Banking Products, Accounts and Core Banking Operations
What this domain tests
Product knowledge plus the arithmetic and process rules behind accounts: which account fits which customer, how interest and TDS work, what nomination and joint-holding options mean, and how core banking changes service delivery.
Account and product rules
- Savings - interest is deregulated since 2011 and computed on the daily closing balance; withdrawals are restricted by the bank.
- Current - for businesses, no interest paid, unlimited transactions.
- Fixed deposit - lump sum for a fixed term; recurring deposit - monthly instalments.
- BSBDA - zero-balance basic savings account with caps on deposits and withdrawals.
- NRE/NRO/FCNR(B) - for non-resident customers; NRE and FCNR(B) balances are repatriable, NRO is for Indian-source income.
Core banking operations
CBS centralises branch data so a customer can transact at any branch (Anywhere Banking). It enables straight-through posting, automatic interest application, MIS, and end-of-day reconciliation. Every account needs a nomination option, correct KYC records, and a dormant/inoperative flag if unused for the period fixed by the bank.
Worked example
₹1,00,000 is placed in a 90-day deposit at 7% p.a. On a 365-day-year simple interest basis: interest = 1,00,000 × 7/100 × 90/365 = ₹1,726.03. If the depositor closes it after 45 days, the bank pays the card rate for 45 days minus the premature-withdrawal penalty, not the contracted 7%.
Traps
Do not compound when the question says simple interest or states a 365-day convention. Joint holders can be "either or survivor" (operation) while the survivor clause governs succession - operation and ownership are different questions. TDS on deposit interest applies only above the threshold fixed by the Finance Act, so learn the concept, not a stale figure.