Nigam, B, M. (1997). Banking in India in Eighties. New Delhi UBSPO. Websites http://www.iibf.org.in/scripts/iib_financeinclusion.asp/ http://www.scribd.com/doc/ http://chestofbooks.com/finance/banking/Banking-Credits-And-Finance/ 51 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT 3 - EQUITY & DEBT MARKET STRUCTURE 3.0 Learning Objectives 3.1 Introduction 3.2 IRDA 3.2.1 History 3.2.2 Insurance Regulatory Development Authority Act (IRDA) 1999 3.2.3 Roles, Duties and Functions 3.3 CIBIL 3.3.1 Formation of the Credit Information Bureau (India) Limited (CIBIL) 3.3.2 Members of CIBIL 3.3.3 Operation of CIBIL 3.3.4 Functions 3.4 Fair Practices Code for Debt Collection 3.5 Summary 3.6 Keywords 3.7 Learning Activity 3.8 Unit End Questions 3.9 References 3.0 LEARNING OBJECTIVES After studying this unit, you will be able to Explain IRDA Describe CIBIL State the Fair practices code for debt collection 3.1 INTRODUCTION In different modules of this course you have considered the significance of protection and its significance and how it assumes a vital part in monetary advancement of the country. At this 52 CU IDOL SELF LEARNING MATERIAL (SLM)
point you should be knowledgeable that in protection business, there is an agreement between people or gathering or money managers and insurance agencies. The term of these agreements shifts from one year to thirty years or more and volume of such agreements are likewise exceptionally enormous. As you most likely are aware the protection contract is of guarantees or confirmations by the insurance agencies to repay the safeguarded in the event of mishappening however nothing is substantial. At the point when the item is immaterial (which can't be seen or contact) and volume of such agreements is tremendous then the questions do emerge in any industry. To resolve these debates the Government of any nation selects controller and furthermore implements the law which controls the business. The capital market cultivates monetary development in different manners, for example, by increasing the quantum of reserve funds and capital arrangement and through effective distribution of capital, which, thusly, raises the usefulness of speculation. It additionally upgrades the effectiveness of a monetary framework as various contenders strive with one another for monetary assets. Further, it adds to the monetary extending of the economy by growing the monetary area and advancing the utilization of creative, complex and savvy monetary instruments, which at last diminish the expense of capital. Well-working capital business sectors likewise force discipline on firms to perform. Value and obligation markets can likewise diffuse weight on the financial area by differentiating credit hazard across the economy. Albeit the capital market in India has a long history, during the most part, it stayed on the fringe of the monetary framework. Different changes attempted since the mid-1990s by the Securities and Exchange Board of India (SEBI) and the Government have achieved a huge underlying change in the Indian capital market. Therefore, the Indian value market has gotten current and straightforward. In any case, its job in capital arrangement keeps on being restricted. The private corporate obligation market is dynamic principally as private positions, while the public issue market for corporate obligation is yet to get. It is the essential value and obligation advertises that interface the guarantors of protections and financial backers and give assets to capital development. In some high level nations, particularly the US, the new issue market has been very fruitful in financing new organizations and prodding the improvement of new innovation organizations. A developing economy requires hazard capital and long haul assets as obligation for empowering the corporates to pick a proper blend of obligation and value. Long haul assets are likewise significant for financing foundation projects. Subsequently, to support India's high development way, the capital market needs to assume a significant part. The meaning of a well-working homegrown capital market has additionally expanded as banks need to raise vital capital from the market to support their developing activities. A developing group of experimental exploration shows that securities exchange advancement matters for development as admittance to outer capital permits monetarily compelled firms to grow. It is contended that nations with better-created monetary frameworks, particularly those with fluid stock trades, will in general become 53 CU IDOL SELF LEARNING MATERIAL (SLM)
quicker. Then again, Singhcontends that securities exchange extension is anything but a fundamental regular movement of a country's monetary turn of events and securities exchange improvement may not help in accomplishing speedier industrialisation and quicker long haul financial development in the greater part of the non-industrial nations in view of a few reasons. To start with, on account of innate unpredictability and discretion of the financial exchange, the subsequent evaluating measure is a helpless manual for effective venture assignment. Second, in the wake of troublesome monetary shocks, the connections between the stock and money markets might worsen macroeconomic insecurity and lessen long haul financial development. Third, securities exchange advancement is probably going to subvert the job of existing financial frameworks in agricultural nations, which have not been without merit in a few nations, not least in exceptionally effective East Asian economies. 3.2 IRDA IRDA or Insurance Regulatory and Development Authority of India is the summit body that administers and manages the protection area in India. The basic role of IRDA is to shield the interest of the policyholders and guarantee the development of protection in the country. 3.2.1 History In India, Government started exercising control on Insurance business by passing two acts in the year 1912 namely Provident Insurance Societies Act V of 1912. Indian Life Insurance Companies Act VI of 1912. These acts were later comprehensively amended and a new Act namely Insurance Act 1938 came into existence for controlling. Investment of funds. Expenditure and Management of the insurance companies. The Office of Controller was set up to carry out this demonstration. Once more, this Act was altered in 1950 according to the need of great importance. However, considering developing acts of neglect in Life Insurance business and furthermore because of the ignorance level being high and absence of will for spread of Life Insurance business, it was nationalized by Government of India. LIC Act was passed in June; 1956, and this Act came into power from first Sept.1956. Additionally, general protection business was nationalized Act came into power w.e.f first April 1973 through General Insurance Business Nationalization Act 1972. To execute these demonstrations the Government rolled out some minor improvements in the Insurance Act 1938. In mid-90's, with the world market influences playing with original 54 CU IDOL SELF LEARNING MATERIAL (SLM)
capacity; developing education level; better administrative frameworks and need for quick development in this area, the need of great importance was to go with the world and open up Life and General Insurance Sector to private business people by and by so that there is no syndication and the client/purchaser/purchaser gets a greater number of decisions than one sort of Insurance item. To consider the progression interaction in Insurance area in India, Malhotra Committee was shaped under the Chairmanship of Late Shri R.N. Malhotra. The Malhotra advisory group presented its report in 1994 which prescribed that privately owned businesses be permitted to work in India. The Government acknowledged the Committee's proposal and Insurance Regulatory Authority (IRA) was set up in 1996 to show the way for privatization of protection Industry. The fundamental point was the advancement of Insurance covering all layers of society (too rich as well as poor, people from rustic, ancestral, chaotic area, social area, incapacitated local area, day by day bets, ladies everywhere, and so on) acquired significance through concerns set forth by political pioneers, exchange unionists, social associations, cooperatives and strategy producers; which corrected the name IRA to IRDA (Insurance Regulatory and Development Authority). Once more, a few corrections were made in the Insurance Act 1938 for smooth working of IRDA. 3.2.2 Insurance Regulatory Development Authority Act (IRDA) 1999 This Act was passed by Parliament in Dec.1999 and it got official consent in Jan.2000. The point of the Authority is \"to secure the interest of holders of Insurance strategies to manage, advance and guarantee precise development of Insurance industry and for issue associated therewith or coincidental thereto.\" Under this Act, an authority called IRDA is set up which replaces Controller of Insurance under Insurance Act 1938. Definitions Like some other Act, different terms have been characterized as follows under segment 2. \"Appointed Day\" signifies the date on which the authority is set up. \"Authority\" signifies the Insurance Regulatory and Development Authority. \"Chairperson\" signifies the executive of the authority. \"Fund\" signifies the Insurance Regulatory and Development Authority Fund. \"Interim Insurance Regulatory Authority\" signifies the Insurance Regulatory Authority set up by the Central Government. \"Intermediary or Insurance go-between\" incorporates Insurance agents, reinsurance merchants, protection specialists, assessors and misfortune assessors. \"Member\" signifies an entire time or low maintenance individual from the Authority and incorporates the Chairperson. \"Notification\" signifies a warning distributed in the Official Gazette. 55 CU IDOL SELF LEARNING MATERIAL (SLM)
\"Prescribed\" signifies endorsed by rules made under this act. \"Regulations\" signifies the guidelines made by the authority. Features of Authority Corporate body by the previously mentioned name which implies it will go about as gathering of people, called individuals, who will work together not as a unique individual like Controller of Insurance. Having never-ending progression which implies any part might leave or pass on however the authority will work. A normal seal with ability to go into an agreement by appending a stamp on the reports. Sue or be sued implies the authority can document a body of evidence against any individual or association and the other way around. Composition of Authority The Authority shall consist of nine persons as per details given below. Chairperson Not more than 5 whole time members Not more than 4 part time members These persons shall be appointed by the Central Govt. from amongst persons of ability, integrity & standing who have knowledge or experience in life Insurance, general Insurance, actuarial science, finance, economics, law accountancy, administration or other discipline which would in the opinion of the Central Govt. be useful to the authority. Tenure The Chairman tenure will be for 5 years and eligible for reappointment till he attains the age of 65 years. The appointment of members will be for 5 years and eligible for reappointment but not exceeding the age 62 years. Removal of Members (Section 6) The Central Government can remove any member of the Authority if he i. Is declared bankrupt. ii. Has become physically or mentally incapable of acting as a member. 56 CU IDOL SELF LEARNING MATERIAL (SLM)
