every business has own scope to generate income. bank has many resources to generate own income......

1. A
SEMINAR REPORT
On
“REVENUE RESOURCES OF BANK”
Femeena R. Dobariya
Enrollment No. : 147600585008
A Report Submitted In Partial Fulfillment for the
Award of the Degree Of
INTEGRATED MBA (IX)
Submitted To:
Smt. Shantaben Haribhai Gajera MBA Mahila
College, Amreli.
Affiliated To:
Gujarat Technological University, Ahmedabad
1

2. STUDENT DECLARATION
I hereby declare that this seminar report titled “REVENUE RESOURCES
OF BANK” submitted to the Smt. S.H. Gajera MBA College – Amreli is a
bonafide work undertake by me and it is not submitted to any other
University or Institution for the award of any degree, diploma/certificate
or published any time before.
Name: Femeena R. Dobariya
Signature of student
(Femeena R. Dobariya)
GUIDE CERTIFICATE
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3. This is to certify that the seminar report title “REVENUE RESOURCES
OF BANK” submitted in partial fulfilment for the award of the degree of
integrated MBA in Gujarat Technological University was carried out by
Femeena R. Dobariya under my guidance. This has not been submitted
to any other University or Institute for the award of any
degree/diploma/certificate.
Name of faculty Guide: Mr. Bharat Savaliya
Signature of guide
Name of Principal: Mr. Niraj Raval
Signature of the Director / principal
ACKNOWLEDGEMENT
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4. Many individuals have rendered their helping hand to me in carrying out
this seminar. I take this opportunity to express my gratitude to all of
them.
My sincere thanks to seminar guide Mr. Bharat Savaliya. Who has
spent his precious time with me and in fulfilling the requirement of this
seminar.
I pay heartiest gratitude to my collage principal Mr. Niraj Raval. Who
has provided me the valuable suggestions, support and guidance during
my seminar work to successfully complete it. I am highly obliged to him
for his Valuable support and guidance.
Thanks to my all faculty member for their cooperation and support.
Place: Amreli
Yours Faithfully
(Femeena R. Dobariya)
TABLE OF CONTENT
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5. INTRODUCTION
5
No. Particular Page
no
1 Introduction 1
2 What is revenue? 2
3 What is banking? 3
4 Major players 8
5 Historical background 9
6 Challenges faced by Indian banking sector 11
7 Facts and figure 13
8 Revenue sources of bank 14
9 Conclusion 23
10 Bibliography 24

6. Banks are involved in many business lines, such as personal and commercial
banking, capital markets, wealth management and insurance, generating
revenue from a variety of businesses. The marketplace is full of various types
of products and services. You have to understand that exactly in that way the
bank is like a shop that buys and sells money in various forms like loans,
deposits, certificates of deposit and many other types of financial products.
Banks can differ markedly in their sources of income. Some focus on
business lending, some on household lending and some on fee-earning
activities. Increasingly, however most banks are diversifying into fee-earning
activities. Diversification across various sources of earning is welcomed for, it
is claimed Diversification reduce risk, whether it does not course depends on
how independent of each other the various earnings sources are. During the
1990s, the Indian banking sector witnessed more reforms than most other
Indian economy.
The conventional wisdom in the banking industry is that earnings from fee-
based products are more stable than loan fee-based activities reduce bank
risk via diversification. As compared to the development world, the Indian
banking sector apart from the relaying on traditional sources of revenue like,
loan making is also focusing on the activities that generate fee income service
changes, trading revenue and other types of non-interest income.
New types of activities that generate fee income include securities brokerage,
film financing, and equity participation in business, real estate brokerage
services, real estate development, real estate equity participation, and
insurance brokerage activities. Banks also receive fee income from a number
of off-balance sheet items including loan commitments, note issuance
facilities, letters of credit, foreign exchange services, and Derivative activities
WHAT IS REVENUE?
6

