STUDY ON BANKING OPERATION IN AXIS BANK LTD

Executive Summary

Banks play very important role in the economic life of the nation. The health of the economy is
closely related to the soundness of its banking system. Although banks create no new wealth but
their borrowing, lending and related activities facilitate the process of production, distribution,
exchange and consumption of wealth. In this way banks become very effective partners in the
process of economic development. The study is done on the Banking Operation in AXIS
BANK LTD..This project gives an overview of various banking operation. The study is done in
three areas of banking operations are ‘Clearing’, ‘Foreign Exchange’ & ‘NRI Services’. CMS
(Cash Management Services) in which payments received from buyers and made to the suppliers
are efficiently processed to optimize cash flow position and to ensure the effective management
of the business' operating funds. Axis bank cash management enables the efficient utilization of
receivables through coordinated management of payments, collections and balances in customer
accounts.

Starting from the Clearing, the operations focus on the understanding of how clearing process is
done and how it benefits the bank and also to its customers. The main objective of Clearing is to
speed up the collection of cheques. Clearing operation denotes all activities from the time a
commitment is made for a transaction until it is settled .Study provides knowledge of various
clearing attributes which are important from bank point of view.

“Foreign Exchange’ basics was the another important part to come across in which basic
concepts of foreign exchange is enhanced. Foreign exchange market ‘Forex’ deal with the
exchange of currencies with different countries all across the globe. The main objective of Forex
is to ensure liquidity for worldwide operations and maintain access to local credit markets. A
study has been done as how Forex helps in making margin and also the various parameters of
Forex like the participants, rates of transactions, concept of SWIFT, letter of credit, etc.

NRI services was the another thing to deal with. NRI services are related to nonresident Indian
and various lists of services offered by Axis bank which include remittance facilities, various
accounts for the customer, and the most importantly Portfolio Investment Scheme (PIS). The
main objective of NRI services is to provide outstanding personalized services to meet the needs
of customer worldwide. NRIs are permitted to invest in shares/convertible debentures of Indian
companies by RBI under portfolio investment scheme.

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Introduction
Company profile: Axis Bank
Axis Bank was the first of new private bank to have begun operation in 1994 after Government
of India allowed. Axis Bank was jointly promoted by the administrator of the specified
undertaking of the

 Unit trust of India (UTI-1)

 Life Insurance Corporation of India (LIC)
 General Insurance Corporation ltd (GIC)

Also with associates viz. National Insurance Company Ltd., The New India Assurance
Company, The Oriental Insurance Corporation and United Insurance Company Ltd.

Axis Bank in India today is capitalized with Rs. 232.86 Crores with 47.50% public holding other
than promoters. It has more than 200 branch offices and Extension Counters in the country with
over 1250 Axis Bank ATM proving to be one of the largest ATM networks in the country. Axis
Bank India commits to adopt the best industry practices internationally to achieve excellence.
Axis Bank has strengths in retail as well as corporate banking. By the end of December 2004,
Axis Bank in India had over 2.7 million debit cards. This is the first bank in India to offer the AT
PAR Cheque facility, without any charges, to all its Savings Bank customers in all the places
across the country where it has presence.

With the AT PAR cheque facility, customers can make cheque payments to any beneficiary at
any of its existence place. The ceiling per instrument is Rs. 50,000/-.The latest offerings of the
bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel
Currency Card. The Travel Currency Card is a signature based pre-paid travel card which
enables
traveler’s global access to their money in local currency of the visiting country in a safe and
convenient way. The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.

Banking Operation At Axis Bank

The Bank operates in four segments: treasury, retail banking, corporate/wholesale banking
and oth The treasury operations include investments in sovereign and corporate debt, equity and
mutual funds, trading operations, derivative trading and foreign exchange operations on the
account, and for customers and central funding. .Retail banking includes lending to
individuals/small businesses subject to the orientation, product and granularity criterion. It also
includes liability products, card services, Internet banking, automated teller machines (ATM)
services, depository, financial advisory services, and nonresident Indian (NRI) services.

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Objectives, Scope & Methodology

Broad Objective

To acquire the knowledge about the Banking Operations.

Specific Objectives

 To understand the process of “Clearing”

 To get the concept of foreign exchange and foreign exchange trading
 To know about the NRI services provided by Axis Bank

Clearing Objective

 Main objective of clearing is to speed up the collection of cheques.

