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The first bank was probably the religious temples of the ancient world wherein gold was stored in the form of easy-to-carry compressed plates. Their owners justly felt that temples were the safest places to store their gold as they were constantly attended, well built and were sacred, thus deterring would-be thieves. There are extent records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. Ancient Greece holds further evidence of banking. Greek temples as well as private and civic entities conducted financial transactions such as loans, deposits, currency exchange, and validation of coinage. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could cash the note in another city, saving the client the danger of carting coinage with him on his journey. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The origin of banking in India can be traced back to almost the Vedic period. The transformation from pure money lending to proper banking appears to have taken place before the times of Manu. Manu, a great Hindu jurist, had devoted a section of his work explaining the deposits and advances and he even laid down certain rules on rates of interest. Through out Mauryan period and later on desi bankers played some role in the economy of the country. However, it was during the Moghul period that indigenous bankers started playing a vital role in lending money and financing of the foreign trade and commerce. Banking during british period before independence The first joint stock bank, namely The General Bank of India was established in 1786. Later on Bank of Hindustan and Bengal Bank came into existence. Bank of Hindustan carried on business till 1906. East India Company established the following three banks, namely The Bank of Bengal in 1809, The Bank of Bombay in 1840, and Bank of Madras in 1843. They were collectively called Presidency Banks and were well functioning independent units. The three banks established by the East India Company were amalgamated in 1920 and a new bank called Imperial Bank of India was established. A number of private banks had been established by the businessmen from mid of the 19th century onwards. In the surchanged atmosphere of Swadeshi movement, a number of banks with Indian management, namely, Punjab National Bank Ltd., Bank of India Ltd., Canara Bank Ltd, Indian Bank Ltd. etc. were established. The Reserve Bank of India was established as the Central bank of the country in 1935 under an act called Reserve bank of India Act. Later on with the passage of the Banking Regulation Act passed in 1949, RBI was brought under government control. Under this Act, RBI was conferred with supervision and control of the banks and licensing powers and the authority to conduct inspections was also given to it. After independence In 1955, the Imperial Bank of India was nationalised and was given the name State Bank of India. It was established under State Bank of India Act, 1955. In 1960, RBI was empowered to force the compulsory merger of the weak banks with the strong ones. This led to reduction in the number of banks from 566 in 1951 to about 89 in 1969. On July 19, 1969, 14 major banks were nationalised. In1980, another six banks were nationalised, and thus raising the number of nationalized banks to 20. On the suggestions of Narsimham Committee, the Banking Regulation Act was amended in 1993 and thus the gates for the new private sector banks were opened. Normally chartered accounting firms audit trading and manufacturing firms. The work of bank branch audit is a very specialized job and comes once in a year. Number of CA firms eligible for Bank audits are limited. Auditors should update their knowledge about RBI circulars as RBI on monthly /yearly basis keep on revising its guidelines. Audit in this field should be done with extra precaution.

What is a Bank ? Introduction

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system. The term bank is derived from the French word Banco which means a Bench or Money exchange table. In olden days, European money lenders or money changers used to display (show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or exchanging.

Definition of a Bank

Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays out on customer's order."
The origin of the word bank lies in the city of Italy , where the Lombard Jews were used to keep benches in the market place to transact the business. Italian word for the bench is banco. Such banco arrangements were used to be made for smooth exchange of money and other bills of the business. From those banco arrangements, people used to call them as the banco personnel or the banco area or some specific banco. Gradually, with the mix up of the population and spreading the banco styled business, same banco word started giving rise to the bank (by stylish pronunciation, like today's SMS wording). Later on, when the financial organizations started to function with the similar objectives, people gave them the name banco and then the bank. Though, majority of the bankers believe the above theory of development for the bank word. But few also say that the bank word has its origin in the French word beque; incidentally, it also means a bench. This is not the end. Another group is there who advocates German word bank as the ancestor of today's English word bank. In German, bank means a heap of anything or joint stock fund. (English bank is also nothing but a junk place of all unIn general terms, banking is the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. The fundamental functions of a commercial bank during the past two centuries have been making loans, receiving deposits, and lending credit either in the form of bank notes or of "created" deposits. The banks in which people keep their checking accounts are commercial banks.

