Swagat 2010 2011 Training Booklet

SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME
Training Programme : Banking Awareness and Prevention of Frauds SESSION PLAN

DAY 1 Introduction and Ice Breaker Overview of Banking Industry: Types of Banks Functions of RBI Axis Bank : An overview Anti Money Laundering & KYC Regulations LUNCH Legal and Regulatory aspects of Banking- Rules of the Game. Types of customers: Individual/s, Sole Proprietor Firms, Partnership Firms, LLPs, Companies, HUF, Trusts, Associations, Societies, Clubs, Section 25 Companies Group Discussion / Banking Quiz. DAY 2 Current, Savings Bank and Term Deposits, including Recurring Deposits generic features Accounts of Minors/ Senior Citizens. LUNCH Term Deposits Application of Income Tax Laws, RBI Rules, IBA guidelines and Advance against TD. Retail Banking Products. DAY 3 Accounts of Non-Resident Indians and Foreign Nationals, basic forex, electronic payments systems Rules of Nomination Negotiable Instruments Act, Paying and Collecting Banker including Clearing and Collection Mechanism. LUNCH Payment and settlement systems: Payment and Settlement Systems, including EFT, NEFT, ECS, NECS, RTGS, Speed clearing and the latest India Money Line, the 24 Hrs NEFT just going to be launched. Business Banking Products: Current Accounts / CMS / Govt. Business DAY 4 Protection to customers : Consumer Protection Act, BCSBI / Code of Commitment to Customers / Banking Ombudsman Scheme/ Common Audit irregularities Customer Service and customer compliant redressal methodology. Prevention of Frauds Modus Operandi, Precautions and Prevention and discussion. LUNCH Demat Accounts and on-line trading accounts eBanking basics: ATM, iConnect, EDCs, e-payments, including the dangers of Phishing, Vishing etc. Cash Department Functions including safety measures against frauds. DAY 5 Finacle 10.2 User Application Training Exit Test & Feedback Open House & Wrap-up
Section 1: Our Bank & the Banking Environment About Axis Bank2 Axis Bank Highlights3 The Indian Banking Environment.5 Section 2: The Basics of Branch Operations Account Opening Guidelines for Savings Bank and Term Deposit Accounts....8 Documentation for certain types of Current Accounts....22 Account Number details...27 Anti Money Laundering (AML) and Know Your Customer (KYC) Guidelines.28 Deposit Accounts General Guidelines...34 ACCOUNTS OF MINORS..38 Nomination Facility.40 Section 3: Taxation as Applied to Banking Income Tax and TDS..42 Banking - Secured..54 Payment and Settlement Systems..56 Retail Assets/Liability Products..57 Accounts of Non-Resident-Indians (NRIs) /FEMA Guidelines61 Cash Management Services and Government Business67 iConnect FAQ...73 Section 5: Banking Regulations and Guidleines Prevention of Frauds.75 Negotiable Instruments Act.81 Important Banking Regulations.86 Section 6: Summing it Up! Test Your Understanding.93 Did You Know?98 Common Customer Service Issues. ..100 Appendices: I-List of Important Websites 103 II-Banks Dress Code...104 III-Banking Codes and Standards Board of India.105 IV- Code of bank's commitment to Micro and Small Enterprises106 V- RBI circular on Material alterations on the existing MICR/Non-MICR cheques107
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About Axis Bank

Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and the four PSU General Insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The present shareholding pattern of our Bank is as given below. Administrator of the Specified Undertaking of the UTI Life Insurance Corporation of India GIC and four PSU Insurance Companies Non-Promoter Indian Shareholding Non-Promoter Foreign Shareholding Our Board of Directors Dr Adarsh Kishore Smt. Shikha Sharma Shri Sisir K Chakrabarti Shri J.R. Varma Dr. R.H. Patil Smt. Rama Bijapurkar Shri R.B.L. Vaish Shri M.V. Subbiah Shri K. N. Prithviraj Shri V. R. Kaundinya Shri S B Mathur Shri M S Sundara Rajan Shri. S K Roongta Shri. Prasad R Menon Chairman Managing Director & CEO Deputy Managing Director Director Director Director Director Director Director Director Director Director Director Director 23.78% 9.60% 4.12% 16.47% 46.03%
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Axis Bank Highlights

Business Figures as on 30th September, 2010 with the 31st March, 2010 figures in bracket: Deposits: Rs. 156,887 (141,300) Crore Savings Bank : Rs. 37,812 (33,862) Crore Advances: Rs. 110,593 (104,343) Crore
Current Accounts: Rs. 27,374 (32,168)Crore Investments: Rs. 61,942 (55,975) Crore Net Profit: Rs. 1,477 (2,515) crores Capital Adequacy Ratio: 13.68 (15.80) % [Tier - I capital amounted to 9.77 (11.18) % ] Equity Capital : Rs. 409 (405) Crore Networth : Rs, 17,682 (16,044) Crore
Branches and Extension Counters: 1,103 (1,035), covering
676 centres + 4 overseas centres. ATMs : 4,846 (4,293) International Presence: 4 Centres, with Branches at Singapore, Hong Kong and Dubai, and Representative Offices in Shanghai and Dubai.
Balance sheet size: 199,833 crore
Leadership positions:
Over 86.92 lakh Savings Bank accounts 4,846 ATMs Among top 3 deployers in India 160 lakh debit and prepaid cards 3rd largest Debit Card base in India. First Indian Bank to launch Travel Currency Cards, now in 9 currencies First Indian bank to launch Remittance Card and Meal Card. Over 169,000 EDC machines Second largest in the cards acquiring business in India 6,778 CMS clients Among the top players
Debt Capital Markets

Ranked No. 1 Debt Arranger by Prime Database for quarter ending June 2010 Ranked No.1 Debt Arranger by Bloomberg Underwriter league table for the period Jan 10-Sep 10 Recent Awards: - Asia Money 2010: Best Domestic Debt House in India - Euromoney 2010: Best Debt House in India - Finance Asia 2010: Best Bond House in India 1,477 Crore (Rs. 1,815.36 crore) Consistent track record of profitability Net profit increased by more than 30% y-o-y in the past 40 out of 42 quarters Net NPA - 0.34 (0.35)% Gross NPA 1.12 (0.96) %
Profitability:
Asset Quality:
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BU SINESS DIVISION S
Broadly, the business divisions in the bank leaving aside the support functions are as follows: Retail Banking, SME & Agri Corporate Banking and Institutional Banking
Retail Banking, SME and Agri

Consists of four segments Mass and Mass Affluent segment. The group manages the retail liability, retail asset and card products of the Bank. Affluent segment : The group manages all the affluent customer segments such as Wealth Management and Private Banking, all investment products (Insurance, mutual fund, GOD etc) Distribution : The group manages the overall distribution infrastructure for the Banks products. Advances : The group manages the SME and Agri business of the Bank
Corporate & Institutional Banking

Consists of seven segments
Infrastructure : Provides end to end services including credit, advisory, loan syndication and other corporate banking services to infrastructure companies. Large Corporate : Provides end to end services for Large corporates including the international banking business. Mid Corporate : Provides end to end services for Mid corporates. Capital Markets : Provides advisory services Mergers and Acquisitions, Private Equity syndication and Equity Capital Markets including broker financiang and other stock market related activities. Business Banking : Provides various services to Corporate, Government and Business Banking clients including current accounts, CMS. They are also responsible for Custodial services and Corporate Depository services. Treasury : Treasury is responsible for the maintenance of the statutory requirements such as the Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and the investment of such funds. It also manages the assets and liabilities of the bank. Primary Dealing activities can be classified into Money Market Operations, Foreign Exchange Operations, Currency Futures, International Business, CSGL facilities, Derivatives etc DCM and Equity trading : Primarily deals with DCM origination, bond trading and equity trading activities of the Bank.
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The Indian Banking Environment

Modern banking in India started in the early 18th century1. Today, banks are among the main participants of the financial system in India.
BANKING STRUCTURE
The commercial banking structure in India consists of: Scheduled Commercial Banks & Unscheduled Banks, with the Reserve Bank of India (RBI) as the apex governing body. RBI has licensing powers & the authority to conduct inspections on other banks. The chart below depicts the Indian banking industry. The figures in brackets are the number of banks in each category.
Reserve Bank of India

RESERVE BANK OF INDIA Central Bank and supreme monetary authority
Scheduled Banks Cooperative Commercial
Non-Scheduled Banks
Urban Cooperatives
Rural Cooperatives
Public Sector
Private Sector (22)
Foreign Banks (31)
Local Areas Banks (4)
SBI & Regional Rural Associates (7) Banks (82) (7) ((7 RBI is the apex governing body in the Indian Banking industry. It formulates guidelines from time to time to ensure a clean banking environment. It is responsible for overseeing the activities of other banks. It issues licenses to other banks to start new branches, install ATMs etc. It also conducts regular checks to ensure that all guidelines are being adhered to. It is responsible for controlling the money supply in the economy.
Nationalized Banks (19)
Non-Scheduled Banks
These are banks, which are not included in the Second Schedule of the Reserve Bank of India Act, 1934, as they do not satisfy the conditions laid down by that schedule.
Scheduled Banks
Scheduled Banks are those, which are included in the Second Schedule of the Reserve Bank of India Act, 1934. Looking at the snippet on the right, it is apparent that all big banks are scheduled banks. They can be classified further as Commercial Banks and Cooperative Banks.
The IInd Schedule To be included in the 2nd Schedule, a bank: Must have a paid-up capital and reserves of an aggregate value of not less than Rs.500,000/Satisfy the RBI that its affairs are not conducted in a manner detrimental to the interests of its depositors, shareholders and society.
Cooperative Banks
A non commercial bank registered under the State Co-Operative Societies Act or the Multi State cooperative Societies Act.
Commercial Banks
Foreign Banks: These are banks that were incorporated outside India but have branches within the country. For example, ABN Amro, BNP Paribas, etc. Public Sector Banks: Banks in which the government has got majority shareholdings are known as Public Sector Banks. This group consists of SBI and its Associates, Regional Rural Banks, and other Nationalized Banks. State Bank of India and its Associates: This group comprises of the State Bank of India (SBI) and its six Associates. Regional Rural Banks: These banks were established as per the provisions of the Regional Rural Banks Act, 1976. A Regional Rural Bank is a joint ownership between the Central Government, the State Government and a sponsoring bank in the ratio 50:15:35. RRBs were established to operate exclusively in rural areas to provide credit and other
The General Bank of India, established in 1878 was the first Indian Bank. SBI, which was known as The Bank of Bengal back in 1806 when it was started is today the oldest Indian bank in existence.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME facilities to small and marginal farmer, agricultural labourers, artisans and small entrepreneurs. Nationalized Banks: This group consists of erstwhile private sector banks that were brought under government control. The Government of India Nationalised 14 private banks in 1969 and another 6 in the year 1980, of which, New Bank of India was merged with Punjab National Bank. Old Private Sector Banks: This group consists of banks that were established by the privy states, community organizations or by a group of professionals for the cause of economic betterment in their areas of operation. Initially their operations were concentrated in a few regional areas. However, their branches slowly spread throughout the nation as they grew. These Banks are registered as companies under the Companies Act 1956 and were incorporated prior to 1994. New Private Sector banks: RBI permitted formation of new private sector Banks after accepting the recommendations of Narasimham Committee with an objective to bring more competition and efficiency in the banking sector. These banks were started as profit oriented public limited companies. These banks are technology-driven and thus usually better managed than other banks. Axis Bank is among the first banks to start operations as a new generation Private sector bank. New Private Sector Banks came into existence after 1994.
TOTAL OF 19 NATIONALISED BANKS

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 Union Bank of India United Bank of India Vijaya Bank State Bank of India (SBI) 6 Associates of SBI State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Travancore Other Public Sector Banks IDBI Bank
TOTAL OF 22 PVT BANKS 16 OLD PRIVATE SECTOR BANKS

City Union Bank Ltd. Development Credit Bank Ltd. Ing Vysya Bank Ltd. The Karnataka Bank Ltd. Nainital Bank Ltd. SBI Commercial & International Bank Ltd. Tamilnad Mercantile Bank Ltd. The Bank of Rajasthan Ltd. The Catholic Syrian Bank Ltd. The Dhanalakshmi Bank Ltd. The Federal Bank Ltd. The Jammu & Kashmir Bank Ltd. The Karur Vysya Bank Ltd. The Lakshmi Vilas Bank Ltd. The Ratnakar Bank Ltd. The South Indian Bank Ltd. 6 NEW PRIVATE SECTOR BANKS HDFC Bank ICICI Bank Axis Bank Indusind Bank YES BANK
TOTAL OF 31 FOREIGN BANKS
The Royal Bank of Scotland Abu Dhabi Commercial Bank Limited American Express Bank Limited Antwerp Diamond Bank N.V. Arab Bangladesh Bank Limited. Bank Internasional Indonesia Bank of America NA Bank of Bahrain and Kuwait B.S.C. Bank of Ceylon Barclays Bank PLC BNP Paribas Chinatrust Commercial Bank Shinhan Bank Citibank N.A.. Credit Agricole Corporate and Investment Bank Deutsche Bank AG JPMorgan Chase Bank Krung Thai Bank Public Company Limited Mashreqbank psc MIZUHO Corporate Bank Ltd. Oman International Bank S.A.O.G. Societe Generale Sonali Bank Standard Chartered Bank State Bank of Mauritius Ltd. The Bank of Nova Scotia The Bank of Tokyo-Mitsubishi UFJ Ltd. The Development Bank of Singapore Ltd. Hongkong and Corporation Ltd. Bank United Overseas Shanghai Banking
State Bank of Bikaner & Jaipur Kotak Mahindra Bank
# 4 LOCAL AREA BANKS Coastal Local Area Bank Ltd