 To provide the unique services to the customer by reducing the cost of transaction.
 To minimize the clearing related fraud and reconciliation problem so that bank can
operate its operation smoothly.

Foreign Exchange Objective

 To fund worldwide operations at the lowest after-tax cost

 To ensure liquidity for worldwide operations and maintain access to local credit markets
 To protect assets worldwide
 To maximize US dollar profits from overseas operations.

NRI Objectives

 To provide outstanding personalized services to meet the needs of customer worldwide

 To provide service solution to ensure convenience, value and absolute satisfaction of
costumer

Methodology

 Secondary Data
 Guidelines of Axis Bank
 Axis Bank knowledge point(intranet)
 Regular consultation with employees of Axis Bank
 Observation

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Theoretical Perspective

Clearing

Clearing operations is a process in which bankers exchange the cheques (drawn on other banks)
received from their clients and settle the accounts. This is one the most important and popular
services. The exchange of cheques amongst banks and settlements of the accounts take place at
clearing houses. The clearing houses are generally managed by RBI and in certain centers where
RBI does not have a presence; the same are managed by SBI.

The Bank as a part of the normal banking operations undertakes collection of cheques deposited
by their customers, some of which could also be drawn on non-local bank branches. Such
cheques are called outstation cheques. In order to facilitate faster collection of outstation
cheques, the Reserve Bank of India started a special clearing styled, Speed Clearing by
leveraging the core banking solutions implemented in banks

In India, as on date, there are about 1047 clearing houses. Bankers in their normal course of
business receive millions of cheques from their client from collection. Thus, collection of
cheques is one of the prime services provided by bankers. The bankers who extens the service of
collecting the funds of the cheques are known as “COLLECTING BANKERS”.

“CLEARING speeds up collection of cheques and therefore enhances customer service, reduces
the scope for clearing related frauds, minimizes cost of collection of cheques, reduces
reconciliation problems, eliminates logistics problems etc.”

Managing Receivables: Collections

Axis bank facilitates faster collections be enabling quick realization of local and upcountry
cheques and pooling the funds in a central account. Axis bank provides following collection
products:

Local Cheque Collection (LCC) - enables to realize funds (on an assured day) through local
cheques payable within the purview of local clearing. Bank provides these services at Axis bank
network: 140 locations with courier pickup facility and various co-coordinator locations.

Up Country Cheque Collections (UCC) – UCC enables to realize fund at lower costs be
depositing outstation cheques at Axis bank locations. These cheques can be drawn on any of the
following:

 Axis bank locations: all cheques drawn on Axis bank locations.

 Correspondent bank locations: currently available at more than 900 locations.
 Remote locations: cheques drawn on locations not covered by Axis bank locations or
correspondent bank locations can be deposited at any of bank locations.

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IPO Collections- As collecting bankers, Axis bank provide service relating to public/rights
issues, private placements, buyback offers, etc.

Bulk Collections- Axis bank also cater to customer business model which has bulk collection
cheques. Performance of bulk collections can be arranged by courier and executed via electronic
transmissions of diskettes, and the bank processes collections in a convenient and efficient way.

Managing Payables: Payments

Payable at par cheque books: Customer can issue local cheques at all Axis bank locations,
absolutely free of cost. This makes any customer a universal customer of Axis bank and
eliminates the need for opening and tracking separate accounts.

Bulk payments: this enables to issue bulk demand draft, pay orders at all Axis bank locations. It
also offer efficient printing and dispatching facilities through Axis bank dedicated HUB to
ensure error free services and fast movement of funds at minimal costs.

Statutory payments: any one can make statutory payments like taxes, utility bills, etc. within a
committed time frame at any of Axis bank branches on a regular basis which is executed through
its dedicated HUB.

Dividend/Interest/Principle/Refund Order Payment: any one can use this facility at all Axis bank
locations and over 500 correspondent bank locations.

Foreign Exchange

International trade in commodities and services necessitates a method of conversion of value of

commodities and services of one country in terms of purchasing power in another country. The
mechanism by which such conversion takes place is one of the meanings of ‘Foreign Exchange’.

Foreign exchange is the method of conversion of one currency into another. The foreign
currency in such conversion is treated as a commodity and the home currency as the purchasing
power.

Exchange Rates

In finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX
rate) between two currencies specify how much one currency is worth in terms of the other. It is
the value of a foreign nation’s currency in terms of the home nation’s currency.

