Main Retail Liability Products

Demand Deposits: Payable on demand, allowing easy

access to funds.

Term Deposits: Repayable after a fixed period, also

known as Time Deposits or Fixed Deposits.

Recurring Deposits: Help people with regular income

save a fixed amount monthly while earning interest like
Fixed Deposits.
DEMAND DEPOSIT

➢Demand Deposits are a type of bank deposit that can

be withdrawn by the customer on demand at any time.
➢These deposits are repayable immediately, usually
through means like checks, online transactions, or
ATMs.
➢Demand Deposits offer high liquidity and convenience
for customers, making them popular for day-to-day
transactions.
Which of the following features is unique to a
current account compared to other retail
liability products?

A) Interest earning potential

B) Unlimited transaction capability
C) Minimum balance requirement
D) Fixed maturity period

Answer: B) Unlimited transaction capability

What is the primary advantage of a sweep-in
facility associated with savings accounts?

A) It guarantees higher interest rates.

B) It automatically transfers excess funds to fixed
deposits for better returns.
C) It allows unlimited withdrawals without penalties.
D) It provides overdraft protection.

Answer: B) It automatically transfers excess funds to

fixed deposits for better returns.
In a fixed deposit account, which of the
following features typically affects the interest
rate offered?

A) Account holder's credit score

B) Duration of the deposit
C) Type of savings account held
D) Frequency of deposits

Answer: B) Duration of the deposit

Which of the following is true regarding joint savings accounts?

A) All account holders must sign for withdrawals.

B) They can be set up with different modes of operation, such as
"Either or Survivor."
C) They typically offer lower interest rates than individual accounts.
D) They have no restrictions on the number of withdrawals.

Answer: B) They can be set up with different modes of operation,

such as "Either or Survivor."
In which scenario would a bank typically offer a higher interest rate on
a fixed deposit?

A) When the deposit amount is lower than the bank's minimum

requirement
B) For longer-term deposits compared to short-term ones
C) When the account holder has multiple accounts with the bank
D) For deposits made in a foreign currency

Answer: B) For longer-term deposits compared to short-term ones

DEMAND DEPOSIT

➢Banks pay low or no interest on demand deposits due

to their high liquidity nature.

➢Demand deposits are collectively known as CASA

Deposits (Current Account and Savings Account).
Current Account:
➢ A current account is a demand deposit that allows
unlimited withdrawals based on the account
balance or a predetermined agreed amount.

➢ It encompasses deposit accounts that are distinct

from savings and term deposits.
Transfer of Accounts

Following steps should be taken to transfer account:

➢ The account holder provides a letter to the transferor branch

indicating their desire to transfer the account to another branch. The
letter should be addressed to the transferor branch, signed according
to the account's constitution, and as per the specimen signature
available with the transferor branch.

➢ The account holder's letter is handed over to the transferee branch

(the branch where the account is being transferred).

➢ For accounts held by companies, a board resolution is also required

for the transfer.
Inoperative Accounts

When there are no transactions or operations conducted in

a current account for a consecutive period of two years,
the account is classified as an inoperative account.

Banks may levy incidental charges on these accounts

every six months, debiting the charges from the
inoperative account and crediting them to the Profit and
Loss (P/L) account under the category of "Incidental
Charges."
To reactivate an inoperative account, the
following steps are typically taken:

➢ The account holder provides valid reasons for the non-

operation of the account.

➢ The bank obtains fresh Know Your Customer (KYC)

documents from the account holder and verifies them.

➢ Once the bank is satisfied with the reasons and has

verified the KYC documents, the inoperative account
can be made operative again.
Which document is NOT classified as an officially valid
document for opening a bank account?

A) Driving License
B) Voter ID
C) Utility Bill
D) Passport
Officially Valid Documents (OVDs) for Account Opening
1.Aadhaar Card: A 12-digit unique identification number
issued by the UIDAI.
2.Passport: A valid passport issued by the Government of
India.
3.Voter ID: A voter identification card issued by the
Election Commission of India.
4.Driving License: A valid driving license issued by the
relevant authority in India.
5.National Rural Employment Guarantee Act (NREGA) Job
Card: Issued under the Mahatma Gandhi NREGA.
6.Letter from a recognized public authority or public
servant: This must contain the name, address, and
photograph of the individual.
Documents Required for Opening a Savings Account

When opening a Savings Account, the following documents are

typically required:

➢ Proof of Identity (OVD): Document verifying the account

holder's identity.
➢ Proof of Address: If the address differs from the identity proof
or lacks an address.
➢ Recent Photograph: A recent passport-sized photograph.
➢ PAN Card or Declaration: Submission of PAN card or Form
60/61 as per Income Tax Act.
Which of the following documents can be used
as an officially valid document under the Know
Your Customer (KYC) norms?

