RETAIL BANKING

1. RETAIL BANKING

2. 1.1 Overview 1.2 Objective 1.3 Products/Services Operative account Non operative account Miscellaneous services 1.4 Instruments of operative account 1.5 Types of operative account 1.6 Savings account –definition /facilities 1.7 Types of flexi deposit 1.8 Current account –definition/facilities 1.9 Advances- definition /types 1.10 Cycle of operative account 1.11 Types of non operative account 1.12 Types of deposits 1.13 Cycle of non operative account 1.14 Types of loans 1.15 Cycle of loans 1.16 Types of miscellaneous services CONTENTS

3. Retail Banking denotes catering to the requirements of retail customers viz..individuals,professionals,self employed etc. Retail banking has seen a transformation over the past two decades with respect to business focus, delivery channel emphasis and the overall approach to the banking business. Today, given the greater stress being placed on mass customisation, banks are increasingly relying on technology to provide customised solutions to consumers. Overview

4. The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to the customers through the growing branch network, as well as through alternative delivery channels like ATMs, PhoneBanking, NetBanking and MobileBanking. Objective Of Retail Banking

5. Operative accounts Non operative account Miscellaneous services Products/Services Offered

6. The Main services offered in this sector are : Savings account Flexi deposits Auto sweep Reverse sweep Current account Advances Operating account

7. Cheques Demand drafts Managers cheques Cash Instruments of operative accounts

8. A minimum quaterly balance needs to be maintained in this type of account.The minimum balance criteria differs from bank to bank. Non Maintenance of minimum balance in the account attracts a quarterly fee which again is determined by the bank and varies for each bank Savings account

9. Debit-cum-ATM card Auto Invest Account Internet Banking Phone Banking Anywhere Banking Standing instructions Doorstep service Facilities offered for Savingsaccount

10. There are two types: 1) In a savings account,the amount held over and above the prescribed minimum balance would be automatically put in a term deposit earning higher return for customer.This is termed ‘AUTO SWEEP’ Flexi Deposit

11. Eg : If ‘A’ hold an savings account with bank ‘ABC’ where the minimum balance is Rs 5000.If ‘A’ has a balance of Rs 6000 in his account the remaining 1000 ( 6000-5000) will be automatically put in a term deposit. Auto Sweep

12. Whenever the customer issues a cheque which brings down his savings account balance below the prescribed limit,the shortfall amount will be automatically taken from the term deposit.This is called ‘reverse sweep’. Reverse Sweep

13. Eg : Considering the pervious example of ‘A’ where Rs 1000 from his account is held as term deposit.If ‘A’ has issued a cheque for Rs 1000,when this cheque debits his account his balance reduces to rs4000 which is below the minimum limit of Rs5000.In such a case Rs 1000 which was held in term deposit gets adjusted to savings account to bring back the saving account minimum balance to Rs 5000 Reverse sweep

14. 2)The fixed deposit of a customer is held in units of 1000 or so as prescribed by the bank.In case of need the customer can withdraw part amount of deposit without closing the deposit. In case of fore-closure,the deposit would earn interest at rates applicable for the period run without any penalty. Flexi Deposit

15. Eg :If ‘A’ holds a deposit of Rs 10000 with bank ‘ABC’ broken into units of 1000 for a period of 6 months.Incase he withdraws Rs 700 after 3 months. Cal: He will earn interest for Rs 10000 for 3 months.When he withdraws Rs 700 from his account the deposit is broken and Rs 1000 is moved to savings account.The remaining 9000 will earn interest for the remaining time period. Flexi Deposit

16. What is Current account? A running account supporting unlimited withdrawals and deposits A current account is meant for convenience and not to save money Current Account

17. Unlimited Withdrawal and Deposit Unlimited Cheque book Demand Drafts and Payorders Funds Transfer ( Local or Anywhere) Collection of Cheques/ Drafts Statements,Advices, Daily statement by e-mail Cash withdrawal and Deposits Multicity Cheque payment facility Anywhere Banking facility Doorstep Banking - Pick up and delivery of Currency / Cheque Mobile Banking Facilities offered for currentaccount

18. STANDING INSTRUCTIONSStanding instructions can be given to the Bank for transfer/remittance of funds from one account to other account/s maintained in the same branch, any other branch of the Bank or any other bank or any other third party STANDING INSTRUCTIONS

19. An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally granted for a short period of time. Further the purpose of granting advances is to meet the day-to-day requirements of business. The rate of interest charged on advances varies from bank to bank.Interest is charged only on the amount withdrawn and not on the sanctioned amount. Advances

20. Bank has a very wide bouquet of types of credit facilities which can be tailor-made to suit customer specific requirements. In a nutshell, the Bank offers : Advances

21. Cash Credit Over draft Discounting of bills Types of Advances

22. Cash credit is an arrangement whereby the bank allows the borrower to draw amount upto a specified limit. The amount is credited to the account of the customer. The customer can withdraw this amount as and when he requires. Interest is charged on the amount actually withdrawn. Cash Credit is granted as per terms and conditions agreed with the customers. Cash Credit

23. Overdraft is also a credit facility granted by bank. A customer who has a current account with the bank is allowed to withdraw more than the amount of credit balance in his account.It is a temporary arrangement. Overdraft facility with a specified limit may be allowed either on the security of assets, or on personal security, or both Overdraft

24. Banks provide short-term finance by discounting bills, that is, making payment of the amount before the due date of the bills after deducting a certain rate of discount. The party gets the funds without waiting for the date of maturity of the bills. In case any bill is dishonoured on the due date, the bank can recover the amount from the customer. Discounting of Bills

