BANKING

OPERATI0N
INSURANCE
RISK
MANAGEMENT
UNIT- I

INTRODUCTION
TO
BANKING BUSINESS
WHAT IS BANK?
 BANK IS A ?

A banking company in India is the one which transacts the

business of banking which means accepting, for the purpose
of lending and investment of deposits of money from the
public, repayable on demand or otherwise by cheques , draft,
order or otherwise.
In simple terms, a bank accepts money on deposits,
repayable on demand and also earns a margin of profit by
lending money.
 The word Bank derived..

Bank is the word derived from French Bancus,

which means a bench
It is believed that the early bankers used to transact
money on the bench in the open market.
 ROLE OF BANKING

It encourages savings habit amongst people and thereby makes funds

available for productive use.
It acts as an intermediary between people having surplus money and
those requiring money for various business activities.
It facilitates business transactions through receipts and payments by
cheques instead of currency.
It provides loans and advances to businessmen for short term and long-
term purposes.
 FUNCTIONS OF OLD BANKING SYSTEM

Accepting Deposits
Issue of Demand Draft (DD)
Granting Loans and Advances
Undertaking safe custody of valuables and important
documents
Minimum Balance for opening an account
High rate of interest
Token system for withdrawals of cash
 DISADVANTAGES OLD BANKING SYSTEM

Possibility of human errors

Time constraints
Limited customer relationship(CRM)
No Over Draft (OD) facility available
Processing fee (HIGH)
Delay in cheque processing
Limited use of technology
 NEW BANKING SYSTEM ADVANTAGES

Increased operation efficiency, profitability and

productivity.
Superior customer service
Provide services/products across a range of channels
Better cross selling ability.
Minimal transaction cost
Improved financial analysis capabilities
 FOCUS ASPECTS OF NEW BANKING SYSTEM

Core Banking Solutions(CBS)

Customer Relationship Management(CRM)
Electronic Fund Transfer (EFT)
Electronic Clearing System (ECS)
Any Branch Banking, Risk Management
ATMs, Card Management and Mobile Banking
 CATEGORIES OF BANKING SECTOR

On the basis of service rendered by the banks the following

categories have been identified

Retail Banks
Corporate Banks
Rural Banks
International Banks
NEW BANKING SYSTEM IN THE WORLD
RETAIL BANKING
 RETAIL BANKING

Retail banking is when a bank executes transactions directly with consumers, rather
than corporations or other banks.
Services offered include savings and transactional accounts, mortgages, personal
loans, debit cards, and credit cards. The term is generally used to distinguish these
banking services from investment banking, commercial banking or wholesale
banking.
It may also be used to refer to a division of a bank dealing with retail
customers and can also be termed as Personal Banking services..
Typical mass-market banking in which individual customers use local branches
of larger commercial banks. Services offered include savings and checking
accounts, mortgages, personal loans, debit/credit cards and certificates of
deposit (CDs).
RETAIL BANKING GROUPS
 ACCOUNTS, DEPOSITS AND LOANS OF RETAIL

ATM
Home Loans
Savings Accounts
Personal Loans
Current Accounts
Car Loans
Trading accounts
Commercial Vehicle Loans
Fixed Deposits
Loans against Securities
Internet Banking
Education loan
Mobile Banking
 CORPARATE BANKING

Financial services
Setting up new projects
Expansion
diversification
Financial restricting
commercial banking facilities
 RURAL BANKING FUNCTIONS

To accept deposits
To grant advances
To provide ancillary banking services
To supply inputs and equipments to farmers
To provide assistance in the marketing of their products
To maintain god owns
To help in the overall development of villages in its area
To extend credit and all other banking services
INTERNATIONAL BANKING
INTERNATIONAL BANKING
INTERNATIONAL BANKING (Indian)