BANKING MODULE

Contents –
Sl. No. Description Page number

1 Definition and history of Banks and Finance 1

2 History of Banks 2

3 Feature of Finance 5

4 Different functions of Bank 6

5 Economic Reforms in Banking 7

6 RBI and its Functions 8 – 11

7 Types of Bank Accounts 12 – 14

8 Indian Banking Scenario 15 – 16

9 Sales and Marketing in Banking 17 – 19

10 Loans in Banking and Finance 20 – 21

11 Cheques in Banking 22 – 23

12 The concept of Retail Banking 24 – 28

13 Retail Banking Vs Corporate Banking 29 – 31

14 Communication 32 – 40

15 Abbreviation 41 – 53

pg. 1
Definition and History of Banks and Finance

Banks is an establishment authorised by Government

Regulatory to accepts depositspay interest, Clear Checks,
make loans and act as an intermediary in financial
transactions and provide others financial services and
products to its consumers. And the term Finance is a process
of money management where banking, investments, credit,
asset and liabilities in three categories like Public Finance,
Private Finance and commercial Finance. Finance is the life
blood of trade, commerce and industry. Now-adays banking
sectors act as the backbone of modern business,
development of any

country mainly depends upon the banking systems. The term bank is either derived from an old Italian word
“banca” or from a French word “banque” both mean a bench or money exchange table. In olden days European
money lenders or money changes used to display coins of different countries big quantity for the purpose of
exchanging.

Characteristics And Features Of Banks:

1. Dealing in Money-
Bank is financial institution which deals with others people's money given by depositors.
2. Individual/Firm and 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. Providing 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, through ATM and others
facilitated systemised.
6. Profit and Service Oriented-
A bank is a profit seeking institution having service oriented approach.
7. Ever Increasing Functions-
Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions,
services and activities of a bank.
8. 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.

9. Banking Business-
A bank's main activity should be to do business of banking which should not be subsidiary to any other business
10. 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.

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History Of Bank:
1. The origin of western type commercial Banking in India dates back to the 18th century. The story of
banking starts from Bank of Hindustan established in 1770 and it was first bank at Calcutta under
European management. It was liquidated in 1830-32.
2. From Bank of Hindustan in 1770, the evolution of banking in India can be divided into three different
periods as follows:
 Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969
 Phase II: From Nationalization of India banks in 1969 up to advent of liberalization and banking reforms
in 1991
 Phase III: From Indian Financial and Banking Sector Reforms 1991 onward
3. In 1786 General Bank of India was set up. Since Calcutta was the most active trading port in India,
mainly due to the trade of the British Empire, it became a banking center.
4. Three Presidency banks were set up under charters from the British East India Company-
 Bank of Calcutta
 Bank of Bombay
 Bank of Madras.
These worked as quasi central banks in India for many years.
5. The Bank of Calcutta established in 1806 immediately became Bank of Bengal.
6. In 1921 these 3 banks merged with each other and Imperial Bank of India got birth.

Imperial Bank of India was later renamed in 1955 as the State Bank of India. Thus, State bank of India is the
oldest Bank of India.

7. In 1839, there was a fruitless effort by Indian merchants to establish a Bank called Union Bank. It failed
within a decade.
8. Next came Allahabad Bank which was established in 1865 and working even today.
9. The oldest Public Sector Bank in India having branches all over India and serving the customers for the
last 145 years is Allahabad Bank.
10. The first Bank of India with Limited Liability to be managed by Indian Board was Oudh Commercial
Bank. It was established in 1881 at Faizabad. This bank failed in 1958.
11. The first bank purely managed by Indians was Punjab National Bank, established in Lahore in 1895. The
Punjab national Bank has not only survived till date but also is one of the largest banks in India.
12. The first Indian commercial bank which was wholly owned and managed by Indians was Central Bank of
India which was established in 1911. So, Central Bank of India is called India‟s First Truly Swadeshi
bank.
Some facts about banking in India

 Reserve Bank of India (RBI) was established in 1935 and Nationalized in 1949.
 Sir Osborne Smith was the first Governor of the Reserve Bank of India CD Deshmukh was the first Indian

Governor of RBI.
 Savings account system in India was started by Presidency Bank, in 1833.
 Cheque system was first introduced by Bengal Bank which was established in 1784.
 Allahabad Bank is the oldest existing public sector bank in India.
pg. 3
  Hongkong and Shanghai Banking Corporation (HSBC) introduced first time ATM in India in 1987,

Mumbai.
 Bank of India is the first Indian Bank to open overseas branch. It established a branch in London in 1946.
 Central Bank of India was the first public bank to introduce credit card. Central Bank of India is the first

commercial bank which was managed by Indians.

 ICICI Bank was the first Indian Bank to provide internet banking facility.
 ICICI Bank was the first Bank to provide Mobile ATM.
 Bank of Baroda has the maximum number of overseas branches.

 SBI (State Bank of India) has the total number of maximum branches and holds 2nd position in the world.
 India‟s first “talking” Automated Teller Machine (ATM) launched by Union Bank of India (UBI) for

visually impaired was launched in Ahmedabad (Gujarat).

 The National Payments Corporation of India (NPCI) launches India‟s first rural bank ATM card with a

regional rural bank in Varanasi.

Note: NPCI launched the first Gramin bank ATM card with the Kashi Gomti Samyut Gramin Bank in
association with Union Bank of India in Varanasi. The card is called RuPay Gramin Card.

India‟s first non-bank owned ATM opens in Maharashtra: Tata Communications Payments Solutions Ltd,
a wholly owned subsidiary of Tata Communications Ltd, which unveiled the ATM at Chandrapada in
Thane district, plans to roll out 15,000 such ATMs by 2016.

Note: Private sector lender Federal Bank announced its tie-up with Tata Communications Payment Solutions Ltd
as the sponsor bank to deploy White Label ATMs (WLAs).

Banking Appetite.
1. First India bank Got ISO : Canara Bank
2. First Governor of RBI : Mr. Osborne Smith
3. First Indian governor of RBI : Mr. C D Deshmukh
4. First Bank to Introduce ATM in India : HSBC
5. First Bank to introduce saving Bank in India : Presidency bank in 1830
6. First Bank to Introduce Cheque system in India : Bengal Bank 1784
7. First Bank to introduce Internet Banking : ICICI BANK
8. First Bank to introduce Mutual Fund : State Bank of India
9. First Bank to introduce Credit Card in India : Central Bank of India
10. First Foreign Bank in India : Comptoired‟ Escompte de Paris of France in 1860
11. First Bank Set Up in India : Bank of Hindustan in 1770
12. First Joint Stock Bank of British India : State Bank of India
13. First Joint Stock Bank of India : Allahabad Bank
14. First Bank that is oldest Public Bank in India : Allahabad Bank
pg. 4
15. First national bank that is merged with Punjab National Bank : New Bank of India in 1993
16. First Indian bank to open branch outside India in London in 1946 : Bank of India
17. First Indian Bank started with Indian capital /indigenous Bank of India : Punjab National Bank

Some Features of Finance

Finance is defined in numerous ways by different groups of people. Though it is difficult to give a perfect
definition of Finance following selected statements will help you deduce its broad meaning.
A. In General sense-
"Finance is the management of money and other valuables, which can be easily converted into cash."
B. According to Experts-
"Finance is a simple task of providing the necessary funds (money) required by the business of entities like
companies, firms, individuals and others on the terms that are most favourable to achieve their economic
objectives."
C. According to Entrepreneurs-
"Finance is concerned with cash. It is so, since, every business transaction involves cash directly or indirectly."
D. According to Academicians-
"Finance is the procurement (to get, obtain) of funds and effective (properly planned) utilisation of funds. It also
deals with profits that adequately compensate for the cost and risks borne by the business."

Features of Finance:

1. Investment Opportunities
In Finance, Investment can be explained as a utilisation of money for profit or returns. Investment can be done
by:-
Creating physical assets with the money (such as development of land, acquiring commercial assets, etc.),
Carrying on business activities (like manufacturing, trading, etc.), and Acquiring financial securities (such as
shares, bonds, units of mutual funds, etc.). Investment opportunities are commitments of monetary resources at
different times with an expectation of economic returns in the future.

2. Profitable Opportunities
In Finance, Profitable opportunities are considered as an important aspiration (goal). Profitable opportunities
signify that the firm must utilize its available resources most efficiently under the conditions of cut-throat
competitive markets. Profitable opportunities shall be a vision. It shall not result in short-term profits at the
expense of long-term gains. For example, business carried on with non-compliance of law, unethical ways of
acquiring the business, etc., usually may result in huge short-term profits but may also hinder the smooth
possibility of long-term gains and survival of business in the future.
3. Optimal Mix of Funds
Finance is concerned with the best optimal mix of funds in order to obtain the desired and determined results
respectively. Primarily, funds are of two types, namely, Owned funds (Promoter Contribution, Equity shares,
etc.), and Borrowed funds (Bank Loan, Bank overdraft, Debentures, etc). The composition of funds should be
such that it shall not result in loss of profits to the Entrepreneurs (Promoters) and must recover the cost of
business units effectively and efficiently.
4. System of Internal Controls
Finance is concerned with internal controls maintained in the organisation or workplace. Internal controls are set
of rules and regulations framed at the inception stage of the organisation, and they are altered as per the

pg. 5
requirement of its business. However, these rules and regulations are monitored at various intervals to
accomplish the same which have been consistently followed.
5. Future Decision Making
Finance is concerned with the future decision of the organisation. A "Good Finance” is an indicator of growth
and good returns. This is possible only with the good analytical decision of the organisation. However, the
decision shall be framed by giving more emphasis on the present and future perspective (economic conditions)
respectively.
Different Fun

Different functions of Bank:

nof Banks
1. Savings Banking-
Saving banks are established to create saving habit among the people. These banks are helpful for salaried people
and low income groups. The deposits collected from customers are invested in bonds, securities, etc. At present
most of the commercial banks carry the functions of savings banks. Postal department also performs the
functions of saving bank.
2. Commercial Banking-
Commercial banks are established with an objective to help businessmen. These banks collect money from
general public and give short-term loans to businessmen by way of cash credits, overdrafts, etc. Commercial
banks provide various services like collecting cheques, bill of exchange, and remittance money from one place to
another place. In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial
banks were nationalised by Government of India. The policies regarding deposits, loans, rate of interest, etc. of
these banks are controlled by the Central Bank.
3. Industrial/Development Banking-
Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to
industries. The main objective of these banks is to provide long-term loans for expansion and modernization of
industries. In India such banks are established on a large scale after independence. They are Industrial Finance
Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial
Development Bank of India (IDBI).
4. Land Mortgage and Land Development Banking-
Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to
finance agricultural sector. They also help in land development. In India, Government has come forward to assist
these banks. The Government has guaranteed the debentures issued by such banks. There is a great risk involved
in the financing of agriculture and generally commercial banks do not take much interest in financing agricultural
sector.
5. Indigenous Banking-
Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general public and grant loans
to the needy persons out of their own funds as well as from deposits. These indigenous banks are popular in
villages and small towns. They perform combined functions of trading and banking activities. Certain
well-known indian communities like Marwaries and Multani even today run specialised indigenous banks.
6. Central/ Federal /National Banking-
Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A, Federal Reserve and in
U.K, Bank of England. These central banks are the bankers of the other banks. They provide specialised
functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign
exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with
other banks. The principal responsibility of Central Bank is thorough control on currency of a country.
7. Co-operative Banking-
In India, Co-operative banks are registered under the Co-operative Societies Act, 1912. They generally give
credit facilities to small farmers, salaried employees, small-scale industries, etc. Co-operative Banks are available
in rural as well as in urban areas. The functions of these banks are just similar to commercial banks.

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 8. Exchange Banking-
Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks working in India. These
banks are mainly concerned with financing foreign trade.

Following are the various functions of Exchange Banks :-

 Remitting money from one country to another country,
 Discounting of foreign bills,
 Buying and Selling Gold and Silver, and
 Helping Import and Export Trade.
9. Consumers Banking-
Consumers bank is a new addition to the existing type of banks. Such banks are usually found only in advanced
countries like U.S.A. and Germany. The main objective of this bank is to give loans to consumers for purchase
of the durables like Motor car, television set, washing machine, furniture, etc. The consumers have to repay the
loans in easy instalments.

Economic Reforms In Banking Sector:

g Sector in India
Indian banking sector has undergone major changes and reforms during economic reforms. Though it was a part
of overall economic reforms, it has changed the very functioning of Indian banks. This reform has not only
influenced the productivity and efficiency of many of the Indian Banks, but has left everlasting footprints on the
working of the banking sector in India.Let us get acquainted with some of the important reforms in the banking
sector in India.

