(i) The essence of banking is the acceptance of deposits from the public withdrawal by cheque.
(ii) Types of Deposits: Banks accepts different types of deposits, both time and demand deposits, from the public. While time deposits, like fixed deposits or recurring deposits are repayable after an agreed period. Demand deposits, like deposits in current account and savings bank accounts, are repayable on demand, subject to term and conditions of the deposits. The period of deposit and rate of interest applicable to the deposit are matter to be agreed between the depositor and the bank under the terms of deposit, subject to any directions given by the RBI in this regard.
(iii) Regulation of acceptance of deposits: The Banking Regulation Act does not contain any specific provisions for regulation of acceptance of deposits of banks. However, Section 35A which authorize The RBI to give directions is wide enough to cover acceptance of deposits. The Reserve Bank of India Issues the directions from time to time regulating the rates of interest applicable to deposits. The direction may either fix the rates or specify the minimum/maximum rate of interest on savings deposits and time deposits for various periods as also for special categories of deposits like senior citizen, NRI deposit. If no rates are specified by RBI then the banks are free to decide their rate accordingly.
(iv) Return on unclaimed deposits: Bank have to file a return every year on their unclaimed deposits under Section 26 of the Banking Regulation Act.The return has to be filed within thirty days of each calender year in the form and manner prescribed and should cover all deposits not operated for ten years. In the case of fixed deposits the period of ten years starts from the expiry of the period of the deposit.
(ii) Types of Deposits: Banks accepts different types of deposits, both time and demand deposits, from the public. While time deposits, like fixed deposits or recurring deposits are repayable after an agreed period. Demand deposits, like deposits in current account and savings bank accounts, are repayable on demand, subject to term and conditions of the deposits. The period of deposit and rate of interest applicable to the deposit are matter to be agreed between the depositor and the bank under the terms of deposit, subject to any directions given by the RBI in this regard.
(iii) Regulation of acceptance of deposits: The Banking Regulation Act does not contain any specific provisions for regulation of acceptance of deposits of banks. However, Section 35A which authorize The RBI to give directions is wide enough to cover acceptance of deposits. The Reserve Bank of India Issues the directions from time to time regulating the rates of interest applicable to deposits. The direction may either fix the rates or specify the minimum/maximum rate of interest on savings deposits and time deposits for various periods as also for special categories of deposits like senior citizen, NRI deposit. If no rates are specified by RBI then the banks are free to decide their rate accordingly.
(iv) Return on unclaimed deposits: Bank have to file a return every year on their unclaimed deposits under Section 26 of the Banking Regulation Act.The return has to be filed within thirty days of each calender year in the form and manner prescribed and should cover all deposits not operated for ten years. In the case of fixed deposits the period of ten years starts from the expiry of the period of the deposit.
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