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IMPORTANCE OF RETAIL BANKING PROJECT

FINANCIAL ANALYSIS REPORT 10-Jul-12

INDIAN OVERSEAS BANK

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CONTENT
SL.NO.
1. 2. 3. 4. 5. 6.

PARTICULAR
Declaration Certificate Preface Acknowledgement Object of the project About retail banking/Purpose of banking a. Banking b. Meaning of retail c. Meaning of banking d. Meaning of retail banking e. Types of banking f. Types of retail banking g. Strategic retail banking concept h. Retail banking in India I. Opportunities and challenges of retail banking in India/why customer choosing bank the post office, mutual fund share etc j. future of retail banking No. of table-12,graph-3,hirachy of format 0 0 0 0 0 9 0 0

PAGE NO. Total words-15,064 4 5 6 7 8 17 18 19 21 23 25 26 28 29 31 -------32 33 34 88 89 91 92 93 94 95 96 99 100

20 0 24 0 0 0 30 -------0 0 0 35 0 90 0 0 0 0 0 97 0

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Processing channels Risk involve in retail banking Banking regulation Introduction ,customer service hierarchy IOB branch, The structure of an INDIAN OVERSEAS BANK Scope and purpose of study Methodology and source of data SWOT analysis Limitations of the study Conclusion Recommendations Bibliography Annex : Glossary Thank you IOBIAN

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DECLARATION
I Manish Kumar, a student of M.B.A. Part II second semester of N.S.I.B.M, JAMSHEDPUR, hereby declare that, the project entitled. IMPORTANCE OF RETAIL BANKING has been submitted by me for any other degree or diploma of any university or scientific organization. The project is the result of my bonafide work and source of literature used and all assistance received during the course of investigation have duly acknowledged.

Place-JAMSHEDPUR Date-

MANISH KUMAR

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CERTIFICATE
This is certify that Mr. MANISH KUMAR from the NETAJI SUBHAS INSTITUTE OF BUSINESS MANAGEMENT, POKHARI, JAMSHEDPUR have successfully complicated their summer internship project (SIP) on Importance of retail banking with INDIAN OVERSEAS BANK, BARIDIH, JAMSHEDPUR branch from 15th May 2010 to 15th July 2010 in partial fulfillment of MBA curriculum as prescribed by N.S.I.B.M.

During his training period, his work and conduct were found to be excellent.

We wish him all success for his future endeavors.

Place: Jamshedpur Date:

MR.AMIT ANU (Branch Manager)

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PREFACE
The MBA programme is well structured and integrated course of business studies. The main objective of practical training at MBA level is to develop skill in student by supplement to the theoretical study of business management in general. Industrial training helps to gain real life knowledge about the industrial environment and business practices. The MBA programme provides student with a fundamental knowledge of business and organizational functions and activities, as well as an exposure to strategic thinking of management. In every professional course, training is an important factor. Professors give us theoretical knowledge of various subjects in the college but we are practically exposed of such subjects when we get the training in the organization. It is only the training through which I come to know that what an industry is and how it works. I can learn about various departmental operations being performed in the industry, which would, in return, help me in the future when I will enter the practical field.

Training is an integral part of MBA and each and every student has to undergo the training for 45 days in a company and then prepare a project report on the same after the completion of training. During this whole training I got a lot of experience and came to know about the management practices in real that how it differs from those of theoretical knowledge and the practically in the real life. In todays globalize world, where cutthroat competition is prevailing in the market, theoretical knowledge is not sufficient. Beside this one need to have practical knowledge, which would help an individual in his/her carrier activities and it is true that Experience is best teacher.

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ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting this final project report. The whole summer internship project (sip) period of time with Indian overseas bank has been full of learning and sense of contribution towards the organization. I would like to thank Indian overseas bank (lob) for giving us an opportunity of learning and contributing through this project. I also take this opportunity to thank all those people that made this experience a memorable one. A successful project can never be prepared by the single efforts of the person to whom project is assigned, but it also demand the help and guardianship of some conversant person who helped the under signed actively or passively in the completion of successful project. In this context as a student of NETAJI SUBHAS INSTITUTE OF BUSINESS MANAGEMENT.I would first of all like to express my gratitude to Mr.Sumit chakrawarthy, for assigning me such a worthwhile topic importance of retail banking to work in Indian overseas bank, baridih branch. The project couldnt have been complete without timely and vital help of others office members. Special thank to Mr.Amit Anu, branch manager, Mrs. B.B.Das,deputy manager,Mr.Tapan Sarkar,Mr.Ujjual Kumar Banarjee ,Mr.Ashok Kumar Das,Pardeep Kumar Banarjee for their invaluable guidance keen interest cooperation, inspiration and of course moral support throughout my project session.

Place:-Jamshedpur

MANISH KUMAR

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OBJECT OF THE PROJECT

As per Requirement of Master of Business Administration (M.B.A) under Kolhan University, it is Mandatory for MBA Student to undertake a project so as to gain the practical exposure to theory learnt and to submit a project in third semester. I have completed a project report on importance of retail banking This has been completed in time span of two months. The project task was given to me by organization to find the Project also indicates about how to save and invest your money and earn good return in future. It also includes other investment options wherein you can understand which instrument gives maximum return and to invest in which instrument. Subject is very nice, and I hope, I will get lots of enjoyment to done this subject. The objective of this summer project is to gain lots of practical experiences and some technical experiences also. For my project I have more focus on Retail Banking product &services. I hope, after this process very carefully bank will respond to customer needs, in terms of product development and delivery systems and my useful suggestions will bring some new revolution in bank.

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ABOUT RETAIL BANKING

a. Banking

Bank is a financial intermediary that accepts deposits and channels those deposits into lending activities. Banks are a fundamental component of the financial system, and are also active players in financial markets. The essential role of a bank is to connect those who have capital (such as investors or depositors), with those who seek capital (such as individuals wanting a loan, or businesses wanting to grow). Banks are the nerve centre of trade, commerce, and business in a country. Banking plays a very important part in the economic development of all the nations of the world. Industrial revolution that took place in European countries in the18th and 19th centuries would not have taken place without the evolution of a good banking system. In fact, banking is the life-blood of modern commerce.

The word banking has been used to denote a certain kind of trading in money. It consists of basically the exchange of money, the lending of money, the depositing of money, and the transmitting of money .In the present context of highly competitive banking scenario, retail banking constitutes the prime base for growth and resilience for any bank, be it global or local. In Fact, retail banking has been the axis of all successful banks. In a developing and globalized economy like INDIA having a huge base of customer population with sustained growth in education and standard of living, the scope for enhancing RETAIL BANKING is substantial. Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should

~9~ be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dials a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III. Phase I The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.

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These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with. The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.

~ 11 ~ Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi 14 major commercial banks in the country was nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions. Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of Mr. Narasimham, a committee was set up by his name which worked for the liberalization of banking practices.

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The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

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PURPOSE OF BANKING
1. CUSTOMERS POINT OF VIEW Earn money through interest & maximize his investment Future benefits of money in uncertainty Easy to collect loan for standard of living Provide loan for purchasing of car, home, education etc. Retail shopping through ATM transaction available Currency exchange, cheaqe clearance through of bank Security of earning internet through deposit Employee salary account and provide insurance facility Draft ,Chalan ,fixed deposit facilities Facility of paying electricity bills ,tax, insurance premium Locker facilities ,earn money through mutual fund 2. ORGNISATION POINT OF VIEW issue commercial paper issue public latter exchange bills credit facility 3. GOVERNMENT POINT OF VIEW increase per capital income develop people morality nearest place to public for transaction of money taking loan for development purpose 4. BANK POINT OF VIEW Regulation of money Earning interest through granting loan Earning through of discounting bills Earning through exchange of currency Earning through making draft, clearing cheque ,non maintaining minimum balance Earning through of other sources

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GROWTH OF INDIAN BANKING ASSETS

(US $ billions)

The Indian banking market is growing at an astonishing rate, with assets expected to reach US $ 1 trillion by 2010. An expanding economy, middle class and technological innovations are all contributing to this growth. The countrys middle accounts for over 330 million people in correlation with the growth of the economy rising income levels, increased standard of living and affordability of banking products are promising factors of continued expansion.

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Graphical Representation
1000 900 800 700 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005

1. Worth of assets

YEARS Worth($)

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300

250

200

150

100

50

0 2006 2008 2010 E

2. Worth of assets

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b. Meaning of retail Retail means sale of goods in small quantities, it is concerned with buying of goods in small quantities from the wholesaler and selling them in small quantities to the ultimate consumers as per their requirements. The person engaged in this trade is called the retailer. He acts as a link between the wholesaler and the customers. In retail trade goods are sold to the ultimate consumers for personal use and for the use of the business in small quantities only. The retailer does not specialize in a particular line or a particular product. Rather he maintains a large variety of goods. Generally, sales are limited to a local and on a small scale.

Retail banking has been describe as hotter than ndaloo considering the fact that vindaloo, the Indian English innovative curry available in umpteen numbers of restaurants in London. Is indeed very hot and spicy, it seems that retail banking is perceived to be the in thing in todays world of banking.

