Core Banking vs Allied

Banking activities
Core Banking
• Banking is defined as accepting for the purpose of lending and
investments, deposits of money from the public, repayable on
demand or otherwise, and withdrawable by cheque, order or
otherwise.
• Bank is a financial intermediary.
• A financial intermediary is typically an institution that facilitates the
channeling of funds between lenders and borrowers. That is, savers
(lenders) give funds to an intermediary institution (a bank), and that
institution gives those funds to spenders/entrepreneur (borrowers).
This may be in the form of loans or mortgages.
 Business of Trust
• Banking is business of trust of their customers , stakeholders and
investors.
• Banking is different from FMCG Business
• Banking products are not tangible and its all about services and
customer get satisfaction after opening their accounts or relationship
• Customer satisfaction means the matching of customer expectation
with products offered as per needs of customer
 Importance of Banking
• The banking sector was always deemed to be one of the most vital
sectors for the economy to be able to function.
• Its importance as the “lifeblood” of economic activity, in collecting
deposits and providing credits to states and people, households and
businesses is undisputable.
Core Functions of a Bank
Banking

Liability Assets
Sources of Funds Application of Funds - Lending

Saving A/cs
Current A/cs Central Bank Fund Based
Non Fund Based
Term Deposits Inter Bank deposits Lending

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 Role of Banks
• Banks play an important role as an intermediary, or go-between, in the
financial system.
• They have three main functions:
• Banks are where people can safely deposit their savings, which banks then
pay interest on.
• Lending and Investments.
• Banks are largely responsible for the payments system.
• Purpose of Banks. A Bank is a financial institution which is involved in
borrowing and lending money. Banks take customer deposits in return for
paying customers an annual interest payment. The bank then use the
majority of these deposits to lend to other customers for a variety of loans.
• Bank provides funds for business as well as personal needs of the
individuals. they play a significant role in the economy of a nation.
• It acts as an intermediary between people having surplus money and
those requiring money.
• It facilitates business transactions through receipts and cheques
instead of currency.
 Activities of Core Banking
• Accepting Deposits – Time deposit and demand deposit
• Opening new accounts
• Processing cash deposits and withdrawals
• Processing payments and cheques
• Extending loans – Retail and Corporate
• Investments for regulatory requirements
• Maintaining records for all the bank’s transactions.
Banking – Financial Intermediation

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Types of Allied Banking
TYPES OF BANKING SERVICES
• Personal banking services
• Wholesale and Corporate banking services
• Business banking services
• SME banking services
Retail Banking services
International Banking services
• Other services
Personal Banking Customers
PERSONAL BANKING SERVICES
Forex services
• The banks and other institutions facilitate the buying and selling of foreign
currencies
Demat services
• Demat refers to dematerialized account.
• Demat account allows you to buy , sell and transfer securities without
endless paperwork and delays.
Personal Banking Customers
Cards
• All the major banks offer and debit cards which enables us to cash
cash free shopping, recharges, payments of bill, donations etc.
Insurance services
• All the major banks offers insurance services in the field of life
insurance, general insurance motor insurance etc..
Personal Banking Customers
Mutual Funds:-
• A mutual fund is a professionally managed type of collective
investment scheme that pools money from many investors and invests
it in stocks, bonds, short-term money market instruments, and/or
other securities.
• The Mutual fund have a fund manager that trades the pooled money
on a regular basis.
 RETAIL BANKING SERVICES
• RETAIL BANKING, also known as consumer banking, is the provision of
services by a bank to the general public, rather than to companies
corporations or other banks, which are described as wholesale banking.
• Banking services , whether an asset side (loan) or liabilities side (deposits)
as applied to individuals and small businessmen
• RETAIL BANKING PRODUCTS & SERVICES -
• 1. Deposits 2. Loans
3. Cards & alternate delivery channels 4.
Services
• Retail Banking refers to the dealing of commercial banks with individual
consumers, both the liabilities (deposits) and assets (loans) of the balance
sheet.
• DEPOSITS – Saving bank, current account, term deposits
• LOANS – Term loans, working capital & cash credit, Home loan, vehicle loan,
consumer loans and personal loans
 INTERNATIONAL BANKING
• All the foreign currency transactions such as Export, Import and Remittances used
to cover under international banking
• Foreign exchange market is the place where each country / people can pay for
their requirements and receive their requirements in their own home currency
• Banks are amongst the active members of the foreign exchange markets and they
provide certain types of services to their customers called international banking
services
• Banking services catering to cross border transactions is called International
Banking
• International banking services can be grouped under e segments - 1.
Needs of Exporters 2. Requirements of Importers
3. Remittances services
 WHOLESALE BANKING
• Wholesale banking refers to doing banking business with industrial and business entities – mostly
corporates and trading houses including multinational, business houses and prime public sector
companies
• In India, banks are doing this type of business traditionally and this segment of banking business is
also called as Corporate Banking / Commercial Banking
• Banks are providing a wide range of products by way of various commercial, transactional and
electronic banking products
• Banks achieve this through innovative product development and well integrated approach to
relationship management
• Product offerings are suitably structured taking into account a client risk profile and specific needs
• Products offered can be classified into 4 major groups - 1. Fund based
services 2. Non fund based services
3. Value added services 4. Internet banking
services
Corporate Banking Services
CORPORATE BANKING SERVICES
Project Finance:-
• It is a method of financing very large capital intensive projects, with long
gestation period, where the lenders rely on the assets created for the
project as security and
• cash flow generated by the project as source of funds for repaying their
dues.
Merchant Banking:-
• Commercial loans
• Loans from Export Credit Agencies
• Financing of Imports
Business Banking Customers
Cash management
• Trade services
• Transaction banking
• Investment banking
• Custodial services
• Online Services
Business Banking Customer
• Cash Management Services:- Cash Management is a marketing term for
certain services offered primarily to larger business customers.
• Trade Services:- Customers can effect remittances as well as get their
applications for issuance of Letters of Credit and Bank Guarantees
processed online.
• Investment Banking:- The bank acts as an agent collects money from
subscribers (both equity & debt) & remit the same to companies , gives
strategic ideas to business firms while merger…
• Custodial Services:- The Banks has set up the Custody Services group
offering quality and reliable services to the clients and has in place a
customized Information system , high storage vaults and premises for
processing / safekeeping securities
 Other Services
• Locker facility
• Demand drafts
• e-Tax
• e-Freight
• Public provident fund
• Centralized pension processing
• Travelers cheques
• Money transfer
• RTGS / NEFT