iii. Has been awarded punishment by any Court. iv. Has acquired such financial or other interest which affects his function as a member. v. Has so abused his position as to render his continuation in office detrimental to the public interest. But no member can be removed from the office unless & until the reasonable opportunity of being heard is given to such member in the matter. Salary & Allowances (Section 7) The Chairperson and full-time individuals will get the compensation and recompense as endorsed by the Government. Bar on Future Employment (Section 8) The Chairperson and the entire time individuals can't acknowledge any arrangement without Govt. endorsement inside a long time from the date on which he stops or resigns from the workplace. Superintendence and Direction (Section 9) The Chairperson will have by and large control and give guidance in regard of all managerial issue of the Authority. He will seat the gathering as and when he is available in the gathering. Meeting of Authority (Section 10) The gathering of the Authority will be held at that point and spot as chosen by the Chairperson according to guideline made under this demonstration. In the event that the Chairperson can't go to the gathering, the individuals will pick the Chairperson from among the current individuals. Every one of the issues to be talked about in the gathering will be chosen by a greater part of votes by the present and casting a ballot. If there should arise an occurrence of equivalent democratic the choice of Chairperson of that gathering will be conclusive. Invalidation of Proceedings of Authority (Section 11) The procedures of Authority won't become discredit (not substantial according to law) because of following reasons. 1. Defects in the development of the authority. 2. Defect in arrangement of any member. Officials and Employees of Authority (Section 12) 57 CU IDOL SELF LEARNING MATERIAL (SLM)
The Authority might delegate officials and workers as it thinks about vital for the productive release of its capacities. The terms and states of such officials will be administered according to the guidelines made under this Act. Transfer of Assets, Liabilities etc. (Section 13) As expressed over that at first the Authority was framed under the name \"Protection Regulatory Authority (IRA)\" and later on the name was changed to \"Protection Regulatory and Development Authority.\" (IRDA) Therefore the resources and liabilities of IRA will be moved to IRDA on the date of foundation of the Authority. Duties, Powers and Functions of Authority (Section 14) The Authority will have the obligation to manage, advance and guarantee deliberate development of the Insurance business and reinsurance business subject to the arrangements of some other arrangements of the demonstration. Forces and Functions to 1. Issue to the candidate (Insurance organization or Insurance Agent or Surveyors or Insurance Brokers or Third-Party Administrators) a testament of enlistment, recharge, change, pull out, suspend or drop such enrolment. 2. Protection of the interests of the policyholders in issue concerning allocating of strategy, assignment by policyholders, insurable premium, settlement of protection guarantee, give up worth of strategy and different agreements of agreements of protection. 3. Specifying essential capabilities, implicit rules and common sense preparing for protection representatives, specialists, assessors, Third Party Administrator. 4. Specifying the set of accepted rules for assessors and misfortune assessors (Who survey the deficiency of policyholder if there should arise an occurrence of General Insurance). 5. Promoting productivity in the lead of protection business. 6. Promoting and controlling proficient associations associated with the protection and re-protection business. 7. Levying expenses and different charges on insurance agencies, Agents, Insurance Brokers, Surveyors and Third-party Administrator. 8. Calling for data from, undertaking examination of, leading enquiries and examinations including review of the back up plans, go-betweens, protection go-betweens and different associations associated with the Insurance business. 9. Control and guideline of the rates, benefits, agreements that might be offered by safety net providers in regard of general protection business not really controlled and directed by the Tariff Advisory Committee under area 64U of the Insurance Act, 1938. 58 CU IDOL SELF LEARNING MATERIAL (SLM)
10. Specifying the structure and way in which books of record will be kept up with and proclamation of records will be delivered by safety net providers and other protection go-betweens. 11. Regulating speculation of assets by insurance agencies. 12. Regulating support of edge of dissolvability i.e., having adequate assets to pay protection guarantee sum. 13. To resolve the questions among safety net providers and go-betweens or protection go- betweens. 14. Supervising the working of the Tariff Advisory Committee. 15. Specifying the level of premium pay of the backup plan to fund plans for advancing and controlling proficient associations alluded to in clause(f). 16. Specifying the level of disaster protection business and general protection business to be embraced by the safety net provider in the country or social area. 17. Exercising such different powers as might be recommended. Grants from the Central Government (Section 15) The Government after endorsement from the Parliament might allow assets to release their obligations according to this Act. Constitution of Funds (Section 16) 1. There will be an asset to be classified \"The Insurance Regulatory and Development Authority Fund\" and there will be attributed there to. i. All Government awards, expenses and charges got by the Authority. ii. All totals got by the Authority from such other source as might be settled on by the Central Government. iii. The level of recommended premium pay got from the guarantor/protection delegates. 2. The fund will be applied for meeting. i. The pay rates, stipends and other compensation of the individuals, officials and different workers of the Authority. ii. Different costs of the Authority regarding the release of its capacities and for the reasons for this act. Accounts and Audit (Section 17) 1. The Authority will keep up with legitimate records and other significant records and set up a yearly proclamation of records in such structure as might be recommended by 59 CU IDOL SELF LEARNING MATERIAL (SLM)
the Central Government in meeting with the Comptroller and Auditor-General of India. 2. The records of the Authority will be reviewed by the Comptroller and Auditor-General of India at such spans as might be indicated by him and any consumption caused regarding such review will be payable by the Authority to the Comptroller and Auditor-General. 3. The Comptroller and Auditor-General of India and some other individual delegated by him regarding the review of the of the records of the Authority will have similar rights, advantages and authority regarding such review as the Comptroller and Auditor- General by and large has regarding the review of the Government accounts and, in the specific will reserve the privilege to request the creation of books of record, associated vouchers and different archives and papers and to investigate any of the workplaces of the Authority. 4. The records of the Authority as affirmed by the Comptroller and Auditor General of India or some other individual named by him for this benefit along with the review report subsequently will be sent every year to the Central Government and that Government will make the equivalent be laid before each House of Parliament. Establishment of Insurance Advisory Committee (Section 25) 1. The Authority may, by notice, build up with impact from such date as it might determine in such notice, a Committee to be known as the Insurance Advisory Committee. 2. The Insurance Advisory Committee will comprise of not more than 25 individuals barring ex-officio individuals to address the interests of business, industry, transport, agribusiness, buyer fora, assessors, specialists, go-betweens, associations occupied with wellbeing and misfortune counteraction, research bodies and representatives' relationship in the protection area. 3. The Chairperson and the individuals from the Authority will be the ex-officio Chairperson and ex officio individuals from the Insurance Advisory Committee. 4. The objects of the Insurance Advisory Committee will be to prompt the Authority on issue identified with protection. 5. The Insurance Advisory Committee might prompt the Authority on such different matters as might be recommended. 3.2.3 Roles, Duties and Functions Roles Insurance regulator IRDA was set up as there felt the need. 60 CU IDOL SELF LEARNING MATERIAL (SLM)
To set up a free administrative body, that gives more prominent self-rule to insurance agencies to work on their exhibition. To empower the insurance agencies to go about as free organizations with financial intentions. To ensure the interest of holders of protection approaches. To revise the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General. Insurance Business (Nationalization) Act, 1972. To end the imposing business model of the Life Insurance Corporation of India and General Insurance Corporation and its auxiliaries. IRDA has guaranteed an agreeable advancement for the protection business in India since progression. It is because of different endeavours made by it that the public trust in the business is positive today and the business in general is undeniably more powerful and has scored well on number of boundaries. In the year 2000, IRDA began offering licenses to private back up plans and ICICI prudential and HDFC Standard Life protection turned into the primary private guarantors to sell an arrangement. In 2001, because of the IRDA's drives for protection market progression, however much 16 notes private area organizations incorporating joint endeavours with driving unfamiliar insurance agencies entered the Indian protection area. Of this, 10 were under the disaster protection classification and six under broad protection. In this manner, in all there are 28 players (15-disaster protection of which, 14 are private guarantors and 13-general protection of which 9 are private) in the Indian protection industry till date. That very year, Royal Sundaram Alliance turned into the main non-life guarantor to sell an arrangement. In the year 2002, IRDA permitted Banks to sell the protection plans. As TPAs enter the scene, back up plans began setting non-life claims in the credit only mode. Protection premium per capita in India has expanded to $16.90 and by and large entrance in India remained at 3.28 percent of the GDP in 2003. India's general world rankings as far as complete premium volumes improved from 23rd in 2000 to nineteenth in 2003 and its offer on the planet market expanded from 0.41 percent to 0.59 percent during a similar period. In the 2004 spending plan, the Government proposed for expanding the unfamiliar value stake to 49%, this is yet to be affected. Under the current rules, there is a 26 percent value cap for unfamiliar accomplices in direct protection and reinsurance Company. For the year finishing 31st March, 2005, the primary year expense of the disaster protection industry developed by 260% to 25,350 crores, when contrasted with 9,709 crores in the year 2000-01. Likewise, the non-life coverage industry additionally saw a 180-percent development, composing a gross premium of 18,095.25 crores in 2004-05 - up from 10,087.03 crores in 2000-01. As insurance agencies are trustees of public cash, IRDA embraced a thorough arrangement of examination of uses dependent on monetary strength, 61 CU IDOL SELF LEARNING MATERIAL (SLM)
