MOB -- PGDM IInd Yr DR D TANDON

(A) 7 Ps in Indian Banks

(i) PRODUCT - product' satisfies the needs and wants of customers.
(ii) PRICE - The price' of the product is fixed in the form of interest, service charges and
other fees to cover transaction costs, overheads, risk premium and to generate a
reasonable surplus for the bank
(iii) PROMOTION -promotion' includes all publicity vehicles that aim at customer
information, education and image building.
(iv) PLACE - place' of a branch, he said suitable location and convenience determine the
choice of a bank by a customer. A bulk of the banking business for any branch should
come from its immediate neighbourhood
(v) PEOPLE - a team of motivated and dedicated staff with positive attitudes in favour of
business development and offering high service quality will make the bank the most
preferred one for the customers.
(vi) PROCESS- processes' in providing banking services, systems and procedures are viewed
as vehicles for the delivery of customer satisfaction.Hence, banks keep on refining or
reinventing or re-engineering their systems and procedures to keep managing customers'
ever increasing expectations
(vii) PHYSICAL EVIDENCE - will help evaluate the service before its purchase and to assess
the customers' comfort zone with the service during and after consumption. The
conditions like lighting, temperature, noise and colour create favourable perceptions
among customers.

(B)
Cs of Banking Attributes of a Customer
(i) Character: The bank assesses the trustworthiness of candidates for character. Factors for
character criteria are: business experience and knowledge, personal and/or small business
credit history, references, and education.
(ii)
Capacity: The business and individual's ability to pay back the small business credit
determines capacity. Bankers will review the cash flow of the business and determine
alternative courses of repayment available.
(iii)
(iv) Collateral:To reduce the risk of lending, collateral in various forms of assets can act as
another method of repayment. Collateral would include: equipment, real estate, inventory,
account receivables, and securities.

A personal guarantee (signed document) can be required as an additional reassurance of
repayment. Obtaining small business credit and providing guarantees may seem troubling,
but the bank really does not want to exercise its position on seizing and liquidating assets. In
most cases, the banker will work diligently to find payment solutions.
Conditions: This is a review of the small business credit or loan conditions in terms of use for
expansion or buying equipment. This also applies to the external environment that impact a
company's ability for repayment such as: customer base, competitors, liabilities, and
economics.
(v) Capital: A business owner's investment into their own company sends a message of
confidence in the business and the ability to repay the small business credit or loan. Net-
worth and equity are the two key financials used. Ultimately, a business owner unwilling to
invest their own funds in the company will often find banks are unwilling to take the first risk.
(vi) Creditworthiness
(vii) Competition
(viii) Capacity to Repay
(ix) Curteous
( C)
Accounts NRE NRO FCNR (B)
Purpose of
account
To park overseas savings
remitted to India after
converting to Rupees
To park overseas savings remitted to
India after converting to Rupees and
Indian earnings
To park overseas
savings without
converting into Rupees
Currency Rupees Rupees
USD, EURO, GBP,
CAD, JPY, AUD
Minimum
Balance
Rs. 1,000 Rs. 1,000
USD 1000 or
equivalent
Type of account
Savings, Current, TDR
,STDR
Savings, Current, TDR, STDR TDR, STDR
Investment
Term
Min: 1 Year
Max: 10 Years
Min: 7 Days
Max: 10 Years
Min: 1 Year
Max: 5 Years
Joint Holding Only with NRIs Both with Resident and NRIs Only with NRIs
Repatriability of
Principal
Freely Repatriable Up to USD 1 million (Conditional) Freely Repatriable
Repatriability of
Interest
Freely Repatriable
Freely Repatriable subject to
deduction of tax
Freely Repatriable
Taxability in
India
Interest income tax free in
India
Interest income is taxed as per India
Income Tax Rules. Reduced tax under
Double Tax Avoidance Agreement
Interest income tax free
in India