What do you mean by banking?

In general terms, banking is the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. The fundamental functions of a commercial bank during the past two centuries have been making loans, receiving deposits, and lending credit either in the form of bank notes or of "created" deposits. The banks in which people keep their checking accounts are commercial

Characteristics / Features of a Bank

1. Dealing in Money
Bank is a financial institution which deals with other people's money i.e. money given by depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company which is in the business of banking.

3. Acceptance of Deposi
A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances
A bank lends out money in the form of loans to those who require it for different purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, etc.

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.

9. Connecting Link
A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who are in need of money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be subsidiary to any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is a bank and that it is dealing in money.

If some thing can be thought of & perceived older days those are in PO boxes, pagers, mobiles, telephones, but now everywhere Internet is used for anything. Normally you cannot communicate with others without Internet to prove this just look at current situation of communication in the world today. If you want to do something with Internet, whatever its a shopping, or learning, research, investing, entertainment, you can do it with in one click. If you need the any thing of your life it can be got easily from the net within few days & even hours. You can shop from click of the mouse all the items will be shipped to your home. You just need to pay for them. Once you think whats this mechanism that brings every thing to your doorstep and who create this? Everything has changed because of Internet, how is this made possible at all, at this moment you may think is that possible? But its not to thing for wondering. Well, there are so many ways that this can be done & such as online credit facilities are one of the ways merchant banking & their products. A merchant banker, which in turn takes care of the entire Internet sales, offers the online credit facility. The purpose of that to links your cash directly available for the transactions you are required to use the credit card. Only you need is your credit card details & a PIN number which is most important part & need to be kept secret all the time along with you. When you appoint to an online transaction you give your credit card only in the last movement of the transaction.

From your home by using your own personal computer without having to go to the bank at all, you can use you hard money in the bank. Your credit card has given you that facility. This is same as accessing your money in bank account from ATM machine. This is the revolution of the world money and banking. From food and beverages to clothing at the click of the mouse button, you can buy anything online. To compare commodities and prices on the Internet is very easy & in the world of shopping thus online shopping becomes a beauty. In just some minutes, you will be able to go through the whole shops stock. When you personally go to the shop, this needs less time and money, than you will use. Well this is by now one of the best advantages of opening a merchant account. One other advantage that comes with the online banking offered by merchant banks is the easy way to settle all your bills. At any time or day, you are able to pay all your bills by the use of your credit card online. When you are paying your bills, you just enter your credit card details online and have some few mouse clicks, all the bills are taken of. Yes certainly, to pay those lousy bills that keep on coming every month, no more waiting in long queues. There are also other things from apart from bill payments using credit cards that you can benefit. It may consist of online gambling & working on net. When you have a merchant banking account, it is really easy to earn your bread & butter. Just drop in to any nearest bank today & find out how to open a merchant account. You will also learn about the different aspects about owing a credit card. Sky is the Limit for online; within day-by-day facilities emerge through Internet increasing so why not entering this easy world with just a mouse click

Importance of banks for business

Banking is very important for the business or an economy. It is a financial institution that is involved as payment agent for customers and facilitates borrowing and lending of money also. Banking is important to business because businesses deposit their extra money here. This way their money is not only safe but also earns interest for them. On the other hand, businesses can borrow money from banks when they need to invest in their businesses. Apart from that Banks also act as guarantee giver in case of creditors and suppliers.