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c.Meaning of banking Banking has come to occupy a pivotal position in a nations economy. According to the modern concept, banking is a business which not only deals with borrowings, lending and remittance of funds, but also an important instrument for fostering economic growth. The Banking regulation act 1949, defines the term banking as the accepting for the purpose of lending or investment of deposits of money from the public or otherwise and withdraw able by cheque, draft, order or otherwise. Thus, the essentials of banking are: (1) There should be acceptance of deposited. (2) Deposits should be from the public. (3) Deposits should be repayable on demand or expiry of a term or after a specified period. (4) The purpose of deposits should be lending or investment. Bank is an institution which deals in money and credit. It buys money from depositors and sell to the borrowers. It is body of persons whether incorporated or not who carry on the business of banking. A bank may define as a corporation or person which collects deposits from the public, repayable on demand and which supplies and facilitates all kinds of exchanges.

~ 19 ~ d.Meaning of retail banking

Retail banking means mobilizing deposit form individuals and providing loan facilities to them in the form of home loans, auto loans, credit cards, etc, is becoming popular. This used to be considered by the banks as a tough proposition because of the volume of operations involved. But during the last couple of years or so, banks seem to have realized that the only sustainable way to increase deposits is to look at small and middle class consumer retail deposit and not the price sensitive corporate depositors. With financial sector reforms gathering momentum, the banking system is facing increasing companies from non-banks and the capital market. More and more companies are tapping the capital market directly for finance. This is one of the main reasons for the banks to focus vigorously on the much ignored retail deposits. Another reason is the current liquidity the margins are 1 to 2 percent above the prime rate; in retail market they are 3to4 percent. It is reported that Indian retail market has the potential to be second only to the USA. National Readership Survey 5puts Indian households with monthly of over Rs. 5000 at 4.5 million. According to the survey, the category of households with annual income of Rs. 2 lakhs and above is growing at the rate of 30 per cent per annum. No winder, banks with vision and insight are trying to woo this market through a series of innovative additions to their products, services, technology and marketing methods. Fixed and unfixed Deposits, (cluster deposits which can be broken into smaller units to help meet depositors overdraft without breaking up entirely), centralized database for any branch banking (whereby the customer can access his account in any of the branches irrespective of where the account is maintained), room services (whereby the customers are visited at their residences offices to enable them to open their accounts), automatic teller machines, tale banking network, extended banking time, courier pickup for cheques and documents, etc are some of the privileges extended to the customers by the banks in are eagerness to cultivate the retail market. In short, in the bold new world of retail banking the customer is crowned as king.

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Retail Banking Business Evaluation

Save Money Reduce Merchandising Fixture Maintenance Costs. Reduce Collateral Production Costs - Getting the right number of fixtures in the right place. Avoid Compliance Cost - Avoiding fines. Reduce Distribution Costs.

Make Money

Raise customer awareness of products and services. Insulate customers from competition. Increase cross-sales ratios. Increase products / customer. Target customer segments. Reinforce brand. Increase relationship sales success.

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Save Time

Efficient Merchandising Maintenance. Automatic campaign documentation and instructions. Faster campaign launches. Efficient distribution. Lower campaign support requirements.

Save Labour

Reduce the time it takes for branch employee installations.

~ 22 ~ e.Types of banking Banks' activities can be divided into:-

Retail banking dealing directly with individuals and small businesses;

Business banking, providing services to mid-market business; Corporate banking directed at large business entities; Private banking providing wealth management services to high net worth individuals and families; and

Investment banking
Relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations. Core banking(cbs) Core Banking System Means keeping centralized data of a bankand it's all branches, Extension Counter, By keeping Centralized Data The bank is able to monitor and transact, able to provide effectively customer services through the various payment gateways, Like Any Branch Banking,ATM-Onsite/line, ATM-Offsite/offline,NEFT(National Electronic Fund Transfer) or EFT (Electronic Fund Transfer),RTGS i.e. Real Time Gross Settlement and all other services like Mobile Banking,SMS Banking, e-mail/Mobile Alerts-banking or Net-Banking Service Means you can Access your own account via internet by using own login ID and Passwords or PIN. Any Time Any Where in the world.

~ 23 ~ f.Types of retail banking Commercial banks:-the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses. Community banks: - locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners. Community development banks:- : regulated banks that provide financial services and credit to under-served markets or populations. Postal service banks: - savings banks associated with national postal systems. Private banks: - banks that manage the assets of high net worth individuals. Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. Savings banks:- savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises.

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Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreach and by their socially responsible approach to business and society.

Building and landes banks:- : institutions that conduct retail banking.

Ethical banks: - banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.

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g.strategic retail marketing concept In the earlier issues we were discussing about the ways and means in marketing as a very effective tool for business mobilization. The success of marketing depends on how effectively we translate all our initiative into profitable business and at the sometime meet the customers needs in total and also make the product and service experience a satisfying one. In this issue, we will discuss the three important dimensions of marketing viz., Internal marketing External marketing Interactive marketing Internal marketing concentrates on the internal base that is available within the bank i.e. all the staff members. It includes making all the staff aware of the different products and services offered by the bank. The basic features of the products and services should be understood by the staff. In addition they should be made aware of the special features of the products and service that differentiate each product or the unique selling proposition or USP of each product. This will be the main selling point for marketing the product to the relevant segment. The awareness of the products and service are communicated to the staff by official circulars as well as on line through the intranet and by the branch head. In additional, through the training system, all the staff members are systematically training in the product awareness as well as marketing strategies and on site training by the training system and quality circles/learning initiatives at the branch itself. External marketing is translating the understanding of the concepts and fundamentals learned into action. The success of the learning and training depends on how effectively it is converted into business for the bank. External

~ 26 ~ marketing concentrates on initiatives undertaken by the branch/staff to market a product to the existing customers of the bank. The features of each product may be conveyed to clients by letters/posters/branch customer meetings or at the clients place itself. Interactive marketing is the matrimony of internal marketing and external marketing. Internal marketing is raw material, external marketing is the work in progress and interactive marketing is the finished product ready for sale. The objective of all of us should be to sell the products and services ready for sale to realize the business objectives and earn profits in the process. For achieving this, all the staff should interact with all the customers to know their needs, pitch our matching products and complete the sale by highlighting the benefits. We should be very careful in selling the right product to the customers to match their requirements and should never mis-sell. Interaction nurtures relationship and good relationship fosters loyalty. Loyal customers dont stop with themselves but also make referrals thus bringing in new customers. The process continues and builds up our customer base. To make it happen, let us realize that the success of business mobilization lies in understanding our products and service, understanding our customers and their needs, develop a relationship based approach and convert the relationship into business. In addition, sourcing and expanding new customers are essential for the growth of business and our marketing strategies should be aimed to improve this aspect also. This can be best achieved through referrals from the existing customer base and our brand building exercises and marketing strategies. This will definitely improve our income through cross selling different fee based products.

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h.retail banking in India Retail banking in India is not a new phenomenon. It has always been prevalent in India in various forms. For the last few years it has become synonymous with mainstream banking for many banks. The typical products offered in the Indian retail banking segment are housing loan, consumption loan for purchase of durables, auto loan, credit cards and educational loan. The loans are marketed under attractive brand name to differentiate the products offered by different banks. The loans are generally for duration of 5 to 7 years with housing loan granted for a longer duration of 15 years. A credit card is another rapidly growing sub- segment of this product group. In recent past retail banking has turned out to be a key profit driver for banks with retail portfolio. The overall impairment of retail loan portfolio worked out much less than gross NAP ratio for the entire loan portfolio. Within the retail segment, the housing loan had least gross asset impairment. In fact retailing make ample business sense in the banking sectors. While new generation private sectors banks have been able to create a niche in this regard, the public sectors banks have not logged behind. Leveraging their vast branch network and outreach, public sectors banks have aggressively prayed to garner larger slice of retail pie. By international standard however there is still much scope for retail banking in India. After all, retail loan constitute less than 7% of GDP in India vis a-vis about 35% for other Asian economies- South Korea (55%), Taiwan (52%), Malaysia (33%) and Thailand (18%).As retail banking is still growing from modest base, there is a likelihood that the growth numbers seems to get somewhat exaggerated. One thus, has to exercise caution is interpreting the growth of retail banking in India.