1. Reduced CRR and SLR:

The Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are gradually reduced during the economic
reforms period in India. By Law in India the CRR remains between 3-15% of the Net Demand and Time
Liabilities. It is reduced from the earlier high level of 15% plus incremental CRR of 10% to current 4% level.
Similarly, the SLR Is also reduced from early 38.5% to current minimum of 25% level. This has left more
loanable funds with commercial banks, solving the liquidity problem.
2. Deregulation of Interest Rate:
During the economic reforms period, interest rates of commercial banks were deregulated. Banks now enjoy
freedom of fixing the lower and upper limit of interest on deposits. Interest rate slabs are reduced from Rs.20
Lakhs to just Rs. 2 Lakhs. Interest rates on the bank loans above Rs.2 lakhs are full decontrolled. These measures
have resulted in more freedom to commercial banks in interest rate regime.
3. Fixing prudential Norms:
In order to induce professionalism in its operations, the RBI fixed prudential norms for commercial banks. It
includes recognition of income sources. Classification of assets, provisions for bad debts, maintaining
international standards in accounting practices, etc. It helped banks in reducing and restructuring Non-performing
assets (NPAs).
4. Introduction of CRAR:
Capital to Risk Weighted Asset Ratio (CRAR) was introduced in 1992. It resulted in an improvement in the
capital position of commercial banks, all most all the banks in India has reached the Capital Adequacy Ratio
(CAR) above the statutory level of 9%.
5. Operational Autonomy:
During the reforms period commercial banks enjoyed the operational freedom. If a bank satisfies the CAR then it
gets freedom in opening new branches, upgrading the extension counters, closing down existing branches and
they get liberal lending norms.

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 6. Banking Diversification:

The Indian banking sector was well diversified, during the economic reforms period. Many of the banks have
stared new services and new products. Some of them have established subsidiaries in merchant banking, mutual
funds, insurance, venture capital, etc which has led to diversified sources of income of them.
7. New Generation Banks:
During the reforms period many new generation banks have successfully emerged on the financial horizon.
Banks such as ICICI Bank, HDFC Bank, UTI Bank have given a big challenge to the public sector banks leading
to a greater degree of competition.
8. Improved Profitability and Efficiency:
During the reform period, the productivity and efficiency of many commercial banks has improved. It has
happened due to the reduced Non-performing loans, increased use of technology, more computerization and
some other relevant measures adopted by the government.

FUNCTIONS OF R.B.I:

As a central bank, the Reserve Bank has significant

powers and duties to perform. For smooth and speedy
progress of the Indian Financial System, it has to perform
some important tasks. Among others it includes
maintaining monetary and financial stability, to develop
and maintain stable payment system, to promote and
develop financial infrastructure and to regulate or control
the financial institutions. For simplification, the
functions of the Reserve Bank are classified into the
traditional functions, the development functions and
supervisory functions.

Functions of Reserve Bank of India

TRADITIONAL FUNCTIONS OF RBI:
Traditional functions are those functions which every central bank of each nation performs all over the world.
Basically these functions are in line with the objectives with which the bank is set up. It includes fundamental
functions of the Central Bank. They comprise the following tasks.

1. Issue of Currency Notes: The RBI has the sole right or authority or monopoly of issuing currency notes
except one rupee note and coins of smaller denomination. These currency notes are legal tender issued by
the RBI. Currently it is in denominations of Rs. 2, 5, 10, 20, 50, 100, 500, and 1,000. The RBI has
powers not only to issue and withdraw but even to exchange these currency notes for other
denominations. It issues these notes against the security of gold bullion, foreign securities, rupee coins,
exchange bills and promissory notes and government of India bonds.
2. Banker to other Banks: The RBI being an apex monitory institution has obligatory powers to guide, help
and direct other commercial banks in the country. The RBI can control the volumes of banks reserves and
allow other banks to create credit in that proportion. Every commercial bank has to maintain a part of
their reserves with its parent's viz. the RBI. Similarly, in need or in urgency these banks approach the RBI
for fund. Thus it is called as the lender of the last resort.
3. Banker to the Government: The RBI being the apex monitory body has to work as an agent of the central
and state governments. It performs various banking function such as to accept deposits, taxes and make
payments on behalf of the government. It works as a representative of the government even at the
international level. It maintains government accounts, provides financial advice to the government. It
pg. 8
 manages government public debts and maintains foreign exchange reserves on behalf of the government.
It provides overdraft facility to the government when it faces financial crunch.
4. Exchange Rate Management: It is an essential function of the RBI. In order to maintain stability in the
external value of rupee, it has to prepare domestic policies in that direction. Also it needs to prepare and
implement the foreign exchange rate policy which will help in attaining the exchange rate stability. In
order to maintain the exchange rate stability, it has to bring demand and supply of the foreign currency
(U.S Dollar) close to each other.
5. Credit Control Function: Commercial bank in the country creates credit according to the demand in the
economy. But if this credit creation is unchecked or unregulated then it leads the economy into
inflationary cycles. On the other credit creation is below the required limit then it harms the growth of the
economy. As a central bank of the nation the RBI has to look for growth with price stability. Thus it
regulates the credit creation capacity of commercial banks by using various credit control tools.
6. Supervisory Function: The RBI has been endowed with vast powers for supervising the banking system
in the country. It has powers to issue license for setting up new banks, to open new branches, to decide
minimum reserves, to inspect functioning of commercial banks in India and abroad, and to guide and
direct the commercial banks in India. It can have periodical inspections an audit of the commercial banks
in India.
DEVELOPMENTAL/ PROMOTIONAL FUNCTIONS OF RBI
Along with the routine traditional functions, central banks especially in the developing country like India have to
perform numerous functions. These functions are country specific functions and can change according to the
requirements of that country. The RBI has been performing as a promoter of the financial system since its
inception. Some of the major development functions of the RBI are maintained below.
1. Development of the Financial System:
The financial system comprises the financial institutions, financial markets and financial instruments. The sound
and efficient financial system is a precondition of the rapid economic development of the nation. The RBI has
encouraged establishment of main banking and non-banking institutions to cater to the credit requirements of
diverse sectors of the economy.
2. Development of Agriculture:

In an agrarian economy like ours, the RBI has to provide special attention for the credit need of agriculture and
allied activities. It has successfully rendered service in this direction by increasing the flow of credit to this
sector. It has earlier the Agriculture Refinance and Development Corporation (ARDC) to look after the credit,
National Bank for Agriculture and Rural Development (NABARD) and Regional Rural Banks (RRBs).
3. Provision of Industrial Finance:

Rapid industrial growth is the key to faster economic development. In this regard, the adequate and timely
availability of credit to small, medium and large industry is very significant. In this regard the RBI has always
been instrumental in setting up special financial institutions such as ICICI Ltd. IDBI, SIDBI and EXIM BANK
etc.
4. Provisions of Training:

The RBI has always tried to provide essential training to the staff of the banking industry. The RBI has set up the
bankers' training colleges at several places. National Institute of Bank Management i.e NIBM, Bankers Staff
College i.e BSC and College of Agriculture Banking i.e CAB are few to mention.

pg. 9
 5. Collection of Data:

Being the apex monetary authority of the country, the RBI collects process and disseminates statistical data on
several topics. It includes interest rate, inflation, savings and investments etc. This data proves to be quite useful
for researchers and policy makers.
6. Publication of the Reports:

The Reserve Bank has its separate publication division. This division collects and publishes data on several
sectors of the economy. The reports and bulletins are regularly published by the RBI. It includes RBI weekly
reports, RBI Annual Report, Report on Trend and Progress of Commercial Banks India., etc. This information is
made available to the public also at cheaper rates.
7. Promotion of Banking Habits:

As an apex organization, the RBI always tries to promote the banking habits in the country. It institutionalizes
savings and takes measures for an expansion of the banking network. It has set up many institutions such as the
Deposit Insurance Corporation-1962, UTI-1964, IDBI-1964, NABARD-1982, NHB-1988, etc. These
organizations develop and promote banking habits among the people. During economic reforms it has taken
many initiatives for encouraging and promoting banking in India.
8. Promotion of Export through Refinance:

The RBI always tries to encourage the facilities for providing finance for foreign trade especially exports from
India. The Export-Import Bank of India (EXIM Bank India) and the Export Credit Guarantee Corporation of
India (ECGC) are supported by refinancing their lending for export purpose.

SUPERVISORY FUNCTIONS OF RBI

The reserve bank also performs many supervisory functions. It has authority to regulate and administer the entire
banking and financial system. Some of its supervisory functions are given below.
1. Granting license to banks:

The RBI grants license to banks for carrying its business. License is also given for opening extension counters,
new branches, even to close down existing branches.
2. Bank Inspection:

The RBI grants license to banks working as per the directives and in a prudent manner without undue risk. In
addition to this it can ask for periodical information from banks on various components of assets and liabilities.
3. Control over NBFIs:

The Non-Bank Financial Institutions are not influenced by the working of a monitory policy. However RBI has a
right to issue directives to the NBFIs from time to time regarding their functioning. Through periodic inspection,
it can control the NBFIs.
4. Implementation of the Deposit Insurance Scheme:

The RBI has set up the Deposit Insurance Guarantee Corporation in order to protect the deposits of small
depositors. All bank deposits below Rs. One lakh are insured with this corporation. The RBI work to implement
the Deposit Insurance Scheme in case of a bank failure. Banks are considered the backbone of a country's
pg. 10
economy. Its more true for a developing country like India. Indian Banking system is very strong. In the global
financial turmoil that happened sometime ago, our country was least affected because of soundness of Indian
Banking and Financial system. In fact many countries of the world are trying to learn lessons from our
disciplined system of Banking. Banks in India are not only strong but are also growing fast. According to
studies. Banking sector is one of the fastest growing sectors in the country. This growth has brought many
opportunities.

pg. 11
Types of Bank Accounts and it's Functions

 CURRENT DEPOSITS / ACCOUNTS

 SAVING BANK / Saving Fund DEPOSITS / ACCOUNTS
 RECURRING DEPOSITS / ACCOUNTS
 FIXED DEPOSITS / ACCOUNTS OR TERM DEPOSITS

Traditionally banks in India have four types of deposit accounts, namely Current Accounts, Saving Banking
Accounts, Recurring Deposits and, Fixed Deposits. However, in recent years, due to ever increasing competition,
some banks have introduced new products, which combine the features of above two or more types of deposit
accounts. These are known by different names in different banks, e.g 2-in-1 deposits, Smart Deposits, Power
Saving Deposits, and Automatic Sweep Deposits etc. However, these have not been very popular among the
public.

What is a Current Account ? Who uses current accounts?

Current Accounts in Banks

Current Accounts are basically meant for businessmen and are never used for the purpose of investment or
savings. These deposits are the most liquid deposits and there are no limits for number of transactions or the
amount of transactions in a day. Most of the current account is opened in the names of firm / company accounts.
Cheque book facility is provided and the account holder can deposit all types of the cheques and drafts in their
name or endorsed in their favour by third parties. No interest is paid by banks on these accounts. On the other
hand, banks charges certain service charges, on such accounts.
Features of Current Accounts:

The main objective of Current Account holders in opening this account is to enable them (mostly businessmen)
to conduct their business transactions smoothly. There are no restrictions on the number of times deposit in cash
 cheque can be made or the amount of such deposits; Usually banks do not have any interest on such current
accounts. However, in recent times some banks have introduced special current accounts where interest (as per
banks' own guidelines) is paid. The current accounts do not have any fixed maturity as these are on continuous
basis accounts
What is a Savings Bank Account? Who uses Saving Bank Accounts?
These deposits accounts are one of the most popular deposits for individual accounts. These accounts not only
provide cheque facility but also have lot of flexibility for deposits and withdrawal of funds from the account.
Most of the banks have rules for the maximum number of withdrawals in a period and the maximum amount of
withdrawal, but hardly any bank enforces these. However, banks have every right to enforce such restrictions if it
is felt that the account is being misused as a current account. Till 24/10/2011, the interest on Saving Bank
Accounts was regulated by RBI and it was fixed at 4.00% on daily balance basis. However, wef 25th October,
2011, RBI has deregulated Saving Fund account interest rates and now banks are free to decide the same within
certain conditions imposed by RBI. Under directions of RBI, now banks are also required to open no frill
accounts (this term is used for accounts which do not have any minimum balance requirements). Although Public
Sector Banks still pay only 4% rate of interest, some private banks like Kotak Bank and Yes Bank pay between
6% and 7% on such deposits. From the FY 2012-13, interest earned upto Rs 10,000 in a financial year on Saving
Bank accounts is exempted from tax.

pg. 12
Extra Notes-

Saving accounts are one of the most popular deposit accounts for individuals in India. In such accounts, the
depositor is normally issued cheque books and the customer is allowed the flexibility of deposits of any amount
and withdrawal of funds from the account at any time. Although, most of the banks have rules for the maximum
number of withdrawals in a period and the maximum amount of withdrawal, yet no bank strictly enforces these
owing to competition in the banking circles. However, banks have every right to enforce such restrictions if it is
felt that the account is being misused as a current account. (See below the features of Saving Bank accounts) All
PS Banks, Private Sectors (like SBI, PNB, BOB, ICICI Bank, Yes Bank, Kotak Bank etc.) have the facility of
Saving Bank accounts and these are frequently used by salaried persons, pensioners, senior citizens and even by
students and housewives. These are the basic accounts used by public for savings and making payments by
cheques.
Interest on Saving Accounts - Is it Regulated by RBI?
Till 24/10/2011, the interest on Saving Fund accounts was regulated by RBI and it was 4.00% p.a. on daily
balance basis. However, wef 25th October, 2011, RBI has deregulated SF interest rates and banks are now free to
decide the same within certain conditions imposed by RBI.