Most businesses have a need for a line of credit or other financing with a bank. Especially when business is slow or the company is in some way struggling, relations with your banker can become strained. When the banker is worried, he may start asking hard questions. Here are some ideas on how to deal with this situation and on how to make your banker a partner all the time, not just when things are going well. The key to excellent relations with your banker is having excellent communications. To have him on your side, he needs to understand what you are doing and to be confident of what to expect in the future. You must reach the point in your dealings with him that you tell him what is happening before it happens. The better able you are to project, the more confidence he will have. It should be self evident that the banker's main concern is being repaid. The objective here is to inspire genuine, earned confidence, not to pull the wool over the eyes of an unsuspecting lender. Be informed, do what is right, and communicate. Since your banker expects you to know your business much better than he does, communicate on an ongoing basis the following elements of

your business. 1. What happened during the period? 2. What is going to happen in the next reporting period? 3. What are the main issues facing the business and what you are doing about them? The assumption here is that you have an ongoing relationship with your banker that you want to improve by building his confidence in you. When appropriate communication is in place you will face fewer questions, in fact you will be the one posing as well as answering most of the questions. The first thing you have to do is to report to him on time. Do not make him wait, or remind you. In the event cannot meet the dead line tell him before you are late and tell him when you will deliver your report. Starting with your next submission write a one- page situation assessment describing what he will be see in your financial statements. Briefly, tell him what is going on that causes the numbers to be what they are. Tell him what you are doing and what you genuinely expect to see in your next report. You might even consider calculating some of the ratios for him that he uses to monitor your company. (If you do not know what these are, ask him). If you have a problem that you do not know how to handle, seek qualified help and tell him you are doing so. He may even suggest a trusted resource. If there are problems evident in your statement be up front about what you are doing. Do not minimize the significance of items that you do not yet have under control. This should serve as the basis for your discussion of the period. Do the same thing next reporting period except now you add information relative to how good, or poor your projections were. If you were close, good, if you were not, you have to discuss why you were off and what you are doing to get better. You might think this is a chance to look bad. Maybe so, but if you cannot project for your banker, how good are the projections you are using for yourself? If you are not making projections, it is difficult to understand how it is that you think you are in control of your business. Your banker will be pleased to be your partner, once you have exhibited that you are in fact in control of your business and that you know what is going on. Remember it is hard to say 'I told you so," unless you told him so.

. IMPORTANCE OF BANK Bank plays an important role in promoting economic development of a country.Bank provides necessary funds for executive program in the process of economicdevelopment. They collect savings of large masses of people scattered throughout thecountry, which is the absence of bank world have remained idle and unproductive. Theseamounts are collected, pooled together and made available to commerce and industry for meting the requirement. This provides finance for successfully carrying on various stagesof production as well as distribution.Bank stimulate the habit of savings amount people by the security and interestthey offer with these savings which are deposited by people are in position to utilize thedeposited amount more productively.The bank increased the transaction capacity of the customers by advancing loanswhen they require for additional funds to finance their expanded program of transaction.In short, the economic development of a particular country depends on the sound bankingsystem (Gillani & Sariwal, 1994, p. 13)

Financial Banking
Posted on February 11, 2011 by Bimal Bhatt

People go to banks for depositing and withdrawing their money, the main function of a bank is to accept money in form of deposits from people and give this money as loans to people. Banks give interest on deposits to its customers and charge interest from customers who avail loans. In this way banks help people with excess money and people with facing deficits. Banking is a business of dealing in money and instruments of credit. Banks connect people from different financial back ground and helps them make money. But banking now has many different functions other then receiving and lending money. Nowadays banks offer many other services other than normal banking like electronic funds transfer, internet banking , ATM service, visa service, phone banking, mobile banking, 24 hours banking service, loan services ,depository services, bill payments , relationship banking, debit cards , credit cards , broking etc. Banks are now more of a financial institution that offers all the financial services to the customer. So we now use the word financial banking for banking. Banks now also have many branches for customers convenience and also follows flexible timings. Customers do not have to stand in queue for their daily banking transactions. They can carry out their banking transactions at their convenience

Let us understand the services that financial banking offers:

Online Banking: With the use of a computer with internet you can carry out all your banking transactions from everywhere. You can access and manage your accounts 24 hours a day, seven days a week. By using online banking you can receive and pay money within seconds. Online banking allows a customer to conduct all the financial transaction from his/ her computer. The main online banking services are :
1. Account to account transfer, wire transfers, application for new accounts or loans or credit or debit cards. 2. Electronic bill payments like phone bills , mobile bills electricity bills , gas bills etc. 3. Funds transfer between a customers own account to another customers account. 4. Investment purchase or sale. 5. Loan applications and transactions 6. Bank statements

