Question

Write Short Notes on.
Derivative deposits.

Answer 1

Derivative deposits refers to the deposits that arise in the depositor's account with respects to the proceeds of some loan credited to the depositor's account. For example: If Mr. A is granted a loan of Rs. 50,000 by the bank and it is credited to his account. Then the deposit of Rs.50,000 will be termed as the derivative deposit of Mr. A.