Which Banks Are Paying Maximum Interest Rates on Savings Accounts / Which Banks are paying Best
Interest on Saving Accounts?
Sometimes a question is asked as to which is the best bank for opening a Savings account? Frankly speaking
there is no straight forward answer to this query, as all banks offer almost similar facilities to Savings Bank
account holders i.e. allowing deposit and withdrawals with cheque book facilities. However, the customer service
and rate of interest varies from bank to bank and more so from Branch to Branch also. With ATM facilities you
may need to go to bank only on rare occasions. Therefore, now rate of interest is becoming a major deciding
factor for opening a new account. After deregulation by RBI of the Saving Bank interest, each bank is free to fix
its rate of interest on Saving Funds. On the very first day of deregulation, Yes Bank announced the increase of
Saving Fund Interest from 4% to 6%.

What are Recurring Deposit Accounts? Who use Recurring Deposit Accounts? or RD accounts
These are popularly known as RD accounts and are special kind of Term Deposits and are suitable for people
who do not have lump sum amount of savings, but are ready to save a small amount every month. Normally, such
deposits earn interest on the amount already deposited (through monthly instalments) at the same rates as are
applicable for Fixed Deposits / Term Deposits. These are best if you wish to create a fund for your child's
education or marriage of your daughter or buy a car without loans or save for the future.

Under these type of deposits, the person has to usually deposit a fixed amount of money every month (usually a
minimum of Rs,100/- p.m.). Any default in payment within the month attracts a small penalty. However, some
Banks besides offering a fixed instalment RD, have also introduced a flexible / variable RD. Under these flexible
RDs the person is allowed to deposit even higher amount of instalments, with an upper limit fixed for the same
e.g. 10 times of the minimum amount agreed upon. These accounts can be funded by giving Standing Instructions
by which bank withdraws a fixed amount on a fixed date of the month from the saving bank of the customer (as
per his mandate), and the same is credited to RD account. Recurring Deposit accounts are normally allowed for
maturities ranging from 6 months to 120 months. A Pass book is usually issued wherein the person can get the
entries for all the deposits made by him / her and the interest earned. Banks also indicate the maturity
pg. 13
value of the RD assuming that the monthly instalments will be paid regularly on due dates. In case instalment is
delayed, the interest payable in the account will be reduced and some nominal penalty charged for default in
regular payments. Premature withdrawal of accumulated amount permitted is usually allowed (however, penalty
may be imposed for early withdrawals). These accounts can be opened in single or joint names. Nomination
facility is also available. The RD interest rates paid by banks in India are usually the same as payable on Fixed
Deposits, except when specific rates on FDs are paid for particular number of days e.g.
What are Fixed Deposit Accounts in India or Term Deposits?
All Banks in India (including SBI, PNB, BoB, BoI, Canara Bank, ICICI Bank, Yes Bank etc.) Offer fixed
deposits schemes with a wide range of tenures for periods from 7 days to 10 years. These are also popularly
known as FD accounts. However, in some other countries these are known as "Term Deposits" or even called
"Bond". The term "fixed" in Fixed Deposits (FD) denotes the period of maturity or tenor. Therefore, the
depositors are supposed to continue such Fixed Deposits for the length of time for which the depositor decides to
keep the money with the bank. However, in case of need, the depositor can ask for closing (or breaking) the fixed
deposit prematurely by paying a penalty (usually of 1%, but some banks either charge less or no penalty). (Some
banks introduced variable interest fixed deposits. The rate of interest on such deposits keeps on varying with the
prevalent market rates i.e. it will go up if market interest rates go and it will come down if the market rates fall.
However, such type of fixed deposits has not been popular till date). The rate of interest for Fixed Deposits
differs from bank to bank (unlike earlier when the same were regulated by RBI and all banks used to have the
same interest rate structure. The present trends indicate that private sector and foreign banks offer higher rate of
interest. The earlier trend that private sector and foreign banks offer higher rate of interest is no more valid these
days. However, now day's small banks are forced to offer higher rate of interest to attract more deposits. Usually
a bank FD is paid in lump sum on the date of maturity. However, most of the banks have also facility to pay/
credit interest in saving account at the end of every quarter. If one desires to get interest paid every month, then
the interest paid will be at a marginal discounted rate. In the changed computerized environment, now the Interest
payable on Fixed Deposit can also be easily transferred on due dates to SavingsBank or Current Account
of the customer.

pg. 14
Indian Banking Scenario
Regulation of Banking system in India started with Banking Regulation Act, 1949. Banks in India used to be in
private hands. In 1969, 14 big private banks were nationalized bringing them under the ownership of
government. After 11 years, in 1980, six more banks were nationalised. Of these 20 banks, one New Bank of
India got merged in Punjab National Bank. Now in all there are 27 public sector banks in the country consisting
of 19 nationalised banks and 8 banks from State Bank group (State Bank of India and its associates). In the last
two decades Public Sector Banks in India have witnessed a transition from traditional banking to modern
technology driven banking. Exposure to competition has made these banks re-engineer and re-structure their
processes, systems and product line. After economic liberalization these banks have been given enough freedom
to do so. However, for various matters these are required to follow guidelines issued by Ministry of Finance,
Reserve Bank of India and Indian Banks Association. Post nationalisation, the Banks were asked to open more
branches in rural areas. Large number of people were recruited to man these newly opened branches. Expanded
network gave a new identity to these banks and millions of new customers came to the fold of Banking. The
business of Banking moved from class banking to mass banking. Manpower requirements Public sector banks in
India employ more than 7 lakh people at present. Of these a large number of people will be retiring in next 5-6
years. To fill this gap and to take up the growing business the Banks are on a recruiting spree as can be seen in
media and from vacancy announcements. Only this year about 40,000 vacancies have been created in public
sector banks due to retirements, resignations and expansion of business. Earlier recruitments in public sector
banks were made through Banking Service Recruitment Boards. Each board was taking care of manpower
requirements of 3-5 banks in a certain geographical area. Now the boards have been abolished and each public
sector bank may announce it's own recruitment process for the number of people required from time to time.
Thus more such advertisements are seen these days. Another change is seen in lateral hiring by these banks.
Earlier officers were recruited only in Junior Management Grade. Now public sector banks are offering direct
employment in middle and senior management cadres as well. Thus for both freshers and experienced people
career opportunities are available in public sector banks. To meet their manpower requirements these banks are
presently recruiting in large numbers both in clerical and officer cadre. Clerical Positions A clerk is mostly a
front staff in a bank. Depending on the requirement clerks are placed at different counters of the banks e.g.
savings, deposit, current deposit, term deposit, retail loans, cash credit, agricultural loans, credit cards,
government business, cash receipt or payment etc. Maximum customer interface in banks occurs at these
counters managed by clerical staff.

Career Prospects
Finally selected candidates can look forward to a fruitful career in the bank, they join. All public sector banks
provide training to new employees for equipping them to take up their assignments. Induction training which
happens immediately or soon after joining is the first training programme they attend. Subsequently they are
offered training in various banking disciplines. Public sector banks are few organisation which offer promotion
from one cadre to another. Thus those who join as clerks may be promoted as officers, as per banks norms. For
bright candidates, in some banks, this promotion from a clerk to officer is possible in a period as short as one
year. Recruitments in Officers cadre Vacancies in officers cadre in public sector banks are filled from within the
organization after promotion of clerks and also by direct recruitment. To meet the shortage of manpower in
officers cadre, now a days the public sector banks are required to recruit large number of officers. Most of the
vacancies for which recruitments are made are in Junior Management Graduate Scale I, which is the entry level
position for joining a public sector bank as an officer. This entry level position is known as that of probationary
officer or management trainee. Bank probationary officers can come from any discipline or field of study,
although there is a misconception that only people from commerce or finance background are eligible. A finance
or commerce background may help the candidate adjust to the banking environments faster than others but banks
recruit talents from diverse backgrounds of science, literature etc.
pg. 15
The minimum age to apply for entry level officers position is 21 years while maximum age may be 26 years or
above as decided by individual banks. As regards qualification, the candidate should at least be a graduate from a
UGC recognised university. In some banks only first class graduates are considered eligible. For some other
banks the minimum percentage of marks required is 55 percent. Those with post graduate qualification may get
some relaxation in qualifying percentage of marks, in few cases. There have also been instances of banks
preferring to recruit people with post graduate degree or diploma in management. Particular recruitment
advertisement should be carefully studied to know the eligibility criteria.
The test for probationary officers consists of the following objective papers:

 General Awareness
 Data Interpretation and Logical reasoning
 Verbal Reasoning
 English

Some banks prefer to include a descriptive paper also in the test process. In this paper the candidate is required to
write essay and attempt composition. Minimum qualifying marks are prescribed for both objective and subjective
papers. Candidates are called for interview on the basis of marks obtained in written examination. Interview for
officers position is expected to be more comprehensive. Here along with general questions, the interview panel
may try to judge the candidates understanding of nation's economy, issues before the economy etc. One should
always be ready to answer questions like 'why you want to choose banking as a career?', 'what are your
expectation from the job' etc. Also questions relating to earlier job experiences may be asked. For getting selected
a candidate should do well both in written examination and interview.
Recruitment in higher scales
With some experience one can expect to join a public sector bank in a higher scale. Most of the vacancies in
higher scales exist in Middle Management Grade II or III. Of course the candidate should fulfill the eligibility
criteria as regards to age and qualification. The experience required for higher scales keeps changing from bank
to bank, it may be one year or more. Professionally qualified people (with qualifications like MBA, CA etc)
stand better chance in this regard.

Campus Recruitments: Since last 3-4 years public sector banks have started recruiting from campuses. This
campus recruitment covers only a small part of their manpower needs but it has opened a new window of
opportunity to students wanting to make a career in banks. From campuses banks are taking MBAs from
different disciplines, agriculture graduates, chartered accountants etc.

Career Progression: There is a well define d career progression path in each public sector bank. Performance
and potential are key elements which determine this career progression. Most senior officials in public sector
banks started their career as clerk or scale I officer only. In tune with the time banks have reviewed their
promotion policy and now for bright, hardworking and knowledgeable employees it takes less time to move to
higher scales. In many banks a person who joined as an officer may reach to the position of Genera Manager in
14 years. After that one can aspire for the position of executive director or chairman of a bank. These are very
high positions, nomination to which is decided by the Government and not by the individual banks. Many public
sector banks have a network of foreign branches. Thus joining a public sector bank gives you the opportunity of
working abroad also. Transferability in a bank job provides you the chance of seeing different parts of the
country. To Conclude Public sector banks may not offer fancy financial packages which multinational and few
other companies offer. But the compensation in these banks with the recent wage revision and including
perquisites is quite good. And there is an element of job security too. The housing and medical facilities are also
considered attractive.

pg. 16
SALES AND MARKETING IN BANKING AND FINANCE:

SALES IN BANKING AND FINANCE: There is a basics of selling a product within an industry. And similar is
the case in terms of the banking industry. And that basic is centric towards creating a need. Creating need is a
very important tool used for selling purposes. Where relationship management performs that task to a great
extend. Building your relationship with your customer is all about relationship management, thus once the
relationship is made and is concrete to an extend the task of creating the need becomes easier because of the trust
worthiness of the employee representing the bank while pitching the product to the customer.
SELLING: Providing customers with products they wish to buy is known as selling.
TYPES OF SELLING: Direct selling and Indirect selling are the types of selling generally used.

Direct selling deals with face to face selling of a product via direct medium of communication and speech which
is highly effective. And direct selling also deals with communication done over the phone so as to convert a lead
generated into a profitable assignment.

On the other hand, Indirect selling deals with indierct method of pitching and projecting a product. Which
includes advertisements, promotion, displays etc. Thus to elaborate, indirect selling can be defined as the one
where any form of selling takes place without the involvement of a sales person.
METHODS OF SELLING: Selling methods can be classified into three main categories, consisting
of the follows:
 Personal selling
 Business to Business
 Telemarketing

Selling is highly influenced by the buying decisions of the customers, where the buying decisions are broadly
categorized as the Extensive buying decision, which includes all the premium products and the respective buying
decision of the customer towards the same.

Limited buying decisions which includes the products that provide luxury and sometimes also performs the task
of need. And, finally the routine buying decisions of the customer that deals with the day to day usual products.
Hence, it is very important to judge the buying decision of the customer before pitching the product for sale.
Judging the buying decision in the best possible way helps to convert the lead in the most effective manner.

SELLING MODEL: Every industry uses their own sales model so as to perform the selling activities efficiently.
Similar is the case with the banking industry. And thus, the selling model used by the banks for selling their
products is known as the PROBOCS model of sales.

Where, probocs denotes the several stages that the financial institutions plan so as to convert a generated lead
into a profitable piece of work.

Where, P denotes preliminary preparation, R denotes reaching the customer, O denotes opening the call, B
denotes building the needs, O denotes offering solutions and handling objections, C denotes closing and
generating referrals and lastly S denotes servicing the customer post sale.