Capital Local Area Bank Ltd South Gujarat Local Area Bank Ltd
Krishna Bhima Samruddhi Local Area The
Commonwealth Bank of Australia
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RE GULATO RY FR AM EWORK
Banks in India are broadly governed by the two umbrella acts viz. Reserve Bank of India Act, 1934: which specifies the powers of RBI over the banks Banking Regulation Act, 1949 In addition, banks like cooperative banks, development banks etc., which are formed/registered under the separate acts like Central or State Cooperative Societies Act, RRB Act etc., are also governed by the respective acts. The functions of the banks are expected to be strictly within the regulations governing them and they are being supervised/monitored by RBI through their various supervision tools like calling for reports/returns, inspection, introducing disclosure norms etc., as well as other regulatory authorities like Registrar of Co-operative Societies in case of co-operative banks. In addition to the above, the banking operations are also subject to the legal provisions contained in certain other Acts as well some of which are as under:
The Negotiable Instruments Act, 1881. The companies Act, 1956 The Income Tax Act, 1961 Partnership Act, 1932 Indian Contract Act, 1872 Securities and Exchange Board of India Act, 1992 Transfer of Property Act, 1882 Indian Stamp Act, 1899 Registration Act, 1908 Financial Regulators in India
Sale of Goods Act, 1930 Limitation Act, 1963 Information Technology Act, 2000 Bankers Books Evidence Act, 1891 Banking Secrecy Act, Prevention of Money Laundering Act, 2002 Foreign Exchange Management Act, 1999 Foreign Contribution (Regulation) Act, 1976
Reserve Bank of India (RBI) National Housing Bank (NHB) Securities and Exchange Board of India (SEBI) Insurance Regulatory and Development Authority (IRDA) Pension Fund Regulatory and Development Authority (PFRDA) Institute of Chartered Accountants of India (ICAI) Self-Regulatory Organizations In addition to the above legal framework, banks in India also have Self Regulatory Organisations (SROs) in the financial system. At present, there are four SROs in the financial system Indian Banks Association (IBA) Foreign Exchange Dealers Association of India (FEDAI) Primary Dealers Association of India (PDAI) Fixed Income Money Market and Derivatives Association of India (FIMMDA)
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Account Opening
A customers formal relationship with any bank begins with Account Opening. In our bank the accounts of the customers are usually not opened at branches. The applications (known as Account Opening Forms or AOFs) are received, scrutinized and then forwarded to Central Processing Unit (CPU)2 and where they are eventually opened. In order to prevent misuse of banking channel for perpetration of financial frauds, money laundering, financing terrorism etc., Reserve Bank of India has as a part of their initiatives to prevent suspicious activities, advised banks to follow certain procedure which are known as Know Your Customer (KYC) guidelines.
Guidelines for Opening of Savings Bank Account and Term Deposits Accounts:
1. Account of Resident Individual: For account of individuals, a proof of photo identification and proof of address to be enclosed with Account Opening Form. A copy of PAN Card or a declaration vide Form-60 also is mandatory to be obtained. The account opening form should be signed by the individual and photograph should be affixed. A comprehensive list of documents qualifying to be attached as id & address proof is enumerated in below mentioned table A and B respectively. A single copy of document is sufficient if that particular document is appearing in both the tables. Table A
Proof of identity (Any one of the following) 1. 2. 3. 4. 5. PAN Card Passport (valid) Election Card Photo Identity issued by Government / Defence services / Public Sector undertaking Letter from recognized public authority / Defence Authority /public servant verifying the identity and photograph of the applicant Driving Licence Care needs to be exercised to ascertain the genuineness and validity. Ex-Serviceman Card / Bar Council / Indian Medical Association Card / Senior Citizen Card Arms Licence issued by State / Central Government of India Authorities Freedom fighters pass issued by Ministry of Home Affairs, Government of India with photograph of applicant Pension payment order / book / card issued by State / Central Government of India Printed Ration Card with photograph of applicant Household Card with photograph issued by Government of Andhra Pradesh ID card with photograph issued by Government of Jammu and Kashmir Bank passbook with photograph issued by nationalized banks along with cheque from the same account. This passbook should have transaction for the last 6 months. Photo Social Security Card (Smart Card) issued by Central / State Government or Union Territories Certificate issued by the Headman of the Local Area for North Eastern States. Branch to confirm that the certificate is issued by the right person. For married women, proof of identity with her maiden name, if supported with a verified true copy of marriage certificate are acceptable as valid identity proof.
Table B
Proof of address (Any one of the following) Passport. Only if the address mentioned in the AOF is the same as the address appearing on the passport. 2. Telephone / Mobile / Electricity Bill. Any connection to be at least 6 months old in the name of the account holder / spouse / family member, and the bill date should not be older than 3 months from the account opening date. 3. Ration Card 4. 6 months bank account / credit card statement 5. Letter from a recognized public authority or public servant verifying the address of the customer. 6. Gas connection registration letter 7. Income tax / Wealth tax assessment order 8. Domicile certificate with communication address and photograph 9. Certificate by Village Extension Officer (VEO) / Village Head or equal or higher rank officer. Branch to confirm that the certificate is issued by the right person. 10. Registered lease / leave and licence agreement with a utility bill in the name of the landlord. 11. Address proof in the name of the father / mother / spouse / blood relative of the applicant, as a supporting document that establishes the relationship between the applicant and the person in whose name the address proof is available. 1.
6. 7. 8. 9.
10. 11. 12. 13. 14.
15. 16.
17.
2 Like the CPU of a computer, the CPU Department of our bank processes all the information sent by branches and stores it in powerful computers. Please do not take the print out of this booklet -8-
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME 1. a. Joint Accounts For joint accounts the above documents are required for both, the applicant as well as the joint applicant(s). However, in case of husband and wife, address proof of any of the spouse can beobtained, with a copy of the marriage certificate. Similarly, in case of father-daughter, father-son, mother-daughter, mother-son or vise-verse, address proof of only one holder can be obtained if a valid proof is obtained such relationship. This valid proof can either be a birth certificate, passport, PAN Card, Certificate from a State/ Central Education Board or from a recognized University. If the account is jointly held by more than two individuals, the address proof of the first holder of the account only can be obtained, in case all the holders hail from the same family and there is sufficient documentary proof (to the satisfaction of the Branch) is available to prove this. Joint Account with an illiterate person can be opened only as Jointly operated and not as either or survivor, taking thumb impression of the illiterate person. However, in such cases, cheque book cannot be issued and third party cash withdrawal cannot be made. A certificate vide Annexure-X also should be obtained. 1. b. Accounts of Hindu Undivided Family (All of the following documents to be obtained) a) Copy of PAN / Form 60 of HUF b) Declaration from the Karta c) Proof of Identification and address of Karta as per documentation for individual (Table A & B respectively in the section 1 above) d) Prescribed Joint Hindu Family Letter signed by all the adult coparceners 1. c. Account of Senior Citizen (All of the following documents are to be obtained) a) Proof of Identity such as Senior Citizen Card or any other proof of identity (as listed in Table A) subject to Banks satisfaction and Proof of Address (as listed in Table B) b) Proof of Date of Birth to the satisfaction of the Branch. 1. d. For Newly Married Woman In addition to the documents to be obtained as in Table A and B for individuals, the identity and address proof of the Husband is to be taken along with any of the following documents: a) b) Marriage Certificate / affidavit Wedding photograph along with Marriage invitation
1. e. Account of Foreign National i) Foreign nationals on employment or setting up business: These persons are eligible to open normal rupee account with following documents: Passport with valid visa Letter from employer/ contract letter/ permission from RBI in case of business, if applicable Address Proof as per Table B above. ii) Foreign Students: They are eligible to open normal rupee account with following documents: Passport with valid visa Proof of admission Address Proof as per Table B above
iii) Tourist on Visit to India: They are eligible to open a Non-Resident (Ordinary) Rupee Account (NRO Account) for a maximum period of six months and the only document required is Passport with valid Visa. For the extensive guidelines on operations of the accounts of foreign nationals, circular no. TREASURY/ IB/ 021/ 200405 dated 29.03.2005 may be referred. 1. f. Account of Minors: There are two categories of account of Minors, viz: a) Account of Minor under Guardianship and to be operated by Guardian: Such accounts are like normal resident individual accounts where the minor is below the age of 12 years at the time of account opening. The documents to be collected for opening such accounts are id & address proof of the natural/court appointed guardian as per Table A & B above. A certified copy of birth certificate/ school certificate (establishing Date of Birth) and applicable declaration vide appendix: (I) V, VI or VII of Manual of Instructions Retail banking, Vol. 1: Deposits to be obtained for opening a Savings or Term Deposit Account. If the guardian is appointed by the court, a certified copy of court order also should be obtained.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME b) Account of Minor to be operated by Minors alone: If the minor is over and above of 12 years of age (but below 18 years) the account can be opened in his/her name singly provided the minor is literate and can sign uniformly. Otherwise, the account can still be opened under guardianship. To open the account of the minor to be operated singly by him/her, following documents are required to be obtained: A copy of birth certificate or school certificate establishing date of birth A letter from the parents/ natural guardian/ court appointed guardian of the minor as per attached Annexure-IX. Address and ID proof of the natural guardian/ parents/ court appointed guardian as per table A&B above A copy of school photo ID card of the minor or a certificate from the school identifying the photo of the minor Applicable declaration vide appendix: (I) V, VI or VII of Manual of Instructions Retail banking, Vol. 1: Deposits
1.g Account of Illiterate Person: The account can be opened with left thumb impression in case of a male, and right thumb impression in case of a female. Id and address proof should be taken invariably as per Table A&B above. A certificate from the Branch Official as per Annexure-X should be attached with the Account Opening Form. However, in such cases, cheque book cannot be issued and third party cash withdrawal cannot be made. The implication of operation of account should be told to the illiterate person in Hindi/ Vernacular language in presence of a witness and a certificate vide Annexure-X should be attached with Account opening form. 1.h Account of Visually challenged person: Apart from id & address proof vide table A&B above a certificate vide Annexure X, with witnesss signature should be attached with Account opening form. Regarding operation of the account, paragraph no. 1.53 to 1.57, Manual of Instructions- Retail Banking, Vol.-1, Deposits should be referred. 1. i Account of Pardanashin Lady: The Account Opening Form should be signed by two witnesses, identifying the photograph in addition to id & address proof of the lady as per Table A&B above. 2. Salary Accounts
2.1 Salary Accounts are the accounts where an employer enters into an understanding with the Bank for opening accounts of the employees for their Salary to be credited in respective accounts. The KYC requirement to open these accounts is the same as in the case of normal resident individual account, depicted in section 1 above. However, there are certain deviations permitted for these accounts which are mentioned below. 2.2 A due diligence may be done by the Branch for Government/ Corporate to consider acceptance of the Company documents as Identity and Address proof. We give hereunder, the due diligence grades which may be given to different Corporate. Any Corporate which satisfies any one criteria as per the under mentioned chart for being considered as a reputed and reliable company, the Identity and Address proof submitted by the Company for its salaried employees can be considered as an acceptable document towards fulfillment of KYC norms. The Corporate would be classified as under: Sr. No. 1 2 3 4 5 6 7 8 Particulars Corporate listed on any stock exchange Subsidiaries of listed Corporate Public Limited Corporate Multinational Corporate Company with more than 100 employees Company with Turnover above Rs.50 crores Multilevel Corporate Proprietary/Partnership Corporate Qualifies Exemption Yes Yes Yes Yes Yes Yes No No For
In the case of all corporate satisfying criteria as per the above chart, the Identity Card issued by the Company may be considered as a fulfillment of the KYC norms for employees not able to produce the prescribed documents towards identity proof. However for Government Organization the id card issued or a photo identity letter issued by concerned Government department/ Body/ Authority can be considered as KYC complied document. If the identity Card does not indicate the address, Address Proof document (Telephone bill/Bank account statement/Electricity bill/Ration card/Letter from Employer) will have to be produced.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME In case of a company satisfying the above criteria which does not issue an Identity Card and where even the employees are not able to produce the prescribed address proof documents mentioned above towards KYC compliance, the employer company can submit a letter signed by the Authorized Signatory(ies) certifying the photograph and the address of all the concerned employees as appearing in the account opening form. The letter should mention the names of their employees. 2.3 In each case involving Corporate belonging to categories 1 to 6, the Branch Heads/Branch Sales Manager will have to furnish a certificate stating that on the basis of due diligence conducted they have satisfied themselves as to the exempted status of the concerned Company which will have to be kept attached to the account opening form. 2.4 Salary account of defence personnel: Salary account of defence personnel is opened under scheme code SBSDF. For the purpose of id proof any of the following may be accepted apart from the list given in Table A of 1 above: The officer should verify the original ID card and mention the ID Card number on the AOF with the legend Original Sighted under his/her initial. Introduction by the Unit / Regiment Head or Authorised Signatory of the Unit / Regiment Photocopy of the salary slip with photograph duly attested by the Unit / Regiment Head / PAO / DDO
For the purpose of address proof of accounts under SBSDF, a separate address proof is not mandatory if the correspondence address is given as the address of the battalion. If any other address is mentioned as correspondence address, a separate address proof should be obtained as per Table B under point no. 1 above. 2.5. Additional Documents Prescribed For The Above Corporate (Need Not be Insisted Upon from the Employee(s) of Government & Defence Organizations/ Authorities/ Bodies/ Departments): The above relaxations are given to certain reputed corporate which are known for their Corporate Governance and strong processes with regards to employee recruitment & management. However in wake of the recent happenings, and to ensure that these relaxations are not misused for opening fictitious accounts and in order to further strengthen our KYC when opening salary accounts with the relaxed norms the following changes may be considered. Scenario 1: In cases where the applicant has provided a valid & acceptable Photo Id & Address proof then the corporate only needs to provide a introduction by way of authorizing the application form or issuing a letter towards the introduction Scenario 2: In cases where the applicant has only provided a valid & acceptable Photo Id but has not provided a Address proof then the corporate needs to provide a declaration on their letter head confirming the bonafides of their employee along with the address as per their records in the attached format. Refer annexure VII. Scenario 3: In cases where the applicant has only provided a valid & acceptable Address proof but has not provided a valid Photo ID proof then the corporate needs to provide a declaration on their letter head confirming the bonafides of their employee along with the Photo duly stamped, address as per their records in the attached format. The applicant will also have to provide at least one additional document from the list below Refer annexure VII Scenario 4: In cases where the applicant has not provided both a valid & acceptable Photo Id proof Address proof then the corporate needs to provide a declaration on their letter head confirming the bonafides of their employee along with the Photo duly stamped and address as per their records in the attached format. The applicant will also have to provide at least one additional document from the list below. Refer annexure VII 2.6 In order to strengthen KYC, It is hereby decided that in the case of Scenario 3 & 4 mentioned above, the applicant has to submit any one the following additional document at the time of account opening. The Account opening application form will have to be supported by any one of the following document failing which we shall not open the Salary account. a. School Leaving Certificate b. College Leaving Certificate c. Mark sheet copies of SSC, Junior College, Senior College, Graduation, Post Graduation etc. d. PPF Passbook (Address page, latest transaction page not more than 12 month old transaction) e. Passbook copy of any other Bank account that the Customer Holds (Address page, latest transaction page not more than 12 month old transaction) f. Credit Card statement (not more than 3 months old) 3. General Covenants: Accounts of Resident Individual a) b) c) d) In all cases of Partnership firms, Limited Companies and Association of Persons (AOP), persons authorized to operate the account should also furnish their photograph, identity proof and address proof Every document submitted for opening of account has to be verified with its original and a suitable stamp confirming the same is to be affixed and signed by the verifying official In case of accounts of individual, the PAN/PAN allotment letter/ GIR No./Form 60 has to be obtained. For all other matters of account opening and field verification please refer to instructions contained in Circular No. Compliance/39/2008-09 dated January 23, 2009.
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME e) f) Every Account Opening Form (AOF) has to be affixed with the latest photograph (Not more than 6 months old) of the prospective customer. Care needs to be exercised by the Branch to compare the signature on the AOF with the signature (if available) appearing on the document submitted. In case of signature mismatch in AOF as with the documents provided for customer identification, the Branch Head would have to certify that the AOF has been signed by the accountholders in his/branch officials presence. A sample of this certificate is attached as Annexure-III. This certificate has to be attached to the AOF before sending the same to CPU for account opening. AOF with existing customer ID - Branch Head has to certify that the customer ID is backed by all the necessary documents which are held by the Branch and original account is KYC compliant. In case the main account is opened at some other branch, the branch having original account need to confirm through mail that the main account with them is KYC complaint. In such cases, Branch is required to take a fresh address proof document. PAN has to be verified on the Income Tax site and documented on the copy of the PAN submitted along with the AOF.
g) h)
i)
4. Account of Non-Resident Indian (NRI) Over period of time, Bank has issued comprehensive and exhaustive instructions relating to KYC documentation for NRI/PIO customers. These instructions are consolidated here-under. The below-mentioned guidelines override/supersede instructions contained in previous circulars and other communiqus on the subject. 4.1. General Accounts (NRI Normal, NRI Prime, NRI Priority, NRI Zero etc.) Customer sub-segment NRIs Proposed documents Option 1 Copy of current, live Indian Passport & valid work, residential or student visa Attestation formalities To be attested by AXIS Banks staff#1 or by an official of the Indian Embassy or a Notary Public or by customers Bank abroad or by an authorized officer of our overseas alliance partner#2 or by the overseas employer of the customer#3. #1 Sales Executives/Sales Officers posted abroad can attest the documents, but not SEs/SOs posted in India #2Attestation by overseas alliance partner is permitted only in cases where Bank has a formal apex level agreement with the concerned Finance Company and specimen signature of the attester is available on our records. #3Attestation by overseas employer is permitted only for NRI Salary accounts All copies (except cheque) to be selfattested by the applicant. Copy of the cheque to be attested by an Axis Bank official along with a certification that cheque has been presented for payment to drawee bank.
Option 2 1. Copy of current, live Indian Passport & valid work, residential or student visa PLUS 2. Bank statement of a recent date (ideally not more than 6 months old) in the name of the applicant at his/her Bank in the country of residence.[ Estatement / Bank passbook also can be accepted. ] PLUS 3. a) A self-cheque (in rupee or foreign currency) drawn by the customer on his account abroad or his existing NRE a/c with a Bank in India. OR b) Copy of the driving license/social security card/work permit/green card etc. issued by a Statutory/Government/Quasi-Government Authority in the country of residence (list not exhaustive but indicative)
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME PIOs For KYC Copy of the current & live foreign passport establishing his/her citizenship. FOR ESTABLISHING PIO STATUS a) Copy of PIO card issued by the Government of India OR b) Copy of a recent bank statement of his NRE a/c with a Bank in India or a cancelled personalized cheque from his NRE account with the Bank OR c) A copy of the current Indian Passport of his spouse, father or mother (the name of the spouse/father/mother should match with corresponding details in his passport) OR d) A letter of introduction from an existing customer of the Bank confirming that the applicant is a Person of Indian Origin and that he is not a person of Pakistani or Bangladeshi Nationality. OR e) Indian Passport, Driving License, PAN Card Voter id card or any other document issued by a Government/Quasi Government authority in India in the name of the applicant at any point in time (even expired/lapsed documents are acceptable) However, no separate proof for PIO status determination need be insisted upon in the following cases. a. When the place of birth as appearing in passport is part of post independent India and the date of birth of the applicant is on or after 26th January, 1950. The rationale is that any person born in India after 26th January, 1950 automatically becomes citizen of India by birth as per Citizenship Act, 1955. When the account is getting opened through a correspondent/partner Bank tie up formed at the apex level. In such case, the customer should be introduced by the Partner Bank and a copy of his/her account statement with the partner bank should be submitted as additional document. When a branch official in the rank of Manager or above has certified in the AOF that he is fully satisfied about the PIO status of the applicant. This discretion should be used judiciously and must not be delegated to an officer below the rank of Manager (certification to be given alongside the mandatory certification by Bank official required for opening the account)
Attestation formalities are the same as prescribed in Option 1 for NRIs. In case a customer wants to opt for self attestation then, the documents prescribed (KYC + PIO) should be accompanied by a self cheque (drawn on his account abroad or on his NRE a/c with a Bank) and his Bank Statements / E-Statements / Passbook copy in the country of residence.
b.
c.
4.2 PIS Accounts: In addition to the above documents for NRI/PIO copy of PAN Card is mandatory for PIS Accounts. 4.3 NRI Salary Accounts: 4.3.a. Wherever proper Passport and visa are available, accounts are opened in the normal course after obtaining documents prescribed for general accounts for NRI/PIO together with proof of employment in the Organization/Establishment from which salary credits are expected.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME 4.3.b Opening of NRI Salary Accounts in Freeze Code with basic KYC : Where the above (as in sec. 4.3.a) documents are not available, a normal photo id proof (as stipulated for resident a/cs) is obtained and address proof by way of letter from the Command Officer is also obtained. Thereafter a/c is opened in DEBIT FREEZE mode. This facilitates generation of a/c number and WK that can be passed on to the army officials prior to their departure. Once the officer receives his passport with visa, he arranges to deliver an attested copy of the same to the Bank Branch who lifts the debit freeze after clearing the discrepancies in AIMS. 4.3.c This process for opening accounts under Debit Freeze to be approved by SVP / President at Retail Banking Department on case-to-case basis. 4.4 Mariners International Account (SEAFARER / MARINER account): Passport, Continuous Discharge Certificate (CDC) booklet which is valid and continuous + Mariner's Declaration (format attached) OR Passport, Valid Visa +Latest contract letter / Letter from organization confirming applicant is an employee + Mariner's Declaration (format attached) 4.5 Documentation/verification protocol for address/signature proof for all NRI accounts would be as prescribed herein under. PROOF OF ADDRESS Passport to be taken as both Id & address proof wherever Passport address is the same as primary address in Account Opening Form. Additional address proof should be called for only in the following scenarios: a. b. For NRIs: - Where Indian Address given in Account Opening Form is not the same as the one shown in Passport, then a separate proof of customers present Indian address to be submitted. For PIOs: - Where overseas address given in Account Opening Form is not the same as address shown in his foreign passport [or where the passport contain no address], then a separate proof of customers present overseas address to be submitted.
Acceptable documents for address proof in the above scenarios will be the same as those permitted as address proof for resident individuals. 4.6 SIGNATURE MIS-MATCH Normally, Passport signature should be matched with the Account Opening Form Signature. In case the signature in AOF is materially different from signature in passport then a self signed personalized cheque of NRE account with other bank or foreign currency cheque should be accepted as a supportive document (where the signature should match the AOF signature). OR 'Signature Difference Declaration' (as per format in Annexure-IV) should be taken from the customer, which should be attested only by a Branch official in the rank of Manager or above. 4.7 ADDITIONAL GUIDELINES 4.7.1. Translation of visa: - A few references have been made on the procedure to be adopted when visa is in a foreign language and the contents are not comprehensible. Accordingly, it has been decided that when visa stamping is in a foreign language not familiar to the Bank, the following additional documents may be requested. a. Attested copy of the work permit/ offer letter from the overseas employer b. Attested copy of existing NRE account statement/passbook in the name of the applicant c. Attested copy of one-way flight ticket to the destination country. However in case the applicant is not in a position to produce any of the above documents, then the account may be opened on the basis of a simple written indemnity cum affidavit of the applicant (in plain paper as per format vide Annexure-VI) witnessed by a Bank Officer stating the purpose and validity period of visa. 4.7.2 Self-attestation facility will be available only for NRIs/PIOs residing in countries that are members/submembers of the Financial Action Task Force (FATF)[list of countries enclosed as Annexure-VI]. 4.7.3 Whenever self-cheque is accepted as additional proof, the signature on the same should match with that in the AOF.
4.7.4 An NRI/PIO can choose either overseas or Indian address as his communication address and no additional documents (other than what is already prescribed in the Table above) will be required for such a choice. For example, an NRI can receive his statements in his overseas P.O. Box Number though there may not be any documents to corroborate this address as his own. A PIO need not give any Indian address in his AOF and if giving need not produce any address proof for the same. 4.7.5 For PIOs (foreign passport holders), in addition to documents establishing KYC & PIO status, PIO declaration should also be signed and submitted (format already incorporated in the AOF) 4.7.6 Visit visa/tourist visa etc. that indicate a temporary / transient stay are not to be accepted for setting up NRI accounts. Ideally, the passport & visa should have a residual validity of at least 3 months, though the Branch Head can waive this condition in deserving cases at his discretion, in which case a noting to that effect should be recorded in the AOF. 4.7.7 Computer generated bank statements, e-statements passbook extracts etc are acceptable and there is no need to insist on signed bank-statement. 4.7.8 In some Countries like Saudi Arabia, Indonesia, etc where Work Permit (IQAMA) or Residence Permit or STAY Permit or Employment Permit is issued to NRIs and they do not have any other document issued by the overseas government of the country where they reside / work except for the above said document which construed as a VALID VISA as well as a document issued by the overseas government authority. We may accept the same without considering it as a shortfall or a discrepancy in opening of the said Account. 4.7.9 For application received from our existing NRI customers for opening additional accounts, we may accept just Self attested copies of passport and Valid Visa along with duly filled and signed application form subject to the following. i) Passport details should match with existing finacle records ii) Visa should be valid for at least 3 months from the date of a/c opening iii) Address should be the same as in finacle. Wherever a new a/c is opened with a different address we should ask for full KYC. iv) Signature in the AOF should fully match with that in finacle 4.7.10 Where applications received from prospective customers who have attested their passport and visa by Indian Embassy or Consulate, bearing seal and attestation only on the 1st page and round seal in original on the remaining pages. 4.7.11 In case of a joint account opening, a foreign currency cheque or NRE cheque (personalized) showing names of both applicant but drawn only by the 1st applicant, may be accepted as cheque requirement from 2nd holder and additional document such as driving license, social security card, or additional document issued by overseas government may not be required. 4.7.12 There may be stray cases where 2nd applicant who is the spouse of the 1st applicant is on a residence permit or dependant visa and does not have a bank account overseas due to which overseas bank account statement as required for self attestation cannot be produced. A waiver is given in such cases on production of bank statement provided all the other required documents are in place. 4.7.13 Indian address proof of an NRI Customer can be in the name of his immediate family members (spouse/father/mother), provided the relationship between the NRI and the address holder is clearly established through passport and the family member gives his no objection in writing for having his address as the Indian address of the NRI applicant. 4.7.14 In case of our existing account holder, the latest copy of our bank statement may be acceptable as his Indian address proof for new NRI account opening. 4.7.15 On site verification of addresses is waived for NRI Accounts.
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4.8 SB-RFC Account A person who was an NRI for a minimum period of one year can open an SBRFC (Savings Bank Resident Foreign Currency) account any time after his return to India. This account is available in major 5 currencies (USD, GBP, EURO, AUD, CAD). The extant eligibility norms on SB-RFC a/cs for returning NRIs are as follows: A person should have enjoyed non resident status at least for one year to be eligible to open RFC a/c. He can open the a/c either as SB, CA or FD. Permissible credits are those emanating from foreign exchange revenues/assets pertaining to the period during which the person was a non-resident (e.g. balance transfer from NRE/FCNR deposits, pension/insurance/bond payments received from abroad, proceeds of overseas assets acquired while being a non-resident etc) It is not mandatory that he should have RNOR (resident but not ordinarily resident) status for opening or maintaining SBRFC account. SBRFC a/cs once opened can be maintained indefinitely without any expiry time-frame. The eligibility of a person for opening SBRFC a/c should be verified based on documents submitted with AOF. Suggested documents in this regard are Copy of passport and visa (to prove that customer enjoyed NRI status in the past) RFC declaration (format attached vide Annexure - VIII) Copy of NRI a/c statement or cancelled NRI cheque held by customer previously - preferable but not mandatory (either from Axis Bank or other bank)
4.9 DEVIATIONS No officer will have powers to allow deviations in respect of basic KYC norms. However, Segment Head (NRI) at RBD will have the discretion to allow deviation in other areas of viz. PIO status proof, signature proof etc. on very genuine and deserving cases, based on the recommendation of the Branch Head. The reason/justification for allowing such deviations must be properly documented in all sanctions. 5. No Frills (Azadi) Accounts No Frills account can be opened with some relaxed proof of identity and address of the individual. For such accounts; Balances should not exceed Rs. 50,000/- at any time The sum total of all credits to the account should not exceed Rs. 1 lakh during the financial year. The moment the account crosses the monetary thresholds mentioned, the account should be treated as a normal savings bank account and should be subjected to KYC stipulations as specified for a normal individual account. Apart from documents mentioned in Table A under section 1, following also can be accepted as id proof: Introduction from an existing account holder who has been subjected to full KYC due diligence and whose account is at least six months old with satisfactory transactions. OR Any other evidence as to the identity the customer to the satisfaction of the Bank. This should be valid only in the case of group accounts sourced from a union body or association whose office bearers could attest the identity of its members. OR Application on plain paper with photograph of the applicant pasted on it. The application should express desire to open a No Frills Saving Bank Account, declare address for correspondence. An introduction by any government official or existing account holder or authorized signatory of a corporate body or firm or an institution, which is operating a KYC compliant account with the bank. The introducer should attest the address and sign across the photograph of the applicant.
Apart from documents mentioned in Table B under section 1, following also can be accepted as address proof: Any evidence to prove the address of the customer to the satisfaction of the Bank. This should be valid only in the case of group accounts sourced from a union body or association whose office bearers could attest the identity and address of its members. OR Application on plain paper with photograph of the applicant pasted on it. The application should express desire to open a No Frills Saving Bank Account, declare address for correspondence. An introduction by any government official or existing account holder or authorized signatory of a corporate body or firm or an institution, which is operating a KYC compliant account with the bank. The introducer should attest the address and sign across the photograph of the applicant.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME 6. Account of Institutions/ Organizations: Account of non-individuals (except HUF) is opened under scheme code SBTRS. For the convenience of business they have been classified into 4 constitutions codes of 9-A, 9-B, 9-C & 9-D in finacle. However, technically, and as per their legal identity they are classified as: Section 25 Company, Government, Society & Trust. This is based on their legal constitution and registration. Accordingly an NGO or Club can either be a Section 25 Company, Society or Trust based on its legal identity, but NGOs account should ideally be opened under constitution code 9-B in finacle and Clubs account should ideally be opened under constitution code 9-D. Hence, It is possible that for a Trust, Society or Section 25 Company account is opened under either constitution code 9-A, 9-B, 9-C or 9-D, depending upon the business consideration. The decision of the Branch shall be final as what account has to be opened under which constitution code (in finacle) while the documentation for account opening shall be complied with the basic characteristic of the organization depending upon their constitution as a legal entity and their registration. For all the accounts under SBTRS, KYC compliance has to be done (as per detail in the following paragraphs) for the entity, which is opening the account and the KYC for the individuals who are authorized to open and operate the account. The KYC of the individual/ individuals has to be as per stipulation given in the table-A&B above under point no. 1. 6.1. Documents For accounts of Section 25 Companies: There are certain companies registered under section 25 of Companies Act 1956 or under the corresponding provisions In Indian Companies Act 1913 and have the option not to add to their names the word limited or the word private limited. Their Savings/ Term Deposit account can be opened with following documents: Proof of identity (All of the following documents are to be obtained) Certified True and Updated copy of Articles of Association, Memorandum of Association (MOA) and byelaws. Certified True and Updated copy of Certificate of Incorporation Certified true copy of Board Resolution listing out the names of authorized signatories and financial powers vested (if any). Specimen signatures and photographs of all authorized signatories duly certified. Latest list of all the Directors with their addresses, duly dated and signed by the Company Secretary / director(s) and Form 32 in case the directors are different from the list mentioned in the MOA. Proof of identity and address of all the authorized signatories as per Table A and B respectively. License issued under Section 25 of the Companies Act. Declaration for availing of at par cheque facility with no limit on clearing payments at centres other than the base branch as per the draft given below: We, the Trustees / Office-bearers of__________ Trust / Co-operative / Association/ Society / Section 25 Company, hereby declare that all funds withdrawn by us from our savings bank account / s are for the attainment of the objects of the Trust / Co-operative / Association / Society / Section 25 Company or for the benefit of the ultimate beneficiary. 6.2. Government Body/ Government Department/ Defence Establishment For Government Department Savings Bank Accounts Any government department/body (being a Government Department / Semi-Government / Quasi Government Body) receiving any budgetary allocation for performance of their functions is prohibited from opening a savings account unless the Government Department/Body receiving the budgetary allocation receives the same for implementation of various programmes / schemes sponsored by Central Government / State Government and in such cases, an authorization letter from the respective Government Department/Body is essential to open the Savings Bank Account. 6.2.1. The following documents are required: Duly Filled in Account Opening Form Authority Letter (An Authority Letter is a document, wherein a Government Officer directs the Bank to open an account mentioning the name and designation of Authorized Signatory/ Signatories and mode of operation). It is important to note that the format of Authority Letter cannot be suggested uniformly as the same differs widely from one state to another state and one organization to another organization.
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Address proof of Government Organization, Central/State Government Department and Defence Unit/Establishment If available. An address on the letter head of the government body may be accepted as the address proof. Anyone of the documents no. 2, 4, 5,6,7,9 or 10 enumerated in the Table B under point 1 above also can be accepted for the purpose of address proof of the entity. Photograph of Authorized Signatory/ Signatories If available. Identity and address proof of Authorized Signatory/ Signatories If available. This id & address proof may be as per the list in Table A and table B of point no. 1 above.
In cases where documents mentioned as if available could not be obtained, a certificate from the Branch Head as per the enclosed format (Annexure-I) is to be attached to the AOF and kept on records. It should be noted that the said officer may after sometime get transferred and when the intending incumbent occupies the chair, this exercise to co-relate to new incumbent with the designation has to be done again. The above certificate should be enclosed invariably in case the Authority Letter is signed by the official who is the same person named as the authorized signatory for the account. 6.2.2. In case of Departments/ Bodies other than Local Body and Government Offices, where enough clarity does not exist for a particular body whether it is of Government or not, any of the following may be provided with account opening form: A link of official website showing that a particular organization is promoted/ sponsored/ affiliated/ associated or linked to Central or State Government A letter head indicating that a particular organization is of Government A copy of Gazette Notification of Central or Sate Government Any other valid document to the satisfaction of the Bank Authority Letter (An Authority Letter is a document, wherein a Government Officer directs the Bank to open an account mentioning the name and designation of Authorized Signatory/ Signatories and mode of operation)
6.2.3. Accounts nomenclature may be as decided by the concerned Government Body/ Department, which is opening the account, to be mentioned in the Authority Letter . 6.2.4. The above documentation will apply to all the autonomous/ affiliated/ sponsored/ linked/ associated/ offshoot bodies of Government, irrespective of their activity, after having them recognized as Government Body/ Department as per point no. 6.2.2 above. 6.3. Trust Accounts The entities which may be known by names like Trust, Foundation, Clubs, Association, NGO, etc but are formed as Trust, based on a Trust Deed under Indian Trust Act 1882 or relevant State Acts (Like Bombay Public Trust Act, 1950), account is opened under SBTRS. 6.3.1. Trust is required to be registered to open an account. A clarification regarding their registration is given below: If Public Trust, (i.e. the beneficiary of the Trust is public at large). A copy of the registration and certificate from Charity Commissioner or certificate of tax exemption from Income Tax Department is to be obtained. At places where Charity Commissioner does not exist, a copy of the registered trust deed, registered at the office of the Sub-Registrar of Assurances would be required. In such cases, registration remains as endorsement of the Trust Deed on the face / back of the Trust Deed itself, with the registration / serial number, date, etc., mentioned and document stamped by the Registering Office. If Private Trust, In States, where separate Trust Act does not exists, Trust is formed under the Indian Trust Act and the registration is done by the Sub-Registrar of Assurances by endorsing the Trust Deed on the face / back of the Trust Deed itself, with the registration / serial number, date, etc., mentioned and document stamped by the Registering Office. Will A Trust account can be opened on the basis of a Will. However, a copy of the probate certified by the court should be attached with the Will. Such Will can replace the Registered Trust Deed for the purpose of opening of account and the executors and administrators appointed by the court would be the authorized signatory of the account, whose id & address proof as per Table A & B under section 1 should be obtained. Alternatively, an introduction of the executors and administrators should be obtained from a reputed lawyer known to the Bank. 6.3.2. Documents to be collected for Account Opening of a Trust:
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Account Opening Form to be signed by Authorized Signatory/ Signatories as per Resolution/ Court Order. Certificate of registration, if registered (as per explanation given in 6.3.1 above) Certified true copy of the Trust Deed / Bye Laws/ Will Resolution of the Managing Body of the Trust / Foundation / Association authorizing the individual(s) for opening and operating the account. Resolution should be as per bye laws/ trust deed If applicable, Power of attorney granted to its Office Bearers to transact business on its behalf Copy of PAN, if available List of the names and addresses of all the current trustees on the letterhead of the Trust signed by the Managing Trustee or any of the authorized signatories. Trust Deed. In case of vernacular language, a self-attested English version copy needs to be submitted. Alternatively, a translation of the relevant portion of the Trust Deed/ Bye Laws by the Branch Staff with signature number is required to be attached. Declaration for availing at par cheques facility with no limit on clearing payments, at centers other than the base branch as per format given below. We, the Trustees / Office-bearers of__________ Trust / Co-operative / Association/ Society, hereby declare that all funds withdrawn by us from our account / s are for the attainment of the objects of the Trust / Co-operative / Association / Society or for the benefit of the ultimate beneficiary. Photograph of all the current Trustees should be obtained. In case the Trust Deed has photographs of all the current trustees, a certified true photo-copy of Trust Deed (with recognizable image of all the current Trustees) can be obtained in lieu of photographs separately. A list from the Trust should be obtained, mentioning names and addresses of all the current trustees. The id & address proof of the entire authorized signatory to be taken. Documents enumerated in Table A & B of point no. 1 above respectively should be obtained for this purpose for each and every signatory A separate address proof for the Trust may be obtained, which can either of the documents copy vide point no. 2, 4,5,7,9 or 10 of Table B of point no. 1 above. In case of non availability of the separate address proof, the address in the registered Trust Deed/ Bye Law shall be accepted for the purpose of address proof.
6.4. Employee Welfare Trust: Employee Welfare Trusts are also a private Trust, which is set up by the employer for the benefit of the employee in general in confirmation with the Labor Laws of the country. They may or may not be registered with the conventional authorities as in the case of normal Public/ Private Trusts. This can either be a PF Trust, Pension Trust, Gratuity Trust or Superannuation Trust for the employees of a certain company, which would be evident from their name as well. The following documents are required to be obtained, while opening such accounts: Duly filled Account Opening Form, to be signed by Authorized Signatories as per the resolution A certified true copy of Trust Deed/ Bye laws A copy of Income Tax Exemption Certificate or a copy of the application made to IT Department for exemption from paying income tax (In case a copy of application to IT Department is obtained, it should be ensured that a copy of permission, whenever arrived, should be obtained from the customer). Address proof of the Employee Welfare Trust should be obtained. However, if the same is not available, the address proof of the company/ employer should be obtained, as approved for opening of a current account of the company. A list containing names and addresses of all the trustees should be obtained Photograph of all the Trustees should be obtained. In case the Trust Deed has a photograph of all the current trustees, a certified true photo-copy of Trust Deed (with recognizable image of all the current Trustees) can be obtained in lieu of photographs separately A copy of resolution to open and operate the Bank account should be obtained Id and address proof of all the authorized signatories and their photograph should be obtained as per Table A & B of section no. 1 above respectively.
6.5. Account of Society: The entities which may be known by names like Trust, Foundation, Clubs, Association, Society, NGO etc but are registered as Societies and registered under the Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory, the following documents can be collected (The registering office in this case is the Registrar / Sub-Registrar of Societies). Account Opening Form to be filled and signed by the Authorized Signatories as per resolution Copy of Memorandum and Articles of Association/Bye-law
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Certified true copy of registration certificate [in case of society registered under Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory] Resolution preferably as per Annexure-II The id & address proof of the entire authorized signatory to be taken. Documents enumerated in Table A & B of point no. 1 above respectively should be obtained for this purpose for each and every signatory Declaration for availing at par cheques facility with no limit on clearing payments, at centers other than the base branch as per format given below. We, the Trustees / Office-bearers of__________ Trust / Co-operative / Association/ Society, hereby declare that all funds withdrawn by us from our account / s are for the attainment of the objects of the Trust / Co-operative / Association / Society or for the benefit of the ultimate beneficiary. For proof of address of the society, any of the following should be obtained: 1. Copy of Certificate issued by Registrar of Coop Societies. 2. Bank certificate from existing banker. 3. Bank statement of accounts with last 30 days transactions from the preceding 3 months. 4. Registration certificate having address issued by the Central / State or any other local government authority 5. Either of the documents copy vide point no. 2,4,5,7,9 or 10 of Table B of point no. 1 above.
6.6. Account of Self Help Group: Self Help Group is an unregistered and primary society collecting contribution from the members on a periodical basis. The following documents are required to be obtained while opening the account of Self Help group: Account opening Form to be signed by Authorized Signatory/ Signatories as per resolution Photograph and photo id proof of Authorized Signatory/ Signatories (any one from Table A under section 1) A copy of resolution passed by the members to open and operate the Bank Account (To be signed by all members) OR Photo Copy of register where the resolution is passed and signed by all the members of SHG Introduction of SHG OR attestation of resolution from DRDA/ Government Officer/ Local Bodies (Municipal Body or Gram Panchayat) This is to be noted that all the accounts of SHG should be labeled as SHG in finacle at the time of opening of account. 6.7. FCRA Account: FCRA accounts are the designated account of the entity to receive donations from foreign source as per FCRA Act, 1976. The entity is required to get registered with Ministry of Home Affairs, Central Govt. The requirement of documents to open a FCRA account is as per the constitution of the entity (Trust/ Society or Section 25 Company). The nomenclature of the account should invariably contain word FCRA e.g. XYZ-FCRA. While opening such accounts, the debit and credit should be frozen. The Branch, after having received the permission from Ministry of Home Affairs, Govt of India, should lift the freeze and allow operation in the account. Such accounts should be labeled as FCRA in finacle while opening the account. 6.8. Account of Official Liquidator: The liquidator of a company can open a Savings Bank account with the Bank with the purpose to receive the proceeds and settle the claim. To open the account a copy of the certified copy of the court order (giving details of official liquidator) with id and address proof of the official liquidator(s) (as per table A&B under section 1 above) should be obtained. Alternatively, an introduction of the liquidator(s) should be obtained from a reputed lawyer known to the Bank. After opening of the account the official liquidator should be asked to report the same to the court. 6.9. Account of Unregistered Trust/ Society: Until registered, these bodies cannot be termed either as a society or a trust. The can open a Savings Bank account with similar id and address proof of the authorized signatories and their photograph. A certified copy of resolution and the deed/ bye laws (whatever the case may be) should be obtained. However, in such cases, a certificate from the Branch head should be enclosed that he/she is thoroughly satisfied with such entity, its objective and credential of the office bearers. Under no circumstances, account of such entities should be allowed to be overdrawn.
7.
General Covenants: Accounts of Entity (Trust/ Society/ Section 25 Company/ Government): 7.1. In case the authorized signatory is existing customer of the Bank, KYC documents (id and address proof) may be waived provided the customer-id is quoted in the Account Opening Form and a certification is provided from the
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Branch Official that the said customer is fully KYC compliant. Such certification should be provided by the Branch where the customer-id is maintained and any officer of that Branch having signature number can sign this certification, or send a lotus notes of this effect. 7.2. Under scheme code SBTRS, multiple accounts can be opened at various Branches with same customer id. However, the authorized signatory/ signatories may change as per specific resolution provided by the Trust/ Society/ Section 25 Company. In such cases Account Opening Forms can be sent to CPU by the base Branch for the different accounts to be set up in different Branches with same customer id. However, it will be required for the Base Branch to obtain prior permission from Central Office, Retail Banking Department for such an arrangement. 7.3. For certain Government schemes, it will be possible to open a non-operative account in other than Base Branch (where parent account is maintained) for collection purpose only. In such cases, Base Branch may have account of certain Government Body, and based upon the requirement of the customer, the Base Branch will initiate to get various collection accounts opened in various Branches. This can be facilitated only with the approval of Retail Banking Department, Central Office. Such collection accounts can be set up in finacle through an approval of RBD, CO and without any document or AOF, and with same customer-id of that of Base Branch. The said non-operative collection accounts shall not have cheque book/ withdrawal facility. The debit entry in these accounts can be posted only by the Base Branch. 7.4 Opening of inter-sol SBTRS account for collection purpose other wise (other than the conditions stipulated in section 7.3 above) shall be kept on to be governed by point no. 1.246 of Manual of Instructions Retail banking, Vol. 1: Deposits 7.5. In case a Trust/ Society decide to open account in the name of unit whose name is different from the name of the Society/ Trust, following additional documents should be obtained: An affidavit by the Trust/ Society stating that the said entity is owned and managed by the Trust/ Society and it is nothing but the unit of said Trust/ Society Copy of resolution passed by the Trust/ Society, if any, to set up such unit (This is not mandatory, and a copy of resolution should be taken if available) Copies of application form submitted to competent authority for obtaining permission to run such a unit and a certified copy of such permission Copy of Trust Deed/ Bye Laws of the Trust/ Society KYC of Authorized Signatories, viz. id & address proof as per Table A&B under Section 1. 7.6. The provision of 7.5 above applies to the unit whose name does not contain the name of the Trust/ Society which has launched them. In case the name of the unit contains the name of Trust/ Society, the account can be opened without the specification enumerated in 7.5 above, and account can be opened with the documents required for respective Trust/ Society. 7.7 In case of the educational institute and healthcare organizations (hospitals) which has a permission from any Valid Govt. Dept. / UGC/State Board/Central Board/Other Authorized Board will be sufficient for opening account of the Education Institute if the parent organization (i.e. Society/Trust) provides a resolution requesting the Bank to open the account in the name of the Unit (i.e. Education Institute/Health Care Organization). For this, documentary proof has to be obtained. 7.8 In case one of the authorized signatory/ trustee is illiterate, the account cannot be allowed to be operated singly. However, the thumb impression can be accepted for that signatory along with other signatory/ signatories. However, in such circumstances also, cheque book should not be issued and no third party cash withdrawal should be permitted. 7.9 In case of an Entity or a Association registered neither as a Trust or Society, it can be seen that the existing account of the entity is a Savings Bank Account. If the existing Banking relationship of the entity, with a Nationalized Bank is under Savings Bank account, a similar Savings Bank Account can be opened with Axis Bank as well. In such cases, it has to be recognized that the entity exists. KYC documentation would be required to be obtained for the entity as well as the authorized signatories under extant KYC. To ascertain the type of existing account, a copy of statement or Passbook shall be sufficient. 7.10 As this segment requires a lot of interpretation for document requirement, the CPU shall invariably make a reference to the product group (SBTRS) in Retail Banking, Central Office, whenever required. The clarification given by Retail banking should be acceptable to open an account. Copies of the exchange of communication between CPU and Retail Banking are to be endorsed to Compliance Department for reference. In case, the issue raised is perceived as a matter of policy, the Retail Banking Department will refer the same to Compliance Department. The clarification of Compliance Department shall be final and create a line of reference for all future cases with similar issue.
Documents for certain types of current accounts:

1. TRUST: Definition The entities which may be known by names like Trust, foundation, Clubs, Association, NGO, etc but are formed as Trust, based on a trust Deed under Indian Trust Act 1882 or relevant states like (Bombay Public Trust Act, 1950). Trust is required to be registered to open an account. A clarification regarding their registration is given below: Public Trust: (The beneficiary of the Trust is Public at large): A copy of registration and certificate from Charity Commissioner or Certificate of tax exemption from Income Tax department to be obtained. At places where Charity Commissioner does not exist, a copy of the trust deed, registered at the office of the Sub Registrar of Assurances would be required. In such cases, registration remains as endorsement of the Trust Deed on the face / back of the Trust Deed itself, with the registration / serial number, date, etc., mentioned and document stamped by the Registering Office. Private Trust : In certain states, where separate Trust Act does not exist, Trust is formed under the Indian Trust Act and the registration is done by the Sub Registrar of Assurances by endorsing the Trust Deed on the face / back of the Trust Deed itself, with the registration / serial number, date, etc., mentioned and document stamped by the registering office. Will: A Trust account can be opened on the basis of a Will. However, a copy of the probate certified by the court should be attached with the will. Such will can replace Registered Trust Deed for the purpose of opening of account and the executors and administrators appointed by the court would be the authorised signatory of the account, whose identity & address proof to be obtained are as applicable to the proprietor, prescribed by us under existing guidelines. 2, SOCIETY: Definition The entities which may be known by names like Trust, foundation, Clubs, Association, NGO, etc but are registered as Societies and registered under the Societies Registration Act, 1860 or any other corresponding law in force in state or a Union Territory. List of documents required (Trust / Society): Copy of PAN Card/ PAN Intimation Letter/ Completed Form No 60. Proof of Identity of Trust / Society: Certificate of registration as applicable, depending on the nature of trust i.e., public/private/will etc. Certified true copy of Trust deed / Bye Laws / Will. In case Trust deed is in vernacular language, a self-attested English version copy needs to be submitted. Alternatively, a translation of the relevant portion of the Trust Deed / Bye Laws by the Branch Staff with signature number is required to be attached. Resolution of the Managing Body of the Trust / Foundation / Association of the individual(s) for opening and operating the account as per Banks format (inbuilt in the account opening form. List of all current Trustees & Settlors in the Letter Head of the Trust containing Photo, Name and Addresses. Address proof of the Trust / Society: (any one of the following) A copy of the registration certificate / certificate of registration with Sub Registrars Office/ Income Tax Exemption Certificate. Address available in Registered Trust Deed acceptable. Telephone / Electricity Bill of public sector operators in the State (Bills not older than 3 months) Property ownership deed i.e. Title deeds of the property in the name of the Trust duly stamped and registered. TAN allotment letter. Property tax or water tax paid receipt / bill raised in the name of the Trust. Bank Statement (not more than 3 months old) mentioning the name & address of the Trust from PSU / Private Sector / Foreign banks. PAN Intimation Letter issued by IT authority. Last available Income Tax Assessment Order. Latest Wealth Tax Assessment Order. Certificate issued by village Administrative Officer / Panchayat Head / Mukhiya / Village Developmental officer / Block development officer or Equal Rank officer for customers in rural / village areas. Proof of identity & address of authorised signatories: ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Note: In case of the educational institute and healthcare organizations (hospitals) a permission from any valid Govt. Dept./ UGC/ State Board/ Central Board/ Other Authorized Board will be sufficient for opening their account if the parent organization (i.e. Society/Trust) provides a resolution requesting the Bank to open the account in the name of the Unit (i.e. Education Institute/Health Care Organization). For this, documentary proof has to be obtained. 3. State / Urban / District Central Co-operative / Regional Rural Bank / Local Area Bank
List of documents required (Bank): Copy of PAN Card/ PAN Intimation Letter Proof of Identity of Bank: RBI License for UCBs / Inspection Letter of NABARD for State Apex or DCCBs. Certified True and Updated copy of rules & by-laws of the Bank signed by any director. For RRB, a copy of Gazette Notification attested by Director / Secretary / Chairman / Chairperson / Two Authorised signatories. For Local Area Bank letter issued by the sponsored Bank. Duly signed Board Resolution (format inbuilt with the AOF) for opening and operating the account. List of all Directors with their addresses attested by directors / company secretary / chairman / Chairperson or minimum two authorised signatories. Proof of address of the Bank: (any one of the following) Address duly incorporated in Board Resolution Copy of registration under Shop & Establishment Act having address RBI License for UCBs / Inspection Letter of NABARD for State Apex or DCCBs. Proof of identity & address of authorised signatories: ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines. 4. Hindu Undivided Family (HUF) List of documents required (HUF): Copy of PAN Card/ PAN Intimation Letter/ Completed Form No 60. Proof of identity of HUF HUF letter with the name and signature of all adult male & female co-parceners. Copy of PAN Card/ PAN Intimation Letter The letter of mandate of HUF Proof of identity & address of Karta ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines. 5. Association of Persons (AOP) or Body of Individuals (BOI) List of documents required: PAN card copy / PAN intimation Letter / Completed Form No. 60. Proof of identity of AOP/BOI PAN card copy / PAN intimation Letter Copy of agreement. Copy of Certificate of Registration issued by Charity Commissioner . Registrar of Co-operative Society or any other competent authority. Any other document originating from any Central or State Government. Department establishing identity and address of such AOP / BOI. Resolution of the managing body of such association or body of individuals authorising one or more members to operate the account. Proof of Address of AOP/BOI: (any one document required) Copy of agreement. Copy of Certificate of Registration issued by Charity Commissioner . Registrar of Co-operative Society or any other competent authority. Any other document originating from any Central or State Government. Department establishing identity and address of such AOP / BOI.
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Resolution of the managing body of such association or body of individuals authorising one or more members to operate the account. Proof of identity & address of authorised signatories / POA holder ID & address proof of authorised signatories/POA holder to be obtained as applicable to the proprietor, prescribed under existing guidelines. 6. Accounts of Limited Liability Partnership( LLP ): Concept of limited liability partnership LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP, a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partners wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both a corporate structure as well as a partnership firm structure LLP is called a hybrid between a company and a partnership. Structure of an LLP: LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Difference between LLP & Traditional Partnership Firm: Under Traditional Partnership Firm, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partners wrongful acts or misconduct. Difference between LLP & a Company A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners. The management-ownership divide inherent in a company is not there in a limited liability partnership. LLP will have more flexibility as compared to a company. List of documents required: In addition to document for partnership firm mentioned under existing guidelines following documents need to be obtained from the customer for opening account of LLPs:
Certificate of Incorporation as a LLP. The registered agreement between the partners. 7. Account of Official Liquidator for settlement of claims List of documents required: Certified copy of the Court Order appointing the official liquidator. Letter from the registrar of Co Operative Societies in case of a Co-Operative Bank going into Liquidation. Registration of companies in case of a company going into Liquidation. ID & address proof of official liquidator to be obtained as applicable to the proprietor, prescribed under existing guidelines. 8. Foreign Companies A foreign company planning to set up business operations in India may do so in the following manner: (i) As an entity incorporated under the Companies Act, 1956 through Joint Ventures; or Wholly Owned Subsidiaries
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME The documents required for opening of these accounts are the same as applicable to any other companies prescribed in our earlier guidelines. (ii) As an office of a foreign entity through Liaison office / Representative office Branch office Project office Liaison Office / Representative Office: A Liaison office can carry on only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India. Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office abroad. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian customers. The companies desirous of opening a liaison office in India may make an application in form FNC-1 along with the documents mentioned therein to Foreign Investment Division, Foreign Exchange Department, Reserve Bank of India, Central Office, Mumbai. Permission to set up such offices is initially granted for a period of 3 years and this may be extended from time to time by the Regional Office in whose jurisdiction the office is set up. Liaison/Representative offices have to file an Activity Certificate on annual basis from a Chartered Accountant to the concerned Regional Office of the Reserve Bank of India, stating that the Liaison Office has undertaken only those activities permitted by Reserve Bank of India. List of documents required: Copy of PAN card / PAN intimation Letter /Completed Form No. 60 Proof of Identity of Liaison Office / Representative Office: Certified true copy of Certificate of Incorporation. Certified true copy of Memorandum & Article of Association. List of Directors and copy of Form 32 (If Directors different from MOA) Certified true copy of board resolution with authorised officials name PAN Card/TAN allotment letter/GIR No. Certified true copy of Certificate of Commencement of business (Public Limited Company). RBI Permission letter for setting up office in India. Proof of address of Liaison Office / Representative Office: Address proof of the company as applicable to Private & Public limited companies, prescribed under existing guidelines Proof of Identity & address of authorised signatories: ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines. Branch Office: Reserve Bank permits companies engaged in manufacturing and trading activities abroad to set up Branch Offices in India for the following purposes: To represent the parent company/other foreign companies in various matters in India e.g. acting as buying/selling agents in India To conduct research work in the area in which the parent company is engaged To undertake export and import activities and trading on wholesale basis To promote possible technical and financial collaborations between the Indian companies and overseas companies. Rendering professional or consultancy services Rendering services in Information technology and development of software in India Rendering technical support to the products supplied by the parent/Group companies. A branch office is not allowed to carry out manufacturing, processing activities directly/indirectly. A Branch Office is also not allowed to undertake Retail Trading activities of any nature in India. Branch Offices have to submit Activity Certificate from a Chartered Accountant on an annual basis to the Central Office of FED. For annual remittance of profit Branch Office may submit required documents to an authorised dealer. Permission for setting up branch offices is granted by the Reserve Bank of India. Reserve Bank of India considers the track record of the Applicant Company, existing trade relations with India, the activity of the company proposing to set up office in India as well as the financial position of the company while scrutinising the application. List of documents required: Copy of PAN card / PAN intimation Letter /Completed Form No. 60
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Proof of Identity of Branch Office: Certified true copy of Certificate of Incorporation. Certified true copy of Memorandum & Article of Association. List of Directors and copy of Form 32 (If Directors different from MOA) Certified true copy of board resolution with authorised officials name PAN Card/TAN allotment letter/GIR No. Certified true copy of Certificate of Commencement of business (Public Limited Company). RBI Permission letter for setting up office in India. Proof of address of Branch Office: Address proof of the company as applicable to Private & Public limited companies, prescribed under existing guidelines Proof of Identity & address of authorised signatories: ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines. Project Office: Foreign companies are granted projects in India by Indian entities. General Permission has been granted by Reserve Bank of India vide Notification No. FEMA 95/2003-RB dated July 2, 2003 to foreign companies to open Project Office/s in India provided they have secured from an Indian company, a contract to execute a project in India, and the project is funded directly by inward remittance from abroad; or the project is funded by a bilateral or multilateral International Financing Agency; or the project has been cleared by an appropriate authority; or a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project. However, if the above criterion is not met, or if the parent entity is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China, such applications have to be forwarded to Central Office of the Foreign Exchange Department of the Reserve Bank at Mumbai for approval. List of documents required: Copy of PAN card / PAN intimation Letter /Completed Form No. 60 Proof of Identity of Project Office: Certified true copy of Certificate of Incorporation. Certified true copy of Memorandum & Article of Association. List of Directors and copy of Form 32 (If Directors different from MOA) Certified true copy of board resolution with authorised officials name PAN Card/TAN allotment letter/GIR No. Certified true copy of Certificate of Commencement of business (Public Limited Company). RBI Permission letter for setting up office in India. Copy of contract/sanction letter by the Project Sanctioning Authority in India. RBI approval in case if the parent entity is established in Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China. Clearance from Appropriate Government Authorities in India (if applicable). Proof of address of Project Office: Address proof of the company as applicable to Private & Public limited companies, prescribed under existing guidelines Proof of Identity & address of authorised signatories: ID & address proof of all authorised signatories to be obtained as applicable to the proprietor, prescribed under existing guidelines. Account Opening Ready Reckoner Branches The forefront ISA Check of Retail Banking Activity Receive Completed AOF from customer Scrutinize the form Verify the documents against the original & sign Hand over the AOF no. to the customer Enter the AOF details in the system Dispatch the forms at the end of the day, to CPU
In our bank the accounts of the customers are not opened and maintained at branches. The applications are received, scrutinized and then forwarded to Central Processing Unit (CPU) and the accounts are opened at CPU. The centralized data base can be accessed by all the branches throughout the country. Since the branches extend services out of the centralized data base, they are known as Service Outlet (SOL).
ISA means Identity, Signature and Address. ISA check implies physical verification of these three features, using List A and List B above. Or using a copy of the passport, and self-signed cheque from the existing bank account of the customer.
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ACCOUNT DETAILS
In our bank, when an account is opened, the account holder becomes a client of the bank. A client ID Number is allotted to him. A client can open many account at different branches. Each and every account is identified by an account number. Customer ID is a unique number allotted to each customer. Now, its possible that a single customer has two or more accounts. For example, say a customer by name Mr. Rajan has his salary account with our bank. He may want to open another account jointly with his wife. Each account is identified by a unique Account No. and all the accounts of Mr. Rajan are linked to a single Customer ID. Lets look more closely at the account no. 9 09 01 123456789 5 Bank Code A/c opening Yr. Account Type Account No. Check Digit
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Anti Money Laundering (AML) and Know Your Customer (KYC) Guidelines INTRODUCTION
TO
A ML
AND
KYC
Money laundering is the process where the money earned from criminal activities such as drugs trafficking; smuggling and terrorism are converted into legitimate money through a series of financial transactions making it impossible to trace back the origin of funds. Criminals are thus able to hide and disguise the true origin and ownership their earnings and avoid prosecution, conviction and confiscation of the tainted funds. Of late this has become a serious issue in the international community because of the increasing use of such funds to finance terrorism. Recent technological advancements have facilitated on-line transfer of funds and real time settlement between banks across the globe. Money launderers are now able to adopt innovative means and move funds faster across continents making detection and preventive action much more difficult. Because of this threat, banks have to adopt a dynamic approach in tracking fund movement and increase their vigilance and monitoring of their customers. The Basel Statement of Principles enunciated in 1989 outlines the basic procedures and policies which banks must adopt to assist law enforcement agencies in tackling this menace. A Financial Action Task Force (FATF) comprising 26 countries and two regional organisations was formed in 1989 (currently 35 members of the FATF; 33 jurisdictions and 2 regional organisations (the Gulf Cooperation Council and the European Commission) and the recommendations made periodically by the Task Force have formed the guiding principles for comprehensive legislation on anti-money laundering and systems and procedures adopted by the banking system. In line with these happenings across the globe, a comprehensive bill on the Prevention of Money Laundering was introduced in the Indian Parliament in 1998 and the Prevention of Money Laundering Act, 2003 has been passed by the Parliament.
WHO
IS A
CUSTOMER?
RBI defines customer as: One who maintains an account with the bank, or Any person or entity connected with a financial transaction like a remittance: The remitter or purchaser of an outward remittance The beneficiary of an inward remittance Necessary prior checks should be carried out for checking of a prospective customers identity against persons of known criminal background or banned entities. Since this can only be ensured fully by installing suitable software, it has been decided to introduce these prior checks after the software has been identified and installed. Detailed guidelines will be issued after implementation of the software. Meanwhile, Branches and Extension Counters should carefully peruse the lists of such persons/entities circulated by us from time to time through the Zonal Offices and crosscheck prospective customers particulars with such lists. The accounts of Politically Exposed Persons resident outside India will need to be opened after a strict verification of all relevant aspects. Politically Exposed Persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g., Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials etc. It has been decided that all such accounts should be opened only after clearance from the NRI Department, Central Office. Whenever any remitter wishes to deposit more than Rs. 20,000/- in cash for purchasing a draft or for making a remittance in any other form, documents constituting identity proof of the remitter as per List A must be scrutinized and copies thereof retained with the Application Form (the voucher).
KNOW YOUR CUSTOMER