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Quotations

An exchange system quotation is given by stating the number of units of "quote currency" (price
currency, payment currency) that can be exchanged for one unit of "base currency" (unit
currency, transaction currency).

There is a market convention that determines which is the base currency and which is the term
currency. In most parts of the world, the order is: EUR – GBP – AUD – NZD – USD – others.
Thus if we are doing a conversion from USD into INR, USD is the base currency, INR is the
term currency and the exchange rate tells us how many Indian rupees we would pay or receive
for 1 USD.

The exchange rate can be quoted in following two ways:

i) Direct Quotations
In direct quotations, the price of counter currency is expressed as a certain number of
units of that local currency per unit of USD (or the base currency). In other words
here USD is a Base currency & INR is a Term currency

E.g. USD 1 = Rs 46.4825

Ii Indirect Quotations
In indirect quotations, the rates are quoted as a certain number of units of USD (or the
base currency) per unit of local currency. It is a reverse of direct quotation.
E.g. Rs 100 = USD 2.1525

Two Way Quotation/Bid & Ask Rates

In foreign exchange market, it is a practice to always quote two way rates i.e. the rate for buying
(bid) as well as for selling (ask). Bid is to buy and Ask is to sell.
The quotations are given in the ascending order. The first rate / lower rate are the bid rate. The
second / higher rate is the ask rate. This mean when we will buy, we will buy at bid rate and
when we sell we sell at ask rate.
For example, when a bank quotes
USD 1 = (INR) 46.4825 - 46.4875,
it means that the bank is ready to deal in USD and would buy USD at Rs 46.4825 and sell USD
at Rs 46.4875.
The difference between bid (buying) and ask (selling) rates is known as spread.
It is conventional that rate are quoted by giving the first rate in full and only last two digits of the
other. For example the rates mentioned above earlier are quoted as:
1USD= (INR) 46.4825/75

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To save time, participants in foreign exchange market, often quote the rates by giving only last two digits,
as it is presumed that the other figures are known. The above mentioned rates may thus be quoted as
25/75.
Incidentally, the figure 48 (in USD = 1 INR 46.4825/75) is known as “Big figure”.

Cross Rate
In case, the price of one currency is not quoted against the other currency, the parity between
them is decided by using an intermediary currency. The rate thus obtained is called a Cross Rate
and the principle applied to obtain the cross rate is called the Chain Rule. In India, US Dollar
being the currency of intervention, only US Dollar / Rupee exchange rate is available in the
Indian foreign Exchange market and exchange rates of Rupee with all other foreign currencies
are derived from this rate.
1) If US Dollar is quoted in India at US $ 1 = Rs 46.6675 / 6725 and SGD is quoted as
US $ 1 = SGD 1.7925/75, then the rate at which the Bank can buy SGD against
Rupee can be calculated as follows:
Buy US $ at their offer rate US $ 1 = Rs 46.6725
Buy SGD against US $ i.e. Sell US $ at their bid rate US $ 1 = SGD 1.7925
US $ 1 = SGD 1.7925
1
SGD 1 = US $ --------
1.7925
US $ 1 = Rs 46.6725
1
Therefore, SGD 1 = Rs --------- x 46.6725
1.7925
SGD 1 = Rs 26.0375
2) Similarly, the rate at which the Bank can sell SGD and receive Rupee can be
calculated as follows:
Buy US $ at their offer rate US $ 1 = SGD 1.7975
Sell US $ at their bid rate US $ 1 = Rs 46.6675
US $ 1 = SGD 1.7975
1
SGD 1 = US $ --------
1.7975
US $ 1 = Rs 46.6675
46.6675
Therefore, SGD 1 = Rs -----------
1.7975

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SGD 1 = 25.9625

Modes of Remittance
Banks use the following modes of remittance for undertaking transactions for customers
(merchants) to receive or send foreign exchange.

(i) Telegraphic Transfer (TT)

Telegraphic Transfer is one of the most popular and fastest modes of transferring funds from one
centre to another. Messages for transfer are sent by way of Telex or SWIFT (Society for
Worldwide Inter-bank Financial Tele-communication). Use of this mode is restricted to the
banks having agency arrangement.

(ii) Mail Transfer (MT)

Instructions in case of Mail Transfer are sent by way of an order in writing and delivered /
despatched by mail. The instrument is not a negotiable pay order. It is also based on the
arrangement between two banks. It is not as quick as TT, but is a cheaper mode than TT.