Which is actually a very important parameter to be kept in mind since a good servicing post sales can only lead
to a good relationship building and thus to further selling opportunities and referrals as well.
pg. 17
Meeting a customer for the first time to pitch a product should be done very accurately and decently. In the
language of sales, the first meeting is always considered as the critical moment of truth. When the meeting tends
to end on a positive note, it is known as the moment of magic and when the meeting ends on a negative note, it is
known as the moment of misery.

Hence, it is the responsibility of the sales person pitching the product to the customer in his first meeting to pitch
the product in a definite and precise manner so as to create a moment of magic. Response modes are the other
important parameters to be kept in mind during a sales process so as to conclude the sales on a positive note.
Response modes describes how potential customers react to your proposition.
5 STAGES OF SALES FUNNEL: The sales funnel is divided into 5 stages namely,
 Lead
 Prospect
 Qualified prospect
 Committed
 transact
Where, lead implies to the suspect that we have deduced out of our target group.

Prospect is the one where an initial agreement has already taken place between the buyer and the seller. Qualified
prospect denotes to the one's who are almost agreed to give a positive thought over the product. Committed are
the ones who have agreed to move forward towards the
Buying decision of the product and last but not the least, Transacted stage signifies that the work is done on a
positive note and the call has been closed by signing the written documents.
COLD CALLING: It is one of the most powerful tool used now a days to transact a sales call.
One of the most important tips of cold calling is known as the ELEVATOR PITCH.

The pitching done within a short period of time when met someone for the first time is known as the elevator
pitch.

Thus from the above noted definition itself we can deduce that an elevator pitch should always be very definite
and organized so as to close the call on a positive note.

MARKETING IN BANKING AND FINANCE: Lets first understand the meaning of marketing within an
organizational setup.

Marketing is the process of determining consumer demand for a product or service, motivating its sale and
distributing it into ultimate consumption at a profit.

Now a day, it is quite frequently visible that marketing in banks has taken an aggressive form so as to meet the
demand of the competitive market and to build a recognition of their own.

Bank marketing involves providing of services and are aimed to satisfy customer's needs and wants. Needs and
wants may even be non-financial in nature depending upon the circumstances.

pg. 18
Indulgent of the competitive element, efficiency and effectiveness are also the broad parameters considered while
marketing a financial product. Where the organizational objectives are still the driving force towars the efficient
and effective marketing of product and services within the organisation as and when required.

Which includes, the social objectives to render towards the service part and point of the organisation. And
commercial objectives are considered to make profit within an organization so as to contribute towards its
growth.
Policies of marketing which are essential for a banks success are as follows:
 Create, win and keep customers through proper method of marketing policies.
 Organise roadside camps so as to promote the product and also to make the customers aware of it.
 Organizational design should be oriented to the customers.
 Highlight the benefits of the products clearly on the front page of the company's website.

Thus, these are some of the methods and ways through which the marketing conditions and marketing strategies
can be made totally customer centric so as to generate leads in bulk which can further be converted on a positive
note if duties are performed efficiently.

pg. 19
LOANS IN BANKING AND FINANCE:
LOANS: In finance, a loan is the lending of money from one individual, organisation or entity to another individual,
organisation or entity. Now, let‟s understand the concept behind loans within an financial institution.

A loan is a debt provided by an entity(organization or individual) to another entity at an interest rate, and
evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed,
the interest rate the lender is charging, and the date of repayment. A loan entrails the reallocation of the subject
asset for a period of time, between the lender and the borrower. The loan is generally provided at a cost, referred
to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of
these obligations and restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as the loan covenants. Acting as a provider of loans is one of the principal tasks for financial
institutions such as banks and credit card companies.
TYPES OF LOANS IN BANKS:
Generally, the loans which are granted and disbursed by the banks are discussed as follows:

1. HOME LOAN: Home loans are taken by people for a variety of home-related purposes such as
construction of home, home renovation, home extension, buying property or land, or payment of stamp
duties. Home loans comprise an adjustable or fixed interest rate and payment terms.
Some types of home loans are mentioned below:
a. Home purchase loan
b. Land purchase loan
c. Home construction loan
d. Home extension loan
e. Home renovation loan
f. Stamp duty loan
g. NRI home loans
h. Loan against property
2. PERSONAL LOAN: This type of loan is given to individuals after accessing their credentials based on
their profession or business or any other source of income. The loan can be utilized for any purpose, for
example, paying debt, marriage expenses or vacation expenditure. The span of personal loan repayment
varies from 12 months to 60 months depending upon the principal amount and the EMIs. The interest rate
ranges from 15 percent to 28 percent varying from bank to bank. Approximately 2 percent of the total
loan amount is charged as the loan processing fee. The EMI starts once the disbursement of loan has been
made.
3. BUSINESS LOAN: This type of loan is provided to either existing businesses or those venturing into new
business. As banks provide loans on the basis of individual's credentials, it is bit difficult to get a loan for
starting a business. It is very important for individuals (starting a business) to have a clear cut business
plan as it is the most important requirement to convince the banks that your business has the capacity of
repayment. Banks then rely on individual's background, assets/property, previous loan history and
dedication towards work. Banks also prefer those individuals who have already insured the property for
their business. Nowadays, banks are working on providing more lucrative and easy business loans
options for the first time business owners.

pg. 20
For existing business, loan is provided in the following ways:

 Term loans: Amount provided for a fixed tenure at the applicable interest rate: three years for short term
loans and 10-15 years for long term loans.
 Bank overdraft limits: Ability to withdraw more money than what is deposited.

 Bill discounting: Short-term borrowing used to improve a company's working capital and cash flow
position.
 Letter of credit for international business: Bank guaranteeing of a buyer's payment to a seller in specified
period.

4. EDUCATION LOAN: Required by and provided to students who want to pursue higher education in
resident country or abroad. Students should have an admission offer from an institution before they apply
for an education loan. The term for education loan varies from bank to bank. The RBI has fixed certain
norms on the total amount of loan that can be disbursed; however, banks can increase or decrease the
limit depending upon the credentials of the institution. For studying in India, Rs.10lakh is the average and
for studying in abroad, the average is Rs.20lakh. The repayment tenure varies between 10yeras and
15years depending upon the loan amount and the repayment begins between six months and two years of
the course completion. Early repayment has no associated charges.
5. GOLD LOAN: Gold loan is imparted only on providing gold as security to a bank or any other lending
institution. It is considered as one of the safest methods as the loan amount is provided on the basis of the
security submitted. Amount ranging from Rs.5000 to Rs.25lakh can be taken as loan against loan.
Amount equivalent to 80 percent to 90 percent (varying from bank to bank) of the total value of the gold
is given as loan to the borrower. Depending upon the bank, the tenure of gold loan varies from one day to
two years. The rate of interest usually ranges from 14 percent to 24 percent depending upon the financial
institution. The banks charge processing fees of upto 1.5 percent. There is no prepayment fee.
6. VEHICLE/CAR LOAN: Compared to other loans, it is easier and simpler to take vehicle loans. Vehicle
loans involve less paperwork and around three to six working days are required to get the clearance. The
interest rates vary from bank to bank based on their base rate. The repayment process involves monthly
EMIs and early repayment options.
7. LOAN AGAINST INSURANCE POLICY: Any individual having an insurance policy can take loan against
it from the insurance company. The amount of loan depends upon the type and period of the policy. It is
generally up to 80 percent of the surrender value of the policy. The rate of interest on loan against
insurance is very less and varies with the companies. The tenure (during the policy term) and repayment
options are decided by the insurer company as per their policies. The unpaid loan amount/interest amount
is adjusted to the policy amount before any payment against the policy is made
8. LOAN AGAINST PPF: Loan against PPF is one of the easiest and most beneficial loan options in India.
The loan is disbursed easily. The loan against PPF is usually of a small amount depending upon the
money in the PPF account. The rate of interest is 2 percent more than the rate of interest given for the
PPF at the time when loan is taken. The loan is available from the second year of account opening, i.e.,
after completion of one year of account opening. The loan can be availed within five years of account
opening. If five financial years have passed since the account opening, the account holder cannot apply
for the loan. The repayment of the loan should be made in the next 36 months, i.e., three years from the
date of loan.

pg. 21
CHEQUES IN BANKING –
A cheque is a payment instrument that is issued by a bank
account holder for making payments to an individual or
company and cash withdrawals from the bank. Apart
from that, it also facilitates funds transfer to another bank
account.

For instance, you can make cash payment for a utility bill or you can do it by writing a cheque. The biggest
benefit of a cheque is that it allows high value transactions which may become a bit cumbersome if hard cash
was used instead.
The following details are necessary in a cheque –
i. A cheque must be drawn upon a specified bank (Drawee).
ii. A cheque must be signed by the person (Drawer) issuing the cheque.
iii. A cheque must have the name of the recepient (Payee) of the cheque.
iv. A cheque must mention the amount of money in words and figures.
v. A cheque must be dated.
Classification of Cheques:
A cheque is one of the safest modes of making payment as there is an entry against the cheque honoured by the
bank that can be traced back if needed.
i. Based On The Location, Cheques Are Classified As: –
a. Local cheques: If issued by a bank in the same city as the payee.
b. Outstation cheques: If a given city‟s local cheque is presented elsewhere it becomes an outstation
cheque and may attract some nominal but fixed banking charges.
c. At par cheque: Is a cheque which is accepted at par at all its branches across the country. Unlike local
cheque it can be present across the country without attracting additional banking charges.
ai. Based On Its Value, Cheques Are Classified As: –
a. Normal Value cheques: Cheques below the amount of Rs. 1 lakh are called normal value cheques.
b. High Value cheques: Cheque bearing an amount higher than Rs. 1 lakh is a high value cheque.
c. Gift cheques: Cheques used for gifting money to loved ones are gift cheques. The value may vary from
Rs. 100 to Rs. 10,000.
Cheques Are Mainly Of Four Types:-
1. Open Cheque: A cheque is called open when it is possible to get cash over the counter at the bank. The
holder of an open cheque can receive payment over the counter at the bank, deposit the cheque in his own
account or pass it to someone else by signing on the back of a cheque.
2. Bearer Cheque: A cheque which is payable to any person who presents it for payment at the bank
counter is called „Bearer cheque‟. A bearer cheque can be transferred by mere delivery and requires no
endorsement.
3. Order Cheque: It is the one which is payable to a particular person. In such a cheque the word „bearer‟
may be cut out or cancelled and the word „order‟ may be written. The payee can transfer an order
cheque to someone else by signing his or her name on the back of it.

pg. 22
 4. Crossed Cheque: When a cheque is crossed, the holder cannot encash it at the counter of the bank. The
payment of such cheque is only credited to the bank account of the payee. Crossed cheque is done by
drawing two parallel lines across top left corner of the cheque, with or without writing „Account
payee‟ in the space between the lines.
Banks Also Offer Various Cheques Which Guarantee Payments -

1. A Self Cheque: Is written by the account holder as pay self to receive money in physical form from the
branch where he holds his account. This can be alternated by using an ATM card.
2. Post-dated cheque (PDC): A PDC is a form of a crossed or account payee bearer cheque but post-dated
to meet the said financial payment at a future date. The cheque is valid from the date of issue to three
months.
3. A Banker’s cheque: A banker‟s cheque is issued by a bank drawing money from its own funds rather
than that from an account holder‟s. Banker‟s cheque is issued after the bank verifies the account status
of the requestor and the amount is immediately deducted from the customer‟s account. A banker‟s
cheque cannot be dishonored as in the case of a normal cheque, when an account holder has insufficient
funds in his/her account. Though different from a normal cheque it requires clearing too.
4. A Traveller’s cheque: It is a printed open type cheque issued as an alternate for carrying around cash
while travelling abroad or on a vacation to a foreign country as they come with a replacement guarantee
and lifelong validity. Traveler‟s cheques are widely accepted by merchants, restaurants and other
recreational organizations. The unused cheques from the recent trip can be used for your next trip.

pg. 23
THE CONCEPT OF RETAIL BANKING -

RETAIL BANKING IN INDIA – AN OVERVIEW

This chapter is devoted to present an overview of the Indian Banking industry with an elaborate discussion on the
concept of Retail Banking. It traces the history of Indian banking industry after independence and the challenges
faced by Indian banking industry since 1991. Also, a full description of the evolution of retail banking in India
and its present status is discussed in this chapter.
3.1 INDIAN BANKING INDUSTRY

Banks are among the main participants of the financial system in India. Banking offers several facilities and
opportunities. Banking in India originated in the last decades of the 18th Century. The oldest bank in existence in
India is the State Bank of India, a government owned bank that traces its origin in June 1806. It is the largest
commercial bank in the country today.
There are three different phases in the history of banking in India.
1. Pre – Nationalization Era
2. Nationalization Stage

3. Post liberalization Era

Pre – Nationalization Era:

In India the business of banking and credit was practiced even in very early times. The remittance of money
through Hundies, an indigenous credit instrument was very popular. The hundies were issued by bankers known
as Shroffs, Sahukars, Shahus or Mahajans in different parts of the country.
Organizational Structure of Banks in India

In India banks are classified in various categories according to different criteria. The following charts indicate the
banking structure.

pg. 24
Broad classification of banks in India:

RESERVE BANK OF INDIA

COMMERCIAL BANK CO-OPERATIVE BANK DEVELOPMENT BANK

NATIONALISED PRIVATE SHORT TERM LONG TERM

CREDIT CREDIT

AGRICULTURAL URBAN
CREDIT CREDIT

EXIM INDUSTRIAL AGRICULTURE

1. The RBI: The RBI is the supreme monetary and banking authority in the country and has the
responsibility to control the banking system in the country. It keeps the reserves of all scheduled banks
and hence is known as the “Reserve bank”.
2. Public Sector Banks:
i. State Bank of India and its Associates (8)
ii. Nationalized Banks (19)
iii. Regional Rural Banks sponsored by Public Sector Banks (196)
3. Private Sector Banks:
i. Old generation private banks (22)
ii. Foreign new generation private banks (8)
iii. Banks in India (40)
4. Co-operative sector banks:
a. State cooperative banks
b. Central co-operative banks.
c. Primary agriculture credit societies
d. Land development banks.
e. State land development banks
pg. 25
 5. Development banks:

Development banks mostly provide long term finance for setting up industries. They also provide short term
finance (for export and input attitude)
a. Industrial finance cooperation of India (IFCI)
b. Industrial Development Bank of India (IDBI)
c. Industrial Investment Bank of India (IIBI)
d. Small Industrial Development Bank of India (SIDBI)
e. National Bank for Agriculture and Rural Development (NABARD)
f. Export Import Bank of India.