KYC essentially involves identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information. Special attention will have to be given to due diligence for accounts of trusts, companies and client accounts opened by professional intermediaries. In the case of trusts, branches should take reasonable precautions to verify the identity of the trustees and the settlers of the trust. Beneficiaries should also be identified when they are defined. For companies, branches need to be vigilant against business entities being used by individuals as a front for maintaining accounts with banks. As regards client accounts, when the Bank has knowledge or reason to believe that the client account opened by a professional intermediary is on behalf of a single client, that client must be identified as per our procedure. These guidelines are so important, that even an existing account may have to be closed due to the Banks inability to verify the customers identity, although only Branch Heads will have the authority to take such a decision. The aim of these guidelines is to: Determine and document the true identity and basic background of all customers Obtain and document any additional customer information, commensurate with assessment of the money laundering risk posed by customers' expected use of the Bank's products and services; Minimise frauds Avoid opening of accounts with fictitious names and addresses Check misappropriations Prevent money laundering
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Obtain protection under Section 131 of Negotiable Instruments Act Weed out undesirable customers
ACCOUNT PROFILING
RBI has stipulated categorization of customers into low, medium and high-risk categories. It has been decided to do so based on anticipated transactions volume in each account. This would help the Bank to classify the accounts into different risk categories for the purpose of activity/transaction monitoring. The cut off limits for monitoring could be specified depending upon the risk profile. The profile would need to be updated from time to time. As money laundering is a process essentially involving a series of transactions, it has been considered appropriate to compile the profile in the case of only Savings Bank and Current Accounts rather than Term Deposits. It will also not be necessary to extend the procedure to asset accounts.
Account Profile
Additional data which is collected in the AOF such as annual income, age, occupation etc., in case of individuals and details of the type and extent of the business in case of current account is used to develop what is known as an Account Profile. Such a profile gives us an idea of the type of transactions /activities expected to pass through the account, which would eventually help us identify any suspicious transaction not commensurate with the customer profile. Although this information is completely voluntary3, it is invaluable for monitoring the activities in the accounts, as also aid risk perception from the money laundering point of view. The risk factor would determine the nature and extent of monitoring required.
Transaction Profile
Just as we try to draw up an account profile, constant monitoring of the accounts helps us draw up a Transaction Profile. This is again done so that we are able to spot quickly if there is any unusual activity in the account. Does the customer deal in large cash transactions? If so, what is the nature of such transactions? Do we have any other agreement with the client for fund transfers? If so, what are the arrangements? Details of loan facilities enjoyed by the customer from the bank. Do we have regular contact with the customers? If so, by what means e.g. personal visits, telephone calls, e-mail etc? Who are the persons generally contacted by us? Have exchange control formalities been completed for foreign citizens, companies etc
MONITORING
OF
TRANSACTIONS
The extent of monitoring should depend on the risk sensitivity of the account. A list of clearing credit transactions for Rs. 50,000/- and above in the newly opened accounts is being sent by Data Centre on a daily basis. Branches should scrutinize the transactions. Any transaction exceeding the threshold limit of 10 lacs should be monitored to see if it conforms to the profile. If not, details may be sought to establish the nature of transaction. Apart from such transactions which cross the threshold limit, certain other activates may give rise to suspicion of money laundering. An indicative list of such suspicious activities is given in the next page. However, it needs to be ensured that, in our zeal to monitor such activities, genuine and bonafide transactions of customers are not delayed and customers inconvenienced. Further, any enquiries made in such matters must take care of the sensitivity of the customers involved and must be handled at a sufficiently senior level with delicacy and tact. Apart from following the procedures relating to remittances as laid down in the FEMA guidelines, the branches while dealing with overseas fund transfers, both inwards and outwards, will have to be vigilant in ascertaining, wherever possible, the purpose of remittances, particulars of the remitter as well as the beneficiaries, and link such remittances to the customer profile on record. It may be necessary to scrutinise transactions more closely if the pattern of remittances arouses suspicion. However, care will have to be taken not to delay crediting the proceeds of the remittances solely for lack of particulars of the above nature. Here again, the matter should be handled with appropriate tact. To monitor overall activities in the context of the Anti-Money Laundering Policy, the Vice President (Operations) at this office has been nominated as Money Laundering Reporting Officer (MLRO) for the Bank, who would be responsible for reporting transactions of a suspicious nature to the Senior Management of the Bank as well as various regulatory authorities. Branches would also report to the MLRO any suspicious activities noticed by them.
Indicative list of suspicious activities

Activities not consistent with the customer's business
Corporate accounts where deposits or withdrawals are primarily in cash rather than cheques. Corporate accounts where deposits and withdrawals by cheque/telegraphic transfers/foreign inward remittances/ any other means are received from/ made to sources apparently unconnected with the corporate business activity/dealings.
This means that the customer MAY disclose these details in the AOF as per his/her wish. The bank cannot enforce such disclosures and make
them mandatory for account opening. Please do not take the print out of this booklet - 29 -
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Unusual applications for DD/TT/PO against cash. Accounts with large volume of credits through DD/TT/PO whereas the nature of business does not justify such credits. A single substantial cash deposit composed of many high denomination notes. Frequent exchanges of small denomination notes for large denomination notes or vice versa. Deposit of many cheques but rare withdrawals for daily operations.
Attempts to avoid reporting/record-keeping requirements

A customer who is reluctant to provide information needed for a mandatory report, to have the report filed or to proceed with a transaction after being informed that the report must be filed. Any individual or group that coerces/induces or attempts to coerce/induce a bank employee to not file any report or any other forms. An account where there are several cash deposits/withdrawals below a specified threshold level to avoid filing of reports that may be necessary in case of transactions above the threshold level, as the customer intentionally splits the transaction into smaller amounts for the purpose of avoiding the threshold limits.
Unusual Activities
A customer who often visits the safe deposit area immediately before making cash deposits - especially deposits just under the threshold level. An account that has frequent deposits of large amounts of currency bearing the labels of other banks. Funds coming from the list of countries/centres which are known for money laundering
Customer who provides insufficient or suspicious information

A customer/company who is reluctant to provide complete information regarding the purpose of the business, prior banking relationships, officers or directors, or its locations. In this case account need not be opened. A customer/company who is reluctant to reveal details about its activities or to provide financial statements. A customer who has no record of past or present employment but makes frequent large transactions.
Certain suspicious funds transfer activities

Sending or receiving frequent or large volumes of cross border remittances not supported by business reasons. Receiving large TT/DD remittances from various centres and remitting the consolidated amount to a different account/centre on the same day leaving minimum balance in the account
Certain bank employees arousing suspicion

An employee whose lavish lifestyle cannot be supported by his or her salary. An employee who is reluctant to take a vacation. An employee who is associated with mysterious disappearances or unexplained shortages of significant amounts of bank funds. An employee in whose case negligence/wilful blindness is reported repeatedly
Checklist for handling overseas money transfers

A customer maintains multiple accounts, transfers money among the accounts and uses one account as a master account from which wire/funds transfer originates or into which wire/funds transfers are received (a customer deposits funds in several accounts, usually in accounts below a specified threshold and the funds are then consolidated into one master account and wired outside the country) A customer regularly depositing or withdrawing large amounts by a wire transfer to, from, or through countries that are known sources of narcotics or where bank secrecy laws facilitate laundering money. A customer sends and receives wire transfers (from financial haven countries) particularly if there is no apparent business reason for such transfers and it is not consistent with the customer's business or history. A customer receiving many small incoming wire transfers of funds or deposits of cheques and money orders and then ordering large outgoing wire transfers to another city or country. Customer experiences increased remittance activity when previously there has been no such regular activity. Loan proceeds unexpectedly are wired or mailed to an offshore bank or third party. A business customer uses or evidences a sudden increase in wire transfer to send and receive large amounts of money, internationally and/or domestically and such transfers are not consistent with the customer's history.
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Deposits of currency or monetary instruments into the account of a domestic trade or business, which in turn are quickly wire transferred abroad or moved among other accounts for no particular business purpose. Sending or receiving frequent or large volumes of wire transfer to and from offshore institutions. Instructing the Bank to transfer funds abroad and to expect an equal incoming wire transfer from other sources. Receiving wire transfers and immediately purchasing monetary instruments prepared for prepayment to a third party. Periodic wire transfers from a person's account/s to bank haven countries. A customer pays for a large (international or domestic) wire transfer using multiple monetary instruments drawn on several financial institutions. A customer or a non-customer receives incoming or makes outgoing wire transfers involving currency amounts just below a specified threshold, or that involves numerous Bank or travellers cheques A customer or a non-customer receives incoming wire transfers from the bank to 'Pay upon proper identification' or to convert the funds to bankers' cheques and mail them to customer or non-customer, when The amount is very large (say over Rs 10 lacs) The amount is just under the specified threshold The funds come from a foreign country or Such transactions occur repeatedly A customer or a non-customer arranges large wire transfers out of the country which are paid for by multiple bankers' cheques (just under the specific threshold) A non-customer sends numerous wire transfers using currency amounts just below the specified threshold limits
RISK MANAGEMENT
The concurrent / internal auditors specifically check and verify the application of KYC procedures at the branches and comment on the lapses. To assist them in their work, the AIMS (Account Irregularity Monitoring System) software has been implemented at the CPU, which will indicate the up-to-date state of KYC compliance in respect of each new account opened. The branches should make adequate efforts to rectify the irregularities pointed out by the CPU auditors as soon as possible.
Monitoring of Compliance of the Account Opening Procedure

In our bank the following measures have been put in place to ensure compliance of the account opening procedure on an on-going basis. Day end checking at branch level Verification by controlling officials during visits to Concurrent audit at the CPU branches System audit at new branches Periodical inspection of branches by internal / external auditors Snap audit Concurrent audit of bigger branches For more information and detailed guidelines/procedures on opening of different types of accounts, introduction, conduct of accounts, disclosures, monitoring of large cash withdrawals and deposits, obtaining of photographs etc., one may refer to the manual of instructions. PRECAUTIONS FOR OPENING AND CONDUCT OF ACCOUNTS4 Recently, certain instances have come to our notice where accounts have been opened at some of our branches by miscreants to obtain unlawful payment of the following types of instruments:Those issued in favour of genuine persons but illegally obtained by persons claiming to be the original payees. Those which have been stolen from the issuing bank and put to misuse. Those whose material details like payees name, account details, amount etc. have been altered. In most of these cases, our branches have performed the role of collecting bankers and the relative instruments have either been paid in some instances or dishonoured in others due to vigilant and timely detection by the paying banks. As such, we have not been out of funds in these cases. However, branches need to be fully aware that our protection as a collecting bank would be available under the Negotiable Instruments Act only if it can be conclusively established that the relative accounts have been opened by our branches after rigorously following the procedures laid down for opening of accounts, including observance of the Know Your Customer (KYC) norms aimed at establishing the identity and other particulars of the account holder. It is, therefore, of utmost importance that the various guidelines laid down in this regard, consolidated in our Circular No. OPERATIONS/65/2003-04 dated August 12, 2003, are followed meticulously in letter and spirit. In addition to these guidelines, it has been decided to lay down the following safeguards in the matter:The scrutiny of the account opening forms should be done by an official at least of the level of Manager before being sent to CPU. The local courier agency should be instructed to return any deliverable to the branch immediately, if the address is not traceable, with a proper remark to that effect. Under no circumstances should the couriers deliver such consignments to any one claiming to be the consignee. Delivery of the Debit Cards, PINs etc to third parties against authority letters should be done only with the approval of
Extract from our Circular No: OPERATIONS/86/2003-04 Date : November 27, 200 Please do not take the print out of this booklet - 31 -
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME the Branch Head/Manager (Operations), duly recorded on the letter to that effect. The officials at the branches should be exhorted to be discreet while passing on information on telephone or otherwise, making sure that the concerned person inquiring is the account holder and not a third party. Branches while collecting high value instruments of say Rs. 50,000/- and above on behalf of other branches should check the relative account in Finacle, particularly in regard to the date of opening, before crediting the proceeds. Having opened the accounts with due precaution, it is also necessary that all vouchers, cheques, drafts, dividend warrants etc. presented for payment or collection are verified thoroughly before authorisation is given. In a couple of cases recently it was possible to detect the alterations made in a dividend warrant and a cheque due to such scrutiny before payment was made by our branches. All officials should, therefore, be made aware of the paramount importance of a proper scrutiny of instruments passing through their hands. EXTRACT FROM RBI CIRCULAR FOR INFORMATION5
Prevention of Money Laundering Act, 2002 Obligation of banks in terms of Rules notified thereunder
Please refer to our circular DBOD.No.AML.BC.58/14.01.001/ 2004-05 dated November 29, 2004 on KYC Guidelines and Anti Money Laundering Standards. Banks were advised to put in place a policy framework within three months of the date of the circular and ensure that the banks were fully compliant with the provisions of the circular by December 31, 2005. The Chairmen/CEOs of banks were advised to personally monitor the progress in this regard and take appropriate steps to ensure that systems and procedures were put in place and instructions had percolated to the operational levels. It should also be ensured that there is a proper system of fixing accountability for serious lapses and intentional circumvention of the prescribed procedures and guidelines. Attention of banks is further invited to paragraphs 4 and 10 of the guidelines enclosed to our above said circular in terms of which banks were advised to appoint a Principal officer and put in place a system of internal reporting of suspicious transactions and cash transactions of Rs.10 lakh and above. In this connection, we advise that the Government of India, Ministry of Finance, Department of Revenue, issued a notification dated July 1, 2005 in the Gazette of India, notifying the Rules under the Prevention of Money Laundering Act (PMLA), 2002. In terms of the Rules, the provisions of PMLA, 2002 came into effect form July 1, 2005. Section 12 of the PMLA, 2002 casts certain obligations on the banking companies in regard to preservation and reporting of customer account information. Banks are, therefore, advised to go through the provisions of PMLA, 2002 and the Rules notified there under and take all steps considered necessary to ensure compliance with the requirements of section 12 of the Act ibid. Maintenance of records of transactions Banks should introduce a system of maintaining proper record of transactions prescribed under Rule 3, as mentioned below: All cash transactions of the value of more than rupees ten lakh or its equivalent in foreign currency; All series of cash transactions integrally connected to each other which have been valued below rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds rupees ten lakh; All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place; All suspicious transactions whether or not made in cash and by way of as mentioned in the Rules. Information to be preserved Banks are required to maintain the following information in respect of transactions referred to in Rule 3: The nature of the transactions; The amount of the transaction and the currency in which it was denominated; The date on which the transaction was conducted; and The parties to the transaction. Maintenance and Preservation of records Banks should take appropriate steps to evolve a system for proper maintenance and preservation of account information in a manner that allows data to be retrieved easily and quickly whenever required or when requested by the competent authorities. Further, banks should maintain for at least ten years from the date of cessation of transaction between the bank and the client, all necessary records of transactions, both domestic or international, which will permit reconstruction of individual transactions (including the amounts and types of currency involved if any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.
RBI/2005-06/301DBOD.NO.AML.BC.63 /14.01.001/2005-06 dated 15th February, 2006
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Banks should ensure that records pertaining to the identification of the customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN, utility bills etc.) obtained while opening the account and during the course of business relationship, are properly preserved for at least ten years after the business relationship is ended. The identification records and transaction data should be made available to the competent authorities upon request. Reporting to Financial Intelligence Unit-India It is advised that in terms of the PMLA rules, banks are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) at the following address: Director, FIU-IND, Financial Intelligence Unit-India, 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021 I) Banks should carefully go through all the reporting formats. There are altogether five reporting formats viz. i) Manual reporting of cash transactions ii) Manual reporting of suspicious transactions iii) Consolidated reporting of cash transactions by Principal Officer of the bank iv) Electronic data structure for cash transaction reporting and v) Electronic data structure for suspicious transaction reporting which are enclosed to this circular. The reporting formats contain detailed guidelines on the compilation and manner/procedure of submission of the reports to FIU-IND. It would be necessary for banks to initiate urgent steps to ensure electronic filing of cash transaction report (CTR) as early as possible. The related hardware and technical requirement for preparing reports in an electronic format, the related data files and data structures thereof are furnished in the instructions part of the concerned formats. However, banks which are not in a position to immediately file electronic reports may file manual reports to FIU-IND. While detailed instructions for filing all types of reports are given in the instructions part of the related formats, banks should scrupulously adhere to the following: The cash transaction report (CTR) for each month should be submitted to FIU-IND by 15th of the succeeding month. While filing CTR, individual transactions below rupees fifty thousand may not be included; The Suspicious Transaction Report (STR) should be furnished within 7 days of arriving at a conclusion that any transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature. The Principal Officer should record his reasons for treating any transaction or a series of transactions as suspicious. It should be ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received from a branch or any other office. Such report should be made available to the competent authorities on request; The Principal Officer will be responsible for timely submission of CTR and STR to FIU-IND; Utmost confidentiality should be maintained in filing of CTR and STR to FIU-IND. The reports may be transmitted by speed/registered post, fax, email at the notified address; It should be ensured that the reports for all the branches are filed in one mode i.e. electronic or manual; A summary of cash transaction report for the bank as a whole may be compiled by the Principal Officer of the bank in physical form as per the format specified. The summary should be signed by the Principal Officer and submitted both for manual and electronic reporting. Banks may not put any restrictions on operations in the accounts where an STR has been made. However, it should be ensured that there is no tipping off to the customer at any level. These instructions are issued under Section 35A of the Banking Regulation Act, 1949 and Rule 7 of Prevention of Moneylaundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. Any contravention thereof or non-compliance shall attract penalties.
CASH TRANSACTION GUIDELINES

Savings/Current Accounts: There is no restriction for the amount. If the total amount deposited by way of cash in an account in a day is Rs.50000 and above, PAN of the account holder/s should be obtained if not taken on record at the time of opening the account. In case, the account holder/s does not have the PAN, then form 60/61 should be obtained on the day of such deposit. Time Deposits: As per the IT rules, cash remittances exceeding Rs.50000 requires the account holders PAN or form 60/61. As per our internal rules, for opening a Fixed Deposit account for amounts exceeding Rs.50000 (whether by cash or by cheque), PAN or form 60/61 is to be obtained. Cash payment should not be made by a bank to any person whose total holdings of Time Deposit are Rs.20000 or more as per Sec. 269 (T) of IT Act. Demand Draft/Pay Order/Bankers Cheque: As per the IT rules, cash transaction for Rs.50000 and above per day requires the remitters PAN or form 60/61. However, RBI has permitted cash transactions only for amounts of less than Rs.50000. In our Bank, for an amount exceeding Rs.20000, the remitter has to be identified. Cash transactions for Rs.50000 and above are therefore, not permitted.
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Deposit Accounts General Guidelines

CURRENT
AND
S AVINGS BANK ACCOUNTS
Deposit accounts can be broadly classified as Demand Deposits and Term or Time Deposits. Current & Saving Deposits are Demand Deposits. While no interest is to be paid in Current Deposits, the accounts can be opened by different types of Depositors like individual/s, Corporates, Association of Persons, Body of Individuals, Firms, and Sole Proprietary Concerns etc. mainly for business purpose. Savings account is to be allowed only for savings purpose and not for business purpose. RBI even now regulates the interest rate in Savings bank account and presently it is 3.5%. Interest can be paid on daily products at quarterly or longer rests As per RBI guidelines, apart from individuals, banks can open SB A/c in the name of the following organizations/agencies.6 Primary Co-operative Credit Society which is being financed by the Bank Khadi & Village Industries Board Agriculture Produce Market Committees. Societies registered under Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory. Companies governed by the Companies Act, 1956, which have been licensed by the Central Government u/s 25 of the said Act, or under corresponding provisions in the Indian Companies Act, 1913 and permitted not to add to their names the word limited or the words Private Limited. Institutions other than tho7se mentioned in Clause (i) above and whose entire income is exempt from payment of Income Tax under the Income Tax Act, 1961. Government Departments /Bodies /Agencies in respect of grants / subsidies released for implementation of various programmes / schemes sponsored by Central Government subject to production of an authorization from the respective Govt. Departments to open savings bank account. Development of Women and Children in Rural Areas (DWCRA). Self Help Groups (SHGs) registered or unregistered which are engaged in promoting saving habit among their members. Farmers clubs Vikas Volunteer Vahini (VVV) RBI has directed7 that banks may open SB accounts in the name of State Govt departments/bodies/agencies in respect of grants/subsidies released for implementation of various programmes /schemes sponsored by State Govts on production of an authorization to the bank from the respective Govt. departments certifying that the concerned govt. dept. or body has been permitted to open SB account.
Interest Payments in Current Accounts
Can be paid for accounts maintained by Regional Rural Banks with sponsoring banks at the rate which is decided by the concerned sponsoring bank. Can also to be paid for current accounts of Deceased individual account holder and sole proprietory concern for credit balances, from the date of death to the date of settlement at saving bank rate.
Ref. RBI Credit Information Review Oct 2000, Also available on Internet at www.cir.rbi.org.in As per RBI DBOD/DIR/BC 51/13.03.00/2002-03 on the subject of opening of SB accounts in the name of certain bodies /organizations
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DOMESTIC TERM DEPOSITS

Interest Rate: De-regulated. Banks can offer Fixed or Floating rates. Banks have been given discretion to offer differential rates of interest on domestic term deposits of the same maturity of Rs.15 lakhs and above. i.e. depending upon size of the deposit of Rs.15 lakhs and above. e.g. for a Deposit of Rs. 20 lakhs a bank can offer higher rate than that of a Rs.10 lakh deposit even for the same tenure. Min Period: 7 Days as prescribed by RBI. In our bank, the minimum period is 7 days in respect of bulk deposits (i.e.Rs.15 lakhs and above). For all other deposits, the minimum period (in our bank) is 15 days. Maximum Period: 10 Years. However, banks may accept deposits for periods exceeding 10 years in case of court orders or in case of minors where interest of minor is involved. Rate of Interest and Margin for Advance against Term Deposits: De-regulated and left to be decided by individual banks. In our bank, the minimum margin to be maintained on such advance is 15% and the rate of interest over the deposit rate, is 2% for deposits upto Rs. 1 Crore, 3% for deposits above Rs. 1 crore, and 4% for third party loans irrespective of deposit amount. Deposit Scheme for senior citizens (60 years and above in age): Banks are permitted to formulate Fixed Deposit Schemes specifically meant for Senior Citizens offering higher rates as compared to normal deposits of any size. Discretion to disallow premature withdrawal: Freedom given to banks in respect of large deposits held by entities other than individuals and HUF. Penalty for premature payment: De-regulated. Banks can even pay without penalty. Renewal of overdue deposit: Renewal as of date is permitted where overdue period is upto 14 days only. Payment of interest in accounts of deceased customers: Where the depositor has expired before the date of maturity of the deposit and the amount is claimed after the date of maturity the bank should pay interest at contracted rate till the date of maturity. The bank should pay simple interest at the applicable rate, operative on the date of maturity for the period for which the deposit remained with the bank beyond the date of maturity. In case of death of the depositor after the date of maturity of the deposit, however, the bank should pay interest @ SB rate operative on the date of maturity from the date of maturity till the date of payment. Payment of interest in Term Deposit maturing on holidays: As per IBA - Code for Banking Practice, if the noted due date of a term deposit falls on a holiday, Sunday, non-business working day, interest be paid for such intervening day (s) at the originally contracted date till the succeeding working day.
Settlement of Claims in Deceased Depositors Accounts

As per RBI directives, while settling the claim of deceased depositors where nomination is not registered, the requirement of insisting on succession certificate from the legal heirs has been totally withdrawn irrespective of the amount involved. However, banks should adopt such safeguards in settling claims, as they consider appropriate including taking of indemnity bond. Succession certificate can be insisted upon only in case of failure to comply with such safeguards by the claimants. With a view of harmonizing present regulations on interest rates and interest calculation methodologies and based on the views of a working group headed by Mr. Sinor (IBA), RBI has announced the following changes in the guidelines: All aspects concerning renewal of overdue deposits including payment of interest for renewal within and after 14 days, margin on advance against term deposit and interest payable on maturity proceeds of deposit account of deceased depositor and method of calculation of interest on payment of interest on fixed deposit have been deregulated and left to the discretion of individual banks subject to their boards laying down a transparent policy in this regard.
Interest Application on Premature Withdrawals and Part Withdrawals of Term Deposits

These guidelines cover premature withdrawals and part-withdrawals and are not applicable to Inter-Bank deposits. Premature withdrawal (Full amount): Interest paid is always at the rate corresponding to the period for which the deposit has run.
Rupee Deposits
Particulars for Domestic/NRO Deposits (1) For Deposits of less than Rs 15 lacs For deposits that have run for less than fifteen days B. For deposits that have run for at least fifteen days Penal Interest Rates No interest to be paid. No premature penalty to be charged.
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Particulars for Domestic/NRO Deposits (2) For Deposits of Rs 15 lacs and above but less than Rs 5 crores(*) A. For deposits that have run for less than seven days B. For deposits that have run for at least seven days (3) For Deposits of Rs 5 Crore and above(*) A. For deposits that have run for less than seven days B. For deposits that have run for at least seven days PARTICULARS for Non-Resident Rupee Deposits (1) For Deposits of less than Rs 5 crore A. For deposits that have run for less than one year B. For deposits that have run for at least one year (2) For Deposits of Rs 5 crore and above(*) A. For deposits that have run for less than one year B. For deposits that have run for at least one year Penal Interest Rates No interest to be paid. No premature penalty to be charged. No interest to be paid. Premature penalty of 1% to be charged. PENAL INTEREST RATES No interest to be paid. No premature penalty to be charged. No interest to be paid. Premature penalty of 1% to be charged.
2. Foreign Currency Deposits:

A) Resident Foreign Currency (RFC):The following rules are subject to a deposit running for the minimum period stipulated in the rate chart (which is at present 30 days). If the deposit has not completed the minimum period, no interest will be paid on the deposit. Deposit Currency/ USD 10,00,000 EUR 10,00,000 GBP 7,50,000 For deposit amounts below the threshold limit No penalty. No penalty. No penalty. For deposit amounts equal to & above the threshold limit of 1%. Penalty Penalty of 1%. Penalty of 1%.
B) Foreign Currency Non Resident (FCNR (B)) Deposits:

The following rules are subject to a deposit running for the minimum period stipulated in the rate chart (which is at present 12 months). If the deposit has not completed the minimum period, it will not get any interest.
Deposit Currency/ Threshold Limit(*) USD 10,00,000 EUR 10,00,000 GBP 7,50,000 JPY 12,50,00,000
For deposit amounts below the threshold limit No penalty. No penalty. No penalty. No penalty.
For deposit amounts equal to & above the threshold limit Penalty 1%. Penalty 1%. Penalty 1%. Penalty 1%.
(*)The amounts mentioned as threshold for premature penalty are applicable as on the date of this circular. These amounts can change in the future. In case of changes this circular may be read along with the changed threshold limits.
Part Withdrawals of Term Deposits

All part withdrawals in Finacle for all products are governed by the same rules. Applicability of penal rate on the part withdrawn amount is governed by the rule of threshold limits set for each product. The logic of part withdrawal is detailed below: The original deposit amount gets reset to a new value, which is equal to original deposit less part withdrawn amount. The rate of interest applicable on the residual deposit also gets reset based on the residual principal. The tenor of the deposit remains unchanged. Interest paid on the part withdrawn amount is equal to the rate applicable on the original deposit for the period run and not on the amount of part withdrawal. Penalty is applied if the original deposit is over the threshold limit set for the scheme. The following examples of domestic rupee deposits illustrate:
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Case I: Deposit Amount: Scheme Tenor : Opened on : Maturity : Rate : Case II Deposit Amount : Scheme: Tenor : Opened on : Maturity : Rate : 4,00,00,000.00 STD 45 days 20-10-2003 04-12-2003 04.00% 25,00,00,000.00 HVTDS 45 days 20-10-2003 04-12-2003 04.25% Part withdrawal of 1 crore happens after the deposit has run for 20 days. Rate applicable on a deposit of 4 crores for a period of 20 days is 3.25%. Interest payable on the part withdrawal amount of 1 crore is 3.25% without penalty (as there is no premature penalty on deposit below 5 crores). The residual deposits principal gets reset to 3 crores The rate gets reset to the rate applicable on a deposit of 3 crores for a tenor of 45 days effective on 20.10.2003 (which may be different than the rate applicable on the original deposit of 4 crores). This circular will be made effective from 1st December June 2003. Part withdrawal of 1 crore happens after the deposit has run for 20 days. Rate applicable on a deposit of 25 crores for a period of 20 days is 3.75%. Interest payable on the part withdrawal amount of 1 crore is 3.75% less 1% penalty (as there is 1% premature penalty on deposit of 5 crores & above), applicable rate is 2.75% The residual deposits principal gets reset to 24 crores. The applicable rate gets reset to the rate applicable on a deposit of 24 crores for a tenor of 45 days effective on 20.10.2003 (which may be different than the rate applicable on the original deposit of 25 crores).
Interest Payment on Overdue Deposits8

Further to our circular No: OPERATIONS/17/2002-03 dt. August 28, 2002 discontinuing backdated renewal of overdue deposits where the overdue period is above 14 days, we have built in a structure in Finacle, disabling renewal of such deposits and providing for payment of interest for the overdue period if it exceeds 14 days, which will be available to users from 16th September 2002. We furnish below further clarifications in this regard. The rules as per the above circular are applicable not only to domestic deposits, but to all rupee deposits such as NRO and NRE. FCNR and RFC schemes are already covered by similar directives, as mentioned in the Manual of Instructions. The schemes excluded from this directive are Inter-Bank deposits, High Value Term Deposits, Certificate of Deposits, MIBOR linked term deposits, Recurring deposits, and withdrawn schemes of NRNR and NRSR. Overdue deposits with overdue period upto 14 days can be renewed in the usual manner. While closing overdue deposits with overdue period above 14 days, user will be given an option whether to apply overdue interest or not. It should be ensured that overdue interest is applied only when at least the principal portion of the deposit is renewed. In all cases of payment of overdue interest, a narration should be made on the new deposit receipt manually, "Renewed Deposit - Overdue interest Rs. ___ paid". This is very important. If the renewed deposit is closed prematurely before completion of the minimum stipulated period for term deposits (7 days for deposits of Rs.15 lac and above /15 days for deposits below Rs.15 lac / 6 months for NRE deposits, etc.), the overdue interest paid as above will have to be recovered from the customer and credited into the respective Interest Paid GL head. Branches will have to ensure that their Overdue Deposits portfolio is monitored on a regular basis, and maturity notices are sent to the clients well in advance.
Insurance Coverage on Deposits