(iii) Demand Draft (DD)

It is an order in writing to the correspondent bank / branch abroad as per the agreed arrangement,
to pay the beneficiary the sum indicated thereon. The DD is handed over to the remitting party
who mails it to the beneficiary for receiving payment by presentation to the drawee bank branch.

NRI Services

Non Resident Indian (NRI)

A Non-Resident Indian is termed as a "person resident outside India". Clause 2(W) of FEMA
1999 indicates that "A person resident outside India" means a person who is not resident in India.
Clause 2(V) of FEMA 1999 defines a "Resident" as follows:

A person residing in India for more than 182 days during the preceding FY but does not include:

 A person who has gone out of India or who stays outside India, in either case
 for or on taking up employment outside India, or
 for carrying on outside India a business or vocation outside India, or
 For any other purpose, in such circumstances as would indicate his intention to
stay outside India for an uncertain period.

 A person who has come to or stays in India in either case, otherwise than

 for or taking up employment in India, or

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 for carrying on in India a business or vocation in India, or

 for any other purpose, in such circumstances as would indicate his intention to stay in
India for an uncertain period
 Any person or body corporate registered or incorporated in India,
 An office, branch or agency in India owned or controlled by a person resident
outside India,
 An office, branch or agency outside India owned or controlled by a person
resident in India.

Portfolio Investment Scheme

 NRIs are permitted to invest in shares / convertible debentures of Indian

companies, by Reserve Bank of India, under Portfolio Investment Scheme (PIS),
in secondary market through a registered broker on a recognized Stock Exchange.
 Reserve Bank of India, vide A.P. (DIR Series) Circular No. 13 dated November
29, 2001 has prohibited OCBs to invest under PIS in India. Further, the OCBs that
have already made investments under PIS have been allowed to continue to hold
such shares / convertible debentures till such time these are sold on the stock
exchange.

Transactions covered under PIS:

 Only secondary market purchase and sales of shares / convertible debentures of Indian
companies by NRI's are within the ambit of the PIS scheme.

Transactions excluded from the ambit of PIS:

 Securities purchased as a resident individual are not covered under this scheme.
 Derivative segment transactions or Mutual fund unit purchases are not within the ambit
of the PIS scheme.

Who can avail PIS?

 Foreign Institutional Investors (FIIs),

 Non-Resident Indians (NRIs), and
 Person of Indian Origin (PIOs) are allowed to invest in the secondary capital markets in
India through the portfolio investment scheme (PIS).

Features Of PIS A/c

 Dedicated Relationship Manager

 Issuance of PIS permission
 Management of transfer of funds for buy / sale transactions
 Computation of Capital gain if any & effect payment of applicable taxes
 Reporting of NRI Investments to RBI

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 Transaction alerts / updates via e-mail / Mobile alert facility

Tariff Structure
 Account opening charges :NIL
 Purchase Transaction : Rs 100 per scrip
 Sale Transaction : Rs 100 per scrip
 Annual Maintenance Fees : Rs 1000

Methodology And Procedure

The methodology used for this project is mainly primary and secondary data. Primary data
include observation and employees knowledge. Secondary data were axis bank guidelines and
reports provided by bank itself.

Clearing
CLEARING ZONE
Procedure Of Clearing

CLEARING HOUSE

A-Service B-Service
Branch Branch

A-1 B-1
Branch Branch

A BANK B BANK

Actions at A-1 Branch: A-1 branch forward all the cheques received from their clients to its
Service Branch and parks the total amount of the cheques lodged in clearing in a suspense
account.

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Action at Service Branch: All the cheques received from all the branches of A bank are
amalgamated bank-wise. The amount of the cheque is encoded on the MICR band with an
encoder machine and the collecting bank’s clearing endorsement is affixed on the reverse side of
the cheque. Then the cheques are forwarded to Clearing House.

Action at Clearing House: At the Clearing House, the numerous cheques received from the
member’s banks and read and sorted by a machine known as ‘reader sorter’. Then cheques are
distributed to all the respective banks after sorting. The net amount of cheques received/delivered
is adjusted in the current accounts of the respective banks maintained with the clearing house.