history and notoriety of the advertisers, concerning consistence with guidelines and the strength of inner control frameworks, item advancements, specialized and administrative abilities, obligation to add to India's improvement as a provincial protection centre point and a worldwide monetary community for setting up insurance agencies. Furthermore, it set down tough standards identifying with dissolvability and has supported with proper guidelines the venture of assets by insurance agencies to guarantee that they are monetarily solid. One illustration of IRDA's viable method of working was shown when the unexpected exit of both the advertisers of AMP Sanmar Life Insurance Company Limited didn't make any frenzy among the organization's policyholders. Additionally, the issue of Life Insurance Corporation of India's (LIC) dissolvability edge was dealt with cautiously. The nation's head life back up plan today meets the specified dissolvability standards. The IRDA likewise gave miniature protection guidelines to expand the spread of protection in the country, especially among the neediest portions Along with the advancement modified, measures to increase expectations of corporate administration and market direct, reinforcing security of policyholders' inclinations have additionally been presented. This has helped the change from the state syndication to unregulated economy without any difficulty. What's more, IRDA has constantly attempted to foster the market through novel thoughts and drives with contributions from different partners. The attention on forceful advertising has made protection a dawn industry in the nation drawing in youthful ability. The business has effectively tried different things with new dissemination channels and cutting down the exchange’s costs. The Unit Linked Policies (ULIPs) acquired another measurement the offer of protection items constraining the IRDA to come out with its own arrangement of rules to effectively direct these items. While the upgrades may not look sensational, the bearing and speed is a marker of India's development on the worldwide scene. Today, IRDA has numerous applications from planned safety net providers and it is relied upon of the business to further develop the protection entrance to no less than 5% in the following five years. Duties Issue to the candidate an authentication of enlistment, re-establish, alter, pull out, suspend or drop such enrolment. Protection of the interests of the strategy holders in issue concerning allotting of strategy, selection by strategy holders, settlement of protection guarantee, give up worth of strategy and different agreements of agreements of protection. Specifying imperative capabilities, set of accepted rules and pragmatic preparing for mediator or protection go-betweens and specialists. Specifying the set of accepted rules for assessors and misfortune assessors. Promoting productivity in the direct of protection business. 62 CU IDOL SELF LEARNING MATERIAL (SLM)
Promoting and controlling proficient associations associated with the protection and re-protection business. Levying expenses and different charges for completing the reasons for this Act. Calling for data from, undertaking review of, leading enquiries and examinations including review of the back up plans, delegates, protection go-betweens and different associations associated with the protection business. Capacities Segment 14 of IRDA Act, 1999 sets out the obligations, powers and elements of IRDA 1. Subject to the arrangements of this Act and some other law for the time being in power, the Authority will have the obligation to control, advance and guarantee precise development of the protection business and re-protection business. Without bias to the over-simplification of the arrangements contained in sub-area (1). The forces and elements of the Authority will include Issue to the candidate an endorsement of enlistment, restore, adjust, pull out, suspend or drop such enrolment. Protection of the interests of the arrangement holders in issue concerning doling out of strategy, designation by strategy holders, insurable premium, settlement of protection guarantee, give up worth of strategy and different agreements of agreements of protection. Specifying essential capabilities, set of principles and pragmatic preparing for delegate or protection go-betweens and specialists. Specifying the implicit rules for assessors and misfortune assessors. Promoting proficiency in the lead of protection business. Promoting and directing proficient associations associated with the protection and re- protection business. Levying expenses and different charges for doing the motivations behind this Act. Calling for data from, undertaking review of, leading enquiries and examinations including review of the back up plans, delegates, protection go-betweens and different associations associated with the protection business. Control and guideline of the rates, benefits, agreements that might be offered by safety net providers in regard of general protection business not really controlled and directed by the Tariff Advisory Committee under area 64U of the Insurance Act, 1938 (4 of 1938). 63 CU IDOL SELF LEARNING MATERIAL (SLM)
Specifying the structure and way where books of record will be kept up with and articulation of records will be delivered by back up plans and other protection delegates. Regulating venture of assets by insurance agencies regulating upkeep of edge of dissolvability. Adjudication of debates among safety net providers and mediators or protection delegates. Supervising the working of the Tariff Advisory Committee. Specifying the level of premium pay of the guarantor to back plans for advancing and managing proficient associations alluded to in condition. Specifying the level of life coverage business and general protection business to be embraced by the guarantor in the rustic or social area. Exercising such different powers as might be recommended. 3.3 CIBIL CIBIL is India's First Credit Information Company, CIBIL is the most established credit score offices in India, and capacities dependent on a permit conceded by the RBI. It sticks to the Credit Information Act of 2005 and records the reimbursement of advances and Mastercard’s by the two people and organizations. 3.3.1 Formation of the Credit Information Bureau (India) Limited (CIBIL) The Credit Information Bureau (India) Ltd. (CIBIL) was fused in 2000 and dispatched its tasks in April 2004. Following authorization of the Credit Information Companies (Regulation) Act (CICRA) in 2005, three other Credit Information Companies (CICs) were likewise set up. With the business having seen very nearly ten years of activity, the foundation for credit data sharing should be reinforced. Regions where changes are vital incorporate expanding the inclusion of credit data business, orchestrating the announcing designs across CICs, defending the order of records and their classification dependent on instalment history, normalizing the substance of credit data reports, and setting up accepted procedures for CICs and credit establishments. 3.3.2 Members of CIBIL TransUnion CIBIL Membership is available to the following institutions. Credit Institutions(banks, RRBs, Co-operative bank , NBFC, Public Financial Institution, Housing Finance Institution etc. companies engaged in the business of credit cards and other similar cards and companies dealing with distribution of credit 64 CU IDOL SELF LEARNING MATERIAL (SLM)
in any other manner or any other institution which the Reserve Bank may specify, from time to time, for this purpose. Insurance Companies Companies providing cellular or telephone services Credit Rating Agencies Asset Reconstruction Companies Telecom Companies What is the process to become a Member of TransUnion CIBIL?Also, turning into a Member of a credit data authority guarantees your association's consistence with the Credit Information Companies (Regulation) Act 2005. The Act specifies that all the credit foundations including NBFC's, banks and other monetary establishments ought to be an individual from a Credit Information Bureau. The potential Member should give a solitary resource for TransUnion CIBIL (a nodal official). List of archives to be executed and dispatched. i. Membership Application Form to be appropriately filled in by the FI/Bank. ii. Letter of Application on FI/Bank's Letter head. iii. Pricing Annexure: To be marked and stepped by the part. iv. Operating Rule Book: All pages to be marked and stepped by the part. v. Copy of Letter of Authority gave by FI/Bank on Letter head: Letter of Authority that affirms limit and authority of the signatories to the archives executed by the particular Members. vi. Certified genuine duplicate of the permit gave by RBI/for HFC. To be marked and stepped by the part. vii. Payment of Annual expense and Membership charge Pricing i. Membership Fee: INR 10,000/ - (Plus Taxes @15%). ii. Annual Fee: INR 5,000/ - (Plus Taxes @15%). iii. Membership expense and Annual charge instalment to be made with a money order/Demand Draft to be given for \"TransUnion CIBIL Limited\". The actual duplicates can be couriered to the location given underneath: TransUnion CIBIL Membership Team, TransUnion CIBIL Limited. 65 CU IDOL SELF LEARNING MATERIAL (SLM)
Once documentation is finished we will give you the expenses related with utilizing our administrations. Upon consummation of the relative multitude of conventions TransUnion CIBIL will give you a \"Part Kit\". The Member Kit will give you indispensable data that will help you start utilizing our administrations. 3.3.3 Operation of CIBIL For credit grantors to acquire a total image of the instalment history of credit candidate, they should have the option to access the candidate's finished credit record that might be spread over various establishments. CIBIL gathers business and purchaser credit-related information and examines such information to make and appropriate credit reports to members. 1. CIBIL has a huge impact in getting a credit. In the event that people don't have a CIBIL score that is satisfactory, most banks won't discover people commendable for the advance. 2. When you apply for an advance, the bank audits people financial assessment and record first. 3. If people have a low financial assessment, the bank will expect that you have an awful record, and will, along these lines, decline people apply for the credit. 4. If the financial assessment is solid unexpectedly, the bank will handily acknowledge people credit. 5. The higher the score, the more noteworthy the shot at endorsing people advance. 6. The CIBIL score decides your qualification for credits. A decent score on CIBIL makes people effectively meet all requirements for an advance. 7. If your CIBIL score is acceptable, customers can begin arranging the advance loan cost for the advantage. 8. Approval of the credit will be quick and simple. Banks or moneylenders will give people, without yearly expenses, a preapproved advance or a Visa. 3.3.4 Functions The key function of CIBIL is to provide a credit report and credit score for individuals and credit rank for companies, which are the decisive factors in getting new credit applications approved It is a composite credit bureau which caters both commercial and consumer segments. The consumer credit bureau covers credit availed by individuals while the commercial credit bureau covers credit availed by non-individuals such as partnership firms’ proprietary concerns, private and public limited co. 66 CU IDOL SELF LEARNING MATERIAL (SLM)
