transactions through receipts and payments by cheques instead of currency. 

(iv) It provides loans and advances to businessmen for short term and long term purposes. 

(v) It also facilitates import export transactions. 

(vi) It helps in national development by providing credit to farmers, small-scale industries and self-employed people as well as to large business houses which leads to balanced economic development in the country. 

(vii) It helps in raising the standard of living of people in general by providing loans for purchase of consumer durable goods, houses, automobiles, etc.

8. What is meant by the Central Bank?

Ans:- A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks.

9. What are the functions performed by 

(a) EXIM Bank. and 

(b) NABARD?

Ans:- (A) EXIM Bank: EXIM bank can provide you the required support and assistance. The bank grants loans to exporters and importers and also provides information about the international market. It gives guidance about the opportunities for export or import, the risks involved in it and the competition to be faced, etc.

(B) NABARD: NABARD can provide credit, both short-term and long-term, through regional rural banks. It provides financial assistance, especially, to co-operative credit, in the field of agriculture, small-scale industries, cottage and village industries, handicrafts and allied economic activities in rural areas.

10. Give any four secondary functions of a commercial bank.

Ans:- banks perform a number of other functions, which are called secondary functions. These are as follows: 

(i) Issuing letters of credit, travellers’ cheque, etc. 

(ii) Undertaking safe custody of valuables, important documents and securities by providing safe deposit vaults or lockers. 

(iii) Providing customers with facilities of foreign exchange dealings. 

(iv) Transferring money from one account to another; and from one branch to another branch of the bank through cheque, pay order, demand draft.

11. Explain the primary functions of a commercial bank.

Ans:- Primary functions  is the main function which is performed compulsory by every Bank or we can say that the organisation which performs these functions is known as a Banks. 

The primary functions of a commercial bank include: 

(a) Accepting deposits: The most important activity of a commercial Bank is to mobilise deposits from the public. People who have surplus income and savings find it convenient to deposit the same with Banks. Depending upon the nature of deposits, funds deposited with the Bank also earn interest. 

(b) Grant of loans and advances: The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. 

12. Explain the different types of commercial banks giving examples of each.

Ans:- Commercial banks are three types which are:

(i) Public Sector Banks: These are banks where majority stake is held by the Government of India or Reserve Bank of India. 

Examples of public sector banks are: State Bank of India, Corporation Bank, Bank of Baroda, Punjab National Bank, Canara Bank, Bank of India and Oriental Bank of Commerce, etc. 

(ii) Private Sectors Banks: In case of private sector banks majority of share capital of the Bank is held by private individuals. These Banks are registered as companies with limited liability. For example: The Jammu and Kashmir Bank Ltd., ICICI Bank Ltd., Development Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank Ltd., Global Trust Bank, ING Vysya Bank, etc. 

(iii) Foreign Banks: These Banks are registered and have their headquarters in a foreign country but operate their branches in our country. Some of the foreign banks operating in our country are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, American Express Bank, Standard & Chartered Bank, Grindlays Bank, etc. 

13. Distinguish between banks and moneylenders on the basis of 

(i) Entity. 

(ii) Security.

(iii) Activity. and 

(iv) Clients.

Ans:- 

14. Describe the functions performed by a commercial bank.

Ans:- The functions of commercial banks are as follows: 

(i) Primary functions: This is the main function which is performed compulsory by every Bank or we can say that the organisation which performs these functions is known as a Bank. 

The primary functions of a commercial bank include: 

(a) Accepting deposits. and 

(b) Granting loans and advances.

(ii) Secondary functions: In addition to the primary functions of accepting deposits and lending money, banks perform a number of other functions, which are called secondary functions. 

These are as follows: 

(a) Issuing letters of credit, travellers, cheque, etc. 

(b) Undertaking safe custody of valuables, important document and securities by providing safe deposit vaults or lockers. 

(c) Providing customers with facilities of foreign exchange dealings. 

(d) Transferring money from one account to another; and from one branch to another branch of the bank through cheque, pay order, demand draft. 

(e) Standing guarantee on behalf of its customers, for making payment for purchase of goods, machinery, vehicles etc.

15. Explain the recent development in the field of banking by giving examples of the latest facilities being offered to customers. 

Ans:- Here are some recent developments and examples of the latest facilities being offered to customers:

(i) Digital Banking: Digital banking can help customers’ needs to be able to access banking services including account creation and registration (onboarding), making payments, e-commerce transactions, applying for loans, investments, to financial management easily, quickly, anywhere and anytime.