25. What is the minimum & maximum period for which customer can avail advance from the Bank? The Minimum period for which an advance may be sanctioned starts is one day. The maximum period for which an advance can be sanctioned depends upon:- The Debt Service Capacity of the borrower reckoned from the cash flow from the business operations; and, The purpose of the advance Advances

26. Origination Service Closure Cycle of Operative account

27. Operative Account Origination Scrutiny & verification Account opening & maintenance Application Communication Applicant should submit Account opening form Address proof Identity proof Self cheque or cash for minimum balance Welcomepack With debit card, cheque book, details of Account sent to customer Verify and check validity of documents provided Account opened Cheque book printing Mapping of signature

28. SERVICING OPERATIVE ACCOUNT

29. CLOSURE OF OPERATIVE ACCOUNT

30. Deposits Loans Non operating account

31. They can be broadly classified as Fixed deposit Recurring deposit Deposit Services

32. The products or features offered by banks under these categories varies from bank to bank Mentioned below are a few of such products offered by banks Deposit Services

33. Fixed Deposits impose a Simple Interest Formula on the Principle amount deposited by the customer. Interest can be paid Quarterly, Semi-Annually or Annually as req. by customer. Fixed Deposits

34. Every month the Customer Pays the Installment which is fixed in the beginning. For Preclosure a Penalty of 1% -2 %is Charged. Recurring/Monthly Deposits

35. Origination Servicing Closure Cycle of Non operating Account

36. Non Operative Account Origination Scrutiny & verification Opening Of Deposit Application Communication Provide the following Request form Proof of indentity Cheque or cash for Amount to be Deposited PAN details or Form 60 for Beyond deposit of Rs 50000 Validity of documents Certifcate of Deposit Despatched Stating maturity Date ,rate of Interest and Amount to be Earned end of tenure Deposit opened,details Of maturity maintained On system If existing customer And holds account, Mapped to customer Savings account

37. Non Operative Account Servicing Transctions Fee & Charges Interest Reporting Collect monthly deposit For recurring deposit Movement for funds To savings account For reverse sweep Withdraw of funds From Issue of duplicate Deposit receipt Monthly Statements with Interest Calculations Quarterly interest Accrued to account For recurring deposit For fixed deposit quarterly,semi Annually or annually Loss of interest Loss of interest Nominal charge

38. Non Operative Account Closure Request Processing Payment Closure On Maturity Preclosure Renew If no confirmation Received from Customer The deposit gets Renewed for another Same tenure Recover penalty Fee for recurring Deposit Change maturity date On system The principal plus Interest earned during The tenure Principal plus interest For the period when The funds where held Pay interest or reinvest As desired by customer Certificate of Deposit recovered And deposit closed By issuing demand draft Certificate of Deposit recovered And deposit closed Issuing demand draft

40. Housing loans are referred to the loans provided by the banks for the following purposes For construction/purchase of flat/house Repairs/Renovation of existing house/flat Purchase of flat/house resold Purchase of land Housing loan

41. The criteria for providing housing loans differs from bank to bank. The eligibility is mainly for Individuals Salaried class,businessmen, professionals with minimum period of service Age – Upto 50-55 years Home Loan

42. The loan amount will be calculated based on the value of property the customer is going to buy and also based on the earnings of the customer. The loan amount would be 36 times gross salary or 60 times net salary of the customer which ever is higher.Spouse income also considered Margin: 15% on total project cost ( cost of land + cost of construction) 30% - For repairs Housing loan sanction

43. There are 2 options Fixed rate Floating rate The rate also varies with the tenure selected by customer.There is maximum of 20 years tenure offered by banks Housing loan Interest Rate

44. Housing loan Repayment

45. Origination Verification Sanction Disbursal Closure Cycle of a housing loan

46. Customer contribution • 15% for new house/ flat • 20% for old house/ flat • 20% for repairs and • renovation ORIGNIATION OF HOUSING LOAN Application Eligibility Criteria Margin Documentation • You must be at least 21 • years of age when the loan • is sanctioned. • The loan must terminate • before or when you turn • 65 years of age or before • retirement, whichever is • earlier. • You must be employed • or self-employed with a • regular source of income If customer has identified property to Be purchased Submit housing loan application Details on next slide

47. Passport size photograph Proof of residence (This applies only to new or non-bank customers, and could be either a PAN identity card, voter identification card or passport) Sale Deed/ Agreement of Sale Bank account Statement or passbook, for the last six months For employees or people in service, you also need to provide: Salary certificate and other information, if any, about your repayment capacity Form 16 or a copy of the Income Tax Returns for the last 2 yearsFor self employed and other IT assessees: IT returns for the last 3 years· Receipts of advance tax paid Any other information about your repayment capacity In addition to the above mandatory documents, you are also required to furnish one or more of the following documents wherever applicable:· Letter of allotment from the housing board or society Copy of the approved plan Permission for construction Copy of the relative order in the case of conversion of agricultural land. (not required where the house/flat has been constructed by an approved builder) Documents for housing loan origination

48. Additional documents required for an old house/flat : In the case of an old existing house, you will need to get a valuation certificate from approved valuers as well as a certificate from a government approved architect /structural engineer regarding the condition of the flat/house as well as its remaining life. Documents for Housing loan

49. Customers who have not identified the property to be bought : In-principle approvalBanks give in-principle approvals based on the customer income and capacity to repay, to enable them to identify a house/ flat with full confidence. All loans are at the sole discretion of the Bank. Customer needs to identify the property within 3 months from the loan being sanctioned Housing loan Origination

50. Stages in verification & processing Scrutiny of the application and documents Verification Processing charges Sanctioning of loan Disbursal of loan Verification & Processing ofHousing loan