BANKING

Presented By
Mukundan S
Banking Overview
• A bank is a financial institution licensed to receive deposits and
make loans. Mainly categorized as retail, commercial, and
investment banks

• Commercial Banking : Banking products & services for

corporations, government with services like Merchant services
(POS), Insurance products, Global trade services (LC, Forex)

• Investment Banks: Advisory-based financial transactions on

behalf of corporations, and governments

• Banks make profit by charging more interest to borrowers than they

pay on savings accounts in addition fees & charges

• Banks are regulated by the central bank ex: SAMA in SA, RBI in IN

• Banking is a mode considered by government for cash liquidity flow

Banks in SA
• The National Commercial Bank
• The Saudi British Bank
• Saudi Investment Bank
• alinma bank
• Banque Saudi Fransi
• Riyad Bank
• Samba Financial Group (Samba)
• alawwal bank
• Al Rajhi Bank
• Arab National Bank
• Bank AlBilad
• Bank AlJazira
• Gulf International Bank Saudi Aribia (GIB-SA)
Foreign Banks in SA
• Emirates NBD
• National Bank of Bahrain (NBB)
• National Bank of Kuwait (NBK)
• Muscat Bank
• Deutsche Bank
• BNP Paribas
• J.P. Morgan Chase N.A
• National Bank Of Pakistan
• State Bank of India(SBI)
• T.C.ZIRAAT BANKASI A.S.
• Industrial and Commercial Bank of China (ICBC)
Foreign Banks in SA (contd..)

• Qatar National Bank

• MUFG Bank, Ltd.
• First Abu Dhabi Bank
• Trade bank of Iraq
• Standard Chartered Bank
• Credit Suisse Bank
• Bank of China Limited
Banking Governing Authority
• SAMA expanded as Saudi Arabian Monetary Agency/Authority is
the governing body of all the banks in SA

• They are law proposers of the banks registered under them

• SAMA main functions includes supervising banks, managing foreign

exchange reserves, promoting price abiding SHARIA law

• Operates number of cross-bank electronic financial systems such as

MADA (previously SPAN – Saudi Payment Network), SARIE (Saudi
Arabian Riyal Interbank Express), and SADAD
Associates
• Bloomberg – Provide us the daily exchange rate

• SIMAH – Saudi Credit Bureau which is centralized governing body

enumerate credit score of customer (Similar to CIBIL)

• WASEL – (Saudi Post) Government agency that record the national

address of citizen

• YAKEEN – Third party system which have handshake with

government to provides details of customer in MOI using the
National/IQAMA id
Bank Holders
The bank org pertains below key stake holders

1. Procurement
2. Business or Product Owners
3. Operations
4. Risk
5. Treasury
6. Marketing
7. Finance
8. HR
Retail Banking
• Retail banking, also known as consumer banking, is the provision of services
by a bank to the general public

• Target customer of the retail banking is individual providing various services

• These banks also cater to high-net-worth individuals, giving them specialty

services such as private banking

• Private banking is offering for the high-net-worth individual (HNWI)

clients of a financial institution Ex: Account of Royal Families where a
"personal banker" coordinates all the activities

• Account holders in private banking relished with many perks such as fee
exemptions, high interest rate etc..
Do you know..??

The banking terminology for the services like

saving/Current account, TD, Credit Card &
Loans???
Services - Liability
• The term Liabilities in banking refers “what the bank owes to
others/customer”

• Main profit earning mode by bank is through the liabilities

• Services under the liability are as follows,

1. Current accounts
2. Savings accounts (Joint & Sole)
3. Debit cards
4. Term deposits

• When a customer open Savings account with any amount in it, the bank is liable to
pay the amount on demand of customer where demand can be through various mode
like withdrawal from teller, ATM, other channels etc..

• The services are provided with different flavors with changes in their properties. For
ex saving account interest rate of Senior citizen account differs with non–senior
saving account holder
Services - Asset
• The term Assets in banking refers “what the customer owes to bank”

• Services under the assets are as follows,

1. Loans
2. Credit Cards

• When a customer avail loans/credit card, customer is abide to repay it as

installments or partial or fully

• These service incur fee & interest like processing fee, late repayment,
replacement fee, profit for cards

• The above services are provide with different flavors with changes in their
properties. For ex rate of interest for personal loan availed differs with the
salary which is categorized as banks preference
Liability Services - Accounts
• An arrangement by bank, accepts a customer's financial assets and holds them on
behalf of the customer at his or her discretion

• Types of accounts are as follows,

1. Savings
2. Current
3. TD

• The interest rate is applicable for the saving account of all CCY types, same
applicable for TD based on the amount, CCY & tenor

• Current accounts are meant to carry out business transactions which has its own
perks like limit less withdrawals, check limit, over draft facility etc..

• Unlike saving account minimum balance has to be maintained for Current account
Liability Services – Account- Opening
Liability Services - Accounts
• Other services customer can avail is as follows

 Fund transfer (SARIE, SWIFT, Own A/C, Same Bank)

 Standing instruction
 SADAD payment
 MOI payment
 Sweep accounts
 Payroll processing
Liability Services - Accounts
• In SABB we have the facility to open the account using (OAO – e-Forms)
Online account opening portal in SABB link

• Customer segment will be defaulted as Ruwaad when account is opened in

e-Form

• SAR account will be open as default with debit card request

• The default type will be Current account

• All the account types have account life cycle like : Dormant, Unclaimed,
Closing & Closed

• Additionally restrictions of Debit & Credit block can be added to the account
Liability Services – Debit Card
• Debit card – Card facility provided to the customer, where the money is
immediately transferred directly from the cardholder's bank account
when performing any transaction.

