A

Sectoral Analysis Project

On

Understanding the Dynamics

Of

Banking System

Submitted by:

Touseef Rasool Bhat ID: - 09PR001014B062 Sen Hall, PROTON business school.

Submitted to: Academics, PROTON business school.

INDEX

1 Introduction

2 Banks

3 Comparative study of Accounts

4 Comparative study of services

5 Other Banking Details

7 Summary

8 Conclusion

Introduction:

Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August, 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

The nationalized banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.

The Banking sector in India has always been one of the most preferred avenues of employment. In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the

McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the market index during the same period. It is projected that the sector has the potential to account for over 7.7 per cent of GDP with over Rs.7, 500 billion in market cap, and to provide over 1.5 million jobs.

Today, banks have diversified their activities and are getting into new products and services that include opportunities in credit cards, consumer finance, wealth management, life and general insurance, investment banking, mutual funds, pension fund regulation, stock broking services, custodian services, private equity, etc. Further, most of the leading Indian banks are going global, setting up offices in foreign countries, by themselves or through their subsidiaries.

The banking sector will have to raise Rs. 60,000 crore as additional capital in the next five years, as said by Finance Minister, P. Chidambaram.

Inaugurating the two-day bankers' conference `Bancon 2005' in Kolkata, Mr. Chidambaram said it was important to increase the capital base of the banks and urged the industry to gear up itself to raise Rs. 60,000 crore capital in the next five years. He said the issue would be discussed at the meeting of the bank CMDs convened on November 18.

Scope for raising capital:

Banks, which do not have the scope to raise Tier-I capital, would have to go in for Tier-II capital, he said, adding that the additional capital could be raised by way of improved profitability, by better recovery or by raising from the market.

Stating that the contribution of the banking sector to gross domestic product (GDP) was low at 35 per cent, the Finance Minister said the sector should set the goal for raising the contribution to GDP to 50 per cent and it would be only possible by raising the size of the banks.

Mr. Chidambaram said for banks to raise their share to 50 per cent, bank credit had to grow at a much faster pace. He said the size of Indian banks was a limiting factor.

Indian Banking Sector in next 5 years:

The last decade has seen many positive developments in the Indian banking sector. The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favorably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs). A few banks have established an outstanding track record of innovation, growth and value creation. This is reflected in their market valuation. However, improved regulations, innovation, growth and value creation in the sector remain limited to small part of it. The cost of banking intermediation in India is higher and bank penetration is farLower than in other markets. India’s banking industry must strengthen itself significantly if ithas to support the modern and vibrant economy which India aspires to be. While the onus for thischange lies mainly with bank managements, an enabling policy and regulatory framework willalso be critical to their success. The failure to respond to changing market realitieshas stunted the development of the financial sector in many developing countries. A weakBanking structure has been unable to fuel continued growth, which has harmed the long-term health of their economies it emphasize the need to act both decisivelyand quickly to build an enabling, rather than a limiting, banking sector in India.

BANKS:

Public Sector Banks are the banks. These banks are:

1. The State Bank of India Group (Total:8 Banks) namely SBI (State Bank of India), State Bank of Indore, SBBJ (Bikaner & Jaipur), SBH (Hyderabad), SBM (Mysore), SBP (Patiala), SBS (Saurashtra), and SBT (Travancore).

2. Nationalized Banks (Total: 19 Banks) namely Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Punjab National Bank, Syndicate Bank, UCO Bank, United Bank of India, Union Bank of India and Vijaya Bank.

3. Other Public Sector Bank i.e. IDBI Bank Limited.

4. Private Sector Banks (Total: 27 Banks). The major recruiters in the private sector include the ICICI Bank, HDFC Bank, Axis Bank, Federal Bank, Centurion Bank of Punjab, Indusind Bank, Kotak Mahindra Bank, Yes Bank, ING Vysya Bank, Bank of Rajasthan, Karur Vysya Bank, Karnataka Bank, Jammu & Kashmir Bank, South Indian Bank, Bharat Overseas Bank, etc. These banks conduct their own exams, but normally follow patterns similar to those of the exams of the public sector banks.