Telephone Banking: This service provided by the banks allows the customer to perform transactions on the phone. Most of the banks use automated phone answering machine to answer customer queries. The customer first has to dial the phone banking number and then answer the password either verbally or entering on the phone. It offers services like account balance information , latest transaction, funds transfer between customers, status of the cheque, ordering cheque books, change of address, debit and credit card status etc. Sometimes there are also live bank representatives located in a call center or a branch for answering customer queries.
ATM (Automated Teller Machines): An ATM is a computerized device that provides access to financial transaction without the human clerk or a bank teller. The customer using an ATM has to insert a ATM card and then type the password. After the computer verifies the password the customer has access to his account. The customer can withdraw and deposit money, demand a cheque book or bank statement , check their account balances etc. ATMs can be accessed anytime . They are generally placed near the bank premises or near railway stations, airports, gas stations, malls or any other public place where customers can use it. Most of the ATMs are connected to inter bank networks thus enabling customers to deposit or withdraw money from the machines of the banks where they do not have their account.

Loan Services: These days most of the banks offer many types of loans like auto loans, housing loans, personal loans , educational loans, travel loans and other business loans. There are also classified as unsecured and secured loans , personal loans are generally unsecured, because they are given against a personal promise to repay and not against any collateral. Secured Loans are given against a collateral. Housing loans are becoming very popular but are very risky as the lender can seize the property if the borrower fails to repay the loan amount. Each bank has its own criteria for loan applications. Lending money is the primary way of each banks to make money.

Investment Banking: This is a field in banking that helps companies acquire funds to raise their capital. Investment bankers also advice companies on mergers, acquisitions, and also how to manage their assets. Investment banking helps in issuing securities in the primary market by underwriting or acting as clients agents in issuance of securities. Investment banking also provides services in trading of derivatives, foreign exchange, commodities and equity trading. Debit and credit cards: Banks provide customers credit cards through which they can buy goods and services. The credit cards allows the customer to use the credit given by the bank by charging interest. Every customer has different credit limit given by the issuer. Each month the customer receives a statement stating the purchases undertaken with the card and the total amount owed. The credit card issuer charges interest on the amount owed. A credit card is also called plastic currency because it is made of plastic and is used in place of money. Debit cards is also a plastic card that provides an alternative payment method to cash. While credit cards give credit to customers, debit cards do not provide any credit. When the customers make any purchases against the debit cards the money is directly debited from their account by the vendor. Therefore you cannot make purchases more than your account balance. Both these cards have made purchase and sales transactions very convenient. Relationship banking: This is used by banks as a value added service to its preferred customers. It also used to increase its profitability. Relationship banking involves selling financial products and services to tighten the relations with customers and increase their loyalty. It offers certificates of deposits, safe deposit vaults, insurance advice, investment advice etc. Relationship banking also deals with specialized products for customers like senior citizens, students and the wealthy. It improves customer service and strengthens the bond between banks and customers. There are various other products like broking, depository services that makes banks a one stop shop for all your financial requirements. Banks are now more keen to increase customer relationship and improve customer service. So along with the normal banking transactions financial banking gives services that promote growth and profit not only in terms of money but also human relations.

What is a loan on credit card? Loan on credit card is similar to personal loans, but this is pre-approved, and it comes without the need for any documentation.

