Suren & Praveen

JAIIB
Practices & Principles of Banking
Brief Notes

JAIIB
 Module-2
Functions of Banks
Lesson – 17 – Ancillary Services

 Apart from the primary concepts of banking (lending and accepting deposits),
banks undertake other activities too for the customer’s needs.

 Remittance is defined as transfer of funds from one bank / branch to another

bank / branch. The common mode of fund transfers are DD, Banker's Cheque,
NEFT, RTGS etc.,

 Purchase of DD / BC can be made through cash only up to Rs.50,000/-.

 NEFT - National Electronic Funds Transfer System is operated from 21st

November 2005. The NEFT system is available round the clock throughout the
year on all days, i.e., on 24x7x365 basis. NEFT presently operates in batches on
half-hourly intervals throughout the day.

 Remittances through NEFT system for other countries are permitted only to
Nepal under Indo-Nepal Remittance Scheme. The beneficiary would receive
funds in Nepalese Rupees.

 RTGS - Real Time Gross Settlement is a fast electronic payment system that can
be made for a minimum of ₹2Lakh and above.

 DBT - Direct Benefit Transfer is an electronic fund transfer mechanism

introduced in 2013 to credit Government subsidies and funds directly to
beneficiary's bank accounts.

 Mobile Banking & Net Banking are the new age banking facilities provided by
banks to ease the customer's want of coming to banks physically. Payment and
settlement system is governed by ‘The Payment and Settlement Systems Act,

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 2007’. Reserve Bank of India and the Board for Regulation and Supervision of
Payment and Settlement Systems are the regulators.

 IMPS - Immediate Payment Service is an instant payment inter-bank electronic

funds transfer system service working round the clock provided by NPCI
through mobile phones using IFSC or UPI.

 CTS 2010 - Cheque Truncation System is a cheque clearance system introduced

in 2010 that involves the digitalisation of a physical paper cheque into a
substitute electronic form for transmission to the paying bank. NPCI is the
service provider of CTS whereas the implementation of CTS in India was vested
to IBA & NPCI.

 Pan India CTS will be made operational by September 2020 said RBI recently in
its Statement on Development and Regulatory Policies.

 Safe Deposit Locker / Vault is a facility provided to customers for

safeguarding their valuables for a prescribed fee. Minors can't be allowed to
rent lockers. The relationship between the bank and the hirer is that of a Lessor
and Lessee (also Bailor and Bailee) as the bank allows its place to use.

 Nominations for lockers are also available under Section 45 of Banking

Regulations Act. If the SDV is hired by two or more individuals jointly,
nomination can be made by them in favor of one or more persons.

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