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i.Opportunities and challenges of retail banking in India Retail banking has immense opportunities in a growing economy like India. As the growth story get unfolded in India RETAIL BANKING is going to emerge a major driver. How does the world view us? According to A.T.KEARNEY, a global management consulting firm, recently identified India as the second most attractive retail destination of 30 emergent markets. The rise of the Indian middle class is an important contributory factor in this regard. The percent of middle to high income Indian household is expected to continue rising. The younger population not only wields increasing purchasing power, but as far as acquiring personal debt is concerned they are perhaps more comfortable than previous generation .Improving consumer purchasing power coupled with more liberal attitudes towards personal debts, is contributing to Indias retail banking segment. The combination of the above factors promises substantial growth in the retail sectors, which at present is in the nascent stage. Due to bundling of services and delivery channels, the area of potential conflicts of interest trends to increase in universal banks and financial conglomerates. Some of the, key policy issues relevant to the retail banking sectors are: Financial inclusion Responsible lending. Acers to finance. Long term saving. Financial capability Consumer protection. Regulation and financial crime prevent

~ 29 ~ j .Future of retail banking Customer should be the all and end all of retail Banking .The document analyzed the key policy issues relevant to the retail banking sectors and highlighted the role of financial inclusion responsible lending, access to finance, and consumer protection. It is in their context that ones reminded of the needs to develop the standard and code for banking. The contribution of the COMMITTEE OR PROCEDURE PERFORMANCE AUDIT ON PUBLIC SERVICE (CPPAPS) has been invaluable and has provided great insight. Based on the recommendation of the CPPAPS, the annual policy statement for 2005 to 2006 announced the decision to set up an independent Banking Codes & Standards Board of India an the mode of the mechanism in the UK in order insure the Comprehensive Code of Conduct for fair treatment of customer is evolved and adhered to. The Code and Standard together with institutional mechanism to monitor them are expected to enhance the quality of customer service, to the individual customer in particular. The Code will bring about greater transparency in the system and also take the issue of information asymmetry. The board would function as an industry wide watchdog of the banking Code and ensure that the banks comply with the banking codes. The codes would establish the banking industries, key commitment and obligation to customer on standard of practice disclosure and principles of conducts for their banking services. The board will monitor compliance with the codes by the affiliated banks.

Sharing of information about the credit history of household is extremely important as far retail banking is concerned. Perhaps due to confidential nature of banker customer bank have a traditional resistance to share credit, information on the client, not only with one another, but also across sectors, globally credit information Bureaus have, therefore ,been set up to function as a repository of credit information both current and historical data existing and potential borrowers. The database maintained by these institutions can be accessed by the lending institution. Credit Bureaus have been established not only in country with developed financial system but also in countries relatively less developed financial

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market Such us Srilanka, Mxico, Bangladesh and the Philipines.In Indian case the credit information Bureau (India) limited (CIBIL), Incorporated in 2000 aims at fulfilling the needs of credit granting institution for comprehensive credit information, collating, are disseminating credit information pertaining to both commercial and consumer borrowers. As the same time banks must declaring a borrower as defaulter. Outsourcing has become an important issue in the recent past with the increasing market orientation of the financial system and cope with the competition as also to benefit from the technological innovations such as, e-banking the banks are making increasing use of outsourcing as a means of both reducing costs and achieving better efficiency while outsourcing does have various cost advantages, it has the potential to transfer risk, management and compliance to third parties who may not regulated. A recent BIS report on outsourcing in financial services developed same highlevel principles. A basic requirement in this context is that a regulated entity seeking to outsource activities should have in place a comprehensive policy on outsourcing risk management programmed to address the outsourced activities and the relationship with the service provider. Application of these is under consideration.

Why customers choosing bank more than post office, mutual fund, share etc? Security They havent any risk The rate of return is higher than post office Facilities are more Available at any place Satisfaction of customer is higher

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PROCCESING CHANNELS
Banks offer many different channels to access their banking and other services: A branch is a retail location ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. Some ATMs provide additional services. Mail: most banks accept check deposits via mail and use mail to communicate to their customers, eg by sending out statements Telephone banking is a service which allows its customers to perform transactions over the telephone without speaking to a human Call center: if any detail of with help you Online banking is a term used for performing transactions, payments etc. over the Internet Mobile banking is a method of using one's mobile phone to conduct banking transactions Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a videoconference enabled bank branch.

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RISK INVOLVED IN RETAIL BANKING

There are of course, considerable risks in retail banking. They are: Databases on credit history are large. Collection mechanisms are poor. Investments in technology are large. Operating efficiency level needs to be very high. Unlike corporate banking, retail banking involves a large number of small accounts. Demands on processing capabilities are higher. Retail segment is not something you can get into overnight. The right systems and the right architecture needs to be put in place first.

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BANKING REGULATION
Banking law is based on a contractual analysis of the relationship between the bank and the customer as any entity for which the bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: The bank account balance is the financial position between the bank and the customer when the account is in credit, the bank owes the balance to the customer when the account is overdrawn, the customer owes the balance to the bank. The bank agrees to pay the customer's cheques up to the amount standing to the credit of the customer's account, plus any agreed overdraft limit. The bank may not pay from the customer's account without a mandate from the customer, e.g. a cheque drawn by the customer. The bank agrees to promptly collect the cheques deposited to the customer's account as the customer's agent, and to credit the proceeds to the customer's account. The bank has a right to combine the customer's accounts, since each account is just an aspect of the same credit relationship. The bank has a lien on cheques deposited to the customer's account, to the extent that the customer is indebted to the bank. The bank must not disclose details of transactions through the customer's account unless the customer consents, there is a public duty to disclose, the bank's interests require it, or the law demands it. The bank must not close a customer's account without reasonable notice, since cheques are outstanding in the ordinary course of business for several days.

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INTRODUCTION

IOB

How it began Pre-nationalization era (1947- 69) At the time of Nationalization (1969) Post - Nationalization era (1969-1992) Post perform period development after (1992 ) Performance During( 2002 - 2003)

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How it began Indian Overseas Bank (IOB) was founded on February 10th 1937, by Shri.M.Ct.M. Chidambaram Chettyar, a pioneer in many fields - Banking, Insurance and Industry with the twin objectives of specializing in foreign exchange business and overseas banking. IOB had the unique distinction of commencing business on 10th February 1937 (on the inaugural day itself) in three branches simultaneously - at Karaikudi and Chennai in India and Rangoon in Burma (presently Myanmar) followed by a branch in Penang. At the dawn of Independence IOB had 38 branches in India and 7 branches abroad. Deposits stood at Rs.6.64 Crs and Advances at Rs.3.23 Crs at that time.

~ 36 ~ Pre-Nationalization era (1947- 69)

During the period, IOB expanded its domestic activities and enlarged its international banking operations. As early as in 1957, the Bank established a training centre which has now grown into a Staff College at Chennai with 9 training centers all over the country. IOB was the first Bank to venture into consumer credit. It introduced the popular Personal Loan scheme during this period. In 1964, the Bank made a beginning in computerization in the areas of interbranch reconciliation and provident fund accounts. In 1968, IOB established a full-fledged department to cater exclusively to the needs of the Agriculture sector.

~ 37 ~ At the time of Nationalization (1969)

IOB was one of the 14 major banks that were nationalized in 1969.On the eve of Nationalization in 1969, IOB had 195 branches in India with aggregate deposits of Rs. 67.70 Crs. and Advances of Rs. 44.90 Crs. The major objectives of bank automation are better customer service, flawless book keeping and prompt decision-making that leads to improved productivity and profitability. The concept of bank automation started in the year 1981, but it was during the period 1984-1987 banks in India started the branch level automation, making use of the then available MSDOS based stand alone computers. This initiative was taken by the banks on the basis of First Rangarajan Committee report on bank computerization submitted in the year 1984. ALPMs (Advanced Ledger Posting Machines) were the fashion in those days. However, the pace of bank automation was very slow in the banks primarily owing to the lack of trade union consensus on bank automation. Another committee was constituted in 1988 under the chairmanship of Dr. C Rangarajan, the then Deputy Governor of RBI to slate down a perspective plans on automation of banks for a five year period. This paved way to the implementation of multi-user Total Branch Automation packages running on a LAN (Local Area Network), either on a Netware or a UNIX operating system. With the implementation of TBA, banks started to offer the facilities of exclusive Customer Terminal, Single window transaction, on-line and off-site ATMs, Tele-Banking etc. But with the advent of new generation private sector banks in India during 19941996, the real era of bank marketing started and these banks started to offer anywhere and anytime banking facilities to its customers.

~ 38 ~

This was possible for them mainly owing to the fact that they opted for the implementation of a WAN (Wide Area Network) based centralized banking solution rather than a LAN based branch banking solution to network their limited number of branch outlets. The old generation banks in India hesitated to follow this banking fashion on account of its large network of branches on one hand and the then prevailing exorbitant IT cost on the other hand. But with the globalization and liberalization of Indian market and with the enactment of TRAI (with a mission to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society) during the late nineties, there happened a drastic reduction in IT cost.

~ 39 ~

Post - Nationalization era (1969-1992)

In 1973, IOB had to wind up its five Malaysian branches as the Banking law in Malaysia prohibited operation of foreign Government owned banks. This led to creation of United Asian Bank Berhad in which IOB had 16.67% of the paid up capital. In the same year Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOBs branch at Bangkok in Thailand. In 1977, IOB opened its branch in Seoul and the Bank opened a Foreign Currency Banking Unit in the free trade zone in Colombo in 1979. The Bank has sponsored 3 Regional Rural Banks viz. Puri Gramya Bank, Pandyan Grama Bank, Dhenkanal Gramya Bank . The Bank setup a separate Computer Policy and Planning Department (CPPD) to implement the programme of computerization, to develop software packages on its own and to impart training to staff members in this field.

