GLOBAL TRUST BURST.

(MODULE 1)
The case describes the growth and collapse of Global Trust Bank (GTB), a
leading private sector bank in India. Since 2001, GTB's name was associated
with scams and controversies, thereby casting shadows over the credibility of
the bank and its management. Due to the over exposure to capital markets and
huge non-performing assets (NPA's), the bank was in a financial mess. When
GTB tried to cover up its monumental NPA's through under provisioning, the
Reserve Bank of India (RBI) - the Central Bank and the Regulatory Authority
for Banks in India, appointed an independent team to review the finances of the
bank. The review revealed various financial discrepancies kept covered by the
bank. RBI imposed a three month moratorium on GTB on the ground of 'wrong
financial disclosures' and within two days the bank was merged with Oriental
Bank of Commerce (OBC), a public sector bank. With the merger becoming
effective, GTB's identity came to an end and it became a part of OBC. The case
aims to teach students how financial mismanagement can lead to significant
losses for a bank.

RBI imposed a three month moratorium on GTB on the ground of "wrong

financial disclosures" and within two days the bank was merged with Oriental
Bank of Commerce (OBC), a public sector bank. With the merger becoming
effective, GTB's identity came to an end and it became a part of OBC.

Issues:
» The case aims to teach students how financial mismanagement can lead to
significant losses for a bank. The case is designed to enable students to:

» Analyze the reasons that led to the fall of Global Trust Bank

» Discuss the importance of proper supervision and control systems in a bank to

mitigate risks

» Understand how overexposure to capital markets can lead to huge NPAs for a
bank

» Appreciate the need for financial institutions to uphold the ideals of

transparency and absolute scrupulousness where public money was involved

» Examine the role of RBI as a regulating authority and debating on the

justifiability of its actions in the GTB fiasco
 HARSHAD MEHTA SCAM (MODULE 2)

Harshad Mehta, known for his rags-to-riches story, used receipts of public
sector banks to manipulate stock prices

The year 1992 will go down in the history of India as the year of the stock
market scam. Harshad Mehta, a broker known for his rags-to-riches story and a
poster boy for many investors, had used receipts of public sector banks to
manipulate stock prices.

Mehta siphoned off around Rs 1,000 crore from the banking system to buy
stocks on the Bombay Stock Exchange. As he pumped in money, the markets
continued to achieve new highs. Retail investors took cues from what Mehta
was buying and followed in the footsteps of the ‘Big Bull’.

In the period between April 1991 and April 1992, the Sensex went into a frenzy
and returned 274 percent, moving from 1,194 points to 4,467. That is the
highest annual return for the index.

The scam came to light when the State Bank of India reported a shortfall in
government securities. That led to an investigation that later showed that Mehta
had manipulated around Rs 3,500 crore in the system. On August 6, 1992, after
the scam was exposed, the markets crashed by 72 percent leading to one of the
biggest falls and a bearish phase that lasted for two years.

Mehta was jailed in 1992. In 1995, he again caused a furore when he claimed
that he made a donation of Rs 1 crore to PV Narasimha Rao, the then prime
minister, and the ruling Congress to set him free. He died in jail on December
31, 2001, after a cardiac arrest.

It was around the time Ketan Parekh, another stock broker, was being probed
for using bank and promoter funds to manipulate stock prices. Like Mehta,
Parekh was later convicted and banned from trading.
 KETAN PAREKH SCAM IN 2001
Ketan Parekh is a former stock broker from Mumbai, India, who was convicted
in 2008, for involvement in the Indian stock market manipulation scam that
occurred from late 1998 to 2001. During this period, Parekh artificially rigged
prices of certain chosen securities (informally referred to as K-10 stocks), using
large sums of money borrowed from banks including the Madhavpura
Mercantile Co-operative Bank, of which he himself was a director.As a result,
he was barred from trading in the Indian stock exchanges till 2017.

Parekh purchased large stakes in less known small market capitalization

companies, and jacked up their prices through circular trading with other
traders, and collusion with these companies and large institutional investors.
This resulted in steep hikes in share prices (for example: shares of Zee telefilms
zoomed up from Rs. 127 to a price of Rs. 10,000.This set of ten stocks was
colloquially referred to as "K-10" stocks and Parekh was playfully referred to as
"Pentafour".

