Promotion Clerk To Officer-Study Material 2016 - Part 1

ZONAL TRAINING CENTRE - 36 TEG BAHADUR ROAD
DEHRADUN - 248001
T EL – 0135-2670946 - E-MAIL – ztcddn@pnb.co.in
PROMOTION FROM CLERICAL CADRE TO JMG SCALE - I
PART - I
STUDY
MATERIAL 2016
TABLE OF CONTENTS
Sl. No. Contents Page Number
PAPER - FIRST
1 Priority Sector guidelines 4
2 Customer compensation Policy 12
3 Cheque collection policy 14
4 Grievance Redressal Policy 14
5 Nomination 16
6 General Banking Guidelines 17
7 Garnishee order – Attachment order 20
8 Acts in Brief 22
9 Different types of customers 40
10 Credit Management and risk policy 2016-17 53
11 Clean Note policy 73
12 Non Performing Assets module 74
13 Policy on collection of dues and reposidary security 85
14 Government Sponsored Schemes 88
15 Social security scheme 91
16 Basel Accord – guidelines 92
17 Commercial Paper and Certificate of deposits 94
18 CGTMSE 94
19 Know your customer guidelines 96
20 Foreign Exchange 102
21 Analysis of Financial statements 123
QUESTION ANSWERS - PAPER FIRST
21 One Line questions answers 137
22 Retail lending schemes 180
23 Retail deposit schemes 192
24 Policy and acts 204
Refer PART-II for More MCQ and Paper-II
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PAPER
-
FIRST
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PRIORITY SECTOR GUIDELINES
Category of Priority Sector
i) Agriculture
ii) Micro, Small and Medium Enterprises
iii) Export Credit
iv) Education
v) Housing
vi) Social Infrastructure
vii) Renewable Energy
(viii) Others
Priority Sector Targets
(Domestic scheduled commercial bank and foreign banks with 20 branches & above)
Total Priority sector as % of ANBC OR credit equivalent of Off-balance sheet 40%
exposure, whichever is higher)
Agriculture (% of ANBC or CEOBE) 18%
(Within 18% target 8% of ANBE or CEOBE is for small and marginal farmers to be
achieved 7% by March 2016 and 8% by March 2017)
-Foreign banks with 20 branches & above to achieve agriculture target within a
period of 5 years i.e. ending March 31,2018
Weaker Sections (% of ANBC or CEOBE) 10%
Foreign banks with 20 branches & above to achieve by March 31,2018
Micro Enterprises (% of ANBC or CEOBE) 7.5%
(7% by March 2016 and 7.50% by March 2017)
Foreign banks with less than 20 branches – Priority Sector targets

Financial Year Total PS as % of ANBC or credit equivalent amount of OBSE
whichever is higher
2015-16 32
2016-17 34
2017-18 36
2018-19 38
2019-20 40
Computation of Adjusted Net Bank credit (ANBC)
Bank Credit in India (As prescribed in section 42(2) of RBI Act 1934 I
Bills Redisounted with RBI and other approved FIs II
Net Bank Credit (NBC) –Provisions, accrued interest etc. not to be deducted III ( I-II)
Bonds/debentures in Non-SLR Categories under HTM category+other investments IV
eligible to be treated as PS + Outstanding deposits under RIDF and other eligible
funds with NABARD, NHB,SIDBI and MUDRA Ltd. on account of PS shortfall +
Outstanding PSLCs
Eligible amount for exemptions on issuance of long-term bonds for infrastructure V
and affordable housing
Eligible Advances extended in India against incremental FCNR (B)/NRE deposit, VI
qualifying for exemption from CRR/SLR requirements
ANBC III+IV-V-VI
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ELIGIBLE CATEGORIES UNDER PS – DESCRIPTION
Agriculture
(i) Farm Credit (which will include short-term crop loans and medium/long-term credit to farmers)
A) Loans to individual farmers [SHGs or JLGs i.e. groups of individual farmers] directly
engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry,
bee-keeping and sericulture. This will include:
i) Crop Loans to farmers
ii) Medium and long term loans to farmers for purchase of agriculture implements and
machinery, loans for irrigation and other development activities.
iii) Loans to farmers for pre and post harvest activities for spraying
iv) Loans to farmers upto 50 lacs against pledge / hypothecation of agriculture produce for a
period not exceeding 12 months.
v) Loans to distressed farmers indebted to non institutional lenders
vi) Loans to farmers under KCCs
vii) Loans to small and marginal farmers for purchase of land for agriculture purpose.
B) Loans to corporate farmers, farmers' producer organizations / companies of individual farmers,
partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied
Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an
aggregate limit of 2 crore per borrower. To include
i) Crop loans to farmers which will include traditional/non- traditional plantations
and horticulture and loans for allied activities
ii) Medium and long term loans to farmers for purchase of agriculture implements and
machinery, loans for irrigation and other development activities.
iii) Loans to farmers for pre and post harvest activities for spraying
iv) Loans to farmers upto 50 lacs against pledge / hypothecation of agriculture produce
for a period not exceeding 12 months
(ii) Agriculture Infrastructure - An aggregate sanctioned limit of Rs.100 crore per borrower from
banking system
i) Loans for construction of storage facilities (warehouses, market yards, godowns and silos)
including cold storage units/ cold storage chains designed to store agriculture produce/
products, irrespective of their location.
ii) Soil conservation and watershed development.
iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-
pesticides, bio-fertilizer, and vermi composting.
(iii) Ancillary Activities.
(i) Loans up to 5 crore to co-operative societies of farmers for disposing of the produce of
members.
(ii) Loans for setting up of Agriclinics and Agribusiness Centres.
(iii) Loans for Food and Agro-processing up to an aggregate sanctioned limit of 100 crore per
borrower from the banking system.
(iv) Loans to custom service units managed by individuals, institutions or organizations who
maintain a fleet of tractors, bulldozers, well boring equipments threshers, and under farm
work for farmers on contract basis
(v) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS)
and Large-sized Adivasi Multi- Purpose Societies (LAMPS) for on-lending to agriculture.
(vi) Loans sanctioned by banks to MFIs for on-lending to agriculture sector as per the conditions
specified in paragraph IX of this circular
(vii) Outstanding deposits under RIDF and other eligible funds with NABARD on account of
priority sector shortfall.
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For the purpose of computation of 7 percent/ 8 percent target, Small and Marginal
Farmers will include the following:-
- Farmers with landholding of up to 1 hectare are considered as Marginal Farmers.

Farmers with a landholding of more than 1 hectare and upto 2 hectares are
considered as Small Farmers.
- Landless agricultural labourers, tenant farmers, oral lessees and share-croppers
whose land holding is within the limits prescribed.
- Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of
individual Small and Marginal farmers directly engaged in Agriculture and Allied
Activities, provided banks maintain disaggregated data of such loans.
- Loans to farmers' producer companies of individual farmers, and co-operatives of
farmers directly engaged in Agriculture and Allied Activities, where the membership
of Small and Marginal Farmers is not less than 75 per cent by number and whose
land-holding share is also not less than 75 per cent of the total land-holding.
MSME (MICRO, SMALL AND MEDIUM ENTERPRISES)

The limits for investment in plant and machinery/equipment for manufacturing / service
enterprise as per MSMED Act 2006:
Manufacturing Enterprises Investment in Plant and Machinary

Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed
five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten
crore rupees
Service Sector Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore
rupees
Medium Enterprises More than two crore rupees but does not exceed five
crore rupees
Classification of MSME Loans under Priority Sector
Manufacturing Enterprises : The Micro, Small and Medium Enterprises engaged in the
manufacture or production of goods to any industry specified in the first schedule to the Industries
(Development and Regulation) Act, 1951 as notified by GOI from time to time. Manufacturing
enterprises are defined in terms of investment in plant and machinary
Service Enterprises : Bank loans up to 5 crore per unit to Micro and Small Enterprises and Rs.10
crore to Medium Enterprises engaged in providing or rendering of services and defined in terms of
investment in equipment under MSMED Act, 2006.
Khadi and Village Industries Sector (KVI)
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All loans to units in the KVI sector will be eligible for classification under the sub-target of 7 percent
/7.5 percent prescribed for Micro Enterprises under priority sector.
Other Finance to MSMEs :

(i) Loans to entities involved in assisting the decentralized sector in the supply of inputs
to and marketing of outputs of artisans, village and cottage industries.
(ii) Loans to co-operatives of producers in the decentralized sector viz. artisans, village and
cottage industries.
(iii) Loans sanctioned by banks to MFIs for on-lending to MSME sector as per the
conditions specified in paragraph IX of this circular.
(iv) Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami
Card, Swarojgar Credit Card, and Weaver’s Card etc. in existence and catering to the non-
farm entrepreneurial credit needs of individuals).
(v) Outstanding deposits with SIDBI & MUDRA Ltd. on account of priority sector shortfall.
(vi) Overdrafts extended by banks after April 8,2015 upto Rs.5000/- under PMJDY accounts
provided the borrower’s household annual income does not exceed Rs.100000/- for rural
areas and Rs.160000/- in non rural areas. This OD will qualify as achievement of targets for
lending to MSME
IMPORTANT
1) Considering that the MSMED Act, 2006 the current sub-categorization within the
definition of micro enterprises in the existing guidelines is dispensed with.
2) To ensure that MSMEs do not remain small and medium units merely to remain eligible
for priority sector status, the MSME units will continue to enjoy the priority sector lending
status up to three years after they grow out of the MSME category.
Export Credit
Domestic banks Foreign banks with 20 Foreign banks with less than
branches & above 20 branches
Incremental export credit over Incremental export credit over Export credit will be allowed up
corresponding date of the corresponding date of the to 32 percent of ANBC or Credit
preceding year, up to 2 percent preceding year, up to 2 percent Equivalent Amount of Off-
of ANBC or Credit Equivalent of ANBC or Credit Equivalent Balance Sheet Exposure,
Amount of Off-Balance Sheet Amount of Off-Balance Sheet whichever is higher
Exposure, whichever is higher, Exposure, whichever is higher,
effective from April 1, 2015 effective from April 1, 2017 (As
subject to a sanctioned limit of per their approved plans, foreign
up to Rs.25 crore per borrower banks with 20 branches and
to units having turnover of up to above are allowed to count
Rs.100 crore. certain percentage of export
credit limit as priority sector till
March 2017).
Education
Loans to individuals for educational purposes including vocational courses upto Rs. 10 lakh irrespective
of the sanctioned amount will be considered as eligible for priority sector.
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Housing
1) Loans to individuals up to Rs.28 lakh in metropolitan centres (with population of ten
lakh and above) and loans up to Rs. 20 lakh in other centres for
purchase/construction of a dwelling unit per family provided the overall cost of the
dwelling unit in the metropolitan centre and at other centres should not exceed Rs.
35 lakh and Rs. 25 lakh respectively.
2) Housing Loan to Staff member (Bank’s own employees) excluded from PS.
3) housing loans which are backed by long term bonds are exempted from ANBC,
banks should either include such housing loans to individuals up to Rs.28 lakh in
metropolitan centres and Rs. 20 lakh in other centres under priority sector or take
benefit of exemption from ANBC, but not both.
4) Loans for repairs to damaged dwelling units of families up to ` 5 lakh in metropolitan
centres and up to ` 2 lakh in other centres.
5) Loans to any Government Agency for constructions of dwelling unit or for slum
clearance and rehabilitation of slum dwellers- maximum ceiling Rs.10 lacs per unit.
6) Housing projects exclusively for the purpose of construction of houses for
economically weaker sections and low income groups, the total cost of which does
not exceed 10 lakh per dwelling unit. For the purpose of identifying the economically
weaker sections and low income groups, the family income limit of 2 lakh per annum,
irrespective of the location, is prescribed.
7) Bank loans to Housing Finance Companies (NHB approved HFCs), for their
refinance, for on-lending for the purpose of purchase/construction/reconstruction of
individual dwelling units or for slum clearance and rehabilitation of slum dwellers,
subject to an aggregate loan limit of 10 lakh per borrower. Eligibility under priority
sector loans to HFCs is restricted to five percent of the individual bank’s total
priority sector lending, on an ongoing basis.
8) Outstanding deposits with NHB on account of priority sector shortfall.
Social infrastructure
Bank loans up to a limit of 5 crore per borrower for building social infrastructure for activities
namely schools, health care facilities, drinking water facilities and sanitation facilities in Tier
II to Tier VI centres. Bank loans for construction/refurbishment of household toilets and
household level water improvements, subject to above criteria.
Renewable Energy
(1) Bank loans up to a limit of 15 crore to borrowers for purposes like solar based power
generators, biomass based power generators, wind mills, micro-hydel plants and for
non-conventional energy based public utilities viz. street lighting systems, and
remote village electrification.
(2) For individual households, the loan limit will be 10 lakh per borrower.
Others
1) Loans not exceeding 50,000/- per borrower provided directly by banks to individuals
and their SHG/JLG, provided the individual borrower’s household annual income in
rural areas does not exceed 100,000/- and for non-rural areas it does not exceed
1,60,000/-.
2) Loans to distressed persons not exceeding 100,000/- per borrower to prepay their
debt to non- institutional lenders.
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3) Loans sanctioned to State Sponsored Organisations for Scheduled Castes/
Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or
the marketing of the outputs of the beneficiaries of these organisations.
Weaker Sections
PS Loans to following borrowers will be considered as weaker section category:
1) Small and Marginal Farmers

2) Artisans, village and cottage industries where individual credit limits do not exceed 1
lakh
3) Beneficiaries under Govt. Sponsored schemes like NRLM, NULM and SRMS
4) Scheduled Castes and Scheduled Tribes
5) Beneficiaries of Differential Rate of Interest (DRI) scheme
6) Self Help Groups
7) Distressed farmers indebted to non-institutional lenders
8) Distressed persons other than farmers, with loan amount not exceeding 1 lakh per
borrower to prepay their debt to non-institutional lenders
9) Individual women beneficiaries up to 1 lakh per borrower
10) Persons with disabilities
11) Overdrafts upto 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts,
provided the borrowers’ household annual income does not exceed 100,000/- for
rural areas and Rs. 1,60,000/- for non-rural areas.
12) Minority communities as may be notified by Government of India from time to time
Investments by banks in securitised assets
Investments by banks in securitised assets, representing loans to various categories of

priority sector, except 'others' category, are eligible for classification under respective
categories of priority sector depending on the underlying assets provided:
a) the securitised assets are originated by banks and financial institutions and are
eligible to be classified as priority sector advances prior to securitisation and fulfil the
Reserve Bank of India guidelines on securitisation.
b) the all inclusive interest charged to the ultimate borrower by the originating entity
should not exceed the Base Rate of the investing bank plus 8 percent per annum.
Transfer of Assets through Direct Assignment /Outright purchases

(i) Assignments/Outright purchases of pool of assets by banks representing loans under
various categories of priority sector, except the 'others' category, will be eligible for
classification under respective categories of priority sector provided:
(a) the assets are originated by banks and financial institutions which are eligible to be
classified as priority sector advances prior to the purchase and fulfil the Reserve
Bank of India guidelines on outright purchase/assignment.
(b) the eligible loan assets so purchased should not be disposed of other than by way of
repayment.
(c) the all inclusive interest charged to the ultimate borrower by the originating entity
should not exceed the Base Rate of the purchasing bank plus 8 percent per annum.
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Bank loans to MFIs for on-lending
(a) Bank credit to MFIs extended for on-lending to individuals and also to members of
SHGs / JLGs will be eligible for categorization as priority sector advance under
respective category provided not less than 85% of the total assets are in the nature
of “Qualifying Assets”. The categories are :
(i) Agriculture
(ii) Micro
(iii) Small & Medium enterprises
(iv) Social infrastructure
(v) Others
Aggregate loan for income generation activity should be not less than 50% of total
loans given by MFIs.
(b) Qualifying assets means a loan disbursed by MFI, which satisfy the following :
(i) The loan is to be extended to a borrower whose household annual income in
rural areas does not exceed 1,00,000/- while for non-rural areas it should not
exceed 1,60,000/-.
(ii) Loan does not exceed 60,000/- in the first cycle and 100,000/- in the
subsequent cycles
(iii) Total indebtedness of the borrower does not exceed 1,00,000/-.
(iv) Tenure of loan is not less than 24 months when loan amount exceeds
15,000/- with right to borrower of prepayment without penalty.
(v) The loan is without collateral.
(vi) Loan is repayable by weekly, fortnightly or monthly installments at the choice
of the borrower.
(c) Cap on Margin, Interest and Pricing guidelines
(i) Margin cap should not exceed 10 percent for MFIs having loan portfolio
exceeding 100 crore and 12 percent for others.
(ii) With effect from April 1, 2014, interest rate on individual loans will be the
average Base Rate of five largest commercial banks by assets multiplied by
2.75 per annum or cost of funds plus margin cap, whichever is less. The
average of the Base Rate shall be advised by Reserve Bank of India.
(iii) Only three components are to be included in pricing of loans viz., (a) a
processing fee not exceeding 1 percent of the gross loan amount, (b) the
interest charge and (c) the insurance premium.
(iv) Processing fee is not to be included in the margin cap or the interest cap.
(v) Only the actual cost of insurance i.e. actual cost of group insurance for life,
health and livestock for borrower and spouse can be recovered;
(vi) There should not be any penalty for delayed payment
(vii) No security deposit / Margin is to be taken
Monitoring of Priority Sector Lending targets
More frequent monitoring of priority sector lending compliance of banks on ‘quarterly’ basis
instead of annual basis.
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Non-achievement of Priority Sector targets
(1) Scheduled Commercial Banks having any shortfall in lending to priority sector shall
be allocated amounts for contribution to the Rural Infrastructure Development Fund
(RIDF) (NABARD) and other Funds with NABARD/NHB/SIDBI/MUDRA Ltd., as
decided by the Reserve Bank from time to time.
(2) For the year 2015-16, the shortfall in achieving priority sector target/sub-targets will
be assessed based on the position as on March 31, 2016.
(3) From financial year 2016-17 onwards, the achievement will be arrived at the end of
financial year based on the average of priority sector target /sub-target achievement
as at the end of each quarter.
Common guidelines for priority sector loans

1. Rate of interest
The ROI on bank loans will be as per directives issued by RBI from time to time.
2. Service charges
No loan related and adhoc service charges/inspection charges should be levied on priority
sector loans up to 25,000. In case of finance to SHGs/JLGs the limit of Rs. 25000/- will be
applicable per member and not to the group as a whole.
3. Receipt, Sanction/Rejection/Disbursement Register
A register/ electronic record should be maintained by the branches, wherein the date of
receipt, sanction/rejection/disbursement with reasons thereof, etc., should be recorded. The
register/electronic record should be made available to all inspecting agencies.
4. Issue of Acknowledgement of Loan Applications
Branches should provide acknowledgement for loan and dispose the applications within the
prescribed time limit.
Definitions/Clarifications
i) Contingent liabilities/off-balance sheet items do not form part of priority sector target
achievement.
ii) Term “all inclusive interest” includes interest (effective annual interest),
processing fees and service charges.
iii) On-lending: Loans sanctioned by bank to eligible intermediaries for onward lending
only for creation of priority sector assets. Average maturity of PS Asset thus created
should be co-terminus with maturity of bank loan.
iv) Loans extended under priority sector are for approved purposes and the end use is
continuously monitored.

CUSTOMER COMPENSATION POLICY
AREA AND LEVEL OF COMPENSATION
1)Unauthorized Debit
2)Payment of cheques after stop payment instructions
3)Standing Instructions not compiled for
4)Delay in Remittance
5)Delay in issuance of duplicate draft
6)Delay in collection of cheques
7)Instruments lost in transit
8)ATM Failure to dispense cash/short cash
UNAUTHORIZED ERRONEOUS DEBIT
1) Bank will reverse the entry immediately on being informed, after verifying the position,
maximum within 7 days (within 1 month if third party is involved) from the date of reporting.
2) where neither bank nor customer is at fault, but fault lies elsewhere(hacking/phishing) the
compensation will be limited upto Rs. 5000/- only.
Payment of cheques after stop payment

The bank will reverse such debit within 2 days of error coming to notice. Besides, any financial loss due
to returning of cheque or charging of penalty for not maintaining minimum balance on this account will
be compensated.
ECS Direct debits/other debits to a/c

The bank will compensate the customer to the extent of financial loss incurred on account of delay in
carrying out the standing instructions. In such case, charges debited in account will also be reversed.
Delay in Collection of local Cheques and other Negotiable instruments

Interest for delayed collection shall be paid at the following rates:
1) If the proceeds of cheque under collection were to be credited to Savings Bank or Current
account of the customer, interest at the rate of Saving Bank Rate for the period of delay.
2) If the proceeds of cheque under collection were to be credited to an overdraft/loan account
of the customer, interest will be paid at the rate applicable to the overdraft/loan account.
Delay in collection of cheques / instruments payable outside India

As per FEDAI Rules which reads :
ADs shall pay or send Intimation to the beneficiary in two working days from the date of receipt of
credit advice / nostro statement. In case of delay, the bank shall pay the beneficiary interest @ 2 %
over its savings bank interest rate.
Delay in credit / refunds of NEFT Transactions

In case of delay in crediting the beneficiary customer’s account or in returning the uncredited
amount to the remitter in case of NEFT, Bank shall pay penal interest at the current RBI LAF Repo
Rate plus two percent for the period of delay.
Delayed credit relating to bills negotiated/sent on collection basis to Exporters.

On receipt of credit advice/statement of Nostro/Vostro account Bank shall transfer funds to the
credit of exporter’s account within two working days and if fails Bank shall pay compensation for
the delayed period at the minimum interest rate charged on export credit as advised by RBI from
time to time.
Delay in payment of Inward Remittance

Bank shall pay or send intimation, as the case may be, to the beneficiary within two working days from
the date of receipt of credit advice/nostro statement.
In case of delay, Bank shall pay the beneficiary interest @ 2% over the savings bank interest rate.
Delay in Collection of Outstation Cheques in India

If the proceeds to be credited to Savings Bank or Current account:
i. SF rate for delay beyond to 7/10/14 days.
ii. TD or SF rate (whichever is higher) for applicable period if delay is beyond 14 up to 90 days.
iii. 2% above TD rate if delay is beyond 90 days.
If proceeds were to be credited to OD/loan account:
i. Interest at rate applicable to loan account.
ii. 2% above loan rate if delay is beyond 90 days.
Interest will be paid only if the amount calculated is Rs. 10/- or more. Rounding of up to the nearest
rupee
INSTRUMENTS LOST IN TRANSIT/IN CLEARING HOUSE
(a) Intimation regarding loss of instrument is conveyed to the customer beyond the time limit
stipulated for collection (7/10/14 days as the case may be) interest will be paid for the period
exceeding the stipulated collection period at the rates specified under cheque collection policy.
(b) In addition, bank will pay interest on the amount of the cheque for a further period of 15 days at
Savings Bank rate to provide for likely further delay in obtaining duplicate cheque/instrument and
collection thereof.
c) The bank would also compensate the customer for any reasonable charges he/she incurs in
getting duplicate cheque/instrument upon production of receipt, in the event the instrument is to
be obtained from a bank/ institution who would charge a fee for issue of duplicate instrument.
Delay in issuance of duplicate draft
Duplicate draft will be issued within 15 days from date of receipt of request from the applicant. In the
event of delay, interest @ FD rate of the corresponding period will be paid.
ATM Failure to dispense cash/short cash
For any failure to re-credit the customer’s account within 7 working days from the date of receipt of the
complaint, bank shall pay compensation of Rs.100/- per day. Customer is entitled to receive such
compensation only if claim is lodged within 30 days of the date of transaction
Delay in disbursement of revised pension and arrears

All the pensioners are compensated for the delayed period, if delay is on the part of the bank, beyond
the due date at the fixed interest rate of 8%.

CHEQUE COLLECTION POLICY (CCC 03/2016)
Same day credit
Bank will provide same day credit to its customers in respect of outstanding instruments drawn on any
of its own branches on CBS network.
Speed Clearing
“Speed Clearing” is currently available in all MICR centres across the country. Under “Speed Clearing”
system, cheques payable at any core banking solution (CBS) branches of any banks of any centres are
collected through local clearing and not through outstation collection.
Immediate Credit of Local / Outstation Cheques / Instruments up to Rs.15000/-

Immediate credit for third party cheques up to the aggregate value of Rs. 15000/- (Outstanding at
any given point of time) tendered for collection by individual account holders including staff
members but excluding minors and non-residents subject to satisfactory conduct of such accounts
for a period not less than six months may be allowed.
Charging of Interest on cheques returned unpaid where Instant Credit was given:
i. At Clean Overdraft Rate in case of Saving Bank/Current account,

ii. At the rate applicable to the concerned account /at Clean Overdraft Rate, whichever is higher, in case
of Cash Credit/Overdraft account.
GRIVANCE REDRESSAL POLICY - CCC 06/2015

Grievances related to attitudinal aspects
- Such complaints shall be handled courteously, sympathetically and above all swiftly.
- Misbehavior /rude behaviour with customers shall be treated at Zero tolerance level
TIME SCHEDULE FOR REDRESSAL OF COMPLAINTS

General complaints 21 days
(not resolved within 21 days to be referred to CCSO)
Complaints forwarded by RBI/MOF/ MPs/VVIPs 21 days
Complaints from PM’s office 15 days
ATM complaints related to dispensation of cash 7 Working days
Complaints related to point of sale transactions 45 days
Complaints requiring some time for examination of issues involved/ detail investigations /
enquiries, Bank will send final response or explain reasons for further time required within
30 days of receipt of complaint.
th
Customer’s Day is observed on 15 of every month. On this day, Branch Manager to meet
customers between 3 pm and 5 pm without any prior appointment.
CUSTOMER RIGHT POLICY - CCC 07/2015

1. Right to Fair Treatment - Both the customer and the Bank have a right to be treated
with courtesy. The customer should not be unfairly discriminated against on grounds such

as gender, age, religion, caste and physical ability when offering and delivering financial
products.
2. Right to Transparency, Fair and Honest Dealing - The product’s price, the
associated risks, the terms and conditions that govern use over the product’s life cycle
and the responsibilities of the customer and the Bank, will be clearly disclosed. Over the
course of their relationship, the Bank cannot threaten the customer with physical harm,
exert undue influence, or engage in blatant harassment.
3.Right to Suitability
The products offered should be appropriate to the needs of the customer and based on an
assessment of the customer’s financial circumstances and understanding.
4.Right to Privacy
Customers’ personal information to be kept confidential unless they have offered specific
consent to the Bank or such information is required to be provided under the law or it is
provided for a mandated business purpose (for example, to credit information companies).
5. Right to Grievance Redress and Compensation
The customer has a right to have a clear and easy way to have any valid grievances
redressed.
FACILITY AVAILABLE INTERSOL / BASE BRANCH – (ccc 08/2014)

Sr.N Facilities available in Inter-sol Facilities not available on inter-sol
o.
1. Issue of Pass book Issue of Cheque Book
2. Issue of Statement of Account Change in name in Customer Master
(CUMM)
3. Confirmation of Deposit (FDR Creation of Security Register Maintenance
Receipt)
4. Issue of Debit Card Marking Lien (ALM)
5. Issue of IBS User Freeze/Unfreeze the Account (AFSM)
6. Feeding of Standing Instructions Feeding of Standing Instructions in PPF
7. Deposit in PPF in all branches Adding/modification of Nomination
(not only in Govt. Business
Branches)
8. Feeding of 15G/15H Change in Transfer of Scheme Code (ACXFRSC)
Address etc. in Customer Master
(CUMM)
9. Issue of Demand Draft Transfer of Account from one sol to another
(ACXFRSOL)
10. Issue of TDS Certificate Premature Cancelation of FDR
11. RTGS/NEFT
(With the permission of Incumbent Incharge after exercising due diligence)
12. Submission of Life Certificate by Pensioners

NOMINATION
The Banking Regulation Act was amended in 1984 and sections 45ZA to 45ZF were added to the
Act for providing nomination facility in Banks.
Sec. 45ZA and 45ZB deal with the provisions for nomination deposit accounts section 45ZC and
45ZD for safe custody and section 45ZE and 45ZF for safe deposit lockers.
Banks cannot provide nomination facility in respect of Jewel Loans, Cash Credit Account or any
such account other than the three mentioned above.
NOMINATION FACILITY FOR DEPOSIT ACCOUNTS
What Type of Accounts: Nomination facility is available only in respect of a deposit account held in
individual capacity (including sole prop. CA account) of the depositor(s) and not in any
representative capacity. As such no nomination can be made in case of accounts in the name of a
company, firm HUF, association trust, etc.
Minor’s Account: Where the deposit is the name of a minor, the nomination will be made by his
legal guardian. In case of self operated minor accounts no nomination can be accepted.
Non-resident Accounts: Nomination facility is available.
Joint Account: Nomination should be made jointly by all joint account holders even if the account
is operated by either or survivor or former or survivor.
Who can be appointed as nominee?

Only Individuals can be appointed as nominee. Nomination cannot be made in favour of
firms/companies/H U F or any representative body.
In case of deposits, only one person can be appointed as nominee; for a particular account . (This
provision is different in safe deposit locker accounts).
In case of deposit accounts under Capital Gains Accounts Scheme 1988 a maximum of three
nominations under both schemes Account- A (Savings Fund), Account-B (Term Deposit) is permitted.
In case of pension accounts there should be two types of nominations; one for payment of pension
arrears which is made under “Arrears of Pension (Nomination) Rule 1983”. The other is made under
Banking Companies Nomination Rules 1985.
A minor can be appointed as nominee. However in such cases another adult (not necessarily his/her
guardian or relative) must be named to receive the deposit on behalf of the minor, in case of the
death of depositor(s) during the minority of the nominee.
Nonresidents including foreign nationals can be appointed as nominee. However, on the death of
depositor the deposit proceeds cannot be repatriated without obtaining prior permission from
Reserve Bank.
A lunatic cannot be appointed as nominee.
Particulars Deposit accounts Safe custody Safe deposit vault (locker)
Section 45ZA 45ZC 45ZE,45ZF
Nomination 819A 820A 821A ,821B*
Cancellation 819B 820B 821C
Substitution/ 819C 820C 821D
Variation 821 E*
* To be used for nomination/variation for more than one person.

NOMINATION FACILITY IN SAFE DEPOSIT LOCKER ACCOUNTS
The main points of difference between nomination facility in deposit account and that of Safe
Deposit Locker Account are the following:
Number of Nominees
In case of safe deposit locker account in joint names more than one person can be appointed as
nominee. Each hirer can have its own nominee. However, the maximum number of nominees will be
restricted to the number of joint account holders
NOMINATION FACILITY FOR ARTICLES KEPT IN SAFE CUSTODY

Nomination facility is available only where the articles are held in single name of individuals. In other
words Safe Custody (Account) in Joint Names is not eligible for nomination. (Note the differences
from deposit account and lockers where nomination is acceptable in account in joint names). Like
deposit accounts nomination is also not available on safe custody deposits made in representative
capacity.
Where a minor delivers the goods for safe custody, the nomination will be made by his lawful
guardian.
Only one individual can be appointed as nominee. Where the nominee is a minor, any other adult
should also be appointed to receive the articles in the event of the death of the depositor during the
minority of the nominee.
GENERAL BANKING - GUIDELINES
CRR & SLR AT A GLANCE
CRR SLR
Statutory requirement Sec 42(1) of RBI Act Sec 24(2)a of Banking Regulation Act
Minimum and Maximum RBI Discretion RBI Discretion
Present Rate 4% 21.25%
Maintained Cash Balance with RBI Cash in hand, Gold/ investment in
approved Govt. Securities / net Bank
balance with scheduled
commercial
Computation basis %age of NDTL on fortnightly %age of NDTL on daily basis on last
average basis. Friday of 2nd preceding fortnight
DIFFERENCE BETWEEN BILL OF EXCHANGE AND CHEQUE

S.NO. Bill of Exchange Cheque
Cannot be drawn payable to bearer
1. Can be done
on demand
2. Any one can be drawee of bill Only Banker will be drawee
Can be made payble on demand or
3. Payable on demand
after certain period
Usance Bills are required to be
4. Cheque require no acceptance
accepted
5. Usance Bills qualify for 3 days grade Chques does not require grace period

BANKER-CUSTOMER RELATIONSHIP
Transaction Bank Customer

Deposit in the bank Debtor Creditor
Loan form Bank Creditor Debtor
Locker Lessor Lessee
Safe custody Bailee Bailor
Purchase of draft Debtor Creditor
Payee of draft Trustee Beneficiary
Collection of cheque Agent Pricipal
Pledge Pledgee Pledger
Mortgage Mortgagee Mortgagor
Standing instruction Agent Principal
Sale/purchase of securities on behalf of customer Agent Principal
Money deposited but instructions not given for its disposal Trustee Beneficiary
POSITION OF AVAILABILITY OF RIGHT OF SET OFF
Right to Set Off

Deposit in name of Loan in name of Status of Availability
Single PERSON Same person Available
Single PERSON Same person, jointly with others Available
Joint Name One of the Joint a/c Holder Not available
Single Person Same name but with different capacity i.e. trustee Not available
Proprietor Prop Firm Available
Prop Firm Proprietor Available
Partner in a firm Partnership Firm Available
Partnership Firm Partner Not available
Trust Trustee Not available
Trustee Trust Not available
Minor( Under guardianship) Guardian Not available
HOLDER & HOLDER IN DUE COURSE

Consideration Not essential Essential
Good Faith Not essential NI Should have been obtained in
good faith
Title Same as that of Transferee’s get better title
transferor notwithstanding any defect in transferor’s
Time Before or after maturity title maturity only
Before
Inchoate Instrument Can complete Can complete
Possession of NI May / may not be Possession essential
Authority Can sue in his own name Can sue in his own name

CIRCUMSTANCES WITH REGARD TO PAYMENT OF CHEQUE
DEATH OF DRAWER (in case of Relationship is terminated and cheque should not
individual, Joint individual, HUF, be paid.
Partnership firm, Proprietorship firm)
INSOLVENCY of a customer or Payment be made as per direction of official
liquidation of a company assignee/receiver
INSANITY of a customer Payment should be made as per the direction of
court.
DRAWER IS ARRESTED/ CONVICTED cheque is to be paid
ACCOUNTS IN REPRESENTATIVE the cheques signed by representatives such as
CAPACITY (a company, a trust, a society director, trustee, secretary etc, who have expired
etc) & the authorized representative who has and cheques bearing date prior to the date of date
signed the cheque has expired:, of death of such representatives, can be paid.
STOP PAYMENT In PARTNERSHIP FIRM any partner, whether
authorized to operate a/c or not, may issue stop
payment instruction. In case of JOINT
ACCOUNTS OPERATING JOINTLY OR
WITH E/S OPTIONS, any of the Joint account
holders may give instructions for stop payment.
Stopping the payment of a post dated cheque
issued to debt of liability. It is also a criminal
offence under SECTION 138 of the NI act.
STATUTORY PROTECTION TO PAYING BANKER (SEC-85)

Sec. of NI Conditions to be fulfilled for availing protection.
85(1)
Regularity of endorsement i.e no break in chain of endorsement. Paying bank not
concerned with genuineness. No protection is available, if drawer’s signatures are forged.
If an order cheque, without having any endorsement, is paid to someone else, banker
would not get protection.
85(2) Endorsement on bearer cheques A paying banker is not required to verify endorsement on
bearer cheques, even if, such endorsement restricts further transferability of the
instrument.
85(A) Protection available u/s 85(1), is also available to Crossed Bank drafts.
89 Cheques on which alteration is not apparent: - Where a cheque, promissory note, or bill of
exchange, has been materially altered, but does not appear to have been so altered,
payment thereof, shall discharge a banker from all liabilities thereon.
128 Paying bank gets protection if the Payment of a crossed cheque is made in due course.

GARNISHEE ORDER - ATTACHMENT ORDER
Garnishee Order Attachment Order
1. Issued by Court of law. 1. Issued by Revenue Authorities.
2. Applies to balance in the account at the 2. Besides balance in the account at the
receipt of order. Future credits are not receipt of the order, it covers future
3. Applicable only when relationship is that 3. Applicable when relationship between
and creditor between the bank and the and the customer is of debtor and
time of receipt of order or at a future
4. When issued in single name, does not 4. When issued in single name, applies pro-
joint account of the judgement debtor joint account of the assesses with other
5. When issued in joint names, applies to 5. When issued in joint names, applies to
accounts of judgement debtors. individual accounts like a garnishee order.
6. When issued in the name of a partner in 6. Same as in case of garnishee order.
individual capacity, does not apply to
account. 7. Same as in case of garnishee order.
7. When issued in the name of the firm,
individual account of partners. 8. Applies to deceased accounts
8. Applies to deceased accounts also 9. Bankers' right of set off enjoys priority
9. Bankers' right of set off enjoys priority
GARNISHEE AND I T ATTACHMENT ORDER

P ar t i c ul ar s G ar ni sh ee I T at t ac hm ent or der
Authority Court Revenue/Tax authority
Amount May be specific Must be specific, else it is a not valid order.
Applicable amount At the time of receipt At the time of receipt and all credits after
Receipt
Joint Accounts Order Single name Not applicable Applicable pro-rata
Order in name of Partner, Not applicable Not applicable

Trustee, executor, director
etc
Deceased accounts Applicable Applicable
Insolvents Not applicable Applicable
Undrawn CC or OD Not applicable Not applicable
balances
Proceeds of cheques/Bills Not attached Attached
on collection
Future Credits Not attached Attached
Right to set off Available Available
Both received Preference to Preference to attachment being State dues
simultaneously or pending attachment being State
for payment dues.
Limitation 12 Years being 30 years being Govt dues.
execution of decree
Order Joint Names Applicable Applicable

MINOR’s ACCOUNT AND GUARDIAN
Kinds of minor Guardian

Types of guardians Natural guardian. OR Testamentary (appointed by will OR Legal (appointed by the
court)
Hindu son/unmarried Father and after death mother
daughter
Types married daughter Husband, if major otherwise OR Father in law and after his death mother in law, if
husband is minor or expired.
Hindu Minor widow Father in law and after his death mother in law`
Mohammdan minor Father, after his death executor of father’s will in absence of will his paternal grand
father and after his death, his executor
Illegitimate minor Mother and after his death father.
Loan against FD No loan in case of Self-operated account in guardian operated it can be for benefit of
minor.
Pre-mature payment in Permitted as he can give proper discharge
self operated a/c
Partnership Cannot be partner but can be admitted for benefits of partnership
Nomination Can become nominee but cannot nominate On his behalf his guardian can nominate.
CONSUMER PROTECTION ACT 1986
The act extends to whole of India except J&K. J&K has a separate act on similar lines.
WHAT IS THE LIMITATION PERIOD FOR FILING COMPLAINT

Two years from the date of cause of action (Sec 24A).
WHAT IS THE JURISDICTION FOR COMPLAINT

OFFICE VALUE/COMPENSATION
National Consumer Disputes Redressal Commission More than Rs. 100 Lac
(National Commission)
State Consumer Disputes Redressal Commission More that Rs. 20 Lac & upto Rs. 100 Lac
(State Commission)
District Consumer Disputes Red ressal Commission Upto Rs. 20 Lac
(District Forum)
WHAT IS THE TIME LIMIT FOR DECIDING COMPLAINTS/APPEALS?
Without analysis/testing of commodities : 3 months

With analysis/testing of commodities : 5 months
National & State Commissions : 3 months
WHICH IS THE OFFICE FOR APPEAL?
DECISION OF WHOM TO APPEAL

District Forum State Commission
State Commission National Commission
National Commission Supreme Court

ACTS IN BRIEF
BANKING REGULATION ACT, 1949

1) The law relating to banking came into force on 16.03.1949 under the name of the
banking Companies Act, 1949.
2) W.e.f. 01.03.1966 its name was changed to Banking Regulation Act, 1949.
3) Originally the Act was not applicable to the State of J&K. In 1956 it was made applicable
to J&K also.
4) The Banking Regulation Act, 1949 does not apply to primary agricultural credit societies,
co-operative land mortgage banks and non-agricultural primary credit societies with
paid up capital and reserves of less than Rs.1Iakh.
5) As per Section 5, Approved Securities means (i) Securities in which a trustee may
invest money under clause (a), clause (b), Clause (bb), clause (c) or Clause (d) of Section
20 of the Indian Trust Act, 1882. and (ii) Such of the securities authorised by the Central
Govt. under clause (b) of Section 20 of the Indian Trust Act, 1882, as may be prescribed.
6) As per Section 5, 'Banking' means the accepting, for the purpose of lending or
investment of deposits of money from the public, repayable on demand or otherwise,
and withdraw-able by cheque, draft order or otherwise. 'Demand Liabilities' means
liabilities which must be met on demand and 'time liabilities' means liabilities which are
not demand liabilities.
7) Sectjon 6 lays down the forms of business in-addition to the business of banking in
which a bank may engage.
8) Section 7 prohibits use of words 'bank' 'banker' or banking company by a company other
than a banking company.
9) Section 8 prohibits trading activities for a bank except in connection with realisation of
security given to or held by it.
10) As per Section 9 a banking company cannot hold any immovable property, howsoever
acquired except such as is required for its own use, for a period exceeding 7 years from
the acquisition thereof. The aforesaid period of 7 years can be extended by RBI by a
period not exceeding 5 years where it is satisfied that such extension would be in the
interest of depositors of the banking company.
11) As per Section 13, payment of commission, brokerage, discount or remuneration in
respect of any shares by a banking company shall not be more than 2.5% of th-e-paIG up
value of said shares.
12) As per Section 17 a banking company is required to transfer to Reserve Fund 20% of the
profits before declaring dividend. As per current guidelines of RBI a scheduled bank is
required to transfer 25% of the profit before providing for bonus and declaring dividend.
13) As per Section 19(2) no banking company can hold shares in another company whether
as pledgee, mortgagee or absolute owner of an amount exceeding 30% of the paid up
share capital of that company or 30% of its own paid up share capital and reserves,
whichever is less. (RBI has reduced it to 10%).

14) As per Section 21 A, Rate of Interest charged by banks are not subject to scrutiny of
courts.
15) As per Section 24, banks are required to maintain Statutory Liquidity Ratio as prescribed
by RBI. Maximum SLR will be 40% of NDTL. As per amendment to Banking Regulation
Act, the condition of minimum SLR of 25% of NDTL has been removed. Thus, RBI has
liberty to fix minimum SLR.
16) As per Section 26, banking companies are required to submit a return of all deposit
accounts which have not been operated for the last 10 years. The return is submitted as
on 31 st December and within one month
17) Section 45 Y relates to power granted to Central Govt. to make rules for preservation of
records.
18) Section 45Z relates to return of paid instruments to customers after keeping a true copy
of all relevant parts of such instruments.
19) 5ection 45ZA to 45 ZF relate to nomination in deposits, safe custody and locker
accounts.
RESERVE BANK OF INDIA ACT, 1934
1) Reserve Bank of India Act, 1934 came into force on 01.04.1935.

2) RBI was established on the recommendations of the Hilton Young Commission.
3) Section 4 : The capital of RBI shall be 5 crores of rupees.
4) Section 22 confers sole right on RBI to issue bank notes of denominational values of
Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000 and Rs. 10,000, or
any other denomination which the Central Govt. may direct.
5) Section 27 lays down that RBI shall not reissue bank notes which are torn, defaced or
excessively spoiled.
6) Section 29 exempts RBI from stamp duty on Bank notes.
7) Section 31 prohibits drawing, accepting, making or issue of any bill of exchange, hundi,
promissory notes payable to bearer on demand except15y Central Govt or RBI.
promissory Note can not be issued payable to bearer even if it is payable after some
time.
8) Section 33 lays down that assets of the issue department of RBI shall consist of gold
coin, gold bullion, foreign securities, rupee coins and rupee securities. The aggregate
value of gold coin, gold bullion and foreign securities held shall not at anytime be less
than RS.200 crore of which gold coin and gold bullion not less than Rs.115 crore.
9) Section 42(1) deals with cash reserves ratio to be maintained by scheduled commercial
banks.
10) Section 49 requires RBI to publish bank rate from time to time.

NEGOTIABLE INSTRUMENTS ACT
I) Provisions relating to Negotiable Instruments are given in the Negotiable Instruments Act,
1881. The Negotiable Instruments Act is applicable in whole of India including Jammu &
Kashmir. The Act came into force w.eJ. Mar 01,1882. Latest amendment was in Dec 2002.
Total sections in N I Act are 147.
II) What is a Negotiable Instrument?: As per Section 13 of the N I Act, NI means and include
promissory note (PN),bill of exchange (BoE) and cheque.
III) Negotiable Instruments as per N I Act:Promissory Note, Bill of Exchange, Cheque, DD
Negotiable Instruments as per Section 137 of Transfer of Property Act: Documents of title to
Goods such as Railway Receipt, Bill of Lading, Warehouse Receipt etc.
IV)Negotiable Instruments as per practice and usage: Treasury Bills, Certificate of Deposit,
Commercial Paper, Govt. Promissory Note.
V) Features of Negotiable Instrument: (i) it is freely transferable and (ii) the title of the
Transferee will be better than the transferor if the transferee took the instrument for value
and in good faith under circumstances when he did not have suspicion about any defect in
the title of the transferor. Such a transferee is called holder in due course and is defined in
Section 9 of the Act.
VI)Promissory Note: defined in Section 4 of N I Act. It is an instrument in writing (not being a
bank note or a currency note) containing an unconditional undertaking signed by the maker, to
pay a certain sum of money only to, or to the order of, a certain person, or the bearer of the
instrument. There are two parties in a PN i.e. promisor and promisee or maker and payee.
Currency notes and bank notes are not promissory notes as per sec 4.
VII) Bill of Exchange: defined in Section 5 of N I Act. Bill of exchange is an instrument in writing
containing an unconditional order, signed by the maker, directing a certain person to pay a
certain sum of money only to, or to the order of, a certain person or to the bearer of the
instrument. In a Bill of Exchange, the person ordering for payment is called Drawer and the
person directed to pay is called Drawee. The beneficiary is called payee.
VIII) Cheque: defined in Sec 6 of NI Act. It is a bill of exchange but always payable on demand
and drawee is --always a banker. Thus, a cheque is similar to a Bill of Exchange. Further, any bill
which is payable on demand and in which drawee is a banker will be called cheque. The
definition includes cheques in electronic form and truncated cheques.
IX)Demand & Usance PN or BOE:The promissory note or-bill of exchange can be payable on
demand or after some time. If no time is mentioned then the same will be treated as Demand
promissory note or Demand Bill of Exchange. If these are payable after sometime called as
Usance PN or BOE.
X) Bearer or Order:A negotiable instrument can be payable to bearer or order. If neither bearer
nor order is written it is treated as payable to order. If both bearer or order are written it is
treated as payable to bearer.
XI)0n 'demand bearer instruments: As per Section 31 of RBI Act, 1934, no person other than
Central Government or Reserve Bank of India or any other person authorized in this behalf can
issue bearer promissory notes and a demand bills of exchange payable to bearer.

Presumption of N I: As per Section 118 of N I Act, N I is presumed to be (i) made for
consideration (ii) executed on the date appearing on the instrument and (iii) every holder is a
holder in due course.
Inchoate instrument:defined in section 20 of the NI Act. It is an instrument on which date,
payee or amount is not mentioned. It can be completed by the Holder and the completion will
not be treated as material alteration. An instrument without signatures is not treated as an
instrument at all.
Ambiguous instrument: defined in Section 17 of N I Act. An instrument which can be treated as
Bill of Exchqnge or Promissory Note is called as Ambiguous instrument. Holder can treat it PN or
BOE as per his discretion.
Holder: defined in section 8 of the NI Act. Holder of a promissory note, bill of exchange or
cheque means any person entitled in his own name to the possession thereof and to receive
the amount due thereon from parties thereto.
Holder in Due Course: defined in Section 9 pf the NI Act. Holder in due course is a person who
became possessor of a NI for valuable consideration, in good faith, before becoming due, and
without having any reason to believe that the person transferring the instrument was not
entitled thereto.
Transfer of a Negotiable Instrument and Endorsement
Transfer of a Negotiable instrument: by assignment (under Transfer of Property Act) or by
Negotiation (under NI Act).
Negotiation of a Bearer instruments: A bearer instrument is negotiated by mere delivery and
no endorsement is required.
Negotiation of an order instrument: An order instrument can be negotiated by endorsement
followed by delivery. It may -be noted that legal heirs can not complete the negotiation of a
negotiable instrument with endorsement by the deceased merely by delivery.
Endorsement: Signing of an instrument on the back or face thereof or on a slip of paper
annexed thereto for the purpose of negotiation is called endorsement (Section 15). The person
who transfers the instrument is called endorser and the person to whom it is transferred is
called endorsee.
Blank Endorsement: In a blank endorsement the endorser just signs his name without
indicating endorsee. It can be converted into full by writing name of a person above signatures.
The effect of an endorsement in blank is that it makes an instrument dawn originally payable to
order to bearer instrument for the purpose of negotiation wj1ich can be further negotiated by
mere delivery.
Endorsement in Full: When, the endorser indicates the name of the endorsee it is called full
endorsement.
Sans Recourse Endorsement: An endorsement in which endorser excludes his liability is termed
'sans recourse' or without recourse endorsement. In case of dishonour of instrument, the
amount can not be recovered from such endorser.
Facultative: An endorsement in which endorser waives the notice of dishonour is called
Facultative
endorsement. But this is not applicable to other parties to the instrument.

Restrictive endorsement: An endorsement which restricts further right of negotiation is called
as restrictive endorsement. For example if it is written in the endorsement as "Pay to Hari for
my use" it is restrictive endorsement.
Conditional Endorsement: When alongwith endorsement. condition is imposed by endorser.
For example, pay to C on completion of studies. Paying bank not to ensure compliance of
condition. Condition binds endorser and endorsee only.
Back to Back Endorsement: An endorsement in which the endorser himself becomes endorsee
is called as back to back endorsement and in such a case, the endorsee can recover the amount
only from parties prior to his own endorsement.
Negotiation Back: When the drawer of a cheque himself becomes endorsee, it is called
Negotiation Back" and this cheque is treated as satisfied.
Partial Endorsement: The endorsement can be made only for full amount but in case part
payment has been received and a note to that effect is made on the instrument, then the same
can be endorsed for the balance amount.
Forged Endorsement: When endorsement is made by a person other than Holder by forging
signatures of Holder. Title does not pass to any person on the basis of such endorsement. A
person getting instrument after such endorsement does not become holder.
PAYMENT OF CHEQUES
Protection to paying banker: A paying banker gets protection under Section 85 of the NI Act. In
the case of order cheques, protection is available under section 85( 1) and for bearer cheques it
is available under section 85(2) of NI Act. In the case of drafts it is available under section 85A.
As per section 85(1) of the Act a paying banker is discharged by payment in due course of a
cheque payable to order and which purports to be endorsed by or on behalf of payee. It means
paying banker is -_. concerned about regularity of endorsement and not its genuineness or
forgery.
As per section 85(2) of the NI Act, a bank will be discharged of its liability by making payment in
due course of a cheque payable 10 bearer if the payment is made in due course
notwithstanding any endorsement. If the cheque is endorsed, the bank is not required to take
note of any such endorsement.
Thus as per section 85(2), 'Once a bearer always a bearer'
Payment in due course is defined in Sec 10 of the Act and means (i) payment is accordance with
the apparent tenor of the instrument(ii) in good faith and without negligence (iii)to any person
in possession thereof (iv) under circumstances which don't afford a reasonable ground for
believing that the is not entitled to receive payment of the amount therein mentioned.
Payment of a cheque: While making payment of a cheque, bank is required to take certain
precautions.
(a) Form of the cheque has not been given in the Act. It is simply as per practice. However, RBI
has prescribed format at centres where cheque truncation has started. RBI has prescribed the
new cheque standards "CTS-2010" and all banks providing cheque facility to their customers,
will issue only 'CTS- 2010' standard cheques not later than March 31, 2013 on priority basis.
(b) Different ink: A cheque can be drawn in different inks, handwritings or different scripts.
Thus, a cheque presented with different ink, handwriting or script can be paid.

(c) Language: The cheque should be written in Hindi, English or Regional language. Bank is
within its powers to return a cheque written in a language other than the language of that
region.
(d) Signatures on Back: When a cheque is presented for payment signatures of the presenter
are taken on the back as a witness of payment. If the presenter refuses to sign, the bank can
take receipt on a separate paper.
(e) Date: Ante dated: A cheque dated prior to its date of presentation is called ante dated
cheque and can be paid within 3 months from the date of issue. Post dated cheque means a
cheque which is dated subsequently to the date of presentation. Both ante-dated and post-
dated cheques are valid in law. A post-dated cheque can be passed only on the date written on
it or within three months thereafter.
Stale cheque: As per practice, a Cheque used to be treated as stale after 3 months of its issue.
RBI has reduced the period within which cheques/drafts/pay orders/banker's cheques are
presented for payment to three months from the date of such instrument. The guideline will
be effective from April 1, 2012. It has been done because these. instruments are being
circulated in the market like cash.. The drawer may further reduce validity and can revalidate
the cheque any number of times.
Impossible Date:A cheque with impossible date like 31.11.10 should be paid on the last day of
the month or within three months of the last day of the month.
Cheque dated prior to opening the account: A cheque dated prior to the date of opening the
account or issue of cheque book can be paid if otherwise in order.
Amount: (i) The amount should be written both in words and figures. (ii) Amount in words is
called legal amount and amount written in figures is called courtesy amount. (iii) As per Sec 18
of the NI Act, if the. amount written in words and figures differ, the amount written in words
will be the amount intended to be payable. (iv) If the balance in the account is just equal to the
amount of the cheque, the cheque will be paid. (v) If the balance in the account is insufficient to
pay the cheque, it should not be paid relying on the balance in some other account or
transferring the amount from other account unless there is an arrangement to that effect. If
bank makes payment without sufficient balance in the account on which cheque has been
drawn by relying on balance in some other account and customer contests the payment of
cheque, bank may not be able to exercise the right of set off. (vi) If number of cheques are
presented at the same time and the balance is not sufficient to pay all the cheques, then
normally priority is given to cheques favouring revenue authorities, then to cheques favouring
public authorities. If balance is left, maximum number of cheques should be passed taking care
that cheque of very small
amount is not dishonoured.
Banking Hours: "As per section 65 of the Act, presentment for payment of a cheque must be
made within banking hours. If a cheque presented after banking hours is paid, it will not be a
payment in due course. However, the payment of a reasonable amount can be made to drawer
even after banking hours. Further, the presentment should be within banking hours. Actual
payment may be even after banking hours.
Mutilation: if there is any mutilation of cheque, it should be confirmed by drawer
Material alteration: (i) Any change in date, amount or name of payee is called material
alteration. (ii) The change from order to bearer, or cancellation of crossing or converting special

crossing to general crossing is also material alteration. (iii) However, bearer to order or crossing
a cheque or converting general crossing to special crossing is not material alteration. (iv) If
there is any material alteration on a cheque it can be paid only after confirmation from drawer.
In the case of joint accounts with "either or survivor" clause any of the-account holders can
confirm material alteration. (v) The confirmation should
be under full signatures as per specimen signatures (vi) With effect from 1 si Dec 2010, in case
of clearing houses where image based cheque truncation has started, cheques with material
alteration will not be acceptable even if the same has been authenticated. This rule does not
apply to change in date. (vii) Under Section 89 of the NI Act, 1881 paying banker gets protection
in case of payment of materially...aJtered cheques if the alteration is not apparent at the time
of payment and payment has been made in due course.
Payee: if the payee is fictitious person then the cheque can be paid to bearer if it is payable to
bearer but if the cheque is payable to order, it can be paid only to the drawer
Bearer or 'Order: if a cheque is payable to bearer or order, it can be paid to bearer. However, if
neither bearer nor order is written it is payable to order.
Forged signatures: (i) If there is a forgery in the signatures, such an instrument is null and void.
Paying banker will not get protection if it pays such a cheque even though the drawer might
have been careless in, custody of the cheque book or bank might have sent statement of
accounts and the customer .did not point out the mistake. (ii) However, if the cheque has been
signed by the drawer himself but in a different fashion, the banker will not be liable.
Crossing
(a) General Crossing: If a cheque or a draft bears across its face addition of two parallel
transverse lines with or without addition of words 'and company' or any abbreviation thereof, it
is called General Crossing (Section 123).
(b) General Crossing: is a direction to the paying banker to pay the cheque/draft through some
bank.
(c) Even if the name of a city is written between two parallel lines like "Indore", it will continue
to be a general crossing and the cheque can be paid to any bank. Such cheque can be paid at
any station to a bank and not necessarily at Indore.
(d) Special Crossing: When a cheque/draft bears the name of a bank across its face with or
without two parallel transverse lines either with or without the words 'not negotiable', it is said
to be specially crossed (section 124).
(e) A cheque with special crossing can be paid only to the named bank or his authorized agent
for collection.
(f) A cheque crossed to two banks has to be returned unpaid unless crossed by one bank to
another as his agent for collection (Section127).
(g) The special crossing is in favour of a bank and not in favour of a particular branch. Hence a
cheque favouring PNB Bhopal, can be paid to a branch of PNB at any other place also.
(h) For special crossing it is not necessary that the cheque should bear two parallel lines.
(i) The Act does not restrict the payment of a crossed cheque to the banker in cash. Therefore,
a cheque with general or special crossing can be paid to a bank in cash.
j) Applicability of provisions relating to Crossing: Provisions relating to crossing are applicable
to cheques and drafts only and not to Promissory Notes or Bill of Exchange. Therefore, if any Bill

or Promissory note is having addition of two parallel lines or name of a banker, it does not have
any effect.
(k) Who can cross a cheque:The Crossing be done by drawer, payee or holder or a banker.
(I) 'Account Payee' crossing (i) Account payee crossing is not recognised by law but is a long
standing practice amongst bankers. (ii) It is a direction to the collecting banker. (iii) Such a
cheque can be collected for credit of the named payee and can not be endorsed.
(m) RBI guidelines on Account payee crossing: In consonance with the legal requirements and
in particular the intent of the Negotiable Instruments Act, and with a view to protect the banks
being burdened with liabilities arising out of unauthorized collections, and in the interest of the
integrity and soundness of the payment and banking systems, RBI in 2006, prohibited the banks
from crediting 'account payee' cheque to the account of any person other than the payee
named therein. RBI has clarified that the practice of collecting third party account payee
cheques on behalf of co-operative credit societies who are their constituents is generally not
permissible but banks may consider collecting account payee
cheques drawn for an amount not exceeding Rs.2O,OOO/- to the account of their customers
who are cooperative credit societies, if the payees of such cheques are the constituents of
such co-operative credit societies.
(n)'Not negotiable' crossing takes away an important characteristic of negotiability. A cheque
with Not negotiable crossing remains freely transferable and can be endorsed. But a person
taking a cheque crossed generally or specially bearing in either case the words 'not negotiable'
shall not have and shall not be capable of giving a better title to the cheque than that which the
person from whom he took it had (Section 130). Nobody will be a holder in due course of a
cheque bearing Not Negotiable Crossing.
(0) Cancellation of crossing can be done by drawer only under his full signatures by writing the
words crossing cancelled. In such cases, the payment is made in cash to a person known to the
bank.
(p) Under Section 128 of the N I Act. The paying banker is will get protection in respect of
crossed cheques or drafts provided the instrument has been paid in accordance with the
requirement of the crossing and payment has been made in due course.
(q) As per Section 129 of the N I Act, if a banker pays a cheque in violation of the crossing
direction, it will not be a payment in due course and bank sf1att1)e liable to the true owner of
the cheque for any loss he may sustain owing to payment of the cheque. Others Instruments
returned unpaid should have a signed / initialed objection slip on which a definite and valid
reason for refusing payment must be stated.
When cheque valuing rupees one crore and above drawn on a particular account of the
drawer is dishonoured on four occasions during the financial year for want of sufficient funds in
the account, no fresh cheque book should be issued. Also, the .bank may consider closing
current account at its discretion. Further, banks should have a Board approved policy for
dealing with frequent dishonour of cheques of value of less than Rs. 1 crore. The policy should
also deal with matters relating to frequent dishonour of ECS mandates.
COLLECTION OF CHEQUES
Protection to Collecting Banker:
Under Section 131 of the Act a collecting banker gets protection for collection of cheques and
under section 131 A for collection of drafts. The protection is against risk of conversion i.e.

illegal interference with rights of true owner of the instrument inconsistent with his right of
ownership.
Such protection is available to the banker when: (i) the cheque/draft is crossed (ii) the bank
receives the payment for its customer (iii) the bank acts as agent for collection and not holder
for value (iv) it receives the payment in good faith and without negligence.
To get protection as a collecting banker the bank must ensure that there is no negligence
involved. Examples of negligence could be opening of accounts without proper introduction,
ignoring 'not negotiable or 'account payee' crossing, collecting cheques payable to firm, Ltd Co,
Trust, Institutions in the personal accounts of partner, director, trustee or the office bearer.
DISHONOUR OF CHEQUES DUE TO INSUFFICIENT BALANCE
Law on making bouncing of cheques for insufficiency of funds a penal offence was
recommended by Rajamanar Committee. The said Act has been made effective from
01.04.1989.
As per Section 138 of the Act, if any cheque drawn by a person on an account maintained by
him with a banker for payment of any arnount of money to another person for the discharge, in
whole or in part, of any debt or other liability, is returned by the bank unpaid, either with the
reason funds insufficient or exceeds arrangement or similar reason, such person shall be
deemed to have committed an offence.
As per judgements of the Supreme Court, the cheques which are dishonoured on account of
the payment being stopped by the drawer or Account being closed will attract penalty
prescribed under Sec 138 of the Act.
Penalty as per section 138: In case of dishonour of cheque due to reasons stated above,
punishment can be imprisonment up to two year, or maximum fine up to twice the amount of
the cheque, or both.
Conditions for invoking section 138:The provisions of this section shall apply when the
following conditions are satisfied: (a) the cheque has been presented to the bank within a
period of three months from the date on which it is drawn or within the period of its validity,
whichever is earlier. (b) the cheque had been received for consideration (c) the payee or the
holder in due course of the. cheque, makes a demand for the payment of the said amount of
money by giving a notice, in writing, to the' drawer, of the cheque, within thirty days of the
receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(d) the drawer of such cheque fails to make the payment of the said amount, to the holder in
due course of the cheque, within fifteen days of the receipt of the said notice. As per Sec 139 of
the Act, unless the contrary is proved, it shall be presumed, that the holder of a cheque
received the cheque for the discharge, in whole of in part, of any debt or other liability.
Liability of Directors: As per Sect 141 of the Act, If the person committing an offence under
section 138 is a company, every person who, at the time the offence was committed, was in
charge of, and was responsible to the company for the conduct of the business of the company
as well as the company shall be deemed to be guilty of the offence. However, the nominee
directors employed in Central or State Govt or a financial corporation controlled by the Central
or State Govt shall not be liable. Further, if it is proved that the offence was committed without
the knowledge of the concerned official of the company he will not be liable.
Limitation period for making complaint: The complaint in such cases should be made in the
court of a metropolitan magistrate or a judicial magistrate of the first class or above within one

month of the date of the cause-of-action (Le. if payment is not made within 15 days). Unless
otherwise disproved, Bank's cheque returning slip or memo having official mark of the bank
shall be presumed to be proof of dishonour of the cheque.
BILL OF EXCHANGE
Demand Bill: A bill of exchange payable on demand or at sight or on presentment is called
Demand Bill.
Usance Bill:A bill of exchange payable after some time is called Usance Bill.
Documentary bill is one which is accompanied by document of title to goods like railway
receipt, bill of lading, etc.
Clean bill: is one which is not accompanied by any document of title to goods.
Inland bill: is one which is drawn or made in India and is either payable in India or on a person
resident in India.
Foreign bill :is one which is not an Inland Bill Le. it is drawn outside India or if drawn in India is
payable outside India on a person resident outside India. Foreign Bills are issued in more than
one part.
Accomodation Bill: means a bill issued without consideration and dealing in such bills is called
kite flying.
Interest Rate: If in a bill of exchange or promissory note, interest rate is not mentioned, it will
be 18% p.a.
CALCULATION OF DUE DATE

Usance bills should be presented for acceptance within a reasonable time. he reasonable time
is given under section 105 of NI Act. As per section toS, reasonable time means as per usage
and practice of the area. The drawee is allowed 48 hours excluding public holiday to accept the
bill.
If a Usance bill is payable after date, its due date is calculated from date of the bill and if it is
payable after sight, its due date is calculated from the date of acceptance.
As per section 22 of the N I Act, three days of grace are allowed in the case of Usance bills and
Usance promissory notes. But if the due date is fixed on a particular day or days of grace are
specifically prohibited, the same need not be given.
As per Section 25 of the Act, if a bill or promissory note matures for payment on public holiday
under NI Act, 1881 (Sunday or any day declared to be public holiday by the Central
Government) it falls due on immediate next preceding business day. It may be noted that ze"
Jan, is" August and 2nd October are national holidays and if the bill falls due on any of these
dates, then preceding business day will be the due date.
If the period of usance is given in days, then the day from which due date is to be calculated is
excluded.
Due consideration should be given to leap year in which February has 29 days.
If the period of usance is given in months and there is no corresponding day in the month in
which bill matures, last day of the month is taken into account. For example, a bill dated 31 st
Dec payable two months after date will fall due on 31 st Feb without grace period. But since
February has only 28 days, zs" February will be considered and after 3 days of grace, 3rd March
will be due date.