All bank deposits are covered under the insurance scheme offered by Deposit Insurance and Credit Guarantee Corporation of India (DICGC) subject to certain limits and conditions. The details of the insurance cover in force will be made available to the depositor. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits: Deposits of foreign Governments Deposits of Central/State Governments Inter-bank deposits Deposits of the State Land Development Banks with the State co-operative bank Any amount due on account of and deposit received outside India Any amount, which has been specifically exempted by the corporation with the prior approval of Reserve Bank of India
Extract from our Circular No: OPERATIONS/19/2002-03 Dt. Sept 12, 2002 .
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME Each depositor in a bank is insured upto a maximum of Rs.1, 00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same right and same capacity. The deposits kept in different branches of a bank are aggregated for the purpose of insurance cover and a maximum amount upto Rupees one lakh is paid. For example, if an individual had an account with a principal amount of Rs.95, 000 plus accrued interest of Rs.4, 000, the total amount insured by the DICGC would be Rs.99, 000. If, however, the principal amount in that account was Rs. One lakh, the accrued interest would not be insured, not because it was interest but because that was the amount over the insurance limit.
ACCOUNTS
OF
MINORS
Account Opening
While opening the account of a Minor, the Bank is guided by the provisions of Section 3 of the Indian Majority Act, 1875, which defines, inter alia, that A minor is a person below the age of 18 years, unless a guardian is appointed by Court of Law or the property of the minor is under superintendence of Court of Wards, in which case minority extends till the age of 21 years. The Indian Majority (Amendment) Act, 1999 (33 of 1999), provides for removal of the discriminatory prescription of two different ages for attaining majority. Therefore, a Minor in both the cases becomes a Major on attaining 18 years of age. As per the Banks Manual of Instructions on Retail Banking, Volume 1, Deposits, Chapter II, Paragraphs 2.58 to 2.70, three types of minors accounts can be opened at the branches. These accounts and their operative guidelines are as follows:1. Accounts in the name of the Minor alone A literate minor above the age of 12 years, who can comprehend the nature of banking transactions and can sign uniformly, is allowed to open and operate such an account. The maximum balance in such accounts is normally restricted to Rs.1 lac and exceptions permitted with the approval of the Branch Head. Instruments in the name of the minor only as payee are allowed to be credited to such accounts. This precludes the possibility that instruments issued in favour of the father or the mother are collected in such accounts. 2. Accounts in the name of the Minor alone but operated by the Guardian Such accounts opened in the name of the minor are operated by one of the parents as guardian for and on behalf of the minor, or, in case where the natural guardian is not alive or is unable to discharge duties, by a guardian appointed by a Court of Law for and on the minors behalf. The exact age of the minor is irrelevant for such an account as long as he remains a minor. The minors signature is not admitted in the account for the purpose of operation. Here again, instruments in the name of the minor only as payee are allowed to be credited to such accounts. Instruments issued in favour of the father or the mother is not collected for this type of account. There is however no restriction as to the deposit/maximum balance in these accounts unlike in the accounts mentioned in type 1 above. A minors account may be opened with the mother as guardian to sign on his behalf but they should ensure that such an account is not allowed to be overdrawn. Further, branches should clarify at the time of opening of such accounts to the guardians that the minors acceptance may be necessary for paying out money from such an account where the amount involved is large, say, more than Rs.1.00 lakh on any one instance, and where the minor is old enough to understand the nature of the transaction. 3. Joint Accounts in the name of the Minor and the Guardian Such accounts opened in the joint names of the minor and the guardian are operated with the signature/s of either the minor (signed by minor himself if he is above12 years and literate or by the guardian on behalf of the minor, if he is below 12 years or not literate) or the guardian (in his personal capacity) with the mandate as either or survivor, or former or survivor (former may be minor or survivor), or jointly by both where the mandate provides for joint operation. In these cases, instruments both in the name of the minor and/or the named guardian as payee(s) are allowed to be credited to such accounts. There is no restriction again as to the deposit/maximum balance in these accounts unlike in the accounts mentioned in type 1 above. Minors Income
Under section 64.1a of the IT Act, the income of a minor shall be clubbed with that of the parent. If the marriage of the parents subsists, then to that parents income whose income is more. If the marriage of the parents does not subsist, to that parent maintaining the child. No clubbing if the child is disabled. No clubbing if the income is arising out of the skill etc. of the child No clubbing if the parents are not alive.
In all the above cases, the birth date of the minor (verified from the original school/birth certificate or other similar document and copy held in records duly marked as original verified) is required to be invariably recorded in the account opening form/specimen signature card and entered into the customer master. This is necessary because when a minor attains majority, the status of the guardian i.e. his authority to sign for and on behalf of the minor is revoked. Simultaneously, the minor is required to ratify the actions taken by the guardian in the past
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME for and on his behalf so as to bind him on the transactions as he has now become capable of contracting in his own capacity in the eyes of the law. Cheques issued by the guardian prior to the date of minor attaining majority but presented after the minor attains majority also require confirmation from the minor before payment. This date is thus of legal importance to the Bank and it is preferable that the Bank formalizes a system (preferably to be centralized) for ensuring conversion of a minor account after this date. For this purpose, at present branches are required to send a communication (as per Annexure (II) VII) of the Manual of Instructions) to the guardian for conversion of the minor account to a normal account and for completion of account opening formalities by the minor who has since attained majority. To centralise this activity, we have advised our CPU to issue such letters for all the branches. For this purpose, the Data Centre would be generating a list of such accounts from Finacle where a minor would be turning into a major. This option would be run by Data Centre every month along with the month end activities. The list will then be forwarded to the CPU who would send the relative letters. This activity will start from August, 2005 and letters will be sent for all savings accounts where the minor is becoming 18 years of age between 01.09.2005 and 30.09.2005 and so on every month thereafter. Branches need not therefore send such letters after August 1, 2005. This will be applicable to the accounts of both Type 2 and 3 mentioned above i.e. the account in the name of the minor and the joint account of the minor and the guardian where guardian is signing on behalf of the minor. In addition, after a minor attains majority, branches should take a balance confirmation letter as well as a new account opening form from the erstwhile minor and modify their records accordingly.
ATM Cards Issued to Minors

The Bank currently issues Trust 24 ATM cards to Minors, above the age of 12. In order to increase operational efficiencies, it has been decided to issue Debit Card to minors above the age of 12. The details of the offering are as follows: Issuance of Debit Card to minors above the age of 12 years, who can sign uniformly. Daily withdrawals limits of Rs. 1500/- at ATMs Daily spend limits of Rs. 1000/- at merchant outlets Duly filled Debit Card application form for Minors. The form needs to be filled by the guardian and it covers the following aspects Consent of natural guardian for issuance of Debit card to minor Confirmation that the Guardian has explained the minor about the usage of Debit Card especially the fact that the PIN number is not to be disclosed to anybody. Also, that the Bank has issued the Debit card to minor at the request of his natural guardian and the Bank is not liable for any misuse of the Debit card issued to the minor. Adequate number of application forms would be dispatched to the Zonal offices and the branches are requested to contact their respective Zonal offices for the requisite number of forms. The Branch would be required to attach a Bar code sticker (specific to the Branch) while submitting the application form to CPU.
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Nomination Facility
Q.1 Ans. Where are the rules for Nomination Facility in Banks mentioned? The rules are as per Banking Regulation Act
Q.2 Can Nomination be made in any Deposit Account? Ans. Yes in Current or Savings or Term Deposits but the Account should stand in the name of Individual or Individuals or Sole Proprietary Concern. Q.3 Can a minor be appointed as Nominee in a Deposit Account?
Ans. Yes. But the A/c holder/holders will have to appoint another person who is not a minor, to enable the bank to settle claim to minor if the need arises when the minor is still to become a major. Q.4 What are the prescribed forms for making Nomination? Deposit A/c Making Cancellation Variation Q.5 DA 1 DA 2 DA 3 Locker SL 1 SL 2 SL 3 Safe Custody SC 1 SC 2 SC - 3 Deposit Accounts Safe Custody Safe Deposit vault (Lockers) Sec 45ZA Sec 45ZC Sec 45 ZE 45ZB 45ZD 45ZF
In the event of death of depositor in a Term Deposit before due date, what is the option available to Nominee?
Ans. The Nominee can be given on request, a premature payment. Q.6 In case of Joint Deposit Account say in the name of A & B with disposal instruments E or S, can the nominee claim the amount in case of death of A.? Ans. No. Nominee gets the right only in case when both A and B die. Q.7 Ans. While accepting Nomination, should a bank insist on taking Signature of Nominee? No. Only Name and Address should be taken.
Q.8 Who can identify a Nominee before Settlement of claim? Ans. A Magistrate and Judicial Official or an Officer of the Central or State Government or an Officer of a Bank or any two persons acceptable to the Bank can identify nominee. Q.9 Can Multiple Nomination (more than one nominee) be accepted?
Ans. No. Only single nomination per contract should be taken except in case of a locker, standing in joint names and operated jointly in which multiple nomination can be taken and for this a special form SL 1A is to be got signed by such joint locker holders. Q.10 Ans. Q.11 Ans. Q.12. Can a minor be appointed as nominee in a Locker? In practice, a minor is not accepted as nominee in a locker. Can nomination be accepted in Safe Custody? Yes, but only in case of single safe custody. Is nomination compulsory?
Ans. No, it is an option. However, RBI has advised that while opening deposit accounts, banks should insist on the person opening the deposit account to make a nomination. In case the person opening the account declines to make a nomination, the bank should explain to him/her the advantages of nomination facility. If the person opening the account still does not want to nominate, the bank should obtain from him/her, a specific letter stating that he/she does not want to
40
SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME make a nomination. In case the person opening the account declines to give such a letter, the bank should record the fact on the account opening form and proceed with opening the account if otherwise found eligible. Under no circumstances, bank should refuse to open an account solely on the ground that the person opening the account refused to nominate. Q.13 Why nomination?
Ans. Nomination is a facility, which facilitates settlement of claim in case of death, to the nominee, easily and fast, without any hassle. Q.14. Ans. No. Q.15. Ans. Can a Registered Trust be appointed as Nominee in a Deposit Account of an individual? No, because a Trust, even though registered, is not a single individual person. Can we accept nomination in an overdraft account to settle the claim in case of credit balance?
NOMIN ATION RULES
AT A GLANCE:
Forms DA 1 DA 2 DA 3 SC 1 SC 2 SC 3 SL 1 SL 1A SL 2 SL 3 SL 3A
A. Deposit Accounts: For registration of Nomination For cancellation of Nomination For Variation of Nomination B. Safe Custody: For Registration of Nomination For Cancellation of Nomination For Variation of Nomination C. Safe Deposit Vault (Locker) Registration (sole hirer) Registration (joint hirers) Cancellation (sole/Joint hirer) Variation (sole hirer) Variation (joint hirer)
Type of the A/c Deposit Safe custody
Eligible account Single or joint Single
No. of nominees permitted One One In case of Accounts in single name:: One In case of Joint account
Safe Deposit vault/locker
Single or Joint
--E or S a/c --F or S a/c
:: one :: one
--Joint opr. A/c :: one or more
41
BANKING AWARENESS TRAINING
42
Income Tax
FAQ
ON
INCOME TAX RULES
1. What are the banking transactions for which PAN/GIR number is to be quoted? (i) Opening a time deposit, exceeding fifty thousand rupees, made in cash with a bank. (ii) Opening an account (not being a time deposit referred above) with a bank, whether by cash, or by any other mode. (iii) Payment in cash for purchase of bank drafts or pay order from a bank for an amount aggregating fifty thousand rupees or more during any one day. (iv) Deposit in cash aggregating fifty thousand rupees or more, with a bank during any one day. (A strict interpretation of the Income tax rules does not necessitate obtention of PAN when an account is opened by a cheque, under 1(ii) above. However, keeping in mind the stipulation of quoting PAN for subsequent cash deposits of Rs.50,000/- and above, it is prudent to obtain PAN at the time of opening accounts itself. This practice is also followed by peer level banks.) 2. What if the customer has not been allotted a PAN/GIR number? A person who has not been allotted PAN, or who does not have a General Index Register Number, and who makes the above transactions shall make a declaration in Form No.60 giving therein the particulars of such transaction. This declaration must be made on each occasion on which any of the above specified transactions are entered into. Persons, who have agricultural income and are not in receipt of any other income chargeable to income tax, shall make a declaration in Form No.61. A minor who does not have any income chargeable to income tax, shall quote the PAN/GIR Number of his father or mother or guardian, as the case may be. 3. Under 1(i) and 1(ii) above, (opening an account), should PAN be obtained from all joint holders of the account? Yes. The rules regarding obtaining PAN are applicable even to joint holders of accounts, and not only to the primary holder. 4. What are the rules regarding reporting to Income Tax authorities? Branches shall forward to the concerned Director of Income Tax (Investigation) or Commissioner of Income Tax (CIB), a statement indicating therein details of all documents pertaining to transactions referred to under 1(i) to 1(iv) above, containing the name and address of the person entering into the transactions, nature and date of the transactions, and PAN or GIR number quoted in the documents pertaining to these transactions. This is to be submitted in two instalments, in October and March of every year, enclosing form 60/61 as detailed in the next paragraph. The assistance of Data Centre may be availed for system-generation of such reports. 5. Are the Form Nos.60/61 thus collected, to be forwarded to IT authorities? Except for those collected under 1(ii) above, all other form Nos. 60/61 received during a financial year shall be forwarded to the concerned Director of Income Tax (Investigation) in two instalments, along with a statement as detailed in the earlier paragraph, that is, the forms received upto the 30th September, shall be forwarded latest by 31st October of that year, and the forms received till the 31st March shall be furnished latest by 30th April of the same year.
43
BANKING AWARENESS TRAINING 6. In respect of 1(iv) above, for cash deposits aggregating fifty thousand rupees or more, should the PAN of the account holder be obtained, or the PAN of the person depositing the cash? The PAN/GIR number of the account holder is to be obtained. The details of PAN should be fed in the relevant field of 'CUMM' in Finacle, so that it is available in the system generated report. 7. Can we issue Demand Drafts/Pay Orders etc against cash above rupees fifty thousand? No. As per RBI guidelines, Banks are required to issue travellers cheques, Demand Drafts, etc for Rs.50, 000/- and above only by debit to customers' accounts or against cheques and not against cash. 8. Can we provide information to Income Tax authorities, even when the information sought are not specific to any pending enquiry or proceedings? Section 133(6) of the Income Tax Act, 1961 requires the bank to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs relevant to any enquiry or proceeding under this Act. However, under the authority of the Director, or Commissioner of Income Tax, powers can be exercised by Income Tax department under section 133(6) to call for information even when no proceedings are actually before them. This can be used to make a sweeping or roving enquiry, by calling for information in regard to all deposit-holders. Therefore we are bound to provide such information. 9. Should TDS be effected for customers earning more than their MAXIMUM EXEMPTION AMOUNT CHARGEABLE TO INCOME TAX as interest, even if they submit form 15G ? Yes. TDS has to be effected, and form15G cannot be accepted in such cases. Even if accepted and marked in Finacle, TDS will be deducted, when the interest amount exceeds Rs. 160,000 for Males and Rs. 190,000 for Females, in a Financial Year.
TAX DEDUCTION
AT
S O U R C E (T DS)
Tax deducted at source is one of the modes of collecting Income-tax from the assessees. Assessee pays tax in the assessment year on the income earned in previous year. Due to this rule the tax collection is delayed till the completion of the previous year. Even sometimes people conceal their income and the tax is not paid at all. In order to overcome these problems, government started deducting some amount of tax from the amount, which is receivable by the assessee. The amount of tax so deducted is called as Tax Deducted at Source, i.e., TDS. Such collection of tax is effected at the source when income arises or accrues. Hence where any specified type of income arises or accrues to any one, the Income-tax Act enjoins on the payer of such income to deduct a stipulated percentage of such income by way of Income-tax and pay only the balance amount to the recipient of such income. The tax so deducted at source by the payer has to be deposited in the Government treasury to the credit of Central Govt. within the specified time. The tax so deducted from the income of the recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment. Income from several sources is subjected to tax deduction at source. Presently this concept of T.D.S. is also used as an instrument in enlarging the tax base. Amongst such income subjected to T.D.S. is the interest on Bank deposits. TDS is applicable if the total interest on Fixed Deposit/s of a depositor maintained in a branch of a bank is in excess of Rs.10000/- during the Financial Year. Subject to certain conditions, the depositor/s may request for relief from TDS by forwarding the formats 15G (15H for senior citizens) as prescribed by the Income Tax Act.
Please do not take the print out of this booklet 44
SUMMARY
OF
I M P O R T A N T T DS R U L E S
AS PER
F I N A N C E A C T 2009
Please find below a summary of the important TDS rules / procedures as amended by the Finance (No. 2) Act, 2009. 1. Branches/Offices/Hubs should note that the Finance (No. 2) Act, 2009 has removed surcharge and education cess on TDS applicable on payments made to resident taxpayers. The salient features for levy of surcharge and education cess on TDS are given below. a. b. Resident payee (including domestic company): No surcharge and education cess will be levied on applicable TDS. However, the education cess will be levied on TDS applicable on salary payments under section 192 of the Income Tax Act, 1961. Foreign company: The education cess @3 % will be applicable to TDS on payments made to foreign company. However surcharge @2.5% will be applicable to TDS on all payments, if aggregate payments made to the company during the year exceeds Rs. 1 crore. Non-residents (except foreign company): Only education cess and no surcharge will be levied on TDS on payments made to non-residents.
c. 2.
Branches/Offices/Hubs should take note of the following aspects detailed in the Annexure. a) Annexure I b) Annexure II c) Annexure III - When liability to deduct tax at source arises and the applicable rates. - The due dates for remittance of TDS amounts. - When to deduct tax at lower rates or not to deduct any tax and the prescribed forms to be obtained for doing so.
3. 4.
The TDS rates as mentioned in Annexure I for payments made on interest on deposits u/s 194A of the Income Tax Act, 1961 will be applicable from 1st April 2009 and all other payments will be applicable from 19th August 2009. Branches/Offices/Hubs should also note that: a) TDS should be remitted, strictly within the stipulated due dates, as specified in Annexure II. b) In terms of CBDT notification no. 34/2008 dated 13th March 2008, any payment of Income tax by companies and some other specified assesses should be made online (e-payment) by mode of internet banking. Kindly refer F&A Circular/165/2008-09 dated 3rd April 2008 regarding procedure for e-payment of Income Tax. While remittance of TDS in electronic mode i.e. e-payment, utmost care should be taken in online filling of TDS challans as the payment made online through e-payment mode is irreversible. c) Any delay in remittance of TDS amount to the Income- tax authorities attracts interest @ 1% per month or for a part of the month of delay. Branches/Offices/Hubs should put in place appropriate systems to ensure that TDS amounts are remitted to Income Tax department promptly within the stipulated due dates. However, if any delay is caused due to extraordinary reasons, the TDS amount should be remitted along with interest for the delayed period to avoid penal action in future. Branches/Offices/Hubs should note that provisions are there in the Income Tax Act that result in a disallowance of expenses in case of non-deduction of TDS or short deduction of TDS, deferring the allowance of such expenses in case of a delay in the year of actual remittance of TDS.
BANKING AWARENESS TRAINING d) In case of tax deduction under Section 194A (payment of interest other than interest on securities), as per sub-section 4 of that Section, any excess or deficit arising out of a previous deduction can be adjusted while making subsequent remittance of TDS amounts under that Section during the same financial year. However, the same benefit is not available in case of tax deduction under any other section. For TDS other than on interest on deposits (Section 194A), if any excess amount is deducted and deposited, the refund can be claimed from the Income Tax department only. e) The Income Tax department has clarified that the certificate for nil deduction or deduction at lower rates (issued under Section 197A) will be valid only in respect of credits or payments made on or after the date of such certificates or during the period mentioned in the certificate. f) The Permanent Account Number (PAN) of the payee should invariably be obtained before issuance of TDS certificate. The mention of PAN of payees in the quarterly TDS returns as well as on TDS Certificates is mandatory. Not obtaining the PAN also entails penalty. The Finance Act 2009 has prescribed that w.e.f. 1.4.2010 in case of payees who do not give PAN, the TDS will be deducted at higher of the following rates. TDS rate as applicable TDS rate of 20% 5. 6. 7. Branches/Offices/Hubs should use separate challans for Section-wise TDS. Branches/Offices/Hubs should review the TDS payments for the year on or around 15th March 2010 and if any short deduction or deposit or non-deduction or deposit is found, then such shortfall should be paid along with interest @1% per month before 31st March 2010. Branches/Offices/Hubs may please note that the TDS returns need to be filed within the due dates prescribed. The following are the TDS returns needed to be filed for the financial year 2009-2010 and their due dates.
Return in respect of TDS from Salary payments.
Prescribed Form 24Q
Return for the Quarter ended 30th June 2009 30th Sept 2009 31st Dec 2009 31st March 2010 15th July 2009 15th Oct 2009 15th Jan 2010 15th June 2010
Due date for filing
Return in respect of TDS from the payments made to the residents.
Prescribed Form 26Q
Return for the Quarter ended 30th June 2009 30th Sept 2009 31st Dec 2009 31st March 2010 15th July 2009 15th Oct 2009 15th Jan 2010 15th June 2010
Due date for filing
46
BANKING AWARENESS TRAINING Return of payment of interest on deposits to residents without TDS. 26QAA 30th June 2009 30th Sept 2009 31st Dec 2009 31st March 2010 TDS from payments made to Nonresidents/foreign companies 27Q 30th June 2009 30th Sept 2009 31st Dec 2009 31st March 2010 31st July 2009 31st Oct 2009 31st Jan 2010 30th April 2010 14th July 2009 14th Oct 2009 14th Jan 2010 14th April 2010
Note : - In case of any date falls on Sunday/public holiday payment have to be done on the previous day. Branches/Offices/Hubs should ensure that the TDS e-returns are filed positively within the due dates. 8. 9. The Branches are hereby instructed not to use the following TANs used from the central office for making any TDS payments. TAN of CPU-TDS : MUMU 05151 G TAN on HR : MUMU 01693 G
TAN of CAP-HUB : MUMU 05154 C
Branch Heads/ Zonal heads/ Departmental heads are advised to bring the contents of this circular to the notice of all the concerned employees.
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Annexure I
The rates of TDS in respect of payments generally made by the Branches/Offices/Hubs as prescribed by Part II of First Schedule of Finance (No. 2) Act, 2009. I. RATES APPLICABLE UPTO 30TH SEPTEMBER 2009.
NATURE OF PAYMENT
Interest other than Interest on securities.
Section of the IT Act 1961
When to Deduct Tax at Source
Rate at Which Tax is to be Deducted at
Source
194A (payment to residents)
(e.g. interest paid / payable on deposits)
At the time of credit or payment, whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 10,000/-.
IN
CASE OF
RESIDENTS:
For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10.30%.
IN
THE CASE OF
NON RESIDENTS:
30.90%
(Applicable to NRO Accounts only)

a. Non-Resident Individuals b. Foreign Company 195 (payment to nonresidents) Without Surcharge With Surcharge** 41.20 % 42.23 %
** Surcharge@2.5% shall be applicable only if the aggregate interest payments during the previous year exceed Rs. 1 crore.
Payments to resident contractors other than sub-contractors and advertising contracts.
194C
At the time of credit or payment whichever is earlier, when the contract value exceeds Rs. 20,000 or when the aggregate payments to a single payee during the previous year exceed Rs. 50,000.
For individuals & HUFs, co-operative society, local authority, partnership firm and domestic companies 2%
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BANKING AWARENESS TRAINING Section of the IT Act 1961 When to Deduct Tax at Source Rate at Which Tax is to be Deducted at
NATURE OF PAYMENT
Payments resident : made to
Source
194C
i) sub-contractors ii) to contractors for Advertising Contracts
At the time of credit or payment whichever is earlier, when the contract value exceeds Rs. 20,000 or when the aggregate payments to a single payee during the previous year exceed Rs. 50,000. At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 2,500. At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 120,000/-.
For individuals & HUFs, co-operative society, local authority, partnership firm and domestic companies 1%
Commission or Brokerage paid to residents (excluding Brokerage payable / paid on purchase/ sale of securities). Rent paid to residents (Rent means any payment for the use of land, building, land appurtenant to a building, machinery, plant, equipment, furniture or fittings)
194H
For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10%
194 I
A.
Rent for use of any machinery or plant or equipment:
For individuals, HUFs, co-operative society, local authority, partnership firm and domestic companies
B.
10%
Rent for use of any land, building, furniture and/or fittings:
(i) For individuals & HUFs
15%
(It means the car, delivery van taken on hire for use will also fall under the rent because car/delivery van is a machinery under Income Tax Act)
(ii) For co-operative society, local authority, Partnership firms and Domestic companies 20%
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BANKING AWARENESS TRAINING Section of the IT Act 1961 194 J When to Deduct Tax at Source Rate at Which Tax is to be Deducted at
NATURE OF PAYMENT
Fees for Services residents. Professional paid to
Source
For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10 %.
Fees for Technical Services or payment of royalties payable to residents.
At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceeds Rs. 20, 000/-.
II. RATES APPLICABLE FROM 1st OCTOBER 2009
NATURE OF PAYMENT
Interest other than Interest on securities.
Section of the IT Act 1961
When to Deduct Tax at Source
Rate at Which Tax is to be Deducted at
Source
194A (payment to residents)
(e.g. interest paid / payable on deposits)
At the time of credit or payment, whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 10,000/-.
I. IN
CASE OF
RESIDENTS:
For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10%.
IN
a. b.
THE CASE OF
NON RESIDENTS:
30.90%
(Applicable to NRO Accounts only)

Non-Resident Individuals Foreign Company 41.20 % 42.23 %
Without Surcharge With Surcharge^ 195 (payment to nonresidents)
^Surcharge@2.5% shall be applicable only if the aggregate interest

NATURE OF PAYMENT
Payments to contractors, subcontractors, including advertising contracts who are residents.
Source
payments during the previous year exceed Rs. 1 crore.
194C
At the time of credit or payment whichever is earlier, when the contract value exceeds Rs. 20,000 or when the aggregate payments to a single payee during the previous year exceed Rs. 50,000.
A.
OTHER THAN GOODS TRANSPORT BUSINESS
(i) For Individuals and HUFs
1%
(ii) For Co-operative society, local authority, partnership firm and domestic companies 2%
B.
FOR GOODS TRANSPORT BUSINESS
In case PAN is submitted - NIL In case PAN is not submitted

I.For Individuals and HUFs 1% II.For Co-operative society, local authority, partnership firm and domestic companies 2% Commission or Brokerage to residents.(excluding Brokerage payable / paid on purchase/ sale of securities). Rent paid to residents. (Rent means any payment for the use of land, building, land appurtenant to a building, machinery, plant, equipment, furniture or fittings)(It means the car, delivery van taken on hire for use will also fall under the rent because car/delivery 194 I 194H At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 2,500. At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceed Rs. 120,000/-. For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10%
A.
Rent for use of any machinery or plant or equipment:
For individuals, HUFs, co-operative society, local authority, partnership firm and domestic companies
B.
2%
Rent for use of any land, building, furniture and/or fittings:
For individuals, HUFs, co-operative society, local authority, partnership firm and domestic companies 10%
51
NATURE OF PAYMENT
van is a machinery under Income Tax Act) Fees for Professional Services paid residents. Fees for Technical Services or payment of royalties to residents,
Source
194 J
At the time of credit or payment whichever is earlier, when the aggregate sums payable during the financial year exceeds Rs. 20, 000/-.
For Individuals, HUFs, Partnership firms, co-operative societies local authorities and domestic companies 10 %.
ANNEXURE
Section of the Income Tax Act & Nature of Income/payment 192 Salary 194 A Interest other than Interest on securities 194 C Payments to contractors 194 H Commission or Brokerage 194 I Rent 194 J Fees for Professional or Technical Services or royalty 195 Payments to Non-Resident or foreign companies Due Dates for remittance of TDS to taxation authorities
Within 1 week from the last day of the month in which the deduction is made
Within 1 week from the last day of the month in which the deduction is made. Within 1 week from the last day of the month in which the deduction is made. Within 1 week from the last day of the month in which the deduction is made. Within 1 week from the last day of the month in which the deduction is made. Within 1 week from the last day of the month in which the deduction is made
Within 1 week from the last day of the month in which the deduction is made
In case of payments made u/s 194A, 194C, 194H, 194I, 194J, 195 any tax deducted from credit for provisions made on the last day of March i.e., 31st March can be deposited in the government account within 2 months from the date of such payment/provision.
Annexure III
Deduction of Tax at Lower rates or Nil rates

a) In case of Sec 194 A Interest on Deposits The Branches/offices/Hubs may deduct tax at lower rates or not deduct any tax if the customers (Individuals, HUF, trust, society, AOP, BOI, local authority but not being a company or a firm) give a declaration in Form 15G in triplicate to the effect that the tax on his estimated total income of the relevant financial year will be nil. Also if an individual is of the age more than 65 years then such declaration could be in Form 15H. On receipt of such declaration the Branches/Offices/Hubs should complete and certify the details to be filled up by the branch and then to deliver (or cause to be delivered) two copies of the same to the Chief Commissioner or Commissioner of Income Tax (or TDS office) within seven days of the month following the month in which the declaration is received from the customer. However, if the aggregate amount of interest income paid or credited or likely to be paid or credited to the concerned depositor by the branch during the financial year ending 31st March, 2009 exceeds the amount as specified in the table below, the branch shall not give effect to the aforesaid Form No. 15G/15H and shall deduct tax on such interest as per normal practice. The limits for the same are mentioned in the table below:
Status of depositor
Depositor is less than 65 years of age
Gender of depositor Male
Form to be submitted by the depositor 15 G
Remarks Nil TDS, only if interest credited or paid or likely to be credited or paid during the financial year is less than Rs. 1,60,000/- else TDS at prescribed rates. Nil TDS, only if interest credited or paid or likely to be credited or paid during the financial year is less than Rs. 1,90,000/- else TDS at prescribed rates. Nil TDS. If interest credited or paid or likely to be credited or paid during the financial year is less than Rs. 2,40,000/- else TDS at prescribed rates.
Depositor is less than 65 years of age Depositor is more than 65 years of age
Female
15 G
Male/Female
15G/15H
b) In cases other than Sec 194A, the request for deduction at lower rates or non deduction should be obliged by the branch only if the payee furnishes a certificate from the assessing officer/TDS officer to this effect (as per section 197). The payee can make such request to the assessing officer/TDS officer in prescribed Form No. 13 and get a certificate for lower/NIL deduction of tax at source. The payee is required to produce the certificate from the Income Tax department for lower deduction/NIL deduction of TDS in all the above cases except in the case of interest other than interest on securities under section 194A where the declaration 15G / Form 15H shall be furnished by the payee.
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Banking - Secured
NETSECURE with SMS
NETSECURE with WebPin
NETSECURE with 1-Touch
We at Axis Bank have always endeavoured to provide the best of banking services to our customers. Our latest initiative is NETSECURE, which is a #Two Factor Authentication system to provide added security to your online banking transactions and this makes your fund transfers absolutely safe and secure. NETSECURE is a secured system wherein two different parameters (one that you already know, like your login ID and password and second, a single usage password that you generate or receive) are used together to verify your identity on the Internet. Using two factors as opposed to one factor (just the login ID and password) ensures heightened security for your online transactions. We have introduced three types of NETSECURE for your convenience. Please register for one of the three options to enable fund transfers online. In NETSECURE with SMS, the NETSECURE Code (a single usage password) is sent to your mobile phone through SMS. Every time you transfer funds or register a beneficiary (recipient), you need to enter the NETSECURE Code to complete the transaction, after which the Code will expire. To login using NETSECURE with WebPin, you need to register one or more of your frequently used computers. You can then use iConnect only from these registered computers. In addition, during registration, you will be prompted to set a WebPin. This WebPin will be used to generate a NETSECURE Code (a single usage password) which will be required to login and transact on iConnect. NETSECURE 1-Touch is a small device that generates a unique NETSECURE Code (a single usage password) every time a button on it is pressed and held. This NETSECURE Code will have to be entered in addition to your login ID and password to login to iConnect. Every NETSECURE Code expires after 50 seconds and you have to generate a new code to login.
#2FA stands for Two Factor Authentication.
This is an enhanced process to further secure your access and
usage with iConnect. The 1st factor is "what you know", ie, your "User-ID", "Password". The 2nd factor is "what you have", which is the Security Token either through SMS or web PIN or a personal security 1Touch device we will be issuing to persons who opts for this to access iConnect. Used in combination, these two factors will provide greater peace of mind in performing banking transactions over the Internet.
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eShop Card is a Virtual Credit Card launched by Axis Bank. You can create your own eShop Card using your existing Axis Bank Credit Card. This eShop Card can be used to shop online at all merchant websites. 1. 2. 3. 4. 5. The actual Credit Card number is never used on the merchant website. Therefore, eShop Card is the most secure way to make online payments and to shop online, without the risk of exposing your Credit Card to fraud. The eShop Card can be created with an amount up to your available card limit. The eShop Card is valid for a maximum of 48 hours. The eShop Card can be used at any online merchant site that accepts Visa Cards. At the end of the validity period of the eShop Card, the unutilised amount is credited back to your Credit Card account.
Verified By Visa(VBV) is an easy to use, secured online payment service from Axis Bank that lets you shop securely online with your existing Axis Bank Credit Card. This service through a simple checkout process, confirms your identity when you make purchases on the Internet. Through a personal assurance message it also reassures you of the authenticity of the online store.
Verified By Visa(VBV)/MasterCard SecureCode is an easy to use, secured online payment service from Axis Bank that lets you shop securely online with your existing Axis Bank Debit Card. This service through a simple checkout process, confirms your identity when you make purchases on the Internet. Through a personal assurance message it also reassures you of the authenticity of the online store.
E-Statement
Help a needy child...
Axis Bank offers the facility of E-Statement. E-Statement are secure and electronic way to receive statement of accounts from the Bank. You can now register for this facility and allow us to help a needy child. Axis Bank donates a notebook to a needy child for every e-statement registration.
Prompt delivery Person specific delivery No hassle of physical record maintenance Monthly statements on email id within a week of the following month Password protected for security
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Payment and Settlement Systems