A) Health Insurance Card

B) National Rural Employment Guarantee Act
(NREGA) Job Card
C) School Leaving Certificate
D) Credit Card Statement
What is the minimum age for a minor to
open a savings bank account in India
independently?

A) 10 years
B) 12 years
C) 14 years
D) 18 years
Who can open a savings bank account for a minor
below the age of 10 in India?

A) The minor can open it independently.

B) Only a legal guardian or parent can open the
account.
C) A teacher can open the account.
D) A friend can open the account.

Answer: B) Only a legal guardian or parent can

open the account.
In a minor's savings bank account, which of the following is
true regarding the operation of the account?

A) The minor can operate the account independently at any

age.
B) The account can only be operated by the guardian until the
minor reaches a certain age.
C) The minor must have a job to operate the account.
D) The account cannot be operated by anyone.

Answer: B) The account can only be operated by the guardian

until the minor reaches a certain age.
Savings Bank Account for Minors:

A minor, aged below 18 years, can open and operate a

Savings Account under certain conditions:

➢ The minor should be able to understand account rules.

➢ The account opening form must be signed in front of a
bank official.
➢ Proper identification, date of birth, and photograph are
required.
➢ Maximum balance may be capped depending on the
minor's age.
TIME DEPOSITS: KEY POINTS

Introduction:

➢ Time deposits are fixed contracts where banks

pay the deposited amount along with interest on
a future date.
➢ Also known as Term Deposits.
➢ Each deposit is a separate contract and not
negotiable.
TIME DEPOSITS: KEY POINTS

Periodicity:

➢Minimum period varies based on deposit amount

(e.g., 7 days for > 15 lakhs).
➢Maximum period is 120 months, with options for
multiples of 3 months.
➢Special cases may extend to 20 years.
TIME DEPOSITS: KEY POINTS

Interest on Fixed Deposit:

➢ Interest paid quarterly, can be reinvested for

compound interest (Cumulative FD).

➢ Interest can also be credited to Savings Account

or sent by cheque (Simple FD).
TIME DEPOSITS: KEY POINTS

Premature Payment of FD:

➢ Banks usually allow premature withdrawal with

penalties.

➢ Interest paid at applicable rate minus penalty for

the remaining period.
TIME DEPOSITS: KEY POINTS

TDS on Interest:

➢ TDS applicable on interest exceeding certain limits

(e.g., 50,000 for Senior Citizens).
➢ Rate varies based on availability of PAN card.
➢ Interest income from FD is taxable and banks levy
TDS.
TIME DEPOSITS: KEY POINTS

Deposit of TDS to Income Tax Department:

➢ Banks must deposit TDS to the government by the

7th of the subsequent month.

➢ TDS deducted in March can be deposited by April

30, as per the latest Income Tax Department
guidelines.
TIME DEPOSITS: KEY POINTS

Recent RBI Rule on Overdue FD:

➢ RBI's announcement on July 2, 2021, concerns

unclaimed amount after FD maturity.

➢ Unclaimed amount attracts interest rate applicable to

savings account or contracted rate of matured FD,
whichever is lower.
Statement 1: Joint savings accounts can be operated by any
one of the account holders independently.

Statement 2: In a joint account, all account holders must

agree to close the account.

Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: C) Only Statement 2 is true.

Statement 1: A high-interest savings account often requires a
higher minimum balance than a regular savings account.

Statement 2: These accounts typically come with more

restrictions on withdrawals.

Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Statement 1: Minors can operate their own savings accounts
without any restrictions once they turn 18.

Statement 2: Parents or guardians are required to manage

accounts for minors until they reach a certain age.

Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

TIME DEPOSITS: KEY POINTS

Form 15G/15H:

➢ Individuals with income within the exempted limit can

avoid TDS deduction by submitting Form 15G/15H to
the bank.
➢ Form 15H is for individuals aged 60 or above;
➢ Form 15G is for others whose income won't exceed the
exemption limit.
➢ Forms must be submitted each financial year; banks
issue Form 16A for TDS.
Advances Against Bank's Own Time Deposit
Receipts:
➢ Banks offer loans against Fixed Deposits (FDs) to help
customers with temporary fund requirements.
➢ Loan amount is usually around 80% to 90% of the FD
value, subject to variations among banks.
➢ Interest on the loan is generally higher than the interest
earned on the FD (1% to 2% difference).
➢ The margin serves as protection in case of loan default; the
FD is adjusted against the loan on maturity.
➢ Each FD is treated as a distinct contract, leading to the
issuance of a Fixed Deposit Receipt (FDR).
➢ FDR surrendered to the bank during repayment.
RECURRING DEPOSIT (RD)

A Recurring Deposit (RD) allows individuals with a

consistent income to save a fixed amount each month
while earning interest comparable to Fixed Deposits
(FDs). The contractual agreement between the customer
and the bank is similar to that of FDs and has a fixed
duration.
RECURRING DEPOSIT (RD)
Regular Savings: RD enables individuals to save a predetermined sum
every month.
Interest Earnings: Interest rates are equivalent to those offered for FDs.
Contractual Agreement: Similar to FDs, RD has a fixed tenure and
contractual terms.
Premature Payment: Banks allow early closure of RD under FD-like
terms.
Loan Facility: Similar terms for availing loans against RDs as for FDs.
Eligibility: Individuals with proper introduction and complying with KYC
norms can open RD accounts.
OPERATIONAL ASPECTS OF RECURRING DEPOSIT (RD) ACCOUNTS

Account Funding:

➢ Standing Instructions: Depositors can set up standing instructions

to transfer monthly installments from their current/savings
accounts, with applicable service charges.
➢ Advance Payments: Installments can be paid in advance, but no
extra benefit is earned.
➢ KYC Requirements: KYC-AML-CFT policy compliance includes
photograph, proof of identification, and address documents.
OPERATIONAL ASPECTS OF RECURRING DEPOSIT (RD) ACCOUNTS

Delayed Installments:

➢ Due Date: Monthly installments must be paid by the last

working day of the month.

➢ Penalty Interest: Penalties are calculated for arrears. If paid

into the RD account, full maturity value is received;
otherwise, maturity value is reduced by the penalty amount.
OPERATIONAL ASPECTS OF RECURRING DEPOSIT (RD) ACCOUNTS

Unclaimed Deposits:

➢ Balances in inactive savings/current accounts for 10 years or

unclaimed term deposits after 10 years of maturity are classified as
"Unclaimed Deposits."

➢ These amounts are transferred to the "Depositor Education and

Awareness (DEA) Fund" by banks.

➢ Depositors can still claim these deposits with applicable interest

from the respective bank(s) at a later date.
OPERATIONAL ASPECTS OF RECURRING DEPOSIT (RD) ACCOUNTS

Penal Interest:

➢ Delays in installment payments lead to penalties. Banks may

charge around Rs 2.00 plus service tax for every Rs 100/- per
month for deposits of any period.
➢ Fraction of a month is considered as a full month for
calculating the penalty.
➢ Installments paid within the calendar month it's due are
treated as paid on time.
NOMINATION FACILITY IN BANKING ACCOUNTS

Regulations and Framework:

➢ The Central Government, in consultation with the Reserve

Bank of India (RBI), introduced the Banking Companies
(Nomination) Rules, 1985, along with new Sections 45ZA
to 45ZF of the Banking Regulation Act, 1949, to enable
nomination facilities in banking.

➢ These rules provide guidelines for nomination in deposit

accounts, safe custody items, and safety lockers.
NOMINATION FACILITY IN BANKING ACCOUNTS

Scope of Nomination Facility:

➢ Available for all types of deposit accounts, articles in safe

custody, and safe deposit vaults.

➢ Applicable to individual capacity savings and deposit

accounts (single/joint), as well as sole proprietary concern
current accounts.

➢ Not applicable to accounts opened in representative

capacity.
NOMINATION FACILITY IN BANKING ACCOUNTS
Nomination Guidelines:

➢ Nomination can be made in favor of one person only, except in

jointly operated locker accounts where up to 2 persons can be
nominated with mutual consent.

➢ Account holder(s) can make, cancel, or change the nomination

during their lifetime.

➢ Minor can also be nominated; if the minor receives the amount

before adulthood, the natural guardian receives it on their behalf.

➢ Nominee's right to receive payment arises after the account holder's

death in single accounts or after the death of all depositors in joint
accounts.
SETTLEMENT OF CLAIMS FOR DECEASED DEPOSITORS

Nominee/Survivor Clause Accounts:

➢ For accounts with a valid nomination or survivorship clause,
banks follow provisions of Sections 45ZA to 45ZF and the
Banking Companies (Nomination) Rules, 1985.