It later transpired that promoters and industrialists often gave Parekh funds to
artificially rig up their share prices. Thus in just a few months, scrips of
virtually unknown companies like Visualsoft rose from Rs 625 to Rs 8,448 per
share and Sonata Software rose from Rs 90 to Rs 2,936.60. However, the bear
cartel in Bombay stock exchange started to hammer his K-10 stocks in February
2001, leading them to fall and precipitating a payment crisis in Kolkata.]

On 1 March 2001, just after the Indian Union Budget had been presented, the
BSE Sensex crashed 176 points, prompting the then NDA government to set up
an inquiry into the market reaction. Subsequently the RBI refused to clear pay
orders (POs) that had been given by Parekh as collateral for loans to BOI (Bank
of India), as they found them to be suspicious. The RBI commenced an
investigation against Parekh. Around the same time, a bear cartel of brokers in
Mumbai opposed to Parekh tried to dump their shares of K-10 stocks.
Panicking, Parekh sold off his entire ownership of the so called K-10 stocks that
he had successfully jacked up over the past two years, especially those of two
entities - GTB bank and MMCB bank. He carried out this large scale dump in
the evening, after regular trading hours, from 5 pm to midnight at the Calcutta
Stock Exchange. This resulted in a stock market crash the next day, resulting in
large scale losses for large institutional investors, including insurance
companies and mutual funds.
ACCOUNT KIT AND INTERNET BANKING
(MODULE 3)
ACCOUNT KIT
Account kit means those kits or things that a bank usually gives to his new
customers after opening an account in their bank.
A really important function of the Account Kit is to set proper expectations
moving forward. When customers know what is what and how things work at
your bank upfront, they aren’t left to their own ideas which inevitably causes
problems in the relationship.

What does the Welcome Kit comprise? Savings Account Welcome Kit contents
are as listed below:
a. Welcome letter
b. Debit Card (wherever applicable)
c. Cheque Book (wherever applicable)
d. Pass book
e. Code of Bank's commitment to Customers
f. Most Important Terms and Conditions of Debit Cards

What Is a Debit Card?

A debit card is a payment card that deducts money directly from a
consumer’s checking account to pay for a purchase. Debit cards eliminate the
need to carry cash or physical checks to make purchases. In addition, debit
cards, also called check cards, offer the convenience of credit cards and many of
the same consumer protections when issued by major payment processors like
Visa or Mastercard.
Debit cards usually have daily purchase limits, meaning it may not be possible
to make an especially large purchase with a debit card.

Types of Debit Cards

Check Card. A check card is a general term for a type of debit card that
functions like writing a check
1. Visa Debit Card
2. Mastercard Debit Card
3. Maestro Debit Card
4. Prepaid Debit Card
5. ATM Card
6. EMV Card

Definition of Cheque – What is a Cheque ?

As per negotiable instrument act 1881, A “cheque” is a bill of exchange drawn
on a specified banker and not expressed to be payable otherwise than on
demand.
There are three parties in Cheque Transaction – Drawer, Drawee and Payee. 1.
Drawer (Maker of Cheque) – The person who issue the cheque or hold
the account with bank.
2. Drawee – The Person who is directed to make the payment against
cheque. In case of cheque, it is bank.
3. Payee – A person whose name is mentioned in the cheque or to whom the
drawee makes payment. If drawer has drawn the cheque in favour of self
then drawer is payee.

Different Types of Cheque

There may be different types of Cheques depending on how the drawer has
issued the Cheque.
1. Open / Bearer Cheque 2. Order Cheque
3. Crossed Cheque
4. Anti Dated Cheque
5. Post Dated Cheque 6. Stale Cheque
7. Mutilated Cheque

INTERNET BANKING
Online banking, also known as internet banking, is an electronic payment
system that enables customers of a bank or other financial institution to conduct
a range of financial transactions through the financial institution's website. The
online banking system will typically connect to or be part of the core banking
system operated by a bank and is in contrast to branch banking which was the
traditional way customers accessed banking services.

Internet banking software provides personal and corporate banking services

offering features such as viewing account balances, obtaining statements,
checking recent transaction and making payments.

Online banking facilities typically have many features and capabilities in

common, but also have some that are application specific. The common features
fall broadly into several categories:

A bank customer can perform non-transactional tasks through online banking,

including:
• Viewing account balances
• Viewing recent transactions
• Downloading bank statements, for example in PDF format
 • Viewing images of paid cheques
• Ordering cheque books
• Download periodic account statements
• Downloading applications for M-banking, E-banking etc.