5. Co-operative Banks: All major National and State Co-operative Banks and Scheduled Urban Co-operative Banks conduct their own exams to recruit staff. Their recruitment exams, too, are generally similar to the exams of the public sector banks.

The three banks I visited are:

The Jammu & Kashmir Bank LimitedC-lal chowk Okhla Industrial Phase II, NewDelhi, 1100024.Web: www.jkbank.net.Branch Head (Forex) - Mr. Ankur Sharma.E-mail:ankursharma@jkbmail.com

Kotak Mahindra BankC-lal chowk Okhla Industrial Phase II, New Delhi, 1100024.Web: www.kotakmahindrabank.com.Phone: 011-40515349Service Manager- Mrs. Joti Pasricha.

The Saraswat Co-operative Bank Limited20A, Lajpat Nagar-4, New Delhi, 1100024Web: www.saraswatbank.net.Phone: 011-26422100.Branch Manager- Mr.Vikas Mehra

COMPARATIVE STUDY OF ACCOUNTS:Type of account The J&K Bank Ltd. Kotak Mahindra Saraswat BankSavings Salient Features  

Account can be opened with a minimum initial deposit of Rs.100/- to Rs.500/-

Convenient and easy to operate account to save

Edge Savings Account Pro

Savings Account Classic

Savings Account Nova Savings Account Ace Savings

Savings Accounts with various schemes

Saves time and money

Affordable

time and money.

Suitable for irregular income group No time bar on depositing or withdrawing money.

SB Ujala -No Frills Account

  Main Features   A variant of

Saving Bank account to ensure financial inclusion and to strive for making banking services easily accessible to all segments of society.

Minimum initial deposit is Rs.50/-. However, customers also allowed to open the account with banking instruments like Banker's cheque, etc. However, minimum balance of Rs 50/- is mandatory to keep the account operational.

Account Easy Savings Account (No Frills Account) Corporate Salary Account

Current Purpose     Business

account.

  Validity   Six months.

However, revalidated for further 3 months.

  Variants   Platinum Current

Account Gold Current

Account

Premium Plus

Current Account

Premium Current Account

Basic Current Account

New Current Account Edge

Current Account Pro Current

Account Elite Current

Ace Current Account

This account is mainly used by the bank for business and operational purposes

Fixed deposits Term Loans & Deposits Term Loans & DepositsTerm deposit through Phone Banking or Net Banking.

Foreign Currency Accounts in 9 Major Currencies of the World. Correspondent relationship with 125 Banks spread over 45 Countries. 11 Forex Centers in Maharashtra & Goa and Specialized NRI Centre. Well Equipped Treasury Department 

Member of SWIFT Network for speedy & accurate Funds Transfer. All types of Forex services rendered to many other Cooperative Banks.

NRE/NRO/FCNR. For the purpose of opening a new account and for augmenting/replenishing your existing account, you may choose any of our NRI branches convenient to you and any one or more of the following modes of remittance.

A demand draft drawn in any freely convertible foreign currency.

Your personal cheque in foreign currency drawn on your account abroad.

Drafts drawn abroad in Indian Rupees by Reserve Bank of India authorized Exchange Houses.

International Money Orders in foreign currency.

Transfers from existing FCNR/Non-Resident External Rupee

Remittance facility is available up to USD 1 million per financial year subject to prescribed documentationProceeds of demand drafts/ banker's cheques issued against encashment of foreign currency can be credited to NRE accounts where such instrument issued is supported by an Encashment Certificate issued by AD category I/ category IIOverdraft limit against NRE and FCNR Deposits enhanced to Rs.100 Lakhs against the previous overdraft limit of Rs.20 Lakhs.

Account is maintained in Indian Rupees. Accounts can be opened/credited with legitimate local funds of the non-resident; foreign exchange funds may also be credited into the accounts. –

Accounts can be opened jointly with non-residents/residents. Funds held in NRO accounts, can be repatriated outside India with an overall limit of USD one million per calendar year including sale of assets held by NRI’s in India, on production of an undertaking and certificate by a person making remittance in Form and application for remittance as given under section 195 of the Indian Income-Tax Act. Interest is subject to deduction of tax at source at the rate of 30% plus surcharge if any for the financial year 2006-07.   Loans against the deposits can be availed

Accounts with us.

of for purposes other than relending, carrying on agricultural / Plantation activities / real estate business.  