DISHONOUR OF A BILL
If the drawee does not accept the bill within stipulated period it is treated as dishonoured by
non acceptance.
In such case, drawee will not be liable on the bill. In certain cases, such bill is required to be
presented to a person named in the bill called as Drawee in case of need.
If a bill after being accepted is not paid on due date, it is said to have been dishonoured .due to
non payment.
Noting and Protesting: Under section 99 of the Act, when a promissory note or bill of exchange
has been dishonoured by non-acceptance or non-payment, the holder may get the dishonour
noted by a notary public 'upon the instrument within a reasonable time after dishonour.
If the dishonour is got certified from the Notary public, such certificate is called a rotest.(Sec
100).
While noting and protest is optional in case of Inland bills, foreign bills of exchange must be
protested for dishonour when such protest is required by the law of the place where they are
drawn (Section 104).
Noting and Protesting is done only in the case of dishonour of demand or usance bills or
promissory notes and not in the case of dishnour of a cheque.
A person accepting the bill to save the honour of a party to the bill is called "Acceptor for
honour".
Liabilities of the parties: If a bill is dishonoured by non acceptance, then holder can recover
the amount from all prior parties except drawee. In this case, the drawer will be the principal
debtor.
If a bill is dishonoured due to non payment (it means it was accepted), then the holder can
recover the amount from all prior parties including the acceptor of the bill (previously called the
drawee). In this case, acceptor ( drawee) will be the principal debtor.
Stamping-Of a Bill: A demand bill need not be stamped but a usance bill is stamped as per
provisions of the Indian Stamp Act.
The value of stamps on a usance bill or promissory note depends on tenor and amount of the
bill. However, if the usance period of a bill is up to 3 months, no stamp duty is levied if the bill
is for genuine trade transaction and bank is a party to the bill.
INDIAN CONTRACT ACT, 1872

Sec. 2 (a) – Proposal – “When one person signifies to another his willingness to do or to
abstain from doing anything, with a view to obtain the assent of that other person to such act of
abstinence, he is said to make a proposal.”
Sec. 2 (b) – Promise – “When the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted.” [It is an accepted proposal.]
Sec. 2 (h) – Contract – “An agreement enforceable by law is a Contract.”
Sec. 42 Devolution of Joint Liabilities – “When 2 or more persons have made a JOINT
PROMISE, then unless a contrary intention appears in the contract, all such persons MUST
jointly fulfill the promise. In the event of death of any of them, his representative jointly with the
survivor/s and in case of death of all promisors, the representatives of all jointly must fulfil the
promise.”
Sec. 43 – Any one of the Joint Promisor may be compelled to perform – It allows the promisee
to seek performance from any of the joint promisors. The liability of joint promisors are JOINT /
JOINT & SEVERAL.

Sec. 44 – Effect of release of a Joint Promisor – Where 2 or more persons have made a joint
promise, a release of one of such joint promisors by the promise does not discharge the joint
promisor/s, neither does I free him from the responsibility to the other joint promisors.
Sec. 45 Devolution of Joint Rights – When a person has made a promise to 2 or more
promises jointly, then unless a contrary intention appears from the contract, the right to claim
performance rests with all the joint promises and after the death of any of them, with the
representative of such deceased person jointly with the survivors. Thus right of promise is
JOINT.
Sec. 56 – Frustration of Contract – A Contract is said to be frustrated when its performance or
execution becomes impossible.
Sec. 62 - Novation of Contract – It means substitution of a new contract for the original one.
[The consideration of new is discharge of the old in which all the parties must consent.]
Sec. 59 - Appropriation by the Debtor – Where a debtor owing several debts to one person,
makes a payment to him with express intimation that the payment is to be applied to a particular
debt, the payment, if accepted, must be applied to that debt. Where without any express
intimation payment is made implying that it should be appropriated to a particular debt, it must
be applied.
Sec. 60 – Appropriation by the Creditor – Where the debtor has omitted to intimate and there
are no other circumstances to which debt payment is to be applied, the Creditor may, at his
discretion, apply it to any lawful debt actually due and payable to him. The amount can been
applied to even “TIME BARRED” debt. But, it cannot be applied to a disputed debt.
Sec. 61 – Where neither party appropriates – The payment is to be applied in discharge of the
debts in order of time, including time-barred debts. If the debts are of equal standing, the
payment is to be applied proportionately.
Sec. 124 – Contract of Indemnity – “A Contract by which one party promises to save the
other from loss caused to him by the conduct of promisor himself or by the conduct of
any other person. [For ex. – A says to B, “if you lend $20 to C, I will see that your money
comes back is Indemnity. Here, A is indemnifier and B is indemnified.]
Sec. 126 – Contract of Guarantee – “A Contract to perform the promise or discharge the
liability of a 3rd person in case of his default.” [For ex. – A says to B, if you lend $20 to C, and he
does not pay you, “I will” is a Guarantee. Here, A is the Surety(Guarantor), B is the Creditor and
C is the Principal Debtor.]
Sec. 128 – The liability of Surety is secondary and is co-extensive with that of Principal Debtor.
[Liability : Primary – Principal Debtor]
Sec. 129 – Continuing Guarantee extends to a series of transactions. [Like in C/C accounts]
Sec. 130 – Continuing Guarantee may be revoked by the Surety, as to future transactions.
Sec. 131 – Continuing Guarantee may be revoked with the death of Surety, as regards future
transactions.
Sec. 148 – Bailment – It is the delivery of goods by one person to another for some purpose,
under a contract that the goods shall, when the purpose is accomplished, be returned or
otherwise disposed of according to the directions of the person delivering them.
Sec. 171 – Lien – It is the right of a Creditor to retain the goods and securities in his
possession, belonging to the debtor, until his debt is discharged.
Banker’s Lien – It is more than a General Lien and confers upon him the right to retain
securities, etc. in respect of general balance due by their owner to the banker. It is also
known as Implied Pledge because the banker may proceed to sell the goods and
securities retained in the event of default by giving a reasonable notice.
Sec. 172 – Pledge – The Bailment of goods as a security for payment of a debt or performance
of a promise.

Sec. 182 – AGENT - A persons employed to do any act for another or to represent another in
dealings with third persons. The person for whom such act is done, or who is so represented is
called the “Principal”.
Sec. 183 - Who can engage an AGENT ? - Any person who is of the age of majority according
to the law to which he is subject, and who is of sound mind may employ an agent. [Thus, a
minor cannot become a Principal and appoint an agent, whereas an adult can appoint an
agent.] An Agency being a contract of employment to bring the Principal into Legal relation with
a 3rd Party. As such, the Principal should be a person competent to enter into contract. In
employment, employee is under the control of his master and has no power to contract on
behalf of the master so as to bind him.
Sec. 184 – Who can be appointed as an AGENT ? - No person who is of the age of majority
and of sound mind can become an agent, so as to be responsible to his principal. Thus, a
person may contract through a MINOR agent, but the minor will not be responsible to his
Principal. [Minor can be appointed as an Agent, but will not be responsible.]
PARTNERSHIP ACT, 1932

Sec. 4 – Partnership – It is a relation between persons who have agreed to share
the profits of business carried on by all or any of them acting for all.
Elements of Partnership –
1) It is an association of 2 or more persons. [As per Indian Companies Act, 2013 –
Maximum number is 100. Minimum & Maximum number of members required in case of
Companies are – Private : 2 & 200; Public: 7 & No Limit.]
2) It must be on an AGREEMENT entered into by all the persons concerned. [Like any other
contract, it must fulfil all the formalities of a Valid Contract.]
3) It is organized to carry on some business. [The business includes every trade, occupation
and profession and not any Charitable/Religious Work, Recreational Club, etc..]
4) The persons concerned must agree to share the profits of the business. [Losses are
considered as Profits with negative sign. There cannot be a partnership to share only
losses.]
5) The business is to be carried on by all or any of them acting for all. [Every partner
assumes a dual role. He is a Principal as well as an Agent towards the other partners.]
Registration of Firm not compulsory and an Unregistered firm is not an illegal association. But,
the consequences of non-registration are – 1) No suit by partners; 2) No suit by the firm; & 3)
No right of set-off.
Sec. 30 – Position of Minor in a Firm – If all partners agree, a minor may be admitted to the
benefits of an already existing firm. Thus, there must be at least 2 major partners before a minor
is admitted into the benefits of partnership.
The RIGHTS of such a minor will be – 1) He can share the profits; 2) He can have access to
accounts; 3) He has a right to sue for his due share of profits. He can do so only when he wants
to sever his connection with the firm. 4) He has a right to elect to become a full fledged partner.
[At any time within 6 months of his attaining majority or of his obtaining knowledge that he had
been admitted to the benefits of partnership, whichever date is later, the minor may give public
notice that he has elected to become a partner of the firm. If he fails to do so, he will be liable to
the debts of the firm since his admission date in the firm.]
The LIABILITIES of such a minor will be – 1) His share is liable for the acts of the firm. [He will
neither be personally liable nor his personal estate liable for the firm.] 2) He will personally liable
on electing to become a partner on majority since his admission date.
Sec. 32 – Retirement of a Partner – The Section provides that the partner may retire from the
firm – 1) With the consent of all the other partners; or 2) In accordance with an express

agreement by the partner; or 3) Where the partnership is at Will, by giving notice in writing to all
the other partners of his intention to retire.
Sec. 39 – Dissolution of Partnership – It means the discontinuance of JURAL
relation between all the partners of the firm. [It amounts to the break-up of the relation of
partnership between all the partners.]
MODES OF DISSOLUTION OF PARTNERSHIP FIRM –
Sec. 40 – By Mutual Agreement – At any time consent of all the partners.
Sec. 41 – By Operation of Law – It is also called Compulsory Dissolution. It may be
the resultant when – 1) All or but one of the partners are adjudicated as insolvent; or 2)
The happening of the event makes the carrying on of the partnership business unlawful.
Sec. 42 – By the happening of Certain contingencies – It is also called Optional
Dissolution. It will be dissolved on happening of any of the events – 1) On expiry of a
fixed term for which it is constituted; 2) On the completion of adventures/undertakings
for which it is constituted; 3) On the death of a partner; & 4) On the adjudication of the
partner as an insolvent.
Sec. 43 – By Notice of Dissolution – Where it is at Will, on giving a notice in writing to
other partners of his intention to retire.
Sec. 44 - By a Decree of Court – On a suit by a Partner, the Court may dissolve on any
of the grounds namely – 1) Insanity of a Partner; 2) Permanent Incapacity of a Partner;
3) Misconduct of a Partner affecting Business; 4) Wilful and Persistent Disregard of
Partnership Agreement by a Partner; 5) Transfer of Interest or Share by a Partner; 6)
Continuous Losses; & 7) Just and Equitable ground – Deadlock in management,
Disappearance of substratum (main objective), Partners not on speaking terms, etc..
JOINT HINDU FAMILY BUSINESS – 1) It exists because of the Status. 2) A person
becomes a member merely by his birth. 3) A female member cannot become a
member. 4) Minors are members of the firm from the date of their birth. 5) The death of
a member will not affect the running. 6) The Karta has the authority to contract. 7) Karta
is liable unlimitedly. The liability of other Co-parceners are limited to the extent of their
share in the profits of the family business, unless they took part in the transaction done
by the Karta.
Doctrine of Relation Back – The Official Receiver or Assignee gives the Order of
Adjudication taking the effect from a back date. This is done by him to protect the
interest of lawful Creditors from the clutches of the Insolvent person, who voluntarily /
fraudulently transfers his property to a person before being declared as insolvent.
TRANSFER OF PROPERTY ACT, 1882
Sec. 58 (a) – Mortgage – It is the TRANSFER OF AN INTEREST IN SPECIFIC IMMOVABLE

PROPERTY for the purpose of securing the payment of money advanced or to be
advanced by way of loan, an existing or future debt or the performance of an
engagement which may give rise to a pecuniary liability. [Where the loan raised or
performance assured through the security of immovable property is called Mortgage.]
[For Ex. In case of a Bank loan against the security of an IP, Mortgagor – the person seeking
loan and/or offering his IP; Mortgagee – the Bank extending loan.]
[Specific IP should be identifiable by its location, size, boundaries, etc..]

Sec. 100 – Charge – Where immovable property of one person is, by act of parties or operation
of law, made security for the payment of money to another and the transaction does not amount
to a mortgage, the latter person is said to have a Charge on the property.
Types of Mortgages –
Sec. 58 (b) – Simple Mortgage – It is without delivering possession of the mortgaged property,
the mortgagor binds himself personally to pay the mortgage money and agrees, expressly or
impliedly, that the in the event of his failing to pay according to his contract, the mortgagee shall
have a right to cause the mortgaged property to be sold and proceeds of sale to be applied in
payment of the mortgage money. [Mortgagor – Keeps possession of IP; Binds himself to pay
the money; & Agrees to extend right in the event of his failure to pay. Mortgagee – On getting
the right can sell the IP with Court Intervention; & Apply the sale proceeds to pay the debt.]
Sec. 58 (c) - Mortgage by Conditional Sale – The mortgagor ostensibly sells the mortgaged
property to mortgagee on condition that – 1) On default of payment of the mortgage money on a
certain date, the sale shall become absolute; or 2) On making such payment, the sale shall
become void; or 3) On making such payment, the buyer (mortgagee) shall transfer the property
to seller (mortgagor). [Mortgagor – No personal liability; Makes an ostensible sale on certain
conditions; Possession of IP remains with him; On payment, IP is re-transferred. Mortgagee –
Effect of sale by foreclosure only.]
Sec. 58 (d) - Usufructuary Mortgage – The mortgagor (1) delivers possession expressly or by
implication binds himself to deliver possession of the mortgaged property to the mortgagee; and
(2) authorizes him - (a) to retain such possession until payment of the mortgage money, and (b)
to receive the rents and profits accruing from the property or any part of such rents and profits
and to appropriate the same (i) in lieu of interest, or (ii) in payment of the mortgage money, or
(iii) partly in lieu of interest or partly in payment of the mortgaged money. [Mortgagor – Delivers
possession of IP; No personal liability to pay; & Bring a suit for redemption of IP within 30 years.
Mortgagee – Keeps possession of IP till debts cleared; Authorised to receive rents & profits
from the IP; Authorised to appropriate it towards interest & debt; No suit within 30 years,
becomes absolute owner of IP.]
Sec. 58 (e) English Mortgage (Possessory Mortgage) - The mortgagor binds himself to repay
the mortgage money on a certain date, and transfers the mortgage property absolutely to the
mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of
the mortgage money as agreed. [Mortgagor – Absolute transfer of IP; Remain liable
continually; Mortgagee – On payment, he will re-transfer the IP; On default, has a right to sell
without seeking the permission of the Court in special cases.]
Sec. 58 (f) – Mortgage by Deposit of Title Deeds (Equitable Mortgage) – A person in the
towns specified delivers to a creditor or is agent documents of title to IP with intent to create a
security thereon. [Mortgagor – Delivers title deeds of IP in towns specified; Keeps possession
of IP; & Shows an intention to create security. Mortgagee – Gets the title deeds of IP.]
EM does not require any thing in writing. EM can be executed on Oral transaction.
Sec. 58 (g) – Anamolous Mortgage – A mortgage which does not fall within any of the other
five classes is called so.
Sec. 67 – Right to Foreclosure – In case of Mortgage by Conditional Sale or Anamolous
Mortgage, a mortgagee may sue for foreclosure, i.e. may obtain a decree from the court
debarring the mortgagor of his right to redeem the property.
Sec. 130 – Assignment of an Actionable Claim – It can be effected, with or without
consideration, only by the execution of an instrument in writing signed by the transferor or his
duly authorized agent and shall be complete and effectual upon the execution of such
instrument. [For ex. FDRs of Bank, LIC Policies.]

LIMITATION ACT, 1963
It extends to the whole of India except the state of Jammu & Kashmir.
Sec. 3 – It only bars the legal remedy but does not destroy the right to which the
remedy relates to. The right to the debt continues notwithstanding the fact that the legal
remedy is barred by limitation.
Sec. 4 – If the period of limitation expires on a day when the court was closed due to
vacation, the filing of the suit on the next working day will be deemed to be within the
prescribed period of limitation.
Sec. 18 – Effect of Acknowledgement in writing – Where, before the expiration of the
prescribed period for a suit or application, an acknowledgement of liability has been
made in writing signed by the party, or by his agent duly authorized in this behalf, a
fresh period of limitation shall be computed from the time when the acknowledgement
was so signed. [Where the defendant had acknowledged the payments in writing, the
limitation starts running from the date of acknowledgement.]
Sec. 19 – Effect of payment on account of debt or of interest – Where such
payment is made before the expiration of the prescribed period by the person liable to
pay the debt or legacy or his agent duly authorized in this behalf, a fresh period of
limitation shall be computed from the time when the payment was made.
Description of Suit relating to / Suit By Period of Time from which the period
Limitation begins to run
ACCOUNTS - For the balance due on 3 years The close of the year in which the
a mutual, open and current account, last item admitted or proved is
where there have been reciprocal entered in the account: such year
demands between the parties. to be computed as in the account.
CONTRACTS – On a B/E or P/N 3 years When the Bill or Note falls due.
payable at a fixed time after date.
CONTRACTS – On a B/E or P/N 3 years When the same is presented.
payable at sight, or after, sight, but
not at a fixed time.
CONTRACTS – By a Surety against 3 years When the Surety pays the
the Principal Debtor. Creditor.
CONTRACTS – By a Surety against 3 years When the Surety pays anything in
a Co-Surety. excess of his own share.
IP - By a Mortgagor to redeem or 30 years When the right to redeem or to
recover possession of IP mortgaged. recover possession accrues. [It
(in case of Conditional Sale by accrues when he make full
Foreclosure.) payment.]
IP – By a Mortgagor to recover 12 years When the transfer becomes
possession of IP mortgaged and known to the Plaintiff.
afterwards transferred for a valuable
consideration.
Any Suit - For which no period of 3 years When the right to Sue accrues.
limitation is provided elsewhere in this
Schedule

SARFAESI ACT – 2002
Securitisation & Reconstruction of Financial Assets and Enforcement of Security

Interest Act 2002
(1) Applicable w.e.f. Aug 23, 2002 in entire India, including J&K ( as amended in
2004 on intervention of supreme court of India)
(2) Banks’ right – To take possession, recover money from the parties, take over
management and appoint managers.
(3) Hypothecation - Hypothecation is defined under section 2 of this act.
(4) Possession – 60 days notice before possession should be given.
(5) Sale – 30 days notice should be given before sale. Minimum reserve price to be
fixed by bank. Sale by public tenders or through auction. If sale is to be made
through public auction public notice in two new papers must be given out of
which one should be regional news paper.
(6) Remedy to borrower – If borrower objects, bank to send reply within 15 days
(previously 7 days) (amended on 03.01.2013) (LAW DIV cir 3/2013)
(7) Secured creditor can now participate in bidding. (amended on 03.01.2013)
(8) In Joint Advances having more than 1 Secured Creditor, action u/s 13(4) can be
taken with consent of Secured Creditors representing 60% in value of
outstanding as on date. (amended on 03.01.2013)
(9) DRTs decision – Appeal to DRAT can be done within 30 days after deposit Of
50% of the amount which can be reduced to 25% by DRAT.
(10) Authorised Officer in banks – Scale IV officers or officers approved by Board
of directors of the bank.
THE COMPANIES ACT 2013

The Act comprises of 29 chapters, 470 Sections with 7 schedules as against 658
sections and 14 schedules in The Companies Act, 1956.
Salient features of The Companies Act, 2013 are as under:

Small Company means a company other than a public company where:-
i) Paid up share capital of which does not exceed 50 lacs rupees or such higher
amount as may be prescribed which shall not be more than 5 crore rupees or
ii) Turn over of which as per its last profit and loss account does not exceed 2 crore
rupees or such higher amount as may be prescribed which shall not be more
than 20 crore rupees
Dormant Company means :
A company formed for a future project or to hold an asset or intellectual property and
has no significant accounting transaction.
INCORPORATION
1) Seven or more persons can form a public company.
2) Two or more persons can form a private company.
3) One person can form a One Person Company as private company.
4) Numbers of permissible members in private company has been raised to 200 as
against existing limit of 50 members.

5) Limit of number of members in an association or partnership(without
incorporation) increased upto 100.
6) Objects clause in the Memorandum of Association of a company not required to
be divided into main, ancillary and other objects. Only the objects for which the
company is incorporated along with matters considered necessary for its
furtherance to be mentioned.
7) The company can not provide for other object clause.
8) Corporate Identity Number to be allotted to the company on and from the date of
incorporation.
9) Certificate of commencement of business (which was applicable to public
companies) will no longer be issued by ROC.
DIRECTORS
1) Public company will have minimum 3 Directors, whereas private will have
minimum 2 Directors. One person company will have one Director.
2) Maximum number of directors has been increased from twelve (12) to fifteen
(15) directors. Further no Central Govt. approval is required to increase the
maximum number of directors beyond fifteen.
3) A person can hold directorship of up to 20 companies, of which not more than 10
can be public companies.
4) At least one of the directors shall be a person who has stayed in India for 182
days or more in the previous calendar year.
5) Such class or classes of companies as may be prescribed shall have a woman
director.
6) Every listed public company shall have at least 1/3rd of the total number of
directors as independent directors.
CORPORATE SOCIAL RESPONSIBILITY

1) Formation of CSR committee has been made mandatory for a company having
net worth of Rs. 500 crore or more or turnover of Rs. 1000 crore or more or net
profit of Rs. 5 crore or more during any financial year.
2) Such company shall spend, in every financial year, at least 2% of the average
net profits of the company made during three immediately preceding financial
years, in pursuance of its Corporate Social Responsibility Policy.

DIFFERENT TYPES OF CUSTOMER’S ACCOUNTS
(A) MINORS
i) As per section 3 of the Indian Majority Act, 1875, a person who has not attained the
age of 18 years and become major at the age of 18 whether guardian is natural or
appointed by a court of law.
ii) As per section 11 of the Indian Contract Act, 1872 a minor is not competent to enter
into a contract and the contract entered into by him is void ab-initio but a contract for
the supply of necessities of life to a minor is a valid contract, if it is done by a person
who is legally bound to supply the necessities to the minor and these necessities must
be suitable to the conditions of his life.
iii) As per Section 183 of Indian Contract Act, a minor cannot appoint an agent but as per
Section 184 of the Indian Contract Act, a minor can be appointed as an agent and he
can make principal liable by his actions. A minor can not delegate authority in his self
operated account.
iv) A minor can draw or endorse or negotiate a cheque or a bill but he cannot be held
liable on such cheque or bill. However, such bill will be valid and other parties will
be liable in their respective capacities (Section 26 of NI Act).
v) A minor can not appoint nominee but minor can be appointed nominee.
vi) Minor cannot be declared insolvent because he does not incur any personal liability.
vii) Partner: A minor cannot be full fledged partner in a partnership concern as he can not
enter into a valid contract and partnership is created by agreement. As per section 30 of
Indian Partnership Act, 1932 a minor may be admitted to benefits of partnership with
the consent of all partners. On attaining majority, a minor has to give public notice
within six months of attaining majority or when it comes to his knowledge after
becoming major which ever is later, whether he wants to continue as a partner. If he
remains silent, it amounts to his implied consent. If he chooses to become a
partner, he will be held liable as a partner from the date he has been admitted to
the benefit of the partnership firm and his profit sharing ratio will continue as it was
existing before becoming major.
viii) As per section 6 of the Hindu Minority and Guardianship Act, 1956,
(1) Father is the natural guardian of a Hindu minor boy or an unmarried girl and
after him, the mother.
(2) Married Hindu minor girl, her husband is the natural guardian. If the husband is
minor or minor girl becomes widow, her father in law and after him the mother
in law will be the guardians.
(3) Change of Religion When guardian of a Hindu minor ceases to be a Hindu or he
becomes a hermit or sanyasi he ceases to be natural guardian.
ix) Testamentary guardian - Guardian appointed by will of the father under section 9 of
the Hindu Minority & Guardianship Act, 1956, But such guardian will come into picture
only on the death of father as well as mother. Similarly, mother can also appoint a
testamentary guardian for her minor child. Where no testamentary guardian is
appointed by a Hindu father/mother, the court can appoint a guardian for person or
property of the Hindu minor.

x) As per law applicable to Muslims, father is the natural guardian. A Muslim father can
appoint a testamentary guardian and even mother of a Muslim child can be
testamentary guardian. If the father dies without leaving behind a will, father's father
i.e. paternal grandfather is the guardian. The testamentary guardian appointed by
the will of the father will have priority over paternal grandfather. On the death of
paternal grandfather, the person appointed by the will of the paternal grandfather will
be guardian. If the father's father dies intestate, court can appoint a guardian.
xi) Minor’s Account : A minor can have account under guardianship as well as self
operated account.
xii) Account under guardianship - For guardianship accounts, the bank records the date of birth of
the minor as given by the minor or the guardian. If guardian dies during minority, next guardian
will operate the account. In case the minor dies, the balance in the account will be paid to
the legal heirs of the minor.
xiii) Mother as Guardian: Though as per section 6 of the Hindu Minority and Guardianship Act,
1956, father is the natural guardian, RBI on the basis of Supreme Court Judgement has
allowed mother to open and operate all types of deposit accounts even though the father is
alive. Both mother and father will act in the capacity of natural guardian simultaneously.
xiv) Self-operated deposit account can be opened by minor provided he has completed the
age of 10 years and is literate. Minor can not appoint nominee in this account. On his
behalf nomination will be done by a person legally competent to act on his behalf.
Joint account is also allowed in the name of two minors provided both are of 10
years of age, are literate, belong to the same family and operation is jointly.
xv) Joint Account with minor Minor's account can be a joint account with the guardian also.
In that case the account is operated by the natural guardian in two capacities - one
as joint account holder and the other as a natural guardian of minor joint account
holder. Special instructions like 'either or survivor' or 'jointly or survivor' should be
obtained which remain dormant during minority of the minor and become operative
after the minor becomes major. In jointly operated accounts with minor, till attainment
of majority by minor, guardian will sign for himself as well as on behalf of minor.
When minor becomes major, account will be operated jointly by guardian and
minor who has become major.
xvi) Payment by minor - A bearer cheque presented for cash payment by a minor may be
paid as a minor can give a valid discharge in the capacity of the payee. Minor can
obtain premature payment of FDR as he can give valid discharge but can not raise
loan against security of FDR.
OPENING/ OPERATING BANK ACCOUNTS OF PERSONS WITH MENTAL ILLNESS & WITH
DISABILITIES LIKE AUTISM, CEREBRAL PALSY, MENTAL RETARDATION AND MULTIPLE
DISABILITIES
(i)The Mental Health Act, 1987 provides for a law relating to the treatment and care of mentally
ill persons and to make better provision with respect to their property and affairs. According to
the said Act, "mentally ill person" means a person who is in need of treatment by reason of any
mental disorder other than mental retardation. Sections 53 and 54 of this Act provide for the

appointment of guardians for mentally ill persons and in certain cases, managers in respect of
their property. The prescribed appointing authorities are the district courts and collectors of
districts under the Mental Health Act,
1987.
(ii) The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation
and Multiple Disabilities Act, 1999 provides for a law relating to certain specified disabilities.
Clause (j) of Section 2 of that Act defines a "person with disability" to mean a person suffering
from any of the conditions relating to autism, cerebral palsy, mental retardation or a
combination of any two or more of such conditions and includes a person suffering from severe
multiple disabilities. This Act empowers a Local Level Committee to appoint a guardian, to a
person with disabilities, who shall have the care of the person and property of the disabled
person.
(iii) Branches to take note of the legal position stated above and may rely on and be guided by
the orders / certificates issued by the competent authority, under the respective Acts,
appointing guardians / managers for the purposes of opening / operating bank accounts. In
case of doubt, care may be taken to obtain proper legal advice from the Law Division, HO.
ACCOUNTS OF VISUALLY CHALLENGED (BLIND) PERSONS

A visually challenged person is competent to the contract like any other person. However, on
account of his physical disability, he may contest subsequently that the facts were
misrepresented to him and thereby avoid the contract. Therefore, signature or thumb
impression of the blind person should be attested by an independent witness to the effect
that all terms and conditions were properly explained to the blind person in his presence.
Moreover, cash deposit and withdrawal by blind person should be handled by the officer of the
bank. RBI has advised banks to ensure that all the banking facilities such as cheque book
facility including third party cheques, ATM facility, Net banking facility, locker facility, retail
loans, credit cards etc. are invariably offered to the visually challenged without any
discrimination.
ACCOUNTS OF ILLITERATE PERSONS
An illiterate person is competent to contract like any other person. Banks should get the
consent witnessed to the effect that the terms and conditions of the bank were explained to
the illiterate person in his own language and he signed the form after understanding in their
presence to void contest having misrepresented. Normally cheque book is not issued to
illiterate depositor. However, cheque book can be issued for making statutory payments,
post dated cheques for repayment of instalments of loan. In such cases, the cheques will be
crossed account payee and thumb impression of the illiterate depositor will be verified on such
cheques at the time of issue of cheque book by competent authority of the bank.
ACCOUNTS OF MARRIED WOMEN & PARDANASHIN LADIES
A married woman, being an independent person, is legally competent to enter into a
contract. Banks can safely open account in her name after observing usual safeguards. Bank
should obtain employment/occupation particulars of her husband. Any cheque issued in favour
of the company/firm where her husband is employed and endorsed in her favour should not

be collected without sufficient enquiry to avoid being liable for conversion. A pardanashin lady
is one who remains in complete seclusion and does not transact with people other than
members of her family. Though pardanashin lady is legally competent to enter into a contract,
she may be able to avoid it on the pretext of undue influence and the onus of proving absence
Of undue influence is on the bank. Therefore, bank should take extra care in this regard.
Signature of pardanashin lady should be attested by her guardian if she is unmarried and by
her husband if she is married. The signature may be attested by any other member of the
family also. If she is illiterate she will not be issued cheque book and for every payment she will
have to give the discharge in the presence of an independent witness. However, in case of
literate woman, cheque book will be issued and payment will be made on the basis of recorded
signatures.
JOINT ACCOUNTS
Joint accounts can be opened with various types of operating instructions like Either or
Survivor, Joint Operation or Former or Survivor or Either or Joint or Survivor. The position in
such cases as under:
Either or Survivor (E or S):It means anyone can operate the account till both are alive. After the
death of either of them, the bank can pay the balance to the survivor without any formality.
To be operated jointly: Account will be operated by both jointly till both are alive and, if one of
the two expires, the bank would pay the final balance to the survivor, along with all the legal
heirs of the deceased.
JOintly or bySurvivors: Account can be operated by both / all the person jointly during their
lifetime and, in the event of death of anyone, the balance is payable to the surviving persons
jointly.
Former or Survivor: In such accounts, till the first named person is alive, the second named
person has no right to withdraw/operate the account. After the death of the first named
person, the payment will be made to second named person,
Anyone or anyone of the survivors: In such accounts, anyone can operate the account during
the lifetime of all. In case of death of anyone of them, anyone of the survivors can operate the
account.
Repayment of Term/Fixed Deposits in joint accounts:
(a) Either or Survivor FDRs: Payment on due date or thereafter can be made to either of them.
In case of premature payment, the signatures of both the depositors may have to be
obtained. If one of the depositors expires before the maturity, no pre-payment -at the
fixed/term deposit may be allowed without the concurrence of the legal heirs of the deceased
joint holder. However, payment can be made to survivor alone on maturity.
(b)Former or Survivor accounts: The 'Former' alone can operate/withdraw the matured
amount of the fixed/term deposit, when both the depositors are alive. However, in case the
deposit is to be paid before maturity, the signature of both the depositors may have to be
obtained. Further, if the former expires before the maturity of the fixed/term deposit, the
'Survivor' can withdraw the deposit on maturity. For premature withdrawal the consent of the
surviving depositor and the legal heirs of the deceased is required.
ACCOUNTS OF PROPRIETORSHIP AND PARTNERSHIP FIRMS
For opening account of a sole proprietorship concern, sole proprietorship letter is obtained
signed by the sole proprietor in his individual capacity. Basically there is hardly any difference

between the sole proprietor as an individual and sole proprietorship which is nothing but a
business name of the concern owned by him. That is why RBI allowed extension of nomination
facility in accounts of sole proprietorship concerns. •
As per section 4 of the Indian Partnership Act, 1932 partnership is the relation between Persons
who have agreed to share the profits of a business carried on by all or any of them acting for all.
Minimum partners: A partnership firm should have minimum 2 partners.
Maximum partners: Limit of number of members in an association or partnership ( without
incorporation ) increased up to 100.
Who can become a partner?: Only a person competent to contract can become partner.
Minor, insolvent, insane cannot become partner. A company and a firm can become partner in
another firm.
Who can not become a partner?: HUF can not become partner as per judgement of the
Supreme Court because HUF is neither a legal person nor a natural person and can not be liable
for action of others. Charitable Trust can not become partner because partnership is formed for
business.
Partnership Deed: Partnership can be oral or in writing. Therefore, banks do not insist on
partnership deed while opening accounts of a partnership concern and rely on contents of
partnership letter executed by the partners in their individual capacities.
Registration of Partnership: A partnership firm is registered with registrar of firms. Though, it is
not necessary that the firm be registered yet registration is preferred because an unregistered
firm can not sue others in its own name for recovery of its dues while others can sue it in its
name. Therefore, while granting loans banks prefer that the firm should be registered one.
(Section 69 of Indian Partnership Act, 1932)
Minor as partner: As per section 30 of the Partnership Act, 1932, a minor cannot be a full
fledged partner but he can be admitted to the benefits of partnership. His liability is maximum
to the extent of his share in the firm and he will not be personally liable. On attaining majority,
a minor has to decide within 6 months from date of majority or date of his knowledge about his
admission for benefits, whichever is later whether he wants to continue as a partner. If chooses
to be a partner, his liability begins from date he was admitted in the firm for benefits and his
profit sharing ratio continues in earlier ratio.
lmplied authority of partner: As per section 19 of the Partnership Act, 1932, a partner of a firm
has implied authority to act on behalf of the firm for the normal business of the firm and bind
the firm. All actions of the partner in the ordinary course of business are actions of all partners.
However, in the absence of any usage or custom of the trade to the contrary, a partner's
implied authority does not cover (a) admission of any liability in a suit against the firm (b)
withdrawal of any suit filed on behalf of the firm (c) acquire/transfer any immovable property
on behalf of the firm (d) submitting a dispute relating to the business of the firm to arbitration
(e) opening a bank account on behalf of the firm in his own name (f) compromising on behalf of
a firm (g) entering into partnership on behalf of the firm, But if all partners agree for these
issues and authorize anyone in this regard, these jobs can be undertaken by the said partner.
Liability of partner: As per section 25 of the Indian Partnership Act, 1932 every partner is liable.
jointly with all other partners and also severally, for all acts of the firm while he is a partner.
Thus, liability of a partner is unlimited. However, as per section 49 of the same Act, where there
are joint debts due from the firm, and also separate debts due from any partner, the separate

property of any partner shall be applied first in the payment of his separate debts, and the
surplus (if any) in the payment of the debts of the firm. To be able to recover its debts from
assets of the firm as also the individual assets of the partner (s), the banks get the
documents executed not only as partners but also as individuals, In case of Limited Liability
Partnership, the liability of partner is limited up to the amount agreed to be contributed by him.
ln order to bind the firm, a partner of a firm must sign for and on behalf of the firm and not in
his individual capacity.
Account of Partnership firm: For opening account of a partnership firm, all partners are
required to sign Account opening form except minor who is admitted for benefits of firm.
0perational Authority: In Partnership accounts operation authority is given by all partners. Any
change in the operational authority is also with the consent of all partners including those who
were earlier not authorized to operate. Every partner including a sleeping partner has authority
to stop payment of a cheque issued by another partner of the firm. However, the revocation of
stop payment of cheque will be as per operational authority,
As per section 18 of Partnership Act 1932, a partner is the agent of the firm for the purpose of
business of the firm, Being an agent, he can't delegate his authority to an outsider without the
written consent of all other partners.
Death, insolvency, insanity of partner: On the death, insolvency or insanity of a partner, the
partnership is dissolved and operations are stopped. The cheques signed by the deceased,
insane or insolvent partner will not be paid. If the account is in credit, operations are allowed
for winding up of the firm. In such case operations are allowed on the basis of a fresh mandate.
It the account is in debit, operations in the account should be stopped to retain liability of the
deceased /insolvent partner or his/her estate and to avoid operations of the Clayton's rule.
Banks must ensure that cheques drawn in favour of or endorsed in the name of the firm are not
allowed to be collected in the personal account of a partner without sufficient inquiry. Other
wise bank may not be able to get any protection available to a collecting banker under Section
131 of NI Act, 1881.
Two firms having all common partners, are one firm as firm is not a legal entity. It is only
consolidated name of all partners.
A/CS OF PERSONS WITH MENTAL ILLNESS & WITH DISABILITIES LIKE (AUTISM, CEREBRAL PALSY,
MENTAL RETARDATION AND MULTIPLE DISABILITIES)
1) The Mental Health Act, 1987 provides for a law relating to the treatment and care of mentally ill
persons and to make better provision with respect to their property and affairs.
2) “Mentally ill person” means a person who is in need of treatment by reasons of any mental disorder
other than mental retardation. Section 53 and 54 of this act provide for the appointment of
guardians for mentally ill persons and in certain cases managers in respect of their property. The
prescribed appointing authorities are the district courts and collectors of districts under the Mental
Health Act 1987.
3) The National Trust for welfare of persons with Autism, Cerebral palsy, Mental retardation and
Multiple Retardation and Multiple Disabilities Act, 1999 provides for a law relating to certain
Specified disabilities. Clause (j) of section 2 of that Act defines a “person with disability” to mean a
person suffering from any of the conditions relating to autism, cerebral palsy, mental retardation or
a combination of any two or more of such conditions and includes a person suffering from severe
multiple disabilities. This Act empowers a Local level committee to appoint a guardian, to a person

with disabilities, who shall have the care of the person and property of the disabled person.
4) Branches to take note of the legal position stated as above and may rely on and be guided by the
orders / certificates issued by the competent authority, under the respective Acts, appointing
guardians / managers for the purpose of opening / operating bank accounts.
ACCOUNTS OF LIMITED COMPANIES

A limited company is an artificial person with perpetual succession incorporated under the
Companies Act.
SMALL COMPANY
It is a company other than a public company where :
a) Paid up share capital does not exceed 50 lacs or such higher amount as may be
prescribed which shall not be more than 5 crore rupees OR
b) Turnover as per its last profit & Loss account does not exceed Rs. 2 crore or such higher
amount as prescribed which shall not be more than 20 crore rupees.
Dormant Company
A company formed for a future project or to hold an asset or intellectual property and has no
significant account transactions.
One person company :
One person company means a company which has only one person as a member.
Number of members: A limited company may be private limited or public limited. In the case of
a private limited company, minimum number of members should be 2 and maximum number
of members excluding employees can be 200. For public limited company minimum number of
shareholders should be 7 and there is no ceiling on maximum number.
Number of Directors: A private limited company should have minimum 2 directors whereas a
public limited company should have minimum 3 directors and One person company will have
one Director.
(1) Maximum Number of directors increased from 12 to 15. Further No central Government
approval is required to increase the maximum number of directors beyond fifteen.
(2) A Person can hold directorship of up to 20 companies, of which not more than 10 can be
public companies.
(3) At least one of the directors shall be a person who stayed in India for 182 days or more in the
previous calendar year. Such classes of a company shall have a woman director.
(4) Every listed public company shall have at least 1/3rd of the total number of directors as
independent directors.
OBJECT CLAUSE
Object clause in the Memorandum of association of a company not required to be divided into main,
ancillary and other objects. Only the objects for which the company is incorporated along with matters
considered necessary for its furtherance to be mentioned.
Corporate Identity Number :
Corporate identity number (CIN) to be allotted to the company on and from the date of
incorporation. CIN is to be issued by Registrar of companies containing 21 digits alpha-
numeric code. To explain 21 digits alpha numeric code, it contains 6 parts :
Part-1 = Status of listing - First character starts with L (Listed) or U (Unlisted)
Part-2 = Next 5 numeric digits categorize the industry of the company MCA has their own

categorization in this regard.
Part-3 = Next 2 alphabets represent the state code of the registered office exists and which
ROC has registered the company.
Part-4 = Next 4 numeric digits shows the year of incorporation.
Part-5 = Next 3 alphabets reveals classification of the company, Public Limited or PVt. LTd.
Part-6 = Last 6 numeric digits indicate the registration number. Registration number includes
the code of ROCs that company has been registered.
Certificate of commencement of business - No longer be issued by ROC - As per section 11 of

company act directors to file a declaration in this regard to ROC.
Corporate Social Responsibility – Formation of CSR committee has been made mandatory for a
company having net worth of Rs.500 crore or more or turnover of Rs.1000 crore or more or net
profit of Rs.5 crore or more during any financial year.
These companies shall spend in every financial year, at least 2% of the average net profits of
the company made during three immediately preceding financial years, in pursuance of its
corporate social responsibility policy.
Transferability of shares: Shares of a public limited company are transferable and are quoted
on the stock exchange while in case of a private limited company the same are held by friends
and relatives and are transferable only among the members and are not quoted on stock
exchange.
Shareholders are owners of the company, directors are agents of the company and debenture
holders are creditors of the company.
Documents for opening account:For opening account of a limited company bank should obtain
the following:
(a) Memorandum of Association: It contains name of the Company, its authorised capital,
registered office and liability of shareholders, objects of the company etc. Anything done by the
directors beyond the objects stated in the memorandum of association is called ultra-vires the
company and can't be ratified even in a general body meeting. Therefore, directors can borrow
only for the objects mentioned in the memorandum of association. If any loan is given for
objects other than those mentioned in Memorandum of Association, company will not be liable
for such loans.
b) Articles of Association: lays down the internal working of the company like rights and
powers of the directors, rules of conducting meetings, borrowing power of directors etc.
(c) Certificate of incorporation: It is equivalent to birth registration certificate of the company.
It is issued by Registrar of Companies after the promoters file memorandum and articles of
association with it. This is the most important document. A company does not exist without it.
If an account is opened without this certificate, the bank will hold the amount as trustee.
(d) Certificate of commencement of business: No longer be issued by ROCs.
(e) Resolution of Board of Directors which is passed by the Board of Directors authorising
opening and operation of the account by named officials of the company. A copy of the
resolution should be attested by its Company Secretary and I or Chairman of the meeting at
which resolution was passed.

f) While opening account of a limited company, no introduction is required as Certificate of
Incorporation is sufficient for that purpose. However, KYC norms are required to be applied on
all persons authorized to operate the account of company.
Operational Authority: The operational authority is decided by Board Resolution. Any change in
operational authority is also as per Board Resolution. Stop payment of a cheque and revocation
of stop payment will be as per operational authority.
The directors can not delegate their authority to any other person.
ln case a director dies, the cheques signed by him presented for payment can be paid if these
are otherwise in order and are dated prior to his death.
Common Seal of the Company is to be affixed on documents as per Articles of Association or
Board Resolution.
Cheque favouring company should not be credited to the personal account of the director. Such
cheques should not be paid in cash. These should be credited to the account of company only.
Borrowing powers of Directors: The borrowing powers of company arise from Memorandum of
Association. The Borrowing powers of directors are given in the Articles of Association. If it is
not mentioned in Articles of Association, it is equal to paid up capital and reserves of the
company. Under Section 293.1 (d) of the Companies Act, 1956, the Board of Directors of a
public limited company or a private limited company which is a subsidiary of public limited
company can't borrow in excess of its paid-up capital and free reserves. However, short term
borrowings like cash credit, overdraft, BP limit are not covered under this provision. If
the directors want to borrow more than the paid up capital and reserves of the company,
consent of the shareholders is required in the General Body meeting. -
Registration of Charge
When to be registered: Under section77 of company act 2013 corresponding 125 of the
Companies Act, 1956, a charge within or outside India, on its property or assets or any of its
undertakings, whether tangible or otherwise, and situated in or outside India, to register the
particulars of charge signed by the company and the charge holder together with the
instruments creating such charge, on payment of such fees with the registrar within 30 days of
its creation.
Type of charges : All type of charges are to be registered with the Registrar, even ‘ pledges’ will
have to be registered.
Failure of registration by the company : When a company fails to register the charge within
30 days, the person in whose favour the charge is created may apply to the Registrar for charge
registration. Registrar within 14 days after giving notice to the company allow registration.
Company on failure to register charge with in 30 days may make application to registrar, who
may permit registration within a period of 300 days of such creation on payment of additional
fee.
Extension of Period of Registration : If registration is not made with in 300 days of such
creation company shall seek extention of time in accordance with section 87 of 2013 act.
Modification: Whenever, there is a change in terms and conditions of the loan, the particulars
of Modification of charge should be filed with the ROC within 30 days of the modification.
Satisfaction: When loan is repaid, particulars of satisfaction of charge should be filed with ROC
within 30 days of the satisfaction of charge.

ROC with whom particulars to be filed: The particulars of the charge should be filed with the
Registrar of companies in whose jurisdiction the Registered Office of the Company is located.
For example, a company having its registered office at Jaipur shall have to file particulars of
charge with ROC Jaipur though loan might have been availed from a bank in Delhi and security
may be located in any other state.
Forms: For filing particulars of fresh charge, Form No. 8 is required. Form used for modification
of the charge is same as that for fresh registration. For satisfaction of charge, Form No. 17 is to
be submitted duly signed by both the company and the charge holder. Currently, the particulars
of charge are filed electronically.
Period for filing particulars: Particulars of charge are required to be filed within 30 days of
creation of charge.
Duty to file particulars of charge: It is the primary duty of the company to get the charge I
modification of charge / satisfaction of the charge registered with ROC. However, if the
company does not get the charge registered, bank in its own interest can file particulars of
charge.
Consequence of non filing the particulars: In case the particulars of charge are not filed, the
bank becomes the unsecured creditor against the official liquidator.
Priority of charge: The priority of the charge is reckoned from the date of creation of charge
(i.e. date of documents) and not from the date of registration if the charge is registered within
the stipulated period.
REVIVAL AND REHABILITATION OF SICK COMPANIES (Sec 253 of 2013 corresponding to sec
424 of 1956)
Secured creditors representing 50% or more of the debt of a company and whose debt the
company failed to pay within 30 days of service notice can apply to tribunal for declaring
company as sick. A company that fails to repay the debt of secured creditors representing
50% or more may also apply to the tribunal to be declared sick.
Acquiring of financial assets by securitisation company :
As per section 254 of 2013 Where financial assets of sick company have been acquired by any
securitisation company or reconstruction company any application for revival or rehabilitation
shall not be made without consent of securitisation company or reconstruction company which
has acquired the assets.
ACOUNTS OF HINDU UNDIVIDED FAMILY (HUF)
Under Mitakshara School of Hindu Law, HUF can be formed by the Hindus, the Sikhs and the
Jains and the Buddhists Till August 05, the eldest male member of the family used to be the
'Karta' while all other male members were called coparceners. The Hindu Succession Act was
amended w.eJ. 09.09.05. The salient features of the Amendment are as under: (a) Daughters
have been given equal rights in the Mitakshara Coparcernary property. The daughter of a
Coparcener by birth is / becomes a coparcener in her own right and has the rights / liabilities
in the coparcener property. The female coparcener can also act as Karta. (b) The disability
on female heirs to ask for partition in respect of dwelling houses has been removed.
1) HUF is neither a legal person nor a natural person. It is not created by agreement. It is
not incorporated under any Act. It is from a common ancestor and membership is by
birth or adoption.

2) The eldest coparcener including female is the Karta. The Karta gets this right because of
being the senior most member of the family and is not selected by other coparceners.
He/She continues to be Karta even when he/she lives outside India.
3) Operational authority to operate the account is with Karta. Karta can appoint any other
coparcener or third party to conduct business of HUF and/or operate the account. 4)
Coparcener can not stop payment of the cheque unless he is authorized to operate the
account.
4) Position of a Karta of HUF is different from a partner of a partnership firm. Kara has the
authority to act on behalf of HUF in the matter of compromise or subjecting a dispute to
arbitration which a partner does not enjoy.
5) Though Karta is competent to raise loan on behalf of HUF for family business and bind it
by doing so, it is always advisable to get the documents executed by all major
coparceners (including female coparceners) so that they are personally also liable.
6) In case of death, insanity or insolvency of Karta, next senior most member of family
becomes Karta.
7) The liability of Karta is unlimited while that of co parceners is limited up to their share
in the firm.
ACCOUNT OF TRUSTS
According to Section 3 of the Indian Trust Act, 1882, a trust is an obligation annexed to the
ownership of property, and arising out of a confidence reposed in and accepted by the owner,
or declared and accepted by him for the benefit of another and the owner.
Parties to a Trust:The person reposing the confidence is called the author of the trust, the
person in whom confidence Js reposed is called trustee and the person for whose benefit trust
is reposed is called beneficiary.
Types of Trusts: Trusts can be of two types - private trusts where beneficiaries are certain
specified individuals or groups and public trusts where beneficiary is public at large. While
private trusts are governed by Indian Trust Act, 1882, public trusts are governed by Public
Trusts Act of the concerned state. The document creating a trust is called 'trust deed'. Public
Trusts are registered with the Charity Commissioner.
Operational Authority: The operation and other aspects of the bank account are to be
conducted as per the Trust Deed. Unless otherwise provided for in the trust deed, all trustees
have to operate the account jointly. Trustees can't delegate their powers to an outsider even by
mutual consent.
Loan to a trust: Unless specifically provided for in the trust deed, no trustee or trustees can
raise loan against the security of the assets of the trust. Further, the loan should be for the
objects as mentioned in the Trust Deed.
On the death of a trustee, the trust property is passed on to the next trustee while in the event
of death of sole trustee or last surviving trustee, the court can appoint a trustee.
Death or insolvency of a trustee does not affect the trust property and the bank can pay
cheques issued by the deceased trustee prior to his death.
Stop payment of a cheque and revocation of stop payment as per operational authority.
Cheques favouring Trust should not be credited to personal account of Trustee without proper
enquiry. The funds lying in Trust account should not be allowed to be used for adjusting debt of
the Trustee.

ACCOUNT OF EXECUTORS AND ADMINISTRATORS
An executor is a person named by the deceased in his will to mange his estate whereas an
administrator is appointed by the court of law for the same purpose where the deceased dies
without leaving behind a will (intestate ).
In the eyes of law, executors and administrators, unlike trustees are treated as one person. On.
opening a bank account, therefore, executors/administrators can authorise anyone or more of
them to operate the account.
On the death of an executor or administrator, the surviving executor(s) or administrator(s) can
continue to operate the account unless otherwise provided for in the will or letter of
administration.
While opening the account of an executor, bank should obtain letter of probate, which is an
official confirmation of the will of the deceased by a court of law. For opening account in the
name of administrator(s), letter of administration is required which is issued by the court of
law.
SOCIETIES AND CLUBS
Societies and Clubs are non-profit making organizations created for promoting art, culture,
literature, sports etc.
These can be registered under Societies Registration Act 1860 with Registrar of Societies.
Societies can also be registered with Registrar of Companies under section 25 of Companies
Act which pertains to non profit making companies.
Documents to be obtained while opening the account:
(i) Copy of Registration Certificate (ii) Copy of Bye laws which contain rules and regulations (iii)
Copy of resolution passed by the Managing Committee which should include authority to open
the account and operational authority.
Loan to Society: loan is for the objects of the society, raising of loan is permitted as per Bye
laws and resolution should be passed by the Management Committee.
Cheques presented after death of Secretary or Office Bearer: Any cheque signed by the
Secretary of Club or Society or any other office bearer who is authorized to operate the account
and presented after his death can be paid-provided if is otherwise in order and dated prior to
his death.
MANDATE AND POWER OF ATTORNEY
Mandate:When an account holder authorises another person through a simple letter of
authority, it is called mandate.
Power of Attorney: On the other hand, power of attorney is executed on stamped paper and
may cover any other transactions besides opening/operation of an account. Bank generally
accept mandates. Power of Attorney is also acceptable. A mandate does not require witnessing
or stamping. On the other hand, power of attorney is stamped as per the State Stamp Rules of
the state where executed. It should either be registered with
a Registrar or attested by Notary Public. The account holder can revoke mandate or power of
attorney any time even if it is stated to be irrevocable.
Any cheque signed by the agent and presented after cancellation of authority shall not be paid.
However, principal continues to be liable for the acts of the agent done prior to revocation of
authority.

Power of attorney or mandate is revoked by death, insanity, insolvency of the Principal. Any
cheque signed by the principal or agent presented after the death, insanity or insolvency of the
principal will not be paid.
If Cheque issued by the agent is presented for payment after his death, insanity or insolvency,
the same can be paid so long as the principal is alive provided the same is dated prior to the
date of death or insanity of the agent. Agent can not delegate authority to a third party.
DEATH OF A CUSTOMER AND SETTLEMENT OF CLAIMS

1) In the case of death of individual customer, operation in the account should be stopped.
Any cheque presented after the death of individual account holder should not be paid as
bank's authority to pay the cheque is terminated in case of death, insanity or insolvency
of individual customer.
2) The payment should be made to nominee if there is nomination. If there is no nominee
but will has been written by the account holder, then the person named in the will be
required to bring Probate from competent court. The person named in the will or
probate is called Executor. In this case payment should be made to
executor.
3) When a person dies without writing will, he is said as having dies intestate and,
payment will be made to legal heirs.
4) As per RBI guidelines Succession certificate is not mandatory for any amount. Bank has
to satisfy about legal heirs.
5) For delivering contents of locker or safe custody, Letter of Administration is required.
While delivering contents of locker or safe custody, inventory should be prepared.
6) If some sealed packet is found in the locker of safe custody, it should be delivered as it
is without opening the same.
7) If any credit is received in the account after death of customer, it should be credited to
a separate account in the name of customer with the permission of legal heir or
nominee. Otherwise it should be returned to remitter under intimation to the legal heir
or nominee.
8) Pre-mature payment of term deposit can be allowed but no loan can be allowed.
9) Interest in case of current account should be paid at Saving rate from date of death till
date of payment.
10) ln case of term deposits, up to due date interest should be paid at contracted rate. For
overdue period, interest should be paid at applicable rare on date of maturity if the
death was before maturity and at saving
rate if the depositor died after maturity.
Agriculture Interest Subvention Scheme

Available for Short term crop loan upto Rs. 3 lacs, Interest rate from borrower is to be charged for
regular STLs 7%, Interest subvention from Govt. Of India through Reserve Bank of India allowed to
banks @ 2% on half yearly basis, Interest subsidy from Govt. Of India is allowed to prompt paying
customers @ 3% resulting effective rate of interest is charged @ 4% i.e. 7%-3%

GIST OF CREDIT MANAGEMENT AND RISK POLICY FOR THE YEAR 2016-17
The Bank understands the importance of measuring and mitigating the credit risk. With overall
objective to strengthen the processes and structure of credit risk management for ensuring sustainable
growth of loan portfolio bank every year enumerates the credit .
Definition of - Credit Risk
“Credit risk” is the possibility of loss associated with changes in the credit quality of the borrowers or
counter parties. Counter parties may include an individual, small & medium enterprise, corporate, bank,
financial institution, or a sovereign. In a bank’s portfolio, losses stem from outright default due to
inability or unwillingness of a borrower to honour commitments in relation to lending, settlement and
other financial transactions.
Credit Risk Management – Framework
1) Credit Risk Management Structure

2) Credit Risk Policy & Strategy
3) Processes and Systems
CREDIT RISK MANAGEMENT STRUCTURE
(1) a) Integrated Risk Management Division (IRMD):

Division is headed by GM with distinct functions as follows:
framing of policies, inter alia, related to credit risk, development of

systems & models for identifying, measuring and managing credit risks
and their implementation;
monitoring and managing the industry risk;
integrated risk management functions;
b) Circle Risk Management Departments (CRMDs):
Risk Management Departments functioning at Circles are called as Circle Risk
Management Departments (CRMDs). CRMDs will function under the administrative
supervision of second senior most official of the Circle. The operational work will be
looked after by DGM/AGM/CM of the Circle Office who is not directly involved in the
process of the sanction of credit proposal.
(2) Risk Management Committee (RMC)
RMC is a Sub-Committee of Board with overall responsibility of formulating policies/procedures
and managing all the risks.
(3) Credit Risk Management Committee (CRMC)
It is a top level functional Committee headed by Managing Director & CEO and comprises of
EDs, GMs of Integrated Risk Management, Credit, Treasury, etc.
(4) Credit Audit Review Division (CARD)
Bank has also set up a Loan Review/Audit Mechanism to be looked after independently by
CARD.
(5) Credit Approval Committees (CACs)
Based on the communication received from Department of Financial Services, Ministry of
Finance, Govt. of India, Credit Approval Committees at HO/CO level have been formed as under:

CAC at CO/ HO level Headed by Credit proposals
COCAC Circle Head (AGM) Beyond loaning powers of Incumbent of the branch
but not exceeding 15 crores
Circle Head (DGM) Beyond loaning powers of Incumbent of the branch
but not exceeding 30 crores
FGMCAC FGM Beyond loaning powers of Circle Head/Incumbent of
LCB but not exceeding Rs.50 crore beyond loaning
power of CH
HOCAC Level-I Senior most Above Rs.50 crore & upto Rs.75 crore
GM(Credit)
HOCAC Level-II Senior most ED Above Rs.75 crore & upto Rs.150 crore
HOCAC Level-III Managing Director Above Rs.150 crore & upto Rs.400 crore
& CEO
Branches in various scales shall continue to exercise their vested loaning powers as per the extant
system. However, the existing individual loaning powers except for staff loans vested with officers in
various scales and posted at administrative offices (other than branches) shall become redundant, as all
the proposals falling within their vested loaning powers shall now be placed before the respective Credit
Approval Committees.
CREDIT RISK POLICY & STRATEGY
Bank has implemented the Basel III guidelines w.e.f 01.04.2013 on the basis of regulatory guidelines. RBI
vide their letter dated 31.07.2013 has also allowed the bank to participate in the parallel run process for
Foundation Internal Rating Based (FIRB) approach for regulatory capital calculation for credit risk and
bank has been computing and submitting the regulatory data to RBI under parallel run process for FIRB.
The bank has implemented the following system for adopting Standardized Approach:
i) Capital Charge for Credit Risk
Bank has implemented Standardized Approach through CRISMAC software of ladder system. Under
Standardized Approach, loan assets have been classified into following major categories:
Claims on Domestic/Foreign sovereigns
Particulars Risk Weight

Claims on Central Government/ State Govt. and accounts guaranteed by 0%
Central Government
State Govt. guaranteed claims 20%
Claims on RBI/DIGCC/CGTMSE/ Credit Risk Guarantee Fund Trust for Low 0%
Income Housing (CRGFTLIH)
claims on ECGC 20%
claims on scheduled banks having CRAR of at-least 9% 20%
Other banks having CRAR of at-least 9% 100%
banks having CRAR less than 9% upto 625%

Claim on foreign banks will be risk weighted as per the ratings assigned by international rating agencies
namely Standard & Poor, Moody‟s and FITCH.
Claims on Corporates (CARE,CRISIL, INDIA RATING, ICRA, BRICKWORK, SMERA)
Infrastructure finance companies &Corporate with rating (Long term claims) Risk weight
AAA 20%
AA 30%
A 50%
BBB 100%
BB & BELOW 150%
Unrated 100%
Corporate with rating (short term claims) Risk weight
A1+ 20%
A1 30%
A2 50%
A3 100%
A4 & D 150%
Unrated 100%
All unrated standard restructured/rescheduled claims 125%
Risk weight – Others
Regulatory retail portfolio 75%
Housing loans – Outstanding upto 30 Lakhs & LTV upto 80% 35%
Housing loans – Outstanding upto 30 Lakhs & LTV above 80% and upto 90% 50%
Housing Loans – outstanding above 30 lakhs upto 75 lacs & LTV upto 75% 35%
HL above 30 lacs upto 75 lakhs & LTV above 75 and upto 80 50%
Housing loans – Outstanding above 75 lacs (LTV upto 75 %) 75%
Restructured housing loans Risk weight above +
25%
Commercial real estate - Residential Housing (CRE-RH) 75%
Commercial real estate – CRE 100%
Loan to Value Ratio (LTV) is computed as a percentage of outstanding in the account
(Principal+Interest+Other charges without any netting) in the numerator and the latest realizable value
of the residential property mortgaged to the bank, exclusive of stamp duty, registration and other
documentation charges, as per bank record, in the denominator.
Consumer credit including personal loans and credit card receivables 125%
Capital Market Exposure 125%
venture capital fund 150%
Claims on NBFC-ND-SI 100%
Claims on bank’s own staff which are fully covered by superannuation benefits 20%
and/or mortgage of flat/house
Other loans and advances to Bank‟s own staff As per regulatory
retail
NON PERFORMING ASSETS - Unsecured portion of NPA net of specific provision and partial write offs
shall be risk weighted as under:
Specific provision Residential Mortgage Other NPAs
less than 20% of outstanding amount of NPA 100% 150%
at least 20% and upto 50% of outstanding amount 75% 100%

of NPA
at least 50% of outstanding amount of NPA 50% 50%
Where a NPA is fully secured by the following form of collaterals that are not recognized for credit risk
mitigation purposes, either independently or along with other eligible collateral, a 100 per cent risk
weight may apply, net of specific provisions, when provisions reach 15 per cent of the outstanding
amount: (i) Land and building valued by an expert valuer and with valuation not more than three years
old, and (ii) Plant and machinery in good working condition at a value not higher than the depreciated
value as reflected in the audited balance sheet of the borrower, which is not older than eighteen
months
RW is also applicable where the fund based facility is undrawn or partially undrawn and the
same is not unconditionally cancellable.
Non market related off balance sheet items would also attract risk weight after applying CCF
(Credit conversion factor)
Internal Rating Based Approach

The IRB approach allows banks, subject to the approval of RBI, to use their own internal estimates for
some or all of the risk components [Probability of Default(PD), Loss Given Default(LGD), Exposure at
Default(EAD) and Effective Maturity(M)] in determining the capital requirement for a given credit
exposure.
Credit Risk Mitigation Techniques
RBI has prescribed list of eligible financial collaterals, method of valuation of these collaterals and
haircut thereon etc., which would help the bank in reducing the exposure amount by permitting offset
of such collaterals against the exposure. Under Standardized Approach, the following securities (either
primary or collateral) are eligible for treatment as credit risk mitigants:
(i) Cash or deposit with the bank which is incurring the counter-party exposure.
(ii) Gold: Gold would include both bullion and jewellery. Value of the collateralized jewellery should be
benchmarked to 99.99 purity.
(iii) Securities issued by Central and State Governments.
(iv) Kisan Vikas Patra and National Savings Certificates, provided no lock in period is operational and if
they can be encashed within the holding period.
(v) Life insurance policies with a declared surrender value of an insurance company, which is regulated
by an insurance sector regulator.
(vi) Debt securities rated by a recognised Credit Rating Agency where these are either: (a) at least BBB-
when issued by public sector entities; or (b) at least A3 for short-term debt instruments
(vii) Debt securities not rated by a recognised Credit Rating Agency where these are: a) issued by a bank;
and b) listed on a recognised exchange; and c) classified as senior debt; and d) all rated issues of the
same seniority by the issuing bank that are rated at least BBB- or A3 by a chosen Credit Rating Agency ;
and e) the bank holding the securities as collateral has no information to suggest that the issue justifies
a rating below BBB- or A3 (as applicable) and; f) Banks should be sufficiently confident about the market
liquidity of the security.
(viii) Units of Mutual funds regulated by the securities regulator of the jurisdiction of the bank‟s
operation mutual funds where:

a price for the units is publicly quoted daily i.e., where the daily NAV is available in public
domain; and
Mutual fund is limited to investing in the instruments listed in this paragraph.
CREDIT RISK STRATEGIES
Bank has prescribed various risk strategies for credit portfolio, which involve the following:
A. Identification of Target Market for the bank