➢ If the nominee/survivor is established with due care, and no

court order restricts payment, the bank's payment to them is a
valid discharge of their liability.

➢ The nominee/survivor receives the payment as a trustee for

legal heirs, ensuring their rights are unaffected.
SETTLEMENT OF CLAIMS FOR DECEASED DEPOSITORS

Accounts without Nominee/Survivor Clause:

➢ Simplified procedure for payment to legal heirs, based

on a minimum balance threshold, to avoid
inconvenience.

➢ Premature termination of term deposits allowed in the

event of the depositor's death, without incurring
penalties.
In a fixed deposit, what is the impact of premature
withdrawal on the interest rate?

A) Full interest is paid as per the original term.

B) A penalty is applied, reducing the interest rate.
C) No interest is paid.
D) The interest rate increases.

Answer: B) A penalty is applied, reducing the interest

rate.
Statement 1: A savings account typically offers a higher
interest rate than a current account.

Statement 2: A current account is designed primarily for

individuals who need to conduct frequent transactions.
Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Statement 1: Fixed deposits usually require a minimum
lock-in period.
Statement 2: Interest on fixed deposits is typically
compounded quarterly.

Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Statement 1: A recurring deposit account allows deposits to
be made in varying amounts each month.

Statement 2: The maturity amount in a recurring deposit

depends on the total contributions and the interest rate.

Which of the following is true?

A) Both statements are true.

B) Only Statement 1 is true.
C) Only Statement 2 is true.
D) Both statements are false.

Answer: C) Only Statement 2 is true.

Statement 1: A home loan is typically secured against
the property being financed.

Statement 2: The interest on home loans is usually

lower than that on personal loans.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Home Loan

Banks offer various home loan products, including

loans for new construction, old house purchase, and
more. Multiple property ownership is now allowed as
long as funds aren't used for commercial purposes.
Home Loan Scheme

Eligibility:
Available for salaried employees, professionals, self-
employed individuals, NRIs, PIOs, HUF, proprietorship
firms, partnerships, and corporate employees.
Purpose:
Used to buy/construct/renovate houses/flats, purchase
land, and acquire household items for furnishing.
Quantum of Loan:
Loan amounts vary for construction, repairs, plots, and
furnishings. Calculated based on income and repayment
capacity.
Home Loan Scheme

Margin and Loan-to-Value (LTV):

Margin percentages depend on the loan amount. LTV ratios set
by RBI: up to 90% for loans up to 30L, 80% for loans up to
75L, and 75% for loans above 75L.

Interest:
Floating ROI linked to the bank's base/repo rate, varying
between banks.
Home Loan Scheme

Disbursement:
Immediate for ready properties. Stage-linked for
construction projects. Not upfront for incomplete/under-
construction projects.

Repayment:
Flexible, up to 30 years with a maximum moratorium of
18 months for construction and 3 months for purchase.
Repaid before retirement or age 65
Home Loan Scheme

Special Features:

➢ Some banks require health/life insurance for borrowers.

Other Features:
➢ Interest on Daily Reducing Balance Basis
➢ No Pre-Payment Charges on Floating Rate Loan
➢ Facility for step up/step down EMIs available
➢ Inclusion of Income of Close Relatives for Enhanced Loan
➢ Tax Benefit on Interest and Installments repaid in Home
Loans
A borrower wants to purchase a property valued at ₹50
lakh. If the bank has a margin requirement of 20%, how
much can the borrower borrow?

A) ₹40 lakh
B) ₹30 lakh
C) ₹20 lakh
D) ₹50 lakh

Answer: A) ₹40 lakh

In the context of loan-to-value (LTV) ratio, what does a
higher LTV indicate?

A) Lower risk for the lender

B) Higher risk for the lender
C) Better creditworthiness of the borrower
D) Increased loan repayment capacity

Answer: B) Higher risk for the lender

Statement 1: The loan-to-value (LTV) ratio is the ratio
of the loan amount to the appraised value of the
asset.

Statement 2: A lower LTV ratio indicates higher risk for

the lender.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: B) Statement 1 is true, Statement 2 is false.

Statement 1: The Marginal Cost of Funds based
Lending Rate (MCLR) is determined by the bank based
on its cost of funds.

Statement 2: MCLR is a fixed rate that does not

change over time.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: B) Statement 1 is true, Statement 2 is false.