Studying the operating policies of all the banks mentioned above, the banks are providing the same but differentiated services to the customers. In case of J & K Bank ltd. They have divided savings account into two categories:

Urban Accounts Rural Accounts.

In Case of Kotak Mahindra their all accounts are divided into sub categories:

Edge Savings Account Pro

Savings Account Classic

Savings Account Nova Savings Account Ace Savings

Account Easy Savings Account (No Frills Account) Corporate Salary Account

Saraswati Bank has different strategy in handling deposits and NRO accounts. There are some fixed terms and conditions for NRO accounts which other banks do not have.

Bank in the year 2008 launched the Branding Initiative .The purpose of such an exercise was to reconfirm the thrust of Bank on its core values, which can be summed up as "Sense of Belonging ".The name of the Bank should always inspire the Sense of Belonging in all its stakeholders and that Bank continues to fulfill the changing needs and expectations of the customer with unflinching gusto and aplomb for improving the customer satisfaction 

Indian banks have compared favorably on growth, asset quality and profitability with other regional banks over the last few years.

The Jammu & Kashmir Bank Limited claims the 100% transparency in their operations and is one of the most recognized banks in India which pays the highest dividend to its shareholders.

Kotak Mahindra Bank claims better and quick services to the customers which makes hem different from other banks Kotak has a new customer service department which provides useful information to the customers without standing in the queue.

The Saraswat Co-operative bank ltd. gives more emphasis on highest standards of professionalism and excellence in all the areas of working, which gains the interest and faith of the customer

THE JAMMU & KASHMIR BANK LIMITED:

Serve to empower

The Jammu & Kashmir Bank limited was established in ______ with the purpose to provide financial help to the local industries and inhabitants of Jammu and Kashmir. It is the only Private bank whose 51% of the shares are held within the government. The Headquarters are located in Srinagar (summer) & Jammu (winter).The Jammu & Kashmir Bank limited ranked 163 among all corporate in India and it gives highest dividend to its customers. The present chairman of the bank is Mr.Haseeb Drabu.

The Corporate Social Responsibility (CSR) of the J&K Bank seeks to recognize obligations towards society and aims to integrate the CSR ideals into its mission for optimizing both business and social performance. It stresses on promoting work life balance, give attention to social and environmental concerns and host of factors that facilitate business pursuits and accomplishment of economic goals. The CSR is not just recognized as promulgating the Bank's own values and principles of philanthropy but also the values and principles of all those who have a stake in it or are affected by its operations. By supporting social cause aligned to the mission the CSR strategy differentiates the Bank's brand and enhances its reputation. The Bank manages social issues in the same manner as any other strategic business issues.

Core Banking Details:At the time of Incorporation the bank was following traditional method to handle its operations and later on in 1996 the bank adhered to the Core banking system. The bank invested huge capital on information technology and adapted thereby to the new system. The bank had given contract to an IT company and local experts to get system changed which helped the bank in focusing their day-day-operations effectively. Also the government of the state helped out the bank in re structuring and becoming computer friendly. The Okhla branch was changed at the same time.

The problems faces by the bank were: Huge money invested No awareness among customers

The whole organization was restructured Hiring of technically expert professionals

Besides these problems faced by the bank, the bank today says that the change was very positive in nature. From this new system we handle the operations effectively and sufficiently, time is saved ad customer is very much satisfied. The whole information lies on the website, online forms can be submitted, accounts can be operated which saves time and money of the customer as well of the bank

Saraswati Co-operative Bank - It provides core banking facility to its customer at every point of time. It has a heavy network of ATM established all over , various other facility like internet banking , mobile banking etc are also being provided to the customer .Kotak Mahindra Bank - It provides core banking facility to its customer at every point of time. It has a heavy network of ATM established all over , various other facility like internet banking , mobile banking etc are also being provided to the customer .

The Bank has done no underwriting so far in this branch.