The aim of the CIBIL is to minimise instances of concurrent and social defaults by providing credit information, pertaining to non-individualborrowers such as public ltd companies, private ltd co-partnership firms, proprietorships, etc. It maintains a central database of info. As received from its members. 3.4 FAIR PRACTICES CODE FOR DEBT COLLECTION Demand for Lenders Liability Law The Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act was authorized in India in 2002. The Act permitted bank to claim resources of defaulting organizations without going through the bulky legitimate interaction. In numerous nations, banks are commanded by law to regard the right and premium of borrowers, investors and different clients. All the banks in India have outlined their own arrangement of reasonable practices codes according to the rules and carried out it from November 1, 2003. The 'Code of Bank's Commitment to Customers' was delivered by Dr. Y.V Reddy, the then Governor, Reserve Bank of India, in a debut work held at RBI on 1 July, 2006. The fair practices code for debt collection framed by the banks is revolved around dignity and respect to customers. The codes are outlined based on recommendations of the Working Group on Lenders’ Liability Laws constituted by the Government of India. Banks security repossession policies were aimed at recovery of dues in the event of default and not aimed at whimsical deprivation of the property. The debt collection codes framed by the commercial banks in India are in line with regulatory or supervisory instructions of RBI, Model policy of IBA, fair practice codes and charters of BCSBI. In terms of IBA model policy, the customer would be contacted ordinarily at the place of the absence of any specified place at the place of his/her residence. If the customer is unavailable at his/her residence, he/she will be contacted at the place of business/occupation. Normally the bank’s representatives will contact the borrower between 0700 hrs and 1900 hrs, unless the special circumstance of his/her business or occupation requires the bank to contact at a different time. In the circumstances where the customer is refusing to pay, is not contactable, is non-cooperative, disputing earlier commitments,unable to establish contact during specified calling hours, banks may contact the borrower up to 2100 hrs. While written communications, telephonic reminders or visits by the bank’s representatives to the borrowers place or residence will be used as loan follow up measures, the bank will not initiate any legal or other recovery measures including 67 CU IDOL SELF LEARNING MATERIAL (SLM)
repossession of the security without giving due notice in writing. Banks are committed to ensure that all written and verbal communication with its borrowers will be in simple business language and will adopt civil manners for interaction with borrowers. Borrower’s requests to avoid calls at a particular time or at a particular place would be honored as far as possible The Reserve Bank of India’s fair practice code for collection of credit cards dues states that “in regard to appointment of third party agencies for debt collection, it is essential that such agents refrain from action that could damage the integrity and reputation of the bank and that they observe strict customer confidentiality. The guidelines further state that banks and their agents should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude the privacy of the credit card holders’ family members, referees and friends, making threatening and anonymous calls or making false and misleading representations. In line with model policies adapted by the member banks of IBA, the Identity and authority of persons authorized to represent bank for follow up and recovery of dues would be made known to the borrowers at the first instance. The bank staff or any person authorized to represent the bank in collection of dues or/and security repossession will identify himself / herself and display the authority letter issued by the bank and upon request. In the recovery process the bank would respect privacy of its borrowers, contacting the borrower on phone or personal visits for recovery of dues cannot be construed as an intrusion of the privacy of the borrower. However, inappropriate occasions such as bereavement in the family or such other calamitous occasions will be avoided by the bank for making calls/visits to collect dues.The bank may document the efforts made for the recovery of dues and gist of interactions with the borrowers. 3.5 SUMMARY The capital market cultivates monetary development in different manners, for example, by increasing the quantum of reserve funds and capital arrangement and through effective assignment of capital, which, thusly, raises the efficiency of speculation. It likewise improves the proficiency of a monetary framework as various contenders compete with one another for monetary assets. Further, it adds to the monetary developing of the economy by amplifying the monetary area and advancing the utilization of imaginative, modern and practical monetary instruments, which eventually diminish the expense of capital. 68 CU IDOL SELF LEARNING MATERIAL (SLM)
The Office of Controller was set up to execute this demonstration. Once more, this Act was revised in 1950 according to the need of great importance. In any case, taking into account developing acts of neglect in Life Insurance business and furthermore because of the ignorance level being high and absence of will for spread of Life Insurance business, it was nationalized by Government of India. LIC Act was passed in June; 1956, and this Act came into power from first Sept.1956. IRDA has guaranteed a palatable advancement for the protection business in India since progression. It is because of different endeavours made by it that the public trust in the business is positive today and the business overall is undeniably more powerful and has scored well on number of boundaries. In the year 2000, IRDA began offering licenses to private guarantors and ICICI prudential and HDFC Standard Life protection turned into the main private back up plans to sell an approach. In 2001, because of the IRDA's drives for protection market progression, however much 16 Notes private area organizations incorporating joint endeavours with driving unfamiliar insurance agencies entered the Indian protection area. The Credit Information Bureau (India) Ltd. (CIBIL) was consolidated in 2000 and dispatched its tasks in April 2004. Following order of the Credit Information Companies (Regulation) Act (CICRA) in 2005, three other Credit Information Companies (CICs) were likewise set up. With the business having seen just about ten years of activity, the foundation for credit data sharing should be reinforced. The Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act was instituted in India in 2002. The Act permitted bank to claim resources of defaulting organizations without going through the unwieldy legitimate cycle. In numerous nations, banks are ordered by law to regard the right and premium of borrowers, investors and different clients. For credit grantors to acquire a total image of the instalment history of credit candidate, they should have the option to access the candidate's finished credit record that might be spread over various organizations. CIBIL gathers business and shopper credit-related information and examines such information to make and circulate credit reports to Members. 3.6 KEYWORDS Business Correspondence- Is the trading of data in composed structure for the interaction of business exercises. Cheap Money Policy- Is a financial strategy where a national bank sets low loan fees so that credit is effectively achievable. 69 CU IDOL SELF LEARNING MATERIAL (SLM)
Development Finance Institutions- Is a monetary office that give medium and long haul monetary help and occupied with advancement and advancement of industry, horticulture and other key areas. Financial Inclusion or Inclusive Financing – It is the conveyance of monetary administrations, at reasonable expenses, to areas of impeded and low-pay sections of society. Monetization- Is the way toward changing over or setting up something into legitimate delicate. 3.7 LEARNING ACTIVITY 1. Take any bank and identify the company’s mission, values and goals. ___________________________________________________________________________ _________________________________________________________________________ 2. If you are a bank manager, find how to keep your customer updated with new laws of RBI &new rules of bank. ___________________________________________________________________________ ______________________________________________________________________ ____ 3.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define meaning of IRDA. 2. State the functions of CIBIL. 3. Write a short note on operation of CIBIL. 4. Write a short note on members of CIBIL. 5. Define fair practices code for debt collection. Long Questions 1. Explain roles, duties and functions of IRDA. 2. Explain the functions of CIBIL. 3. Describe the fair practices Code for debt collection. 4. Explain the members and operation of CIBIL. 70 CU IDOL SELF LEARNING MATERIAL (SLM)
5. Briefly explain the Insurance Regulatory Development Authority Act (IRDA) 1999. B. Multiple Choice Questions 1. What does IRDA stands for? a. Indian Regulatory Development Authority b. Insurance Regulatory Development Authority c. Investment in Insurance Regulatory Development Authority d. None of these 2. What is the sole public sector company for life insurance? a. Standard Life Insurance Company b. Bharti Axa Life Insurance c. Life Insurance Corporation of India d. None of these 3. Which among the following is incorrect pair? a. LIC - Life Insurer b. Export Credit Guarantee Corporation of India - Credit Insurance c. Agriculture Insurance Company Limited - Crop Insurance d. None of these 4. Identify the year in which CIBIL Limited was founded? a. 2000 b. 2004 c. 2005 d. 2008 5. Who brought ‘The ‘Bankers’ Fair Practice’ Code was brought out in June 2004? a. RBI b. IBA c. GOI d. Individual Bank Answers 71 1-b. 2- c. 3-d. 4- a. 5- c. CU IDOL SELF LEARNING MATERIAL (SLM)
3.9 REFERENCES References Rajesh, R&Sivagnanansithi, T. (2009). “Banking Theory: Law and Practice”. Tata McGraw Hill Publishing Company Ltd. Muralitharan, D. (2009). “Modern Banking: Theory and Practice”. PHI Learning Pvt. Ltd. Shekhar, K, C. (2009). “Banking Theory and Practice”, Vikas Publishing House Pvt. Ltd. Textbooks Hajols, T, N. (2009). “Money and Banking”. Gopaljee Enterprises. Rajesh, R&Sivagnanansithi, T. (2009). “Banking Theory: Law and Practice”. TataMcGraw Hill Publishing Company Ltd. Shekhar, K, C. (2009). “Banking Theory and Practice”. Vikas Publishing House Pvt. Ltd. Websites http://indianeconomyforcs.blogspot.in/2010/07/quantitative-methods-of-rbi- credit.html / http://wiki.answers.com/Q/Explain_each_qualitative_credit_control_ http://www.preservearticles.com/201012291871/methods-of-credit-control.html 72 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT 4 – BCSBI, CIBIL STRUCTURE 4.0 Learning Objectives 4.1 Introduction 4.2 BCSBI Role 4.3 Functions of CIBIL 4.4 Codes of BCSBI 4.5 Functions of Banks 4.6 Summary 4.7 Keywords 4.8 Learning Activity 4.9 Unit End Questions 4.10 References 4.0 LEARNING OBJECTIVES After studying this unit, you will be able to Explain the BCSBI role. Explain the functions of CIBIL. Explain codes of BCSBI. Explain functions of banks. 4.1 INTRODUCTION The banking system in India is altogether unique in relation to that of other Asian countries. In this unit, you will learn about the banks. Banks assume a vital part in development of a country and its economy. Banks gives various administrations which can be classified on the foundations of various measures. A bank takes in cash from one gathering of individuals (investors) and loans it to another (borrowers). It is (nearly) sure that it should reimburse investors; it isn't sure that it will be reimbursed by borrowers. This implies that there should be a gross overall revenue produced using credits progressed which can be set against borrower defaults. The matter of loaning is equivalent to some other business, in that expanded benefit comes to the detriment of expanded danger. Along these lines a bank might 73 CU IDOL SELF LEARNING MATERIAL (SLM)