7. Revenue is the income that a business has from its normal business activities,
usually from the sale of goods and services to customers. Revenue is also
referred to as sales or turnover. Some companies receive revenue from
interest, royalties, or other fees. Revenue may refer to business income in
general, or it may refer to the amount, in a monetary unit, earned during a
period of time.
Revenue is income received by an organization in the form of cash or cash
equivalents. Sales revenue or revenues is income received from selling goods
or services over a period of time. Tax revenue is income that a government
receives from taxpayers.
Revenue is a calculation or estimation of periodic income based on a
particular standard accounting practice or the rules established by a
government or government agency. Two common accounting methods, cash
basis accounting and accrual basis accounting, do not use the same process
for measuring revenue. Corporations that offer shares for sale to the public
are usually required by law to report revenue based on generally accepted
accounting principles or International Financial Reporting Standards.
Revenues are generated from the selling of a business’ products and services
before expenses and taxes. Profit, also known as net income, is left after
setting aside funds for credit losses and accounting for expenses and taxes.
The six largest banks’ net income in 2015 was $34.9 billion.
WHAT IS BANKING?
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8. A bank is a financial institution licensed to receive deposits and make loans.
Banks may also provide financial services, such as wealth management,
currency exchange and safe deposit boxes. Bank is a licensed and regulated
financial institution that lends money, accepts deposits and carries out other
financial transactions for its clients.
 Reserve bank of India:
The Reserve Bank of India (RBI) is India's central banking institution, which
controls the monetary policy of the Indian rupee. It commenced its operations
on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934.The
RBI was nationalized on 1 January 1949.
 Function of RBI:
o Managing foreign exchange
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9. o Issue of currency and other Functions
o Detection of fake currency
o Developmental role
o Financial Supervision
o Regulator and supervisor of the financial system
 commercial bank
A commercial bank is an institution that provides services such as accepting
deposits, providing business loans, and offering basic investment products.
Commercial bank can also refer to a bank, or a division of a large bank, which
more specifically deals with deposit and loan services provided to
corporations or large/middle-sized business - as opposed to individual
members of the public/small business
In this respect, "credit creation" is the most significant function of commercial
banks. While sanctioning a loan to a customer, they do not provide cash to
the borrower. Instead, they open a deposit account from which the borrower
can withdraw. In other words, while sanctioning a loan, they automatically
create deposits, known as a "credit creation from commercial banks".
I. Nationalization:
Nationalization is the process of transforming private assets into public assets
by bringing them under the public ownership of a national government or
state.
II. Private:
9

10. A commercial bank is one primarily engaged in deposit and lending activities
to private and corporate clients in wholesale and retail banking. Other
services typically include bank and credit cards, private banking, custody and
guarantees, cash management and settlement as well as trade finance.
 Co-operative bank:
Cooperative banks are owned by their customers and follow the cooperative
principle of one person, one vote. Co-operative banks are often regulated
under both banking and cooperative legislation. They provide services such
as savings and loans to non-members as well as to members, and some
participate in the wholesale markets for bonds, money and even equities.
Many cooperative banks are traded on public stock markets, with the result
that they are partly owned by non-members. Member control is diluted by
these outside stakes, so they may be regarded as semi-cooperative.
The Reserve Bank of India assists the co-operative structure by providing
concessional finance through NABARD in the form of General Lines of Credit
for lending to agricultural & allied activities. Thus, the whole system is
integrated with the Banking structure of the country.
I. short-term credit
To a bank, short-term credit is a generic term for a revolving line of credit
granted to a business or an individual, or a fixed loan with a term of one year
or less. On your financial statement, the section labeled short-term credit (or
notes) refers to the amount of debt you have to pay off within the next 12
months, even if it is part of a long term loan. The deciding factor on whether a
loan is considered short term is when it expires.
o Agriculture credit:
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11. Agricultural Credit is the amount of investment funds made available for
agricultural production from resources outside the farm sector. Agricultural
Finance is considered as separate field of study dealing with lending and
borrowing by organizations and farmers.
o Urban credit:
The term Urban Co-operative Banks (UCBs), though not formally defined,
refers to primary cooperative banks located in urban and semi-urban areas.
These banks, till 1996, were allowed to lend money only for non-agricultural
purposes.
II. long-term credit
Long term loan provides a business with working capital that it can use to
purchase assets, inventory or equipment which can then be used to create
additional income for the business.
Credit given for long periods and used primarily for the expanded reproduction
of fixed capital (under capitalism) and fixed assets (under socialism). Under
capitalism. In the capitalist countries the characteristic form of long-term credit
is the purchase of corporation securities-stocks and bonds.
 Development bank:
Development banks are specialized financial institutions. They provide
medium and long-term finance to the industrial and agricultural sector. They
provide finance to both private and public sector. Development banks are
multipurpose financial institutions. They do term lending, investment in
securities and other activities. They even promote saving and investment
habit in the public.
I. EXIM Bank:
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12. Export–Import Bank of India is the premier export finance institution in India,
established in 1982 under Export-Import Bank of India Act 1981. Since its
inception, Exim Bank of India has been both a catalyst and a key player in the
promotion of cross border trade and investment.
II. Industrial Bank:
An industrial bank is a financial institution with a limited scope of services.
Industrial banks sell certificates that are labeled as investment shares and
also accept customer deposits. They then invest the proceeds in installment
loans for consumers and small businesses.
III. Agriculture Bank:
A type of bank that lends money to farmers for longer periods of time and
charges them less interest than other types of banks: Stakeholders in
agriculture have pressed the government to establish the newly proposed
agricultural bank.
MAJOR PLAYERS
12