THE banking sector has been witnessing a remarkable transformation over the last eight-nine years. Technology adoption has changed the way one banks these days, with ATMs and credit cards, ECS, RTGS, NEFT facilitating anytime, anywhere, banking. And with the proposed India Money Online from National Payment Corporation of India (NPCI) money transfer will be 24x7 in the near future. How does it work ?. The medium, INdian FInancial NETwork [INFINET] is the communication backbone for the Indian Banking and Financial Sector. All Banks, Public Sector, Private Sector, Cooperative, etc., and the premier Financial Institutions in the country are eligible to become members of the INFINET. The INFINET is a Closed User Group [CUG] Network for the exclusive use of member banks and financial institutions, spread across 300 cities for now. The carrier, the Structured Financial Messaging System (SFMS) is built on the lines of SWIFT but has many more utilities to offer. The major advantage of SFMS is that it can be used practically for all purposes of secure communication within the bank and between banks. The intra-bank part of SFMS, which is most important, can be used by the banks to take full advantage of the secure messaging facility it provides. The Identifier, Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit code with first 4 characters representing the banks code, the next character reserved as control character (Presently 0 appears in the fifth position) and remaining 6 characters to identify the branch. The Modes of Transfer Electronic Clearing Service (ECS) is a mode of electronic funds transfer from one bank account to another bank account using the services of a Clearing House. This is normally for bulk transfers from one account to many accounts or vice-versa. This can be used both for making payments like distribution of dividend, interest, salary, pension, etc. by institutions or for collection of amounts for purposes such as payments to utility companies like telephone, electricity, or charges such as house tax, water tax, etc or for loan installments of financial institutions/banks or regular investments of persons. There are two types of ECS called ECS (Credit) and ECS (Debit). ECS (Credit) is used for affording credit to a large number of beneficiaries by raising a single debit to an account, such as dividend, interest or salary payment. ECS (Debit) is used for raising debits to a number of accounts of consumers/ account holders for crediting a particular institution. Real Time Gross Settlement (RTGS) system, introduced in India since March 2004, is a system through which electronic instructions can be given by banks to transfer funds from their account to the account of another bank. The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. As the name suggests, funds transfer between banks takes place on a real time basis. Therefore, money can reach the beneficiary instantaneously and the beneficiarys bank has the responsibility to credit the beneficiarys account within two hours. The minimum amount to be remitted through RTGS is Rs.1 lakh. There is no upper ceiling for RTGS transactions. The beneficiary bank has to credit the beneficiary's account within two hours of receiving the funds transfer message. National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch. There is no minimum or maximum amount that can be remitted under NEFT. NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on Net settlement, unlike RTGS that works on gross settlement and EFT which is restricted to the fifteen centers only where RBI offices are located, and is now used for Government transactions only. Speed Clearing refers to collection of outstation cheques through the local clearing. It facilitates collection of cheques drawn on outstation core-banking-enabled branches of banks, if they have a net-worked branch locally. As of now, outstation cheques are paid through two channels viz. on Collection basis or through National Clearing (Inter-city Clearing). This requires movement of cheques from the Presentation centre (city where the cheque is presented) to Drawee centre (city where the cheque is payable) which elongates the realisation time for cheques. Speed Clearing aims to reduce the time taken for realisation of outstation cheques.
RBI plans new Payment Systems New and feature rich RTGS system, India MoneyLine A
247 system for one-to-one funds transfers, India Card A domestic card initiative, rival to Visa and MasterCard, Redesigning ECS to function as a true Automated Clearing House (ACH) for bulk transactions, Mobile payments settlement network. For
details visit http://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/VIS01092009.pdf
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RETAIL ASSET PORTFOLIO

Retail asset portfolio consists of those products, which fetch the bank income through interest. i.e. loans. Given below is an array of products, which the retail assets portfolio of our bank consists of: Mortgage Loans Loan Against Property Vehicle Loans Power Drive Personal Loans Personal Power Home Loans Power Home Other Retail Products (Loans against securities, Medical Equipment, Study Power, TOD to salary account holders) Consumer Loans Consumer Power Loan Against Shares Empower Loan Against Mutual Funds
LIABILITY PRODUCTS
Savings Bank Accounts
Easy Access Account Smart Privilege Account Defence Salary Account NRI Accounts Online Trading Account Zero Balance Account Senior Privilege Account Trust/NGO Savings Account No-Frills Azaadi Account Pension Savings Account Prime Savings Account Salary Power Krishi Savings Account Resident Foreign Currency (Domestic) A/c
Current Accounts
Value Based Current Accounts
Local Current Account Business Advantage Account (CAADV) Business Classic Account (CABCA) Channel One Current Account (CACH1) Cash Management Current Account (CACMG) Normal Current Account (CANOR) Business Select Current Account (CASEL) Business Privilege Account (CABPL) Club 50 Current Account (CAC50)
Segment Based Current Accounts

Current Account for Builders & Real Estate (CABRE) Business Global Current Account (CAGBL) Krishi Current Account (CAKRI) Capital Market Current Account (CACAP) Current Account for Inland Road Transport (CAIRT) Current Account for Shipping and Maritime (CASHP) Current Account for Pharma (CAPDC) Current Account for Banks Current Account for Public Sector Enterprises
Current Account for Travel, Tourism and Hospitality (CATTH) Current Account for Chartered Accountants (CAFCA) Current Account for Govt Organisations
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FIXED DEPOSITS
Term Deposits, also known as Fixed Deposits or Time Deposits, are deposits kept for fixed period and are repayable on expiry of the fixed period. Rate of interest: The Bank decides the rates of interest on term deposits of various maturities from time to time by taking into account the directives of the Reserve Bank of India in this regard. The Reserve Bank of India has given freedom to banks to offer varying rates of interest in respect of single term deposits of Rs 15 lacs and above. It has also permitted banks to offer deposit schemes for senior citizens offering higher rates. In terms of Reserve Bank of India directives, interest on term deposits can not be compounded at intervals less than a quarter. Period: The minimum and maximum periods of term deposits are determined by the Bank by taking into consideration the Reserve Bank of Indias guidelines in this regard. The present Reserve Bank of India guidelines provide discretion to banks to offer term deposits from a minimum period of 7 days to maximum of 120 months (10 years). The minimum period of 7 days is applicable only for single term deposits of Rs 15 lacs and above. The minimum period for other deposits is 15 days. The due date of term deposits is to be calculated by including the date of deposit and excluding the date of payment. Short Term Deposits as the name indicates are accepted for short period and interest is paid on the deposit on simple basis. The minimum period for which Short Term Deposit can be accepted is 7 days at present. The maximum period is less than 6 months. Monthly Interest Certificate (MIC) provides fixed monthly income by way of interest to the depositor for a specified period leaving the principal amount of deposit intact. The Scheme could specially appeal to persons who do not have a regular source of income. The monthly interest instalment should be credited to the Savings, Current or Recurring Deposit account of the depositor according to his/her instructions. As per the Reserve Bank of India directive, interest on term deposits is required to be calculated at quarterly or longer intervals (and not monthly). Banks are, however, allowed to pay interest to the depositors on a monthly basis, provided, the amount of interest paid every month is not more than the discounted value of interest for one month, so that even if interest is allowed on the interest so paid, the aggregate amount (i.e. the amount of interest paid monthly together with the interest that may accrue on the amount so paid in one month) would not exceed one months interest on the deposit calculated on a quarterly basis. The minimum period for which a deposit under MIC can be accepted is 12 months as of now. Quarterly Interest Certificate (QIC) scheme provides fixed quarterly income by way of interest to the depositor for a specified period leaving the principal amount deposit intact. The quarterly interest instalment should be credited to the Savings, Current or Recurring Deposit account of the depositor according to his/her instructions. The minimum period for which a deposit under QIC can be accepted is 12 months as of now. Re-Investment Certificate (RIC) is the most popular form of term deposits. It is a cumulative deposit scheme, where the interest is compounded on quarterly basis and is paid along with the principal on maturity. The minimum period for which the deposits under Reinvestment Certificate can be accepted is 6 months. The maximum period is 120 months. Automatic Rollover The Fixed Deposit holder can avail of the facility for automatic rollovers on maturity (for both the principal and interest) and also select this option in the Account Opening Document (AOD). The options available are: Rollover only Principal: Only the principal amount will be rolled over. The interest will be either credited to the customers designated account or paid out. Rollover Principal and Interest accrued in Reinvestment Deposit: This will rollover both the deposit and the interest accrued for the same tenure at the interest rate applicable on the maturity date. On or before the maturity date the following changes can be made in the rollover instructions of the deposit: Change in tenure Change in maturity instructions Change in payment instructions Change in principal (only reduced amount) Change rollover of Principal to rollover of Principal + Interest, or vice versa. Withdrawals: All encashment or withdrawals of Fixed Deposits can only be made at the branch where the deposit was booked
Recurring Deposits
Axis Bank's Recurring Deposit scheme allows its customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time.
Features
Recurring deposits are accepted in equal monthly instalments of minimum Rs 1,000 and above in multiples of Rs 500 thereafter. As per our Banks present guidelines Recurring Deposits can be opened for a minimum period of 12 months and in multiples of 12 months thereoafter, upto a maximum of 120 months. Transfer of Accounts - a recurring deposit account can be transferred from one office of the Bank to another branch.
Tax Saver Fixed Deposit

In the Finance Bill of 2006, the government had announced Tax benefits to Bank Term Deposits which are of over 5 year tenure u/s 80C of IT Act, 1961 vide Notification Number 203/2006 and SO1220 (E) dated 28/07/2006. The salient points of the scheme notification are; (a) Fixed tenure without premature withdrawal. (b) Year is defined as a financial year. (c) Amount limited to Rs. 100 minimum and Rs. 100,000 maximum. (d) Bank will issue a Fixed Deposit Receipt that shall be the basis of claiming tax benefit. (e) Term deposit under this scheme cannot be pledged to secure a loan. Benefits of tax break u/s 80C of IT Act Benefit Illustrator Example Assume that a customer invests Rs 100,000 in this scheme @ 8% p.a. in fixed deposit for five years. He will get a benefit of Rs 30,600 at 30.6 % on the eligible investment of INR 100,000 assuming that he is in Rs 2, 50000 lac to Rs 10, 0000 lac tax bracket, thus his effective investment would be Rs 69,400. He would earn Rs 8000 (08 percent on 1 lac) as interest per annum, which would translate to a return of 11.5 percent on the effective investment of Rs 69,400.
Encash 24
The ENCASH 24 (Flexi Deposits) gives you the liquidity of a Savings Account coupled with high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to your Savings Account providing you the following unique facilities:
Maximum Returns
Your money is no longer idle. As soon as the balance in your Savings Account crosses over Rs 25,000, the excess, in multiples of Rs 10,000 will be transferred automatically to a higher interest earning Fixed Deposit Account. The maturity of fixed or term deposits formed as a result of transfer of money from the Savings Bank account will be for a maximum period of 181 days and the interest will be calculated on simple interest rate basis.
Maximum Liquidity
The money parked in Fixed Deposits as a result of the above mentioned sweep out from your Savings account can be easily accessed by issuing a cheque, withdrawing through ATM etc. This amount is automatically reverse swept from the most recently formed Fixed Deposit in units of Rs 5,000 to the Savings account whenever the balance in your Savings account falls below Rs 25,000. The amount broken form your Fixed Deposit will earn interest rates at the applicable rate for the period that the deposit was held with the Bank. The remaining amount of Fixed Deposit will continue to earn the contracted rate of interest. Auto Renewal On maturity of your linked Fixed Deposit, the Bank will automatically renew it for a maximum period of 181 days. Other Retail Banking Products Credit Card Products: Platinum Credit Card Corporate Credit Card Debit Cards International Visa Debit Card Power Salute International Visa Debit Card NRI International Visa Debit Card International MasterCard Debit Card International Gold Plus MasterCard Debit Card International Priority Banking Visa Debit Card Rewards Card Investment Products
Gold Plus Credit Card Magnet Loyalty Credit Card
Gold Credit Card Shriram Credit Card
Secured Credit Card eShop Card
International Visa Renewal Debit Card Smart Privilege International Visa Debit Card NRI Domestic Visa Debit Card International Visa Gold Debit Card International Business Gold MasterCard Debit Card
Gift Card
Meal Card
BANKING AWARENESS TRAINING Mohur Gold Mutual Funds Online Trading Demat (Depository Services) Insurance Products: Metlife Life Insurance Bajaj Allianz General Insurance Payment Services Bill Pay Direct Tax Payments ECS Pension Disbursement NEFT RTGS Other Services: Online Shopping Lockers IPOSmart Mobile Refill Merchant Acquiring: EDC PSTN PC POS Payment Gateway Travel Currency Card, a foreign currency denominated prepaid card available in 9 currencies.
For further detailed reading, please visit http://10.2.17.134/k%40axis/
EDC GPRS
EDC CDMA
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Accounts of Non-Resident-Indians (NRIs)

A Non Resident Indian is an Indian Citizen who goes abroad to any country except Nepal and Bhutan as student or stays abroad for employment / deputation or carrying on business or vocation outside India or stays abroad which would indicate an intention to say outside India for an uncertain period as per visa issued by host country as well as Foreign citizens. Person of Indian origin: A person who held Indian Passport at any point of time or whose parent /s or grand parent/s was /were citizen/s of India. However, opening of accounts by Foreign Nationals of Pakistan/Bangladesh will require prior approval of RBI. A spouse (not being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian Origin, is also treated as a person of Indian origin provided the bank accounts are opened jointly with the NRI spouse only. The Following Deposit Schemes are available to NRIs in India. Non Resident Ordinary (NRO) Non Resident Account External Rupee Account (NRE) Foreign Currency Non-Resident Account (FCNR)
FEATURES
OF
VARIOUS SCH EMES

NRO NRE Non Resident Indians Permitted Not Permitted FCNR Non Resident Indians Permitted Not Permitted Pound Sterling, US Dollar, Japan Yen, EURO, Canadian Dollar, Australian Dollar
Who can open Joint A/c of two or more NRIs Joint A/c with another person resident in India Currency in which account is denominated
Any person resident outside India Permitted Permitted
Indian Rupees Interest earned is freely repatriable after TDS. Other credits representing current Income and sale proceeds of property subject to certain conditions and over all ceiling is repatriable. Account holder is exposed to the fluctuations in the value of Indian Rupees to the extent of repatriable portion of the Account Current, Saving, deposits, RDS. Term
Indian Rupees
Repatriability
Principal + repatriable
Interest
freely
Principal + repatriable
Interest freely
Foreign Currency Risk
Account holder is exposed to the fluctuations in the value of Indian Rupees. Current, Savings, deposits, RDS. Min- 1 year Max- 10 years Permitted: Subject to certain conditions not to be utilized for re-lending, carrying on agricultural /plantation activities or for investment in real estate business. **Max Rs. 1 crore No TDS at present. Term
Account holder is protected against changes in Rupee Value (depreciation) vis--vis the currency in which the account is denominated Term Deposits but excluding RDS. Min- 1 year Max- 5 years Permitted: Subject to certain conditions not to be utilized for re-lending, carrying on agricultural /plantation activities or for investment in real estate business. **Max Rs. 1 crore No TDS at present.
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Types of Accounts Tenure Deposits of Term
Left to be decided by Deposit Issuing Bank Permitted: Subject to certain conditions not to be utilized for re-lending, carrying on agricultural /plantation activities or for investment in real estate business. As per Sec 195 of Income Tax Act TDS at 30% + Surcharge
Loans against Term Deposits to same party or third party Indian.
TDS on Interest Earned in Deposit A/c
+Education Cess on Interest on SB, RDS and Term Deposits. Surcharge is applicable only when interest payment exceeds Rs.10 lakhs.
CREDITS
TO
N O N -R E S I D E N T E X T E R N A L R U P E E (N R E) A C C O U N T S 9
Attention of authorised dealers is invited to paragraph No.3 of Schedule 1 to Reserve Bank Notification No.FEMA.5/2000-RB dated May 3, 2000 regarding permitted credits to NRE Rupee Accounts and A.P. (DIR Series) Circular No.45 dated May 14, 2002 permitting them to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for. It has been is clarified that authorised dealers may credit the current income like rent, dividend, pension, interest, etc. of NRIs to their Non-Resident (External) Rupee Accounts provided they are satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted/paid/provided for, as the case may be.
Non-Resident Ordinary Rupee (NRO) Account Scheme10

Eligibility
Any person/entity resident outside India may open NRO account with an authorised dealer or an authorised bank for the purpose of putting through bonafide transactions denominated in Rupees. Opening of accounts by individuals/entities of Bangladesh/Pakistan nationality/ownership requires prior approval of Reserve Bank.
Types of Accounts
NRO accounts may be opened/maintained in the form of current, savings, recurring or fixed deposit accounts. Rate of interest applicable to these accounts and guidelines for opening, operating and maintenance of such accounts shall be in accordance with directives/instructions issued by Reserve Bank (DBOD) from time to time.
Joint Accounts with Residents/Non-residents

The accounts may be held jointly with residents and/or with non-residents.
Permissible Credits/Debits
A. Credits Proceeds of remittances from outside India through normal banking channels received in foreign currency which is freely convertible Any foreign currency, which is, freely convertible tendered by the account-holder during his temporary visit to India. Foreign currency exceeding USD 5000/- or its equivalent in form of cash should be supported by Currency Declaration Form. Rupee funds should be supported by Encashment Certificate, if they represent funds brought from outside India. Transfers from rupee accounts of non-resident banks. Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest etc. as also sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/inheritance. B. Debits All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank. Remittance outside India of current income like rent, dividend, pension, interest etc. in India of the account holder. Remittance of an amount of balances in NRO account of NRI/PIO up to USD One million, per calendar year, for all bonafide purposes to the satisfaction of the authorised dealer.
As per Circular NO 5 of RBI AP (Dir Series) dated 15th July 2002 Ref: Circular No: RBI AP (Dir Series) Circular 12 Dated 16th November, 2006
10
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Remittance of assets
5.1 Remittance of assets by NRI/PIO NRIs/PIO may remit through an Authorised Dealer, an amount not exceeding USD One million per FINANCIAL YEAR, out of balances held in the NRO account representing the sale proceeds of assets (a) acquired in India out of rupee/foreign currency funds or (b) by way of inheritance legacy from a person who was resident in India subject to conditions outlined below: (a) Assets acquired in India out rupee/foreign currency funds (i) Immovable property NRI/PIO may remit sale proceeds of immovable property purchased by him as a resident or out of Rupee funds as NRI/PIO. As per AP (Dir) Circular 12 dated 16th November, 2006.Accodingly AD Category-1 banks may, now allow remittance out of balances out of balances in NRO accounts including sale proceeds of immovable property provided the amount does not exceed USD one million per financial year (April- March) . (ii) Other financial assets For remittance of sale proceeds of financial assets there is no lock-in-period. (b) Assets acquired by way of inheritance/legacy For remittance of sale proceeds of assets, both financial and immovable property acquired by way of inheritance/legacy from a person who was resident in India there is no lock-in-period. NRI/PIO may submit to the satisfaction of Authorised Dealer documentary evidence in support of inheritance/legacy. 5.2 Remittance of assets out of NRO account by a person resident outside India other than NRI/PIO A citizen of a foreign state not being a citizen of Pakistan, Bangladesh, Nepal or Bhutan who (i) (ii) has retired from an employment in India, or has inherited assets from a person who was resident in India, or
(iii) is a widow resident outside India and has inherited assets of her deceased husband who was an Indian citizen resident in India. may remit an amount up to USD One million, per financial year on production of documentary evidence in support of acquisition, inheritance or legacy of assets to the authorised dealer. 5.3 Restrictions (a) The facility of remittance of sale proceeds of immovable property to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan is not available. (b) The facility of remittance of sale proceeds of other financial assets is not available to a citizen of Pakistan, Bangladesh, Nepal and Bhutan.
Foreign Nationals of non-Indian origin on a visit to India

NRO account (current/savings) can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The balance in the NRO account may be converted by the authorized dealer into foreign currency for payment to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.
Grant of Loans/overdrafts by authorised dealers/bank to account holders and third parties

(a) Loans to non-resident account holders and to third parties may be granted in Rupees by authorised dealers against the security of fixed deposits subject to the following terms and conditions: (i) The loans shall be utilised only for meeting borrower's personal requirements and/or business purpose and not for carrying on agricultural/plantation activities or real estate business or for relending. (ii) Regulations relating to margin and rate of interest as stipulated by Reserve Bank from time to time shall be complied with. (iii) The usual norms and considerations as applicable in the case of advances to trade/industry shall be applicable for such loans/facilities granted to third parties.
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BANKING AWARENESS TRAINING (b) Authorised dealer/bank may permit overdraft in the account of the account holder subject to his commercial judgement and compliance with the interest rate etc. directives.
Change of Resident Status of Account holder

(a) From Resident to Non-resident When a person resident in India leaves India for a country (other than Nepal or Bhutan) for taking up employment or for carrying on business or vocation outside India or for any other purpose indicating his intention to stay outside India for an uncertain period, his existing account should be designated as a Non-Resident (Ordinary) Account. When a person resident in India leaves for Nepal or Bhutan for taking up employment or for carrying on business or vocation or for any other purposes indicating his intention to stay in Nepal or Bhutan for an uncertain period, his existing account will continue as a resident account. Such account should not be designated as Non-Resident (Ordinary) Account (NRO). (b) From Non-Resident to Resident NRO accounts may be re-designated as resident rupee accounts on the return of the account holder to India for taking up employment, or for carrying on business or vocation or for any other purpose indicating his intention to stay in India for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit. The client also has the option to retain the amounts lying in the NRE and FCNR accounts as foreign currency in an RFC account.
Treatment of loans/overdrafts in the event of change in the resident status of the borrower
In case of person who had availed of loan or overdraft facilities while resident in India and who subsequently becomes a person resident outside India, the authorised dealer may at their discretion and commercial judgement allow continuance of the loan/overdraft facilities. In such cases, payment of interest and repayment of loan may be made by inward remittance or out of legitimate resources in India of the person concerned.
Payment of funds to Non-resident/Resident Nominee

The amount due/payable to non-resident nominee from the NRO account of a deceased account holder shall be credited to NRO account of the nominee with an authorised dealer/authorised bank in India. The amount payable to resident nominee from the NRO account of a deceased account holder shall be credited to resident account of the nominee with a bank in India.
Facilities to a person going abroad for studies

Persons going abroad for studies are treated as Non-Resident Indians (NRIs) and are eligible for all the facilities available to NRIs. Educational and other loans availed of by them as residents in India will continue to be available as per FEMA regulations.
International Credit Cards

Authorised dealers have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of RBI. Such transactions may be settled by inward remittance or out of balances held in the cardholder's FCNR/NRE/NRO Accounts.
Income-Tax
The remittances (net of applicable taxes) will be allowed to be made by the authorised dealers on production of an undertaking by the remitter and a Certificate from a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India in their Circular No. 10/2002 dated October 9, 2002 [cf. our A.P. (DIR Series) Circular No. 56 dated November 26, 2002 ]. The abovementioned paragraphs 1 to 13 relate to opening of and operations in NRO accounts as per RBI Master Circular No 9/2004-05 dated 19th March 2005 and subsequent changes announced by RBI.
Further Updates
RBI CIRCULAR RB/2004-05/394,AP(DIR)CIRCULAR NO 37DT 15TH MARCH 2005 Operations in Non-Resident External (NRE)/Foreign Currency Non-resident (Bank) (FCNR (B)) Accounts by the Resident Power of Attorney Holder Attention of the banks authorised to deal in foreign exchange is invited to Foreign Exchange Management (Deposit) Regulations, 2000 notified vide Notification No. FEMA 5/2000-RB dated 3rd May 2000. In terms of para 9(c) of
BANKING AWARENESS TRAINING Schedule 1 to Notification ibid, banks authorised to deal in foreign exchange are permitted to allow operations on the NRE account in terms of Power of Attorney granted in favour of a resident by the non-resident account holder, provided such operations are restricted to withdrawals for local payments. 2. The position has since been reviewed with reference to the observations/recommendations made in this regard by the Committee on Procedures and Performance Audit on Public Services (CPPAPS) (Chairman: Shri S.S. Tarapore) and it has been decided that in addition to the facility mentioned in paragraph 1, banks authorised to deal in foreign exchange may also permit a resident power of attorney holder to remit, through normal banking channels, funds out of the balances in NRE account to the non-resident account holder provided specific powers for the purpose have been given. The remittances under power of attorney are permitted only to the non-resident account holder. 3. Terms and conditions as applicable to NRE accounts in respect of operations by power of attorney apply, mutatis mutandis, to FCNR (B) accounts. Therefore, banks may allow a resident power of attorney holder to remit, through normal banking channels, funds out of the balances in FCNR (B) account to the non-resident account holder, provided specific powers for the purpose have been given to the power of attorney holder.
R BI (F E MA ) R E G U L A T I O N S
1. Remittance of assets by NRI/ PIO
1.1 A Non-Resident Indian (NRI) may remit an amount upto USD one million, per financial year, out of the balances held in his Non-Resident (Ordinary) Rupee (NRO) account/sale proceeds of assets (inclusive of assets acquired by way of inheritance), for all bonafide purposes, to the satisfaction of the authorized dealer, on production of an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002. 1.2 NRI may remit sale proceeds of immovable property purchased by him out of Rupee funds or as a person resident in India as indicated in para 1.1 above. 1.3 In respect of remittance of sale proceeds of assets acquired by way of inheritance or legacy for which there is no lock-in period, NRI may submit documentary evidence in support of inheritance or legacy of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002. 1.4 The remittance facility in respect of sale proceeds of immovable property is not available to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
2. Repatriation of sale proceeds of residential property purchased by NRIs out of foreign exchange:
2.1 There is no lock-in period for sale of residential property purchased by NRI out of foreign exchange. However, repatriation of sale proceeds of residential property purchased by NRI out of foreign exchange is restricted to not more than two such properties. 2.2 Authorized dealers may permit repatriation of amounts representing the refund of application/earnest money/purchase consideration made by the house building agencies/seller on account of non-allotment of flat/plot/cancellation of bookings/deals for purchase of residential/ commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/FCNR account of the account holder, or remittance from outside India through normal banking channels and the authorized dealer is satisfied about the genuineness of the transaction. Such funds may also be credited to the NRE/FCNR account of the NRIs, if they so desire. 2.3 Authorized dealers may allow repatriation of sale proceeds of residential accommodation purchased by NRIs out of funds raised by them by way of loans from the authorized dealers/housing finance institutions to the extent of such loan/s repaid by them out of foreign inward remittances received through normal banking channel or by debit to their NRE/FCNR accounts. 3. Remittance
of current income:
3.1 Remittance of current income like rent, dividend, pension, interest etc. of NRIs who do not maintain NRO Account is freely allowed, on the basis of appropriate certification by a Chartered Accountant certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for. 3.2 NRIs have the option to credit the current income to their Non-Resident (External) Rupee account, provided the authorized dealer is satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted/provided for. 4. Income-
tax clearance:
BANKING AWARENESS TRAINING The remittances will be allowed to be made by the authorized dealers on production of an undertaking by the remitter and a Certificate from a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India in their Circular No.10/2002 dated October 9, 2002. [AP(DIR Series) Circular No.56 dated November 26,2002]. General conditions to be satisfied for repatriation of Sale proceeds of immovable property: 1. Documentary evidence in support of the acquisition of the immovable property proposed to be remitted. 2. Form 2, Form A2, Undertaking and Certification relating to tax compliance. 3. In case, the remittance is to be made in more than one instalment, the remittances of all instalments should be remitted through the same authorised dealer.
OVERSEAS CITIZENSHIP
OF
I N D I A (O CI)
OCI Scheme is operational from 02.12.2005. The Constitution of India does not allow holding Indian citizenship and citizenship of a foreign country simultaneously. Based on the recommendation of the High Level committee on Indian Diaspora, the Government of India decided to grant Overseas Citizenship of India (OCI) commonly known as dual citizenship. Persons of Indian Origin (PIOs) of certain category as has been specified in the Brochure who migrated from India and acquired citizenship of a foreign country other than Pakistan and Bangladesh, are eligible for grant of OCI as long as their home countries allow dual citizenship in some form or the other under their local laws. Persons registered as OCI have not been given any voting rights, election to Lok Sabha/Rajya Sabha/Legislative Assembly/Council, holding Constitutional posts such as President, Vice President, Judge of Supreme Court/High Court etc. Registered OCIs shall be entitled to following benefits: (i) Multiple entry, multi-purpose life long visa to visit India; (ii) Exemption from reporting to Police authorities for any length of stay in India; and Parity with NRIs in financial, economic and educational fields except in the acquisition of agricultural or plantation properties.
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CASH MANAGEMENT SERVICES

In today's competitive market place, effectively managing cash flow can make the difference between success and failure. Axis Bank offers a wide range of collection and payment services to meet corporates complex cash management needs. Payments received from companys vendors and made to its suppliers are efficiently processed to optimise cash flow position and to ensure the effective management of business operating funds. The flow of receivables and payables can also be seen through our web solution. Above all our quick adaptation of the latest technology differentiates Axis Bank from the other competing banks. Under cash management services, we offer our corporate and institutional clients customised solutions towards collection, payment & remittance services allowing them to minimize the gap between collections & remittances, thereby improving their cash flows. Axis Bank is fast emerging as one of the front-runners in the area of Cash Management Services with a constant endeavour to offer competitive and innovative customized solutions to the corporate. The Bank offers a comprehensive array of collection and payment products. Our technological initiatives backed by innovative solutions enable us to constantly provide our customers with improved offerings to help them do their business better. A strong capital market during the year has helped corporates to raise money through IPOs and FPOs. Active participation in FPO/IPO businesses has also contributed significantly to interest free float for the Bank. Considering the importance of Payment Services, the bank had a special focus on CMS Payment Mandates.
What is Cash Management Services (CMS)?

A hybrid system of collections and remittances at faster pace with certain value additions. Effective & efficient mode of managing the Collections and Receivables.
Objectives of CMS To attract and retain Customers by offering customized Products & Services. To adapt to the changing business environment. To provide additional value added facilities to Customers. To create niche market segments and stay ahead of competition. To make the process involved in collections and remittances efficient and effective. Manage cash flows, liquidity and ensure reduction in costs. Non customers can also avail of CMS facilities.
Cash Management Network

Presently, we offer an ever-expanding network of electronically linked CMS branches across more than 226 cities in the country. In addition to our own locations, we have tied up with various other banks to offer a broader coverage to meet the specific requirements of our customers under Cash Management Services. We have today an extensive correspondent bank network of more than 2500 locations, which provides us a definite competitive advantage. Our dedicated Centralised Collection & Payment Hub (CCPH) is available on all days except Sundays & National Holidays to resolve customer queries promptly and efficiently. Additionally, we are also offering our services and own network of 226 locations to other Private and MNC Banks as a Correspondent Bank.
Advantages of Cash Management Services

For Corporates Improved liquidity through faster access to funds. Assured Funds in the Pooling Account. Reduced borrowings and lower interest payments. Deployment of Funds is easier by reduction in accounts maintained with Banks for different requirements. Lower operational costs. Greater ease in accounting and reconciliation through Client Specific MIS, including MIS through Web. Single Window Query For the Bank Client Acquisition by offering CMS as an entry strategy Fee as well as Float Based Income Cross Selling of Other Banking Products Developing Overall Relationships Monitoring of Cash Inflows of the Corporate where Bank has a Credit Exposure Balancing of Mismatches at the Branch level from the CMS funds
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CMS Products: Collections
Local Cheque Collection

We offer local cheque collections in locations where our bank is present a well as where our coordinators are present. (Currently, there are 19 coordinator locations). Local cheque collecting facility is available at more than 295 clearing locations.
CMS PRODUCTS Collections
USP of LCC Product

Hassle free as no account number needs to be mentioned No need for maintaining multiple accounts Single window mechanism for resolution of queries Cheque pick up facility available through courier agencies Customized MIS Real Time viewing of CMS Transactions through Web CMS Facility. Additional information can be captured
Collection Services - Local and Upcountry PDC (Post Dated Cheques) Management/Bulk Collections. Collecting Banker for IPOs/FPOs/Rights Issue Collecting Banker for fee/prospectus collections Utility Bill Collection Cash Pick-up and delivery. ECS Debit Web CMS. Collections Management
Post-dated cheque Bulk Collections
Management/
Upcountry Cheque Collection

Upcountry cheques are those where Deposit and drawn on locations are different. This facility is available at more than 3000 Locations. We have a tieup with 8 correspondent banks for this service. USP for UCC Coverage of more than 3000 locations Assured credit irrespective of actual realization All instruments processed Individual tracking of instruments sent to the drawee location Real Time viewing of CMS Transactions through Web CMS Facility.
Handling of post dated cheques drawn on Axis Bank locations and 300 correspondent bank locations Routed through the bulk collection module in CMS software. Deposit Slip Level details for all collections. Instrument level details of return cheques captured. Instrument level details captured Infrastructure to handle PDCs Dedicated team handling PDCs
Cash pick up and delivery

Tie up with reputed vendors to arrange for cash pick up all across India. Call pick up facility as and when required. Complete security and insurance to all cash pick ups One of the few banks to offer cash collections under CMS
Utility Bills Collection Services

Utility Bill Collection is a growing business in our bank. It has many benefits for the bank with a regular high fee income fetching floats for a longer duration. The market is also lucrative and rapidly growing. Collection Channels Cash collection Cheque Collections Drop Boxes ATMs i- Connect ECS Requirements of Utility Service Providers Realization & Remittance Drop Boxes Cash pick-up arrangement MIS Locations Reconciliation
Electronic Clearing Services (ECS)

Debit Clearing - Applicable for Telephone & Electricity Bill Collection, Loan Instalments, or any other Regular Dues, available at all RBI approved locations.
Collecting Banker for IPOs/Rights Issue

The following intermediaries participate in a rights issue process: Merchant Bankers to the issue or Book Running
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BANKING AWARENESS TRAINING Lead Managers (BRLM) Syndicate members/Sub-Syndicate Members Registrars to the Issue Bankers to the Issue Auditors of the company Underwriters to the issue. Final Certificate to be delivered within four days of the closure of the issue and refund warrant is issued within fifteen days of the closure of the issue. Business Potential A lucrative segment for the volume of float and fee income.
A bankers role in this process is as under:

Signing an Escrow Agreement Open an Escrow Collection Accounts Collect application forms along with the cheque / DD from Syndicate Members/Sub-Syndicate Members after registering bid, on the same day. Scrutiny of the Bid Forms received. Provision / Allocation of Bank Serial Number. Preparation of Banking Schedule. Handing Over of BAF (Bid cum Application Forms) & Schedule to Registrar. Clearing of Cheques. Provisional Certificate to Registrar. Final Certificate to Registrar.
Unique Selling Proposition of our service

Vast coverage Single Point Contact at CCPH, Mumbai Comprehensive MIS (Schedules and Certificates) Reconciliation: CCPH, Controlling Branch and Collecting Branches Formalities: Strict adherence to guidelines by SEBI Enhanced security Relationship Managers IPO Software
Issue Management
Collecting Banker for fee/prospectus collection In-house software developed to cater to this requirement. Centralized Software ensuring online connectivity. Ease in reconciliation MIS in the desired formats. Single window query
Key Responsibilities
Finalization on the draft copy of refund warrant in co-ordination with Registrar, Printer and BRLM. Validating every refund warrant received on clearing with the issue file before payment is made. Each activity has specific timeline and adherence to the same is compulsory.
CMS Products Payments Payments of Interest Warrants/ Dividend Warrants/ Redemption warrants (Tran Code 19, 14, 28)
Online validation of instruments with issue Masters before payment at all Axis Bank branches Online marking of Stop payment and cancellation requests Periodic reconciliation statements as per arrangements Online status of paid-unpaid instruments available Dedicated payment cell to ensure efficient resolution of queries. Web payment through electronic mode. Printing of Instruments with cover note to capture payment details. Online validation of instruments at all Axis Bank branches before payment and online marking of Stop payment and cancellation requests. Online status of paid-unpaid instruments available. Dispatch of the printed instruments to the beneficiaries Currently 90 locations are activated. In case of a new location to be activated a weeks time would be required.
Direct Credit
Facility of crediting multiple Axis Bank accounts across the country against a single file provided in any of our branches. Fully Automated system providing instant credit to the beneficiary.
Remote Printing of Demand Drafts

(Tran Code 16)
Facility of printing bulk DDs with facsimile signature of bank officials Facility of secure data transfer of print files
Customer Cheques (Tran Code 29)