B. Decision on Risk Acceptance levels
C. Quantitative Exposure Ceilings.
An important aspect of targeted marketing is to have matching delivery channels. Bank has created
proper credit delivery channels for building up a sound credit portfolio. Bank has created specialized
structure, wherein relationship management concept has also been introduced. The purpose of creating
specialized structure is to ensure prompt credit dispensation and improving credit risk management
practices. The initiatives taken in this regard are:
- Large Corporate Branches

- Mid Corporate Branches
- International Banking Branches
- Specialized SME Branches
- Trade Finance Branches
- Signature Branches
- Retail Assets Branches
- Specialized Agriculture Finance Branches
I. THRUST AREAS
For the year 2016-17 thrust area for the bank shall be as under:
1) Retail Segment
Retail segment, for business ownership credit dispensation purposes is considered a segment of
borrowers governed by the schemes developed by Retail Assets Division. The performance,
monitoring and control of all the Retail Segment Schemes is looked after by Retail Assets
Division. The retail segment should not be construed as defined by RBI as regulatory retail in the
New Capital Adequacy Framework (NCAF).
Maximum aggregated retail exposure to one counterpart should not exceed the threshold limit
of Rs.5 crore, yet individual housing loans will form part of retail banking segment for the
purpose of reporting irrespective of any upper ceiling.
Advances under following retail loan schemes will be encouraged to increase the priority sector
portfolio/boost the country‟s economic development and meet the needs of various segments
of Society, including those hitherto deprived, students and senior citizens :-
Housing Loans with its variants
Education Loans

Vehicle Loans
Loans to Pensioners
Loan against Gold Jewellery/ Ornaments and Gold Coins
Popularizing Housing Loans to EWS/ LIG categories under “Pradhan Mantri Awas Yojana- PNB
Housing for All”.
The Policy of the Bank will also aim at higher recovery rates, strictly implementing the “System
of monitoring Retail Loan Accounts” by encouraging steps to improve Branch-wise recovery to
minimum 90% and NPAs of less than 2%. The process of sending SMS alerts shall be optimally
utilized to send alerts to retail loan borrowers whose instalments are due/ have become due
besides constitution of dedicated recovery teams at Circle/ Branch level to monitor NPAs/
potential NPAs. Focus shall be on minimizing NPAs by enforcing timely action under SARFAESI,
liquidation of available collaterals/ invoking of guarantee, wherever available. Efforts shall be
made to bring the delinquency levels to NIL in Loans against FDs/ Govt Securities/ Gold, where
100% liquid securities are available.
2) Priority sector Credit:
Bank will continue to direct its policies for boosting advances to all segments of Priority Sector
to remain ahead of the national goals under priority sector, agriculture, weaker sections,
women beneficiaries etc. In addition to agriculture, thrust shall remain on boosting Micro Credit
through financing of Self Help Groups and Joint Liability Groups and also to have higher growth
under Small Enterprises, Education and Housing segments of Priority Sector.
Modifications have been undertaken in the following schemes to remain competitive in the
market.
(i) Kalyani Card Scheme
(ii) PNB Bhu swami yozna
Apart from thrust on investment credit, efforts will be made to cover all the eligible KCC borrowers with
PNB Kisan RuPay Card (KCC Debit Card)
Focused attention shall be paid to increasing investment credit in Agriculture under following:
a. Scheme for construction/ renovation/ modernization of cold storages.
b. Financing under Agricultural Marketing Infrastructure Scheme for facilitating creation of storage
infrastructure, post harvest operations like grading, packing etc. and development of marketing
infrastructure.
c. Financing Green Houses/ Poly houses.
d. Organic Farming
e. Food & Agro Processing
f. Financing to women SHGs and JLGs
g. Financing to Farmer Producer Organizations
h. Women financing shall be augmented by taking advantage of relaxations given in interest,
processing charges and margin under Women Empowerment Campaign.
More focus on:

i. PNB Krishi Bhu- Swami Yojana (PNB Agriculture Land purchase Scheme)

j. Advance against warehouse and cold storage receipts issued by Godowns of CWCs, SWCs and
Warehouses/ cold storages duly accredited by Warehousing Development & Regulatory
Authority (WDRA) upto Rs. 50 Lakh
k. Commercial Dairy
l. Kisan Gold Scheme
m. Allied agricultural activities like poultry, fishery, piggery, sheep/ goat etc.
n. Agri-clinics/Agri-business centres
o. Agriculture infrastructure like cold chains, refrigerated vans etc. for transport and preserving
perishable goods.
p. Dairy Vikas Card/ Working Capital Dairy
q. PNB Kalyani Card for women engaged in farming and non- farming activities.
r. Financing under Venture Capital Assistance of SFAC.
s. Financing to custom hiring/ service units.
3) Advances To Micro, Small & Medium Enterprises (MSME):

In line with GOI policy directives to achieve 20% Year on Year growth in credit to Micro, Small
& Medium sector, the Bank envisages growth of at least 20%.
Following recommendations of High Level Task Force constituted by Hon’ble Prime Minister
on Micro, Small & Medium Enterprises (MSME) Sector will be implemented:
Achievement of 20% year on year growth in credit to Micro and Small Enterprises.
The share of Micro Enterprises be increased to 60% of Micro & Small Enterprises of
previous year by accelerating lending to Micro Enterprises.
10% year on year growth in number of accounts of advances to Micro Enterprises.
As per RBI mandatory guidelines, loans upto Rs.10 lakh to Micro and Small Enterprises, which
are eligible for coverage under Credit Guarantee Scheme of CGTMSE are to be considered on
merits, without accepting any collateral security / third party guarantee and all such cases must
be got covered under guarantee scheme of CGTMSE.
Where the loan amount is above Rs.10 lakh to Rs.50 lakh, wherever collateral security is
available, Incumbents in all the scales are empowered to sanction the loans, as per extant
guidelines. However, if any eligible loan is proposed to be covered under CGTMSE, prior
concurrence be obtained from CIRCLE HEAD.
Where the loan amount is above Rs.50 lakh, in highly deserving cases, FGM shall have the
discretion to examine each proposed case on merits, to cover it in CGTMSE. In case the CGTMSE
Coverage is not obtained, the extant guidelines for obtaining collateral security and/or third
party guarantee, shall apply.
Disposal of loan applications
Upto Rs. 2 lakh 2 weeks

Above 2 lakhs and upto 50 lakhs 4 weeks
Above 50 lakhs & upto 100 lakhs 5-6 weeks
Above 100 lakhs & upto 100 crores 6-7 weeks
Above 100 crores 8-9 weeks

New Schemes
Maximize quality lending under the schemes
1) PNB Sanjeevani
2) PNB Professional
3) Kushal Vyapari
4) PNB Vanita Scheme (with special preference to SC/ST/BPL women)
5) PNB Nurture Scheme ( for financing day care centres/creches and related activities exclusively
for women entrepreneurs)
Moratorium
In case of MSEs (to new as well as to existing cases) where implementation of project is in progress,
liberal moratorium on term loan and working capital shall be extended by including interest also, during
first 6-12 months of operation on case to case basis by the sanctioning authorities.
Loaning powers
Sufficient Loaning Powers have been vested to ensure faster disposal of MSMEs loan
applications.
Branch Managers have been vested with higher powers to directly dispose of proposals at
branch level for financing Micro, Small and Medium Enterprises (manufacturing/service) covered under
priority sector as follows:
i) Scale –II Managers vested with the powers of Scale-III Managers.
ii) Scale–III and IV Managers vested with 150% of their vested loaning powers.
Incumbents of all present 414 MSME Credit Growth Initiative branches and to be identified
subsequently during the year, may consider takeover proposals to the extent of 50% of their regular
loaning powers in case of MSME advances without obtaining prior approval from the next higher
authority.
The Bank is providing 20% concession in processing/upfront fee, in case MSME

applications are received online.
Simplified Loan Application (PNB – 1166/2013) for credit requirement up to Rs. 100 Lakh
for Micro Small and Medium Enterprises (Manufacturing & Service sector) has been made
available along with provisional acknowledgement and check list of documents. Loan
Applications PNB 1016/2013 and PNB 1017/2013 for MSME (Manufacturing) for credit
requirement above Rs. 100 lakh to Rs. 200 lakh & above Rs. 200 lakh respectively are also
available alongwith check list on corporate website/Knowledge Centre.
The Bank is providing Working Capital through simplified turn over method (Nayak
Committee) i.e. providing 20% of the turn over as bank finance with 5% promoter’s
contributions to MSEs units (Manufacturing and Service) for credit requirement up to
Rs. 500 lakh. The Quarterly Monitoring System (QMS) forms have been simplified and
Current ratio norms relaxed to 1.25:1.
MSME Credit Growth Initiative Branches:

414 MSME Credit Growth Initiative branches have been identified. The
broad objective of this initiative has the following 2 aspects:
i) To achieve 30% YoY growth of MSME in the identified 414 branches
ii) To significantly reduce turnaround time (TAT) upto 2-4 weeks
Sick Units
For identifying sick units in MSE sector, Bank has adopted following revised definition of MSEs sick
units: A Micro or Small Enterprise (as defined in the MSMED Act 2006) will be said to have become sick,
if:
Any of the borrowal account of the enterprise remains NPA for three months or more
OR
There is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth during
the previous accounting year.
SCORING
For objective decision making in MSME accounts, Credit Scoring Models for loans up to
Rs. 50 lakh have been launched and made applicable at all branches. These Credit
Scoring Models have been placed Finacle with link as PNB Score and PNB Score SME.
Scoring has been exempted for all MSME accounts upto Rs. 2 Lakh. For accounts more
than Rs. 2 Lakh & upto Rs. 50 lakh, scoring be done under the relevant model i.e. PNB
Score for PNB Sanjeevani & PNB Kushal Vyapari and PNB Score SME for all other MSME
advances. The Score Card IDs generated are to be mandatorily entered in CBS in „V‟
details (Free text Code 1 for PNB Score and Free text 6 for PNB Score SME).
For new Loans under Govt. Sponsored scheme (eg. PMEGP scheme etc.) above Rs.2 lakh
and up to Rs. 20 lakh, where Capital subsidy/interest subsidy/concession etc. is available
for scores above 40 (instead of 50), branches can consider the application for sanction
as per their vested loaning power.
For non Govt. Sponsored schemes, in view of revised guidelines of Risk rating categories,
B3 category (Score>40<46) is defined as Yellow zone instead of earlier B Category
(Score>40<50) where application can be considered by next higher Authority for
sanction.
Scoring Model for Credit Card For scoring of fresh applications for issue of the credit card to individuals
and to assess the credit card limit for Classic, Gold and Platinum Cards.
SCORING MODEL FOR PNB FARM SECTOR
In its endeavor to develop credit scoring models for all eligible small loan accounts under various
segments up to Rs. 50.00 Lacs, bank has developed following models for lending to agricultural
(direct and allied) activities under various schemes of PS&LB Division:
Direct Agriculture with limit above Rs. 1 lac and up to Rs. 50 lacs
Allied Agriculture with limit above Rs. 1 lac and up to Rs. 50 lacs
Direct Agriculture with limit above Rs. 1 lac and up to Rs. 50 lacs
(Renewal/Enhancement)

Allied Agriculture with limit above Rs. 1 lac and up to Rs. 50 lacs
(Renewal/Enhancement)
MUDRA: MUDRA Ltd. (Micro Units Development & Refinance Agency Limited) was launched by the
Hon‟ble Prime Minister on 08.04.2015. All the loans w.e.f. 08/04/2015 given to non-farm enterprises in
manufacturing, trading & services with limit upto Rs. 10.00 Lacs for income generation shall be known as
MUDRA loans under Pradhan Mantri Mudra Yojana (PMMY). The overdraft amount of Rs 5000/-
sanctioned under PMJDY is also classified as MUDRA loans under PMMY. All MUDRA loans shall be
categorized as
Shishu ( Loans with limit upto Rs.50000)

Kishore (Loans from Rs.50001/- to Rs.5.00 Lacs)
Tarun (Loans from Rs.5.00 Lacs to Rs.10.00 Lacs).
Loans covered under Mudra are collateral free loans. However assets created out of Bank finance to be
charged with the Bank. All Shishu loan A/Cs under PMMY are to be disbursed through Mudra card only.
one day of the week is celebrated as “Micro lending Day” in the branches.
CD RATIO
Endeavour would be to take up hi-value agri-projects and cluster based lending to small and medium
enterprises, to enable bank to surpass the benchmark of 60 per cent under CD ratio of rural and semi-
urban areas.
NATIONAL GOALS
Sector National Goal (Computed against ANBC or credit equivalent of Off

Balance Sheet Exposure, whichever is higher)
Priority Sector 40%
Total Agriculture 18%
Within Agriculture, Loans to 11.57% for FY 2015-16 & ultimately to reach 13.5%
non-corporate farmers
Within Agriculture, Loans to 8%
Small & Marginal farmers
Micro Enterprises 7.5%
Weaker Sections 10%
Women beneficiaries 5%
Minority communities 15% of PS
Export Credit
Export credit shall also continue to remain our thrust area and our endeavour will be to achieve the ratio
of export credit to net bank credit of 12%.

II. OTHER STRATEGIES:
i) Non-Fund Based Business
Non-fund based business shall be increased so as to augment non-interest/fee based income.

Structured Financial Messaging System (SFMS) prescribed by Ministry of Finance is now mandatory
for issuance of LC, sending and receiving BG messages as well as message for amendments in bank
guarantee. Similarly negotiation/discounting of ILCs shall be allowed, only if received through SFMS
platform.
ii) Take Over Of Accounts From Other Banks
Only borrowal accounts in "Standard Category" having Credit Risk Rating „B1 & above‟ can be taken
over from other banks. However, HOCAC II & III may consider takeover of „B2‟ & „B3‟ rated accounts
in large and mid corporate categories on merits of the case within its vested loaning powers and MC
shall have full powers in this regard.
Such borrowers should have earned net profit after tax in the immediate preceding three years and
have sound financial position. However, FGMCAC & above have been vested with the powers to relax
the aforesaid criteria to profit after tax in any 2 years out of immediate preceding 3 years.
iii) Large Corporate and Mid Corporate Branches (LCBs & MCBs)
MCBs will handle proposals between Rs.5 crore and Rs.25 crore at places where LCBs are also located
and loan proposals of Rs.5 crore and above at places where LCBs are not located. LCBs will handle
loan proposals above Rs. 25 crore.
DECISION ON RISK ACCEPTANCE LEVELS:
I. Linking Loaning Powers with Risk Rating

For taking expeditious decisions and also to attract quality accounts, the CACs/officials shall exercise
loaning powers linked to risk rating of borrower/rating of the industry, as under:
Credit Risk Rating of Borrower Loaning Powers
A1 & A2 CMs, AGMs, DGMs, COCAC & above shall exercise 125% of
their normal loaning power.
A3 & A4 CMs, AGMs, DGMs, COCAC & above shall exercise 110% of
their normal loaning power.
B1 Normal Loaning Powers by official
In case of exporter borrowers, officials upto AGM level shall exercise powers up to 125% of aggregate
commitment per borrower provided that additional 25% powers are utilized only for export limits.
II. OTHER LOANING POWERS
Sanction of limits in anticipation of approval by MC

Sanction of limits/facilities in anticipation of approval by MC shall be considered in case of

Existing as well as Fresh Borrowers by HOCAC Level III
In Principle Consent
In case of genuine and urgent cases falling under MC/Board sanction, “In Principle” consent
may be given by HOCAC-III in case of both fresh as well as existing borrowers.
Sanction of limits to NBFCs:

All fresh proposals/enhancement/additional/adhoc/temporary facilities to NBFCs shall be considered
at FGMCAC & above only. However, the cases for renewal/review of the existing facilities may
continue to be considered by Incumbents of LCBs/COCAC (DGM headed) and above. Powers vested
with Incumbents of LCB/COCAC(DGM) for considering advances to NBFC:
Incumbents of LCBs/COCAC (Headed by DGM) – 25% of fund based secured advance power
FGMCAC/HOCAC-1/11/111 - 50% of fund based secured advance power
Adhoc limits:
To check frequent sanction of adhoc limits to the borrower without ascertaining genuineness of the
requirement, loaning powers for sanction of adhoc limits at the branch level (except in case of
Incumbents of LCBs and branches headed by AGMs/DGMs) have been withdrawn. In order to
facilitate operational convenience, Temporary Overdrawings and Adhoc Limits have been defined
and will be exercised as under:
(1)Temporary Overdrawings (TOD)

In fund-based secured advances, overdrawings may be allowed for payment of statutory dues,
salaries, wages or any other justifiable debits for very short period say 2-3 days, but not exceeding 7
days (including roll over, if any) to meet temporary mismatch of funds in unforeseen circumstances
by officials at branch level within their vested loaning powers for sanction of adhoc facility. In case
TOD is not adjusted within maximum period of 7 days from the date of sanction, the matter may be
referred to the Circle Head & above for confirmation of action/ sanction of regular adhoc limits.
(2) Adhoc Facilities – Adhoc limit/facility should be granted as regular sanction for fixed
period to the borrower after analyzing the financials & requirements of the borrowers only
for unexpected business and subject to the other laid down stipulations for sanction of adhoc
limits. The cases for sanction of adhoc facility for fixed period (above 7 days) emanating
from these branches shall be considered by COCAC and above within their vested loaning
powers. The adhoc facilities are not to be allowed by Branch Incumbents (other than
Incumbents of LCBs and branches headed by AGMs/DGMs) for proposals falling upto their
vested loaning powers as well as sanctions by the higher authorities.
Linking of pricing with credit risk rating:
Borrowal accounts availing limits over Rs. 20 lakhs, interest rates have been linked
with the credit risk rating with certain exceptions.
REFERENCE LENDING RATE - BASE RATE
The actual lending rate would be the Base Rate plus borrower specific charges, which will include
product specific operating cost, credit risk premium and tenor premium etc.

Base Rate System is mandatorily applicable for all new loans (sanctioned and disbursed after 1.7.2010)
and for all those old loans that come up for renewal on and after 1.7.2010.
The (BPLR) Bench Mark rates are computed as per the methodology advised by the regulator and in line
with RBI monetary signals. At present, the BPLR of the bank is 14% p.a. w.e.f. 01.05.2012, whereas the
Base rate is 10.25% p.a. w.e.f. 09.02.2013.
FGMCAC may allow maximum 100 basis point relaxation in Rate of Interest on applicable Card Rate.
Exposure in Weak Accounts
All irregular/weak accounts shall henceforth be classified as Special Mention Assets (SMA) with sub-
categories as under:
Sub category Basis for classification

SMA – 0 Principal or interest payment not overdue for more than 30 days, but
account showing signs of incipient stress
SMA – 1 Principal or interest payment overdue between 31 to 60 days
SMA – 2 Principal or interest payment overdue between 61 to 90 days
Non-cooperative borrower
If the borrower is defaulting in timely repayment of dues while having ability to pay or non-cooperating
with bank by way of not providing necessary information sought, denying access to assets financed/
collateral securities, obstructing sale of securities and any other tactics to delay the efforts of bank etc.,
the borrower shall be identified as non-cooperative borrower.
Prudential exposure limit for single/group borrowers:
As per RBI guidelines, credit exposure ceiling shall not exceed 15% of the capital funds in case of
individual borrowers (20% provided the additional 5% is on account of credit to infrastructure projects)
and 40% of capital funds in case of group borrowers (50% provided the additional 10% is on account of
credit to all infrastructure projects).
In respect of Oil companies who have been issued Oil Bonds which do not have SLR status, RBI has
revised the above exposure limit (i.e. 15 % in case of single borrower) to 25% of the capital funds, by
Government of India.
In respect of Partnership and Proprietor concern, exposure to a borrower by way of Fund Based/Non
Fund Based facilities shall be restricted to the limits mentioned below:
Proprietor ship concern Rs. 50.00 crores

Partnership concern Rs. 75.00 crores
Single entity with constitution as Society, Trust Rs. 100.00 crores
and HUF
In industries where no exposure ceilings have been fixed, the exposure ceiling may be taken as 1% of the
bank‟s gross advances.

Unsecured exposure ceiling
where the realizable value of tangible security is not more than 10%, ab-initio of the outstanding
exposure shall be treated as „Unsecured Exposure‟, which should not exceed 15% of the total
outstanding advances. The said ceiling shall be reviewed on the basis of data as on close of previous
quarter.
Exposure Limit for Advances to Traders
Loans to Corporate Traders should normally not exceed Rs. 100 Crore. However, facilities to existing
clients having limits above Rs. 100 Crore may be renewed/ reviewed by the Sanctioning Authorities. Any
fresh sanction/enhancement above Rs. 100 Crore may be considered by the Management Committee
up to a maximum exposure ceiling of Rs. 500 Crores. Retail Chains (like Reliance, Easy Day, More etc.)
are kept out of purview of aforesaid ceilings.
Lending to State Govt. Undertakings/PSUs– Exposure Limits
A maximum State-wise exposure limit to State Govt. Undertakings/PSUs (excluding advance against
bank deposits) is fixed at 20% of Bank‟s capital funds as at previous year end.
Quantitative Exposure Ceiling:

i) NBFCs:
The exposure ceiling for single NBFC is fixed at 7% of Capital Funds of the Bank as per its last audited
balance sheet (10% in case of infrastructure sector). In case of group accounts, bank may assume
exposure on all NBFCs up to 40% of its capital funds provided the exposure in excess of 30% is on
account of funds lent to infrastructure sector.
Ceiling for bank‟s aggregate exposure to all NBFCs has been put at 8% of bank’s gross advances at the
close of the previous quarter. Within the above ceiling of 8%, an internal sub-limit for aggregate
exposure to all NBFCs, having gold loans to the extent of 50% or more of their total financial assets is
fixed at 1.5% of bank‟s gross advances
ii) Film Industry sector:

Overall ceiling of Rs. 20 Crores for fresh exposure to be taken during the current year.
iii) Real Estate:
overall exposure ceiling for real estate sector has been fixed at 20% of the total advances of the bank as
at close of last quarter.
iv) Capital Market sector:
Ceiling for capital market exposure is fixed at 40% of its net worth on a solo and on consolidated basis.
Advances against shares / debentures to individual
The maximum ceilings prescribed by RBI for advances to individuals against security of shares and
debentures is Rs. 10 lakh against physical shares and Rs.20 lakh against dematerialised shares from
entire banking system.
Statutory Provisions
As per banking regulation act 1949 advances against shares (both in physical and dematerialised form)
following statutory provisions be adhered to:-

Section 19(2) & (3) A Bank cannot hold shares in any company, whether as pledgee, mortgagee or
absolute owner of an amount exceeding 30% of the paid-up share capital of the company or 30% of the
own paid up share capital and reserves, whichever is less. Further a bank cannot hold shares, whether as
pledgee, mortgagee or absolute owner, in any company in the management of which any Managing
Director or Manager of the bank is in any manner concerned or interested.
Section 20(1) (a) A Bank cannot grant any loans or advances on the security of its own shares.
v) Renewable Energy- Exposure limit

Exposure limit of 1% of Gross Advances for lending to Renewable Energy within the overall limit of 11%
fixed for Energy sector as on close of previous quarter has been fixed by Board.
CREDIT RISK RATING MODELS
All existing borrowers above a threshold limits are also subject to a continuous preventive monitoring
system. This system helps in identifying accounts developing adverse signals to initiate corrective
measures. Following modes are functional:
SN. Credit risk model Total exposure Turnover applicability

applicability
1 Large corporate Above Rs.15 crore OR Above 100 crore except
trading
2 Mid corporate (All trading concerns Above 5 and upto 15 crore Above 25 crore & upto
falling under Large corp. category shall OR 100 crore
be rated under this model)
3 Small Loans Above 50 lakh & upto 5 Up to Rs.25 Cr.
crore (AND)
4 Small Loans – II Above 2 lakh & upto 50 Up to Rs.25 Cr.
lakh
5 NBFC All NBFCs irrespective of limits
6 New Projects Rating model Above 5 crores (OR) Cost of project above
15 crores
7 Entrepreneur new business model New business set up & Cost of project above
require finance above 20 15 crores
lakhs to 5 crores
( New NBFC, MFIs, WC/NFB limits above 5 crore, All
new trading business irrespective of limit.)
8 Half yearly Review of rating i) All listed companies rated on large /mid corporate
rating models. ii) Other borrowal accounts rated on
large / mid corporate rating models availing limits
(FB+NFB) above Rs.50.00 crores from our bank.
9 Credit Risk Rating models for Banks/ FI All banks and Financial Institutions
CREDIT SCORING MODELS:

a) PNB SCORE
To evaluate risk in retail segment, 8 Scoring models for all the retail schemes except

i) PNB Baghban Scheme (Scheme for Reverse Mortgage) and
ii) Loan against Gold Jewellery & Gold Coins
have been developed. It is applicable to all Retail Loan applications (except exempted categories) for
loan upto Rs.50.00 lac, and for retail loan schemes namely
i) Housing Loan,
ii) Education Loan
iii)Vehicle Loan (loans to individuals),
the same is applicable irrespective of amount.
b) PNB SME SCORE

For SME, following models have been developed, which can cater to the requirements of the schemes
under SME sector:
1. SME Manufacturing (New Cases including takeover) - Above Rs.10 Lacs up to Rs.50 Lacs.
2. SME Service (New Cases including takeover) - Above Rs.10 Lacs up to Rs.50 Lacs.
3. SME Manufacturing and Service (New Cases including takeover) - Rs.10 Lacs and below.
4. SME Manufacturing and Service (Renewal / Enhancement) - Above Rs.10 Lacs up to Rs.50 Lacs.
5. SME Manufacturing and Service (Renewal / Enhancement) - Rs.10 Lacs and below
“Advances” exempted from Credit Risk Rating
i. All accounts with sanctioned limits of Rs.2 lakh and below

ii. All loans against shares and debentures, units of mutual funds, LIC policies.
iii. Advances to Central/State Govt. Departments. Undertaking/ Establishments, which are not
running on commercial basis (e.g. Industrial/Agricultural/Rural Development Boards of various State
Govts.). An organization may be treated as not running on commercial basis if the borrower is not
required to draw Profit & Loss A/c (including income & expenditure) and Balance sheet (statement
of affairs) under the law.
iv. Loans to individuals, against mortgage of IPs where market value of IP is at least
150% of the loan amount, who are not engaged in any activity for which annual
accounts are required to be prepared.
v. Advances to individuals under Agriculture (Direct), Agriculture (Indirect), Other
Priority Sectors including Transporters, Artisan and Handicrafts.
vi. Loans under LUCC and advances against warehouse receipts of CWC.
vii. Borrowers who are availing only those loans/limits where full powers have been
granted as per loaning power chart e.g. purchase of cheque drawn by Central &
State Govts and drafts of public sector banks, ILCs/FLCs where full cover is
held by way of deposits till maturity, etc. # (Please refer note below)
viii. Advances against clearing instruments/ bills/ clean overdrafts permitted
within the vested loaning powers at various levels where the client is not
availing any other loan/limit for which risk rating is applicable as per
guidelines.
ix. Borrowers setting up new business where requirement of credit facilities is up
to Rs.20 lakh.
Categories of advances exempted for Credit Scoring for Retail Lending Schemes

a. Advances under Retail Banking Schemes, where scoring models are not available (Loan against
„Gold & Jewellery‟ and PNB Baghban).
b. Housing loans sanctioned under Indira Awaas Yojana (IAY).
Categories of advances exempted for Credit Scoring for SME Sector
a. All accounts with sanctioned limits of Rs.2 lakh and below.

b. Advances to Transporters (including loan for taxi, station wagons etc.).
c. Advances for documentary films (on themes like family planning, social forestry, energy conservation
and commercial advertising).
Following Advances are exempt from the purview of both Credit Risk rating and scoring models:
a. All advances against security of Bank‟s own deposits.

b. All advances against Government securities including NSCs/KVPs/IVPs etc.
c. All staff Loans
VALUATION OF PROPERTY AND PLANT & MACHINERY.
a) Criteria for valuation in fresh loan accounts

where aggregate credit limits are Rs.10 lakhs & above and value of immovable property to be
mortgaged/charged is Rs.20 lakhs & above, branches shall get valuation of such IP done from
the valuer on the Bank‟s approved panel.
Where the value of immovable property to be mortgaged/ charged is Rs.5 crore &above,
branches shall get valuation of such IPs done from minimum two valuers on the Bank‟s
approved panel. In case the difference in valuation is less than 15%, the average value may be
taken.
b) Criteria for valuation in existing loan accounts
i) Wherever the Incumbent feels that realisable value of IPs is significantly lower than the one
on bank‟s record in accounts with aggregate limits/ outstanding of Rs.10 lakhs & above but
less than Rs.1 crore and value of immovable property mortgaged/charged to the bank is
Rs.20 lakhs & above, he may get the property re-valued from the bank‟s approved valuer
provided the valuation is more than one year old.
ii) Accounts having aggregate limit of Rs. 1 crore & above, valuation of immovable properties
charged/mortgaged to the Bank be got done from approved valuer once in three years.
iii) where the value of immovable property to be mortgaged/ charged is Rs.5 crore & above,
branches shall get valuation of such IPs done from minimum two valuers on the Bank‟s
approved panel. In case the difference in valuation is less than 15%, the average value may be
taken.
iv) In all cases if there is significant variation i.e. 25% & above in the realisable value of the
property reported by the valuer and the one assessed by the incumbents, fresh valuation by
another approved valuer of the Bank should be got done after consultation with the
concerned Circle Head, which should be treated as final. However, where variation is below 25%
i.e. one reported by the valuer and the other assessed by the incumbents, the lower of the
two may be reckoned as value of the property.

B. Valuation of Plant & Machinery
i) In cases where new plant and machinery is to be financed, the cost price indicated in the
quotation/ supplier‟s bill shall be reckoned as its value.
ii) In fresh borrowal accounts where credit facility is to be considered against the principal/
collateral security of existing plant & machinery valuation of such plant & machinery be got
done by branches from the valuer on the Bank‟s approved panel.
iii) where the value of Plant & Machinery to be charged is Rs.50 crore & above, branches shall
get valuation of such P&M done from minimum two valuers on the Bank’s approved panel.
METHODS OF LENDING
i) Working Capital Following systems shall continue to be followed for assessment of working capital
requirements of the borrowers:
ii) Simplified method linked with turnover Simplified method based on turnover for assessing working
capital finance upto Rs.2 crore (upto Rs. 5 crore in case of SME units) shall continue.
iii) MPBF System Existing MPBF system with flexible approach shall be followed for units requiring
working capital finance exceeding the above-mentioned amount.
iv) Cash Budget System Cash Budget System shall be followed in Sugar, Tea, Service Sector, construction
activity, Film Production accounts etc. It will be our endeavour to introduce the same selectively in other
areas also.
v) Term Loan All Term Loans, other than retail loans, with sanctioned limit of Rs.1 crore & above needs
to be reviewed annually.
ISSUANCE OF LETTERS OF UNDERTAKING FAVOURING OTHER BANKS/ FINANCIAL INSTITUTIONS

(FIs)/LENDING AGENCIES/OUR OVERSEAS BRANCHES AND SUBSIDIARIES FOR THE LOANS EXTENDED
BY THEM FOR TRADE CREDITS (BUYERS‟ CREDIT)
Branches authorized to deal in Foreign Exchange are permitted to issue Letter of Undertaking (LOU) in
favour of overseas suppliers, bank and financial institutions, up to USD 20 million per transaction for a
period up to one year for import of all non-capital goods permissible under Foreign Trade Policy (except
gold) and up to three years for import of capital goods, subject to prudential guidelines issued by
Reserve Bank of India from time to time. The period of such LOU has to be co-terminus with the period
of credit, reckoned from the date of shipment.
POST-SANCTION FOLLOW UP
a) Vetting of Loan Documents
Vetting of Loan Documents be done from the approved advocate in case of borrowal accounts, with
sanctioned limits of Rs. 2 crore & above (both fund based and non-fund based). The system should be
followed meticulously.
All the loan documents with limits of Rs.2 crore and above (both FB and NFB) should be got
vetted from the local approved Advocate, first before their execution and again after execution
but before disbursement of the loan.

In the first vetting i.e. before execution of documents, counsel will scrutinize the documents,
ensure that deficiencies/inadequacies are made up and the documents are in order for
execution.
In the second vetting i.e. after ensuring that the documents are executed properly and required
papers are registered with Sub-Registrar/Filing of particulars of charge with ROC, as the case
may be are completed, the counsel will issue the certificate with comments as per the check-list.
b) Legal Compliance Certificate
Under this system, for all credit limits of Rs.10 lakh & above, branches will submit legal compliance
certificate, certifying the compliance of all the formalities contained therein.
c) Loan Review Mechanism
Coverage of credit audit:

All standard risk rated accounts except (a) Retail Banking segments (i) Rule Based Lending (housing,
vehicles & personal loan) (ii) Advances against consumer durables, (b) Advances against Bank Deposits,
LIC policies, Govt. securities, Gold/silver jewellery & ornaments, advance against shares, debentures &
Mutual Fund) will be covered under credit audit.
Eligibility of accounts for credit audit: The cut off limit for the purpose of credit audit of risk rated
standard accounts shall be as under:
All rated standard accounts with exposure of Rs.10 cr. & above. In case of accounts with
combined group exposure of Rs.10 cr. and above all the accounts irrespective of individual limits
shall be subjected to credit audit.
5% of rated standard accounts selected on random basis with exposure between Rs.5 cr. and
Rs.10 cr. and outstanding balance of Rs.5 cr. & above (in circles where auditable accounts are
less than 10 in a Financial Year).
Credit Audit Exercise:
All eligible rated standard accounts with exposure of Rs.5 cr. Or Rs.10 cr. & above, as the case
may be.
By concurrent auditor - Upto Rs. 20 crores
By Card / Outsourced auditor – Above Rs. 20 crores
In case of need credit audit may be got conducted by Concurrent Auditor/ Internal Auditor doing annual
audit or by local audit firms.
Credit Rating of accounts Frequency

„A1, „A2‟, „A3‟, „A4‟ rated accounts Yearly
„B1‟, „B2‟, & „B3‟ rated accounts Yearly
„C1‟, „C2‟ and „C3‟ rated accounts To be decided by IBD in consultation with
Credit Review Department

Preventive Monitoring System (PMS)
Dynamic system for tracking the health and conduct of borrowal accounts applicable to all borrowal
accounts having sanctioned limits (FB plus NFB) above Rs. 1 crore.
Stock Audit
Annual Stock Audit should be got compulsorily done in respect of all borrowal accounts, enjoying Fund
Based & Non Fund Based (NFB limits which are being used for Working Capital Funding like LC, SBLC, BG
for purchase of goods for sale and BGs for Mobilization Advances, but excluding Capex LCs, Bid Bond
Guarantees etc.) Working Capital Limits of Rs.5 crores and above from our Bank.
Annual Stock Audit to be compulsorily conducted in all „B2‟ to „C3‟ rated accounts and NPA accounts
enjoying fund based and non- fund based working capital limits of Rs. 3 crore and above.
Grading of Borrowers under the Rating system

i) In order to provide a standard definition and benchmarks under the credit risk rating system, following
matrix has been prescribed in all the risk rating models.
RATING GRADE RISK SIGNIFICANCE

PNB-A1 Minimum Risk
PNB-A2 Marginal Risk
PNB-A3 Modest Risk
PNB-A4 Lower Risk
PNB-B1 Average Risk
PNB-B2 Marginally Acceptable Risk
PNB-B3 Cautiously Acceptable Risk
PNB-C1 High Risk
PNB-C2 Very high Risk
PNB-C3 Exceptionally high Risk
Validity of Credit Risk Rating. The credit risk rating of a borrower shall become due for updation after
the expiry of 12 months from the month of confirmation of rating or 18 months from the date of
balance sheet. The rating shall be treated as „overdue‟ after the expiry of 15 months from the month of
confirmation of rating or 21 months from the date of Balance Sheet on the basis of which the credit risk
rating was assigned, whichever is earlier.
Joint Lending Arrangement (JLA)

All lending arrangements, involving more than one public sector bank, with a single borrower with
aggregate credit limits (both fund based and non fund based) of Rs.150 crore and above shall be under
JLA.
Validity of Credit Limit Sanctioned
Sanctions in respect of Working Capital and Term Loan facilities shall be valid for 6 months, from the
date of sanction.

CLEAN NOTE POLICY
(i) Soiled Notes: Notes which have become unusable due to constant use. The notes which
are complete and only torn in two pieces are also treated as Soiled notes.
(ii) Mutilated Notes: Notes which are torn in more than two pieces or where part of the
note is missing is called mutilated notes.
(iii) Star series notes: These notes are just like other bank notes and are issued by RBI for
replacing wrongly printed notes. Presently, these notes are issued in the denomination
of Rs 10, Rs 20, Rs 50 and Rs 100
BANKER’S INDEMNITY POLICY – GSAD CIRCULAR 11/2015
1) For cash-in-transit exceeding Rs 20 lacs and upto Rs.50 lacs one escort with fire arm
shall be provided.
2) For cash-in-transit exceeding Rs.50 lacs, two guards with fire arms shall escort,
irrespective of whether the insured's own vehicle is used or whether a private vehicle is
engaged.
DEPOSIT INSURANCE
1. Deposit Insurance is provided by Deposit Insurance and Credit Guarantee Corporation.
2. Deposit Insurance is compulsory for all banks in India including private, foreign and co-
operative banks except Primary Agricultural societies.
3. Insurance is available for a maximum of Rs 1 1akh per depositor per bank. If a customer
has more than one account in a bank, all his accounts will be clubbed and maximum
claim will be Rs 1 lakh in case of liquidation or amalgamation of a bank. However,
account of A, A and B, B and A are considered separately

NPA MODULE
ASSET CLASSIFICATION: FINANCIAL PARAMETERS: (IRAC Norms vide RD Cir. 27/2015
DATED 30.09.2015):
An asset, including a leased asset, becomes non performing when it ceases to generate income for the
bank. A non performing asset (NPA) is a loan or an advance where
Sr. Category of account Criteria for classification of account as NPA

No.
1 Term Loan If interest and/or installment of principal remain overdue for a
period of more than 90 days.
2 Cash Credits and i) If the account remains out of order for a period of more than 90 days.
Overdrafts Conditions for treating the account as out of order:
(a) The outstanding balance remains continuously in excess of the
sanctioned limit/drawing power.
(b) Though the outstanding balance is less than the sanctioned
limit/drawing power but there are no credits continuously for 90
days
as on the date of balance sheet or credits are not enough to cover
the interest debited during the same period
(ii) The outstanding in the account based on drawing power calculated
from stock statements older than three months, would be deemed as
irregular. A working capital borrowal account will become NPA if such
irregular drawings are permitted in the account for a continuous period
of 90 days even though the unit may be working or the borrower’s
financial position is satisfactory.
(iii) Regular and adhoc credit limits need to be reviewed / regularized
not later than three months from the due date / date of adhoc sanction.
In case of constraints such as non availability of financial statements and
other data from the borrower branch should show that renewal/ review
of the facility already on. In any case delay beyond 6 months is not
considered desirable as a general discipline. An account where the
regular/adhoc credit limits have not been reviewed/renewed within 180
days from the due date/date of regular/adhoc sanction, will be treated
as NPA.
3 Bills Purchased and If the bill remains overdue for a period of more than 90 days.
Discounted
4 Agricultural Advances The installment of principal or interest thereon remains overdue
for two Crop seasons for short duration crops or one crop season for
long duration crop.
The crop season for each crop, which means the period up to
harvesting of the crops raised, would be as determined by the State
Level Bankers’ Committee in each State.
5 Securitization Amount of liquidity facility remains outstanding for more than 90 days
transaction
6 Derivative transactions The overdue receivables representing positive mark-to-market value of a
derivative contract, if these remain unpaid for a period of 90 days from
the specified due date for payment.
7 Credit Card Accounts Will be treated as non-performing asset if the minimum amount due, as
mentioned in the statement, is not paid fully within 90 days from the
next statement date. The gap between two statements should not be

more than a month.
7 Other Accounts If any amount to be received in respect of that facility remains overdue
for a period of more than 90 days.
8 Payment of Interest In case of default in payment of interest only an account should be
classified as NPA if the interest charged during any quarter is not
serviced fully within 90 days from the end of the quarter.
9 Accounts where a Where the account indicates inherent weakness on the basis of the data
solitary or a few credits available, the account should be deemed as a NPA. In other genuine
are recorded before the cases, the banks must furnish satisfactory evidence to the Statutory
balance sheet date Auditors/Inspecting Officers about the manner of regularization of the
account to eliminate doubts on their performing status.
10 Overdue Amount due to the bank under any credit facility is overdue, if it is not
paid on the due date fixed by the bank.
1. Branches should, classify an account as NPA only if the interest charged during any quarter
is not serviced fully within 90 days from the end of the quarter.
2. All the facilities granted to a borrower /investments in securities issued by the
borrower will have to be treated as NPA and not a particular facility/ investment or
part thereof which has become NPA.
3 Advances against Term Deposits, NSCs eligible for surrender, Indira Vikas Patras, Kisan Vikas
Patras and Life Insurance Policies, need not be treated as NPAs although interest thereon
has not been paid for 90days provided adequate margin is available in the accounts.
However, advances against gold ornaments, Govt. securities and all other securities are not
covered by this exemption. For calculation of the Margin, Value of security should be taken as
under:
Term Deposit Principal and interest accrued
LIC Policy The latest surrender value
NSC eligible for Surrender, IVPs and KVPs The interest accrued on the value of
security should be taken into account.
Note: NSCs may become eligible for surrender on death of holder/ on forfeiture by a pledgee
/ when ordered by a Court of Law.
Accounts covered under above exemption are exempted from application of principle of
percolation (i.e. all accounts of the Borrower are to be classified as NPA if one account
becomes NPA).
DIRECT AGRICULTURE FINANCE :
(a) Loans to individual farmers including self help groups (SHGs) or Joint liability Groups (JLGs)
i.e. groups of individual farmers provided banks maintain disaggregated data on such loans
engaged in Agriculture only.
(b) Loans to corporate including farmers producer companies of individual farmers, partnership
firms and co-operatives of farmers directly engaged in Agriculture activities upto an
aggregate limit of 2 crore per borrower for the following purpose:
(i) Short term loans for raising crops which includes traditional / non traditional plantations and
horticulture.
(ii) Medium and long term loans for agriculture (e.g. purchase of agricultural implements and
machinery, loans for irrigation and other developmental activities undertaken in the farm).
(iii) Loans for pre-harvest and post harvest activities viz, spraying weeding harvesting, grading
and sorting.
(iv) Loans upto 50 lakh against pledge / hypothecation of agricultural produce (including warehouse
receipts) for a period not exceeding 12 months.
KISAN CREDIT CARD
KCC would be deemed NPA if it remains out of order for a period of two crop/one crop season (as the
case may be). A KCC account will be treated as out of order if :

a) There are no credits in the account continuously for two crop seasons/one crop season (as the
case may be) even though the outstanding balance is less than the sanctioned limit/DP
b) The outstanding remains continuously in excess of the limit for two crop seasons/one crop
season (as the case may be)
c) The credits in the account are not sufficient even to cover the interest debited in respect of the
account for two crop seasons/one crop season (as the case may be).
Agriculture advances affected by natural calamities

If relief measures are decided by bank like - conversion of the short-term production loan
into term loan or re-schedulement of the repayment period; and the sanctioning of fresh
short-term loan subject HO guidelines. In such cases of conversion or re-schedulement, the term
loan as well as fresh short-term loan may be treated as current dues and need not be classified as NPA.
The asset classification of these loans would thereafter be governed by the revised terms & conditions
and would be treated as NPA if interest and/or instalment of principal remains overdue for two crop
seasons for short duration crops and for one crop season for long duration crops.
Rural Housing Advances : While fixing the repayment schedule in case of Rural housing advances
granted to agriculturists under Indira Awas Yozana and Golden Jublee Rural Housing Finance scheme it is
to ensure that interest / installment payable on such advances are linked to crop cycle.
Consortium Advance: Each bank may classify the borrowal a/c according to its own record of recovery
and other aspects having a bearing on the recoverability of advances. Where remittances are pooled
with one bank and/or where bank receiving remittances is not parting with the share of other member
banks a/c will be treated as not serviced in the books of the other member banks and be treated as NPA.
The credit facility backed by the Central Government Guarantee though overdue may be treated as
NPA only when the Government repudiates its guarantee when invoked. This exemption
from classification of Government guaranteed advances as NPA is not for the purpose of
recognition of income.
RECOGNITION OF INCOME & APPROPRIATION OF RECOVERY IN NPAS
1) Income from non-performing assets is not recognized on accrual basis but is booked
as income only when it is actually realized. Branches should not charge and take to
income account interest on any NPA. This will apply to Govt. guaranteed accounts also.
2) Interest on advances against term deposits, NSCs, IVPs, KVPs and Life Policies should be taken
to income account on the due date, provided adequate margin is available in the accounts.
3) When a credit facility is classified for the first time as NPA the interest accrued & credited to the
income account in the past periods, which has not been realized should be ascertained and
same should be reversed and should be credited back in the respective account itself at the
close of the year/halfyear/Quarter at the branch level by debiting Profit & Loss Account
with following particulars:
“Unrecovered Interest reversed and recorded in Memoranda A/c”
This will apply to Govt. guaranteed accounts also.
APPROPRIATION OF RECOVERIES
The appropriation of Recoveries in NPA accounts (irrespective of the mode / status / stage of recovery
actions) shall be regulated in the following order of priority:
(i) Expenditure/Out of Pocket Expenses incurred for Recovery (earlier recorded in Memorandum
Dues);
(ii) Principal irregularities i.e. NPA outstanding in the account gets updated / adjusted,
Whichever is earlier;
(iii) Thereafter towards the interest irregularities/accrued interest.

Treatment in Cash Credit- NPA accounts with tagging facility:
(i) Expenditure/Out of pocket Expenses incurred for recovery.
(ii) Principal outstanding balance in Working Capital Facility till it is brought within the DP/Limit
(Whichever is lower)
(iii) Installments in arrear in Term Loan Account.
(iv) Recognition of Recorded Interest.
CLASSIFICATION OF NPA ACCOUNT & PROVISION
SR. Category of CRITERIA RATE OF PROVISION

No. Accounts
1 Sub- Standard A sub-standard asset is one, which A general provision @ of 15% on total
has remained NPA for a period less outstanding be made without making
than or equal to 12 months; such any allowance for ECGC guarantee
an asset will have well defined cover and securities available.
credit weaknessesthat jeopardize The unsecured exposures which
liquidation of the debt and are identified as ‘Substandard’ would
characterized by the distinct attract additional provision of 10% i.e.
possibility that the bank will sustain total of 25% on O/S balance.
some loss, if deficiencies are not
corrected. Infrastructure loan accounts which are
classified as Sub Standard will attract a
provisioning of 20% (escrow a/c)
2 Doubtful If a/c is Sub – Standard for 12 (i) Unsecured Portion: Provision @
months such an asset will have 100% of unsecured portion,
well defined credit weaknesses (ii) Secured Portion: On tangible
with the added characteristic security-
that the weaknesses make
collection or liquidation in full, on Up to one year doubtful- 25 %
the basis of currently known One to three year doubtful-40%
facts, conditions and values, More than 3 year doubtful- 100%
highly questionable and Provision is to be made on outstanding
improbable. net of DI.
Straightway classification
Erosion in the value of security
when realizable value of security
is less than 50% of the value
assessed by the bank.
3 Loss asset A loss asset is one where loss 100% of the Outstanding.
has been identified by the bank
or internal or external auditors or
the RBI Inspectors but the
amount has not been written off,
wholly .
Realisable value of security as
assessed by bank’s approved
valuer / RBI is less than 10% of
the value assessed by the bank.
Provision on Standard Account on Global Loan Portfolio basis
1 STANDARD ON GLOBAL 1) 0.25% for Direct agriculture &Small & Micro Sectors
ACCCOUNT LOAN

(Other than PORTFOLIO 2)1.00% forCommercial Real Estate (CRE) Sector
Resctructured BASIS 3)0.75% Advances to Commercial Real Estate –
Advances) Residential Housing Sector (CRE - RH) It would
consist of loans to builders/developers for
residential housing projects (except for captive
consumption)
4)2.00% for housing loans granted at “Teaser
Rates”. (The provisioning on these assets would
revert to 0.40% after 1 year from the date on
which the rates are reset at higher rates if the
accounts remain ‘standard’.)
5)0.40% for all others advances
2. Standard 2a. From
Restructured 01.06.13 new 5%
Advances standard
account upon
Restructuring
I. In the first
Two years from
the date of
restructuring.
II. In case of
moratorium on
payment of
interest/princip
al after
restructuring –
period covering
moratorium
and two years
thereafter.
III. The
Restructured
a/cs classified
as NPA but
later upgraded
to Standard
category in first
year from date
of Upgradation
2b). stock of w.e.f 31.03.2014 3.5%
Restructured w.e.f 31.03.2015 4.25%
standard w.e.f 31.03.2016 5%
accounts The impact of higher provisions as above will be spread
existing as on over the four quarters of each financial year i.e.2013-14,
31.05.2013 2014-15 and 2015-16 respectively
The provision on Standard Accounts is not reckoned for arriving at net NPAs and is not
netted from gross advances but is shown separately as “Contingent Provisions against standard assets
under other liabilities and Provisions-others in Schedule-5 of the balance sheet.

Risk category ECGC Classification Provisioning Requirement (per cent)
Insignificant A1 0.25
Low A2 0.25
Moderate B1 5
High B2 20
Very high C1 25
Restricted C2 100
Offcredit D 100
Valuation of securities for provisioning purposes (RAD 19/2016)

(i) Wherever the Incumbent feels that realisable value of IPs is significantly lower than the one on
bank’s record in accounts with aggregate limits/ outstanding of Rs.10 lakhs & above but less
than Rs.1 crore and value of immovable property mortgaged/charged to the bank is Rs.20 lakhs
& above, he may get the property re-valued from the bank’s approved valuer provided the
valuation is more than one year old.
(ii) As regards borrowal accounts having aggregate limit of Rs.1 crore & above, valuation of
immovable properties charged/mortgaged to the Bank be got done from approved valuer
once in three years. However, valuation in such accounts shall be got done from Bank’s
approved valuer and fees payable to the valuer be recovered from borrower.
(iii) Where the value of immovable property to be mortgaged/charged is Rs. 5 crore & above,
branches shall get valuation of such IPs done from minimum two valuers on the Bank’s
approved panel.
For the purpose of sale/transfer of Financial assets to Securitizatio co. (RAD 03/2016)
Properties of Rs. 5 crore & above, each
In case the value of immovable property is Rs.5 crore & above, branches shall get valuation of such IP
done from minimum two valuers on the Bank’s approved panel
and
In case the difference in valuation by the two valuers is less than 15%, the average value may be taken.
and
In case the difference in valuation is more than 15%, then the higher value be considered for calculation
of NPRV/Reserve Price.
IRAC NORMS-AGRICULTURAL ADVANCES Income Recognition, Asset Classification,

Provisioning & Related Aspects-Agricultural Advances- Kissan Credit Card Scheme
“A loan granted for short duration crops will be treated as NPA, if the installment of principal or interest
thereon remains overdue for two crop seasons. A loan granted for long duration crops will be treated as
NPA, if the installment of principal or interest thereon remains overdue for one crop season. For the
purpose of these guidelines, “long duration” crops would be crops with crop season longer than one
year and crops, which are not “long duration” crops, would be treated as “short duration” crops. The
crop season for each crop, which means the period up to harvesting of the crops raised, would be as
determined by the State Level Bankers’ Committee in each State. Depending upon the duration of crops
raised by an agriculturist, the above NPA norms would also be made applicable to agricultural term
loans availed of by him.
Kisan Credit Card Account would be deemed to be a Non-Performing Asset (NPA) if it remains out of
order for a period of two crop seasons/one crop season (as the case may be). Therefore a KCC account
can be treated as out of order in the following circumstances:
a) There are no credits in the account continuously for two crop seasons/one crop season (as
the case may be).

b) The outstanding remains continuously in excess of the limit for two crop seasons/one crop
season (as the case may be).
c) The credits in the account are not sufficient even to cover the interest debited in respect of
the account for two crop seasons/one crop season (as the case may be).
All transactions in the NPA A/cs have to be necessarily routed through the Borrowal Loan
A/cs in the CBS System. Any other Accounting procedure adopted by the Branches does not
carry procedural sanction and may be viewed as a serious infringement of Bank Guidelines.
Provisioning Coverage Ratio for Advances [PCR]
Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to gross non-performing assets
and indicates the extent of funds a bank has kept aside to cover loan losses.
SECURITIZATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF

SECURITY INTEREST (SARFAESI)
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI)
Ordinance, 2002 on 21.06.2002 , which was later replaced by Act 54 of 2002.
Powers to the secured creditor: Any secured creditor having security interest by way of Mortgage,
Charge, Hypothecation and assignment (not by lien/pledge) may exercise powers under the Law to take
possession of secured assets (U/s 13-4),
Conditions for exercising powers under the act: Such power can be exercised provided:
The Asset is classified as NPA as per RBI norms
Value of Financial Assets is more than Rs. One lac;
Security Interest is not created on agriculture land, an aircraft or a shipping vessel;
Amount due is 20% or more, of principal and interest thereon;
Debt is not time barred;
Loan is not secured by way of pledge, lien & by security of bank deposits;
Asset is not on conditional sale or hire purchase or lease;
Property is not liable to attachment or sale under code of Civil Procedure.
The assets though exempted U/s 60 CPC (One residential house etc), if it is charged to
secure the debts, can be enforced under SARFAESI act.
Possession Notice: U/s 13(2) of the act, a secured creditor has to give a notice in writing to the borrower
to discharge the debt/liability in full within sixty days from the date of notice. It is not legally necessary
to make a recall of the facility and invocation of guarantee separately. These can be included in the
notice Under Section 13(2) itself.
(LAW Division Cir - 04.2011) -- Under Section 31(i) of the SARFAESI Act, it has been provided that the
provisions of the Act shall not apply to any security interest created in agricultural land.
Representation by the borrower: (U/S 13(3A) if, on receipt of the notice under sub-section (2) the
borrower makes any representation or raises any objection, the secured creditor considers such
representation or objection as not acceptable or tenable, he shall communicate to the borrower within 15
days of receipt of such representation or objection along with the reasons for non acceptance of the
representation or objection.
SALE OF ASSET:
1) Minimum Notice Period: A minimum 30 days notice be given to the owner after taking
possession by the authorized officer and the eventual sale of both movable and immovable properties. In
a recently concluded case, Supreme Court held that it is left at the discretion of the Authorized Officer to
take or not to take the possession of the immovable property before effecting the sale as per Rule 9
framed under the act.
Designated official: The authorized officer has to be an officer in the Rank of the Chief Manager of a
Public Sector Bank or such other person authorized as such by the board of Directors of the Bank.

Appeal to DRT: The borrower may appeal to DRT without depositing any amount. Such appeal has to
be preferred within 45 days (U/s 17) from the date on which such measures had been taken. The appeal
can be made only if secured creditor takes possession of the securities or any other action U/s 13(4) and
not merely on notice U/s 13(2). appeal can be made even for amounts below Rs. 10 lac.
All E-Auctions (i.e under SARFAESI Act & at DRTs) will be conducted at the Circles from 01.04.2015
onwards. Large Corporate Branches (LCBs) will also get their E- Auctions conducted through the
respective Circle Offices.
Branch having the NPA account, for which E-Auction is being conducted, will make payment to the
Service Provider by debiting Expenditure:
General Law Charges (P & L Code No. 1081001) at the following rates:
“Per successful E-Auction /Event @ Rs. 4000/- (Previously Rs. 5000/-) inclusive of Service Tax as
applicable, with maximum of 10 items (movable items viz. Plant, Machinery etc. and/or immovable
properties) per borrower per auction, being conducted on the same day. For every additional 5 items
additional charges @ Rs. 2000/- shall be paid to the Service Provider. For failed per E-Auction/Event
only Rs. 1000/- will be paid.
Debt Recovery Tribunals (DRT)
DRTs were established in 1993 under “Recovery of debts due to Banks and Financial institution act
1993”, on recommendations of Narsimham committee. The act came into effect on 25th June 1993 and
extends to whole of India except J & K. It contains 37 sections spread over 6 chapters.
Amount: It deals with cases of Rs.10 lac & above (Central Govt. can reduce the amount to Rs.1 lac).
Nature of Debts covered: All lawful debts (not time barred by limitation), which have arisen during
ordinary course of business of Banks/FIs, are eligible to be filed. Cases relating to misappropriation of
any amount of a bank by an employee are not covered
Civil Imprisonment: The tribunal can issue orders of attachment and can also order for detention of the
defendant for a term not exceeding 3 months.
Appeal: (i) Appeal against DRT is to be filed to Appellate Tribunal within 45 days of receipt of order. (ii)
The Appellate Tribunal should dispose of the appeal within a period of 6 months from the date of
appeal. (iii) Appeal to be made after depositing 75 % of amount due as determined by the Tribunal
(DRT). DRAT may wave/relax this condition on merits.
LOK ADALATS
ACT: Lok Adalats are created under Legal Services Authority Act-1987.
Category of accounts: All NPA accounts both suit filed and non suit filed
Amount ceiling: Eligible category of accounts with outstanding up to & inclusive of Rs. 20 lac (increased
from Rs. 5 lac), without any cut-off date. For coverage under Lok Adalat, the claim amount should
not exceed Rs. 20 lac.
Banks may also participate in Lok Adalats organized by DRT/DRAT for settlement in accounts where
outstanding are above Rs. 20 lac.
Benefits: (i) No court fee is involved. (ii) If no settlement is arrived, parties may go/continue with legal
proceeding.
Legal status: Its decrees have legal status and are binding on both the parties, however, decree being
in nature of ‘consent decree’, no appeal against the decree is allowed.

Recovery Agencies
Commission payable
For NPA accounts (suit filed / non suit filed)
Age of NPA Commission payable on amount of recovery
A/cs with O/s upto A/cs with O/s above Rs.1 lac
Rs.1 lac
Upto 3 years 7.5% 5%
3 years upto 5 years 10% 7.5%
Beyond 5 years 15% 10%
For decreed accounts
Age of decree Commission payable
Upto 3 years 5% of amount recovered
Above 3 years upto 5 years 7.5% of amount recovered
Above 5 years 10% of amount recovered.
PNB Retired employees working as resolution agents : commission payable

Commission
Outstanding If the Age of NPA is up to 3 If Age of NPA is more
Years than 3 years.
Up to Rs. 1 Lac 8% 10%
Above Rs. 1 lac to Rs. 50 7% 9%
Lac
Above Rs. 50 Lac to 1 6% 8%
crore
Above Rs.1 core upto Rs.5 5% 6%
crore (Max Rs.15 lacs) (Max Rs.15 lacs)
Supporting Agencies
Payment of Expenditure: Outsourcing of Financial Services-Supporting Agencies {P

commission & L- GL Report Code 11427 (Account No. <solid> 1142703) as mentioned in
revenue head Inspection & Audit Division Circular no.51/08 dated 18.09.2008.
Recovery through Where supporting agencies have played a proactive role in recovering bank’s
OTS dues through OTS or otherwise (normal recoveries) after taking
possession under the Act but there is no sale of assets, Circle Head may
approve fee to the Agency at the rate of 50% of normal fee (i.e. fee payable for
sale of asset) with the ceiling of Rs.1,50,000/- (one lac fifty thousands) and
payable to debit Expenditure: Outsourcing of Financial Services-
Supporting Agencies {P & L- GL Report Code 11427 (Account No. <solid>
11427103) as mentioned in Inspection & Audit Division Circular no.51/08 dated
18.09.2008.
POLICY ON SEIZURE AND SALE OF VEHICLES(INCLUDING TRACTORS) (RAD 10/2016)

After seizure of the vehicle, prompt and quick steps shall be taken to dispose off / sell the vehicle but
in any case not exceeding 60 days from the date of seizure, failing which the vehicle / tractor
may be restored back to the borrower.
S.No. Service rendered Fee payable
A Seizure and transporting the vehicle to Maximum Rs.3000/- per vehicle (Cars, Trucks etc.)
a nearby godown Maximum Rs.4000/- per vehicle for tracgtors
B Acting as custodian of vehicle / Storage Maximum Rs.125/- per day for a maximum period
Charges of 60 days during which either the possession is to

be restored to the borrower or the vehicle is sold.
C Sale of vehicle 5% of amount realized.
D Recovery without seizure of 5% of amount recovered
vehicle/Tractor
WILFUL DEFAULTERS (RAD 52/2015)
A “Wilful Default‟ would be deemed to have occurred, if any of the following events is noted:
a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when
it has the capacity to honour the said obligations.
b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not
utilised the finance from the lender for the specific purposes for which finance was availed of but
has diverted the funds for other purposes.
c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has
siphoned off the funds so that the funds have not been utilised for the specific purpose for which
finance was availed of, nor are the funds available with the unit in the form of other assets.
d) The unit has defaulted in meeting its payment / repayment obligations to the lender and has also
disposed off or removed the movable fixed assets or immovable property given for the purpose
of securing a term loan without the knowledge of the bank / lender.
Capacity to pay - The unit has defaulted in meeting its payment / repayment obligations to the lender
even when it has the capacity to honour the said obligations.
Diversion of Funds – “Diversion of funds‟ to include any one of the undernoted occurrences:
(i) Utilization of short-term working capital funds for long-term purposes not in conformity with the
terms of sanction;
(ii) Deploying borrowed Funds for purposes / activities or creation of assets other than those for
which the loan was sanctioned;
(iii) Transferring borrowed funds to the subsidiaries / Group companies or other Corporates by
whatever modalities;
(iv) Routing of funds through any bank other than the lender bank or members of consortium without
prior permission of the lender;
(v) Investment in other companies by way of acquiring equities / debt instruments without approval
of lenders;
(vi) Shortfall in deployment of funds vis-à-vis the amounts disbursed / drawn and the difference not
being accounted for.
Siphoning off funds

Siphoning off funds, should be construed to occur if any funds borrowed from Banks / FIs are utilized for
purposes un-related to the operations of the borrower, to the detriment of the financial health of the
entity or of the lender. The decision as to whether a particular instance amounts to siphoning of funds
would have to be a judgment of the lenders based on objective facts and circumstances of the case. Not
depositing of sale proceeds and receivables in the account are instances of siphoning off
funds.
Cut off Limits - applicable to all non-performing borrowal accounts with outstanding (funded facilities
and such non-funded facilities which are converted into funded facilities) aggregating Rs.25 lac and
above, where “wilful default‟ is identified by the Bank.
PUBLICATION OF PHOTOGRAPHS
Photographs of wilful defaulters with outstanding of Rs. 25 lacs & above be only published.