After this exercise, the service branch representatives return to the

respective banks with cheques drawn on them. The cheques returned paid by the B-1 Branch.
After receiving the confirmation A-1 branch convert the balance into regular balance which can
be drawn by the account holder. In case of dishonor of cheque, the balance is reduced and unpaid
cheque is returned to the account holder.

Procedure At Axis Branch

 At first entry of cheques is done.

 Next step is to validate the customer account for purpose regarding whether there is
sufficient fund or not.
 After validation some cheques are sorted
 Left out cheques are debited
 Bulk posting of sorted cheques is done and finally the sorted cheque is returned back to
SBI.

Foreign Exchange

Various BUYING and SELLING rates:

As all purchase/sale transactions are not alike, there are different buying and selling rates. The
principle involved is that an instrument/ transaction involving little expense (work / effort) and
risk will be more valuable i.e. it will command a better price for the seller than an instrument
costing more to collect and involving greater risk. Different rates are:
 TT selling rate
 TT buying rate
 Bill selling rate
 Bill buying rate

Apart from the above rates, banks usually quote the following rates:
 Travellers cheques selling rate
 Foreign currency note selling rate

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 Clean cheques buying rate

 Travellers cheques buying rate
 Foreign currency note buying rate

Limits Of Lending Foreign Currencies:

Basic travel quota: 2000 USD in a financial year
Business purposes: 25000 USD
Education: 100000 USD
Gift: up to 200000 USD

Procedure Of Various Forex Transactions

1. Import (Advance Remittance): -
 Application form of the bank and A1 form is to be filled along with performa invoice
should be given
 IEC (Import Export Code) should be given to the bank for the first transaction and
further when the code is identified then it is taken as default IEC code of the
respective customer
 Then payment is to be done by the Bank on the basis of Performa invoice
Note: If below 500000 INR then Bill Sell Rate is taken from the card rate keeping a
margin and if above 500000 INR then Treasury decides the rate.

2. Import (Direct Remittance): -

 Application form of the bank and A1 form is to be filled by the customer
 IEC (Import Export Code) should be given to the bank for the first transaction and
further when the code is identified then it is taken as default IEC code of the respective
customer
 Customer has to give the Bill of Entry, Packing List, Commercial invoice and Bill of
Lading to the bank
 Then payment is to be done by the Bank on the basis of above details

3. Export (Export Collection): -

 Exporter gives the Bill to the Bank and then lodgement is done
 Bank sends the bill to the beneficiary bank
 Now the Beneficiary Bank will collect all the details from the customer and sends back
the credit to the Bank
 And when the SWIFT comes then customer’s a/c is credited i.e. it is realized

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4. Export (Inward Remittance)

 SWIFT related to the transaction comes to the Bank

 Then amount, beneficiary bank and other details given in a SWIFT is matched with the
details given by the Head Office about the debit / credit statement in the Nostro Account
 If there is an amount less than 500000 INR then TT Buy rate and if above than treasury
rate is applied
 Then the rate is verified by the TFC and the transaction is done which means customer
a/c is credited

5. Selling Of Currencies
 Application form of the bank along with A2 form should be filled in by the customer and
he should be an account holder in the bank
 The customer has to submit a copy of his passport and visa along with confirm air ticket
and if the customer is NRE then only passport
 According to customer need he is given the currencies which is according to CCY Sell
rate keeping a margin and then the respective amount is debited from customer’s a/c

6. Issuance Of Letter Of Credit

 Application is given by the customer with all the terms and conditions along with the
insurance contract in case of FOB (Free on Board)
 On the basis of these documents LC (letter of credit) is opened and supplier is given
intimation about this.
 As per the contract, the beneficiary bank presents the document to importer’s bank
along with the bill of lading, packing list, declaration certificate and all other necessary
documents
 Then importer’s bank gives an intimation to its importer after receiving the documents
and then lodgment is done
 The importer arranges for the fund and payment has to be done within the due date.

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NRI Services

Steps Involved In Sending Money

 Step 1: Customer registers on Axis Remit site giving basic KYC (Know your
customer) information. It must be noted that the information provided by
customer is cross-checked and the customer id will be disabled later if the KYC
check turns negative.

 Step 2: Remitter Customer registers one or more beneficiaries for receiving

remittances. This can be the remitter himself or his friends/relatives. The only
condition is that the beneficiary should have a proper Bank account with a Bank
in India.