13.  State Bank of India
 ICICI Bank
 HDFC Bank
 Punjab National Bank
 Axis Bank
 Bank of Baroda
 Bank of India
 IDBI Bank
 Kotak Mahindra Bank
 Yes Bank
HISTORICAL BACKGROUND
13

14. Bank of Hindustan was set up in 1870; it was the earliest Indian Bank. Later,
three presidency banks under Presidency Bank's act 1876 i.e. Bank of
Calcutta, Bank of Bombay and Bank of Madras were set up, which laid
foundation for modern banking in India. In 1921, all presidency banks were
amalgamated to form the Imperial Bank of India.
Imperial bank carried out limited number of central banking functions prior to
establishment of RBI. It engaged in all types of commercial banking business
except dealing in foreign exchange. Reserve Bank of India Act was passed in
1934 & Reserve Bank of India (RBI) was constituted as an apex body without
major government ownership. Banking Regulations Act was passed in 1949.
This regulation brought RBI under government control. Under the act, RBI got
wide ranging powers for supervision & control of banks. The Act also vested
licensing powers & the authority to conduct inspections in RBI. In 1955, RBI
acquired control of the Imperial Bank of India, which was renamed as State
Bank of India.
In 1959, SBI took over control of eight private banks floated in the erstwhile
princely states, making them as its 100% subsidiaries. It was 1960, when RBI
was empowered to force compulsory merger of weak banks with the strong
ones. It significantly reduced the total number of banks from 566 in 1951 to 85
in 1969.
In July 1969, government nationalized 14 banks having deposits of Rs. 50
crores & above. In 1980, government acquired 6 more banks with deposits of
more than Rs.200 crores. Nationalization of banks was to make them play the
role of catalytic agents for economic growth. The Narasimha Committee
report suggested wide ranging reforms for the banking sector in 1992 to
introduce internationally accepted banking practices.
The amendment of Banking Regulation Act in 1993 saw the entry of new
private sector banks. Banking industry is the back bone for growth of any
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15. economy. The journey of Indian Banking Industry has faced many waves of
economic crisis. Recently, we have seen the economic crisis of US in 2008-09
and now the European crisis. The general scenario of the world economy is
very critical. It is the banking rules and regulation framework of India which
has prevented it from the world economic crisis. In order to understand the
challenges and opportunities of Indian Banking Industry.
CHALLENGES FACED BY INDIAN BANKING SECTOR:
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16.  Competition
With the ever-increasing pace and extent of globalization of the Indian
economy and the systematic opening up of the Indian Banking System to
global competition, banks need to equip themselves to operate in the
increasingly competitive Environment. This will make it imperative for Banks
to enhance their systems and procedures to international standards and also
simultaneously fortify their financial positions.
 Losses in Rural Branches:
Most of the rural branches are running at a loss because of high overheads
and prevalence of the barter system in most parts of rural India.
 Large Over-Dues:
The small branches of commercial banks are now faced with a new problem
—a large amount of overdue advances to farmers. The decision of the former
National Front Government to waive all loans to farmers up to the value of Rs.
10,000 crores has added to the plight of such banks.
 Advance to Priority Sector:
As far as advances to the priority sectors are concerned, the progress has
been slow. This is partly attributable to the fact that the bank officials from top
to bottom could not accept nationalization gracefully, viz., and diversion of a
certain portion of resources to the top priority and hitherto neglected sectors.
This is also attributable to the poor and unsatisfactory loan recovery rates
from the agricultural and small sector.
 Gap between Promise and Performance:
One major weakness of the nationalized banking system in India is its failure
to sustain the desired credit pattern and fill in credit gaps in different sectors.
Even though there has been a reorientation of bank objectives, the bank staff
has remained virtually static and the bank procedures and practices have
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17. continued to remain old and outmoded. The post-nationalization period has
seen a widening gap between promise and performance. The main reason
seems to be the failure of the bank staff to appreciate the new work
philosophy and new social objectives.
 Bureaucratization:
Another problem faced by the commercial banks is bureaucratization of the
banking system. This is indeed the result of nationalization. The smooth
functioning of banks has been hampered by red-tapism, long delays, lack of
initiative and failure to take quick decisions.
 Political Pressures:
The smooth working of nationalized banks has also been hampered by
growing political pressures from the Centre and the States. Nationalized
banks often face lots of difficulties due to various political pressures. Such
pressures are created in the selection of personnel and grant of loans to
particular parties without considering their creditworthiness.
FACTS AND FIGURES
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18.  Market Size: The Indian banking system consists of 27 public sector
banks, 22 private sector banks, 44 foreign banks, 56 regional rural banks,
1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition
to cooperative credit institutions. Bank credit grew at 12.64 per cent year-on-
year to Rs 85.511 lakh crore (US$ 1,326.78 billion) on May 11, 2018 from Rs
75.91 lakh crore (US$ 1,131.47) on May 12, 2017.
 India has the highest number of bank branches in the world. According
to IMF data for 2015 there are over 1.2 lakh bank branches in India, followed by
China and Colombia with over 95,680 and 94,074 bank branches respectively.
RBI data for the June 2016 quarter shows India now has over 1.3 lakh bank
branches
 Despite this feat, India has far fewer banks compared to its population
size. There only 13.54 bank branches per 1 lakh adults. Colombia, with 257.69
bank branches per 1 lakh adults, tops this list. Among our neighboring
countries, Sri Lanka has better reach with nearly 18.58 bank branches per 1
lakh people. China, Pakistan and Nepal have around 8 bank branches per 1
lakh people, and Myanmar has the least with just 3.3. India has 42.54 bank
branches per 1,000 sq km. China, given its vast geographical size, has just
over 9.5 bank branches per 1,000 sq km.
 Banks are required to provide all the forms (opening a bank account,
obtaining a cheque book, etc.) to their customers in three languages- Hindi,
English, and an appropriate regional language.
REVENUE SOURCES OF BANK:
18

