Service Charge Policies and Overdue Charges 2019-20

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Questions and Answers

What is the overdue charge percentage for annual rent that remains unpaid until 1st October 2019?

30%

20% (correct)

10%

40%

Which forms are prescribed for Articles left in Safe Custody under the Banking Companies (Nomination) Rules, 1985?

SL1, SL2, SL3

SC1, SC2, SC3 (correct)

SL1A, SL3A, SC2A

AC1, AC2, AC3

What is the main requirement for a nominee who is a minor in the context of Safe Custody?

Nominee can act independently.

Same procedure as prescribed for bank deposit accounts must be followed. (correct)

Nominee must be a legal adult.

No nomination is allowed for minors.

In which scenario are nomination rules applicable for lockers held in joint names?

When operated jointly. Signup and view all the answers

What must be done to thumb impressions affixed on the nomination forms?

They must be attested by two witnesses. Signup and view all the answers

Who may act on behalf of a minor when making a nomination for a locker?

A person lawfully entitled to act on behalf of the minor. Signup and view all the answers

What is stated about the duplicate keys of the bank dealing with SBI?

They are provided free of charge. Signup and view all the answers

Which account types are eligible for the nomination facility?

Individual depositors and sole proprietary concerns. Signup and view all the answers

What is the bank's responsibility regarding natural calamities affecting locker contents?

The bank is not liable for loss arising from natural calamities. Signup and view all the answers

What should branches do to protect their locker systems from catastrophes?

Exercise appropriate care of their locker systems. Signup and view all the answers

In case of loss of locker contents due to negligence, what is the compensation amount a customer might be entitled to?

One hundred times the annual rent of the locker. Signup and view all the answers

What is the banks' position regarding insurance for locker contents?

Banks have no liability to insure locker contents. Signup and view all the answers

What should be done immediately upon receipt of security forms?

They must be opened immediately. Signup and view all the answers

Who is responsible for ensuring that the security forms are counted and verified?

Cash Officer and Service Manager/Branch Manager. Signup and view all the answers

What should the quality of the cupboards storing security forms be?

Adequately insured and securely locked. Signup and view all the answers

What accompanies the consignments of security forms upon receipt?

An acknowledgment letter. Signup and view all the answers

What should be ensured when there is a change in incumbency or at specified intervals regarding passwords?

Password secrecy for cash replenishment Signup and view all the answers

What should be done with cancelled forms?

Entered in CBS through the proper menu Signup and view all the answers

Which procedure is critical to prevent banking irregularities from re-occurring?

Rectifying irregularities pointed out by audit/inspection Signup and view all the answers

What does the Maker-Checker concept ensure in banking procedures?

Dual control of transactions to prevent fraud Signup and view all the answers

What is required in case of lost instruments to prevent future claims?

No Objection Letter from the payee Signup and view all the answers

Which of the following actions is discouraged to maintain good conduct in banking?

Engaging in commercial propositions Signup and view all the answers

Who can keep the blank cheque books under lock and key?

An official not below the rank of accountant Signup and view all the answers

What is the primary focus of Risk Focused Internal Audit (RFIA)?

Evaluating and improving risk management and governance Signup and view all the answers

How should the security forms be stored after they are returned?

In the FBR safe or a strongroom cupboard Signup and view all the answers

What should not be done concerning remittance and withdrawal transactions?

Show remittance as withdrawal Signup and view all the answers

What is the requirement for checking the forms in a cheque book upon receipt?

The first and last serial numbers must be recorded in the Cheque Book Register Signup and view all the answers

Which authority's approval is needed for the cancellation of stale instruments over ₹50,000?

Controller of Operations Signup and view all the answers

What is a consequence of non-compliance with regulatory directives in banking?

Potential loss of reputation and stakeholder confidence Signup and view all the answers

What should be done if irregularities are found during an audit?

Ensure the same irregularities do not recur Signup and view all the answers

What type of forms should be under the charge of a supervising official?

Bank Guarantee and Letters of Credit forms Signup and view all the answers

What is the purpose of keeping track of the closing stock of security forms?

To ensure compliance with banking regulations Signup and view all the answers

What is the primary objective of Risk Focused Internal Audit (RFIA)?

To assess risks and provide feedback for improvement. Signup and view all the answers

Which group includes branches with net Fund-Based exposure of Rs 150 Cr and above?

Group I Signup and view all the answers

What model is used for the continuous monitoring of controls at branches?

Outlier Model Signup and view all the answers

Which of the following scoring parameters relates to Credit Risk Management?

Increase in NPAs Signup and view all the answers

How are branches prioritized for audit under the Outlier Model?

By assigning outlier audit scores. Signup and view all the answers

Which branches fall under Group II?

Those with aggregate non-food advances of Rs 25 Crores and above. Signup and view all the answers

What does an increase in controllable overheads indicate in operational risk management?

Potential inefficiencies within branch operations. Signup and view all the answers

What is the major focus of the scoring parameter related to 'Quick Mortality Exposure'?

Risk related to sudden account closures. Signup and view all the answers

Study Notes

Overdue Charges

Overdue charges on advance rent for 2019-20 are set at 10%/20%/30%/40%, applicable if payment remains unpaid by specific dates: July 1, October 1, January 1, and April 1, respectively.
Circular reference: R&DB/BOD-SC/19/2022 - 23, dated October 1, 2022 for service charge revisions.

Safe Custody and Nomination Facility

Service charges apply to articles under Safe Custody, and duplicate keys for SBI-held accounts are provided without charge.
Nomination facility for Safe Deposit Lockers follows provisions of Banking Regulation Act, 1949 and Nomination Rules, 1985.
Nominees can be appointed for both individual and joint accounts; procedures for minors apply similarly to bank deposit accounts.
Thumb impressions on forms need witness attestation, but signatures do not; this applies to both Safe Custody and Safety Lockers.
Nomination for lockers is valid only if operated jointly; the representative of a minor can make nominations.

Liability and Insurance of Locker Contents

The bank is not liable for losses due to natural disasters or the customer's negligence.
In the event of loss due to specific incidents, the bank may offer compensation equal to one hundred times the annual rent of the locker.
Banks are not required to insure locker contents and do not maintain records of items stored.

Security Forms and Procedures

Security forms must be opened immediately upon receipt and acknowledged promptly to the CirSD.
All security forms are to be locked up and adequately insured.
Cancelled forms require an entry in CBS; no No Objection Letter is needed unless it's evident that the form was sent to the payee.

Risk Focused Internal Audit (RFIA)

RFIA evaluates risks and provides feedback for operational improvements, essential for reducing loss and reputational damage.
Audit units are grouped based on fund exposure, with Group I focusing on branches exceeding Rs 250 Cr in fund exposure, Group II on branches with non-food advances over Rs 25 Cr, and Group III on all remaining branches.
Outlier branches are identified through analytics-based models, monitoring controls and scoring based on operational effectiveness.

Credit and Operational Risk Management

Identifying gaps in controls, evaluating exposure at stress, and assessing the growth of advances and increases in NPAs are critical for Credit Risk Management.
Operational Risk Management entails monitoring for data inaccuracies, overhead controls, and account reconciliations.

Employee Conduct and Compliance

Employees must maintain strict adherence to bank procedures and not engage in unauthorized commercial propositions.
Ethical guidelines discourage accepting gifts or valuables; compliance with laid down directives is critical for sustaining stakeholder confidence.

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Description

This quiz explores the overdue period clarifications regarding standing instructions for advance rental for the financial year 2019-20. It includes details about overdue charges and service charges as per Circular No.: R&DB/BOD-SC/19/2022 - 23. Test your understanding of these financial policies and their implications.