Chp-9 Explain the following
Chp-10 Explain the following
100
Central Bank
A Bank which is entrusted with the functions of guiding and regulating the banking system of a country is known as its Central bank. Such a bank does not deal with the general public.
It acts essentially as Government’s banker; maintaining deposit accounts of all other banks and advances money to other banks, when needed.
The Central Bank provides guidance to other banks whenever they face any problem.
The Central Bank maintains records of Government revenue and expenditure under various heads.
Foreign exchange rates are also determined by the Central Bank.
It issues currency notes and regulates their circulation in the country.
The Reserve Bank of India is the central bank of our country.
100
Principle of Indemnity
This principle is applicable to the fire and marine insurance.The purpose of this principle is that the insured is not allowed to make any profit from the insurance contract on the happening of the event that is insured against. Compensation is paid on the basis of amount of actual loss or the sum insured, whichever is less.
200
Commercial banks
Commercial Banks are banking institutions that accept deposits and grant short term loans and advances to their customers.
In addition to giving short-term loans, commercial banks also give medium-term and long-term loans to business enterprises.
Some of the commercial Banks are also providing housing loans on a long-term basis to individuals.
Types of commercial banks with 1 example each:
Public Sector Banks - State Bank of India
Private Sectors Banks - ICICI Bank Ltd
Foreign Banks - HSBC Bank
200
Principle of subrogation
In the contract of insurance subrogation means that after the insurer has compensated the insured, the insurer gets all the rights of the insured with regard to the subject matter of the insurance.
300
Development Banks
Development Banks provide businesses with medium and long-term capital for purchase of machinery and equipment, for using the latest technology, or for expansion and modernization.
They also undertake other development measures like Public Sector Banks comprising 19 nationalized banks and State Bank of India and its 7 associate Banks.
Examples- Industrial Finance Corporation of India (IFCI) and State Financial Corporations (SFCs), National Housing Bank (NHB).
300
Principle of insurable interest
It means that if there is a loss due to the damage of the insured property or to the assured life it will be the personal loss of the insured. A person has insurable interest in the property or life insured if he stands to gain from its existence or lose financially from its damage or destruction. In case of life insurance, a person taking the policy must have insurable interest at the time of taking the policy.
400
Specialised Banks
Specialised Banks are banks which cater to the requirements and provide overall support for setting up business in specific areas of activity.
Three examples of Specialised banks are :-
1. EXIM Bank(Export-Import Bank of India)
2. SIDBI Bank(Small Industries Development Bank of India)
3. National Bank for Agricultural and Rural Development (NABARD)
400
Utmost good faith
Insurance contracts are the contracts of mutual trust and confidence. Both parties to the contract i.e., the insurer and the insured must disclose all relevant information to each other. The insurer must honour all the promises made in the policy
500
Net Banking
The Internet (or Net) provides a secure medium for transferring funds electronically between bank accounts, and also for making banking transactions over the Internet.
All banking activities that were earlier done by visiting a bank can now be done through a computer with Internet access.
Credit card transactions are a form of Net Banking
With Net-Banking, you can not only view your account balance but also open a fixed deposit account, transfer funds, pay your electricity, telephone or mobile phone bills and much more.
500
Fire Insurance
A contract of fire insurance is a contract whereby the insurer, on payment of premium by the insured, undertakes to compensate the insured for the loss or damage caused by fire.
The insured cannot claim anything more than the value of property lost or damaged by fire OR the amount of policy, whichever is lower.
there must have been actual fire; and
the fire must have been accidental, not purposely. The basic principle applied with regard to claim is the principle of indemnity. The insured will be paid by the insurance company for the amount of actual loss suffered subject to a maximum amount for which he had taken the policy. He cannot make a profit through insurance.