BANKS AND LOAN PRODUCTS
Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, ...Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, ...Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, ...Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, .
Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, ...
Financial Planning: Updates on Financial Planning, Tips to manage money. Know about importance of Financial Planning, rules of financial planning, .....
2. 2
I M POSSIBLE
Bibek Prajapati
(FCMA, CS , MBA, M COM, ).
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3. Banking – Defined
Banking Functions
Deposit Schemes
KYC Norms
Payment Mechanism
Lending activity
Agency Services
General Utility
Services
Banker Customer
Relationship
Nominations
E Banking
Mode of Securities
5 Cs of Credit
Secured Vs
Unsecured Loan
Retail Lending
Products
Credit Cards
Frauds & Scams
Credit Information
Bureau
Banking Ombudsman
4. Banking is defined in Section 5 (b) of the
Banking Regulation Act 1949 as
the acceptance of deposits of money from
the public for the purpose of lending or
investment. Such deposits may be repayable
on demand or otherwise and withdrawable by
cheque, draft, order or otherwise.
5. Accepting of Deposits from Public
Lending to the Public
General Utility Services
Agency Services
8. Demand deposits are those which can be
withdrawn or transferred by the customers at
any time without prior notice to the bank.
These deposits are maintained to meet
liquidity and transaction needs.
Time Deposits are also called Fixed Deposits
or Term Deposits. These are repayable after
the expiry of a specified period
9.
10.
11. In order to prevent identity theft, identity
fraud, money laundering, terrorist financing
etc, the RBI had directed all banks and
financial institutions to put in place a policy
framework to know their customers before
opening any account.
KYC involves verifying customers' identity and
address by asking them to submit documents
that are accepted as relevant proof.
12. Photograph
Identity proof: Any one of the documents viz.
PAN Card/Voters Identity/Passport/Driving
Licence
Address proof: Anyone of the documents viz.
Ration card/Electricity Bill/Telephone
Bill/Letter from the employer or any
recognized public authority certifying the
address
15. Bouncing of Cheque comes under Section 138 of Negotiable
Instruments Act, which can lead to criminal. In case of cheque
bounce, the opposite party can be sued. The rules in this
regard are:
a) If a cheque is bounced, a notice has to be sent to the
opposite party within 30 days from the date of memo
accompanying the bounced cheque received from the Bank.
b) The opposite party has 15 days time from the receipt of
the notice to settle the matter and no cause of action arises
till the expiry of these 15 days or if paid within this specified
period.
c) After the completion of said 15 days, if the opposite party
does not settle the matter or ignores the notice, then the
holder of the cheque may file a criminal complaint before the
appropriate court within 30 days of the expiry of said 15
days.
d) If it is beyond 30 days period, the delay can be ignored by
16. Consumer finance
Working capital
finance
Term finance
Corporate finance
Bill finance
Export finance
Trade Finance
Rural finance
Agriculture finance
SME finance
Microfinance
17. Agency services are those services which are rendered by
commercial banks as agents of their customers. These are:
a) Collection and payment of cheques and bills on behalf of the
customers;
b) Collection of dividends, interest and rent, etc. on behalf of
customers, if so instructed by them;
c) Purchase and sale of shares and securities on behalf of customers;
d) Payment of rent, interest, insurance premium, subscriptions etc.
on behalf of customers, if so instructed;
e) Acting as a trustee or executor;
f) Acting as agents or correspondents on behalf of customers for
other banks and financial institutions at home and abroad.
18. General utility services are those services which are rendered
by commercial banks not only to the customers but also to
the general public. These are available to the public on
payment of a fee or charge.
They include :
a) Issuing letters of credit and travellers’ cheques;
b) Underwriting of shares, debentures, etc.;
c) Safe-keeping of valuables in safe deposit locker;
d) Underwriting loans floated by government and public
bodies.
e) Supplying trade information and statistical data useful to
customers;
f) Acting as a referee regarding the financial status of
customers;
g) Undertaking foreign exchange business
20. An account can have only one individual as nominee. It can be
made in favour of a minor also.
Nomination can be made for all types of accounts - Savings,
Current, Demat, Recurring and Fixed deposit.
A nominee can be added by simply filling up a form and
submitting it to the bank branch.
Addition/ modification/deletion of nomination can be made
as many times as desired.
Always ask for an acknowledgement after the submission of
the nomination form.
In the event of demise of the account holder the bank shall
hand over the proceeds from his account to the nominee with
minimal documentation.
21. The Banking Ombudsman is a senior official,
appointed by the Reserve Bank of India to address
grievances and complaints from customers,
regarding deficiencies in banking services. It covers
all kinds of banks – PSU Banks, Private banks, Rural
banks and co-operative banks.
It covers deficiencies in services of banking
transactions viz. internet banking, ATM cards, debit
cards, credit cards, deduction of service charges by
banks without prior intimation, unfair practices of
banks and non-compliance by direct sales agents
(DSA) of banks for services promised while opening
an account, credit services etc.
22. Nature of complaints referred to Banking
Ombudsman
Levying of charges without any notice or Information
Cheque lost in transit by the bank
Non-updation of CIBIL records
Loss of cheque from Cheque drop box
Unreasonable credit card charges or fraudulent transactions on lost
credit card
Fraudulent transfer of funds by using net banking
Closure of any account without providing any information or reason
When bank demands unreasonable proofs for opening of account
Change in terms and conditions without notice or valid reason
Delay in providing any service
Mis-selling of Insurance products
Forcing customers to take insurance policies for processing Loans
Harassment to customer or misbehaviour for any reason
23. Procedure of Complaint ?
There are two ways of filing your complain .