During the early part of the 19th Century, the volume of foreign trade was relatively small. As the trade
expanded, the need for banks of the European type was felt and the government of the East India Company took
interest in having its own bank. The first banks were the general banks of India, which started in 1786, and the
Bank of Hindustan, both of these are now defunct. The oldest bank in existence in India is the State Bank of
India, which originated in the name of Bank of Calcutta in June 1806. It almost immediately became the Bank of
Bengal and included as one of the three Presidency Banks. The other two being the Bank of Bombay and the
Bank of Madras. All the three banks were established under charters from the British East India Company. For
many years the Presidency Banks acted as quasi- central banks, as did their successors. The three banks were
merged in 1925 to form the Imperial Bank of India, which later on became the State Bank of India. The swadeshi
movement witnessed the birth of several indigenous banks including the Punjab National Bank, Bank of Baroda
and Canara Bank. In 1955, the Reserve Bank of India was established under the Reserve Bank of India Act as the
Central Bank of India.
NATIONALIZATION STAGE:

After Independence in 1951, the All India Rural Credit Survey Committee recommended nationalization of the
Imperial Bank of India. In 1955 the Imperial Bank of India was nationalized and established as the State bank of
India.

The main objective of establishing SBI by nationalizing the Imperial Bank of India was “to extend banking
facilities on a large scale more particularly in the rural and semi- urban areas and to diverse it for other public
purposes.

In 1959, the SBI (Subsidiary Bank) Act was proposed and the eight state –associated banks were taken over by
the SBI as its subordinates. With effect from 1st January 1963, these subsidiary banks formed the State Bank of
India group.

On 19th July 1969, the nationalization of 14 major scheduled commercial Banks each having deposits worth Rs
50 crores and above came into effect. It was a turning point in the history of commercial banking in India.

Later the government nationalized six more commercial private sector banks with deposit liability of not less
than Rs 200 crores on 15th April 1980. These banks were:
1. Andhra Bank
2. Corporation Bank
3. New Bank of India
4. Oriented Bank of Commerce
5. Punjab and Sindh Bank
pg. 26
6. Vijaya Bank

In 1969, the lead Bank Scheme was introduced to extend banking facilities to every corner of the country. Later
in 1975, Regional Rural Banks were set up to supplement the activities of the commercial banks and especially
to meet the credit needs of the weaker sections of the rural society.

Nationalization of banks paved way for Retail Banking and as a result there has been an all round growth in the
branch network, the deposit mobilization, credit disposals and employment.

The first year after nationalization witnessed the total growth in the agriculture loans and the loans to SSI by 87%
and 48% respectively. The overall growth in the

deposits and the advances indicates the improvement that has taken place in the banking habits of the people in
the rural and semi-urban areas where the branch network has spread. Such credit expansion enabled the banks to
achieve the goals of nationalization.
Consequences of Nationalization:
a. The quality of credit assets fell because of liberal credit extension policy.
b. Excessive political interference.
c. Poor performance appraisal policy
d. The credit facilities extended to the priority sector at concessional rates.
e. The high level of low yielding SLR investments adversely affected the profitability of the banks.
f. The rapid branch expansion adversely affected the profitability of banks due to increase in the fixed costs.
g. Downward trend in the quality of services and efficiency of the banks.
POST- LIBERALIZATION ERA- THRUST ON QUALITY AND PROFITABILITY:
The need for restructuring the banking industry was felt greater with the initiation of the real sector reform
process in1992. The reform process has enhanced the opportunities and challenges for the real sector making
them operate in a borderless global market place. However, to harness the benefits of globalization, there should
be an efficient financial sector to support the structural reform taking place in the real economy. The root causes
for the lack luster performance of banks, formed the elements of the banking sector reforms. Some of the factors
are:
a. Regulated interest rate structure
b. Lack of focus on profitability
c. Lack of transparency in the bank‟s balance sheet
d. Lack of competition
e. Excessive regulation on organization structure and managerial resources.
f. Excessive support from government.

In this context, the recommendations made by a high level committee on functional sector, chaired by
M.Narasimhan, laid the foundation for the banking sector reforms. These reforms tried to enhance the viability
and efficiency of the banking sector. The Narasimhan committee suggested that there should be functional
autonomy, flexibility in operations, dilution of banking strangulation, reduction in reserve requirements and
adequate financial infrastructure in terms of supervision, audit and technology. The committee further advocated
introduction of prudential norms, transparency in operations and movements in productivity, which aimed at
liberalizing the regulatory frame work but also to keep them in tune with international standards. The emphasis
shifted to efficient and prudential banking linked to better customer care and customer services.

pg. 27
Typical Products Offered By A Retail Bank Include:

I. Transactional accounts
a. Checking accounts (American english)
b. Current accounts (British english)

AI. Savings accounts

BI. Debit cards

IV. ATM cards

V. Credit cards
VI. Traveler’s Cheques
VII. Mortgages
VIII. Home equity loans
IX. Personal loans.
X. Certificates of deposit/Term deposits
In some countries, such as the US, they may also offer more specialised accounts such as:
I. Sweep accounts
II. Money market accounts
III. Individual Retirement Accounts (IRA's)

Sub-types Of Retail Banks:

1. Community development bank are regulated banks that provide financial services and credit to
underserved markets or populations.
2. Private Banks manage the assets of high-net-worth individuals.
3. Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks
are essentially private banks.
4. Savings banks accept savings deposits.
5. Postal savings banks are savings banks associated with national postal systems.

pg. 28
Retail Banking Vs. Corporate Banking

Retail banking refers to the division of a bank that deals directly with retail customers. Also known as consumer
banking or personal banking, retail banking is the visible face of banking to the general public, with bank
branches located in abundance in most major cities. Banks that focus purely on retail clientele are relatively few,
and most retail banking is conducted by separate divisions of banks, large and small. Customer deposits garnered
by retail banking represent an extremely important source of funding for most banks.

Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate
customers. The term was originally used in the U.S. to distinguish it from investment banking, after the
Glass-Steagall Act of 1933 separated the two activities. While the Act was repealed in the 1990s, corporate
banking and investment banking services have been offered for many years under the same umbrella by most
banks in the U.S. and elsewhere. Corporate banking is a key profit center for most banks; however, as the biggest
originator of customer loans, it is also the source of regular write-downs for loans that have soured.

Products and Services – Retail Banking

Retail banking encompasses a wide variety of products and services, including:

1. Checking and savings accounts – customers are generally charged a monthly fee for checking accounts;
savings accounts offer slightly higher interest rates than checking accounts but generally cannot have
checks written on them.
2. Certificates of Deposit and Guaranteed Investment Certificates (in Canada) – these are the most popular
investment products with conservative investors, and an important funding source for banks since the
funds in these products are available to them for defined periods of time.
3. Mortgages on residential and investment properties – because of their size, mortgages account for both a
substantial part of retail banking profits, as well as the biggest chunk of a bank‟s exposure to its retail
client base.
4. Automobile financing – banks offer loans for new and used vehicles, as well as refinancing for existing
car loans.
5. Credit cards – the high interest rates charged on most credit cards makes this a lucrative source of
interest income and fees for banks.
6. Lines of credit and personal credit products – Home equity lines of credit (HELOC) have diminished
significantly in their importance as a profit center for banks after the housing collapse in the U.S. and
subsequent tightening of mortgage lending standards.
7. Foreign currency and remittance services – the increase in cross-border banking transactions by retail
clients, and the higher spreads on currencies paid by them, makes these services a profitable offering for
retail banking.

pg. 29
Retail banking clients may also be offered the following services, generally through another division or affiliate
of the bank:
1. Stock brokerage (discount and full-service)
2. Insurance
3. Wealth management
4. Private banking
The level of personalized retail banking services offered to a client depends on his or her income level and the
extent of the individual‟s dealings with the bank. While a client of modest means would generally be served by a
teller or customer service representative, a high net worth individual who has an extensive relationship with the
bank would typically have his or her banking requirements handled by an account manager or private banker.

Although brick-and-mortar branches are still necessary to convey the sense of solidity and stability that is crucial
to banking, the reality is that retail banking is perhaps one area of banking that has been most impacted by
technology, thanks to the proliferation of ATMs and the popularity of online and telephone banking.

Products and Services – Corporate Banking

The corporate banking segment of banks typically serves a diverse range of clients, ranging from small to
mid-sized local businesses with a few millions in revenues to large conglomerates with billions in sales and
offices across the country. Commercial banks offer the following products and services to corporations and
other financial institutions:

1. Loans And Other Credit Products – this is typically the biggest area of business within corporate banking,
and as noted earlier, one of the biggest sources of profit and risk for a bank.
2. Treasury And Cash Management Services – used by companies for managing their working capital and
currency conversion requirements.
3. Equipment Lending – commercial banks structure customized loans and leases for a range of equipment
used by companies in diverse sectors such as manufacturing, transportation and information technology.
4. Commercial Real Estate – services offered by banks in this area include real asset analysis, portfolio
evaluation, debt and equity structuring.
5. Trade Finance – involves letters of credit, bill collection, and factoring.
6. Employer Services – services such as payroll and group retirement plans are typically offered by
specialized affiliates of a bank.

Through their investment banking arms, commercial banks also offer related services to their corporate clients,
such as asset management and securities underwriters.
Importance to the Economy
Retail and commercial banks are of critical importance to the domestic and global economies. Retail banking
brings in the customer deposits that largely enable banks to make loans to their retail and business customers.
Commercial banks, for their part, make the loans that enable businesses to grow and hire people, contributing to
expansion of the economy.
For proof of the importance of banks to the economy, one needs to look no further than the global credit crisis of
2007-08. The crisis had its roots in the U.S. housing bubble and the excessive exposure of banks and financial
institutions around the world to derivatives and securities based on U.S. home prices. As iconic American
pg. 30
investment banks and institutions either declared bankruptcy (Lehman Brothers) or were on the verge of it (Bear
Stearns, AIG, Fannie Mae, Freddie Mac), banks grew increasingly reluctant to lend money, either to their
counterparts or to companies. This resulted in a near-total freeze in the global banking and lending mechanism,
causing the most severe recession worldwide since the 1930s‟ Depression. This near-death experience for the
global economy led to renewed regulatory focus on the largest banks that are deemed “too big to fail” because of
their importance to the worldwide financial system.
The Bottom Line
Retail and commercial banks are essential for the smooth functioning of an economy. Most large banks have
specialized divisions that deal in retail banking and corporate banking; both businesses are among the largest
profit centers for most banks.

pg. 31
COMMUNICATION
Communication is simply the act of transferring information
from one place to another.
The different categories of communication are:

Verbal Communication : face-to-face, telephone, radio

or television and other media.
Non-Verbal Communication : Body language,
gestures, how we dress or act - even our scent.

Written Communication : letters, e-mails, books,

magazines, the Internet or via other media.

Visualizations : graphs and charts, maps, logos and

other visualizations can communicate messages.

Now we will discuss about communication skills.

What is Interpersonal Communication?
Interpersonal communication is the process by which people exchange information, feelings, and meaning
through verbal and non-verbal messages: it is face-to-face communication. When two or more people are in the
same place and are aware of each other's presence, then communication is taking place, no matter how subtle or
unintentional. Without speech, an observer may be using cues of posture, facial expression, and dress to form an
impression of the other's role, emotional state, personality and/or intentions. Although no communication may be
intended, people receive messages through such forms of non-verbal behaviour.

