Description
Accepting, for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise withdraw able by cheque, draft, order or otherwise.
As per section 5(B) Banking Regulation Act
1949, the term Banking is defined as
“Accepting, for the purpose of lending or
investment of deposits of money from the
public repayable on demand or otherwise
withdraw able by cheque, draft, order or
otherwise.”
? First bank established in 1786 – The General Bank Of India
? East India Company established
Bank of Bengal (1809)
Bank of Bombay(1840)
Bank of Madras (1843)
They were known as Presidency Banks
? These three banks were amalgamated in 1920 to form the Imperial
Bank of India
? Reserve Bank of India – 1935
? The Banking Companies Act – 1949
? Imperial Bank Of India was nationalized in 1955 and re – christened
as State Bank Of India
? Nationalization Of 14 major banks – 1969 (Acquisition and transfer
of undertaking act)
? Second Phase of Nationalization – 1980
? Liberalization of Banks - 1991
?Public sector Banks
?Private sector Banks
?Foreign Banks
?Cooperative Banks
?Regional Rural Banks
? Accepting Deposits
? Advancing Loans
? Investing Funds
? Promoting Banking Habit
? Agency Services (fund transfer, funds collection,
portfolio management, collecting dividends,
premium payment, foreign exchange dealings)
? General Utility service ( safe custody service,
issue of traveler’s cheque, credit information,
business information, issue of demand drafts and
pay orders)
? Realization of Socio-economic Objectives
?The Reserve Bank of India – established in
1935 under RBI Act 1934 and was
Nationalized in 1949.
?Objective- To regulate the issue of bank
notes and ensure stability of Indian economy.
?Functions of RBI are classified in 3 heads
- Traditional Functions
- Promotional Functions
- Supervisory Functions
?Monopoly of currency notes issue
?Banker, agent and advisor to the Government
?Lender of the last resort
?Controller of credit
?Information Dissemination
?Custodian of foreign exchange reserves
?Banker’s Bank
?Extension of facilities for the small scale
industries
?Extension of facilities for the provision of
agricultural credit through NABARD
?Granting license to new banks or cancelling
that of existing ones
?Periodic review of the work of commercial
banks
?Control of non-banking finance company (Non-
bank financial companies (NBFCs) are financial institutions
that provide banking services without meeting the legal
definition of a bank, i.e. one that does not hold a banking
license. These institutions are not allowed to take deposits
from the public. NBFCs offer most sorts of banking services,
such as loans and credit facilities, private education
funding, retirement planning, trading in share
markets,etc.) e.g. Cholamandalam investments, sundaram
finance
?Cash Reserve Ratio
?Repo Rate
?Reverse Repo Rate
?Statutory Liquidity Ratio
?Bank Rate
? Bank status
? Ownership
? Primary motive
? Dealing with public
? Competition
? Control
? Note issue
? Custodian
? Banker
? Cash reserve ratio
? Lender of last resort
? Clearing house
? Regulation
?Banker
A Banker Must:
? Collect cheques for his customers
? Make payment of cheques drawn on him
? Maintain a running account of his customers.
?Customer
A person/entity has to fulfill the following requirements
to qualify as a customer:
? There should be an intention to get into a banking
relationship
? An account(deposit/loan) account should be opened
with the bank.
Banker-Customer Relationship:
?Debtor and Creditor
?Trustee and Beneficiary
?Agent and Principal
?Bailee and Bailor
?Lesse and Lessor
?Indemnifier and Indemnified
?Right of Lien
Particular lien
General lien
?Right of set off
?Right of appropriation
? Right to charge interest
?Right to charge service charges
?Right to close an account
?Obligation to honor cheques
?Obligation to maintain secrecy of
customer?s account or affairs
?Obligation to keep a proper record of
transactions
?Duty to provide proper accounts
?Obligation to abide by the instructions
given by the customer
?Bankers? Fair Practice Code
?Redressal of Grievances
?Right to draw cheques
? Right to Information
?Right of Compensation
?Right for Claiming Damage
?Right to close the Account
?Right of Raising Grievance
?Pertaining to Cheque Books
?Pertaining to deposit
?Loss of Instruments
? Deposits
- Savings A/c
- Current A/c
- Term Deposits
- Recurring Deposits
• Investments
- Mutual Funds
- Shares
- Life Insurance (ULIPs)
- General Insurance
• Advances
- Personal Loans/Business Loans
- Auto Loans/Two Wheeler Loans
- Housing Loans
- Gold Loans
- Education Loans
- Cash Credit/ Working Capital Loans
- Credit Cards
- Loan Against Property/Security
- Commercial Vehicle Loans
- Construction Equipment Loans
- Project Finance
? Foreign Exchange
- Purchase/Sell of FCY
- Travelers Cheques
- FCY Demand Drafts
- FOREX cards
• Remittances
- Inward Remittance
- Outward Remittance
• Clearing
TYPES OF LOANS OFFERED
BY INDIAN BANKS
?Cars are becoming affordable due to
ease and availability of finance and
lower interest rates.
