Modern Banking

RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021
• Funds Transfer between your Accounts (Real-time): You can transfer

funds to the extent of “Net available balance” (from one of your accounts – viz.
Source Account) or up to the ‘Per day limit’ fixed by the Bank for you, whichever
is less, to any one of your other accounts.
• Third Party Funds Transfer (Real-time): You can transfer funds to the
extent of “Net available balance” (from one of your accounts viz. Source account)
or up to the “Per day limit” fixed by the Bank for you, whichever is less, to any
one of the Beneficiary Accounts maintained by you. All the Beneficiary Accounts
maintained by you will be available in the pick list and you can select any one of
the accounts.
• NEFT online Transfer: You can transfer funds to the extent of “Net available
balance” (from one of your accounts viz. Source account) or upto the “Per day
limit” fixed by the Bank for you, whichever is less, to an account with another
Bank. The funds will be transferred using the NEFT facility provided by RBI and
will be processed in the next available settlement cycle depending on the time of
request. The beneficiary gets the credit on the same day or the next day
depending on the time of settlement.
Term Deposit Options:
• Term Deposit Details: You can view the details of the selected Term Deposit
account such as principal, contracted interest rate, maturity value, tenure,
maturity date, lien (if any) etc.
Loan Options:
• Loan Account Details: You can view the details of the loan account selected
and print these details using “print” option. You can also go to “Account
Summary”, ‘Early and Final Settlement” and “Loan Repayment” options from
here.
• Loan Account Activity: You can view the details of transactions for the
selected account for any specified period. The details of transactions can be
directly printed using ‘print’ option or can be downloaded and saved as a file
using “download” option.
Standing Instruction (SI) Options:
• Initiate Standing Instructions: You can create a Standing Instruction. The

Standing Instructions are of 3 types viz., Account to Account, Credit to Loan
Account and Banker’s Cheque (BC) Request. Wherever the BC request is
selected, you have to fill up beneficiary details also. The Bank will prepare the
BC and mail it to you. For all the 3 types, the Standing Instructions will be
executed on the Day Begin of the execution day. In case of insufficient balance,
no further trials will be made till the next execution date.
• View SI: You can view the details of the Standing Instructions you had given
either directly at the branch or through Internet Banking.
Safe custody and safe deposit

The facility of Safe Deposit Lockers is an ancillary service offered by the Bank. The
Bank's branches offering this facility will indicate/display this information.
Secrecy and Confidentiality:
The Bank will ensure utmost secrecy of the Safe Deposit Lockers hired by the customer
and will not divulge any information about hiring of lockers, mode of operation etc. to
anyone, except when the disclosure is required to be made with the clear consent of the
hirer(s) or in compliance of the orders of a competent authority having statutory
powers.
Bank’s lockers will be available to any person, having contractual capacity i.e. capacity
to enter into a contract. Thus locker can be hired by an individual singly and / or two or
more individuals jointly as well as firms, limited Companies, Societies, Associations,
Clubs etc.
Allotment of locker
Allotment of lockers shall be based on the duly (properly) filled in application of the
prospective hirers on the printed format provided by the bank. Lockers will be allotted
by the branches on first come first served basis.
Providing a copy of the agreement:
Branches will give a copy of the agreement to the locker-hirer at the time of allotment of
the locker, if preferred by the customer.
Recovery of rent from hirer(s)
Safe Deposit Locker rent will be payable in advance and in the event of locker rent
remaining unpaid, when due, the Bank will have the right to refuse access to the locker
hirer(s). Locker rent will be recovered on annual basis. The lease period of one year will
start from the date of hiring the locker and will continue till the preceding day of the
corresponding date in the subsequent year.
Operations of Safe Deposit Vaults/Lockers:
Branches will exercise due care and necessary precaution for the protection of the
lockers provided to the customer. The Hirer/s can operate the Safe Deposit Locker only
on the Bank’s working days and during the business hours of the Bank.
Before operating the locker, the hirer/s should sign the attendance register which shall
be kept at the bank.
Death of the hirer:
• Notice of knowledge of the death of a hirer or a surviving hirer will be recorded in

the Locker Register with date and source of information under the initials of an
officer.
• As a further precaution, a slip reading 'hirer deceased' will be pasted on the

locker.
• Thereafter access to the locker should be allowed on production of legal
representation.
• Where authority has been given to the survivor or survivors to operate the locker
in writing specifically at the time of lease of the locker, in the case of joint
account, the question of legal representation does not arise unless the survivor
also dies.
Surrender of Locker:
• Locker can be surrendered by the hirer/s at any time during the contract period
through a written application and handing over of keys to the Bank Officials.
• Bank can also request for surrender of locker with due notice.
The major aspects governing the locker services are:
• The Bank will hire locker only to properly introduced persons.