Comparative study of the types of services provided by the Bank:Investment

Mutual Funds:The Banks has entered into the Mutual fund distribution business 5 years back and today we have a successful tie up with 21 fund houses with total funds invested at around Rs 100 crores. The major fund houses where our Bank has tie up are as follows:

 Birla Sun life Mutual Fund. HDFC Mutual Fund. MetLife Mutual Fund.

PPF:

BANK Amount of deposit Time periodThe J & K Bank Ltd Max.1 lakh deposit in every

yearMax.7 years

Kotak Mahindra Bank Particularly only for employees only

Saraswati Co-operative Bank Not applicable Not applicable

Insurance:

The Bank diversified its operations when it ventured into the insurance business, both life and non-life segments.

The Bank has entered into an alliance with Bajaj Allianz to distribute their non-life products.

These products are available at all branches of the bank across India.

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and others.

Banks Process The J & K bank limited On one lakh loan they provide 99 thousand ,

one thousand will give for insurance

Kotak Mahindra Bank All type of insurance services are being provided by the bank like ---

1. Life insurance2. General insurance3. Fire insurance etc.

Saraswati Cooperative Bank Not applicable

D-mats:

D-mats service is provided by the bank for trading. The customer applying for D-mat must have account with the bank . The brokerage charge per share is 0.25.

Portfolio management services

BanksThe Jammu & Kashmir Bank Limited Wealth Management

Kotak Mahindra Bank Limited Available for Wealth Management clients

Saraswati Cooperative Bank Not applicable

Electronic clearing Services:

ECS is a mode of electronic fund transfer from one bank account to another using the services of

a clearing house. It is normally used for bulk or repetitive transfers. While ECS (credit) is used

sassy institutions for distributing dividend, salary or pension, ECS (debit) is used by individuals to make

regular payments to utility or insurance firms, or to repay bank loans via EMIs.

Banks ProcessThe J & K Bank Limited

Kotak Mahindra Bank ECS is a one-time instruction to debit the EMI to your bank account when your account is with another bank.

Saraswati Cooperative Bank Instead of cheque they issue list of the customer by which cheque were cleared

High Value Clearing Services

Banks ProcessThe J & K Bank Limited

Kotak Mahindra Bank ECS is a one-time instruction to debit the EMI to your bank account when your account is with another bank.

Saraswati Cooperative Bank Instead of cheque they issue list of the customer by which cheque were cleared

Types of Loans and services:

JK BANK Term Loans

Domestic Term Deposits up to Rs.1.00 Crore, w.e.f 19.10.2009.

Maturity Period Revised Interest Rates Per Annum

7 days to 30 days 2.75%

31 days to 45 days 3.25%

46 days to 90 days 3.50%

91 days to 180 days 4.75%

181 days to less than 1 years 5.75%

1 year to less than 2 years 6.75%

2 years to less than 3 years 7.25%

3 years to less than 5 years 7.75%

5 years and above 7.25%

o The above rates are applicable for fresh deposits and renewal of maturing deposits.

o The Term Deposits of Senior Citizens of over 60 years of age shall earn 0.50 % additional rate across all maturities.

    High Value Deposits -Above Rs. 1 Crore to less than Rs.5 crore, wef 19.10.2009. Maturity Period

Revised Interest Rates Per Annum (%)

91 days to 180 days 4.25%

181 days to 270 days 4.50%

271 days to 1 year 5.50%

Above 1 year up to 3 years (Maximum) 6.75%

Agriculture & Allied activities

1% below the rate prescribed for each Rating Grade

SMEs

0.50% below the rate prescribed for each Rating Grade

Agri Term Loans

  a)  Up to Rs.0.50 lacs

10.00 %

b)  Above Rs.0.50 laces

11.00 %

Banks ProesssThe J & K Bank Limited On one lakh loan they provide 99 thousand ,

one thousand will give for insurance

Kotak Mahindra Bank All type of insurance services are being provided by the bank like ---

4. Life insurance5. General insurance6. Fire insurance etc.

Saraswati Cooperative Bank Not applicable

Bank OverdraftsBanks Loan limit Interest chargedThe J & K Bank Limited

12%

Kotak Mahindra Bank OD is provided against FD up to 90% of the value of FD

2 % more then the interest rate applicable in FD

The Saraswat Cooperative Bank

Maximum 11 lakh 13%

Cash Credits

Banks Loan limit Interest charged The J & K Bank

No limit 11%

Limited

Kotak Mahindra Bank No limits 13%

The Saraswat Cooperative Bank

No limit 13%

Housing:Quantum of loan  

For Construction /Purchase 60 months net salary or 75.00 Lacs whichever is lower. For repairs/renovation 20 months net salary, subject to a maximum of Rs.10.00 Lacs.