?Most people also tend to purchase car
regarding it as a status symbol and
prestige in the society.
?A car loan or auto loan is obtained to
purchase a new or a used car.
? The car is used as a collateral security for
availing the loan.
?The loan period for a new car ranges from 3
to 7 years, while for used car it is shorter in
duration.
?The interest rate for auto loans depends on
the period of the car loan, and the credit
rating of the buyer.
?Usually 80-90% of the amount is financed and
the rest is usually the down payment
?There are a number of banks and other financial
institutions providing excellent loans suiting the
needs of different class of customers.
? The interest rates on the loans and the period
of repayment of the loan are framed such that
they are easily affordable by any class of
household sector and individuals who satisfy the
eligibility.
?The risk in auto loans is less.
?If a person is not able to repay then the bank or
any other institution from where the loan has
been acquired, can seize the vehicle.
? Therefore, the borrower should calculate his
monthly budget carefully and avail a loan.
? He should also carefully study the terms and
conditions of the interest rates, the monthly
installments, the tenure of the loan etc
?The giant among the open account credit is the
bank credit card or „plastic card?.
?These cards are issued by the bank or any other
financial institution that allows the customer to
make purchases at any establishment that
accepts it.
?It is widely used for the purchase of consumer
goods and services.
?The two types of cards that are issued are the
Visa and the Master Card.
?The credit card is now used to pay almost for
everything – groceries, cosmetics, assets, doctor
bills, hotel charges, college and tuition fee etc.
?Many banks and other financial institutions
are now providing a variety of educational
loans at reasonable interest rates.
? So, people have a choice to select the kind
of educational loan that suits them the best
depending on their repaying capacity.
?Until a few years back most educational loans
were offered to students going abroad to
pursue their higher studies.
?But now, people have the facility to provide
quality education in India itself, and save a
lot of money through educational loans from
banks.
?Interestingly, the idea of selling educational
loans was tough in India initially, as people
did not generally look for such loans.
? But as the expenses for education have
increased, the youth are not willing to let
their parents pay for their education and
remain a burden on them.
?The lower interest rates are actually the icing
on the cake for those availing an educational
loan.
?Sometimes borrowers may pledge their shares
and take loan.
?This provides a collateral security to the lender
for the loan availed.
? If default occurs then the lender has every right
to seize the shares and sell them to satisfy the
unpaid loan amount.
?If there is still any deficiency then the borrower
may or may not pay.
? This is a type of consumer credit loan.
? It is an unsecured loan granted for personal use
based on the borrower?s integrity and ability to pay.
? Whether you require money for your home renovation
or a new laptop, be it vacations with family or paying
off the credit card debts. Personal loan is your friend in
need, which smoothens up your cash flow to take care
of your immediate needs.
? Personal Loan is For Salaried People. Business Loan is
For Businessman or Self Employed .
? One of the most widely preferred and popular loans
are the home loans.
? In India, most people have a dream of having their
“own house”.
? To fulfill their dreams they need huge capital that is
beyond their monthly income.
? Therefore, banks and other financial institutions
have recognized this need to issue different kinds of
loans to their customers.
? The advantage in obtaining a home loan is that the
liquid cash or the savings is not used and the monthly
loan installment is minimal and thus affordable.
?The risk involved in such loans is minimum.
?Since the target market is the household and the
individuals, the default rate is generally very low.
?If there is a situation of default then a period of
extension is given to the customer.
?Even then if the customer fails to repay the loan,
then the house or the land for the purchase or
the construction for which the loan was applied
can be seized.
? Interest is charged on the amount disbursed to the
borrower and is called EMI.
? The appraisal officer states, the entire terms and
conditions and also attends to the queries of the
prospective borrower.
? Various details like eligibility criteria, the period of
repayment of loan, the interest rates on the loan,
the documentation required from the borrower etc.,
are discussed during this meeting.
? If the customer is satisfied and proper study is done
then the application is filled. The processing fee is
paid which is about 1% of the loan amount. This fee
is not refundable and is paid only if the chances of
getting the loan are really good.
doc_335269527.pptx
Accepting, for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise withdraw able by cheque, draft, order or otherwise.