(ii) Contactless Payment: Contactless payment is a secure payment method using a debit or credit card, smartcard, or another payment device by using RFID technology and near-field communication. 

(iii) Personalised banking: Personalised banking focuses on delivering unique experiences to customers based on their financial needs and preferences outlined by behaviours. This personalised approach goes beyond the one-size-fits-all approach of traditional banking services.

(iv) Instant payment: Instant payments are set up so that the money reaches the recipient’s bank account within seconds, which means it’s not possible to retrieve the money via a clearing process.

(v) Open banking: Open banking allows customers to share their financial information securely and electronically with other authorised organisations, such as fintech companies, payment providers, lenders, and other banks.

(vi) Blockchain: Blockchain technology is a decentralised, distributed ledger system that allows for secure and transparent transactions between two parties without the need for a trusted intermediary.

16. What is meant by co-operative banks? Explain the types of co-operative banks in India.

Ans:- A co-operative Bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often formed by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide a wide range of banking and financial services to their members.

There are three types of co-operative banks operating in our country they are: 

(i) Primary Credit Societies: These are formed at the village or town level with borrower and non-borrower members residing in one locality. The operations of each society are restricted to a small area so that the members know each other and are able to watch over the activities of all members to prevent frauds. 

(ii) Central Co-operative Banks: These banks operate at the district level having some of the primary credit societies belonging to the same district as their members. These banks provide loans to their members (i.e., primary credit societies) and function as a link between the primary credit societies and state co-operative banks. 

(iii) State Co-operative Banks: These are the apex (highest level) cooperative banks in all the states of the country. They mobilise funds and help in its proper channelization among various sectors. The money reaches the individual borrowers from the state co-operative banks through the central co-operative banks and the primary credit societies.

17. Describe the procedure of opening a savings bank account in a bank.

Ans:- The procedure of opening a saving bank account in a bank are as follows:

(i) Filling up the Form The application form has to be filled up giving the following necessary information: 

(a) Name of the person (applicant). 

(b) His/her occupation. 

(c) Residential Address. 

(d) Specimen signature of the applicant. 

(e) Name, address, account number and signature of the person introducing the applicant. Besides the above information you have to give an undertaking that you will abide by the rules and regulations of the bank, which are in force. At the end of the application form, you have to put your signature.

(ii) Proper Introduction Every bank requires that a person known to the bank should introduce the applicant. It may be convenient to be introduced by a person having already an account in that bank. Some banks may accept the attested copy of Passport or Driving Licence, if any, of the applicant. In that case personal introduction is not necessary. Introduction is required to prevent the possibility of opening of account by an undesirable person. 

(iii) Specimen Signature The applicant has to put his/her specimen signatures at the blank space provided on the application form for that purpose. In addition, specimen signatures have to be put separately on a card on which a photograph of the applicant has to be pasted, along with his/her name and account number.

18. State the procedure for depositing cash in the savings bank account.

Ans:- For deposit of the initial amount while opening your account. It is a printed form, which you get in the bank. Each ‘pay-in-slip’ has two parts divided by perforation, the right-hand part known as ‘foil’ and the left-hand part known as ‘counter-foil’. The slip has to be filled up while depositing cash or a cheque.

Deposit cash in your account. The pay-in-slip has to be filled up giving the date of deposit, your name or account-holder’s name if you deposit money in somebody’s account, account number, and the amount deposited in figures and words. Besides you have to enter on the slip, in the place indicated, how many currency notes of different denominations (Rs. 5, 10, 20, 50, 100, etc.) are being deposited along with the amount against the types of notes. The bank has a counter for cash receipts.

19. What procedure will you follow for depositing a cheque in your savings bank account?

Ans:- To deposit the cheque you have to use the pay-in-slip again, filling in particulars like the date of deposit, the account number, name of the account-holder, the serial number and date of the cheque, name and address of the bank on which the cheque is drawn, and the amount of the cheque in figures and words. After signing the slip, you have to attach the cheque with the foil by an all pin (steel pin), and present the slip at the counter for the cheque receipt.

20. Describe the use of withdrawal form for operating savings bank accounts.

Ans:- The withdrawal form has to be filled in, mentioning the date of withdrawal, account number, amount to the withdrawn (in figures and words) and the signature of the account holder. You have to produce it along with your pass book at the counter at which your account is handled. At the counter the officer concerned generally passes the form for payment after checking the balance in the account and the signature on the withdrawal form against the specimen signatures on record.