 Step 3: Remitter initiates a remittance transaction in Axis Remit by mentioning

the beneficiary & amount. Thereafter he/she uses the electronic clearance service
in his country to park money in our designated Nostro Account, the details of
which are conveyed to him at Axis Remit site. Such electronic transfer of funds
can either be a push transaction (where customer pushes i.e. originates the transfer
of funds, as in Power Transfer module of I-connect) or a pull transaction (where
the Bank pulls money from the customer account – as in ECS debits).

 Step 4: Remitter revisits Axis Remit site after completing the transfer (only in the
case of CIP (Push) transactions) and keys in the net-transfer reference number in
the appropriate module.

 Step 5: At the back-end, the service provider (TOML) matches the customer
furnished information with Credits in Axis bank Nostro Account and releases
payments to beneficiaries. The credits to beneficiaries are passed on by way of
account credit (for Axis Bank customers) and NEFT / Demand Draft (for non-
Axis Bank beneficiaries).

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PIS Process Flow

Beginning Of A Relationship

Customer fills up application Bank opens SBNRE/ SBNRO/ &

form along with applicable NREPI/NRPEO (Demat optional)
documentation.

Bank verify original copy of

LOA( Letter of authority) to operate Bank will issue PIS permit letter to
the account. the customer

Execution Of A Transaction(Purchase)
Bank debits NREPI/NROPI a/c and
Receive contract note from
credit broker a/c or issue PO favoring
broker for purchase (t + o)
broker.

In case of Ban/Caution bank rejects

the contract note.

Execution Of Transaction (sale)

Bank receives contract note Bank receives cheques from broker to

from broker for sale (t+ o) be credited in customers
NREPI/NROPI a/c.

Bank computes Capital Gain Tax FIFO basis (for short term) and
sends TDS certificate to customer annually.
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Learning From The Study

Clearing
1. Cash Management Services (CMS): Clearing is an integral part of Cash Management
Services. In today’s competitive marketplace, effectively managing cash flow can make
the difference between success and failure. Axis bank cash flow solutions gives
maximum control over this vital asset.
2. Local cheques and Outstation cheques: if the collecting and the paying banks are
within a same clearing zone, such a cheque is known as ‘Local Cheque’. If the collecting
bank and the paying bank are situated in two different clearing zone, then the cheque is
treated as an outstation cheque.
3. Dividend Warrant
An order of payment (such as a cheque payable to a shareholder) in which a dividend is
paid is known as dividend warrant. Here a bank uses cheques for the purpose of giving
dividend.
4. Initial Public Offering(IPO)
IPO is a collection part of Cash Management Services (CMS).
It referred to simply as an "offering" or "flotation," is when a company (called the issuer)
issues common stock or shares to the public for the first time. They are often issued by
smaller, younger companies seeking capital to expand, but can also be done by large
privately-owned Companies looking to become publicly traded. Here banks play an
important role as they collect funds on behalf of the companies.
5. Disbursement
It is a payment part of CMS arrangement. In this, bank makes payment on behalf of its
customer when customer has to make payment to his party. Bank will collect fund from
the customer and put it in the ‘Disbursement’ account and sent it back to the particular
city bank and then to the party subsequently.

Foreign Exchange
1. Vostro Account - Account held by a foreign bank in a domestic bank is called
vostroaccount. For example UBS of Switzerland opening an account in AXIS BANK in
India, this is Vostro account for AXIS BANK in India.
2. Nostro Account - Account held by a particular domestic bank in a foreign bank is called
Nostro account. Here in the above example given in Vostro account the same account is a
nostro account for UBS Switzerland, or if AXIS BANK India opens an account in UBS
Switzerland then that account is a Nostro account for AXIS BANK India. Nostro accounts
are usually in the currency of the foreign country. This allows for easy cash management
because currency doesn't need to be converted.

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3. Loro Account - An account held by a domestic bank in itself on behalf of a foreign bank.
The latter in turn would view this account as a nostro account.(Generally not in practice)
4. SWIFT: A SWIFT consists of a one-page document containing the name and code of the
originating bank, the date and time, the address and code of the receiving bank, the name
and internal code of the officer initiating the transmission, the names and numbers of the
accounts involved in the transfer, a description of the asset being transferred, the MT
category of the transmission, and acceptable, standardized phrases as described above.
5. Direct Import Bill: In direct import bill, supplier supplies the goods and importer receives
the goods and also all required document subsequently. After receiving the goods and
documents payment is made by the importer.It is a safest method transaction as there is no
risk involved in it.

