Banking Awareness PDF

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Banking Awareness Capsule
Contents
First In Banks In India ...................................................................................................................................2
Indian Currency ..............................................................................................................................................3
Reserve Bank of India....................................................................................................................................4
RBI Committees In Recent Times ................................................................................................................6
Some Important Banking Institutions .......................................................................................................7
The Emergence of Small Finance and Payment Banks ..............................................................................16
Credit Rating Agencies in India .................................................................................................................17
Know Your Customer Guidelines ..............................................................................................................18
Types of Accounts, Deposits, Cheques, DDs & BSBDS ...........................................................................19
Types of Payments & Money Transfer .....................................................................................................21
Balance Sheet ................................................................................................................................................26
NPA and Recovering NPA.............................................................................................................................27
Basel Accords ................................................................................................................................................28
Various Types Of Risks ................................................................................................................................29
Inflation and its types ..................................................................................................................................29
Financial Inclusion Schemes ......................................................................................................................29
Financial Market...........................................................................................................................................32
Priority Sector Lending ...............................................................................................................................35
Miscellaneous................................................................................................................................................37
Banks Head Quarters & Taglines.................................................................................................................43
Important Banking Abbreviations ............................................................................................................44
First In Banks In India

1. The First Bank in India Bank of Hindustan (1770- Calcutta )
2. First Governor of RBI Mr. Osborne Smith
3. First Indian governor of RBI Mr. C D Deshmukh
4. First Bank to Introduce ATM in India HSBC
5. First Bank to introduce saving Bank in India Presidency bank in 1830
6. First Bank to Introduce Cheque system in India Bengal Bank 1784
7. First Bank to introduce Internet Banking ICICI BANK
8. First Bank to introduce Mutual Fund State Bank of India
9. First Bank to introduce Credit Card in India Central Bank of India
10. First Foreign Bank in India Comptoire dEscompte de Paris of France in 1860
11. First Joint Stock Bank of India Allahabad Bank
12. First Indian bank to open branch outside India in London in 1946 Bank of India
13. First Indian Bank started with Indian capital indigenous Bank -- Punjab National Bank
14. First Regional Rural Bank - Prathama Grameen Bank ( Sponsoring Bank- Syndicate Bank)
15. First Universal Bank in India ICICI Bank
16. First bank in India listed in New York Stock Exchange (NYSE) ICICI Bank
17. First Bank in India to launch Talking ATMs for differently able person Union Bank of India
18. First Bank in India to launch its own Payment Aggregators State Bank of India. (SBIePay)
19. Countrys first all woman bank Bhartiya Mahila Bank
20. First Indian private sector bank to open a branch in the African continent ICICI Bank
21. First private sector bank to open dedicated branch for Startups - RBL
22. First Aadhaar-based ATM launched by DCB Bank
23. First bank to sell Indian gold coins - IOB
24. First India bank Got ISO Canara Bank
25. First Bank to introduce Internet Banking ICICI BANK
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26. First Payment Bank Airtel m commerce, Rajasthan

27. First small finance bank - Capital Small Finance Bank Limited, Punjab
28. First contactless credit cards for small and mid-sized enterprises ICICI
29. First certified green bond at London Stock Exchange Axis Bank
30. Indias first small and medium enterprises (SME) Bank - HDFC
31. First issurer of Masala Bonds HDFC
32. First domestic bank to open branch in Yangon SBI
33. Indias First Transaction On Blockchain executed by ICICI Bank
34. First firm to get debt recast under RBIs S4A Scheme - HCC
Indian Currency
The Indian currency is called the Indian Rupee (INR) and the coins are called paise. One Rupee consists of 100 paise.
The Reserve Bank manages currency in India. The Government, on the advice of the Reserve Bank, decides on the
various denominations.
The Reserve Bank can also issue notes in the denominations of one thousand rupees, five thousand rupees and
ten thousand rupees, or any other denomination that the Central Government may specify.
There cannot, though, be notes in denominations higher than ten thousand rupees in terms of the current
provisions of the Reserve Bank of India Act, 1934. Coins can be issued up to the denomination of Rs.1000.
Soiled and Mutilated Notes
Soiled notes are notes, which have become dirty and limp due to excessive use. Mutilated notes are notes,
which are torn, disfigured, burnt, washed, eaten by white ants, etc.
A double numbered note cut into two pieces but on which both the numbers are intact is now being treated as
soiled note.Soiled notes can be tendered at all bank branches for and exchange obtained.
Soiled or mutilated notes are fully payable against such notes. Payment of exchange value of mutilated
notes is governed by the RBI under refund Rules, 1975.
In order to increase the life of currency notes, Reserve Bank of India (RBI) issued Clean Note Policy in 2001.
These Rules have been framed under Section 28 of the Reserve Bank of India Act, 1934. The public can get value for
these notes as laid down in the Rules, after adjudication. Currently, provisions exist for paying either full, half or no
value as far as notes in the denomination for Rs.10 and above are concerned; as regards Re.1, Rs.2 & Rs.5, a tenderer
can get either full or no value depending upon the condition of the note.
Coin Minting:
The Union Government has the sole right to mint the coins and one rupee note. The responsibility for coinage comes
under the Coinage Act, 1906 which is amended from time to time. The designing and minting of coins in various
denominations is also the responsibility of the Government of India. The coins are issued for circulation only through
the Reserve Bank in terms of the RBI Act.
Coins are minted at the four India Government Mints.
1. Mumbai,
2. Alipore (Kolkata),
3. Saifabad (Hyderabad),Cherlapally (Hyderabad)
4. NOIDA (UP).
Currency Notes:
The design of banknotes is approved by the central government, on the recommendation of the central board of the
Reserve Bank of India. The current series of banknotes (which began in 1996) is known as the Mahatma Gandhi
series. Banknotes are issued in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.2000.
1. Currency notes are printed at the Currency Note Press in Nashik,
2. Bank Note Press in Dewas,
3. Bharatiya Reserve Bank Note Mudran (P) Ltd at Salboni and Mysore and at
4. The Watermark Paper Manufacturing Mill in Hoshangabad.
Demonetisation in India
The largest note ever printed by the Reserve Bank of India was Rs.10000 which was introduced in 1938 by
the British India government and subsequently again by Independent India in 1954.
The notes introduced in 1954 were Rs.500, Rs.1000, Rs.5000 and Rs.10000.
These notes were withdrawn in 1946 by the RBI under the British Indian Government to curb the
black money menace in India.
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These notes were exchanged for Rs.100 or lower denomination

The notes were re-introduced in 1954 by the RBI, which was subsequently demonetized in 1978 by
the Morarji Desai-led Janta Parivar government(first non government congress in Independent India)
just after the downfall of the Indira Gandhi government in 1977 due to Emergency crisis the country
faced.
3 times demontisation occur in India Since 1935(1946, 1978, and 2016)
Reserve Bank of India
RBI was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The Central bank was formed under the recommendations from John Hilton Young Commission 1926-also
called Royal Commission of Indian Currency and Finance.
The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to
Mumbai in 1937.
Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the
Government of India.
The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of
India in keeping with the Reserve Bank of India Act. Appointed/nominated for a period of four years
Constitution
Official Directors
Full-time: Governor and not more than four Deputy Governors
Non-Official Directors
Nominated by Government: ten Directors from various fields and two government Official
Others: four Directors - one each from four local boards.
Functions of RBI:
Monetary Authority: Formulates, implements and monitors the monetary policy.
Objective: maintaining price stability and ensuring adequate flow of credit to productive sectors.
Regulator and supervisor of the financial system: Prescribes broad parameters of banking operations within
which the country's banking and financial system functions.
Objective: maintain public confidence in the system, protect depositors' interest and provide cost-effective
banking services to the public.
Manager of Foreign Exchange Manages the Foreign Exchange Management Act, 1999.
Objective: to facilitate external trade and payment and promote orderly development and maintenance of
foreign exchange market in India.
Issuer of currency: Issues and exchanges or destroys currency and coins not fit for circulation. Objective: to
give the public adequate quantity of supplies of currency notes and coins and in good quality.
Developmental role Performs a wide range of promotional functions to support national
Objectives.
Related Functions
Banker to the Government: performs merchant banking function for the central and the state governments;
also acts as their banker.
RBI under the Section 20 of the RBI Act 1934 has the obligation to undertake the receipts and payments of the
Central Government and to carry out the exchange, remittance and other banking operations, including the
management of the public debt of the Union.
Further, as per Section 21 of the said Act, RBI also has the right to transact Government business of the Union
in India.
State Government transactions are carried out by RBI in terms of the agreement entered into with the State
Governments in terms of section 21 A of the Act.
As of now, such agreements exist between RBI and all the State Governments except Government of
Sikkim.
Banker to banks: maintains banking accounts of all scheduled banks. Offices Has 19 regional offices,
most of them in state capitals and 11 Sub-offices.
Currency Circulation:
In India we follow Minimum Reserve System. Under this system, Reserve Bank of India (RBI) maintains gold and
foreign exchange reserves of Rs. 200 crores. Out of Rs. 200 crores, at least 115 crores must be in the form of gold and
Rs85crores of foreign exchange in its holding totaling the sum.
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Fully Owned RBI Subsidiaries:

1. National Housing Bank (NHB)
2. Deposit Insurance and Credit Guarantee Corporation of India(DICGC).
3. Bharatiya Reserve Bank Note Mudran Private Limited(BRBNMPL),
RBI -Monetary Policy

RBI regulates liquidity in a manner that balances inflation and help in GDP growth and development. The tools that
RBI uses to manage monetary policy are,
Bank rate:
Bank rate is the interest rate at which central bank lends money to domestic banks. Such loans are given out either by
direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, bank rate is
also known as discount rate. In bank rate there is no need for collateral security.
Repo rate: Bank Rate 6.75%
When banks sell security, banks promise to buy back the same security from Repo Rate 6.25%
RBI at a predetermined date with an interest at the rate of REPO. It is Reverse Repo Rate 5.75%
actually a repurchase agreement. When RBI reduces the Repo Rate, the MSF 6.75%
banks can borrow more at a lower cost. CRR 4%
Reverse repo rate: SLR 20.75%
In case RBI borrowing money from banks and the interest paid by RBI to
banks on such borrowing is known as Reverse Repo Rate. It is opposite of Repo rate.
An increase in this rate can cause the banks to transfer more funds to RBI due to their attractive interest rates. Hence
RBI uses this way to drawn out excess money from the banks.
Cash reserve ratio:
All the commercial banks has to keep certain minimum amount of cash reserves with RBI. It uses CRR as a tool to
increase or decrease the reserve requirement depending on whether RBI wants to increase or decrease in the money
supply. RBI can vary Cash Reserve Ratio (CRR) rate between 3% and 15%.
SLR:
Amount of liquid assets such as Gold or other approved securities that a financial institution must maintain as reserves
other than the cash.
MSF:
Marginal standing facility (MSF) created by Reserve Bank of India in its credit policy of May 2011 which is a frame
for banks to borrow from the RBI in an emergency situation when inter-bank liquidity dries up completely.
Liquidity Adjustment Facility:
Liquidity adjustment facility (LAF) is a monetary policy toolwas introduced by RBI during June, 2000which allows
banks to borrow money through repurchase agreements. LAF is used to aid banks in adjusting the day to day
mismatches inliquidity.
This tool used for absorbing liquidity and injecting the same with banks through agreement with the Cap of
0.25% of NDTL as on April 2014.
Monetary Policy Committee

The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a
statutory and institutionalized framework for a Monetary Policy Committee, for maintaining price stability, while
keeping in mind the objective of growth.
As per the provisions of the RBI Act, out of the six Members of Monetary Policy Committee, three Members
will be from the RBI and the other three Members of MPC will be appointed by the Central Government.
1. The Governor of the BankChairperson, ex officio;
2. Deputy Governor of the Bank, in charge of Monetary PolicyMember, ex officio;
3. One officer of the Bank to be nominated by the Central BoardMember, ex officio;
4. Shri ChetanGhate, Professor, Indian Statistical Institute (ISI) Member
5. Professor PamiDua, Director, Delhi School of Economics (DSE) Member
6. Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management (IIM), Ahmedabad
The Members of the Monetary Policy Committee appointed by the Central Government shall hold office for a
period of four years, with immediate effect or until further orders, whichever is earlier.
Acts administered by Reserve Bank of India

Reserve Bank of India Act, 1934
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Public Debt Act, 1944/Government Securities Act, 2006

Government Securities Regulations, 2007
Banking Regulation Act, 1949
Foreign Exchange Management Act, 1999
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Chapter
II)
Credit Information Companies(Regulation) Act, 2005
Payment and Settlement Systems Act, 2007
Payment and Settlement Systems Regulations, 2008 and Amended up to 2011 and BPSS Regulations, 2008
The Payment and Settlement Systems (Amendment) Act, 2015 - No. 18 of 2015
Factoring Regulation Act, 2011
Other relevant Acts
Negotiable Instruments Act, 1881
Bankers' Books Evidence Act, 1891
State Bank of India Act, 1955
Companies Act, 1956/ Companies Act, 2013
Securities Contract (Regulation) Act, 1956
State Bank of India Subsidiary Banks) Act, 1959
Deposit Insurance and Credit Guarantee Corporation Act, 1961
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
Regional Rural Banks Act, 1976
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
National Bank for Agriculture and Rural Development Act, 1981
National Housing Bank Act, 1987
Recovery of Debts Due to Banks and Financial Institutions Act, 1993
Competition Act, 2002
Indian Coinage Act, 2011 : Governs currency and coins
Banking Secrecy Act
The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003
The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993
RBI Committees In Recent Times
Committee Date Headed by

Mundra Committee-To Speed up the Process of November 2016 S.S .Mundra
Recalibration of ATMs
To study the regulatory issues relating to June 2016 SudarshanSen
Financial Technology (Fintech) and Digital
Banking in India
PJ Nayak Committee -To Review Governance June 2016 P J Nayak
of Boards of Banks in India.
To look at the various facets of household August 2016 Dr. TarunRamadorai
finance in India and to benchmark Indias
position
Working Group on Import Data Processing and April 2016 A. K. Pandey
Monitoring System
Working Group on Interest Rate Options February 2016 P. G. Apte
Advisory Committee on Ways and Means December 2015 Deepak Mohanty
Advances to State Governments January 2016
Sumit Bose Committee on Mediumterm Path on
Financial Inclusion
Committee on Differential Premium System for September 2015 Jasbir Singh
Banks in India
Working Group on Compilation of Flow of August 2015 D. K. Mohanty
Funds Accounts for Indian Economy August
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2015 D. K. Mohanty Compilation of Flow of

Funds Accounts of the Indian Economy
High Powered Committee on Urban Co June 2015 R. Gandhi
operative Banks (UCBs)
Committee on Data Standardization March 2015 LP. Parthasarathi
Internal Working Group (IWG) to Revisit the March 2015 Lily Vadera
Existing Priority Sector Lending Guidelines
Committee on Capacity Building in Banks and September 2014 G. Gopalakrishna
NonBanks
Committee on Implementation of July 2014 B. Mahapatra
Countercyclical Capital Buffer
Committee on Data and Information July 2014 D. K. Mohanty
Management in the Reserve Bank of India.
Committee on Productivity Growth for the June 2014 B. N. Goldar
Indian Economy
Committee to Review Governance of Boards of May 2014 P. J. Nayak
Banks in India
Working Group on Resolution Regime for May 2014 Anand Sinha
Financial Institutions
GIRO Advisory Group - UmeshBellur Group on April 2014 Anil Kumar Sharma
Enabling PKI in Payment System Applications
Committee on Licensing of New Urban September 2011 Malegam Committee
Cooperative Banks
Committee on Issues and Concerns in the NEFC August 2011 Usha Throat
Sector
Some Important Banking Institutions
IMF & WORLD Bank

First of all history behind the establishment of these two institutions
World bank and IMF are called the "Bretton wood institutions". In July 1944 during the United Nations
Monetary and Financial conference in Bretton woods, New hampshire, representatives of 45 governments
agreed to set up the World bank (which came into existence during the conference) and IMF (which came
into existence in 1945).
Reasons: Great Depression in the 1930s. Countries tried to protect their domestic economy by putting
barriers on foreign trade and devaluing their currency to gain market share in export markets. These led to
decline in world trade and living standards fell sharply. By 1940s it was clear that the world needed global
institutions for economic cooperation.
IMF(International Monetary Fund) World Bank
Stability Growth
Objective: To deal with all the issues related to the Objective: To lessen poverty and promote the
financial sector and macroeconomics. long term development of the economy.
IMF is about balancing the international financial World Bank is for development projects in the
system in both rich and poor countries (Greece is a developing world.
recent recipient).
You go to the IMF when you are so messed up that You go to the World Bank when you want to
your currency is dropping like crazy. IMF comes build a dam or power plant or a road.
and usually fixes stuff along with advice.
IMF is a fund. Meaning it has a pool of money World Bank is a bank. Meaning it borrows money
given to it by 188 member countries in the past from investors around the world and then lends to
and lends out of that fund. It doesn't usually the poor governments.
borrow new money.
World Bank is a much bigger institution and has two arms:
IBRD (International Bank for Reconstruction and Development):Charges a slightly higher interest rate
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than it borrows and it is mainly for profitable commercial projects [such as roads and dams].
IDA(International Development Association):This is a grant body. No interest and usually countries are
given long periods for repaying. The focus is on social projects such as immunization and education,
open only for the poorest nations.
Banks In India
There are currently 27 public sector banks in India out of which 19 are nationalised banks and 6 are SBI and its
associate banks, and rest two are IDBI Bank and Bharatiya Mahila Bank, which are categorised as other public sector
banks. There are total 93 commercial banks in India.
Commercial Banks:
They are refers to both scheduled and non-scheduled commercial banks which are regulated under Banking Regulation
Act, 1949.
Scheduled Commercial Banks:
Listed on second schedule of RBI Act 1934.
Minimum Paid up capital should be Rs 5.00 Lac.
These Banks have to maintain stipulated CRR, SLR and other instructions issued from time to time fixed by
the Central Bank.
The Indian banking sector is classified into scheduled banks and non-scheduled banks.
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban
Cooperative Banks.
Scheduled Commercial Banks in India are categorized into five different groups:
State Bank of India and its Associates
Nationalised Banks
Private Sector Banks
Foreign Banks
Regional Rural Banks
What are Public Sector Banks?