Statement 1: The primary risk associated with retail
asset products is the default risk of borrowers.

Statement 2: Retail asset products typically have lower

yields compared to wholesale banking products.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Statement 1: A fixed-rate personal loan has a consistent
interest rate throughout the loan tenure.

Statement 2: Fixed-rate loans typically offer lower overall

interest costs compared to variable-rate loans in a rising
interest rate environment.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: B) Statement 1 is true, Statement 2 is false.

Statement 1: Personal loans are generally unsecured
and have higher interest rates compared to secured
loans.
Statement 2: Personal loans can only be used for
education expenses.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: B) Statement 1 is true, Statement 2 is false.

Statement 1: The interest on education loans is usually lower
than that on personal loans.

Statement 2: Education loans typically have flexible repayment

options, including a moratorium period.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Statement 1: A home equity loan allows homeowners to
borrow against the equity in their property.

Statement 2: Home equity loans typically have a higher interest

rate than first mortgages.

A) Both statements are true.

B) Statement 1 is true, Statement 2 is false.
C) Statement 1 is false, Statement 2 is true.
D) Both statements are false.

Answer: A) Both statements are true.

Which of the following is a likely consequence of a
higher margin requirement on a home loan?

A) Lower interest rates

B) Increased borrower equity
C) Easier loan approval
D) Higher loan amounts

Answer: B) Increased borrower equity

In which of the following cases would the margin
requirement be highest?

A) A newly constructed residential property

B) An old residential property
C) A commercial property
D) A property under litigation

Answer: D) A property under litigation

What is the purpose of obtaining a No Objection
Certificate (NOC) in the loan processing stage?

A) To verify the borrower’s identity

B) To confirm there are no outstanding dues on the
property
C) To assess the borrower’s creditworthiness
D) To sanction the loan amount

Answer: B) To confirm there are no outstanding dues on

the property
Which of the following is a common requirement for
overseas education loans that may not apply to
domestic loans?

A) Letter of acceptance from the educational institution

B) Proof of residency in India
C) A copy of the course curriculum
D) A detailed project report on the educational expenses

Answer: A) Letter of acceptance from the educational

institution
In retail lending, what does the term ‘marginal
cost of funds based lending rate (MCLR)’ refer to?

A) A fixed rate set by banks

B) The minimum interest rate for loans based on
marginal costs
C) An average rate of all types of loans
D) An international benchmark for loan rates

Answer: B) The minimum interest rate for loans

based on marginal costs
Which of the following best describes the term
'overdraft’?

A) A loan secured by property

B) An agreement that allows an account holder to
withdraw more than the available balance
C) A type of investment product
D) A personal loan with a variable interest rate

Answer: B) An agreement that allows an account holder

to withdraw more than the available balance
Banks in Credit Card Market

➢ Citibank and HSBC were pioneers in the Indian credit card

market during the 1980s.
➢ Over the years, the number of players increased, with more
than ten in 2000.
➢ Andhra Bank, Bank of Baroda, and Bank of India among
public sector banks, along with Standard Chartered Bank
among foreign banks, entered the market.
➢ Major players that later dominated the market include ICICI
Bank, State Bank of India, and HDFC Bank.
Salient Features of Credit Cards

➢ Accepted globally through Visa and Master Card affiliation.

➢ Issued with card limits for usage and cash withdrawals.
➢ Regular billing cycle with a due date for payment.
➢ Offers reward points for usage.
➢ Cashback offers with caps to incentivize usage.
➢ Payment options include full payment, minimum payment,
or EMI conversion.
➢ Charges for late payments.
What is the primary difference between a credit card
and a debit card?

A) Credit cards allow borrowing up to a limit, while debit

cards draw directly from a bank account.
B) Debit cards have higher fees than credit cards.
C) Credit cards cannot be used for online transactions.
D) Debit cards offer rewards points.

Answer: A) Credit cards allow borrowing up to a limit,

while debit cards draw directly from a bank account.
Statement: The liability for fraudulent transactions on credit cards is
typically capped at a certain amount if reported promptly.

Which of the following statements is correct in this context?

A) The liability cap is unlimited.

B) Cardholders are not liable if they report the fraud within 60 days.
C) Cardholders can be held responsible for the entire amount if they
fail to report within 30 days.
D) Only transactions above a certain amount are eligible for the
liability cap.

Answer: C) Cardholders can be held responsible for the entire amount

if they fail to report within 30 days.
Statement: Credit utilization ratio plays a crucial role in determining
a credit score.