Elements of Interpersonal Communication

a. The Communicators: For any
communication to occur there must be at
least two people involved. It is easy to think
about communication involving a sender
and a receiver of a message. However, the
problem with this way of seeing a
relationship is that it presents
communication as a one-way process where
one person sends the message and the other
receives it. While one person is talking and
another is listening, for example.

In fact communications are almost always complex, two-way processes, with people sending and receiving
messages to and from each other simultaneously. In other words, communication is an interactive process. While
one person is talking the other is listening - but while listening they are also sending feedback in the form of
smiles, head nods etc.
pg. 32
 a. The Message: Message not only means the speech used or information conveyed, but also the nonverbal
messages exchanged such as facial expressions, tone of voice, gestures and body language. Non-verbal
behaviour can convey additional information about the spoken message. In particular, it can reveal more
about emotional attitudes which may underlie the content of speech. See our page: Effective Speaking for
more on how you can use your voice to full effect.
b. Noise: Noise has a special meaning in communication theory. It refers to anything that distorts the
message, so that what is received is different from what is intended by the speaker. Whilst physical 'noise'
(for example, background sounds or a low-flying jet plane) can interfere with communication, other
factors are considered to be 'noise'. The use of complicated jargon, inappropriate body language,
inattention, disinterest, and cultural differences can be considered 'noise' in the context of interpersonal
communication. In other words, any distortions or inconsistencies that occur during an attempt to
communicate can be seen as noise.
c. Feedback: Feedback consists of messages the receiver returns, which allows the sender to know how
accurately the message has been received, as well as the receiver's reaction. The receiver may also
respond to the unintentional message as well as the intentional message. Types of feedback range from
direct verbal statements, for example "Say that again, I don't understand", to subtle facial expressions or
changes in posture that might indicate to the sender that the receiver feels uncomfortable with the
message. Feedback allows the sender to regulate, adapt or repeat the message in order to improve
communication.
d. Context: All communication is influenced by the context in which it takes place. However, apart from
looking at the situational context of where the interaction takes place, for example in a room, office, or
perhaps outdoors, the social context also needs to be considered, for example the roles, responsibilities
and relative status of the participants. The emotional climate and participants' expectations of the
interaction will also affect the communication.
e. Channel: The channel refers to the physical means by which the message is transferred from one person
to another. In face-to-face context the channels which are used are speech and vision, however during a
telephone conversation the channel is limited to speech alone.
Uses of Interpersonal Communication
Most of us engage in some form of interpersonal communication on a regular basis, how well we communicate
with others are a measure of our interpersonal skills.
a. Interpersonal communication is a key life skill and can be used to: Give and collect information.
b. Influence the attitudes and behaviour of others.
c. Form contacts and maintain relationships.
d. Make sense of the world and our experiences in it.
e. Express personal needs and understand the needs of others.
f. Give and receive emotional support.
g. Make decisions and solve problems.
h. Anticipate and predict behaviour.
i. Regulate power.
j. Core Interpersonal Skills

1) Verbal Communication

Effective verbal or spoken communication is dependent on a number of factors and cannot be fully isolated from
other important interpersonal skills. Clarity of speech, remaining calm and focused, being polite and following
some basic rules of etiquette will all aid the process of verbal communication.

pg. 33
  Opening Communication:

In many interpersonal encounters, the first few minutes are extremely important as first impressions have a
significant impact on the success of further communication. Everyone has expectations and norms as to how
initial meetings should proceed and people tend to behave according to these expectations. If these expectations
are mismatched, communication will not be effective or run smoothly, and some form of negotiation will be
needed if relations are to continue. At a first meeting, formalities and appropriate greetings are usually expected:
such formalities could include a handshake, an introduction to yourself, eye contact and discussion around a
neutral subject such as the weather or your journey may be useful. A friendly disposition and smiling face are
much more likely to encourage communication than a blank face, inattention or disinterested reception.

 Reinforcement:
The use of encouraging words alongside non-verbal gestures such as head nods, a warm facial expression and
maintaining eye contact, are more likely to reinforce openness in others.
Encourage others to participate in discussion (particularly in group work)

Signify interest in what other people have to say Pave the way for development and/or maintenance of a
relationship

Allay fears and give reassurance Show warmth and openness.

Reduce shyness or nervousness in ourselves and others.
Effective Listening

Active listening is an important skill and yet, as communicators, people tend to spend far more energy
considering what they are going to say rather than listening to what the other person is trying to say. Arrange a
comfortable environment conducive to the purpose of the communication, for example a warm and light room
with minimal background noise.

 Be prepared to listen.
 Keep an open mind and concentrate on the main direction of the speaker's message.
 Avoid distractions if at all possible.
 Delay judgment until you have heard everything.
 Be objective.
 Do not be trying to think of your next question while the other person is giving information.
 Do not dwell on one or two points at the expense of others.
 The speaker should not be stereotyped. Try not to let prejudices associated with, for example, gender,

ethnicity, social class, appearance or dress interfere with what is being said.
Questioning:
Effective questioning is an essential skill. Questioning can be used to:
a. Obtain information.
b. Start a conversation.
c. Test understanding.
d. Draw someone into a conversation.
e. Show interest in a person.
f. Seek support or agreement.
g. Reflecting and Clarifying
pg. 34
 h. Reflecting is the process of feeding-back to another person your understanding of what has been said.
Although reflecting is a specialised skill used within counselling it can also be applied to a wide range of
communication contexts and is a useful skill to learn.
i. Reflecting often involves paraphrasing the message communicated to you by the speaker in your own
words, capturing the essence of the facts and feelings expressed, and communicating your understanding
back to the speaker.
It is a useful skill because:
a. You can check that you have understood the message clearly.
b. The speaker gets feedback as to how the message is received.
c. It shows interest in, and respect for, what the other person has to say.
d. You are demonstrating that you are considering the other person's viewpoint.
Effective Speaking
a. Accent- Gradually, over the years, through the migration of people and exposure to the media, accents are
being broken down and neutralised. In some ways this is a shame because accents can add a dimension
and distinctiveness to voice and emphasise individuality. It is important to get used to the sound of your
own voice. Most people are more relaxed in a private situation, particularly at home, where there are no
pressures to conform to any other social rules and expectations. This is not the case in public situations
when there are all sorts of influences exerted upon the way people speak.
b. Volume- This is not a question of treating the voice like the volume control on the TV remote. Some
people have naturally soft voices and physically cannot bellow. Additionally, if the voice is raised too
much, tonal quality is lost. Instead of raising the voice it should be 'projected out'. Support the voice with
lots of breath - the further you want to project the voice out, the more breath you need. When talking to a
group or meeting, it is important to never aim your talk to the front row or just to the people nearest you,
but to consciously project what you have to say to those furthest away. By developing a strong voice, as
opposed to a loud voice, you will be seen as someone positive.
c. Clarity- Some people tend to speak through clenched teeth and with little movement of their lips. It is
this inability to open mouths and failure to make speech sounds with precision that is the root cause of
inaudibility. The sound is locked into the mouth and not let out. To have good articulation it is important
to unclench the jaw, open the mouth and give full benefit to each sound you make, paying particular
attention to the ends of words. This will also help your audience as a certain amount of lip-reading will
be possible.
d. Variety- To make speech effective and interesting, certain techniques can be applied. However, it is
important not to sound false or as if you are giving a performance. Whilst words convey meaning, how
they are said reflects feelings and emotions. Vocal variety can be achieved by variations in:

Pace: This is the speed at which you talk. If speech is too fast then the listeners will not have time
to assimilate what is being said. Nevertheless, it is a good idea to vary the pace - quickening up at
times and then slowing down – this will help to maintain interest.

Volume: By raising or lowering volume occasionally, you can create emphasis. If you drop your
voice to almost a whisper (as long as it is projected) for a sentence or two, it will make your
audience suddenly alert, be careful not to overuse this technique.
Pitch - Inflection - Emphasis: When speaking in public, try to convey the information with as much
vocal energy and enthusiasm as possible. This does not mean your voice has to swoop and dive all
over the place in an uncontrolled manner. Try to make the talk interesting and remember that when
you are nervous or even excited, vocal chords tense and shorten causing the voice to
pg. 35
 get higher. Emphasise certain words and phrases within the talk to convey their importance and
help to add variety.

Pause: Pauses are powerful. They can be used for effect to highlight the preceding statement or to
gain attention before an important message. Pauses mean silence for a few seconds. Listeners
interpret meaning during pauses so have the courage to stay silent for up to five seconds –
dramatic pauses like this convey authority and confidence.
3. Conversational Skills

Conversations are supposed to be fun. They involve personal interactions between two or more people about
something of interest. But many people worry about having conversations. They are concerned that they won't be
able to keep the conversation going, or about what they will say.
4. Non- Verbal Communication

 There are many different types of non-verbal communication. They include:

 Body Movements (Kinesics), for example, hand gestures or nodding or shaking the head;
 Posture or how you stand or sit, whether your arms are crossed, and so on;
 Eye Contact, where the amount of eye contact often determines the level of trust and trustworthiness;
 Para-language or aspects of the voice apart from speech, such as pitch, tone, and speed of speaking;
 Closeness or Personal Space (Proxemics), which determines the level of intimacy;
 Facial Expressions, including smiling, frowning and even blinking; and
 Physiological Changes, for example, sweating or blinking more when nervous.

5. Body Language
Body movements can be used to reinforce or emphasise what a person is saying and also offer information about
the emotions and attitudes of a person. However, it is also possible for body movements to conflict with what is
said. A skilled observer may be able to detect such discrepancies in behaviour and use them as a clue to what
someone is really feeling and thinking. There are several different categories of body movement, these include:-
a. Emblems-

Gestures that serve the same function as a word are called emblems. For example, the signals that mean 'OK',
'Come here!', or the hand movement used when hitch-hiking. However, be aware that whilst some emblems are
internationally recognised, others may need to be interpreted in their cultural context.
b. Illustrators-

Gestures which accompany words to illustrate a verbal message are known as illustrators. For example, the
common circular hand movement which accompanies the phrase 'over and over again', or nodding the head in a
particular direction when saying 'over there'.
c. Regulators-
Gestures used to give feedback when conversing are called regulators. Examples of 'regulators' include head
nods, short sounds such as 'uh-huh', 'mm-mm', and expressions of interest or boredom. Regulators allow the
other person to adapt his or her speech to reflect the level of interest or agreement. Without receiving feedback,
many people find it difficult to maintain a conversation. Again, however, they may vary in different cultural
contexts.
d. Adaptors-
pg. 36
Adaptors are non-verbal behaviours which either satisfies some physical need. Adaptors include such actions as
scratching or adjusting uncomfortable glasses, or represent a psychological need such as biting fingernails when
nervous. Although normally subconscious, adaptors are more likely to be restrained in public places than in the
private world of individuals where they are less likely to be noticed. Adaptive behaviours often accompany
feelings of anxiety or hostility.
e. Postures-

Two forms of posture have been identified, 'open' and 'closed', which may reflect an individual's degree of
confidence, status or receptivity to another person. Someone seated in a closed position might have his/her arms
folded, legs crossed or be positioned at a slight angle from the person with whom they are interacting. In an open
posture, you might expect to see someone directly facing you with hands apart on the arms of the chair. An open
posture can be used to communicate openness or interest in someone and a readiness to listen, whereas the
closed posture might imply discomfort or disinterest.