Bank customers can transact banking tasks through online banking, including:
• Funds transfers between the customer's linked accounts
• Paying third parties, including bill payments (see, e.g., BPAY) and third
party fund transfers (see, e.g., FAST)
• Investment purchase or sale
• Loan applications and transactions, such as repayments of enrollments
• Credit card applications
• Register utility billers and make bill payments
• Financial institution administration
• Management of multiple users having varying levels of authority
• Transaction approval process

Some financial institutions offer special internet banking services, for example:
Personal financial management support, such as importing data into personal
accounting software. Some online banking platforms support account
aggregation to allow the customers to monitor all of their accounts in one place
whether they are with their main bank or with other institutions.
Yes Bank- When the pillars break down (MODULE 4)
Yes, bank on things being worse than they look
The bank’s troubles run deeper than investors believe, and a cleanup will
probably be harder.
It’s no secret that India’s banking regulator hates having its officials sit on the
boards of state-run lenders.

Yes bank Stock Introduction -

How much is a CEO worth to you ? 1 Crore? 10 Crore? How about 100 Crores.
As the dust settled in the markets on the fateful day of September 21st, Yes
Bank had lost 22,000 Crores in a single day of trading. For those fleeting~6
hours, the CEO’s position at Yes Bank was valued at a mind-boggling 22,000
crores, for the RBI had released a circular the previous day denying the
promoter of Yes Bank, Rana Kapoor an additional term to carry on as CEO. Yes
Bank’s stock was on a free fall. To truly understand the events leading up to this
spectacular fall we must go back in time and understand the fundamentals of the
stock and the company.
Yes bank share price deep dives as Rana Kapoor's tenure is not extended

Exposures Towards Jet Airways and IL&FS Behind Yes Bank Crisis

In November last year, the RBI initiated probe into Yes Bank’s exposure
towards IL&FS, Dewan Housing Finance Corp. Ltd (DHFL), Indiabulls Group,
and Sudhir Valia-promoted entities Fortune Financial Services India Ltd and
Suraksha ARC.

Yes Bank investors lost nearly Rs 16,316 crore market capitalisation on

Tuesday, April 23, as the private bank’s shares plunged 30% to Rs 167 on the
National Stock Exchange (NSE), days after the bank reported a whopping Rs
1,507 crore net loss for the March quarter (fourth quarter of financial year 2018-
19). The bank posted a net profit of Rs 1,180 crore during the same period an
year ago.

Since the last three quarters, Yes Bank has been posting lacklustre financial
results on the grounds of massive exposure to crippled entities in infrastructure,
airlines and real estate sectors. The setbacks to the Yes Bank growth story
reflect the deepening crisis in the Indian banking sector fuelled by high levels of
non-performing assets (NPA).
The Bank had also attracted downgradings from a set of brokerage firms -
Macquarie Research has double-downgraded the Bank’s stock to
‘underperform’, foreign brokerage house Citi downgraded the stock to ‘sell’ and
HSBC downgraded to‘reduce’ call.

During the March quarter, Yes Bank’s gross non-performing assets ratio more
than doubled to 3.22 % from 1.28 % in the year- ago period and 2.10 % in the
December quarter. The gross NPA Ratio is the ratio of total gross NPA to total
advances (loans) of the bank.

On the outset, Yes Bank’s market performance can be attributed to its massive
exposures to stressed companies whose financial transactions are under probe
by various state- agencies and its board’s mismanagement, as flagged by the
Reserve Bank of India.

Last year, the RBI demanded the private lender’s founder Rana Kapoor to step
down as Chief Executive Officer, following a spat over breaches of
confidentiality and regulatory guidelines revealed in their inspections. Kapoor
was replaced by Ravneet Gill in January this year.

As per the bank’s recent filings, it’s gross slippage (accumulated bad loans)
stood at Rs 3,481 crore. Of that, Rs 552 crore were on account of exposure to an
airlines (reportedly, the airlines in question is the recently grounded Jet Airways
although the bank did not reveal this) while Rs 529 crore was because of
exposure to struggling infrastructure conglomerate IL&FS.

Yes Bank has a total exposure of over Rs 2,600 crore to various special purpose
vehicles of IL&FS.