~ 40 ~

Post peform period development after 1992

IOB entered Web site during the month of February 1997.IOB got autonomous status during 1997-98 IOB had the distinction of being the first Bank in Banking Industry to obtain ISO 9001 Certification for its Computer Policy and Planning Department from Det Norske Veritas (DNV), Netherlands in September 1999. This Certification covers Design, Development, Implementation and Maintenance of software developed in-house, procurement and supply of hardware and execution of turnkey projects. IOB started STAR services in December 1999 for speedy realization of outstation cheques. Now the Banks has 14 STARS centres and one Controlling Centre for providing this service. During 1999, IOB started tapping the potential of internet by enabling ABB card holders in Delhi to pay their telephone bills by just logging on to MTNL web site and by authorizing the Bank to debit towards the telephone bills. A Voluntary Retirement Scheme was introduced in the Bank on the lines of IBA package with Boards approval. The scheme was offered to Officers/Employees from December 15, 2000. The Bank made a successful debut in raising capital from the public during the financial year 2000-01, despite a subdued capital market. The issue opened on September 25, 2000 for raising Rs.111.20 crore and was oversubscribed by 1.87 times. The issue closed on September 29, 2000 - on the earliest closing day. The allotment was made in October 2000. Consequent to the public issue, the share of

~ 41 ~ the Government in the Bank's capital came down to 75%. The shares of the Bank have been listed on the Madras Stock Exchange (Regional), Stock Exchange at Mumbai and the National Stock Exchange of India Ltd. IOB bagged the NABARD's award for credit linking the highest number of Self Help Groups for 2000-2001 among the Banks in Tamil Nadu.

IDRBT (Institute for Development and Research in Banking Technology) conferred the Best Award under Banking Technology to IOB. The award was given for the innovative use of banking applications on INFINET (Indian Financial Network) for the year 2001. Mobile banking under SMS technology implemented in Ahmadabad and Baroda. Pilot run of Phase I of the Internet Banking commenced covering 34 branches in 5 Metropolitan centers. IOB was one among the first to join Reserve Bank of Indias negotiated dealing system for security dialing online. The Bank has finalized an e-commerce strategy and has developed the necessary internet banking modules in-house. For the first time a Total Branch Automation package developed in-house has been customized in one of the Overseas Branches of the Bank. Most software developed in-house. IOBNET connects Central Office with all Regional Office. The Bank has paid a maiden dividend of 10% p.a for 2000-01, followed by 12% during 2001-02.

~ 42 ~

Performance during 2002 - 2003

Operating Profit improved to Rs.794 crore.Net Profit up by 81% at Rs.416 crore. Owned funds rose to Rs.1460 crore from Rs.1133 crore. Profit per Employee rose to Rs.1.70 lac from Rs.93, 000. Ratio of operating profit to average working funds went up from 1.78% to 1.99%. Return on Assets leaped from 0.65% to 1.01%. EPS up from Rs.5.18 to Rs.9.35. Domestic Net Interest Margin improved to 3.14% as of March 2003. Business per Employee improved to Rs.204 lakh from Rs.175 lakh. Capital Adequacy Ratio improved from 10.82% to 11.30%. The Banks global deposits stood at Rs.36699 Crore and global gross advances stood at Rs. 17447 crore. Domestic Deposits grew by 14.03% (System - 12.20%). Domestic deposits grew by Rs.4770 crore to Rs.35717 crore. Domestic Advances grew by 16.28% (System 15.45%). Net domestic advances grew by Rs.2281 crore to close at Rs.16068 crore. Deposits and advances growth has been above that of the System for most part of the financial year. Priority Sector lending continues to be significantly higher at 42.9% (Norm 40%). Agriculture Business Consultancy Services (ABCS) has been making steady progress in offering consultancy services for hi-tech agricultural projects with a special thrust on projects for wasteland development, dry land horticulture, herbal / medicinal plants cultivation, food processing and setting up of cold storages. Housing finance has been extended to the tune of Rs.591 crore under direct housing finance during the year. Special Housing Finance Divisions have been set up at various branches throughout India for giving a push to housing finance. During 2002-03, the Bank had sanctioned educational loans to the tune of Rs.143 crore under Banks Vidya Jyothi Educational loan scheme benefiting 7021 students.

~ 43 ~

The Bank has issued 1.45 lakh Kisan Credit Cards during 2002-2003 and as of March 2003 the total number of cards in circulation being 4.12 lac cards. Under Micro Credit 13,802 Self Help groups were credit linked during the year and till March 2003, 30899 Self Help groups were credit linked. Weaker section credit was 10.8% of net bank credit (norm 10%). Banks credit to women constitutes 5.5% of the net bank credit against the stipulated norm of 3% Sakthi IOB Chidambaram Chettiar memorial trust was formed by the Management of the Bank, Officers Association and Workmen Union in 1995. The objective of the trust is to empower downtrodden women by enabling them to have access to vocational training. The trust has so far trained 1331 women in various job oriented courses like tailoring, nursing, retail management, computer and secretarial practice and screen printing. Under Prime Ministers Rozgar Yojana (PMRY), 6443 borrowers were assisted to the tune of Rs. 33.40 crore. The Bank continues to lay emphasis on retail credit and mobilization of low / no cost deposits through efficient and quick customer service and expansion of the client base horizontally. IOB has developed over the years an array of products to meet the specific needs of customers especially the retail segment. Personal loans for purchase of consumer durables continue to be a popular retail product of the Bank. A new credit scheme " Shubh Yatra " was introduced to provide loans to those who undertake foreign travel for tourism, employment and medical treatment. Another scheme "Sanjeevini was designed to extend loans to Medical Practitioners, hospitals, etc. for expansion and equipments. The Bank has recently launched a new product in alliance with Life Insurance Corporation of India - IOB Chiranjeevi Bima Yojana. This provides the customer the benefit of life insurance cover.

~ 44 ~ The Bank as a Corporate Agent markets the life policies of Life Insurance Corporation of India and non-life products of National Insurance Company at select branches. IOB Akshay is another product that provides loan against life policies of LIC and other private insurance companies approved by IRDA. Another product introduced by the Bank is Money Home. This provides a fast track channel for remittances from the USA to India to benefit our customers. All the 3 Regional Rural Banks sponsored by the Bank recorded profits in 20022003. Pandyan Grama Bank has been adjudged the best and Dhenkanal Gramya Bank ranked 7 among 196 RRBs in a private survey on banking. Foreign exchange turnover of the Bank amounted to Rs.18494 crore in 2002-03, as compared to Rs. 15244 crore during 2001-02, giving a growth rate of over 21%. Higher growth in forex business has been achieved despite the appreciation of the rupee, global recession and deceleration in Precious Metals business, owing to volatile gold price in the international market. Export Credit stood at Rs.1160 crore as on 31st March 2003. The new Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI) empowers Banks to take series of actions to enforce securities charged to the Bank, which were not available earlier. 1830 notices involving an amount of Rs. 499.92 crore have been issued till March 2003 by the Bank under the SARFAESI Act to the NPA borrowers. Recovery made under SARFAESI Act was Rs. 23.74 crore involving 645 accounts up to March 2003. Net NPA ratio down to 5.23% from 6.32%. The Bank has lead responsibility in 12 districts in Tamilnadu State and one district in Kerala State. The Bank is also the convenor of State Level Bankers Committee for Tamilnadu State. As of March 2003, IOB had 1427 branches in India and 6 branches overseas. Besides the Bank had 243 Extension Counters.

~ 45 ~

IOB has specialized branches to cater to the exclusive needs of Commercial & Industrial credit (the branch has Received ISO 9002 certification), Industrial finance, Small Scale industries, hi-tech agriculture and foreign exchange. The bank is a depository participant. To meet the needs of investors in the capital market the bank has two exclusive offices one at Mumbai and the other at Chennai. The Bank opened its first Asset Recovery Management Branch in Chennai on 21st February 2003. It would focus on recovery of dues under DRT cases of Chennai (Metro) and (Non-Metro) Regions of the Bank. 544 branches have been totally computerized and 883 branches have been partially computerized as of March 2003. In all 1427 branches have been brought under computerization i.e. 100% of the bank's branch network as of March 2003 is covered under computerization. 100 Automated Teller machines (ATM) in-operation, 42 centers are linked under Any Branch Banking (ABB) covering 293 branches. The Banks house magazine in Hindi VANI got the first prize in the Hindi House Journal competition conducted by Reserve Bank of India for the year 2000-2001.
Vision of the Bank is

~ 46 ~

INDIAN OVERSEAS BANK

(FINANCIAL ANALYSIS REPORT 1)

In year 2000,it come out with a public issue of 11,12,00,000 shares of Rs.10 each for cash at par aggregating Rs.111.20 crores. It also raised Rs.125 crores though bonds issue in year 2001.it gained the rating of AA for the issue. Being ranked as the best public sector bank in India in 2007, its key trade of bank distinctly indicates the increase in both the retail product deposits. Indian Overseas Bank net profit declined 60.47% to Rs 127.44 crore in Qtr ending March 2010 for the financial year 2009-2010 compared toRs 322.37 crore in qtr ending March 2009. Total operating income rose 1.45% to Rs 2547.83 crore in Qtr ending March 2010 for the financial year 2009-2010 compared toRs 2511.50 crore in qtr ending March 2009. For the audited full year 2009-2010, net profit declined 46.68% to Rs 706.96 crore in the Year ending March 2009-2010 compared toRs 1325.79 crore during the previous year ended March 2008-2009. Total operating income rose 6.27% to Rs 10245.77 crore in the Year ending March 2009-2010 compared toRs 9641.40 crore during the previous year ended March 2008-2009.

