JAIIB OCTOBER 08/2007

WELCOME TO VIRTUAL CLASS ROOM SESSION PRINCIPLES OF BANKING MODULE B

BANKER-CUSTOMER RELATIONSHIP
DEBTOR-CREDITOR CREDITOR-DEBTOR AGENT-PRINCIPAL LESSOR-LESSEE BAILEE-BAILOR

FAQs

KYC: Know Your Customer Know your customer norms are applicable to all customer accounts. It deals with not only to identify the customer but also to understand the activities of the customer, to ensure that the operations in the customer account/s is/are for genuine purpose

Garnishee Order
A garnishee order is issued by a court Ex: Mr X borrows money from Mr Y and fails to

repay. Mr Y files a suit against Mr X, under the Civil Procedure Code and the Court issues a decree and attaches the funds in Mr. Xs bank account with bank A. The order issued by the Court on bank A is known as Garnishee Order Mr Y is the judgement creditor Mr.X is the Judgement debtor. Bank A is Judgement debtors debtor

NEGOTIABLE INSTRUMENTS

BANKERS DUTIES & RESPONSIBILITIES PAYING BANKER PAYMENT OF CHEQUES

PAYMENT IN DUE COURSE

APPARENT TENOR

PAYMENT IN GOOD FAITH

WITHOUT NEGLIGENCE

CHEQUES
BEARER
ORDER

CROSSED
OPEN

NEGOTIABLE INSTRUMENTS
BANKERS DUTIES

& RESPONSIBILITIES C0LLECTING BANKER COLLECTION OF CHEQUES

HOLDER IN DUE COURSE

CONSIDERATION

TITLE

IBEFORE MATURITY

WORKING CAPITAL OPERATING CYCLE

CASH RAW MATERIAL

BILLS REALISED

SEMI FINISHED PRODUCTS

BILLS PAYABLE CREDIT SALES

FINISHED PRODUCTS

DEPOSIT ACCOUNTS
CURRENT

CERTIFICATE

SAVINGS

DEPOSITS

FLEXI

FIXED

RECURRING

CERTIFICATE OF DEPOSIT

CD IS A MONEY MARKET INSTRUMENT ISSUED AT A DISCOUNT MINIMUM AMOUNT IS Rs. One LAKH MINIMUM PERIOD OF CD 15 DAYS MAXIMUM PERIOD OF 1 YEAR DIFFERS FROM FD a) Prepayment not allowed b) Loan is not allowed

CHARGES
HYPOTHECATION PLEDGE MORTGAGE ASSIGNMENT LIEN SET OFF

FUND BASED FINANCE

CASH CREDIT

BILLS FINANCE

OVERDRAFT

LOANS & ADVANCES

TERM FINANCE

RETAIL FINANCE

Non-Fund Based Finance

LETTERS OF CREDIT

BANK GUARANTEE

CO-ACCEPTANCE OF BILLS

Non-Resident Indian Accounts

Who is a Non Resident Indian?

1)An Indian citizen who resides outside India on account of a) Employment/business/vocation and b) staying outside India for an uncertain period 2)A person of Indian origin but a citizen in any other country except Pakistan/Bangladesh if at any time holding an Indian passport

6 Cs

CHARACTER CAPTIAL CAPACITY COLLATERAL CONDITION COMPLIANCE

Claytons Case
Applicable only to a a) joint a/c and or a partnership a/c b) running c/c and o/d a/cs c) Not to two different a/cs (Right of set off is applicable)

Based on the concept of Appropriation

FAQs

Distinguish -Cash Credit and Overdraft Both CC and OD forms part of working capital finance CC is granted against moveable goods (inventory/semi finished goods/goods etc) OD is granted against paper security (Fixed deposit receipts/shares/book debts)

ALL THE BEST & THANK YOU

T.M.C.VARADARAJAN
TEL : 022-25638965 (R)

022-66364206 (O) e.mail: t.varadarajan@scotiabank.com tmc_varadarajan@yahoo.co.in