GOOD AFTERNOON & HEARTY WELCOME

To a presentation on
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Basics of

BANKING

K P RAPHEL , Director,
CBRSETI ,THRISSUR

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STRUCTURE OF PRESENTATION

What is Banking. Evolution of Banking. Major Acts related to Banking Banking Functions Opening of bank accounts . Lending Present Day Indian Banking Scenario

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WHAT IS BANKING ?

ACCEPTING DEPOSITS FOR LENDING

LENDING IS KARMA OF BANKERS

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INFORMAL BANING

Barter system HAWALA has its origin in ISLAMIC LAWS The financing of long distance trade Money is transferred via a network of Hawala Brokers ,without exchanging any promissory instruments. Attractive because it provides fast and convenient transfer of funds

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ORIGIN OF FORMAL BANKING

BANK OF VENICE - 1157 BANK OF ENGLAND 1694 GENERAL BANK OF INDIA -1786 NATIONALISATION OF BANKS -1969

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PRE & POST NATIONALISATION ERA

Pre nationalisation era

Post nationalisation era Modern Era

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Central Bank Reserve Bank Of India 01.04.1935 John Hilton Young Commission 1926 RBI Act 1934 Nationalisation on 01.01.0949 RBI the REGULATOR

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RESERVE BANK OF INDIA - RBI ACT 1934 , established on 01.04.1935 ,nationalised on 01.01.1949 1 Central Office and 4 Local Boards 1 Governor,4 Dy Governers&15 directors

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FUNCTIONS

Issuance of Currency (u/s 22) Bankers to Government (u/s 20) Bankers Bank Controller of Banks Controller of Credit Statutory Reserve Liquidity adjustment facility

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Banking Regulation Act 1949

Came in to effect on 16.03.1949 Applicable all over India Not applicable to PACS,Co operative land mortgage banks and Non Agrl Primary credit societies

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SCHEDULED BANK

As per sec 2(e) of RBI Act ,Scheduled Bank is a Bank, whose name is included in the Second Schedule of RBI Act A State Co op bank or a Company, defined in Companies Act 1956 Paid up Capital & Reserve not less than 5 lacs

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Negotiable Instruments Act 1889

Effective from 01.03.1882 Applicable all over India 147 sections and 17 chapters

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NEGOTIABLE INSTRUMENTS

As per s 13,a Negotiable Instrument means and include Promissory Note, Bill of Exchange and Cheque payable to Bearer or Order. As per S 21 of Indian currency Act Currency Note is not a Negotiable Instrument

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CHEQUES

Drawer - Account Holder Drawee _ Banker Payee Person named in Cheque

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Paper Cheque Electronic Cheque-E C Cheque is a Cheque,which contains the exact mirror image of a paper cheque and is generated , written and signed in a sewcured in a secured system ensuring the minimum safty standards with the use of digital signature

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TRUNCATED CHEQUE

The cheque is scanned and electronic image , instead of the physical chequeis transmitted in clearing house

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Bearer / Order cheque Date of Cheque Negotiation. Endorsements Crossing Dishonour of Cheque

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BANK ACCOUNTS

KYC NORMS Know Your Customer guidelines were issued by RBI in Aug 2002 u/s 35(A) of BR act relates to identification of depositors with the objective to prevent banks from being used by Criminal elements for money laundering activities

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BANK ACCOUNTS
Documents for opening Bank A/c Who can open an account ? Types of accounts Current A/C Savings Bank A/C Term deposits Recurring account
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OTHER SERVICES

Remittances & Exchange Funds Transfer Safe Deposit Locker Safe Custody Article

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LOANS & ADVANCES

Term Loans Working Capital Finance

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PRIORITY SECTOR ADVANCE

Over all target

--- 40% of ANBC

Adjusted Net Bank Credit means Net bank credit plus Investments made by Banks in NON- SLR Bonds held in HTM category

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COMPONENTS OF PS
1.AGRICULTURE 2.SMALL ENTERPRISES 3.OTHER PRIORITY

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PRESENT DAY BANKING SCENARIO IN INDIA

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NEW INITIATIVES

Financial Sector Reforms Financial Inclusion Simplify K Y C NORMS Opening of NO FRILL ACCOUNTS General Purpose Credit Cards SLBC project 100% Financial Inclusion Business Correspondents/Facilitator

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Financial literacy- Credit counseling centers Bio metric ATMS Usage of Other banks ATMs Cash delivery at POS M&A

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FINANCIAL INCLUSION

What is financial exclusion ? 139 districts suffer Financial Exclusion Adult population per branch is 20,000 URBAN areas-59% banked 41%unbanked RURAL areas 39% banked 61% unbanked

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ANNUAL MONETARY POLICY 2010 -11

Announced on 20.04.2010 Key rates hiked by 25 BPs CRR 5.75 to 6.0%(wef24.04.10) REPO 5.0 to 5.25% REVERSE REPO 3.5% to 3.75% GDP growth rate forecast 8% Credit Growth target 20%

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PROJECT REPORT

1. 2.

PROMOTER PRODUCT

3.
4. 5.

PROCESS
FINANCIALS MARKETING

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PROMOTER

BACKGROUND OF PROMOTERS EDUCATIONAL QUALIFICATION EXPERIENCE PAST RECORD EXISTING STATUS OF BUSINESS NET WORTH IT/WT ASSESSMENT ORDERS

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PRODUCT

MARKET SURVEY PROFILE OF INDUSTRY DETAILS OF INPUTS AVAILABILITY

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PROCESS

LICENCE & PERMITS LAND & BUILDING MECHINERY PLANT LAYOUT POWER ,WATER , FUEL & OTHER UTILITIES AVAILABILITY OF MANPOWER

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FINANCIALS

COST OF LAND&LAND DEVELOPMENT COST OF BUILDING & STRUCTURES COST OF PLANT & MACHINERY SOURCE OF FUNDS WORKING CAPITAL PRELIMINARY EXPENSES OPERATING STATEMENT FUND FLOW STATEMENT BREAKEVEN ANALYSIS

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MARKETING

RESEARCH PLANNING BRANDING PRICING DISTRIBUTION SELLING PACKAGING

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MARKETING

MERCHANDISING WAREHOUSING AFTER SALES SERVICE SALES PROMOTION ADVERTISING CREDIT POLICY

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ANY CLARIFICATION ?

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Thank you very much for your active listening

HAVE A NICE EVENING

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