HDFC Bank and Financial Institutions in India

ACE Banker Induction Program - Day 1

• The program is an induction program for ACE Bankers at HDFC Bank.
• The program is run by the Institute of Finance, Banking & Insurance (ifbi).
• This is not a training program; it's about achieving role readiness.
• Key aspects for a great learning experience involve staying curious, asking questions, and participating in activities.
• 100% attendance is expected.
• Participants must arrive on time, complete all assignments on time.
• Professional attire is required for the training.
• Participants will be seated at tables and chairs while attending the training.

Participants Introduction

• The session will involve participants sharing their names, educations, and a unique quality.
• Participants will be asked about their dreams related to working as a banker.

Banking Overview

• This section is dedicated to a comprehensive overview of banking's core concepts.

Basics of Banking

• This section focuses on the fundamental aspects of banking.

Circle of Trust

• A circular graphic displays the relationships between depositors (customers who borrow), the bank (lender), and borrowers (customers who deposit) within a system of trust.
• The bank acts as an intermediary between depositors and borrowers.
• Depositors and borrowers trust the bank to manage the flow of money responsibly.

Watch Videos

• Important takeaways from videos on the evolution of banking and money should be noted.
• Participants have 5 minutes to present their takeaways at the end of each video.

Milestones in Indian Banking

• The history of the banking industry in India is discussed, including the formation of central banks and banking regulations.
• Key legislative changes, such as the Banking Regulations Act, 1949, and nationalization movements affecting the Indian banking sector are presented.
• Significant milestones are highlighted, showing various phases in the growth and evolution of banking in India.
• A historical timeline for significant milestones in the Indian banking industry including the formation of Presidency Banks, role of RBI, key legislation, and nationalization movements is provided

Narasimham Committee Recommendations

• These recommendations focused on transparency and deregulation in Indian banking, aimed to align practices with international standards, and permitted new players entry with a minimum equity requirement.
• Significant technological advancements, using technology driven approach, that transformed banking operations, are recounted.
• This section details how the Indian banking industry has adapted to technological advancements

Scheduled Banks & Non-Scheduled Banks in India

• Scheduled Banks Definition: Banks listed in the RBI's Second Schedule, meeting minimum capital and reserve requirements, and operating in accordance with RBI guidelines.
• Scheduled Banks Privileges: Access to RBI liquidity support and loans at the bank rate, eligibility for membership in clearing Houses.
• Non-Scheduled Banks Definition: Banks not listed in the RBI's Second Schedule; typically smaller banks with lesser capital and reserves.
• Non-Scheduled Banks Characteristics: Not typically entitled to all the privileges enjoyed by Scheduled Banks.

Classification of Bank in India

• A chart categorized types of banks in India, including Commercial Banks, Small Finance Banks, Payment Banks, and Cooperative Banks.
• The banks are further categorized by their public or private sector ownership (e.g., SBI, HDFC Bank, foreign banks).

Financial Regulators

• This section details the various financial regulators in India, showing the supervision over the financial institutions, that maintain financial stability in the country.
• Regulators include RBI, SEBI, IRDAI, and also details other financial institutes (National Institute of Securities Markets (NISM) and the Payment Regulatory and Development Authority (PRDA).

Activity

• Participants are required to research and list the role of the RBI.
• This activity involves a 15-minute research period followed by a discussion with the class.

Reserve Bank Of India (RBI) History

• This section presents various key aspects of RBI’s history and operations in India, including the establishment date, and role of the RBI in India's economic and banking system,
• The role of RBI in nationalizing the banking sector and its development across periods in history are included.

Reserve Bank Of India (RBI) The Regulator

• This section examines RBI's functions as a monetary authority, regulator, supervisor, and manager of foreign exchange in India.

RBI & Banking Regulation Act

• This section explains the two vital acts governing the banking industry in India: the RBI Act of 1934 and the Banking Regulation Act of 1949.
• The RBI Act governs monetary policy, financial stability, currency issuance, and bank regulations.
• The Banking Regulation Act provides a framework for regulating banks, ensuring their proper functioning and safeguarding depositors' interests.

Reserve Bank of India Role in Banking System

• RBI’s crucial functions to ensure financial stability, promote economic growth, and maintain the financial system are detailed.
• This includes monetary policy, regulation, and the management of currency/the supply of currency.

Reserve Bank of India Role in Banking System contd...