19. 1. Saving account:
A savings account is an interest-bearing deposit account held at a bank or
another financial institution that provides a modest interest rate. The banks
lend money to customers at a higher rate than they pay to depositors or than
they borrow it. The difference, known as the margin or turn, is kept by the
bank. For example, if a bank pays 1% interest on deposits, they may charge
6% interest on loans.
Having a strong base of savings account deposits is critical for a bank to
remain solvent and profitable. Banks use that money to lend to borrowers,
who then pay interest on their loans. After paying for various costs, banks pay
money on savings deposits to attract new savers and keep the ones they
have
The difference between the money earned as interest on loans, any operating
expenses, and the money paid as interest to savings accounts is profit to the
banks. For example, assume you deposit £1,000 into a savings account that
pays 1% interest. Your interest payment for the year is £10.Now, assume that
the bank loans your £1,000 to a business at a 5% interest rate. The bank will
earn £50 in interest income. Now assume that the bank has £30 worth of
expenses to pay for employees, property, insurance and other expenses.
Rs.10 profit amount of the bank.
Banks will raise or lower their interest rates on savings accounts based on a
few factors. One is the amount of interest they’ve been able to charge
borrowers. Another factor is the prime interest rate in the country in which the
bank is based. Finally, the third factor is how aggressive the bank would like
to be in pursuing new account holders. If the bank would like to lend more,
they may raise their interest rates on savings accounts to attract a larger base
of deposits.
2. Loan interest
A loan is money, property or other material goods that is given to another
party in exchange for future repayment of the loan value amount along with
19