• In SABB, the card are provided based on the segments and is managed in
HUB

• Debit card can be used in four different mode

 Contact transaction
 Contactless transaction
 Magnetic stripe transaction
 Card details transaction

• Additional card linking app features in SABB – Apple & MADA pay
Liability Services – Debit Card
• Debit card are provided in different flavors or products

• Travel card is a best example where the account linked to it will be

both base CCY and FCY CCY

• UMLATY is the product of SABB where Cortex application is the

CMS (Card Management Systems) for it with the accounts
maintained in HUB

• Debit Card has its own state changes based on the Human actions
 Liability Services – Card
Represent Contactless Card
Chip Card
BIN – First 6
Digit

Expiry of the card

Normally it will be 3 years VISA / Master
Card Network or Card Association
Liability Services – Card
Magnetic stripe with card details

CVV
Card Verification Value
Liability Services – TD
• A term or time deposit is a fixed-term investment that includes the deposit of money into an
account at a financial institution where the amount is returned to customer based on the
maturity instruction

• The TD rate differs with maturity & CCY sometimes with amount

• There is an option available where you can withdraw amount called as threshold amount
(basically varies with the Bank)

• There are three types of basic maturity instructions

▫ Roll over Principal
▫ Roll over Principal & Interest
▫ Credit to Account on Maturity

• Other type of deposit is Recurring deposit where your amount can be from 1000 to 1000000,
monthly debit from your account will be processed.

• A fixed rate will be implemented upon the last debit on your account the total amount with
interest will be credited
Liability Services – TD
• Maturity instructions explained below,

▫ Roll over Principal – A new TD or deal will be created with the

principal amount whereas the interest will be credited to the account
mentioned during the creation of TD

▫ Roll over Principal & Interest – A new TD or deal will be created

with the principal & interest amount

▫ Credit to Account on Maturity – Both the sum (Principal and

Interest ) will be credited to the account mentioned during the TD
creation
Asset Services – Loans
• Loan is the lending of money by one or more individuals, organizations etc..

• The borrower incurs a debt and is usually liable to pay interest on that debt
until it is repaid as well as to repay the principal amount

• Types of loans : Secured loan & Unsecured loan

• Secured loan is a loan backed by collateral—financial assets you own,

like a home or a car that can be used as payment to the lender if you don't
pay back the loan.

• Unsecured loan is a loan that is issued and supported only by the borrower's

creditworthiness, rather than by any type of collateral. Ex: Credit card, personal
loan etc..
Asset Services – Loans
• Amortization is used in the process of paying off debt through regular
principal and interest payments over time

• The EMI – Equated Monthly Instalment have two parts Principal &
Interest

• The EMI amount varies with the tenor (No of months) as you

• The interest rate differs with the banks but there is a threshold rate which
is set by governing body which is the max the bank can incur on customer

• Banks usually decides based on the market, their business needs, and
individual customers.
Asset Services – Loans
• Loan can be repaid in different mode : Instalments, Partial
payment & Full payment

• The loan repayment can be ECS (Electronic Clearing Services)

or DD (Direct Debit) & Manual payment

• When customer doesn’t make the payment on time he is called to be

a Delinquent customer

• The delinquency has its own unique life cycle based on the number
of days customer is past due
Asset Services – Loan Life Cycle
Asset Services – Credit Card
• As mentioned earlier Credit card is a type of unsecured loan where the credit limit is provided
based on the credibility of the customer

• The card holder is liable to pay for the usage monthly on due date (Usage like cash advance
(Hard cash or movement from CC to Saving A/c), POS & e-Com)

• The card can be closed based on the card holder request after paying all his past due (if any) +
present due amount or due amount

• Statement date is the date when customer is notified with the amount he/she is liable to pay
(SABB : 5,10,15,20,25,30,31)

• Payment date is the day when customer has to be pay the amount mentioned in the statement
(SABB: 25,30,5,10,5,20,20 respectively to statement date)

• There are fees incurred like Late payment fee, Annual fee, Card replacement fee, Cash advance fee
(Cash advance fee have interest)
Asset Services – Credit Card
• There are two types of due : Min due & Full due customer can mention while
applying for card

• Basically the Min due % varies with bank, SABB min due is 5%

• The loan repayment can be ECS (Electronic Clearing Services) or DD (Direct

Debit) & Manual payment (Through Channel)

• When customer doesn’t make the payment on time he is called to be a Delinquent

customer

• The delinquency has its own unique life cycle based on the number of days customer is
past due

• There are two card networks/associates – VISA & Master Card

Asset Services – Credit Card
• Min due :
▫ Suppose a customer statement states 1000 SAR dated 05th Feb then, he
is liable to pay 5% of 1000 SAR = 50 SAR on payment date
▫ On 05th March his statement will have the below
 950 SAR previous balance + Interest
 CC usage between 05th Feb to 05th March

• Full due :
▫ Suppose a customer statement states 1000 SAR dated 05th Feb
then, he is liable to pay full 1000 SAR on payment date
Asset Services – CC Life Cycle
Thank You