• The section outlines various supporting roles of the Reserve Bank of India in furthering the country’s economic development such as facilitating trade, overseeing banks and financial institutions, and managing foreign exchange.
• It also mentions supporting initiatives such as financial inclusion and aiding infrastructure development.

Subsidiaries of RBI

• The various Indian institutions controlled by Reserve Bank of India are detailed.
• They include DICGC, NABARD, SIDBI, and ReBIT, each with specific objectives and functions.

Controls in Indian Economy and Inflation

• Explains monetary policies, currency management, and other critical aspects that impact the economy and inflation.
• Explains the monetary policies that the RBI follows, including interest rates, open market operations, and reserve ratios (CRR, SLR).

RBI Bank Rate Key Rates to understand

• This section thoroughly describes the roles of Bank Rate, Repo Rate, and Reverse Repo Rate in managing money supply, controlling inflation and encouraging economic activities..

RBI Bank RateKey Rates to understand

• Various instruments like the Marginal Standing Facility (MSF), Cash Reserve Ratio (CRR), and Statutory Liquidity Ratio (SLR) are detailed and their impact and purpose is described.

Activity

• Participants have to research and find the current bank rate.

Developmental and Promotional Functions of RBI

• This section details various roles of RBI, including setting up financial institutions (NABARD, SFCs, DICGC, UTI, and IDBI) to promote savings, mobilize funds, and support industries, agriculture, and other sectors.
• RBI plays a crucial role in fostering financial inclusion by promoting savings and providing credit access, especially in rural populations.

The Reserve Bank of India (RBI) role in the Indian economy

• The RBI's financial inclusion drive spans all population segments, focusing on the underprivileged and rural areas.
• Activities include the Pradhan Mantri Jan Dhan Yojana (PMJDY), Basic Savings Bank Deposit Accounts (BSBDAs), and financial literacy programs.
• The role of RBI in supporting agricultural finance, SME promotion, infrastructure development, and the development of financial markets is detailed.

The Reserve Bank of India (RBI) role in the Indian economy

• Various initiatives aiming to promote digital banking, financial literacy, and environmentally friendly projects are detailed.
• The support provided by RBI for research, innovation, and development in banking is extensively covered

RBI Monetary Policy

• This section outlines the actions taken by the Reserve Bank of India (RBI) to manage the money supply and interest rates for stability, economic growth, and financial stability.
• It explains measures like inflation control, liquidity management, and credit flow to manage and achieve stability and growth.

RBI Annual Policy

• The RBI's annual policy document that outlines the central bank's strategy for management of economy, projections, reviews of past performances, and future goals are discussed.
• Key components include the economic outlook, monetary policy stance, financial sector developments, sectoral focus, and regulatory changes.

General Credit Controls and Checks on Lending Rates

• The Reserve Bank of India uses tools to manage the credit flow, control inflation, and maintain financial stability such as Cash Reserve Ratio, Statutory Liquidity Ratio, Open Market Operations, and bank rate.

Key Agencies Under the RBI

• The details of the following specific entities and their functions is provided, along with histories:
  • DICGC
  • NABARD
  • SIDBI
  • NPCI
  • CGTMSE
  • EXIM Bank
  • ECGC
  • IDRBT

Key Agencies Under the RBI

• This section details additional key financial agencies supervised and regulated by the Reserve Bank of India

Bank Customer Relationship

• This section defines the critical aspects of relationships between a bank and its customers in terms of rights and obligations.
• The rights and responsibilities of both sides to maintaining accountability and trust are defined.

Indian Contract Act, 1872

• This section examines the important aspects of the act that relate to the commerce and trade sector of India.
• The section’s purpose includes explaining contracts, proposals, promises, consideration between parties, and the essential criteria required to make a valid contract.
• The act emphasizes the importance of competency, which is contingent upon age and mental capacity.

The Sale of Goods Act, 1930

• This section outlines the purpose of the act related to sale of goods, emphasizing the essential elements like the parties involved, goods, the nature of transfer of property in the goods, and price.
• It also explains other conditions essential for a valid contract related to the sale of goods.

Negotiable Instruments Act, 1881 (NI Act)

• The key features of negotiable instruments like Promissory Notes, Bills of Exchange, and Cheques are described, including their types, components, and how they are transferred.
• The sections related to the Act governing the rules, liabilities, and handling of cheques are outlined, including issues like alteration, endorsements, and returning of cheques.

