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Banking Overview
 

Banking Overview

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    Banking Overview Banking Overview Presentation Transcript

    • Agenda
      • I Introduction to Banking
      • II Introduction to Retail Banking
      • III Banking Terminology
      • IV CASA
      • V Time Deposits
      • VI Loans
      • VII Remittances
      • VIII Non-Branch Delivery Channels
      • IX Audit and Supervision
      • X Software Expectations
      • XI Wrap-Up
    • Introduction to Banking
    • Banks
      • Role of Intermediary
      • Banks and “Banking” Functions
      • Competitors to Banks
      • “ Disintermediation”
      • Changing Role of Banks
      • Towards a Financial Supermarket...
    • What is Banking
      • Borrowing and safe keeping of money
      • Lending of money
      • Transmitting of money
      • Exchanging of money
      • Exchange of financial information
    • BANKING FRAMEWORK
      • Retail Banking
        • CASA, Deposits, Loans, Credit Cards, FX, Remittances, Securitization
      • Corporate Banking
        • Trade Finance, Project Finance, Bills, LCs, Guarantees, Syndicated Financing
      • Investment Banking
        • FX, Money Markets, Securities, Leasing, Factoring
      • Private Banking Trusts, Portfolio Management
      • Fiduciary Services
        • Pensions, Custody Services, Will & Estate Management
      • Other services Correspondent Banking, Safe deposit Vaults, Insurance, Travel, Bill Payment, Tax Counselling
      BANKING FRAMEWORK-2
    • Retail VS Wholesale Banking
      • Retail Banking Wholesale Banking
      • Focus On Individual Customers Focus On Large Corporate Entities
      • Wide Branch Network Limited Branch Networking
      • Variety Of Services Available Focus On Smaller Customer Base
    • Money Multiplier Effect
      • Money supply creation by Banks
      • Need to regulate and control
      • Methodology of regulation
    • Customer and the Bank
      • Who is a “Customer”
      • Customer Confidentiality
      • “Ownership” of Accounts
      • Precaution against “Conversion” and “Frauds”
      • Legal Responsibility to prevent Money Laundering Breaking country’s Laws
    • Bank-Client Relationship
      • “ Good Faith”
      • Banker’s General Right of Lien
      • Rights of Set -Off
      • “ Estoppel”
      • Confidentiality
      • Disclosure Under Laws of the Land
      • Full Disclosure of Terms and Conditions of Relationship
      • Can bank Discriminate between Customers in Treatment?
    • Interest
      • Accrual
      • Capitalization
      • Accrual Frequency
      • Capitalization Frequency
      • Interest Methods
        • Monthly Minimum, Daily Balance, Average Balance,...
      • Interest Basis
        • 30/360, Actual/Actual, Actual/360,...
      • Withholding tax, Interest tax deduction
      • Bank Accounting Peculiarities
      • “Window Dressing”
      • Income Recognition
      • NPA Classification
      • International Accountancy Rules
      • Capital Adequacy
      • Deposit Risk Cover Protection
      Banks’ Books of Accounts
    • General Ledger
      • General Ledger and Subsidiary Ledger
      • Central Bank Reporting
      • Multi-Currency Treatment
      • Treatment of Inter-Branch Transactions
      • Treatment of Suspense Accounts, Entries
      • External General Ledger
    • Lending of Money
      • Statutory controls on lending
      • Principles of sound lending
      • Purposes
      • Periods
      • Types of lending
      • Security for advances
    • Principles of Sound Lending
      • Borrower
        • Character
        • Capital
        • Capability
      • Bank
        • Safety of funds
        • Spread of risk
        • Liquidity of funds
        • Profitability
      • Viability of the scheme
    • Traditional Banking...
      • Competition, Disintermediation and Diminishing Spreads
      • Movement towards Fee-income
      • Technology Driving Banking, Banking Driving Technology
      • Market Place crowded, Mixed, Technology-driven
    • Types of lending
      • Fund based
        • Term Loans
        • Cash Credit / Overdraft
        • Purchase & Discount of Bills (inland & foreign)
      • Non Fund based
        • Letters of credit
        • Guarantee
        • Bills Co-acceptance