Even though a personal loan is among the quickest options for obtaining a loan, some bit of documentation is still required and hence it may take a couple of days at least for it to come through. However, in case of a loan on credit card, there is no need for any documentation and hence it is the quickest source of unsecured finance. Loan on credit cards is often mistaken for cash withdrawal on credit cards. The key difference is the interest rate charged -- interest on loan on credit card will be similar to or a few notches higher than that of a personal loan while interest on cash withdrawals tend to be much higher and also the limit on cash withdrawal could be much lower than that of the eligible loan amount on the credit card. This facility may be best suited when there is an immediate/urgent need for cash and you cash withdrawal limit is insufficient to satisfy your need. Cash withdrawal on credit card can satisfy your need at the spur of the moment but it comes with a high interest rate. Hence, it makes more economic sense to opt for loan on credit card vis-a-viz the cash withdrawal facility because the interest rate is lower and the loan disbursal is also quick because of no documentation needed. You will either receive a demand draft from the bank or a direct transfer to your bank account.

Mobile banking (also known as M-Banking, mbanking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Mobile banking and Mobile payments are often, incorrectly, used interchangeably. The two terms are differentiated by their service provider-to-consumer relationship; financial institutionto-consumer versus commercial institution-to-consumer for mobile banking and payments, respectively. Mobile Banking involves using mobile devices gain to access financial services. Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods or services either at the point of purchase or remotely. [1] Bill payment is not considered a form of mobile payment because it does not occur in real time. The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers.[2]

Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the 11 Advantages Of Using Mobile Banking Through Cell Phone
Mobile banking through cell phone is really catching up. Now you can access your account, transfer funds or make payments with your mobile. Mobile connectivity is vast and this makes mobile banking very successful. Advantages Of Mobile Banking Mobile banking through cell phone offers many advantages for customers as well as banks. Some of them are as follows:1. Mobile banking has an edge over internet banking. In case of online banking, you must have an internet connection and a computer. This is a problem in developing countries. However, with mobile banking, connectivity is not a problem. You can find mobile connectivity in the remotest of places also where having an internet connection is a problem. 2. You can make transactions or pay bills anytime. It saves a lot of time. 3. Mobile banking thorough cell phone is user friendly. The interface is also very simple. You just need to follow the instructions to make the transaction. It also saves the record of any transactions made. 4. Cell phone banking is cost effective. Various banks provide this facility at a lower cost as compared to banking by self. 5. Banking through mobile reduces the risk of fraud. You will get an SMS whenever there is an activity in your account. This includes deposits, cash withdrawals, funds transfer etc. You will get a notice as soon as any amount is deducted or deposited in your account. 6. Banking through cell phone benefits the banks too. It cuts down on the cost of tele- banking and is more economical. 7. Mobile banking through cell phone is very advantageous to the banks as it serves as a guide in order to help the banks improve their customer care services. 8. Banks can be in touch with their clients with mobile banking. 9. Banks can also promote and sell their products and services like credit cards, loans etc. to a specific group of customers. 10. Various banking services like Account Balance Enquiry , Credit/Debit Alerts, Bill Payment Alerts, Transaction History, Fund Transfer Facilities, Minimum Balance Alerts etc. can be accessed from your mobile. 11. You can transfer money instantly to another account in the same bank using mobile banking.

Mobile banking has become really popular owing to the convenience that it gives its customers. You can access your account, pay bills, and make cash transfers through cell phone banking. It offers many benefits over internet banking and banking in person. With the wide range of mobile connectivity, mobile banking through cell phone can be accessed by anyone.

What is E-Banking ? Online Banking

E-banking refers to electronic banking. It is like e-business in banking industry. E-banking is also called as "Virtual Banking" or "Online Banking". E-banking is a result of the growing expectations of bank's customers.

What is E-Banking ? Online Banking

E-banking refers to electronic banking. It is like e-business in banking industry. E-banking is also called as "Virtual Banking" or "Online Banking". E-banking is a result of the growing expectations of bank's customers.

Image Credits Jochem Koole.

E-banking involves information technology based banking. Under this I.T system, the banking services are delivered by way of a Computer-Controlled System. This system does involve direct interface with the customers. The customers do not have to visit the bank's premises.