20. interest or other finance charges. A loan may be for a specific, one-time
amount or can be available as an open-ended line of credit up to a specified
limit or ceiling amount.
Types of loan:
 Personal loan
 Vehicle loan
 Gold loan
 Home loan
 Staff loan
 Student loan
 Over draft loan
Mortgage loan with rising aspiration levels, consumers are trying to look at
unique ways of realizing their dream car, house and many such materialistic
ambitions. One of the easiest and non-complicated ways of receiving this
dream is a bank loan. There are a wide range of loans that are on offer from
home loans to car loans, personal loans, travel loans and loans for investing
in securities. The bank levies varying degrees of interest rates on different
types of loans depending on the duration of the loan and the amount of loan
involved.
When you deposit money into your bank account, you’re giving your bank
permission to use your money to make loans. Your bank loans your money
out to others at a cost to the lender, in the form of an interest rate (think:
mortgages, student loans, car loans, credit cards, etc.). Banks collect money
off the interest paid by borrowers, and a small amount of that interest is given
back to customers’ bank account. This is partially due to customers’
expectation that they will see a return when they “invest” their savings with a
bank, as well as the bank’s way of saying thank you for the investment. The
difference between the amount of interest banks earn by leveraging customer
deposits through lending products (auto loans, mortgages, etc.) and the
20

21. interest banks pay their customers based on their average checking account
balance is net interest margin.
Even though your money is being loaned out to other people, you can
withdraw all of your money out of our bank account right now without a
problem. This is because banks are required to keep a minimum fraction of
customer deposits on hand at the bank, known as the reserve requirement
Loans approved by banks will vary in size, and may have fixed or variable
interest rates but, in all cases, the bank will lend the money to the customer at
a higher rate than they borrow it.
3. Credit Card Charges:
Credit card is the best means for cashless transactions. It saves you from
carrying cash or getting money debited at the time of purchase. Credit cards
come with different benefits and discounts on shopping, travelling etc.
The eligibility for credit card varies according to the lender and the purpose for
which the card is availed. The basic clauses include-
o Applicant should be at least 18 years old
o Applicant should be salaried or self-employed, with a regular
source of income to pay back the credit card bills
o He should have a savings account in his name
o He should not have a bad credit history
It's one of the things credit card users should pay close attention to with their
credit cards. Different types of credit cards charge different kinds of fees and
many of them are avoidable. The best way to avoid credit card fees is to know
what they are and when they're charged. That way, you can adjust how you
use your credit card to completely avoid paying fees. Like………
 Annual Fee
 Balance transfer fees
21

