Chapter Based Questions: What is Bank ? | Introduction to Financial Markets for Class 9 PDF Download

Q.1. Choose the correct answer.

(i) Banks pay the depositor ______ in return for depositing the money.
(a) Loan
(b) Interest
(c) Allowance

Correct Answer is Option (b)

(ii) When an account holder needs money over and above his savings for any purpose, then banks also lend money to him which is known as ______.
(a) Interest
(b) Loan
(c) Allowance

Correct Answer is Option (b)

(iii) The person who gets a loan from a bank can be termed as ______.
(a) Lender
(b) Borrower
(c) Depositor

Correct Answer is Option (b)

(iv) After opening a bank account, the bank allots a unique ______ number to the account holder.
(a) account
(b) ledger
(c) folio

Correct Answer is Option (a)

(v) can be deposited in ATM.
(a) Only cash.
(b) Only Cheque.
(c) Both cash and cheque

Correct Answer is Option (a)

Q.2. Fill in the blanks.

(i) Bank is a place where someone can _______ money for saving and safe-keeping and ______ it when necessary.
(ii) ________ is the amount paid by the borrower to the bank for availing the loan.
(iii) ATM card issued by the banks gives the benefit withdrawing _______ from the ATM.
(iv) _______ helps you to make banking transactions online without going to the bank or ATM.
(v) Fixed deposits and recurring deposits are considered as ______ avenues for people.
(vi)  When a depositor invests a lump sum amount with the bank for a predetermined period, it is known as _______.
(vii) Through internet banking _______ can be transferred from one bank account to another bank account.

(i) Deposit and Withdraw
(ii) Interest
(iii) Cash
(iv) Internet Banking
(v) Investment
(vi) Fixed Deposit
(vii) Money

Q.3. Match the following.

(i) Electronic banking - cash deposit
(ii) ATM - Internet banking
(iii) Recurring deposit - Written mandate to make payments
(iv) cheque - cash withdrawal
(v) pay-in slip - investment at periodic interval

(i) Electronic banking - Internet Banking
(ii) ATM - Cash Withdrawal
(iii) Recurring deposit - Investment at periodic level
(iv) cheque - Written mandate to make payments
(v) pay-in slip - Cash deposit

Q.4. True or false.

(i) The bank account can be opened either in single name or in joint names with members of the family or friends.
(ii) Your bank pass book gives a record of all the transactions that have been made in your family members’ bank account.
(iii) The pay-in slip should have the date mentioned by the depositor.
(iv) Crossing the cheque is mandatory when you intend to deposit money in another person’s bank account.
(v) In general Personal Identification Number is not necessary to make withdrawals from ATM by using ATM/debit cards.

(i) True
(ii) False
(iii) True
(iv) True
(v) False

Q.5. Answer the following briefly

1. What is a bank passbook?

Ans: A bank passbook is a document provided by the bank to account holders that records all the transactions made in their account. It shows the details of deposits, withdrawals, and the balance after each transaction. It serves as a record for the account holder to track their financial activity.

2. What is a cheque book?

Ans: A cheque book is a booklet provided by the bank that contains pre-printed, numbered cheques. Each cheque is a written order instructing the bank to pay a specified amount of money from the account holder's account to the person or entity named on the cheque.

3. How will you open a bank account?

Ans: To open a bank account, you need to fill out an account-opening form provided by the bank. Submit necessary documents such as address proof, identity proof, and photographs. Once the paperwork is completed and verified, the bank will open the account, allot a unique account number, and provide documents like the pay-in slip, cheque book, and passbook. Nowadays, banks also offer internet banking facilities for easier account management.

4. How do you make a cash deposit in a bank?

Ans: To make a cash deposit in a bank, fill out a pay-in slip with details such as your name, account number, date, and the amount to be deposited. Present the slip along with the cash to the bank teller. The teller will process the transaction and provide you with a stamped receipt as proof of the deposit.

5. When you intend to pay money to a particular person to his bank account by way of cheque, what are to be written on the cheque?

