Banks provide key services like accepting deposits, lending money, and facilitating payments. For deposits, banks offer savings accounts that earn interest, fixed deposits for higher returns over a set period, and current accounts for businesses. Banks also lend large sums of money through various loan products and charge interest. Additionally, banks enable various payment methods like cheques, debit/credit cards, online transfers, and more.

3. MAIN FUNCTIONS OF A BANK
1.Accept deposits
2.Lend money
3.Provide various modes of making payment
4.Provides other services

4. 1. ACCEPTING DEPOSITS

5. What kind of deposits do bank
accept?
•Savings deposit- to save money
•Fixed deposit – for better returns
•Demand or current deposit – business man

6. •There is restrictions on the number of withdrawals – to
develop a habit of saving
•Not meant for business – as the same money can be
reinvested in the business to earn high rate of profit much
higher than the what is provided by banks

7. MAINLY MEANT FOR SALARIED PEOPLE

8. YOUR MONEY GROW – As you earn small
rate of interest

9. Phone bills
Electricity bills
Shopping bills

10. SO IN A SAVINGS ACCOUNT
• It can be opened by anyone by filling in an application form with ID proof and photograph.
• Customer can deposit his savings and earn small rate of interest
• There is restrictions on number of withdrawals
• There is safety of money

11. 2. FIXED / TERM / DEPOSIT ACCOUNT
Money grows Deposited for a specific time period Cannot be withdrawn

12. INVESTED PROFITABLY
1
2
3

13. IN TERM DEPOSIT
• Large sum of money is deposited for a fixed period of time for which the bank issues Deposit
receipt.
• It carries a high rate of interest.
• Money can be withdrawn only after maturity period.
• However, money can be borrowed by keeping fixed deposit receipt as security.

14. 3. CURRENT ACCOUNT

15. CURRENT ACCOUNT

17. WHAT IS AN
OVERDRAFT?
A bank allows an overdraft of
20000$ to his customer
 He has 10000$ in his account
He withdraws– 15000$
Interest charged only on 5000$
@ Low rate of interest
Pay bank charges
A FACILITY GIVEN BY THE
BANK TO WITHDRAW MORE
THAN WHAT IS THERE IN THE
ACCOUNT

18. Overdraft facility by the bank is 10000$
Date Details Deposits withdrawals Balance
1-1-16 Sales 15000 - 15000
10-1-16 Purchases 5600 9400
15-1-16 Wage Bills 5000 4400
20-1-16 Payment 10000 -5600
30-1-16 Overdraft
charges
100 -5700
31-1-16 Interest
charges
57 -5757

19. Overdraft
creditors
Stock
Wage Bills
Cash
Debtors

20. SO IN CURRENT ACCOUNT….
• It is generally used by Business man.
• There is no restriction on number of deposits and withdrawals.
• Bank does not provide any interest on these account.
• Bank allows overdraft facilities to meet the working capital requirement of traders. Interest is
charged on the overdrawn amount only.

21. 2. LEND MONEY - LOANS
•Bank provides large sum of money as loan to his customer
•The customer in need of money has to approach the bank , submit an
application and after scrutiny, the loan is sanctioned. Sometimes the
customer is asked to give collateral security such as documents of
title, gold, fixed deposit receipts etc.……
•Banks charges high rate of interest and it is applicable to the entire
amount and not the amount used.
•Customer need to repay in small amount for an agreed period of time
or pay interest and principal separately as is decided by the bank. Any
default in making payment will prove to be detrimental to the
customer.

22. 3. PAYMENT SERVICES
• CHEQUES
• ATM
• STANDING ORDER
• DIRECT DEBIT
• DEBIT CARDS
• CREDIT CARDS
• BANK GIRO
• BANK DRAFT
• EFT

24. 3 PARTIES TO CHEQUE
PAYEE – GETS MONEY
DRAWEE - BANK
DRAWER

25. Points to remember while writing a
cheque (2)
• USE PEN • NOT PENCIL

26. ALTERATION MUST BE COUNTER SIGNED

27. AMOUNT WRITTEN SHOULD MATCH
•In words
•Twenty thousand five
hundred and fifty
only
•In figures
•20, 550/-
No spaces before or after the words or figure

28. SIGNATURE MUST MATCH
ACTUAL SIGNATURE ON CHEQUE SPECIMEN SIGNATURE

29. When can a banker refuse payment of
cheque (2)
•Customer is insane or insolvent or dead
•Customer has ordered not to make payment of cheque
•There is no sufficient funds in the account
•Stale cheque – todays date 10/7/2016 cheque date 1/1/2016
•Post dated cheque – todays date 10/7/2016 cheque date
1/1/2017