loan either at extremely high rates to exceptionally dangerous borrowers and expectation that the default rate is adequately low to leave it in benefit or at extremely low rates to expanded to incorporate monetary establishments that lead current records for clients and empower clients to pay and be paid by outsiders, regardless of whether they don't pay and gather checks. A bank is an establishment, normally consolidated with influence to give its promissory notes expected to flow as cash (known as certified receipts); or to get the cash of others on broad store, to shape a joint asset that will be utilized by the organization, for its own advantage, for at least one of the motivations behind making impermanent advances and limits; of managing in notes, unfamiliar and home-grown bills of trade, mint piece, bullion, credits, and the reduction of cash; or with both these forces, and with the advantages, notwithstanding these fundamental forces, of getting extraordinary stores and making assortments for the holders of debatable paper, if the foundation wants to participate in such business. Banking in the cutting edge feeling of the word can be followed to middle age and early Renaissance Italy, to the rich urban areas in the north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families ruled banking in fourteenth century Florence, setting up branches in numerous different pieces of Europe. Quite possibly the most renowned Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397. The soonest realized state store bank, Banco di San Giorgio (Bank of St. George), was established in 1407 at Genoa, Italy. With the end goal of fostering an institutional system for sharing of data on borrowers/likely borrowers among banks and monetary establishments, Credit Information Bureau (India) Ltd. (CIBIL) was officially dispatched on May 5, 2004, for gathering, handling and sharing credit data on the borrowers of acknowledge organizations and fill in as a powerful system for controlling the development of Non-performing Assets (NPAs). In November 2003, Reserve Bank of India (RBI) established the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S.S.Tarapore (previous Deputy Governor) to resolve the issues identifying with accessibility of sufficient financial administrations to the normal individual. The command to the Committee included ID of elements that restrained the achievement of best client benefits and recommending steps to work on the nature of banking administrations to singular clients. 4.2 BCSBI ROLE In November 2003, Reserve Bank of India (RBI) established the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S.S.Tarapore (previous Deputy Governor) to resolve the issues identifying with accessibility of sa tisfactory financial administrations to the normal individual. The order to the Committee included ID of elements that repressed the accomplishment of best client benefits and proposing steps to work on the nature of banking administrations to singular clients. The Committee felt that 74 CU IDOL SELF LEARNING MATERIAL (SLM)
with an end goal to constantly update the bundle of administrations that banks offered to their clients, there was a requirement for benchmarking of such administrations. After an inside and out investigation at the grass-roots level, the Committee inferred that there was an institutional hole for estimating the presentation of banks against a seat mark mirroring the accepted procedures (Code and Standards). Subsequently, the Committee suggested setting up of the Banking Codes and Standards Board of India (BCSBI). BCSBI was set up to guarantee that the normal individual as a shopper of monetary administrations from the financial Industry is not the slightest bit at a disadvantageous position and truly gets what he/she has been guaranteed. Banks are needed to enrol themselves with BCSBI as individuals and have the Code received by their separate sheets. From there on, the banks should go into a contract with BCSBI, restricting them to checking by BSCBI all things considered. Any Scheduled Commercial Bank is qualified to become individual from BCSBI. The Code addresses every part bank's obligation to least guidelines of administration to singular clients corresponding to items and administrations offered by the bank, for example Deposit accounts Safe deposit lockers Settlement of accounts of deceased account holders Foreign exchange services Remittances within India Loans and advances and guarantees Credit cards Internet banking In these areas the Code, inter alia, dwells upon Interest rates Tariff schedule Terms and conditions governing relationship between the bank and the customer Compensation for loss, if any, to the customer due the acts of omission or commission on the part of the bank Privacy and confidentiality of the information relating to the customer Norms governing advertisements, marketing and sales by banks Every member bank is required to 75 CU IDOL SELF LEARNING MATERIAL (SLM)
Have a help desk/ helpline at the branch Have a Code Compliance officer at each Controlling Office above the level of the branch Display at each branch name and contact number of Code Compliance Officer Display name and address of the Banking Ombudsman In the event that a client isn't offered types of assistance as guaranteed in the Code, he would first be able to move toward the assistance work area of the branch/bank. On the off chance that the issue isn't settled, the Code Compliance Officer of the bank might be drawn nearer by the complainant. On the off chance that the issue is as yet not made plans as per the general inclination of the client he should take it up with the Banking Ombudsman. The primary roles of the BCSBI are To plan, advance, get ready, create, advance and distribute thorough Codes and Standards for banks, for accommodating reasonable treatment to their clients. To work as a free and self-ruling body to screen, and to guarantee that the Codes and Standards embraced by banks are clung to, in letter and soul, while conveying administrations to their clients. BCSBI has as a team with the Indian Banks' Association (IBA), advanced two codes - Code of Bank's Commitment to Customers and the Code of Bank's Commitment to Micro and Small Enterprises - which set least guidelines of banking rehearses for part banks to follow when they are managing singular clients and miniature and little undertakings. These Codes are dependent upon periodical audit and update. The focal goal of these Codes is advancing acceptable financial works on, setting least principles, expanding straightforwardness, accomplishing higher working norms or more all, advancing a genial investor client relationship which would cultivate certainty of the average person in the financial framework. The Codes lay incredible accentuation on straightforwardness and giving full data to the client before an item or administration is offered to him. The Codes are responsibilities of banks to their clients as well as it might be said a Charter of Rights for the normal individual. By setting the base principles of client care, the Codes make the client mindful of he can anticipate that each bank should manage the his/her everyday necessities. BCSBI screens the execution of the Codes through the accompanying strategies. Gets from part banks an Annual Statement of Compliance (ASC) Visits branches to discover the situation with ground-level execution of Codes Studies grumblings got from clients and orders/grants gave by Banking Ombudsmen/Appellate Authority to see if there is any framework wide lack Organizes a yearly Conference with Principal Code Compliance Officers of the Member banks to talk about execution issues. 76 CU IDOL SELF LEARNING MATERIAL (SLM)
4.3 FUNCTIONS OF CIBIL All the banks and monetary establishments working in India are under a commitment to give month to month answering to CIBIL about their borrower's financial record whether they had reimbursed the advance, Visas bills, and so forth on schedule or had defaulted in one or the other reimbursement/premium instalment. Based on such credit data from banks it utilizes it for additional spread to moneylenders for credit assessment measure in light of the fact that at whatever point an imminent client moves toward any loan specialist for profiting credit then such loan specialist by all appearances requests that that client present the CIBIL report to investigation his credit value. CIBIL does the rating of both Institutional and Individual Customers dependent on their financial record and rate them dependent on CIBIL's inside rating boundaries. It should be noted here that the CIBIL score isn't just valuable for the loan specialists yet additionally for the clients in arranging their credit prerequisites likewise. A CIBIL score is fundamentally a three-digit numeric score of your record going from 300-900. It is determined by examining the record and enquiries made by moneylenders for the benefit of borrowers. The Score shows the 'likelihood of default' by the borrower in future. The lower the score poor people it is and closer the score to 900 the higher are the odds that your credit application will be endorsed. Note that almost 90% of people advances are conceded with score more prominent than 750 which is viewed as a reasonable score in a large portion of the cases by the moneylenders. CIBIL RANK – It is a particular office planned distinctly for institutional clients that have extraordinary credits of Rs. 10 lakhs to Rs. 50 crores in which CIBIL gives a Rank going from 10 to 1. It tends to be acquired simply by the moneylenders for taking objective choices however subject to non-exposure to any outsider and by the actual organization. A score of 10 is considered to the most noticeably awful and 1 is the awesome. We can say that it is determining future dependent on verifiable information of borrowers. CIBIL Score impacts you’re getting power in light of the fact that a decent CIBIL score might get you credit at nearly lower costs. 77 CU IDOL SELF LEARNING MATERIAL (SLM)
4.4 CODES OF BCSBI Sl.N Para of the Issues Raised by BCSBI Clarifications o. Code Member Banks 1 There are multiple IBA has clarified on its website that the codes and charters following codes evolved by them are not for customer service applicable to members of the BCSBI. from BCSBI, IBA Bankers’ Fair Practice Code and RBI. There may be need to move Fair Practice Code for Credit Card towards unification Operations thereof. Model Code for Collection of Dues The contents and Repossession of security. covered in the Fair Member banks are, therefore, required to Practices Code are follow BCSBI Codes. also covered in the A reference is invited to the introductory BCSBI Code. para in the Code which clarifies that the BCSBI member Code does not replace or supersede banks are required to regulatory or supervisory instructions of the follow, practice and Reserve Bank of India (RBI) and that banks provide information will comply with such on both the codes to instructions/directions issued by RBI from customers. Branches time to time. Provisions of the Code may are often getting set higher standards than what is indicated confused. in the regulatory instructions and such higher standards will prevail as the Code represents best practices voluntarily agreed to by banks as their commitment to customers. 2 2.1.6 To As the Code is a large The full text of the Code must be given to Publicise The document, portions the customer as he may avail of different Code We applicable to the products / services offered by the bank and Will: product opted for may he must be made aware of all his rights. a. provide be given to the you with a customer 78 CU IDOL SELF LEARNING MATERIAL (SLM)
copy of the Code, on request, over the counter or by electronic communication or mail b. provide you ( new customer) with a copy of the Code when you open your account 3 3.2 'Do Not The underlying principle of the Code is the Call Service’ need for explicit consent and not implicit When you Why cannot there be an consent. The customer has a right to privacy become customer, our entry in the DNC only and should not be taken for granted. will we at the specific instance Member banks can ask the customer to of the customer? exercise his option, in writing, as to automatically The customer is whether he would like to receive register your entitled to receive all information about new products / services name under our updated information offered by the bank over the telephone, 'Do Not Call ' on our products / through SMS or e-mail before using these Service. We services to enable modes for marketing their products. will not him to take a prudent inform/extend decision. to you through It is the responsibility telephone of the bank to inform calls/SMS/e- the customers also, as mails any new to the latest product information on /service unless products and services. and until you inform us in writing that you consent to 79 CU IDOL SELF LEARNING MATERIAL (SLM)