Personal Development
Personal development is a lifelong process. It's a way for people to assess their skills and qualities, consider their
aims in life and set goals in order to realise and maximise their potential. This page helps you to identify the
skills you need to set life goals which can enhance your employability prospects, raise your confidence and lead
to a more fulfilling, higher quality life. Plan to make relevant, positive and effective life choices and decisions
for your future to enable personal empowerment. Although early life development and early formative
experiences within the family, at school, etc. can help to shape us as adults, personal development should not
stop later in life. This page contains information and advice that is designed to help you to think about your
personal development and ways in which you can work towards goals and your full potential.
There are many ideas surrounding personal development, one of which is detailed below:
The important of Mind-set
Mind sets are not just important for learning new skills. They can affect the way that we think about everything.
There are three key things that you can do to develop a growth mind set:

a. You need to recognise that a growth mind set is not just good, but is also supported by science. In other
words, you need to be committed to developing a growth mind set.
b. You can learn and teach others about how to develop and improve their abilities through adopting a
growth mind set. This will help you to take control of your life, which is hugely empowering. Research
shows that people who feel in control tend toperform better. It's a virtuous cycle.
c. Listen out for your fixed mind set voice. When you hear that little critical voice in your head telling you
that you can't do something, reply with a growth mind set approach and tell it that you can learn.
Positive Thinking
Positive thinking is the idea that you can change your life by thinking positively about things. This idea can
sound a bit soft and fluffy, which is something of a problem for many people who recognise that just thinking
good thoughts won't change the world and therefore discard the whole idea. However, research shows that
positive thinking really does have a scientific basis. You can't change the world, but you can change how you
perceive it and how you react to it. And that can change the way that you feel about yourself and others, which
can in turn have a huge effect on your well-being.
1. The effect of Negative Thinking-

pg. 37
Most negative emotions, such as fear or anger, are designed to help with survival. They cause us to take swift
and effective action to save ourselves from whatever is threatening us. This means that they also prevent us from
being distracted by other things around us.
2. The effect of Positive Thinking-

People who think more positively are more likely to do things to deliver on those options. They build new skills
and develop existing ones, so that they genuinely have more options in life.
Now few tips of developing positive thinking
a.Meditation b. Writing c. Play

Personal Empowerment
At a basic level, the term 'empowerment' simply means 'becoming powerful'. Building personal empowerment
involves reflecting on our personal values, skills and goals and being prepared to adjust our behaviour in order to
achieve our goals. Personal empowerment also means being aware that other people have their own set of values
and goals which may different to ours. Many other, more detailed, definitions exist. These usually centre on the
idea that personal empowerment gives an individual the ability to:
a. Take control of their circumstances and achieve their own goals in their personal and working life.
b. Become more aware of their strengths and weaknesses and therefore be better equipped to deal with
problems and achieve goals.
c. Enhance the contribution they make both as an individual and as a member of a team.
d. Take opportunities to enhance personal growth and a sense of fulfilment.
e. Developing personal empowerment usually involves making some fundamental changes in life, which is
not always an easy process. The degree of change required will differ from person to person, depending
on the individual starting point.
Lifelong Learning
There does not need to be a specific reason for learning since learning for the sake of learning can in itself be a
rewarding experience. There is a common view that continuous learning and having an active mind throughout
life may delay or halt the progress of some forms of dementia, although there is actually very little scientific
evidence to support these claims. However, keeping the brain active does have advantages since learning can
prevent you from becoming bored and thus enable a more fulfilling life at any age. There are, of course, many
reasons why people learn for personal development.
a. You may want to increase your knowledge or skills around a particular hobby or pastime that you enjoy.
b. Perhaps you want to develop some entirely new skill that will in some way enhance your life – take a
pottery or car mechanic course for example.
c. Perhaps you want to research a medical condition or your ancestry.
d. Perhaps you're planning a trip and want to learn more about the history and culture of your destination.
e. Maybe you will decide to take a degree course later in life simply because you enjoy your chosen subject
and the challenges of academic study.
Self-Motivation
Motivation is what pushes us to achieve our goals, feel more fulfilled and improve overall quality of life.
Personal drive to achieve, the desire to improve or to meet certain standards. Commitment to personal or
organisational goals; Initiative, which he defined as 'readiness to act on opportunities'; and Optimism, the ability
to keep going and pursue goals in the face of setbacks. There are many advantages to self-motivation. People
pg. 38
who are self-motivated, for example, tend to be more organised, have good time management skills and more
self-esteem and confidence. Understanding and developing your self-motivation can help you to take control of
many other aspects of your life.
a. Self-Motivation

Neuro-Linguistic Programming, or NLP, provides practical ways in which you can change the way that you
think, view past events, and approach your life. Neuro-Linguistic Programming shows you how to take control
of your mind, and therefore your life.
b. Personal Presentation

Personal presentation is all about marketing YOU, the brand that is you. What others see you do and hear you say
will influence their opinion of you – so personal presentation is about painting yourself in as positive a light as
possible – always. Personal presentation is about you and how you present yourself in everyday situations.
However, personal presentation always involves at least two people - the person presenting themselves (you) and
the person receiving the presentation. It can therefore be described as an interaction. Personal presentation is
concerned with conveying appropriate signals for the situation and for the other individuals involved. People who
lack self-esteem and confidence may fail to convey their message effectively or fully utilise their skills and
abilities because of the way they present themselves. By improving your personal presentation you improve your
communication skills and reduce barriers to understanding. Everybody presents themselves differently and most
can improve their personal presentation.
Finally two things you have to take care –
1) Keeping your Mind Healthy
2) Care your physic and body
Interview Skills in Banking
Bank Teller Interview Tips with Sample Questions-

A bank teller handles thousands of dollars of cash, mortgage and loan payments, checks deposits and funds
transfers, and is a bank's front line in building and maintaining customer relationships. Therefore, bank teller
candidates should be detail oriented, accurate, friendly and personable, honest, reliable and possess strong
customer service skills. Financial institutions conduct interviews aimed at identifying these characteristics in
potential employees.
Sample Interview Tips

Being prepared for an interview not only gives the employer a good first impression of you, but it's a necessary
step in the hiring process. Here are some tips to get prospective bank tellers through the progression of a job
interview:

Be on time; preferably 10-15 minutes early Research information about the company, such as mission statement,
company history and product line Dress professionally Bring a few copies of your resume, CV, reference list or
other important documentation Turn off your cellular phone to avoid distractions Prior to the interview, practice
answering questions that may be asked, such as what skills can you offer that are applicable to the position Have
a list of questions to ask the employer Smile and make eye contact with the greeter (e.g. receptionist) and
interviewer Following the interview, have an understanding of the next step in the hiring process
What Sample Questions May Be Asked During a Bank Teller Interview?

pg. 39
The purpose of an interview is to give the bank an overall sense of the interviewee's character, knowledge about
the position, experience and professional goals. The questions below are examples of questions that might be
asked at a bank teller interview:
a. Tell me about yourself. Why do you want to work here?
b. Customers can sometimes get very upset with bank policy. How would you handle a regular customer
who is angry because they don't have the funds available in their account to withdraw and want you to
bend the rules, just this once?
c. Do you know the proper techniques for detecting counterfeit cash and fraudulent checks?
d. What are your long-term goals? Where do you see yourself in five years?
e. Describe a time that you had to handle an upset customer.
f. What was the customer upset with? How was it resolved?
g. Can you explain our bank's various checking account options?
h. What qualities do you think a bank teller should possess?

Employment Information
Potential bank tellers may be trusted with thousands of dollars and personal account information daily and
therefore must be detail oriented, honest and trustworthy. Bank tellers are required to balance all currency and
cash transactions, receive payments and deposits and prepare them for shipment to branch locations or the
Federal Reserve Bank.

They also verify customer identity and document and currency authenticity and prepare cashier's checks. Bank
tellers must demonstrate the calm and supportive demeanor needed for dealing with angry or upset customers. In
addition to honesty and customer service, banks appreciate individuals who excel at selling their products. When
preparing for a bank teller interview, it is helpful to be acquainted with the bank's services and account options.
A bank teller should be familiar with the products available for customers, and be able to explain them clearly to
the customers.

pg. 40
List Of Banking Abbreviations

ABCI - Association of Business Communicators of

India ABCP - Asset Backed Commercial Paper ACU -
Asian Clearing Union
ADB - Asian Development Bank
ADF - Augmented Dicky Fuller
ADR - Asset Development Reserve
ADRs - American Depository Receipts
ADs - Authorised Dealers
AFI - Annual Financial Inspection
AIFI - All India Financial Institution
AIMSCS - Advanced Institute of Mathematics, Statistics and Computer Science
ALM - Asset Liability Management
AMA - Advanced Measurement Approach
AMFI - Association of Mutual Funds in
India AML - Anti-Money Laundering AMU
- Asian Monetary Unit
ANBC - Adjusted Net Bank Credit
APS - Annual Policy Statement
AS - Accounting Standard
ATM - Automated Teller Machine BAFT -
Bankers‟ Association for Finance & Trade BC -
Business Correspondent
BCBS - Basel Committee on Banking
Supervision BCP - Business Continuity Planning
BCSBI - Banking Codes and Standards Board of India
BE - Budget Estimates
BF - Business Facilitator
BFS - Board for Financial Supervision BFSI -
Banking Financial Services and Insurance BIS -
Bank for International Settlements BMP - Basic
Management Programme
BoP - Balance of Payments
BPLR - Benchmark Prime Lending Rate
BPSS - Board for Regulation and Supervision of Payment and Settlement Systems
BRBNMPL - Bharatiya Reserve Bank Note Mudran Private Limited
BSA - Bilateral Swap Arrangements
BSE - Bombay Stock Exchange, Mumbai
BSR - Basic Statistical Returns
BTC - Bankers‟ Training College
CA - Concurrent Audit
CAB - College of Agricultural Banking
CACP - Commission for Agricultural Costs and Prices
pg. 41
CAD - Current Account Deficit
CAMELS - Capital Adquacy, Asset Quality, Management, Earnings, Liquidity, Systems
and
Control
CAS - Central Account Section
CBDT - Central Board of Direct Taxes
CBLO - Collateralised Borrowing and Lending Obligation
CBS - Consolidated Banking Statistics
CBS - Core Banking Solutions
CC - Cubic Capacity
CCB - Central Co-operative Bank
CCC - Central Complaints Committee
CCIL - Clearing Corporation of India Limited
CCR - Counterfeit Currency Report
CCRS - Currency Chest Reporting System
CD - Certificate of Deposit
C-D - Currency-Deposit
CDBMS - Centralised Data Base Management
System
CDOs - Collateralised Debt Obligations
CDR - Corporate Debt Restructuring
LIST OF ABBREVIATIONS
xvi
CDS - Credit Default Swap
CENVAT - Central Value Added Tax CFMS -
Centralised Funds Management System CFSA -
Committee on Financial Sector Assessment

CFT - Combating Financing of Terrorism

CGFTMSE - Credit Guarantee Fund Trust for
Micro and Small Enterprises
CGRA - Currency & Gold Revaluation
Account CIC - Central Information
Commission CICs - Credit Information
Companies
CIS - Commonwealth of Independent States
CMCPS - Compulsorily and Mandatorily
Convertible Preference Shares
CMIS - Currency Management Information
System
CoBoSAC - Corporate Bonds and Securitisation
Advisory Committee
CODs - Central Office Departments
CoR - Certificate of Registration
CP - Commercial Paper
CPADS - Centralised Public Accounts Department
pg. 42
System
CPC - Cheque Processing Centre
CPDO - Centralised Public Debt Office
CPFF - Commercial Paper Funding Facility
CPI - Consumer Price Index
CPI-AL - Consumer Price Index-
Agricultural Labourers
CPI-RL - Consumer Price Index-
Rural Labourers
CPI-IW - Consumer Price Index for Industrial
Workers
CPIO - Central Public Information Officer
CPIs - Consumer Price Indices
CPMG - Corporate Performance Monitoring
Group
CPPC - Central Pension Payment Cell
CPSEs - Central Public Sector Enterprises
CR - Contingency Reserve
CRAR - Capital to Risk-Weighted Assets Ratio
CRCS - Central Registar of Co-operative
Societies
CRR - Cash Reserve Ratio
CSAA - Control Self Assessment Audit
CSD - Customer Services Department
CSF - Consolidated Sinking Fund CSGL -
Constituant Subsidiary General Ledger CSO -
Central Statistical Organisation CTR - Cash
Transaction Receipt
CTS - Cheque Truncation System
CTS - Complaint Tracking System
CVD - Countervailing Duty
CVPS - Currency Verification and Processing
System
CWC - Central Water Commission
DAD - Deposit Accounts Department
DAP - District Agricultural Plan
DAPM - Department of Administration and
Personnel Management
DBOD - Department of Banking Operations and
Development
DBS - Department of Banking Supervision
DCC - District Consultative Committee DCCB
- District Central Cooperative Bank DCM -
Department of Currency Management
pg. 43
DEAP - Department of Economic Analysis and
Policy
DEBC - Department of Expenditure and
Budgetary Control
DEIO - Department of External Investments and
Operations
DEPB - Duty Entitlement Pass Book DGBA -
Department of Government and Bank
Accounts
DGCI & S - Directorate General of
Commercial Intelligence and Statistics DIC -
District Industries Centre
DICGC - Deposit Insurance and Credit
Guarantee Corporation
DIP - Disclosure and Investor Protection DIT
- Department of Information Technology
DMIS - Document Management Information
System
DNBS - Department of Non-Banking Supervision
DOC - Department of Communication DoT -
Department of Telecommunication
DRG - Development Research Group
DRI - Differential Rate of Interest
DRT - Debt Recovery Tribunal
DS - Difference Stationary
DSB - Designated Settlement Banks
DSIM - Department of Statistics and Information
Management
DvP - Delivery versus Payment
EACB - European Association of Co-operative
Banks
EBT - Electronic Benefit Transfer
ECB - European Central Bank ECBs -
External Commercial Borrowings ECGC -
Export Credit Guarantee Corporation ECR -
Export Credit Refinance
ECS - Electronic Clearing Services EEA -
Exchange Equalisation Account EEFC -
Exchange Earners‟ Foreign Currency EFT -
Electronic Funds Transfer EMEs - Emerging
Market Economies
EOU - Export Oriented Unit
EPCG - Export Promotion Capital Goods
ESOS - Employees Stock Option Scheme
pg. 44
EU - European Union
EXIM Bank - Export Import Bank
FAO - Food & Agriculture Organisation
FAQs - Frequently Asked Questions
FATF - Financial Action Task Force
FBT - Fringe Benefit Tax
FC - Financial Conglomerate
FCAs - Foreign Currency Assets
FCCB - Foreign Currency Convertible Bond
FCI - Food Corporation of India
FCNR(B) - Foreign Currency Non-Resident (Banks)
FDI - Foreign Direct Investment
FED - Foreign Exchange Department
FEDAI - Foreign Exchange Dealers‟ Association
of India
FI - Financial Institutions
FIEO - Federation of Indian Export
Organisation
FIIs - Foreign Institutional Investors
FIPB - Foreign Investment Promotion Board
FITL - Funded Interest Term Loan
FIU-IND - Financial Intelligence Unit-India
FLCCs - Financial Literacy and Credit Counseling
Centres
FMCG - Fast Moving Consumer Goods
FMD - Financial Markets Department
FOF - Flow of Funds
FPS - Focus Product Scheme
FRBM - Fiscal Responsibility and Budget
Management
FRBs - Floating Rate Bonds
FRL - Full Reservoir Level
FRLs - Fiscal Responsibility Legislations
FSB - Financial Stability Board
FSF - Financial Stability Forum
LIST OF ABBREVIATIONS
xviii
FST - Financial Sector Technology
FVCIs - Foreign Venture Capital Investors
GCC - Gulf Cooperation Council GCCs -
General-purpose Credit Cards GDP - Gross
Domestic Product GDRs - Global
Depository Receipts GFCE - Government
Financial Consumption
pg. 45
Expenditure
GFD - Gross Fiscal Deficit
GFSR - Global Financial Stability Report
GIPSA - General Insurer‟s (Public Sector)
Association of India
GoI - Government of India
GRF - Guarantee Redemption Fund
GSDP - Gross State Domestic Product
GST - Goods and Services Tax
HFCs - Housing Finance Companies
HLAC - High Level Advisory Committee
HLCCFM - High Level Coordination Committee on
Financial Markets
HLG - High Level Group
HR - Human Resources
HRDD - Human Resources Development
Department
HRMS - Human Resources Management
System
HSUI - Housing Start Up Index
HTM - Held-to-Maturity IAS - Integrated
Accounting Systems IASC - Inspection and
Audit Sub-Committee IBA - Indian Banks‟
Association
ICAC - International Cotton Advisory
Committee
ICAI - Institute of Chartered Accountants of
India
ICAR - Indian Council for Agricultural Research
ICCOMS - Integrated Computerised Currency
Operations and Management System
ICT - Information and Communication
Technology
IDMD - Internal Debt Management Department
IDR - Indian Depository Receipt
IDRBT - Institute for Development & Research
in Banking Technology
IEM - Industrial Entrepreneurs Memoranda
IES - Integrated Establishment System
IGIDR - Indira Gandhi Institute of Development
Research
IIA - Institute of Internal Auditors
IIBM - Indian Institute of Bank Management
IIFCL - India Infrastructure Finance
Company
pg. 46
Limited
IIFT - Indian Institute of Foreign Trade
IIP - Index of Industrial Production
ILO - International Labour Organisation
IMA - Internal Models Approach
IMD - India Millennium Deposits
IMD - India Meteorological Department
IMF - International Monetary Fund
IMFC - International Monetary and Financial
Committee
IODP - Integrated Officers Development
Programmes
IPAs - Issuing and Paying Agents
IPCC - Inter-Govermental Panel on Climate
Change
IPCs - Irrevocable Payment Commitments
IPDIs - Innovative Perpetual Debt Instruments
IPOs - Initial Public Offerings
IP-RR - Interest Payment - Revenue Receipt
IRB - Internal Ratings-Based IRDA - Insurance
Regulatory and Development Authority