22.  Cash advance fee
 expedited payment fee
 Finance charges
 Foreign transactions fees
 Over the limit fees
 late fee
 returned check fee
 Less Common Fee
4. Auction of Assets
Many times, when an individual or a company defaults on a specific loan, the
bank impounds on the collateral that was given in exchange of the loan
amount and puts it up for sale. These can involve a wide range of products
ranging from houses, cars and other personal belongings including jewelry.
The bank has to bear additional cost for the maintenance and upkeep of all
these properties and ensure that no damage is done to them. In contrast to
that auctioning these properties is an easy way for the bank to recover the
defaulted loan amount as well as dispense with the collateral that it had taken
over.
Thus, this kind of disposal of the asset is not just profitable but also a low
expense affair for the bank while try to boost its bottom-line in the best
possible manner.
5. Trading financial instruments in the financial markets:
Many banks, especially the investment banks are active traders in the equity,
forex and commodity markets. They have a huge customer base who are
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23. invested in the various financial instruments floated by them like Mutual
Funds, SIPs and the like.
The bank in turn uses this amount to invest in various securities trading as
well as open positions in the debt market as well. What this does is helping
the bank in fat-lining its profit parameters as well as maximizing gains for its
customers through this wide-ranging investment basket. The favorable rate of
return acts as an easy trigger for additional interest and increased interest in
the investment tools offered by a particular bank.
6. Charges for Financial Advice & Services
This is another interesting and hugely beneficial service offered by investment
banks. Many big companies which are not listed thus far and plan and initial
public offering seek the advice from established financial institutions like
investment banks for effective execution of their red herring prospectus and
eventual offering.
This is also applicable for all those companies that are looking to explore the
markets for a follow-on public offering. The bank provides crucial advice in
terms of what rate the issue should be priced, the total number of shares
issued, conducts the due diligence of the interested company and many such
associated services. Of course, all of this is for a price. This is the advisory fee
that the bank charges in return for its services and the time it spends to
finalize the deal for the specific company.
A lot of times a bank’s help is sought in negotiating crucial acquisition and
mergers of companies as well. The logic is when a big investment bank is
involved; the chances of good deal are always higher with limited scope for
foul play. Fair pricing is also another great motivation for involving an
investment bank to negotiate M&A deals.
7. Interbank Lending
If a bank has a surplus of liquid (available) assets then the bank can make
money by lending these assets to other banks in the interbank market. As
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24. money flows in and out, banks will both lend and borrow money on the
interbank market as needs require.
Another very popular mode of earning money for a bank is through the rate of
interest earned via inter-bank lending. In simpler terms, it means that when
one bank lends money to another bank, a certain amount of interest is levied
on it. This directly goes into the bank’s kitty of funds that it raises for its
effective functioning and faultless maintenance. The steady fund inflow is one
of the most fundamental triggers to maintain this service record and attract
additional customers.
Most of this lending is for the short-term, sometimes just overnight loans and
at times extending for 3 months also. These loans are essentially for
addressing a bank’s daily liquidity needs and day to day expenses and
payouts that might be lined up on a daily basis. The benefit of an inter-bank
lending for the borrower bank is the fact that rate of interest at which it takes
the loans is always at the best possible rates compared to any loan from other
sources. This helps the bank save crucial interest outgo that might otherwise
have drained its balance sheet. Hence, this two becomes a form of earning for
the bank.
Inter-bank lending is not just in terms of money lending and borrowing. If the
bank has surplus assets that it can put forth in the market place, it can even
make money by putting out these assets on loan to customer banks. In this
way instead of these assets being NPAs or non-performing assets for the
bank, it is a unique way in which it can turn a liability into a profit-making
proposition and instantly opens up a revenue source for the bank without too
much of a service cost.
8. Interchange fee
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25. When processing a transaction in a bank make money. Each time you use
your card to swipe at a store, the store pays an interchange fee. Both your
bank and the stores’ bank benefit, however the majority of the amount goes to
your bank
Banks cover some of their cost by charging membership fees, late fees,
overdraft fees, and ATM fees.
9. ATM:
Every transaction beyond this threshold will be charged Rs. 20 per use. The
number of free transactions at ATMs (Automated Teller Machines) of non-
home banks has also been cut to three times a month from five times,
according to the RBI's latest guidelines. Withdrawal charge, transferring
charge, Annual Maintenance Charges, duplicate ATM charge.
10. Locker Facility:
Most people are scared of keeping their most expensive jewelries and
important documents at home owing to the threat of theft that makes them
nervous. Customers use the locker facility to store valuables, documents,
jewelry and cash. They pay a yearly fee as a rent to use this facility. Banks
have of different sizes to suit the needs of many different types of customers.
Rental depends on the size of the lockers and location of the branch viz
metro/urban or semi-urban/rural. Bank charges annual and monthly fees for
the maintenance in return for these services.
11. Fixed Deposit Account
FDs are risk free investments. Unlike other investment tools, FDs are not
market-driven. You get an assured sum of money at the end of the maturity
period. This is thus an attractive investment for risk-averse investors.
25

26. Bank collect, finance from public for fixed time The minimum tenure on Bank
FDs is 7 days to 14 days, while the maximum is 10 years.so… this finance
can invest for long term in Equity and debt market, Bonds, Real Estate,
Mutual funds, Stocks, Gold.
12. Insurance
In recent eras banks are starting to offer insurance service plan to their
customers. Here two common insurance which is provide by all Bank to
customer. Life Insurance Corporation in this insurance customer have to pay
rs.312 annually and in Pradhan mantra surkhsha vima yojna customer have to
pay Rs 12 annually.
13. Penalty charge
If customer do not maintain the minimum annual balance as stipulated by the
bank, customer pay charges of non-maintenance to the bank. Which is one
kind of income for bank.
14. Clearing Cheque
normally during business transactions, we do get other bank cheque for
payment o we pay our bank cheque to people here the other party may not be
having same bank as of us hence he deposit the cheque with bank he was
having, for example person receiving hdfc bank cheque and deposit in sbi in
his account.
here at we need to understand is cheque don’t directly credit to or account,
cheque go for clearing that means “every bank will be having clearinghouse
hence every bank will pass these cheques via scanned copy to respective
banks (cheque truncation system) and hence as all banks branches are
connected via intranet (core banking) they do access different branch
respective bank cheque and proceed immediately via scanned copy easier to
26