NRI Services

1. Benefits provided by Axis Bank to NRI’s: Axis bank provides following services to their
customers:

 Balance requirement- Basic(5000/-), Prime(25000/-), Priority(1,00,000/-)

 Free VISA international debit card, (Prime & Priority)

 Free iConnect- Internet Banking Facility

 Mobile Banking- On domestic & international mobile numbers

 Mandate/ power of Attorney Facility available

 Portfolio Investment Scheme and Demat Accounts

 Free financial advisory services for investment in mutual funds and insurance

 Free personal accident cover of Rs 200,000/- on debit card

 Free phone banking facility

 Tax advisory services facility

 Auto chequebook replenishment

 Expert personalized service of dedicated relationship manager

 Free email alert on customer account transaction

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 PAN application assistance

 Any branch banking facility

2. NRI Deposits: Axis Bank offers following four deposits to NRI’s:

 NRE A/C (non resident rupee a/c)

 NRO A/C (non resident ordinary a/c)

 FCNR A/C

Limitation Of The Study

Clearing:

1. Frauds: in today’s world lot of frauding activity takes place. A fraudster may rewrite the
amount of money on cheque. For eg: he may chage amount of 40000 to 48000.

2. Cost of collection of cheque : Cost of collection of cheques charged by the Clearing

House i.e. SBI in Ranchi.

3. Reconciliation Problem& Lost in Transit: If the balances of the cheques received and
entered does not tally. When cheques are brought in from the Clearing house there are
chances that it can be lost in transit or in case of outstation cheques.

4. Link Problem: If there is no slink, no work can be done. No entries can be done, and if
entries not done then all the Inward cheques are to be returned to the clearing house
mentioning link as a problem.

FOREX: Forex is a very huge market but for many retail traders transaction with brokers, the
odds might turn against them. Some of them are as follows :

1. Leverage - With tremendous leverage available to forex traders the risk is too much to
bear for the account size can be affected, thus, this can direct margin calls. In this
situation a good money management ordinance must be conformed with.

2. Brokers - Direct retail traders must hire a broker instead of doing transaction straight in
the interbank market themselves. Hence, the broker will be the median in every

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transaction and is, actually, making the market. Brokers have the ability to diversify
spreads and/or decline a trade during a changeable trading condition. Dealing with
brokers can be avoided if you know how to utilize forex futures.

3. Spreads - As the direct retail trader in the business and as a newbie you must use a
broker to trade. Brokers can't bargain at the interbank rates. A broker will broadly quote a
fixed spread of 3-20 pips trusting on the currency pair. The fundamental interbank rate
might be as low as 1 pip.

NRI Services:
 Refunds: some online services providers will not give a refund in case of errors,
claiming inability to reconvert from the rupee or other converted currency.
 Exchange rate risk: exchange rates provided by service providers may vary. Exchange
Rates provided by service providers can vary. A Rs.5. difference in exchange rate would
result in a Rs 500 difference for a Transfer of every US $ 1,000! (Example Rs 44, 300
instead of Rs 44, 800).

Conclusion
In a nutshell, banking operation is mainly a legal transaction which is carried out by bank when
executing its specific functions. Banking operation can be categorized into different criteria like
in terms of return, fee and commission business, payment transaction, money market transaction,
security transaction, etc.

When we look upon the popularity Customer Management Services is one of the important parts
of banking operation. Clearing is one of its part in which bankers exchange the cheques received
from their client and settle the accounts. Clearing helps in enhancing the customer service as it
speeds up the collection of cheques, also minimizes the cost of collecting cheques and reduces
the scope of clearing related frauds.

Banking operation also includes operation carried on foreign exchange. It is a method of

conversion of one currency into another. Foreign exchange market is the largest and most liquid
market in the world which allows investors to make investment all around the globe. This market
allows 24 hours of trading. This is the only market where trading losses can be managed by
foreign exchange hedging.

The market for NRI services is growing rapidly all over the globe as people migrates all over the
world for the purpose of better job and standard living. Bank provides variety of services and
benefits to the NRI

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Bibliography
 AXIS bank guidelines
 RBI guidelines
 AXIS bank knowledge point
 Axis bank .com
 Wikipedia.org
 Ambest.com
 Ubs.com
 Answers.com

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