Financial Literacy Unit 6: Formalities to open various types of bank accounts

Flashcards for BCOM202 Financial Literacy Unit 6 - Formalities to open various types of bank accounts.

What are the two ways to open a bank account?

Online and offline

What are the benefits of having a bank account?

Withdrawal and deposit of funds, government subsidies, tracking money inflow/outflow, bill payment, safety, loans/insurance, investment growth.

What are the four categories of bank accounts?

Savings accounts, recurring accounts, fixed deposit accounts, and current accounts.

What are the steps to open a bank account?

Deciding the bank account type, approaching the bank, completing the application, providing documentation, verification, and depositing funds.

What does 'nomination' mean in banking?

A nomination in banking refers to an account holder's right to nominate one or more people who will receive the money if the account holder dies.

What documents are accepted as proof of age and identity when opening a bank account?

PAN card, Voter ID, Passport, Driving licence or Aadhaar card.

What documents are accepted as proof of address when opening a bank account?

Driver's licence, utility bill, voter ID, or passport.

What document is needed as proof of business existence for a current account?

Registration certificate issued by relevant authorities.

What is a Permanent Account Number (PAN)?

Unique 10-digit alphanumeric number provided to Indian taxpayers by the Income Tax Department.

When selecting a bank, what factors should be considered?

Accessibility, mobile banking, internet banking.

What documents qualify as proof of identity for opening a savings account?

Passport, Driving Licence, Voters’ Identity Card, PAN Card, Aadhaar Card issued by UIDAI, NREGA Card.

What is the average quarterly balance required for opening a current account?

Rs 10,000 and Rs 50,000

What documents are accepted as primary proof for sole proprietorships?

Registration Certificate (RC), Trade License, Labour License, Liquor License, Drug License.

What documents are accepted as secondary proof for sole proprietorships?

PF/ESIC registration certificate, utility bills, a certificate confirming the existence of your business by the Panchayat/Ward Commission

What documents are required from LLPs?

Certificate of Incorporation, LLP agreement, PAN, and identity proofs of all the partners

What documents are required for opening a current account for a company?

A Certificate of Incorporation, Board Resolution for opening a Current Account, Memorandum of Association and Articles of Association.

What documents are accepted as proof of identity for opening a fixed deposit account?

PAN Card, Voter ID Card, Aadhar Card, and Passport

What activities require a PAN card?

Purchase a car, property, participate in the stock market, or exchange your Indian rupees for foreign cash.

According to the Foreign Exchange Management Act, what transactions require a PAN card?

All transactions involving foreign currency.

Under which act is a PAN card required to purchase listed or unlisted securities?

Securities Contracts (Regulation) Act of 1956

What two types of documents are required for KYC (Know Your Customer) verification?

Identity and address verification.

What document must be uploaded for Aadhaar-based KYC?

Original Aadhar card.

What is one of the main functions of KYC?

Examining consumer-related money laundering threats.

Why is there no requirement for physical documents for eKYC verification?

There is no requirement for physical documents because it is done digitally

What are the two approaches to the eKYC process for online applications?

Aadhaar OTP and Aadhaar Based Biometric