A bank is a financial institution licensed by a government (RBI). Its primary activities include providing financial services to customers while enriching its investors. Many financial activities were allowed over time. For example banks are important players in financial markets and offer financial services such as investment funds. Structure of the organized banking sector in India. Number of banks is in brackets.
Indian Banking Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. No’s of Bank
1.) 88 scheduled commercial banks (SCBs) – 2.) 27 public sector banks (that is with the Government of India holding a stake) 3.) 31 private banks (these do not have government stake; they may be publicly listed and traded on
4.) 38 foreign banks 5.) They have a combined network of over 53,000 branches and 17,000 ATMs.
According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.
) National Bank:
The term national bank especially in developing countries. In any such case. the creditors can look to both the "entirety of the bank's assets" as well as the entirety of the sole proprietor's/general-partners' assets. Cooperative banking institutions take deposits and lend money in most parts of the world.Type of Bank
A.) Co-operative Bank: Co-operative banking is retail and commercial banking organized on a cooperative basis.
B.) Private Bank : The private banks are not incorporated. a bank owned by the state an ordinary private bank which operates nationally. A private bank is owned by either individual or a general partner with limited partners.
Firm a/c Rs. Debit card.Credit card.5000 minimum. Debit card.Nationalized Bank
Types of Deposit and Process
State Bank of India Rishala Chowk Branch Deesa (B. gold card Free statement
. SMS Facilities . Resident proof must be required Minimum Rs.10000 minimum M. Introduction a/c no and Signature Minimum 1.100000 and accident Rs. SMS Facilities Internet banking facility Current A/c Prescribe Documents with Photo graphs.1000 limit.I.500 without cheque book 2. ID Proof .Mevada Branch Manager Mo-94260 04863 Fixed Deposit Prescribe Documents with Photo graphs.1000 Insurance for ordinary death Rs.1000 Minimum Maximum no Rs. ID Proof.)Rs. 200000 ATM. at par facilities cheque RTGS. Debit card. SMS Facilities Internet banking facility
Unlimited cheque Over draft withdrawal. Minimum Minimum period period 1 year 1 year ATM.K)-385535 Savings A/c Prescribe Documents with Photo graphs.) With Cheque Book Rs. NEFT ATM. ID Proof NRO Prescribe Documents with Photo graphs. Introduction a/c no. Signature and Firm ref Personal a/c Rs. ID Proof.
)Rs.100000 & Acc. Garden road Deesa (B.1000 Accident Insurance Rs.30000 minimum
Fixed Deposit Prescribe Documents with Photo graphs.Co-operative Bank
The Mehsana Urban Co-Operative Bank Limited Arati complex. ID Proof. ID Proof Minimum Rs.100000 & Acc. Death Rs 200000
Current A/c Prescribe Documents with Photo graphs. Introduction a/c no and Signature Minimum 1.1000 Minimum period 30 days. at par cheque Accident Insurance Rs.) With Cheque Book Rs. Death Rs 200000 cover 2 or 3 Partner
. Signature and Firm ref Firm a/c Rs. ID Proof. Maximum 3 years onwards
Unlimited cheque Over draft facilities withdrawal.500 without cheque book 2. Introduction a/c no.K)-385535
Savings A/c Prescribe Documents with Photo graphs.
ATM. Introduction a/c no. Minimum Cheque Minimum period period 1 year 1 year Insurance for Unlimited cheque Over draft Ace deposit. Introduction a/c no and Signature Current A/c Prescribe Documents with Photo graphs. ID Proof. Net banking.10000 cheque book With limit. Aditya Complex Near Jalaram Temple Deesa-385535 Savings A/c Prescribe Documents with Photo graphs.DD Internet banking Free statement Free statement facility Net banking. gold ActivMoney DD card .Private Bank
Kotak Mahindra Bank Ltd.Credit card. ID Proof. par cheque book . phone banking phone banking
Fixed Deposit Prescribe Documents with Photo graphs. ID Proof
. SMS Facilities. 63/66. ordinary death withdrawal.1000 Minimum Rs. at SMS Facilities Over draft. RTGS. Debit card. at par facilities Free at par Rs. Resident proof must be required Minimum Firm a/c Rs. ID Proof . Global Access.2500 without minimum Maximum no Rs. NEFT no Mandate 200000 extra charge Facility ATM.10000 Minimum Rs. Signature and Firm ref Himanshu M Bharakhada Branch Manager Mo-98250 14980
NRI Prescribe Documents with Photo graphs. Debit card.100000 and cheque cheque. accident Rs.