STATUS NOTE ON FRESH SLIPPAGE TO NPA CATEGORY
Circle Offices are required to submit Status Notes of freshly slipped NPA accounts with balance
outstanding of above Rs. 50 lacs, to HO: Recovery Division and above Rs. 10 lacs to Rs. 50 lacs to the
Zonal Office (erstwhile FGMO), on “as and when” basis i.e immediately at the time of becoming NPA.
ENGAGEMENT OF DETECTIVE AGENCIES

Objective
1. Locate the borrower(s)/ co-borrower(s)/ guarantor(s)/ mortgagor(s), (in/outside India)
including their legal
2. Ascertain latest information about their present address(es)/ occupation(s), business(es),
income streams, details of their all assets, whether charged or uncharged, their
location(whether in India or abroad), value and ownership, etc.;
3. Give details of bank accounts maintained by the defaulting borrower(s)/guarantor(s),
including their legal heirs;
4. Give details of credit facilities availed/to be availed by defaulting borrower(s)/ guarantor(s)
from other Banks
5. Confirm present state of ownership of the secured assets by personal visit(s)/market report,
duly confirmed by the documents.
6. Gather any other information which the Bank cannot access by utilizing normal channels
like CIBIL/internet/local enquiries and which may be considered necessary by the Bank for
recovery of the Bank’s dues;
Eligibility criteria for allocation of accounts to Detective Agencies

All NPA accounts under any category i.e Sub-Standard, Doubtful and Loss category (whether non-suit
filed, suit filed or decreed)
Time Frame for submission of reports

A time frame of maximum 60 days will be allowed to the Agency for submission of report.
Fees payable to the Detective Agencies
S.No Nature Of Task Assigned Fee Payable

.
1. On receipt of information about whereabouts of Rs. 7,500/- per person subject to
the missing/absconding borrower / guarantor / maximum fee of Rs. 30,000/- under
co-borrower / director etc. subject to this category, per account.
production of documentary proof/evidence.
2. For locating properties other than details of which Rs. 20,000/- for each property
are available in Bank‟s records, which may lead located, subject to maximum fee of
to attachment of the same along-with the Rs. 1.50 lacs under this category per
documentary proof. (All the properties in one account.
title deed to be considered as one
property).
3. For providing any other information, which may Rs. 2,500/- per piece of information,
be helpful for recovery of Bank‟s dues e.g with maximum amount of Rs.
information about other businesses, credit 10,000/- per account.
facilities from other banks, accounts with other
banks including verification of present position of
properties as per Bank‟s records, subject to
production of documentary proof/evidence.

4. Payment of reasonable out of pocket expenses may also be sanctioned subject to maximum of
Rs. 10,000/- per account. Circe Head will be the competent Authority to take a decision for
payment of such out of pocket expenses. The Detective Agency to give details of visits/proof of
expenditure.
5. In case the Detective Agency fails to trace Maximum fee of Rs. 3,000/- per
the borrower/guarantor etc. account can be paid.
6. In case the Detective Agency fails to trace Maximum fee of Rs. 7,000/- per
the property.
The fees will be paid by the branches to the debit of Expenditure: Outsourcing of Financial
Services-Supporting Agencies {P & L- GL Report Code 11427 (Account No. <solid> 1142703)
POLICY ON COLLECTION OF DUES & REPOSSESSION OF SECURITY – (RAD 06/2016)
All the members of the staff or any person authorized to represent our Bank in collection or/and security
repossession would follow the guidelines set out below:
1) The Bank would respect your privacy.

2) The Bank is committed to ensure that all written and verbal communication with you will be
in simple business language
3) Bank‟s representatives will contact you between 0700 hrs and 1900 hrs, unless the special
circumstance of your business or occupation requires the Bank to contact at a different time
4) In the case of hypothecated assets after taking possession if no payment is forthcoming, a
Sale Notice of 7 days time to respond will be sent to you. Thereafter the Bank will arrange
for the sale of the hypothecated assets in such a manner as deemed fit by the Bank. In respect
of cases under SARFAESI Act as per the provisions of the Act, 30 days‟ notice of sale will be
sent.
FILING OF RECOVERY SUITS AND SARFAESI ACTION (RAD 28/2015)
1) The SARFAESI action is taken only in respect of those assets which are charged /
mortgaged in favour of bank. As such, the defaulting borrowers & guarantors who have
not created any security in favour of bank, and other attachable assets of defaulting
borrowers and guarantors which are not charged / mortgaged in favour of bank remain
unaffected by SARFAESI action
2) In recovery suit all the obligants, irrespective of whether they have created any security in
favour of bank or not, are impleaded as parties, and their assets, even though not charged to
bank, may be got attached and sold for the recovery of bank’s dues.
It is in the interest of the bank to avail both the remedies viz. SARFAESI action & filing of
suit simultaneously.
Major Legal Remedies available through Court / DRT:
DRTs: For recoverable amount of Rs.10.00 lacs and above, application may be filed
before Debt Recovery Tribunal
Civil Courts: For recoverable amount of less than Rs.10.00 lacs, recovery suits may be
filed before Civil Courts in terms of the provisions of Civil Procedure Code.
Filing of Recovery Certificate: Certificate proceedings under Agriculture Credit Act / Public Demand
Recovery Act / Public Recovery Act enacted in several States provide effective and speedy

remedy for recovery of dues in respect of loans for agricultural / allied activities & Govt.
Sponsored Schemes etc.
Attachment of Other Assets: Other assets of defaulting borrowers / guarantors which are not
charged in favour of bank may be got attached only through DRT / Court after filing suit in DRT
/ Court.
Arrest & Detention of Borrowers / Guarantors: In the execution of recovery certificate / decree,
arrest and detention of defaulter borrowers / guarantors may also be sought by moving an
application before Court / DRT (Recovery Officer)
i) Ensure that recovery suits are filed before DRT / Court in all the eligible NPA accounts within
three months of slipping to NPA category
ii) In all the matters where certificate proceedings are available under Agriculture Credit Act /
Public Demand Recovery Act / Public Recovery Act enacted in various States, such
proceedings be initiated / availed before Competent authority in all the
eligible matters within three months of slipping of account to NPA category.
POLICY ON COMPROMISE /WRITE OFF / NEGOTIATED SETTLEMENT (RAD 05/2016)
1) Calculation of Recoverable dues:

Relevant /Material Date : The date on which a/c was transferred to Protested
Or the date of NPA whichever is earlier shall be relevant / material date for calculation of
recoverable dues.
Charging of interest after NPA : On daily reducing balance @ base rate or
Contractual rate whichever is lower prevailing on the date of consideration of compromise
proposal.
NPA under Direct Agriculture Advances with balance O/S upto Rs.10 lacs (including KCC but
excluding Tractor Loans)recoverable dues shall be calculated with interest @ 6% simple from
date of classification of a/c as NPA
2) Valuation of Securities
Valuation report should indicate Realizable value in addition to the Market value. In case
of Plant & Machinery only realizable value should be taken into consideration.
3) Periodicity of Valuation
i) for the purpose of OTS, especially in respect of the accounts involving book
outstanding of upto Rs. 2 crore, the valuation report should be as recent as
possible but not more than 1 year old.
ii) where book outstanding and/or Value of Securities is more than Rs. 2 crore,
valuation of property(ies) and other details should not be more than 6 months
old (revised from 3 months to 6 months)
iii) wherever properties are valued at Rs. 5 crore or above, minimum two
independent latest Valuation Reports from Bank’s Board approved valuers
shall be obtained.
(Important Note: (NEW ADDITION FOR CLARITY)

The above mentioned periodicity for valuation reports is meant only in case of OTS/Compromise/Write off
cases and in other NPA accounts, the valuation will continue to be done as per the Valuation Policy
framed by HO: IRMD from time to time thorugh L & Circulars. )
4) Variation in valuation reports
While considering an OTS/Compromise etc. proposal:

(i) In case the difference in valuation is less than 15%, the average value may
be taken.
(ii) In case the difference in valuations is more than 15%, fresh valuation may be
got done from independent third valuer approved by the Bank’s Board) and
average of those two valuation reports be taken, in which the variation is less
than 15%.
5) Vetting of valuation by Bank officials
Up to Rs.50 lacs Valuation to be verified/vetted by an official of the bank

independently not below the rank of Scale II
More than Rs. 50 lacs Valuation to be verified/vetted by 2 officials of the Bank
and up to Rs. 5.00 independently, one of the officials should not be below the rank of
crores Chief Manager.
More than Rs. 5.00 1) Valuation to be verified/vetted by 2 officials of the Bank
crores independently, one of the officials must not be below the
rank of Chief Manager.
2) Further additional vetting shall be done by two Circle
Office officials independently, one of whom should not
be less than the rank of Chief Manager
6) Minimum Indicative OTS Amount
Situation Minimum Indicative OTS Amount

Where NPRV > Recoverable dues Recoverable dues
Where NPRV < Recoverable dues but more than NPRV of the securities
Book outstanding
Where NPRV < less than Book outstanding NPRV of the securities
Where NPRV is Zero Whatever maximum can be recovered
Direct Agriculture Advance where balance O/S upto Rs.10 lac the realizable value of Primary /
collateral security will exclude the agricultural land offered as security. Security available other
than agriculture land shall be taken into consideration for arriving at NPRV. Indicative OTS
amount will be where NPRV is less than Book outstanding:
Sub –Standard NPAs Minimum 50% of Book O/S
Doubtful NPAs Minimum 40% of Book O/S
Stock Audit of Large Borrowal Accounts in NPA Category

(I)Annual stock audit should be got compulsorily done in respect of all borrowers whether standard or
NPAs, enjoying fund based and working capital limits of Rs. 5 crore and above from our bank.
(ii). In case of borrowers enjoying fund based working capital limits less than Rs. 5 Crore, Stock Audit
may also be got done in emergent cases and/or where bank’s interests demand. However, for modalities
of stock audit, prior concurrence of the concerned Circle Head be obtained.
(iii). In cases where the borrower is enjoying working capital limits (fund based) of less than Rs. 5 crore
from our Bank and Rs. 20 crore and above in aggregate from the banking system, the matter should be

taken up with lead bank/major share-holder banks in multiple banking arrangement for getting the stock
audit conducted.
PUBLICATION OF NAMES & PHOTOGRAPHS OF DEFAULTING BORROWERS – EDUCATION

LOAN
While banks are free to take non-coercive methods for recovery of their dues, practices such as
displaying names and photographs of defaulting students be stopped forthwith.” (RD
04/2014 dated 14.02.2014)
GETTING INFORMATION OF ATTACHABLE ASSETS OF LOAN DEFAULTERS BY OBTAINING

WEALTH TAX RETURNS FROM WEALTH TAX AUTHORITIES
(RD 27/2014 DATED 09.06.2014)
Bank has been filing Original Applications (OA) in Debt Recovery Tribunals (DRTs) wherever its dues are
Rs.10 lac and above and Civil suits in the Civil Courts where the dues are less than Rs.10 lacs. A number
of decrees remain unexecuted due to inability of the bank to provide attachable assets of the Judgement
Debtors. As per Wealth Tax Act, every individual, Hindu Undivided Family and Company whose net
wealth exceeds the maximum amount (presently Rs.30 lacs), is liable to file Wealth Tax Return.
APPROPRIATION OF CGTMSE CLAIM RECEIVED-CHANGE IN PROCEDURE

(RD 39/2014 dated 10.11.2014)
1) Neither the permission of CGFT is required for appropriation of claim amount nor it is
mandatory to Write off/Scale down the dues. Accordingly, claim amount so received from CGFT
should therefore be:
(i) Credited straightway to the NPA Account.
(ii) Recoveries thereafter if any have to be remitted (after netting of the cost incurred, if any)
to CGFT, of course after routing through the concerned NPA Account, so as to maintain
an appropriate record.
2) Ensure that respective NPA account does not get upgraded by credit of CGTMSE
claim amount and no debit operations are allowed in the account except for
remittance of recoveries to CGFT.
“While crediting the amount of claims received from CGFT under CGTMSE Guarantee
Cover in respective NPA accounts, a clear narration “CGTMSE CLAIM RECEIVED
ON________” be invariably given in the Ledger A/c of the party.
MONITORING OF QUICK MORTALITY CASES – (RD 06/2015 dated 24.02.2015)
Monitoring by Recovery Division is in addition to the monitoring being done by the

Inspection & Audit Division and neither supersedes nor amends /dilutes the spirit of the
guidelines circulated by them from time to time.
Levels/Competent Authority for monitoring of Quick Mortality Cases
S.No. Aggregate Sanctioned Limit Competent authority
1 Upto Rs.10 lacs Circle Head
2 Above Rs.10 lacs up to 50 lacs FGM
3 Above 50 lacs to 1 crore GM (Recovery)
4 Above 1 crore to 5 crore ED*
5 Above 5 crore Managing Director/CEO
*For QMCs under NPA category will be monitored by the ED looking after the Recovery Division and
for Non-NPA QMCs, if any, ED looking after the particular FGMO will monitor.
Note
Large Corporate Branches (LCBs) will send the information irrespective of the aggregate sanctioned
limit of Quick Mortality Cases to the respective FGMOs.

GOVERNMENT SPONSORED SCHEMES
PMEGP ( Prime Ministers employment Generation prorgramme )

1) Applicable in Urban and Rural Areas (Area classified as villages in the record of statement government
and rural areas with population upto 20000)
2) New Units who have not borrowed under any subsidy scheme are eligible
3) Individual above 18 years of age are eligible
4) No income ceiling
5) Qualification – For manufacturing project costing above 10 lacs and service /business projects above
Rs. 5 lacs– 8th Pass
6)Only one person from family eligible
7)Project cost – Manufacturing sector – upto 25 lacs, Business/Service sector – 10 lacs
8)Loan amount – 90% of project cost including subsidy for general category
95% of project cost for special category i.e. SC/ST,OBC,Ex-man,women, Minority etc.
9)Subsidy – 15% in Urban and 25% in rural areas, Special category 25% and 35%
No ceiling on subsidy amount.
10)Margin – 10% for General category and 5% for special category
11) Collateral – Upto 10 lacs exempted
12) Repayment – between 3 to 7 years with moratorium period
NRLM – Aajeevika scheme
1) Restructured SGSY launched effective Ist April 2013
2) Women SHGs consisting of 10-15 persons (more than 70% BPS or rural poor members are NRLM
compliant SHGs)
3) Financial Assistance - Revolving fund – Min 10000 Max 15000 per SHG to strengthen institutional and
financial management capacity
Common Investment support – It is to be used to give loans to SHGs and/or to under take social
economic activity.
4)Interest subvention – Difference between ROI fixed by Ministry of finance and 7% (Max 5.5%)
5)SHGs will get additional interest subvention of 5% on prompt payment. - Payment within 30 days
from due date in Term Loan accounts and atleast one credit in a month in CC account.
6) No capital subsidy
7) Loan amount - Through doses
Ist dose - 4-8 times of proposed corpus maxi Rs.50000/-
IInd dose – 5-10 times of existing corpus and proposed saving for next 12 months or max 1 lakh
IIIRd dose – Minimum 2 lacs based on micro credit plan and previous credit history
Iv dose – Loan amount between 5-10 lacs based on micro credit plan of SHG
8) Repayment - Ist dose - 6-12 months, 2nd dose – 12-24 months, 3rd dose- between 2 to 5 years
4th dose – between 3 to 6 years
NULM – National Urban Livelihood Mission
1)Unemployed urban poor under Self employment program (SEP)
2)Target – Minimum 30% women beneficiary, Minority – 15%, Differently abled 3%, SC/ST as per ratio
in city / town
3)NO minimum education qualification
Individual Enterprises – SEP -I
1) Age - Minimum 18 years at the time of loan application
2) Project cost – Maximum Rs.2 lacs
3) No collateral – CGTMSE cover
4) Repayment – 5 to 7 years and moratorium 6 to 18 months

Group component – SEP – G
1) Group have minimum 5 members with a minimum 70% from urban poor families
2) All members minimum 18 years of age
3) Project cost-= Maximum 10 lacs
4)Margin – as per bank’s discretion
5)Colleteral - NIL to be covered under CGTMSE
6) Repayment – 5 to 7 years
7)Interest subsidy available and no capital subsidy available
8)Application will be sponsored by ULB
DRI – DIFFERENTIAL RATE OF INTEREST SCHEME

1) Applicability - All over India
2) Eligibility – (i) Individuals having family income not to exceed 18000/- p.a. in Rural and 24000/- p.a. in
Urban and Semi urban Areas (ii) individual land holding not exceed 1 acre or irrigated and 2.5 acre of un-
irrigated (iii) No ceiling for SC/ST
3)Productive purpose, education by students, purchase of life equipments by physically handicapped
4)Max. Rs.15000 for physically handicapped & additional 5000/- for artificial limbs/Braille typewriter
5) No subsidy, No margin
6) ROI – 4% simple
7)Repayment maximum 5 years with grace period of 2 years depending upto activity
8)Loans upto Rs.20000 for housing to SC/ST and under INdiraAwas yozna will be allowed under DRI
SRMS – SCHEME FOR RHABILITATION OF MANUAL SCAVANGERS
1) Applicability – Both urban and rural areas by PSBs
2) No income criteria, Age above 18 years, unemployed, No minimum education
3) Maximum project cost - Rs.5 lac and Bank loan- Project cost less capital subsidy
4)Subsidy – Project upto Rs.25000/- 50%, and Project cost above 25000/- Minimum Rs.12500/- and
maximum Rs.20000/-
5)No margin
6)ROI – Upto Rs.25000/- 5% - women beneficiary – 4%, Above Rs.25000/- 6%
7)Repayment – Loan upto 25000/- - 3 years, Above 25000/- 5 years, Moratorium – 6 months
8)Disposal of loan application – Upto Rs.25000/- within 15 days and above 25000/- 8-9 weeks

SOCIAL SECURITY SCHEMES
SUKANYA SAMRIDDHI ACCOUNT
1) The account may be opened by the natural or legal guardian in the name of a girl child from the birth
of the girl child till she attains the age of ten years
2) A depositor may open and operate only one account in the name of a girl child
3) Birth certificate of a girl child in whose name the account is opened shall be submitted along with
other documents relating to identity and residence proof of the depositor.
4) Natural or legal guardian of a girl child shall be allowed to open the account for two girl children only.
Third account will be allowed in case of twin births.
5) Initial deposit Rs.1000/- there after in multiple of Rs.100/- Minimum 1000/- in a financial year and
maximum 150000/-
6) Deposits will be made till completion of 14 years from the account open date
7) Irregular account will be regularized on penalty of Rs.50/- along with minimum deposit amount for
the year(s) of default.
8) Operation : (i) By natural / legal guardian till she attains the age of 10 years
(ii)BY herself on attaining the age of 10 years – deposit can be made by guardian
9)Premature closure: (1) In the event of death of a/c holder – amount be paid to guardian
(2) On extreme compassionate ground like medical support in life.
10)Withdrawal : (i) When a/c holder girl child attains the age of 18 years withdrawal upto 50% of the
credit balance available at the end of previous financial year .
11)Closure on Maturity : (i) The Account shall mature on completion of 21 years from the date of
opening of account.
(ii) If marriage takes place before completion of such period operation of a/c shall not be permitted after
marriage.
PMJJBY (PRADHAN MANTRI JEEVAN JYOTI BIMA YOZNA)
1) Coverage : All SF account holder in the age group of 18 to 50 years. IN case of multiple SF account
only one account will be covered. Aadhar will be primary KYC for account
2) Initial cover period : Ist June 2015 to 31st May 2016, Enrolment – 31st May 2015
3) Self certificate / declaration of good health
4) Rs.2 lakhs is payable on members death due to any reason
5) Premium Rs.330/- per year per member and premium will be deducted from the account holders
saving bank account through auto debit facility in one instalment.
6)Eligibility to Join : SF a/c holder of participating bank aged 18 to 50 years willing to join/enable auto
debit
7)Termination:
(i) On attaining the age of 55 years subject to annual renewal upto that date (entry will
not be possible after 50 years of age)
(ii) Closure of account with the bank or insufficiency of balance
(iii)Member is covered with LIC/other company through more than one a/c insurance
will be restricted to Rs.2 lacs and premium liable to be forfeited.
(iv) If insurance cover is ceased due to technical reason same can be reinstated on
receipt of full annual premium.
8)Premium appropriation: Insurance premium to LIC/other company - Rs.289/- PA/PM
Reimbursement of expenses to BC/Micro/Corporate/Agent - Rs.30/- PA/PM
Admn. Expenses to participating bank : Rs. 11/-PA/PM
(PA-Per annum, PM- per member)
9)Master policy holder : Participating Bank
PMSBY – PRADHAN MANTRI SURAKSHA BIMA YOZNA
1) Accidental insurance scheme offering accidental death / accidental disability
2) Coverage : All SF account holder in the age group of 18 to 70 years in participating bank. Multiple SF

account holder can joint with only one account. Primary KYC would be Aadhar
3) Initial Cover period : Ist June 2015 to 31st May 2016 Enrolment – 31st May 2015
4) Benefits – Death – Rs.2.00 lacs , Irrecoverable loss of both eyes/ both hands or feet or loss of sight of
One eye and loss of use of hand or foot - Rs.2.00 lacs, Total and irrecoverable loss of sight of one eye
or loss of use of one hand or foot - Rs. 1.00 lac
5)Premium – Rs.12/- per year per member and deducted from the account of member
6)Eligibility condition : SF a/c holder of participating bank aged between 18 to 70 years
7)Termination – (i) On attaining age of 70 years (ii) Closure of account with bank or insufficiency of
funds (iii) Member is covered with LIC/other company through more than one a/c insurance will be
restricted to Rs.2 lacs and premium liable to be forfeited.
8)Premium appropriation: Insurance premium to LIC/other company - Rs.10/- PA/PM
Reimbursement of expenses to BC/Micro/Corporate/Agent - Rs.1/- PA/PM
Admn. Expenses to participating bank : Rs. 1/-PA/PM
(PA-Per annum, PM- per member)
ATAL PENSION YOZNA
ATAL PENSION YOJANA (APY)- OPERATIONAL GUIDELINES FOR ENROLMENT OF CUSTOMERS IN CBS.
MENU OPTION FOR APY IN CBS IS APYREG.
Reports Can be generated _ PNBRPT - 29
1) Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes
between the age of 18 years and 40 years.
2)Eligibility: All Bank account holders. The Central Government would also co-contribute 50% of the
total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a
period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who join the NPS between the period 1
June, 2015 and 31December, 2015 and who are not members of any statutory social security scheme
and who are not income tax payers.
3)Age of joining and contribution period : Minimum age 18 years Maximum 40 years. The age of exit
and start of pension : 60 years. Minimum period of contribution by subscriber under APY is 20 years.
4)Target – Unorganised sector workers.
5)Funding - (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the total
contribution or Rs. 1000 per annum, whichever is lower,
6)Under APY individual subscriber can contribute on monthly basis. Bank should collect additional
amount for delayed payment: Rs.1/- upto Rs.100/-, Rs.2/- from 101 to 500/-, Rs.5/- from 501/- to 1000
per month, Rs.10/- beyond Rs.1000/-.
7)Discontinuation of payment contribution shall result in :1) After 6 months account frozen, 2) After 12
months account will be de activated, 3)After 24 months account will be closed.
8)Exit- Before completion of 60 years not permitted except death or eternal disease
BASEL ACCORD
All the 3 Basel accord covers :
Basel - I = Credit Risk and Market Risk
Basel – II = Basel I + Operational Risk
Basel - III = Basel II + Liquidity Risk
PILLAR - 1 -> MINIMUM CAPITAL REQUIREMENT

PILLAR - 2 -> SUPERVISORY VIEW
PILLAR - 3 -> MARKET DISCIPLINE

RISK CATEGORISATION
Credit risk - Credit risk is the possibility of loss associated with changes in the credit quality of
borrower or counter parties.
Operational risk - The risk or loss resulting from inadequate or failed internal processes, people and
systems or from external events. It also includes legal risk i.e. exposure to fines,
penalties, damages resulting from supervisory action as well as private settlement
Market risk - Market risk is defined as the risk of losses in on-balance sheet and off-balance sheet
positions arising from movements in market prices.
Liquidity Risk- LIQUIDITY RISK IS THE RISK THAT A BANK MAY BE UNABLE TO MEET SHORT TERM
FINANCIAL DEMANDS. (Probability of loss arising from a situation where (1)Not enough
cash to meet need of depositor/borrower (2)sale of liquid assets will yield less than face
value (3)Liquid assets will not be sold at desired time due to lack of buyer.)
CAPITAL CONSERVATION BUFFER (CCB)

CCB IS DESIGNED TO ENSURE THAT BANKS BUILD UP CAPITAL BUFFERS DURING NORMAL TIMES
(OUTSIDES PERIOD OF STRESS) - WHICH CAN BE DRAWN DOWN AS LOSSES ARE INCURRED DURING A
STRESSED PERIOD.
Requirement is based on Simple capital conservation rules – designed to avoid breaches of minimum
capital requirement. Thus in addition to minimum capital requirement Banks are required to hold CCB
of 2.50% of RWAs starting from March 2016 ( Internationally January 2016) @ 0.625% per year
COUNTERCYCLICAL CAPITAL BUFFER

Countercyclical Capital buffer within a range of 0 – 2.5% of common equity or other fully loss absorbing
capital will be implemented according to national circumstances.
Basel Time Table – Regulatory Requirement
MINIUM CAPITAL RATIOS MAR MAR 31, MAR 31 MAR 31 MAR 31 MAR
31, 2014 2015 2016 2017 2018 31
2019
MINIMUM COMMON 5.00 5.50 5.50 5.50 5.50 5.50

EQUITY Tier 1 (CET 1)
Capital conservation 0.625 1.25 1.875 2.50

buffer (CCB)
Minimum CET1+CCB 5.00 5.50 6.125 6.75 7.375 8.00
Minimum Tier-I capital * 6.50 7.00 7.00 7.00 7.00 7.00
MINIMUM TOTAL 9.00 9.00 9.00 9.00 9.00 9.00

CAPITAL REQUIREMENT
MINIMUM TOTAL 9.00 9.00 9.625 10.25 10.875 11.50

CAPITAL+ CCB

COMMERICAL PAPER AND CERTIFICATE OF DEPOSITS
Description CPs (Companies having NW Rs.4 CDs
crores, A2 credit rating, WC
sanctioned in standard cat.
Can be issued by Reputed companies, Financial Commercial Banks (Except RRBs)
Institutions and FIs within their limit
Issue period Minimum 7 days and Maximum Minimum 7 days and Maximum
12 months 12 months and for FIs Minimum
1 year and maximum 3 years
Amount Min Rs.5 lacs and in its multiple Min Rs.1 lac and in its multiple
Prematurity cancellation Not allowed Not allowed
RTGS AND NEFT
Description RTGS ( REAL TIME GROSS NEFT (NATIONAL ELECTRONIC FUND
SETTLEMENT) TRANSFER)
Settlement At present maximum 2 hours 12 hourly settlements between 8
AM to 7 PM ( On Saturday 6 from 8
AM to 1PM
Amount Rs.2 lacs and above No minimum & Maximum
Interest on delayed credit Repo rate + 2% Repo Rate + 2 % (Destination bank
to credit within 2 hours or return)
IFSC code (11 digit) Ist 4 Bank code – 5th reserved and Ist 4 Bank code – 5th reserved and
next 6 branch code next 6 branch code
CGTMSE - CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTERPRISES –MSME 59/2014
Exemption for CGTMSE Coverage
(1) Banks are mandated not to accept collateral security in case of loans upto 10 Lakh extended to
units in MSE Sector which are eligible for coverage under CGTMSE.
(2) Loans upto 10 Lakh to micro and small enterprises without accepting any collateral security / third
party guarantee
(3) Where the loan amount is above 10 lakh to 50 lakh, wherever collateral security is available,
Incumbents in all the scales are empowered to sanction the loans, as per extant guidelines.
However, if any eligible loan is proposed to be covered under CGTMSE, prior concurrence be
obtained from CIRCLE HEAD.
(4) Where the loan amount is above 50 lakh, in highly deserving cases, FGM shall have the discretion
to examine each proposed case on merits, to cover it in CGTMSE.
Lodgment of Claims:
For loan sanctioned on or before 31.12.2012: Accounts sanctioned on or before 31.12.2012, the claims
are to be lodged within a maximum period of one year from the date of NPA, if date of NPA is after the
lock-in period. In case of date of NPA is within lock-in-period, claim is to be lodged within one year from
the expiry of lock-in period.
For loan sanctioned on or after 01.01.2013: Accounts sanctioned on or after 01.01.2013, the claims are
to be lodged within a maximum period of two years from the date of NPA, if date of NPA is after the
lock-in period. In case of date of NPA is within lock-in-period claim is to be lodged within two years from
the expiry of lock-in period.

ANNUAL GUARANTEE FEE / ANNUAL SERCIVE FEE:
a) Loans sanctioned on or before 31.12.2012
The annual service fee at specified rate (currently 0.50% in the case of credit facility upto 5
Lakh and 0.75% in the case of credit facility above 5 Lakh)
b) For loan sanctioned on or after 01.01.2013:
Annual Guarantee Fee at specified rate (a) currently 1.00% in the case of credit facility upto
100 Lakh sanctioned to others (b) 0.75% in the case of credit facility upto 5 Lakh and 0.85%
in the case of credit facility above 5 Lakh and upto 100 Lakh sanctioned to Micro Enterprises,
women and units in North Eastern Region including (State of Sikkim)
c) Effective 01.10.2015 CGTMSE has modified charges of Annual Service Fee / Annual Guarantee
fee depending upon the NPA level of the bank:
Sr. No. Annual Service Fee (ASF)/Annual Guarantee Fee

(AGF)
NPA level of Bank (%) ASF/AGF (%)
1 Above 20% SR+100 bps
2 15%-20% SR+50 bps
3 12%-15% SR+25 bps
4 12% and below SR
5 Below 6% @ SR-25 bps
SR = Standard Rate (Existing ASF/AGF prescribed rate).
Changed rates are not applicable for credit facility up to Rs. 5 lakh.
NPA level (amt. wise) of the Bank shall be computed as a % of guarantees
issued on and up to March 31 every year.
@ Provided Bank has been obtaining guarantee cover from the Trust for at least 5 complete years.
GUARANTEEs – Extent of guarantee will be as under:
Category Maximum guarantee where credit facility is
Upto 5 lacs 5 lacs to 50 lacs 50 lacs to 100 lacs
Micro enterprises 85% of default amt. 75% / 37.50 lacs 37.50 lacs +50% of
max. 4.25 lac default amt. above 50
lac max 50 lac
Women entrepreneurs/ 80% of the amount in default subject to a 40 Lakh plus 50% of
Units located in North maximum of Rs. 40 Lakh amount in default
East Region (incl. above 50 Lakh subject
Sikkim) other than to overall ceiling of 50
credit facility upto 5 Lakh
lakh to micro
enterprises
All other category of 75% of the amount in default subject to a 37.50 Lakh plus 50% of
borrowers maximum of 37.50 Lakh amount in default
above 50 Lakh subject
to overall ceiling of 50
Lakh
Any credit facility which has been sanctioned by MLI, under the Credit Guarantee Scheme (CGS),
to an eligible borrower, with interest rate more than 4% over its Base Rate (BR) will not be
eligible for coverage under the CGS.

KNOW YOUR CUSTOMER
Definition:
Beneficial owner
1) Customer is a company – Natural person acting alone or together has a controlling ownership
interest or who exercise control through other means. Controlling ownership means - ownership of/
entitlement to more than 25 per cent of the shares or capital or profits of the company
2)Customer is a partnership firm - natural person(s), who has/have ownership of/entitlement to more
than 15 per cent of capital or profits of the partnership
3)Customer is unincorporated association or body of individual - natural person(s), who has/have
ownership of/entitlement to more than 15 per cent of the property or capital or profits of the
unincorporated association or body of individuals.
4)Customer is Trust - identification of the author of the trust, the trustee, the beneficiaries with 15% or
more interest in the trust and any other natural person exercising ultimate effective control over the trust
through a chain of control or ownership.
Body of individuals includes societies
5)Officially valid document (OVD) means the passport, the driving licence, the Permanent Account
Number (PAN) Card, the Voter's Identity Card issued by the Election Commission of India, job card
issued by NREGA duly signed by an officer of the State Government, letter issued by the Unique
Identification Authority of India containing details of name, address and Aadhaar number.
Where simplified measures are applied for verifying the Identify –following documents shall be OVD
1. identity card with applicant’s photograph issued by Central/ State Government Departments, Statutory/
Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial
Institutions;
2. Letter issued by a Gazetted officer, with a duly attested photograph of the person.
Proof of address where simplified measured are applied:
1. Utility bill, which is not more than two months old, of any service provider (electricity, telephone, post-
paid mobile phone, piped gas, water bill);
2. Property or Municipal Tax receipt;
3. Bank account or Post Office savings bank account statement;
4. Pension or family Pension Payment Orders (PPOs)
5. Letter of allotment of accommodation from employer issued by State or Central Government
departments
6. Documents issued by Government departments of foreign jurisdictions or letter issued by Foreign
Embassy or Mission in India.
Person means –
a) an individual, b) a Hindu undivided family, c) a company, d) a firm, e) an association of persons or a
body of individuals, whether incorporated or not, f. every artificial juridical person, not falling within any
one of the above persons (a to e), and g. any agency, office or branch owned or controlled by any of the
above persons (a to f)
Suspicious transaction means a “transaction” as defined below, including an attempted transaction,
whether or not made in cash, which, to a person acting in good faith,:
a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in
the Schedule to the Act, regardless of the value involved; or
b) appears to be made in circumstances of unusual or unjustified complexity; or
c) appears to not have economic rationale or bona-fide purpose; or
d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to
terrorism.
Small Account means: A Saving Account in which
a) the aggregate of all credits in a financial year does not exceed rupees one lakh;
b) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand; and
c) the balance at any point of time does not exceed rupees fifty thousand.
Transaction” means : a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof
and includes:
a) opening of an account;

b) deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in cash or by cheque,
payment order or other instruments or by electronic or other non-physical means;
c) the use of a safety deposit box or any other form of safe deposit;
d) entering into any fiduciary relationship;
e) any payment made or received, in whole or in part, for any contractual or other legal obligation; or
f) establishing or creating a legal person or legal arrangement.
Customer means :
A person who is engaged in a financial transaction or activity with a Regulated Entity and includes a
person on whose behalf the person who is engaged in the transaction or activity, is acting.
KEY ELEMENTS OF KYC POLICY
a) Customer Acceptance Policy; b) Customer Identification Procedures;
c) Monitoring of Transactions; d) Risk Management
a. Customer Acceptance Policy : contains
(a) No account is opened in anonymous or fictitious/benami name.
(b) No account is opened where the RE is unable to apply appropriate CDD measures, either due to non-
cooperation of the customer or non-reliability of the documents/information furnished by the customer.
(c) No transaction or account based relationship is undertaken without following the CDD procedure.
(d) The mandatory information to be sought for KYC purpose while opening an account and during the
periodic updation, is specified.
(e) ‘Optional’/additional information, is obtained with the explicit consent of the customer after the
account is opened.
(f) CDD Procedure is followed for all the joint account holders, while opening a joint account.
(g) Circumstances in which, a customer is permitted to act on behalf of another person/entity, is clearly
spelt out.
(h) Suitable system is put in place to ensure that the identity of the customer does not match with any
person or entity, whose name appears in the sanctions lists circulated by Reserve Bank of India.
Risk Management
a) Customers shall be categorised as low, medium and high risk category, based on the assessment and
risk perception.
b) Risk categorisation shall be undertaken based on parameters such as customer’s identity,
social/ financial status, nature of business activity, and information about the clients’ business and
their location
b. Customer Identification Procedures :
i) The Customer Identification Procedure will be carried out at the time of:
(a) Commencement of an account-based relationship with the customer.
(b) Carrying out any international money transfer operations for a person who is not an account holder
of the bank.
(c) When there is a doubt about the authenticity or adequacy of the customer identification data
(d) Selling third party products as agents, selling their own products, payment of dues of credit
cards/sale and reloading of prepaid/travel cards and any other product for more than rupees fifty
thousand.
(e) Carrying out transactions for a non-account based customer, that is a walk-in customer, where the
amount involved is equal to or exceeds rupees fifty thousand, whether conducted as a single transaction
or several transactions that appear to be connected.
(f) When a RE has reason to believe that a customer (account- based or walk-in) is intentionally
structuring a transaction into a series of transactions below the threshold of rupees fifty thousand.
While undertaking customer identification, ensure that :
(a) Decision-making functions of determining compliance with KYC norms shall not be outsourced.
(b) Introduction shall not be sought while opening accounts.

(c) The customers shall not be required to furnish an additional OVD, if the OVD submitted by the
customer for KYC contains both proof of identity and proof of address.
(d) The customers shall not be required to furnish separate proof of address for permanent and current
addresses, if these are different. In case the proof of address furnished by the customer is the address
where the customer is currently residing, a declaration shall be taken from the customer about her/his
local address on which all correspondence will be made by the RE.
(e) The local address for correspondence, for which their proof of address is not available, shall be
verified through ‘positive confirmation’ such as acknowledgment of receipt of letter, cheque books,
ATM cards, telephonic conversation, visits to the place, or the like.
(f) In case it is observed that the address mentioned as per ‘proof of address’ has undergone a change,
REs shall ensure that fresh proof of address is obtained within a period of six months.
Customer Due diligence procedure (CDD procedure)
To obtain the following documents from an individual while establishing an account based relationship:
(a) one certified copy of an OVD containing details of identity and address;
(b) one recent photograph; and
(c) such other documents pertaining to the nature of business or financial status specified by the RE in
their KYC policy.
Provided that information collected from customers for the purpose of opening of account shall be
treated as confidential and details thereof shall not be divulged for the purpose of cross selling, or for
any other purpose without the express permission of the customer.
E-KYC
e-KYC service of Unique Identification Authority of India (UIDAI) shall be accepted as a valid process for
KYC verification under the PML Rules, as
(a) the information containing demographic details and photographs made available from UIDAI as a
result of e-KYC process is treated as an ‘Officially Valid Document’, and
(b) transfer of KYC data, electronically to the RE from UIDAI, is accepted as valid process for KYC
verification.
Provided REs/ Business Correspondents (BCs)/ Business Facilitators (BFs) shall obtain authorisation from
the individual user authorising UIDAI by way of explicit consent to release his/her identity/address
through biometric authentication to the REs.
Change of name
A copy of the marriage certificate issued by the State Government or Gazette notification indicating
change in name together with a certified copy of the ‘officially valid document’ in the existing name of
the person shall be obtained for proof of address and identity, while establishing an account based
relationship or while undertaking periodic updation exercise in cases of persons who change their
names on account of marriage or otherwise.
Accounts of Close Relatives : In case the person who proposes to open an account does not have an
OVD as ‘proof of address’, such person shall provide OVD of the relative as provided at sub-section 77 of
Section 2 of the Companies Act, 2013, read with Rule 4 of Companies (Specification of definitions
details) Rules, 2014, with whom the person is staying, as the ‘proof of address’. A declaration from the
relative that the said person is a relative and is staying with him/her shall be obtained.
Customer not having any OVDs
In case an individual customer who does not possess either any of the OVDs or the documents
applicable in respect of simplified procedure and desires to open a bank account, banks shall open a
‘Small Account’, subject to the following:
(a) The bank shall obtain a self-attested photograph from the customer.
(b) The designated officer of the bank certifies under his signature that the person opening the account
has affixed his signature or thumb impression in his presence.

(c) Such accounts are opened only at Core Banking Solution (CBS) linked branches or in a branch where it
is possible to manually monitor and ensure that foreign remittances are not credited to the account.
(d) Stipulated monthly and annual limits on aggregate of transactions and balance requirements in such
accounts are not breached, before a transaction is allowed to take place.
(e) The account shall be monitored and when there is suspicion of money laundering or financing of
terrorism activities or other high risk scenarios, the identity of the customer shall be established through
the production of “officially valid documents”.
(f) Foreign remittance shall not be allowed to be credited into the account unless the identity of the
customer is fully established through the production of “officially valid documents”.
(g) The account remains operational initially for a period of twelve months which can be extended for a
further period of twelve months, provided the account holder applies and furnishes evidence of having
applied for any of the OVDs during the first twelve months of the opening of the said account.
(h) The entire relaxation provisions shall be reviewed after twenty four months.
CDD measure for proprietary firm
In addition to certified copy of identity and address of the individual proprietor any two of the following
documents as a proof of business / activity in the name of firm shall be obtained.
(a) Registration certificate (b) Certificate/licence issued by the municipal authorities under Shop and
Establishment Act. (c) Sales and income tax returns. (d) CST/VAT certificate. (e) Certificate/registration
document issued by Sales Tax/Service Tax/Professional Tax authorities.(f) Licence/certificate of practice
issued in the name of the proprietary concern by any professional body incorporated under a statute.
(g) Complete Income Tax Return (not just the acknowledgement) in the name of the sole proprietor
where the firm's income is reflected, duly authenticated/acknowledged by the Income Tax authorities.
(h) Utility bills such as electricity, water, and landline telephone bills.
CDD Measures for Legal Entities
For opening an account of a company, one certified copy of each of the following documents shall be
obtained:
(a) Certificate of incorporation. (b) Memorandum and Articles of Association. (c) A resolution from the
Board of Directors and power of attorney granted to its managers, officers or employees to transact on
its behalf. (d) Officially valid documents in respect of managers, officers or employees holding an
attorney to transact on its behalf
CDD measure for partnership firm
For opening an account of a partnership firm, one certified copy of each of the following documents
shall be obtained:
(a) Registration certificate. (b) Partnership deed. (c) Officially valid documents in respect of the person
holding an attorney to transact on its behalf.
CDD measure for Trust account
For opening an account of a trust, one certified copy of each of the following documents shall be
obtained:
(a) Registration certificate. (b) Trust deed. (c) Officially valid documents in respect of the person holding
a power of attorney to transact on its behalf.
CDD unincorporated association or body of individuals
For opening an account of an unincorporated association or a body of individuals, one certified copy of
each of the following documents shall be obtained:
(a) resolution of the managing body of such association or body of individuals; (b) power of attorney
granted to transact on its behalf; (c) Officially valid documents in respect of the person holding an
attorney to transact on its behalf and (d) such information as may be required by the RE to collectively
establish the legal existence of such an association or body of individuals.
Proof of address : Customers to submit only one documentary proof of address (either current or

permanent) while opening a bank account or while undergoing periodic updation. In case the address
mentioned as per proof of address undergoes a change, fresh proof of address be submitted to the
branch within a period of six months.
Updating of KYC Data
Full KYC exercise including obtaining fresh photograph/s at least every two years for high risk
customers, every eight years for medium risk customers and every ten years for low risk customers be
done.
Walk in customers : Customer identification procedure will also be carried out in respect of walk-in-
customers (non-account based customer) approaching bank for transactions equal or exceeding
Rs.50,000/- [Rupees fifty thousand] , whether conducted as a single transaction or series of transactions
that appear to be connected.
Accounts of migratory workers: A migratory worker may visit any branch of the bank servicing the area
of his / her permanent residence for opening a bank account. The branch will open his / her account on
self-certification basis, or on introduction basis, and / or on the basis of the documents made available
by the individual including a proof of permanent place of residence, as the case may be, and allow
operations immediately.
Salaried employees : Bank will rely on certificate/letter of identity/address issued only by corporate and
other entities of repute and will ascertain the competent authority designated by the concerned
employer to issue such certificate/letter along with one of the officially valid document as per PML Act
Foreign Student:
Bank will open a Non Resident Ordinary (NRO) bank account of a foreign student on the basis of his / her
passport (with appropriate visa & immigration endorsement) which contains the proof of identity and
address in the home country along with a photograph and a letter offering admission from the
educational institution. (ii) Within a period of 30 days of opening the account, the foreign student will
submit to the branch where the account is opened, a valid address proof giving local address (iii) During
the 30 days period, the account will be operated with a condition of allowing foreign remittances not
exceeding USD 1,000 into the account and a cap of monthly withdrawal to Rs.50,000/-, pending
verification of address.
Periodic Updation
Periodic updation shall be carried out at least once in every two years for high risk customers, once in
every eight years for medium risk customers and once in every ten years for low risk customers:
(a) Fresh proofs of identity and address shall not be sought at the time of periodic updation, from
customers who are categorised as ‘low risk’, when there is no change in status with respect to their
identities and addresses and a self-certification to that effect is obtained.
(b) A certified copy of the proof of address forwarded by ‘low risk’ customers through mail/post, etc., in
case of change of address shall be acceptable.
(c) Physical presence of low risk customer at the time of periodic updation shall not be insisted upon.
(d) The time limits prescribed above would apply from the date of opening of the account/ last
verification of KYC.
(e) Fresh photographs shall be obtained from customer for whom account was opened when they were
minor, on their becoming a major.
Partial freezing and closure of accounts
Where REs are unable to comply with the CDD requirements, they shall not open accounts, commence
business relations or perform transactions. In case of existing business relationship which is not KYC
compliant, banks shall ordinarily take step to terminate the existing business relationship after giving
due notice.
(b) As an exception to the Rule, banks shall have an option to choose not to terminate business
relationship straight away and instead opt for a phased closure of operations in this account as

explained below:
i. The option of ‘partial freezing’ shall be exercised after giving due notice of three months to the
customers to comply with KYC requirements.
ii. A reminder giving a further period of three months shall also be given.
iii. Thereafter, ‘partial freezing’ shall be imposed by allowing all credits and disallowing all debits with
the freedom to close the accounts in case of the account being KYC non-compliant after six months of
issuing first notice.
iv. All debits and credits from/ to the accounts shall be disallowed, in case of the account being KYC non-
compliant after six months of imposing ‘partial freezing’,
v. The account holders shall have the option, to revive their accounts by submitting the KYC documents.
(c) When an account is closed whether without ‘partial freezing’ or after ‘partial freezing’, the reason for
that shall be communicated to account holder.
Maintenance and preservation of record:
Bank will preserve and maintain proper record of all transactions including the records as mentioned
below:
a)All cash transactions of the value of more than Rupees Ten lakh or its equivalent in foreign currency;
b) All series of cash transactions integrally connected to each other which have been valued below
Rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place
within a month
c) All transactions involving receipts by non-profit organizations of value more than Rupees ten lakh or
its equivalent in foreign currency
d) All cash transactions where forged or counterfeit currency notes or bank notes have been used as
genuine
Record Maintenance
1)Maintain all necessary records of transactions between the RE and the customer, both domestic and
international, for at least five years from the date of transaction;
2) preserve the records pertaining to the identification of the customers and their addresses obtained
while opening the account and during the course of business relationship, for at least five years after the
business relationship is ended
Address Proof – (KYC AML 06/2015)
(1)Customers to submit only one documentary proof of address (either current or permanent) while
opening a bank account or while undergoing periodic updation.
(2) In case the proof of address furnished by the customer is not the local address or address where the
customer is currently residing, the bank will take a declaration of the local address on which all
correspondence will be made by the bank with the customer. No proof is required to be submitted for
such address for correspondence / local address.
Introduction clarification : As per RBI guidelines, banks should not insist on introduction for opening
bank accounts of customers wherein documents of identity and address as required under the
instructions are provided. Therefore, Introduction is not mandatory for opening bank account. (KYC
AML 21/2015)

GIST OF FOREIGN EXCHANGE – GUIDELINES
Definition of NRI/ PIO

In terms of Regulation 2 of FEMA Notification No.13 dated May 3, 2000,
Non-Resident Indian (NRI) - A person resident outside India who is a citizen of India.
Person of Indian Origin (PIO) - A citizen of any country other than Bangladesh or Pakistan who had
(a) at any time held Indian passport or
(b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the
Constitution of India or the Citizenship Act, 1955 or (c) the person is a spouse of an Indian citizen or a
person referred to in (a) or (b).
Export Performance FOB/FOR
As per Export Import policy Value Converted in $ Million
Category
2015-2020
Export House One Star Export house 3

Star Export House Two Star Export house 25
Trading House Three Star Export House 100
Star Trading house Four Star Export HOuse 500
Premier Tradinq House Five Star Export HOuse 2000
Export performance is required for present year + previous two years but it is necessary in at least 2
years out of 3 years
Current account transactions - are those that are not capital account transactions (i.e. export/import
of goods/ services, payment /receipt of interest etc
Capital account - Transactions that affect/alter the asset or liability position of Indian Residents
outside India.
NOSTRO Account - Account of State Bank with Citibank in New York in $. Also called our account with
you.
VOSTRO Account - Citibank account with State Bank in New Delhi in Indian Rupee. Also called your
account with us.
LORO Account - When PNB wants to utilize the above NOSTRO account, for PNB it becomes LORO
account Also called their account with Ihem.
MIRROR A/C - The account of a foreign bank as maintenained in the books of a bank in India is called
Mirror / Shadow account. It is just copy of entries in NOstro account like maintenance of cash book by
a firm for a bank account.
TT (Buying)rate - when bank pay rupee funds on or after the receipt of FC. E.g. being payment of an
inward remittance or an export bill sent on collection basis realised and credited to the nostro
account. Applicable normally in following cases:
a)Clean inward remittances for which cover has already been provided to the Nostro account of the
Bank.
b)Conversion proceeds of instruments sent on collection basis.
c)Cancellation of outward TT/MT/DD etc.
d)Cancellation of forward sale contract.
Bill (Buying) rate - Applied for export bills. The rate will be worse than that is applied for TT
(Buying)owing to the additional handling cost.
Applicable normally in following cases:
Purchase/discount/negotiation of export bills

TT(Selling)rate - Applied when bank simultaneously parts with FC on receipt of rupees in India.TT
selling rates is applied for all outward remittances other than for imports payments. In such cases
though rupee funds are received immediately FC is paid only when remittance reaches the beneficiary
at the foreign centre. Bank has the advantage of float funds in its nostro account and thus TT(Selling)
rate is worked out with minimum amount of profit loaded
Applicable normally in following cases:
a)Clean outward remittance in FC by TT/MT/DD.
b)Cancellation of purchased bills on return or transfer to collection account.
c)Cancellation of fwd purchase contract.
d)Import documents received directly by the importer
Bill (selling )rate - Transactions involving remittance for imports except - Import documents received
directly by the importer - above.
In addition following merchant rates are also in vogue.
1) Cheque buying rate 2) TC (Buying) rate.
3) TC (Selling) rate. 4) Currency (Buying) rate and
5) Currency (Selling) rate.
Direct Rates :
When foreign currency is fixed and Indian currency is variable. In India direct rates are quoted
Indirect rates
When foreign currency is variable and Indian currency is fixed.
Ready or cash rates
The transaction to be settled on the same day. It is also known as ‘ Value Today
Spot Rates
Contract deliverable on the 2nd succeeding working day i.e. T+2 days. By default all inter bank
transactions are quoted as Spot Rates
Tom Rates
Contract deliverable immediately therefore T+1 day on the day next to the date of transactions.
Forward rates
Contract deliverable on a pre determined day in future i.e. 1 or 2 or 3 months after, are called forward
rates.
Cross Rates
Cross rate is the currency exchange rate expressed by a currency pair, in which none of the currencies
involved is the official currency of the country in which quotation is made. For example If a currency
exchange rate between Japanese yen and USD is quoted in Britain newspaper this would be called as
cross rates.
Cover Rate:
Cover rate is the rate at which ADs can cover the transactions in the inter bank market without
making profit or incurring loss. If the AD had to buy a 100,000 dollar export bill it will sell the same in
the inter bank market without loss of time so as to avoid exchange fluctuation risk. Similarly for a sale
of $100,000 to an importer it will buy from the IB market. The rate at which the AD can dispose off
i.e. sell USD and in the later case acquire i.e. buy USD is called the “cover rate”
Margin:
Margin is the profit loaded into the base rate for finalising the merchant rate. Earlier FEDAI had
prescribed profit margin to be loaded by the ADs but now ADs are free to charge profit margin as per
their discretion.
REVOCABLE CREDIT
Revocable credit is one which is expressly stated to be revocable. It can be cancelled or amended by

the Issuing Bank at any time without notice to the Beneficiary. For all practical purposes it is worthless
piece of paper. However, if the Negotiating Bank has negotiated the documents which appear on
their face to be in compliance with the terms and conditions of the credit before receipt of the notice
of amendment/cancellation, then it becomes irrevocable. A problem may arise when the Negotiating
Bank has negotiated the documents but the notice of amendment/cancellation has been received on
the same day after negotiation. ( IN UCP 600 REVOCABLE CREDIT HAS BEEN REMOVED, NOW
REVOCABLE CREDIT CAN NOT BE ISSUED.)
IRREVOCABLE CREDIT
Irrevocable credit is a definite undertaking by the Issuing Bank and it cannot be amended or cancelled
without the consent of the beneficiary. The consent of the Confirming Bank may not be necessary as
it can elect not to confirm the amendments
CONFIRMED CREDIT
When an irrevocable credit is confirmed by the Advising Bank at the request of the Issuing Bank the
credit is called a confirmed credit. Such a confirmation is a definite and clear undertaking by the
Confirming Bank. So far as the seller is concerned, this is the best form of credit to have as he is
assured of payment by a bank in his own country if he presents the documents asked for in the
manner stipulated.
STANDBY LETTER OF CREDIT
A letter of credit issued in place of a guarantee is known as a standby credit. Strictly speaking this is
not a documentary credit as no document of title will be required to be submitted under the terms of
the credit. Because of the restrictions on the issue of guarantees in certain countries such as the
United States of America, Japan etc. standby letters of credit are common in those countries.
DEFERRED PAYMENT CREDIT
Deferred payment credit is one where payment is made in instalments over a period of time by a
designed bank on the respective due dates determined in accordance with the stipulations of the
credit without drawing of drafts. In a way, it is an extended payment credit. Under deferred payment
credit, no draft will be called upon to be drawn, but it must specify the maturity at which payment is
to be made and how such maturity is to be determined. Such credits are normally used in the
import/export of capital goods. Deferred payment credit should not be confused with instalment
credit. An instalment credit requires specific quantities to be shipped weekly or monthly and it allows
partial shipments and deferred payment credit may or may not allow partial shipments.
TRANSFERABLE CREDIT
A credit under which the beneficiary has the right to make part or all of the credit available to one or
more third parties is known as a transferable credit. A credit can be transferable if the Issuing Bank
specifically assents and issues a transferable credit.
BACK TO BACK LETTER OF CREDIT
A back to back letter of credit is issued on the strength of a credit already issued. It is normally used
where the exporter is not the supplier of the goods and credit is not transferable. It should be
ensured that the second credit terms are identical to those of the first credit; the difference being
mainly on the date of expiry and the amount. The second credit must expire before the first credit
and the amount of the second credit will have to be less than that of the first credit.
RESTRICTED LETTER OF CREDIT
In this type of credit the Issuing Bank will restrict negotiation to a particular bank or normally to their
own branches/correspondent banks to offer business to the latter.
REVOLVING LETTER OF CREDIT
A revolving letter of credit is one where the amount if renewed or reinstated from time to time
without a specific amendment. Such drawings have to take place within the validity period. The

amount under the credit can revolve in relation to time or value. There are two types of revolving
credits. In the first case, credit gets reinstated immediately after a drawing is made. For example, if a
credit is opened for USD 100,000 and the beneficiary draws a bill for USD 25,000; immediately after
that drawing, the credit again reverts to its original amount of USD 100,000.
RED/GREEN CLAUSE LETTER OF CREDIT
Red clause letter of credit is a means of financing before shipment and are so called because the
clause relating to the provision for finance was originally in red ink on the credit to draw attention to
this special feature. This credit is available for procuring raw materials and manufacturing the goods
to be shipped. The green clause letter of credit is an extension of the red clause credits in that it
envisages the grant of storage facilities at the port of shipment over and above preshipment finance.
REIMBURSEMENT CREDIT - When a credit is opened in a currency of a third country, it refers to as
reimbursement credit is because under such credit, reimbursement comes from the bank of a third
country.
ASIAN CLEARING UNION (ACU) - (1) Participating countries are members of ACU are INDIA, NEPAL,
IRAN, PAKISTAN, SRI LANKA, BANGLADESH, MYANMAR, BHUTAN, MALDIVES
(2) Asian Monetary Units (AMUs) is the common unit of account of ACU and denominated as “ACU
Dollar and ACU Euro. Myanmar is the 9th country of ACU member effective from 01.01.2010
VARIOUS STATEMENT / FORMS
XOS STATEMENT
Half yearly statement to be submitted to RBI containing details of all export bills outstanding beyond
six months from the date of export as at the endof June and December
BEF
Half yearly statement to be submitted to RBI containing details of importer , who have defaulted in
submission of appropriate documents evidencing imports into india within 6 months from the date of
remittance.
EBW
Half yearly statements to be submitted to RBI containing details of export bill written off as on June
and December
ARBITRAGE - Simultaneous buying and selling of same currencies for the purpose of profit booking
from the price difference
FORFETING - IT is trade finance involving discounting of export receivables with or without recourse to
the exporter.
SPREAD - Difference between buying and selling rate of same currencies for the corresponding
maturities.
‘ KNOWN HOLIDAY’ - As per FEDAI Rules ‘ KNOWN HOLIDAY’ means - Which is known at least 3
working days before the date of a holiday.
“Sudden declared holiday” - which is not known holiday (Example – Suppose day 1,2,3,4 are
working day and if day 4 is declared holiday on or after day 1 it will be a sudden declared
holiday. If day 4 is declared as holiday prior to day 1 it would be a known holiday.)
Settlement Date change
a)When maturity date of forward contract falls on a month end and the said day is declared as a
holiday subsequently the settlement should be preponed to preceding working day if the said day is
known holiday.
(b)In all other cases if the maturity date is declared as a holiday subsequently. The settlement date
should be postponed to the next working day.
MTSS - A cap of USD 2500 has been placed on individual remittance under the scheme. Amounts of
Rs.50000/- may be paid in cash to a beneficiary in India. Any amount exceeding should be

paid through DD/PO. Only 30 remittances can be received by a single individual beneficiary
under the scheme during a calendar year.
INCOTERMS - International Commercial Terms
EXW Ex-works i.e. ex factory. It means price quoted by the seller is such that he
would deliver the goods at his factory.
FCA Free carrier – Seller has to bear all costs and risk till keeps the goods
incharge of first carrier.
FAS Free alongside ship – The meaning of this terms is that price quoted is such
that seller hasto incur all costs (freight, insurance, loading etc.) till he keep;s
the goods alongside the ship .
FOB Free on Board - The meaning of this term is that seller has to bear all costs
till he loads the goods on the ship named in the contract.
CIF CIF stands for cost, insurance and freight upto a named destination.
The price quoted by the seller includes all cost till goods are loaded on
board and the freight insurance upto the named place of destination.
CRF CFR stands for cost and Freight – Seller has to bear all costs and expenses till
the goods are loaded on board plus freight upto the destination named in
the contract.
CPT CPT STANDS for carriage paid to – Here the seller has to clear the goods for
export, arrange for the carrier, deliver the goods to him pay the freight/cost
of carriage to take the goods to the named destination .
CIP CIP stands for Carriage and Insurance paid upto – Here the seller has to clear
the goods for export, arrange for the and payment of carriage and
insurance upto the destinatioin.
DAP,DAT,DDP These terms stands for:
DAP stands for Delivery at Place
DAT stands for Delivery at Terminal
DDP stands for Delivery duty paid
All these terms indicates the maximum obligation of the seller. i.e. the
obligation to deliver the goods at the destination and to bear all cost and
risks till goods reach that point.
EDF FORM - EDF form replaces GR / PP forms . When exports are made otherwise than by post and
Custom Office is where EDl facility is not available).
SDF Form – Withdrawn - Now only shipping bill will be used
VP/COD form - When exports are made by post parcel under arrangements to realise proceeds
through postal channels on value payable or cash delivery basis.
SOFTEX Form - In case of export of computer software in non-physically form.
SUBMISSION OF CDF FORMS - (1) “Foreign exchange in any form can be brought into India freely
without limit provided it is declared on the Currency Declaration Form (CDF) on arrival to the Custom
Authorities. When foreign exchange brought in the form of currency notes or travellers' cheques does
not exceed US$ 10,000/- or its equivalent and / or the value of foreign currency notes does not exceed
US$ 5,000/- or its equivalent, declaration thereof on CDF is not insisted upon.”
(2) Branches to ensure RBI guidelines which stipulate obtaining of PAN Card mandatorily for cash
payments in excess of INR 25,000
EXPORT OF GOODS AND SERVICES -
(1) Export trade is regulated by the Directorate General of Foreign trade (DGFT)
(2)All export contracts and invoices shall be denominated either in freely convertible currency or in

Indian Rupees but export proceeds sall be realized in freely convertible currency.
3)Settlement system under ACU Mechanism - Permitted to settle transactions between ACU
countries Asian Monetary Unit has been denominated as ‘ACU Dollar and ‘ACU EURO” equivalent to
value to One USD and one Euro
4) EDF Exemption
A) Export of goods free of cost, for export promotion-up to 2 per cent of the average annual exports
of the applicant during the preceding three financial years subject to a ceiling of Rs.5 lakhs
B) For status holder exporters, Rs.10 lakhs or 2 per cent of the average annual export realization
during the preceding three licensing years (April-March), whichever is Lower.
5) REALIZATION AND REPATRIATION OF PROCEEDS OF EXPORT
OF GOODS / SOFTWARE / SERVICES
A) Max. period of realization and repatriation of export proceeds shall be nine months from the date
of export for all exporters including Units in SEZs, Status Holder Exporters, EOUs, Units in EHTPs, STPs
& BTPs until further notice.
B) Goods exported to a warehouse established outside India: As soon as it is realized and in any case
within fifteen months from the date of shipment of goods.
C) Participants in international exhibition/trade fair – Exporter can open temporary foreign currency
a/c and deposit the sale proceeds in the account. They can also operate the account during their stay
abroad and balance should be repatriated to India within 1 month from the date of closure of trade
fair/ exhibition.
D) Extension of Time- AD Category – I banks to extend the period of realization of export proceeds
beyond stipulated period of realization from the date of export, up to a period of six months
FOREIGN STUDENTS STUDYING IN INDIA – KYC PROCEDURE
i)Foreign student to open a NRO account on the basis of passport with appropriate visa &
immigration endorsement containing proof of identity and address in home country along with a
photo and letter offering admission from the educational institution.
ii)Within 30 days of opening the account the foreign student should submit to branch a valid
address proof giving local address in the form of rent agreement or a letter from the
educational institution as a proof of living in a facility provided by the educational institution. Bank
will not insist on the landlord visiting the branch for verification of rent agreement.
iii)During these 30 days period the a/c will be operated with a condition of allowing foreign
remittances not exceeding USD 1000 and a cap of monthly withdrawal to Rs.50000/- pending
verification of address.
iv)If Foreign national do not furnish the document of valid address proof giving local address within a
period 30 days of opening of the account and bank is unable to apply appropriate KYC measure,
Bank should consider alosing the account or terminating the banking /business relationship
after issuing due notice to the customer.
v)Student with Pakistani nationality will need prior approval of the Reserve Bank of India for opening
the account.
RDA - The remitter and the beneficiary should be individuals barring a few exceptions. Remittances
through Exchange Houses for financing of trade transactions are permitted up to Rs.15,00,000
(Rupees fifteen lakhs only) per transaction. The accounts should not be used for cross-border
outward remittances from India. AD banks may permit to regularize payments exceeding the
permitted limit under RDA provided that they are satisfied with the bonafide of the transaction.
(Fex control 01/2016)
Drawing Arrangements with Exchange Houses are primarily designed to
channel cross-border inward personal remittances. Under no circumstances, donations /
contributions to charitable institutions should be routed through the Exchange Houses.