21. What particulars do you have to fill in the form of application while opening a savings bank account?

Ans:- The application form has to be filled up giving the following necessary information: 

(a) Name of the person (applicant). 

(b) His/her occupation. 

(c) Residential Address. 

(d) Specimen signature of the applicant. 

(e) Name, address, account number and signature of the person introducing the applicant.

22. State how will you withdraw cash from your savings bank account.

Ans:- The procedure for withdrawal of money from the saving account are as follow:

Money can be withdrawn by using 

(a) Withdrawal form. 

(b) Cheque. 

(c) ATM card.

23. Describe briefly the use of pay-in-slips for depositing cash or cheques into the savings bank account.

Ans:- ‘Pay-in-slip’ has two parts divided by perforation, the right-hand part known as ‘foil’ and the left-hand part known as ‘counter-foil’. The slip has to be filled up while depositing cash or a cheque. Separate pay-in-slip forms will have to be filled up while depositing both cash and cheques. The pay-in-slip has to be filled up giving the date of deposit, your name or account-holder’s name if you deposit money in somebody’s account, account number, and the amount deposited in figures and words. The bank has a counter for cash receipts. You have to sign and present the pay-in-slip there and also hand over the amount of cash. To deposit the cheque you have to use the pay-in-slip again, filling in particulars like the date of deposit, the account number etc. After signing the slip, you have to attach the cheque with the foil by an all pin (steel pin), and present the slip at the counter for the cheque receipt. The person at the counter will keep the foil with the cheque attached, and return to you the counter-foil with a bank rubber stamp and his signature. 

24. What is pay-in-slip? State its utility.

Ans:- A ‘Pay In-slip’ for deposit of the initial amount while opening your account. It is a printed form, which you get in the bank. Each ‘pay-in-slip’ has two parts divided by perforation, the right-hand part known as ‘foil’ and the left-hand part known as ‘counter-foil’.

The slip has to be filled up while depositing cash or a cheque. Separate pay-in-slip form will have to be filled up while depositing both cash and cheques.

25. Can you withdraw an amount in excess of the balance in your savings bank account? Give reason in support of your answer.

Ans:- No, you generally cannot withdraw an amount in excess of the balance in your savings bank account. This is because savings accounts typically have a feature called “non-sufficient funds” (NSF) protection or overdraft protection, which prevents transactions that would result in a negative balance.

26. What is an ATM? How does it help the customers of the bank?

Ans:- An automated teller machine (ATM) is a specialised computer that allows you to complete bank transactions without the need of a bank representative. An ATM is a machine that allows you to withdraw money, deposit cash or checks, view your balance or transfer money between accounts.

Banks have now installed their own Automated Teller Machine (ATM) throughout the country at convenient locations. By using this, customers can deposit or withdraw money from their own account any time.

27. While opening a savings bank account, why is it necessary to arrange an introduction of the applicant by a person known to the bank?

Ans:- Requiring an introduction of the applicant by a person known to the bank is a common practice in many banking institutions, although it may not be mandatory for all banks or in all jurisdictions. 

Here’s why this practice is often implemented:

Identity Verification: Introducing a new applicant through a person known to the bank helps verify the applicant’s identity. Identity verification is a critical process to ensure that the person who is opening a bank account or applying for loans is the person they claim to be. Bank identity verification plays an essential role in open banking, anti-money laundering (AML), and knowing your customer (KYC) processes. 

Risk Management: Banks have a responsibility to mitigate the risk of fraudulent activities such as identity theft and money laundering.you can use a simple matrix or a tool like SWOT analysis to categorise and rank risks. Then, you can focus on the most urgent and significant ones and plan how to mitigate or prevent them.

Building Trust: The first step to building trust is to understand what your clients want to achieve and how they measure success. This means asking the right questions, listening actively, and clarifying any assumptions or gaps. 

28. What are the different methods of withdrawing money from the savings bank account?

Ans:- The different method of withdrawing money from the saving bank accounts are:

(i) Withdrawal Form: Every bank has printed withdrawal forms, which can be used by account holders to withdraw cash from deposit accounts.

(ii) Cheque: As an account-holder, you can withdraw cash from your savings bank account by making use of a cheque also. Cheques can also be issued for payment to other parties. Thus, a cheque issued to another person can be either encashed by him at the bank, or deposited in his account in some other bank.

(iii) ATM Card: Banks issue ATM cards to its depositors for easy withdrawal of money from their accounts. This card is used for withdrawal of money from savings and current deposit accounts through Automated Teller Machine (ATM).