In November last year, the RBI also initiated probe into Yes Bank’s exposure
towards IL&FS, Dewan Housing Finance Corp. Ltd (DHFL), Indiabulls Group,
and Sudhir Valia-promoted entities Fortune Financial Services India Ltd and
Suraksha ARC.
SAVING ACCOUNT IN HDFC (MODULE 5)
Saving Accounts in HDFC Bank
Commercial banks (like ICICI, HDFC, etc.), co-operative banks (like Saraswat,
Cosmos, etc.), public sector banks (like State bank of India, Bank of India, etc.)
and postal departments accept deposits by way of opening saving bank account
with them.
The 'saving account' is generally opened in bank by salaried persons or by the
persons who have a fixed regular income. This facility is also given to students,
senior citizens, pensioners, and so on.

Types of HDFC Savings Accounts

• SavingsMax Account
• Regular Savings Account
• Women's Savings Account
• Kid's Advantage Account
• Senior Citizens Account
• Family Savings Group Account
• Basic Savings Bank Deposit Account
• Institutional Savings Account
• BSBDA Small Account

A savings account is a zero balance account opened as an operative account for

fixed deposits/investments, for day to day personal transactions, remittances to
India, or for salary and payments, standing orders and direct debits/savings.
HDFC Bank offers the following Savings Account Schemes:

SavingsMax Account:
Higher interest can be earned on funds that are lying idle, through the automatic
sweep out facility.

Regular Savings Account:

This account is created for all your day to day banking requirements.

Women’s Savings Account:

This account offers women a complete banking solution and caters to her
financial, lifestyle and investment needs.

Kid’s Advantage Account:

This account scheme aims to develop money management skills in kids and is a
great method to accumulate savings for your child.
Senior Citizens Account:
This savings scheme is solely for the convenience of senior citizens and comes
with the benefits in relation to health, investment, and other day to day banking
solutions.

Family Savings Group Account:

This savings account scheme is a complete banking solution for your entire
family, with benefits from a single account.

Basic Savings Bank Deposit Account:

This is a zero balance savings account with free ATM(debit card), that meets all
your banking requirements.

Institutional Savings Account:

This Zero balance savings account are made available for Trusts, Societies,
Associations, Clubs, NGOs and so on.

BSBDA Small Account:

This is a zero balance savings account that comes with a free ATM card, that
gives access HDFC’s large ATM network across India and helps to meet all
your banking requirements.

Features and Benefit Of HDFC Savings Account

• The HDFC Savings account scheme offers various options to meet the
requirements of different customers in an unique manner.
• It offers a complete banking solution that allows the customer and his/her
family to benefit from one single account.
• With just one savings account customers can enjoy everything from
health, investment, etc. to everyday banking solutions.
• Widest ATM networks across the country to meet all your banking needs.
• Free Net Banking, Mobile Banking and Phone Banking.
• Email account statements are sent out on a monthly basis.
• "Money Maximizer" (sweep-out) facility is provided on some savings
accounts so that surplus funds can be put into high earning fixed deposit
at the threshold of Rs. 1,25,000.
CHARGES
Savings Standing Passbook Debit Card
Account Instructions issuance (annual
Scheme fee)

Savings Rs. 25 + Free Free

Max remittance
Account fee
Regular Rs. 25 + Free Rs. 150 +
Savings remittance Taxes
Account fee

Women’s Rs. 25 + Free Rs. 150 +

Savings remittance Taxes
Account fee
Kid’s Rs. 25 + Free Free
Advantage remittance
Account fee
Senior Rs. 25 + Free Free for
Citizens remittance life time
Account fee for 1st
applicant

Rs.100 +
taxes for
other
applicants.
Family Rs. 25 + Free Free for all
Savings remittance applicants
Group fee
Account

Basic Rs. 25 + Free Rs.100 +

Savings remittance taxes
Bank fee
Deposit
Account
Institutional Rs. 25 + N/A N/A
Savings remittance
Account fee
Rs. 25 + Fre Rs100 +
BSBDA remittance taxes
Small A/c fee
KOKAN MERCHANTILE COOPERATIVE BANK
(MODULE 6)

COMPANY PROFILE
REAY ROAD MAZGAON BRANCH:
Harbour crest, mazgaon T.T.Shavdas champsi Marg, railway colony,
Mumbai Maharashtra 400010
IFSC CODE: KKBK0KMCB04
Email: kmcbco@vsnl.net / W: www.kokanbank.net
Kokan Mercantile Co-operative Bank Ltd is a multi-state cooperative bank
mainly known as Kokan Bank, has been serving the community for the past
fifty years in the entire Kokan region (Western Maharashtra) with 25 branches
spread across in Greater Mumbai, Thane, Raigad, Ratnagiri and State of Goa.