For purchase of land: 20 months net salary/income subject to maximum of Rs.5 Lacs within J&K and Rs10.00 Lacs outside J&K.

Also as an incentive for small borrowers, the loans upto Rs. 1.5 Lacs granted for repairs/renovations of existing houses would now be secured by third party guarantee of two persons or such other security as is deemed appropriate by the Bank.

Eligibility   Employees of Govt. , Semi-Govt. Dept., Civic Bodies, PSU's with minimum 5 years

service. Reputed Businessmen with minimum 5 years standing.

Professionals & Self employed like Doctors ,Engineers , CA's , Advocates with minimum 5 years standing

Banks Loan limit Interest charged

The Jammu & Kashmir Bank Limited

Upto-5 yrs5-10 yrsMore than 10 yrs

8%10%12%

Kotak Mahindra Bank

Upto – 2 yrs2 yrs to 10 yrsMore then 10 yrs

8.25%10.5%12.5%

Saraswati Cooperative Bank

1 .Upto 2 lakhs2. 2 lakh-10 lakhs

9.50%10.5%

Vehicle:-Eligibility  

Permanent Employees of State / Central Government, Employees of Government / Semi-Government Undertakings & Autonomous Bodies

Employees of Private Limited Companies, Private Organizations, Reputed Establishments & Employees on contractual basis with Central/State Govt, Government/ Semi-Government Undertakings& Autonomous bodies*

Businessmen, Professionals and self employed individuals.

  Security   Primary

Hypothecation of vehicle to be purchased & Bank’s charge to be registered with RTO. Collateral

o No third party guarantee required in respect of permanent employees of State and Central Government, employees of State / Central Government Undertakings & Autonomous bodies drawing salary through our Bank and where letter of undertaking from employer is available.

o Guarantee of one person for all other applicants of the bank.

    Repayment  

Flexible repayment options ranging from 12 to 84 months in equal monthly installments.

Banks Loan limit Interest chargedThe Jammu & Kashmir Bank Limited

For 1 year1-3 year3-7 year

8%10%12%

Kotak MahindraBank

For 1 yrs1-3 year3-7 yrs

8.25%10.2512.25%

Saraswati Cooperative Bank

1. Upto 2 lakhs2. 2 lakhs-10 lakhs

11.50%12%

Education:Cal of Finance  

Rs.10.00 Lacs for studies in India . Rs.20.00 Lacs for studies abroad.

Eligibility   Should be an Indian National Should have secured admission to professional/technical courses through entrance

test/selection process.

Should have secured admission to foreign universities/institutions

Should have passed the qualifying examination for admission to the courses.

Employed person intending to improve their educational qualification and/or receive training in modern technology in India or abroad can also be assisted under this scheme provided training offers prospects of better placement.

Security

Personal guarantee of borrower/ 's Collateral security equal to amount of loan.

Banks Loan limit Interest chargedThe Jammu & Kashmir Bank Limited

For 1 year1-3 year3-7 year

8%10%12%

Kotak MahindraBank For 1 yrs1-3 year3-7 yrs

8.25%10.2512.25%

Saraswati Cooperative Bank

1. Up to 2 lakhs2. 2 lakhs-10 lakhs

11.50%12%

Mortgage loans:Banks Loan limit Interest chargedThe Jammu & Kashmir Bank Limited

For 1 year1-3 year3-7 year

8%10%12%

Kotak MahindraBank For 1 yrs1-3 year3-7 yrs

8.25%10.2512.25%

Saraswati Cooperative Bank

1. Upto 2 lakhs2. 2 lakhs-10 lakhs

11.50%12%

Other Loans: Consumer Loan. SAHOLIAT/SARAL Finance Personal Loan to Pensioners. Mortgage Loan for Trade & Service Sector. Loans against Mortgage of Immovable Property Fair Price Shop Scheme Travel & Tourist Taxi Operators Craft Development Finance . Dastkar Finance Giri Finance Scheme Khatamband Craftsmen Finance Commercial Premises Finance Laptop/PC Finance Contractor Finance

Locker facilities:Locker facility is available in the all three banks .lockers are given to the customers upon verifying their nationship, income and all other mandatory things. The security of the lockers is taken by the bank itself and if case of the theft, there are rules drawn for the customer to claim liability.

