Chapter 11 Correspondence with Banks Solutions

Basis

Current Account

Savings Account

1. Meaning

It is a type of bank account that is generally opened by the businessman to carry out their business activities.

It is a type of bank account which is opened by salaried and household people with an aim of saving their part of the income and earn interest.

2. Withdrawals

There are no restrictions on the number of withdrawals. They can withdraw money by cheque.

There are restrictions over the number of withdrawals. They can withdraw money either by cheque or by withdrawal slip.

3. Facilities

Such account holder gets the facilities of Passbook, Cheque Book, Statement of Account and Pay-in-Slip Book.

Such account holders get the facilities of Passbook, Cheque Book, and Pay-in-Slip Book.

4. Rate of Interest

Generally, no interest is allowed on the Current Account. If it is allowed it is a very nominal rate.

The rate of interest on the Saving Account is higher than the Current Account but less than fixed deposits.

5. Overdraft facility

Overdraft facility is allowed to Current Account holders.

Overdraft facility is not allowed to Saving Account holder.

6. Suitability

It is suitable for traders, business firms, and institutions.

It is suitable for salary earners, households, and fixed income groups.

Basis

Loan

Overdraft

1. Meaning

Amount granted for a specific period of time, against personal security, gold or silver, and other movable or immovable assets is called a loan.

Overdraft is a credit facility granted by the bank to Current account holders. Under an overdraft facility, the bank allows its customers to overdraw an amount up to a particular limit.

2. Eligibility

Savings account, Fixed, Recurring, and Current account holders are eligible for the loan facilities.

Only Current account holders are eligible for an overdraft facility.

3. Duration

The loan is a long period facility.

Overdraft is a short period facility.

4. Purpose

The purpose is to meet long-term requirements.

The purpose is to meet short-term working capital requirements.

5. Repayment

The amount of the loan may be repaid in installments or in a lump sum on its due date.

The amount of overdraft is adjusted against the balance of Deposits in the Current account.

6. Security

It is provided against personal security, gold or silver, and other movable or immovable assets.

It is provided against collateral securities like shares, FDR, LIC Policy, etc.

Basis

Fixed Deposit Account

Recurring Deposit Account

1. Meaning

Fixed Deposits are the deposits received for a fixed period of time.

A Recurring Deposit account is that account where depositors regularly deposit a fixed amount for a specific period of time.

2. Facilities

The bank gives a Fixed Deposit Receipt to the Fixed Deposit holders.

The bank gives a Pass Book and Pay-in-Slip book to Recurring Deposit holders.

3. Rate of Interest

The rate of interest allowed is higher. The longer the period of deposit, the higher will be the rate of interest.

The rate of interest is less than Fixed Deposit Account.

4. Suitability

It is suitable for those people having surplus income in hand.

It is suitable for fixed-income groups and lower-income groups.

PRAGAT KRUSHI SEVA COMPANY LTD.
Registered office: Milind Sally Manjul,
Nashik Pune Highway, Sangamner
CIN: H353558 MH 2019 PLO 227244Phone: 02425 – 223019
Fax: 02425 – 227230Website: www.pragatksltd.com
Email:[email protected]Date: 10th March 2019.Ref No. BlbRbl212019
The Bank Manager, IDBI Bank,
New Nagar Road,
Jantar Raja Maidan,
Sangamner.Sub: Opening of Current Account.Dear Sir,The Board of Directors of a company have passed a resolution on 3rd March 2019 to open a Current Account in your bank in the name of the company i.e. “PRAGAT KRUSHI SEVA COMPANY LTD.” and to appoint you as the company’s banker.Please find enclosed herewith the following documents for the purpose of opening the Current Account of our company.Account opening form duly filled, signed and dated.Certified copy of Memorandum of Association.Certified copy of Articles of Associations.Certified copy of Incorporation Certificate.Certified copy of Board resolution regarding opening a Current Account.Specimen signature of two directors Mr. Maithily Kulkarni and Mr. Ajit Godse and the company secretaryCertified copy of the list of present Directors of the company.Duly filled up Pay-in-slip along with ₹ 5,000 (Rupees Five thousand only) in cash as initial deposit.Certified copies of PAN and TAN.Thanking you,Yours Faithfully,
for PRAGAT KRUSHI SEVA CO. LTD.
(Sign)
Company Secretary.Encl: As above

AVANI GLASS LIMITED COMPANY
Registered Office: Janata Raja Maidan,
Vidya Nagar, Sangamner.
CIN: B45453 MH 1992 PCL 123272Phone: 02425 – 227244
Website: www.avaniglass.comFax: 02425 – 222340
Email:[email protected]Date: 15th March 2019Ref. No. B/PC/1/19-20
The Bank Manager,
New Nagar Road,
Sangamner.Sub: Stop Payment of Cheque No 303592
Ref: Our Account No 30357090414Dear Sir,It is to bring to your notice, to stop payment of the Cheque no. 303592 dated 10th March 2019 of ₹ 75,000 (Rupee Seventy Five Thousand) issued by the company from Current Account no. 30357090414 in favour of Mr. Krushna Chaudhari, Nashik.The said cheque is reported to be lost by the party. So we kindly request you to stop the payment of the said cheque.We highly regret the inconvenience caused to you and wishing your kind co-operation in the above matter.Thanking you,Yours Faithfully,
for AVANI GLASS LIMITED COMPANY
(Sign)
Company Secretary.

B.K. INDUSTRIES LTD.
Registered Office: 240, Apeksh.
F.C. Road, Pune 4
CIN: B40418 MH 2010PIL 373078Phone: 020 – 3070901
Fax: 020 – 3145402Website: www.BKundu.com
Email:[email protected]Date: 25th May 2019Ref. No. BP/23/19-20
The Bank Manager,
Bank of Maharastra,
F.C. Road,
Pune – 4.Sub: Issue of Letter of Credit.
Ref: Our Current Account No 020304147911Dear Sir,We are pleased to inform you that, we want to import printing machine from America.As per the quotation received from Mark Industries, America we have to place an order along with a letter of credit.We, therefore, request you to issue a letter of credit in favor of the said company USD 4,50,0000. This letter may be issued on the basis of the credit balance in our current account and as per the prevailing exchange rate.Kindly issue the letter of credit and oblige. This will enable us to place an order at an early date.Thanking you,Yours Faithfully
for B.K. INDUSTRIES LTD.
(Sign)
Company Secretary.

JAI MATA GLASS AGENCIES LTD.
Registered Office: 285, M.G. Road,
Dwarka. Nashik.Phone: 0253 – 27304580
Fax: 0253 – 283048800Website: jaymata.com
Email:[email protected]Date: 10th January, 2019Ref. No. BK/7/20-19
The Manager,
RDBI Bank
Dwarka, Nashik.Sub: Request for overdraft facility
Ref: Account No. 00303540451Dear Sir,The Board of Directors in their meeting held on 2nd January 2019 has decided to request you to grant our company an overdraft facility up to ₹ 10 lakhs for a period of 5 months from March 2019 to July 2019.We are the manufacturer of Tuffen glass and we have a large export order for which we need to have working capital to fulfill our daily needs.We request you to accept our security of Fixed Deposit worth ₹ 10 lakhs with your bank.
We would also like to bring to your notice that we are being your customer for the last 10 years.
Expecting your early reply in favor of our overdraft facility.Thanking you,Yours Faithfully,
for JAI MATA GLASS AGENCIES LTD.
(Sign)
Company Secretary