Commercial Applications
A recurring deposit account allows the account holder to withdraw the entire deposited amount along with interest at any time before the maturity period.
- True
- False
Answer
False
Reason — A Recurring Deposit Account does NOT permit withdrawals before maturity. Under this scheme, the account holder is required to deposit a specific amount every month and gets back the entire amount together with interest only on the maturity date. The number of instalments may vary from 12 to 72.
Related Questions
The Statutory Liquidity Ratio (SLR) requires commercial banks to maintain a certain percentage of their liabilities in liquid assets, which can include government securities.
- True
- False
A commercial bank is considering increasing its lending to small businesses. Which of the following actions by the Central Bank would most likely constrain the bank's ability to do so?
- Reducing the Statutory Liquidity Ratio (SLR).
- Increasing the Cash Reserve Ratio (CRR).
- Lowering the Bank Rate.
- Conducting open market operations to purchase government securities.
An open cheque is safer than a crossed cheque because it can be cashed by anyone.
- True
- False
A country is facing economic instability, and the central bank decides to implement strict credit control measures. Which combination of actions is the central bank most likely to take to stabilize the economy?
- Increase the bank rate and sell government securities.
- Decrease the Cash Reserve Ratio (CRR) and lower the bank rate.
- Increase the Statutory Liquidity Ratio (SLR) and buy government securities.
- Lower the reserve requirement and reduce the statutory liquidity ratio.