Banks Type of account Amount charged Types of locker as per depthThe J & K Bank Limited

For Saving account 600 per annum1200 per annum2500 per annum

SmallMediumLarge

Kotak Mahindra Bank For saving account 1200 per annum Lockers are available only in one size.

Saraswati Cooperative Bank

For Saving account 600 per annum1000 per annum1200 per annum

A- Small lockerB- Medium lockerC- Large locker

Rail Reservation & Mobile charging;The mentioned facility is not available at this branch, but is available in regional and state offices.

ATM & other facilities:The JK Bank has more than 220 Atm in the state of Jammu and Kashmir. And outside the state there is ATM facility at every branch in the country, Major railway stations, Shopping malls and Airports. Kotak Bank also serves effectively by providing ATM with every new account.

On line Money transfer facility is also available in the branch.

The Bank provides all the types of Credit cards which depend upon the credibility of the customer.

Debit cards are provided with each savings account.

Smart Cards are not available in this branch and they are going to provide such facility in the coming year.

Credit card/debit card/smart card or any other types of card

Facilities Bank: The J & K Bank Limited

Types of card Amount chargedCredit card 500Smart card Debit card 1500

Private bank: Kotak Mahindra Bank

Types of card Amount chargedCredit card 1000Smart card 1200Debit card 111

Saraswati Co-operative bank:

Co-operative Bank: Saraswati co-operative central bank

Process Not applicable

RBI Policy:

CRR PROJECT- I these project for example you have 10 lakh rupees for that project, out of these ¼ th of

the 10 lakh you have to save for kissan yojana.

After deducting ¼ t from the total amount, In the remaining amount the bank only

provide 70% to the customer, ad 30% will save it.

Government policy:

Swarnjayanti projectchetriya and Gramin yojana project

Prime minister rojgar yojanaMinority yojana

Internal communication system of the Bank

The J & K Bank Limited

-

Head Office- General Office Regional office

Staff Branch

SOURCE ----------------- INTERNETPHONE

Kotak Mahindra EVERY WEDNESDAY RECEIVED MAIL FROM HEAD OFFICE

BUSSINESS SOLUTION group CENTRAL TEAM Message (Ask Process)

SOURCE ----------------- INTERNETPHONE

FAX

POSTAL

Saraswati Co-Operative Bank-

Banking Ombudsmen

Banking Ombudsman is a quasi judicial authority functioning under India’s Banking

Ombudsman Scheme 2006, and the authority was created pursuant to the a decision by the

Government of India to enable resolution of complaints of customers of banks relating to certain

services rendered by the banks. The Banking Ombudsman Scheme was first introduced in India

in 1995, and was revised in 2002. The current scheme became operative from the 1 January

For Internal communication the one CIRCULAR is issued from head branch and it is Send in all the branches. And in the branches they again circulate the circular for all the members or the employees of the branch.

2006, and replaced and superseded the banking Ombudsman Scheme 2002. From 2002 until

2006, around 36,000 complaints have been dealt by the Banking Ombudsmen.