Facility to print CCs with facsimile signature of
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BANKING AWARENESS TRAINING customers Printing of instruments with cover note to capture payment details Online validation of instruments to prevent fraudulent encashment Printing of CCs can be initiated by Customer through Web Payment Interface The print file may be directly uploaded by the client or submitted to any branch for upload realization of funds. Reduces fraud and transit risk associated with paper based instruments Finality of payments; technically no cheque returns possible
Management (MIS)

Information
System
Issue file to be uploaded/forwarded in a mutually agreed format Online marking of Stop payment and cancellation requests.
Customized MIS through E-Mail/ Fax/ Courier. Customized Reports based on: Daily Pooling Details. Location wise Collections. Pipeline Credits for Next Day. Instrument wise return status
ECS & EFT: Advantages

Savings in administrative cost towards printing of paper instruments in MICR format and dispatching them by registered post. Loss of instrument in transit or fraudulent encashment thereof totally eliminated. Better Cash Management as arrangement of funds is to be made on the specified date. Ensuring better customer/ investor service. Automatic Reconciliation Faster collection of bills by the companies. Automatic debiting to the accounts cutting down the procedural delay. Effortless Receipt & Payment on Due Date.
Web CMS
Queries can be sought on an online basis of Location wise collections/returns Deposit slip enquiry Pooling details query Return cheques Deposit slip lodging details Pooling pipeline query Instrument query
Electronic Clearing Service (ECS)

Debit and Credit ECS facility available at all designated ECS centers. ECS Credit can be utilized for payments like interest / dividend etc. ECS Debit can be utilized for payment of utility bills (electricity, telephone), collection of taxes etc. Available in 64 Brigand SBI locations.
CMS PRODUCTS Payments Payment of Interests/ Dividend/ Redemption Centralised/Remote Printing of Bulk Customer Cheques Remote/Centralised printing of Bulk DDs Direct Credit I-connect and corporate I-connect Electronic Clearing System (ECS) Electronic Fund Transfer (EFT)/National Electronic Fund Transfer (NEFT) Real Time Gross Settlement (RTGS)
National Electronic Fund Transfer (NEFT)

Available at all designated NEFT Centers. An expeditious system of funds transfer across any of over 63,000 branches of more than 89 Banks. 11 hourly settlements every day 9 a.m. to 7 p.m. on weekdays, 5 on Saturdays 9 a.m. to 1 p.m. Latest guidelines can be read at http://www.rbi.org.in/scripts/NotificationUser.aspx?I d=5489&Mode=0
RTGS
Faster realization of Receivables Reduced paperwork resulting in lower transaction processing cost Real-time settlement across geographies & Banks Extended cut-off times for transfer of funds Reduced working capital cycle and quicker
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GOVERNMENT BUSINESS
The Bank has witnessed tremendous growth in Govt. Business making it a leading player among its Peer Banks in this segment today. Under Govt. Business the Bank handles Revenue Collection on behalf of the Central & State Governments, handling Expenditure-related Payments of Central Govt. Ministries & Departments and Collection of Railway Freight & Passenger Revenue, etc as an Agency Bank of RBI. Apart from handling Govt. Business as an Agency Bank, the Bank has been able to develop customized offerings towards providing Account Management Services and Collection/ Payment Services to various Other Government Organizations/ Bodies with an objective of generating substantial Current Account Balances as well as Fee Income.
Background
Reserve Bank of India (RBI) is the main Banker of the Government of India and other Public Sector Banks functioned as the agents of RBI and till October 1, 2003 the Collection of Revenue and Expenditure were routed through RBI and Public Sector Banks wherein Collections and Payments are made by the Banks first and settled with RBI later. With an objective to help the Central Government/ State Governments to get quick service with safety of funds while introducing an element of competition for Government Business, the All India Financial Institution (AFI) Promoted Private Sector Banks were considered on a pilot basis, for conducting Government Business based on the Notification issued in 2000 empowering RBI to appoint any Scheduled Bank for Government Business. Accordingly the Bank was inducted on a pilot basis for conducting the following Government Business: Type of Government Business Handling Subscription of Relief Bonds Collection of Commercial Taxes in twin cities of Hyderabad & Secunderabad (Govt. of Andhra Pradesh) Effective From August 2000 July 2001
Subsequently, Axis Bank, along with the 3 other AFI Promoted Private Sector Banks viz. ICICI Bank, HDFC Bank and IDBI Bank, was authorised by Govt. of India and RBI for conducting all Government Business w.e.f. October 1, 2003 (for which the Bank has signed an Agreement with Reserve Bank of India on February 16, 2004) and which includes the following: - Collection of Income/ Other Direct Taxes on behalf of Central Board of Direct Taxes (CBDT) - Collection of Central Excise & Service Tax on behalf of Central Board of Excise & Customs (CBEC) - Pension Payment on behalf of Civil & Non Civil Ministries i.e. Defence, P&T, Railways - Expenditure-related Payments of Central Govt. Ministries & Departments State Government Business such as Collection of Commercial Taxes, State Excise, etc.
The Government Business Group

The Group primarily focuses on the various businesses in the Government Segment as an authorized Agency Bank of Reserve Bank of India. The focus is to increase the fee income by maximizing the Govt. Tax Revenue Collection on behalf of the various existing Central Govt. Departments and State Governments through the Corporate Banking Relationship Managers and Branches. Additionally, the focus is also to get empanelled with various other Central Govt. Ministries/ Departments such as Railways, Posts etc. and State Governments for various businesses. The role of the Government Business Group at Central Office is to formulate strategies for various businesses in Govt. Segment, drive business through Zonal BB/ Regional BB, explore new business opportunities, conceptualize/ customize/ structure products to suit the client requirements, make presentations to various clients for getting business mandates, coordinate with Govt. Business Implementation Team and IT Deptt. For implementation of business mandates, etc. The Group focuses on providing Collection & Payment and Account Management Services to the following client segments: Central Government Ministries/ Departments which includes Civil Ministries/ Departments including Department of Revenue (CBDT/CBEC), Ministry of Finance and Other Ministries/ Departments/ Affiliated Offices. Non Civil Ministries/ Departments including Ministry of Railways, Ministry of Defence, Department of Posts and Department of Telecommunication. State Government Departments & Corporations, which includes Commercial
Taxes Department and Other State Govt. Departments including Department of IT for e-Governance initiatives, State
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BANKING AWARENESS TRAINING Level Corporations including SPVs. Other Government Departments/ Organizations which includes Municipal Corporations, State Electricity Boards & Distribution Companies, State Housing Boards & Development Authorities, Port Trusts, etc.
Some of our Associations with Government Departments/ Organizations

Municipal Corporations: - The Bank is associated with various Municipal Corporations including Municipal Corporation of Delhi, Bangalore Mahanagar Palike, Amravati Municipal Corporation, etc .for Account Management Services, SingleWindow Payment Facility as well as Collection of Municipal Taxes through Offline & Online modes and eProcurement Project. State Housing Boards & State Urban Development Authorities: The Bank is associated with Chandigarh Housing Board as Principal Banker, Haryana Housing Board, Delhi Development Authority, Haryana Urban Development Authority, etc for Account Management Services as well as acting as Banker to their Housing Schemes. State Electricity Boards: The Bank is associated with various Electricity Boards including West Bengal State Electricity Board, Assam State Electricity Board, etc for Account Management Services as well as Collection of Electricity Bills through Offline & Online modes. Directorate General of Foreign Trade (DGFT): The Bank has tied-up with DGFT for providing Online Payment Services towards payment of Import/Export Application Fees by the Importers/Exporters.
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iConnect FAQ
What does it Cost? It is FREE What I can do with Internet Banking iConnect? Check online balances of the operating, loan, and deposit accounts i.e. SB, CA, CC, FD, LN, OD etc. Can take printout of the statements or can save in the PC in a specified file format Request online Cheque Book The customer can forward their iConnect related suggestions and grievances by using mail option to RM (IBRM) Can do Online Fund Transfer to their own linked Axis Bank accounts OR to another Axis Bank Account holder OR to another RTGS enable Bank branch The customer can make Utility bill payments online, by using Electronic Bill Payment and Presentment options The customer can buy goods Online and pay online through iConnect (E-shopping) The customer can trade over internet and do broker payment online through iConnect (E-broking) The customer can request for Demand Draft and Pay orders online. The customer can stop payment of cheque/s.
What kind of Equipment and software do I need? A computer with Internet Access For better results, The customer may access iConnect in Internet Explorer version 5.5 or more
Is it Safe? Yes. iConnect can be accessed only with valid Customer ID and passwords. The site is Verisign certified and besides that, we use 128 Bit digital encryption, which is strongest available encryption standard in the world. iConnect uses 128-bit SSL encryption, which provides a high level of security. Besides, we have our own security mechanisms. For instance, we use data encryption, firewalls and server authentication. Customers are assigned a unique personal Customer ID and passwords. In case customers forget to log out, Internet banking sessions are set to 'time out' after a period of inactivity. Additionally, pages automatically expire, ensuring that no one can use the 'back' button or the 'history' option on the browser to view earlier pages. Similarly iConnect automatically disables customers' login after five consecutive login failures. How do I sign up? The customer can get the application form through our website or from any of our Axis Bank branch or ATM centres. The customer can submit the duly filled forms to the nearest Axis Bank branch. How to access iConnect? Login to our website www.axisbank.com and click the icon iConnect OR use https://www.axisbank.com, which will directly connect the customers to iConnect Bank will provide the customers the Login ID and passwords for accessing iConnect. How to Login- New User? The pin mailer provided by the bank will contain two types of passwords: Login/Sign on password: This will help the customer to login to iConnect service Transaction Password: Transaction Passwords are for effecting transactions like, fund transfer, online shopping, online trading and Utility Bill payments, through iConnect
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BANKING AWARENESS TRAINING FACILITIES OFFERED BY INTERNET BANKING FACILITY ICONNECT After successfully changing the password as mentioned above iConnect will display the following options on the screen:
Accounts Depository Bills Power Transfer/Visa Transfer Online IPO
Operating Accounts Demat Account Statement Bills Presentment Registration Registration Balance & payments Self Linked Transfer Cheque Book FD requests Portfolio Summary Inbox Change Password
Term Deposits Holdings Bill Payment Payment Payment Statement Third Party Transfer Demand Draft
Loan Accounts Demand Drafts Personal Payee
Withdraw Request
Credit Card Funds transfer Requests Fixed Deposits Portfolio Mails Customise
Status Inquiry E-statement
Portfolio Snapshot Compose Personal preferences Mobile registration
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Prevention of Frauds
DEFINITION OF FRAUD A fraud is defined as any behaviour by which one Person intends to gain a dishonest advantage over another. In other words, a fraud is an act or omission which is intended to cause wrongful gain to one person and wrongful loss to the other, either by way of concealment of facts or otherwise. A bank fraud is a deliberate act of omission or commission by any person carried out in the books of account maintained manually or under computer system in banks resulting into wrongful gain to any person for a temporary period or otherwise with or without any monetary loss to the bank. Fraud is one of the OPERATIONAL RISKS involving loss of Money to Customers Income to the Bank Image of the Bank & Morale & confidence of the staff CLASSIFICATION OF FRAUDS As per the provisions of the Indian Penal Code, frauds have been classified as under: Misappropriation and criminal breach of trust. Fraudulent encashment through forged instruments, manipulation of books of accounts or through fictitious accounts and conversion of property Unauthorised credit facilities extended for reward or for illegal gratification. Negligence and Cash shortage. Cheating and forgery. Irregularities in Foreign Exchange Transactions. Any other type of fraud not coming under the above CAUSES OR FACTORS FACILITATING OCCURRENCE OF FRAUDS There are two causes due to which frauds are perpetrated in a Bank. - SYSTEM FAILURE and (B) HUMAN FAILURE SYSTEM FAILURE Frauds are an attack on the systems and procedures in a Bank. More often it was observed that cases of frauds perpetration, which could be attributed mainly due to system failure, are almost negligible. HUMAN FAILURE Negligence on the part of the operating staff in complying with the Banks laid down systems and procedures was more pronounced in most of the cases detected such as Complacency on the part of those entrusted with supervisory functions, especially in regard to opening and conduct of NEW ACCOUNTS Resorting to unauthorised practices to achieve the business targets in an unethical and risky manner. Negligence in following the correct procedures General atmosphere of laxity and permissiveness that may have kept crept in at various levels especially in balancing / checking of day books and other books of accounts - Casual approach to internal control and Inspection. Deviations from laid down instructions Shortcut in procedures for the purpose of rendering quicker service. Officials exceeding the financial powers vested with them. Business development tends to take precedence over adherence to systems and procedures. There exists strong competitive pressures on the operative staff to grow at a faster rate. No visible corrective measures in respect of frauds perpetrated earlier TYPES OF FRAUDS Frauds are a criminal breach of trust and can be categorised as: Frauds committed by accountholders of the Bank or by outsiders. The accountholders or outsiders normally study the flow of activity and systems, procedures, practices etc followed by any Branch of a Bank and try to take advantage of any loopholes or laxity on the part of the staff working thereat. Frauds committed by Staff of the Bank, either singly or in collusion with their own colleagues or with outsiders. A study of high value frauds in various banks had revealed that in majority of the cases, the staff members who perpetrated frauds were treated as STAR PERFORMERS by their superiors. They generally used to behave very politely, oblige everyone without any murmur, used to put in extra hours of work and did not avail any leave. Frauds committed by such persons do not come to light speedily due to the fact that banks were not strictly following the practice of JOB ROTATION or compulsory leave among the staff. SOURCES OF DETECTION The major sources of detection of frauds are Complaints Change in incumbencies Reconciliation of outstanding entries in Inter Office / Office accounts. Internal House keeping - Balancing of books Reconciliation of statement of account of customers. Controllers visits to Branches Inspection and Audit including snap audits others NATURE OF FRAUDS - MAJOR HEADS Frauds are normally committed in the following areas 1.Deposit accounts 2.Remittances
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BANKING AWARENESS TRAINING 3.Clearing transactions 4.Inter-branch transactions / office accounts. 5.Cash shortages 6.Loans and advances 7.Foreign exchange transactions & Miscellaneous frauds FINDINGS OF STUDY ON HIGH VALUE FRAUDS (1)Increase in the involvement of the staff members. Near failure of internal control system. Accounts opened without proper identification. Extensive use of fake / forged instruments. Laxity in observing rules and systems/procedures by staff at all levels. Poor state of House keeping Outsourcing of some work in the day to day transactions. (8) Professionals like Chartered Accountants / Advocates certifying false accounts / giving wrong opinion. (9) Low rate of prosecution against outsiders as well as staff involved in the frauds (10) Undue delay in Investigation of frauds by various investigating agencies. CRITICAL SYSTEM RELATED AREAS Secrecy of Password - No staff member should use the login identity of other staff members. Sensitive Passwords should always be recorded / reported under due authentication. System maintenance by agencies other than the one approved by IT department, Corporate Office should not be permitted with out their approval. Ensure that, Logins other than the login of the current users at the Branch are deleted. Ensure that the agency entrusted with the work of Virus Detection carries out the exercise at the regular intervals without any exception. All system- generated transactions should be checked with a view to ensure that the entries are proper. Ensure no outsider is allowed entry in the Systems Room. Check whether employees have cultivated the habit of Logging out even when they are away from the desks for laid down a short time. ACTION AREAS PREVENTIVE MEASURES - CORE
(A) Utmost vigilance while opening New Accounts including independent verification of identity and address of account holder by the Bank - KNOW YOUR CUSTOMER - Due diligence to be exercised at the Customer Acquisition at the entry level. (B) Monitoring of LARGE transactions in NEW Accounts. (C) Job Rotation for Staff - This should be a regular feature - Life style of the staff should be watched - Their borrowings, Investments, Deduction from Salary etc to be checked - Do not permit staff to open accounts at different Branches- Periodical scrutiny of their Bank Accounts - Avoid overdependence on any staff. (D) OUTSOURCE STAFF - Awareness - Verify the antecedents of employees - Suitable Indemnity clauses to be incorporated in the agreement executed with the outsource agency. (E) Control over transactions in In-operative accounts. (F) Proper checks and control on Housekeeping Monitoring and reporting High value Cash transactions as per RBI directives.- Proper checking and preservation of various outputs generated daily - Timely adjustment of outstanding entries in Office Accounts- Prompt attending of queries relating to Inter-Office transactions. (G) Control and safe keeping of critical documents Dual custody of Security forms - ATM Cards, Pin Mailers etc (H) Prompt submission of control returns in respect of items of expenditure and Advances( I) Extreme care to be displayed regarding secrecy Password, usage of sensitive passwords, system maintenance y approved agencies etc. (J) Proper scrutiny of Letters of Credit of other Banks, Invoices, Bills of Exchange, RR /LR, Currencies before processing the transactions. (K) Loans and Advances - Exercise caution in respect of Old Borrowal accounts - Total reliance of past track records may not be valid - Intelligent scrutiny of stock statement /QIS / Financial statement etc - Periodic review of borrowal accounts to ensure end use of funds. Abundant caution to be exercised in respect of Advances against SHARES (L) Strict adherence to Exchange Control / FEMA regulations.
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BANKING AWARENESS TRAINING SO PREVENTION IS BETTER THAN CURE & A STITCH IN TIME SAVES NINE
MITRA COMMITTEE REPORT
ON
LEGAL ASPECTS
OF
BANK FRAUDS
As per the direction of the Board for Financial Supervision, RBI had set up a committee under the Chairmanship of Dr. N.L.Mitra, Vice Chancellor of National Law University, Jodhpur to look into the Legal aspects of Bank Frauds. The recommendations of The Mitra Committee submitted to RBI have been accepted by RBI, and banks have been directed to implement the above recommendations. While we have already taken necessary steps to implement some of the recommendations, it has been decided to put in place the following measures to comply fully with the recommendations of The Mitra Committee. The Mitra Committee has observed that banks and financial institutions must prepare "Best Practice Code" for its officers and staff to provide detailed rule based procedural system in customer related matters and application of discretionary powers. As you are aware, systems and procedures governing the day-to-day operations are contained in Manual of Instructions sent to branches. Procedures are also communicated to branches by means of circulars/circular letters issued by various departments at this office. Further, job cards on various topics have since been prepared and will be sent to branches shortly. Accordingly, it has been decided that henceforth, Manual of Instructions, Job cards, Circulars, Circular letters, and Documentation Manual on advances, will collectively be known as the 'Best Practice Code" of the Bank. The Mitra Committee has suggested that a legal compliance certificate needs to be mandated in all --oOo
transactions exceeding a value limit. Accordingly, a legal compliance certification process will henceforth be enforced as detailed below: Deposit Accounts - The certificate-All rules and regulations laid down under KYC (Know your customer) guidelines have been complied with. will be given on the vouchers by the branches under the authentication of the Branch Head / Manager Operations) in respect of all transactions above Rs. 1 crore in SB accounts, Rs. 2 crores in respect of TD accounts and Rs. 3 crores in respect of Current Accounts. Inter bank transactions will be kept outside this certification process. Advances - The certificate-RBI instructions / Central Office instructions including instructions on documentation/ instructions of other regulatory authorities /local laws etc have been compiled with. will be given in all appraisal notes recommending sanction of advances /loans above Rs. One crore. Such certificate should be incorporated in respect of credit proposals sanctioned at branches, as well as at Zonal Offices / Central Office. Concurrent auditors wherever posted/our officials from the Inspection & Audit Department at this office will verify the presence of above certificates, during the course of audit /inspection.
OPENING
OF ACCOUNTS THROUGH FORGED DOCUMENTS
Extract from our Circular No:OPERATIONS/56/2004-05 Dt. November 17, 2004
Recently, there was an occasion of an account being opened at one of our branches on the basis of forged documents, which was later used to encash fraudulent drafts drawn on another bank within 20 days of opening of the account. Enquiries have since revealed that the account was not opened as per the extant guidelines thus facilitating the fraudulent encashment of the drafts. The discrepancies which have been observed in the case are brought out in this Circular so as to pre-empt incidents of this nature. i. Instead of taking one document from List A (proof of identity) and the other from List B (proof of address) as required in terms of our Circular No. OPERATIONS/65/2003-04 dated August 12, 2003, Driving Licence and PAN Card, both belonging to the same group were taken. ii. The account holder was a student and a PAN Card was taken as one of the documents. As a student normally does not earn income and, therefore, cannot be an income tax payer, production of a PAN Card should have raised suspicion at the very outset. iii. The photograph of the student on the driving licence, which was five years old, and the photo on the account opening form were the same. This should again have raised suspicion as the driving licence was taken when the age of the student was 18 years whereas at the time of account opening, he was 23 years old and it is common knowledge that significant changes in appearance occur during this phase of life. iv. The PAN No. was BTDSD7223J and the Card was purportedly issued by Chief Commissioner of Income Tax, Guwahati. It should have been possible to detect from the very number on the PAN card produced that it was a fake one since it is
BANKING AWARENESS TRAINING common knowledge that no PAN Number can start with any character other than A. In the instant case it starts with B. Further, the fourth character in the case of individuals should be P. In the instant case it is S. Similarly, the fifth character should be first letter of the surname. As the surname of the account holder was Thapa, the character should have been T. However, the fifth character in the instant case is D. For ready reference, we give below the structure of a valid PAN (Permanent Account Number), which appears in the following format:- AAAPA9999C (10 characters, no spaces and no special characters like; / etc). The first three characters (AAA) constitute an alphabetic series running from AAA to ZZZ. The fourth character ( P ) represents the status of the assessee as shown below: A J Association of Persons; B Artificial Judicial Person, L Body of Individuals, C Company, F Local Authority, P Individual, T Firm, H Hindu Undivided Family,
Association of Persons (Trust), G Government
The fifth character corresponds to the first character of the assessees surname in case of individuals and the first character of the name in case of others. The next four digits (9999) are sequential numbers running from 0001 to 9999. The tenth character (C) is an alphabetic check digit. Any PAN Card obtained should be checked against this structure to verify its authenticity.
We also give below, for ready reference, the structure of a valid TAN (Tax deduction Account Number:In a typical number like MUMS12345C, The first three characters (MUM) represent the area code. eg. MUM for Mumbai. The fourth character (S) is the first character of the name. The next five numbers (12345) are sequential numbers running from 00001 to 99999. The last (tenth) character (C) is an alphabetic check digit. iv. Further, the account was not monitored for high value transactions, a list of which is made available every day to the branches by the Data Centre. Had this been done, certain transactions would have alerted the branch personnel about the possibility of the account being used to fraudulently encash certain instruments and misappropriate the proceeds. v. In this connection, in recent times we have issued various circulars on the precautions to be observed while opening accounts in order to prevent frauds. A list of such circulars is given below for ready reference so that our staff members may once again refer to them and thereby keep themselves well informed on the care to be taken in such instances. Circular No. OPERATIONS/65/2003-04 dated August 12, 2003 on Anti - Money Laundering Policy and KYC guidelines Circular No. Operations/66/2003-04 dated August 21, 2003 on Account Opening Formalities - Uniformity in signatures. Circular No. OPERATIONS/86/2003-04 dated November 27, 2003 on Precautions for Opening and Conduct of Accounts. Circular No. OPERATIONS/88/2003-04 dated December 01, 2003 on Fraudulent Accounts opened by Ms. Sunita Ravi Shinde and Mr. Sunil Kumar Sharma. Circular No. OPERATIONS/90/2003-04 dated December 05, 2003 on Monitoring of Receipt of Deliverables (cheque books, debit cards, PINs etc ) at branches. Circular No. OPERATIONS/99/2003-04 dated January 29, 2004 on Attempted fraud by deposit of forged demand drafts. Circular No. OPERATIONS/103/2003-04 dated February 23, 2004 on Payment of altered cheque. Circular No. OPERATIONS/109/2003-04 dated March 08, 2004 on Frauds in newly opened accounts. We once again urge upon all staff members to make themselves conversant with the above-mentioned Circulars so that incidents of this nature can be prevented by the alertness and awareness on the part of our employees. Income Tax Department has provided online verification facility for verification of PAN. The address of this site is: http://incometaxindiaefiling.gov.in/challan
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PREVENTION OF FRAUDS DOS AND DONTS EXTRACT FROMOUR CIRCULAR/COMPLIANCE/7/2009-10 DATED 4/5/09
Sr.No. 1. 2. 3. 4.
Dos
Do obtain the prescribed documents required for identity proof and address proof for individual account holders. Do insist on prospective account holders signing the form in your presence. Do obtain the prescribed additional documents for Proprietorship and Partnership Firms, Limited Companies, Clubs/Associations etc. Do scrutinse documents carefully and compare with their originals/cross check with web site at the time of account opening to ascertain their genuineness so that forged documents are not accepted. Do verify the address mentioned on the account opening form and proof obtained are the same. Do verify the structure of the PAN in case a PAN card is obtained and check from NSDL site. Do ensure that the signatures on various documents obtained are clearly visible and tally with those on the account opening form. Do have the account opening forms scrutinised by the Branch Head/Operations Head before they are sent to CPU. Do instruct the local courier agency to return any undeliverable to the branch immediately if the address is untraceable. Do monitor transactions, especially in newly opened accounts, for unusual/high value/intersol entries. Do verify vouchers, cheques, drafts, dividend warrants, pay orders presented for payment or collection, thoroughly on Maker and Checker basis to detect any signs of alteration before allowing payment. Do verify the material instrument for forgery and colour xerox. Do check high value instruments, say of Rs.50,000/- and above, collected on behalf of other branches with the relative account details in Finacle, particularly in regard to the date of opening, before crediting the proceeds. Do monitor newly opened accounts for instances of large deposits and withdrawals. Do advise customers on the precautions to be taken while depositing cheques in drop boxes at branches/extension counters/ATMs. Do follow proper instructions for hotlisting/destruction and custody of ATM Cards/Debit Cards/PIN Mailers. Do seek confirmation from the drawer in cases of cheques originally crossed but later opened and presented for cash payment. Do supervise outsourced agencies and their workforce carefully. Do seek confirmation from the drawer bank for the genuineness of the materially altered/mutilated damaged instruments and instruments in abbreviated name before sending the same in clearing. Field Visits as prescribed in Compliance Circular 39/2008-09 dated January 23, 2009 must be made. Transactions in new accounts be closely monitored. High Value instruments should be closely scrutinized/checked with UV lamps.
5. 6. 7. 8. 9. 10. 11.
12. 13.
14. 15. 16. 17. 18. 19.
20. 21. 22.
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BANKING AWARENESS TRAINING Sr.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
Donts
Dont open accounts without adhering to KYC norms that would lead to opening of impersonated accounts culminating into frauds. Dont accept photocopies of any documents without verifying them with their respective originals. Dont accept Personal Accident Insurance Policy/Premium Receipt as proof of address. Dont deliver Debit Cards, PINs etc. to third parties against authority letters without the approval of the Branch Head/Operations Head. Dont accept requests for duplicate PINs without following the prescribed instructions in this regard. Dont entertain request for change in name/surname without obtention of proper documents. Dont entertain request for change of address received over telephone/e-mail. Dont leave valuable documents like ATM Cards/Debit Cards/PIN Mailers/instruments in open drawers to prevent pilferage. Dont credit OSC of another branch directly without first lodging it in the SL-Others Account of your own branch when sending the instrument in clearing. Dont regularise clearing batches before marking returns. Dont open zero balance accounts marketed by unscrupulous firms. Dont put through transactions in inoperative/dormant accounts before contacting the customer and ascertaining the reasons for the prolonged period of inactivity. Dont allow cooperative societies to deposit cheques favouring individuals in their account for collection of proceeds. Dont make payment of materially altered cheques without carefully verifying whether the alterations have been duly authenticated. Dont collect third party cheques on behalf of customers. Dont compromise your login ID and password under any circumstances. Dont make payment of colour xerox/mutilated/damaged instruments.
COMMON MISTAKES
TO
A V O I D 11
Some of the significant breaches observed with respect to prevention of frauds are listed below: Third party cheques were collected on behalf of our customers. Altered cheques with visible forged signatures have been paid. The address mentioned on the AOF and proof obtained for the same have been found to be different. The Xerox copies of documents submitted along with the AOF have not been verified with the originals. Instances of frequent deposits and withdrawals of large volume of cash in newly opened accounts were ignored. Opening of accounts without adhering to KYC norms leading to opening of impersonated accounts culminating into frauds. Lack of adequate supervision on outsourced agencies. Collection of forged dividend warrants and colour Xerox instruments. ``Though the above list is not exhaustive, it is imperative that officials at branches work in a more methodical manner so that such shortcomings are not repeated. The contents of this circular should be brought to the notice of all officials working at the branch/extension counter.
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Circular No. COMPLIANCE/2/2008-08 Dated April 2, 2008
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Negotiable Instruments Act