~ 47 ~

TOTAL ADVANCES AND DEPOSITS OF THE BANK

180000 160000 140000 120000 100000 80000 60000 40000 20000 0 Jan-05 Jan-06 Jan-07 Jan-08

Advance

Deposit

~ 48 ~ (FINANCIAL ANALYSIS PEPORT 2)

Particular

1 31/03/07

2 31/03/08
07.57 02.70 01.54 01.63 02.70 21.00 09.06 02.34 04.07 11.14 11.14 02.40 --------------------------

3 31/03/09
11.87 01.39 01.42 01.69 01.39 30.00 07.33 04.50 06.23 15.00 22.40 02.40 03.70 ------------------------------

4 31/03/10
16.77 01.78 01.78 04.83 01.78 40.00 06.33 07.40 08.50 18.50 27.63 03.00 05.60 -----------------------------------

Tangible net worth (TNW)

Debt equity ratio Current ratio Net working capital TOL/TNW Sales(net sales less excise) Gross fix assets N PAT Net cash generation(net of dividend/drawing) N PAT/sales PBIT/sales Stocks Sundry debtors Sundry creditors for goods Unsecured loans(to be pegged from directors/partners/friends/ relatives/associate

07.01
02.83 01.55 00.56 02.83 0.26 10.79 00.03 ------------11.54 11.54 00.00 -------------------------------

------------------ -----------------

~ 49 ~

12 Month

ADVANCE

DEPOSIT

March-2005 March-2006 March-2007 March-2008

26274 35759 47923 61748 Table of advance &deposit

44241 50229 68746 83204

In 2006, total business of the bank crossed Rs.1, 00,000 crores where as the total net profit exceeded the same figure in 2007 as of September 2008,ther are 1424 braches under core banking solution,522 braches under total branch Automation and a number of braches linked under service like NEFT and RTGS. Indian overseas bank has been upgraded to BBB Long term rating by standard and poors, third bank in India other SBI and ICICI. The latest audited reports revel that the bank registered a net profit of Rs.1325 crore in the financial year that ended on March 2009 with an increase of almost 21% in its total business.

~ 50 ~

HIERARCHY OF INDIAN OVERSEAS BANK

HEAD OFFICE (CHENNAI) (MD, GMD, DGM)

ZONAL OFFICE (DGM, AGM)

BRANCH OFFICE (GM,DGM, AGM, BM)

INTER OFFICE MEMORENDUM

THE GENERAL MANAGER THE ZONAL MANAGER (All Zones) THE DGM /AGM (All LCBs / CBBS) THE DGM / AGM (All Zonal Audit Offices)

~ 51 ~

CUSTOMER SERVICE HIERARCHY IN BRANCH

In a customer service concern to the management science related queuing model/theory function. This function shows that Indian overseas branch in service facility. When a customers wait for concern services before, after and between services spend time in purposes of achieve to desire service. In a function of distribution /transfer a service in involve a various types of job and branch staff are involve to service purposes. This process of distribution of service channel time is limited and maximum public sector bank done to be work in require time given by government. Maximum public bank in required standard time 10.00am to 4.00pm for doing jobs/service bank staff. The process of service time one hour is spend in lunch and cash updating process may be loss of time in complex busy server to effected service. All these factors (server busy, equipment problem, poor staff efficiency, and other) affected in facility distribution process .the IOB is also affected in distribution process and result to maximum 200 customers are facilities. The maximum 200 customers data in only 100 customer concerns to withdrawing facility and other remaining customer join in queue for deposited, open new account, cheqe, draft and other purposes. In IOB branch only one particular cash counter to give a facility and job and other two staff involve namely clerk and deputy manager to generate a particular transaction queue number and lastly verification of customer then services provided to customer. All process of transaction due to increase queue length and effected customers. In general, a queue is formed at a queuing system when either customers (human being or physical entities) requiring service wait due to number of customers

~ 52 ~ exceed the number of service facilities, or service facilities do not work efficiently and take more time than prescribed to serve a customers. Queuing theory can be applied to a variety of operational situation where it not possible to predict accurately the arrival time of customers and service time of service facility or facilities. Obviously, an increase in the existing service facilities would reduce the customers waiting time. Conversely, decreasing the level of service should result in long queue. This means an increase (decrease) in the level of service increase (decreases) the cost of operating service facilities but decrease (increase) the cost of waiting.

~ 53 ~

THE STRUCTURE OF AN INDIAN OVERSEAS BRANCH

Single queue and multiple service facilities

Customers
Waiting area

Inspection counters and gives token number (Clerk)

S e r v i c e

Inspection counters of check queue number and token number (Deputy Manager or Manager)

Cash transaction counter and cheek particular token (Clerk)

F a c il it y

Served customers

~ 54 ~

NEED HIERARCHY AND FINANCIAL PLANNING (Part A)

5. Tax and Estate/legacy Planning 5. Self Actualization 4. Retirement Planning

4. Self-Esteem 3. Planning Financial Goods 3. Social Needs 2. Risk Management 2. Security Needs 1. Contingency Planning 1. Basic Needs

~ 55 ~

NEED HIERARCHY AND FINANCIAL PLANNING (Part B)

Utilities Payment/Bill Payment

DD/Cheque/NEFT/RTGS

Debit Card/Credit Card

Online Banking/SMC/E-mail Alerts

CD-Classic/Super

SB-No Frills/Silver/Gold

Clean Loan

1. Contingency planning

~ 56 ~

Electrical Equpment/Plant & Machinery All Risk/Fire/Marine/Farmers/Householder/Shoph olders All General Insurance Products Through USGI

Life/Endowment/Money Back/Market Plus/Bima Gold

All Life Insurance Products Thro LIC:

Healthcare Plus/Personal Accident Insurance/Asset Insurance/NRI Shield

Jeevan/Vidya Suraksha/Liability Insurance

2. Risk Management

~ 57 ~

d.Mutul Funds/ULIPs:-SIP/Bulk Investment/Equity Trading/Demat Account

c.Retail LOANS:-Pushpaka/Easy Trade/Sanjeevini/Liquirent/CC against Jewellery/Home Dcor/Home Improvement/Subharuha/NRI Home Loans/Sahayika/Vidya Jyothi

b.Gold Retail 4/8/20/50 gm

a.Fixed Deposits:-FD/SFD/RD/RD Gold/RDP/Easy Deposit/ED/WD/VS/Tax Saver

3. Planning for financial goals

~ 58 ~

c.Mutual Funds and Insurance Related Schemes

b.Pensioners Loans Scheme

a.FD Schemes:-Vardhan Scheme/Varshik Aai Yojna/PF/Gratuity/Pension Accounts

4. Retirement Planning

~ 59 ~

Participation in CSRSampoorna/Shakti/Microfinance

TTD Deposit/Charity/Sponsorship Facilitation

IOB Tax Saver

5. Tax and Estate Planning

~ 60 ~

Management - IOB
Name S A Bhat Vinita Kumar Natesan Sridaran Ashok Kumar Bhargava A Vellayan Nupur Mitra Name Y L Madan Chitra Chandramouliswaran B V Appa Rao Chiranjlb Sen Sooraj Prakash Khatri K Ananda Kumar Designation Chairman and Managing director Nominee Director Director Shareholder Director Shareholder Director Executive Director Designation Executive Director Nominee Director Nominee Director Shareholder Director Non Official Part Time Director Employee Director

~ 61 ~

BOARD OF DIRECTORS DESK

CONSTITUTION

The Constitution of the Board of the Bank is governed by The Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970, formulated by the Central Government, after consultation with the Reserve Bank of India, in exercise of the powers conferred by section 9 of The Banking Companies (Acquisition and Transfer of Undertakings) Ac, t 1970.

COMPOSITION

The Composition of the Board of Directors of a Bank is governed by The Nationalized Banks (Management and Miscellaneous Provisions) Scheme 1970 read with The Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act 2006 and amendment to the vide Extraordinary Gazette Notification dated 19.02.2007 of the Central Government.

~ 62 ~

CONTRIBUTION In terms of The Banking Companies (Acquisition and Transfer of Undertakings Act 1970, the General Superintendence, Direction and Management of the affairs and business of the Bank vests in the Board of Directors which is entitled to exercise all such powers and do all such acts and things as the Bank is authorized to exercise and do.