• • • • Branch to branch core banking system Inter. balance of payments and withdrawal are done. Here computer software is developed to perform core operations of banking like recording of transactions. It allows the user (customers) to operate accounts from any branch if it has installed core banking solutions. satellite. Net electronic fund term)
The Mehsana Urban Co-Operative Bank Limited • • • Branch to branch core banking system Inter.Core Banking
The platform where communication technology and information technology are merged to suit core needs of banking is known as Core Banking Solutions. and interest calculations on loans and deposits.transaction banking system Branch to another bank RTGS & NEFT system
.transaction banking system Branch to another bank RTGS & NEFT system (Real time gross statement. internet etc. This software is installed at different branches of bank and then interconnected by means of communication lines like telephones. SBI Core banking system • • •
Branch to branch core banking system Inter. passbook maintenance.transaction banking system Branch to another bank
Kotak Mahindra Bank Ltd. customer records.
The duration of the scheme is of 15 years but can be extended for 1 or more terms of 5 years.) State Bank India: PPF.70000 in a year.) Investment amounts
. 15 years. 8 %. The PPF account can be terminated at any time but further contributions to the scheme later can only be made once 15 year term is over. All HPO’s authorized Post Offices.Type of service proved by the bank
Investment A. as announced by the Government of India from time to time. Open ended Close ended Tax saving
The popular Kotak Mahindra Mutual Fund Schemes have been listed below. Min: Rs.) PPF
I. Max: Rs.) Mutual funds: I. I.500.) Kotak Mutual Fund
• • •
There are 3 type of mutual fund.
o o o o o o
Kotak Lifestyle Kotak Global India Kotak Income Plus Kotak Tax Saver Kotak Opportunities Kotak 3
And any amount that is to be credited is also fully exempted from wealth tax.500 can be made per annum and any further amount can be made in multiples of Rs. up to 60% of the balance at the start of the extended period can be withdrawn. This interest rate is calculated based on the minimum amount that exists in your account between 5th of March and 31st of March.
A.A minimum amount of Rs. So one should not withdraw any part of the PPF amount between March 5th and 31st if the Interest rate is to be fully utilized. along with this we also provide long term values to our customers. Next loan can be taken once the first loan is completely paid off.5 subject to a maximum of Rs.) Tax benefits The Interest accrued from PPF is completely exempted from the Income Tax under section 88 of IT Act.) The Mehsana Urban Co-Operative Bank Limited: Co-operative banks give a life insurance
cover to the share holder and bond holder.) Loan facility Loans of up to 25% of the balance at the end of 1st financial year from 3rd to 6th year can be taken. If the account is extended beyond 15 years.5 lacks D-mats
A.70000 per annum. One of our important goals is to simplify investing for you. III. From the 6 th year you can withdraw amount from your account but that can be made only once in a financial year. Account holder insurance Rs.
.1 lacks Share holder insurance Rs.
B.) Kotak Mahindra Bank Ltd :
Investing from your perspective.)
Withdrawal policy Withdrawal of PPF amount is not possible for the first 5 years. II. IV.) Interest rate calculation The interest rate for your PPF account is calculated on every 31st of March at 8%. and make recommendations based on your needs.) State Bank of India: Account holder may be given a facility by taking the premium amount as
per the age limit and paid general death 1 lack and accident case 2 lacks.