Type of complaints (Applicable in all banks)

The type and scope of the complaints which may be considered by a Banking

Ombudsman is very comprehensive, and it has been empowered to receive and consider

complaints pertaining to the following:

Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills,

etc.;

Non-acceptance, without sufficient cause, of small denomination notes tendered for any

purpose, and for charging of commission for this service;

Non-acceptance, without sufficient cause, of coins tendered and for charging of

commission for this service;

Failure to issue or delay in issue, of drafts, pay orders or bankers’ cheques;

Non-adherence to prescribed working hours;

Failure to honour guarantee or letter of credit commitments;

Failure to provide or delay in providing a banking facility (other than loans and advances)

promised in writing by a bank or its direct selling agents;

Delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-

observance of the Reserve Bank directives, if any, applicable to rate of interest on

deposits in any savings, current or other account maintained with a bank ;

Delays in receipt of export proceeds, handling of export bills, collection of bills etc., for

exporters provided the said complaints pertain to the bank's operations in India;

Refusal to open deposit accounts without any valid reason for refusal;

Levying of charges without adequate prior notice to the customer;

Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on

ATM/debit card operations or credit card operations;

Non-disbursement or delay in disbursement of pension to the extent the grievance can be

attributed to the action on the part of the bank concerned, (but not with regard to its

employees);

Refusal to accept or delay in accepting payment towards taxes, as required by Reserve

Bank/Government.

Refusal to issue or delay in issuing, or failure to service or delay in servicing or

redemption of Government securities.

Forced closure of deposit accounts without due notice or without sufficient reason.

Refusal to close or delay in closing the accounts.

For handling the consumer grievances all the three Bank has established its own

customer service

center, where the services are available to the customer 24* 7.

Role of CIBIL

CIBIL - India's first credit information bureau- is a repository of information, which contains the

credit history of commercial and consumer borrowers. CIBIL provides this information to its

Members in the form of credit information reports

The Credit Information Companies (Regulation) Act, 2005, and various Rules and Regulations

issued by Reserve State bank of India has empowered CIBIL or (Credit Information Bureau

(India) Ltd to collect the data from various types of credit grantors (i.e. lenders). and then share

the same within the group.  

MEMBERS OF CIBIL:

Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies,

Housing Finance Companies and Credit Card Companies are Members of CIBIL.

How Does CIBIL operates?

At present, CIBIL collects and updates the information about the borrowers from its Members

(who are actually credit grantors) only.  (However, later on  it is likely that this information  will

be supplement by CIBIL with public domain information  so as to  create a truly comprehensive

snapshot of an entity’s financial track record)..

Then CIBIL allows the credit grantors to have access to its database to search and gain a

complete picture of the payment history of a credit applicant.

Thus, we can say that CIBIL collects commercial and consumer credit-related data and collates

such data to create and distribute credit reports to Members.   

Type of Information Held by CIBIL Type of information on a borrower is available in the CIR. The CIR includes the following information: (ALL THE BANKS)

Basic borrower information like: i. Name

ii. Address

In case of individuals:

iii. Identification numbers

iv. Passport ID

v. Voters ID

vi. Date of birth

In case of non-individuals

vii. D-U-N-S® Number viii. Registration Number

ix. Legal Constitution

Records of all the credit facilities availed by the borrower

Past payment history

Amount overdue

Number of inquiries made on that borrower, by different Members

Suit-filed status

Type of information is NOT included in the credit information report (CIR)

The CIR does not contain:

Income / Revenue details

Amount(s) deposited with the bank

Details of borrowers' assets

Value of asset(s) mortgaged

Details of investment(s)

Benefits : A Borrower Get From CIBIL

CIBIL's CIRs are aimed at helping credit grantors make fast and objective lending decisions.

This will contribute to a more competitive credit marketplace among Credit Grantors. With a

Bureau in place, responsible customers can expect faster and more competitive services at better

terms from the Credit Grantors.

NPA’S In Banks and Their Rules

Non Performing Asset means a loan or an account of borrower, which has been classified by a

bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the

directions or guidelines relating to asset classification issued by RBI.

There are three major types of NPA:

Sub-standard: The account holder comes in this category when they don’t pay three installments

continuously after 90 days and up to 1year.

Doubtful NPA: Under doubtful NPA there are three sub categories:

D1 i.e. up to 1 year : 20% provision is made by the banks

D2 i.e. up to 2 year: 30% provision is made by the bank

D3 i.e. up to 3 year : 100% provision is made by the bank

Loss Assets: Under this 100% provision is made. When account holder comes in this category

their account can be written off by the banks.

After this the assets are handed over to recovery agents for sale.

Debt recovery tribunal

It is the special court established by central government for the purpose of bank or any

financial institutions recovery.

The judges of this court are the retired judges of high court.