Account Details: View your bank account details, account balance, download statements and more. Also view your Demat, Loan & Credit Card Account Details too all in one place. Fund Transfer: Transfer fund to your own accounts, other Axis Bank accounts or Other Bank account seamlessly. Request Services: Give a request for Cheque book, Demand Draft, Stop Cheque Payment, Debit Card Loyalty Point Redemption etc. Investment Services: View your complete Portfolio with the bank, Create Fixed Deposit, Apply for IPO etc. Value Added Services: Pay Utility bills for more than 160 billers, Recharge Mobile, Create Virtual Cards, Pay any Visa Credit Card bills, Register for estatement and sms banking etc.

Popular services covered under E-Banking

The popular services covered under E-banking include :1. 2. 3. 4. 5. 6. 7. 8. 9. Automated Teller Machines, Credit Cards, Debit Cards, Smart Cards, Electronic Funds Transfer (EFT) System, Cheques Truncation Payment System, Mobile Banking, Internet Banking, Telephone Banking, etc.

Advantages of E-Banking

The main advantages of E-banking are :1. 2. 3. 4. 5. The operating cost per unit services is lower for the banks. It offers convenience to customers as they are not required to go to the bank's premises. There is very low incidence of errors. The customer can obtain funds at any time from ATM machines. The credit cards and debit cards enables the Customers to obtain discounts from retail outlets. 6. The customer can easily transfer the funds from one place to another place electronically.

International banking services

When you need a bank that still offers service for your importing and exporting needs, talk to us today. With our network of experienced bankers and product specialists we have the people, experience and skills to help your business. We have the technology you want to make things easy, but we also have the expertise and personal service to back it up.

Foreign exchange payment options

Need help with foreign exchange payment options? We can offer the following services:

Online telegraphic transfers In branch telegraphic transfers drafts negotiation of foreign cheques.

Trade finance and services

We provide help for exporters and importers with their documentary credit and collection needs and working capital requirements.

Foreign exchange hedging

Let us help you minimise the risks of foreign exchange in your business.

International Trade Enabler

International Trade Enabler is a web based system that provides Bank of Queensland customers with the capability to establish and amend import documentary letters of credit, to monitor these transactions and to monitor other international trade transactions.

Guide to importing and exporting (PDF 269kb)

If you are new to international trade we have developed a brief overview of things to consider. It includes some definitions, how to get started and a rundown on some of the risks to be aware of.

Foreign currency accounts and deposits

Bank of Queensland offers services to help customers who deal regularly in foreign currencies. These products can reduce the need to convert from one currency to another.

Travel money

We can help you with foreign cash, travellers cheques or pre-paid travel money cards if you are travelling overseas.

Non-Banking Activities

All banks perform non-banking activities along with their traditional functions.

A bank cannot survive without performing the following non-banking activities: 1. Banks help their customers to make utility payments with ease. 2. They perform merchant banking for their customers. 3. They provide factoring services to their clients. 4. They manage mutual funds and minimize investment risks. 5. They issue gift cheques to the people. 6. They conduct feasibility study and submit the feasibility report. 7. They facilitate the share transactions by maintaining demat accounts. 8. They offer credit and debit cards facility. 9. They also offer leasing services. 10. They give hire-purchase services to owners of various goods. 11. They are now allowed to offer insurance services. 12. They provide funds (capital) for starting new ventures. Now let's discuss important non-banking activities performed by banks.

1. Utility Payments

Banks make utility payments for their customers. Utility payments include payment of an Electricity bill, Insurance premiums, phone bill, water bill, etc. They also pay SIP (Systmatic Investment Plan) payments to Mutual funds for their customers. These payments are made by using the Electronic Clearance Scheme (ECS). Banks charge a small (nominal) fee for making these payments.

2. Merchant Banking

Large banks perform merchant banking for their customers. They help them to raise finance. They give them advice about starting and running a business. They help their customers to make a profit in the stock exchange. They even do project management. They also help in expanding and modernizing the business of their clients. Today, banks help to revive (cure) sick industries. They also help in restructuring the business.

