BANKING AFFAIRS

Detailed explanation-1: -Basis: REPUBLIC ACT NO. 9576, SEC. 3: The term “insured deposit” means the amount due to any bona fide depositor for legitimate deposits in an insured bank net of any obligation of the depositor to the insured bank as of date of closure, but not to exceed Five hundred thousand pesos (P500, 000).

Detailed explanation-2: -Each depositor in a bank is insured up to a maximum of 5, 00, 000 (Five Lakhs) Rupees. For both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank’s license or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

Detailed explanation-3: -These accounts also have what we call the overdraft facility. For the convenience of the accountholders banks also allow withdrawal of amounts in excess of the balance of the deposit. This facility is known as an overdraft facility.

Detailed explanation-4: -12. Who pays the cost of deposits insurance? Deposit insurance premium is borne entirely by the insured bank.