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COIMBATORE CITY.
CHAPTER-1
INTRODUCTION
1.1.
MEANING OF BANK:
A bank is a financial intermediary and money creator that creates money by
DEFINITION OF BANK :
A financial institution licensed as a receiver of deposits.
In
most
countries,
banks
are
regulated
by
the
national
1.3.
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 Deposit
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
3. CORPORATE BANKING
Corporate Banking application provides features to administer and manage
non personal accounts online.
More Features
Merchant Payments
1.4.
OTHER SERVICES
SBI Finder
OnlineSBI Global
Genuine Applications !
SBI e file
NRI Services
SBI F.A.S.T.
This facility is open even to those, who do not have bank account. The persons
without bank accounts can deposit cash at the NEFT-enabled branch with instructions to
transfer funds using NEFT. A separate Transaction Code (No. 50) has been allotted in the
NEFT system to facilitate walk-in-customers to deposit cash and transfer funds to the
beneficiary.
1.7. Comparison between RTGS and NEFT:
(i) The main difference between the two is that RTGS is on gross settlement basis, NEFT is
on net settlement basis.
(ii) RTGS completes transactions in real-time while NEFT completes transactions in cycles.
(iii)The transfer in RTGS is completed on a one to one basis, while NEFT is on a deferred
net basis, where transfers are bundled and deferred for a specific time.
(iv) RTGS is a high value transfer system, handling funds worth Rs, 1, 00,000 and above,
while NEFT transfers smaller amounts below Rs. 10,000.
5. Bank Overdraft:
An overdraft is an advance given by the bank allowing a customer to overdraw his
current account up to an agreed amount. An overdraft account is operated in the same way
as a current account. In overdraft the interest is charged on the credit actually utilised, i.e. to
the extent amount is overdrawn.
Overdraft facility is widely used by the businessmen. They can use more money than
the credit amount in their account, and secondly, interest is paid only on the amount actually
withdrawn from the bank and not to the overdraft limit allowed by the bank.
6. Cash-credit:
Under cash-credit a bank advances loans to the customer on the basis of his current
assets, receivables or fixed assets by hypothecating them in favour of the banker.
1.8.
Various other deposit schemes to meet the requirements of individual depositors, like
Multi Option Deposit Scheme etc. are also available with the branches of the Bank. Detailed
information on these schemes is available from our branches.
ii.
Deposit Schemes for Senior Citizens: The fixed deposits of senior citizens (60 years
and over)attract additional interest of 0.50% for maturity period of one year and above up to
5 years and 0.25% for maturity period of 5 years. These are subject to change.
iii.
Articles in safe custody: Articles such as shares, securities etc. can be kept in safe
custody of the Bank. The terms and conditions and charges for safe custody are available on
request at branches and our helplines.
iv.
Exchange of soiled/mutilated currency notes: All the branches of the Bank will
exchange freely soiled/slightly mutilated currency notes and certain other types of mutilated
currency notes of all denominations. The Bank's currency chest branches will exchange all
categories of mutilated currency notes. Currency exchange facility is offered to the Bank's
customers and others. The Bank follows RBI guidelines in this respect. RBI has permitted
the banks to exchange mutilated currency notes which are genuine and where mutilations
are such as not to cause suspicion or fraud.
v.
Safe Deposit Lockers: This ancillary service available at select branches is by hiring
a locker of various sizes by an individual, firms, limited companies etc. for a minimum
period of one year for which rent is payable in advance. Nomination facility is available to
the hirer. Terms and conditions and annual hire charges can be obtained from the branches.
The hire charges are also available on clicking the link Service Charges and fees on the
home page of the Banks website.
vi.
rate and charges which will apply to foreign exchange transactions are provided at select
branches. Cross border payments will be made subject to the provisions of the applicable
Regulations about foreign exchange.
vii.
Automated Teller Machine (ATM) card is issued to all savings bank and current
account holders if the branch is ATM enabled. The card can be used to for withdrawal of
cash, for balance enquiries, for statement of accounts of recent transactions and in certain
ATMs for services like payment of fees, temple donations etc. The use of card is subject to
an Annual fee which at present is Rs 50/- for domestic, VISA, Master card and Rs 100/- for
International Card per annum from the second year of use. Replacement of damaged ATM
card is free of cost. A service charge of Rs.200/- is recovered for replacement of lost card.
As transactions in accounts using ATM cards are possible only by a person holding both the
card and the Personal Identification Number (PIN) known only to him, all successful
transactions through ATM will be considered authentic. If the cardholder suspects
irregularity, this must immediately be reported and request be given for hotlisting the card.
ix.