PSBs in India are banks where a majority stake i.e. more than 50% is held by a government. Thus at
present all the nationalised banks are Public Sector banks. In addition to these, IDBI Bank Ltd and SBI are
too Public Sector Bank (though not nationalised bank) as GoI has over 50% stake in these banks too.
What are Private Sector Banks?
Private Banks are banks that do not have any government stakes. Private Banks have gained quite a strong
foothold in the Indian banking industry over the last few years especially because of optimum use of
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technology. The Private Banks are accountable for a share of 18.2 percent of the Indian banking industry.
IndusInd Bank was the first private bank in India and among the fastest growing Bank Private Banks in the
country.
Comparison between Private and Public Sector Banks
Private sector banks introduced the concept of online banking in India. This was mostly because the private
banks were technologically well equipped.
Private sector banks were using state of the art technology and fully computerized systems
since the time they entered the Indian market whereas the Public sector banks were not.
However despite the technological challenges the public sector banks in India are still the
preferred destinations for many as they are considered as safer options for money deposit.
What are Foreign Banks?
A foreign bank is a bank with head office outside the country in which it is located. e.g. Standard
Chartered Bank.
What are Regional Rural Banks?
After nationalization, of banks in 1960 there were problems which made it difficult for commercial banks
even under government ownership to lend to farmers. Government set up Narasimham Working Group in
1975. On the basis of this committees recommendations, a Regional Rural Banks Ordinance was
promulgated in September 1975, which was replaced by the Regional Rural Banks Act 1976.
First RRB: PrathamaGrameen Bank
The RRBs were owned by three entities with their respective shares as follows:
Central Government 50%
State government 15%
Sponsor bank 35
NABARD
NABARD is an apex development bank, established in 1982 by a Special Act of the Parliament, with a
mandate to uplift rural India by facilitating credit flow in agriculture, cottage and village industries,
handicrafts and small-scale industries. NABARD functions to promote sustainable rural development for
attaining prosperity of rural areas in India.
RBI has sold its own stake to the Government of India. Therefore, Government of India holds 99% stake in
NABARD.
It has power to deal with all matters concerning policy, planning as well as operations in
giving credit for agriculture and other economic activities in the rural areas.
A refinancing agency for those institutions that provide investment and production credit for
promoting the several developmental programs for rural development.
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Improving the absorptive capacity of the credit delivery system in India, including
monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, and training of
personnel.
Co-ordinates the rural credit financing activities of all sorts of institutions engaged in
developmental work at the field level.
Prepares rural credit plans, annually, for all districts in the country.
Promotes research in rural banking, and the field of agriculture and rural development.
IDBI
Industrial Development Bank of India (IDBI) came into being on 1st July, 1964 as a Development Financial
Institutions under IDBI Act 1964.It is headquartered at Mumbai.
*Key points:
Regarded as a Public Financial Institution in terms of Companies Act. It continued as DFI till
2004 when it was transferred into a Bank. To transform this into Bank Industrial Development
Bank Act 2003 was passed.
A new company under the name of Industrial Development Bank of India Ltd. was
incorporated as a Govt company under the Companies Act on 27th September, 2004, and thus now it
came to be known as IDBI Ltd wef 1st October 2004 but it also worked as a Bank in terms of the
Repeal Act.
W.e.f. 2nd April, 2005, IDBI Bank Ltd. was finally amalgamated with IDBI Ltd. and was
known as IDBI Ltd. It is a Public Sector Bank as GoI has above 70% shareholding in this Bank.
DICGC:
Deposit Insurance and Credit Guarantee Corporation BANKS CAPITALS
(DICGC) is a subsidiary of Reserve Bank of India. The New bank license 500 crores
authorized capital of the Corporation is 50 crore, which is Private banks 500 crores
fully issued and subscribed by the RBI. It is headquartered Foreign bank 500 crores
in Mumbai. Urban cooperative banks 100 crores
It was established on 15 July 1978 under Deposit State cooperative banks 100 crores
Insurance and Credit Guarantee Corporation Act, Small bank & payment 100 crores
1961 for the purpose of providing insurance of EXIM bank 8500 crores
deposits and guaranteeing of credit facilities. SIDBI 1000 crores
DICGC insures all bank deposits, such as saving, Authorised Regional 2000 crores
fixed, current, recurring deposits for up to the limit MUDRA BANK 20000 crore
of Rs. 100,000 of each deposits in a bank.The NABARD 500 crores
insurance covers principal and interest up to a
maximum amount of 1 lakh.
All commercial banks including branches of foreign banks functioning in India, local area banks and
regional rural banks are insured by the DICGC.
SIDBI
Small Industries Development Bank of India (SIDBI) was set up under an Act of Parliament in 1990.
Though it was a wholly owned subsidiary of Industrial Development Bank of India, presently the ownership
is held by 33 Government of India owned / controlled institutions.
It is headquartered in Lucknow
Functions:
To initiate steps for technological upgradation and modernisation of existing units.
To expand the channels for marketing the products of SSI sector in domestic and
international markets.
To promote employment oriented industries especially in semi-urban areas to create more
employment opportunities and thereby checking migration of people to urban areas.
IFCI
Government of India set up the Industrial Finance Corporation of India (IFCI) in 1948 under a special
Act. This is the first financial institution set up in India with the mainobject of making medium and long
term credit to industrial needs. It issue bonds and debentures in the open market, to borrow foreign
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currency from the World Bank and other organisations, accept deposits from the public and also borrow
from the Reserve Bank.
Functions
Grants loans and advances to industrial concerns.
Granting of loans both in rupees and foreign currencies.
Underwrites the issue of stocks, bonds, shares etc.
Grant loans only to public limited companies and co-operatives but not to private limited
companies or partnership firms.
EXIM
Export-Import Bank (Exim bank) was set up in 1982 to take over the operations of international finance
wing of the IDBI and to provide financial assistance to exporters and importers.
The authorised capital of Exim bank is Rs. 200 crore and paid-up-capital is Rs. 100 crorewholly
subscribed by the Central Government.
Functions
Provides direct financial assistance to exporters of plant, machinery and related service in
the form of medium-term credit.
Provides rediscount of export bills for a period not exceeding 90 days against short-term
usance export bills discounted by commercial banks.
Gives overseas buyers credit to foreign importers for import of Indian capital goods and
related services.
Developing and financing export oriented industries.
Collecting and compiling the market and credit information about foreign trade.
NHB
National Housing Bank(NHB), a wholly owned subsidiary of Reserve Bank of India (RBI), was set up by
an Act of Parliament in 1987.
NHB is an apex financial institution for housing. It commenced its operations in 1988.
Objective:
To promote housing finance institutions both at local and regional levels and to provide
financial and other support incidental to such institutions and for matters connected therewith
NHB registers, regulates and supervises Housing Finance Company (HFCs), keeps
surveillance through On-site & Off-site Mechanisms and coordinates with other Regulators.
SEBI
Securities Exchange Board of India was set up in 1988 to regulate the functions of securities market. It
promotes orderly development in the stock market but initially it was not able to exercise complete
control over the stock market transactions. It was left as a watchdog to observe the activities but was found
ineffective in regulating and controlling them. So in 1992, SEBI was granted legal status.
i.Reason for establishment: With the growth in the dealings of stock markets many malpractices started
in stock markets such as price rigging, and delay in delivery of shares, violation of rules and regulations of
stock exchange.
ii.Due to these malpractices the customers started losing confidence in the stock exchange. So government
of India decided to set up an agency or regulatory body known as Securities Exchange Board of India
(SEBI).
Functions:
Checks Price Rigging
Prohibits Insider trading
Prohibits fraudulent and Unfair Trade Practices
Registers and regulates the working of stock brokers, sub-brokers,share transfer agents,
trustees, merchant bankers and all those who are associated with stock exchange in any manner.
Registers and regulates the working of mutual funds etc.
Regulates takeover of the companies
MUDRA Bank
Micro Units Development and Refinance Agency Bank (MUDRA Bank), is a new institution setup in 8 April 2015 by
the Government of India for development of micro units and refinance of MFIs to encourage entrepreneurship in India
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& provide the funding to the non-corporate small business sector.

It was announced by the Finance Minister while presenting the Union Budget for FY 2016.MUDRA has a
corpus of Rs 20,000 crore, and creditguarantee corpus of Rs 3,000 crore.
Products and Offerings:
The initial products and schemes under this umbrella have already been created and the interventions have been
named Shishu, Kishor and Tarun to signify the stage of growth of the beneficiary micro unit / entrepreneurs.
Shishu: covering loans upto Rs. 50,000/-
Kishor: covering loans above Rs. 50,000/- and upto Rs. 5 lakh
Tarun: covering loans above Rs. 5 lakh and upto Rs. 10 lakh
Indian Postal payment Bank:
The India Post Payments Bank (IPPB) was a Public Limited Company under the Department of Posts with
100% GOI equity.
IPPB will offer demand deposits such as savings and current accounts upto a balance of Rs 1 Lac
The corpus of the payments bank is of Rs 800 crore (650 branches)
Various Types of Banking

Investment Banks
Investment banking is a special segment of banking operation that helps individuals, corporations,
and governments such as raising financial capital by underwriting or acting as the client's agent in the
issuance of securities.
Universal Banking:
A universal bank participates in both investment banking with commercial banking under one roof
and reaping synergies.
Retail Banking:
Retail banking or Consumer Banking is refers to the division of a bank that deals directly deals
individual consumers, rather than to companies, corporations or other banks. Services offered include
savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.
Wholesale Banking:
This Banks provides banking solutions to corporate and institutional and other financial institutions
such as large corporations and other banks, whereas retail banking focuses more on the individual or
small business.
Islamic or Sharia banking
Islamic or Sharia banking is a finance system based on the principles of not charging interest, which
is prohibited under Islam. Islamic Banks are providing sharia compliant finance. The Reserve Bank
of has proposed opening of Islamic window in conventional banks for gradual introduction of
Sharia-compliant or interest-free banking in the country.
Financial Insitutions In India
Regulator Constitution Sectors Chairma Headquarter Committee

n Recommend
ation
Reserve Bank The Reserve Bank of India was Financial system Urjit Patel Mumbai Hilton Young
of India (RBI) conceptualized based on the and monetary Founded: April Commission
guidelines presented by the policy, Money 1, 1935
Central Legislative Assembly Market (Kolkata)
passed these guidelines as the
RBI Act 1934
Securities and In April 1988 the SEBI was Security & U.K. Mumbai
Exchange constituted as the regulator of Capital Market, Sinha Formed: 12
Board of India capital markets in India under a stock broking & April 1992
(SEBI) resolution of the Government of Merchant
India. Banking,
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Nidhis, Chit
Fund
Companies
Insurance It was constituted by an Act of Insurance T. S. Hyderabad Malhotra
Regulatory and Parliament called the Insurance industry Vijayan Committee
Development Regulatory and Development
Authority Authority Act, 1999
(IRDA)
Forward On 28 September 2015 the Commodity Ramesh Mumbai
Markets FMC was merged with the Market Abhishek Formed: 1953
Commission Securities and Exchange Board
of India (SEBI).
Pension Fund PFRDA has set up a Trust Pension sector Hemant New Delh G N Bajpai
Regulatory and under the Indian Trusts Act, Contracto
Development 1882 to oversee the functions of r
Authority the Pension Fund Managers
(PFRDA) (PFMs).
NABARD NABARD was established on Agriculture Dr. Harsh Mumbai, Shivaraman
(National Bank the recommendations of Development Kumar Maharashtra Committee
for Agriculture Shivaraman Committee, (by Bank Bhanwala 12 July 1982
and Rural Act 61, 1981 of Parliament) on
Development) 12 July 1982 to implement the
National Bank for Agriculture
and Rural Development Act
1981.
Nationalization of Banks in India
The nationalization of banks was an important move undertaken by the Union Government for the development of the
country. Firstly, it instilled public confidence in the banking system encouraging the masses to save and invest.
By the early 1960s, the Government realized that a significant share of deposits coming from the masses of
India was controlled by 14 privately owned commercial banks. Acquisition of the Imperial Bank of India in
1955 was the next big step.
1770: First bankBank of Hindustan.
1949: RBI was nationalized (RBI was state owned at the time of Indian independence).
1955: Control of Imperial Bank of India was acquired by RBI
1969: 14 Indian private banks were nationalised
1972: 106 insurance companies were nationalised into four insurance companies
1980: 6 more Indian private banks were nationalised
1993: New Bank of India Merged into Punjab National Bank
The Story behind SBI and IDBI:
The State Bank of India was set up as the Imperial Bank of India in January 1921 through the merger of Bank of
Calcutta, Bank of Bombay and Bank of Madras.
In 1955, the RBI fall for a 60-percent stake in the bank and renamed it State Bank of India (under SBI Act,
1955). During the nationalisation of banks in 1969, and again in 1980, SBI was not added to the list of the
nationalised banks since it was already a state-owned financial institution.
In 2008, the Government of India took over the RBI's stake in the bank to avoid any conflict of interests
within the RBI (which both owned and regulated the SBI). Now though the SBI and its subsidiaries are often
referred to as a nationalised bank, it is a Public Sector Undertaking (PSU) and not one of the nationalised
banks of India.
In the same way, IDBI Bank is also a public sector bank but not one of the nationalised banks of India. IDBI
Bank was established in 1964 (under IDBI Act, 1964) to support developmental finance in the country.
Initially, it was a financial institution and did not participate in core banking activities.
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Draft Guidelines for on tap licensing of Universal Banks in the Private Sector
Eligible Promoters:
Existing non-banking financial companies (NBFCs) that are controlled by residents and have a successful
track record for at least 10 years.
Individuals / professionals who are residents and have 10 years of experience in banking and finance.
Entities / groups in the private sector that are owned and controlled by residents [as defined in FEMA
Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided
that if such entity / group has total assets of Rs.50 billion or more, the non-financial business of the group does
not account for 40 per cent or more in terms of total assets / in terms of gross income.
Minimum capital requirement & foreign shareholding:

The initial minimum paid-up voting equity capital for a bank shall be Rs.5 billion. Thereafter, the bank shall
have a minimum net worth of Rs.5 billion at all times.
The foreign shareholding in the bank would be as per the existing foreign direct investment (FDI) policy
subject to the minimum promoter shareholding requirement indicated in paragraph (IV) above. At present, the
aggregate foreign investment limit is 74 per cent.
Business plan & Conditions:

The business plan submitted by the applicant should be genuine and viable and address how the bank proposes
to achieve financial inclusion.
The bank shall get its shares listed on the stock exchanges within six years of the commencement of business
by the bank. The bank shall open at least 25 per cent of its branches in unbanked rural centres (population up
to 9,999 as per the latest census).
The bank shall comply with the priority sector lending targets and sub-targets as applicable to the existing
domestic scheduled commercial banks. The board of the bank should have a majority of independent directors.
NBFC(Non-Banking Financial Company)

It is engaged in the business of loans and advances, acquisition of bonds/debentures/securities issued by Government
or local authority or other marketable securities, leasing, hire-purchase, insurance business, chit business but does not
include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale
of any goods or providing any services and sale or purchase of immovable property.
Difference between Banks & NBFCs
NBFC cannot accept demand deposits
NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on
itself
deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to
depositors of NBFCs, unlike in case of banks.
NBFCs but exempted from the requirement of registration
Housing Finance Companies
Merchant Banking Companies
Stock Exchanges
Companies engaged in the business of stockbroking/sub-broking
Venture Capital Fund Companies
Nidhi Companies
Insurance companies
Chit Fund Companies
*Key point: There is no Ombudsman for hearing complaints against NBFCs. In respect of credit card
operations of an NBFC, which is a subsidiary of a bank if a complainant does not get satisfactory response from the
NBFC within a maximum period of thirty 30days from the date of lodging the complaint, the customer will have the
option to approach the Office of the concerned Banking Ombudsman for redressal of his grievances.
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Self Help Groups(SHG)

Self help groups refer to group of 15-20 people (generally women) , who pool or collect their resources
like money so as to help each other in times of need. Self help groups give loans to its members at a
general interest rate which is less than interest rate of moneylenders.Self help groups are also able to
take loans from bank when they have pooled good amount of money. Also SHG act as building groups
of village and provide platform to discuss village issues.
Women's Self-Help Groups (WSHGs)

Formed under the state government's Nava Jatan programme to address malnourished children. WSHGs
adopt malnourished children in their area and provide them food with the help of Anganwadi centres.
Cooperative Banks
Banks in India can be broadly classified under two heads commercial banks and co-operative banks.
While commercial banks (nationalised banks, State Bank group, private sector banks, foreign banks and
regional rural banks) account for an overwhelming share of the banking business, co-operative banks also
play an important role.
The structure of cooperative network in India can be divided into 2 broad segments
Urban Cooperative Banks
Rural Cooperatives
Urban Cooperatives are scheduled and non-scheduled.

Banking activities of Urban Cooperative Banks are monitored by RBI. Registration and Management
activities are managed by Registrar of Cooperative Societies (RCS). These RCS operate in single-state and
Central RCS (CRCS) operate in multiple state.
Rural Cooperatives are short-term and long-term structures.

Short-term cooperative banks are three tiered operating in different states.
State Cooperative Banks: Operate at the apex level in states
District Central Cooperative Banks: Operate at the district levels
Primary Agricultural Credit Societies: Operate at the village or grass-root level.
Long-term structures
State Cooperative Agriculture and Rural Development Banks (SCARDS): Operate at state-level.
Primary Cooperative Agriculture and Rural Development Banks (PCARDBS): Operate at district/block
level.
Banking Codes and Standards Board of India (BCSBI)

Under the recommendations from RBI constituted the Committee on Procedures and Performance Audit of Public
Services under the Chairmanship of Shri S.S.Tarapore Banking Codes and Standards Board of India (BCSBI) was set
up in February 18, 2006. The Independent banking industry watchdog is based in Mumbai, Maharashtra, It functions
as an independent and autonomous body.
Banking Industry Watchdog:
BCSBI was envisaged to ensure that the common person as a consumer of financial services from the banking
Industry is in no way at a disadvantageous position and really gets what he/she has been promised.
The Banking Codes and Standards Board of India was registered as a society under the Societies Registration
Act, 1860 in February 2006.
Membership of BCSBI is voluntary and open to scheduled banks. Initially the membership of BCSBI was
open to scheduled commercial banks and has now been extended to include Regional Rural Banks and select
Urban Co-operative Banks.
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The Emergence of Small Finance and Payment Banks
With a need of financial inclusion in the country, RBI and government has taken many steps at different times. Taking
a further step, RBI gave differentiated licenses for specific activities to new set of banks named Payment Banks and
Small Banks.
Payment Banks:
Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI).
These banks can accept a restricted deposit which is currently limited to INR 1 lakh per customer.
Initial Capital - 100 crore
Payments Banks Formation - Nachiket Mor Committee
For the first five years, the stake of the promoter should be 40% minimum. Foreign share holding will be
allowed in these banks as per the rules for FDI in private banks in India
On 19 August 2015, the Reserve Bank of India gave "in-principle" licences to eleven entities to launch payments
banks:
Aditya Birla Nuvo
Airtel M Commerce Services
Cholamandalam Distribution Services
Department of Posts
FINO PayTech
National Securities Depository
Reliance Industries
Dilip Shanghvi, Sun Pharmaceuticals
Vijay Shekhar Sharma, Paytm
Tech Mahindra
Vodafone M-Pesa
Out of these, three have surrendered their licenses. First one being "Chalomandalam Distribution Services", then
"Dilip Shanghvi, Sun Pharmaceuticals" and the latest, "Tech Mahindra".
The "in-principle" license is valid for 18 months within which the entities must fulfill the requirements.They
are not allowed to engage in banking activities within the period. The RBI will consider grant full licenses
under Section 22 of the Banking Regulation Act, 1949, after it is satisfied that the conditions have been
fulfilled.
Airtel Payments Bank Limited or Airtel Bank, a subsidiary of Bharti Airtel Limited rolled out Indias first
Payment Bank in Rajasthan with massive 7.25% interest on savings accounts.
Airtel Banks services can be accessed by Airtel customers on their mobile phones through the Airtel Money
app, through USSD by dialing *400#; or via a simple IVR by dialing 400.
Features:
1. Digital Banking: Quick and paperless account opening using Aadhaar based e-KYC. This requires no documents at
all, only the customers Aadhaar number is needed
2. Customers Airtel mobile number will be his/her bank account number
3. Interest rate of 7.25 % p.a. on deposits in savings accounts
4. Money transfer to any bank account in India (Free money transfer from Airtel to Airtel numbers within Airtel Bank)
5. Personal Accidental Insurance of Rs 1 Lakh with every Savings Account
6. Deposit and withdrawal facility across a network of Airtel retail outlets.
7. Airtel payments bank offers 1 minute talktime for every Rs 1 deposit.
Small Finance Bank Payment Bank

Capital requirement is Rs 100 crore Paid-up equity capital requirement of Rs 100 crore
The bank shall primarily undertake basic banking activities Payment Banks will initially be restricted to holding
of accepting deposits and lending to small farmers, small a maximum balance of 1 lakh rupees per individual
businesses, micro and small industries, and unorganised customer. It can issue ATM or debit cards but not
sector entities. It cannot set up subsidiaries to undertake credit cards.
non-banking financial services activities.
a) Professionals with 10 years in financial services or Card Issuers, Finance Companies, Business
promoter group with 5 year track record. Correspondents, Telecom Companies, Retailers etc
b) Existing Non-Banking Finance Companies (NBFCs),
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Micro Finance Institutions (MFIs), and Local Area Banks

(LABs) that are owned and controlled by residents can also
opt for conversion into small finance banks.
Promoters initial contribution should be 40% lowered to Promoters should retain a 40% stake for first five
26% in 12 years. years.
*The maximum loan size and investment limit exposure to No credit lending is allowed
single/group borrowers/issuers would be restricted to 15
per cent of capital funds
* Loans and advances of up to Rs 25 lakhs, primarily to
micro enterprises, should constitute at least 50 per cent of
the loan portfolio.
For the first three years, 25 per cent of branches should be No such Rules
in unbanked rural areas.
The small finance banks will be required to extend 75 -do-
percent of its Adjusted Net Bank Credit (ANBC) to the
sectors eligible for classification as priority sector lending
(PSL) by the Reserve Bank.
The foreign shareholding in the small finance bank would The foreign shareholding in the should be as per the
be as per the Foreign Direct Investment (FDI) policy for Foreign Direct Investment (FDI) policy for private
private sector banks as amended from time to time. sector banks as amended from time to time.
These banks will be subject to all prudential norms and These banks also should maintain CRR with the
regulations of RBI as applicable to existing commercial Reserve Bank, it will be required to invest minimum
banks including requirement of maintenance of Cash 75 percent of its demand deposit balances in
Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). Statutory Liquidity Ratio (SLR) with maturity up to
No forbearance would be provided for complying with the one year and hold maximum 25 per cent in current
statutory provisions. and time or fixed deposits with other scheduled
commercial banks for operational purposes and
liquidity management.
These Banks can offer all types of Deposits as like Payments banks can only offer Savings and Current
commercial Banks be it savings, Current, Fixed as well as accounts.
Recurring.
Banks Board Bureau (BBB)

The main aim of Banks Board Bureau is to recommend appointment of directors in Public Sector Banks (PSBs) and
advice on ways of raising funds and dealing with issues of stressed assets.
Besides this task, the BBB will also be a link between the government and banks and will be engaged with
banks to evolve strategies for them.
The first chairman of Banks Board Bureau selected is Vinod Rai who is former CAG.
Credit Rating Agencies in India

A credit rating agency is a company which rates the debtors on the basis of their ability to pay back the debt in timely
manner.
There are three big credit rating agencievvs in the world which are
1. Standard & Poor's (S&P) Headquarter New York, US
2. Moody's Headquarter - New York, US
3. Fitch Ratings- New York, US
There are mainly 5 credit rating agencies in India which are
CARE (Credit CRISIL (Credit ICRA ( Investment SMERA( SME ONICRA
Analysis and Rating Information information and Rating Agency of
Research) Services of India credit rating India Ltd)
Limited) agency)
Founded: 1993 Founded:1987 Founded 1991 Founded:2005
Mumbai Mumbai Gurgaon Mumbai Gurgaon, India
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It is the second-largest *CRISIL is the *It is a public *SMERA is a full *It is a private
credit rating agency in largest credit rating limited company. service credit rating sector
India. agency in India, with * ICRAs majority agency exclusively set agency set up by
a market share of shareholder is up for micro, small Onida Finance
greater than 60%. Moodys and medium
*CRISILs majority enterprises (MSME) in
shareholder is India.
Standard & Poors.
Rating of Banks in India
As per the recommendations of Padmanabhan Committee the banks in India should be rated on a 5 point
scale of A to E, based on international CAMELS rating model.
Upon this guidelines RBI has evolved the model for rating banks based on CAMELS. Each of the 6
components would be weighed on a scale of 1 to 100 and would contain several parameters with
individual weightage.
CAMELS Rating for Rating parameters for Rating Scale in India
Domestic Banks foreign banks
C Capital adequacy C Capital adequacy ratio A Sound in every respect
ratio
A Asset quality A Asset quality B Fundamentally sound, but with moderate
weaknesses
M Management L Liquidity C Financial, operational and/or compliance
Effectiveness weaknesses that give cause for supervisory
concern
E Earning C Compliance D Serious or moderate financial, operational
and/or managerial weaknesses that could impair
future viability
L Liquidity (asset- S System and controls E Critical financial weaknesses that render the
liability) possibility of failure in the near term
S System and
controls
Know Your Customer Guidelines

KYC means Know Your Customer. It is a process by which banks obtain information about the identity and address
of the customers.
This process helps to ensure that banks services are not misused. The KYC procedure is to be completed by
the banks while opening accounts. Banks are also required to periodically update their customers KYC
details.
To open a bank account, one needs to submit a proof of identity and proof of address together with a recent
photograph.
You can still open a bank account known as Small Account by submitting your recent photograph and
putting your signature or thumb impression in the presence of the bank official.
However Small Accounts have certain limitations such as:
Balance in such accounts at any point of time should not exceed Rs.50,000
Total credits in one year should not exceed Rs.1,00,000
Total withdrawal and transfers in a month should not exceed Rs.10,000
Foreign remittances cannot be credited to such accounts.
E-KYC -Electronic KYC.
E-KYC is possible only for those who have Aadhaar numbers. While using e-KYC service, you have to authorise the
Unique Identification Authority of India (UIDAI), by explicit consent, to release your identity/address through
biometric authentication to the bank branches/business correspondent (BC).
The UIDAI then transfers your data comprising your name, age, gender, and photograph electronically to the
bank.
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Information thus provided through e-KYC process is permitted to be treated as an Officially Valid
Document under PML Rules and is a valid process for KYC verification.
Types of Accounts, Deposits, Cheques, DDs & BSBDS

Bank Accounts are classified into four different types. They are,
1) Current Account
2) Savings Account
3) Recurring Deposit Account
4) Fixed Deposit Account
1) Current account
For business persons, firms, companies, public enterprises etcand are never used for the
purpose of investment or savings.
These deposits are the most liquid deposits and there are no limits for number of transactions
or the amount of transactions in a day.
No interest paid on amount held in the account, banks charges certain service charges, on
such accounts.
Do not have any fixed maturity as these are on continuous basis accounts.
2) Savings Account
For saving purposes
Any individual either single or jointly can open a savings account. Most of the salaried persons, pensioners
and students use Savings Account.
Advantage of having Savings Account is Banks pay interest for the savings. The saving account holder is
allowed to withdraw money from the account as and when required.
Rate of interest ranges between 4% to 6% per annum in India.
There is no restriction on the number and amount of deposits. But withdrawals are subjected to certain
restrictions. Some banks recommend to maintain a minimum amount to keep it functioning.
3) Recurring deposit account or RD account is opened by those who want to save certain amount of
money regularly for a certain period of time and earn a higher interest rate.
A fixed amount is deposited every month for a specified period and the total amount is repaid
with interest at the end of the particular fixed period.
Period of deposit is minimum six months and maximum ten years.
Interest rates vary for different plans based on the amount one saves and the period of time
and also on banks.
No withdrawals are allowed from the RD account. However, the bank may allow to close the
account before the maturity period.
Can be opened in single or joint names. Banks are also providing the Nomination facility to
the RD account holders.
4) Fixed Deposit Account(FD)
A particular sum of money is deposited in a bank for specific period of time. In some other countries these
are known as "Term Deposits" or even called "Bond".
Its one time deposit and one time take away (withdraw) account. The money deposited in this account can not
be withdrawn before the expiry of period.
In case of need, the depositor can ask for closing the fixed deposit prematurely by paying a penalty(usually of
1%, but some banks either charge less or no penalty) The penalty amount varies with banks.
A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit vary according to
amount, period and also from bank to bank.
Demat account
Demat account is an account in which the shares and securities are held in dematerialized form i.e. electronically
without any physical papers held. To carry out transactions in the stock market, one should get open a demat account.
Multiple demat accounts can be opened. Demat accounts are held by a single person i.e. no joint accounts can be
operated.
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CASA Deposits
It refers to Current Account Saving Account Deposits.
Low interest deposits for the Banks compared to other types of the deposits. So banks tend to
increase the CASA deposits and for this they offer various services such as salary accounts to
companies and encouraging merchants to open current accounts also use their cash-management
facilities.
The Bank is High CASA ratio(CASA deposits as % of total deposits) are in a more
comfortable position than the Banks with low CASA ratios , which are more dependent on term
deposits for their funding, and are vulnerable to interest rate shocks in the economy, plus lower
spread they earn.
Term Deposits are of three kinds
1. Fixed deposits: A fixed rate of interest is paid at fixed, regular intervals.
2. Re-investment deposits: Interest is compounded quarterly and paid on maturity, along with
the principal amount of the deposit. In the Flexi Deposits amount in savings deposit accounts beyond
a fixed limit is automatically converted into term-deposits.
3. Recurring deposits: Fixed amount is deposited at regular intervals for a fixed term and the
repayment of principal and accumulated interest is made at the end of the term. These deposits are
usually targeted at persons who are salaried or receive other regular income. A Recurring Deposit
can usually be opened for any period from 6 months to 120 months.
Cheque and its Types