~ 63 ~

STRENGTH OF THE BOARD

Presently, there are best Directors on the Board of the Bank. Brief Particulars of each of the directors are placed below:

Shri S.A. Bhat Chairman and Managing Director

Shri S A Bhat joined Bank of India as a Probationary Officer in 1972 and was with them till 1st February 2006. In Bank Of India, he started as an officer and Branch Manager of rural and semi urban branches. He was Chief Dealer at Mumbai Overseas Branch, of Bank of India. He had a twoyear stint at Bank of Indias London Branch. He was with that Banks New York Office for four years as Vice President and Comptroller. Shri Bhat was appointed by the GOI as Executive Director of UCO Bank on 2nd February 2006 and held that position till his present assignment as CMD of Indian Overseas Bank.

~ 64 ~

Some few wards of director desk

Excellent brand image as Good people to grow with. Pan India network. Loyal customer base. Committed and skilled staff. Good customer service 100% core banking service. Spectrum of product and services in line with the market players. Bouquet of E product to cater to the younger generation of customers.

~ 65 ~

Shri Y.L. Madan Executive Director of IOB

Shri Y L Madan joined Canara Bank in 1973 as Officer trainee and has 35 years of experience. He served mostly in northern areas of Punjab, Haryana, Chandigarh, Bihar, Delhi and had a posting at Overseas Exchange Company in Doha, Quatar, managed by Canara Bank, He had one year stint as Faculty in Canara Bank Training Centre, Mumbai. He was the General Manager from October 2003 in Canara Bank before his appointment in IOB as its Executive Director.

~ 66 ~

Smt.Nupur Mitra Executive Director of IOB

Smt.Nupur Mitra started her career with Bank of India in Lucknow as Direct Recruit Officer in the year 1975. During her service spanning over 34 years, she served the Bank of India in various capacities at the branches and its Zonal Offices. After an exemplary overseas stint, back in the Motherland, she headed the Mumbai and Chandigarh Zones of the Bank. As General Manager at the Corporate Office she was in charge of Credit, SME, Retail Banking (Deposit & Advances), Card Products, Public Relations, Depository Services, etc. Smt. Nupur Mitra was the General Manager of Bank of India before her appointment in IOB as its Executive Director.

~ 67 ~

~ 68 ~

ALL TRANSACTION WITH BSE &NSE LAST IN YEAR ENDING Bulk deals for IOB between 01-05-2005 and 06-05-2010 on both BSE & NSE for all transactions
Date Company Client Tci Cyprus Holding Limited Tci Cyprus Holding Limited Life Insurance Corporation Of India Jpmsl Copthall Mauritius Invt Ltd Tci Cyprus Holding Limited Morgan Stanley Dean Witter Mauritius Co. Ltd The Childrens Investment Master Fund Goldman Sachs Investments Mauritius I Ltd Tci Cyprus Holding Limited Tran SELL SELL BUY SELL BUY SELL Qty Traded Price 12863437 22500000 15000000 8595763 8595763 18431173 36.50 36.50 36.50 137.00 137.00 128.05

09-Mar-2009 IOB (BSE) 09-Mar-2009 IOB (NSE) 09-Mar-2009 IOB (NSE) 11-Apr-2008 IOB (BSE) 11-Apr-2008 IOB (BSE) 07-Apr-2008 IOB (NSE)

07-Apr-2008 IOB (NSE)

BUY

18431173

128.05

04-Mar-2008 IOB (NSE)

SELL

18962113

160.00

04-Mar-2008 IOB (NSE)

BUY

18962113

160.00

~ 69 ~

FOREX COLLECTION SERVICE

Collection of foreign currency clean instruments

Apart from providing various personal and commercial banking services, IOB offers services for transferring currencies across countries to facilitate cross-border transactions. The Collection of foreign currency clean instruments cheques, drafts are undertaken by all branches of Indian Overseas Bank. The procedure for the collection of foreign currency is detailed below:

A step by step explanation

Foreign Instruments such as cheques, drafts are forwarded by the authorised dealer branches to the respective correspondents in the other country using the 'Cash Letter Form'. The proceeds of the Collection Instruments are provisionally (under reserve) credited to the NOSTRO account of the bank as soon as it is received by the correspondents.

They are sent for collection through the Clearing Agent or Collection Agent, whichever is appropriate.

~ 70 ~ The NOSTRO account is finally deemed as credited after final realization, which may take about 15 - 20 working days.

Exceptions If the drawee bank is unable to pay the amount due to insufficient balance or other valid reasons, the provisional credit will be withdrawn

In the case of altered, forged or stolen instruments the provisional credit can be withdrawn on any day thereafter When these instruments are returned for reasons mentioned above, after the proceeds have been credited to the customer's account, the bank would recover the amount by applying the TT selling rate and other charges involved in this respect, from the customer.

Rupee Conversion

The realization proceeds of the collection items are normally converted into Rupees and credited to the accounts of the beneficiaries after a cooling period of 15/20 days by the branches.

~ 71 ~

INTERNET BANKING
Internet Banking is the online banking service provided by Indian Overseas Bank for the benefit of customers to access and transacts their account 24*7 on all 365 days. Internet Banking is the most convenient and powerful way to manage your account asit is Real Time, giving you up-to-the-second details on your account. You can check your:

Balance Enquiry Last Few transactions Account Statement Transfer money to any of your bank accounts (within and outside IOB)

Also you can pay your Direct Taxes Indirect Taxes College Fees for the students studying at SASTRA-Tanjore Utility bills like Insurance, mobile etc and many more. Tamilnadu Electricity board bills Recurring deposit installments Loan installments IOB Credit card dues (Still you dont have an IOB Credit card! Do contact your branch today!)

~ 72 ~ REGISTRATION Savings/ Current account holders Deposit / Loan account holders Proprietary firms Partnership companies Limited Companies Societies/Trusts HUFs Step 1

Login to www.iobnet.co.in Click on Register Individual if you are an individual or a proprietary firm Else click on Register Corporate Once registered submit the application forms and the annexure displayed to you (in case of Companies/Partnership firms/Societies/Trusts) to your branch down the PIN number which is to be used for all Funds transfer transactions (Dont share this with anyone! Do we keep a blank cheque carelessly? NO! Your password and PIN are as important as that!) Your account will be activated by the branch on receipt of the application Step 2: with your password. are case sensitive (b is different from B) Password & transaction PIN are different where password is used to login and PIN for funds transfer.

~ 73 ~

IOB PREMBLE
Earlier revision in interest rates on domestic and NRO term deposit was advised vide permanent circular 2009 to 2010 it has been decided rates on domestic and NRO term deposits i.e. 15/03/2010 in view of the present market tend and competition. Some of the rates of interest following of IOB branch;

Period of deposit Up to Rs.25 lakh 02.50 03.00 03.50 04.00 05.50 06.00 06.75 07.25

Interest rate per annual Above Rs.25 lakh 02.50 03.00 03.50 04.00 05.50 06.00 06.75 07.25 Up to 1crore 02.50 02.50 02.50 02.50 04.00 04.50 06.50 06.50

7 to 14 day and 15to 29 30 to 45 days 46 to 120 days 121to 179 days 180 to 269 days 270 to 1 years 1 years to 5 years 5 years to above

~ 74 ~

Interest rate norms of IOB-some of norms following in IOB branch; Minimum amount Rs.1 lakh for senior citizens additional rate of interest is Rs.0.75% continues for deposits up to a maximum of Rs.25 lakh. No change in IOB tax saver deposit scheme. Deposit accepted from resident Indian senior citizens under vordhan scheme continuous to carry an additional interest rate of Rs.0.75% over the card rates for aggregate deposits not exceeding Rs.25 lakh and for a period up to 10 years in the name of depositors in the same branch for different branches. Acceptance of bulk deposits in term of co circular. Treasury domestic department, before accepting single deposits.

~ 75 ~ SERVICE AVAILABLE AT FREE OF CHARGE

In IOB branches available services of free charge of customers following some point; CBS transaction Insurance /renewal/annual fee for ATM card No panel charge for not maintaining minimum balance, for NO frills a/c Variations in nomination Closure of a/c SB/CD/CC Charges in operation in SB/CD/CC Duplicate deposit receipts Cancelation of DD/BC Balance enquire of ATM cards Both Dr and Cr transaction in ECS for individual a/c No processing charge for advances up to Rs.25000/No processing charges for all government sponsored programs. No processing charges for advance against our deposits. No processing charge for agriculture jewel loans. No processing charge for short term agriculture loans(KCC &crop loans) for credit limit up to Rs.3 lakh. No processing charges for the advances against government securities (UTI, matual funds units, NSC, KVP, IVP LIC ETC). No processing charges for pensioners medical benefit scheme (PMBS). No processing charges for inland study loans. Special features/concessions available for IOB classic current a/c. Special features/concessions available for IOB-super current a/c. Special features/concession available for SB-gold a/c.