Negotiable Instruments Act, 1881 (NI Act) : Cheques

• Types, components, and procedures for using and processing cheques (including crossings and endorsements) are explicitly described within the framework of negotiable instruments.
• Detailed descriptions of situations where the cheques may be returned, liabilities faced by the parties associated with cheques, and provisions of Sections 31 and 85 of the NI Act.

Cheque Truncation System (CTS)

• This section explicitly outlines the components, process, benefits of the CTS, along with its importance in the evolution of banking and financial systems in India.
• The difference between traditional cheque clearing and the CTS-based system is compared and contrasted.

Paying & Collecting Banker in Clearing

• The respective roles and responsibilities within the clearing procedure.
• The process by which payment is authorized, communicated, and processed under various scenarios for the clearing process are detailed.
• The various roles and responsibilities assumed by banks (paying and collecting bankers) when processing clearing procedures are explained.

Cheque Truncation System and Clearing Process

• This section explains how the CTS system functions in the context of clearing and processing cheques.
• Descriptions of the components and process involved in using the CTS system are provided.
• Benefits of the system, including time efficiency, security, cost-effectiveness, and reduced environmental impact, are highlighted

Traditional Verses CTS Clearing

• The differences between traditional and the CTS methods of cheque clearing and processing are clearly described.
• This includes aspects like cheque deposit, movement, image creation, data transmission, clearing house processes, settlement time, return processes, and various benefits like reduced costs, enhanced security, improved environmental impact, among others.

Activity : Banking Overview

• A series of activities for various groups are described.
• This entails discussions of topics that concern banking overviews and related themes.
• This includes topics like purpose of banks, customer needs, products and services of banks, factors influencing customer's arrival and use of banks' products/services.

Debrief : Why do Bank exist

• This section summarises the different reasons behind banks' existence in the economy, emphasizing their role as financial intermediaries and the different services they provide.

Why do banks need customers

• The section explains that banks require customers who provide deposits to function. They use the deposits to lend money to those in need of capital.

What do banks do

• The section describes the key functions of banks, including accepting deposits and lending money.
• It uses a balance model to illustrate this fundamental banking principle.

What are the Products of a bank

• This section differentiates between assets (loans given out by the bank), and liabilities (money borrowed by the bank).
• Examples of assets and liability products of a bank are given.

Types of Products - Product Suite

• This section lists various product types offered by banks, categorized as assets and liabilities.
• It shows a wide range of products ranging from loans to deposits.

Why do customers come to a bank

• This section explains the various motives individuals and businesses have for using banks, including new products like loans and deposits, service requests, address changes, funds transfer, and investment products.

Types of Customers

• The types of clients that banks can serve, including individuals, firms, trusts, corporations, and Hindu Undivided Families.

HDFC Bank – History & Achievements

• The presentation covers the establishment of and notable milestones in the growth and achievements of HDFC Bank.
• It details its inception, product launches, and strategic mergers with other organizations.

Mission and Values

• The principles and mission statement of HDFC bank are described, including crucial aspects of operational excellence, customer focus, and delivering exceptional customer service while maintaining sustainability and corporate responsibility.

History & Milestones

• This section notes important developments and milestones since HDFC Bank's start, including IPO listings, introduction of debit cards, and significant mergers
• Technological advancements since the inception of the bank are highlighted, such as net banking platforms and digital loan services.

History & Milestones

• Recognizes the corporate milestones and notable awards won by HDFC bank between 2014-2023.

Our Business

• Highlights the diversified offerings and services of HDFC bank, encompassing deposits, loans, investments, and banking for NRI clients.
• The section summarizes the various aspects of HDFC bank products and services.

Our Business

• Describes specific key product categories offered by HDFC bank, including services related to corporate banking, SME banking, investment banking, securities trading and Treasury services.

Who is a Modern banker?

• A modern banker is a versatile individual adept at understanding customer needs, providing financial advice, and implementing secure digital banking.
• Their job entails understanding broader banking industry requirements and customer relationship management.

Discussion

• Discussion questions about banking sector topics and their context.
• This includes questions related to the function and purpose of the Negotiable instruments Act of 1881, and questions related to the establishment dates of HDFC Bank and the number of its branches.
• Good communication etiquette in customer service and the specific roles and responsibilities of a Customer Service Executive (CSE) function in HDFC Bank are explained.
• The purpose of customer profiling in banking and aspects of the customer profile are highlighted.

Time to Vigil

• The inclusion of visual content for an activity during the program