COMMERCE PROJECT

Name: Divyansh Gupta

Class: XII B
Topic: Visit a Commercial Bank: Find
out the procedure to open a savings
account.
 AKNOWLEDGEMENT
The success and outcome of this project required a lot of guidance and
assistance from many people and I am extremely privileged to have got this all
along the completion of my project. All I have done is only due to such
supervision and assistance and I would not forget to thank them. I respect and
thank Mrs Aditi Mukherjee ma’am , for providing me an opportunity to do the
project work on ‘Saving Bank Account’ in COMMERCE and giving us all the
support and guidance, which made me complete the project duly. I owe my
deep gratitude to our project guide Mr MD Tarique Sir who took keen interest
on our project work and guided us all along, till the completion of our project
work by providing all the necessary information for developing a good system.
I am thankful to and fortunate enough to get constant encouragement, support
and guidance all teaching staffs which helped us in successfully completing
our project work.
 INDEX
• Introduction
• Types of central bank

• Commercial Bank

• Function of Commercial Bank

• Cash Reserve Ratio

• Statutory Liquidity Ratio

•Function of Central Bank

• Quantitative Credit Control

• Open Market Operation

• Bank Saving Account

• Who can open saving account

•How to open bank saving account

• Advantage and Disadvantage

• Conclusion

• Bibliography
INTRODUCTION
.
TYPES OF CENTRAL BANK
 COMMERCIAL BANK
• The funds thus obtained from various classes of people are
pooled together and lend to users of capital.
• Banks do not lend the entire sum of deposit. But a portion is
kept in the form of cash. This is called Cash Reserve Ratio(CRR)
in order to meet the unforeseen demand of some depositors.
• In its loans and advances, banks maintain a diversified portfolio
in order to seek a balance between liquidity and profitability.
• Banks perform some other functions that enhance their yield.
They keep valuables in their custody, collect chequable amounts,
the purchase and sell of shares, debenture, they act as agents of
their customers. Besides they act as trustee and executors of wills,
pay bills of customers.
Functions Of A Commercial Bank
• The funds thus obtained from various classes of people are
pooled together and lend to users of capital.
• Banks do not lend the entire sum of deposit. But a portion is kept in
the form of cash. This is called Cash Reserve Ratio(CRR) in order to
meet the unforeseen demand of some depositors.
• In its loans and advances, banks maintain a diversified portfolio
in order to seek a balance between liquidity and profitability.
• Banks perform some other functions that enhance their yield. They
keep valuables in their custody, collect chequable amounts, the
purchase and sell of shares, debenture, they act as agents of their
customers. Besides they act as trustee and executors of wills, pay bills of
customers.
 Cash Reserve Ratio (CRR)
• Is the minimum fraction of the
total deposits of customers which
commercial banks have to hold as
reserves either in cash or as
deposits with the central bank.
• fixed by the Central Bank as a tool
in monetary policy in influencing
the volume of credit
 Statutory Liquidity Ratio (SLR)

• Refers minimum portion of deposits that the

commercial banks are required to maintain
in the form of liquid asset such as gold or
govt. Approved securities (bonds, shares).
• Fixed central bank of a country in order to
control the expansion of bank credit.
 Functions of Central Bank
(i) Monopoly of Note Issue :
The Central Bank enjoys the exclusive power of note issue. In India the
RBI issues all notes except Re 1 notes and coins. Re 1 notes are issued by
the Government of India under the guidance of RBI. The currency notes
issued by the Central Bank are declared unlimited legal tender
throughout The country. The Central Bank has to keep reserve of Gold,
Silver and foreign securities for issuing notes.
(ii) Banker, Agent, Advisor To The Government :
The Banking A/c of the government both central and state are maintained
by the Central Bank as the commercial bank does for its customers. As a
banker and to the government it helps the government in short term loans and
advances for temporary requirements and floats public loans For the
government.
iii) Banker’s Bank :
• All commercial banks keep part of their cash balances as deposits with the
Central Bank of the country. This is either because of convention or legal
compulsion. The commercial banks regularly Draw currency during the busy season
and paying in surplus during the slack season. Part of these balances are meant for
clearing purposes i.e.; all commercial banks keep deposit account with the Central
Bank. The deposit balances of the Central Bank is considered as cash reserves for
General purpose.
• Under the Banking Regulations Act of 1949, the Central Bank of India have
been empowered with the right to supervise and control the activities of various
scheduled commercial banks. These powers are related to licensing, branch
expansion, liquidity of assets and methods of working of The Bank.