Portfolio management service: A. Auto sweep service. Transfer funds between your own accounts or to any accounts with Kotak Mahindra Bank or with any other Bank* which participates in RBI NEFT scheme.) Kotak Mahindra Bank Ltd :
Portfolio management means to understand the client needs and requirements in terms of risk and returns and providing asset portfolio recommendations Advantages of Using a Portfolio Management Service
• • • • • •
Lower cost as compared to a mutual fund Tailor-made solutions & services Privileged access to the Fund Manager Control of Portfolio is ultimately in the Client's hands.) Banking Accounts b. This is paper less service to save the time to credit their payment easily and safely. and Power of attorney for share trading online.) Requests Profile g.) Kotak Bill Pay / Get Money f. AMC.Rs.) netc@rd e.Kotak security provides different type of service Auto-pay service.) Mail
. There are different type of service provide.
a.) Investments d. These services should be registrar given a bank detail for their account to the require institute.) Demat Accounts c. Regular Reporting and communications A dedicated Investment manager
Electronic clearing service
The Scheme shall be called "Electronic Clearing Service (Debit Clearing)" and will be referred to as ECS (Debit Clearing) hereinafter.
High value clearing. 5. is set to be phased out. the facility that enables depositors to encash cheques drawn for over Rs 1 lakh the next day. High value clearing service 1. 4. 3. In every bank not exceeding Rs 5 per transaction for Rs 1 lakh and Rs 25 per transaction for above Rs 1 lakh — for transactions done through NEFT has been fixed. The electronic alternatives service. such as national electronic fund transfer (NEFT) and real time gross settlement (RTGS) have reduced the need for cheque-based clearing. An amount not exceeding Rs 25 per transaction for Rs 1-5 lakh and Rs 50 per transaction for Rs 5 lakh and above for RTGS transactions has been introduced by RBI. 2. Most banks in Mumbai that participate in high value clearing are RTGS/NEFT enabled and payments can be effected more efficiently using RTGS and NEFT fund transfer mechanisms. Time by time RBI change their policy.
Types of Loan and Advance
whichever is less
Min.) Up to 10 lakes Max.2 lacs to Rs.5 lack Max.25 lacs. 7.1.75% (2.00.Rs 80 Max:Rs:8.50. .00000 to 8%
.12 Yrs Not exceeding Rs.5% lakes 11.) More Min.75% (2) Up to 20 12.or 5 times gross salary.. than 10 lakes 14 %(new car) 5 lacs for old 10.) Up to 10 lakes Max Rs. 15 lacs.50% (3) More then 20 lakes 12% Min. . 10.Rs 5000000 Min. 2 Lakes 11.) Above 15% 5 or 3 times 10 lakes 12.75% (Only vehicles personal use)
1% of loan amount.50 lacs for studies in India Rs. . whichever is less Net take home salary should be 50% of gross salary after EMI of proposed loan From Rs. 30 lakes 1.19 %
1. 25.50 lack 15%
Mortgage loans External Commercial Borrowings Agricultural loan
loans upto Rs25.Rs 100000 Min: Rs.15% Max.Rs 50000 Max.) min Rs.000/Max :Rs.) Up to 10 lakes up to Rs.000/. 60% of the market value of the property
Min.75% (2. 2 lacs to Rs. Min : Rs. 000/.000/10. . 30 lakes (20 year period ) 8% 10.15000 to 1.00. 1.000/-.) up to Rs. . Not exceeding Rs.State Bank of India
The Mehsana Urban Co-Operative Bank Limited
Kotak Mahindra Bank Ltd
gross salary if salary above Rs.
Medium range Rs. 750 per year (2.1250 per year ATM and other online banking facilities
State bank of India: there are providing 2 type of service.)
High range Rs.
4. 100 and maximum of Rs. Third party transfer and RTGS/NEFT any other facility. Access any ATM in the country absolutely free 3. A Mini-statement showing the past few transactions can be generated from any of the SBI ATMs.
pension. 000 (in multiples of 100) per day. SBI provide E-Ticking. State bank of India:
1. anywhere and at any time. State Bank also provides account Balance Check facility at the ATMs. 2. SBI ATM services are available for any individual account holder (savings. Mobile recharge. The transaction limits set by State Bank of India also known as ATM withdrawal limit is a minimum of Rs.
Kotak Mahindra Bank Ltd:
1. Kotak payment gateway and any other facility. The state of the art touch screen Kotak Mahindra Bank ATMs are part of the Visa/Plus and Cash net ATM network. Donation. Transfer funds between accounts 5. banking a/c. E-Tax. 15. Affiliated to the VISA network 2. current.) SBI Credit Card or State Bank of India Credit Card offers you exclusive deals and
convenience of cashless shopping with complete online payments and balance transfer
ATM card Facilities State bank of India
1. 4. Cash Withdrawals as fast as in mere 60 seconds from any SBI ATM. 3. E-Payment. and NRE accounts) with SBI. Demat a/c. 5. That means you can withdraw cash from our ATM Network with any International and Domestic Visa/Visa Electron/Plus Credit Cards/Debit Cards.