avail of this information/ service 4 3.4.2 Changes The medium through A reference is invited to Para 3.5.1 of the in Fees & which customers can be Code wherein the modes of communicating Charges intimated about changes to terms and conditions have been If we increase changes in fees and listed. any of these charges should be Banks need to ensure that changes to terms charges or included in the Code. and conditions including fees and charges introduce a For example: any of the reach the customer 30 days prior to the new charge, it following modes: changes becoming effective. will be notified i. Notice at the one month branches prior to the ii. Annexure to the revised charges statement of account being levied / iii.Letters becoming iv.e-mail effective. v. SMS vi. Website vii. Newspaper 5 Is Email a valid mode If a customer has registered an e-mail id of communication for with the bank, communications may be sent customers who have to him by e-mail. given their email ID to the bank for regulatory purpose - informing that the account is inoperative / dormant / Nomination confirmation etc 6 4. Advertising, In spite of DNC Please see clarifications at items 3 & 4 Marketing registrations, we (the above. and Sales bank) will continue to intimate changes in d. We may, product features and 80 CU IDOL SELF LEARNING MATERIAL (SLM)
from time to send email/SMS alerts time, for security purposes. communicate to your various features of our products availed by you. 7 5.1 Credit As per Regulation No.10 (a) (ii) (A) to the Reference This para needs to be Credit Information Companies (Regulation) Agencies modified to read as “If Act, 2005 credit information is to be d. If your loan your loan account has updated on a monthly basis or at such account has been in default, and shorter intervals as may be mutually agreed been in default, thereafter regularised, upon between the credit institution and and thereafter bank will take steps to credit information company. regularised, we update this information will take steps as applicable with the to update this CRA in 60 days in the information format as per guidelines with the CRA issued by CRA/RBI in the next from time to time monthly report. 8 6. Collection ‘Calling and SMS It is preferable for the bank, in its own of Dues alerts’ should be interest, to send reminders in writing or Whenever we included as modes for through personal visits. give loans, we contacting the will explain to borrower. you the repayment process by way of amount, tenure and periodicity of repayment. 9 6. Collection The provision should The bank is committed to have details of 81 CU IDOL SELF LEARNING MATERIAL (SLM)
of dues be amended to read as recovery agents on their websites. b. We will also “these details are Therefore, if a customer requests the branch make available available on the for details of the recovery agency firms the on request website and can also be same can be provided to the customer at the details of the obtained by writing to branch. recovery the Nodal officer of the agency firms/ Bank.” companies at our branches. 10 8.1.1 Banks should have the According to RBI regulations banks must Savings/Curre freedom to decide issue monthly statements of account, free of nt Accounts - periodicity of sending cost to those customers who opt for Statements (a) physical statements to statements of account. a. To help you customers. However, manage your the customer can walk account and into the branch to check entries in collect monthly it, we will statements free of cost. provide you with a monthly statement of account unless you have opted for a pass book. 11 8.1.1 Entry of the name of This is a fraud-prone area and the source of Savings/Curre the payee of a cheque several complaints. It is, therefore, nt Accounts in case of debit entries imperative that member banks modify their Statements need not be entered as procedures and systems to enter the name of e. We will the customer is the payee in the pass book / statements of ensure that expected to keep a account. entries in your record of the cheques pass book / he issues. statements are Existing systems do brief and not allow such entries. intelligible 82 CU IDOL SELF LEARNING MATERIAL (SLM)
12 8.1.2 Term The provision may be The bank is committed to explain the IT Deposit modified to read as We rules and obtain Form 15 G /15H, at the When you will accept Form 15 H time of placement of Term Deposit. place a term / 15 G from you at the If a bank is willing to accept an application deposit with us, time of application if for FD through electronic media, it can also we will you are not liable to transmit Form 15G / 15 H through internet f: obtain Form pay tax on your interest to the customer to enable him to submit the 15 H / 15 G income. Additionally, it same. needs to be mentioned from you at the that: time of application if you are not liable to pay tax on your interest income. 13 8.1.6 Dormant How can the bank It is important to advise the joint account / Inoperative notify the joint holder(s) that the account is proposed to be accounts account holders before classified as dormant / inoperative. The We will an account is classified joint account holder(s) has the power to as dormant, when the operate the account, except if mandated b. notify the address of the joint otherwise. joint holder/s account holders are The account opening form should have the also before an different? The system provision for address of the joint account account is only captures the holder(s) and the system should be enabled classified as address of the 1st to capture contact details of all the account inoperative / account holder. holders. dormant Is it practically Yes. possible to assess any account as dormant / The Code provides that the account holders inoperative or be advised that their account is liable to be unclaimed three classified as dormant after a period of months in advance? inspiration of 1 year and 9 months i.e. three Decision to classify months before the account is classified as any account as dormant / inoperative. dormant / inoperative 83 CU IDOL SELF LEARNING MATERIAL (SLM)
or unclaimed could be taken only after the expiry of the stipulated period? 14 8.2 Clearing With regard to A person who deposits a cheque to be Cycle / collection of cheques, collected from another bank is a Collection it is mandated that the ‘customer’ of the collecting bank. Services collecting bank Compensation for delay, must, therefore, be b. We will pay should compensate its paid by the collecting bank. The customer you customer for delay in has a relationship with his bank and not compensation collection. No with the paying bank. as per our liability is fixed on Cheque the paying bank, for Collection / delay, if any, at its In the present CBS environment banks end. The paying bank should keep all details of accounts including Compensation is expected to remit phone number(s) of customer(s) up-to-date the proceeds of the so that the data can be accessed at all policy for any inward instrument as branches besides the home branch. early as possible, but delay in in any case, by the Bankers have to use their discretion and collection of following day of exercise due diligence while allowing instruments, receipt. Time limit operations in such accounts. without waiting for a demand. and compensation amount should be set for delays at the paying bank and such amount should be remitted voluntarily. 15 8.3 Cash While RBI has set a Compensation should be paid by the card Transactions limit of 12 working issuing bank to its customer. The customer d. We will days for settling these has a relationship with his bank and not reimburse transactions, many a with the ATM owning bank. amounts times there is a delay wrongly beyond 12 working debited in days when the ATM is failed ATM owned by some other 84 CU IDOL SELF LEARNING MATERIAL (SLM)
transactions bank. In such cases, the within a compensation to be maximum paid should be shared period of 12 by the other bank and days from the time limit for date of receipt responding to other of your bank ATM failed complaint. transactions should be specified. 16 8.3.1 Direct In case of pensioners’ “The paying branch before commencement debits and account Life Certificate of pension obtains an undertaking from the standing is obtained during pensioner in the prescribed form for this instructions November every year. purpose and therefore, can recover the We will In the event of death of excess payment made to the pensioner's b. act upon pensioner say during account due to delay in receipt of any mandates given December and bank not material information or due to any by you for being informed, the Bonafede error. The bank has also right to direct debits bank shall continue to recover the excess amount of pension [say Electronic pay pension till October credited to the deceased pensioner’s (till due date for next account from his/ her legal heirs/nominees.” Clearing Service (ECS)] Life Certificate). and other Standing Instructions standing accepted under such instructions. In accounts will allow case of any transfer of funds even delay or failure after death of the in executing pensioner. Pension paid the mandate after death cannot be resulting in recovered under such financial loss circumstances. or additional cost, we will compensate as per the compensation policy of the bank. 85 CU IDOL SELF LEARNING MATERIAL (SLM)
17 8.9 Foreign Compensation would The beneficiary of the remittance is a Exchange be paid provided the customer of the receiving bank. Services beneficiary details are Compensation for delay, must, therefore, be f. In case of correctly mentioned paid by the receiving bank. The customer delay beyond by the remitting bank has a relationship with his bank and not the day when with the remitting bank. The receiving bank the amount is has to make efforts to ascertain correct due for credit, beneficiary details. you will be compensated (a) for any loss on account of interest for due period beyond the due date and (b) also for adverse movement of forex rate as per the Compensation Policy of the bank. 18 8.11.1 Loan The various terms of The MITC must necessarily contain the products the loan are provided most important terms and conditions Applications to the loan applicants including those which affect the customer for loans and while applying for a adversely. their loan and also clearly The sanction letter may not contain all processing indicated on the terms and conditions of the loan. Some c. We will give sanction letter which is conditions may form part of the loan you the Most accepted by the agreement. The Most Important Terms and Important applicant / borrower. Conditions may, therefore, be listed Terms and In view of the above separately. Conditions the MITCs may not be (MITC) insisted upon Banks should be able to decide the most important terms and conditions for each of governing the BCSBI may prescribe their products. Terms and conditions of 86 CU IDOL SELF LEARNING MATERIAL (SLM)
loan / credit a format of MITC so similar products may differ from bank to facility you have availed. that uniformity is bank. maintained and to avoid subjectivity between most important and important terms of loan sanctioned. 19 8.11.1 Loan Products Compliance with the Applications provision may not be for loans and possible under the The mortgager should be advised to collect their following the documents. processing circumstances: The bank should compensate the borrower l. We will A third party makes and assist the customer in obtaining compensate final payment and the duplicate documents. you for any mortgager does not delay in return claim the document; Courts have to be made aware of the Code commitment and compensation has to be of securities / Documents have been paid for the delay. documents / mutilated / destroyed title deeds to due to natural mortgaged calamity; property The account is closed beyond 15 days by intervention of of the Courts and there is a repayment of delay in receipt of the all dues agreed title deeds from the to or Courts. contracted. 20 8.14.3 Credit Some banks may Card choose not to send Statements statements in following a. To help you scenarios- Item No. 1 has been noted for consideration manage your 1) In case no at the appropriate time. credit card transactions or Credit card statements are required to be account and outstanding are 87 CU IDOL SELF LEARNING MATERIAL (SLM)
