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Monday, July 14, 2014

Quarterly Average Balance (QAB) Calculation for Savings Bank Account!!

High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below;
With a Average quarterly balance to be maintained at a level of Rs.20,000, you fail to keep the balance as per the above  example. What you got to keep in mind is for any quarter the sum of closing balance should not be less than (Rs.20,000 * 91) in this case, which is Rs.18,20,000. You might keep the same amount for one day in your account or you may distribute the same over the quarter.
High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below; 
- See more at: http://investorspedia.blogspot.in/2013/08/average-quarterly-balance-qab.html#sthash.oO4TtwBr.dpuf
1. Introduction
Money laundering is a serious threat to economic, security and social stability. It provides the fuel for drug dealers, terrorist, illegal arm dealers, corrupt public officials and others to operate and expand their criminal enterprises.  If unchecked, money laundering can erode the integrity of a nation’s financial institutions. Due to the high integration of capital markets money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial system, where it can undermine national economies and currencies. Money laundering is thus not only a law enforcement problem; it also poses a serious threat to national and international security level.

Prevention of money laundering Act (PMLA) was passed in 2002 to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for matters connection therewith. It forms the core of the legal framework put in place by India to fight money laundering. PMLA and rules notified there under come into force from July 1, 2005.


2. What is money laundering??
Money laundering is directly or indirectly attempting to indulge or knowingly assisting or knowingly is a party or is actually involved in any process or activity connected with the property. It is the process of moving illegally acquired cash through financial system so that it appears to be legally acquired.

Whoever commits the offence of money laundering shall be punishable with rigorous imprisonment for a term which shall be not less than three years but which may extend to seven years and shall also be liable for a fine, which may extend to five lakhs rupees. The Period of seven years may extend to ten years depending up on the thickness of the offence.

2.1. Steps involved in money laundering
2.1.1.Placement: Cash in introduced in to the system by some means
2.1.2.Layering: Such cash in revolved into the financial system by carrying out complex financial transaction to cover the illegal source
2.1.3.Integration: The final step involves acquiring wealth from such complex transactions.
- See more at: http://investorspedia.blogspot.in/2013/03/money-laundering-everything-about-it.html#sthash.93c1jzZg.dpuf
High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below; 
- See more at: http://investorspedia.blogspot.in/2013/08/average-quarterly-balance-qab.html#sthash.oO4TtwBr.dpuf
High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below; 


With a Average quarterly balance to be maintained at a level of Rs.20,000, you fail to keep the balance as per the above  example. What you got to keep in mind is for any quarter the sum of closing balance should not be less than (Rs.20,000 * 91) in this case, which is Rs.18,20,000. You might keep the same amount for one day in your account or you may distribute the same over the quarter.
- See more at: http://investorspedia.blogspot.in/2013/08/average-quarterly-balance-qab.html#sthash.oO4TtwBr.dpuf
High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below; 


With a Average quarterly balance to be maintained at a level of Rs.20,000, you fail to keep the balance as per the above  example. What you got to keep in mind is for any quarter the sum of closing balance should not be less than (Rs.20,000 * 91) in this case, which is Rs.18,20,000. You might keep the same amount for one day in your account or you may distribute the same over the quarter.
- See more at: http://investorspedia.blogspot.in/2013/08/average-quarterly-balance-qab.html#sthash.oO4TtwBr.dpuf
High misconception among the people about average quarterly balance is that the balance which is to be maintained should be kept in savings bank account throughout the quarter. Say for example for a account the average quarterly balance to be kept is Rs.5,000. What people do here is they keep extra Rs.5,000 throughout the quarterly in their bank account to avoid any penalty charges as failure in maintaining the balance attracts unnecessary charges on the shortage funds.(List of banks that provides Savings bank account are ICICI bank, Axis bank, HDFC bank etc.)

But this is not the case, as the calculation of Average Quarterly Balance is done in a different way and same is very easy to understand. Let see how it’s been calculated with an example;

By Definition: The Quarterly Average balance (QAB) is the average of all the closing day balance for any quarter. In simple terms, add up all the closing day balance of the quarter and divide the same with the number of days of that quarter.

Therefore, QAB = (Total of all closing day balance in a quarter/total number of days of that quarter)

Example: Let say you are having a Savings bank account were you are supposed to maintain a Average quarterly balance of Rs.20,000, and the quarter we are talking here is April to June. You withdraw on April 20th  a sum of Rs. 20,000 and redeposit on June 20th a sum of Rs.10,000. What would be your Average quarterly balance is calculated as below; 


With a Average quarterly balance to be maintained at a level of Rs.20,000, you fail to keep the balance as per the above  example. What you got to keep in mind is for any quarter the sum of closing balance should not be less than (Rs.20,000 * 91) in this case, which is Rs.18,20,000. You might keep the same amount for one day in your account or you may distribute the same over the quarter.
- See more at: http://investorspedia.blogspot.in/2013/08/average-quarterly-balance-qab.html#sthash.oO4TtwBr.dpuf

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