Test Blueprint & Topic Weightage
| Section / Topic | Question Range | Difficulty Level |
|---|---|---|
| General Eligibility & Account Types | Q1 – Q3, Q5 – Q6 | Easy to Medium |
| Maturity & Withdrawal Regulations | Q4, Q7 – Q8 | Medium |
| FCNR(B) & Special Provisions | Q9 – Q11 | Hard |
⚠️ Examiner Trap Alert: Students often falsely assume that FCNR(B) accounts allow recurring deposits or misunderstand the 14-day grace period for renewals. Always remember that FCNR(B) only permits Term Deposits, and overdue periods beyond 14 days are treated as entirely fresh deposits.
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✅ General Practice
Q1Banks can accept interest-free deposits only in a …… .Q2What is the definition of a "Reinvestment Deposit"?Q3Which of the following statements regarding the additional interest benefit for bank staff are correct?Q4How does a bank determine the detailed procedure for levying penalties on partial premature withdrawal of deposits?Q5Which of the following statements regarding the eligibility for opening savings bank accounts are correct?Q6Based on eligibility rules for opening savings bank accounts, which of the following entities is not eligible?Q7If a domestic term deposit matures and the proceeds remain unpaid, the unclaimed amount will attract an interest rate applicable to a savings account or the contracted rate on the matured deposit, ……Q8How is the rate of interest determined for a matured deposit standing in the name of a deceased individual depositor?
✅ | FCNR(B) & Special Provisions
Q9Are banks permitted to accept recurring deposits under the FCNR(B) Scheme?Q10Which of the following statements regarding the renewal of FCNR(B) deposits are correct?Q11Which of the following statements regarding remuneration for mobilizing deposits are correct?
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High-Yield Core Concepts
Current Account Restrictions
While Domestic Term Deposits earn fixed interest, banks are strictly permitted to accept interest-free deposits only in Current Accounts.
Maturity Rules
Unpaid matured deposits attract the lower of the savings or contracted rate, while early closures are governed by the bank’s specific Premature Withdrawal Penalty policy.
Foreign Currency Restrictions
As per FCNR(B) Scheme Rules, recurring deposits are explicitly prohibited, restricting this scheme purely to term deposits.
Remuneration Limitations
Under the RBI Master Direction, banks generally cannot pay commission or brokerage for mobilizing deposits, with strict exceptions only for Business Correspondents or Direct Selling Agents.
Semantic Comparison
| Feature / Metric | Interest Rates on Deposits | Interest Rates on Advances |
|---|---|---|
| Core Definition | The rate banks pay to customers for parking their funds. | The rate banks charge to customers for borrowing funds. |
| Primary Use Case | Encourages consumer savings and mobilizes bank liquidity. | Generates primary interest income and profitability for the bank. |
| Exam Importance | Highly tested in operational banking and RBI compliance modules. | Critical for credit management and priority sector lending topics. |