In this court only the recovery cases of 10 lakhs and above can be filed.

KYC norms:

KYC is the acronym for Know Your Customer, which in turn refers to the obligation of a

financial institution to know its customers and know who it is dealing with. The KYC

requirements are part of the anti-money laundering and anti-terrorist financing measures.

The J & K BANK LTD.

Documents required Process 1. Voter I.D.

2. PAN No.

3.Address proof

(1)

(2)

By the help of these documents they renewal the data of the customers, Update the account and open new account.From last transaction statement.

Kotak Mahindra Bank

Documents required Process 1. Voter I.D.

2.PAN No. or any I.D Proof

3.Address proof

(1)

(2)

By the help of these documents they renewal the data of the customers, Update the account and open new account.From last few transaction statement.

Saraswat Cooperative Bank:Documents required Process 1. Voter I.D.

2.PAN No. or any I.D Proof

3.Address proof

By the help of these documents they renewal the data of the customers, Update the account and open new account.

Summary:Dynamics of Banking Sector:

In terms of overall financial performance, CY04 turned out to be yet another commendable year for the banking sector. Not only were banks able to expand their core business activities, but they also strengthened their capital base, and improved asset quality and profitability during the year. In more specific terms, the risk weighted capital adequacy ratio increased to 10.5 percent against the minimum requirement of 8.0 percent The aforementioned changes in the structure of banking sector deposits (liabilities), advances and investments (assets), as examined from various dimensions, suggest that the risk profile of the banking sector has substantially changed during the last three years. It then becomes important to assess the evolving risk profile specifically in terms of credit, liquidity and market risks, while the discussion in the preceding section demonstrates that the underlying risks to the banking sector have increased during CY04, the financial soundness indicators clearly reflect that their risk absorption capacity has also increased considerably during the same period. Furthermore, there have been a number of developments that not only provide useful insights for the prudent management of the overall risks of the banking sector, but also attest the sustainability of this impressive growth.The banks are today much concerned about raising the funds by meeting the customer’s satisfaction.

Various services are provided which are too affordable and saves time to the customer.

In short the banking sector in India today has undergone a dynamic change to compete in the domestic as well in the international market.

Conclusion:The dynamics of banking sector deposits (liabilities), loans and advances and investments (assets), indicate that banking sector risks have increased during the past three years. Fortunately, due to prudent regulatory measures, the risk-taking capacity of the banking sector (as measured by the capital to risk weighted assets ratio) has also witnessed a visible rise, or rather has outpaced the increase in risks over the same period. Furthermore, a brief review of the various regulatory measures indicates that banks are equipped with various policy tools to prudently manage their risks. Finally, the regression analysis suggests that the banking sector has strong links with the state of the economy. As the economy is now at a high growth trajectory and its trickle down affects are likely to create more business activities in the future, the banking sector will continue to receive the requisite vital support from theMacroeconomic environment. Given these dynamics, the strong banking sector performance is expected to uphold in the foreseeable future.Management imperatives will differ by bank. However, there will be common themes across classes of banks:PSBs need to fundamentally strengthen institutional skill levels especially in sales and marketing, service operations, risk management and the overall organizational performance ethic. The last, i.e., strengthening human capital will be the single biggest challenge. Old private sector banks also have the need to fundamentally strengthen skill levels. However, even more imperative is their need to examine their participation in the Indian banking sector and their ability to remain independent in the light of the discontinuities in the sector. New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serve segments like the rural/low income and affluent HNI segments; actively adopting acquisitions as a means to grow and reaching the next level of performance in their service platforms.Attracting, developing and retaining more leadership capacity would be key to achieving this and would pose the biggest challenge. Foreign banks committed to making a play in India will need to adopt alternative approachesto win the “race for the customer” and build a value-creating customer franchise in advance of regulations potentially opening up post 2009. At the same time, they should stay in the game for potential acquisition opportunities as and when they appear in the near term. Maintaining a fundamentally long-term value-creation mindset will be their greatest challenge. The extent to which Indian policy makers and bank managements develop and execute such a clear and complementary agenda to tackle emerging discontinuities will lay the foundationsfor a high-performing sector in 2010.