• Lockers are rented out for a minimum period of one year. Annual rent is payable
in advance.
• Loss of key should be immediately informed to the branch.
• Withstanding instruction, the rent may be paid from the deposit account of the
hirer.
Merchant Banking
Merchant banking is called commercial services bank in INDIA. It is a bank that
provides financial services mainly for companies and large-scale investors.
Merchant banking implies investment management. Companies raise capital by issuing
securities in the market. Merchant bankers act as intermediaries between the issuers of
capital and the investors who purchase these securities.
Merchant banking is the financial intermediation that matches the entities that need
capital and those that have capital for investment.
Services of merchant bankers
The services provided by merchant bankers include management of mutual funds,
public issues, trusts, securities and international funds. It involves dealing with the
corporate clients and advising them on various issues like- mergers, acquisitions, public
issues, etc.
Merchant Banking is a combination of Banking and consultancy services.
Merchant banking
Banking services + Consultancy services
It helps businessmen to start It provides consultancy to its clients for
financial,
a business and helps to raise finance marketing, managerial and legal matters
In short, merchant banking provides a wide range of services for starting until running a
business. It acts as Financial Engineer for a business.
Functions of Merchant Banking

Merchant banking primarily involves financial advice and services for
large corporations and wealthy individuals. The important functions of merchant
banking are depicted below.
1. Raising Finance for Clients: Merchant Banking helps its clients to raise
finance through issue of shares, debentures, bank loans, etc. It helps its clients to
raise finance from the domestic and international market. This finance is used for
starting a new business or project or for modernization or expansion of the
business.
2. Project Management: Merchant bankers help their clients in the many ways.
For e.g. advising about location of a project, preparing a project report,
conducting feasibility studies, making a plan for financing the project, finding
out sources of finance, advising about concessions and incentives from the
government.
3. Advice on Expansion and Modernization: Merchant bankers give advice
for expansion and modernization of the business units. They give expert
advice on mergers and acquisition, takeovers, diversification of
business, foreign collaborations and joint-ventures, technology up-gradation,
etc.
4. Special Assistance to Small Companies and Entrepreneurs: Merchant
banks advise small companies about business opportunities, government
policies, incentives and concessions available. It also helps them to take
advantage of these opportunities, concessions, etc.
5. Services to Public Sector Units: Merchant banks offer many services to
public sector units and public utilities. They help in arranging long-term finance
from term lending institutions, marketing of securities.
6. Revival of Sick Industrial Units: Merchant banks help to revive (cure) sick
industrial units.
7. Portfolio Management: A merchant bank manages the portfolios
(investments) of its clients. This makes investments safe, liquid and profitable for
the client. It offers expert guidance to its clients for taking investment decisions.
8. Money Market Operation : Merchant bankers deal with and underwrite
short-term money market instruments, such as:
i. Government Bonds.
ii. Commercial paper issued by large corporate firms.
iii. Treasury bills issued by the Government
Q5.FOREX SERVICE OFFERED TO EXPORTERS AND

IMPORTERS
• Pre-shipment finance in foreign currency and Indian rupees
• Post-shipment finance in foreign currency and Indian rupees
• Handling export bills on collection basis
• Outward remittances for purposes as permitted under
Exchange Control guidelines
• Inward remittances including advance payments
• Quoting of competitive rates for transactions
• Maintenance of Exchange Earners Foreign Currency (EEFC)
accounts
• Assistance in obtaining credit reports on overseas parties
• Services Offered To Importers
• Establishment of Import Letters of Credit covering import into
India and handling of bills under Letter of Credit
• Handling of import bills on collection basis
• Remittance of advance payment against imports
• Offering utilisation of PCFC ( pre-shipment credit in foreign
currency) for imports
• Credit reports on overseas suppliers
• Interest rates in respect of Export Credit

Modern Banking

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RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

• Funds Transfer between your Accounts (Real-time): You can transfer

Term Deposit Options:

Standing Instruction (SI) Options:

• Initiate Standing Instructions: You can create a Standing Instruction. The

Safe custody and safe deposit

• Notice of knowledge of the death of a hirer or a surviving hirer will be recorded in

• As a further precaution, a slip reading 'hirer deceased' will be pasted on the

The major aspects governing the locker services are:

• The Bank will hire locker only to properly introduced persons.

Functions of Merchant Banking

Q5.FOREX SERVICE OFFERED TO EXPORTERS AND

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