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Question
Match the following:
| Group A | Group B |
| 1. D-mat account | a. Current account |
| 2. Over draft facility | b. Agency function |
| 3. ATM facility | c. Share brokers |
| 4. Commercial bank | d. General function |
| 5. Credit creation | e. Recurring account |
| f. Profit making | |
| g. Central bank | |
| h. Commercial bank |
Solution
| Group A | Group B |
| 1) D-mat account | c. Share brokers |
| 2) Over-draft facility | a. Current account |
| 3) ATM facility | d. General function |
| 4) Commercial banks | f. Profit making |
| 5) Credit creation | h. Commercial banks |
Explanations:
1. Dematerialised account (D-mat account) facility is useful for the shareholders. The transactions related to purchase and sale of shares are recorded in this account.
2. Over-draft facility is provided to current account holders which facilitates them to withdraw some amount of money beyond their deposits from the bank. For this facility commercial banks charge some nominal interest on the extra amount drawn.
3. ATM facility is the general function of commercial banks which facilitates the consumers to withdraw cash at any time without actually visiting the bank.
4. Commercial banks are profit making institutes. They accept deposits from the public and pay interest on it and advance these deposits as loan to seekers at an interest rate higher than that what was offered on deposits. This is how they make profits.
5. By advancing loans out of the deposits, commercial banks create credit in an economy. They channelize surplus money from the public and offer those to the seekers.
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