A cheque is an agreement between two individuals or organizations to make a payment. In simple words Cheque is an
order to a bank to pay a stated sum from the drawers account, written on a specially printed form. Cheque is used to
make safe and convenient payment. It is less risky and the danger of loss is minimized.
Drawer: The person writing the cheque, who has a transaction banking account where their money is held.
The drawer writes the various details including the monetary amount, date, and a payee on the cheque, and
signs it, ordering their bank, known as the Drawee, to pay that person or company the amount of money
stated.
Bearer Cheque
Bearer Cheque refer to a cheque that is payable to whoever presents the cheque, rather than to a designated payee.
Uncrossed/Open Cheque
When a cheque is not crossed, it is known as an Open Cheque or an Uncrossed Cheque. The payment of such a
cheque can be obtained at the counter of the bank.
Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque. A crossed cheque cannot be encashed
at the cash counter of a bank but it can only be credited to the payees account.
Anti-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as anti-dated cheque.
Such a cheque is valid upto three months from the date of the cheque.
Post-Dated Cheque
If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A postdated cheque
cannot be honoured earlier than the date on the cheque.
Stale Cheque
If a cheque is presented for payment after three months from the date of the cheque it is called stale cheque. A stale
cheque is not honoured by the bank.
Demand Draft:
DD, it is kind of a pre-paid negotiable instrument that is used to direct payments from one bank to another bank or one
of its own branches to pay a certain sum to the specified party
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Types of Payments & Money Transfer
Automatic Teller Machine

Automated Teller Machine is a computerized machine that provides the customers of banks the facility of accessing
their account for dispensing cash and to carry out other financial & non-financial transactions without the need to
actually visit their bank branch.
Various types of ATMs
On Site ATM: This type of Atm-Is situated either within the branch premises or in very close proximity of the
branch.
Offsite ATM:Is not situated within the branch premises but is located at other places, such as malls, airports and
petrol stations etc...
Worksite ATM: It is located within the premises of an organisation and is generally meant only for the employees of
the organisation.
White Label ATMs (WLAs): ATMs set up, owned and operated by non-banks are called White Label ATMs. Non-
bank ATM operators are authorized under Payment & Settlement Systems Act, 2007 by the RBI. However in White
Label ATMs acceptance of cash deposits at the WLAs is not permitted at present.
Brown Label ATM: 'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the
ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided
by a sponsor bank whose brand is used on the ATM.
Free transactions at ATMs
With effect from November 01, 2014, a bank must offer to its savings bank account holders a minimum number of
free transactions at ATMs, However It is not applicable to Basic Savings Bank Deposit Accounts (BSBDA) as
withdrawals from BSBDA are subject to the conditions associated with such accounts.
Banks own ATMs at any location: Banks must offer their savings bank account holders a minimum of five free
transactions (including both financial and non-financial) in a month.
Transactions at any other banks ATMs at Metro locations: In case of ATMs located in six metro locations, viz.
Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, banks must offer their savings bank account
holders a minimum of three free transactions (including both financial and non-financial transactions) in a month.
Failed ATM/WLA transaction:

The customer should lodge a complaint with the card issuing bank at the earliest. This process is applicable even if the
transaction was carried out at another banks/non-banks ATM.
Banks have been mandated to resolve customer complaints by re-crediting the customers account within 7
working days from the date of complaint. However if the complaint raised but the customer is not resolved
Banks have to pay compensation of Rs. 100/- per day for delays in re-crediting the amount beyond 7
working days from the date of receipt of complaint for failed ATM transactions.
The compensation has to be credited to the account of the customer without any claim being made by the
customer. If the complaint is not lodged within 30 days of transaction, the customer is not entitled for any
compensation for delay in resolving his / her complaint.
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Credit Card
A credit card is a Plastic card issued by Banks to enable the cardholder to pay a merchant for goods and services,
based on the cardholder's promise to the card issuer to pay them for the amounts so paid plus other agreed
charges.Central Bank of India was the first public bank to introduce Credit card.
Banks in India can undertake credit card business either departmentally or through a subsidiary company set
up for the purpose. They can also undertake domestic credit card business by entering into tie-up arrangement
with one of the banks already having arrangements for issue of credit cards.
Prior approval of the Reserve Bank is not necessary for banks desirous of undertaking credit card business
either independently or in tie-up arrangement with other card issuing banks.
Banks can do so with the approval of their Boards. However, only banks with net worth of `100 crore and
above should undertake credit card business.
Prepaid cards
A prepaid card works a bit like a gift card you top it up with money, and you can only spend up to that
amount. Often used by travellers to carry holiday money, and by anyone without a normal bank account
generally kids, teens and people with poor credit ratings.
Smart card:
It contains an electronic chip which is used to store cash. This is most useful when you have to pay for small
purchases. For example bus fares and coffee. No identification, signature or payment authorisation is
required for using this card. The exact amount of purchase is deducted from the smart card during payment
and is collected by smart card reading machines. No change is given.
Co-branded cards
are credit cards issued by card companies that have tied up with a popular brand for the purpose of offering
certain exclusive benefits to the consumer. For example, the Citi-Times card gives you all the benefits of a
Citibank credit card along with a special discount on Times Music cassettes, free entry to Times Music
events, etc.
Rupay Card:
RuPay is the Indian version of the card network which is started by National Payment Corporation of India on 26th
March, 2012. Rupay primarily provides debit cards. Apart from this, Rupay also issues Kisan Credit Cards for
farmers.
RuPay competes with other card based payment system providers such as MasterCard, Visa and Amex in
India.RuPay has over 36% of market share in Indian card payment scheme behind Visa which has over
50% of the market share.
India is now the sixth country in the world to have domestic payment gateway system (the other five
countries are US, Japan, China, Singapore and Brazil).
RuPayis the combination of two terms Rupee and Payment. The RuPay Visual Identity is a modern and
dynamic unit.
The orange and green -nation on the move and a service that matches its pace.
The color blue - feeling of tranquility which is the people must get while owning a card of the brand
RuPay.
Kisan Credit Card

The Kisan Credit Card (KCC) was introduced by the NDA Government in August 1998 has emerged as an innovative
credit delivery mechanism to meet the production credit requirements of the farmers in a timely and hassle-free
manner. The card is valid for five years and subject to annual renewals.
This KCC card offering Credit to the farmers in Two types viz,
Cash Credit
Term Credit (For allied activities such as pump sets, land development, plantation,
drip irrigation)
The scheme is under implementation in the entire country by the vast institutional credit framework involving
Commercial Banks, RRBs and Cooperatives and has received wide acceptability amongst bankers and
farmers.
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It was first proposed in the Budget 1998-99 by then Finance Minister Yashwant Sinha. In the Subsequenttimes
NABARD had prepared a Model Kisan Credit Card Scheme in consultation with the Major Banks on the
recommendations of R V Gupta Committee.
Repayment:
Cash Credit: Crop loans as well as working capital for agriculture and allied activities to be provided
as revolving cash credit limit repayable in 12 months. .
Term Loan: Repayable within a maximum period of 5 years, depending on the type of activity /
investment and repayment capacity.
Point of Sale Machine

A point-of-sale (POS) terminal is a computerised replacement for a cash register which can process credit and debit
cards. A customer needs to enter a card PIN to complete the transaction using the PoS terminal.
Merchant Discount Rate (MDR):

MDR is capped for debit cards but not for credit cards. Effective July 1, 2012, RBI capped the MDR for debit cards at
0.75 per cent of the transaction amount for value up to Rs.2,000 and 1 per cent for a transaction amount for value
above Rs.2,000. For credit cards, the MDR varies between 1.5 per cent to 2.5 per cent.
Electronic Funds Transfer at Point of Sale(EFTPOS)

EFTPOSis an electronic payment system involving electronic funds transfers based on the use of payment cards, such
as debit or credit cards, at payment terminals located at points of sale.
MICR(Magnetic Ink Character Recognition)

It is a technology which allows machines to read and process cheques enabling thousands of cheque
transactions in a short time.
MICR code is usually a nine digit code
First three digits: Represent the city code that is the city in which the bank branch is located. Next three
digits: Bank code
Last three digits: Bank branch code
e.g. For example, if you have an account with Axis Bank,New Delhi (Defence Colony) then its nine digit
MICR code will be 110211004 where:
110, the first three digits representing the city code for New Delhi;
211, the next three digits representing the bank code for Axis bank;
And 004, the last three digits representing the bank branch code for Defence Colony.
IFSC(Indian Financial System Code)

The Payment Systems such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement
(RTGS) & Centralized Funds Management System Code Name Digits
(CFMS) used IFS Codes. IFSC developed by the IFSC(Indian Financial System Code) 11
Reserve Bank of India. MICR (Magnetic Ink Character Recognition) 9
The code consists of 11 Characters: SWIFT (Society for Worldwide Interbank 11
First 4 characters represent the entity Financial Telecommunication (SWIFT))
Fifth position has been defaulted with a 0 (Zero) for PAN (Permanent Account Number) 10
future use UID ( Unique Identification Number) 12
Last 6 characters denotes the branch identity UAN (Universal Account Number) 12
e.g ICIC0000438 PIN (Postal Index Number) 6
CIN (Cheque Identification Number) 7
BIC (Bank Identification Code) 8
SWIFT Code:
It is a unique identification code for both financial and non-financial institutions approved by the International
Organization for Standardization (ISO). SWIFT Standards, a division of the Society for Worldwide Interbank
Financial Telecommunication (SWIFT), handles the registration of these codes.
SWIFT Codes are used when transferring money between banks, particularly for international wire transfers,
and also for the exchange of other messages between banks.
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Bharat Bill Payment System (BBPS)

Bharat Bill Payment System (BBPS) is an integrated bill payment system which will offer interoperable bill payment
service to customers online as well as through a network of agents on the ground. The system will provide multiple
payment modes and instant confirmation of payment.
With a need of bill payments system, various organizations decided to provide a single platform to make all
these payments. So an integrated bill payment system called BBPS was proposed for which the policy
guidelines were issued by the Reserve Bank of India on November 28, 2014.
National Payment Corporation (NPCI) had been identified to act as Bharat Bill Payment Central Unit
(BBPCU) which will be a single authorized entity for operating the BBPS.
The biggest advantage is that the bill can be paid anywhere and anytime. The system will provide multiple
payment modes and instant confirmation of payment. Payments may be made through the BBPS using cash,
transfer cheques, and electronic modes. The BBPS outlets would include banks, ATMs, business
correspondents, kiosks etc.s
Electronic Clearing Service (ECS)

The Reserve Bank of India offers the Electronic Clearing System (ECS) for faster payments and collections.
ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in
nature. By repetitive and periodic, it is meant that the transactions occur repetitively and after a fixed
time interval.
ECS is used by institutions for making bulk payment of amounts or for bulk collection of amounts.
Examples for bulk payment of amounts include paying of interest, salary, pension, etc.
Examples for bulk collection of amounts includes telephone / electricity / water bills, cess / tax
collections, loan installment repayments, periodic investments in mutual funds, insurance premium,
etc.
ECS is used for faster payments and collections. It is used for either making bulk payment of
amounts or for bulk collection of amounts. The institutions who apply for ECS can initiate the
process, no need to go to bank branch again and again.
Two variants:
ECS Credit: ECS Credit is for making bulk payment of amounts. Under this scheme, a single account is
debited and then multiple accounts are credited. Example: A company has 50 employees and at the start of
month it gives salary to all the employees so instead of crediting each account separately, the company can
use the ECS Credit Scheme.
ECS Debit: ECS Debit is for bulk collection of amounts. Under this scheme, multiple accounts are debited
and then a single account is credited. Example: Many people go for insurance policies and they have allowed
the payment of their premiums from their account. Now it is possible that on a single day, many customer
accounts are to be debited to have the premium from them. Here ECS Debit scheme can be used.
Block Chain Technology

ICICI Bank is the first bank in the country and among the first few globally to exchange and authenticate remittance
transaction messages as well as original international trade documents related to purchase order, invoice, shipping &
insurance, among others, electronically on block chain in real time.

The usage of block chain technology simplifies the process and makes it almost instantto only a few
minutes. Typically, this process takes a few days.
The block chain application co-created by ICICI Bank replicates the paper-intensive international trade
finance process as an electronic de centralised ledger, that gives all the participating entities including banks
the ability to access a single source of information.
NEFT, IMPS & RTGS
(National Electronic Funds Transfer (NEFT) Real Time Gross Settlement (RTGS)
NEFT and RTGS are settlement systems by RBI while IMPS is settlement mechanism introduced by National
Payment Corporation in 2010.
There is no limit either minimum or maximum on (RBI has not fixed the maximum amount. It has given
the amount of funds that could be transferred using liberty to the bank to decide the maximum amount.)
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NEFT. However, maximum amount per transaction is The minimum amount to be remitted through RTGS is ` 2
limited to Rs.50, 000/- for cash-based remittances lakh. There is no upper ceiling for RTGS transactions.
within India and also for remittances to Nepal under the
Indo-Nepal Remittance Facility Scheme.
NEFT operates in hourly batches - there are twelve The RTGS service window for customer's transactions is
settlements from 8 am to 7 pm on week days (Monday available to banks from 9.00 hours to 16.30 hours on week
through Friday) and six settlements from 8 am to 1 pm days and from 9.00 hours to 14:00 hours on Saturdays for
on Saturdays. settlement at the RBI end.
a) Inward transactions Free, no charge to be levied. a) Inward transactions Free, no charge to be levied.
b) Outward transactions at originating bank branches
charges applicable for the remitter b) Outward transactions ` 2 lakh to ` 5 lakh - not
- For transactions up to Rs 10,000 ---Rs 2.50 (+ Service exceeding ` 30.00 per transaction;
Tax) Above ` 5 lakh not exceeding ` 55.00 per transaction.
- For transactions above Rs 10,000 up to Rs 1 lakh: not
exceeding Rs 5 (+ Service Tax)
- For transactions above Rs 1 lakh and up to Rs 2 lakhs:
not exceeding Rs 15 (+ Service Tax)
- For transactions above Rs 2 lakhs: not exceeding Rs 25
(+ Service Tax)
IMPS:
Immediate Payment Service (IMPS) is an instant interbank electronic fund transfer service through mobile
phones.
Immediate transfer (24 x 7)
Upper limit : 50k per day. Total 2.5 lac per month.
Unified Payment Interface
Unified Payment Interface have officially launched by National Payments Corporation of India (NPCI), under RBI for
instant inter-bank real time transactions using android apps.
UPI is a payment system that allows money transfer between any two bank accounts by using a smartphone.
UPI allows a customer to pay directly from a bank account to different merchants, both online and offline,
without the hassle of typing credit card details, IFSC code, or net banking/wallet passwords.
Banks Live on UPI (App Name) Non-Bank UPI App

1. Andhra Bank (Andhra Bank One ) 2. ICICI Bank (Pockets- ICICI
Bank)
3. Allahabad Bank(Allahabad Bank 4. IDBI Bank Nupay
UPI)
5. Axis Bank(Axis Pay) 6. IDFC Bank (IDFC Bank UPI Alphapay
App)
7. Bank of Maharashtra (MAHAUPI) 8. IndusInd Bank (Indus Pay) Finmo
9. Bank of Bardoda (Baroda MPay) 10. TJSB Sahakari Bank Jugnoo Pay
11. Bhartiya Mahila Bank 12. Oriental Bank of Mypoolin
Commerce (OBCUPI PSP)
13. Canara Bank (Empower) 14. Karnataka Bank (KBL Smartz) Paysay
15. Central Bank of India 16. Kodak Mahindra Bank (KayPay) PhonePe
17. Catholic Syrian Bank(CSB UPI) 18. RBL Bank Ltd Splitkart
19. DCB Bank 20. UCO Bank (UCO UPI) Trupay
21. Federal Bank (Lotza) 22. Union Bank of India (Union
Bank UPI)
23. HDFC Bank(HDFC Bank 24. United Bank of India (United
MobileBanking) UPI)
25. HSBC Bank 26. Punjab National Bank (PNB
UPI)
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27. South Indian Bank (SIB M-Pay 28. Standard Chartered Bank
(UPI Pay))
29. State Bank of India (SBI Pay) 30. Vijaya Bank (Vijaya UPI App)
31. YES Bank (Yes Pay) 32. Dena Bank
Aadhaar Enabled Payment System:

AEPS is to further speed track Financial Inclusion in the country, it is a bank led model which allows online
interoperable financial inclusion transaction at PoS (MicroATM) through the Business correspondent of any bank
using the Aadhaar authentication.
The four Aadhaar enabled basic types of banking transactions are as follows:-
Balance Enquiry
Cash Withdrawal
Cash Deposit
Aadhaar to Aadhaar Funds Transfer
1. The only inputs required for a customer to do a transaction under this scenario are:-
2. IIN (Identifying the Bank to which the customer is associated)
3. Aadhaar Number
4. Fingerprint captured during their enrollment
*99# Service
NPCI launched *99# service, which works on Unstructured Supplementary Service Data (USSD) channel. This
service was launched envisioning the potential of Mobile Banking and the need for immediate low value remittances
which will help in financial deepening and inclusion of under banked society in the mainstream banking services.
*99# service was dedicated to the nation by Prime Minister of India Narendra Modi on 28th August 2014 as
part of Pradhan Mantri Jan Dhan Yojana (PMJDY).
Banking customers can avail this service by dialing *99#, a Common number across all Telecom Service
Providers (TSPs) on their mobile phone and transact through an interactive menu displayed on the mobile
screen.
Key services offered under *99# service include, interbank account to account fund transfer, balance enquiry,
mini statement besides host of other services.
This service offered by 43 leading banks & all GSM service providers and can be accessed in 12 different
languages including Hindi & English.
Currently, following Financial (Fund Transfer (P2P), (P2A), (P2U)) and, Non-financial and Value Added
Services (VAS) are offered through *99# service.(P2P- Person to Person ), (P2Account ), (P2U- Aadhaar
Number(UID)).
National Automated Clearing House (NACH):

NPCI has implemented National Automated Clearing House (NACH) with an aim to consolidate multiple ECS
systems running across India and provides a framework for the harmonization of standard & practices.
This system has been launched for Banks, Financial Institutions, Corporates and Government a web based
solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in
nature.
NACHs Aadhaar Payment Bridge (APB) System, developed by NPCI has been helping the Government and
Government Agencies in making the Direct Benefit Transfer scheme a success.
Balance Sheet
A balance sheet is a snapshot of a business' financial position on one particular day.
It provides a summary of what a business owns or is owed. It states what assets the business owns and
what liabilities it owes, at a particular date.
The balance sheet is used to show how the business is being funded and how those funds are being used.
Why it is called Balance Sheet?
Because there is a debit entry and a credit entry for everything, so the total value of the assets is always the
same value as the total of the liabilities.
Contents
Fixed assets:: Long-term
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Current assets: Short-term

Current liabilities: What the business owes and must repay in the short term
Long-term liabilities: Owner's or shareholders' capital
Fixed assets
Tangible assets - e.g. buildings, land, machinery, computers, fixtures and fittings.
Intangible assets - e.g. goodwill, intellectual property rights (such as patents, trademarks and long-term
investments.
Current assets e.g. stock, work in progress, money owed by customers, cash in hand or at the bank, short-
term investments, pre-payments
Current liabilities
These are amounts owed to you and due within one year.
money owed to suppliers
short-term loans, overdrafts or other finance
taxes due within the year
Long-term liabilities
Creditors due after one year: Amounts due to be repaid in loans or financing after one year, eg bank or
directors' loans, finance agreements
Capital and reserves: Share capital and retained profits, after dividends (if your business is a limited
company), or proprietors capital invested in business (if you are an unincorporated business)
What does a balance sheet show?
How solvent the business is
How liquid its assets are - how much is in the form of cash or can
Be easily converted into cash, i.e. stocks and shares
How the business is financed
How much capital is being used
NPA and Recovering NPA
Non-performing asset (NPA) :

Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of
principal has remained past due for a specified period of time when it ceases to generate income for the lender.
According to the Bank for International Settlements (BIS), Indias corporate-debt-to-GDP ratio stood at 515 of
GDP as of March 31, 2016. The size of Indias corporate debt, relative to GDP, is much lower than other
major economies such as the US (72%) and the EU (105%).
Recovering NPA:
For recovery of NPA there are different tools are available. The important purpose of these tools are to recover the
loan amount from borrower. These tools can because according to Loan amount.
Securitization Act:
The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI) aims to empower banks as secured creditors to take possession, manage and sell the securities without
the intervention of court/tribunal.
It also aims at Asset Reconstruction by securitization or Reconstruction Company. However, loan with
balance below Rs.1 lakh unsecured loans and loans against collateral of agricultural land are exempted from
the purview of this act.
After the amendment of the SARFAESI Act in August 2016, the law now allows secured creditors to take
possession over a collateral, against which a loan had been provided, upon a default in repayment. This
process is undertaken with the assistance of the District Magistrate, and does not require the intervention of
courts or tribunals. The Bill provides that this process will have to be completed within 30 days by the District
Magistrate.
ARC:
ARCs specialized in resolution of stressed assets. They acquire stressed assets from banking sector and use their
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expertise to resolve these cases. They in-turn issue security receipts against acquired assets to
Qualified Institutional Borrowers (which also includes banks).
Lok Adalats:
LokAdalat is for the recovery of small loans. According to RBI guidelines issued in 2001, they cover NPA up to Rs. 5
lakhs, both suit filed and non-suit filed are covered.
Debt Recovery Tribunals:

The debt recovery tribunal act was passed by Indian Parliament in 1993 with the objective of facilitating the banks and
financial institutions for speedy recovery of dues in cases where the loan amount is Rs. 10 lakhs and above. GOI has
constituted 33 Debt Recovery Tribunals and 5 Debt Recovery Appellate Tribunal across the country.
Basel Accords
The Basel Accords refer to the banking supervision Accords (recommendations on banking regulations) issued by the
Basel Committee on Banking Supervision (BCBS). They are called the Basel Accords as the BCBS maintains its
secretariat at the Bank for International Settlements (BIS) in Basel, Switzerland and the committee normally meets
there. The Basel Accords is a set of recommendations for regulations in the banking industry.
Upto now three accords have been published
BASEL I
Basel I norms were published in 1988 which asked to set a minimum capital requirements for banks. It defined capital
requirement and structure of risk weights for banks. The goal was to minimize credit risk i.e. the defaults on a credit or
loan when the borrower is unable to pay back to the bank.
The 1988 Accord called for a minimum capital ratio of capital to risk-weighted assets of 8% to be implemented by the
end of 1992. Ultimately, this framework was introduced not only in member countries but also in virtually all other
countries with active international banks.
BASEL II
After Basel I, Basel II norms were published in 2004.
Unlike the goal of Basel I norms, Basel II focused on how much of the banks capital, bank must keep aside in order
to reduce their credit risks. So in case if a bank is exposed to a greater risk, it needs to keep aside a greater capital to
guard against the risks.
Basel II was to be implemented in early 2008.
The revised framework comprised three pillars, namely:
Minimum capital requirements, which sought to develop and expand the standardised rules set out in the 1988 Accord;
Supervisory review of an institutions capital adequacy and internal assessment process; and
Effective use of disclosure as a lever to strengthen market discipline and encourage sound banking practices.
BASEL III
After Basel II, Basel III norms were published in 2010. They have been designed to address the shortcomings
of Basel II after the 2008 financial crisis that the world faced.
In September 2010, the Group of Governors and Heads of Supervision announced higher global minimum
capital standards for commercial banks.
According to Basel Committee, Basel III is a comprehensive set of reform measures, developed by the
Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of
the banking sector.
These measures aim to:
Improve the banking sectors ability to absorb shocks arising from financial and economic stress, whatever the
source
Improve risk management and governance
Strengthen banks transparency and disclosures.
The three pillars of Basel Norms are unchanged in Basel III also.
Basel III was to be implemented until 31 March 2018 which is extended to 31 March 2019.
Basel III is not to be succeeded by Basel II, rather Basel III will work alongside Basel I and Basel II.
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Various Types Of Risks

Financial Risk
Financial Risk develops from the business transactions done by the Banks which is exposed to potential Loss.
Market Risk:
Market Risk is a type of risk in which losses in on- or off-balance sheet positions that arise from movement in market
prices. Market risk is the most prominent for banks present in investment banking.
Credit Risk:
Credit Risk is the potential that a bank borrower/counter party fails to meet the obligations on agreed terms. There is
always scope for the borrower to default from his commitments for one or the other reason resulting in crystalisation
of credit risk to the bank. Credit risk is inherent to the business of lending funds to the operations linked closely to
market risk variables
Interest Rate Risk
Interest Rate Risk is the type of risk arises due to fluctuation in interest rate. Changes in interest rate affect earnings,
value of assets, liability off-balance sheet items and cash flow. Earnings side involves analyzing the impact of changes
in interest rates on accrual or reported earnings in the near term.
Liquidity risk
This kind of Risk arises due to inability of bank to meet its obligations when any asset may not be realized into cash.
Also, we can say that, it is a mismatch of assets and liabilities. Liquidity is the ability to efficiently accommodate
deposit as also reduction in liabilities and to fund the loan growth and possible funding of the off-balance sheet claims.
Foreign Exchange Risk
Forex risk is the risk that a bank may suffer loss as a result of adverse exchange rate movement during a period in
which it has an open position, either spot or forward or both in same foreign currency.
Capital Risk
This type of risk arises where the capital comes under risk partially or the whole in some cases emergencies.
Operational Risk
This risks arises due to failure of day to day activities, system or people. It includes both internal and external frauds
like failures related to policies, laws, regulations, documentation or any technological risks. It is defined as any risk
that is not categorized as market or credit risk, is the risk of loss arising from inadequate or failed internal processes,
people and systems or from external events.
Inflation and its types
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time
Types of Inflation:
Demand pull inflation: This type of inflation occurs when total demand for goods and services in an economy
exceeds the supply of the same.
Cost-push Inflation: If there is increase in the cost of production of goods and services, due to increase of wages and
raw materials cost, there is likely to be a consequent increase in the prices of finished goods and services.
Stagflation: It is a situation in which the inflation rate is high and the economic growth rate is low.
Reflation: It is the act of stimulating the economy by increasing the money supply or by reducing taxes. It is an act of
pumping money in the market to increase the circulation so that economy can be stipulated again.
Disinflation: It is a decrease in the rate of inflation a slowdown in the rate of increase of the general price level of
goods and services in a nations gross domestic product over time.
Deflation: It is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate
falls below 0% (a negative inflation rate).
Hyper inflation: It is the extremely rapid escalation of prices (typically more than 50% per month) for goods and
services.
How to Measure Inflation:
CPI(Consumer Price Index): A consumer price index (CPI) measures changes in the price level of consumer goods
and services purchased by households or consumer.
Wholesale price index: The Wholesale Price Index or WPI is the price of a representative basket of wholesale goods.
Financial Inclusion Schemes

Financial inclusion is the delivery of financial services at affordable costs to vast sections of disadvantaged and low
income groups.
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No-frills account These accounts provide basic facilities of deposit and withdrawal to accountholders makes
banking affordable by cutting down on extra frills that are no use for the lower section of the society. These accounts
are expected to provide a low-cost mode to access BANK ACCOUNTS. RBI also eased KYC (Know Your customer)
norms for opening of such accounts.
Banking service reaches homes through business correspondents The banking systems have started to
adopt the business correspondent mechanism to facilitate banking services in those areas where banks are unable to
open brick and mortar branches for cost considerations.
Business Correspondents provide affordability and easy accessibility to this unbanked population. Armed with suitable
technology, the business correspondents help in taking the banks to the doorsteps of rural households.
Lead Bank Scheme-1969 aimed at forming a coordinated approach for providing banking facilities. To enable
banks to assume their lead role in an effective and systematic manner, all districts in the country (excepting the
metropolitan cities of Mumbai, Kolkata, Chennai and certain Union Territories) were allotted among Public Sector
Banks and a few Private Sector Banks The Lead bank role is to act as a consortium leader for co-coordinating the
efforts of all credit institutions in each of the allotted districts for expansion of branch banking facilities and for
meeting the credit needs of the rural economy. For the preparation of District Credit Plans and monitoring their
implementation a Lead bank Officer (LBO) now designated as Lead District Manager was appointed in 1979
Swabhiman Scheme Opening of Bank accounts covering the habitations with minimum population atleast through
Business correspondent model providing cash services.Habitations with population more than 1600 in plain areas and
1000 in north-eastern and hilly states as per 2001 census are covered.
Indo-Nepal Remittance Facility scheme

Indo-Nepal Remittance Facility is a cross-border remittance scheme to transfer funds from India to Nepal, enabled
under the NEFT Scheme.
The scheme was launched to provide a safe and cost-efficient avenue to migrant Nepalese workers in India to
remit money back to their families in Nepal. A remitter can transfer funds up to Indian Rupees 50,000
(maximum permissible amount) from any of the NEFT-enabled branches in India.
The beneficiary would receive funds in Nepalese Rupees.
Under the Scheme, even a walk-in customer can transfer funds upto Rs 50,000 by depositing the cash at the
remitting bank branch.
In Nepal, the Indo-Nepal Remittance Facility Scheme is handled by Nepal SBI Ltd. (NSBL). If the beneficiary
does not have a bank account with NSBL or resides in a locality/ area in Nepal not serviced by a NSBL bank
branch, an arrangement has been entered into by NSBL with a money transfer company in Nepal (called
Prabhu Money Transfer) who would make arrangements for delivery of cash (in Nepalese Rupees) to the
beneficiary.
The bank branches originating the Indo-Nepal remittance transactions under the NEFT will process it like any
other NEFT transaction,
However an originator in India is allowed to remit a maximum of 12 remittances in a year under the scheme.
In case of complaints relating to non-credit or delay in credit to the beneficiary account or for complaints of
any other nature, the NEFT Customer Facilitation Centre (CFC) of the respective bank (the originating bank
and / or SBI) can be contacted.
Lead Bank Scheme

The Lead Bank Scheme was introduced in 1969 to provide lead roles to individual banks (both in public sector and
private sector) for the districts allotted to them.
Commercial banks did not have adequate presence in rural areas and also lacked the required rural orientation
and so the rural areas were not able to enjoy the benefits of banking.
So a bank (public or private) was given some area in which that bank had to play a lead role in providing
financial services to the people, making them aware about the banks and various benefits of banks and also
generating trust among people so that they deposit their money without any fear of loss or fraud. So this bank
was the lead bank of area.
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Kisan Vikas Patra

KisanVikas Patra is a saving certificate scheme which was first launched in 1988 by India Post. KVP was closed in
2011 and the new government relaunched it in 2014. It is regulated by KVP Rules 2014, Scheme is available through
Post Offices and those banks that are authorized to operate PPF scheme.
Amount Invested matures in 112 months.
Rate of Interest 7.7%.
Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
KVP can be purchased from any Departmental Post office.
Facility of nomination is available(pledge for loan facility and 3. pre-mature payment after 2 years and 6
months subject to certain conditions, is eligible).
Certificate can be transferred from one person to another and from one post office to another.
Certificate can be encashed after 2 & 1/2 years from the date of issue.
Denomination: Rs.1000, Rs.5000, Rs.10000 and Rs.50000 and there is no maximum Limit.
Types of certificates: Category Single, Joint A-Type and Joint B-Type (E/S).
Pradhan Mantri Jan-Dhan Yojana

Pradhan Mantri Jan-Dhan Yojana is India's National Mission for Financial Inclusion Scheme which was launched by
the Prime Minister of India Narendra Modi on 28 August 2014.PMJDY accounts are being opened with Zero balance.
Benefits under PMJDY Scheme
Interest on deposit.
Accidental insurance cover of Rs. 1 lac
The scheme provide life cover of Rs. 30,000/- payable on death of the beneficiary, subject to fulfillment of the
eligibility condition.
After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
The Claim under Personal Accidental Insurance under PMJDY shall be payable if the Rupay Card holder have
performed minimum one successful financial or non-financial customer induced transaction at any Bank
Branch, Bank Mitra, ATM, POS, E-COM etc.
Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the
household.
Basic Savings Bank Deposit Account(BSBDA)

