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JAIIB OCTOBER 08/2007 WELCOME TO VIRTUAL CLASS ROOM SESSION PRINCIPLES OF BANKING MODULE B.

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Presentation on theme: "JAIIB OCTOBER 08/2007 WELCOME TO VIRTUAL CLASS ROOM SESSION PRINCIPLES OF BANKING MODULE B."— Presentation transcript:

1 JAIIB OCTOBER 08/2007 WELCOME TO VIRTUAL CLASS ROOM SESSION PRINCIPLES OF BANKING MODULE B

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

3 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

4 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. X’s 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 debtor’s debtor

5 BANKER’S DUTIES & RESPONSIBILITIES PAYING BANKER PAYMENT OF CHEQUES PAYMENT IN DUE COURSE APPARENT TENOR PAYMENT IN GOOD FAITH WITHOUT NEGLIGENCE NEGOTIABLE INSTRUMENTS

6 CHEQUES BEARER ORDER CROSSED OPEN

7 NEGOTIABLE INSTRUMENTS  BANKER’S DUTIES & RESPONSIBILITIES  C0LLECTING BANKER  COLLECTION OF  CHEQUES HOLDER IN DUE COURSE CONSIDERATION TITLE IBEFORE MATURITY

8 WORKING CAPITAL OPERATING CYCLE RAW MATERIAL SEMI FINISHED PRODUCTS FINISHED PRODUCTS CREDIT SALES BILLS PAYABLE BILLS REALISED CASH

9 DEPOSIT ACCOUNTS DEPOSITS CURRENTSAVINGSFIXEDRECURRINGFLEXICERTIFICATE

10 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

11 CHARGES HYPOTHECATIONHYPOTHECATION PLEDGEPLEDGE MORTGAGEMORTGAGE ASSIGNMENTASSIGNMENT LIENLIEN SET OFFSET OFF

12 FUND BASED FINANCE LOANS & ADVANCES CASH CREDIT OVERDRAFT RETAIL FINANCE TERM FINANCE BILLS FINANCE

13 Non-Fund Based Finance BANK GUARANTEE CO- ACCEPTANCE OF BILLS LETTERS OF CREDIT

14 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

15 6 Cs CHARACTER CHARACTER CAPTIAL CAPTIAL CAPACITY CAPACITY COLLATERAL COLLATERAL CONDITION CONDITION COMPLIANCE COMPLIANCE

16 Clayton’s Case Applicable only to a Applicable only to a a) joint a/c and or a partnership a/c a) joint a/c and or a partnership a/c b) running c/c and o/d a/cs b) running c/c and o/d a/cs c) Not to two different a/cs c) Not to two different a/cs (Right of set off is applicable) (Right of set off is applicable) Based on the concept of Appropriation Based on the concept of Appropriation

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

18 ALL THE BEST & THANK YOU  T.M.C.VARADARAJAN  TEL : 022-25638965 (R)  022-66364206 (O)  e.mail: t.varadarajan@scotiabank.comt.varadarajan@scotiabank.com  tmc_varadarajan@yahoo.co.intmc_varadarajan@yahoo.co.in


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