Banking Operations by Pooja Kadam

Banking Operations
Prepared by : Pooja Kadam

Roll no : 16
Subject : Commercial banking
Submitted to : Dr. Sonali Kale
how do banks work
Deposit collection
 Bank deposit means the money placed into the banking institutions
for safekeeping.
 Bank accept the deposit from the public and mobilizes the fund to
productive sectors.
 Collection of adequate deposit is required for the efficient and
effective operations.
 Lending power of a bank depends on the amounts they can borrow
by way of deposits.
Types of deposit account
Current deposit(Demand deposit):
 Maintained by the traders and businessman .
 No interest is paid.
 These deposits can be withdrawal at anytime by means of cheque.
Saving deposit:
 account is maintained by general public and non profit making organizations.
 Certain restrictions on depositors regarding number of withdrawals and the
amount to be deposited in given period.
 Interest is payable on certain frequency.
Fixed deposit:
 Payable on maturity.
 Fixed amount and interest rate.
 Interest paid in certain frequency i.e. monthly, quarterly or on maturity.
Call deposit:
 Hybrid deposit that means combination of current and saving deposit.
 Any amount can be deposited and withdrawn in a call.
 Interest on mutual agreement.
Recurring deposit:
 Fixed amount is deposited at a regular interval for a fixed term.
 Repayment of principal and accumulated interest is made at the end of the term.
 Targeted to the investors who want to deposit a fixed amount every month.
Credit Operations
Loans and Advances
• Money lent by any financial institution to any other entity or individual for
specific purpose.
• In case of loans, debt is provided with or without collateral and the time of
repayment is more than a year with formal documentation.
• In case of advances, debt is usually provided with collateral and time of
repayment is less than a year which is less formal
• An asset is what the bank holds in terms of the credit given to the customer 
Interest rate charged are different for different products. Fixed interest
followed for some products while a floating interest charged for others.In fixed
interest rates, the customer is protected against fluctuations in the interest
rate.
Types of Loan
Asset-Liability Management (ALM )
• ALM basically refers to the process by which an institution manages its
balance sheet in order to allow for alternative interest rate and liquidity
scenarios.
• ALM models enable institutions to measure and monitor risk, and provide
suitable strategies for their management.
• ALM includes not only a formalization of understanding the risks, but also
provides a way to quantify and manage these risks.
Money laundering and its prevention
Money laundering is process by which illegal funds and assets are converted
into legitimate funds and assets. In the initial - or placement - stage of money
laundering, the launderer introduces his illegal profits into the financial
system. This might be done by breaking up large amounts of cash into less
conspicuous smaller sums that are then deposited directly into a bank account,
or by purchasing a series of monetary instruments (cheques, money orders,
etc.) that are then collected and deposited into accounts at another location.
After the funds have entered the financial system, the second – or layering –
stage takes place. In this phase, the launderer engages in a series of
conversions or movements of the funds to distance them from their source.
PREVENTION FUNCTION
 The fraud risk management, fraud monitoring and fraud investigation function must
be owned by the bank's CEO, Audit Committee of the Board and the Special
Committee of the Board.
 Banks with the approval of their respective Boards, shall frame internal policy for
fraud risk management and fraud investigation function.
 Banks shall send the Fraud Monitoring Returns1 (FMR) through the XBRL system.
Banks should specifically nominate an official of the rank of General Manager who
will be responsible for submitting all the returns.
 The major functions of the Special Committee would be to monitor and review all
the frauds of ₹10 million and above.
SECURITY MEASURES FOR ATMS
The criminals have realized that ATMs are softer targets. We should adopt
following security measures to protect these ATMs :
 ATMs should be well lit inside as well outside.

 The shutter of the ATM on the top should be covered by a box which should
be kept locked so that no unauthorized person can bring it down.
 The ATM should be properly grouted in the ground.
 The e-surveillance system installed in the ATM should be functional.
 The shutter of the ATM must have centre lock fixed in the ground so that it
can not be cut.
 Branch incumbent should get the ATM included in police beat route

Banking Operations by Pooja Kadam

Uploaded by

Copyright:

Available Formats

Banking Operations by Pooja Kadam

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Banking Operations by Pooja Kadam

Uploaded by

Copyright:

Available Formats

Banking Operations

Prepared by : Pooja Kadam

 ATMs should be well lit inside as well outside.

You might also like