(iv) Clearing House Facility :

• By virtue of its unique position in dealing with domestic and foreign funds the
Central Bank has a Special position for conducting:
• (a) Clearing house operation
• (b) Interbank transfer of funds
• (c) Settlement of accounts.
• Clearing house facility means providing an opportunity to member commercial banks
to settle Their claims on each other mutually E.g.: Indian Bank has to pay to SBI a
sum of` 2 lakh and SBI has to pay to Indian bank`1,50,000.This can be settled with a
check of `50,000 by Indian Bank On the RBI in-favour of SBI. As a result Indian
Banks accounts will be debited and SBI’s account will be credited.
• (vi) Lender OF Last Resort: Central bank provides security to their cash
reserves, gives them loan and accommodation at the times of emergency and
thus act as the lender of the last resort. The Reserve Bank provide financial
assistance to the scheduled banks by rediscounting their eligible bill, and
through loans and advances against approved securities

(vii) Credit Control

• In order to ensure price stability and Economic growth of
a country, the Central Bank undertakes The
responsibility of controlling credit.
• The Central Bank ensures price stability and avoids
inflationary And deflationary tendencies by several monetary
methods such as regulation of Bank rate, open Market
operation, change invariable reservation, etc.
 Quantitative /General Credit Controls
• Bank Rate (or Discount Rate) Policy : The bank
rate is the rate at which the central bank lends
funds to commercial banks a lender of last resort
against approved securities or eligible bills of
exchange.
• During inflationary tendencies, the central bank
may increase bank rate lending rates by bank
on loans and advances also move up,
borrowing from banks becomes expensive and
is discouraged and, monetary expansion
decreases During deflationary tendencies, bank
rate may be decreased.
 Open Market Operation
• Open market operation refers to buying and selling of
approved securities by the Central Bank with a view
to influencing money supply in the economy.
• During inflationary tendencies, central bank sells
securities to the public and banks a portion of purchasing
power of the public and commercial banks' cash flows
goes to the central bank With reduction in deposits,
lending power of banks decreases which leads to
reduction in credit expansion.
• The central bank purchase securities during falling prices
(i.e. deflationary).
 Bank Saving Account
A savings account can be opened in a bank, post office,
or any financial institution. However, banks are more
convenient as their norms are customer-friendly and
services are easily accessible. This article tells you how
to open a savings bank account in a commercial bank in
India while offering a brief insight into the benefits of
having a savings account.
Opening a savings bank account is really very simple
and easy these days and you can open it without much
restrictions. Earlier you needed to have an introducer
who is an existing account holder in the same bank, to
open a savings bank account, but currently, introduction
 Who Can Open Savings Bank Account

Resident individuals, Non resident Indians,

Foreign Nationals and other categories of
applicants can open a savings account after
complying with bank’s KYC requirements.
Those who are below the age of 18 are also
eligible to open a savings account under the
guardianship of parents. Zero balance accounts
can also be opened under the Pradhan Mantri
Jan Dhan Yojana (PMJDY), given a set of
conditions.
 How to Open a Savings Bank Account