Drafts drawn by the Exchange House should have a validity of only three months from the date of
issue thereof. (Fex control 01/2016)
Resident Indians as well as those Non-residents who are – (i) not citizens of Pakistan or Bangladesh
and (ii) not going to Pakistan or Bangladesh, areallowed to take Indian notes up to an amount not
exceeding Rs.25,000/- while leaving the country though an airport.
Citizens of Pakistan and Bangladesh exiting the country by air are allowed to carry up to a maximum of
Rs.10,000/- up to the boarding point in international airports, but not beyond. (Fex control 02/2016)
Foreign exchange in any form can be brought into India freely without limit provided it is declared on
the Currency Declaration Form (CDF) on arrival to the Custom Authorities. When foreign exchange
brought in the form of currency notes or travellers' cheques does not exceed US$ 10,000/- or its
equivalent and / or the value of foreign currency notes does not exceed US$ 5,000/- or its equivalent,
declaration thereof on CDF is not insisted upon. (Fex control 02/2016)
AMCs may accept payment in cash below Rs.50,000/- (Rupees fifty thousand only) against sale of
foreign exchange for travel abroad (for private visit or for any other purpose). Wherever the sale of
foreign exchange is for the amount equivalent to Rs.50,000/- and above whether it involves a single
drawal or multiple drawals for a single journey, the payment must be received only by a crossed
cheque drawn on the applicant’s bank account. (Fex control 02/2016)
Write-off of fake foreign currency notes
In the event of foreign currency notes purchased being found fake/forged subsequently, AMCs may
write- off up to US $ 2000 per financial year after approval of their Top Management after exhausting
all available options for recovery of the amount. Any write-off in excess of the above amount, would
require the approval of the Regional Office concerned of the Foreign Exchange Department of the
Reserve Bank. (Fex control 02/2016)
U/s 2(77) Company act 2013 ‘‘relative’’, with reference to any person, means anyone who is related
to another, if—
(i) they are members of a Hindu Undivided Family;
(ii) they are husband and wife; or
(iii) one person is related to the other in such manner as may be prescribed.
As prescribed
Father (including step-father)
Mother (including step-mother)
Son (including step-son)
Son's wife
Daughter
Daughter's husband
Brother (including step-brothers)
Sister (including step-sister)
Fex control 04/2016)
Borrowing by resident individual: An individual resident in India may
borrow a sum not exceeding US$ 250,000/- or its equivalent from his close relative outside India,
subject to the conditions that:
a. the minimum maturity period of the loan is one year;
b. the loan is free of interest; and
c. the amount of loan is received by inward remittance in free foreign
exchange through normal banking channels or by debit to the

NRE/FCNR account of the non-resident lender.
External commercial borrowings
Individual Limits: The individual limits refer to the amount of ECB which can be raised in a financial
year under the automatic route.
i. The individual limits of ECB that can be raised by eligible entities under the automatic route per FY
are set out as under:
a) Up to USD 750 million or equivalent for the companies in infrastructure and manufacturing sectors;
b) Up to USD 200 million or equivalent for companies in software development sector;
c) Up to USD 100 million or equivalent for entities engaged in micro finance activities; and
d) Up to 500 million or equivalent for remaining entities.
Borrowing by persons resident in Indian in INR other than companies in India - A person resident in
India, not being a company may borrow in INR from NRIs/PIOs after satisfying the below conditions:
i) Borrowing shall be only on a non-repatriation basis; loan should be received either by inward
remittance from outside India or by debit to NRE/NRO/FCNR(B)/NRNR/NRSR account of the lender,
maintained with AD in India. ROI- BR+2%, Period-Max 3 years,
Repayment – To the credit to NRO account of the lender
INR Loans to NRI by Resident Individual
A resident individual may grant INR loan to a NRI relative by way of crossed cheque/electronic transfer
subject to the following terms and conditions:
i) The loan is free of interest and minimum maturity is one year;
ii) The loan amount should be within the limit under the LRS
iii) The loan amount shall not be remitted outside India but shall be credited to the NRO account of
the borrower;
iv) Repayment of loan shall be made by way of inward remittances from outside India or by debit to
the NRO/NRE/FCNR(B) account of the borrower or out of the sale proceeds of the shares or securities
or immovable property against which such loan was granted.
Change of status of borrower to a person resident outside India:
In case of change of status of a borrower who has taken Rupee loan/ overdraft from an authorized
dealer bank, from a person resident in India to a person resident outside India, the AD bank may allow
continuance of loan/overdraft till its original maturity subject to the satisfaction of the lender. So long
as the borrower continues to remain a person resident outside India, the repayment shall be out of
inward remittance from outside India or from NRE/FCNR(B)/NRNR/NRO/NRSR account of the
borrower.
Change of the status of the lender to a person resident outside India: In case a rupee loan was
granted by a person resident in India to another person resident in India and the lender subsequently
becomes a person resident outside India, the repayment of the loan by the resident borrower should
be made by credit to the NRO account of the lender.
Under the Liberalised Remittance Scheme, Authorised Dealers may freely allow remittances by
resident individuals up to USD 2,50,000 per Financial Year (April- March) for any permitted current or
capital account transaction or a combination of both. The Scheme is not available to corporates,
partnership firms, HUF, Trusts, etc.
The permissible capital account transactions by an individual under LRS are:

(i) opening of foreign currency account abroad with a bank;
(ii) purchase of property abroad;
(iii) making investments abroad- acquisition and holding shares of both listed unlisted overseas
company
(iv) setting up Wholly Owned Subsidiaries and Joint Ventures
(v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives
as defined in Companies Act, 1956.
Schedule –I - expressly prohibited
Like – Lottery winnings, racing/riding etc. or any other hobby, purchase of lottery tickets, banned /
football pools etc. Payment of commission on exports made towards equity investment in wholly
owned subsidiary abroad of Indian companies.
Schedule – II - Require prior approval of Central Government Like – Cultural Tours, Advt. in foreign
print media, remittance of hiring charges of transponders by TV Channels, Internet service providers,
remittance of prize money/ sponsorship of sports.
Schedule – III - Require prior approval from Reserve Bank of India

Subject to ceiling prescribed in Schedule III prior permission of RBI is required for drawl of foreign
exchange.

The limit of USD 2,50,000 per Financial Year (FY) under the Scheme also includes/subsumes
remittances for current account transactions available to resident individuals under Para 1 of Schedule
III to Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015.
Exceeding USD 2,50,000, requires prior permission from the Reserve Bank of India.
Private visits – Maximum USD In irrespective of number of visits other than NEPAL and BHUTAN
Gift and Donation – Maximum USD 250000 in one FY
Going abroad on employment – Can draw Foreign exchange upto USD 250000 in one FY
Emigration -up to the amount prescribed by the country of emigration or USD 250,000 - excess of this
limit may be allowed only towards meeting
incidental expenses
Maintenance of close relative -A resident individual can remit up-to USD 2,50,000 per FY – Relatives
defined in sec 6 of company act 1956
Business trip - For business trips to foreign countries, resident individuals can avail of foreign
exchange up to USD 2,50,000 in a FY irrespective of the number of visits
Medical treatment abroad - up to an amount of USD 2,50,000 or its equivalent per FY without
insisting on any estimate from a hospital/ doctor. For amount exceeding $250000, ADs may release
foreign exchange under general permission based on the estimate from the doctor in India or
hospital/ doctor abroad. In addition, an amount up to USD 250,000 per FY allowed to a person for
accompanying as attendant.
Students for pursuing study abroad - up to USD 2,50,000 or its equivalent to resident individuals for
studies abroad without insisting on any estimate from the foreign University. exceeding USD 2,50,000
based on the estimate received from the institution abroad.
Documents –
1) The resident individual seeking to make the remittance should furnish Form A-2 and Application
cum- Declaration for purchase of foreign exchange under LRS. PAN Card mandatory for Capital a/c
transaction and for CA transactions PAN Card not to be insisted upon for transaction upto $25000.
Loan to close relative in rupees to NRI/PIO – Relative as per sec 6 of company act is eligible –

maturity – one year, interest free, limit max. as per LRS USD 250000/-, Repayment – through inward
remittance or sale of property/shares acquired through this loan.
Rupee Gift to NRI/PIO – within overall limit of USD250000/-, should be credited to the NRO account
of NRI/PIO
Release of foreign currency notes and coins – Out of overall ceiling of USD 250000
Travel -i) Travellers proceeding to countries other than Iraq, Libya, islamicRepublic of Iran, Russian
Federation and other Republics of Commonwealth of Independent States - not exceeding USD 3000
per visit or its equivalent.
ii) Proceeding to Iraq or Libya - not exceeding USD 5000 per visit or its equivalent.
iii) Travellers proceeding to Islamic Republic of Iran, Russian Federation
and other Republics of Commonwealth of Independent States - full
exchange may be released.
iv) Travellers proceeding for Haj/Umrah pilgrimage- full amount of entitlement in cash or up to the
cash limit as specified by the Haj Committee of India, may be released.
Period of surrender of foreign exchange – Can be utilized for any other permitted purpose. Resident
individual to surrender received / realised / unspent / unused foreign exchange to an Authorised
Person within a period of 180 days from the date of receipt / realisation / purchase / acquisition /
date of return of the traveller,
Unspent Foreign Exchange - Returning traveller is permitted to retain with him, foreign currency,
travellers’ cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins
without any ceiling beyond 180 days.
Salary remittance - A person who is resident but not permanently resident in India and
a) is a citizen of a foreign State other than Pakistan; or
b) is a citizen of India, who is on deputation to the office or branch of a foreign company or subsidiary
or joint venture in India of such foreign company, may make remittance up to his net salary (after
deduction of taxes, contribution to provident fund and other deductions).
Remittance facilities for others
1) Gift/ donation - Persons other than individuals to remit towards donations up-to one per cent of
their foreign exchange earnings during the previous three financial years or USD 5,000,000, whichever
is less.
2) Commission to agents abroad for sale of residential flats or commercial plots in India - USD
25,000 or five percent of the inward remittance whichever is more and exceeding it require RBI
approval.
3) Remittances towards consultancy services - Remittances by persons other than individuals shall
require prior approval of the Reserve Bank of India if remittances exceed USD 10,000,000 per project
for any consultancy services in respect of infrastructure projects and USD 1,000,000 per project, for
other consultancy services procured from outside India.
4) Remittances towards re-imbursement of pre-incorporation expenses - Remittances by persons
other than individuals shall require prior approval of the Reserve Bank of India for remittances
exceeding five per cent of investment brought into India or USD 100,000 whichever is higher.
Issue of Guarantee – Import of service –
1) AD Category-I banks are permitted to issue guarantee for amount not
exceeding USD 500,000 or its equivalent in favour of a non-resident service provider
2) In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/

State Governments, approval from the Ministry of Finance, Government of India for issue of
guarantee for an amount exceeding USD 100,000 (USD One hundred thousand) or its equivalent
would be required.
Prohibition on acquisition or transfer of immovable property in India by citizens of certain countries
Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong
Kong cannot, without prior permission of the Reserve Bank, acquire or transfer immovable property in
India, other than on lease, not exceeding five years.
'Remittance of assets' means remittance outside India of funds in a deposit with a bank/ firm/
company, provident fund balance or superannuation benefits, amount of claim or maturity proceeds
of insurance policy, sale proceeds of shares, securities, immovable property or any other asset held in
India in accordance with the provisions of the Foreign Exchange Management Act, 1999 (FEMA) or
rules/ regulations made under FEMA.
'Expatriate staff' is a person whose provident/ superannuation/ pension fund is maintained outside
India by his principal employer outside India
‘Not permanently resident' is a person resident in India for employment of a specified duration or for
a specific job/ assignment, the duration of which is not more than three years.
Remittance of assets permitted under the regulations
Remittances by individuals not being NRIs/ PIOs - ADs may allow remittance of assets by a foreign
national upto maximum of USD 1 million per financial year where:
(i) the person has retired from employment in India;
(ii) the person has inherited from a person referred to in section 6(5) of the Act
(iii) the person is a non-resident widow and has inherited assets from her deceased spouse who was
an Indian national resident in India.
Facilities are not available for citizens of Nepal or Bhutan or a PIO.
Remittances by NRIs/ PIOs
ADs may allow NRIs/ PIOs to remit up to USD one million, per FY:
(i) out of balances in (NRO) accounts/ sale proceeds of assets/ assets acquired in India by way of
inheritance/ legacy;
(ii) in respect of assets acquired under a deed of settlement made by either of his/ her parents or a
relative as defined in Companies Act, 2013. The settlement should take effect on the death of the
settler.
(iii) in case settlement is done without retaining any life interest in the property i.e. during the lifetime
of the owner/ parent, it would tantamount to regular transfer by way of gift and the remittance of
sale proceeds of such property would be guided by the extant instructions on remittance of balance in
the NRO account.
Remittance of assets requiring RBI approval
Prior approval of the Reserve Bank is necessary for remittance of assets where:
a) Remittance is in excess of USD 1,000,000 (US Dollar One million only) per financial year (i) on
account of legacy, bequest or inheritance to a citizen of foreign state, resident outside India; (ii) by
NRIs/ PIOs out of the balances held in NRO accounts/ sale proceeds of assets/ the assets acquired by
way of inheritance/ legacy.
In terms of Para 2.52 of the Foreign Trade Policy (2015-2020) - “All export contracts and invoices shall
be denominated either in freely convertible currency or Indian rupees but export proceeds shall be

realized in freely convertible currency. (Fex control 13/2016)
Export proceeds against specific exports may also be realized in rupees, provided it is through a freely
convertible Vostro account of a non resident bank situated in any country other than a member
country of ACU or Nepal or Bhutan.
Indian Rupee is not a freely convertible currency, as yet.
Exchange Earners’ Foreign Currency (EEFC) Account
1) Resident individuals can open EEFC a/c with AD and are permitted to include resident close
relative(s) as defined in the Companies Act 1956 as a joint holder(s) in their EEFC accounts on former
or survivor basis.
2) It is a non-interest bearing current account.
3) All categories of foreign exchange earners are allowed to credit 100% of their foreign exchange
earnings to their EEFC Accounts
Advance Payments against Exports – where an exporter receives advance payment (with or without
interest), from a buyer outside India, the exporter shall be under an obligation to ensure that the
shipment of goods is made within one year from the date of receipt of advance payment.
EDF Approval for Trade Fair/Exhibitions abroad- Gift of unsold item- It is permissible to 'gift’ unsold
goods up to the value of USD 5000 per exporter, per exhibition/trade fair.
Opening / Hiring of Ware houses abroad - AD Category – I banks may consider the applications
received from exporters and grant permission for opening / hiring warehouses abroad subject to the
following conditions:
(i) Applicant’s export outstanding does not exceed 5 per cent of exports made during the previous
financial year.
(ii) Applicant has a minimum export turnover of USD 100,000/- during the last financial year.
Export of Currency-
(i) Any person resident in India may take outside India (other than to Nepal and Bhutan) currency
notes of Government of India and Reserve Bank of India notes up to an amount not exceeding
Rs.25,000 (Rupees twenty five thousand only); and
(ii) Any person resident outside India, not being a citizen of Pakistan and Bangladesh and also not a
traveler coming from and going to Pakistan and Bangladesh, and visiting India may take outside India
currency notes of Government of India and Reserve Bank of India notes up to an amount not
exceeding Rs. 25,000 (Rupees twenty five thousand only) while exiting only through an airport.
EDF Form –
1) The EDF will be used for declaration of export of Goods at Non-EDI ports.
2) Shipping Bill will be used for declaration of export of Goods at EDI ports.
3) Within 21 days from the date of export, exporter should lodge the duplicate copy together with
relative shipping documents and an extra copy of the invoice with the ADCategory – I banks named in
the EDF form.
With operationalization of EDPMS on March 01, 2014, realization of all export transaction for shipping
documents after February 28, 2014 should be reported in EDPMS and old outstanding shipping bills
prior to March 01, 2014 should continue to be reported in XOS till completion of the cycle.
Reduction in Invoice Value on Account of Prepayment of Usance Bills - cash discount to overseas
buyers for prepayment of the usance
bills may be allowed to the extent of amount of proportionate interest on the unexpired period of
usance, calculated at the rate of interest stipulated in the export contract or at the prime rate/LIBOR
of the currency of invoice where rate of interest is not stipulated in the contract.
Reduction in Invoice Value in other cases –

If, after a bill has been negotiated or sent for collection, its amount is to be reduced for any reason,
AD Category – I banks may approve such reduction, if satisfied about genuineness of the request,
provided:
(a) The reduction does not exceed 25 per cent of invoice value
(b) exporters who have been in the export business for more than three
years, reduction in invoice value may be allowed, without any percentage ceiling subject to condition
that export outstanding does not exceed 5% of the average realization for last 3 years.
Write off of export bills –
After liberalizing and simplifying the procedure, the limits prescribed for “write-offs” of unrealized
export bills are as under:
Self “write-off” by an exporter (Other than Status Holder Exporter) 5%*
Self “write-off” by Status Holder Exporters 10%*
Write-off” by Authorized Dealer Bank- 10%*
*of the total export proceeds realized during the previous calendar year.
Import of Foreign Exchange into India - where the aggregate value of the foreign exchange in the
form of currency notes, bank notes or travellers cheques brought in by such person at any one time
does not exceed USD 10,000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of
foreign currency notes (cash portion) alone brought in by such person at any one time does not
exceed USD 5,000 (US Dollars five thousand) or its equivalent. (Fex control 14/2016)
Any person resident in India who had gone out of India on a temporary visit, may bring into India at
the time of his return from any place outside India (other than from Nepal and Bhutan), currency
notes of Government of India and Reserve Bank of India notes up to an amount not exceeding
Rs.25,000 (Rupees twenty five thousand only).
Advance Remittance for the Import of Services - AD Category – I bank may allow advance remittance
for import of services without any ceiling subject to the following conditions :
1) Where the amount of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of
international repute situated outside India, or a guarantee from an AD Category – I bank in India, if
such a guarantee is issued against the counter-guarantee of a bank of international repute situated
outside India, should be obtained from the overseas beneficiary.
2) In the case of a Public Sector Company or a Department/ Undertaking of the Government of India/
State Governments, approval from the Ministry of Finance, Government of India for advance
remittance for import of services without bank guarantee for an amount exceeding USD 100,000 (USD
One hundred thousand) or its equivalent would be required.
Receipt of Import Bills/Documents -Import bills and documents should be received from the banker
of the supplier by the banker of the importer in India. AD Category – I bank should not, therefore,
make remittances where import bills have been received directly by the importers except:
1) Where value of import bills does not exceed USD 300000
2) Import bills received by Indian subsidiary of foreign company
3) Import bills received by status holder exporter, 100% EOU, SEZ, Public Limited company
4) Import bills received by Public limited company, Pvt. LTd. co.,
Evidence of Import –
Physical Imports - where value of foreign exchange remitted / paid for import into India exceeds USD
100,000 or its equivalent, it is obligatory on the part of the AD Category– I bank through which the
relative remittance was made, to ensure that the importer submits :-
(a) The Exchange Control Copy of the Bill of Entry for Home Consumption, or
(b) The Exchange Control Copy of the Bill of Entry for warehousing, in case of 100% Export Oriented

Units, or
(c) Customs Assessment Certificate or Postal Appraisal Form, as declared by the importer to the
Customs Authorities, where import has been made by post, or Courier Bill of Entry
Evidence of Import in Lieu of Bill of Entry
(i) AD Category – I bank may accept, in lieu of Exchange Control Copy of Bill of Entry for home
consumption, a certificate from the Chief Executive Officer (CEO) or auditor of the company that the
goods for which remittance was made have actually been imported into India provided :-
(a) The amount of foreign exchange remitted is less than USD 1,000,000 or its equivalent and
(b) The importer is a company listed on a stock exchange in India and whose net worth is not less than
Rs.100 crore as on the date of its last audited balance sheet, or, the importer is a public sector
company or an undertaking of the Government of India or its departments.
Non-physical Imports
(i) Where imports are made in non-physical form, i.e., software or data through internet / datacom
channels and drawings and designs through e-mail / fax, a certificate from a Chartered Accountant
that the software / data / drawing/ design has been received by the importer, may be obtained.
Follow-up for Import Evidence
(i) In case an importer does not furnish any documentary evidence of import, as required under
paragraph C.7. of Section III, within 3 months from the date of remittance involving foreign exchange
exceeding USD 100,000, the AD Category – I bank should rigorously follow-up for the next 3 months,
including issuing registered letters to the importer.
(ii) AD Category - I banks should henceforth submit a statement on half-yearly basis as at the end of
June & December of every year, in form BEF furnishing details of import transactions, exceeding USD
100,000 in respect of which importers have defaulted in submission of appropriate document
evidencing import within 6 months from the date of remittance using the online eXtensible Business
Reporting Language (XBRL) system
(iii) AD Category – I bank need not follow up submission of evidence of import involving amount of
USD 100,000 or less provided they are satisfied about the genuineness of the transaction and the
bonafides of the remitter.
Processing of import related payments through Online Payment gateway Service Providers (OPGSPs)
- AD Category-l banks have been permitted to offer facility of payment for imports of goods and
software of value not exceeding USD 2,000 by entering into standing
arrangements with the OPGSPs
Resident bank account maintained by residents in India - Joint holder – liberalization -Individuals
resident in India are permitted to include non-resident Indian (NRI) close relative (s) as defined in
Section
6 of the Companies Act, 1956 as a joint holder(s) in their resident savings bank accounts on “Either or
Survivor” basis subject to the following conditions:
a. Such account will be treated as resident bank account for all purposes and all regulations applicable
to a resident bank account shall be applicable.
b. Cheques, instruments, remittances, cash, card or any other proceeds
belonging to the NRI close relative shall not be eligible for credit to this account.
c. Where he becomes survivor a/c be treated as NRO a/c
Crystallization of Inoperative Foreign Currency Deposits – Reserve Bank (Depositor Education and
Awareness Fund) Scheme, 2014 –

(a) In case a foreign currency denominated deposit with a fixed maturity date remains inoperative for
a period of three years from the date of maturity of the deposit, at the end of the third year, the
authorised bank shall convert the balances lying in the foreign currency denominated deposit into
Indian Rupee at the exchange rate prevailing as on that date.
(b) In case of foreign currency denominated deposit with no fixed maturity period, if the deposit
remains inoperative for a period of three years (debit of bank charges not to be reckoned as
operation), the authorised bank shall, after giving a three month notice to the depositor at his last
known address as available with it, convert the deposit from the foreign currency in which it is
denominated to Indian Rupee at the end of the notice period at the prevailing exchange rate.
Regularisation of assets held abroad by a person resident in India under Foreign Exchange
Management Act, 1999 - Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax
Act,
2015 – If no proceeds shall lie under FEMA against the declarant with respect to asset held abroad
and taxes and penalties have been paid - Permission from FEMA is not required for disposal of assets
and bringing back the proceeds through banking channels with in 180 days.
2) In case declarant wishes to hold the assets RBI’s permission is required. If permission not granted,
within 180 days bring the proceeds to India through banking channels after disposal of the assets.
An Indian company having overseas offices may acquire immovable
property outside India for its business and residential purposes provided total remittances do not
exceed the following limits prescribed for initial and recurring expenses, respectively:
a) 15 per cent of the average annual sales/ income or turnover of the
Indian entity during the last two financial years or up to 25 per cent of
the net worth, whichever is higher;
b) 10 per cent of the average annual sales/ income or turnover during
the last two financial years.
(FEX Control 22/2016)
“Foreign Currency Account” means an account held or maintained in currency other than the currency
of India or Nepal or Bhutan.
A person resident in India may open, hold and maintain with an authorized dealer in India the
following accounts:
1)EEFC 2)RFC 3) RFC (D) 4) DDA(Diamond dollar account)
Following persons resident in India can open foreign currency accounts with an authorized dealer in
India:
1)A unit in SEZ, 2)Exporter of services and engi. Goods on deferred terms 3)Indian agents of foreign
airline/shipping co 4)Indian companies received FDI 5) Organisers of Int’l conf./seminars/conventions
Following persons resident in India can open foreign currency accounts outside India :
(1) A resident individual under the Liberalized Remittance Scheme;
(2) A person going abroad to participate in an exhibition/ trade fair;
(3) A person going abroad for studies;
(4) A person who is on a visit to a foreign country provided the balances
are repatriated on return to India;
Export and Import of currency to or from Nepal and Bhutan
A person may
i)take or send out of India to Nepal or Bhutan, currency notes of Government of India and Reserve

Bank of India notes (other than notes of denominations of above Rs.100 in either case) provided that
an individual travelling from India to Nepal or Bhutan can carry Reserve Bank of India currency notes
of denomination Rs.500/- and/or Rs.1000/- up to a limit of Rs.25,000/- ;
ii) bring into India from Nepal or Bhutan, currency notes of Government of India and Reserve Bank of
India notes (other than notes of denominations of above Rs.100 in either case) ;
iii) take out of India to Nepal or Bhutan, or bring into India from Nepal or Bhutan, currency notes
being the currency of Nepal or Bhutan.
iv) may take or send outside India (other than to Nepal and Bhutan)
commemorative coins not exceeding two coins each.
Period for surrender of realised foreign exchange
Not being an individual resident in India –
i) foreign exchange due or accrued as remuneration for services rendered, whether in or outside India,
or in settlement of any lawful obligation, or an income on assets held outside India, or as inheritance,
settlement or gift, within seven days from the date of its receipt;
ii) in all other cases within a period of ninety days from the date of its receipt.
iii) A person who has acquired or purchased foreign exchange for any purpose does not use it for such
purpose or for any other purpose for which purchase or acquisition of foreign exchange is permissible
shall surrender such foreign exchange or the unused portion thereof to an authorised person within a
period of sixty days from the date of its acquisition or purchase by him.
iv) where the foreign exchange acquired or purchased is for the purpose of foreign travel, the unspent
balance of such foreign exchange be surrendered to an authorised person -
(i) within ninety days from the date of return of the traveller to India, when the unspent foreign
exchange is in the form of currency notes and coins; and
(ii) within one hundred eighty days from the date of return of the traveller to India, when the unspent
foreign exchange is in the form of travellers cheques.
Period for surrender of realised foreign exchange - individual resident in India –
A person being an individual resident in India shall surrender the received/ realised/unspent/ unused
foreign exchange whether in the form of currency notes, coins and travellers cheques, etc. to an
authorised person within a period of 180 days from the date of such receipt/ realisation/ purchase/
acquisition or date of his return to India,as the case may be.
Exemption:-
Nothing in these regulations shall apply to foreign exchange in the form of currency of Nepal or
Bhutan.
A) Person permanently residence in India - Following are the limits for possession or retention of
foreign currency or foreign coins, namely :-
i)possession without limit of foreign currency and coins by an authorised person within the scope of
his authority ;
ii) possession without limit of foreign coins by any person;
iii) retention by a person resident in India of foreign currency notes, bank notes and foreign currency
travellers' cheques not exceeding US$ 2000 or its equivalent in aggregate, provided that such foreign
exchange in the form of currency notes, bank notes and travellers cheques;
B)A person resident in India but not permanently resident therein may possess without limit foreign
currency in the form of currency notes, bank notes and travellers cheques, if such foreign currency
was acquired, held or owned by him when he was resident outside India and, has been brought into
India in accordance with the regulations made under the Act.

('not permanently resident' means a person resident in India for employment of a specified duration
(irrespective of length thereof) or for a specific job or assignment, the duration of which does not
exceed three years.)
Definition of "Currency", 2015 - Debit cards, ATM cards or any other instrument which can be used to
create a financial liability may be defined as currency.
General permission has been given to any person to buy foreign exchange from any post office in
India in the form of postal order or money order.
Opening, holding and maintaining foreign currency accounts by a
person resident in India –
1) Exchange Earner's Foreign Currency (EEFC) Account – EEFC Account A person resident in India may
open an EEFC account with an AD in India
Permissible Credits-
a. 100 percent FOREX earnings by way of inward remittance through
normal banking channel, (other than loans or investments);
b. payments received for the purpose of counter trade;
c. advance remittance received by an exporter towards export of goods
or services;
d. professional earnings including director’s fees, consultancy fees,
lecture fees, honorarium and similar other earnings received by a
professional by rendering services in his individual capacity;
e. interest earned on the funds held in the account;
f. Re-credit of un-utilised foreign currency earlier withdrawn from the
account;
g. repayment of trade related loans/ advances (which were granted to the account holder's importer
customer out of balances held in the EEFC
accounts); and
h. disinvestment proceeds received by the resident account holder on
conversion of shares held by him to ADRs/ GDRs under the ADR/GDR
Scheme approved by the Government of India.
2) Non interest bearing account, No Fund based, Non fund based facility against the security of EEFC,
Rupee withdrawal permitted but amount withdrawn cannot be re-credited in account, Packing credit
advance can be repaid.
RFC ACCOUNT –
1) A person resident in India is permitted to open a RFC account with an AD bank in India out of
foreign exchange received or acquired by him:
a) as pension or superannuation benefits from his overseas employer;
b) by converting assets which were acquired by him when he was a nonresident or inherited from or
gifted by a person resident outside India and repatriated to India;
c) received as proceeds of LIC claims/ maturity/ surrendered value settled in forex from an Indian
insurance company
d) balances in the RFC account are free from all restrictions regarding
utilisation of foreign currency balances outside India.
e) jointly with resident relative as joint holder on ‘former or survivor’ basis is permitted.
f)Balances of NRE/FCNR a/c can be credited to RFC a/c when status changes to resident.

RFC (D) ACCOUNT
1) A resident individual may open an RFC(D) account to retain in a bank
account in India the foreign exchange acquired in the form of currency notes,bank notes and
travellers cheques from overseas sources such as:
a) payment while on a visit abroad for services not arising from any business or anything done in India;
b) honorarium or gift or for services rendered or in settlement of any lawful obligation from any
person not resident in India and who is on a visit to India;
c) honorarium or gift while on a visit to any place outside India;
d) gift from a relative;
e) unspent foreign exchange acquired from an authorised person for travel abroad;
The sum total of the accruals in the account during a calendar month should be converted into Rupees
on or before the last day of the succeeding calendar month
Diamond Dollar Account (DDA) Scheme – DDA Account
Firms and companies which comply with the eligibility criteria stipulated in the Foreign Trade Policy of
the Government of India may open DDA accounts :
The salient features of the Scheme are:
1) Realisation of export proceeds and local sales (in USD) of rough, cut,
polished diamonds; and pre and post shipment finance availed in USD can be credited to such
account.
2) Payments for purchase of rough, cut and polished diamonds can be made from DDA account.
3) The account should be maintained in the form of a non-interest bearing current account.
4) No EEFC facility should be allowed in respect of the remittances received
A person resident in India may open, held and maintained, Single or joint foreign currency account
with AD in the form of current or savings or term deposit account in cases where the account holder is
an individual, and in the form of current account or term deposit account in all other cases. On the
death of FC a/c holder:
1) the AD with whom the account is held or maintained may remit
to a nominee being a person resident outside India, funds to the extent of his share or entitlement
from the account of the deceased account holder
2) a nominee being a person resident in India, who is desirous of remitting funds outside India out of
his share for meeting the liabilities abroad of the deceased, may apply to the Reserve Bank for such
remittance
Non-Resident (External) Rupee Account Scheme –
Non-resident Indians (NRIs) are permitted to open and maintain savings, current, recurring or fixed
deposit account singly or jointly (two or more NRIs or by an NRI with a resident relative(s) on ‘former
or survivor’ basis.)
i) Current income like rent, dividend, pension, interest etc. of NRIs will be construed as a permissible
credit to their NRE account
ii) Immediately upon the return of the account holder to India for taking
up employment or on change in the residential status NRE accounts should be designated as resident
accounts or the funds held in these accounts may be transferred to the RFC accounts
iii) Income from interest on balances standing to the credit of NRE Accounts is exempt from Income
Tax and wealth tax.
iv) Inward/outward remittances to/from the account are permitted.
Foreign Currency (Non-resident) Account (Banks) Scheme – FCNR (B) Account – NRIs are permitted
to open and maintain these accounts
Only in the form of FIXED DEPOSITs with ADs in any permissible currency. Other conditions like
Credit/Debit, Joint a/c, Loans & Adv, Operation by Power of Attorney are same as applicable in NRE

a/cs.
Non-Resident (Ordinary) Account Scheme – NRO account –
Any person resident outside India may open and maintain NRO account in any form, e.g. savings,
current, recurring or fixed deposit account with an AD for the purpose of putting through bona fide
transactions denominated in Indian Rupees.
i) NRO (current/ savings) account can be opened by a foreign national of non- Indian origin visiting
India for domestic use
ii) Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of
Bangladesh ownership requires prior approval of the Reserve Bank
iii) Individuals of Bangladesh nationality may be allowed to open these
accounts subject to the individual/ s holding a valid visa and valid residential permit.
iv) A/C can be held jointly with residents.
v) The account can be debited for the purpose of local payments or remittance of current income
abroad. Balances in the NRO account cannot be repatriated abroad except by NRIs up to USD 1 million
per FY. Funds can be transferred to NRE account within this USD 1 Million facility.
vi) Account be designated as Resident account on returning to India.
vii) Income-Tax - The remittances (net of applicable taxes) will be allowed to be made by the
Authorised Dealer
Special Non-Resident Rupee Account - SNRR account –
A Registered Foreign Portfolio Investor (RFPI) may open an SNRR account with an AD in India for
routing the receipt and payment relating to purchase and sale of securities under the Portfolio
investment scheme.
i) SNRR account shall be a non-interest bearing current account.
ii) The permitted credits to the account are: (a) Inward remittances; (b) Sale proceeds (net of taxes) of
securities in India; (c) Transfers from the foreign currency account of the RFPI and The permitted
debits are: (a) Purchase of securities in India; (b) Transfers to the foreign currency account of the RFPI
Escrow Account – (Intermediate pass through a/c - It is a temporary pass through account held by a
third party during the process of a transaction between two parties) Resident or non-resident
corporate/ acquirers may open Escrow account in INR with an authorized dealer in India as an Escrow
agent
Acceptance of deposit by a company in India from NRIs on repatriation basis- A company
incorporated in India including NBFC registered with the RBI cannot accept deposits on repatriation
basis.
Acceptance of deposits by Indian proprietorship concern/ firm or a
company from NRIs on non-repatriation basis - An Indian proprietorship concern/ firm or a company
(including Non-Banking Finance Company) registered with Reserve Bank can accept deposits from
NRIs on non-repatriation basis
Foreign Direct Investment –Reporting under FDI Scheme, Mandatory filing of form ARF, FCGPR and
FCTRS on e-Biz platform and discontinuation of physical filing from February 8, 2016 –
- Advance Remittance Form (ARF) which is used by the companies to
report the FDI inflows to RBI;
- FCGPR Form which a company submits to RBI for reporting the issue
of eligible instruments to the overseas investor against the above
mentioned FDI inflow; and
- FCTRS Form which is submitted to RBI for transfer of securities
between resident and person outside India.

Beginning February 8, 2016 the physical filing of forms ARF, FCGPR and FC-TRS will be discontinued
and forms submitted in online mode only through e-Biz portal will be accepted.
WORLD TRAVEL CARD

(A) Eligibility:
(1) Indian Nationals desirous of visiting abroad (except Nepal and Bhutan) for any
purpose as permitted by RBI (against payment of rupee or to the debit their EEFC/ RFC
account).
(2)Foreign Nationals while on visit to India (against FOREX brought in India & or in INR
balance supported by encashment certificate).
(3)NRIs against surrender of FOREX / to the debit of their NRE / FCNR account.
(B)Currency of Issue:
USD, GBP & EUR.
(C) VALIDITY
Expiry will be 5 years from the month of printing
(D) Income tax guidelines, copy of PAN card should be obtained in case of foreign exchange
transactions exceeding Rs.25000.
(E) Expected date of journey should not be beyond 60 days from the date of loading.
(F) While loading a WTC with amount not exceeding USD 25000 (instead of USD 5000
earlier), a simplified Application-cum-Declaration form (Form A2, as per annexure
VIII hyper link available), should be obtained.
CROSS BORDER REMITTANCES – ONLINE SCANNING OF DATA

Outward remittance
Lodging remittances through menu option ORM, Indo Nepal outward remittance
through menu option INREMIT
Inward remittances
Remittance through DD/Cheque/swift/TCs – Finacle menu option IRM, MTSS, RDA
through IBS
Flow of Data : Data at entered status flows to EDH (Enterprise Dataware House) where only
software is functioning. Remittance Transactions at entered status is scanned and Alerts are
being generated.
Display of Pop-up / AML Alert
If remitter or beneficiary details are matches with the details available in watch list uploaded in
online integration system System will generate and send response during verification of
IRM/ORM/MTSS/INREMIT.
UNDERSTANDING POP-UPs
Branches to verify this and if satisfied can overrule by using menu option AMLEXCP.

STANDUP INDIA SCHEME
1) Entrepreneurship promotion among SC/ST and women entrepreneurs
2) Two projects per bank branch minimum out of it one for SC/ST and other for women
3) Refinance available through SIDBI
4) Bank loan repayable upto 7 years and finance amount between Rs.10 lakh to Rs.100 lakh
In the non farm sector
5) The loan would be secured and backed by credit guarantee which is operated by National Credit
Guarantee Trustee company Ltd. (NCGTC)
6) Margin money for composite loan will be 25%
STARTUP INDIA SCHEME

1) To be categories start up India entity it should be a company, partnership or LLP, in existence at
least for 5 years. Turnover should not be above Rs.25 crores. The entity should be formed by
spilitting or reconstructions of existing entities .
2) Income tax exemption for 3 years
3) Self certification to reduce regulatory liabilities for pollution, PF, labour contracts etc.
4) Loans from 10 lacs to 1 crore
5) National Credit Guarantee Trustee company Ltd. (NCGTC) will support to flow funds to startup

ANALYSIS OF FINANCIAL STATEMENT
Financial Statements refer to the two statements, which are prepared by a business concern at
periodical intervals, say at the end of the year.
1) Income Statement or Trading and Profit & Loss Account, which is prepared to know the profit /
loss earned during a specified period.
2) Positional Statement or Balance Sheet, which is prepared on a particular date to know the
financial position.
Types of Financial Analysis :

1. External Analysis: Parties who are not connected with or don't have access to the business
concern, e.g. Investors, Credit agencies, etc. make this kind of analysis.
2. Internal Analysis: Persons who have access to the books of accounts, make an internal
Analysis for various internal purposes
Methods used in Analysis & Interpretation of Financial Statements :
1. Comparative Financial Statements of two or more years: They are prepared to show (a) Absolute
data of two or more years, (b) Increase and decrease in absolute data and (c) Increase and decrease
in absolute data in terms of percentages.
2. Funds flow and cash flow statements.
3. Statement of 'Changes in net working capital'.
4. Accounting ratios'
5. Common-measurement statements.
Analysis and interpretation of Balance Sheets
Balance sheets are studied by different people with different purposes. A banker studies balance
sheets to find out whether
(a) the unit is financially sound and stable, i.e. solvent,

(b) its liquidity is satisfactory,
(c) its profitability or earning capacity is up to the standard, and
(d) it is well managed
Assets are the uses/application whereas liabilities are the sources/mobilization of funds. Assets may
be either fixed or current in nature. Liabilities, on the other hand, are raised to acquire various assets
for the business and can come from any of the following :

i) Proprietor/owner/shareholder capital;
ii) Debt/loan & advances from banks or else; and
iii) The Sundry creditors (outsiders) who supply goods and services to the business enterprise
but defer payments due to them.
Liabilities, besides Proprietor/owner/shareholder capital, too may either be term/ fixed liabilities or
current liabilities.
Classification of Assets and Liabilities
ASSETS
Current Assets :
1) Cash and Bank balances;
2) Investments (excluding investments in shares and advances to other firms/companies, not
connected with the business of the borrowing firm):
a) Government and other trustee securities (other than for the long purposes e.g. sinking
fund, gratuity fund etc.);
b) Fixed deposits with banks;
3) Receivables arising out of sales other than deferred receivables (including bills purchased and
discounted by bankers);
4) Instalments of deferred receivables due within 1 year;
5) Raw materials and components used in the process of manufacture including those in transit
(excluding 'dead inventory' i.e. slow moving or obsolete items);
6) Stocks-in-process including goods in transit;
7) Finished goods including goods in transit;
8) Other consumable spares (excluding 'dead inventory' i.e. slow moving or obsolete items);
9) Advance payment of tax (provision for taxes and advance payment of tax should be netted out);
10) Pre-paid expenses;
11) Advances for purchase of raw materials, components and consumable stores (amount related
to inter-connected company transactions should be treated current only after examining the
nature of transactions and merits of the case, e.g. advance paid for supplies for a period more
than the normal trade practice in spite of any other considerations such as regular and assured
supply should not be considered);
12) Deposits kept with public bodies, etc. for the normal business operations e.g. earnest deposits
kept by construction companies etc. maturing within the normal operation cycle.
13) Monies receivable from contracted sale of fixed assets during the next 12 months.
Other non-current assets :
1) Investments, book debts, advance deposits which are not current

i) a) Investments in subsidiary companies/affiliates
b) Others
ii) Advances to suppliers of capital goods/spares and contractors for expenditure
iii) Deferred receivables (other than those maturing within 1 year)
2) Non-consumable stores and spares
3) Other miscellaneous assets including dues from directors

4) Intangible assets e.g. Patents, Goodwill, Preliminary expenses, Bad & Doubtful not provided for
etc.
Fixed Assets :
1) Gross Block (Land & Buildings, Machinery, Construction in progress, etc.)

2) Depreciation to date
3) Net block i.e. 1)-2)
LIABILITIES
Current Liabilities : They include estimated accrued amounts, which are anticipated to cover
expenditure within the year for unknown obligations, viz. the amount of which can be determined only
approximately, e.g. provision for accrued bonus payments, taxes, etc.
1) Short-term borrowings (including bills purchased and discounting and excess borrowing placed
on repayment basis) from
a) Applicant Banks
b) Other Banks;
2) Unsecured loans/short-term borrowings from others;
3) Public deposits maturing within 1 year;
4) Sundry creditors (trade) for raw materials and consumable stores and spares;
5) Interest and other charges accrued but not due for payment;
6) Advances/progress payments from customers;
7) Investments of term loan, deferred payment credits, debentures, redeemable preference
shares and long term deposits payable within 1 year;
8) Statutory liabilities:
a) Provision for taxation (Estimated amounts would be taken in cases where specific
provisions have not been made for those liabilities which will be paid eventually out of
the general reserve.)
b) Provident fund dues
c) Sales Tax, excise duty, etc.
d) Obligations towards workers considered as statutory
e) Others (to be specified);
9) Miscellaneous Current liabilities
a) Dividend payable (Estimated amounts would be taken in cases where specific provisions
have not been made for those liabilities which will be paid eventually out of the general
reserve.)
b) Liabilities for expenses
c) Gratuity payable within 1 year
d) Other provisions
e) Any other payments due within 12 months.
Fixed/Term liabilities :
1) Debentures (not maturing within 1 year)

2) Redeemable Preference Shares (not maturing within 1 year, but of maturity not exceeding 12
years)

3) Term loans (excluding instalments payable within 1 year)
4) Deferred payment credits (excluding instalments payable within 1 year)
5) Term deposits (repayable after 1 year)
6) Other term liabilities
Contingent liabilities : They are liabilities that do not exist at the time of the balance sheet but which
may arise in future, e.g. Arrears of cumulative dividends, Gratuity scheme of staff, Liability as a surety,
etc. They are shown as footnote to the balance sheet.
Net Worth :
1) Equity share capital

2) Preference share capital (maturing after 12 years)
3) General reserve
4) Development rebate reserve
5) Other reserves (excluding provisional)
6) Surplus/deficits in Profit & Loss account
Tangible Net worth : Net Worth - Intangible assets
Limitations of Balance Sheet :
1. B/S is prepared on a particular date and, thus, gives only a snap shot of the company's financial
status as on the date. It may, of course, be window-dressed to achieve pre-meditated motives
of the promoters. However, its study along with the related Auditor's report, annexure, etc. can
lead us to a number of inferences as well as to the underlying problems.
2. It gives a 'fair' view as being based on accounting facts, conventions and personal opinions of
the accountant / manager / auditor.
3. Often, it may be 'misleading' in absolute terms but can be useful in 'relative' terms. A watchful
and through analysis must cross check all inferences with other facts and figures available
thereon relating to the qualitative aspects in particular.
4. An audited B/S would be more reliable but that too has its own limitations.
5. It does not depict the exact position and are essentially interim in nature. The exact position can
only be known if the business is closed.
6. Finally, it discloses only monetary facts, e.g. Conflict between the production head and
marketing chief may be very important but not reflected in the B/S.
ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT
Financial statements give quantitative data which by themselves may not present full picture of the
business concern. So a banker must go beyond them and examine the strengths and weaknesses of
the enterprise and the business it is in. The key areas where the banker should explore include :
1) Quality of Management
2) Managerial efficiency and competence
3) Technology and maintenance back up
4) Marketing prospects and options
5) Growth prospects and government policies
6) Competition and ways to cope up with demands and changes in future
PROFIT AND LOSS ACCOUNT

1. It summarises the transactions which together result in a profit/loss for a specific period of
time. It is shown on the Balance Sheet as an increase/decrease in owners' equity.
2. It reveals the results of business operations and reasons for profit/loss.
3. It records expenses & revenues and affects changes in owners' equity.
4. This may be prepared in either 'T' form, i.e. listing revenue on the right and expenses on the left
side of the account, or in 'Vertical' form beginning with Sales and ending at Net Profit.
P & L Account Analysis
Analysis of P & L account is very simple. The items of income and expenditure are merely rearranged
in a way to depict profits made by the business at different levels of operation, e.g. gross profit,
operating profit, profit before interest & taxes and profit after taxes.
Reserve Bank of India has prescribed a proforma P&L a/c where the banks are required to find out the
operating profit besides the gross profit and the net profit. The 'gross profit' shows the differences
between 'net sales' (gross sales minus sale return) and 'Cost of Sales'/'Cost of Goods Sold'. The cost
of sales includes all costs of production (or purchase), (viz., R.M. consumed, power & fuel, direct labour,
consumable stores, repairs & maintenance, other manufacturing expenses & depreciation) plus the
difference in the opening and closing stocks-in-progress and finished goods (or stocks in trade):
1) Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses - Closing Stock;
2) Sales - Cost of Goods Sold = Gross Profit; and
3) Gross Profit + Other Incomes - Indirect Expenses = Net Profit.
i) Gross profit takes into account a large number of direct costs & expenses.
ii) operating profit Deducting from the gross profit, the indirect expenses like interest, selling,
general & administration expenses arrives at operating profit. Thus operating profit shows the
profits earned from the main business operations.
iii) profit before taxation - Other incomes and expenses are added to or deducted from it to find
out profit before taxation.
iv) net profit - After making provisions for taxation, the net profit is arrived at.
TREATMENT OF VARIOUS ITEMS OF CURRENT ASSETS AND CURRENT LIABILITIES DURING ASSESMENT
OF WORKING CAPITAL
Term loan instalment : Term Loan instalment for next 12 months should not be treated as current
liability, except where overdue and not rescheduled while computing MPBF and the same may not be
taken into account while computing NWC.
While computing Current Ratio T/L installment payable within 12 months, except where overdue
and have not been rescheduled, should be taken as current liability.
Import Duty : Duty benefit arising out of unutilised advance license should not be treated as current
assets.
Bills Negotiated under Usance Letter of Credit as receivables : Receivables by inland sales by way of
usance LC may be shown separately under current assets for arriving at MPBF.

The stipulated NWC may be reckoned after excluding amount of such bills. Prescribed minimum current
ratio 1.33:1 may be ensured after deducting above items from the current assets, and also the short-
term bank borrowing from current liability.
Export Receivables :
1. For MPBF Calculations Export Receivables may be excluded from Current Assets and in respect
of such receivables the borrowers need not bring 25% by way of NWC.
2. Where an Exporter desires that the Export Receivables may be included in total currents for
arriving at MPBF, but the minimum stipulated NWC (i.e25% of total current assets under second
method of lending) may be reckoned after excluding the quantum of Export Receivables from
total current assets for fixing up the post shipment limits
Under such situation sanctioning authority may permit to accept lower current ratio keeping in view the
margin requirement in respect of limits set up for domestic sales as against normal current ratio of
1.33:1 where Export Receivables are being financed without any margins.
Bank may adopt prescribed procedure laid down either as 1 or 2 above so long as there is consistency in
the approach in the case of the same borrower.
Treatment of Margin Money on account of Letters Of Credit/Bank Guarantees
Margin Money on account of Letter Of Credit/Bank Guarantee should be excluded from current assets
while assessing working capital needs of the borrower.
Treatment of Investment made in Associate/Allied companies/Subsidiaries Etc.
Investment made in shares, debentures etc. of current nature, units of U.T.I and other mutual funds and
in associate cos. /subsidiaries as well as investment made and/or loan extended as inter corporate
deposit are to be excluded from the level of current assets at the time of computing maximum
permissible bank finance. It is to insure that above investments do not disturb the current ratio.
Sanctioning Authority may permit adjustments, of such items for arriving at NWC provided the co.
is financially sound and the current ratio does not slip below 1.33:1 level after such investments
Treatment of Redeemable Preference Shares : Preference Share redeemable within one year be
treated as current liabilities. However preference share redeemable after one year be treated as term
liabilities.
Treatment of Sundry Creditors for arriving at Drawing Power against stocks:
The sundry Creditors may be netted from the value of the stocks for allowing drawing power after
providing stipulated margin. The system is to be followed as under:
i) Borrower should provide statement of stocks, sundry creditors for purchased stock and sundry
debtors.
ii) The actual amount of sundry creditors may be netted against the sundry debtors and the excess
amount of the sundry creditors may be deducted from the value of stocks
iii) To arrive at the value of security and the drawing power may be calculated after deducting the
stipulated margin. Sundry debtors older than 6 months should not be considered for netting.

iv) The netted sundry debtors shall be got hypothecated to the bank by obtaining supplementary
agreement if such book debts are not already charged to the bank.
v) The excess amount of sundry debtors left after netting may be considered for financing under
post sales limits like; DD, BD, ABC, CC, BOOKDEBTS etc. as per terms of sanction.
vi) While netting sundry debtors and sundry creditors, it should be ensured that there is no double
financing from the financial system.
RATIO ANALYSIS
Ratio Analysis has proved to be a powerful tool of financial analysis across the business world. An
investor uses it to find out
1) What is he going to earn from the investment?' i.e. interested in the profitability of the firm.
2) 'Whether the firm will be able to repay?' It has the concern of liquidity position of the
organization.
A banker is interested in such analysis for making a final credit decision, through following four kinds
of Accounting Ratios :
1. Liquidity Ratios
2. Solvency/Leverage/Capital Ratios
3. Profitability Ratios
4. Activity Ratios
Limitation of Ratio Analysis :
1. Useful only when intra and inter-firm comparison is made. But if, there is inconsistency in
accounting from year to year and firm to firm (like method of depreciation accounting,
valuation of inventory etc.), the study will be vitiated.
2. These are based on financial statements and hence suffer from the limitations, which the
financial statements are subject to. The major drawbacks are of the financial statements that
(a) they do not take into account the human resources into account,
(b) they are past performance and future performance may be altogether different,
(c) they are subject to being manipulated, and
(d) they do not take into account, inflation.
3. No ideal can be standardized.
Thus, discreetly calculated and wisely interpreted, ratio analysis may prove an useful tool of financial
analysis, otherwise misleading and dangerous.

CALCULATION OF VARIOUS RATIOS
A) LIQUIDITY RATIO
1)Current Ratio = Tool to measure short term solvency. If the ratio is
Current Assets / Current Liabilities more than 1:1, it indicates that Current assets
are sufficient to cover the current liabilities, ideally
it should be 2:1 (1.33:1 is required under 2nd
method of lending).
2)Quick Ratio or Acid Test Ratio Tools to measure the capacity of the firm to pay
Quick Assets* / Current Liabilities off liabilities immediately. Ideal is 1:1 which is
rare. It indicates that the Current assets can be
Quick Assets = CA – (Inventory+ Prepaid exp) paid off without difficulty. If two firms have same
ratio but different quick ratio, the concern with
low quick ratio is overstocking.
B) SOLVENCY RATIO
1) Debt Equity Ratio = The Ratio shows dependence or otherwise on
Long Term Debt & / Equity && outside long term fund. An ideal ratio is 2:1.
In highly capital intensive units the ratio could
&- Include all debt/liabilities repayable after one be considered at higher level.
Year
&& - includes shares capital, free reserves,
premium on shares, development rebate
reserves after adjusting loss balance
2. Tangible Net Worth/ Outside Liabilities ratio This ratio depicts the capital structure. If the ratio
shows rising trend, the borrower is relying more
Tangible Net Worth*/ Total Outside liabilities** on his own funds and less on outside funds.
* Paid up capital + Res. & Sur. - Intangible Assets

** Total Liabilities - Net worth
3. Debt service Coverage Ratio = It measures the ability of a concern to pay interest
on loan and repay instalments of loan and
Net Profit after tax + Depreciation + Annual indicates the margin of safety. It varies from
Interest on Term Loan /Annual Intt. of Term Loan industry to industry. The ideal ratio is 3:1.
+ Annual Instalment on Term Loan
C) PROFITABILITY RATIO
1. Return on Investment (ROI) = IT is useful for inter-firm comparison but it has
Operating Profit / Capital employed X 100%
OR many limitations.
Return on Capital employed =
Profit before Intt & Tax / Capital employed
X 100%
OR
Gross Profit /Capital employed X 100%
OR
Return on equity =
Net profit / Book value of shares

2. Return on Total Assets This ratio measures managerial efficiency. Higher
the better.
Profit before Interest & Taxes (PBIT) /
Total Assets -- Fictitious Assets*
* Fictitious assets e.g. Preliminary Exp.,

P&L a/c (debit balance)
3. i) Gross Profit ratio = It signifies cost efficiency of the unit. Higher ratio is
Gross profit/ sales x 100 the better.
ii) Net profit ratio =
PBIT (Profit before interest and tax)/sales x100
iii)Operating profit ratio
Operating profit / sales X 100
4. Operating Ratio
Operating Expenses # / sales
#Excluding financial expenses e.g. interest

D) ACTIVITY RATIO
1. Turnover Ratio @= sales /capital employed* *Capital employed =Share capital+Reserve &
Sur plus--(Non-business assets+Fictitious
@The turnover indicates efficiency with which
assets).
capital is rotated in business.
Total Assets turnover ratio 1 = 1-Efficiency in the use of total assets

Net sales/ Total assets
Tangible fixed asset turnover ratio# = # This shows the efficient use of fixed assets.
Net sales/Net Fixed asset-Intangible assets

2. Receivable turnover ratio *= *Indicates how the trade credit is revolved in a
Net sales / Average receivables financial year.
Debtors turnover ratio$= $ It reflects debtors velocity

Credit sales / Average Debotrs
Creditors turnover ratio#= #It reflects repayment velocity of creditors.

Credit purchases / Average credotprs
3. Working Capital turnover Ratio @= @It reflects the efficiency of the use of working
Sales / working capital capital in the business.
E) STOCK EXCHANGE RATIOs
1. Earning per share = It shows earning per share
Profit after tax / No. of shares
2. Earning yield rate = It reflects the financial status of the share.
Earning per share /Market price of share
3. Dividend yield rate= It shows yield to share holder vis-à-vis share's
Dividend per share / Market price of share worth in the market.
4. Earning cover ratio It shows dividend coverage of company's
Profit after tax / Total dividend paid
total earnings.

BALANCE SHEET ANALYSIS - EXERCISE
Balance sheet of M/S ABC & Co., a partnership concern for the last 3 years is given hereunder:
BALANCE SHEET (Amt in ‘000)
Liabilities 31.03.10 31.03.11 31.03.12 Assets 31.03.10 31.03.11 31.03.12
Capital 715 955 973 Fixed assets 1147 1037 847
CC Limit 2023 1798 1874 Security Dep. 200 129 275
Friend’s Dep. 537 964 1044 Closing stock 1873 2518 2570
Term Loan 600 500 400 Cash in hand 28 6 68
Adv from cust. 0 117 113 FDR in Bank 3 3 3
Creditors 1059 2006 4473 Advance tax 35 35 60
Audit fee payable 5 10 13 Adv. For furnit. 150 40 500
CST payable 1 3 14 Sundry debtors 1524 2603 4685
Labour &wages 32 43 94 TDS 7 5 6
Salary 15 15 14 Indira Vik patra 40 45 51
UP Trade Tax 20 10 53
Total 5007 6421 9065 Total 5007 6421 9065
PROFIT AND LOSS ACCOUNT
Particulars 31.03.10 31.03.11 31.03.12 Particulars 31.03.10 31.03.11 31.03.12
Opening stock 1006 1873 2518 Sales 7950 10682 17739
Purchases 7098 8727 14121 Closing stock 1873 2518 2570
Packing material 73 230 562
Labour &wages 615 989 1205
Freight charges 49 7 9
Gross profit 982 1374 1894
Total 9823 13200 20309 Total 9823 13200 20309
Salaries/all. 233 266 343 Gross profit 985 1373 1894
Printing & Sta. 16 9 30 Other income 122 141 156
Travelling Exp. 37 41 152
Bank Intt & Char. 86 172 213
Telephone Exp. 41 71 85
Interest on Cap. 110 129 172
Depreciation 27 236 190
Partners’ sal. 160 160 192
Other exp. 328 337 482
Net profit 69 93 191
Total 1107 1514 2050 Total 1107 1514 2050
Note: TL of Rs.6 lacs is repayable in 60 EMI of Rs. 10000/- each w.e.f. Dec. 2009, IVP will due in 2015
Bank Interest includes term loan interest of Rs.40000/-, 71000/- & 58500/- in the year 2010,2011
2012 respectively. Borrower has also assured that deposits from friends will not be withdrawn till
currency of t he bank loan.
PRESENT POSITION AND REQUIREMENT OF THE CUSTOMER
1) Party is availing cash credit limit of Rs.20 lacs from our Bank.
2) Party has now requested for enhancement of limit from Rs. 20 lacs to Rs.40 lacs
3) Party has projected sales of Rs. 200 lacs in 2013-14

You are requested to calculate following by re-arranging the balance sheet
1) Net working capital

2) Current Ratio
3) Operating profit
4) Cash profit
5) Debt equity ratio
6) Profit to sales ratio
7) Debt Service coverage Ratio
8) Stock turnover Ratio
9) Permissible Bank finance
10) Give your observations on the financial position and your final decision on the proposal.

SOLUTION
Liabilities 31.03.10 31.03.11 31.03.12 Assets 31.03.10 31.03.11 31.03.12

Net worth Fixed Assets
Capital 715 955 973 Fixed assets 1147 1037 847
Adv. For Furn. 150 40 500
715 955 973 1297 1077 1347
Long Term funds Non current
Assets
Friends Dep. 537 964 1044 Security Dep. 200 129 275
Term Loan 560 440 320 Indira V. Patra 40 45 51
1097 1404 1364 240 174 326
Current Current Assets
Liabilities
Overdue T/L 40 60 80 Closing Stock 1873 2518 2570
CC Limit 2023 1798 1874 Cash in hand 28 6 68
Adv. From Cust. 0 117 113 FDR in Bank 3 3 3
Creditors 1059 2006 4473 Advance tax 35 35 60
Audit fee pay. 5 10 13 Sundry debtors 1524 2603 4685
CST Payable 1 3 14 TDS 7 5 6
Labour &wages 32 43 94
Salary 15 15 14
UP Trade tax 20 10 53
3195 4062 6728 3470 5170 7392
GRAND TOTAL 5007 6421 9065 5007 6421 9065
1.NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES

31.03.2010 31.03.2011 31.03.2012
Current Asset 3470 5170 7392
Current Liabilities 3195 4062 6728
Net working capital 275 1108 664
2.CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES

31.03.2010 31.03.2011 31.03.2012
Current Asset 3470 5170 7392
Current Liabilities 3195 4062 6728
Net working capital 1.09 1.27 1.10
3.OPERATING PROFIT = PROFIT FROM OPERATIONS = NET PROFIT – OTHER INCOME

31.03.2010 31.03.2011 31.03.2012
Add salary to partner 160 160 192
Add intt on capital 110 129 172
Total profit 339 382 555
Less other income 122 141 156
Operating profit 217 241 399
4.CASH PROFIT = NET PROFIT (BEFORE SALARY & INTEREST ON PARTNERS’ CAPITAL+DEPREC.

31.03.2010 31.03.2011 31.03.2012
Add salary to partner 160 160 192
Add intt on capital 110 129 172
Add depreciation 27 236 190
Operating profit 366 618 745
5. PROFIT TO SALE RATIO

31.03.2010 31.03.2011 31.03.2012
Total Sales 7950 10682 17739
Profit to sale ratio 4.26 3.58 3.13
6.DEBT EQUITY RATIO = LONG TERM DEBT/ EQUITY (EQUITY =CAPITAL +RESERVES)
31.03.2010 31.03.2011 31.03.2012
Long Term Debt 1096 1404 1365
Equity (Capital) 715 956 973
Debt equity Ratio 1.53 1.47 1.40
7.STOCK TURNOVER RATIO = AVERAGE STOCKS / TOTAL SALES

(AVERAGE STOCKS = OPENING STOCKS + CLOSING STOCKS /2)
31.03.2010 31.03.2011 31.03.2012
Opening stock 1006 1873 2518
Closing stock 1873 2518 2570
Average stocks 1439 2195 2544
Sales 7950 10682 17739
Stock turnover ratio 0.18 0.21 0.14
Days (Ratio to 66 days 77 days 52 days
multiply with 365 i.e.
days in a year
7.DEBT SERVICE COVERAGE RATIO (DSCR) = PROFIT + DEPRECIATION + INTEREST ON LONG TERM DEBT
/ INSTALLMENTS OF LONG TERM DEBT +INTEREST ON LONG TERM DEBT
31.03.2010 31.03.2011 31.03.2012
Add-Salary to partner 160 160 192
Add Intt on capital 110 129 172
Add Depreciation 27 236 190
Add Intt on LTD 40 71 58
Total - A 406 689 803
TL Instalments 40 120 120
Add Intt on LTd 40 71 58
Total - B 80 191 178
DSCR (A/B) 5.08 3.61 4.51

8. PERMISSIBLE BANK FINANCE (AS PER NAYAK COMMITTEE NORMS)
Projected / Accepted sales for the next year 200 lacs A
25% of projected / Accepted sales 50 lacs B
5% minimum stipulated margin 10 lacs C
Actual available net working capital 6.64 lac D
PBF (B-C) or 40 lac
(B-D) 43.36 lac
Whichever is less 40 lac
However party has to bring fresh capital to make good the deficit of around 3.36 lac
( 10 lac - 6.64lac)
OBSERVATION / COMMENTS
1. Party has withdrawn capital during the year

2. Net working capital has gone down due to withdrawal of capital and investment in fixed assets.
3. Current Ratio has deteriorated and not up to the mark (has given advance for fixed assets)
4. Sales has increased considerably.
5. Profit has also increased but in %age terms in relation to sales it has gone down
6. Debt equity ratio and DSCR have also improved slightly.
7. Stock turnover ratio has also improved.