27. pass or reject the cheque. During this process it takes 1 or 2 days for the bank
to credit account. For this they charge amount from their customers.
15. NEFT OR RTGS
Sometime we need to transfer money from our bank to other banks hence we
go fill the neft form or rtgs form in bank and send money to other banks this
process banks may charge minimal fees for the amount to be transferred.
NEFT(up to two lakhs) RTGS(two lakhs and above) however customer can
send via neft mode any amount but it process in batch wise i all neft
transactions will reach rbi and form a queue depending on availability of time
they execute one by one. But RTGS is immediate settlement immediately
amount process at a time we enter or processed. And for this service bank
take charge from customer.
16. Mini-statement
Keep track of the transactions in your account by availing this service. Mini-
statement gives you an insight into the last 10 transactions in your account.
Monthly bank provides 1 time free mini-statement facility, if any customer
wants rather than one time they have to pay charge as per bank.
17. Duplicate Passbook Printing Charges
sometime customer may need account statement on white paper for
submitting in government offices like in passport office or any other banks for
getting loan here if passbook is already printed and customer needs duplicate
print banks will charge hereon.
18. Cheque Bouncing
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28. Whenever cheque bounce against any party because of insufficient balance,
customer not fill up all information, expiry date etc.. at time bank charge
amount from customer who send cheque
19. Mobile Banking / SMS Alerts:
Customer want to bank via SMS or want to get alerts of credits and debits on
SMS, bank charges fees from customer and makes money.
CONCLUSION
The trade center and the back office must be well coordinated and function in
an efficient manner. In the face of declining net interest margins, depository
institutions have entered new product areas moving from traditional lending to
areas that generate non-interest revenues.
In common terms, a bank’s fundamental business is borrowing and lending
money. Their earnings comprise of the interest that they earn from
independent customers. The interest at which they lend money is always
higher than what they borrow money at. This difference in interest rate is what
comprises a chunk of the funds earned by both commercial and retail banks.
They essentially borrow money from other customers who deposit their hard-
earned cash in the bank for safekeeping.
In that context, the rate of interest that a bank charges is entirely dependent
on the demand and supply dynamics for a particular amount, the number of
people who are ready to borrow the amount and the exact amount that the
bank can spare as loan. Not just the bank’s availability, but the loan eligibility
of every person is dependent on certain norms specified by the country’s
central bank. This is because loaning money can be extremely risky business
28

29. and there never any certainty that the bank will actually get back the amount
that is being loaned.
Banks also charge customers a certain amount as charges or fees for taking
care of the bank accounts of individual customers. There are few other
miscellaneous charges levied by the bank like charges levied for overdraft
facilities or cheque facilities and the like.
BIBLIOGRAPHY
https://www.financialexpress.com/money/from-minimum-balance-to-atm-
withdrawal-charges-what-you-shouldknow-about-sbi-hdfc-bank-icici-
bank-savings-accounts/998616/ (viewed on 4 July 2018, at 3:00 pm)
https://www.investopedia.com/terms/b/bank.asp) (viewed on 4 July
2018, at 3:30 pm)
http://www.businessdictionary.com/definition/revenue.html (viewed on 5
July 2018, at 4:12 pm)
https://www.ibef.org/industry/banking-india.aspx (viewed on 6 July 2018,
at 4:30 pm)
https://en.wikipedia.org/wiki/Bank (viewed on 7 July 2018, at 8:00 am)
https://www.investopedia.com/terms/c/commercialbank.asp (viewed on 7
July 2018, at 8:30 am)
https://www.atmmarketplace.com/articles/5-ways-to-boost-your-atm-
revenue/(viewed on 8 July 2018, at 10:00 am)
29

30. https://en.wikipedia.org/wiki/Credit_card (viewed on 10 July 2018, at
2:00 am)
https://en.wikipedia.org/wiki/Banking_in_India (viewed on 12 July 2018,
at 11:30 am)
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