check details of involved sent in the case of scenarios 2 & 3. purchases/cash 2) In cases after drawings using sending the statements the credit card, the customer is we will offer delinquent for over 180 you free of cost days a facility to receive credit 3) For outstanding card transaction below Rs. 100 details either via monthly mail and, if you so desire, also through the Internet. 21 8.14.3 Credit Besides monthly A reference is invited to para 3.5.1 - Card statement we can let a Changes in terms and conditions. (Account Statements customer know of statements is one of the modes) c. We will let changes through emails you know / or SMS or letters. notify changes However it is also the in schedule of customer’s fees and responsibility to have charges and latest address/mobile terms and number and email id conditions. updated with the bank Normally, changes (other than interest rates and those which are a result of regulatory requirements) will be made with prospective 88 CU IDOL SELF LEARNING MATERIAL (SLM)
effect giving notice of at least one month. Code of Bank's Commitment to Micro and Small Enterprises Sl. No. Para of the Code Issues Raised by BCSBI Clarifications Member Banks 1 5.3 Sanction / A bank has suggested that Parameters need to be shared Rejection as there are several so that the customers are able We will specific internal to take appropriate measures parameters on the basis of to ensure that their f. Follow a rating which a bank rates a performance on these system, the parameters customer and takes a call parameters meet the required of which will be shared whether to lend or not to standards. with you. lend and would vary from product to product, sharing of the parameters without complete information would not be of any use to the applicants. Moreover, the reasons for rejection are invariably shared with the applicants as prescribed by RBI. 4.5 FUNCTIONS OF BANKS There are two types of functions of banks. 1. Primary functions – being primary are also called banking functions. 2. Secondary functions. Both the types of functions of bank are explained below in detail. Primary Functions of Bank All banks have to perform two major primary functions namely 1. Accepting of deposits 2. Granting of loans and advances Accepting of Deposits 89 CU IDOL SELF LEARNING MATERIAL (SLM)
An extremely essential yet significant capacity of the multitude of business banks is assembling public assets, giving safe guardianship of reserve funds and premium on the reserve funds to contributors. Bank acknowledges various kinds of stores from the public, for example Saving deposits: supports saving propensities among general society. It is reasonable for compensation and workers. The pace of interest is low. There is no limitation on the number and measure of withdrawals. The record for saving stores can be opened in a solitary name or in joint names. The investors simply need to keep up with least equilibrium which changes across various banks. Additionally, Bank gives ATM cum charge card, check book, and Internet banking office. Applicants can think about the Types of Checks at the connected page. Fixed deposits: Also known as Term Deposits. Cash is saved for a fixed residency. No withdrawal cash during this period permitted. In the event that investors pull out before development, banks demand a punishment for untimely withdrawal. As a single amount sum is paid at one time for a particular period, the pace of interest is high however shifts with the time of store. Current deposits: They are opened by finance managers. The record holders get an overdraft office on this record. These stores go about as a momentary credit to address pressing issues. Bank charges an exorbitant loan fee alongside the charges for overdraft office to keep a save for obscure requests for the overdraft. Recurring deposits: A specific amount of cash is kept in the bank at a normal span. Cash can be removed solely after the expiry of a specific period. A higher pace of revenue is paid on repeating stores as it gives an advantage of accumulated pace of revenue and empowers contributors to gather a major amount of cash. This sort of record is worked by salaried people and unimportant merchants. Giving of Loans and Advances The stores acknowledged from general society are used by the banks to propel advances to the organizations and people to meet their vulnerabilities. Bank charges a higher pace of revenue on advances and advances than what it pays on stores. The distinction between the loaning financing cost and financing cost for stores is bank benefit. Bank offers the accompanying kinds of loans and advances. Bank overdraft: This office is for current record holders. It permits holders to pull out cash whenever more than accessible in bank balance however up to as far as possible. An overdraft office is allowed against insurance security. The interest for overdraft is paid uniquely on the acquired sum for the period for which the credit is taken. 90 CU IDOL SELF LEARNING MATERIAL (SLM)
Cash credits: A momentary advance office up to a particular breaking point fixed ahead of time. Banks permit the client to take a credit against a home loan of certain property (substantial resources and/ensures). Money credit is given to a record holders and furthermore to the individuals who don't have a record with a bank. Interest is charged on the sum removed in abundance of the breaking point. Through cash credit, a bigger measure of advance is endorsed than that of overdraft for a more dra wn out period. Loans - Banks loan cash to the client for present moment or medium times of say 1 to 5 years against substantial resources. These days, banks do loan cash as long as possible. The borrower reimburses the cash either in a single amount sum or as portions spread throughout a pre-chosen time-frame. Bank charges revenue on the real measure of advance endorsed, if removed. The loan cost is lower than overdrafts and money credits offices. Discounting the Bill of Exchange - It is a sort of momentary advance, where the dealer limits the bill from the bank for certain expenses. The bank propels cash by limiting or buying the bills of trade. It covers the bill add up to the drawer(seller) for the benefit of the drawee (purchaser) by deducting common markdown charges. On development, the bank presents the bill to the drawee or acceptor to gather the bill sum. Secondary Functions of Bank Like primary functions of bank, the secondary functions are also classified into two parts. 1. Agency functions 2. Utility functions Agency Functions of Bank Banks are the agents for their customers; hence it has to perform various agency functions as mentioned below. Transfer of Funds Transferring of funds from one branch/place to another Periodic Collections Collecting dividend, salary, pension, and similar periodic collections on the clients’ behalf Periodic Payments Making periodic payments of rents, electricity bills, etc on behalf of the client Collection of Cheques 91 CU IDOL SELF LEARNING MATERIAL (SLM)
Like collecting money from the bills of exchanges, the bank collects the money of the cheques through the clearing section of its customers. Portfolio Management Banks manage the portfolio of their clients. It undertakes the activity to purchase and sell the shares and debentures of the clients and debits or credits the account. Other Agency Functions Under this bank act as a representative of its clients for other institutions it acts as an executor, trustee, administrators, advisers, etc. of the client. 4.6 SUMMARY A bank is an establishment, normally fused with influence to give its promissory notes proposed to circle as cash (known as certified receipts); or to get the cash of others on broad store, to frame a joint asset that will be utilized by the organization, for its own advantage, for at least one of the motivations behind making brief advances and limits; of managing in notes, unfamiliar and homegrown bills of trade, mint piece, bullion, credits, and the reduction of cash; or with both these forces, and with the advantages, notwithstanding these essential forces, of getting unique stores and making assortments for the holders of debatable paper, if the foundation decides to take part in such business. In November 2003, Reserve Bank of India (RBI) established the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S.S.Tarapore (previous Deputy Governor) to resolve the issues identifying with accessibility of sufficient financial administrations to the normal individual. The command to the Committee included ID of components that repressed the fulfilment of best client benefits and proposing steps to work on the nature of banking administrations to singular clients. The Committee felt that with an end goal to consistently redesign the bundle of administrations that banks offered to their clients, there was a requirement for benchmarking of such administrations. The Scheme of Banking Ombudsman, which has been working for a long while, doesn't investigate foundational issues with the end goal of upholding a recommended nature of administration. Preferably, such a capacity ought to be performed by a Self- Regulatory Organization (SRO) however taking into account the current structure of the financial area in India, it was felt that a free, self-ruling Board will be most appropriate for the capacity. Accordingly, Dr. Y.V. Reddy, Governor, Reserve Bank of India, in his Monetary Policy Statement (April 2005) declared setting up of the 92 CU IDOL SELF LEARNING MATERIAL (SLM)
Banking Codes and Standards Board of India to guarantee that a complete set of accepted rules for reasonable treatment of clients was developed and clung to. BCSBI has in a joint effort with the Indian Banks' Association (IBA), advanced two codes - Code of Bank's Commitment to Customers and the Code of Bank's Commitment to Micro and Small Enterprises - which set least guidelines of banking rehearses for part banks to follow when they are managing singular clients and miniature and little ventures. These Codes are dependent upon periodical audit and modification.. The focal goal of these Codes is advancing acceptable financial works on, setting least norms, expanding straightforwardness, accomplishing higher working guidelines or more all, advancing a welcoming investor client relationship which would encourage certainty of the everyday person in the financial framework. The stores acknowledged from the general population are used by the banks to propel credits to the organizations and people to meet their vulnerabilities. Bank charges a higher pace of revenue on credits and advances than what it pays on stores. The distinction between the loaning financing cost and loan fee for stores is bank benefit. Encourages saving propensities among the general population. It is appropriate for compensation and workers. The pace of interest is low. There is no limitation on the number and measure of withdrawals. The record for saving stores can be opened in a solitary name or in joint names. The contributors simply need to keep up with least equilibrium which changes across various banks. Likewise, Bank gives ATM cum charge card, check book, and Internet banking office. 4.7 KEYWORDS ATMs - Automatic Teller Machines. Bank Rate- It is the loan fee at which a country's national bank loans cash to homegrown banks. Democratization- It is the activity of making something majority rule. Economyis the riches and assets of a nation or locale, esp. as far as the creation and utilization of labour and products. Governance - It is the demonstration of administering. It identifies with choices that characterize assumptions, award power, or confirm execution. 4.8 LEARNING ACTIVITY 1. Study and compare the classic and general microfinance models of Grameen Bank. 93 CU IDOL SELF LEARNING MATERIAL (SLM)
