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Deposit Policy (3293 words) |
 | Where the depositor desires to renew the deposit by seeking premature closure of an existing term deposit account, the bank will permit the renewal at the applicable rate on the date of renewal, provided the deposit is renewed for a period longer than the balance period of the original deposit. |
| While prematurely closing a deposit for the purpose of renewal, interest on the deposit for the period it has remained with the bank will be paid at the rate applicable to the period less penal interest for which the deposit remained with the bank and not at the contracted rate. |
| The Bank may also consider loan against deposit standing in the name of minor, however, a suitable declaration stating that loan is for the benefit of the minor, is to be furnished by the depositor - applicant. |
| Value and Duration in Retail Financial Markets: The Economics of Bank Deposits (6277 words) |
| Valuation models that assign a fixed maturity to the stock of deposits at best capture only a portion of the economic value of the franchise, and cannot reliably be used to measure the duration of the balance sheet or the value of a deposit franchise, whether the existing franchise or a potential deposit acquisition. |
| If, for instance, the deposit balances were treated as 3 month liabilities at their current rate of 4.5 percent, then a 1 percent interest rate shock impacts the value of the deposit liabilities by less than.25 percent of the outstanding balance, and, therefore, greatly understates the impact of franchise value risk in this illustration. |
| On the other hand, if the deposit balance is treated as a four year bond at 4.5 percent, the change in value is approximately 3.5 percent of the account balance, which greatly overstates the impact on the value of the firm. |
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