Based on this statement, which of the following is accurate?

A) A lower credit utilization ratio is generally favorable for a credit

score.
B) Credit utilization has no impact on credit scores.
C) A high utilization ratio indicates good credit management.
D) Utilization is calculated only for revolving credit accounts.

Answer: A) A lower credit utilization ratio is generally favorable for a

credit score.
Objective of Prepaid Cards

➢ Prepaid cards are often designed to cater to the

unbanked population or act as an extension of the
existing card market.

➢ They can be issued in various forms, including

physical cards, virtual cards, and mobile wallets.
Types of PPIs

➢ Closed System PPIs: Issued by an entity for

purchases from that entity only. No cash withdrawal is
permitted.
➢ Semi-closed System PPIs: Used for purchases at
specific merchant locations with a contract to accept
the PPI. No cash withdrawal is allowed.
➢ Open System PPIs: Issued by banks, usable at any
merchant, and allows cash withdrawal at ATMs/Point
of Sale (PoS) terminals.
What type of PPI can be used for making payments
at various merchants and is reloadable?

A) Closed system PPI

B) Open system PPI
C) Semi-closed system PPI
D) Credit card

Answer: C) Semi-closed system PPI

Which of the following types of PPIs can only
be used at specific merchants and cannot be
redeemed for cash?

A) Open system PPIs

B) Closed system PPIs
C) Semi-closed system PPIs
D) E-wallets

Answer: B) Closed system PPIs

Which of the following statements about open
system PPIs is true?

A) They can only be used at specific retailers.

B) They allow fund transfers to other bank accounts.
C) They cannot be used for online purchases.
D) They are restricted to domestic transactions only.

Answer: B) They allow fund transfers to other bank

accounts.
Which type of PPI is typically provided by
companies as a reward for employees or customers
and is often limited to use within a specific
ecosystem?

A) Open system PPI

B) Closed system PPI
C) E-wallet
D) Virtual prepaid card

Answer: B) Closed system PPI

What is a key feature of a semi-closed system PPI?

A) It can be used at any merchant worldwide.

B) It can be used only at select merchants but allows
cash withdrawals.
C) It allows for multiple loading methods, including
cash and bank transfers.
D) It has no expiration date for funds.

Answer: C) It allows for multiple loading methods,

including cash and bank transfers.
Which of the following statements accurately
describes a debit card transaction?

A) Funds are borrowed and paid back later.

B) The transaction amount is deducted directly from
the linked bank account.
C) Debit cards can be used to increase credit scores.
D) Debit cards offer an interest-free credit period.

Answer: B) The transaction amount is deducted

directly from the linked bank account.
What is a distinguishing feature of a contactless
debit card?

A) It requires a signature for all transactions.

B) It uses Near Field Communication (NFC)
technology for transactions.
C) It cannot be used for online purchases.
D) It has a higher daily withdrawal limit than regular
debit cards.

Answer: B) It uses Near Field Communication (NFC)

technology for transactions.
Which regulatory framework governs the issuance
and use of debit cards in India?

A) Securities and Exchange Board of India (SEBI)

regulations
B) Reserve Bank of India (RBI) guidelines
C) Insurance Regulatory and Development Authority
(IRDA) norms
D) National Payments Corporation of India (NPCI)
rules
Which of the following is a key advantage of using a
debit card over a credit card?

A) Higher credit limits

B) Ability to build a credit history
C) No risk of incurring debt
D) Rewards programs

Answer: C) No risk of incurring debt

National Payments Corporation of India (NPCI) is an
organization responsible for retail payments and settlement
systems in India.

➢ It was established as a collaboration between the Reserve

Bank of India (RBI) and the Indian Banks' Association
(IBA).

➢ NPCI operates under the Payment and Settlement Systems

Act, 2007, to develop a robust payment and settlement
infrastructure in India.
RuPay

➢ RuPay is a card payment scheme introduced by NPCI to

facilitate electronic payments in India.
➢ It fulfills RBI's vision of creating a domestic, open-loop,
multilateral system for electronic payments.
➢ RuPay enables Indian banks and financial institutions to
participate in electronic payment transactions.
➢ RuPay offers various types of cards: RuPay Credit
card, RuPay Debit card, RuPay Prepaid card, and RuPay
Global card.
Which of the following features is unique to a
current account compared to other retail
liability products?

A) Interest earning potential

B) Unlimited transaction capability
C) Minimum balance requirement
D) Fixed maturity period

Answer: B) Unlimited transaction capability