Training in

Banking Services
By
Murali Mahalingam on 18/02/2004

Misys International Banking Systems

What are Banking Services

• Traditionally Bank’s Borrow and Lend Money

• Services are activities to improve profitability

• Bank’s Provide Following Services

– Clearing

– Remittance

– Safe keeping

Misys International Banking Systems

What are Banking Services…. contd

– Foreign Exchange
– Investment
– Merchant Banking
– Capital Market
– Trade
– Agency
– Miscellaneous

………The list is exhaustive……………….

Misys International Banking Systems

Banking Services - Bank’s Earnings

• What Bank’s earn?

– Fees
– Commission
– Brokerage
– Rent
– Processing Charges

Misys International Banking Systems

Banking Services- Clearing

• Clearing Services
– Clearing process
• ….How it works?...Who does it?...parties involved?
– Local clearing of cheques
• … what is a cheque…parties to a cheque
– Collection of outstation cheques
– Collection of Dividend and Interest Warrants

Misys International Banking Systems

Banking Services - Remittance

• Remittance Services
– Drafts…. What is a Draft ?
– Electronic Funds Transfer (Within Bank or Network of
Banks)
– SWIFT (Society for Worldwide Interbank Financial
Telecommunication)

Misys International Banking Systems

Banking Services- Safe Keeping

• Safe Keeping Services

– Safe keeping of valuables
– Safe keeping of financial instruments
– Safe deposit locker
• Lessor (Bank) and Lessee (Customer)

Misys International Banking Systems

Banking Services- Foreign Exchange

• Foreign Exchange Services

– Buying & Selling currencies
– Issuing Travellers Cheques
– Remittance to other countries

Misys International Banking Systems

Banking Services-Investment

• Investment Services
– Bonds
– Mutual Funds
– IPO
– Gold

Misys International Banking Systems

Banking Services- Merchant Banking

• Merchant Banking Services

– Underwriting of shares/debentures
– Promoters for new ventures
– Bankers to a IPO

Misys International Banking Systems

Banking Services- Capital Market

• Capital Market Services

– Dematerialization… What is it?
– Online trading service (Buy/Sell)
• Shares
• Bonds
• IPO etc..

Misys International Banking Systems

Banking Services- Trade

• Trade Services
– Issuing Letters of Credit
• What is an LC
– Issuing Letters of Guarantee
• What is a Guarantee
– Collection of Bills
• What is a Bill of Exchange

Misys International Banking Systems

Banking Services- Agency

• Agency Services
– Executor and Trustee Services
– Sale/Purchase of Government Securities
– Acting as agent of Government, Local Authority
• Collection of taxes

Misys International Banking Systems

Banking Services - Miscellaneous

• Miscellaneous Services
– Issuance of
• ATM
• Credit Cards
• Debit Cards
– Set up of standing instructions/orders and Alerts
– Bill payments facilities
– Online Services
• Shopping
• Charity
– Facility Management Services
• Buying cinema tickets, household utility services etc…..

Misys International Banking Systems

Quiz Session

Q) Pay order is payable at the ?

1) Branch of issue
2) Branch other than issuing branch

Q) What does ATM stand for

1) Any time money
2) All time money
3) Automated Teller Machine

Misys International Banking Systems

Quiz Session

Q) In a Travellers cheque purchaser signs in one place

which serves to identify him
1) At the time of encashment
2) At the time of Disbursement
3) At the time of endorsement

Q) In a safe deposit locker the banker is a?

1) Lessor
2) Lessee

Misys International Banking Systems

Quiz Session

Q) Letter of Credit is opened by

1) Importer’s Bank
2) Exporter’s Bank

Q) Person who is entitled to receive the amount

mentioned in a cheque is referred to as
1) Payee
2) Drawer
3) Bailee

Misys International Banking Systems

Quiz Session… contd

Q) The bank that collects a cheque on behalf of the

customer is referred to as
1) Collecting Bank
2) Paying Bank

Q) What is the relationship between the bank and

customer in case of collection of cheques
1) Agent and Principal
2) Lessor and Lessee

Misys International Banking Systems

Quiz Session …. contd

Q) Guarantees and Letters of Credit are referred to as

1) Contingent Liabilities
2) Contingent Assets

Q) Clearing operations are done by

1) Central bank or any other designated bank by the central
bank
2) Foreign bank

Misys International Banking Systems

Quiz Session ….. contd

Q) When a cheque is returned because of want of

funds it is referred to as
1) Dishonor of a cheque
2) Payment of a cheque

Q) Can a cheque be crossed?

1) Yes
2) No

Misys International Banking Systems

Quiz Session…. contd

Q) Can a “Crossed Cheque” be presented for cash

payment across the counter of a bank
1) No
2) Yes

Q) Can a Draft be cancelled by the purchaser?

1) Yes
2) No

Misys International Banking Systems

Quiz Session…. contd

Q) Cheque is an order on a bank by ?

1) Drawer (customer)
2) Payee (beneficiary)

Q) Draft is always drawn on an identified branch of a

bank?
1) Yes
2) No

Misys International Banking Systems

Quiz Session….. contd

Q) LC stands for
1) Letter of Credit
2) Letter of Confirmation
3) Letter of Continuity

Q) Cheques, Drafts are referred to as

1) Negotiable Instruments
2) Financial Instruments

Misys International Banking Systems

Quiz Session…..contd

Misys International Banking Systems