~ 76 ~

CUSTOMER SERVICE NORMS

Cheque can be encashed within 5 minutes.Cash deposits can be made within 5 minutes. Drafts can be issued within 30 minutes. We give instant credit of outstation cheque & drafts upto Rs.15000/-.to individuals at specific requests &as request and as per norms. You can meet the officer in charge for your grerances.if any on 15th of every month. We give interest for delay collection of outstations cheques &drafts as per norms. You can put your complaint and suggestion in the box.ment for the same. Please tender your cash at the counter only & not to any other person & get the counter foil of your pay in- slip singed by any officers. In case of delay please contact the officer in charge & incase of any further assistance write to regional managers.

~ 77 ~

CUSTOMER SERVICE INFORMATION

Some of point of view following customers service massage;

We have separately displayed the key interest rates on deposits & forex rates in the IOB branch. Nomination facility is available on deposits accounts, articles in safe deposit vaults. We exchange soiled notes and mutilated notes. We accept/exchange coins of all domination. If a bank notes tendered after stamping the notes. Please refer to our cheque collaction policy for the applicable time frames for collection of local and outstations cheques. For satisfactory accounts, we offer immediate credit of outstation cheque up to Rs.15000/-. Banks BPLR(benchmark prime lending rates) and its effective date.

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GRIEVANCE REDRESSAL OF IOB If you have any grievance/complaits, please approach the branch manager for registering your complaint in the complaint resister. You will be given acknowledgement immediately. If your complaint is unsolved at the branch level, you may approach the banking ombudsman, Reserve bank of India chambers.

OTHER SERVICE PROVIDED BY IOB We accept direct tax collection.(please quote PAN/TAN on challan.dont drop the challans in the drop boxes. We open public provident fund a/c. The senior citizens saving scheme 2004 is operated here. Prime ministers Rozgar Yojana/other scheme sponsored by government of India and state government are operated here. We offer SSI loans/products. We issue Kissan Credit Cards. We open No frills a/c. Domination for prime ministers relief fund are accepted here.

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INFORMATION AVAILABLE FROM ANY IOB BRANCH

Information available iniobian branch booklet from.(please approach may I help you counter. In elaborate some point of information of iobian branch; All the items mentioned in booklet. The citizens charter for currency exchange facilitieas. Time norms for common transaction. Design and security features of all the banknotes. Policy documents relating to cheque collection , grievance redressed mcchansim ,security repossession and compensation. The complete service charges including service rendered free of charge. Fair practice code/the code of banks commitment to customers.

~ 80 ~ SERVICE CHARGE IN IOB BRANCH Some of charges including on the customer when which costumers dont maintained owe account. Charges will be payable of the iobian related branch. SERVICE CHARGE TABLE

Sl. no.

Types of accounts

Minimum balance requirement(Rs) With cheque facility 500 Without cheque facility 100

Charge for non mantance there of a/c (Rs)

Savings bank a/c

1.

Rural &semi rural

Rs.7/-per month

2.

Others(urban &metro) Pensioners a/c

1000

500

Rs.14/-per month

3.

250

Rs.7/-per month rural semi rural.Rs.14 U&M Nill

4.

No frill a/c

---------

Current a/c

1.

Metro &urban

Tiny &village,cotttge industry 1000

Other

2000

Rs.57/-per month irrespective of no. of defaults in a month.

2.

Other

1000

1000

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RETAIL BANKING PRODUCTS

As we know that retail banking under a several of product to do arrears as a customer. Customer makes to purchase a product and take services in IOB branch. Some of point to following iobian in several branches; 1. Savings bank accounts a. b. c. d. e. f. SB Regular SB No frills SB Gold-1 SB Gold-2 SB Silver-1 SB Silver-2

2. Current deposits a. Classic deposits b. Super deposits 3. Term deposits a. b. c. d. e. f. g. h. i. Reinvestment deposits scheme Fixed deposits Recurring deposits RD Gold Education deposits Easy deposits Vardhan scheme Floating Rate deposits Tax Saver scheme

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4. Insurance linked products a. b. c. d. e. f. g. IOB NRI Shield IOB Jeevan IOB Personal Accident Insurance IOB Healthcare Plus IOB Vidya Suraksha IOB Vidya Jyothi With Suraksha Liability Insurance

5. USGI a. Retail policy Motor Insurance Schemes Farmers Package Policy Shopkeepers Insurance Policy Cattle Insurance Policy Householders Insurance Policy Jewellers Block Policy Burglay Policy Workermens Compensation Policy Fidelity Gurantee Money Insurance Office Package Policy All Risk Insurance Policy

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b.Commercial Policy 6. LIC a.Insurance Plans Children plans Plans for handicapped dependants Endowment assurance plans Plans for HNIs Money Back plans Special Money Back plan for Women Whole Life plans Term Assurance plan Joint Life Plan b.Pension Plans c.Unit Linked plans d.Special plans e.Group Scheme f.Social Security Scheme Standard Fire and Special Perils Policy Marine Cargo-Specific Policy & Annual Sales Turnover Policy Marine Cargo Open Policies Annual Turnover Policies Machinery Breakdown Policy Electronic All Risk Insurance Boiler Pressure Plant Insurance Industrial All Risk Insurance Public Liability-Insurance Public Liability(industrial & storage risks)

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g.Jeevan Akshay-4 h.Jeevan Tarang i.Market Plus 1 J.Jeevan Anand k.Jeevan Sathi Plus l.New BIMA Gold 7. IT Related Product a. Internet Banking b. IOB Mobile Banking SMS Banking GPRS Banking c. IOB Visa International Card d. POS Machine e. Internet Payment Gateway 8. IOB Fine Gold-999.9 Pure Gold from PAMP, Switzerland 9. New Scheme under Agri Direct IOB Urban Horticulture Scheme IOB Agri Transport IOB Green Credit 10. Retail Credit Scheme Sahayika Pensioners Loan Scheme Subhagruha Home Improvement Scheme HHome Decor Scheme

~ 85 ~ Home Loan for NRIs Pushpaka Liquirent Clean Loan Vidya Jyothi IOB Akshay Sanjeevini Easy Trade Commercial Cash Credit Against Jewellery Agriculture Jewel Loan

11. NRI Accounts Foreign currency accounts Non-Resident External(NRE) accounts Non Resident Odinary(NRO) accounts Resident Foreign Currency (RFC)accounts

12. ATM ON WHEELS INDIAN OVERSEAS BANK LAUNCHES FIRST MOBILE ATM 13. Mobile banking simple to activate of any IOB branches and knowing all transaction on mobile thru SMS.

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Before you become a customer Give you clear information explaining the key features of the service and products you tell us you interested; Give you information on any types of product and services which we offered and that may suit your needs; Tell you if we offered products and services in more than one way and tell you how to find out more about them; Tell you what information we need from you to prove your identity and address, for us to comply with legal, regulatory and internal policy requirement.

When you become a customer Give you more information on the key features of the product, including applicable interest rates/fees and charge; Give you extra information on your rights and responsibilities especially regarding availing of nomination facility offered on all deposits accounts, articles in safe custody and safe deposit vaults; Automatically register your name under Do not call service. We will not inform/extend to you though telephone calls/SMSs/e-mail any new product/service unless and until you inform us in writing that you consent to this information/service.

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ABOUT BRANCH
Indian overseas bank (IOB) Marcy hospital, Baridih Jamshedpur Jharkhand-831017 CBS Branch code-1511 Mr. Amit Anu Branch Manager M.no-9934155025 Mrs.B.B.Das Deputy Manager M.no-9835368232 The IOB branch in encounter baridih 12 Sep 1994 and branch establish 18 dec 2001 Marcy hospital campuses. This branch in only five official member to done of job all banking transaction and customer satisfactory is favorable for branch. In this branch environment and security are very well. One most point observed that is every officer and staffs behaviors is very well. Any banking service done time to time or before which given by regional branch norms. We at the Indian overseas bank, baridih are committed to become the Bank of choice by providing. SUPRIOR,PRO ACTIVE,INNOVATIVESTATE OF THE ART Banking services with an attitude of care and concern for the customers and patrons.
100 P e r 50 c g e e n 0 t a

67.23 32.77
Satisfied Dissatisfied

Satisfaction

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SCOPE AND PORPOSE OF STUDY

The purpose of study of preparation of this report is focus of retail banking function of the bank with specific reference to Indian overseas bank. The report states the following points; The study gives an insight into the procedure followed by the bank as per the norms of the Reserve bank of India and the authority that governs the functioning of Indian overseas bank. It also explains certain terminologies commonly used in the banking industry. The report states the different types of retail banking products and financed by the bank and their classification as retail banking based of importance. The financial analysis of retail banking product and service i.e. the study of lots of product and other financial accounts to judge the credibility and repaying capacity of the prospective customer is done in great detail.

The same is illustrated with the help of practical case analysis to build a better understanding of the importance of banking and the procedure of financial analysis.