Gold Debit Card A world of privileges to match your style. Best Compliments Card Give a loved one the perfect gift .
2. Vishal Mega Mart Card. With this card. Spice Jet SBI Card and more. Social Card. The benefits and features of State Bank of India credit cards do not end here. Railway Card. You can use your ATM-cum-Debit card to transact for FREE at any of over 12. Powerful.000 ATMs of any bank in State Bank Group within the country. UBI Cards. with unmatched convenience and flexibility.solutions and all this come with redeemable reward points system. Gold & Platinum Card and SBI partnership cards that include Go Air. secure and within your reach! Access India Debit Card (NRO Card) A domestic use only card for customers holding Non Resident (Ordinary) accounts. status and lifestyle. Transparent. Hero Honda. Lifestyle Card. Global Debit Card Convenient access to your account with the Global Debit Card. Kotak Mahindra Bank Ltd Credit Cards Simple. SBI Advantage Card.with the Kotak Mahindra prepaid credit card! Netc@rd Online shopping across the world is now easy.) State Bank ATM-cum-Debit Card: State Bank if India offers unparalleled convenience
through State Bank ATM-cum-Debit card. The available SBI Credit Cards are: SBI Silver. LG. VISA and VISA Electron logos. there is no need to carry cash in your wallet. What a Credit Card should be! Platinum Debit Card Exclusive privileges for elite customers. All Debit/ Credit Cards issued by any bank outside India displaying Maestro.
External Policy RBI Policy
a) Restructuring of the system of bank inspections
. Employee Card. Cirrus. Master Card. SBI Card For Doctors. You can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit Card.
0 per cent to 4. regulations and the state of the economy. Business has to take account of government economic policy. fiscal policy.Introduction of off-site surveillance. Financial derivatives such as options. exchange rates. bonds and equities (corporate ownership and debt).0 per cent. futures contracts.75 per cent with immediate effect m) The cash reserve ratio (CRR) of scheduled banks has been retained unchanged at 5. government versus private sector spending/savings.
• • • • • • • •
long term interest rates. the Virtual Bank advises you on how to make the best of all these factors.in this section we look at the different types of government policy. credit quality. Follow the links below to the area you would like to look at in more detail: Government policy . swaps. To reduce the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 5.0 per cent to 4. The Bank Rate has been retained unchanged at 6. international capital flows of money on large scales.75 per cent with immediate effect l) To reduce the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 5. monetary policy and supply-side policy. velocity of money through the economy. Strengthening of the role of statutory auditors and Strengthening of the internal defences of supervised institutions. etc.
b) c) d) e) f) g) h) i) j) k)
No business can isolate themselves from the external economic environment.
Consumer grievances handling system
.0 per cent of net demand and time liabilities (NDTL). In this section. We explain relevant concepts and theories and also give you some worksheets to see how well you understand them all. Supervision of financial institutions Consolidated accounting Legal issues in bank frauds Divergence in assessments of non-performing assets Supervisory rating model for banks.
alterations to the Terms of Reference require approval by the Board of the Banking Ombudsman Scheme Ltd. objective are not achieved. and also set out limits to those powers. pay orders or bankers’ cheques.
Credibility of customer
CIBIL . m) Failure to honor guarantee or letter of credit commitments. which contains the credit history of commercial and consumer borrowers. of small denomination notes tendered for any purpose. g) Non-payment or inordinate delay in the payment or collection of cheques. of coins tendered and for charging of commission for this service. and for charging of commission for this service. without sufficient cause. j) Non-payment or delay in payment of inward remittances .
a) the amount which the complainant has claimed or could claim in respect of the subject
matter of the complaint exceeds the ﬁnancial limit. fair in all the circumstances f) The type and scope of the complaints which may be considered by a Banking Ombudsman is very comprehensive. d) At any time that a complaint is under consideration by him or her the Banking Ombudsman may seek to promote a settlement or withdrawal of the complaint by agreement between the complainant and the Participating Bank concerned.is a repository of information.India's first credit information bureau.
