Introduction, Deposit Account & Remittance-New.pdf

INTRODUCTION, DEPOSIT ACCOUNTSAND REMITTANCE Meaning A bank is a financial institution which performs the deposit and lending function. A bank allows a person with excess money (Saver) to deposit his money in the bank and earns an interest rate. Similarly, the bank lends to a person who ne...

INTRODUCTION, DEPOSIT ACCOUNTSAND REMITTANCE Meaning A bank is a financial institution which performs the deposit and lending function. A bank allows a person with excess money (Saver) to deposit his money in the bank and earns an interest rate. Similarly, the bank lends to a person who needs money (borrower) at an interest rate. Thus, the banks act asan intermediary between the saver and the borrower. Definitions As per Banking Regulation Act, 1949 “Banking Company” means any company which transacts the business of banking in India. “Banking” means the accepting, for the purpose of lending or investment, of depositsof money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.  Reserve Bank of India RBI is the Central Bank of our country. It was established on April 1, 1935 under the RBI Act, 1934. In India, the RBI supervises operations of all the banks. The main purpose of the RBI is to conduct consolidated supervision of the financial sector in India, which is made up of commercial banks, financial institutions, and non-banking finance firms. Main functions of RBI: 1.Issue of Currency Notes: The RBI has the sole right or authority or monopoly of issuing currency notes except one rupee note and coins of smaller denomination. These currency notes are legal tender issued by the RBI. Currently it is in denominations of Rs. 2, 5, 10, 20, 50, 100, 500, and 1,000. The RBI has powers not only to issue and withdraw but even to exchange these currency notes for other denominations. 2. Banker to other Banks: The RBI being an apex monitory institution has obligatory powers to guide, help and direct other commercial banks in the country. The RBI can control the volumes of banks reserves and allow other banks to create credit in that proportion. Every commercial bank has to maintain a part of their reserves with its parent's viz. the RBI. Similarly, in need or in urgency these banks approach the RBI for fund. Thus, it is called as the lender of the last resort. 3. Banker to the Government: The RBI being the apex monitory body has to work as an agent of the central and state governments. It performs various banking function such as to accept deposits, taxes and make payments on behalf of the government. It works as a representative of the government even at the international level. It maintains government accounts, provides financial advice to the government. It manages government public debts and maintains foreign exchange reserves on behalf of the government. It provides overdraft facility to the government when it faces financial crunch. 4. Exchange Rate Management: It is an essential function of the RBI. In order to maintain stability in the external value of rupee, it has to prepare domestic policies in that direction. Also, it needs to prepare and implement the foreign exchange rate policy which will help in attaining the exchange rate stability. In order to maintain the exchange rate stability, it has to bring demand and supply of the foreign currency (U.S Dollar) close to each other. 5. Credit Control Function: Commercial bank in the country creates credit according to the demand in the economy. But if this credit creation is unchecked or unregulated then it leads the economy into inflationary cycles. On the other credit creation is below the required limit then it harms the growth of the economy. As a central bank of the nation the RBI has to look for growth with price stability. Thus, it regulates the credit creation capacity of commercial banks by using various credit control tools. 6. Supervisory Function: The RBI has been endowed with vast powers for supervising the banking system in the country. It has powers to issue license for setting up new banks, to open new branches, to decide minimum reserves, to inspect functioning of commercial banks in India and abroad, and to guide and direct the commercial banks in India. It can have periodical inspections an audit of the commercial banks in India. 7. Development of the Financial System: The financial system comprises the financial institutions, financial markets and financial instruments. The sound and efficient financial system is a precondition of the rapid economic development of the nation. The RBI has encouraged establishment of main banking and nonbanking institutions to cater to the credit requirements of diverse sectors of the economy. 8. Development of Agriculture: In an agrarian economy like ours, the RBI has to provide special attention for the credit need of agriculture and allied activities. It has successfully rendered service in this direction by increasing the flow of credit to this sector. It has earlier the Agriculture Refinance and Development Corporation (ARDC) to look after the credit, National Bank for Agriculture and Rural Development (NABARD) and Regional Rural Banks (RRBs). 