This is an act to define and lay down the law relating to promissory Notes, Bills of Exchange and Cheques. There are 142 Sections and Sections 138-142 relate to Penalties in case of Dishonour of certain cheques for insufficiency of Funds in Accounts, which are introduced w. e. f. 1/4/1989. Those apart, there are about 21 amendments in the original act and adaptation orders relating to the act of 1889. The NIA does not give the definition of Negotiable Instruments but according to Sec. 13, it states as under: Sec.13: ANegotiable Instrument means a promissory Note, bill of exchange or Cheque payable either to order or to bearer. . Section 4 PROMISSORY NOTE a)MAKER/ PROMISER b)PAYEE Section 5 BILLS OF EXCHANGE A) DRAWER B) DRAWEE ACCEPTOR C) PAYEE Section 6 CHEQUE DRAWEE Always a Banker Section 13(2) A Cheque is bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. A Negotiable Instrument may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute the person the holder there of, the instrument is said to be negotiated. When the maker or holder of negotiable Instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he said to endorse the same and is called the endorser. Endorsement in blank and in full - endorsee. If the endorser signs his name only, the endorsement is said to be in blank and if he adds a direction to pay the amount mentioned in the instrument to, or to the order of a specified person, the endorsement is said to be in full, and the person so specified is called the endorsee of the instrument. OR A "bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. A Promissory Note is an instrument in writing (not being a bank-note or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. However as per Section 31 of the RBI Act 1934, No person in India other than the RBI or, as expressly authorised by this Act, the Central Govt., Shall draw, accept, make or issue any bill of exchange, hundi, promissory note or engagement for the payment of money Payable to bearer on demand or borrow, owe or take up any sum or sums of money on the bills, hundies or notes payable to bearer on demand of any such person: Provided that Cheques or drafts including hundies payable to bearer on demand or otherwise, may be drawn on a persons account with a Banker, Shroff or agent". Some of the important sections are reproduced for ready reference.
Section 14 NEGOTIATION Section 15 ENDORSEMET
Section 16 (1)
Section 47 - NEGOTIATION BY DELIVERY: Subject to the provisions of Section 58, a PN, BOE or Cheque payable to bearer is negotiable by delivery thereof.
Section 48 - NEGOTIATION BY ENDORSEMENTS: Subject to the provisions of Section 58, a PN, BOE or Cheque (Payable to order) is negotiable by the holder by endorsement and delivery thereof.
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BANKING AWARENESS TRAINING Section 58 - INSTRUMENT OBTAINED BY UNLAWFUL MEANS OR FOR UNLAWFUL CONSIDERATION: When a negotiable instrument has been lost, or has been obtained from any maker, acceptor or holder there of by means of an offence or fraud, or for an unlawful consideration, on possessor or endorsee who claims through the person who found or so obtained the instrument is entitled to receive the amount due thereon from such maker, acceptor or holder, or from any party prior to such holder, unless such possessor or endorsee is, or some person through whom he claims was, a holder thereof in due course. Section 50 - EFFECT OF ENDORSEMENT: The endorsement of a negotiable instrument followed by delivery transfers to the endorsee the property therein with the right of further negotiation, but the endorsement may by express words, restrict or exclude such right, or may merely constitute the endorsee an agent to endorse the instrument, or to receive its contents for the endorser, or for some other specified person. Section 8 - HOLDER: The holder of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties there to. Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction. Section 9 - HOLDER IN DUE COURSE: Holder in due course means any person who for consideration became the possessor of a PN, BOE or Cheque if payable to bearer, or the payee or endorsee thereof, if payable to order, before the amount mentioned in it became payable and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. Section 10 - PAYMENT IN DUE COURSE: Payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances, which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned. Section 31 - LIABILITY OF DRAWEE OF CHEQUE: The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required to do so, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default. Section 85(1) - CHEQUE PAYABLE TO ORDER: Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course. Section 85(2) - CHEQUE PAYABLE TO BEARER: Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, not withstanding any endorsement whether in full or in blank appearing thereon, and not withstanding that any such endorsement purports to restrict or exclude further negotiation. Section 85(A) - DRAFTS DRAWN BY ONE BRANCH OF A BANK ON ANOTHER PAYABLE TO ORDER: Where any draft, that is an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course. Section 89 - PAYMENT OF INSTRUMENT ON WHICH ALTERATION IS NOT APPARENT: Where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered, or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated, payment thereof by a person or banker liable to pay, and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such person or banker from all liability thereon; and such payment shall not be questioned by reason of the instrument having been altered, or the cheque crossed. Section 129 - PAYMENT OF CROSSED CHEQUE OUT OF DUE COURSE: Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom the same is crossed, or his agent for collection, being a banker, shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. Section 131 - CHEQUE COLLECTING BANKERS PROTECTION (NON-LIABILITY OF BANKER RECEIVING PAYMENT OF CHEQUE) A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment. A banker receives payment of a crossed cheque for a customer within the meaning of this section not withstanding that he credits his customers account with the amount of the cheque before receiving payment thereof. Section 138 - PENALTIES IN CASE OF DISHONOUR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNT
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BANKING AWARENESS TRAINING Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an arrangement made with that bank, such person shall be deemed to have committed on offence and shall, without prejudice to any other provision of this act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both. Provided that nothing contained in this section shall apply unless The cheque has been presented to the bank within a period of 6 months from the date on which it is drawn or within the period of its validity, whichever is earlier; The payee or holder in due course of the cheque, as the case may be, makes the demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and The drawer of such cheques fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of cheque, within 15 days of the receipt of the said notice. Explanation: Debt or other liability for the purpose of this section means a legally enforceable debt or other liability. Section 142: Cognizance of offence - Not with standing any thing contained in the code of Criminal Procedure, 1973 (2 of 1974) No court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing made by the payee or, as case may be , the holder in due course of the cheque; Such complaint is made within one month of the date on which the cause of action under Clause(c) of the provision to section 138. No court inferior to that of Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138. CROSSING OF CHEQUES Sections 123 - 131 of NIA contain provisions related to crossing. According to section 131 -A, these sections are also applicable in case of drafts. Crossing on cheques is of two types - General crossing and Special crossing. According to section 123 of NIA, drawing of two parallel transverse lines on the face of cheque constitutes General Crossing . The effect of general crossing is that the paying banker will not make cash payment across the counter of such cheque. Such cheque is paid through a collecting banker, by crediting the account of payee or the holder of the cheque, even if the paying banker and collecting Banker are the same. SPECIAL CROSSING According to section 124 of NIA Where a cheque bears across its face an addition of the name of the banker, either with or without the words not negotiable that the addition shall be deemed a crossing and a cheque shall be deemed to be crossed specially and to be crossed to that banker. Explanation The addition of the name of banker across the face of the cheque constitutes Special Crossing . Drawing of to parallel lines across the face of cheque is not essential in case of special crossing. Special crossing differs from general crossing because for Special crossing the name of a banker is must but in case of general crossing, drawing of two parallel transverse lines is a must. A special crossing can be done i.e. writing of name of Banker, in between two parallel transverse lines with or without other words like A/C Payee Only or And Company or Not Negotiable as it is customary today. The effect of special crossing is that, such cheque should be paid by paying banker only through a Banker and through the Banker to whom it is specially crossed. However the banker to whom, the cheque is crossed specially, may appoint another bank as his agent for collection. Eg. A cheque is crossed to A Bank LTD.; B Bank Ltd. can be the presenting Bank of the cheque provided B Bank Ltd. is agent for collection for A Bank Ltd. According to section of 126 of NIA: Where a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker and where a cheque is crossed specially, the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed or his agent for collection. CONSEQUENCES OF VIOLATION CONTRAVENTION OF Section 126 of NIA /
If the paying banker makes any payment contravening the provision of Sec. 126, then according to Sec. 129, than the paying banker shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. Generally the paying banker is not responsible to the payee or the holder of the cheque, as there is no contract between the two, but in this case, the Paying Banker is liable to the true owner of the cheque for any loss sustained. So, Sec. 129 is a caution to the paying banker. That apart, the paying Banker, if he fails to make a payment of a crossed cheque in accordance
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BANKING AWARENESS TRAINING with Section 126, will not be entitled to debit his customers account with amount of such cheque. NOT NEGOTIABLE CROSSING The word Not Negotiable may be included in General or Special crossing. These words do not make the cheque non-transferable but the important ingredient of Negotiability is lost. According to sec. 130 A person taking a cheque crossed generally or specially, bearing in either case the words Not Negotiable shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had. 1) Not Negotiable crossing is a warning to the endorsee or the holder of the cheque to accept it only if he knows the endorser and is convinced that the letter has good title thereto. 8) 5) 6) 4) There should be no stop payment received and the balance should not have been attached under Garnishee Order or Income Tax attachment order or other statutory attachments. All material alteration should have been authenticated with full signature and not by initials. In case of crossed cheques, the payment should not be made across the counter but only as per provisions of Sec. 126 of NIA. In case the cheque has to be returned for shortage of funds, the reason to be mentioned in cheque return memo should be Funds Insufficient in case of Current and Saving Bank Accounts and Exceeds arrangement in case of Cash Credit and Overdraft Accounts. The reason Refer to Drawer should not be used in these cases. This is based on instructions given by RBI. For return of cheque, issued against cheques lodged where the effects are not cleared, the reason in return memo should be Effects not cleared. The Bank should not suggest in return memo Please present again. It is for the presenter to decide whether or not to present again and any suggestion in this regard by the Bank is unwarranted. When the cheque returned earlier with the reason Effect not cleared is presented again and there are still no funds in account, it should normally be returned with the objection Insufficient Funds. The objection effects not cleared should not be repeated normally. This is based on suggestion made by the Systems and Procedures Committee of IBA.
7)
The paying banker can make the payment of such cheque even if they bear endorsement and is protected provided the payment is made in due course and in accordance with Sec. 126 of NIA. ACCOUNT PAYEE CROSSING The word Account Payee or Account Payee only used in crossing are as per usages and practices and not as per NIA. However, these words are direction to the Collecting Banker that he should collect the amount of the cheque for the benefit to the Payees account only. RBI has therefore advised bankers not to allow the credit of cheques crossed Account Payee only to the account of third party. Payment of crossed cheques where crossing has been erased or obliterated which cannot be detected by Paying Banker - The Paying Banker is protected by Sec. 89 of NIA provided that the paying banker has taken reasonable precautions and it is paid as per Sec. - 10 of NIA. OPENING OF CROSSING Only the Drawer of a cheque is entitled to open the crossing by cancelling the crossing and writing the words Pay Cash with full signature. In practice, before making the cash payment of such cheques, the paying banker must be very careful in ascertaining the validity or genuineness of the drawers signature. PAYMENT OF CHEQUES Before cheques are paid the following precaution should be taken. 2) The signature should be verified and confirmed. There is no protection to Paying Banker if signature is forged. Even Sec. 89 which gives protection to Paying Banker in respect of material / chemical alternation which is not visible or apparent after taking reasonable and usual precaution is not available if signature of drawer is forged. The cheque should be dated but not post-dated or stale.
COLLECTION OF CHEQUES When cheques and DDs are collected, the Banker runs the risk of conversion (unlawful taking or using of something belonging to someone else or depriving the lawful owner). In order to be protected, as per Sec. 131 of NIA, the following essential requirements are to be ensured. The Banker should have collected the cheque only for a customer (a duly introduced account) the cheque should have been crossed generally or specially to the banker. Such crossing should have been done before the cheque / DD is lodged in clearing or collection. The cheque / DD should have been collected in Good Faith and without negligence. Subject to the abovementioned conditions, the collecting Banker shall not incur any liability to the true owner of the cheque, in case the title to the cheque proves defective, by reason only of having received such payment. This protection is extended even to those crossed cheques for which a Banker receives a payment for a customer even if the Banker credits the Customers account with the amount of the cheque before receiving the payment thereof. Collection of a cheque payable to order without verifying endorsement thereon or where the form of endorsement
3)
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BANKING AWARENESS TRAINING or endorsements should have aroused the suspicion of Banker is example of negligence. Similarly, collection of a cheque crossed account payee for the account of a person other than payee and failure to watch initial operations in a newly opened account where large withdrawals take place could be construed as negligence. BILLS OF EXCHANGE (BE) & PROMISSORY NOTE (PN) Instrument payable on demand - Section 19 of NIA A PN or BE in which no time for payment is specified is payable on demand. At Sight, On Presentment, After sight - Sec. 21 At Sight or on Presentment Means on demand. After sight: Means not on demand but in PN, means after Presentment for sight and in BE, means after acceptance or noting for non-acceptance or protest for nonacceptance DRAWEES TIME FOR DELIBERATION-Section 63 of NIA The holder of a BE must, if so required by the drawer of a bill of exchange, allow the Drawee 48 hours (exclusive of Public Holidays) to consider whether he will accept it. Therefore, after sight in case of a Bill of Exchange may not be the date of presentation as 48 hours time should be given. MATURITY AND DAYS OF GRACE Section 22 The maturity of PN or BE is the date at which it falls due, Every PN or BE which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed is to be payable. CALCULATING MATURITY OF BILL OR NOTE PAYABLE SO MANY MONTHS AFTER DATE OR SIGHT - Section 23 presentation for sight in case of PN and date of acceptance in case of BE (in case it is after sight). If the month in which the period would terminate has no corresponding day, the period shall be held to terminate on the last day of such month. Eg: A PN dated 31st Jan. 1995 is made payable at one month after date. This PN is at maturity on the third day after the 28th Feb. 1995. CALCULATING MATURITY OF BILLS OR NOTE PAYABLE SO MANY DAYS AFTER DATE OR SIGHT - Section 24 In calculating the date at which a PN or BE made payable a certain number of days after the date or after the sight or after the certain event is at maturity, the day of the date or day of presentation for acceptance or sight, or of protest for non-acceptance, or on which the event happens, shall be excluded. Section 25 - WHEN DAY OF MATURITY IS A HOLIDAY: When the day on which a PN or BE is at maturity is a Public Holiday, the instrument shall be deemed to be due on the next preceding business day. Section 32 - LIABILITY OF MAKER OF NOTE AND ACCEPTOR OF BILL: In absence of a contract to the contrary, the maker of a Promissory Note and acceptor before the maturity of a BE, are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity is bound to pay the amount thereof to the holder on demand. In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default. Section 36 - LIABILITY OF PRIOR PARTIES TO HOLDER IN DUE COURSE:
Every prior party to a negotiable instrument is liable The period stated shall be held to terminate on the day of thereon to a holder on due course until the instrument is month which correspond with the day on which the duly satisfied. instrument is dated (in case it is after date) or date of E.g. P issues a cheque in favour of Q. Q endorses it to R for value and thereafter R endorses it to S. If, the cheque is dishonoured, S, the holder in due course, has the right to sue prior parties i.e. P,Q or R. If he sues R, and R pays S, R becomes entitled to recover the amount from Q and similarly, Q can claim the amount from P. Note: In the above are only some important sections of NIA are covered and the readers are advised to refer standard books containing other provisions/sections of NIA with illustrations. --oOo
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Important Banking Regulations

PART - A INDIAN CONTRACT ACT - 1872 The law relating to contracts is contained in the Indian Contract Act 1872. Definition: Sec. 2 of the Indian Contract Act defines a contract as an agreement enforceable by law. Essentials of a valid contract: Essential elements of a valid contract are given in Sec. 10. As per Section 10, all agreements are contracts if they are made by the free consent of parties competent to contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Promise to pay a time barred debt: Section 25 of the Act provides exception to the general rule that a contract without consideration is void. The important exception for a Banker is the promise of debtor to pay a TIME BARRED debt. As per the section 18 of The Limitation Act - 1963, an acknowledgment in writing by a debtor saves the limitation if it is provided before the period of limitation expires. But as per section 25(3) of the Contract Act, a written promise to pay a time barred debt is enforceable though it is made after the period of limitation and in spite of the absence of consideration. Guarantee: As per Sec 126 of the Contract Act, a contract of guarantee is a contract to perform the promise, or discharge the liability of a third person in case of default. The person who gives the guarantee is called the surety. Liability of a Surety: As per Sec. 128 the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. Right of Subrogation: Section 140: Right of subrogation: Where a guaranteed debt has become due and the surety has paid all that he is liable for, he is invested with all the rights within the creditor had against the principal debtor. Bailment: Section 148 defines Bailment as the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed off according to the direction of the persons delivering them. Pledge: Sec. 172 defines Pledge as the Bailment of goods as security for payment of a debt or performance of a promise. General lien: A general lien, according to Sec 171 is available to Bankers (among others). A Bankers lien is an implied pledge. Joint Accounts: Section 45 "When a person has made a promise to two or more persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests as between him and then, with them during their joint lives, and after the death of any of them, with the representatives of such deceased person jointly with the survivor or survivors after the death of the last survivor, with the representatives of all jointly". The account opening forms of Joint Accounts of Individuals are based on Section 45 of Indian Contract Act wherein operating instructions and disposal instructions are obtained. E. g. - Former or Survivor, either or Survivor, Jointly etc. Because unless otherwise provided for, a joint account is to be operated by all the parties. SALE OF GOODS ACT - 1872 Definition: Sec. 4: A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Document of title to goods: Sec. 2(4) of the Act explains Document of title to goods as a document used in the ordinary course of business as proof of the possession or control of goods. It authorises either by endorsement or delivery its possessor to transfer or receive goods represented by it. Document of Title to goods: A. Bill of Lading B. Dock warrant C. Ware house - keepers or wharfingers certificate D. Delivery order E. Railway Receipt. BANKING REGULATION ACT, 1949 Object: The Banking Regulation Act was passed with a view to consolidate at one place all provisions of law relating to the business of banking and to have effective control over such business. The Banking Regulation Act enacted in 1949 provides a framework for regulation and supervision of commercial banking activity. The provisions of this Act shall be in addition to, and not, in derogation of the Companies Act, 1956 (1 of 1956), and any other law for the time being in force. However the provisions of the Companies Act apply to only the banks in the private sector. Provisions of the Act does not apply toA primary agricultural credit society;
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BANKING AWARENESS TRAINING A co-operative land mortgage bank; and Any other co-operative society, except in certain cases. Business of Banking Companies: Sec. 5 of the Act defines the business of banking company as accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, and order or otherwise. Other permitted business: Section 6 of Banking Regulations Act, 1949 elaborately specifies the other forms of business, which a banking company may carry in addition to banking as defined in section 5. These include in a nutshell Issuing Demand Drafts & Travelers Cheques Collection of Cheques, Bills of exchange Discounting and purchase of Bills Safe Deposit Lockers Issuing Letters of Credit & Letters of Guarantee Sales and Purchase of Foreign Exchange Custodial Services Investment services Doing all such other things as are incidental or conducive to the promotion or advancement of the business of the company; Any other form of business, which the Central Government may, by notification in the Official Gazette, specify as a form of business in which it is lawful for a banking company to engage. No banking company shall engage in any form of business other than those referred to above Prohibition: Under Sec. 9 a banking company is prohibited from holding any immovable property how so ever acquired for any period exceeding seven years from the date of acquisition. Opening of New Branches: The RBIs prior permission is required for opening new branches (Sec. 23) Selective Credit Control: Under Sec. 21, the Reserve Bank is empowered to determine the policy in relation to advances to be followed by banks generally or by any bank in particular and RBI is authorised to issue directions to banks as regards the purpose of advances, the margins to be maintained in respect of the secured advances and it can also prescribe the rates of interest and other terms and conditions on which advances may be made. Holding of shares: As per Sec. 19(2), no banking company can hold shares in a company whether as pledgee, mortgagee or absolute owner of an amount exceeding 30% of the paid up share capital of that company or 30% of its own paid up capital plus reserve whichever is less. SLR: As per Sec 24 scheduled and non-scheduled Banks should maintain Statutory Liquid Ratio of minimum of 25% and RBI is empowered to increase it to a maximum of 40% of the total demand and time liabilities in India. Return on unclaimed deposits: Sec 26 lays down that, every banking company shall within 30 days after the closing of each calendar year, submit a return in the prescribed form and manner to the RBI as at the end of such calendar year of all the accounts in India, which have not been operated upon for 10 years. Inspection by RBI: U/S 35 RBI may cause an inspection to be made of on any banking company and its books and accounts. Disputing the rate of interest on advances: Sec 21/A provides that the rates of interest charged by the banking companies to the debtor shall not be reopened in a court on the ground that the rates are excessive. Nomination: Sec 45 enables a Banking company to make payment to the nominee of a deceased depositor, return to the nominee, the articles left by a deceased person in the banks safe custody and release to the nominee of the hirer, the contents of a safety locker in the event of the death of the hirer. (Sec. 45ZA-ZF) Section 45 ZA-ZF of Banking Regulation Act: Nomination facility in Banks was introduced w. e. f. 2903-1985. Deposit A/Cs Relationship) Safe Custody Relationship) Sec Sec 45 45 ZA-ZB ZC-ZD (Debtor-Creditor (Bailee-Bailor
Safe Deposit Locker Sec 45 ZE-ZF (Lesser-Lessee Relationship) THE REGISTRATION ACT, 1908 Object and coverage: The object of the Act is to 1. Give notice to the world and as a source of information 2. Prevent fraud and forgery 3. The act extends to the whole of India except the state of Jammu and Kashmir. Compulsory registration: Sec 17 of the Act lists the documents, which are to be compulsorily registered. Registration optional: Sec. 1A of the Act lists the documents for which registration is optional. Time of presentation for registration:
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BANKING AWARENESS TRAINING Sec 23 of the Act provides that a document (other than a will) shall not be accepted for registration unless it is presented for that purpose to the proper officer within 4 months from the date of execution (subject to provisions of Sec. 24, 25 & 26) Effect of non-registration: Sec 49 of the Act provides that no document required by section 17 or any provision of the Transfer of Property Act to be registered shall: Legal application: Sec. 3 provides that every suit instituted, appeal preferred and applicable made after the prescribed period shall be dismissed although limitation has not been set up as a defence. Acknowledgement of debt: Section 18 provides that an acknowledgment of debt signed by the debtor either personally or by an agent duly authorised, before the expiry of the limitation period, gives a fresh period of limitation from the date of acknowledgment in writing. Section 19: If a debtor makes a part payment before the expiry of the limitation period either by himself or by a duly authorised agent in his handwriting a fresh period of limitation starts from the date of such part payment.
(a) (b) (c)
Affect any immovable property comprised there in or Confer any power to adopt or Be received as evidence of any transaction affecting such transaction unless it has been registered.
LIMITATION ACT 1963 Description of suit 1. 2. 3. On a bill of exchange payable at sight or after sight but not at a fixed time. On a bill of exchange or promissory note payable at fixed time after sight or after demand. On a bill of exchange or promissory note payable on demand. Period of limitation Three years from the bill is presented Three years from the fixed time expires Three from the date of bill or note
4.
On a promissory note or bond payable by instalments For enforcement of charge on movable property A suit to recover a loan secured by a mortgage A suit by the state Govt. for recovery of possession of Govt. land encroached upon by tress-passers.
Three from the expiration of the first term of payment as to the part then payable and for other parts the expiration of the respective terms of payment. Three years from the date of charge. 12 years when the money sued for became due. 30 years from the date of trespassing. List III or the concurrent list includes matters on which both the Union Parliament and the state legislature can legislate. Stamping: As per section 17, all instruments chargeable with duty and executed by any person in India must be stamped before or at the time of execution. Instrument executed out of India: When any such instrument is received in India, it must be stamped within three months of its receipt in India as per Sec. 18(1) However, any Bill of Exchange attracting stamp duty or promissory note drawn or made out of India must be stamped by the first holder in India before he presents the same for acceptance or payment or endorses, transfers or otherwise negotiates the same in India. Unstamped / Understamped Instruments - Remedy: As per Sec. 35, permission can be accorded in certain cases by the court or an appropriate authority to admit an unstamped or insufficiently stamped document in
5. 6. 1.
THE INDIAN STAMP ACT - 1899 Preamble and Constitution The constitution of India contains three lists regarding the powers to legislate with regard to stamp duties. List - I: Union parliament has the exclusive power to fix the rates of duty in respect of documents enumerated in entry 91 of list I. Entry 91: Bills of Exchange, Promissory Notes, Bills of Lading, Letters of Credit, Policies of Insurance, Transfer of Shares, Debentures, Proxies and Receipts. Hence stamp duty on these documents is uniform all over India. List II contain matters on which the state legislatures have the exclusive power to legislate.
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BANKING AWARENESS TRAINING evidence, on payment of certain penalties in addition to the applicable duty. This provision however does not apply to acknowledgment of debt, promissory note or bill of exchange. If these document are unstamped or insufficiency stamped, they will be treated as invalid abinitio and cannot be admitted as evidence even on payment of duty and penalty. TRANSFER OF PROPERTY ACT - 1882 Coverage of the Act: The transfer of property Act deals with the transfer of both movable and immovable property. The Act prescribes the various modes of transfer of property. It also enumerates certain properties, which cannot be transferred at all. Mortgage: Sec 58 of the Act defines mortgage as the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, on existing or future debt or the performance of an agreement which may gives rise to a pecuniary liability Types of Mortgage: Sec 58 of the Act describes six types of mortgages Simple mortgage (Sec. 58(h)) 1. 2. Mortgage by conditional sale - Sec. 58(c) Mortgage - Sec 58(d) Sec 11 of the companies Act 1956 provides that the number of partners in a firm carrying on banking business should not exceed ten and in any other business twenty. Implied authority to pledge goods: As per Sec 19 The act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firms. This authority of a partner to bind the firm is called his implied authority. Inter-alia the following two acts of a partner which falls under implied authority of a partner is most relevant to the Banker. 1) 2) Drawing, accepting, and indorsing bills and other negotiable instruments in the name of the firm. Pledging goods of the firm for the purpose of borrowing money.
A Partner cannot mortgage firms property: Sec. 19(2) enumerates the acts, which are outside the purview of the implied authority of a partner, and the most relevant of this to a Banker is that the implied authority does not include transfer of immovable property belonging to the firm by a partner. COMPANIES ACT - 1956 Definition: Sec.3 (1) (i):- A company means A company formed and registered under this act or an existing company Distinct legal entity: Section 34: When a company is registered and a certificate of incorporation is issued by the registrar, the company becomes a distinct legal entity different from the members composing it. It acquires a perpetual succession. Borrowing Powers: Authority of the Directors acting as agents of the company to borrow is subject to Statutory limitation as laid down in section 293(1) [Sec 293(1)(d) prohibits the Directors of a Public Ltd. Company or a Private Ltd. Company which is a subsidiary of a Public Ltd. Company from borrowing money beyond the aggregate of the paid-up capital of the company and its free reserves.] (a) Limitation as contained in the memorandum of the articles. Registration of Charge: As per Sec. 125 there are certain charges, which are void against the liquidator or creditor unless registered with the Registrar. Any charge for the purpose of securing any issue of debentures. A charge on uncalled share capital of the company.
English mortgage - Sec.58 (e) 3. 4. Mortgage by deposits of title deeds Sec 58(f) Anomalous mortgage - Sec.58(g)
Registration compulsory: Section 59: Where the principle money secured is Rs. 100 or upwards, a mortgage (other than a mortgage by deposits of title deeds) can be effected only by a registered instrument. It must be signed by the mortgagor and attested by at least two witnesses. Negotiable Instruments are not actionable claims: Sec. 137 provides that Sec. 130 to 136 dealing with actionable claims do not apply to: Stocks and shares or debentures 1. Negotiable Instruments
Any mercantile document of title to goods. INDIAN PARTNERSHIP ACT 1932 The act came into force on 1.10.1932 Definition: Sec. 4: Partnership is the relation between persons who have agreed to share the profit of business carried on by all or any of them acting for all. Maximum no of partners:
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BANKING AWARENESS TRAINING A charge on immovable property wherever situated or any interest therein A charge on any book-debts of the company. A charge, not being a pledge, on any immovable property of the company A floating charge on the undertaking or any property of the company including stock in trade. A charge on calls made but not paid. A charge on a ship or any share in a ship. A charge on a good will, or a patent or a license under a patent, or a trademark or on a copyright or on a license under a copyright. Effect of registration: Under section 126 any person dealing with the property on which charge has been registered under Sec 125 shall be deemed to have notice of charge as form the date of such registration. This provision protects the interest of the person in whose favour charge is created from subsequent charges on the property. RESERVE BANK OF INDIA ACT, 1934 Demand drafts payable to bearer: Sec. 31 provides that only RBI or any other person so authorised by Central Govt. can draw, accept, make or issue any Bill of Exchange, hundi, promissory Note or engagement for the payment of money payable to bear on demand. Cash Reserve ratio: Sec 42(1) stipulates that every scheduled bank should maintain a minimum of 3% of its Demand and Time liabilities as Cash Reserve with RBI. RBI may vary it upto 20%. From 1st April 2008, the statutory minimum CRR requirement of 3 per cent of the total demand and time liabilities is removed. Submission of weekly figures: As per Sec. 42(2), banks are required to send returns showing the amount of their Demand and Time liabilities, borrowing from other banks, etc. every Friday. INCOME TAX ACT Permanent Account Number (PAN): As per Sec. 139A, for certain banking transactions, the clients are required to furnish their PAN. If the client does not have PAN, then a declaration in form 60/61 is to be obtained in lieu of PAN. PAN can be obtained by filing Form No: 49A and submitting it to IT Dept. Under this section, PAN is to be used for: Opening a bank account Deposit in cash in excess of Rs.50000 in a deposit account, made during the day. Payment in cash for purchase of bank drafts or pay Attachment of Bank A/Cs: As per Sec. 226(3), the IT authorises have powers to attach the credit balances held in bank accounts of an assessee in case of default in payment of Tax dues. Restriction on cash payment: No branch of bank can repay any time deposit made with it otherwise than by an account payee cheque or account payee draft drawn in the name of the person where -The amount of deposit together with interest, if any payable thereon OR -The aggregate amount of deposit held by such person with any other person on the date of such repayment together with interest, if any, payable on such deposit is Rs. 20000/- or more. Such payment may also be made by crediting the amount of such deposits to the Savings Account or Current Account (if any) with such branch of the person to whom such deposit has to he repaid. Tax deduction of source: Section 194 A of the Income Tax Act (for Domestic Deposits) TDS should be recovered on Interest on Domestic Time Deposits (Excluding Recurring Deposit Scheme) made on or after 1-7-95 and deposits renewed on or after 1-1-96, if interest on all time deposits of a depositor in one branch exceeds Rs. 10000 in one financial year. Interest paid + credited + provided should be considered for this purpose. Exemptions are in case of declaration in form 15G or 15H or submission of Form No. 15AA issued by ITO or when exempted as per statutatory provisions. Section 195 of the Income Tax Act (for NRI accounts) TDS should be recovered on interest on NRO account of a NRI at the prescribed rates. Unlike domestic deposit, there is no threshold limit for NRO accounts. All types of deposit accounts (including Savings and Recurring Deposit Scheme) are under the purview of the TDS for orders or bankers cheques exceeding this amount of Rs.50000. (Please note that despite IT Act permitting cash transaction for DDs and Pos for amounts exceeding Rs.50000, RBI has not permitted banks for cash transactions of Rs.50000 and above. Account with a post office savings bank in excess of Rs.50000 Investment in shares and debentures Buying and selling of vehicles Buying/selling of Immovable Properties in excess of Rs.5 lacs. Buying a mobile phone Payment in cash in connection with travel to a foreign country exceeding Rs.25000 Hotel bill in excess of Rs.25000.
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BANKING AWARENESS TRAINING NRI accounts. Please note that TDS provisions are not applicable for NRE and FCNR accounts. Section 226 (3) of the Indian Income Tax Act 1961: That is Attachment order issued by Income Tax authorities attaching credit balances in the account of customers who default on making payment of the Income Tax. CIVIL PROCEDURE CODE 1908 Order 21, Rule 46 of the Code of Civil Procedure 1908: That is Garnishee Order issued by a Court on the Banker attaching the credit balances of Account holders (i.e. of Judgement Debtors). BANKER'S BOOKS EVIDENCE ACT 1891: Section 4 By which "a certified copy of any entry in a banker's books shall in all legal proceedings be received as prima-facie evidence of the existence of such entry and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent, as the original entry itself is now by law admissible, but not further or otherwise", in cases where a banker is not a party to the suit. THE INFORMATION TECHNOLOGY ACT 2000 India is the 13th country in the world to pass this legislation. The need for cyber laws is to facilitate Ecommerce and e-Governance and to curb Cyber crimes. The Bill received the Presidents sanction on 9th June 2000 and became effective from 17th October 2000. The Act is divided into 13 chapters, 94 sections in 4 schedules. List of Major Cyber crimes identified by this act: Unauthorised access to a computer system Unauthorised access to data or information Introduces or cause to introduce viruses Tampering with computer source documents Cause damage or disruption to Computer system Denial of access Uses or downloads un-licensed software Hacking Publishing obscene information Breach of confidentiality and privacy Cyber Squatting Cyber Piracy Based on United Nations Commission on International Trade Law (UNCITRAL) ABA Digital signature guidelines Florida Electronic Commerce Security Act Malaysia Computer crimes Act Singapore Electronic Transactions Act Salient Features of I.T. Act Computer data accorded legal sanctity Certifying Authorities for Digital established Digital Signature recognised Signature Cyber crimes to invite tough penalties E-Governance Filing of forms, application or other documents in any government office in the electronic form. Police Authorities given powers of enforcement The IT Act 2000 provides legal legitimacy to electronic records. It also provides legal recognition to documentation created through the electronic media. The IT Act also therefore amends the Indian Penal Code; The Indian Evidence Act 1872; The Bankers Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934. Appellate authorities set up The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 Banks normally face requests from guardians being either the biological parents or relatives of children suffering from Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities to open account with the Bank in the names of these children and allow their guardian to operate the account. We also find that such requests come from those persons who are affected by these disabilities and who have crossed the age of 18. In view of the fact that the parliament has passed an Act National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (National Trust Act, 1999) and also under the Mental Health Act, 1987, the courts being the district court under Mental Health Act or a local level committee under the National Trust Act, 1999 are authorized to issue such guardianship certificate and based on the said certificate issued by these designated authorities, Banks can open an account in the name of the mentally challenged people, both minor and major and allow them to be operated by their guardian as appointed by these Act. For details, please visit: http://iim.axisb.com/iim/viewinstruction.aspx?id=7893 &highlight=%22autism%22 PART - B Doctrine of Indoor Management: In a company registered under Companies Act, as far as the internal proceedings are concerned, outsiders are entitled to assume that everything has been regularly done. Viz., passing of board resolutions etc. Doctrine of Constructive Notice: The Memorandum of Association / Articles of Association are public documents, any body dealing with a Joint Stock company is supposed to inspect these public document and ensure that his contract with the JSC is in conformity with the provisions of these documents. As per section 126 of Companies Act, the notice takes effect from the date of Registration of charge. [Care, this is not
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BANKING AWARENESS TRAINING for priority of charge inter-se creditors on the assets of the company.] Doctrine of Reputed Ownership: If a creditor possesses legal title or a valid charge, the security is not available for the official receiver / assignee/liquidator if the borrower becomes insolvent. Otherwise, under the Doctrine of Reputed Ownership all the goods / assets / properties, whether in the possession of the insolvent / company under liquidation or not will be available to the official receiver / assignee / liquidator for distribution among all creditors. A valid charge enables the bankers to keep the security outside the purview of Doctrine of Reputed Ownership'. Doctrine of Tacking: A subsequent Mortgagee (say a third charge holder) cannot improve his position or obtain priority by paying off the dues to any prior mortgagee (say First Charge holder). This is u/s 93 of Transfer of Property Act. However, if the original mortgage agreement is made for a higher amount and the instalment in released subsequently (i.e. after creation of II charge on the same asset), priority can be maintained over such subsequent mortgage u/s 79 of TP Act. 'A' again re-mortgaged one property to Y. The liquidator / receiver / assignee may (if no agreement to the contrary) satisfy the claim of X out of one property which is not mortgaged to Y so that the second property which is charged to Y (as also to X) may be fully available to Y. Doctrine of Quantum Merit (Under Contract Act): If a person, at another's request, did some work or delivered goods / services is entitled to receive the payment (i.e. a reasonable amount) E.g. Payment to minor at Guardian's request, entitled to receive from minors' property even if minors' consent is absent. Doctrine of CAVEAT EMPTOR (Beware buyer) - Under Contract Act: The person who buys should keep his eyes and mind open and be cautious while buying goods. Doctrine of Protected Transactions: Generally, an insolvent is not entitled to enter in to any contract or carryout any transactions. But as per the insolvent Act (2 different Acts) there are certain permitted transactions. Doctrine of Relation back or Doctrine of dating back: Doctrine of Marshalling (Sec. 81 of Transfer of Property Act) This is on the system of arranging the securities among several secured creditors. E.g. X. 'A' has two properties - Both are mortgaged to When a person is declared insolvent, the date of insolvency takes backdated effect. This would mean that the person would be deemed to have become insolvent when he carried out the first act of insolvency.
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Test Your Understanding