The aim of introducing BSBDA is part of the efforts of RBI for furthering financial inclusion objectives. The Basic
Savings Bank Deposit Account allows you to bank with a zero minimum balance requirement.
All the existing Nofrills accounts opened by the banks are now converted into BSBDA in compliance with
the guidelines issued in 2012 by the Reserve Bank of India as well as fresh accounts opened under the said
circular should be treated as BSBDA.
RBI guidelines:
Basic Savings Bank Deposit Account should be considered as a normal banking service available to all
customers (Any individual, including poor or those from weaker section of the society), through branches.
BSBDA guidelines are applicable to all scheduled commercial banks in India, including foreign banks
having branches in India.
The services available in the account will include deposit and withdrawal of cash at bank branch as well as
Free ATMscumDebit Card Receipt/credit of money through electronic payment channels or by means
of deposit/collection of cheques drawn by Central/State Government agencies and departments.
There will be no limit on the number of deposits that can be made in a month, account holders will be
allowed a maximum of four withdrawals in a month, including ATM withdrawals.
No charge will be levied for nonoperation/activation of inoperative Basic Savings Bank Deposit Account.
Holders of Basic Savings Bank Deposit Account will not be eligible for opening any other savings bank
deposit account in that bank. If a customer has any other existing savings bank deposit account in that bank,
he/she will be required to close it within 30
days from the date of opening a Basic Savings Bank Deposit Account.
One can have Term/Fixed Deposit, Recurring Deposit etc., and accounts in the bank where one holds
Basic Savings Bank Deposit Account.
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In the BSBDA Accounts with introduction/ Small Accounts aggregate of all credits in a financial year does
not exceed Rs.1.00 lac.
The aggregate of all withdrawals and transfers in a month does not exceed Rs.10,000/ Balance at any point of
time does not exceed Rs.50,000/.
Others
Strategic Debt Restructuring Scheme
The Scheme has been enacted with a view to revive stressed companies and provide lending institutions with a way to
initiate change of management in companies which fail to achieve the milestones under Corporate Debt Restructuring.
The Strategic Debt Restructuring (SDR) has been introduced with a view to ensuring more stake of
promoters in reviving stressed accounts and providing banks with enhanced capabilities to initiate change
of ownership, where necessary, in accounts which fail to achieve the agreed critical conditions and
viability milestones.
Therefore, banks should consider using SDR only in cases where change in ownership is likely to improve
the economic value of the loan asset and the prospects of recovery of their dues.
Conversion of outstanding debts can be done by a consortium of lending institutions. Such a consortium is
known as the Joint Lenders Forum (JLF) which may include banks and other financial institutions such as
NBFCs.The Scheme will not be applicable to a single lender.
Scheme for Sustainable Structuring of Stressed Assets

The Reserve Bank of India has introduced Scheme for Sustainable Structuring of Stressed Assets (S4A) for
resolution of bad loans of large projects in Jun 2016.
The scheme aimed to strengthen the lenders ability to deal with stressed assets, Reserve Bank of India has
been issuing, from time to time, guidelines and prudential norms on stressed assets resolution by regulated
lenders.
The aggregate exposure (including accrued interest) of all institutional lenders in the account is more
than Rs.500 crore (including Rupee loans, Foreign Currency loans/External Commercial Borrowings.
Financial Market
Financial market are divided in two types depends on duration for which they need money. They are Money and
Capital Market.
Money Market Money Market is a short-term credit market. The Money Market is regulated by the Reserve
Bank of India.
It is the centre in which short-term funds are borrowed and lent. It consists of borrowers and lenders of short-
term funds.
The lenders are commercial banks, insurance companies, finance companies and the central bank. The money
market brings together the lenders and the borrowers.
Money and its Types

Money: Money is anything that is widely accepted in exchange for goods and services.
Commodity Money - Commodity money is the type of Money that's in the form of a commodity with
intrinsic value which means it has value outside of its use as money. The commodity itself represents money,
and the money is the commodity. Example: Gold silver, copper, salt, peppercorns, rice, large stones, etc.
Representative MoneyIt is actually represents Money. It is exchangeable for a commodity.
Example: Token coins, or any other physical tokens like certificates.
Fiat Money whose value is not derived from any intrinsic value or any guarantee that it can be converted into
valuable commodity (like gold). It has value as money because a government decreed that it has value for that
purpose.
RBI approach of money supply
Reserve Money (M 0): Notes and coins + reserves of banks with central bank
M1= currency with the public + demand deposits+ other deposit held with the R.B.I.
M2= M1 + savings deposits with post office savings banks
M3 = M1 + time deposit
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M4= M3 + total deposits with the post office savings organization.

Money Market Instruments
1. Treasury Bills
2. Commercial Papers
3. Certificate of Deposit
4. Bankers Acceptance
5. Repurchase Agreement
Treasury Bills:
Treasury bills (T-bills) offer short-term investment opportunities, generally up to one year. They are thus useful in
managing short-term liquidity. At present, the Government of India issues three types of treasury bills through
auctions, namely, 91-day, 182-day and 364-day. There are no treasury bills issued by State Governments.
Minimum Price:
Treasury bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000. Treasury bills are
issued at a discount and are redeemed at par. Treasury bills are also issued under the Market Stabilization Scheme
(MSS).
Government Securities
Government securities, also called the gilt edged securities or G-secs, are not only free from default risk but also
provide reasonable returns and, therefore, offer the most suitable investment opportunity to provident funds.
The Government securities comprise dated securities issued by the Government of India and state
governments as also, treasury bills issued by the Government of India.
Reserve Bank of India manages and services these securities through its public debt offices located in various
places as an agent of the Government.
Mutual Fund
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase
securities.
The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched
Unit Trust of India.
The regulator of mutual funds in India - SEBI.
The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin
Templeton.
Commercial Paper and Certificates of Deposits
Certificate of Deposit Commercial Paper (CP)

Certificate of Deposit (CD) is a negotiable money market Commercial Paper (CP) is an unsecured money market
instrument and issued in demat form or as a Usance instrument issued in the form of a promissory note. It was
Promissory Note against funds deposited at a bank or other introduced in India in 1990with a view to enabling highly
eligible financial institution for a specified time period. rated corporate borrowers.
CDs can be issued by (i) scheduled commercial banks Corporates, primary dealers (PDs) and the All-India
{excluding Regional Rural Banks and Local Area Banks}; Financial Institutions (FIs) are eligible to issue CP. (the
and (ii) select All-India Financial Institutions (FIs) that have tangible net worth of the company, as per the latest
been permitted by RBI audited balance sheet, is not less than Rs. 4 crore)
Minimum amount of a CD should be Rs.1 lakh, i.e., the CP can be issued in denominations of Rs.5 lakh or
minimum deposit that could be accepted from a single multiples thereof.
subscriber should not be less than Rs.1 lakh, and in
multiples of Rs. 1 lakh thereafter.
The maturity period of CDs issued by banks should not be CP can be issued for maturities between a minimum of
less than 7 days and not more than one year, from the 7days and a maximum of up to one year from the date of
date of issue. The FIs can issue CDs for a period not less issue. However, the maturity date of the CP should not go
than 1 year and not exceeding 3 years from the date of beyond the date up to which the credit rating of the issuer
issue. is valid.
CDs can be issued to individuals, corporations, companies Individuals, banking companies, other corporate bodies
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(including banks and PDs), trusts, funds, associations, etc. (registered or incorporated in India) and unincorporated
Non-Resident Indians (NRIs) may also subscribe to CDs, bodies, NRIs and Foreign Institutional Investors (FIIs) etc.
but only on non-repatriable basis, which should be clearly can invest in CPs. However, investment by FIIs would be
stated on the Certificate. Such CDs cannot be endorsed to within the limits set for them by Securities and Exchange
another NRI in the secondary market. Board of India (SEBI) from time-to-time.
Call and Notice Money Market
The money market is a market for short-term financial assets that are close substitutes of money. The most important
feature of a money market instrument is that it is liquid and can be turned into money quickly at low cost and provides
an avenue for equilibrating the short-term surplus funds of lenders and the requirements of borrowers.
Call Money means deals in overnight funds.
Notice Money means deals in funds for 2 14 days.
Term Money means deals in funds for 15 days-1 year.
Participants
Scheduled commercial banks (excluding RRBs), co-operative banks (other than Land Development Banks) and
Primary Dealers (PDs), are permitted to participate in call/notice money market both as borrowers and lenders.
Commercial Paper:
Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
CP, as a privately placed instrument, was introduced in India in 1990 with a view to enable highly rated
corporate borrowers to diversify their sources of short-term borrowings and to provide an additional
instrument to investors.
Individuals, banking companies, other corporate bodies (registered or incorporated in India) and
unincorporated bodies, Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs) etc. can invest
in CPs. However, investment by FIIs would be within the limits set for them by SEBI from time-to-time.
Who is permitted to issue CP:
Subsequently, primary dealers (PDs) and all-India financial institutions (FIs) were also permitted to issue CP to enable
them to meet their short-term funding requirements.
However the corporate issuing CP should meet the following conditions
1. The tangible net worth of the company, as per the latest audited balance sheet, is not less than Rs.4 crore;
2. The company has been sanctioned working capital limit by bank/s or FIs; and
3. The borrowal account of the company is classified as a Standard Asset by the financing bank/institution.
4. The minimum credit rating shall be A3 as per rating symbol and definition prescribed by SEBI.
Minimum and maximum period of maturity:
CP can be issued for maturities between a minimum of 7 days and a maximum of up to one year from the date of
issue.
Denomination:
CP can be issued in denominations of Rs.5 lakh or multiples thereof.
Other Conditions:
Only a scheduled bank can act as an IPA for issuance of CP.
CP can be issued either in the form of a promissory note or in a dematerialised form through any of the
depositories approved by and registered with SEBI. Banks, FIs and PDs can hold CP only in dematerialized
form.
Capital Market
Capital Market are institutional arrangements for facilitating the borrowing and lending of long-term funds. Usually,
stress is laid on the markets for long-term debt and equity claims, government securities, bonds, mortgages, and
other instruments of long-term debts.
This capital market encircles the system through which the public takes up long-term securities, either directly
or through intermediaries. It also to be noted that Risk is much greater in capital market unlike Money Market
which has small risk.
This instruments consists of a series of channels through which the savings of the community are mobilised
and made available to the entrepreneurs for undertaking investment activities.
Regulator: Stock Exchange Board of India setup guidelines, and supervise and regulate the working of capital
market. SEBI in consultation with the Government has taken a number of steps to introduce improved
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practices and greater transperancy in the capital markets in the interest of the investing public and the healthy
development of the capital markets.
Capital Market Instruments
1. Shares
2. Debentures
3. Bonds
Masala Bonds
Masala bonds are the rupee-denominated bonds which can be issued by the Indian entities to raise money from
overseas markets. By rupee-denominated bonds, it means that the money borrowed will be in Indian rupees and not
any foreign currency
Amount Under the automatic route the amount will be equivalent to INR 50 billion (Rs 5,000 crore)per annum
through Automatic Approval, beyond Rs 5,000 crore in a financial year will require prior approval of
the Reserve Bank
Maturity Minimum maturity period of 3 years. However they can be issued for three or five or seven-year
maturities.
Who >>Any corporate or body corporate as well as Real Estate Investment Trusts (REITs) and Infrastructure
Can Investment Trusts (InvITs) can issue such off-shore rupee denominated bonds.
Issue >>>Indian banks can issue these bonds in the forms of (i) Perpetual Debt Instruments (PDI) qualifying
for inclusion as Additional Tier 1 capital and debt capital instruments qualifying for inclusion as Tier 2
capital, and (ii) Long term Rupee Denominated Bonds overseas for financing infrastructure and
affordable housing.
Where The Rupee denominated bonds can only be issued in a country and can only be subscribed by a resident
can of a country:
these 1. that is a member of Financial Action Task Force (FATF) or a member of a FATF-Style
bonds be Regional body; and
issued? 2. whose securities market regulator is a signatory to the International Organization of Securities
Commission's (IOSCOs) Multilateral Memorandum of Understanding (Appendix A
Signatories) or a signatory to bilateral Memorandum of Understanding with the SEBI for
information sharing arrangements;
Key Facts:
Masala bonds are a step to help internationalize the Indian rupee and also deepen the Indian financial
system.The advantage is that that of the currency risk.
IFC issued an Rs 1,000 crore bond to fund infrastructure projects in India. These bonds were listed on the
London Stock Exchange (LSE).
IFC then named them Masala bonds to give a local flavour by calling to mind Indian culture and cuisine.
They are the first rupee bonds listed on the London Stock Exchange.
They can be issued for three or five or seven-year maturities.
The first Masala bonds were issued on 10 November 2014 under IFCs $2 billion offshore rupee program.
They are different from External Commercial Borrowings (ECB) in a way that in ECB the currency risk lies
with the Indian issuer while in case of masala bonds, the currency risk lies with the overseas investor.
In the first ever 'masala bond' issue, housing finance major HDFC has raised Rs 3,000 crore.
Priority Sector Lending

Priority sector lending is an important role by the RBI in banking. Which provides lending to the few
specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for
education.
There are eight Categories.
(i) Agriculture (v) Housing
(ii) Micro, Small and Medium Enterprises (vi) Social Infrastructure
(iii) Export Credit (vii) Renewable Energy
(iv) Education (viii) Others
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Total Priority Sector and Sub Target