3. Factoring Services

Banks also provide factoring services to their clients. Factoring is an agreement between a bank (factor) and a business firm (client). Under this agreement, the business firm sells goods and services to their customers on credit. The bank (factor) purchases the customers' Bills Receivable or debtors account from the business firm. So, the business firm is guaranteed payment for their credit sales. However, the bank (factor) decides whom to give credit and how much credit to give.

4. Mutual Funds

Mutual funds are very popular because of expansion and diversification of the financial sector. The Unit Trust of India (UTI) was the first financial institution to start mutual funds in India. Many other banks now have mutual funds such as ICICI Mutual Fund, SBI Mutual Fund, HDFC Mutual Fund, etc. Mutual Funds are controlled by SEBI. Mutual Funds are purchased by investors because they offer minimum risk, maximum return and liquidity. Mutual funds with their resources and expertise invest on behalf of individual investors giving them capital appreciation with minimum risk. Mutual funds publish the NAV (Net Asset Value) of their funds daily. They also repurchase the units issued by them based on their NAV. Investors who like to play safe go for mutual funds.

5. Gift Cheques

Gift cheques are printed in attractive colours and designs. Gift cheques are issued by banks to the public. They can give these cheques as a present on auspicious occasions like marriage, birthdays, retirements, promotion, anniversary, etc. They are normally issued for Rs. 11, 21, 51 and 101. The purchaser makes full payment at the time of purchase. Gift cheques are transferable by hand delivery. These cheques have an expiry date. If a gift cheque is lost, a duplicate is issued. These cheques are payable on demand. The payee can claim the money at any branch of the issuing bank.

6. Feasibility Reports

Banks conduct feasibility study on behalf of the client and submit the feasibility report. This report shows chances of success of the project. Feasibility study is conducted before starting the project or business. Conducting feasibility study is not compulsory, but it gives many benefits to the businessman. Banks like IDBI or any commercial bank can conduct feasibility study in functional areas such as technical, managerial, financial and economic. After completion of feasibility study, the banks submit a feasibility report. Based on this report the businessman decides whether to do the project / business or not.

7. Demat Account

Demat is a commonly used name for dematerialization. Traditionally, shares were held in a physical form. Under dematerialization, shares are held in an electronic form. Demat account is like money kept in a savings account. You can deposit and withdraw the amount whenever you want. The transactions in electronic shares are quick, safe and simple. The shares purchased by a shareholder are transferred in his name on the next day of payout. A shareholder can sell and transfer his electronic shares from his office / house through a broker. Most of the shares are under demat. Banks facilitate the share transactions by maintaining demat accounts in their branch.

8. Credit and Debit Cards

Most large banks offer credit card facilities. Indian credit card market is growing at 30-35% per annum. ICICI, Citi, HDFC and SBI are the leading banks that offer credit card facilities. Most of the banks also offer debit cards to their customers. With the help of debit cards, the customers

can make payments for the goods and services. This amount gets deducted from the balance they hold with the banks.

9. Leasing Services

Indian banks offer leasing services. In March 1994, RBI permitted banks to enter leasing finance provided following conditions are fulfilled: 1. Specialized branches must be opened for doing this work. 2. Banks may give lease finance up to 10% of their total advances. 3. Assets in leasing will be treated as assets carrying 100% risk weightage.

10. Hire Purchase

Banks provide hire-purchase services. They finance hire-purchase contracts. Here, the owner of goods hires them to another party for a certain period and for the payment of a specific installment. The transfer of goods is passed on to the user after a definite period provided payment of all specified installments is clear.

11. Insurance

Banks are now allowed to offer insurance services through separate branches. Many Indian banks such as ICICI, IDBI, HDFC, etc., have entered into foreign collaborations to provide life insurance service in India. ICICI has joined Prudential Life, HDFC with Standard Life, IDBI with Fortis (now Federal) to provide life insurance services to Indians.

12. Venture Capital Services

Banks like ICICI, SBI, IDBI provides venture capital services. Here, banks provide funds for starting new ventures and for high-risk businesses with high-profit potential. Venture capital

helps businessmen to get funds for highly risky projects. Venture capital means to buy shares in high-risk projects / businesses with high-profit potential.