Internet Banking: Customers can access their bank accounts and transact online
through SBIs internet banking website www.onlinesbi.com if their branches are internet
enabled. A list of internet enabled branches is available at the web site. The customers will
need to sign up for registration by submitting the application form downloadable from
www.onlinesbi.com. Log in will require user id and password customisable by the account
holder. the facilities available include viewing account balances, generating account
statements, bill payments for registered billers, purchase of train tickets online, ordering
chequebooks and drafts, funds transfer within the same branch etc. Further details can be
had from the branch or from the internet banking site www.onlinesbi.com
ONLINE BANKING
Definition
A system allowing individuals to perform banking activities at home, via the
internet. Some online banks are traditional banks which also offer online banking, while
others are online only and have no physical presence. Online banking through traditional
banks enable customers to perform all routine transactions, such as account transfers,
balance inquiries, bill payments, and stop-payment requests, and some even offer online
loan and credit card applications. Account information can be accessed anytime, day or
night, and can be done from anywhere. A few online banks update information in real-time,
while others do it daily. Once information has been entered, it doesn't need to be re-entered
for similar subsequent checks, and future payments can be scheduled to occur automatically.
Many banks allow for file transfer between their program and popular accounting software
packages, to simplify record keeping. Despite the advantages, there are a few drawbacks. It
does take some time to set up and get used to an online account. Also, some banks only offer
online banking in a limited area. In addition, when an account holder pays online, he/she
may have to put in a check request as much as two weeks before the payment is due, but the
bank may withdraw the money from the account the day that request is received, meaning
the person has lost up to two weeks of interest on that payment. Online-only banks have a
few additional drawbacks: an account holder has to mail in deposits (other than direct
deposits), and some services that traditional banks offer are difficult or impossible for
online-only banks to offer, such as traveler's checks and cashier's checks.
How it works/Example:
Most banks offer customers the option of online banking. Customers are able to
access to all of their accounts through an internet connection using the banks own website or
a commercial software package such as Quicken or Money.
Online banking allows customers to monitor accounts, download transactions,
transfer funds between accounts, including checking, saving, and money market/CD
accounts, management investments, and handle loan activity, including applications and
repayments.
Clients can transfer funds to their bank accounts, and pay bills either
electronically (with an account transfer) or by having the bank issue paper checks directly to
the payee.
Banks have set up security systems to ensure that transactions conducted online are
protected from internet security threats.
Some financial institutions offer unique Internet banking services, for example:
Personal financial management support, such as importing data into personal
accounting software. Some online banking platforms support account aggregation to allow
the customers to monitor all of their accounts in one place whether they are with their main
bank or with other institutions.
ONLINE BANKING ADVANTAGES AND DISADVANTAGES
Online banking account is easy to open and operate. The online services offered might differ
from bank to bank, and from country to country. To know about the various services, always
go through the welcome kit that you get at the time of opening the account. You also get the
password to access your online account, which you are supposed to keep with great care for
security reasons.
The common online services offered by banks are:
Transactional activities like funds transfer, bill pay, loan applications and transactions.
Non-transactional activities like request for cheque book, stop payment, online statements,
updating your contact information.
Advantages of Internet Banking
Internet Banking has several advantages over traditional one which makes operating an
account simple and convenient. It allows you to conduct various transactions using the
bank's website and offers several advantages. Some of the advantages of internet banking
are:
It is quite convenient as you can easily pay your bills, can transfer funds between
accounts, etc. Now you do not have to stand in a queue to pay off your bills; also you
do not have to keep receipts of all the bills as you can now easily view your
transactions.
It is available all the time, i.e. 24x7. You can perform your tasks from anywhere and
at any time; even in night when the bank is closed or on holidays. The only thing you
need to have is an active internet connection.
It is fast and efficient. Funds get transferred from one account to the other very fast.
You can also manage several accounts easily through internet banking.
Through Internet banking, you can keep an eye on your transactions and account
balance all the time. This facility also keeps your account safe. This means that by
the ease of monitoring your account at anytime, you can get to know about any
fraudulent activity or threat to your account before it can pose your account to severe
damage.
It also acts as a great medium for the banks to endorse their products and services.
The services include loans, investment options, and many others.
has some disadvantages which must be taken care of. The disadvantages of online banking
include the following:
Understanding the usage of internet banking might be difficult for a beginner at the
first go. Though there are some sites which offer a demo on how to access online
accounts, but not all banks offer this facility. So, a person who is new, might face
some difficulty.
You cannot have access to online banking if you dont have an internet connection;
thus without the availability of internet access, it may not be useful.
Security of transactions is a big issue. Your account information might get hacked by
unauthorized people over the internet.
Another issue is that sometimes it becomes difficult to note whether your transaction
was successful or not. It may be due to the loss of net connectivity in between, or
due to a slow connection, or the banks server is down.
Internet Banking has definitely made the life easy for users by providing online
access to various banking services.