Total Target for Domestic scheduled commercial banks and foreign banks (above 20 branches)
40 percent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is
higher. The said banks have to achieve the Target within a maximum period of five years starting from April 1, 2013
and ending on March 31, 2018
The same target has to be achieved in a phased manner by 2020 by foreign banks with less than 20 branches.
2015-16 32
2016-17 34
2017-18 36
2018-19 38
2019-20 40
Sub-targets for Priority sector:
Sector Target
Agriculture 18 percent of ANBC (Within this 18 % target prescribed for Small and Marginal Farmers,
to be achieved in a phased manner i.e., 7 per cent by March 2016 and 8 per cent by March
2017)
Micro Enterprises 7.5 percent of ANBC (In a phased manner i.e. 7 per cent by March 2016 and 7.5 per cent
by March 2017.)
Advances to Weaker 10 percent of ANBC
Sections
Agriculture
Farm credit:
Loans to individual farmers up to Rs.50 lakh against pledge/hypothecation of agricultural produce (including
warehouse receipts) for a period not exceeding 12 months.
Loans to corporate farmers, farmers' producer organizations/companies
Farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry,
bee-keeping and sericulture up to an aggregate limit of Rs.2 crore per borrower.
Loans up to Rs.50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts)
for a period not exceeding 12 months.
Agricultureinfrastructure
Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage
units/ cold storage chains designed to store agriculture produce/products, irrespective of their location an aggregate
sanctioned limit of Rs.100 crore per borrower from the banking system, will apply.
For the purpose of Ancillary activities loans up to Rs.5 crore to co-operative societies of farmers for disposing
of the produce of members.Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs.100
crore per borrower from the banking system.
For the purpose of computation of 7 percent/ 8 percent target, Small and Marginal Farmers:
Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a landholding
of more than 1 hectare and upto 2 hectares are considered as Small Farmers.
Micro, Small and Medium Enterprises
Manufacturing Sector
Enterprises Investment in plant and machinery The Micro, Small and Medium Enterprises
Micro Enterprises Does not exceed twenty five lakh rupees engaged in the manufacture or production of
Small Enterprises More than twenty five lakh rupees but does not goods to any industry specified in the first
exceed five crore rupees schedule to the Industries (Development and
Medium More than five crore rupees but does not Regulation) Act, 1951 and as notified by the
Enterprises exceed ten crore rupees Government from time to time.
Service Sector
Enterprises Investment in equipment Bank loans up to Rs. 5 crore per unit to Micro
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Micro Enterprises Does not exceed ten lakh rupees and Small Enterprises and Rs. 10 crore to
Small Enterprises More than ten lakh rupees but does not exceed Medium Enterprises engaged in providing or
two crore rupees rendering of services and defined in terms of
Medium More than two crore rupees but does not exceed investment in equipment under MSMED Act,
Enterprises five crore rupees 2006.
Export Credit
Domestic banks Foreign banks with 20 branches and above Foreign banks with less than 20
branches
Export credit over corresponding date Incremental export credit over Export credit will be allowed up
of the preceding year, up to 2 percent corresponding date of the preceding year, up to 32 percent of ANBC or Credit
of ANBC. Effective from April 1, to 2 percent of ANBC or Credit Equivalent Equivalent Amount of Off-
2015 subject to a sanctioned limit of Amount of Off-Balance Sheet Exposure, Balance Sheet Exposure,
Rs.25 crore per borrower to units whichever is higher, effective from April 1, whichever is higher.
having turnover of up to Rs.100 2017 (As per their approved plans, foreign
crore. banks with 20 branches and above are
allowed to count certain percentage of
export credit limit as priority sector till
March 2016).
Education
Loans to individuals for educational purposes including vocational courses upto Rs. 10 lakh irrespective of the
sanctioned amount will be considered as eligible for priority sector.
Housing
(i) Loans to individuals up to Rs. 28 lakh in metropolitan centres (with population of ten lakh and above) and loans
up to Rs. 20 lakh in other centres for purchase/construction of a dwelling unit per family provided the overall cost
of the dwelling unit in the metropolitan centre and at other centres should not exceed Rs. 35 lakh and Rs. 25 lakh
respectively. The housing loans to banks own employees will be excluded.
(ii) Loans for repairs to damaged dwelling units of families up to Rs. 5 lakh in metropolitan centres and up to Rs. 2
lakh in other centres.
Social infrastructure
Bank loans up to a limit of Rs. 5 crore per borrower for building social infrastructure for activities namely schools,
health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.
Renewable Energy
Bank loans up to a limit of Rs. 15 crore to borrowers for purposes like solar based power generators, biomass based
power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities viz. street
lighting systems, and remote village electrification. For individual households, the loan limit will be Rs. 10 lakh per
borrower.
Miscellaneous
Assets Vs. Liabilities
Assets are the ones which are useful or valuable things a person/organization has like goods, property, vehicles,
equipment, machinery, etc. If we talk about banks assets: They are those which the bank has and can be readily
converted to cash whenever bank requires money.
Liabilities are the ones for which an amount of money is owed like in a company the salaries of employees are to be
given, etc. If we talk about banks liabilities: They are those which the bank has from the customer deposits and
borrowed money for banks purpose.
Letter of credit Vs. Bank Guarantee

These are given by buyers to their sellers both in India and outside India. When products are imported from a foreign
company, how the company will assure that they will get the payment in time ans full amount? So the solution is
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Letter of credit and Bank Guarantee

A letter of credit is a letter issued by bank which guarantees buyers payment on time and in correct amount
up to the time the services will be delivered to the buyer.
Unlike in letter of credit, in a bank guarantee the payment is done only when the buyer is not able to pay the
required amount of money to the seller.
So the difference between the two is that if you give letter of credit to seller, that will ensure that bank will pay
on your behalf up to the day the services are being provided to you by the seller and if you give bank
guarantee to seller, that will ensure that bank will pay on your behalf if you are not able to pay the amount.
Insolvency Vs Bankruptcy
When a person/organization is unable to pay their debts when they become due and payable, it is called insolvency.
When a person/organization is unable to pay their debts when they become due and payable and is also declared as
bankrupt by court, it is called bankruptcy.All bankrupts will be called insolvent, but not vice-versa.
FDI Vs FII
Foreign Direct Investment (FDI) as the name suggests is investing directly in another country. A foreign company
which is based in some other country like France invests in India either by setting up a wholly owned subsidiary or
getting into a joint venture with some company based in India and then conducts its business in India.
Examples: IBM India, Maruti Suzuki, SBI life insurance, etc
Foreign Institutional Investor (FII) is similar to FDI in a way that this is also direct investment but investment in
only financial assets such as stocks, bonds etc. of a company located in another country.
Example: Any foreign company invests in the shares of Infosys (based in India).
Foreign Direct Investment in India
Sector FDI Limit Entry Route

Agriculture & Animal Husbandry 100% Automatic
Plantation Sector 100% Automatic
Mining 100% Automatic
Defence Manufacturing 100% Automatic up to 49%
Above 49% under Government route in
cases resulting in access to modern
technology in the country
Broadcasting 100% Automatic
Broadcasting Content Services 49% Government
Print Media 26% Government
Publishing/printing of scientific and technical 100% Government
magazines/specialty journals/ periodicals.
Publication of facsimile edition of foreign 100% Government
newspapers
Civil Aviation Airports 100% Automatic
Green Field Projects & Existing Projects
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Civil Aviation Air Transport Services 100% Automatic up to 49%

Scheduled Air Transport Service/ Domestic Above 49% under Government route
Scheduled Passenger Airline 100% Automatic for NRIs
Regional Air Transport Service
Civil Aviation 100% Automatic
Construction Development: Townships, Housing, 100% Automatic
Built-up Infrastructure
Industrial Parks 100% Automatic
Satellites- establishment and operation, subject to the 100% Government
sectoral guidelines of Department of Space/ISRO
Private Security Agencies 74% Automatic up to 49%
Above 49% & up to 74% under
Government route
Telecom Services 100% Automatic up to 49%
Above 49% under Government route
Cash & Carry Wholesale Trading 100% Automatic
E-commerce activities (e-commerce entities would 100% Automatic
engage only in Business to Business (B2B) e-
commerce and not in Business to Consumer (B2C) e-
commerce.)
Single Brand retail trading 100% Automatic up to 49%
Above 49% under Government route
Multi Brand Retail Trading 51% Government
Duty Free Shops 100% Automatic
Railway Infrastructure 100% Automatic
Asset Reconstruction Companies 100% Automatic
Banking- Private Sector 74% Automatic up to 49%
Above 49% & up to 74% under
Government route
Banking- Public Sector 20% Government
Credit Information Companies (CIC) 100% Automatic
Infrastructure Company in the Securities Market 49% Automatic
Pension Sector 49% Automatic
Power Exchanges 49% Automatic
White Label ATM Operations 100% Automatic
Non-Banking Finance Companies (NBFC) 100% Automatic
Pharmaceuticals(Green Field) 100% Automatic
Pharmaceuticals(Brown Field) 100% Automatic up to 74%
Above 74% under
Government route
Food products manufactured or produced in India 100% Government
Dormant account Vs. Frozen account

The account which has not been used for 24 months (2 years) by its operator is termed as dormant account while the
account in which all the activities have been stopped by the bank is a freezed account.
The dormant accounts can be made as operative as per bank policy. According to RBI guidelines, banks
cannot charge any money to make dormant or inoperative accounts as operative. The interest on amount of
money in saving accounts will be credited in account in case of inoperative account also.
Freezing of account means the transactions in such account cannot be performed until further notice. The
payments will be stopped in such accounts and even cheques drawn before freezing are also not allowed to be
encashed by anyone. Only RBI, SEBI, Income-tax authorities, and court can give orders to freeze account and
not the respective banks.
Cross selling Vs. Up Selling

Cross selling means selling of products/services to an already existing customer. And then if we talk about
banks, when they sell any extra banking products/services to their customer along with the product the
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customer wants. Like selling a credit card and internet banking to a savings or current account customer,
selling their any bancassurance products, etc.
Unlike cross selling, up selling means encouraging customers to purchase a higher-end product or we can say
a more costly product than the customer has asked for. Like the customer asks for a credit card with overdraft
facility of Rs 10,000 but the banking representative tells him benefits of having the card with more facilities,
etc.
Consortium Financing Vs.Multiple Banking

There are cases in which big businesses require large finances which it cannot get from single lender. In Consortium
financing, several banks (or financial institutions) finance a single borrower. In this case there is a common
documentation, joint supervision and follow-up exercises between all banks/financial institutions. So the participating
banks form a new consortium bank. The whole loan amount is divided among those banks forming consortium, so the
risk also gets divided.
The bank which takes the higher risk (by giving the highest amount of loan) will act as a leader and thus it acts
as an intermediary between the consortium and the borrower.
Multiple banking is an arrangement where a borrower takes loan amount from several banks. In this case no
bank knows that his borrower has taken loan from other banks too. There is no contractual relationship
between various banks like that in consortium banking and each bank holds its individual security and own
credit rates.
Moratorium period Vs. Grace period

When we take a loan from bank, we do not have to start paying the EMIs immediately. The bank gives some time
before start paying EMIs which are generally paid on a monthly basis. This time before start of paying EMIs is called
Moratorium period.
Unlike moratorium period, during the grace period, interest is not charged. Actually it is a period of time after a
payment becomes due. Example: Grace period is given for paying off the overdraft value of credit card. If the money
is not paid back within the grace period, interest rate is charged according to the lending institution policy.
NRO Account Vs. NRE Account Vs. FCNR Account

NRO Account: Non Resident Ordinary (NRO) account is a Savings Account or Current Account or Fixed Deposit
Account or Recurring Deposit account opened by NRIs and PIOs. It is a rupee denominated account i.e. the amount in
the account is maintained in Indian Rupees.
NRE Account: Non Resident External (NRE) account is a rupee denominated account which can be Savings Account
or Current Account or Fixed Deposit Account or Recurring Deposit account opened by NRIs and PIOs.
FCNR Account: Foreign Currency Non Resident (FCNR) account is a term deposit account that can be maintained by
NRIs and PIOs in foreign currency. So this means it is not a savings account. Authorized dealer banks in India can
allow deposits in any of the permitted currency (currency freely convertible).
Negotiable Instruments
Negotiable instrument is a document which guarantees the payment of a specific amount of money, either on demand,
or at a set time, with the payer named on the document. A negotiable instrument can be transferred from one person to
another.
According to Section 13 of the Negotiable Instruments Act, 1881, A Negotiable Instrument means a
promissory note, bill of exchange or cheque payable either to order or to bearer.
Securities: Pledge, Hypothecation,Mortgage

Pledge is when the property is offered as collateral or security. It is a right to reserve a legal interest in
something. Example- a lot of banks and credit unions have what is called "cross collateral." So for instance,
if you have a vehicle loan with a bank and also have a checking account with the bank, there is an excellent
chance that you've signed a contract provision where you've "pledged" whatever funds you may have in your
checking account from time to time as additional security on the loan.
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Hypothecation: It is used when you(borrower) have the actual possession of the asset, for which you have
taken the loan. Generally, this is charged against loans for movable assets, like car, bus, etc. (vehicle loans).
Here, the assets (bus, car, etc.) remain with you, and you are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right to sell the asset (bus, car, etc.),
(which is possessed by you) and recover the total amount (with interest).
Mortgage: It is used when you (borrower) have the actual possession of the assets, for which you are
granted loan (e.g., house loan), or against which you are granted loan (e.g., house mortgaged). Mortgages are
generally those assets, which are permanently attached with Earth surface, like house, land, factory etc.
In case you are unable to repay the loan amount, the bank has the right to seize and sell the mortgage, and
recover the loan amount (with interest).
Marginal Cost of funds based Lending Rate (MCLR)

MCLR got effective after April 1, 2016. How RBI decided to implement MCLR system?
Before 2010, there was Benchmark Prime Lending Rate (BPLR) system. Under this banks were allowed to lend
loans to their most trust worthy customers at a low rate. But this system was not transparent.
After this, banks were advised by RBI to apply the system of base rate i.e. below this rate banks will not be able to
lend credits, except in the cases allowed by RBI. Different parameters were used. These parameters include average
cost of funds, marginal cost of funds or any other methodology which seemed reasonable. But then banks used to
change their methodology as when they wanted.
Whenever the RBI cuts the repo rate, same has to be done by banks also in their base rates, but they lower the base
rate in small because most banks currently follow average cost of funds based calculation for arriving at respective
base rates. This is the main reason for changing the policy to Marginal Cost of Funds based Lending Rates
(MCLR).
Marginal Cost of Funds: They are the funds which banks have to give to its customers and RBI instead of investing
them in other ways.
Para banking
Para banking activities are the activities carried out by the bank which are apart from its normal day-to-day activities.
Its not that bank can perform any activity other than daily activities, it can perform only those para banking activities
which are permitted by RBI.
Examples: insurance business, portfolio management services, to become pension fund managers, mutual funds
business, money market mutual funds, underwriting of bonds of PSUs, investment in venture capital funds, etc.
Bancassurance
Bancassurance as the term suggests is Bank + Insurance. Bancassurance means selling insurance product through
banks. It is one of the para banking activity which the RBI has allowed the banks to take up. For selling the
insurance product, bank and insurance company come up in a partnership where the bank sells the insurance
companys insurance products to its clients.
Some examples include:
SBI General Insurance Company Limited: joint venture between SBI and Insurance Australia Group (IAG).
SBI Life Insurance: joint venture life insurance Company between SBI and BNP Paribas Cardiff of France.
E-Lobby
E-Lobby is a facility which is now provided by banks so that their customers can do their banking transactions as per
their convenience 247 i.e. without any time restriction. E-Lobby provides the facility on bank holidays also.
Self service facilities which can be done at banking e-lobbies include: ATM withdrawals, cash deposits, card-to-card
transfers, mobile phone top-ups, railway booking, passbook printing, NEFT, opening of FD/RD accounts, SMS alerts,
cheque drop box, bill payments, mini statements, etc.
Clean Note Policy of RBI

In order to increase the life of currency notes, Reserve Bank of India (RBI) issued Clean Note Policy in 2001.
41 | P a g e
According to the policy: The note packets should not be stapled, while the banding of packets should be done with
paper/polythene bands so that the life of the currency notes is increased.
Debt Consolidation
In simple words Debt Consolidation is going for another loan to pay the existing loan.
Technical definition says that Debt Consolidation is a form of debt refinancing that entails taking out one loan to pay
off many others. Refinancing means replacement of an existing debt to be paid with another one.
Money laundering
It is an act of converting illegal money to legal money. A person who is found having money from illegal sources can
be made to go to prison, or any other liable punishment. So the persons or rather criminals try to convert their illegal
money to legal money so that their money appears clean which is known as money laundering.The act related is
Prevention of Money laundering Act 2002.A step to prevent money laundering is KYC (Know Your Customer)
policy. The KYC helps to ensure that banks services are not misused.
Corporate social responsibility(CSR)

Corporate social responsibility policy functions as a self-regulatory mechanism whereby a business monitors and
ensures its active compliance with the spirit of the law, ethical standards and national or international norms.
The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act
2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to
come into effect from April 1, 2014.
As per this Act Every company, private limited or public limited, which either has a net worth of Rs 500
crore or a turnover of Rs 1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average
net profit for the immediately preceding three financial years on corporate social responsibility activities.
The CSR activities should not be undertaken in the normal course of business and must be with respect to
any of the activities mentioned in Schedule VII of the 2013 Act.
Contribution to any political party is not considered to be a CSR activity and only activities in India would
be considered for computing CSR expenditure.
Corporate Debt Restructuring

Corporate Debt Restructuring is a voluntary non statutory mechanism under which financial institutions and banks
come together to restructure the debt of companies facing financial difficulties due to internal or external factors, in
order to provide timely support to such companies.
External Commercial Borrowing (ECB)

ECB refers to the loans taken from non-resident lenders i.e. the foreign companies to finance commercial activities in
India. ECBs cannot be used for investment in stock market or speculation in real estate. At some times, borrowings
from external companies can be cheaper than that borrowed within the country.
There are two ways in which ECB can be accessed in the country:
1.Automatic Route: Under this, the borrower is not to take any permission from RBI or GOI.
2.Approval Route: Under this, the borrower has to take approval from RBI or GOI.
Initial Public Offering (IPO):

Initial public offering is the process by which a private company can go public by sale of its stocks to general public.
It is the first sale of a corporation's common shares to investors on a public stock exchange.
The company which offers its shares, known as an issuer
Currency Chest :
Currency chest is the place where currency is stored.
It will be the select branches of scheduled banks, which are authorised by the RBI to facilitate distribution of
notes and coins
42 | P a g e
Banks Head Quarters & Taglines
Bank Name HQ TAGLINE

