The account maintained by a businessman with his bankers is known as
Current A/c
Businessman's Bank Account Type
When a businessman maintains an account with their bankers, the primary type of account suitable for their needs is one that allows for frequent transactions, deposits, and withdrawals without significant restrictions. Let's look at the options provided.
Analysing the Account Options
- Current A/c (Current Account): This type of account is specifically designed for businesses, firms, and public enterprises. It allows for a large number of transactions, including unlimited deposits and withdrawals. There is usually no limit on the number of withdrawals in a day. Current accounts do not typically pay interest on the balance. They often come with facilities like overdraft, which is very useful for business operations. This fits the requirements of a businessman who needs to conduct many transactions daily.
- Account Current: This is a different concept altogether. An "Account Current" is a running statement of transactions (debits and credits) between two parties who have regular dealings with each other over a period. It is used to determine the balance owed at the end of a specific period, considering interest on both debits and credits. It is not a type of bank account in the way 'Current A/c' or 'Savings A/c' are.
- Savings A/c (Savings Account): This account is primarily meant for individuals to save money. It usually offers interest on the balance. However, savings accounts typically have restrictions on the number of withdrawals or transactions allowed within a certain period. These limitations make it unsuitable for a businessman who needs to perform frequent business transactions.
Identifying the Suitable Account for a Businessman
Based on the nature of business activities, which involve numerous daily transactions, deposits, and withdrawals, the most appropriate account for a businessman to maintain with their bankers is a Current Account. Its features align with the high-volume transactional needs of a business.
Therefore, the account maintained by a businessman with his bankers is known as a Current A/c.
Important Questions from Basic Banking Concepts
______ is the rate of interest commercial banks have to pay to RBI if they borrow money from it in case of shortage of reserves.
Bull' and 'Bear' are associated with which of the following commercial activities?
What is the meaning of 'Take off stage' in an economy?
The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such per cent of its Net demand and time liabilities (NDTL) that the Reserve Bank may notify from time to time in the Gazette of India is called as _________.
A ______ is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the paper has been issued.