TICK THE MOST APPROPRIATE ANSWER
1)
A banker exposes himself for damages when he 1) 2) 3) 4) Wrongly returns a cheque with the remarks Account Closed Delivers an article deposited by husband to his wife without authority. Collects a cheque crossed to another bank. Collects a cheque, which was not crossed. 6)
2) 3)
Protected if the forgery could not have been detected even with reasonable care and prudence. Protected if account holder maintained substantial balance and the amount of cheque was small. Not entitled to debit the Drawers account with the amount of the cheque.
4)
2)
P and Q have a joint Current Account and have jointly authorized R to operate the account. Notice of Ps death is received by bank and in the meantime a cheque signed by R as per authorization is presented for payment but issued prior to Ps death. 1. 2. 3. 4. Since the cheque was issued prior to Ps death it should be honoured. The cheque will be paid, as R who has signed the cheque is alive. The cheque will be returned. The cheque will be paid. 7)
A Payee presents a cheque duly signed by the Drawer for payment but the handwriting of particulars is different from that of the drawer. In such cases 1) 2) 3) 4) The bank will refuse payment, as the check could be stolen cheque. The bank will make payment only to the Drawer himself. The bank will make payment only if presented in clearing. Will make the payment provided the cheque is otherwise in order.
3)
There is Current Account in the name of Wilson Engineers Ltd. Operated by A or B or C, three directors anyone singly. The branch has received notice of Bs death. Thereafter a cheque signed by B is presented in clearing. 1. 2. 3. 4. The cheque will be paid. The cheque will be returned. The cheque will be paid provided it is confirmed by A or C. None of these.
Cheque payable to A or order and crossed Not Negotiable is presented for payment through collection. Mr. A has endorsed the cheque to B and B has also endorsed on the cheque. As a paying banker you will 1) Pay the cheque provided the collecting banker confirms that As account will be credited on realization. A cheque crossed Not Negotiable cannot be transferred and therefore the cheque will be returned. Not Negotiable crossing does not restrict the transferability of the cheque: the cheque will be paid if otherwise in order. The cheque can be paid only to Drawer of cheque only and hence will be returned.
2)
3)
4)
A cheque that was returned Effects not clear has been presented again and there are no funds in the account to pay the cheque. 1. 2. 3. 4. The cheque has to be paid The cheque should be returned. 8)
4)
Debiting overdraft account should pay the cheque. The cheque should be paid by Temporary Overdraft creation.
Mr. Perfect draws a cheque in favour of Mr. Careless and stipulates that the cheque is valid for 1 month from the date of issue. The Paying Bank 1) Can make the payment even after 1 month as cheque is valid for payment for 3 years as per Law of Limitation. Can make the payment because the NIA does not recognize stipulation of such conditions. Can make the payment because the cheque is valid for 6 months from date of cheque. Cannot ignore the direction of the drawer.
2) 5) If the cheque with forged drawers signature is paid by the bank, the paying banker is 1) Protected if the cheque is paid in good faith and without negligence. 3) 4)
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BANKING AWARENESS TRAINING 9) A cheque is issued Pay cash or order. The Paying Bank 1) 2) 3) 4) Should not pay the cheque as it is irregularly drawn Can make payment to bearer. Can make payment only to the drawer. Cash payment to CASH is not payment in due course. 3) 4) 15) A cheque dated 31st APRIL is presented for payment. The Banker should 1) 2) Pay the cheque if presented on or after 30 th. April. Not to pay because 31st April is an impossible date. Pay only on 1st May or 2 nd. May if 1 st. May is a holiday. None of these.
10) In which of the following cases, a banker should not pay a cheque 1) 2) 3) 4) 5) When the drawer is arrested When the drawer is imprisoned/kept under trial. When the drawer is imprisoned and also convicted. When the drawer is arrested and released on bail and comes to the bank to withdraw money. None of the above.
16) A cheque has been presented for payment through SBI in clearing. However there is also a special crossing of Ratnagar Bank Ltd on the cheque. The paying banker 1) 2) 3) 4) Should ignore the 2nd Special Crossing and pay the cheque. Should return the cheque with the reason Irregularly Issued. Should return the cheque with the reason Cheque crossed to Ratnagar Bank Ltd. None of these.
11) A bearer cheque for Rs. 10,000/- is issued favouring A or bearer. The date of cheque has been altered but duly initialled by drawer and presented by Mr. A 1) 2) 3) 4) The cheque should be paid if otherwise in order. The cheque should not be paid. Can be paid if A is identified. Can be paid only if presented in clearing.
17) If in case of Question No. 16) if apart from the special crossing to Ratnagar Bank Ltd., a second special crossing indicates SBI A/c Ratnagar Bank Ltd., the paying banker should 1) 2) 3) 4) Return the cheques with the reason Ambiguous Crossings. Return the cheque with the reason Crossed to 2 Banks Pay the cheque if otherwise in order. Return the cheque with remark Collecting Banks confirmation required.
12) Section 89 of the NIA gives protection to Banker in respect of 1) 2) 3) 4) Forged signature Forged endorsement Payment of cheques with material alternation that is not apparent or visible. Stolen cheques and DD lodged for collection.
18) Opening of a crossing on a cheque can be done by 1) 2) 3) 4) A holder in due course Payee only. Payee or Drawer. Drawer only.
13) A suspicious looking person presents a cheque for Rs. 25,000/- (open and bearer) for payment. The bank should 1) 2) 3) Pay the amount to bearer. Should pay to the bearer after identification Should pay the cheque only after making inquiries and satisfying himself about the title of the person. None of these.
19) There is a Joint Account A & B operated by E/S. However B calls and informs the bank in writing today not to honour cheques issued by A without consent or B. The Bank should 1) 2) 3) 4) Accept the letter and follow the letter. Ignore the letter. Ask B to submit the letter jointly with A. None of these.
4)
14) Before making payment of an order cheque, the bank should ensure that the endorsements if any are 1) 2) 3) 4) Genuine. Regular. Genuine though irregular. None of these.
20) In the above case, if a cheque is presented in clearing bearing a date prior to Bs letter, the bank should 1) Pay the cheque as the cheque was issued prior to Ws letter.
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BANKING AWARENESS TRAINING 2) 3) 4) Pay the cheque, as B has no authority to give such letter. Return the cheque. None of these. 4) information by him from the bank regarding the return of the cheque as unpaid. The drawer of such cheque fails to make payment of the said amount of money to the payee or as the case may be to the holder in due course of cheque within 15 days of the receipt of said notice.
21) A cheque as per practice is treated as Stale 1) 2) 3) 4) After the expiry of 3 years from the date of cheque. After the expiry of 3 months from the date of cheque. After the expiry of 6 months from the date of cheque. After the expiry of 6 months after the date of cheque.
25) A banker collects a cheque on account of a customer who is not a true owner of the instrument. The bank will be held liable for conversion unless 1) 2) 3) 4) The bank crossed the cheque with a rubber stamp before it was presented to the paying bank. The cheque was specially crossed to the collecting bank. The cheque was crossed A/c Payee only The cheque was crossed before it was deposited into the bank.
22) A post dated cheque is a cheque in which the 1) 2) 3) 4) Date on cheque is subsequent to the date on which it is drawn. Date on cheque is prior to the date on which it is drawn. Date is left bank to be filled in by payee. None of these.
26) While opening a Current/SB Account/FD accounts, identification is absolutely necessary 1) 2) 3) 4) As per KYC guidelines. So that the bank will not be charged for undue influence in future. To get collecting bankers protection under Section 131 and 131-A of NIA. 1 and 3 above.
23) In case of cheque paid after banking hours which of the following statements is not correct 1) 2) Such payment is payment in due course if it has been paid after proper identification of payee. The amount of such cheque cannot be debited to the Drawers account till the opening of the bank on the next day. In the meantime if the drawer countermands payment of such cheque, the banker cannot debit such cheque to the customers account. The death of customer, his insolvency or a Garnishee order served in the meantime would make the payment of the cheque invalid.
27) The statutory protection available under section 131 of the NIA to a collecting Banker would not be available in respect of 1) 2) 3) 4) An Order Cheque bearing irregular endorsement. An Order Cheque where any of the endorsement is forged. Stolen cheques All of the above.
3)
4)
24) A person shall be deemed to have committed an offence as per Section 138 of NIA (Dishonour of cheque for insufficiency etc., of funds in the account and cheque has been returned provided the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity which ever is earlier.) This is so provided (Tick the wrong answer) 1) 2) 3) The cheque has been issued as a gift amount. The cheque has been issued for the discharge in whole or in part any debt or other liability. The payee or the holder in due course of the cheque as the case may be makes a demand for the payment s of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of
28) When a cheque is deposited for collection/ clearing by an account holder, the relationship between customer and the bank is 1) 2) 3) 4) Trustee and beneficiary. Bailor and bailee Pledger and pledgee. Principal and Agent.
29) To qualify for collecting Bankers protection, Bank generally insists that the first transaction should be------------------ in a running account. 1) 2) 3) 4) Deposit of local check i.e. clearing cheque. Deposit of outstation cheque i.e. collection cheque Deposit of Demand Drafts. Cash deposit
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BANKING AWARENESS TRAINING 30) A cheque crossed Account Payee only 1) 2) 3) In direction to paying Banker to ensure the cheque is credited to Payees Account only. Is direction to the Payee not to endorse the cheque Is direction to the Collecting Banker to ensure that the proceeds of the cheque are collected for the account of the payee only. It is an unauthorized crossing. 36) In case of wrongful dishonour of cheques, the Banker is liable to pay damages 1) 2) 3) 4) Only to the payee of the cheque Only to drawee of the cheque Only to drawer of the cheque Anyone of the above depending on who has incurred such loss.
4)
31) A Banker may not get protection when it collects 1) 2) 3) 4) A cheque crossed Not Negotiable An uncrossed cheque. A cheque crossed Not transferable None of these.
37) The balance in a SB A/c. is Rs. 600/-. A cheque is presented for Rs. 6000/- and the branch has to return the cheque. The reason to be furnished in return memo would be 1) 2) 3) 4) Refer to Drawer Exceeds arrangement Funds insufficient Not arranged for.
32) If the banker has collected a crossed cheque in which drawers signature is forged, for his customer, in good faith and without negligence 1) 2) 3) 4) No protection will be available. Collecting banker is protected under Section 131. Paying banker may claim the loss incurred by him from collecting banker. None of these.
38) In view of section 8 of the Negotiable Instrument Act, 1881, the term holder would not include: 1) 2) 3) A thief in possession of an instrument payable to bearer or The finder of a lost instrument payable to bearer, or Even the payee himself if he cannot recover the amount due on the instrument, as when he is prohibited from doing so by an order of the court, All of these. (1) & (2)
33) The maximum number of partners cannot exceed 10 for Banking and 20 for other activities. This is based on 1) 2) 3) 4) Sec 11 of Companies Act. Sec 11 of Indian Partnership Act Sec 11 of Indian contract Act Sec 30 of Partnership Act. 4) 5)
39) Which of the following statement is incorrect in view of the provisions contained in the Negotiable Instruments Act 1881? 1) The holder may convert a special crossing into a general crossing or he may cancel a crossing altogether under his signature; The holder may add general or special crossing to an uncrossed cheque; If a cheque is already crossed generally, the holder may add special crossing to it; Where a cheque is crossed generally or specially, the holder may add the words Not Negotiable.
34) Section 131 and 131(a) of NIA or Collecting Bankers protection protects the Banker from the risk of conversion. Conversion means 1) 2) 3) 4) Wrongful payment but payment otherwise in due course. Negligent Act that could be easily made out of proved. Unlawful taking or using of something belonging to someone else or depriving the lawful owner. None of these.
2) 3) 4)
35) A Holder of a cheque is one 1) 2) 3) 4) Who is in possession of the cheque only for consideration. Who has encashed a cheque but is in possession of cash received. Who is entitled to possession of the cheque in his own name. Who is entitled to possession of the cheque for another person.
40) There is a saving account in the joint names of husband and wife payable to either or survivor. The wife issues a cheque and there are certain cuttings on the cheque, which are authenticated by the husband. What will you do in this case? 1) 2) 3) 4) Pay the cheque if otherwise in order. Return the cheque. Get the cuttings confirmed from the wife also and then pay. Ask the accountholder to issue a fresh cheque.
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BANKING AWARENESS TRAINING 41) For undated cheque, stop payment order remains in force for a period of : 1) 2) 3) 4) Three years Three months. Six months unless revoked by the customer earlier. Until the account is closed by the customer. 4) A cheque cannot be issued favouring a minor.
44) A cheque to be signed jointly has signatures of A and B. However, one of the joint signatures is forged. 1) 2) 3) 4) The bank is protected because at least one of the two signatures is genuine. The bank cannot debit the account. 50% of the amount can be debited to account. None of the above.
42) A crossed cheque was inadvertently paid across the counter. The cheque was favouring A or bearer. Later on it transpired that the presenter of the cheque was not A, but someone else who has stolen the cheque from A. 1) 2) 3) 4) The bank is liable to true owner i.e. Mr. A The bank is liable only to the drawer of cheque. The bank is not liable because once a bearer always a bearer. Bank has to compensate 50% to A.
45) A cheque is presented in clearing without date 1) 2) 3) The cheque should be paid if otherwise in order as the clearing seal of Bank will indicate the date. Return the cheque with the reason Cheque not dated. The Negotiable Instruments Act does not state that cheque should be dated and hence it should be paid. If the previous cheque as per series is paid, this cheque can be paid.
43) A MINOR 1) 2) 3) Can be a payee of a cheque. Cannot be a payee. Can be a payee provided the name of Guardian is also mentioned. ---oOOOo----
4)
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Did You Know?

Clearing Transaction Codes During the clearing process, the cheques are sorted by a reader sorter machine. For this purpose, the cheque contains MICR (Magnetic Ink Character Recognition). The two digit number at the right corner is known as Transaction Code. The following are the transaction codes as approved by the RBI. Transaction Nature of transaction/ Code No. represented by the code 01-09 instruments Transaction Code No. Nature of transaction/instruments represented by the code 21 Central Government transactions
Codes reserved for clearing house control documents representing debit instruments. Savings Bank Account Cheque Current Account cheque Banker's cheque Cash credit account cheque Dividend warrant Traveller's cheque Demand Draft Cheques which will be issued in lieu of existing payment order Gift cheque Interest warrant State government transactions
10 11 12 13 14 15 16 17 18 19 20
22 23 24 25 26 27 28 29 30 31 32-49
Railway transactions Posts & Telegraphs transactions Defence transactions Telecommunication transactions Reserved Departmentalized transactions Refund warrant At Par Current Account Cheques Stock Invest At par Savings Account Cheques Reserved ministries (UMALO)
The transactions in banks are classified into three modes viz., Cash Transactions, Clearing Transactions and Transfer Transactions. Cash Transactions: All the transactions that affect the cash balance of the bank are cash transactions. Viz., cash deposits and cash drawings. Generally this is indicated in the accounts as By cash/To cash Clearing Transactions: In case of crossed instruments like cheques/DDs etc., the transfer of funds between two accounts takes place under clearing system. The settlement takes place between two different banks (collecting bank and the paying bank) situated in the same clearing zone. Generally this is indicated in the accounts as By clg/To clg Transfer Transactions: In case of crossed instruments like cheques/DDs etc., the transfer of funds between two accounts maintained by the same bank takes place under Transfer payment system. Generally this is indicated in the accounts as By Cheque Party Name/To Cheque-Party Name. Credit & Debit Balance When a customer opens a deposit account and remits cash/cheque the account indicates the balance that is repayable to him by the bank. This is known as Credit balance normally indicated by the abbreviation Cr. If the customer has overdrawn his account and owes to the bank, then the balance is known as Debit Balance indicated by Dr. RBI Instructions for Lockers not operated for One Year RBI has advised that in cases where lockers have not been operated for more than three years for medium risk category or one year for a higher risk category, banks should immediately contact the locker-hirer and advise him to either operate the locker or surrender it. This exercise should be carried out even if the locker-hirer is paying the rent regularly. As per internal instructions of the Bank, the Bank can even break open such unused lockers after sending reminders to the customers. Advantages of section 25 companies All the advantages of incorporation are enjoyed by such bodies and yet they are conferred the privilege of not adding the words limited or private limited. The officers and members enjoy limited liability and total immunity from the personal liability. The governing body of the company normally controls the admission and even a partnership firm can be the member. All the provisions of the Companies Act, 1956 apply to section 25 companies unless otherwise provided. In
BANKING AWARENESS TRAINING exercise of the powers conferred by sub-section (6) of section 25 the Central Government exempts section 25 companies from the provisions of sections 147, 160(1)(aa) 166(2), 259, 264(1), 280, 282, 303(2) fully and partly from the provisions of sections 2(45), 171(1), 193, 209(4A), 219, 257, 285, 287, 292, 299 and 301. Unlike a Charitable Trust no administrative charges are to be paid for any donation received by the Organization. The company need not obtain any permission from any authority for sale of immovable property. Over and above these advantages, section 25 company is also eligible to claim exemption u/s 11 of the Income Tax Act, 1961. Section 25 company (1) Governed by Companies Act, 1956 Trust Governed by Bombay Public Trusts Act, 1950
(2) Central Govt. Permission through the Regional Not necessary Director necessary (3) Under jurisdiction of Registrar of Companies Under jurisdiction of Charity Commissioner
(4) Memorandum and Articles of Association as main Trust Deed as main document document (5) No stamp paper necessary for memorandum and Trust deed to be executed on non judicial stamp paper articles of association (6) Objects clause can be altered with prior sanction of Permission of Charity Commissioner required to change objects Central Govt. of the Trust (7) No permission necessary from any authority for sale Prior permission of Charity Commissioner required of immovable property (8) No administrative charges to be paid for any 2% of the donation received is to be paid as administrative donation received. charges to the Charity Commissioner. No charges to be paid on donation received towards corpus. (9) Minimum seven members required Minimum two trustees required
CUMULATIVE DAILY AVERAGE BALANCE (CDMA) CONCEPT Monthly Average Balance (MAB) Average balance of a month e.g.: if in a month say, April, the balances are : 1
st
Cumulative Daily Average Balance (CDAB) Cumulative average balance of all the months. In the taken example, the CDAB will be the same since April is the first month of the year.
Rs.5000 Rs.30000
2nd
3rd Rs.10000 and remained so till 30th, then the average is 315000 30 = 10500 Next Month: May 1st to 31st Rs.15000 and the MAB is Rs.15000 Next Month: June MAB = Total of all days bal 30 CDAB is an important parameter to indicate the performance of branches over a period of time and not on any specific month. Thus, the extra growth shown by branches on certain months (say March) is spread to other months of the year to view the overall position. The CDAB the average of 61 days i.e. 315000 + 465000 61 = 12786.89 315000 + 465000 + total of all days bal in June 91
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Common Customer Service Issues

Status of AOF
The status of the AOF can be tracked by the AOF number. If the customer has the AOF Number handy, then logon to the system run a search for the AOF number Alternately, the customer can search for the customer name and retrieve the account status. Once the AOF is dispatched by the branch, the CPU updates the status after each step.
Welcome Kit Not Received

Check if the account has been opened by the CPU or is still in process If the account is opened, check when it was opened. If it was opened just 2 days back, then inform the customer that the welcome kit is yet to be dispatched from the CPU If it was opened many days back then check the status of the welcome kit If the welcome kit was dispatched, then give the customer the AWB number and the telephone number of the relevant courier to follow up. If the welcome kit was not dispatched in spite of account having opened many days back, check with the CPU regarding the same. Sometimes, welcome kits are dispatched, but are returned to the branch because there was no one to receive it at the customers communication address. Look for kit in the bundle lying in the branch. If yours is an extention counter, then there is a chance that the welcome kit has been sent to the parent branch. Check with the parent branch regarding the same. If the welcome kit is still untraceable, have the customer re-apply for each of the deliverables i.e. Debit card and Cheque Book. Ensure that the customer is not charged for these, since the welcome kit itself did not reach the customer. If the customer at the time of opening the account has opted to collect the welcome kit from the Home Branch, then the CPU forwards the kit to the Home Branch. Advise the customer to collect the same from the Home Branch. Once the welcome kit is traced, have the customer sign the register, verify the signature and only after verifying the identity of the customer must you hand over the welcome kit.
Statement of Accounts
For SB Accounts, our bank emails statement of accounts to customers every quarter. If the customer has opted, the soft copy of the monthly statement is also mailed to the e-mail ID registered with the bank. Pass Books are issued only on request on chargeable basis (not chargeable for Senior Privilege Accounts).
In addition to the above, Clients can approach the Home branch and collect the statements or Phone Banking Centre for the hard copy by Fax or courier. Through Telebanking IVR, the customer can have the details of last 7 transactions. Through i-connect, statements can be viewed, downloaded.
ATM/Phone Banking Pin not received

If its a new account, follow steps outlined above If its a duplicate Pin which has not been receieved, run a search in the system using the debit card number Please note the Duplicate PIN mailer will be sent to the Home branch.
Duplicate Debit Card Request

The customer can apply for a duplicate debit card by filling up the debit card application form. Do remind the customer of the debit card issue charges when he/she submits the form. The filled up form must be scrutinized for errors. If the form is free from errors, stamp the counterfoil and return it to the customer. Enter the relevant details in the system The request can be tracked by the request number. Remember to hand over the request number to the customer.
Duplicate Debit Card Pin/Telebanking Pin/iConnect Password

The customer can apply for duplicate pins by filling up the relevant application form. The application can be given at the home branch or any other branch or dropped in the ATM box but the collection of the duplicate PIN/Login ID is only at the Home branch Do remind the customer of the duplicate pin issue charges if any when he/she submits the form. The filled up form must be scrutinized for errors.
BANKING AWARENESS TRAINING If the form is free from errors, stamp the counterfoil and return it to the customer. Enter the relevant form details in the system. The request can be tracked by the request number. Remember to hand over the request number to the customer.
Debit Card Captured in ATM

The customer has to approach any of the nearby branches or his home branch The branch takes the request and forwards the same to the concerned ATM cell/ATM maintaining Branch. Card will be delivered to the customer after verification of the identity in a deactivated form. Re-activation request then will be sent by the branch to the ATM cell. However, if the customer has not approached any of our branches with in 15 days, the card will be destroyed by the bank. If the card is captured at other banks ATM, the customer should approach the concerned bank for retrieval of the card. If other banks ATM card is captured in our ATM machines, we should advise the claimants to approach the card issuing bank.
Debit Card not working in Merchant Outlets/ATMs

Check if the account is out of Funds Check if the debit card is in active state (not even used in our ATMs once). Check if the account itself is a dormant account
Inoperative Accounts
A savings as well as current account should be treated as inoperative if there are no transactions in the account for a period of two years. For the purpose of classifying an account as inoperative both the type of transactions i.e. debit as well as credit transactions induced at the instance of customers as well as third party should be considered. However, the service charges levied by the Bank should not be considered. During this period, the system disallows any drawings from such accounts (from any of our branches/ATMs/PoS) for security reasons. Transactions are to be permitted in an inoperative account with the authorization of the senior work class. Re-activation of these accounts will be done by the Home Branch at the request of the account holder after proper identification.
Activation of Debit Card

Activation of our banks Debit Card is done by using the card at any of our banks ATM. Entitlement to the insurance benefits accrues only if the card is used at any of the retail outlets
Gold Debit Card getting charged for withdrawals from other bank ATMs
Inform the customer that the charge is reversed the following day of the transaction If the charge has not been reversed even after two working days of the transaction taking place, inform the CPU about the same. Brief the customer of the situation and assure him/her that the charges will be reversed in due course.
Lost Debit Card

The customer may visit any of the Home Branch/any of the nearby branch and request in writing to block the card. Request for blocking the card can be faxed to the home branch Call the ATM Helpline or Phone Banking Centre
Lost Chequebook
If a cheque book is lost, ask the customer to submit a precautionary stop payment request for all the chequebook leaves. This can be a simple written request mentioning the cheque numbers. Advise the customer politely about the charges. If the customer does not remember the cheque numbers, then pull out the details from the system and give them to the customer Follow the procedure of a new cheque book request (outlined below)
Chequebook Request
Requests for chequebooks may be made at: Any branch by tendering the cheque book requisition slip duly filled in. a. The branch official has to verify the customers signature and make an appropriate entry in the system
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BANKING AWARENESS TRAINING ATMs by depositing the cheque book requisition slip duly filled in. I-connect Phone Banking Centre On receiving the request for a chequebook, the CPU forwards the same directly to the customer. In case of urgent requirement, the home branch can issue a cheque book (which is not a personalized cheque book) to the customer.
Stop Payment Request

A stop payment request can be made by submitting a letter to this effect mentining the cheque number, and the payee name if applicable After receiving the request, the branch official must verify the signature of the customer and only after verifying the identity, proceed with the request.
Mobile Alerts Reaching Customer Late

Mobile Alerts are sent by the system promptly after the entries are passed in the customers accounts. However, delays if any in receipt of the alerts may be on account of other technical constrains like network availability with the mobile service provider of the customer.
Address Change
The customer must fill up an address change form and submit it along with the new address proof The branch official must verify the correctness of the new address, and also the signature and identity of the person requesting it.
Adding a Joint Account Holder

The customer must fill up the joint account holder form and submit two photographs of the proposed joint holder along with their identity and signature proof
Adding/Modifying a Nominee
The customer must fill up the nomination form The branch official must verify the signature of the customer on the form
Service Charges
Please keep the latest schedule of the service charges handy and be familiar with the abbreviations used in the statements of accounts for the charges.
Account Balance Inquiries

Please be familiar with the terms like Account Balance, Float Balance, Funds in clearing/Shadow Balance Effective Available Balance, etc.,
Transfer of Account
Customer may be made aware of our any where banking facility and also the associated transaction limits and the applicable charges. We should also advise the customer of the implications of transferring the account on standing instructions, ECS mandates, Post-dated cheques outstanding etc., Request for transfer of accounts may be made at the Home Branch or at the branch to which the accounts is to be transferred. Customer will be allotted a new account number, cheque book and debit card/s.
Closing of Account
The request for closing the deposit account should be made only at the Home Branch by all the depositors under their joint signatures irrespective of the operating instructions. In very special cases, request for closing of the deposit may also be made at any of our branches who will be forwarding the request to the concerned Home Branch.Appendix 1: FAQ on SBEZY Secure In the request for closing the account, the mode of remittance (by Demand Draft/PO) may also be obtained.
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A P P E N D I X I: L I S T
Live Finacle:
OF
IMPORTANT WEBSITES
http://finacle.axisb.com:8080/SSO/ui/SSOLogin.html Enquiry Server from BCC Bangalore: http://fininquiry.axisb.com:8080/SSO/ui/SSOLogin.html
WE-CONNECT: http://we-connect.axisb.com/ A comprehensive information portal where you can explore banking topics in general and our Banks Instruction Manual. You can test you banking knowledge, by taking the online tests, designed for various topics.
Nishchint:
Nishchint is Intranet site used for various types of reports that are not available in Finacle. The site is accessible through the link http://10.2.16.215:7001/simba_indextest.jsp Nishchint site is also available through finacle by using menu option NISH. Silk Route: http://nishtest.axisb.com:7001/silkroute/index.html Information regarding Finacle Helpdesk numbers, Job Card, and Finacle help regarding different menus, functions and options are available on Silk Route site. Also Finacle10 CBT Silk Route is available through Finacle by using menu option SILK. Silk Route can be accessed through Nishchint -> MicroSites ->Silk Route Government Business Module: GBM is used for tax collection and pension disbursement. Government Business Module is available through Finacle by using menu GBM. Suraksha: As Finacle does not have a "Locker Allotment Module", "Safe Deposit Locker Management System" has been developed, which is used for monitoring the leasing of lockers to the customers. Locker Module is available through Finacle by using menu LOCKMAN. Charges Management: This module is used to get the details about charges applied on various customer accounts and available to branches though Finacle using menu Our Bank Circulars http://iim.axisb.com/iim/ for all our internal circulars. Knowledge Portal http://10.2.17.134/k%40axis/: Access to Products, Processes and Promotions information.
CHRGMAN.
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Ap p e nd ix II: B A N K ' S D R E S S C O D E
FOR
BRANCHES
AND
R AC S
Officers at all levels are representatives of the Bank and the dress, grooming and personal hygiene of our officers affect the impression of the public towards our Bank. Officers are, therefore, expected at all times to present a professional and businesslike image to customers, visitors, co-workers and vendors. In this regard, it has been decided to adopt the following dress code in the Bank. Men - should be attired in full-sleeved shirts of pastel colours in either solids or subdued stripes or checks. Trousers should be formal and darker than the shirt - preferably black, dark blue, brown, grey or charcoal. Shirts and trousers should be well co-coordinated. A necktie should be worn during customer hours and for all official engagements. This would be compulsory in metro / urban locations and voluntary for staff in semi-urban / rural locations, service branches, currency chests and ATM nodal cells. At all times, shirts should be fully buttoned and tucked-in. Sleeves should not be rolled up during business hours. Belts and shoes may be black or brown and should be of the same colour. Sandals should not be worn. Socks should match the colour of the trousers. Jackets and business suits may be used for formal occasions and while interacting with corporate clients. Women - Saree or salwar kameez or formal western wear (dark trousers / skirts and sober coloured shirts / blouses with simple details) should be worn. Heavy, ornate designs or large floral designs should be avoided. Cottons, polycots or silks would be the preferred fabrics. Footwear should match the attire. Fancy footwear should be avoided. General : 1. Hair should be neatly trimmed or arranged, regardless of length by lady officers. Similarly, male officers should maintain hairstyles, beards, moustache and sideburns as appropriate for a professional corporate environment. 2. Wrinkled or unpressed clothes should not be worn to office. 3. Footwear should be clean and well polished. Sneakers, floaters and slippers should not be worn. 4. Excessively tight attire should be avoided as also deep necklines. 5. Heavy / chunky or dangling jewellery and ankle bracelets which make noise should be avoided. Multiple earrings or multiple chains, necklaces should be avoided. 6. Chewing paan, tobacco, gum or smoking in the office premises is prohibited. 7. Nails should be clean and properly clipped. 8. Visible body tattoos and body piercing should be avoided. 9. Deodorants could certainly be liberally used. When perfumes are used, however, the smell should not be overpowering. 10. Bright, gaudy, fluorescent colours in clothes should be avoided. 11. Glittering / fluorescent hair gels / colours should be avoided. Saturday Dressing On Saturdays officers may wear formals as above or may opt for "smart casuals" i.e. for men trousers and shirts, which could be full or half sleeved and fully tucked in. Light coloured trousers and dark coloured shirts could be worn on Saturdays. Neckties would be optional. However if there is an official engagement on that day, formal dress code should be followed. Smart casuals would not include jeans, t-shirts, sneakers, shorts, capries, cargoes, dungarees, lowwaist trousers, athletic wear such as track-suits and leisure outfits like kurta-pyjamas. Formal or informal shoes may be worn. However, sneakers, floaters and slippers should not be worn. Officers are expected to present a neat appearance at all times and are not permitted to wear ripped, disheveled or similarly inappropriate clothing. Finally it is just as essential that all officers act in a professional manner and extend the highest courtesy to customers, visitors, co-workers and vendors. Last but not the least, wearing a cheerful and positive attitude is essential to our commitment to exemplary customer service. Compliance Branch Heads and RAC Heads will ensure compliance of the Bank's dress code. Senior Zonal and Central Office functionaries on branch visits will also observe compliance of the dress code.
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A pp e nd ix III : B A N K I N G C O D E S
AND
STANDARDS BOARD
OF
INDIA
An independent and autonomous watch dog to monitor and ensure that the Banking Codes and Standards adopted by the banks are adhered to in true spirit while delivering their service. http://www.bcsbi.org.in
The Banking Codes and Standards Board of India (BCSBI) is an independent and autonomous watch dog to monitor and ensure that the Banking Codes and Standards adopted by the banks are adhered to in true spirit while delivering their services. This is a voluntary Code, which sets minimum standards of banking practices for banks to follow when they are dealing with individual customers. It provides protection to customers and explains how banks are expected to deal with customers for their day-to-day operations. The Code has been based on the model evolved by Indian Banks' Association in consultation with Banking Codes and Standard Board of India. The Banking Codes and Standard Board of India would keep a watch on each bank's adherence to this Code. Our bank has adopted the "Code of Bank's Commitment to Customers. This Code sets minimum standards of banking practices to be followed by our bank while dealing with individual customers. It explains how customers are to be dealt with in their day-to-day operations. The document enshrines the rights of customers in the form of key commitments by our bank to the customers. The Code represents bank's commitment to minimum standards of service to individual customers in relation to products and services offered by the bank, e.g. Deposit accounts, Safe deposit lockers, Settlement of accounts of deceased account holders, Foreign exchange services, Remittances within India, Loans and advances and guarantees, Credit cards, Internet banking, In these areas the Code, inter alia, dwells upon Interest rates, Tariff schedule, Terms and conditions governing relationship between the bank and the customer , Compensation for loss, if any, to the customer due the acts of omission or commission on the part of the bank , Privacy and confidentiality of the information relating to the customer , Norms governing advertisements, marketing and sales by banks. Effective implementation of the above code in letter and spirit would depend on the level of awareness of the staff on the rules and regulations governing banking, obligations, responsibilities, rights of the banker and customer and an overall know-how on the various banking products and services. The full text of the code is available at http://20.1.135.102/HR/Static/Unstructure/Public/BCSBI%20Code.pdf (we-connect)
Revised Code of Banks Commitment to Customers at http://iim.axisb.com/iim/viewinstruction.aspx?id=8230&highlight=
Similarly Code of Commitment to Micro and Small Enterprises is also a voluntary Code, which sets minimum standards of banking practices for banks to follow when they are dealing with Micro and Small Enterprises as defined in the Micro Small and Medium Enterprises Development (MSMED) Act, 2006. It provides protection to MSE customers and explains how banks are expected to deal with customers in day-today operations and in times of financial difficulty. The full text of the code is available at http://20.1.135.102/HR/Static/Unstructure/Public/MSE%20CODE.pdf (we-connect) Please refer to Appendix IV for FAQs BCSBI MSE Code for further reading.
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Appendix IV: code of bank's commitment to micro and small Enterprises FAQs - MSE Code
1. In what way is the Code of Banks Commitment to Micro and Small Enterprises different from the existing regulatory prescription of the Reserve Bank of India and the Government policy framework? The objective of the Code is not to replace the existing regulatory framework but to complement it. Regulations by themselves cannot ensure availability of quality service to all. The Code seeks to achieve this through a positive and voluntary commitment of the bankers to provide easy access to transparent, speedy and efficient banking services. Banks are also committed to provide products and services suiting the needs of MSEs and to consider their financial difficulties sympathetically. 2. Why is the scope of the Code confined to only Micro and Small enterprises? MSEs play a very significant role in maintaining a balanced and sustainable growth of the economy, through employment generation, development of entrepreneurial skills and contribution to export earnings. The Report of the Working Group on rehabilitation of sick SMEs has brought out that this vibrant segment of the Indian economy has been contributing over 39 per cent of the manufacturing sector output, 33 per cent of the national exports and providing employment to nearly 312 lakh people through about 128 lakh units, located in both the rural and urban areas across the country. The Third Census of small enterprises conducted by the Government of India in 2001-02 revealed that 95.5% of Micro & Small Enterprises have been outside the purview of the jurisdiction of financial structure and that there is a critical need to provide banking services to fully exploit the potential of this sector. 3. What are some of the positive features of this Code? Through this Code, banks are committed to make available to MSEs, free of cost: A copy of the Code of Banks Commitment to MSEs which is their Charter of Rights. A checklist of all legal and regulatory requirements along with a simple standardised, easy to understand application form for loan. Banks are also committed to make available to MSEs information about:
The interest rates applicable, and the fees/charges, if any, and any other matter which affects MSEs interest, so that a meaningful comparison with those of other banks can be made and informed decision can be taken by you. The specific time frames for dealing with MSEs loan application, disbursement, services etc. The availability of collateral-free loan. The parameters for credit assessment and post disbursement. MSEs obligations when you are in financial difficulty and how your bank can help you. Nursing sick MSEs and debt restructuring. The services that it has committed to give to MSEs. The internal procedures for dealing with MSEs complaints. The banks policy for collection of dues, cheque collection, compensation, grievance redressal, etc.
4. If banks do not implement the Code, what is the recourse left for the customers? All banks have adopted a Model Grievance Redressal policy framed by the IBA. All banks have a set of internal Grievance Redressal Procedures for handling of complaints with given specific time frame consistent with External Grievance Redressal Mechanisms such as the Banking Ombudsman Scheme. The Code even provides that if customers are not satisfied with the banks response, they should not be discouraged from escalating the complaints and should be helped to take up the matter with the Banking Ombudsman. Individual complaints are also dealt with by the Customer Service Department of the Reserve Bank of India and if the complaints involve systemic issues, the BCSBI pursues the matter with the banks for rectification of the systemic lapses. 5. What is the measure of compliance of banks with the Code of Banks Commitment to Customers ? Banks have initiated several positive measures to comply with the provisions of this Code. All banks are now systematically distributing copies of the Code to all their customers. Since this Code is, in a sense, a Charter of Rights of the individual vis-vis his bank, this is an important action on the part of the bank to voluntarily empower the individual customer. Also, banks have adopted Model policies for Cheque Collection, Grievance Redressal, Security Repossession and Compensation and these are in public domain. Transparency with regard to charges, fees and interest rates is now apparent and all banks have a tariff schedule in public domain. These are some of the positive features. BCSBI is in continuous dialogue with banks towards achieving greater compliance of the Code in letter and spirit.
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RBI/2009-10/503 DPSS. CO. CHD. No. 2806 / 04.07.05 / 2009-10 The Chairman and Managing Director / Chief Executive Officer All Scheduled Commercial Banks including RRBs / Urban Co-operative Banks / State Co-operative Banks / District Central Co-operative Banks
June 22, 2010
Madam / Dear Sir, Standardisation and Enhancement of Security Features in Cheque Forms We invite your attention to our circular DPSS.CO.CHD.No. 1832 / 04.07.05 / 2009-10 dated February 22, 2010 on the subject and specifically to Paragraph 1.8 contained in the annexure thereto on 'prohibiting alterations / corrections on cheques'. A few references have been received from banks and members of the public seeking certain clarifications on legal validity, effective date of implementation, etc. We wish to clarify that the prescription on 'prohibiting alterations / corrections on cheques' i. has been formulated on the basis of recommendations of a working group constituted for examining the need for standardisation of cheque forms and enhancement of security features therein and after consultations with banks; ii. has been introduced to curtail cheque frauds on account of alterations in the various fields of cheques and to give protection to customers as well as banks; iii. will be applicable only for cheques cleared under the image-based Cheque Truncation System (CTS). Collecting banks should ensure, ab initio, that such cheques are not accepted for presentment in CTS. iv. is not applicable to cheques cleared under other clearing arrangements such as MICR clearing, nonMICR clearing, over the counter collection (for cash payment) or direct collection of cheques outside the Clearing House arrangement. v. has been issued in exercise of statutory powers conferred on the Reserve Bank of India under the Payment and Settlement Systems Act, 2007. This prescription will be effective from December 1, 2010. Banks are advised to ensure that adequate care is taken to educate the customers and to create awareness among them so that the entire process is carried out in a smooth manner. As regards other aspects contained in our circular under reference, separate communication will follow from Indian Banks' Association / National Payments Corporation of India. Yours faithfully (Arun Pasricha) General Manager
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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

Training Programme : Banking Awareness and Prevention of Frauds SESSION PLAN

SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

About Axis Bank

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

Axis Bank Highlights

Balance sheet size: 199,833 crore

Debt Capital Markets

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

Retail Banking, SME and Agri

Corporate & Institutional Banking

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

The Indian Banking Environment

Reserve Bank of India

Scheduled Banks Cooperative Commercial

Private Sector (22)

Foreign Banks (31)

Local Areas Banks (4)

Nationalized Banks (19)

TOTAL OF 19 NATIONALISED BANKS

TOTAL OF 22 PVT BANKS 16 OLD PRIVATE SECTOR BANKS

TOTAL OF 31 FOREIGN BANKS

State Bank of Bikaner & Jaipur Kotak Mahindra Bank

# 4 LOCAL AREA BANKS Coastal Local Area Bank Ltd

Krishna Bhima Samruddhi Local Area The

Commonwealth Bank of Australia

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

10. 11. 12. 13. 14.

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

Documents for certain types of current accounts:

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

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SWAGAT 2010-11 BANKING AWARENESS TRAINING PROGRAMME

KNOW YOUR CUSTOMER

Indicative list of suspicious activities

Attempts to avoid reporting/record-keeping requirements

Customer who provides insufficient or suspicious information

Certain suspicious funds transfer activities

Certain bank employees arousing suspicion

Checklist for handling overseas money transfers

Monitoring of Compliance of the Account Opening Procedure

RBI/2005-06/301DBOD.NO.AML.BC.63 /14.01.001/2005-06 dated 15th February, 2006

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CASH TRANSACTION GUIDELINES