S.No. ONE LINE QUESTION – ANSWERS
1 As per Budget 2016-17 what are the challenges – (1) Risks of further global slowdown and
turbulence. (2) Additional fiscal burden due to 7th Central Pay Commission recommendations and
OROP.
2 Agriculture and Farmer welfare fund allocation in budget 2016-17 – 35984 crores.
3 Interest subvention provision to farmers in loan repayment – Rs.15000Crores
4 What is the target for 100% village electrification – By 1st May 2018
5 “Stand Up India Scheme” to facilitate at least two projects per - BANK BRANCH
6 Pradhan Mantri Gram Sarak Yozna Budget allocated during 2016-17 - Rs.97000
crores
7 Target for Pradhan Mandri Mudra YOzna for FY 2016-17 increased to Rs.180000
crores
8 General Insurance Companies owned by Government of India will be listed in – Stock
Exchange
9 To provide relief to those who live in rented the limit of deduction of rent paid under section
80GG from has been increased – From Rs.24000 per annum to Rs. 60000
10 Deduction for additional interest of Rs.50,000 per annum for loans up to Rs.35 lakh
sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs. 50 lakh.
11 Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016
12 Domestic taxpayers can declare undisclosed income or such income represented in the form of
any asset by paying tax at 30%, and surcharge at 7.5% (Will Called Krishi Kalyan
Surcharge) and penalty at 7.5%, which is a total of 45% of the undisclosed income.
13 Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs. 15
lakhs to Rs.50 lakhs.
14 Corpus allocated in FY 2016-17 for Pradhan Mandir Fasal Bima Yozna - Rs.5500 Crore.
15 Corpus allocated in FY 2016-17 for MGNREGS- Rs.38500 Crore.
16 Total Outlay for Infrastructure allocated in budget 2016-17 = Rs.221246 crores
17 Price Stabilisation Fund allocated in FY 2016-17 to help maintain stable prices of Pulses = Rs.
900 crore
18 As and when Plan and Non Plan will be done away - From FY 2017-18
19 Surcharge raised from 12% to 15% on persons, other than companies, firms and cooperative
societies having income above Rs.1 crore.
20 For non-residents providing alternative documents to PAN card TDS not to apply - higher
21 Commodity money means - Commodity money is the value which is derived from the
commodity out of which it is made. The commodity itself represents money, and the money is
the commodity
22 Representative Money - is money that includes token coins, or any other physical tokens like
certificates, that can be reliably exchanged for a fixed amount/quantity of a commodity like gold
or silver.
23 Fiat Money - Fiat money, also known as fiat currency is the money whose value is based On
government order
24 Commercial Bank Money - Commercial bank money or the demand deposits are claims
against financial institutions which may be utilized for purchasing goods and services
25 What do you mean by M1 related to money - Currency with the public + Demand deposits
with the banking system + 'Other' deposits with the RBI
26 What do you mean by M2 related to money – M1 + Savings deposits
27 What do you mean by M3 related to money – M2+ Time deposits with the banking system
= Net bank credit to the Government + Bank credit to the Commercial sector + Net foreign
assets of the banking sector + Goveinment’s currency liabilities to the public - Net non-monetary
liabilities of the banking sector

28 What do you mean by M4 related to money - M3 +All deposits with post office savings
banks (excluding National Savings Certificates)
29 Expand BRBNMPL - Bhartiya Reserve Bank Note Mudran Private Limited
30 Soiled Note - a banknote which, has become dirty due to usage and also includes a two piece
note pasted together wherein both the pieces belong to the same note.
31 Mutilated banknote is a banknote, of which a portion is missing or which is composed of more
than two pieces
32 Imperfect banknote - means any banknote, which is wholly or partially, obliterated, shrunk,
washed, altered or indecipherable but does not include a mutilated banknote.
33 What is the minimum paid up capital required for Payment Banks - 100 Crores
34 Clean Note Policy - a) Not to staple the banknotes, b) Not to write / put rubber stamp or any
other mark on the banknotes, c) Store the banknotes safely to prevent any damage
35 Re 1 note has been released in the country - After a gap of over 20 years and bears the
signature of Finance Secretary Rajiv Mehrishi
36 Call Money - The market to get funds for 1 day only
37 Notice Money - The market to get funds for 2 days to 14 days
38 Term Money - The market to get funds for 15 days to 1 year
39 Commercial Papers-
1) A CP is a short term security (7 days to 365 days) issued by a corporate entity (other than a
bank), at a discount to the face value. 2) Commercial Paper (CP) is an unsecured money market
instrument issued in the form of a promissory note. 3) CPs normally give a higher return than
fixed deposits & CDs. 4) CP can be issued in denominations of Rs. 5 lakh or multiples thereof.
Amount invested by a single investor should not be less than Rs. 5 lakh (face value). 5) Only
corporates who get an investment grade rating can issue CPs, as per RBI rules 6) Bank and FI’s
are prohibited from issuance and underwriting of CP’s.
40 Certificates of Deposit
1) CDs are negotiable money market instrument issued in demat form or as a Usance Promissory
Notes. 2) CDs issued by banks should not have the maturity less than seven days and not more
than one year. 3) Financial Institutions are allowed to issue CDs for a period between 1 year and
up to 3 years. 4) CDs are like bank term deposits but unlike traditional time deposits these are
freely negotiable and are often referred to as Negotiable Certificates of Deposit. 5) CDs normally
give a higher return than Bank term deposit. 6) All scheduled banks (except RRBs and Co-
operative banks) are eligible to issue CDs. 7) CDs are issued in denominations of Rs. 1 Lac and in
the multiples of Rs. 1 Lac thereafter. 8) Discount/Coupon rate of CD is determined by the issuing
bank/FI. 9) Loans cannot be granted against CDs and Banks/FIs cannot buy back their own CDs
before maturity
41 Treasury bills
1) Treasury Bills are short term (up to one year) borrowing instruments of the Government of
India which enable investors to park their short term surplus funds while reducing their market
risk. 2) They are auctioned by Reserve Bank of India at regular intervals and issued at a discount
to face value. 3) Any person in India including Individuals, Firms, Companies, Corporate bodies,
Trusts and Institutions can purchase Treasury Bills. 4) Treasury Bills are eligible securities for SLR
purposes. 5) Treasury Bills are available for a minimum amount of Rs. 25,000 and in multiples of
Rs. 25,000 thereafter. 6) At present, RBI issues T-Bills for three different maturities: 91 days,
182 days and 364 days.
42 Cash Management Bills (CMBs)
1) Government of India, in consultation with the Reserve Bank of India, has decided to issue a
new short-term instrument, known as Cash Management Bills (CMBs), to meet the temporary
mismatches in the cash flow of the Government. 2) The CMBs have the generic character of T-
bills but are issued for maturities less than 91 days. 3) Like T-bills, they are also issued at a
discount and redeemed at face value at maturity. 4) The tenure, notified amount and date of
issue of the CMBs depends upon the temporary cash requirement of the Government

42 Deposit Insurance and Credit Guarantee Corporation is a 100% subsidiary of - Reserve
Bank of India
44 DICGC protects does not protect the bank deposits of - (i) Deposits of foreign
Governments; (ii) Deposits of Central/State Governments; (iii)Inter-bank deposits;(iv) Deposits of
the State Land Development Banks with the State co-operative bank;(v) Any amount due on
account of any deposit received outside India(vi) Any amount, which has been specifically
exempted by the corporation with the previous approval of Reserve Bank of India.
45 Maximum deposit amount insured by the DICGC - Each deposit of Rs.1,00,000/- for both
principal and interest amount held in the same capacity.
46 Are deposits in different banks separately insured - if deposits held with more than one
bank, deposit insurance coverage limit is applied separately to the deposits in each bank.
47 Can any insured bank withdraw from the DICGC coverage- No. The deposit insurance
scheme is compulsory and no bank can withdraw from it.
48 Time line for full implementation of Basel III capital regulations - By March 31, 2019.
49 Current Assets: - that may be converted into cash, sold or consumed within a
year or less. Current Assets include cash, marketable securities, Account and notes receivables,
inventories etc.
50 Fixed Assets: Fixed assets are those tangible physical facilities owned by an enterprise, which
are permanent/durable in nature. Fixed assets are not turned over, meaning they are not
converted into cash. For example: Land and building, machinery, tools, equipments etc
51 Intangible Assets: These assets do not exist in physical form but are notional possessions
owned by an enterprise. These assets generally don’t have real money value but are important
for a company. For example: patents, goodwill, trade-mark etc.
52 Current liabilities : Those obligations of a company which are payable on demand or within a
period of less than 1 year from the date of the balance sheet
53 Term Liabilities: A term liability is a debt which matures after a period of 12 months from the
date of the balance sheet
54 Net Worth: The net worth of a company is the owner’s stake in the business. It is a liability of a
company towards its promoters
55 Specific Reserves and Provisions: Specific Reserves and Provisions are created for the
payment of taxes, dividends and other contingencies
56 Arbitrage means: Buying a financial instrument in one market in order to sell the same
instrument at a higher price in another market.
57 With regard to Indian currency what do you mean by Latest Image - On notes of
denominations of Rs.20 and upwards, a vertical band on the right side of the Mahatma Gandhi’s
portrait contains a latent image showing the respective denominational value numerally (visible
only when the note is held horizontally at eye level).
58 With regard to Indian currency what do you mean by Micro lettering : Numeral
denominational value is visible under magnifying glass between security thread and latent image.
59 What is the 12th Five year Plan Period – 2012-2017
60 What do you mean by OROP - One rank one pension
61 What is One rank One pension – It means that retired soldiers of the same rank and length
of service will receive the same pension, regardless of when they retire.
62 Period of present Foreign Trade Policy - 2015-2020
63 One Star Export house means (Export House) – Export performance FOB/FOR – converted
value of any currency in USD 3 Million during 3 years but minimum 2 years
64 Two Star Export house means (Star Export House) - Export performance FOB/FOR –
converted value of any currency in USD 25 Million during 3 years but minimum 2 years
65 Three Star Export House mean (Trading House)- Export performance FOB/FOR –
66 Four Star Export House means( Start Trading House - Export performance FOB/FOR –

67 Five Start Export House means (Premier Trading House ) - Export performance FOB/FOR
– converted value of any currency in USD 2000 Million during 3 years but minimum 2 years
68 Nostro account – Called our account with you - Example – Account of State Bank of India with
Citibank New York in USD.
69 Vostro account – Called your account with us – Example - Account of Citibank new York with
PNB in India maintained in Indian Rupees.
70 Loro Account – Called their account with them - Example – When PNB wants to utilize the
NOSTRO account of SBI, for PNB it becomes LORO account.
71 In foreign exchange market direct rate means – When foreign currency is fixed and Indian
currency is variable.
72 Spot Rate means – Contract deliverable on the 2nd succeeding work day i.e. T+2 days
73 TOM Rate means – Contract deliverable immediately therefore T+1 day
74 Forward rate – Contract deliverable on a pre determined day in future
75 Cross Rates means - Cross rate is the currency exchange rate expressed by a currency pair, in
which none of the currencies involved is the official currency of the country in which quotation is
made.
76 Revocable letter of credit means - Revocable credit is one which is expressly stated to be
revocable. IN UCP 600 REVOCABLE CREDIT HAS BEEN REMOVED, NOW REVOCABLE CREDIT
CAN NOT BE ISSUED.
77 Red clause Letter of credit – Available pre-shipment credit for manufacturing the goods to be
shipped
78 Green Clause Letter of credit – It is an extension of Red clause LC and it grants the storage
facilities at the port of shipment over and above the preshipment finance.
79 Confirmed letter of credit – When an irrevocable credit is confirmed by the advising bank at
the request of issuing bank the credit is called a confirmed credit.
80 XOS means - Half yearly statement to be submitted to RBI containing details of all export bills
outstanding beyond six months from the date of export as at the end of June and December
81 BEF means - Half yearly statement to be submitted to RBI containing details of importer , who
have defaulted in submission of appropriate documents evidencing imports into india within 6
months from the date of remittance.
82 EBW - Half yearly statements to be submitted to RBI containing details of export bill written off
as on June and December
83 As per FEDAI Rules ‘KNOWN HOLIDAY’ means - Which is known at least 3 working days
before the date of a holiday
84 As per FEDAI Rules “Sudden declared holiday” - which is not known holiday (Example–
Suppose day 1,2,3,4 are working day and if day 4 is declared holiday on or after day 1 it will
be a sudden declared holiday.
85 EDF forms – Export declaration form, it replaces GR/PP forms and used when exports made
otherwise than by post and custom office is not having EDI facility
86 SDF forms - Earlier this export declaration forms are used where custom office is computerized
but now withdrawn and only Shipping bill will be used.
87 Expand CDF - Currency declaration form
88 Maximum period of realization and repatriation of export proceeds-
9 months except export to warehouse established outside India
89 Maximum period of realization and repatriation of export made to warehouse
established outside India - 15 months
90 What is the ceiling for bringing the foreign exchange in any form into India – Without
limit freely provided declared on CDF
91 CDF is not to be insisted upon - When Foreign exchange brought in the form of Currency
notes or TCs not exceeding USD 10000 or its equivalent and value of foreign currency notes does
not exceed USD 5000.
92 SOFTEX means – Export declaration form used to export of computer software in non-physical

mode.
93 For export promotion ceiling for export made free of cost for which EDF is exempted
– 2% of average annual export realization during the preceeding 3 years max. Rs.5 lacs.
94 In respect of status holder exporters ceiling for export made free of cost for which
EDF is exempted – 2% of average annual export realization during the preceding 3 years
max. Rs.10 lacs whichever is lower.
95 Extension of time allowed by AD-1 bank for realization of export proceeds- Upto a
maximum of six months
96 Foreign students studying in India maximum amount can be withdrawn in a month
pending address verification - Rs.50000/-
97 Foreign students studying in India what is the maximum period allowed to submit
address proof in India - 30 days
98 Student of Bangladesh can open account in India freely without RBI’s approval -
YES
99 Student of Pakistan can open account in India freely with RBI’s approval - No, Prior
approval from RBI is required.
100 Remittance through Exchange houses (RDA) for financing of trade transactions –
Permitted upto Rs.1500000/- per transaction
101 Remittance through Exchange houses (RDA) for donations / contributions to
charitable institutions permitted upto maximum of Rs. - - NIL no such transaction is
permitted
102 Draft drawn by Exchange House has a validity period - 3 months
103 Residents as well as non residents except citizens of Pakistan or Bangladesh while leaving India
through airport can take out Indian notes upto an amount not exceeding – Rs.25000/-
104 Residents as well as non residents except citizens of Pakistan or Bangladesh while leaving India
through airport and going to Pakistan / Bangladesh can take out Indian notes upto an amount
not exceeding – NIL
105 Citizens of Pakistan and Bangladesh exiting the country by Air are allowed to carry Indian Notes
upto boarding point in International airport – Rs.10000/-
106 Write off of fake foreign currency notes. Authorised money changers in the event of FC notes
found fake/forged subsequently may write off up to – USD2000
107 Individual resident in India may borrow a sum from close relative outside India not
exceeding – USD 250000
108 Resident individuals are freely allowed remittances under LRS for permitted capital
or current outside India upto a maximum of - USD 250000 per financial year
109 Partnership firms, corporate, HUF, Trusts are allowed remittances under LRS outside
India – Not permitted
110 How much amount in the form of currency notes and coins are to be released to
travelers proceeding to countries other than Iraq /Libiya /Iran/Russian Federation –
USD 3000
111 Travellers going to Iraq or Libya currency notes and coins are to be released upto
maximum of – USD 5000 per visit or its equivalent
112 Travellers proceeding to Islamic Republic of Iran, Russian Federation and other
Republics of commonwealth of independent states – Can be full exchange
113 Travellers proceeds for Haj / Umrah pilgrimate – Full amount of entitlement in cash or up
to the cash limit specified by Haj committee
114 A resident individual to surrender the received / realized / unspent / unused foreign
exchange to an AD with a period of - 180 days from date of receipt.
115 Unspent foreign currency with the returning traveller in the shape of currency, TCs
and notes can be retained upto maximum of – USE 2000
116 Unspent foreign currency with the returning traveller in the shape of foreign coins
can be retained upto maximum of – No ceiling

117 A person who is on deputation to the office or branch of a foreign company in India
may make remittance to home country- upto Net salary after deduction of taxes, PF and
other deductions
118 A citizen of pakistan, who is on deputation to the office or branch of a foreign
company in India may make remittance to home country- NIL
119 Persons other than individuals to remit outside India towards Gift / donations – upto
1% of their Foreign exchange earning during last 3 FYs or USD 5,000,000 whichever is less.
120 Commission to agents abroad for sale of residential flats or commercial plots in India
without RBI’s approval- 5% of the inward remittance or USD 25000 whichever is more per
transaction
121 In respect of infrastructure projects consultancy free is to be remitted without RBI’s
approval - USD 10,000,000 per project
122 Consultancy service other than infrastructure project fee without RBI’s approval –
USD 1,000,000 per project
123 With regard to Direct Benefit Transfer JAM Stands for – JANDHAN, AADHAR AND MOBILE
124 When Amrut Mahotsav will be celebrated – 75th year of Independence the year 2022
125 Prime lending rates are decided by – Individual banks
126 Which is the regulatory authority for Micro Finance - NABARD
127 MUDRA Bank stands for – MICRO UNITS DEVELOPMENT REFINANCE AGENCY BANK
128 What is the fiscal deficit target for the next 2 years –3.5% in 2016-17, 3% in 2017-18
129 Unique identification of a bank branch participating in Electronic clearing service scheme is to be
through 9 digit code named - MICR
130 TReDS stands for – Trade receivables discounting system – an electronic platform for
facilitating financing of trade receivables of MSMEs
131 While label ATMs are known – Set up, owned and operated by Non bank entities
132 The Electronic Fund Transfer system which operates on Deferred Net settlement basis is called -
NEFT
133 Pradhan Mantri Suraksha Bima YOzna features – Covering all Indians for accidental death
risk of Rs.2 lakh for a premium of Rs.12 per year.
134 Pradhan Mantri Jeevan Jyoti Bima YOzana – Cover both natural and accidental death risk
of Rs.2 lakh at a premiuim of Rs.330/- per year for the age group of 18-50
135 GAAR stands for - General Anti avoidance rules
136 Decision passed by Banking Ombudsman – If the person is not satisfied with the decision, he can
file an appeal against the decision, who is the appellate authority – DEPUTY GOVERNOR OF
THE RBI
137 Commercial paper is a security documents issued by corporate for a period between 7 days to
365 days at – discount to the face value
138 Monetary limit for a case to be heard by a single member bench of ITAT – Rs. 15 lakh
139 .Under section 2(15) of Income tax act what is to be included for charity for FY 15-16- YOGA
140 Marginal farmers are those farmers, who has landholding – upto 1 hectare
141 The note which become dirty on account of usage and includes two piece note pasted together
wherein both pieces belongs to the same note which form the entire note is known as – soiled
note
142 Who appoints banking Ombudsman - Reserve Bank of India
143 When default in making repayment whether the banker will be able to proceed against
guarantor / surety even without exhausting the remedies against the principal debtor – Yes –
as per provision of section 128 of contract act
144 Exporter receives advance payment from a buyer outside india shall be under obligation for
shipment of goods with in – One year from date of receipt of advance payment
145 SWIFT denotes – Society for worldwide interbank financial tele-communication
146 When Negotiable instruments has been transferred its title to other person by writing on the
back of instrument is called – Endorsement

147 Under Sukanya Samriddhi Yozna Irregular accounts be made regular by depositing a penalty of
– Rs.50/- along with amount of deposit made.
148 For filing insolvency proceedings by the bank under Provincial insolvency act in NPA accounts
minimum debt amount - Rs.500/-
149 Whether seeding of Aadhaar number in bank account can be done through SMS – Yes, by SMS
alerts user through their registered number sending SMS at 5607040
150 Monetary compensation to be paid in case of Mitra Card/Students – Rs.25000/-
151 Customer having multiple Debit cards accidental death benefit will be available – only once on
the card carrying highest value
152 In Case of account having either or survivor mandate and both the persons are having debit
cards accidental benefit will be given to - Both
153 For updation of KYC Data, Risk category wise reports can be generated through – DAYRPT
10/63
154 To Generation of reminders for customers to submit KYC updation Data is to be done through –
PTW - K
155 Whether Holder of Add-on Debit card is eligible for accidental death insurance covered – NO
156 To Modify / disable SMS alerts in customer’s account which menu is to be used – ALERTS
157 What is the overall priority sector lending target fixed for domestic banks – 40%
158 To avail benefit under various schemes of DBT – Only one account is to be opened
159 Menu option for opening account under Sukanya samridhi yozna - No CBS menu is to be
used, Account to be opened through GBM module
160 Ways and means advance stands for – Temporary overdraft allowed by RBI to
Government for covering mismatch between receipt and payment
161 Call money refers to – Money lent for one day
162 Notice money refers to – Money lent for a period of 2 to 14 days
163 As per RBI directives, the customers are to be classified into ‐ THREE Money Laundering
Risk levels/categories : High Risk Level‐‐I, Medium Risk Level‐‐ II, Low Risk
Level‐‐III
164 KYC guidelines issued under – Sec. 35A of B R Act
165 Who is the competent authority to decide the quantity of coins to be minted – Government of
India
166 For Address proof, telephone bill/Electricity bill/Bank passbook – Not older than 3
months
167 The customer identification data (including photograph(s) is to be updated after ‐ once
in Ten years in case of Low Risk Customers and once in Eight years in
case of Medium Risk Customers & once in Two years in case of High Risk
Customers.
168 In terms of Section 12 of PMLA Act Rule 3 Banks should maintain records for at least
5 years from the date of cessation of transaction between the bank and the
customer
169 Bank to furnish to FIUIND information relating to Cash transactions of the value of
more than rupees ten lakhs or its equivalent in FC and Suspicious transactions
whether or not made in cash.
170 PAN /GIR no. or furnishing of declaration on form no. 60 is NOT required for opening
of time deposits of ‐ 50000/- or less
171 Form 60 obtained at the time of opening SF/CA is to be retained at the branch along
with AOF for a period of - 6 years
172 Form60 obtained in case of term deposits is to be sent to the concerned Director
of Income tax (Investigation) in two installments 31st Oct & 30th April
electronically
173 Banks are prohibited from holding any IP except as acquired for own use for a period exceeding
seven years under Section______of Banking Regulation Act – Section 9

174 A newly opened account shall remain under close watch at least for - an initial period
of six months
175 Withdrawals in new accounts above 25,000/ - with the concurrence of the
incumbent incharge
176 In terms of the RBI Directives, locker hirers will be classified into‐ two categories only,
i.e. Medium Risk Locker Hirers and High Risk Locker Hirers.
177 MAY I HELP YOU' counters, in the branches - with a staff strength of 10 or above
178 BANKING OMBUDSMAN SCHEME ‐ framed and notified under Sec 35A of Banking
Regulation Act
179 An instrument written in Hindi having date as per Saka Samvat calendar is a ‐ valid
instrument
180 Write to the banking Ombudsman‐ after 1 month and before one year since
lodgment of the complaint
181 Petty Cash Maximum Retention Limit Rs.5000/‐‐ For all Offices/branches
182 Duplicate draft will be issued ‐ within 15 days from date of receipt of request ,If
delay, interest @ FD rate
183 Reply in RTI‐ must come in 30 days. For cases concerning life and liberty, it must
come within 48 hours
184 Cheques drawn in favour of a company -should not be paid in cash (including a
bearer cheque)
185 Cheques dishonored for insufficiency of funds – punishment up to two year
imprisonment, and/or fine up to twice the amount of cheque, or both.
186 Limited Liability Partnership ‐ at least two partners but there is no maximum
number of partners in an LLP
187 Disclosure to Incharge of Police Station ‐ U/s 91(1) of Cr PC. U/S 102 , a police
officer can seize a stolen property (including money lying in a Bank).
188 Disclosure to Income tax authorities - (U/s 131 and 133, of Income Tax act).
189 Submitting return to RBI of accounts not operated for the last 10years -(Disclosure
U/s 26 of BR Act)
190 RBI can collect any information in such a manner as it thinks fit - (U/s 45 B of RBI
act )
191 Minor is defined in - Section 3 of Indian Majority Act, 1875
192 Guardian appointed by the will of the minor's father is called - testamentary
guardian.
193 Minor’s Account Opened and Operated by Guardian on Death of Minor − Balance is
payable as a claim case.
194 Minor’s Account Opened and Operated by Guardian on Death of Guardian - paid to the
minor upon his attaining majority. During his minority it can be paid only to
his guardian appointed by Court.
195 As per Sec. 56 of CPC - a woman cannot be arrested or imprisoned for non-
payment of judgement debt.
196 Unless the trust deed provides - trustee(s) cannot delegate his/their powers.
197 A club can be registered under - (I) The Societies Registration Act, 1860 or (ii)
Companies Act,1956
198 In HUF a/c - The Karta can give a mandate in favor of a major co‐‐parcener to
operate the account.
199 In HUF a/c -Mandate in favor of a third party to operate the account is not
acceptable unless all coparceners execute an indemnity.
200 Cheques signed by an authorized signatory - can be paid even after his death,
insolvency or retirement.
201 A person authorised to operate a joint account - can not give mandate to somebody to

operate the account on his behalf. “an agent has no authority to delegate his
powers”.
202 The liability of partners in partnership is - unlimited.
203 A minor being incompetent to contract - can not become a partner in a partnership
firm.
204 Omnibus Resolution− A resolution (passed by Board) authorizing to open account
in the name of the company with any bank at any place
205 The following communities have been notified as minority communities by the
Government of India, Ministry of Welfare: Sikhs, Muslims, Christians, Zoroastrians,
Buddhists, Jains
206 Housing Loan under Priority Sector ‐ 28 lakh in metro centres with population
above 10 lakh and above and 20 lakh in other centres
207 RuPay is a new card payment scheme ‐ launched by the National Payments
Corporation of India (NPCI)
208 The valuation fee payable to valuer/ shroff who undertake testing and approval of
jewellery/ ornaments or Gold Coins - Rs.3.00 per thousand maximum Rs.300/-
209 No service charges/inspection charges should be levied on priority sector loans -up to
25,000.
210 Implementing Agency of DRI- Banks
211 Swarnajayanti Gram SwarojgarYojana (SGSY) restructured into - National Rural
Livelihood Mission (NRLM)
212 As per income tax act Effective 01.01.2016 While opening Bank account which document is not
required to be submitted by customer – Form 61
213 PNB’s Green initiative means – duplicate Debit Card PIN through SMS “DCPIN<space>
Card number to 5607040 from registered Mobile number
214 PAN Number is required while depositing cash in a bank account exceeding – Rs.50000/-
215 Form 60 submitted by the customer for various banking transactions are to be retained with the
branch for a maximum period of - 6 years from the end of FY in which transaction done
216 What is the cash deposit charges at base branch, where customer has account - No Cash
deposit charges to be recovered
217 What do you mean by ‘SLEEP EASY’ facility - Disable IBS Transaction password if not
required to be used
218 With regard to opening of ONLINE account by customer, what do you mean by TCRN -
Temporary customer Reference number
219 In CBS Dormant accounts are called – Inactive
220 What is the CBS menu option for uploading the online account opened by the customer – OOSA
221 CBS menu option ‘ RINGFENC’ is to be used when – Address not verified through letter
of thanks sent at recorded address
222 Third party intersol cash payment in Saving bank account allowed upto maximum amount of –
50000/-
223 .“No Dues Certificate” is not to be obtained for agricultural loans in rural / semi-
urban / urban areas. (PSLB-FC 21/2015)
224 In Agriculture Incumbent Incharge have the discretion to finance - up to ±5 percent
of the approved unit cost .
225 Max extent of loan under KCC – 50 lacs
226 CC Limit under CC (crop) and Term loan limit can be disbursed in cash except where ever
statutory requirement - Rs. 20 lacs
227 Cheque Book facility under KCC – to all KCC holders
228 Eligibility for Purchase of New Tractors - Minimum 2.5 acres of perennially irrigated
land.
229 Eligibility for Truck – 3 acres, for jeep/pickup van‐‐ 2 acre , for two wheelers-1
acre, for power tiller‐‐ 1.5 acre

230 Maximum loan under PNB Krishak Saathi Scheme (PNBKSS) - 100000/‐‐
231 Maximum loan under Kisan gold scheme – 50 lacs
232 FARMERS’ CLUB PROGRAMME- No restriction on the upper limit but the minimum
size should be 10 members
233 FARMERS’ CLUB‐ NABARD assistance will be available @ 10,000/‐‐ per club per annum
for a period of 3 years
234 FARMERS’ CLUB- Assistance exceeding 10,000/- will be met by the sponsoring
agency, i.e. our Bank.
235 PNB Farmers’ Welfare Fund Scheme- Subscription will be 800/‐‐ for 12 months,
400/- for less than 6 months.
236 Eligibility of PNBLUCC- C/C limits upto 20 lakh & dealings with the bank
satisfactory for the last three years
237 PNB Weaver Credit Card(PNBWCC) extent of loan‐‐ Need based, subject to ceiling of
2.00 lakh per borrower
238 PNB Kushal Vyapari Yozna - Need based finance
239 PNB ARTISANS CREDIT CARD SCHEME (PNBACC) extent of loan - 2 lakh.
240 Reservations in PMEGP – SC-15%, ST-7.5%, OBC-27%, Minorities-5%, Ex-
Servicemen-1%, PHC-3% and Women30%(Overall).
241 In PMEGP - No income ceiling for applicants; Above 18 years; For projects
above 10 lakh in manufacturing sector and above 5 lakh in business sector;
the beneficiary should possess at least VIII standard pass.
242 Not Covered under CGTMSE - Retail Trade, Training institutions, Educational
institutions , SHGs and JLGs, ROI more than BR+4%
243 To issue draft in foreign currency, AD should send advice of draft through – MT110
244 The person who do not have any of the officially valid documents can open – Small account
245 For deployment of BC Agents Minimum distance between two customer service point (CSP should
be – Earlier it was 1 Km. but now there is no distance criteria
246 Documents declared void if unstamped or under stamped - Promissory note, Bill of
Exchange.
247 Publishing Photographs of Defaulting borrowers - outstanding of Rs. 5 lacs and above
248 TDS on Recurring Deposit and flexi Recurring Deposit - at the same rate as applicable on
fixed deposit
249 Cash Shortage not recovered debited to – Protested a/c.
250 Tagging arrangement in NPA a/c, maximum debit allowed – 90% of deposit amt
251 Excess cash kept in sundry transfer to misc income – after 6 months in March &
Sep.
252 Normally customers should contacted between – 7 am to 7 pm.
253 Lok Adalat maximum amt. - 20 lacs
254 DRT amt.- 10 lacs & above
255 Banking ombudsman amt. - within 10 lacs
256 Appeal against decision of Banking ombudsman to – Dy. Governor of RBI. within 30
days
257 Under Consumer Protection Act District Forum – upto 20 lacs
( Limitation in all forums is two years from the date on which cause of action
has arisen)
258 Under Consumer Protection Act State Commission – above 20 lacs up to 1 Cr.
259 Under Consumer Protection Act National Commission – above 1 Cr
260 Commission of recovery agent paid through – Misc exp. HO sanction.
261 Deceased claim no need of personal enquiry only relying on declaration – up to 50000
262 Deceased claim, need of succession certificate – No minimum or maximum amt.
263 TOD granted for - maximum 7 days
264 Clean OD to staff minimum service – 3 yrs confirmed service.

265 Individual Housing Loan up to 20 lacs LTV ratio maximum 90% and risk weight 50%.
266 Stock audit – 5 Cr & above in std. a/c and 3 Cr & above in NPA a/c
267 PMS/QMS – above 1 Cr
268 BC letter/Debt acknowledgement should be taken in regular a/c - Yearly
269 BC letter/Debt acknowledgement should be taken in irregular/NPA a/c -Half Yearly(
31.03 & 30.09)
270 Panel intt rate – 2%
271 Simplified Turn over Method for working capital (Nayak committee) – for MSME up to
5 Cr, others up to 2 Cr.
272 Cash Budget Method for working capital finance – Sugar, tea, Service Sector,
construction activity, Film Production
273 Govt supply Bills are collected on the strength of- Power of Attorney.
274 Bridge Loan – temporary loan
275 Demand loan against other Banks FDR – Not allowed
276 Demand loan against balance available in SF/CA – 75% of outstanding.
277 Demand draft must be issued as account payee – above 20000
278 Credit facility to relative of Staff sanctioning power – CH
279 Cash remittance Not exceeding 10 lacs - One bank‘s official
280 Cash remittance not exceeding 10 lacs – One Bank official, Exceeding 10 lacs but not
exceeding 20 lacs - One staff of the bank and one guard/other bank staff with or without
fire arms; Exceeding 20 lacs but not exceeding 50 lacs - One Officer / Spl Assistant not
debarred from officiating/ promotion as Officer and One bank’s guard or hired guard with
fire arms.
281 Cash remittance Exceeding 50 lacs but not exceeding 2 crores ‐ One officer, one
cashier and Two bank‘s guard or hired private guard with fire arms
282 Cash remittance Exceeding 2 crores but not exceeding 5 crores - One officer, one
cashier and two banks guards or hired private guards with fire arms
283 Demand draft/cash order issued by single signature – upto 50000
284 Cheques presented by the customers should be checked through UV lamp/Magnifying
glass – 100000 & above
285 Time for account became Inoperative – 2 yrs.
286 Time for closer of annual Inspection report – Small/Medium Branch within 45 days,
large Branch within 2 months, VLB/ELB within 3 months
287 Time for closer of Revenue Audit report – Small/Medium/Large Branch within 45
days, VLB/ELB within 3 months
288 Accidental Death Insurance ALL Types of Platinum Cards including RuPay card
Compensation per Cardholder except add-on card – 2 lac
289 Accidental Death Claim in Classic / Maestro Debit Card / KISAN Debit Card - 50000
290 Accidental Death Claim in PNB Mitra, Kisan ATM Cards - 25000
291 Rate of intt in NRO deposit a/c- same as domestic resident a/c.
292 Our bank is presently member of 4 CICs namely: 1.CIBIL 2. Equifax 3. Experian 4.
High Mark
293 Saving Deposit rate deregulated from – 25.10.2011
294 Interest rate on NRE & NRO accounts deregulated from – 16.12.2011.
295 Intersol cash payment to account holder (including staff member) - Rs.5.00 lacs
296 Intersol Cash payment to IIIrd party through withdrawal slip - Not allowed
297 Intersol Cash payment to IIIrd party in SF account- Rs.50000/- per day
298 Intersol Cash Payment to IIIrd Party in Current account – Rs.1.00 lac per day
299 Private sector banks to handle - any central/state government business at par with
public sector banks
300 Excess liquidity in the financial system leads to- Inflation
301 What is the limitation period for govt. action – 30 years

302 What is the drawing power if limit is 45 lacs, stock 50 lacs ,margin 30% - 35 lacs.
303 What is the drawing power if limit is 45 lacs, stock 70 lacs, margin 30% -45 lacs.
304 Damodran committee - on customer service.
305 Malegam committee - MFI
306 Recoveries in NPA Accounts (irrespective of the mode / status / stage of recovery
actions), henceforth shall be appropriated in the following order of priority: 1.
Expenditure/Out of Pocket Expenses incurred for Recovery (earlier recorded in
Memorandum Dues; 2. Principal irregularities i.e. NPA outstanding in the
account gets updated / adjusted, whichever is earlier; 3. Thereafter towards
the interest irregularities/accrued interest
307 Money received in the account after receipt of Garnishee Order – Not applicable
308 Money received in the account after receipt of Attachment Order – Applicable.
309 Cash Scroll system is applicable in - Rural and Semi urban branches
310 Full form of PSLC – Priority Sector Lending Certificate
311 What is UCIC- Unique Customer identification Code
312 Concurrent Audit initiated on the recommendation of - Ghosh Committee
313 Who issues Succession Certificate - Special Executive Magistrate.
314 Money Transfer Service Scheme (MTSS) – Single remittance not exceeding
equivalent USD 2500 per transaction & max 30 inward remittances in a
calendar year.
315 Priority Sector guidelines revised w.e.f. 23.04.2015 on the suggestion of- Internal
working group of RBI
316 Priority Sector targets for Foreign Banks with 20 Branches and above in India – Like
Domestic Commercial Bank to be achieved within 5 years by 31.03.2018
317 Physical verification of security forms- Monthly by other than custodian
318 No workman will be eligible to seek transfer unless he has completed - 02 years of
service in the Bank at the place of appointment
319 No workman who has once been transferred on request will be eligible to seek another
transfer for a period of- 03 years from the date of his transfer
320 For non Govt. Sponsored schemes (loans above Rs.2 lakh) and new Loans under Govt.
Sponsored scheme (eg. PMEGP scheme etc.) above Rs.20 lakh – Score as per PNB Score module
between 40 to 46 = Yellow zone - Application can be considered by next higher
authority for sanction.
321 Rating grades w.e.f. 01.04.2014 – PNB-A1 TO PNB –A4 ( Score Band Above 58) – Low
risk, PNB-B1 to PNB-B3 ( Score Band Above 40 to 58)- Average Risk , PNB-C1 TO
PNB-C3 (Score Band Below 40 – High Risk
322 Validity of Credit Risk Rating- After the expiry of 12 months from the month of
confirmation of rating or 18 months from the date of balance sheet on the basis of
which credit risk rating was assigned whichever is earlier, the rating becomes due for
updation. After 3 months from becoming due for updation, the rating is treated
‘overdue’ for renewal
323 MCBs will handle proposals - between 5 crore and 25 crore at places where LCBs
are also located and loan proposals of 5 crore and above at places where
LBs are not located.
324 LCBs will handle loan proposals- above 25 crore
325 The NPA rating categories are as follows: PNB-NS: NPA ‐ Sub‐‐Standard, PNB‐‐ND:
NPA ‐ Doubtful (I,II and III), PNB‐‐NL: NPA ‐ Loss
326 Loaning powers for sanction of adhoc limits at the branch level- withdrawn.
327 Confirmation of Action: not later than three days from the date of the
transaction.
328 Borrowal accounts availing limits over 20 lakhs – interest rates have been linked
with the credit risk rating.

329 Staff members has to avail minimum leave in a calendar year - 6 days
330 Maximum privilege leave can be accumulated by the Officer Staff in whole life for leave
encashment purpose at the time of retirement – 240 days
331 Maximum privilege leave can be accumulated by the Officer Staff in whole life -270 days
332 Debit Transfer transactions are permitted – Either at drawer’s a/c maintained branch or
where payee of cheque maintain his account.
333 Valuation of immovable property from Bank’s Approved Valuer : Credit Limit Rs.10
lakh & above or Value of IP Rs. 20 lakh & above. If the value of IP to be
mortgaged is Rs. 5 crore & above : Valuation from minimum 2 valuers is
mandatory. The valuation of property shall also be done by the incumbents.
334 Requirement of Audited Balance Sheet : limit 20 lacs & above (As per our internal
guidelines) turnover 60 lacs & above (section 44 AB of Income Tax Act)
335 Sanctions in respect of Working Capital and Term Loan facilities are valid for - 6
months from the date of sanction.
336 VETTING OF LOAN DOCUMENTS- 2 crore & above (both FB and NFB) vetted from
the local approved advocate/solicitor, first before their execution and again
after execution but before disbursement of the loans.
337 Legal Compliance Certificate - 10 lakhs and above (Fund Based & Non Fund Based)
in respect of fresh sanction/enhancement/renewal to respective controlling
office within 7 days from the end of the month.
338 Lok Adalats are created under - Legal Services Authority Act‐‐1987.
339 For coverage under Lok Adalat, the claim amount should not exceed -
20 lac.
340 SARFAESI Act - Representation/Objection of the borrower has to be responded
within 15 days.
341 No processing fee is to be charged from borrowers availing KCC limit up-to 3 lac
342 Draft of Rs.___________ & above must be issued with account payee crossing- Rs.20000/-
343 Bank will endeavor to send an acknowledgement/response - within three days from
date of receipt of complaint.
344 Off-site Audit for effective monitoring of Key Risk parameters: Non‐‐Concurrent Audit
branches
345 Credit Card Processing Centre (CCPC) situated at –NOIDA
346 OPTIONAL Group Life Insurance products of ‘PNB MetLife’ for - Housing and Education
Loan borrowers of the Bank.
347 Any payment beyond - Rs. 50,000/- will raise the trigger in CBS system as exception and
only Incumbent is allowed to permit withdrawal beyond Rs. 50,000/- through Withdrawal
Forms
348 Under Priority Sector the limit of loans to farmers against pledge/hypothecation of
agricultural produce (including warehouse receipts) for a period not exceeding 12 months
Rs. 50 lakh under direct agriculture.
349 The limit of bank loans to Micro and Small Service Enterprises (MSEs) engaged in
providing or rendering of services - Rs. 5 crore per borrower/unit.
350 In the following instruments stamp duty as prescribed by the Central Government is
Chargeable - Bills of Exchange, Cheques, Promissory Notes, Bills of Lading,
Letters of Credit, Policies of Insurance, Transfer of Shares, Debentures, Proxies,
Receipts
351 In case of instruments other than cited above, the stamp duties are prescribed by the -
State Governments through separate Acts.
352 Land purchase - Farmers allowed to purchase Agriculture Land within radius of 15 KM
353 Kisan Gold Scheme- Limit enhanced to Rs 50 Lakh under the scheme
354 GATS stands for - General Agreement on Trade in Services.
355 Time period of depositing of TDS Where tax is deducted from April to February -

Within 7 days from the end of the month in which tax is deducted.
356 For Issuance of e- statement of Account , the request of desiring customers for
e ‐statement of account will be uploaded by the branches in finacle menu option:
UPEMAIL
357 PNB Green credit facility is available to – (5% of working capital maximum 2 lac)
Micro Manufacturing Enterprises
358 First follow up for realization of outstation cheque be made after- 3 days of dispatch
by sending branch.
359 As per the limitation clause, the Customers will seek claim / compensation - Within a
year.
360 Bank Accounts can be opened Without introduction - if fully KYC compliant.
DRI Subsidy claim is reimbursed on - Half yearly basis.
361 Bank has introduced Score based QRS - limit of Rs. 20.00 lac and above up to Rs.
1.00 crore in line with PMS to determine Health of account.
362 SAMERA – M/s SME Rating Agency of India Ltd. Credit information Agency for
SME.
363 Farm Mechanisation – Limit for repairs and renovation of tractors increased to Rs
1 Lakh..
364 PNB GCC - Maximum loan amount Rs.10 lacs
365 PNB Kisan Tatkal Card Yojna - Minimum limit: Rs. 1000,Maximum limit:
Rs.50000/‐‐ (Subject to ceiling at 50% of KCC limit, 25% of annual income
whichever is lower)
366 Loans against NRE/FCNRB Fixed Deposits - allowed to depositors/3rd parties without
ceiling subject to usual margin.
367 Customer’s Day is observed on 15th of every month. On this day, Branch Manager to
meet customers between 3 pm and 5 pm without any prior appointment
368 “Per Drop More Crop” Slogan relates to which GOI Yozna - Pradhanmantri Gram Sinchai
Yozna
369 In branches headed by an officer in Scale-I, passing power for debiting the suspense
general head (5711315) is restricted to Rs 20000 , Scale‐II officer – Rs.50000.
370 Maximum ROI shall be capped at BR+4.00% including term premia for CGTMSE covered
accounts.
371 Issue of FDR through IBS - Multi Benefit Term Deposit Scheme, Special Term
Deposit Scheme, Ordinary Term Deposit Scheme & PNB Sugam Term Deposit
Scheme.
372 The new PMS shall classify the eligible accounts in one of the 5 Ranks based on the
PMS score ranging from 0 to 100. The Compliance module will have 30% weightage
while the conduct module will have 70% weightage in the total score.
373 PMS Report under the new system shall be generated by the branches on monthly
basis.(Earlier it was quarterly).
374 Issuance of Cheque Book in Joint Account of Illiterate with Literate Person - can be
issued to Literate Person where operation mandate is as ‘Either or Survivor’.
375 Cash receipt transaction must be entered through __________ menu in order to generate system
generated cash receipt - CASHRCP
376 Locker Rent wef 01.04.2014
Size Rent in Rent in Penalty of Amount of FDR
Urban Rural / Rent in to be obtained
/Metro Semi default (Per
urban month)
Small 1000 800 50 10000
Medium 2200 2000 100 15000
Large 3500 3000 150 20000

Extra Large 6500 6000 200 30000
377 As per PMEGP guidelines Rural area is classified - (1) Any area classified as village as per
revenue record of the State / UT irrespective of population (2) Any area if classified
as town provided population does not exceed 20000
378 In CBS inoperative accounts are known as – “Dormant account” ( If no customer induced
transaction for a continuous period of 24 months)
379 Limit of Consumption loan under KCC- maximum 10% of limit
380 PMEGP loan application for above Rs.2 lacs to Rs.25 lacs are to be disposed off - within
maximum 4 weeks
381 Normally maximum payment through withdrawal slip is restricted to : Rs.50000/-
382 Personalised cheque book allowed to only those customers - who got activated SMS alert
facility
383 Personalised cheque book received back undelivered will be destroyed physically as well as in
system after - 60 days by sending maximum 3 notices at 15 days interval and charging
of Rs.100 from customer account.
384 Customer who opt for internet banking facility must be registered for – SMS ALERT
385 Withdrawal slip should be printed with – Branch name and distinctive number centrally
once in 6 months.
386 Stock of withdrawal slip will remain with supervisory staff and only those account holder will be
issued by affixing date stamp - who carry the Pass Book.
387 Any amount received for credit to inoperative account will be kept in – Sundry account till
account is converted to operative category
388 Abnormal transaction are those transaction in staff account where – Value of each transaction
exceeds Rs.5 lacs or aggregate of all credits during the month exceeds Rs. 10 lacs.
389 In Cash credit accounts intersol cash payment to drawer of the cheque - upto Rs.1 lac
390 Maximum amount of advance against Deposits in Rural Branches - Upto 25 lacs
391 Maximum amount of advance against Deposits in Semi Urban Branches - Upto 100 lacs
392 Information relating to legal heirs along with relationship to be obtained in – Loan application
393 Transfer of funds to accounts through internet Bankingwith in PNB, RTGS, NEFT, SMS-OPT is
required for amount – Above Rs.25000/-
394 Bill payment through internet Banking SMS-OTP is required for amount –above Rs.5000/-
395 OTP received to validate transaction through Internet Banking accounts is valid only for – 5
Minutes
396 Term Loan instalments be treated as ‘ other current liabilities’, while computing MPBF, NWC and
current ratio - due within one year
397 Authorised Dealers and Full Fledged Money Changers may release exchange to the Haj/ Umrah
pilgrims - full amount of BTQ entitlement in cash or up to the cash limit specified by
the Haj Committee of India
398 Life Insurance coverage under PMJDY of Rs.30000/- has been introduced by - Life Insurance
corporation of India and applicable to accounts opened between 15th August 2014 to
26th Jan.2015
399 Under PMJDY Accidental Insurance coverage of Rs.1.00 lac has been introduced by NPCI and
will be allowed to eligible RUPAY Card holders through HDFC Ergo Insurance
company
400 Period of realization and repatriation of export proceeds shall be ________ from the date of
export for all exporters until further notice - nine months
401 Under Basic Saving Bank Deposit account (SBBDA) the Restriction of four withdrawals will
continue and _________________ will be excluded in overall limit of four withdrawals in a month
- number of ATM withdrawals
402 REPAYMENT PERIOD of RESTRUCTURED housing loan may be fixed depending upon the
repaying capacityof the borrower - should not exceed 30 years or till the borrower
attains the age of 70 years

403 If existing KYC compliant customer of our bank to open another a/c - there is no need for
submission of fresh proof of identify and / or proof of address for the purpose.
404 PNB UDAAN is the name - scheme for pursuing higher studies from abroad.
405 To facilitate the documentation for sale of Third Party Products, system generated KYC
Compliance Certificate can be generated through - CBS (MIS) pnbrpt 09/178
406 E-life certificate (Digital life certificate) is named as - “Jeevan Praman”
407 PAHAL (DBTL) SCHEME - Special campaign for opening of accounts of LPG consumers.
408 EDIS (Export Data interfacing system )- Export bills data related to lodgement and realisation
shall flow from CBS to EDIS and EDIS shall take care for uploading and downloading to/from
RBI EDPMS.
409 All officers including those on probation (directly recruited officers consequent upon their
stationary posting after completion of their ‘On the Job Training’) shall be eligible for furniture
facility irrespective of their residential status i.e. officers getting fixed HRA are also entitled for
residential furniture.
410 The Score Card ID generated from ‘’PNB SCORE” model are to be captured in - “Free Text 1”
field in “V“ details
411 Banking facilities to visually impaired persons - all the banking facilities such as cheque
book facility including third party cheques, ATM facility, Net Banking facility, locker
facility, retail loans, credit cards, etc.
412 PNB LADLI – scheme for popularising education among girls of rural / semi urban
India
413 Whether introduction is necessary at the time of opening of bank account - No
414 An individual may carry to Nepal or Bhutan, currency notes of Reserve Bank of India -
denominations above Rs.100/-, i.e. currency notes of Rs.500/- and/or Rs.1000/-
denominations, subject to a limit of Rs.25000/-.
415 Exchange of pre-2005 currency notes. Reserve Bank of India has urged to deposit the old
design notes in their bank accounts or exchange them at the bank branch convenient to public.
The date is now extended upto 30.6.2016.
416 Payments into Government Account through Debit/ Credit cards and Net Banking:
Permissible period for remittance - 1) Remittance norms of T+1 working day, including the
Put Through date should strictly followed, where “T” is the day when money is available with
the receiving bank branch.
417 In addition to the due diligence requirements under KYC norms - the Bank is required by law
to obtain Permanent Account Number (PAN) or General Index Register (GIR) Number or
alternatively declaration in Form No. 60 as specified under the Income Tax Act / Rules”.
418 Self Financed Group Personal Accident Insurance Policy which will cover both workmen & officer
employees of the Bank for the period from 01.01.2016 to 31.12.2016 - Capital Sum Insured
(CSI) will be Rs. 7,00,000/- both for workmen & officers
419 Maximum Housing loan amount to staff members - will be Rs.25 lacs, 40 lacs and 80 lacs
for Sub staff, clerical and officer respectively
420 Rate of Interest to be charged in case of Staff Housing Loan - Upto Rs.40 lacs 6.75% PA
Simple and above 40 lacs 8.00% PA Simple.
421 Launch of personalized Rupay Platinum card for premium customers Eligible
Customers - Daily Maximum Transaction Limit –Rs.50000/- through ATM and Rs.125000/-
at POS/E-commerce. Free insurance of Rs.2.00 lacs on Active rupay platinum debit card - type
of card “PR”.
422 NDML has named its insurance repository as “National Insurance-policy Repository”
(NIR). Our Bank has become Approved Person (AP) for providing e-Insurance account (EIA)
facility to its clients.
423 FEMA – Imports of goods into India –persons, firms and companies application for making
payment exceeding USD 5000 or its equivalent towards imports into India must be made in
form A-1- To liberalize and simplify the procedure requirement of submitting request

in form A-1 to AD-category-1 banks has been dispensed with
424 Charging of fine on delay in filing satisfaction of charge with CERSAI - W.e.f. 1.4.2015
Cersai will charge fine of Rs.5000/- each day for delay beyond a period of 30 days from the date
of satisfaction. (MISD6/2015)
425 As per Rule 2(f) of the Kisan Vikas Patra Rules, 2014, authorized branches of our Bank, which
are conducting PPF, 1968 business, are also eligible for conducting the Kisan Vikas Patra, 2014
business. Authorised PPF branches should follow the same reporting procedure as prescribed for
PPF, 1968 Scheme.
426 Overdrafts extended upto Rs. 5,000/- in Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts will
be eligible for classification under Priority Sector Advances (‘other’ category) as also
weaker sections, provided the borrowers household annual income does not exceed Rs.
60,000/- for rural areas and Rs. 1,20,000/- for non-rural areas
427 An exporter receives advance payment (with or without interest), from a buyer outside India, the
exporter shall be under an obligation to ensure that the shipment of goods is made within one
year from the date of receipt of advance payment.
428 REIMBURSEMENT OF EXPENSES ON REQUEST TRANSFER OF WORKMEN EMPLOYEES
- who are transferred after 3 years of stay at his/her present place of posting/Circle
(i) Reimbursement of expenses on travel on transfer may be considered for travel by 2nd AC for
non- subordinate staff and travel by 2nd sleeper class for subordinate staff.
(ii)Cost of transportation and compensation in respect of losses due to breakage or damage to
goods, will be reimbursed as per the provisions of Bipartite Settlement, as amended upto date.
429 Acquisition/transfer of immovable property – Prohibition on citizens of certain
countries. - No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China,
Iran, Nepal or Bhutan, Macau, Hong Kong without prior permission of the Reserve Bank shall
acquire or transfer immovable property in India, other than lease, not exceeding five years.
430 PRIORITY SECTOR ADVANCES – PERSONS WITH DISABILITIES – INCLUSION UNDER
WEAKER SECTIONS- Effective 13.03.2015Priority Sector loans to Persons with Disabilities
will be eligible for classification under Weaker Sections category
431 Account opening through E-KYC - e-KYC has been accepted as “Officially Valid
Document” under PML rules-e-KYC Service of UIDAI and RBI
432 Non resident deposits – Due to submission of NRD-CSR data in XBRL platform
submission of STAT-5 and STAT-8 statement has been discontinued w.e.f.
March2015.
433 Payment of insurance premium to DICGC for the half year April 2015 to September 2015- Delay
in payment of advance premium/submission of Statement attracts penal interest @
8% per annum over bank rate
434 Sukanya Samriddhi Account – All PPF authorized branches to use GBM module for
opening of account
435 What do you mean by Sukanya Samridhi Account? - Introduced by the Govt of India to
save the money for the purpose of marriage of a girl child and will mature for payment after 14
years. Eligibility - minor girl and deposit amount in a financial year will vary from minimum Rs
1000 to Rs 1. 5 lakh. The interest to be notified by the Govt. and will be credited to this account
at yearly intervals . The Deposits will be made in the account till completion of 14 years
from A/c open date. After 10 years of age account will be self operated by the minor girl. A/C
will mature on completion of 21 years from the date of opening of account
436 Whether money can be transferred to another bank’s account via ATM by use of debit card -
Yes, Some banks allowed the facility
437 (BBPS) Bharat Bill Payment System - It will help to pay different bills at a single point of
transaction [SPOT] like operating as a network agent.
438 BBPCU – Bharat Bill payment Central Unit-which organization has been selected to act as BBPCU
- National Payments corporation of India (NPCI)
439 Bharat Bill Payment Central Unit – What is its function - To set the standards for BBPS

processes, Undertake clearing and settlement activities related to the BBPS.
440 Bharat Bill Payment Operating Units – (BBPOU) which works as per standards set by NPCI have
to get approval from – RBI
441 Maximum amount of prepaid instruments issued by banks are – Rs. 1 lakh
442 Validity period of Gift Card is - 3 years
443 Maximum number of prepaid card can be issued per beneficiary – One
444 IMT stands for - Instant Money Transfer
445 GIRO stands for - General Interbank Recurring Order
446 FINO stands for - Financial Inclusion Network Operation
447 Dynamic Currency Conversion – (DCC) stands for – Credit Card Holder’s preferred currency.
Credit card holder while making payment in foreign currency can get the exact
amount the card will be debited in home currency.
448 Jeevan Pramaan stands for – Based on Aadhar Biometric Authentication it is “digital life
certificate”
449 DEAF ( Depositor Education and Awareness fund) - A bank is required to transfer the
balances with accrued interest in all unclaimed account which have not been
operated for the last 10 years to the account of Govt. of India .
450 Periodicity of transfer of funds in DEAF – Transfers to be affected on last working day of
the month.
451 As per RBI what is the Charter of Customer Right - Five basic right of a customer are:
(a) Right to fair treatment

(b) Right to Transparency, fair and honest dealing
(c) Right to suitability
(d) Right to privacy
(e) Right to Grievance redress and compensation
452 From April 1, 2015 Banks to disclose the total fees and charges applicable on various types of
loans to individual borrower, Publish Annual Percentage Rate (APR) on a loan to an individual
borrower, provide a clear, concise, one page key fact statement/fact sheet - to ensure
greater transparency to the individual customer
453 First bank in India to form an insurance company with 100% capital- Kotak Mahindra Bank.
454 Govt of India ordinance dated Dec 26, 2015 maximum FDI allowed in Insurance Companies is -
increased from 26% to 49% of the total capital of the insurance company
455 IRDA - what is its new name - Insurance Regulatory and Development Authority of
India ( Word India added to its name)
456 Commission for mobilization of deposit can be paid by banks to – Self Help Groups
457 Payment bank’s can accept demand deposit for a maximum of – Rs.1.00 lac per depositor
458 TREDS stands for - Trade Receivables Discounting System
459 Minimum capital of TREDS – Rs. 25 crores.
460 Which committee has recommended that bank’s have to be a member of all the 4 Credit
Information companies (CIBIL, High Mark, Experian and Equifax) - Aditya Puri Committee
461 Non Banking Finance Companies (NBFCs) exempted for submission of credit information to CICs
- Companies which do not have customer interface
462 Obtaining of No Due Certificate - Obtaining ‘No Due Certificate’ from the individual
borrowers (including SHGs & JLGs) in rural and semi-urban areas for all types of
loans have been dispensed with.
463 ECBs can be parked with the AD in term deposit form for a maximum period of – 6 months
464 Maximum denomination of Indian currency note can be taken by any resident to Nepal or Bhutan
- Rs.1000
465 E-KYC stands for – It is an electronic KYC which can be done if customer have Aadhar Number
466 When a person is staying in Dehradun but his address proof shows his address of
Mumbai can he still open an account in Dehradun - He can open an account in

Dehradun even his permanent address of Mumbai and bank does not require to obtain address
proof of Dehradun. Customer to submit Permanent address proof of Mumbai along with a
declaration about his Dehradun address for communication purpose.
467 In case of transfer of bank account from one branch to another is it required for full
KYC again - No Only declaration of current address will serve the purpose.
468 Debt Recovery Tribunals (DRTs) were established on the recommendations of – Tiwari
Committee.
469 Central Repository of Information on Large Credits (CRILC) has been established to: collect,
store, and disseminate credit data to lenders][ CRILC’s essential objective is to
enable banks to take informed credit decisions and early recognition of asset quality
problems by reducing lack of information.
470 Which type of loans are exempted for reporting to CRILC – Crop Loans
471 Banks are required to furnish credit information to CRILC on all their borrowers having aggregate
fund-based and non-fund based exposure of - Rs 5Cr and above
472 The Bharat Bill Payment system recommended by – G. Padmanabhan committee
473 Bharat Bill Payment system – special features
1) An integrated bill payment system in the country.
2) Anytime anywhere’ bill payment facility to customers.
3) Multiple payment modes.
4) Accessible bill payment services to customers.
5) Through a network of agents,
6) Allows multiple payment modes,
7) Instant confirmation of payment,
474 Whether Non Banking Finance company (NBFC) can be appointed as Business correspondent –
Nachiket Mor Committee,Recommended to engage non-deposit taking NBFCs
(NBFCs-ND)as Business Correspondents, subject to the prescribed conditions
475 Distance criteria for Business Correspondent - No restriction on distance criteria as per
RBI
476 If electronic fund transfer instruction dishonoured due to insufficiency of fund or
otherwise, it will be an offence punishable under Sec 138 of the Negotiable Instrument Act -
The provision lies in section 25 of Payment and Settlement Act.
477 IT attachment order attaches credit / deposit received after the receipt of the order – YES
478 For import of Goods India which of the prescribed application form is required from customers to
release the payment - Form A-1 dispensed with
479 One Rupee currency note – GOI has started printing of One rupee currency notes rectangular
in shape, 9.7 x 6.3 cm in size. Paper composition is 100 per cent (Cotton) rag
content, 90 GSM (Grams per Square Meter) with tolerance of +/-3 GSM/ 110 microns
with tolerance +/-5 microns
480 Maximum amount to be deposited in PPF deposit scheme of Government of India -
Rs.150000/-
481 Regarding SHGs (Self Help Group) KYC Verification is required – Only officials of the SHGs
and not for all the members
482 Upper Age limit of MD & CEO and Whole time directors of banks in private sector – 70years
483 if ATM transactions are carried out at both the six metro centres and other locations- total
number of transactions (inclusive of both financial and non-financial) free of
charge at other bank ATMs would continue to remain at FIVE
484 If an existing KYC compliant customer of a bank desires to open another account in the same
bank - no need for submission of fresh proof of identity and/or proof of
address for the purpose
485 Period of realization and repatriation of export proceeds in all cases – 9 months
486 Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India upto Rs.10000/- -
Accepting minimum details from customer for due diligence

487 Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India from Rs.10001/- to
Rs.50000/- - BY accepting any officially valid documents defined under PML rules and
non reloadable in future.
488 Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India upto Rs.100000/- -
With full KYC and can be reloadable in future.
489 An Individual may carry Currency notes denomination above Rs. 100 to Nepal or Bhutan subject
to maximum – Rs.25000/-
490 FEDAI Rules ‘ KNOWN HOLIDAY’ means - Which is known at least 3 working days
before the date of a holiday.
491 “Sudden declared holiday” - which is not known holiday (Example – Suppose day
1,2,3,4 are working day and if day 4 is declared holiday on or after day 1 it will be a sudden
declared holiday. If day 4 is declared as holiday prior to day 1 it would be a known holiday.)
492 Loan for repair / renovation to staff will be : Officer – 10 lac, Clerk-6 lac, Sub Staff- 4 lac
493 What do you mean by NITI Aayog: National Institution for Transforming India Aayog
494 Who is vice chairman of Ist NITI Aayog - Mr. Arvind Panagaria
495 Certificate given by Guinness Book of World Record for PMJDY - For opening accounts with
in one week as part of financial inclusion campaign ( 23rd to 29th August 2014).
496 AEPS stands for – Aadhar enabled Payment System
497 What is the maximum loan amount under “Earnest money deposit scheme” – Rs.15 lacs
498 All new Saving Fund accounts in Metro and Pragati branches will be opened through -
Welcome Kit only
499 What is the rate of interest and interest rate code for persons availed/ availing Housing Loan
for third or subsequent house/flat w.e.f. 01.04.2015 – 0.50% above the base rate –
H3RHB
500 As a second factor authentication in Corporate Internet Banking facility which security channel
has been recently introduced:- Digital Signature Certificate (DSC)
501 Obtaining introduction for opening of account is – not mandatory but Verifying identity by
using reliable, independent source of documents or data or information is of utmost
importance to ensure authenticity of identity and address of customer.
502 What is the penal interest to be paid to DICGC for delay in remittance of deposit insurance
premium – 8% over Bank rate
503 Minimum and Maximum partners can be in a association/partnership interms of
regulation contained in Company Act-2013 - Interms of Company act 2013 In a
association / partnership minimum partners are 2 and maximum partners 100 (as against 2 and
20 in company act 1956)
504 Minimum and Maximum members in a Private Ltd. Company interms of regulation
contained in Company Act-2013 - Interms of Company act 2013 In a private limited
company minimum members are 2 and maximum partners 200 (as against 2 and 50 in company
act 1956)
505 XML reporting format means - XML stands for Extensible Markup Language
506 “sweat equity shares” means such equity shares as are issued by a company to its directors
or employees at a discount or for consideration, other than cash, for providing their
know- whatever name called
507 One person company means : a company which has only one person as a Member and one
member as director by subscribing their names or his name to a memorandum and complying
with the requirements of this Act in respect of registration.
508 Whether banks can sanction loans against the equity shares of the banking company
to its directors? No.
509 What is the definition of net worth of a bank?
Net worth would comprise of Paid-up capital plus Free Reserves including Share Premium but
excluding Revaluation Reserves, plus Investment Fluctuation Reserve and credit balance in Profit
& Loss account, less debit balance in Profit and Loss account, Accumulated Losses and

Intangible Assets
510 Remittace of funds outside India by residents without any document raised to
(simplified request form) - USD 25000
511 Cash withdrawals at point of sale: No cash transactions through the debit cards
should be offered at the Point of Sale under any facility without prior authorization of
Reserve Bank of India under Section 23 of the Banking Regulation Act, 1949
512 Generation of Cibil Report - Credit Limit up to Rs.5.00 lakh - One CIR, Credit Limit
above Rs. 5.00 lakh - Two CIRs ( One from CIBIL mandatory, IInd from Experian /
Equifax without score / High mark)
513 Legal compliance certificate - Based on RBI guidelines Branches to submit legal compliance
certificate for credit limit of Rs.10 lakhs and above
514 Interms of company Act 2013 “Dormant company” means - In case of a company which has
not filed financial statements or annual returns for two financial years consecutively, the
Registrar shall issue a notice to that company and enter the name of such company in the
register maintained for dormant companies.
515 Interms of company Act 2013 “inactive company” means - a company which has not been
carrying on any business or operation, or has not made any significant accounting transaction
during the last two financial years, or has not filed financial statements and annual returns
during the last two financial years;
516 Is PAN Card is mandatory at the time of receiving cash payment against foreign currency /TCs
submitted to money changers ? – Submission of PAN Card is mandatory for cash
payments in excess of INR 25,000
517 What is the limit for declaration of currency in CDF form - When foreign exchange brought
in the form of currency notes or travellers’ cheques does not exceed US$ 10,000/- or
its equivalent and / or the value of foreign currency notes does not exceed US$
5,000/- or its equivalent, declaration thereof on CDF is not insisted upon.”
518 What is the limit of Foreign exchange brought into India – “Foreign exchange in any form
can be brought into India freely without limit provided it is declared on the Currency
Declaration Form (CDF) on arrival to the Custom Authorities
519 Who issues succession Certificate - Special Executive Magistrate
520 As per Sec. 56 of CPC ‐ a woman cannot be arrested or imprisoned for non‐‐payment of
judgement debt
521 Death of Minor −Balance is payable as a claim case
522 What is firewall?: A software programme for protecting against unauthorized access to
the information
523 Call Money - Money lent for one day
524 Notice Money - Money lent for a period of 2-14 days
525 Tenn Money - Money lend for 15 days or more in Inter-bank market
526 WAYS & MEANS ADVANCES (WMA) means - It is temporary overdraft that REI allows to
Govt. to cover the mismatch between Govt. receipt and payment. For Central Govt. it
is for max. 10 days and for State govt. for 14 days. Interest is Repo Rate
527 BEF MEANS - Documentary evidence of imports called BEF for amount above USD
100000 or equivalent.
528 Loans not eligible to be covered under SARFAESI Act - (a) Amount up to Rs.l lac, (b)
agricultural land cannot be sold, (c) pledge & lien (d) limitation expired
529 SARFAESI ACT is applicable – In India including J&K State
530 A lady who has taken a demand loan against FD come to the branch and wants to add name of
her minor son, as joint alc holder. What you will do?: Name can be added only after
adjustment of the loan.
531 Statutory Audit of banks is done as per provisions of: Banking Regulation Act
532 Guardian appointed by will of the father is called: testamentary guardian
533 Maximum amount of deposit in Tax Saving Scheme of the bank can be: Rs 1,50,000

534 A minor approaches for a loan. Which type of loan can be given to him: loan can not be
sanctioned other than for necessities
535 If on a Letter of Credit, date is mentioned as "end of the month", then as per UCPOC 600, it will
mean: 21st to last day of the month
536 If a cheque is dishonoured due to insufficient funds, then as per section 138 of N I Act, court
may award imprisonment up to: 2years
537 Maximum amount of cash that can be accepted for issue of foreign currency at present is :
Rs.50000/- and below
538 Nomination facility is not available in the case of : Trust A/c
539 Buy now and pay later is provided in: Credit Card
540 As per UCPDC 600, beginning of the month implies: 1st to 10th of month
541 What is the status of Nominee? Trustee of legal heirs
542 Where can title deeds be deposited for equitable mortgage? Any notified Place
543 Payment of cheque can be stopped by: only Drawer of the cheque
544 You are maintaining current account in the name of the Trust. You receive notice of death of one
of the trustees. After this notice, a cheque signed by the deceased trustee is presented for
payment. What should the bank do?- Cheque may be paid, if otherwise in order
545 What is maximum limit for remitting funds abroad under Liberalised Remittance Scheme in a
financial year: US $ 250000
546 A Letter of Credit that contains clause for giving advance for pre-shipment is called - Red
Clause LC
547 The consequence of non registration of Partnership - firm cannot sue others for its dues
548 Crossed cheque payment across the counter to the authorized Officer of collecting Bank - can
be made and there are no violation as per NI Act.
549 Validity period of cheque reduced to 3 months from 1.4.12 as per - RBI Guidelines under sec
35A of BR Act
550 Kite flying means accommodation receipts and payments and not genuine trade
transactions
551 Unspent foreign exchange can be retained by resident - up to 2000 US $ and no limit for
foreign coins
552 What is the type of liability for the bank on account of issue of Bank Guarantee? - Contingent
Liability
553 When does liquidity risk arises? - Liquidity risk arises when maturing liabilities are more
than maturing assets
554 A bearer cheque of Rs.100,000/- was presented. The cashier informed that the cheque can not
be passed as the balance is less by Rs.1000/-. The tenderer credited the amount of shortfall and
the cheque was paid. Customer disputed the transaction. Whether bank is liable? - Yes. For
disclosing balance to third party, bank is liable to account holder
555 What is the Basic and special feature of Basic bank Account? - Account can be opened with
nil or very small amount and there are no requirement of minimum balance
556 In case of failure of a customer to meet its commitment in settling his dues in time it will come
under which type of risk? - Credit Risk
557 What is the period of present Foreign Trade policy - 2015-2020
558 The Garnishee Order is applicable on the account of a customer when the relationship between
banker customer is- Debtor & Creditor
559 In the case of Hypothecation- neither possession nor ownership come to Bank
560 Negative lien means- Undertaking by the borrower not to sell or create charge on a
particular property without consent of the Bank.
561 A term deposit has been issued in the name of Mr A and Mrs. A payable to either or survivor.
One day both approach the . bank and request for replacement of their names with the
names of their children. What should the bank do?- Bank can not accept the request as
name of one of original depositors must remain.

