BANK DEPOSITS AND KINDS

THEREOF
 THE WORD BANK AND ITS DEFINITION

• It has not so far been decided as to how the word BANK

originated. The most common opinion in this regard is that the
word BANK has been derived from the German word BACK
which means Joint Stock Fund. Later on, when the Germans
Occupied major part of Italy, the word BACK was Italianized
into BANK.
• As defined in the Negotiable Instrument Act 1881, Banker
means a person transacting the business of accepting, for the
purpose of lending or investment, of deposits of money from
public, repayable on demand or otherwise and withdrawable by
cheque, draft, order or otherwise.
 NATURE OF BANK DEPOSITS

• Bank Deposits can broadly classified into following three

categories which is mainly based on the duration and purpose
for which the deposits are to be kept at the Bank before they
can be withdrawn by the depositors.
1. Current Deposits
2. Savings Deposits
3. Fixed or Term Deposits
 CURRENT DEPOSITS
• These kind of deposits are payable to the customer whenever they
are demanded.

• Such deposits bear the obligation of banker of paying all cheques

etc. drawn against to the extent of the balance in the account.

• Because of nature, these deposits are treated as current liabilities by

the Banks.

• In UBL such accounts have been renamed as UBL Business Partner

Account to create an understanding among the customers that they
are treated as Partners by the Bank instead of customers in light of
the slogan of the bank, i.e. Where You Come First, . Various waivers
of Bank’s commission have been offered on such accounts subject
to maintaining of a specified balance.
 CURRENT DEPOSITS
• Moreover, during the current month of May; 2010, a new
account titled as UBL Business Partner Plus account has been
launched with special features as regard to multiple benefits in
the shape of waivers on various products offered by the Bank.

• In the year 2006, UBL has also launched Basic Banking

Account (UBL BBA) which specially aims to provide Banking
facilities to low income groups with no fee for maintaining the
account. However transactions allowed in these accounts are
limited.
 PLS SAVING ACCOUNTS
• Savings Deposits were introduced in England by the Trustee
Savings Banks which were established under Trustee Savings
Bank Act 1863 for receipt of money from depositors without
any benefit to the Trustees or organizers.

• The main object of the savings deposits was to encourage thrift

among people of small means like children, household women
who could deposit only a very small amount at a time.

 In Pakistan Savings Deposits Account can be opened with

small amount of money. Profit is paid on half yearly basis
which is calculated monthly on the basis of minimum balance
retained in the account.
 PLS SAVING ACCOUNTS

• When commercial Banks found that it was a paying business,

they also started accepting savings deposits. Upto recent past,
the depositor was not allowed to withdraw more than a fixed
amount from deposits in a month; and if the depositor desired
to withdraw a large sum, he had to give a prior notice of 10-15
days. Thus the Bankers did not need large sum in reserve to
meet the demand on them and as such some money was
always available for still more expansion of the Banker’s
business.
 In order to popularize this scheme, the State Bank of Pakistan
has allowed the Savings Scheme for school and college
students. The purpose of these accounts is to inculcate the
habit of savings.
 FIXED OR TERM DEPOSITS

• These deposits are placed with the bank for a specified period
in accordance with the agreement made between the customer
and the banker and as such are named as Fixed or Term
Deposits.
• The profit paid on such deposits varies with the duration for
which these are placed with the bank. The frequency of profit
payable is at the discretion of the customer which may be on
monthly basis or at the time of maturity of the deposit.
 The above exposition covers only a very limited aspect of
banking. Section 7 of the Banking Companies Ordinance 1962
authorizes banking companies to engage in the following
forms of business as well.

• Borrowing and lending of money

• Discounting Bills of Exchange and other Negotiable Instruments.
• Collecting Negotiable Instruments on behalf of the customers.
• Buying and selling Bullion and Foreign Exchange.
• Granting of Letter of Credit to the customers.
• Receiving valuables for safe custody.
• Underwriting and dealing in stocks, shares, debentures and other securities
on behalf of the customers and others.
• Acting as agent to his customer; undertaking and executing trust.
• Carrying on guarantees and indemnities position.
• Dealing with any property that may come to it as security in satisfaction of
its outstanding claims.
Thank You