Online Complaint : You can complain to Banking ombudsman
online by filling up the form. Once you fill up the form , you
can also upload your proofs like bank rejection letter, banks
reply or anything else.
Offline Complaint : You can also complain in offline mode to
Banking Ombudsman. Just download the form from Banking
Ombudsman website and fill up the complaint. You should
provide your contact information, name and address of the
bank against which you are lodging the complaint,
documentary evidence and the compensation you need. Once
you have filled up the form, you can send it to the Banking
Ombudsman address which comes under your jurisdiction
25. Internet Banking can be used for the following.
View account balances
Transfer funds between accounts
Create fixed deposits – online
Request a Demand Draft
Order a cheque book
Pay utility bills – insurance premium, credit
card etc.
27. Lien
Set Off
Pledge
Hypothecation
Mortgage
Assignment
28. Mode of
Security
Description
Lien Legal claim against an asset which is used to secure a
loan. For e.g. loans raised from banks against the lien of
FD receipt.
Set Off Right of a creditor to adjust the amount in another
account towards the liability of the same person. For e.g.
banker can exercise the right of adjusting the credit
balance in SB account of a person towards his liability in
loan account.
Pledge It is the bailment or delivery of an asset to a creditor as
security for a debt. For example, in gold loans gold is
delivered to the financing agency as security for availing
gold loan.
Hypothecatio
n
Is the creation of an agreement in respect of taking
security of movable goods, without delivery of
possession of the moveable property. The creditor has
29. Character – borrowers reputation
Capacity – ability to repay a loan
Capital – ability to provide borrower’s
contribution
Collateral – additional security to secure the
loan
Conditions – terms and conditions of the loan
30. If a loan is secured, it means it is secured
against something you own and failing to
repay the loan could result in lender taking
possession of that asset and selling it to
cover their losses.
Unsecured loan does not require you to
secure anything against the loan – the lender
relies on your contractual obligation to pay it
back.
31. Role of HFIs and banks
Construction of Houses or Outright purchase
of housing property
Security being Mortgage of the house
property proposed to be purchased
Loan – long term, repayable after ten, fifteen
or twenty years
Repayable by EMI
EMI based on repayment capacity of the
borrower
32. Legal clearance of the documents of the
properties
Necessary approval of the local authorites
Disbursement of loan in stages if
construction is in stages
Fixed interest or floating interest rate
Spouse’s salary can be reckoned to arrive at
the salary
Tax relief on instalmens as well as interest on
HL
33.
34.
35. Security being hypothecation of the vehicle.
Loan upto 80% of the on road price of the
vehicle
Term – upto 5 years
Interest rate, generally, low
Hypothecation charges to be noted in the RC
book
Cancellation of Hypothecation charge entry in
the RC book, once the loan is closed.
36.
37. The OD Limit, upto 50% of the market value
of the property
Security being mortgage of the house
property
Interest on loan amount to be remitted then
and there
Client can operate the loan account like a
current account, withdrawals subject to the
maximum OD limit.
Loan documents to be signed by the party
38. Security being pledge of gold/gold
ornaments
Interest rate is generally low
Loan eligibility upto certain percentage of the
market value of the gold ornaments
Duration of the loan, generally, one year
Failure to repay the loan and interest would
result in auctioning the gold ornaments by
the bank/financial institution
39.
40. To meet the educational expenses
Upto Rs 4 lakhs no collateral security
Necessary proof of securing education at
specified educational institutions to be
provided
Loans disbursed against reimbursement of
fees remitted, other expenses incurred etc.
Guardian to join as co-obligant
Repayment to start after six months of
getting the job or within such period as
specified in the loan sanction note.
41.
42. Based solely on the credit rating and ability to
repay the loan
Loan for short duration
Interest rate generally high
Repayment through EMI
Post Dated Cheques (PDCs) to be remitted
43.
44. Credit card vs Debit card
Free use of credit for a specific period
Credit Limit
Monthly bill is to be settled before the due
date
Minimum balance to be remitted, the balance
can be carried forward
Interest rate, generally, high
45. Fraudulent forces operating in the society
Offers lucrative returns to lure the investors
Check the service provider/issuing agency is
legitimate
Whether it satisfies in terms of safety and return
Whether the promise is practical and how income
is generated to service the obligation.
Ponzi schemes are fraudulent in vestment
operation that pays return to investors not from
any actual profit, but from their own money or
money paid by subsequent investors.
46. CIBIL (Credit Information Bureau of India Ltd)
Information on credit history of individuals
shared with banks and financial institutions
Banks and financial institutions submit data to
CIBIL
CIBIL tracking repayment history of individuals
CIBIL gives a credit score
Good credit score enables one to get credit at
cheaper rate
Individuals can access CIBIL to know their credit
score on payment of prescribed fee.
47. 47
I M POSSIBLE
Bibek Prajapati
(FCMA, CS , MBA, M COM, ).
My kind request for you Please like , subscribe ,comment and don’t forget to share
Pray to God for the success in Life
Thank You