Canara Bank Bangalore Together we can.
Vijaya Bank Bangalore A friend u can bank upon
State Bank of Mysore Bengaluru Working for a better tomorrow.
Indian Bank Chennai Your Tech Friendly Bank
Indian Overseas Bank Chennai Good people to grow with
Oriental Bank of Gurgaon,Haryana Where every individual is committed
State Bank of Hyderabad Hyderabad Modern.Innovative.Dependable
Andhra Bank Hyderabad Where India Banks
State Bank of Bikaner & Jaipur The Nation banks on us.
Karur Vysya Bank Karur Smart way to Bank
Lakshmi Vilas Bank Karur The changing face of prosperity
Federal Bank Kerala Your perfect Banking Partner
Ratnakar Bank Kolhapur,Maharashtra
Allahabad Bank Kolkata A tradition of trust.
UCO Bank Kolkata Honours Your trust
United bank of India Kolkata The bank that begins with u
City Union Bank Kumbakonam Trust and Excellence since 1904
Corporation Bank Mangalore,Karnataka Prosperity for all
Karnataka Bank Mangaluru, Your Family Bank across India
Syndicate Bank Manipal,Karnataka Faithful and Friendly
SBI Mumbai The banker to every Indian.
Bank of India Mumbai Relationship beyond banking.
Central Bank of India Mumbai Central to you since 1911.
Dena Bank Mumbai Trusted Family Bank
Union Bank of India Mumbai Good people to bank with
IDBI Bank Mumbai Banking for allAAo Sochein Bada
NABARD Mumbai Revitalizing rural India through urban support
Exim Bank Mumbai Together towards Tomorrow.
ECGC Mumbai You Focus on Exports.We cover the risks.
Axis Bank Mumbai Badhti ka naam Zindagi
ICICI Bank Mumbai Hum Hai Na,Khyal Apka
YES Bank Mumbai Experience our expertise
HDFC Bank Mumbai We understand your world
IndusInd Bank Mumbai We make u feel richer
Kotak Mahindra Bank Mumbai Lets make money simple
Nainital Bank Nainital, Banking with personal touch
Punjab & Sind Bank New Delhi Where service is a way of life
Punjab National bank New Delhi The name you can bank upon
Bharatiya Mahila Bank New Delhi Empowering Women,
Empowering India.
State Bank of Patiala Patiala Blending Modernity with Tradition
Bank of Maharashtra Pune One family One Bank.
Jammu&Kashmir Bank Srinagar,J&K Serving to Empower
State Bank of Travancore Thiruvananthapuram A long tradition of trust.
Catholic Syrian Bank Thrissur, Support all the way.
Dhanlaxmi Bank Thrissur, Tann.Mann.Dhan
South Indian Bank Thrissur, Experience next generation Banking
43 | P a g e
Tamilnad Mercantile Bank Tuticorin Be a step ahead of life

Bank of Baroda Vadodara,Gujarat India's International Bank.
Important Banking Abbreviations
Acronyms Abbreviations
ABEDA Arab Bank for Economic Development in Africa.
ACF Auto Correlation Function.
ACS Automated Clearing Systm.
AD Authorized Dealer.
ADB Asian Development Bank.
ADF Automated Data Flow
ADR American Depository Receipt.
AEPS Aadhaar Enabled Payments Switch
AFS Annual Financial Statement.
AGM Annual General Meeting.
AIC Agricultural Insurance Company.
AIF Alternative Investment Fund
ALCO Asset Liability Committee
ALM Asset Liability Management
AMFL Association of Mutual Funds in India.
AML Anti-Money Laundering
AMRMS Audit and Risk Monitoring Mechanism
ANBC Adjusted Net Bank Credit
APBS Aadhaar Payment Bridge System
ARC Asset Reconstruction Companies
ASBA Applications Supported Bank Accounts
ASSOCHAM Associated Chambers of Commerce and Industry of India.
ATM Automated Teller Machine.
BCBS Basel Committee on Banking Supervision
BCSBI Banking Codes and Standards Board of India
BIS Bank for International Settlements.
BOB Bank of Baroda.
BOE Bill of Exchange
BOI Bank of India.
BOP Balance of Payments.
BOR Bank of Rajasthan.
BOT Build,Operate and Transfer.
BR Act Banking Regulations Act, 1949.
BSCS Basel Committee on Banking Supervision.
BSE Bombay Stock Exchange.
BSR Basic Statistical Returns.
CA Chartered Accountant.
CAD Current Account Deficit
CAG Controller and Auditor General.
CAR Capital Adequacy Ratio
CARE Credit Analysis and Research Limited
CASA Current and Savings Accounts
CB Canara Bank.
CBLO Collateralized Bank Lending Obligations
CBS Core Banking Solution.
44 | P a g e
CCIL Clearing Corporation of India Limited

CCL Cash Credit Limit
CDB Caribbean Development Bank.
CDBS Committee of Direction on Banking Statistics.
CDRS Corporate Debt Restructuring
CDS Credit Default Swap.
CEPA Comprehensive Economic Partnership Management.
CFRA Combined Finance and Revenue Accounts.
CGRA Currency and Gold Revaluation Account.
CIBIL Credit Information Bureau of India Limited
CMIS Currency Management Information
System
COB Corporation Bank.
CP Colombo Plan.
CPFF Commercial Paper Funding Facility
CPI Consumer Price Index.
CRAR Capital To Risk Weighted Asset Ratio.
CRILC Central Repository of Information on Large Credits
CRISIL Credit Rating Information Services Of India
CRMD Credit Risk Management Department.
CRR Cash Reserve Ratio.
CSR corporate social responsibility
CTI Country Threat Index.
CUB City Union Bank
DB Dena Bank.
DPG Deferred Payment Guarantee
DPN Demand Promissory Note
DRAT Debt Recovery Appellate Tribunal
DRI Differential Rate Of Interest
DSCR Debt Service Coverage Ratio
DTAA Double Taxation Avoidance Agreement.
EADB East African Development Bank.
EBRD European Bank for Reconstruction and Development.
ECB External Commercial Borrowings.
ECS Electronic Clearing System.
EDF Export Development Fund
EDI Electronic Data Internchange
EDP Entrepreneurship Development Programme
EEFC Exchange Earners Foreign Currency
EFTPOS Electronic Funds Transfer At Point Of Sale
EIB European Investment Bank.
ELSS Equity Linked Saving Scheme.
EMI Equated Monthly Instalments
EPFO Employees Provident Fund Organisation
EPOS Electronic Point Of Sale
EPS Earning per Share
ESOP Employee Stock Options
EXIM Export Import Bank of India.
FCA Foreign Currency Assets.
FCCB Foreign Currency Convertible Bond
FCNR Foreign Currency Non Resident Deposit Accounts
45 | P a g e
FCNRA Foreign Currency Non resident Account.

FDI Foreign Direct Investment.
FEDAI Foreign Exchange Dealers Association Of India
FERA Foreign Exchange Regulation Act.
FICCI Federation of Indian Chambers of Commerce and Industry.
FII Foreign Institutional Investor.
FIMMDA Fixed Income Money Markets and Derivatives Association.
FINO Financial Information Network and Operation Limited
FIPB Foreign Investment Promotion Board.
FOB Free On Board
FPI Foreign Portfolio Investment.
FSRASC Financial Sector Regulatory Appointment Search Committee
FTA Free Trade Agreement.
GAAR General Anti Avoidance Rule.
GDP Gross Domestic Product
GDR Global Depository Receipt.
GFD Gross Fiscal Deficit.
GIRO Government Internal Revenue Order.
GMS Gold Monetisation Scheme
GST Goods and Services Tax
GSTN Goods and Services Network
HDFC Housing Development Finance Corporation.
IADB Inter American Development Bank.
IAS Integrated Accounting Systems
IBBI Insolvency and Bankruptcy Board of India
IBPS Institute of Banking Personnel Selection.
IBRD International Bank for Reconstruction and Development
IBRD International Bank For Reconstruction And Development.
IBU International Banking Unit
ICA Indian Council of Agricultural Research.
ICICI Industrial Credit and Investment Corporation of India.
ICRA Investment Information and Credit Rating Agency of India Limited
IDB Islamic Development Bank.
IDBI Industrial Development Bank of India.
IDR Indian Depository Receipts.
IDRBT Institute for Development and Research Of Banking
IEPF Investors Education and Protection Fund
IFC International Finance Corporation
IIB International Investment Bank.
IIBF Indian Institute of Banking and Finance.
IMD India Millennium Deposits.
IMF International Monetary Fund.
IMPS Immediate Payment Service
IMT Instant Money Transfer
IOB Indian Overseas Bank.
IPO Initial Public Offer
IPO Initial Public Offering
IPPB India Post Payments Bank
IRBI Industrial Reconstruction Bank Of India.
IRDA Insurance Regulatory and Development Authority of India
IROs Interest rate options
46 | P a g e
IRR Internal Rate Of Return.

ISCI International Standard Industrial Classification
KCC Kisan Credit Card
KMB Kotak Mahindra Bank.
KVB Karur Vysya Bank.
KVIC Khadi and Village Industries Corporation
KVP Kisan Vikas Patra
KYC Know Your Customer Guidelines
LAB Local Area Bank.
LAF Liquidity Adjustment Facility
LAMPS Large Sized Adivasi Multipurpose Societies
LDB Land Development Bank.
LERMS Liberalized Exchange Rate Management System
LIBOR London Inter Bank Offered Rate.
LIC Life Insurance Corporation Of India
LTCG Long-Term Capital Gains
LTN Long Term Note
MCA Ministry Of Company Affairs
MCLR Marginal Cost Of Lending Rate
MFDF Micro Finance Development Fund
MIBOR Mumbai Inter Bank Offer Rate.
MICR Magnetic Ink Character Recognition
MIS Management Information System
MSS Market Stabilisation Scheme
MTN Medium Term Note
MUDRA Micro Units Development And Refinance Agency
NABARD National Bank For Agricultural And Rural Development.
NAS National Account Statistics.
NAV Net Asset Value.
NBC Non Banking Companies.
NBFC Non Banking Finance Companies
NDA Net Domestic Asset
NDS Negotiated Dealing Systems
NDTL Net Demand And Time Liability
NECS National Electronic Clearing System
NEFT National Electronic Funds Transfer System.
NFA No Frills Account.
NFC Non Banking Finance Companies.
NFS National Financial Switch
NHB National Housing Bank.
NIB Nordic Investment Bank.
NPA Non Performing Assets.
NPCI National Payments Corporation Of India
NPS National Pensions Scheme.
NPV Net Present Value
NRE Non Resident External Account
NRI Non Resident Indian
NSE National Stock Exchange.
NSFDC National Scheduled Castes Finance And Development Corporation
OCB Overseas Corporate Bodies
ODIs Offshore/Overseas Derivative Instruments
47 | P a g e
OECD Organisation For Economic Cooperation And Development
OLTAS Online Tax Accounting System

OMO Open Market Operations
OTCEI Over the Counter Exchange Of India
OTP One-Time Password
PACS Primary Agricultural Credit Societies
PAN Permanent Account Number
PDO Public Debt Office
PFRDA Pension Fund Regulatory and Development Authority
PGS Payment Gateway System.
PIN Personal Identification Number
PIS Portfolio Investment Scheme
P-Notes Participatory Notes
POA Power of Attorney
PoS Point of Sale
PPF Public Provident Fund
PPIs Prepaid Payment Instruments
PRSF Partial Risk Sharing Facility
QIB Qualified Institutional Bankers
RBI Reserve Bank of India
RBS Royal Bank of Scotland.
RDBMS Relational Database Management System
RDDBFI Recovery of Debt due to Banks and Financial Institutions
REC Rural Electrification Corporation
RFC Resident Foreign Currency
RIDF Rural Infrastructure Development Fund
RoA Return On Assets
RoE Return On Equity
RRB Regional Rural Bank.
RTGS Real Time Gross Settlement System.
RWA Risk Weighted Assets
SARFAESI Securitization and Reconstruction of Financial Assets and Enforcement
of Security Interest
SBI State Bank of India
SCB Scheduled Commercial Bank
SCC Selective Credit Control.
SDBS Service Discharge Benefit Scheme
SDR Special Drawing Rights
SEBI Securities and Exchange Board of India
SEPA Single Euro Payment Area.
SFMS Structured Financial Messaging Services
SGB Sovereign Gold Bond
SHG Self Help Group
SIDBI Small Industries And Development Bank Of India.
SIDC State Industrial Development Corporation
SIFI Systematically Important Financial Intermediaries
Sip Systematic Investment Plans
SIPS Systemically Important Payment System
SJSRY Swarna Jayanthi Shahari Rozgar Yojana
SLR Statutory Reserve Ratio
48 | P a g e
SLRS Scheme for Liberation and Rehabilitation of Scavengers

SME Small and Medium Industries
SMERA SME Rating Agency of India Limited
SMILE SIDBI Make in India Loan for small Enterprises
SPNS Shared Payment Network System.
SSI Small Scale Industries
SSSBE Small Scale Service and Business Enterprises
SWIFT Society For World Wide Inter Bank Financial Telecommunication.
TDS Tax Deducted at Source
TIN Tax Information Network
UBIN Unique Business Identification Number
UCB Urban Cooperative Bank.
UCNs Uniform Code Numbers
UEBA Universal Electronic Bank Account.
UIDAI Unique Identification Authority of India
UPI Unified Payments Interface
UPIN Unique Property Identification Numbers.
USB Ultra Small Branch.
USD United States Dollar.
USSD Unstructured Supplementary Service Data
UTI Unit Trust of India
VDBS Vertically Differentiated Banking System.
VPA Virtual Payment Address
WBCIS Weather Based Crop Insurance Scheme.
WCTL Working Capital Term Loan
WL ATM White Label ATM.
WMA Ways and Means Advances
WPI Wholesale Price Index
YTM Yield to Maturity
49 | P a g e
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First In Banks In India

26. First Payment Bank Airtel m commerce, Rajasthan

These notes were exchanged for Rs.100 or lower denomination

Reserve Bank of India

Fully Owned RBI Subsidiaries:

RBI -Monetary Policy

Monetary Policy Committee

Acts administered by Reserve Bank of India

Public Debt Act, 1944/Government Securities Act, 2006

RBI Committees In Recent Times

Committee Date Headed by

2015 D. K. Mohanty Compilation of Flow of

Some Important Banking Institutions

IMF & WORLD Bank

What are Public Sector Banks?

& provide the funding to the non-corporate small business sector.

Various Types of Banking

Financial Insitutions In India

Regulator Constitution Sectors Chairma Headquarter Committee

Nationalization of Banks in India

Minimum capital requirement & foreign shareholding:

Business plan & Conditions:

NBFC(Non-Banking Financial Company)

Self Help Groups(SHG)

Women's Self-Help Groups (WSHGs)

Urban Cooperatives are scheduled and non-scheduled.

Rural Cooperatives are short-term and long-term structures.

Banking Codes and Standards Board of India (BCSBI)

The Emergence of Small Finance and Payment Banks

Small Finance Bank Payment Bank

Micro Finance Institutions (MFIs), and Local Area Banks

Banks Board Bureau (BBB)

Credit Rating Agencies in India

Mumbai Mumbai Gurgaon Mumbai Gurgaon, India

Know Your Customer Guidelines

Types of Accounts, Deposits, Cheques, DDs & BSBDS

Cheque and its Types

Types of Payments & Money Transfer

Automatic Teller Machine

Failed ATM/WLA transaction:

Kisan Credit Card

Point of Sale Machine

Merchant Discount Rate (MDR):

Electronic Funds Transfer at Point of Sale(EFTPOS)

MICR(Magnetic Ink Character Recognition)

IFSC(Indian Financial System Code)

Bharat Bill Payment System (BBPS)

Electronic Clearing Service (ECS)

Block Chain Technology

insurance, among others, electronically on block chain in real time.

Unified Payment Interface

Banks Live on UPI (App Name) Non-Bank UPI App

Aadhaar Enabled Payment System:

National Automated Clearing House (NACH):

Current assets: Short-term

NPA and Recovering NPA

Non-performing asset (NPA) :