As per section 5(B) Banking Regulation Act
1949, the term Banking is defined as
“Accepting, for the purpose of lending or
investment of deposits of money from the
public repayable on demand or otherwise
withdraw able by cheque, draft, order or
otherwise.”
? First bank established in 1786 – The General Bank Of India
? East India Company established
Bank of Bengal (1809)
Bank of Bombay(1840)
Bank of Madras (1843)
They were known as Presidency Banks
? These three banks were amalgamated in 1920 to form the Imperial
Bank of India
? Reserve Bank of India – 1935
? The Banking Companies Act – 1949
? Imperial Bank Of India was nationalized in 1955 and re – christened
as State Bank Of India
? Nationalization Of 14 major banks – 1969 (Acquisition and transfer
of undertaking act)
? Second Phase of Nationalization – 1980
? Liberalization of Banks - 1991
?Public sector Banks
?Private sector Banks
?Foreign Banks
?Cooperative Banks
?Regional Rural Banks
? Accepting Deposits
? Advancing Loans
? Investing Funds
? Promoting Banking Habit
? Agency Services (fund transfer, funds collection,
portfolio management, collecting dividends,
premium payment, foreign exchange dealings)
? General Utility service ( safe custody service,
issue of traveler’s cheque, credit information,
business information, issue of demand drafts and
pay orders)
? Realization of Socio-economic Objectives
?The Reserve Bank of India – established in
1935 under RBI Act 1934 and was
Nationalized in 1949.
?Objective- To regulate the issue of bank
notes and ensure stability of Indian economy.
?Functions of RBI are classified in 3 heads
- Traditional Functions
- Promotional Functions
- Supervisory Functions
?Monopoly of currency notes issue
?Banker, agent and advisor to the Government
?Lender of the last resort
?Controller of credit
?Information Dissemination
?Custodian of foreign exchange reserves
?Banker’s Bank
?Extension of facilities for the small scale
industries
?Extension of facilities for the provision of
agricultural credit through NABARD
?Granting license to new banks or cancelling
that of existing ones
?Periodic review of the work of commercial
banks
?Control of non-banking finance company (Non-
bank financial companies (NBFCs) are financial institutions
that provide banking services without meeting the legal
definition of a bank, i.e. one that does not hold a banking
license. These institutions are not allowed to take deposits
from the public. NBFCs offer most sorts of banking services,
such as loans and credit facilities, private education
funding, retirement planning, trading in share
markets,etc.) e.g. Cholamandalam investments, sundaram
finance
?Cash Reserve Ratio
?Repo Rate
?Reverse Repo Rate
?Statutory Liquidity Ratio
?Bank Rate
? Bank status
? Ownership
? Primary motive
? Dealing with public
? Competition
? Control
? Note issue
? Custodian
? Banker
? Cash reserve ratio
? Lender of last resort
? Clearing house
? Regulation
?Banker
A Banker Must:
? Collect cheques for his customers
? Make payment of cheques drawn on him
? Maintain a running account of his customers.
?Customer
A person/entity has to fulfill the following requirements
to qualify as a customer:
? There should be an intention to get into a banking
relationship
? An account(deposit/loan) account should be opened
with the bank.
Banker-Customer Relationship:
?Debtor and Creditor
?Trustee and Beneficiary
?Agent and Principal
?Bailee and Bailor
?Lesse and Lessor
?Indemnifier and Indemnified
?Right of Lien
Particular lien
General lien
?Right of set off
?Right of appropriation
? Right to charge interest
?Right to charge service charges
?Right to close an account
?Obligation to honor cheques
?Obligation to maintain secrecy of
customer?s account or affairs
?Obligation to keep a proper record of
transactions
?Duty to provide proper accounts
?Obligation to abide by the instructions
given by the customer
?Bankers? Fair Practice Code
?Redressal of Grievances
?Right to draw cheques
? Right to Information
?Right of Compensation
?Right for Claiming Damage
?Right to close the Account
?Right of Raising Grievance
?Pertaining to Cheque Books
?Pertaining to deposit
?Loss of Instruments
? Deposits
- Savings A/c
- Current A/c
- Term Deposits
- Recurring Deposits
• Investments
- Mutual Funds
- Shares
- Life Insurance (ULIPs)
- General Insurance
• Advances
- Personal Loans/Business Loans
- Auto Loans/Two Wheeler Loans
- Housing Loans
- Gold Loans
- Education Loans
- Cash Credit/ Working Capital Loans
- Credit Cards
- Loan Against Property/Security
- Commercial Vehicle Loans
- Construction Equipment Loans
- Project Finance
? Foreign Exchange
- Purchase/Sell of FCY
- Travelers Cheques
- FCY Demand Drafts
- FOREX cards
• Remittances
- Inward Remittance
- Outward Remittance
• Clearing
TYPES OF LOANS OFFERED
BY INDIAN BANKS
?Cars are becoming affordable due to
ease and availability of finance and
lower interest rates.
