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प्रश्न
Explain the term bank overdraft.
Write a short note on overdraft facility.
उत्तर
- Overdraft is an arrangement under which a current account holder is allowed to withdraw more than the balance to his credit, up to the specified limit.
- An overdraft is allowed for a short period, and interest is charged on it.
- Commercial banks provide overdraft facilities on the security of some assets or on the personal security of the account holder.
संबंधित प्रश्न
Briefly explain how Cash Reserve Ratio can be used to control credit.
Assertion (A): Central Bank provides loans to the commercial bank in the situation of financial distress.
Reasoning (R): Central Bank can order the government to help the bank facing the financial crisis.
Mention any two agency functions/services of a commercial bank.
Differentiate between Savings Deposit and Current Deposit.
What is creation of credit?
Which is the primary function of Commercial Banks?
A commercial bank accepts deposits from the people for the purposes of giving loans and making investments.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Commercial Banks keep only a fraction of deposits as Cash Reserves and use the remaining deposits for given loans, etc.
Reason (R): All the depositors of Commercial Banks do not approach the banks for withdrawal of money at the [iame time and also they do not withdraw the entire amount in one go.
What is the difference between a loan and an overdraft?
Explain three main features of a current bank account.