562 Maximum amount of fine under section 138 of N I Act for dishonour of cheque due to insufficient
funds is - twice the amount of cheque
563 An NRI can open a joint account with a resident in case of _______ accounts- NRO, NRE,
FCNR only on former or survivor basis
564 A cheque is written in different hand-writings and different inks- It will be paid if otherwise in
order
565 While paying a bearer cheque, signatures are obtained on the back side of the cheque. Why? -
As evidence of payment having received the money.
566 Specify age of depositor who will use form 15 H for declaring that tax should not be deducted at
source from the interest income on term deposits? - He should be senior citizen having
attained 60 years of age
567 Service Area Approach has been still continued for: Government Sponsored Scheme
568 Nomination rules and provisions are given in – Banking Regulation Act Section 45 ZA to
45ZF
569 Definition of guarantee is given in - Indian contract Act
570 CRIF Highmark stands for - Credit information company like Cibil etc.
571 Time limit for disposal of agricultural loan application upto Rs. 2 lac – 2 weeks
572 Time limit for disposal of agricultural loan application upto Rs. 50 lac – 4 weeks
573 What is the margin for production credit in KCC accounts - N IL
574 For agricultural loans to individual borrowers (including SHGs and JLGs) in rural and semi
urban areas – No dues Certificate not to be obtained for loans above Rs.1.00 lac rather
Affidavit to this effect be obtained.
575 For Term Loan to all farmers exceeding Rs.1.00 lac what is value of mortgage agriculture land
required - 200% of loan amount
576 Effective April 1, 2015 Banks to disclose – (1) Total fees and charges applicable on various
types of loans to individual borrower (2) Annual Percentage Rate (APR) on a loan to an Individual
borrower (3) A clear, concise, one page key fact statement/fact sheet, as per prescribed format,
to all individual borrowers at every stage of the loan.
577 Small Company, Dormant Company & One Person company has been introduced under
which act : Company Act 2013
578 A Limited Liability Partnership may have partners as regards its number :Minimum 2
Maximum NO limit
579 Under Sarfaesi Act After receipt of 60 days possession notice borrower can represent to the bank
and bank has to give reply to the said representation within – 15 days
580 Under Basel III Pillar III relates to : Market discipline
581 Under Basel III Pillar II relates to : Supervisory Review & Evaluation Process
582 As per RBI guidelines Basel III Capital Regulation will be fully implemented by :
31st March 2019
583 Securitisation exposure of bank will be risk weighted at : 1111 %
584 Minimum Capital conservation buffer to be maintained as on 31st March 2016 -0.625%
585 Minimum Common Equity – Tier 1 (CET1) as on March 31 2019- 5.50%
586 What is the rural area defined as per PMEGP Scheme - where population upto 20000 & area
classified as village in revenue record
587 What is the minimum Loan amount under PNB Sanjeevani Scheme (MSME Product) and Which
rating module to be used for assessment of the borrower - Minimum Rs.1 lac and PNB
Retail Score
588 SJSRY is meant for gainful employment to the urban poor what is the minimum age of the
borrower and project cost per individual - 18 years and Rs.2.00 lacs
589 Base rate of interest - 9.60 %
590 What is the master policy number of PM Jeevan Jyoti Bima YOzna – 900100013
591 What is the master Policy number of PM Suraksha Bima Yozna –
272200/48/2016/2189

592 Any delayed remittance of Government collection into Government Account attracts penalty on
bank at the rate of - Bank rate + 2%
593 Repayment of New Car loan to Officer Staff - 180 months of 65 years of age whichever
is earlier
594 Repayment of old Car loan to Officer Staff - 120 months of 65 years of age whichever
is earlier
595 Second time car loan to officer staff – After 3 years from the date of availment of earlier
loan
596 Repayment of New Car loan to Workmen Staff - 180 months of 65 years of age whichever
is earlier
597 Repayment of old Car loan to Workmen Staff - 120 months of 65 years of age
whichever is earlier
598 What is the CBS menu option for registration of application under PMJJBY - PMJJBY
599 What is the CBS menu option for registration of application under PMSBY- PMSBY
600 What is the eligibility criteria for availing OverDraft facility under PMJDY ( PM Jandhan yozna)
– BSBD a/c operated safisfactorily for minimum 6 months, OD to earning
member preferably women, Should be regular credit under DBT/DBTL/other
sources, Account seeded with Aadhar, No any other a/c with any other bank/branch,
between 18 to 60 years of age.
601 To allow overdraft under PMJDY the customer who are not eligible are - Minors, KCC/GCC
borrower, more than one member of same family.
602 Facility in PMJDY A/Cs - Running OD facility in SB account
603 Period of OD - – 36 months subject to annual review
604 What is the maximum loan amount under PMJDY – 4 times of average monthly balance
or 50% of credit summations during the previous 6 months or Rs.5000/-
whichever is lower.
605 What is the rate of interest to be charged on PMJDY Overdraft limit – 2% above base rate
606 What is the Credit guarantee cover for the OD amount under PMJDY – 60% of default
amount
607 Rate of guarantee fee to be paid to credit guarantee agency – 1% on loan outstanding
To be borne by bank
608 Overdraft allowed under PMJDY - Security NIL, Processing Fee – NIL
609 What is the age group to be covered under PMSBY - 18 to 70 years
610 Premium amount and coverage under PMSBY scheme - Rs.12/- per year starting from Ist
June to 31st May each year - only accidental death cover allowed
611 What is the age group of the person for admission under PMJJBY – 18 years to 50 years and
once admitted coverage can be upto 55 years on payment of uninterrupted
premium each year
612 Premium amount and coverage under PMJJBY scheme – Rs.330/- per year starting from Ist
June to 31st May each year – Life insurance cover
613 In case of Joint account whether each joint account holder can be covered under PMJJBY
or PMSBY – Yes each member can be covered.
614 What is the age group of citizens to be covered under Atal Pension Yozna – 18 to 40 years,
who are not member of any other statutory social security scheme
615 Minimum contribution of subscriber under NPS named Atal Pension YOzna – Rs.1000/-
616 Under Atal Pension Yozna Central will co-contribute for a period of 5 years if citizen joined NPS
before 31st December 2015 and who are not income tax payer an amount of – 50% of the
subscribers contribution of Rs.1000/- which ever is lower.
617 All New Saving fund accounts in Metro and Pragati Branches will be opened only through -
Welcome Kit only
618 What do you mean by BRICS bank. – BRAZIL, RUSSIA, INDIA, CHINA, SOUTH AFRICA
agreed to establish a New development Bank.

619 Head quarter of the BRICS bank situated in – CHINA
620 Who is the first CEO of BRICS bank - KV Kamath from India
621 What is the menu option to generate Pre-filled 15G/15H – PNBRPT 4/43, 4/44
622 After how many successive attempts the PIN of the Debit Card gets blocked temporarily -
Three
623 DP Indicator to be chosen in Cash Credit accounts if DP is to be derived from Security –D
624 NPAGLXFR menu is to be used for - Transfer of NPA account to NPA GL Head
625 NPACHRG menu is to be used for – Recording of charges to be recovered from NPA a/c
Holder at the time of settlement of account
626 Which menu is to be used to enter Group codes in CBS - CCLD
627 Which CBS menu is to be used to receive Letter of credit messages – SMI
628 EXTM entry debited to wrong category and sub category, what is the menu option for deletion of
this entry - EXTMDEL to be used by user having workclass 100 and above
629 Transfer of cheques between account menu option - XFCHBAC
630 Password protection by the user himself - PAPW
631 Receipt of refund claim for the amount transferred to DEAF (Depositor education and awareness
fund) which is the CBS menu to be used : DEAFC
632 What is the menu option to be utilized for to record ECS mandate: ECSM
633 How many maximum number of debit cards can be issued to one account having mandate either
or survivor - Four ( Two primary and Two Add on)
634 If customer opted for non-mandatory SMS alerts facility, whether SMS Charges are applicable-
YES ( Rs.15+ Service tax per quarter)
635 If customer requested for Personalised cheque book and debit card and requested only for
mandatory SMS alerts to meet out the bank’s requirement. How much SMS alerts charges will be
recovered: NIL
636 Partial recovery of locker rent can be recovered through menu option - LKRCM
637 Which menu option is to be used for Inventory class authorization maintenance – IMAUM
638 Mbps represents - Megabits per second
639 TDS certificate can be printed for Term Deposit customers through menu option - TDSIP
640 Under no circumstances the user is required to refund TDS deducted under a term deposit
account directly through TM by debiting Sundry TDS Account. Which menu option is to be used
for this purpose - RFTDS
641 Under no circumstances the user is required to refund TDS deducted under a term deposit
account directly through TM by debiting Sundry TDS Account. Which menu option is to be used
remittance of TDS amount to Government account : RMTDS
642 REGFLOW menu option is to be used in Term Deposit accounts for – REGENERATION OF
INTEREST FLOWS AFTER CHANGE OF PREFERENTIAL INTEREST
643 When the normal posting of a original account fails due to variety of reasons, then the
______posting of that part transanction can be done by entering additional details – PROXY
644 To view position of overdue loan accounts which menu option is to be utilised - LAOPI
645 Details of overdraft granted in SF/CA accounts can be generated through which of the following
menu options- ACSP
646 Foreign Bills are required to be lodged under which Scheme type - FBA
647 Expatriate staff means - Whose PF/superannuation/ pension fund is maintained outside India
by his principal employer outside India.
648 Not permanently resident means – Person resident in India for employment of a specified
duration or for a specific job / assignment, duration of which is not more than 3 years.
649 For Trade fair / Exhibitions abroad, Gift of unsold items is permissible outside India upto - USD
5000 per exporter per exhibition/trade fair
650 Resident Individual can credit in EEFC (Exchange earners foreign currency) account upto -
100% of their foreign exchange earning
651 Reduction in Invoice value on a/c of Prepayment of usance Bills can be allowed upto –

Proportionate interest of unexpired usance period
652 Reduction in invoice value for bills sent for collection or negotiated can be done upto –
Maximum of 25% of invoice value - If exporter is more than 3 years without any
%age ceiling subject to O/S does not exceed 5% of the average realisation of last 3
years.
653 Write off of export bills :
1)Self write off by an exporter - 5% of export proceeds realized during the
previous calendar year.
2)Self write off by status holder – 10% of export proceeds realized during the
previous calendar year.
3)Write off permitted by AD bank - 10% of export proceeds realized during
the previous calendar year.
654 What is the maximum amount of bills and documents that importer can received directly from
overseas supplier - USD 300000
655 Evidence of import is required for value of foreign exchange remitted / paid for import into India
exceeds - USD100000
656 Where import are made in non-physical form i.e. software or data what will be treated as
evidence of import - A certificate from CA that software / data/drawing/design has
been received
657 Failure in submission of evidence of import a statement at the end of June & December is to
submitted to RBI only using – XBRL (Extensible Business Reporting Language) system
658 If Inoperative FC deposits remain inoperative for 3 years from date of maturity at the end of 3rd
year AD shall convert it into - Indian rupee
659 Foreign Currency account means - An a/c held or maintained in currency other than the
currency of India/Nepal/Bhutan
660 A person resident in India can open Foreign Currency a/c outside India – 1)Under LRS Scheme
2)Going abroad to participate in exhibition/Trade fair 3)Going abroad for studies 4)
Person on a visit to Foreign country provided balances are repatriated on return to
India
661 Not being an individual resident in India, Forex due or accrued as remuneration for services / in
settlement /income on assets held outside India/gift shall be surrendered to Ads – within 7
days
662 Not being an individual resident in India, Forex due or accrued in all cases except as
remuneration for services / in settlement /income on assets held outside India/gift shall be
surrendered to Ads – within 90 days
663 Not being an individual resident in India who acquired or purchased Forex for any purpose does
not use it for such purpose or any other permissible purpose shall be surrender to ADs within –
60 days
664 Not being an individual resident in India unspent foreign exchange in the form of currency notes
and coins should be surrendered within – 90 days
665 Not being an individual resident in India unspent foreign exchange in the form of Travellers
cheques should be surrendered within – 180 days
666 Definition of Currency – Debit Cards, ATM Cards or any other instrument which can be used
to create a financial liability may be defined as currency.
667 Foreign Exchange can be purchased by any person in the form of Postal Order or Money order
from - Post Offices because general permission has been granted.
668 Whether deposit from NRIs can be accepted by a company in India on repatriation basis - NO
only accepted on non repatriation basis
669 Opening, holding and maintaining foreign currency accounts by a person resident in
India –
EEFC (Exchange Earner's Foreign Currency A/C)
1) 100 percent FOREX earnings by way of inward remittance through

normal banking channel, (other than loans or investments)
2) advance remittance received by an exporter
3) Rate of Interest on deposit - NIL Interest
670 Diamond Dollar account can be opened by – Firms and companies which comply the
eligibility criteria laid down in Foreign Trade policy
671 Rate of Interest allowed in Diamond Dollar Account - NIL – should be maintained in non
interest bearing current account
672 Realisation of Export proceeds and local sales in USD of rought / cut / polished diamonds can be
credited to : Diamond Dollar account
673 In Diamond Dollar Account which facility is not allowed - EEFC
674 A ‘Person of Indian Origin’ (PIO) is a citizen of any country except – Bangladesh and Pakistan
subject to having Indian passport or parents or any of his grand parents was a citizen
of India or the person is a spouse of an Indian citizen
675 ‘Permissible currency’ - is a foreign currency which is freely convertible
676 Open market operations refers to – Buying and selling of Government securities in open
market
677 When RBI intends to increase Loan portfolio by the banking system – Bank rate will be
reduced
678 Who is the authority to decide quantity of Coins to be Minted – Government of India
679 With regard to Monetary Policy what do you mean by Quantitative methods – Credit control
methods like Bank rate policy, Open market operation, Various reserve requirements
680 CRR is maintained with Reserve Bank of India in the form - Balances with RBI
681 Who is the regulator of Mutual Fund Market in India – SEBI
682 With regard to Bill business, Bank do not purchase / discount - Accommodation bill
683 Regarding Farmers lending short term crop loan are allowed for a period of – 12months
684 What do you mean by medium and long term loans – Loan allowed for a minimum period of
18 months
685 The Charge where neither the possession of security nor transfer of ownership exists is called –
Hypothecation
686 Securities / Investment where risk in payment of principal and interest is zero are called – Gilt-
edged securities
687 What do you mean by Priority Sector – A group of activities to be taken on priority for
financing
688 What do you mean by notice deposit – Specific period Term deposit with drawable by
giving minimum one banking day notice
689 What do you mean by liquidity – How quickly and cheaply the asset is converted into
cash
690 To safeguard the bank’s interest CC accounts are closed – On the death of the principal
borrower
691 Deficit financing refers to – Public expenditure in excess of public revenue
692 Sensitive Index of Bombay Stock exchange refers to – Sensex
693 What do you mean by Financial Inclusion – Providing banking services to all those living in
remote areas
694 The Term ‘Pledge’ refers to – Bailment of goods as security for payment of debt or
performance of a promise
695 Crossing of cheques written on its face ‘Payees a/c only’ is the instructions given to - Collecting
banker that proceeds are collected for the a/c of the payee only
696 Cheque Truncation means – Scanning of cheques and transmission of electronic image
instead of physical cheques in clearing
697 What do you mean by the Term ‘Moral suasion’ - Advice given by RBI to banks / FIs
with the objective that they might implement it
698 Bank’s deposits are insured by – Deposit Insurance and Credit guarantee corporation Ltd.

699 Indian Financial System code allocated to Indian Bank have – 11 digits
700 As per RBI directions DDs are issued with account payee crossing for – Rs.20000 and above
701 Effective Ist April 2010 Interest on Saving Bank deposits are calculated on the basis of - Daily
product method
702 What do you mean by ‘A crossing which restricts transferability of a cheque’ - Account payee
crossing
703 Interest rate on SF deposits are decided by - Respective Banks
704 Two parallel transverse lines on the face of the cheque is called ‘Crossing’ and when a name of
bank is written between two lines – it is called special crossing
705 What do you mean by ‘Narrow Banking’ – When banks accepts deposits and invests it in
Government Securities
706 What do you mean by Factoring – A means of financing traders and manufacturers by
taking over their receivables
707 For recapitalisation of Public Sector Banks Budget allocation made for Financial year 2016-17 for
– Rs.25000 crores
708 Net Interest margin of a bank means – Difference between the interest income and the
amount of interest paid out
709 Land development bank form a part of the – Co-operative credit structure
710 FINO denotes – Financial Investment Network and Operation s
711 With regards to Asset Reconstruction Companies (ARCs) limit for foreign investment is – 74%
712 Broadly Financial Market are divided into – Two categories Money and Capital Market
713 Lock in period of Term deposit means – Pre mature closure is not possible
714 In primary market shares issued in the form of IPO and FPO, IPO means – Initial public offer
715 In primary market shares issued in the form of IPO and FPO, FPO means – Follow on public
offer
716 Who decides limit for cash withdrawal or purchase of goods and services by using the card –
Card Issuer bank
717 NITI (National Institutions for Transforming India) Aayog replaces – Planning commission
718 Under Basel III Pillar I relates to : Minimum Regulatory Capital Requirements based on
Risk Weighted Assets (RWAs)
719 CAMELS refers to : CAPITAL ADEQUECY RATIO, ASSET QUALITY, MANAGEMENT OF
EFFECTIVENESS, EARNING OF PROFITABILITY, LIQUIDITY, SYSTEM AND CONTROLS
720 Who is the service provider of RUPAY Card - NPCI
721 What do you mean by “Non-profit organisations" - Entity or organisation that is registered as
a trust or a society under the Societies Registration Act, 1860 OR Company registered under Sec
25 of Company Act 1956
722 Customer means – A person who is engaged in a financial transaction or activity with a
Regulated Entity
723 "Walk-in Customer" means - a person who does not have an account based relationship with
the RE, but undertakes transactions with the RE.
724 What do you mean by "FATCA" - Foreign Account Tax Compliance Act of the United
States of America (USA)
725 "Non-face-to-face customers" Refers - customers who open accounts without visiting the
branch / offices of the REs or meeting the officials of REs
726 "Shell bank" means - a bank which is incorporated in a country where it has no physical
presence and is unaffiliated to any regulated financial group.
727 Periodic updation of KYC documents are required - at least once in every two years for
high risk customers, once in every eight years for medium risk customers and once in every ten
years for low risk customers
728 What does the letter "C" represent in the rating model CAMELS: Capital Adequacy
729 Working capital limit to Small Manufacturing Enterprises up to Rs 5 crore is worked out as per
which method?: Turnover method suggested by Nayak Committee

730 Provisions on Standard Assets are shown under which head in the balance sheet of the Bank?:
Other Liabilities and Provisions on Liabilities side
731 If stock statement is not submitted for 3 months from its due date and DP is allowed on the
basis of old stock report, then the account will be considered NPA after:90 days
732 Quick Assets= Current assets - Stocks (prepaid expenses also to be deducted)
733 A cheque is crossed in two bank- whether it is valid or not: the payment of the cheque will be
made only if one bank is acting as agent of other bank otherwise returned
734 The Garnishee Order is applicable on the account of a customer when the relationship between
banker customer is: Debtor & Creditor
735 A/c payee crossing is defined in : it is not defined in any Act
736 Whether Minor can nominate? no
737 A crop is considered a long duration crop if the crop season is: More than 12 months
738 BRICS countries include: Brazil, Russia, India, China & South Africa
739 Legal audit of title document in borrowal account is required in accounts having credit limit of -
Rs.5 crores and above
740 Where bank has filed recovery suit legal audit of title documents – Not required because
remedial measures not possible after filing of suit
741 What is the periodicity of title documents audit – Fresh sanction – Ist audit in next quarter
of sanction date / mortgage date
742 What is the periodicity of title documents audit for the old sanctions – After 3 years or
wherever enhancement / change in security or substitute of IPs
743 Which of the following is not a material alteration? Changing bearer to order
744 For opening an account of a partnership firm, one certified copy of each of the
following documents shall be obtained: (a) Registration certificate.
(b) Partnership deed. (c) Officially valid documents in respect of the person holding an attorney
to transact on its behalf.
745 For opening an account of a trust, one certified copy of each of the following
documents shall be obtained : (a) Registration certificate. (b) Trust deed.(c) Officially valid
documents in respect of the person holding a power of attorney to transact on its behalf.
746 Records pertaining to the identification of the customers and their addresses obtained while
opening the account and during the course of business relationship shall be kept- for at least
five years after the business relationship is ended
747 KYC Verification once done by one branch are valid for – If a/c is transferred to another
branch
748 For opening an account in the name of a sole proprietary firm, a certified copy of an OVD details
of identity and address of the proprietor shall be obtained. In addition to it any two documents
of the firm as a proof of business /activity is to be obtained-Registration Certificate /
License under Shops act/Sales-Income tax returns / CST-VAT certificate
/Registration documents issued by sales, service, Professional tax authorities/Utility
bills
749 Under Shishu category of Mudra scheme what is the maximum Loan amount – Rs.50000/-
750 Under Kishore category of Mudra scheme what is the maximum Loan amount – Above
Rs.50000/- to Rs.5.00 lacs
751 Under Tarun Category of Mudra scheme what is the maximum loan amount – Above Rs. 5.00
lacs to Rs.10 lacs
752 Application form for Mudra Shishu Category Loan - PNB1166 B
753 Application form for Mudra Kishore and Tarun Category Loan – PNB1166A
754 To Grant Overdraft limit under Mudra Scheme what is the Scheme code in CBS to establish OD
limit – ODMUD
755 For financing Under MUdra Kishore and Tarun Category loans to general public Margin for loans
upto Rs.2.00 lacs - NIL
756 For financing Under MUdra Kishore and Tarun Category loans to general public Margin for loans

Above Rs.2.00 lacs to 10 lacs - Between 15 to 25% depending upon the relevant MSME
Scheme
757 What is the CR form number to be used for sanction of Tarun and Kishore Category loans under
Mudra – PNB282B
758 CR form required to completed in case of Shishu Category loan or OD Mudra – PNB 905 –Brief
Confidential Report
759 For Financial year what are the priorities of our Bank - ballooning stressed assets, slow
credit growth and weak earnings from the operations
760 Business budget strategy for FY 2016-17 is - “Potential based Bottom to Top Budget
strategy”
761 As a business budget strategy moto of the FY 2016-17 =
RETAIL PNB – DIGITAL PNB
762 PNB Navodaya means - Employee On-boarding and Mentoring Mechanism
763 Small Farmer means – Farmers with a land holding of over 1 hectare and upto 2 hectare
764 To classify an Priority Sector Advance under MSME manufacturing sector investment in Plant and
machinery in Micro enterprises should not exceed – Twenty five lacs rupees
machinery in Small enterprises– Exceeding Twenty five lacs and upto five crores of
rupees.
machinery in Medium enterprises– Exceeding Five crores and upto Ten crores of rupees.
767 To classify an Priority Sector Advance under Service sector enterprise investment in Plant and
machinery in Micro enterprises should not exceed – Ten lacs rupees
768 To classify an Priority Sector Advance under Service Sector enterprises investment in Plant and
machinery in Small enterprises– Exceeding Ten lacs and upto Two crores of rupees.
769 To classify an Priority Sector Advance under Service Sector enterprises investment in Plant and
machinery in Medium enterprises– Exceeding Two crores and upto Five crores of rupees.
770 Minor is not competent to enter into contract and contract entered into by him is void ab-initio
except supply of necessities. In which act it is defined – Sec 11 of Indian contract Act
771 Under which section A minor can be appointed as an agent and he can make principal liable by
his action – Section 184 of Indian contract act
772 What is the relation between banker and customer when customer takes a locker on rent – Bank
is lesser and customer is lessee
773 What is the relation between banker and payee of the draft – Trustee and beneficiary
774 Goods left negligently by the customer in strong room what is the relation between banker and
customer at this stage – Trustee and beneficiary
775 Money deposited by the customer but no instructions was given for its disposal. Explain
relationship – Trustee and beneficiary
776 After Issue of draft to customer which is the relationship with purchaser – Debtor and creditor
777 If loans are time barred whether right of set off can be exercised - YES
778 With regard to Garnishee order what do you mean by order NISI - requiring the bank to
explain as to why the funds in the account not be utilised to meet the judgement
creditor's claim
779 With regard to Garnishee order what do you mean by order Absolute - direction the bank to
freeze the entire balance or a portion of credit balance in the account of the
judgement debtor.
780 What do you mean by PNB Green initiative of the bank – Issue of duplicate Debit Card PIN
through SMS
781 As per Model Deposit Scheme of IBA, banks can open savings account of a minor independently
when he is at least_ __years old = 10 Years
782 Law relating to partnership firm is given in Indian Partnership Act 1932 but provision with regard
to number of partners in partnership firm contained in - Company Act 2013

783 Garnishee order is issued on the banker of – Judgement debtor
784 Garnishee order is not applied to - money deposited with the bank after receipt of the
Order
785 PAN Number is required while depositing cash in a bank account exceeding – Rs.50000/-
786 Rule in Clayton's case relates to - appropriation of payments
787 Rule in Clayton's case applies to - running accounts having debit balances
788 A customer wants return of his paid cheques. He can ask his bank under which provision:
Banking Regulation Act Section 45Z
789 Statutory liquidity ratio (SLR) is prescribed under which regulation? - Section 24, Banking
Regulation Act 1949.
790 If there is dispute between customer and the bank relating to credit card, where the
Ombudsman decides to give compensation to the customer, what is the maximum amount of
compensation-Rs. 1.00 lac
791 Upto what amount Inter SOL cash payment will be allowed in respect of accounts in the name of
individual(s) if cheque drawn favoring self – Rs.5.00 lacs
792 Details of Form 15 H obtained from the Term Deposit account holders is to be entered through
menu option - CUMM
793 Preferential interest to be paid to the Senior Citizens in their Term Deposit accounts is required
to be defined at which of the following level - Account Preferential Intt Credit
794 Why is it necessary to suspend a cust_id of the customer who does not have any active account
associated with it - It should not be used to introduce any new account
795 Menu option to calculate TDS in a term deposit account - TDSCALC
796 TDS Exempt End Date & TDS Exempt Submission Date are used to control - Date upto which
tax is not to be deducted and date of entry of 15-H form in Finacle
797 Work class allowed to incumbent incharge is - 100
798 Menu option used to print duplicate demand drafts - DDREPRNT
799 While opening a term loan account the function of “Hold in Operative Account” for amount due in
scheme details is to - mark lien in the operative accounts of the customer
800 While opening a term loan account the function of “Recovery Method” in scheme details is to -
Allow recovery of amount of installment from operative account
801 ISDN means- Integrated Services Digital Network
802 TACBSH is the menu option to be used while changing the - GL Sub Head Code
803 Ping is a command which checks about- Latency of the response

804 Menu option to know the authorised user for transfer of inventory from Double lock- IMAUM
805 To view expiry of stock statements on a particular date one has to make use of menu option -
SRL
806 Search on a branch SOL_Id in Finacle can be done through - BRTI
807 Remittance of TDS can be done through menu option - RMTDS
808 Auto Renewal of a term deposit account is possible for how many times in Finacle - ANY
809 DP Indicator to be chosen in Cash Credit accounts if DP is to be derived from Security? - ‘D’
Derived from security
810 Expand MMID – Mobile money identifier
811 What do you mean by MMID – It is a 7 digit numeric identification number
812 What do you mean by IMPS – Immediate payment system
813 IMPS Pin is a combination of – SMS Password and MMID
814 Menu option for uploading the cheque details as per PNB Suraksha Scheme – CHQSUR
815 What is the CBS menu option for uploading the accounts opened by the customer through online
account opening process on internet – OOSA
816 Cash deposit at outstation non base branch (other than same city) can be deposited without any
charges upto - Rs.25000/-

817 Cash deposit at other branch in same city (other than base branch) can be deposited without any
charges upto - Rs.25000/-
818 Menu option to for updation of E-mail address of the customer to receive Monthly statement of
account – UPEMAIL
819 Menu option to allow preferential rate of interest in Sr. Citizen accounts and Staff sr. Citizen
account - PRFUPD
820 As per system Partial recovery of locker rent can be done. What is the menu option for recovery
of partial rent – LKRCM – Sub option –T
821 Duly filled Form 15G / 15H can be generated from CBS through – DAYRPT 4/43 AND 4/44
822 CBS menu CHQSTAT is to be used for - UPDATION OF CHEQUE BOOK STATUS FROM
ACTIVE TO INACTIVE
823 Intersol IIIrd party Cash payment in SF account can be allowed upto maximum amount of -
Rs.50000/- per day
824 Intersol IIIrd party Cash payment in CA account can be allowed upto maximum amount of -
Rs.100000/- per day
825 Intersol IIIrd party transfers in CA account can be allowed upto maximum amount of -
Rs.200000/- per day
826 Intersol IIIrd party transfers in SF account can be allowed upto maximum amount of -
Rs.100000/- per day
827 Concessional rate of interest on deposits to the spouse of retired (deceased) member of staff can
be allowed up to – Equivalent to Staff plus sr.citizen rate
828 ITDREIN means – Income tax department reporting entity identification number
allocated by IT Department
829 Overdraft of Rs.5000/- allowed in PMJDY can be classified as – PMMY LOANS
830 What is the key word for SMS updation of KYC documents in case of low risk customers -
KYCNC
831 In case of pension accounts SMS alerts messages will be sent for every transaction of – Rs.1000
& above
832 In all other accounts SMS alerts messages will be sent for every transaction of – Rs.5000 &
above
833 Effective 01.10.2015 Unique identification number will be allotted to each form 15G/H during
every quarter of the FY, which is a combination of = 10 digit sequence number + Financial
year + TAN of the branch/office
834 What is the menu option to record details of restructured account in CBS – RSAM
835 A cheque has been presented through clearing house and bears special crossing of two banks.:
Return the cheque with the remarks crossed to two banks
836 When a banker is acting on the standing instructions of a customer, their relationship is of : An
agent and a principal
837 What is a probate - A will certified by a court for settlement of property of the
deceased.
838 If a promissory note is payable in instalments, the period of grace for payment will be available -
On each instalment
839 Decision given by the Ombudsman has to be implemented by the bank within_______ from the
date of receipt of acceptance from complainant -
1 month
840 The Banking Codes and Standards Board of India was registered on 18
February, 2006 under - Societies Registration Act, 1860
841 'Customer' has been defined in : KYC Guidelines
842 What is the penalty for denying/delaying the information as per Right to
Information Act?- Rs. 250/- per day maximum 25,000/-.
843 In CBS AEPS stands for Aadhar enabled payment system
844 A bank has a right called ----------to club two accounts (one of which has debit

balance and another has credit balance) in the same capacity, of customer: Right of set off
845 Articles of Association of a company contains details regarding: Matter related to the conduct
of day-to-day business of the company
846 A authorizes B for operating his locker. B approaches the bank for surrender there of. How
would you react? – B cannot surrender the locker because of only operational right
847 Under Balika Shiksha Fixed Deposit Scheme, the initial sum to be deposit by the Government of
India is Rs. _______ - 3000
848 Bailor-bailee relationship is applicable in – Keeping article in safe custody with bank
849 Opened an account on 12.08.15, got issued cheque book on 17.08.15. A cheque dated 10.08.15
is presented for payment, what will be the fate of the cheque? The Cheque will be paid if
otherwise in order.
850 For the enforcement of a mortgage security, court intervention is required even for actions
under the SARFAESI Act - NO
851 Current ratio is: Current Assets/Current Liabilities
852 Legal Compliance Certificate is required in our bank where - limits are Rs 10 lakhs & above
853 PNB Green credit facility is available to - Micro Manufacturing Enterprises
854 Acid Test ratio is: Quick Assets/Current Liabilities
855 A lien is the right to: retain goods or securities belonging to a debtor until he has
discharged a debt due to the retainer thereof
856 What is the most significant financial ratio to assess the repaying capacity of the unit? – DSCR
(Debt service coverage ratio)
857 Contingent Liabilities is shown at: Footnote to the Balance sheet
858 Service Area norms are to be followed only in case of – Govt Sponsored schemes
859 Working capital limit for MSME units up to Rs. 5.00 crore should be assessed as per method –
Nayak committee recommendations
860 Validity of gold card for exporters is – 3 years
861 Under the BCP guidelines, in case of absence of connectivity to Data Centre, what amount of
cash payment can be allowed to a customer without obtaining any Letter of Undertaking? –
Rs.15000/-
862 Details of Nominee are filled in ______? – OAAC – N detail
863 In Finacle it is possible to view the detail of overdue account through-LAOPI
864 Pulling features under PNB suvidha scheme is to be set through menu – SWEEPS (dba user)
865 What is the penalty for default of instalment under PNB Special RD Scheme – NIL
866 Under PNB Special RD Scheme what is the minimum instalment amount and its multiples and
minimum period - Rs.10/- Rs.1/- , 6 months
867 PNB Rakshak scheme cut off level for sweep in and out shall be_________ and minimum sweep
out/sweep in shall be______ - Rs.10000/- & Rs.1000/-
868 Minimum amount and minimum period for opening account under prospective senior citizen
deposit scheme – Rs.100/- and 1 year
869 What is the minimum amount, minimum period and minimum part-withdrawal amount in PNB
Sugam Deposit Scheme- 10000, 46 days, 1000
870 Anupam Deposit scheme – What is the minimum, multiples and maximum amount for opening of
account under the scheme: - Rs.10000/-, Rs.1000/-, Rs.9999000/-
871 What is the minimum, multiples and maximum amount for opening Ordinary term deposit
account: Rs.100, Rs.1/- , Rs.9999999/-
872 What is the minimum and maximum period in Special Term Deposit scheme - 1 year and 10
year
873 What is the minimum and maximum period in Ordinary term deposit scheme - 7 days and 179
days
874 What is the minimum ,multiples and maximum amount for opening Ordinary term deposit
account: Rs.100, Rs.1/- , Rs.9999999/-
875 In case of overdue term deposits interest rate from the date of maturity till payment / renewal

will be paid at the rate of : 4% if it is after 22.08.2008.
876 What is the minimum period for deposit under Varshik Aya YOzna deposit scheme – 24 months
877 As per RBI directors effective 1st April 2016 All rupee loans sanctioned and credit limits renewed
will be priced with reference to- MCLR (Marginal cost of funds based lending rate)
878 MCLR will comprise of – Marginal cost of funds, Negative carry on account of CRR,
Operating costs, Tenor premium
879 Marginal cost of funds means - Comprising of Marginal cost of borrowings and return on
networth.
880 Exempted categories of loans can be priced without linked to MCLR – Advances against
deposits, Advances to own employees, Fixed rate loans granted by banks
881 Loans covered by schemes specially formulated by GOI where in banks charge ROI as per
scheme – Exempted from MCLR pricing
882 WCTL /FITL (Funded interest term loan) granted as rectification / restructure package –
Exempted from MCLR pricing
883 MCLR Review is to be done by banks– Every month on a pre-announced date with the
approval of Board.
884 Marginal cost of borrowings = 92% of marginal cost of funds + return on net worth will
have the balance weightage of 8%
885 Loan limit for Kisan Gold Scheme will be maximum 50 lacs but – 5 times of average annual
total income of borrower or 50% of value of mortage land whichever is lower
886 Maximum limit under PNB Kalyani Card Scheme - Rs.1.00 lac
887 SMSs under PULL SMS facility for retail customers are required to be sent to – 5607040
888 Target fixed for Agriculture under Priority Sector lending – 18% of ANBC
889 Additional subvention to prompt payee farmers allowed by GOI – 3 %
890 Service area approach is applicable in case of only – Government Sponsored schemes
891 What is the minimum land criteria for sanction the tractor loan – 2.5 acres of perennially
irrigated land
892 Maximum family income criteria per annum in case of DRI scheme in rural area- Rs.18000/-
893 Tenor of FDR under Prudent Sweep scheme is – 7 days to 1 year
894 What is the type of credit card to be issued to Housing loan borrower availed HL limit of over
Rs.5.00 lacs to Rs.20 lacs - Gold card
895 Limit for credit card to Housing Loan borrower availed HL limit of over Rs.5.00 lacs to Rs.20 lacs
– 10% of HL amount maximum Rs. 1.00 lac
896 Housing loan allowed above Rs.20 lacs what is the pre approved limit of Credit card for this
borrower – 5% of HL amount maximum Rs. 3.00 lacs
897 Housing loan allowed between Rs.2.00 lacs to Rs.5.00 lacs what is the pre-approved limit of
credit card – 10% of HL amount classic card
898 What is the upper age limit for credit card allowed against the security of Fixed deposit – No
upper age limit
899 What type of income proof required from applicant of credit card against the security of bank’s
own deposit – No income proof required
900 What is the credit card limit against bank’s own deposit – Maximum 75% of the amount of
deposit
901 Independent external monitoring integrity pack is required to be adopted for all procurements,
works and services for the value – Rs.60 lacs and above
902 Effective 1.2.2016 Cersai fee for creation & for subsequent modification of security interest in
favour of secured creditor upto Rs.5.00 lacs – Rs.50/-+Tax
903 Effective 1.2.2016 Cersai fee for creation & for subsequent modification of security interest in
favour of secured creditor Above Rs.5.00 lacs – Rs.100/-+tax
904 Satisfaction of Securitization fee - Rs.50/-+tax
905 Cersai fee for any application for information on recorded / maintained in the register by any
person including online search – Rs.10 + Service tax

906 Maximum Cersai fee for any application for condonation of delay upto 30 days – Not exceeding
10 times of basic fee
907 Additional fee on Registration fee after 30 days for registration of charge for loan amount of upto
5 lacs and above 5 lacs from 31st to 40th day –Rs.100/- & Rs.200 respectively
910 With regard to monitoring of Agriculture loans BM to issue 1st notice prior to due date. What is
the colour of notice – White
911 With regard to monitoring of Agriculture loans BM to issue 2nd notice after 15 days of due date
of instalment. What is the colour of notice – Green
912 ECS system has been migrated from RBI Platform to NPCI Platform thus now ECS is known as –
NACH ( National Automated Clearing House )
913 What is minimum land requirement for financing a tractor without mortgage of land - at least
2.5 acres of perennially irrigated land
914 What is the cash margin for financing a tractor without mortgage of land – 40%
915 What is the repayment period for financing a tractor without mortgage of land – 60 months
916 What is the moratorium period allowed for financing a tractor without mortgage of land – NO
moratorium period
917 What is the sum insured in Self financed Group personal accident insurance policy for workmen
and officers for the period 01.01.2016 to 31.12.2016 - 7.00 lacs
918 As a matter of extra precaution telephonic Confirmation of high value cheque from the account
holder before making payment of the cheque is required for amount - Rs. 2 lacs and above
919 In case of overdue term deposits interest rate from the date of maturity till payment / renewal
will be paid at the rate of - 4% if it is after 22.08.2008.
920 What is the minimum period and maximum amount of deposit under Varshik Aya YOzna deposit
scheme – 24 months and Rs.9999000/-
921 What is the lock-in period of term deposit under PNB TAX Saver deposit scheme – 5 years
922 What is the minimum amount and minimum period under PNB Floating Rate Fixed Deposit
Scheme- 7 days
923 What is the maximum amount of overdraft allowed under PNB Vidyarthi deposit scheme –
Rs.10000/-
924 While opening account under SBVID scheme which date is to be mentioned in Free Text 5 field
of ‘V’ detail – Date of cessation as student
925 What is the cut off level amount for sweep in and sweep out balance in Rural / Semi urban and
Urban/ Metro areas – Rs.100000/-
926 What is the minimum amount and maximum amount to be invested in PNB growth fixed deposit
scheme – Rs.1 crore and Rs.10 crore
927 Personal Accident Insurance benefit under Pnb Rakshak Deposit scheme has been linked with –
credit of monthly salary for previous three months in a/c
928 Personal Accident insurance coverage amount in case of persons below officer rank under Pnb
Rakshak Deposit scheme – Rs.3.00 lacs
929 Personal Accident insurance coverage amount in case of officer below the Brigadier rank under
Pnb Rakshak Deposit scheme – Rs.5.00 lacs
930 Personal Accident insurance coverage amount in case of Brigadier and above under Pnb Rakshak
Deposit scheme – Rs.10.00 lacs
931 Accidental death insurance benefit Air Travel in PNB Rakshak Deposit scheme will be – Rs.5 lacs
below officer, Rs.10 lacs officer below Brigadier and Rs.20 lacs brigadier & above
932 PNB Rakshak deposit scheme for Air travel accidental death coverage will be applicable when –
Ticket purchased using salary a/c through E-com/Internet tran and credit of monthly

salary for previous 3 months ina/c
933 What is the charges to be paid to BCA for activation of RUPAY Dehit cards through Micro ATMs –
Rs.5/- One time
934 Charges payable for seeding Aadhaar number in the bank a/c opened at his/her location –
Rs.5/- One time per account
935 Charges payable for seeding Aadhaar number in the bank a/c which have not been opened at
his/her location – Rs.2/- One time per account
936 What is the credit card limit for Scale II & III to staff in active service – Rs.150000/-
937 What is the credit card limit for Scale II & III to staff Retired- pensioner – Rs. 50000/-
938 On which type of NPA accounts services of detective agency can be utilized – All NPA a/cs
whether non suit filed, suit filed or decreed
939 What is the maximum period allowed to detective agency for submission of finding reports on the
borrower/guarantor/co-borrower/director – 90 days ( First 60 days and by way of
extension 30 days)
940 What is the maximum amount of fee payable to detective agency – Rs.7500/- per person
maximum Rs.30000/- per account
941 For locating property by detective agency other than details available with the bank which may
lead to attachment of the same with documentary proof – Rs.20000/- for each property
located maximum Rs.1.50 lacs
942 Any other information provided by detective agency which may be helpful for recovery –
Rs.2500/- per piece of information with maximum 10000/-
943 Out of pocket expenses payable to detective agency – Maximum 10000/- per account
944 If detective agency fails to trace the borrower / guarantor etc-Maximum fee Rs.3000/- per
a/c can be paid
945 IF detective agency fails to trace the property – Maximum fee Rs.7000/- per account
946 Initial amount for opening of Sukanya samriddhi account – Rs.1000/-
947 Minimum amount in a financial year is to be deposited in Sukanya Samriddhi account –
Rs.1000/-
948 Maximum number of girl children can be covered by a parent in Sukanya samriddhi a/c – 2
949 In Atal Pension YOzna Maximum age of the customer who can opt for scheme - 40 years
950 What is the third piller of 1st phase of PMJDY – Financial Literacy
951 As per KYC norms withdrawal in small account is allowed per month upto a maximum of –
Rs.10000/-
952 How many times in a month a BSBDA a/c holder can use his bank’s ATM network to withdraw
the money – No limit
953 IMPS enables a person to transfer money through browser / application base mobile banking
upto a maximum of – Rs.50000/-
954 Under Financial inclusion can illiterate person be issued Debit Card – YES
955 Under Atal Pension YOzna fixed pension can be chosen from – Rs.1000/-, Rs.2000/-,
Rs.3000/-, Rs.4000/-, Rs.5000/-.
956 What do you mean by Bank mitra - Banking correspondents engaged by Banks
957 What do you mean by Aadhar seeding – Linking of Aadhar with Bank account
958 NPS Swavlamban scheme is managed and regulated by – PFRDA
959 Target customers for recently launched PNB POWER Saving account scheme – WOMEN
960 What is the free accidental insurance coverage available under PNB Power deposit scheme –
Rs.5.00 lacs if QAB in last calendar quarter remains equal or more than 25000/- &
Minimum one Transaction on POS/E-com during last 90 days
961 CBS Scheme code for PNB Power deposits - SBPWR
962 What is the penalty for delayed deposit in Recurring Deposit account - Rs.1.00 per 100 per
month
963 What is the minimum age to provide overdraft under PNB Vidyarthi Account – 18 Years
964 What is the age criteria for opening of a/c under prospective senior citizen deposit scheme to get

the automatic benefit of interest on attaining the age of 60 years - 55 years and above
965 An account under PNB Tax Saver Deposit scheme can be opened with a minimum amount of
100 and in multiple thereof subject to a maximum of – Rs.150000 per financial year
966 What is applicable repo rate under LAF - 6.50%
967 What is applicable reverse repo rate under LAF – 6.00%
968 At present Marginal Standing facility rate – 7.00%
969 At present What is bank rate in percentage term – 7.00%
970 Cash Reserve ratio rate at present – 4%
971 Presently Statutory liquidity ratio – 21.25%
972 In a cheque only the name of the payee is written in English, while the other things are in a
vernacular language - The cheque will be paid if otherwise in order.
973 An inchoate instrument is one in which – Either the name of payee, amount or date is not
mentioned
974 What is the minimum and maximum investment in Grams for Sovereign Gold Bonds – Minimum
2 grams and maximum 500 grams
975 What is the rate of interest payable on Sovereign Gold Bond issued by Government of India –
2.75%
976 According to Mental health act for opening of bank account “mentally ill person” means –
Person who need treatment by reason of mental disorder other than mental
retardation
977 Who is the competent authority to appoint guardian / manager for mentally ill persons – District
courts and collectors of districts under MH Act 1987
978 “Persons with disability” means – Suffering from any conditions relating to autism, cerebral
palsy, mental retardation.
979 Persons with disability covered under – The National Trust for welfare of persons with
Autism, Cerebral Palsy, Mental Retardation, Multiple disability Act 1999
980 Banking codes and standards Board of India registered under which act – The Societies
Registration Act 1860
981 Banks are prohibited from holding any IP except as acquired for own use for a period exceeding
seven years under section – 9 of Banking Regulation act
982 The Plain sheet appended to a Negotiable Instrument for the purpose of making endorsements
on the same is called – Allonge
983 What do you mean by Testamentary guardian – Person named in a will to act as a guardian
984 Who is the competent authority to register Limited Liability Partnership (LLPs) –Registrar of
companies
985 When banker’s duty to maintain secrecy of accounts maintained by the customer comes to an
end – NEVER
986 Under which act and section minimum requirement for paid up capital and reserves for domestic
banks is prescribed – Section 11 of Banking Regulation Act
987 Up to what amount duplicate drafts can be issued without waiting for non-payment advice from
drawee branch – Rs.5000/-
988 Which section of Negotiable Instrument Act provides the criminal liability on drawer of
dishonored cheque – Section 138
989 In case of company accounts what do you mean by birth certificate – Certificate of
Incorporation
990 In terms of Bank’s customer compensation policy on receipt of request for duplicate draft, it will
be issued within – 15 days
991 Draft / Cash orders may be issued with signature of one GBPA holder for an amount upto and
inclusive of – Rs.50000/-
992 All cheques should be processed through Magnifying Glass & UV Lamp issued by the customer
for an amount – Rs.100000 and above
993 Duties of clerical staff should be rotated after every – 6 months

994 Bank’s do not allow advance against its own shares because it is prohibited under – Section 20
of Banking Regulation Act
995 First three digits of MICR code refers to – City code of branch
996 Last three digits of MICR code refers to - Code allocated by RBI to each branch
997 In terms of UCP 600 bank’s deal with – Documents only
998 Saving Bank Vidyarthi account will be treated as inoperative if there is no customer induce
transaction for the last – Not to be converted into inoperative
999 Purchase or sales of goods or services PAN number is mandatorily required if amount exceeds –
Rs. 2 lakhs per transactions
1000 The fund created by Securitization Company for the purpose of acquiring assets is called - SPV
“Special Purpose Vehicle”
1001 As per Companies Act 2013, A single person can hold directorship - A person can hold
directorship of up to 20 companies, of which not more than 10 can be public
companies.
1002 Recovery received in a/cs where CGTMSE claim already received has to be passed on to CGTMSE
within 30 days. In case bank fails interest is to be paid to CGTMSC at the rate of – 4% above
bank rate
1003 Revenue audit reports in case of Small/Medium/Large branches are to be closed within - 45
days
1004 Revenue auditor has to indicate the name of erring official while submitting report where under
charges are above – Rs.5000/-
1005 To get interest subsidy under Ambedkar central sector scheme for higher studies abroad OBC
category means – Student having OBC certificate and family income does not exceed
Rs.3.00 lacs
1006 To get interest subsidy under Ambedkar central sector scheme for higher studies abroad EBC
category means – family income does not exceed Rs.1.00 lacs
1007 What is the CBS menu option to capture details of interest subsidy required under Ambedkar
central sector scheme – OBEDU
1008 Interest subsidy under Ambedkar central sector scheme is applicable for higher studies abroad
on disbursed component of – Rs.20.00 lakhs
1009 Which committee has recommended appointment of Bank’s internal Ombudsman – Damodaran
committee
1010 What is the purpose for appointment of Internal Ombudsman – To escalate minimum cases
to Banking Ombudsman
1011 What is the maximum amount of compensation allowed by internal ombudsman to complainant –
Rs.50000/- or amount loss suffered whichever is lower.
1012 In respect of Women Joint Liability Group maximum amount that can be financed without any
collateral security – Rs.10 lacs
1013 What is the maximum limit allowed for crop production to Women Joint Liability Group (WJLG) –
Rs.50 lacs as in case of KCC account
1014 In respect of women joint liability group interest concession upto 0.50% on the applicable rate
is allowed for loans – Above 20 lacs
1015 Maximum amount per day under MTSS which can be paid to the customer in cash –
Rs.50000/-
1016 Priority Sector loans upto Rs.25000/- Service charges/ Inspection charges to recovered from
borrower upto - No service charges are to be recovered
1017 In case of SHGs/JLGs Limit for not charging service charges /inspection charges is upto
Rs.25000/- - Per member and not for group as a whole
1018 To Finance to persons with disabilities for income generation under MSE sector NHFDC will make
refinance to banks @ - 100% of the loan amount
1019 NHFDC will charge rate of interest on refinance amount – 3% lower than the interest
charged by lending bank

1020 Financing to disable women persons for income generation under MSE sector what is the special
interest disount – 1%
1021 While filling up guarantee application form with CGTMSE IT-PAN number is mandatory w.e.f.
01.04.2016 for credit facility exceeding – Rs.5.00 lacs
1022 At CGTMSE portal effective 1.4.2016 upgradation of NPA module will have maker-checker
concept at respective bank’s CO level. What is level of approving authority in Circle office – Now
below the rank of AGM or its equivalent
1023 What do you mean by PNB Franchise scheme - Financing scheme to the Franchise of
reputed companies/corporate/centres irrespective of any activity
1024 Maximum Loan under PNB Franchise scheme- Need based
1025 Repayment period prescribed under PNB Franchise scheme - Minimum 5 years maximum 7
years for TL , CC to review/renew annually
1026 Loans beyond 10 lacs to 50 lacs allowed without collateral under CGTMSE who is the competent
authority to permit – Circle Head
1027 What the CBS Scheme codes for financing to Franchise of the reputed companies – TL- TLFRN,
CC-CCFRN
1028 To improve performance of the ATM sites what is the time period for electric audit – At least
once a year
1029 BCAs have been allotted the work to deliver demand notices in NPA accounts which is the
purpose – BCA being local person can easily help in recovery
1030 Notice Delivery charges in NPA accounts to be paid to BCA – Rs.10/- per Plus applicable
service tax per notice/envelope.
1031 If BCA provides authenticated, changed address / mobile number what is the remuneration
payable – Rs.5/- plus applicable Service Tax per case
1032 CBS menu option for feeding external credit rating in Big loan accounts – CRMS
1033 Our Head Office has desired deposit of minimum amount in BSBDA, Vidyarthi, Junior SF, Total
Freedom salary accounts as a measure of persuation – Rs.100/-
1034 Under new medical insurance scheme what is the maximum amount to be allowed as advance
for treatment of 9 critical disease – 100% of permissible amount
1035 What is the QAB in Rural and other than rural places in PNB Power Saver Scheme – Rs.500/-
and Rs.1000/-
1036 National Agriculture Insurance scheme (NAIS) and Modified National Agriculture Insurance
scheme (MNAIS) has been replaced by – PMFBY (Pradhan Mantri Fasal Bima YOzna
1037 Farmers eligible for enrollment under PMFBY should be – Regular and renewed account
1038 Farmers are compulsory covered under PMFBY – Loanee farmers to whom credit limit
sanctioned /renewed for notified crops during crop season & farmers whom
Government may decide to include from time to time
1039 Under PMFBY What do you mean by Notified Area - Notified Area is the Unit of Insurance
decided by the State Govt. for notifying a Crop during a season.
1040 Which type of farmers are covered under PMFBY - All farmers including sharecroppers and
tenant farmers growing notified crops in a notified area during the season who have
insurable interest in the crop are eligible.
1041 What are the risk excluded from PMFBY - Risks and Losses arising out of War & kindred
perils, nuclear risks, riots, malicious damage, theft, act of enmity, grazed and/or
destroyed by domestic and/or wild animals
1042 What will be the sum insured under PMFBY - Compulsory Component in case of loanee
farmers, the Sum Insured would be equal to Scale of Finance for that crop as fixed by
District Level Technical Committee (DLTC) which may extend up to the value of the
threshold yield of the insured crop at the option of insured farmer.
1043 What do you mean by APR ( Actuarial Premium Rates) – Basis of loss cost i.e. claims as %
age of sum insured during preceding 10 similar crop season (Kharif / Rabi) and
loading of expenses towards management including capital cost and insurer’s margin

1044 What is the premium rate for Kharif season crop i.e. All foodgrain and oilseeds
crops (all Cereals, Millets, Pulses and Oilseeds crops) - 2.00% of SI or Actuarial
rate, whichever is less
1045 What is the premium rate for Rabi season crop i.e. All foodgrain and oilseeds
crops (all Cereals, Millets, Pulses and Oilseeds crops) – 1.50% of SI or Actuarial rate,
whichever is less
1046 What is the premium rate for Rabi & Kharif season crop i.e. Annual Commercial/ Annual
Horticultural crops – 5.00% of SI or Actuarial rate, whichever is less
1047 What shall be the Bank’s share of commission on collection of premium from farmer under
PMFBY – Service charges @4% of premium collected
1048 URL for crop insurance administration programme - www.agri-insurance.gov.in
1049 What is the cut off date of receipt of proposal and collection of insurance premium - 31st July
(for Kharif) and 31st December (for Rabi)
1050 Under KBS (Kiosk Banking solutions) MBFD will be opened at BC locations by - Customer/s
having operative Saving Fund or Current account/s in our Bank.
1051 A/c Opened under PNB Sanchay scheme and MBFD opened at BC locations will be uploaded by
branch through CBS menu option – FIKSK
1052 What do you mean by Micro Deposit scheme of PNB at BC locations – PNB Sanchay
1053 PNB Sanchay deposit scheme has the combined features of - RD/Flexi RD and Mini Deposit
Scheme
1054 What is the initial deposit amount and multiplication of Micro Deposit scheme – Rs.50/-
1055 At one time what will be the maximum deposit amount under PNB Micro Deposit scheme –
Rs.5000/-
1056 What will be the maximum deposit amount per annum under PNB Micro Deposit Scheme –
Rs.60000/-
1057 Minimum and maximum period of PNB Sanchay Deposit Scheme – 12 months and 36 months
1058 3% Additional incentive interest subvention in addition to 2% regular interest subvention is
allowed to those farmers – Who repay short term production credit within one year of
disbursement of such loan
1059 The customer who has submitted Form 15G/ 15H is allowed TDS Exemption on the basis of -
TDS rate code in CUMM
1060 To avail benefit of TDS exemption after submission of 15G/15H form mentioning TDS exempt
date in CUMM has – No relevance in present system
1061 Wherever section 194 A of income tax act is not applicable like accounts of banks, LIC, UTI etc.
what will be the TDS rate code in CUMM – TDSZR
1062 To apply correct Tax deduction at source rules at the start of Financial year CBS system will reset
the TDS rate code to – TDSGE
1063 Loans to farmers for transporting their own farm produce will be covered under – Priority
sector
1064 Loans given to distressed farmers indebted to non institutional lenders – Covered under PS
lendiong
1065 Loans to corporate farmers, companies, partnerships directly engage in Agriculture and Allied
activities will be covered under Priority Sector lending – Upto Aggregate limit of 2 crores per
borrower
1066 Loans upto an amount of ________ sanctioned for Agriculture infrastructure i.e. storage facility,
market yards will be covered under PS lending – upto 100 crores
1067 Loans to cooperative societies of farmers for disposing off the produce of their members will be
covered under PS lending – Upto 5 crores
1068 Loans allowed to Micro / Small / Medium enterprises engaged in manufacturing or production of
goods under MSME falls under Priority sector lending upto a maximum limit – All irrespective
of Loan limit subject to investment criteria in Plant and machinery
1069 Bank loan under Service Enterprises category of MSME will be covered under Priority sector

lending up to maximum limit of – Rs.5 crore per unit to Micro & Small, Rs.10 crore per
unit to medium subject to investment criteria in equipments
1070 Outstanding deposit with SIDBI / Mudra Ltd. / NABARAD will be classified under Priority Sector
subject to limit of – Shortfall amount of Priority sector lending
1071 What is the ceiling limit of export credit per borrower to classify under Priority Sector lending –
25 crore per borrower to units having turnover upto 100 crores
1072 Loans to individual for educational purpose inclusive of vocational courses are covered under
Priority sector subject to ceiling of – Rs.10 lacs irrespective of sanctioned limit
1073 Housing loans to individuals in metro centres having population of 10 lacs and above are covered
under Priority Sector subject to a limit of – Rs.28 lacs and cost of dwelling unit does not
exceed 35 lacs
1074 Housing loans to individuals in other than metro centres where cost of dwelling unit does not
exceed 25 lacs are covered under PS lending subject a limit of – Rs.20 lacs
1075 For repair of damaged dwelling unit are covered under PS lending subject to ceiling limit of –
Rs.5 lacs in metropolitan and 2 lakhs in other centres
1076 Bank loans to any governmental agency for construction of dwelling units or for slum clearance
and rehabilitation of slum dwellers will be Priority sector loan subject to a ceiling of - 10 lakh
per dwelling unit.
1077 To identify economically weaker sections and low income groups for housing loan construction
projects what is the family income ceiling irrespective of location – Rs. 2 lakh per annum
1078 To construct houses for identified economically weaker sections and low income groups total
cost of each dwelling unit does not exceed – Rs.10 lac
1079 Renewable energy projects What is the maximum loan to be covered under PS lending other
than individual category borrower – Rs.5 crores
1080 Renewable energy projects What is the maximum loan to be covered under PS lending for
individual category borrower – Rs.10 lacs
1081 Loans upto Rs.50000/- per borrower will be covered under PS lending provided – House hold
annual income does not exceed Rs.100000/- in rural and 160000/- in non rural areas
1082 What is the total Priority sector target for domestic schedule commercial banks - 40 % of
ANBC or equivalent amount of OFF BS items whichever is higher
1083 What is the overall target for Agriculture sector under Priority sector lending - 18 % of ANBC or
equivalent amount of OFF BS items whichever is higher
1084 What is the target under PS is for Small and marginal farmers within total 18% target fixed –
8% of ANBC or equivalent amount of OFF BS items whichever is higher by March
2017 and 7% by March 2016
1085 What is the target fixed under PS for micro enterprises – 7.5% of ANBC or equivalent
amount of OFF BS items whichever is higher by March 2017 and 7% by March 2016
1086 What is the overall target fixed for weaker sections under Priority Sector – 10% ANBC or
equivalent amount of OFF BS items whichever is higher
1087 What is the ceiling amount of investment in Plant and machinery to indentify a unit as Micro
enterprises under manufacturing sector – Not exceed 25 lacs
1088 What is the ceiling amount of investment in Plant and machinery to indentify a unit as small
enterprises under manufacturing sector –Exceeding 25 lacs but does not exceed 5 crores
1089 What is the ceiling amount of investment in Plant and machinery to indentify a unit as medium
enterprises under manufacturing sector –Exceeding 5 crores but does not exceed 10
crores
1090 What is the ceiling amount of investment in equipments to indentify a unit as Micro enterprises
under service sector – Not exceed 10 lacs
1091 What is the ceiling amount of investment in equipments to indentify a unit as small enterprises
under manufacturing sector –Exceeding 10 lacs but does not exceed 2 crores
1092 What is the ceiling amount of investment in equipment to indentify a unit as medium enterprises
under manufacturing sector –Exceeding 2 crores but does not exceed 5 crores