?Most people also tend to purchase car
regarding it as a status symbol and
prestige in the society.
?A car loan or auto loan is obtained to
purchase a new or a used car.
? The car is used as a collateral security for
availing the loan.
?The loan period for a new car ranges from 3
to 7 years, while for used car it is shorter in
duration.
?The interest rate for auto loans depends on
the period of the car loan, and the credit
rating of the buyer.
?Usually 80-90% of the amount is financed and
the rest is usually the down payment
?There are a number of banks and other financial
institutions providing excellent loans suiting the
needs of different class of customers.
? The interest rates on the loans and the period
of repayment of the loan are framed such that
they are easily affordable by any class of
household sector and individuals who satisfy the
eligibility.
?The risk in auto loans is less.
?If a person is not able to repay then the bank or
any other institution from where the loan has
been acquired, can seize the vehicle.
? Therefore, the borrower should calculate his
monthly budget carefully and avail a loan.
? He should also carefully study the terms and
conditions of the interest rates, the monthly
installments, the tenure of the loan etc
?The giant among the open account credit is the
bank credit card or „plastic card?.
?These cards are issued by the bank or any other
financial institution that allows the customer to
make purchases at any establishment that
accepts it.
?It is widely used for the purchase of consumer
goods and services.
?The two types of cards that are issued are the
Visa and the Master Card.
?The credit card is now used to pay almost for
everything – groceries, cosmetics, assets, doctor
bills, hotel charges, college and tuition fee etc.
?Many banks and other financial institutions
are now providing a variety of educational
loans at reasonable interest rates.
? So, people have a choice to select the kind
of educational loan that suits them the best
depending on their repaying capacity.
?Until a few years back most educational loans
were offered to students going abroad to
pursue their higher studies.
?But now, people have the facility to provide
quality education in India itself, and save a
lot of money through educational loans from
banks.
?Interestingly, the idea of selling educational
loans was tough in India initially, as people
did not generally look for such loans.
? But as the expenses for education have
increased, the youth are not willing to let
their parents pay for their education and
remain a burden on them.
?The lower interest rates are actually the icing
on the cake for those availing an educational
loan.
?Sometimes borrowers may pledge their shares
and take loan.
?This provides a collateral security to the lender
for the loan availed.
? If default occurs then the lender has every right
to seize the shares and sell them to satisfy the
unpaid loan amount.
?If there is still any deficiency then the borrower
may or may not pay.
? This is a type of consumer credit loan.
? It is an unsecured loan granted for personal use
based on the borrower?s integrity and ability to pay.
? Whether you require money for your home renovation
or a new laptop, be it vacations with family or paying
off the credit card debts. Personal loan is your friend in
need, which smoothens up your cash flow to take care
of your immediate needs.
? Personal Loan is For Salaried People. Business Loan is
For Businessman or Self Employed .
? One of the most widely preferred and popular loans
are the home loans.
? In India, most people have a dream of having their
“own house”.
? To fulfill their dreams they need huge capital that is
beyond their monthly income.
? Therefore, banks and other financial institutions
have recognized this need to issue different kinds of
loans to their customers.
? The advantage in obtaining a home loan is that the
liquid cash or the savings is not used and the monthly
loan installment is minimal and thus affordable.
?The risk involved in such loans is minimum.
?Since the target market is the household and the
individuals, the default rate is generally very low.
?If there is a situation of default then a period of
extension is given to the customer.
?Even then if the customer fails to repay the loan,
then the house or the land for the purchase or
the construction for which the loan was applied
can be seized.
? Interest is charged on the amount disbursed to the
borrower and is called EMI.
? The appraisal officer states, the entire terms and
conditions and also attends to the queries of the
prospective borrower.
? Various details like eligibility criteria, the period of
repayment of loan, the interest rates on the loan,
the documentation required from the borrower etc.,
are discussed during this meeting.
? If the customer is satisfied and proper study is done
then the application is filled. The processing fee is
paid which is about 1% of the loan amount. This fee
is not refundable and is paid only if the chances of
getting the loan are really good.
doc_335269527.pptx