9. Provision of Industrial Finance: Rapid industrial growth is the key to faster economic development. In this regard, the adequate and timely availability of credit to small, medium and large industry is very significant. In this regard the RBI has always been instrumental in setting up special financial institutions such as ICICI Ltd. IDBI, SIDBI and EXIM BANK etc. A. Commercial Banks: Commercial bank is an institution that accepts deposit, makes loans and offer related services. These institutions run to make profit. They cater to the financial requirements of industries and various sectors like agriculture, rural development, etc. it is a profit making institution owned by government or private of both. Commercial banks include public sector, private sector, foreign banks and regional rural banks: Primary functions:  Accepting deposits  Providing loans  Payments and funds transfer  Currency exchange  Investment services  Financial Advisory services  Providing safety vaults a. Nationalized Bank / Public Sector Banks: Public Sector Banks (PSBs) are banks where in the majority stake (i.e. more than 50%) is held by Government of India e.g. State Bank of India, Punjab National Bank, Bank of Baroda etc. The shares of these banks are listed on stock exchanges. b. Private Sector Banks: New Private Sector Banks: HDFC Bank, ICICI Bank, Axis Bank, etc. opened after 1991 due to opening up of the economy by the Government of India. Private sector banks are those whose equity is held by private shareholders. Private sector bank plays a major role in the development of Indian banking industry. Old Private Sector Banks: are like J&K Bank, Development Credit Bank, Karnataka Bank, South India Bank etc., which were all opened prior to 1991. c. Foreign Banks: Foreign Banks: Standard Chartered Bank, HSBC Bank, Duestche Bank, Barclays Bank, BNP Paribas, State Bank of Mauritius, Doha Bank, Citi bank, Bank of America etc., which are incorporated abroad but having branches in India. All types of banking transactions are undertaken. d. Regional Rural Banks: These are state sponsored regional rural oriented banks. They provide credit for agricultural and rural development. The main objective of RRB is to develop rural economy. Their borrowers include small and marginal farmers, agricultural labourers, artisans etc. NABARD holds the apex position in the field of agricultural and rural finance. RRBs are jointly owned by the Government of India (50%), one of the Public Sector Banks (35%) and the Government of the State in which the RRB is situated (15%) –meant to serve rural areas. All the banking services required by customers in the rural areas are available. E.g. Punjab Gramin Bank, Bihar Gramin Bank, Assam Gramin Vikash Bank, Karnataka Vikas Grameena Bank B. Co-operative Banks: Cooperative banks are so-called because they are organised under the provisions of the Cooperative Credit Societies Act of the states. The major beneficiary of the Cooperative Banking is the agricultural sector in particular and the rural sector in general. The cooperative banks in India play an important role even today in rural financing. The enactment of Co-operative Credit Societies Act, 1904, however, gave the real impetus to the movement. The Cooperative Credit Societies Act, 1904was amended in 1912,with a view to broad basing it to enable organisation of non-credit societies. They are organised and managed on the principal of co-operation and mutual help. The main objective of co- operative bank is to provide rural credit. Three tier structures exist in the cooperative banking: State cooperative bank at the apex level. Central cooperative banks at the district level. Primary cooperative banks and the base or local level.  They are further classified as: State Co-operative Banks, Districy Central Co-operative Banks, Urban Co-operative Banks, Primary Agricultural Credit Societies, Employees’ Co-operative Banks, Multi-State Co-operative Banks E.g. Saraswat Co-operative Bank, Punjab & Maharashtra Co-operative Bank (PMC Bank),Thane Janta Sahakari Bank (TJSB), The South Indian Bank, etc. Following are the functions performed by the co-operative banks: 1. Primary Urban Co-operative Bank (PUCBs) This type of Co-operative banks provide their services to mainly urban areas of India, they mainly provide advances in shares and debentures to the small businessmen and also provide these small businessmen loans with extension in credit facilities. 2. District Central Co-operative Bank (DCCBs)- These type of banks provide their services to the district or local area. They make and implements the policies at a district level and also provide credit facilities to the PACs and PUBCs. 3. Primary Agriculture Credit Society (PACs)- PACs are a type of Co-operative bank which provides loans to its customers with less complexity, they also motivate their customers to learn to save their money through deposits. It also provides the benefits and development of the large society. 4. State Co-operative Banks (SCBs)- SCBs are governed by NABARD and acts as supervisor to the DCCBCs. 5. Land Development Banks (LDBs)- These banks help in fulfilling the needs and requirements of the agricultural sector and provide credit in local areas and also perform all the general and basic functions of a bank. This type of bank motivates and helps in the increase in agricultural production in our country.  