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DEPOSITS
Demand deposits (DD)-withdrawable on demand Savings deposits- restrictions as to the number and amount of withdrawals during any specified period Term deposit (TD)- withdrawable only after the expiry of the fixed period of the Deposit e.g., FD, RD, Qtly & Monthly Income Certificates Notice Deposit- Type of TD but withdrawable on giving at least one complete banking days notice Current Account-a form of DD any number of withdrawals allowed based on a specified limit or the balance in the A/c
LOANS
Working Capital, Term loans and Bridge loans Secured and Unsecured loans-Security or Collateral-Mortgage, Hypothecation, Lien or pledge, guarantee or personal security Unsecured Loans-Bank O/D, Corporate Bonds, Credit Card Debt, Credit Facilities or Lines of Credit and Personal Loans
Types of Loans
Term Loan Lines of Credit, Bill discounting and Factoring Equipment Leasing
In FY08, deposits and advances of Private Sector Banks have outperformed those of PSBs as well as Foreign Banks on the back of some aggressive expansion over the last couple of years. Deposits of Private Sector Banks grew at a CAGR of 26% during FY04 FY08, as against an overall CAGR growth of 20.5% by all SCBs. Advances of Private Sector Banks grew at a CAGR of 32% as compared to a CAGR of 30.1% by all SCBs for the same period.
Public Sector Banks accounted for more than 66% of the combined total income (comprising of interest income and noninterest income) of all SCBs. Interest income, a major constituent of the total income of banks grew at a CAGR of 21% over the past four years. Fee based income, a constituent of non interest income increased sharply, growing at a CAGR of 27% between FY04 FY08 outperforming other segments of income including interest income.
Over the last couple of years, fee based services have been an area of focus for private banks, who have looked to increase their presence in areas like investment banking and M&A deals services that were especially lucrative in a high growth economy like India. Fee based income of Private Sector Banks grew at a CAGR of 45% between FY04 FY08, outperforming its foreign and public sector peers whose fee based income grew at a CAGR of 35% and 18% respectively for the same period.
Off balance sheet exposure of SCBs, increased by a sharp 88.4% in FY08, indicating the sharpest rise in recent years. Within this, the exposure to forward exchange contracts rose by 94.6%, driven by the frequent and sometimes severe fluctuations in the currency market. Retail banking generated high business volumes for both PSBs and private sector banks, constituting the majority of their revenue. Retail banking held a 41% share of the total revenue generated by PSU banks while it was 36% for private sector
NRE A/c.: The funds, standing to the credit of this account, as well as interest earned thereon, are remittable outside India in free foreign exchange, without permission of the RBI. The interest income is not subject to Indian Incometax. Credits to the accounts should be in the form of remittance in foreign exchange from outside India, as well as other funds, which are eligible to be remitted outside India, in free foreign exchange. Funds, emanating from local sources, are not eligible to be credited to these accounts, unless these funds are otherwise remittable outside India, in terms of the existing Exchange Control Regulations.
FCNR A/c.: These accounts can be opened in four foreign currencies: Pounds Sterling; US Dollars; Japanese Yen; Euro. For the purpose of opening an account, remittance in foreign exchange, in the same currency, should be received in India. The accounts can be opened only as fixed deposits, with a minimum maturity of one year and, a maximum maturity of three years. The principal, as well as interest, earned on these accounts, is remittable outside India, in the same currency or, in other convertible currency, as desired by the account holder. The interest, earned on these deposits, is exempt from Indian Income-tax.