. e) In making any recommendation or award under these Terms of Reference the Banking Ombudsman shall do so by reference to what is. without sufficient cause. b) to the extent that the complaint relates to a Participating Bank’s interest rate policies. in his or her opinion. Process of consumer grievances system and this process every bank follow:
• • • • •
Appointment of a Grievance Redressed Officer Compliance with Licensee’s Code of Practice Grievance Filing Commission procedure Monitoring of Complaints brought to the Commission
An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing the broad scope of constituent interests. c) The Banking Ombudsman may take account of a Participating Bank’s security measures of which he or she has knowledge notwithstanding that no disclosure of those measures has been or will be made to the complainant. The Terms of Reference define the principal powers and duties of the Banking Ombudsman. etc. CIBIL provides this information to its Members in the form of credit information reports. In accordance with the Banking Ombudsman constitution. h) Non-acceptance. drafts. of drafts.Consumer grievances handling system there are different objective need are not satisfied. k) Failure to issue or delay in issue. l) Non-adherence to prescribed working hours. i) Non-acceptance. bills.
spread over different institutions. Records of all the credit facilities availed by the borrower Past payment history Amount overdue Number of inquiries made on that borrower. 6. 9. 7. 8. They must be able to gain access to the applicant's complete credit record that may be 3. by different Members Suit-filed status
NPA in Banks and their rules
Bad bank is a term for a financial institution created to hold nonperforming assets owned by a state guaranteed bank. Bank get the by cibil and check the public domain information in order to create a truly comprehensive snapshot of an entity’s financial track record.
. Such institutions have been created to address challenges arising during an economic credit crunch wherein private banks are allowed to take problem assets off their books. Bank collects commercial and consumer credit-related data and collates such data to create and distribute credit reports to Members.
2. For credit grantors to gain a complete picture of the payment history of a credit
5.Source: cibil web site Check the credibility of customer by Bank
Sub standard 4. So. To repair the balance sheet of the banks is only one important element to get the banks back to normal lending activities. Therefore.
. Globally. an asset is considered bad when the borrower defaults on the principal and interest repayments for more than two quarters of 180 days. the officers visit the clients and physically grab the asset that was earlier hypothecated to the bank. and if possible. This may bring down the earnings in gross term and will certainly bring down the ROI ratio. to avoid getting them converted to loss. such officers shall have to give reasons and/or may face enquiry for being incompetent.
1. 2. technically. is sold separately to square-off the NPAs. is NOT of any use to the bank. The other major element is the organizational processes. this cut-off is 90 days. Further. RBI rules for NPA At present. The said asset. the banks are required tom ensure that the NPAs are cleared within 6 months. Because if that happens. pre and post reform NPA levels are not strictly comparable as there has been a significant tightening of accounting norms. Doubt full 5. But in such cases.The increase in NPA figures year after year indicates that more of the loans are turning bad/ doubtful and thus the bank will not be able to recognise any due but unpaid interest on those loans. Irregular 3. Loss But that could NOT be done every now and then. nominal amount of loss or profit gets booked along with the squaring off of the NPAs. and show the recovery. in real terms.
There have been noticeable improvements in the financial health of banks in terms of asset quality. there after.
Identification Documents to be submitted by customers for opening of accounts The identity of the customer. In respect of Medium/High risk customers. Customer identification means identifying the customer and verifying his/her/its identity by using reliable. independent source documents.KYC norms Banking operations are susceptible to the risks of money laundering and terrorist financing. while establishing a banking relationship..e. In order to arrest money laundering. carrying out a financial transaction or when the branch has a doubt about the authenticity/veracity or the adequacy of the previously obtained customer identification data. his/her address location and his /her recent photograph. branches shall call for additional information and documentary evidence Furnishing of Photographs
. besides the normal documents prescribed above for low risk customers. where banks are mostly used in the process. to establish the identity of each new customer. data or information. Customer Identification is carried out at different stages i. Branches need to obtain sufficient information to their satisfaction. whether regular or occasional and the purpose of the intended nature of banking relationship. it is imperative that they know their customers well.