SERVICES OFFERED
1 Saving Account
2 Current Account 3 Fixed Account
4 Recurring Deposit 5 Lakhpati Deposit
6 Team Loan
7 HousingLoan
8 Educational Loan
9 Vehicle Loan
10 Gold Loan
11 Property loan
12 ATM Facility
13 Locker Facility
14 Overdraft Facility
15 Cash Credit Facility

PROCESS OF OPENING A SAVING ACCOUNT APPLICATION FORM

Any financial institution will have a variety of account types and services to
choose from.
Banks often give their products unique names that can be confusing, but they’re
basically products at every institution:
• Checking accounts for making payments and direct deposit.
• Savings accounts for earning interest.
• Money market accounts for slightly more interest (while keeping access
to your cash)
• Certificates of deposit (CDs) for earning even more when you lock up
your funds.
• Loans of all types (auto, home, personal loans, and more)
• Different names are usually different levels of service (with
correspondingly higher pricing or thresholds to avoid fees). Pick the option that
has a mix that is right for you. For example, if you'll keep a low balance in the
account, just open an account that keeps fees at a minimum.
Steps to Open a Savings Account with Kokan Merchantile Cooperative Bank

To open a KMC savings account at any KMC Bank branch, customers will
have to follow the steps mentioned below.
Visit the KMC branch closest to you.
• Request the bank executive for an account opening form.
• On the account opening form, applicants will have to fill in both the parts.
• Form 1 - Name, address, signature, various other details and assets.
• Form 2 - Customers will have to fill in this part if they do not have a PAN
card.
• Ensure that all the fields have been entered and are correct. The details
mentioned in the application form should match those mentioned in the KYC
documents that have been submitted.

Documents Required to Open KMC Savings Account

• To be eligible for the KMC Savings Account, customers will have to submit
the following documents along with account opening form.
• Proof of identity - Passport, Driving license, Voter’s ID card, etc.
• Proof of address - Passport, Driving license, Voter’s ID card, etc.
• PAN card
• Form 16 (only if PAN card is not available)
• 2 latest passport size photographs

The customer will now have to make an initial deposit of Rs.500

As soon as the bank completes the verification process, the account holder will
be granted a welcome kit.

WITHDRAW SLIPS
A withdrawal slip is a bank document on which a person writes the date,
account number and amount of money to withdraw from a bank. It is called a
withdrawal slip because it is used to make a withdrawal from a person’s
account. It includes important information that allows the bank to keep an
accurate record of the withdrawal and provide the required amount.

DEPOSIT SLIPS
A bank deposit slip is a small form designed to place money into a savings or
checking account. A bank deposit slip has the account number, the name of the
depositor as it appears on the account, the date of the deposit and the amount of
funds being placed into an account.

FUNCTIONS OF BANK

A. Primary Functions of Banks

The primary functions of a bank are also known as banking functions. They are
the main functions of a bank.
These primary functions of banks are explained below
.
1. Accepting Deposits:
The bank collects deposits from the public. These deposits can be of different
types,
such as :-
a. SavingDeposits
b. FixedDeposits
c. Current Deposits
d. RecurringDeposits

2. Granting of Loans and Advances:

The bank advances loans to the business community and other members of the
public. The rate charged is higher than what it pays on deposits. The difference
in the interest rates (lending rate and the deposit rate) is its profit.
The types of bank loans and advances are :-
a. Overdraft
b. CashCredits
c. Loans
d. Discounting of Bill of Exchange

LOAN SCHEMES
• Housing Loan
• Vehicle loan
• Education loan
• Gold loan against ornaments
• Loan for business
• Personal loan

B. Secondary Functions of Banks :

The bank performs a number of secondary functions, also called as non-banking
functions.
These important secondary functions of banks are explained below.
1. Agency Functions:
The bank acts as an agent of its customers. The bank performs a number of
agency
functions which includes :-
a. Transfer of Funds
b. Collection of Cheques c. Periodic Payments
d. PortfolioManagement e. Periodic Collections
f. Other Agency Functions