It starts with choosing the right Bank. While

many people select a bank on the basis of its
distance from home or office, it’s important
that you understand your own expectations
and requirements first and invest some time
in researching about the bank. Below are
the steps to open a savings bank account.
Select the Right Bank
Accessibility is a real life issue. When the bank is located in the
same locality as yours, it’s easier to carry out the financial and
non-financial transaction. The same holds true for its ATM
network. However, before selecting the bank make sure the
Internet banking and mobile banking services are available,
since you are going to use the facilities over the time.
Visit the Bank or Bank’s Website
Visit bank’s website to know more about the bank you want
to have your account in. Websites are the best place to
acquire more information on their services, products, and
facilities. Besides, you can choose to visit the branch office
physically during the business hours. Most of the
commercial banks are open from 10am to 4pm on week days
including 1st, 3rd, and 5th Saturday and remain closed on
2nd and 4th Saturday, Sundays and public holidays.
Decide the Type or Scheme of Savings account
Banks have a good number of savings account schemes such as Basic
Savings accounts, No Frill accounts, and Students account etc, each with
its own rules, charges and fees. Depending on whether you want to
operate it singly or jointly, the account opening will be subject to the
submission of correct KYC documents. Pick a scheme type that serves
your needs.
Keep the KYC Documents Ready
To open a savings account in your name you need to have a ‘Proof of
identity’ and ‘proof of address’ together with two recent passport size
photographs.
As per the RBI rules, there are six documents notified as ‘Officially Valid
Documents (OVDs)’ for the purpose of producing ‘Proof of Identity’.
Those are
Passport
Driving Licence
Voters’ Identity Card
PAN Card
Aadhaar Card issued by UIDAI
NREGA Card
You need to submit any one of these documents as proof of identity. If
these documents also contain your address details, then it would be
accepted as ‘proof of address’. If the document submitted by you for proof
of identity does not contain address details, then you will have to submit
another officially valid document which contains address details.
Recommended Reading- RBI Master Circular as on June 2014
Comply With Bank’s KYC Rules
The practice of obtaining these documents is a part of
the KYC norms. KYC means ‘Know Your Customer’
and this is a process by which, banks obtain
information about the identity and address of the
customers and ensure that banks’ services are not
misused.
The KYC procedure is to be completed by the banks
while opening the accounts. In fact, KYC is mandatory
for this purpose.
Therefore, the verifying officer has to make sure that
the documents you have submitted are genuine.
If you don’t have documents to authenticate your
identity, you will not be able to open the account.
Fill out the Forms
When the documents are verified, you’ll be provided
with savings account application and due diligence
Form. Fill out the spaces properly and paste your
photographs in the given space. Put your signature on
the forms and photocopies of the KYC documents in the
presence of the verifying officer. The signature you put
there will be saved in bank’s database. You will have to
use the same signature to operate the account, withdraw
money, or whenever you sign a cheque.
Deposit the Initial Amount
After the submission, you will be requested to deposit
some money in the account. Usually it’s the average or
minimum balance prescribed for the account you have
opened. Collect the receipt after you deposit the money
and keep in touch with the banker as to know exactly
when you can come back and collect your passbook,
ATM, or Cheque book, if applicable.
Once your account is opened, you are required to
maintain a certain amount in a given period of time. This
is called the ‘minimum balance’. When you don’t meet
the prescribed minimum balance, the bank levies a
penalty.
Advantages
1. Earn Interest
A savings account helps you earn interest on the deposited amount. To attract
new customers, banks now offer higher interest rates and a host of other
benefits such as discounts on locker rentals, unlimited ATM transactions, and
more. Moreover, some of the banks also offer many different types of savings
account to meet the different needs of the customers.

2. Safest Investment Option

One of the biggest advantages of saving account is unlike most other
investment options, a savings bank account does not invest your money but
still offers modest returns. All you need to do is to deposit money in your
savings account to take advantage of this feature.

3. Minimum Investment Amount

Browse through the different investment options and you’ll see that a savings
account is also the most affordable. You are simply required to keep the
minimum balance in your account to keep earning interest. This minimum
deposit amount can be different for every bank.
Disadvantages
1. Interest Rates Can Change
One important disadvantage of a savings bank account is that the interest rates offered
by the bank are variable. This means that the bank has the right to make changes to the
interest rate. While the changes are generally minimal, it is possible that the interest rate
of a savings account now can be lower 6 months down the line.

2. Easy Access
While easy access to funds is seen as one of the most important features of savings
account, it can also work as a disadvantage for some people. As these accounts allow
you to access your funds anytime you like, people are more tempted to spend. This can
make long-term savings challenging.

3. Minimum Balance Requirement

When you open a savings bank account, you’ll be required to maintain a minimum
average balance in your account. If you fail to maintain this balance, the bank charges a
penalty for the same. So, before opening an account, make sure that you check the
minimum balance requirements of the bank and always maintain this balance to avoid
the penalty.
 CONCLUSION
Saving bank account are meant to promote the habit of
saving among the citizens while allowing then to use
their funds when required. The main advantage of
saving account is its high liquidity and safety. On the
top of that saving bank account earn moderate interest
rate too.
Commercial banks are the most important part of our
country’s economy system. Commercial bank can be
government operated or can be privately authorised.
 BIBLIOGRAPHY
• WWW. BANK SAVING ACCOUNT.COM
• COMMERCE: CB GUPTA