    • Term Loans
      • Fixed Amount
      • For purchase of fixed assets
      • Payable
        • in suitable installments
        • in lump sum (principal + interest)
      • Usually Secured
    • Cash Credits & Overdrafts
      • Running accounts
      • Drawings fluctuate within a pre-determined band
      • As many drawals as necessary
      • Interest charged on daily balances
      • Cash credit : Usually secured
      • Overdraft : Could be secured or unsecured
    • Bills : Purchase & Discount BILLS INLAND FOREIGN DEMAND USANCE DOCUMENTARY CLEAN
    • Types of Bills
      • Demand Bills
        • Payable on demand or At sight or
        • On presentment or
        • No time for payment specified
      • Usance Bills
        • Payable on the expiry of a certain period after date or sight
    • Types of Bills
      • Clean Bill
        • Unaccompanied by any other allied documents
        • eg : Cheques, Warrants
        • Trade bills without the relative document evidencing dispatch of goods
        • Unsecured. Can be Sight or usance
      • Documentary Bill
        • Accompanied by document of title to goods
        • Secured/Unsecured: Secured/Unsecured
    • Advantages of Bill Business
      • Definite date of repayment
      • Re-discounting facilities
      • Stability of value
      • High profitability
      • Greater legal protection
    • Bill Transactions
      • Collection
      • Purchase & Discount
      • Negotiation
    • Letters of Credit
      • Issuing bank undertakes to make payment to the beneficiary of the LC against presentation of specified documents
      • Beneficiary is assured of payment
      • No immediate outflow of funds
      • Parties to a credit
        • Applicant (buyer)
        • Beneficiary (seller)
        • Issuing bank
    • Guarantees
      • To perform the promise or discharge the liability of a third party in case of his default
      • Three parties
        • Guarantor / Surety (banker)
        • Principal Debtor (on whose behalf)
        • Principal Creditor (in whose favour)
      • Financial Guarantee
      • Performance Guarantee
      • Deferred payment guarantee
      • No immediate outflow of funds
    • Related Services
      • Merchant banking
      • Counselling corporate clients on
        • Capital structure
        • Form of capital to be raised
        • Terms & conditions of the issue
        • Under writing of the issue
        • Timing of the issue
        • Preparation of the prospectus
        • Raising of long term loans
    • Related Services (contd...)
      • Trustee, executor, & admin services
      • To handle
        • Investments / estates / properties
        • Distribution after death
      • To act as guardian of a minor’s property
      • To administer public trusts
      • Factoring
      • Factor maintains the trade debts of the client company
        • Maintains sales ledger
        • Issues invoices
        • Collects payments
      • Credit protection
        • Factor assumes responsibility for trade debts, due to the client company
      • Factor advances a proportion of the trade debts immediately and the balance on maturity of the debts
        • Improves client's liquidity
      Related Services
    • Clearing House Operations
      • Outward clearing
      • Inward clearing
      • Returns- outward clearing
      • Returns- Inward clearing
      • Re-presentations
      • Time factor
      • Reconciliation
    • Automated Clearing House
      • Electronic clearing
      • Paperless transfers of funds
      • Settlement
    • Foreign Exchange
      • FX Market
      • Exchange rates
      • Risks
      • Revaluation
      • Mark to the market
      • Risk management
    • Legal aspects in Banking
      • Customer
      • Types of legal relationships
      • Duties and obligations
      • Rights and remedies
      • Confidentiality
      • Law relating to Limitations
      • Disclosure regulations in Accounts
    • Law and Banking
      • Application of Law
      • Jurisdiction
      • Civil laws
      • Criminal laws
      • Law of limitation
    • Supervision of Banks
      • “Central” Bank of the country
      • Degrees of supervision
      • Modes of Supervision
      • Audit and self-regulation
      • Importance of proper supervision
      • Cross-country regulation of Banks