LIST OF ABBREVIATIONS
xix
IRFs - Interest Rate Futures
ISA - Information Systems Audit
ISACA - Information Systems Audit and Control
Assessment
ISMS - Information Security Management
System
ISO - International Organisation for
Standardisation
IT - Information Technology IT-BPO -
Information Technology - Business Process
Outsourcing
ITEs - Intra-Group Transactions and Exposures
IWMP - Integrated Watershed Management
Programme
JLG - Joint Liability Group
JNNURM - Jawaharlal Nehru National Urban
Renewal Mission
KCCs - Kisan Credit Cards
KVIBs - Khadi and Village Industries
Boards KVIC - Khadi and Village Industries
pg. 47
Commission
KYC - Know Your Customer
LAF - Liquidity Adjustment Facility
LB - Lowest daily outstanding Balance
LCD - Liquid Crystal Display
LIBOR - London Inter-Bank Offer Rate
LOI - Letter of Intent
LPA - Long Period Average MASI -
Management Audit Systems Inspection MAT -
Minimum Alternate Tax MCA - Ministry of
Corporate Affairs
MBS - Mortgage Backed Securities
MF - Mutual Funds
MFDEF - Micro Finance Development and Equity
Fund
MFDF - Micro Finance Development Fund
MFI - Micro Finance Institution MICR - Magnetic
Ink Character Recognition MMA - Macro
Management of Agriculture MMBCS - Magnetic
Media Based Clearing System MMMFs - Money
Market Mutual Funds MMS - Multi Modal
Settlements
MODVAT - Modified Value Added Tax
MoU - Memorandum of Understanding
MPD - Monetary Policy Department
MPI - Macro-Prudential Indicators
MPLS - Multi Protocol Label Switching
MSE-CDP - Micro and Small Enterprises
Cluster Development Programme MSEs - Micro
and Small Enterprises
MSMEs - Micro, Small and Medium Enterprises
MSOE - Minimum Standards of Operational
Efficiency
MSP - Minimum Support Price
MSS - Market Stabilisation Scheme
MTM - Mark-to-Market
NAB - New Arrangement to Borrow NABARD -
National Bank for Agriculture and Rural
Development
NASSCOM - National Association of Software and
Services Companies
NAV - Net Asset Value
NBFCs - Non-Banking Financial
Companies NBFC-D - Deposit taking
NBFC
pg. 48
NBFC-ND - Non-deposit taking NBFC
NBFC-ND-SI - Systemically Important Non-deposit
taking NBFC
NCR - National Capital Region
NBO - National Building Organisation
NDA - Net Domestic Asset
NDS - Negotiated Dealing Systems
NDS - OM - Negotiated Dealing System - Order
Matching
NDTL - Net Demand and Time Liability
LIST OF ABBREVIATIONS
xx
NECS - National Electronic Clearing System
NEFT - National Electronic Funds Transfer
NFS - National Financial Switch
NFA - Net Foreign Assets
NFSM - National Food Security Mission
NGO - Non-Government Organisation
NHB - National Housing Bank NIBM -
National Institute of Bank Management NIC -
National Informatics Centre NIF - National
Investment Fund
NIMSME - National Institute for Micro, Small
and Medium Enterprises
NIPFP - National Institute of Public Finance and
Policy
NOC - No Objection Certificate
NOF - Net Owned Funds
NPAs - Non-Performing Assets NPCI -
National Payments Corporation of India NPS -
New Pension Scheme
NRAA - National Rain Fed Area Authority
NREGS - National Rural Employment
Guarantee Scheme
NR(E)RA - Non-Resident (External) Rupee Account
NRI - Non-Resident Indian
NRRDA - National Rural Road Development
Agency
NSE - National Stock Exchange
NSM - Note Sorting Machine
NSSF - National Small Saving Fund
NSSO - National Sample Survey Organisation
OBCs - Other Backward Classs
OBE - Off- Balance Sheet Exposures
pg. 49
OD - Overdraft
OECD - Organisation for Economic Co-operation
and Development
ODI - Offshore Derivative Instruments
OLTAS - Online Tax Accounting System
OMO - Open Market Operation
OMS - Open Market Sales OPEC -
Organisation for Petroleum Exporting
Countries
ORFS - Online Returns Filing System OSMOS
- Off-Site Monitoring and Surveillance OTC -
Over-the-Counter OTS - One-Time Settlement

PACS - Primary Agricultural Credit Socity

PAD - Public Accounts Department
PAN - Permanent Account Number
PCA - Prompt Corrective Action
PCPS - Perpetual Cumulative Preference
Shares
PDs - Primary Dealers
PDI - Perpetual Debt Instruments
PDO - Public Debt Office
PDO-NDS - Public Debt Office - Negotiated Dealing
System
PDS - Public Distribution System
PE - Private Equity
PFCE - Private Final Consumption Expenditure
PFRDA - Pension Fund Regulatory and
Development Authority
PGPBF - Post Graduate Programme in Banking &
Finance
PIT - Personal Income Tax
PMEGP - Prime Minister Employment Generation
Programme
PMLA - Prevention of Money Laundering Act
PMRY - Prime Minister‟s Rojgar Yojana
PNCPs - Perpetual Non-Cumulative Preference
Shares
POL - Petroleum, Oil and Lubricants
BP - Public Private Partnership
PSBs - Public Sector Banks
LIST OF ABBREVIATIONS
xxi
PSS Act - Payment & Settlement Systems Act
pg. 50
PSUs - Public Sector Undertakings
QCBS - Quality and Cost Based Selection
QIB - Qualified Institutional Buyer
QIP - Qualified Institutional Placement
QMS - Quality Management System
R&D - Research & Development
RBIA - Risk Based Internal Audit
RBSC - Reserve Bank Staff College
RCs - Reconstruction Companies
RCC - Regional Complaints Committee
RCS - Registar of Co-operative Societies
RE - Revised Estimates
REER - Real Effective Exchange Rate REGP -
Rural Employment Generation Programme RIDF -
Rural Infrastructure Development Fund RKVY -
Rashtriya Krishi Vikas Yojana RNCPS -
Redeemable Non-Cumulative
Preference Shares
RoA - Return on Assets
ROE - Return on Equity
ROSC - Report on Observance of Standards
and Codes
RPCD - Rural Planning and Credit Department
RRBs - Regional Rural Banks
RTGS - Real Time Gross Settlement
RTI - Right to Information
RTP - Reserve Tranche Position SAARC -
South Asian Association for Regional
Co-operation
SACPs - Special Agricultural Credit Plans
SAD - Single Administrative Document
SDDS - Special Data Dissemination Standards
SAMIS - Service Area Monitoring and Information
System
SAP - State Agricultural Plan
SARFAESI - Securitisation and Reconstruction of
Financial Assets and Enforcement of
Security Interest
SBI - State Bank of India
SC - Scheduled Caste
SCs - Securitisation Companies
SCB - Scheduled Commercial Bank
SDLs - State Development Loans
SDR - Special Drawing Rights
pg. 51
SEBI - Securities and Exchange Board of
India SEZs - Special Economic Zones SFCs -
State Finance Corporations
SFMS - Structured Financial Messaging System
SFURTI - Scheme for Fund for Regeneration of
Traditional Industries
SGL - Subsidiary General Ledger
SHGs - Self-Help Groups
SIDBI - Small Industries Development Bank of
India
SIFI - Systemically Important Financial
Intermediaries
SIPS - Systemically Important Payment System
SITP - Scheme for Integrated Textile Parks
SIVs - Structured Investment Vehicles
SLAF - Second Liquidity Adjustment Facility
SLA(IC) - Sundry Liabilities Account (Interest
Capitalisation)
SLB - Securities Lending and Borrowing
SLBC - State Level Bankers‟ Committee
SLR - Statutory Liquidity Ratio
SMEs - Small and Medium Enterprises
SMO - Special Market Operations
SPMCIL - Security Printing and Minting
Corporation of India Ltd.
SPV - Special Purpose Vehicle
LIST OF ABBREVIATIONS
xxii
SREP - Supervisory Review and Evaluation
Process
SRMS - Self Employment Scheme for
Rehabilitation of Manual Scavangers
BS - Securities Settlement
System ST - Scheduled Tribe
StCB - State Co-operative Bank
STCRC - Short-Term Co-operative Rural
Credit STOs - State Treasury Offices
STR - Suspicious Transaction Report
STRIPS - Separate Trading for Registered
Interest and Principal of Securities
TAC - Technical Advisory Committee
TAFCUBs - Task Force for Urban
Co-operative Banks
TAG - Technical Advisory Group
pg. 52
TALF - Term Asset-Backed Securities Loan
Facility
TFC - Twelfth Finance Commission TFCI -
Tourism Finance Corporation of India TFP -
Total Factor Productivity TFTS - Trade for
Trade Settlement
TIN - Tax Information Network
TMSM - Training Methods and Skills for
Managers
TMT - Thermo Mechanically Treated
ToRs - Terms of References
TS - Trend Stationary
TUFS - Technology Upgraded Fund Scheme
UBD - Urban Banks Department
UCBs - Urban Cooperative Banks
UCNs - Uniform Code Numbers
UNDP - United Nations Developement
Programme
UNICO - Umbrella Organisation for Large
Cooperative Banks in Europe
UNDP - United Nations Development
Programme
UNIDO - United Nations Industrial Development
Organisation
UNME - Urban Non-Manual Employees
UTs - Union Territories
VAR - Vector Autoregression
VaR - Value at Risk
VKGUY - Vishesh Krishi Gram Udyog Yojana
VPN - Virtual Private Network
WADR - Weighted Average Discount Rate
WEO - World Economic Outlook
WMA - Ways and Means Advances
WPI - Wholesale Price Index
WSS - Weekly Statistical Supplement
WTO - World Trade Organisation
XBRL - eXtensible Business Reporting
Language
XML - Extensible Markup Language
Y-o-Y - Year-on-Year
ZTC - Zonal Training Centre

pg. 53