30. ADVANTAGES DISADVANTAGES
•Safe and convenient for large
amount
•Legal evidence
•Can be made in any
denomination 50$, 1000$,
10000$ ,15,450$ etc…
•Not convenient for small
payments
•Payment for shop, bus tickets
•Delay in receiving cash
•Risk of bad debts
•Not accepted by everyone

32. OPEN / BEARER / ORDER CHEQUE • No need to have an account
• Encash it at the counter
• Any one can encash or use it
• Must be kept safely

33. CROSSED CHEQUE

34. CROSSED CHEQUE

35. SPECIAL CROSSING

36. CHEQUE COUNTER FOIL- Customer can
use to refer it later

38. STANDING ORDER
•Arrangement with the bank
•To make regular payment
•For fixed amount on a fixed date
•Computerized transaction where money is transferred
automatically
•Used to transfer salary by foreigners, fixed loan amount
repayment to avoid any defaults.

39. STANDING ORDER
• PIC SO

41. DIRECT DEBIT
•Arrangement with the bank
•To make regular payment
•But the date is not known
•And the amount is not known and keeps on varying
•E.g. electricity bills, phone bills, water bills etc..
•Payment is made only when the company asks for it.
•Sellers or Companies persuade their customers (by giving
discounts)to use Direct Debit as the amount is transferred instantly
and there is no risk of bad debts.

42. DIRECT DEBIT

45. 1
2
3
HOW DOES A BANK DRAFT WORK?

46. UNDER WHAT CIRCUMSTANCES IS BANK DRAFT
USED?
•When seller and buyer don’t know each other
•Seller is not ready to accept cheque – he is not sure of the credit
worthiness of the buyer.
•Method should guarantee payment
•E.G. Payment of examination fees, admission fees etc.
•It should have a legal evidence for both parties.

47. BANK DRAFT

49. CHEQUE GUARANTEE
CARD
•Bank guarantees the credit
worthiness of its customer
•The cheque guarantee card
number is written behind the
cheque
•Use of cheques have reduced
to considerable extent because
of the clearing time

50. ATM CARD
DEBIT CARD
•

52. DON’T FORGET TO TAKE YOUR ATM CARD

53. CREDIT CARDS

54. DEBIT CARD
• Cards can be used to make payment from the funds available in the account only
• Used to make online payment for goods purchased, bills etc..
• Used to make payment in shops
• Used to withdraw money from ATM
• Sellers prefer this kind of payment as the amount is transferred immediately
• There is no risk of bad debts.
• No bank charges
• No interest charged

55. CREDIT CARDS
• Customers allowed to withdraw even if there is insufficient funds
• Used to make online payment, shopping
• Generally not used to withdraw money from ATM as it carries high rate of interest.
• No interest charged if repayment is done in 21 days.
• There is bank charges
• May lead to over spending and  bad debts.

56. TRAVELER'S CHEQUE
•Pre-printed fixed amount cheque designed to make payment
•Purchased from bank in fixed denomination by paying cash
•It becomes valid only when it is signed by the customer.
•It is as valuable as cash

57. TRAVELLERS CHEQUE
• PIC

60. ATM
• AUTOMATIC TELLER MACHINE
• Connected with banks computer system
• Works with a cash card + secret PIN
number
• Used to withdraw cash
• Bank statement
• Know account balance
• Transfer funds

61. TELEBANKING
• MOBILE APPS CAN BE INSTALLED IN YOUR
MOBILE
• Connected with banks computer
system
• APPS is locked
• Used to
Bank statement
Know account balance
Transfer funds
 Make payments of Bills

62. INTERNET BANKING
• Through banks website
• While selecting banks website check for HTTPS//:
with a lock symbol

65. NIGHT SAFE

66. LOCKER

67. BANK REFERENCE
• REGARDING THE CREDIT WORTHINESS OF THE CUSTOMER
• LETTER OF CREDIT

68. ADVICE ON FINANCIAL MATTERS
• LOAN
• INVESTMENT PLANS

69. BANK STATEMENT
• Payment made
• Withdrawals
• Direct debit
• Transfer
• Interest earned
• Bank charges
• Atm withdrawal

70. INTERNET BANKING LOCAL BANKING• Transfer funds
• Standing instructions and direct debit
• Check balance
• Make payment online using cards
• It works 24 x 7
• Saves labour, premises and equipment
cost
• Reduces errors
• Provides 24 x 7 hours services
•Money can be deposited
•Provides overdraft facility
•Provides night safe and locker
facility
•Cash withdrawal
•Advice on financial matters

71. COLLATERAL SECURITY