Ans: When writing a cheque to pay money into a particular person's bank account, include the following details:

• Date
• Name of the payee (the person to whom the money is to be paid)
• Amount in words and figures
• Your signature Additionally, if you want to restrict the cheque to be deposited only into the payee's account, cross the cheque by drawing two parallel lines on the top left corner and writing "A/C Payee."

6. What is a fixed deposit?

Ans: A fixed deposit is a financial instrument provided by banks where you deposit a lump sum amount for a fixed period at a predetermined interest rate. The interest rate is typically higher than that of a regular savings account. The amount cannot be withdrawn before the maturity date without incurring a penalty.

7. What is a recurring deposit?

Ans: A recurring deposit is a type of savings account where you deposit a fixed amount of money at regular intervals (usually monthly) for a predetermined period. The bank pays interest on the accumulated amount at a rate similar to that of fixed deposits. It is a disciplined way to save money and accumulate a significant amount over time.

Q.6. Answer in detail

1. What are the documents we receive after opening a bank account? Explain.

Ans: After opening a bank account, you typically receive the following documents:

• Passbook: This document records all transactions (deposits, withdrawals, balance) made in the account. It helps you track your financial activity and serves as proof of your account balance.

• Cheque Book: Contains pre-printed cheques that can be used to make payments or transfer money. Each cheque is a written order instructing the bank to pay a specified amount from your account to the person or entity named on the cheque.

• ATM/Debit Card: Allows you to withdraw cash, check your account balance, and make purchases directly from your bank account. It comes with a Personal Identification Number (PIN) for security.

• Internet Banking User ID and Password: Enables you to manage your account online, including checking balances, transferring funds, paying bills, and more. This facility is provided for convenience and accessibility.

• Welcome Kit: Some banks provide a welcome kit that includes brochures about the bank's services, terms and conditions, and other useful information about managing your account.

2. What are the contents of a pay-in slip?

Ans: A pay-in slip is used for depositing money into a bank account and typically contains the following details:

• Name of the Account Holder: The name of the person depositing the money.
• Bank Account Number: The account number into which the money is being deposited.
• Bank’s Branch Name: The name of the bank branch where the deposit is being made.
• Date of Deposit: The date on which the deposit is being made.
• Amount to be Deposited: The total amount to be deposited, both in words and figures.
• Signature of the Depositor: The depositor’s signature for verification purposes.
• Details of Cheque (if applicable): If depositing a cheque, details like the cheque number, the name of the issuing bank, and the amount.
• Denominations of Currency (if cash): The breakdown of the cash being deposited, indicating the number of notes of each denomination.

3. What are the contents of a cheque?

Ans: A cheque is a written document that instructs a bank to pay a specific amount of money from a person's account to another individual or entity. The contents of a cheque typically include:

• Date: The date when the cheque is written.
• Payee’s Name: The name of the person or entity to whom the payment is to be made.
• Amount in Words: The amount of money to be paid, written in words.
• Amount in Figures: The amount of money to be paid, written in numbers.
• Account Number: The account number from which the money will be drawn.
• Cheque Number: A unique number that identifies the cheque.
• Bank Name and Branch: The name of the bank and the branch where the account is held.
• Signature of the Account Holder: The signature of the person issuing the cheque.
• MICR Code: Magnetic Ink Character Recognition code at the bottom, used for processing the cheque electronically.

4. What is electronic banking? What are its uses?

Ans: Electronic Banking: Electronic banking, also known as e-banking or online banking, refers to the use of electronic means to conduct banking transactions. It allows customers to perform financial transactions via the internet without visiting a bank branch.

• Account Management: Customers can check account balances, view transaction history, and download bank statements.
• Fund Transfers: Enables transferring money between accounts within the same bank or to different banks, both domestically and internationally.
• Bill Payments: Allows payment of utility bills, credit card bills, and other recurring payments online.
• Loan Management: Customers can apply for loans, check loan balances, and make loan payments.
• Mobile Banking: Access banking services through mobile applications, providing convenience on the go.
• Investments: Facilitates managing investments, buying and selling stocks, and monitoring investment portfolios.
• Security Alerts: Provides real-time alerts and notifications about account activities and transactions to enhance security.