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METHODOLOGY AND SOURCES OF DATA

The propose of methodology for fulfilling the project of importance of retail banking project is as followed; The study of guidelines laid by the Reserve bank of India (RBI) and the governing authorities of Indian overseas bank (IOB) to be adhered to (retail banking product ) as published in the journal issued by these authorities from time to time. The secondary data is deduced from the books of account and marketing concept strategy maintained by the bank (without disclosure of any personal details of the customers). The data from the official books, news letters published by financial and marketing institutions and website have been utilized for the analytical study of retail banking list made by bank. It also involves active participation in banking transactions and internal functioning of the department of the branch or board. An elaborate study of loans and advances granted by the branch and analysis of the same has been the most significant component of the project. It also helps us understand the whole process of banking growth and financial analysis involved in lots of costumers. This brings forth method to assess the credit worthiness of the costumer and estimated the net worth of the assets owned by him, which assists the bank to ascertain the amount that can be sanctioned to them. The extent to which the credit limit can be sanctioned and drawing power be enhanced are also maintained.

~ 90 ~ Other than, this project deals with the securities that can be used against customers and calculation of equated monthly installment (EMI). Moreover Form of EMIs and credit monitoring lie under the realm of scope of the study. Further the documentation of the proposed advances and their final sanction forms another major area that is taken into consideration. The same is exhibited in various case studies that are included in the project to give a batter view, comprising of an integral part of report. The last topic discussed as per the schedule of project involves an in depth study of the problem related to pre and post sanction of importance of retail banking possible solutions certain conclusion and recommendations are made as per analysis of the cases.

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SWOT ANALYSIS
Strengths: Customer loyalty to words banks. Army camp is present. Fast service given by branch. Interpersonal relationship between the staffs is good. CC cameras present inside the bank. Weakness: A major weakness is that the branch is not being able to retain customers. The infrastructure of the branch is not efficient. Marketing of the bank is very poor. Branch doesnt have proper method to keep old files. Security guard not doing his job in proper way. Use of old generator which creates noise inside the branch ATM not available near the branch. Any transaction of like deposits, withdraw and other services made by three or may be four official staff.

Opportunities: There are many small scale companies in Jamshedpur that are doing good business; the branch should try to turn them in to its customers. Branch is situated in one of the posh area of Jamshedpur where people are economically sounded and if products are marketed properly to them, these customers have huge potential to contribute to bank. Threats: Up-coming technology is biggest threat to this branch. Many private banks have come up in this region, thus competition has increased. The branch has already lost a few customers due to the private banks. The rates of other banks are more competitive.

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LIMITATIONS OF THE STUDY

The study of importance of retail banking pertaining to Indian overseas bank is subject to certain limitation they are identified as follows; As far as the illustrations and the case analysis included in the report are concerned, the scope of study is limited to Indian overseas bank in baridih, Jamshedpur branch. The personal detail is related to the customers have intentionally not been revealed as per the norms of the IOB bank. Specific crucial financial details of the client have also not been disclosed. The secondary data collected and taken into consideration in order to fulfill the objectives of the projects includes published data from the journals magazines and data available from website of the bank and other companies for general public. It also includes the data gathered and observed during the daily functioning of the department of above mentioned bank. The data used for analysis includes the facts and figures from March 2010, to March 2009 and at the same time the latest guidelines as laid down by the Reserve bank of India are strictly followed. Further, the study serves the banking departments of the branch to identify the issues related to banking, maintaining a decreasing trend in the net value of the assets. All summer internship program (SIP) regulations laid down by the bank have been duly complied with.

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CONCLUSION
After studying entire project I can conclude that PRINCIPAL is one of the best public banks in India. I have understood the entire working of importance of retail banking in IOB. Data obtained from my survey says that 60%of customers are dealing with various activities under Retail Banking and 40% of customers are dealing with various activities under Lead Bank schemes with bank more than 10 years bank should retain this customers, as these customers are big assets for the bank. Around 40% of customers were not aware of the products under Retail Banking and 60% of customers were not aware of the products under Lead Bank scheme. Bank should look into this matter very seriously and should market their products in anew and reform manner or else they will loss the customers in masses.

Staff of the Bank should maintain good behavior to their customers, and Staffs should improve their technical skills for better service of their customers & Bank should improve the interest rate more attractive. If Bank will obey these things then Bank will get more profit. In case of a new customer, if a bank approaches it first for opening a Saving Accounts and Current Accounts with them, then there is a good chance for the bank of getting many future businesses and cross sales from the deal. So in all I can conclude that after undertaking this project I got to learn many thing about PRINCIPAL their working and an analysis of various retail banking product option. Developments of different marketing strategies and last on improve information technology.

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RECOMMENDATIONS
More Advertisement is required There should be more hoardings, newspaper advertisement, and awareness programs to make customers aware and get attracted towards the companys plans. Principle should concentrate more on job satisfaction of employees. Bank should make its interest more attractive. According to data obtained by my questionnaire around 70% of respondents not aware of products & only 30% of respondents aware of Products. Bank should know their customers, what they want from bank and each and every employee of the bank should maintain good behavior to every customers. Bank should market its products in a new and reform manner in rural and semi-urban areas. Bank should open more Small branches in Rural and Semi- urban areas. Bank should recruit young and more eligible candidates for rural and semiurban areas. Bank should improve the infrastructure & service facilities. Bank should improve information technology for one counter deal with all banking services. Bank improves survey of market and innovations of different types of product and services other bank. A new product and services should be available all branches at minimum charges. Making good relation to industrial customer and industry may be improving relationship. Increase ATM point and improve ATM near have to branch. Clarity of the goals to the employees, & should know their role that what they have or are suppose to achieve.

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BIBLIOGRAPHY
Information Sources Information has been sourced from various books, Internet. Questionnaire from staffs and customer too. Total numbers of words15,064 BOOKS Training Book IOB IOB Revenue Audit Booklet on Interest Rates and Services Charges. IOB Annual Report (2008-2009) I.M pandey-ninth edition financial management, noida: vikas publishing house. Retail banking & marketing department, marketing kit-IOB, printed by-color point, Chennai. Retail management-Levy &Weitz, published by Tata McGraw-hill publishing company ltd.

Internet
www.iob.co.in www.google.com www.rbi.com

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ANNEX: GLOSSARY
These definitions explain the meaning of words and terms used in the code. they are not precise legal or technical definitions. ATM-an Automated Teller Machine is a machine in which a customer can use their card along with PIN no. to get cash, information and other services. ABB -Any branch banking. Banking ombudsman- an independent dispute resolution authority set up by the RBI to deal with dispute that individuals and small business have with their banks. Banker cheque-banker cheque refers to the locality of place/state to the making a demand draft in any branch. Card-a general term for any plastic card, which a customer may use to pay for goods and services or to withdraw cash. In this code, it includes debit, credit or ATM cards. Credit card-a credit card is a plastic card with a credit facility ,which allows a customer to pay for goods and service or withdraw cash. Cheque- a cheque is a piece of paper that orders a payment of money. The person writing the cheque,the maker, usually has a chequing account (a demand account) where their money is deposited. The maker writes the various detail including the money amount, date, and a payee on the cheque, and signs it ordering their bank to pay this person or company the amount of money stated. Current account-a form of deposit wherefrom withdrawals are allowed any number of times depending upoun the balance in the account or up to a agreed amount. Customer-a person who has an account or who avails of other products/service from a bank. CBS-core banking system. CD- current deposit.

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Demand draft (DD) - Demand draft is a written order for making payments. It is also called in short form as DD. The person making payments is called drawee and recipient is called payee. The bank providing the service is called drawer. Demat account- a demat account refers to dematerialized account and is an account in which the stocks of investors are held in electronic form. Decreased account a decreased account is a deposit account in which case either the single account holder has decreased or in case of joint accounts one or more of joint account holders has have decreased. Dormat /inoperative account-a dormat/inoperative accounts is a savings bank or current account which is not operated upoun for a period specific by the bank. Equity equity means a part of capital of a corporate entity which is represented by the shares of the company whether in physical or in dematerialized from. Electronic clearing system(ECS)- The electronic clearing system is an online transmission system which permits the electronic transmission of payment information by the bank/branches to the Automated Clearing House (ACH) via a communication network. ED- education deposit. FD-fix deposits. Guarantee- a promise given by a person. Government bond- government bond means a security, created and issued, by the government for the purpose of rising a public loan. KYC-Know your customer. Mail- a letter in a physical or electronic form. No frills account- No frills account is a basic banking account. Such account requires either nill minimum balance or very low minimum balance. Charges applicable to such account are low. Service available to such account is limited. NRI-Non-resident Indian

~ 98 ~

Out of date cheque: - a cheque, which has not been paid because the date written on the cheque is of a date exceeding six month from the time of its presentation. PAN card- the permanent Account Number (PAN) is an all India unique number having ten alphanumeric characters allotted by the income tax department , government of india.it is issued in the form of a laminated card. Password a word or number or a combination or an access code, which the customer has chosen to allow them to use a phone or internet banking service. it is also used for identification. Pin ( personal identify number)- a confidential number, use of which along with a card allows customers to pay for articles/services, withdraw cash and use other electronic services offered by the bank. RD-Recurring Deposit Senior citizen-senior citizen a person of over sixty years of age. Unpaid cheque-this is a cheque , which is returned unpaid(bounced) by the bank. USGI-Universal sompo General Insurance Company ltd.

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