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MSSP - Class 8 ppt

  1. 1. Financial Education Class VIII
  2. 2. Introduction to Insurance
  3. 3. What is Insurance?  Insurance is a contract between the insurer (insurance company) and the insured (policyholder).  The person or object covered under insurance is called the insured.  The insurance company that receives the premium as part of consideration from insured to cover/compensate the financial loss is called insurer.  Insurance are of two types : Life and Non- life.  Life insurance is financial cover for contingency linked with human life like death, disability, accident etc.
  4. 4. What is Insurance? (cont.)  The person(s) nominated by the policyholder to receive the policy benefits in the event of his death is called a Nominee.  The duration of the insurance policy is called the policy term.  The amount an insurer is obliged to pay in case of occurrence of a loss/damage to the insured due to the specified event is called the Sum Assured.
  5. 5. Types of Insurance 1. Life Insurance : A contract between an insured and an insurer, where the insurer promises to pay the nominee of the insured a sum in exchange for a premium, upon death of the insured person. 2. Health Insurance : It covers the cost of an individual’s medical and surgical expenses. 3. Travel Insurance : It is intended to cover medical expenses, financial default and other losses incurred while traveling.
  6. 6. Types of Insurance (cont.) 4. Home Insurance : It safeguards the household assets and covers you for damage to your home due to uncertainties and unforeseen contingencies and other damages. 5. Motor Insurance : It provides protection for our vehicle against financial loss and liability that could result as a part of accident or theft.
  7. 7. Types of Banks
  8. 8. Scheduled and Non-Scheduled Banks  A scheduled bank is that which has been included in the Second Schedule of the Reserve Bank of India.  It fulfills the following conditions: -The bank must maintain minimum capital as stipulated by RBI. It assures the RBI about it’s operations not being detrimental to the interest of the depositors. -It is a corporation or a co-operative society and not a partnership or a single owner firm. Banks that are not included in the Second Schedule of the Reserve Bank of India Act are non-scheduled banks .
  9. 9. Reserve Bank of India Commercial Banks Regional Rural Banks Co- operative Banks Rural Co- operative Banks Urban Co- operative Banks Types of Banks
  10. 10. Classification on the Basis of Ownership  Public Sector Banks: Owned and controlled by the government. In India, nationalized banks and the regional rural banks come under this category.  Private Sector Banks: Owned by private individuals or corporations and not by the government or co-operative societies.  Co-operative Banks: Operated along co- operative lines.
  11. 11. Classification on the Basis of Domicile  Domestic Banks : Registered and incorporated within the country.  Foreign Banks : Foreign in origin and have their head offices in the country of origin.
  12. 12. Cheque  A cheque is a document that orders a payment of money from a bank account.
  13. 13. MICR Code and IFSC  Magnetic Ink Character Recognition, or MICR is a character recognition technology used primarily by the banking industry to facilitate the processing of cheques.  The characters are usually printed on the bottom strip of cheque leaf.  The Indian Financial System Code, IFSC is an 11 character code for identifying the bank and branch in which an account is held.  IFSC is used for both the NEFT and RTGS funds transfer systems.
  14. 14. MICR Code and IFSC  Magnetic Ink Character Recognition, or MICR is a character recognition technology used primarily by the banking industry to facilitate the processing of cheques.  The characters are usually printed on the bottom strip of cheque leaf.  The Indian Financial System Code, IFSC is an 11 character code for identifying the bank and branch in which an account is held.  IFSC is used for both the NEFT and RTGS funds transfer systems.
  15. 15. Tax Direct Taxes  Income Tax: Government levy (tax) imposed on individuals or entities (taxpayers) that varies with the income or profits (taxable income) of the taxpayer.  Property Tax: Property tax or ‘house tax’ is a tax on buildings, along with land, and imposed on its owners. The tax is levied by the local government where the property is located.
  16. 16. Tax Indirect Taxes  Goods and Services Tax The goods and Services tax has revolutionized the Indian taxation system. The GST Act was passed in the Lok Sabha on 29th March, 2017 and came into effect from 1st July, 2017 GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on supply of goods and services right from the manufacturer to the consumer.
  17. 17. Why do we pay taxes? What are taxes used for?
  18. 18.  Taxation is the source of money used by the government for development of the country, e.g. Developing roads, infrastructure, education institutions and many more.  Taxes are paid by all the responsible citizens of the country.  Government use different kinds of taxes and vary the tax rates.  Taxes may reduce taxpayers’ income.
