GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fixed asset
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Time liability
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Demand liability
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All of the above
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Detailed explanation-1: -the bank is liable to pay it with interest at the time of its maturity. There is a fixed term for such products and they are liabilities for the bank. Therefore, Fixed deposits, Recurring deposits, Gold deposits, etc. fall under the ‘Term Liabilities’ of a bank.
Detailed explanation-2: -Fixed deposits invested into banks for more than one year are non-current resources. Hence fixed deposits are assets. Also see: Difference Between Assets and Liabilities.
Detailed explanation-3: -Time liabilities refer to the liabilities which the commercial banks are liable to repay to the customers after an agreed period, and demand liabilities are customer deposits which are repayable on demand.
Detailed explanation-4: -Interest on a Term Deposit is payable to the depositor quarterly from the date of issue or at maturity along with principal. But on request from the depositor, interest may be paid at monthly, half-yearly or yearly intervals in case of Term Deposits fixed for a term of twelve months and above.