1093 What is the loan related service charges to be levied for priority sector lending upto Rs.25000/- -
NIL
1094 To identify Loan category under priority sector calculation of loan related service charges will be
done in case of SHG/JLG – Loan amount Rs.25000/- per member basis
1095 Loans to minority communities, disabled persons, women beneficiary upto Rs.
1 lac, self help groups covered under which section of the Priority sector lending – Weaker
section
1096 Hackers are classified into three categories. What do you mean by “Black Hat” hacker - who
"violates computer security for little reason beyond maliciousness or for personal
gain".
1097 What do you mean by “White Hat” hacker - A hacker hired by the owner of computer
system for discovering computer security flaws.
1098 What do you mean by “Grey Hat” hacker - A hacker who breaches the security weakness
in a computer system
1099 Phishing means - a fraudulent attempt to obtain personal or private information like user-id,
credit card details, passwords
1100 Vishing means - known as Voice Phishing
1101 What are the minimum MCLR to be published by banks - 5
1102 Payment made in case for purchase of bank drafts or pay orders or banker’s cheque in a financial
year required to be reported to Income Tax department if aggregate amount is – Rs.10 lacs or
more
1103 Cash deposit or cash withdrawals (including through bearer’s cheque) in a financial year in one
or more current a/c of a person are to reported to Income tax department if aggregate amount is
– Rs. Fifty lacs or more
1104 Cash deposits aggregating to Rs.__________ in a financial year in one or more a/c (other than
CA and time deposit) is to be reported to Income tax department – Rs.10 lacs and above
1105 One or more time deposits (other than renewal) of a person aggregating to Rs.______ in a
financial year of a person are to be reported to Income tax department – Rs.10 lacs or more
1106 As per record maintenance policy of the bank total of 637 records to be kept out of which
________ are to be retained in electronic form – 128
1107 Record of Income tax register / Income tax return filing is to be preserved for a period of – 6
years
1108 Record maintenance policy provides that voucher / voucher register of the branch is to be
preserved for a period of – 8 years
1109 As per record maintenance policy Important document register, budget filed, suspense / sundry
register is to be preserved for a period of – 12 years
1110 Security form issue record register / destroyed register are to be preserved for a period of – All
Time
1111 Record of news paper and periodicals are to be preserved at bank branches for a period of –
One month
1112 With regard to MCLR rates our bank has published – 7 MCLRs
1113 Power to sanction loans on MCLR from overnight to 6 months MCLR vested with - HOCAC-III
& above
1114 Tenor premium on loans is one of the component of – MCLR
1115 For TAN number updation for a branch CBS menu is to be used – TANUPD
1116 Advance against bank’s own term deposit is allowed at the interest rate of – 1% above the
rate allowed on deposits
1117 Advances to borrower against third party term deposit is allowed at the rate of – 2% above the
rate of deposit minimum MCLR
1118 Internal risk rating B1 will be equal to the scoring under PNB Score/ SME Score – Above 52 to
58
1119 Internal risk rating A1 will be equal to the scoring under PNB Score/ SME Score – Above 80

1120 RBI has a plan to cover all banks by 2017-18 in strengthening the cyber risks for which a expert
panel has been constituted. The chairperson is – Meena Hemachandra
1121 Forex Benchmark – Effective May 2,2016 RBI Reference rate will be on actual market
transactions on volume weighted basis. Who has recommended this procedure – P Vijaya
Bhaskar committee
1122 With regard to Payment and settlement systems in India What is main objective of Vision 2018 –
Focus on migrating to a ‘less-cash’ and more digital society.
1123 Partial recovery of locker rent in CBS is to be recovered by invoking menu option – LKRCM sub
option T
1124 What is the CBS menu to be used for recording the charges in NPA accounts to be recovered
from customer - NPACHRG
1125 Single menu option to be used to allow overdraft in PNB Jandhan scheme which will facilitate
creation / verification of Limit, SRM – SBAOD
1126 With regard to population wise classification of centres what is Tier 5 – Population of 5000 to
9999
1127 With regard to population wise classification of centres what is Tier 2 – Population of 50000
to 99999
1128 With regard to population wise classification of centres what is Tier 3 – Population of 20000
to 49999
1129 What is the amount of compensation on transfer allowed to Officers in Scale IV and above –
Rs.20000/-
1130 What is the maximum accumulation of privilege leave - 270 days encashment upto 240
days
1131 What is the rate of special allowance payable to Officers of Scale –I to scale-III - 7.75% of
basic pay + DA

RETAIL LENDING SCHEME
1) What is maximum loan limit that can be availed for construction / purchase of House under
PNB Housing loan scheme for public
a) 10 lacs
b) 50 lacs
c) 100 lacs
d) Need based depending upon project / repay capacity
2) What is the maximum loan limit can be availed for Repair / Renovation / alteration under
PNB Housing loan scheme for public
a) 10 lacs
b) 20 lacs
c) 30 lacs
d) 25 lacs
3) What is the maximum loan limit that can be availed for furnishing under PNB Housing loan
scheme for public
a) 10% of loan for repair with maximum 2 lacs
b) 10% of housing loan maximum 5 lacs
c) 25% of loan for repair maximum 2.50 lacs
d) 10% of loan for repair maximum 1 lac
4) What is the maximum finance available for Earnest money deposit for purchase of House /
flat and what is margin percentage
a) 2.00 lacs & 10%
b) 10.00 lacs and 15%
c) 15.00 lacs and NIL
d) 10.00 lacs and 10%
5) What is the maximum permissible deduction inclusive of proposed Housing loan when
Net monthly salary/ Income of the borrower is between 60000 to 1.00 lac
a) 40%
b) 50%
c) 60%
d) 70%
6) What should be maximum LTV in respect of housing loans above Rs.75 lacs
a) 90%
b) 80%
c) 75%
d) 50%
7) What should be maximum LTV in respect of Housing Loans upto 75 lacs
a) 90%
b) 80%
c) 75%
d) 50%
8) In respect of Housing loan 0.50% extra interest is charged on Housing Loan for
a) 3rd House
b) 2nd House
c) 4th House
d) None of the above
9) What is the repayment period in Housing Loan for Repair and Renovation
a) 15 Years
b) 20 years
c) 25 years
d) 10 years
10) What is the rate of processing fees on Housing loans with limit upto 300 lacs

a) 0.90% of loan amount plus service tax
b) 0.50% of loan amount plus service tax
c) 1.00% of loan amount plus service tax
d) 2.00% of loan amount plus service tax
11) EM of IP or pledge of NSCs etc. up to ________% of loan amount is taken if property is being
purchased from 1st power of attorney holder and hwere there is delay in execution of Tripartite
agreement or where mortgage is not possible being ancestral property or Lal Dora land :
a) 50%
b) 75%
c) 100%
d) 125%
12) Penal interest @ 2% is charged if construction of the house is not completed within a period
of ________.
a) 3 years
b) 4 years
c) 5 years
13) What should be maximum LTV in respect of small Housing Loans upto 20 lacs
a) 90%
b) 80%
c) 75%
d) 50%
14) OD facility can be allowed to existing Housing Loan borrowers if there is no irregularity. The
minimum and maximum OD limits are:
a) Minimum 1 lac and maximum 5 lac
b) Minimum and maximum 5.00 lacs
c) Minimum Rs.50000/- and no maximum
d) Minimum Rs.50000/- and maximum Rs.25.00 lacs
15) Sanctioning authority (Branch Incumbent) can allow repayment of housing loan upto
maximum age of the borrower :
a) 60 years
b) 70 years
c) 75 years
16) PNB Flexible housing loan facility cannot be availed for
a) Purchase of Land/ plot
b) construction of house
c) Purchase of built house
17) To avail loan under PNB Flexible Housing Loan scheme age of the applicant should be less
than :
a) 70 years
b) 65 years
c) 50 years
d) 60 years
18) Under PNB flexible housing loan scheme enhancement of OD limit to the extent of 20% of
original limit will be allowed after expiry of how many years:
a) 3 years
b) 4years
c) 5 years
19) What is the maximum loan allowed for Solar power system being a part of housing loan
a) 5 lacs

b) 2 lacs
c) 4 lacs
d) 2.50 lacs
20) What will be the maximum repayment period for financing solar power system on
standalone basis
a) As per housing finance scheme
b) 60 months
c) 36 months
d) 30 years
21) What will be the maximum repayment period for financing solar power system where
property is mortgage with the bank
a) As per housing finance scheme
b) 60 months
c) 36 months
d) 30 years
22) What will be maximum loan amount allowed for purchase of Land / Plot for house building :
a) Any amount upto 60% of the repaying capacity
b) 50 lacs & upto 100 lacs by CH in Metro/State capital
c) upto 300 lacs by FGMCAC in all centres & 500 lacs in State capitals
d) b & c above
23) What is the margin in percentage for purchase of land / Plot for housing building
a) 40%
b) 50%
c) 25%
d) As per Housing loan scheme
24) In case of land / plot purchased out of bank loan is sold out or a/c closed without
construction within 5 years from the date of first disbursement, rate of interest will be charged
from the date of first disbursement as applicable to :
a) Bank’s Housing loan scheme
b) Commercial real estate
c) a or b whichever is higher
25) Effective 01.04.2016 Retail Asset branches working as specialized branches for retail credit
dispensation has to work as back office and renamed as:
a) Retail Asset branch
b) Retail Asset processing centre
c) Housing loan branch
26) What is the maximum age limit to finance under PNB Gen next housing finance scheme for
public
a) 70 years
b) 60 years
c) 40 years
d) 65 years
27) What is the occupational eligibility and minimum net monthly salary to allow PNB Next
generation housing finance to public :
a) Business class and Rs.20000
b) Salaried and Rs.35000/-
c) Agriculturist and Rs. 60000/-
d) All are eligible
28) What is the minimum loan amount under PNB Next generation housing finance scheme to
public :
a) 5 lacs

b) 10 lacs
c) 20 lacs
d) 50 lacs
29) Although need based finance can be allowed under PNB Next generation HL scheme, what is
the Eligible loan amount under PNB Next generation housing finance scheme to public :
a) Loan amount calculated as per regular housing loan method
b) 1.25 times of loan amount calculated as per regular HL method
c) 1.50 times of loan amount calculated as per regular HL method
30) Moratorium period allowed under PNB next generation HL scheme will be :
a) Under construction flats 60 months other 36 months
b) 60 months in all cases
c) 36 months in all cases
d) 18 months in all cases
31) Car loan can be availed by individuals and professionals with minimum income of
Rs._______ per month
a) 10000/-
b) 15000/-
c) 20000/-
d) No such condition applicable
32) Individuals can avail car loan equal to 25 months net monthly salary or _______ lac
whichever is lower for one or more vehicles.
a) Rs.25 lacs
b) Rs.100 lacs
c) Rs.50 lacs
d) No limit
33) Margin in percentage on advance for new and old car
a) 15% and 30%
b) 10% and 25%
c) 25% and 30%
d) 30% and 40%
34) What is the maximum age for EMI in case of car loan
a) 60 years relaxable upto 70 years
b) 65 years relaxable upto 70 years
c) 65 years with no relaxation
d) 70 years with no relaxation
35) In car loan carry home pay should not be less than 50% of gross salary but if gross salary
exceeds 30000/- and 100000/- per month deduction can be permitted upto _____% and
_______% respectively :
a) 60% and 70%
b) 50% and 60%
c) 60% and 75%
d) 50% and 70%
36) Upfront fee on Car loan is charged @_____ % of the loan subject to maximum 6000/-
exclusive of service tax.
a) 0.5%
b) 0.9%
c) 1.00%
d) 2.00%
37) In car loan, guarantee/ collateral is waived for permanent employees of central Govt./ State
Govt. / PSUs etc and also for other salaried class where cost of car exceeds Rs.___
a) 3.00 lacs
b) 4.00 lacs

c) 5.00 lacs
d) 6.00 lacs
38) In car loan account if borrower does not furnish guarantee, collateral in the shape of ______
% of loan amount can be accepted to secure the bank loan.
a) 100%
b) 125%
c) 150%
d) 200%
39) What is the maximum repayment period in case of car loan – old vehicle.
a) 60 months
b) 84 months
c) 108 months
d) 120 months
40) What is the maximum repayment period in case of car loan new vehicle
a) 60 months
b) 84 months
c) 108 months
d) 120 months
41) To sanction Car loan to a prospective borrower which of the following documents are not
required :
a) Loan application along with KYC documents
b) Salary / Income certificate
c) Driving license
d) All are required
42) What is the car dealer service charges payable in respect of tie up arrangements
a) 1% of the loan amount maximum 10000/-
b) 1.50% of loan amount maximum 15000/-
c) 2% of loan amount maximum 5000/-
d) No service charges are payable.
43) What are the income criteria in two wheeler loan under PNB Saarthi scheme
a) Rs.5000/- per month
b) Rs.10000/- per month
c) Rs.60000/- per month
d) No income criteria
44) In scooter loan suitable guarantee is required, if loan amount is more than Rs._____
a) 20000/-
b) 25000/-
c) 50000/-
d) 60000/-
45) What is the maximum loan amount for purchase of new two wheeler
a) 60000/-
b) 100000/-
c) 80000/-
d) Need based finance is to be sanctioned
46) What is the maximum repayment period for scooter / motorcycle
a) 84 months
b) 60 months
c) 24 months
d) 48 months
47) How much amount is charged from a student borrower availing scooter loan as processing fee ?
a) Rs.270/- plus tax
b) Rs.470/- plus tax
c) Rs.275/- plus tax

d) No processing fee is charged
48) Time norms for Non mortgage loans to the customers other than RAB branches to be
adhered to:
a) 7 days
b) 5 days
c) 10 days
d) 3 days
49) Time norms for mortgage loans to the customers other than RAB branches to be adhered to :
a) 7 days
b) 5 days
c) 10 days
d) 3 days
50) In PNB Saarthi scheme what is the margin %age for borrowers whose salary is being
disbursed through concerned branch or check off facility is there
a) 10%
b) 15%
c) 20%
d) 25%
51) What do you mean by PNB power ride scheme
a) New two wheeler scheme
b) New two wheeler scheme for women
c) Car loan scheme for women
52) What is the minimum and maximum age limit for PNB power ride scheme
a) 18 years and 60 years
b) 18 years and 65 years
c) 21 years and 60 years
d) 18 years and 48 years
53) To sanction two wheeler loan under PNB power ride scheme which of the following
documents are not required :
a) Loan application along with KYC documents
b) Salary / Income certificate
c) Driving license
d) All are required
54) What is the minimum net monthly of the borrower under PNB power ride scheme of the bank :
a) 20000/-
b) 8000/-
c) 10000/-
d) NO income ceiling prescribed
55) What is the maximum loan amount under PNB power ride scheme
a) 100000/-
b) 60000/-
c) 50000/-
d) 25000/-
56) What is the margin and repayment period under PNB power ride scheme
a) 25% and 60 months
b) 20% and 84 months
c) 10% and 36 months
d) 5% and 24 months
57) What is the permissible deductions including the deduction amount of proposed loan to arrive
at Net monthly salary / income:
a) 60%
b) 40%

c) 50%
d) 25%
58) How may margin is required for education loan above Rs.4.00 lac under PNB Saraswati for
courses in India:
a) 25%
b) 20%
c) 5%
d) 10%
59) How much up front fee is charged from student borrower in PNB Saraswati for studies in India :
a) 0.50%
b) 0.90%
c) 1.00%
d) No up front fee is charged
60) What should be minimum age for student to become eligible for education loan :
a) 10 years
b) 18 years
c) No age criteria
61) What is the moratorium period in Education loan under PNB Saraswati scheme
a) Course period + 1 year
b) Period if extendable upto 2 years if the borrower does not get job
c) None of the above
d) a & b above
62) Interest concession @ 1% if allowed if it is serviced during holiday period. When such
concession can be availed by the borrower :
a) At the time of service of interest
b) At the time of final settlement
c) at the time of start of repayment
63) How much amount is treated as priority sector in education loan sanctioned with in India.
a) 10 lacs
b) 15 lacs
c) 20 lacs
d) No amount covered under PS
64) What is the income criteria for sanction of education loan under Education loan scheme of the
bank
a) Rs.10000/- per month
b) Rs.20000/- per month
c) Rs.15000/- per month
d) No income criteria exists
65) Under education loan scheme if fee has been paid by the borrower and require reimbursement
from loan amount, can be reimbursed within :
a) 3 months
b) 6 months
c) 9 months
d) Reimbursement of fee is not applicable
66) What is the maximum repayment period under PNB Sarasvati scheme :
a) 10 years
b) 15 years
c) 60 months
d) 120 months
67) What is the minimum and maximum loan amount under PNB Kaushal

a) Rs.25000 and Rs.2.50 lacs
b) Rs.5000 and Rs.1.50 lac
c) Rs. 0.00 and Rs.4.00 lacs
68) What is the repayment period of loan above Rs.1.00 lac under PNB Kaushal
a) 3 years
b) 5 years
c) 7 years
d) 15 years
69) What is the repayment holiday for the course of 1 year and above under PNB Kaushal
education loan scheme :
a) 6 months
b) 9 months
c) 12 months
d) 18 months
70) What is the interest rate concession allowed to women beneficiary under PNB education loan
scheme
a) 1%
b) 0.50%
c) 0.25%
d) No concession allowed
71) PNB UDaan scheme is meant to allow education loan for study abroad. What will be
maximum loan amount under this scheme :
a) 10 lacs
b) 20 lacs
c) 15 lacs
d) 4 lacs
72) What is the margin under PNB Udaan education loan scheme for loan above Rs. 4/- lacs
a) 5%
b) 10%
c) 15%
d) 25%
73) What do you mean by CGFSEL
a) Credit guarantee fund launched by CGTMSE
b) Credit guarantee fund launched by MUDRA Ltd.
c) Credit guarantee scheme for education loan
d) None of t he above
74) The fund of CGFSEL will be managed by
a) NABARD
b) CGTMSE
c) NCGTC ( National credit guarantee trustee company ltd.)
d) Farmer welfare trust of the bank
75) Education loan upto Rs.7.50 lacs without collateral and / or IIIRd party guarantee with rate of
interest BR+2 % will b covered under CGFSEL subject to payment of guarantee fee at the rate
of :
a) 1% per annum
b) 0.50% per annum
c) 1.50% per annum
d) Without payment of guarantee fee
76) Guarantee for CGFSEL will be borne by the bank and provide guarantee upto a maximum
amount of ______
a) 75% of amount in default
b) 100% of amount in default

c) 50% of amount in default
d) 80% of amount in default
77) Credit Guarantee Fund Scheme for Education Loan (CGFSEL) is applicable new loans
sanctioned on or after the date of notification by government of India i.e.
a) 01.04.2015
b) 16.09.2015
c) 30.09.2015
d) 01.04.2016
78) Presently mortgage loan against IP can be granted for :

a) Personal needs
b) Business needs
c) Both personal and business needs
d) any purpose
79) What is the minimum and maximum amount of loan allowed for personal needs against
mortgage of IP.
a) 1.00 lac and 5.00 lacs
b) 5.00 lac and 50.00 lac
c) 5.00 lac and 500 lacs
d) 10.00 lac and 100 lac
80) What is the minimum and maximum amount of loan allowed for business needs against
Mortgage of IP.
a) 1.00 lac and 5.00 lacs
b) 5.00 lac and 50.00 lac
c) 5.00 lac and 500 lacs
d) 10.00 lac and 100 lac
81) What is the maximum repayment period for term loan allowed against mortgage of IP
a) 84 months
b) 60 months
c) 120 months
d) 30 years
82) Personal loan can be granted to which category of borrower
a) Businessmen
b) Employees
c) Professionally qualified practicing doctors
d) b & c above
83) Personal loan can be availed by employees drawing salary of Rs.30000/- and above & have
completed above 3 years in present organization to the extent of 20 times of net salary with
maximum of :
a) 3.00 lacs
b) 4.00 lacs
c) 5.00 lacs
d) Need based
84) What is the minimum net monthly income for a borrower to become eligible for personal loan in
Semi urban areas :
a) 15000/-
b) 12500/-
c) 10000/-
d) 7500/-
85) Personal loan is repayable in 60 EMI thus 60 advance cheques have to be obtained. What
should be maximum amount of EMI as compared to Income:
a) 50% of net monthly income
b) 60% of net monthly income

c) 70% of net monthly income
86) What is the maximum repayment period of personal loan for defence personal
a) 60 months
b) 36 months or remaining period of stay at present posting
c) 84 months
87) What is minimum income criteria prescribed for personal loan scheme of our bank
a) 15000/-
b) 12500/-
c) 10000/-
d) 7500/-
88) Which type of loan can be availed under pension loan scheme
a) Term Loan
b) Demand Loan
c) Overdraft
d) Any of the above
89) What is the upfront fee on pension loan ?
a) 0.90% of loan amount
b) 0.50% of loan amount
c) 1.00 % of loan amount
d) No upfront fee is charged
90) What is the repayment period prescribed in a pension loan where age of the borrower is
above 75 years
a) 48 months
b) 60 months
c) 36 months
d) 24 months can be extended to 48 months
91) What is the maximum loan amount allowed under Loan against pension scheme
a) 5.00 lacs
b) 10.00 lacs
c) 2.00 lacs
d) 25.00 lacs
92) What is the maximum loan amount allowed to pensioner whose age is above 75 years
a) 12 months pension maximum 5 lacs
b) 18 months pension maximum 5 lacs
c) 24 months pension maximum 5 lacs
d) 12 months pension maximum 3 lacs
93) What is the maximum loan that can be availed against Gold/Silver/ornaments /Gold coins
for productive purpose
a) Rs. 2.00 lacs
b) Rs.5.00 lacs
c) Rs.10.00 lacs
d) Need based without ceiling
94) Which type of loan can be granted under Gold loan scheme of the bank
a) Term Loan
b) Demand loan
c) Overdraft
d) All of the above
95) What is the maximum period during which borrower can repay the loan under Gold loan scheme
a) 24 months
b) 12 months
c) 36 months

96) What is the prescribed margin to allow gold loan
a) 10%
b) 25%
c) 30%
d) 40%
97) What is the maximum loan amount qualify under PNB Baghban scheme
a) 50 lac
b) 75 lacs
c) 80 lac
d) 100 lac
98) What is the margin in PNB Baghban scheme
a) 15% of the realizable value of property
b) 20% of realizable value of property
c) 25% of the realizable value of property
99) Under PNB Baghban scheme what is tenor of loan for senior citizen in age group of 60- 70
years
a) 15-20 years
b) 10-15 years
c) 10-20 years
100) What is not true among the following
a) Residual life of property should be at least 20 years
b) Purpose of loan should not be speculating or trading
c) It should be ensured that will executed by the borrower is the last will
d) Life certificate is not required under the scheme

RETAIL LENDING SCHEMES - ANSWERS
1 D 26 C 51 B 76 A
2 D 27 B 52 B 77 B
3 B 28 C 53 D 78 C
4 C 29 B 54 B 79 A
5 C 30 A 55 B 80 C
6 C 31 C 56 C 81 C
7 B 32 B 57 C 82 D
8 A 33 A 58 C 83 C
9 A 34 B 59 D 84 C
10 B 35 B 60 C 85 B
11 D 36 C 61 D 86 B
12 A 37 D 62 B 87 D
13 A 38 A 63 A 88 D
14 D 39 A 64 D 89 D
15 B 40 B 65 B 90 D
16 A 41 C 66 B 91 B
17 C 42 B 67 B 92 A
18 C 43 B 68 C 93 D
19 B 44 B 69 C 94 D
20 C 45 B 70 B 95 B
21 A 46 B 71 B 96 B
22 D 47 C 72 C 97 D
23 C 48 D 73 C 98 B
24 B 49 C 74 C 99 A
25 B 50 A 75 B 100 D

RETAIL DEPOSIT SCHEMES
1) As per Govt. of India rules Small account means :

a) Sum of credit transaction in a FY does not exceed 1.00 lac
b) Total withdrawal and transfer in a month does not exceed Rs.10000/-
c) At any point of time Balance does not exceed Rs.50000/-
d) All of the above
2) In Basic Saving Bank Scheme permitted number of times withdrawal from branch during a
month:
a) 2
b) 4
c) 6
d) No limit
3) What is the minimum period and minimum amount for opening RD account:
a) 12 months and one thousand
b) 6 months and One hundred
c) 24 months and Two thousands
d) No limit
4) An account under PNB Tax Saver Deposit scheme can be opened with a minimum amount of
100 and in multiple thereof subject to a maximum of
a) 12,00,000/- per year
b) 1,00,000/- per month
c) 1,50,000/- per financial year
d) 1,00,000/- per calendar year
5) What is the lock in period for deposit under PNB Tax Saver Deposit Scheme
a) 3 years
b) 5 years
c) 9 years
d) 12 months
6) Minimum Sweep in/out is for Rs.10000/- under PNB Prudent Sweep but what is the cut of level
for the same
a) Rs.100,000 in irrespective of the location of branch
b) Rs.10000 in R/SU and Rs.20,000 in U/M branches
c) Rs.25000 in R/SU and Rs.50,000 in U/M branches
d) Rs. 5000 in R/SU and Rs.15,000 in U/M branches
7) What is the amount of deposit under PNB Dugana Deposit Scheme
a) Minimum Rs.5000/-
b) Maximum Rs.1 Crore per day
c) Amount may in multiple of Re.1
d) All a, b and c
8) Auto renewal is not available in which one of the following deposit scheme
a) Capital Gain Scheme
b) PNB Tax Saver Deposit scheme
c) Bulk Term deposit
d. All the above
9) Sweep in and out shall take place in PNB RUDENT Sweep Saving Fund Account after the cut of
level of Rs.100000 with minimum sweep in and out of Rs.10000/- to/from FDR. The period of
FDR under the scheme will be
a) 46 days to 179 days
b) 7 days to 1 year
c) 7 days to 6 months
d) 46 days to 6 months

10) Maximum amount that can be deposited in flexi RD is
a) 5 times of Core monthly installment
b) 10 times of Core monthly installment
c) 100 times of Core monthly installment
d) Nothing to do with core amount but maximum of Rs.10000/-
11) Minor who has completed age of ______can open self operated SF account
a) 6 year
b) 14 year
c) 10 year
d) 18 year
12) What is the a/c type to be mentioned in CUMM for eligibility for additional interest allowed by a
bank, in case of a senior citizen:
a) ZOTHR
b) OTHER
c) SRCTN
d) A & B ABOVE
13) Under Balika Shiksha Fixed Deposit Scheme, the initial sum to be
deposit by the Government of India is Rs. _______.
a) 2000/-
b) 3000/-
c) 5000/-
d) 6000/-
14) Maximum period and maximum amount for opening of account in Anupam deposit scheme
a) 179 days and 99,99,999
b) 120 months and 99,99,000
c) 240 months and 99,99,999
d) 6 months and 100000
15) Prospective Senior Citizen Term Deposit can be opened by individuals (Singlly or Jointly) with
others . What is the age criteria of prospective senior citizen
a) 60 and above
b) 55 and above
c) 50 and above
d) 65 and above
16) What is the ceiling on Overdraft amount under PNB Shikshak OD Scheme.
a) Last Salary Credit or Rs. 30000, whichever is lower.
b) Last Salary Credit or Rs. 40000, whichever is lower
c) Last Salary Credit or Rs. 50000, whichever is lower
d) Last Salary credit or Rs.100000 whichever is lower
17) Flexi RD cannot be opened by
a) Individual – singly or jointly or already holding an a/c
b) Minor through guardian or by minor of 10 years and above in his/her own name
c) Firms , Clubs , association, trust , educational institute , Municipal corporation,
Panchayat, Government and Quasi Govt Bodies , Cooperative societies , religious or
charitable institutions , HUF and Corporate etc
18) Which one of the following is not true in respect of Fixed Deposit scheme for Road Accident
Victims
a) A/c can be opened only by claimants of victims of road accident as per court order, a
copy of which is to be held on records.
b) Period may vary from 12 months to 120 months and ROI will be 1 percent above CARD
rate

c) Interest is to be paid at monthly intervals at discounted rate, maturity option is not
available Depositor to open SF account, with no cheque book facility, mandatorily
wherein interest will be credited on monthly basis.
19) What is the minimum age to provide overdraft under PNB Vidyarthi Account
a) 10
b) 18
c) 21
20) What is the penalty for delayed deposit in Recurring Deposit account
a) Rs.1.00 per 100 per month
b) Rs.2/- per 100 per month
c) Rs.3/- per 100 per month
d) Rs.5/- per 100 per month
21) The maximum amount of deposit permitted under PNB Bulk Fixed deposit scheme is _______
and in multiples of ________.
a) 10 crores , 1
b) above 10 crore , 1
c) 10 crore , 10000
d) Above 10 crore, 10000
22) What is the maximum amount to be invested in Senior Citizen savings scheme_____ and in
multiples of ______
a) 5 lacs, 1
b) 10 lac, 10000
c) 15 lac, 1000
d) No limit
23) What is the minimum amount and maximum amount to be invested in PNB growth fixed deposit
scheme
a) 5 lacs, 50 lacs
b) 50 lac, 1 crore
c) 1 crore, 10 crore
d) Any amount
24) What is the minimum period in Income plan and maturity plan under PNB growth Fixed deposit
scheme
a) 6 months and 46 days
b) 12 months and 6 months
c) 6 months and 7 days
d) 7 days and 46 days
25) Under PNB Growth fixed deposit scheme part withdrawal is permitted. What is the minimum
amount of part withdrawal under this scheme
a) Rs. 1000
b) Rs. 10000
c) Rs. 100000
d) Rs. 50000
26) What is the minimum amount of part withdrawal under PNB Bulk deposit scheme
a) Rs. 1000
b) Rs. 100000
c) Part withdrawal not allowed
d) Rs. 50000
27) What is the sweep in and sweep out amount in PNB Smart Banking current account of Gold
Variant
a) Rs.1000

b) Rs.10000
c) Rs.50000
d) Rs.100000
28) Under PNB Smart banking current account scheme what is the minimum and maximum period of
sweep term deposit
a) 7 days and 179 days
b) 46 days and 179 days
c) 180 days and 365 days
d) 15 days and 91 days
29) Under PNB Platinum variant of Smart Banking Current Account how many cheque leaves are
allowed in each quarter without any charge
a) 100
b) 200
c) 300
d) 600
30) What is the QAB Charges for non maintenance of minimum balance in all the four variants of PNB
Smart Banking Current Account i.e. SILVER, GOLD, DIAMOND, PLATINUM
a) 300, 600, 900, 1200
b) 150, 600,1500, 3000
c) 50, 300, 600, 1800
d) 200, 400, 600, 800
31) What is Minimum QAB in Rural/Semi Urban area under PNB Prudent sweep account
a) Rs. 1000
b) Rs. 5000
c) Rs.10000
d) Rs. 500
32) What is the cut off level amount for sweep in and sweep out balance in Rural / Semi urban and
Urban/ Metro areas :
a) Rs.100000
b) Rs.1000 and Rs. 10000
c) Rs.25000 and Rs.50000
33) For consolidated picture of Flexi FD and operative SB/CA accounts what is menu option in CBS
a) PSP
d) FLEXIPSP
c) PBP
34) While opening account under SBVID scheme which date is to be mentioned in Free Text 5 field of
‘V’ detail
a) Date of birth of the student
b) Date of Majority of the student
c) Date of cessation as student
d) No date is required to filled
35) What is the maximum amount of overdraft allowed under PNB Vidyarthi deposit scheme:
a) 5000
b) No overdraft allowed
c) 2000
d) 10000
36) To avail the benefit under Salary accounts for corporate employees what is the minimum account
criteria:
a) 75% of the strength of the permanent employees minimum 10
b) 50% of the strength of the employees
c) 75% of the employees strength whether permanent or not.

37) What is the initial deposit and QAB for salary account scheme for corporate employees
a) 500 and 5000
b) 1000 and 10000
c) NO Initial deposit and NO QAB
d) 5000 and 5000
38) What is the maximum overdraft allowed under Salary account for corporate employee scheme:
a) Last salary credited in the account or Rs.50000
b) Only last salary credited in the account
c) NO overdraft allowed
39) Under PNB Suvidha Pull Sweep Facility, if the number of accounts to be pooled together is 4,
what should be the minimum QAB requirement in any of the SB/CA account is ` ____
a) 1 lac
b) 2 lac
c) 4 lac
d) 4 lac in any 2 SB/ CA accounts
40) What is the minimum amount and minimum period under PNB Floating Rate Fixed Deposit
Scheme:
a) 500 and 6 months
b) 10000 and 46 days
c) 1000 and 180 days
d) 1000 and 7 days
41) What is the minimum amount of FD required for allowing demand loan /overdraft against the
security of PNB Floating rate fixed deposit receipt
a) 5000
b) 2000
c) 10000
d) No minimum amount prescribed
42) What is the lock-in period of term deposit under PNB TAX Saver deposit scheme
a) 7 days
b) 46 days
c) 6 months
d) 5 years
43) Which of the following is correct in respect of Fixed deposit scheme for road accident victims
cancelled prematurely :
a) 1% less than applicable rate period for which deposit has run
b) 2% less than applicable ROI
c) No penalty is to be charged
d) No premature cancellation / part withdrawal permitted without the permission of the
court.
44) What is the penalty of missed installments in Flexi RD Scheme
a) Rs.2 per Rs.100 per month
b) Rs.1 per Rs.100 per month
c) No penalty applicable
45) To allow additional interest on account of Senior Citizen deposit what are the pre-requisites at
the account level
a) Date of birth should be correct
b) Customer type code should be ‘SRCTN’
c) Use INTTM menu to allow additional interest
d) Both a and b
46) Which of the following is correct in respect of RD accounts

a) RD a/c holder cannot amend number of installments
b) RD a/c holder cannot amend amount of monthly installment
c) IF RD is closed within a period of one year premature charges of Rs.100/- will be
levied except in case of death
d) All of the above
47) What is the minimum and maximum amount under PNB Dugna Scheme
a) Rs.100 and less than 1 crore
b) Rs.500 and less than 10 crore
c) Rs.5000 and 1 crore
d) Rs.10000 and 10 crores
48) What is the monthly installment of PNB Lakhpati scheme for 72
Months under Scheme ‘A’ variant
a) 1500
b) 1340
c) 1070
49) What is the cut off level and sweep out/ sweep in amount in Shikshak deposit scheme:
a) Rs.15000 and Rs.1000
b) Rs.5000 and Rs. 10000
c) Rs.15000 and Rs. 10000
d) Rs.40000 and Rs. 10000
50) What is the penal charges for closure of account under PNB SHIKSHAK scheme within 1 year of
the opening of account:
a) No charges
b) Rs.500/-
c) Rs.150/-
d) Rs.1000/-
51) What is minimum amount and multiples under Varshik Aya yozna deposit scheme:
a) Rs.10000/- and Rs.1000/-
b) Rs.100 and Rs.1/-
c) Rs.10000/- and Rs.1/-
52) What is the minimum period for deposit under Varshik Aya YOzna deposit scheme
a) 7 days
b) 6 months
c) 12 months
d) 24 months
53) What is the maximum amount that can be deposited under Varshik Aya yozna scheme
a) 1 crore
b) 10 crore
c) 9999999/-
d) 9999000/-
54) In case of overdue term deposits interest rate from the date of maturity till payment / renewal
will be paid at the rate of :
a) 4% if it is after 22.08.2008.
b) As applicable at the time of renewal/payment
c) No interest on overdue deposit is to be paid
55) At the time of renewal, Interest on overdue term deposit is to be paid from the date of :
a) Renewal of the term deposit
b) Retrospective date
c) Renewal date and retrospective date whichever is lower

56) What is the minimum ,multiples and maximum amount for opening Ordinary term deposit account:
a) Rs.100, Rs.1/- , Rs.9999999/-
b) Rs.500, Rs.1/- , Rs.1 crore
c) Rs.10000, Rs.1000, Rs.10 crores
d) Any of the above
57) What is the minimum and maximum period in Ordinary term deposit scheme
b) 7 days and 179 days
c) 6 months and 120 months
d) 12 months and 120 months
58) What is the minimum and maximum period in Special Term Deposit scheme
b) 6 months and 120 months
c) 1 year and 10 year
d) 7 days to 10 years
59) What is the charges to be recovered from customer when QAB maintained is between 900 to 999
in Urban centre
a) Rs.10/-
b) Rs.15/-
c) Rs.75/-
d) Rs.150/-
60) What is the minimum, multiples and maximum amount for opening Ordinary term deposit
account:
a) Rs.0, Rs.1/- , Rs.9999999/-
b) Rs.500, Rs.1/- , Rs.1 crore
c) Rs.10000, Rs.1000, Rs.10 crores
d) Rs.100, Rs.1/- , Rs.9999999/-
61) Anupam Deposit scheme – What is the minimum, multiples and maximum amount for opening of
account under the scheme:
a) Rs.10000/-, Rs.1000/-, Rs.9999000/-
b) Rs.100/-, Rs.1/- Rs.9999999/-
c) Rs.500/-, Rs.100/-, Rs.9999900/-
d) Any of the above
62) What is the Margin for the overdraft allowed under anupam deposit maturity period
remaining upto 3 years:
a) 25%
b) 10%
c) No margin
d) 7.5%
63) Which one of the following is true
a) No third party advance is allowed under Anupam Scheme
b) No OD to proprietorship firm against FDR in the name of proprietor and No OD to
proprietor against FDR in the name of proprietorship firm
c) The Title of term deposit and Overdraft should be the same
d) All the above
64) What is the minimum amount, minimum period and minimum
part-withdrawal amount in PNB Sugam Deposit Scheme:
a) 10000, 46 days, 1000

b) 100, 7 days, 100
c) 1000, 6 months, 1000

65) What is the minimum and maximum limit while opening account under NRE Rupee Sugam term
deposit scheme
a) 10000 and 9999999
b) 10000 and 9999000
c) 100 and 9999999
d) 10000 and no limit
66) Which of the following is not true with regard to PNB SUGAM deposit scheme
a) Depositor can withdraw any amount before maturity in multiples of Rs.1000/-
b) No penalty is to be charged for premature withdrawal
c) Overdue deposit is to be renewed on the date of presentation
67) In respect of NRO Sugam deposit scheme a/c will be opened jointly with :
a) Resident Indians only
b) Resident and/or with non resident
c) Joint account not permitted only nomination can be done
68) What is the minimum amount and minimum period for opening account under prospective senior
citizen deposit scheme
a) Rs.100 and 1 year
b) Rs.1000 and 6 months
c) Rs.10000 and 12 months
69) Under PNB Rakshak scheme cut off level for sweep in and out shall be_________ and minimum
sweep out/sweep in shall be______
a) Rs.15000 and Rs.10000
b) Rs.10000 and Rs.1000
c) Rs.40000 and Rs.10000
70) Under PNB Rakshak deposit scheme what is the maximum amount of overdraft allowed :
a) Last one months salary
b) Sum of last two months net salary
c) Sum of last two months gross salary
71) Which of the following is not true with regard to PNB Rakshak scheme
a) Only one facility either auto sweep or overdraft can be allowed.
b) Initial deposit and QAB are NIL
c) Occupation code in CBS should be “POLIC”, “COAST” OR “ITBPP”
d) All are correct
72) Under PNB Special RD Scheme what is the minimum instalment amount and its multiples and
minimum period
a) Rs.100/-, Rs.100/-, 6 months
b) Rs.10/- Rs.1/- , 6 months
c) Rs.1000/-, Rs.100/-, 12 months
73) What is the penalty for default of instalment under PNB Special RD Scheme
a) Rs.2/- per Rs.100/- per month
b) Rs.1/- per Rs.100/- per month
c) No penalty will be charged
74) Which of the following is correct with regard to frozen accounts:
a) In Case of Saving Bank accounts at SF rate at regular intervals
b) At the term deposit rate as agreed upon
c) On maturity TDR will be renewed as per the original term

d) All are correct
75) With regard to term deposit of deceased customer which of the following is correct:
a) Death before date of maturity and amount claim after maturity interest at the contracted
rate will be paid till maturity date.
b) As per (a) above after maturity at SB rate
c) In case death after maturity date where depositor fails to renew the deposit Bank shall
pay interest as in case of overdue term deposits.
d) All are correct.
76) If depositor close the TDR before maturity for the purpose of investment in other TD scheme of
the bank, what is the rate of penalty:
a) 1% penal interest will be charged
b) No penalty will be levied if reinvested for longer period than earlier deposit
c) 2% penal interest will be charged
77) What is incorrect in PNB Mitra Account
a) Balance in the account should not exceed Rs.50,000
b) Total credit in the account should not exceed Rs.1.00 in a year
c) Maximum withdrawal / transfer in a month Rs.10000/-
78) Pulling features under PNB suvidha scheme is to be set through menu
a) FFDPSP (GU User)
B) SWEEPS (DBA User)
c) PFOAAC (GU User)
79) Multi Benefit deposit scheme – What is the minimum, multiples and maximum amount for
opening of account under the scheme:
a) Rs.100/-, Rs.1/-, Rs.9999999/-
b) Rs.100/-, Rs.1/- Rs.9999999/-
c) Rs.500/-, Rs.100/-, Rs.9999900/-
d) Any of the above
80) PNB Power Saver scheme is meant to cover women customers, what is the maximum free
accidental insurance coverage for debit card issued under the scheme
a) 50000/-
b) 100000/-
c) 200000/-
d) 500000/-
81) Accidental death coverage under PNB Rakshak deposit scheme is now linked with :
a) Credit card issued
b) Specially designed PNB Rakshak Debit card
c) Credit of monthly salary for previous 3 months
d) Any of the above
82) Under PNB Rakshak deposit scheme Brigadier & above is having free accidental insurance
cover with air travel or without air travel upto a maximum amount of :
a) Rs.5.00 lacs and Rs.3.00 lacs
b) Rs.10.00 lacs and Rs.5.00 lacs
c) Rs.20.00 lacs and Rs. 10.00 lacs
d) Amount covered as per debit card issued in the a/c
83) Under PNB Rakshak deposit scheme Officers below the rank of Brigadier is having free
accidental insurance cover with air travel or without air travel upto a maximum amount of :

84) Under PNB Rakshak deposit scheme persons below the rank of Officers is having free
accidental insurance cover with air travel or without air travel upto a maximum amount of :
85) Deposits held, singly, in the personal name of spouse of a deceased member of a staff or a
deceased retired member of the Bank’s staff concessional rate of interest allowed. Which of
the following is correct:
a) At Staff rate
b) At Sr. citizen rate if age is 60 years and above
c) Staff + Sr. citizen benefit both (if customer is sr. citizen)
d) At Card rate
86) On submission of 15G form by the customer what is the ceiling limit and TDS exemption
code to be entered in CBS
a) 999999999.99 & TDSGE
b) 0.00 to 2.50 lacs & TD15G
c) 0.00 to 5.00 lacs & TD15G
87) What should be the TDS exemption rate code in CBS where 4th Character of the PAN Card
number is ‘P’, ‘H’, ‘A’, ‘B’, ‘T’
a) TD15G
b) TDSPN
c) Only TDS exemption date is to be entered in CUMM
d) TDSGE
88) On submission of Form 15G/15H by the customer mentioning TDS exemption date is
replaced by :
a) PANCARD
b) TDS Rate code
c) Form 60
d) Any of the above
89) TDS exemption limit from 0.00 to 3.00 lakhs is allowed to Sr. citizen customer having 4th
Character in PAN Number as ‘P’ and age group between :
a) above 18 years to 60 years
b) above 60 years to 80 years
c) Above 80 years
d) No exemption is allowed
90) TDS exemption limit from 0.00 to 5.00 lakhs is allowed to Sr. citizen customer having 4th
Character in PAN Number as ‘P’ and age group between :
a) above 18 years to 60 years
b) above 60 years to 80 years
c) Above 80 years
d) No exemption is allowed
91) All the TDS exemption rate code will be reset to TDSGE on
a) 1st June of the relevant financial year

b) 1st April of the relevant financial year
c) 1st January of the relevant financial year
d) Once entered in CBS will continue till customer withdraws
92) In specified categories where TDS is not to be deducted TDS remark codes are to be
mentioned in CUMM along with TDS rate code :
a) TD15H
b) TDSZR

c) TD80G
d) TD60G
93) PNB Sanchay which is combined features of RD/Flexi RD and Mini Deposit scheme is available
with
a) BC Locations
b) Directly at Branch location
c) Directly at Head Office location
94) What is the minimum deposit amount under PNB Power Saver deposit scheme
a) Rs. 1000/-
b) Rs.500/-
c) Rs. 0/-
95) Which of the following is correct with regard to Sukanya Samridhi Account :
a) Opened by a girl child till she attain the age of 10 year
b) Minimum amount per year is Rs.100/- & Maximum Rs.1.50 lacs
c) One withdrawal at the age of 18 years and a/c will mature
on completion of 21 years from the account open date
d) All are correct
96) What will be rate of interest allowed while opening Fixed deposit account for Road
Accident victims
a) At applicable card rate
b) 1% above the card rate
c) No interest will be paid
97) What is the minimum, maximum and multiplicity of period in months in case of RD
accounts.
a) 3, 120, 3
b) 6, 120, 1
c) 12,180, 6
d) Either a or c
98) What is minimum entry age of the customer for opening Family protection account i.e. SF with
insurance cover
a) 10
b) 25
c) 30
d) 50
99) What is the minimum and multiplication amount of special RD account
a) Rs.100 and Rs.10
b) Rs.10 and Rs. 1
c) RS.1000 and Rs.100
100) In our bank Term deposits are auto renewed on maturity. In which of the following schemes
auto renewal is not done:
a) PNB Tax saver deposit scheme
b) Bulk term deposit scheme
c) Interbank deposit for a fixed period
d) All of the above

RETAIL DEPOSIT ANSWERS
1 D 26 C 51 A 76 B
2 B 27 C 52 D 77 D
3 B 28 D 53 D 78 B
4 C 29 D 54 A 79 A
5 B 30 B 55 A 80 D
6 A 31 B 56 A 81 C
7 D 32 A 57 B 82 C
8 D 33 D 58 C 83 B
9 B 34 C 59 B 84 A
10 B 35 B 60 D 85 C
11 C 36 A 61 A 86 B
12 C 37 C 62 D 87 A
13 B 38 A 63 D 88 B
14 B 39 C 64 A 89 B
15 B 40 D 65 D 90 C
16 C 41 C 66 D 91 B
17 D 42 D 67 B 92 B
18 D 43 D 68 A 93 A
19 D 44 C 69 B 94 B
20 A 45 D 70 B 95 D
21 B 46 D 71 D 96 B
22 C 47 C 72 B 97 B
23 C 48 C 73 C 98 B
24 C 49 A 74 D 99 B
25 C 50 C 75 D 100 D

POLICY AND ACTS
BANKING REGULATION ACT Act:

1) Statutory liquidity ratio (SLR) is prescribed under which of the following regulation?
(a) Section 24, Banking Regulation Act 1949.
(b) Section 42(1), Banking Regulation Act 1949
(c) Section 24, RBI Act 1934
(d) Section 42(1), RBI act 1934.
2) With regard to Banking term SLR means :
(a) Special Liquidity Ratio
(b) Statutory Liquidity Ratio
(c) Special Linear Relationship
(d) Specially Lowered Risk
3) What is the maximum extent, upto which a bank can hold the shares of a company when
it is pledge or mortgagee or absolute owner?
(a) No ceiling
(b) 5% of the total unsecured loans
(c) 30% of its own paid up capital and reserves or 30% of the paid up capital of
the company, whichever is lower.
(d) 30% of its own paid up capital and 30% of the paid up capital and reserves of the
company, whichever is lower.
4) A customer wants return of his paid cheques. He can ask his bank under which provision:
(a) RBI Act Section 45
(b) Negotiable Instruments Act Section 45Z
(c) Banking Regulation Act Section 45Z
(d) Negotiable Instrument Act Section 45ZA
RESERVE BANK OF INDIA Act:
5) The highest amount of denomination of bank note which RBI can print:
(a) Rs 100
(b) Rs 500
(c) Rs 1000
(d) Rs 10000
6) Cash reserve ratio is calculated by banks on the basis of which of the following:
(a) Demand and time deposit
(b) Demand and time liabilities
(c) Demand loans and term loans
(d) None of above
7. What is the minimum amount upto which the CRR balance should be maintained by a bank on
a daily basis:
(a) 5% of net demand and time liabilities
(b) 50% of the average fortnightly balances
(c) 70% of the average fortnightly balance
(d) 80% of the average fortnightly balance.
8) On CRR balances maintained with RBI, banks get --------- rate of interest On CRR
balances maintained with RBI:
(a) Saving bank
(b) nil
(c) Bank rate
(d) repo rate

9) The minimum and maximum SLR can be fixed by RBI at ------% and ------- of net demand
time liabilities, respectively:
(a) RBI can fix without any floor or ceiling.
(b) No minimum, max 20%
(c) No minimum, max 40%
(d) Min 3%, max 15%
10) The floor limit for maintaining CRR is:

(a) 3%
(b) 4%
(c) 5%
(d) None of these
NEGOTIABLE INSTRUMENT Act:
11) Where amount in words and figures differ, the provision for making the payment of amount
mentioned in words in a cheque is described u/s ------- of NI act.
(a) 18
(b) 19
(c) 20
(d) 21
12) What is the essential requirement of a special crossing out of the following:
(a) Words within lines or without lines
(b) name of bank, within lines
(c) Rubber stamp of the bank
(d) name of bank within or without lines.
13) In which of the following circumstances, the bank does not become holder for value.
(a) Bank purchased a cheque and credited the amount to customer’s account
(b) Bank purchased a demand bill from a trading firm
(c) Bank branch received a bill for collection which is sent to other branch of t
he bank.
(d) Bank branch discounted a usance bill which it sent to its other branch for
collection of payment on due date
14) A grace period of 3 days is allowed before payment, in respect of which of the following
instruments:
(a) Demand bills and usance bills
(b) demand promissory notes and usance promissory notes
(c) Demand promissory notes and demand bills.
(d) Usance promissory notes and usance bills of exchange.
15) As per provisions of NI ACT 1881 Which of the following is most appropriately called general
crossing :
(a) Words written within two parallel lines
(b) Words written within 2 lines or without lines.
(c) Two parallel lines or without words.
(d) Name of the bank, without lines or within lines.
16) Which of the following features is not present in a non-negotiable crossed cheque:
(a) It can be endorsed any no of times.
(b) It can be transferred from one person to another any no. of times.
(c) This cheque has only a holder and not holder in due course
(d) None of the above
17) What punishment is prescribed under NI Act for dishonour of cheque
(a) Fine equal to the amount of cheque
(b) Fine upto double the amount of cheque

(c) Imprisonment upto 2 years
(d) b and C
18) An inchoate cheque represents which of the following:
(a) A Stale cheque
(b) A post-dated cheque
(c) An ante-dated cheque
(d) An incomplete cheque
RELATIONSHIP - BANKER AND CUSTOMER
19) Safe Custody of Articles - Out of the following select appropriate relationship between a
banker and a customer :
(a) Bailer and bailee
(b) Trustee and beneficiary
(c) Bailee and bailer
(d) Agent and principal
20) Relationship between the bank and customer is not correctly stated, select one out of 4 below:
(a) Shares given for sale –agent and principal
(b) Garnishee order- debtor and creditor
(c) Payee of draft – trustee and beneficiary
(d) Articles left by mistake – agent and principal
21) Banks maintain secrecy in terms of which among the following:
(a) Banking Regulation Act Section 27
(b) RBI Act Section 17.
(c) Banking Companies (Acquisition & Transfer of Undertakings of
Undertakings) Act 1970 Section 13.
(d) Banking Secrecy Action Section 43.
22) In case of cash credit account, the first credit will be adjusted against which of the
following.
(a) It will be adjusted against first debit
(b) It will reduce the outstanding balance
(c) It will reduce the sanctioned limit
(d) It will reduce the outstanding balance
23) A bank has a right named Right of ______ to combine a loan account and a deposit account
of customer, in the same capacity:
(a) Set off
(b) adjustment
(c) lien
(d) appropriation
24) “A customer is a person who maintains an account with a bank‟. The definition of the
customer is available as per:
(a) KYC guidelines of RBI
(b) Negotiable Instruction Act.
(c) RBI Act
(d) Consumer protection Act
TYPE OF CUSTOMERS
25) Out of the following describe owners of a public limited company:

(a) Directors
(b) shareholders
(c) Debenture holders

(d) Either a or B
26) A minor knew before his majority that he was admitted to the benefit of partnership firm
but he remains quite for one year after majority. Describe nature of his liability in the
partnership?
(a) He is liable like other partners from the date of his admission for benefits.
(b) He is liable from date of attaining majority
(c) He is not liable as he has not given his consent
(d) His liability is to the extent of his share in the firm.
27) In a public limited company, maximum and minimum no. of shareholders is:
a) 50 and 10
(b) 100 and 2
(d) 1000 and 100
(d) No limit and 7
28) In a partnership firm, the no. of partners cannot go beyond 100. The provision with regard
to maximum no. of partners is given in :
(a) Indian Partnership act
(b) Indian Contract Act
(c) Companies Act 2013
(d) Banking Regulation Act
29) Deposit accounts in the name of minor, of which of the following should submit photographs:
(a) Minor
(b) minor and his mother father
(c) Guardians
(d) none of the above.
GARNISHEE & INCOME TAX ATTACHMENT ORDER:
30) From the following who can request to issue garnishee order:
(a) court
(b) Judgement debtor
(c) Bank
(d) Judgement Creditor
31) Your branch has received a garnishee order in the name of your customer having saving bank
account, with following transactions. Order on Which of the following will not be applicable
(a) An advice prepared for sending to another branch after debit to the account
(b) Cheque was sent in collection, from another branch but not credit to the account
so far.
(c) Cheque sent in clearing but not realised & amount of which credited to the
account.
(d) An amount of Rs 4000 credited by mistake to the account of the customer.
KNOW YOUR CUSTOMER AND ANTI MONEY LAUNDERING
32) The objective to obtain photograph while opening an account of the customer:
(a) Ensuring protection against conversion in case of collection of cheque.
(b) ensuring provision of NI Act
(c) proper identification of the customer
(d) all the above.
33) The Cash transaction report (CTR) is submitted by banks on a monthly basis to :
(a) RBI, single cash transaction above Rs 10 lacs or aggregate of cash transaction
exceeding Rs.10 lacs in a month

(b) FIU-India, single cash transactions above Rs 10 lacs or aggregate of cash
transaction exceeding Rs.10 lacs in a month
(c) FIU-India, cash transactions of RS 10 lacs or above.
(d) RBI, cash transaction of Rs 10 lacs or above.
34) A customer undertakes a large amount cash transaction through his account. In spite of
enquiring from him, he does not provide the details.
(a) report to local police
(b) report to RBI
(c) report to FIU-India.
(d) No reporting is required.
35) Which of the following accounts is covered in the low risk category of customers:
(a) public limited company account
(b) high net worth individual a/c
(c) Salaried employee
(d) non –resident Indian.
36) As per KYC guidelines PAN is required to be quoted if cash transaction exceeds the
amount:
(a) Rs 49999/-
(b) Rs 50000/-
(c) 100000/-
(d) 10000/-
NOMINATION:
37) A nominee gets payment from the bank in a deposit account after death of the customer as:
(a) Owner of the deposit
(b) as agent of the legal heirs
(c) As agent of the deceased customer
(d) none of the above
38) A saving bank depositor wants to cancel the nomination he had made. Which of the
following form will be used?
(a) DA-1
(b) DA-2
(c) DA-3
(d) SL -3
39) Which of the following requires to be witnessed in case of nomination in a deposit
account:
a) Where minor is appointed as nominee
(b) Where nomination is made by way of thumb impression
(c) Where nomination is made by say of signature in vernacular.
(d) A and b both.
CUSTOMER SERVICE:
40) As per extant RBI guidelines, the banks can allow immediate credit of out-station
cheques, where the amount of which cheque is max Rs ---------------.
(a) Rs 5000
(b) Rs 10000
(c) Rs 15000
(d) at discretion of the bank

Banking Ombudsman Scheme
41) If there is dispute between customer and the bank relating to credit card, where the
Ombudsman decides to give compensation to the customer, what is the maximum amount
of compensation:
(a) Rs 1.00 lacs
(b) Rs 2.00 lacs
(c) Rs 5.00 lacs
(d) Rs 10.00 lacs
42) What is the maximum time available to a customer for lodging complaint to Ombudsman:
(a) 1 month from date of complaint made to bank and no reply received
(b) 1 year from date of receipt of reply from the bank but customer is not satisfied
(c) 1 year from date of lodgement of complaint with the bank + 1 month, where reply
has not been received.
(d) c or b
43) Aggrieved party on the award of Ombudsman, can make application for review to
appellate authority----------- within 30 days of the date of receipt of award:
(a) Governor RBI
(b) Dy. Governor RBI
(c) Chairman IBA
(d) Judge of Distt Court
44) Banks are required to place all the awards of Banking Ombudsman, remaining unimplemented
for more than ------- months with the reasons therefore, before the Customer Service Committee
of the Board to enable the Committee to report to the Board such delays in implementation
without valid reasons and for initiating necessary remedial action.
(a) One month
(b) Two Months
(c) 3 Months
(d) 6 Months
45) Which of the following type of complaint if referred to Ombudsman, will be rejected?
(a) Frivolous, vexatious, malafide
(b) Without sufficient cause
(c) Not pursued by the complainant with diligence
(d) All the above
46) The maximum amount of compensation the Ombudsman can allow to a customer under Banking
Ombudsman Scheme:
(a) Rs 10.00 lacs
(b) Maximum Rs 10 lac
(c) Actual loss with a maxi Rs 10 lacs
(d) Actual loss but not less than Rs 10.00 lacs
THE CONSUMER PROTECTION ACT
47) Which is incorrect with regard to financial jurisdiction of various consumer courts under the
Consumer Protection Act:
(a) Distt Forum – upto Rs 20 lacs
(b) State Commission – above Rs 20 lacs and upto Rs 100 lacs
(c) National Commission – above Rs 100 lacs and above
(d) Supreme Court – above the National Commission
48) what is the Limitation period for appeal from one consumer court to another consumer
court :
(a) 30 days from date of order
(b) 45 days from date of order

(c) 45 days from date of receipt of order
(d) 30 days from date of receipt of order
CHEQUE COLLECTION POLICY:
49) Which of the following is correct with regard to time frame for collection of cheques drawn
at outstations:
(a) State Capitals- 7 days
(b) Major Cities- 14 days
(c) Other locations – 21 days
(d) all the above
50) Upto what amount Inter SOL cash payment will be allowed in respect of accounts in the
name of individual(s) if cheque drawn favoring self:
(a) Rs 5,00,000 per transaction
(b) Rs 1,00,000 per transaction
(c) Rs 2,00,000 per transaction
(d) Rs 50,000 per transaction
51) Bank will consider providing immediate credit for third party cheques upto the aggregate value of
Rs 15000/- tendered for collection by individual account holders. Which is incorrect?
(a) Account opened at least six months earlier and complying the KYC norms.
(b) This facility is available for resident as well as non resident account
holders.
(c) During the preceding three months, no cheques/instruments for which immediate
credit was afforded returned unpaid for financial reasons.
(d) Where the bank has not experienced any difficulty in recovery of any amount
advanced in the past including cheques returned after giving immediate credit.
COMPENSATION POLICY:
52) If the bank has raised an unauthorised/erroneous debit to an account, the entry will be
reversed immediately on being informed of the erroneous debit, after verifying the position
and in cases where neither in the system(viz. hacking, phishing etc), the Bank would
compensate the customer upto only -----------------------)
(a) Rs 1000
(b) Rs 2000
(c) Rs 3000
(d) Rs 5000
53) ATM has not dispensed the cash but account debited, the dispute regarding such
transactions is to be resolved by banks within:
(a) 7 working days
(b) 10 days
(c) 12 days
(d) 15 days
54) In case a cheque has been paid after stop payment instruction is acknowledged by the bank,
the bank shall reverse the transaction and give value-dated credit to protect the interest of the
customer. Such debits will be reversed within ______of the customer intimating the
transaction to the bank:
(a) Twenty four hours
(b) Two days
(c) Three days
55) Duplicate draft will be issued within ____ from the receipt of such request from the
purchaser thereof. For delay beyond the above stipulated period, interest at the rate

applicable for fixed deposit of corresponding period will be paid as compensation to the
customer for such delay.
(a) Week
(b) 15 days
(c) Month
(d) Two months
GRIEVANCE REDRESSAL POLICY:
56) Complaints requiring some time for examination of issues involved/detail investigations/
enquiries. Bank will send final response or explain reasons for further time required within
_______days of receipt of complaint.
(a) 15 days
(b) 21 days
(c) 30 days
(d) 45 days
57) In the branch level customer service committee, which of the following can be a member
(a) staff member (b) customers (c) Senior Citizens
(a) a to c all
(b) a and b only
(c) b and c only
(d) a and c only
58) The branch level customer service committee is required to meet _______ to study
complaints/suggestions, cases of delay etc. and evolve ways and means of improving
customer service.
(a) Once a year
(b) once in 6 months
(c) Once in 3 months
(d) on 15th of every month
BCSBI
59) With a view to look into the grievances of customers, which of the following has been
established
(a) Banking Codes and Standards Board of India on the lines of similar Board in
UK
(b) Banking Customer Standards Board of India.
(c) Banking Practices for Customers Board
60) Banking Codes and Standards Board of India is promoted as a _____ and is _____:
(a) Company, under RBI
(b) Society, independent body
(c) Trust, under IBA
(d) Autonomous body, under Ministry of Finance, Govt of India

POLICY AND ACTS - ANSWERS
1 A 16 C 31 C 46 C
2 B 17 D 32 C 47 D
3 C 18 D 33 B 48 A
4 C 19 C 34 C 49 A
5 D 20 D 35 C 50 A
6 D 21 C 36 A 51 B
7 C 22 A 37 B 52 D
8 B 23 A 38 B 53 A
9 C 24 A 39 B 54 B
10 D 25 B 40 D 55 B
11 A 26 A 41 A 56 C
12 D 27 D 42 D 57 A
13 C 28 C 43 B 58 D
14 D 29 C 44 C 59 A
15 C 30 D 45 D 60 B
Refer Part –II for more MCQ
Reader’s Inputs are Important for me,
Rajesh Sharma,
Sharma
Senior Faculty
rajesh_sharma@pnb.co.in

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ZONAL TRAINING CENTRE - 36 TEG BAHADUR ROAD

PROMOTION FROM CLERICAL CADRE TO JMG SCALE - I

Refer PART-II for More MCQ and Paper-II

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Foreign banks with less than 20 branches – Priority Sector targets

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- Farmers with landholding of up to 1 hectare are considered as Marginal Farmers.

MSME (MICRO, SMALL AND MEDIUM ENTERPRISES)

Manufacturing Enterprises Investment in Plant and Machinary

Classification of MSME Loans under Priority Sector

Khadi and Village Industries Sector (KVI)

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Other Finance to MSMEs :

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1) Small and Marginal Farmers

Investments by banks in securitised assets

Investments by banks in securitised assets, representing loans to various categories of

Transfer of Assets through Direct Assignment /Outright purchases

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(c) Cap on Margin, Interest and Pricing guidelines

Monitoring of Priority Sector Lending targets

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Common guidelines for priority sector loans

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UNAUTHORIZED ERRONEOUS DEBIT

Payment of cheques after stop payment

ECS Direct debits/other debits to a/c

Delay in Collection of local Cheques and other Negotiable instruments

Delay in collection of cheques / instruments payable outside India

Delay in credit / refunds of NEFT Transactions

Delayed credit relating to bills negotiated/sent on collection basis to Exporters.

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Delay in payment of Inward Remittance

Delay in Collection of Outstation Cheques in India

INSTRUMENTS LOST IN TRANSIT/IN CLEARING HOUSE

Delay in issuance of duplicate draft

ATM Failure to dispense cash/short cash

Delay in disbursement of revised pension and arrears

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Immediate Credit of Local / Outstation Cheques / Instruments up to Rs.15000/-

i. At Clean Overdraft Rate in case of Saving Bank/Current account,

GRIVANCE REDRESSAL POLICY - CCC 06/2015

TIME SCHEDULE FOR REDRESSAL OF COMPLAINTS

CUSTOMER RIGHT POLICY - CCC 07/2015

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FACILITY AVAILABLE INTERSOL / BASE BRANCH – (ccc 08/2014)

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Who can be appointed as nominee?

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NOMINATION FACILITY FOR ARTICLES KEPT IN SAFE CUSTODY

DIFFERENCE BETWEEN BILL OF EXCHANGE AND CHEQUE

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Transaction Bank Customer

POSITION OF AVAILABILITY OF RIGHT OF SET OFF

Right to Set Off

HOLDER & HOLDER IN DUE COURSE

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STATUTORY PROTECTION TO PAYING BANKER (SEC-85)

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GARNISHEE AND I T ATTACHMENT ORDER