  19. 19. Money in and Money out
  20. 20. Types/Kinds of a cheque  Bearer Cheque: It is payable to the person specified therein or to any one else who presents it to the bank for payment. The words “or bearer” appearing on the face of the cheque is not cancelled.  Order Cheque: It is expressed to be payable to a particular person without containing words prohibiting transfer or indicating that it will not be transferable.  Open/Uncrossed Cheque: When a cheque is not crossed its payment can be obtained at the counter of the bank.  Crossed Cheque: A crossed cheque cannot be encashed at the cash counter of a bank but can only be credited to the payee’s account.
  21. 21. Types/Kinds of a cheque (cont.)  Ante-Dated Cheque: It is a cheque bearing a date earlier than the date on which it is presented to the bank. It is valid upto 3 months from the date of issue of the cheque.  Post-Dated Cheque: If a cheque bears a date which is yet to come it is known as post- dated cheque. It cannot be honoured earlier than the mentioned date.  Stale Cheque: A cheque when presented for payment after 3 months from the date of the cheque is called stale cheque.
  22. 22. Demand Draft (DD)/Payment Order An instrument used by individuals to make payments or transfer money. - It is a much safer and certain method of payment than cheques. - It can be prepared with cash payment or by paying through your bank account. - The main purpose of a draft is to guarantee the certainty of payment to the payee. - A DD is valid for usually 3 months. Banks may charge a commission for issuing Payment Orders and Banker’s Cheques. - Details required to send a DD are as follows: Type of DD, the mode of payment to the bank, the concerned place where money is to be paid, name of the recipient and the amount.
  23. 23. How to open a bank account
  24. 24. Opening of Account  The procedure and application form used for opening accounts are more or less same in all banks which is as follows: Requirements: - Address Proof and Identity Proof - 2 Photographs - Minimum Balance - In the form, the photo of the individual who is opening the account needs to be affixed in the space provided. - Bank maintains a Card which has two specimen signatures of the account holder. - Introduction by an existing Account Holder when not complying to KYC Norms.
  25. 25. General Features of Children’s Bank Account  A guardian or a parent can open an account for a minor. It can be held jointly or independently. For an independent account the minor has to be more than 10 years of age.  The parent/guardian can choose to get bank statements on a regular basis.  They also have the option to give instructions to the bank to transfer certain specified sum of money into the child’s account on a regular basis.  All the facilities provided in a savings account is provided in this as well.
  26. 26. General features (cont.)  Some banks also provide life insurance cover to the parent/guardian.  The guardian/parents should hold an account with the bank where he/she wants to open an account for the minor.  Minimum balance has to be maintained, failing to which penalty is imposed.  Once the minor account holder turns into major, the account will be treated as a regular account.
  27. 27. Insurance A story
  28. 28.  All the villagers assembled for a discussion after a series of uncertainties.  An educated individual from the village suggested that they should protect themselves from such uncertainties through insurance.  He explained that group insurance is better than individual insurance.  Group insurance saves the insurers from the trouble of issuing multiple insurance policies.  Health insurance can also be availed under group insurance and benefits of cashless facility can be taken.  For this, only an ID proof is required at the hospital after availing the facility.
  29. 29. Value Added Tax (VAT)  An indirect tax imposed on products and services at different stages of manufacturing.  Paid to the government directly by the producer, and the cost is passed to the consumer.  Requires comprehensive and tricky calculations as it involves many stages. Sales Tax  It is levied on the total value of the purchase at the time of the purchase of the products or services.  It is collected from the consumer by the seller at the time of purchase.  It is easy to calculate as it is charged on the final amount.
  30. 30. Value Added Tax (VAT) Sales Tax  Levied on both the producer and consumer.  Collected by state government.  Its economic effect falls on final prices of the goods and services.  Levied only on the end consumer.  It is collected on sales of goods by shops, business establishment and manufacturing unit.  Sales tax relies on the final sale to the customers.
  31. 31. Filling of deposit and withdrawal slips
  32. 32. Circled number Details Entry in the above slip
  33. 33. Circled number Details
  34. 34. Operating Your Account  Making a deposit: To deposit money into your account there are the following options: - If a cheque is received, the beneficiary will deposit it with his banker who will collect the money through clearing house system, where banks in a city exchange cheques with one another and settle the payment by arriving at a net amount of payables and receivables.
  35. 35. Operating Your Account (cont.)  Making a withdrawal: - You can write a cheque made out to ‘Cash’ - Put the date on the cheque - Sign it like you would deposit. - Endorse the cheque and give it to the bank teller, who will give you the cash. - While using an ATM, put your ATM card into the machine, enter the PIN and specify the amount.
  36. 36. Thank You Email : ncfe@nism.ac.in Call : 022 6673 5100-05 Like : facebook.com/ncfeindia Follow : twitter.com/ncfeindia Share : youtube.com/ncfeindia