___________________________________________________________________________ _________________________________________________________________________ 2. Examine the reasons that prompted the bank to introduce a new, more flexible credit system. ___________________________________________________________________________ _________________________________________________________________________ 4.9 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define BCSBI. 2. Write a short note on BCSBI Role. 3. Briefly Explain the Functions of CIBIL. 4. Briefly Explain Codes of BCSBI. 5. Give an overview of Functions of Banks. Long Questions 1. Describe BCSBI Role. 2. Discuss the Functions of CIBIL. 3. Discuss the Codes of BCSBI 4. Explain the Functions of Banks 5. Give an overview of Primary functions and Secondary Functions of Banks. B. Multiple Choice Questions 1. Which of the following organization created “Rupay” card payment network? a. RBI b. VISA c. SBI d. National Payment Corporation of India 2. Which of the following the most widely used monetary policy tool? 94 a. Open market operations b. Issuing of notes c. Close market operations CU IDOL SELF LEARNING MATERIAL (SLM)
d. Discount rate 3. Why should one keep our savings with banks? a. It is safe b. Earns interest c. Can be withdrawn anytime d. All of these 4. Among which of the following bank does not give loan against? a. Gold Ornaments b. LIC policy c. Lottery ticket d. NSC 5. Which of the following rules do not apply to banking companies? a. Companies Act b. Banking Regulation Act c. Reserve Bank of India Act d. All of these Answers 1-d, 2- a, 3-d, 4- c, 5- a. 4.10 REFERENCES References Auerbach, Robert, D. (1990). Finance Markets and Institutions. New York. Macmillan Publishing Co. Inc. Bhole, M, K. (2009). Financial Markets and Institutions. New York. Macmillan Publishing Co. Inc. Hajols, T, N. (2009). “Money and Banking”. Gopaljee Enterprises. Textbooks Taxman. (2010). “Practitioners’ Book on Trade Finance by Taxman”. Taxman Publication Pt. Ltd. 95 CU IDOL SELF LEARNING MATERIAL (SLM)
Rajesh, R&Sivagnanansithi, T. (2009). “Banking Theory: Law and Practice”, Tata McGraw Hill Publishing Company Ltd. Shekhar, K, C. (2009). “Banking Theory and Practice”, Vikas Publishing House Pvt. Ltd. Websites http://www.rbi.org.in/ / http://wiki.answers.com/ http://www.kkhsou.in/main/EVidya2/commerce/reserve_bank.html 96 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT 5 – BANKER CUSTOMER RELATIONSHIP TYPES STRUCTURE 5.0 Learning Objectives 5.1 Introduction 5.2 Different Deposit Products & Services 5.3 Services to Customers & Investors 5.4 KYC 5.5 AML 5.6 CFT norms 5.7 PMLA Act 5.8 KYC Norms 5.9 Summary 5.10 Keywords 5.11 Learning Activity 5.12 Unit End Questions 5.13 References 5.0 LEARNING OBJECTIVES After studying this unit, you will be able to Explain the different deposit products &services. Describewhat is KYC? andKYC norms. Explain the services to customers &investors. Elaborate AML,CFT norms, PMLA acts. 5.1 INTRODUCTION Bank deposits comprise of cash set into banking establishments for care. These deposits are put aside to instalment records, for example, investment accounts, financial records, and currency market accounts. The record holder has the privilege to pull out stored assets, as gone ahead in the agreements administering the record understanding. 97 CU IDOL SELF LEARNING MATERIAL (SLM)
We catch wind of the significance of investment funds since our adolescence from our folks similarly as they would have in their childhood. Investment funds is one of the propensities established profoundly in us. There are a few banks that give a few sorts of deposits. These items not just assistance individuals in protecting their well-deserved cash in the bank yet additionally help them in getting solid returns by giving rewarding financing costs. At the point when we list top financial deposits in India, there are essentially four of them – Savings Account, Current Account, Fixed Deposit (FD) and Recurring Deposit (RD). Given by every one of the main banks of India, these financial deposits items are very well known among the clients on account of the security they offer in the event that they need critical assets. An individual can pick any of the financial stores as indicated by their way of life, work and reserve funds propensities. In this article, we will cover various perspectives identified with these financial deposits, for example, their highlights and advantages that you can appreciate. A bank's responsibility is to give clients monetary administrations that assist individuals with bettering their lives. As innovation advances and rivalry expands, banks are offering various sorts of administrations to remain current and draw in clients. Regardless of whether you are opening your first ledger or have dealt with a financial records for quite a long time, it assists with knowing the various kinds of banking administrations accessible. This guarantees you capitalize on your present monetary organization. Choosing which administrations are most significant can lead you to the bank that best meets your requirements. The know your client or know your customer (KYC) rules in monetary administrations necessitate that experts put forth an attempt to check the character, reasonableness, and dangers implied with keeping a business relationship. The methodology fit inside the more extensive extent of a bank's Anti-Money Laundering (AML) strategy. KYC measures are likewise utilized by organizations of all sizes to guarantee their proposed clients, specialists, advisors, or wholesalers are against pay off agreeable, and are really who they guarantee to be. Banks, back up plans, trade lenders, and other monetary foundations are progressively requesting that clients give definite due persistence data. At first, these guidelines were forced uniquely on the monetary foundations yet presently the non-monetary industry, fintech, virtual resources vendors, and surprisingly non-benefit associations are responsible to oblige. 5.2 DIFFERENT DEPOSIT PRODUCTS & SERVICES Deposit Account Savings Bank Account As the name recommends this sort of record is reasonable for individuals who have a positive pay and are hoping to set aside cash. For instance, individuals who get pay rates or individuals who function as workers. This sort of record can be opened with a 98 CU IDOL SELF LEARNING MATERIAL (SLM)
base introductory store that changes from one bank to another. Cash can be kept whenever in this record. Withdrawals can be made either by marking a withdrawal structure or by giving a check or by utilizing an ATM card. Ordinarily banks put some limitation on the quantity of withdrawal from this record. Interest is permitted on the equilibrium of store in the record. The pace of revenue on reserve funds financial balance fluctuates from one bank to another and furthermore changes every now and then. A base equilibrium must be kept up with in the record as endorsed by the bank. Current Deposit Account Big finance managers, organizations, and establishments like schools, universities, and emergency clinics need to make instalment through their financial balances. Since there are limitations on the quantity of withdrawals from a reserve funds financial balance, that kind of record isn't reasonable for them. They need to have a record from which withdrawal can be made quite a few times. Banks open a current record for them. Like a reserve funds ledger, this record likewise requires a specific least measure of store while opening the record. On this store, the bank doesn't pay any revenue on the equilibriums. Maybe the record holder pays a specific sum every year as a functional charge. Investment Deposit Fixed Deposit Account Some bank clients might jump at the chance to take care of cash for a more extended time frame. Such stores offer a higher loan fee. In case cash is kept in a reserve funds ledger, banks permit a slower pace of revenue. Along these lines, cash is kept in a fixed store record to acquire revenue at a higher rate. Note: This time of store might go from 15 days to three years or really during which no withdrawal is permitted. Recurring Deposit Account While opening the record an individual needs to consent to store a fixed sum once in a month for a specific period. The all out store alongside the interest in that is payable on development. Notwithstanding, the investor can likewise be permitted to close the record before its development and get back the cash alongside the premium till that period. The record can be opened by an individual separately, or mutually with another, or by the gatekeeper for the sake of a minor. The pace of revenue permitted on the stores is 99 CU IDOL SELF LEARNING MATERIAL (SLM)
higher than that on a reserve funds bank store however lower than the rate permitted on a fixed store for a similar period. The Recurring Deposit accounts might be of the accompanying sorts. Home safe account or money box scheme Cumulative-cum-sickness store account Home construction store scheme/ saving account CASA Deposit Account CASA is the abbreviation for Current and Savings account, which is ordinarily utilized in the financial business across West Asia and South-East Asia. Banks ordinarily get most of their assets from different sorts of store plans like current records, Savings Accounts and term stores. CASA store is the measure of cash that gets kept in the Current and Savings Accounts of bank clients. The bank pays exceptionally low or no premium for stores in current records while the stores in Savings Accounts gets somewhat higher financing costs. It is the least expensive and significant wellspring of assets for banks. This asset source is thusly used to appropriate Home Loans, Personal Loans and so on. Reinvestment Deposit Account This is unique term stores. This arrangement assists you with procuring interest on interest, subsequently giving you a two-crease pay. You store your cash with us for any period between a half year to 10 years, and we pay you premium on your kept cash in addition to on the premium you procure. Different Types of Deposit Services Individual Banking Banks typically offer a variety of services to assist individuals in managing their finances, including Checking accounts Savings accounts Debit & credit cards Insurance Wealth management Business Banking 100 CU IDOL SELF LEARNING MATERIAL (SLM)
Search
Read the Text Version
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
- 31
- 32
- 33
- 34
- 35
- 36
- 37
- 38
- 39
- 40
- 41
- 42
- 43
- 44
- 45
- 46
- 47
- 48
- 49
- 50
- 51
- 52
- 53
- 54
- 55
- 56
- 57
- 58
- 59
- 60
- 61
- 62
- 63
- 64
- 65
- 66
- 67
- 68
- 69
- 70
- 71
- 72
- 73
- 74
- 75
- 76
- 77
- 78
- 79
- 80
- 81
- 82
- 83
- 84
- 85
- 86
- 87
- 88
- 89
- 90
- 91
- 92
- 93
- 94
- 95
- 96
- 97
- 98
- 99
- 100
- 101
- 102
- 103
- 104
- 105
- 106
- 107
- 108
- 109
- 110
- 111
- 112
- 113
- 114
- 115
- 116
- 117
- 118
- 119
- 120
- 121
- 122
- 123
- 124
- 125
- 126
- 127
- 128
- 129
- 130
- 131
- 132
- 133
- 134
- 135
- 136
- 137
- 138
- 139
- 140
- 141
- 142
- 143
- 144
- 145
- 146
- 147
- 148
- 149
- 150
- 151
- 152
- 153
- 154
- 155
- 156
- 157
- 158
- 159
- 160
- 161
- 162
- 163
- 164
- 165
- 166
- 167
- 168
- 169
- 170
- 171
- 172
- 173
- 174
- 175
- 176
- 177
- 178
- 179
- 180
- 181
- 182
- 183
- 184
- 185
- 186
- 187
- 188
- 189
- 190
- 191
- 192
- 193
- 194
- 195
- 196
- 197
- 198
- 199
- 200
- 201
- 202
- 203
- 204
- 205
- 206
- 207
- 208
- 209
- 210
- 211
- 212
- 213
- 214
- 215
- 216
- 217
- 218
- 219
- 220
- 221
- 222
- 223
- 224
- 225
- 226
- 227
- 228
- 229
- 230
- 231
- 232
- 233
- 234
- 235
- 236
- 237
- 238
- 239
- 240
- 241
- 242
- 243
- 244
- 245
- 246
- 247
- 248
- 249
- 250
- 251
- 252
- 253
- 254
- 255
- 256
- 257
- 258
- 259
- 260
- 261
- 262
- 263
- 264
- 265
- 266
- 267
- 268
- 269
- 270
- 271
- 272
- 273
- 274
- 275
- 276
- 277
- 278
- 279
- 280
- 281
- 282
- 283
- 284
- 285
- 286
- 287
- 288
- 289
- 290
- 291
- 292
- 293