DEVELOPMENT BANK “A development bank may be defined as a financial institution concerned with providing all types of financial assistance (medium as well as long-term) to business units in the form of loans, underwriting, investment and guarantee operations and development in general and industrial.” Features of a Development Bank A development bank has the following features or characteristics: A development bank does not accept deposits from the public like commercial banks and other financial institutions who entirely depend upon saving mobilization. It is a specialized financial institution which provides medium term and long- term lending facilities. It is a multipurpose financial institution. Besides providing financial help it undertakes promotional activities also. It helps an enterprises from planning to operational level. It provides financial assistance to both private as well as public sector institutions. The role of a development bank is of gap filler. When assistance from other sources is not sufficient then this channel helps. It does not compete with normal channels of finance. Development banks primarily aim to accelerate the rate of growth. It helps industrialization specific and economic development in general. The objective of these banks is to serve public interest rather than earning profits. Development banks react to the socio-economic needs of development. The long term requirements of business concerns are provided by industrial banks, and the various long term lending institutions which are created by government. In India these long term lending institutions are collectively referred as development banks. They are: Industrial Finance Corporation of India (IFCI), 1948 Industrial Credit and Investment Corporation of India (ICICI), 1955 Industrial Development of Bank of India (IDBI), 1964 State Finance Corporation (SFC), 1951 Small Industries Development Bank of India (SIDBI), 1990 Export Import Bank (EXIM) Small Industries Development Corporation (SIDCO) National Bank for Agriculture and Rural Development (NABARD). In addition to these institutions, there are also institutions such as Life Insurance Corporation of India, General Insurance Corporation of India, National Housing Bank, Unit Trust of India, etc., which are providing investment funds. Types of deposit accounts in banks Savings Account: This is a basic deposit account for individuals that allows them to save money andearn a nominal interest rate. Savings accounts in India typically offer easy access to funds through ATMs and online banking. Current Account: Current accounts are primarily used by businesses, self- employed professionals, and individuals with high transaction volumes. They do not usually offer interest but provide featureslike overdraft facilities and check-writing abilities. Fixed Deposit (FD): Fixed deposits in India are time-bound savings instruments where you deposit alump sum amount for a fixed tenure, ranging from a few days to several years. FDs offer higher interest rates compared to savings accounts and are a popular choice for long-term savings. Recurring Deposit (RD): A recurring deposit account allows individuals to save a fixed amount of money regularly over a specified period, typically ranging from 6 months to 10 years. RDs also offer interest, and the interest rate is usually higher than that of savings accounts. Senior Citizens' Savings Scheme (SCSS): This is a government-backed savings scheme in India available to senior citizens. It offers a higher interest rate and tax benefits. The maturity period is fiveyears, which can be extended for an additional three years. Public Provident Fund (PPF): PPF is a long-term savings scheme offered by the government of India. It has a lock-in period of 15 years and offers tax benefits. Deposits can be made annually, andthe interest rate is fixed by the government. NRE (Non-Residential External) Account: NRE accounts are meant for non-resident Indians (NRIs) who want to maintain their Indian income in a foreign currency. These accounts are fully repatriable, meaning the principal and interest can be transferred abroad. NRO (Non-Residential Ordinary) Account: NRO accounts are also for NRIs but are used to manage income earned in India. These accounts are not as freely repatriable as NRE accounts. FCNR (Foreign Currency Non-Residential) Deposit: FCNR deposits allow NRIs to maintain foreign currency accounts in India. The deposits are held in foreign currency, and the interest is tax-free. Minor's Account: These accounts are designed for minors, and they are typically operated by a parent or guardian until the minor reaches a certain age.  Formalities for opening bank accounts Though there might be specific requirements of specific bank, mentioned below are the formalities for opening bank accounts common to all the banks. 1. Account Application Form: Request an account opening application form from the bank. Fill out the form completely and accurately. You may need to provide details such as your name, date of birth, address, occupation, and nominee details. 2. Know Your Customer (KYC) Documents: Banks in India follow strict KYC guidelines to verify theidentity and address of customers. You will need to provide the following documents:  Identity Proof: Any one of the following documents can be used as identity proof: Passport Voter ID card Aadhaar card PAN card (for certain transactions) Driver's license Government-issued photo ID Address Proof: To establish your residential address, you can submit documents such as: Passport Voter ID card Aadhaar card Utility bills (electricity, water, gas, or landline phone bills) Rent agreement Bank statement or passbook with address  Passport-sized Photographs: You will need to provide a few recent passport- sized photographs. 3. Introduction: Some banks may require an introduction from an existing account holder of the samebank. This is common for current accounts and less common for savings accounts. 4. Initial Deposit: Depending on the type of account, you may need to make an initial deposit. The minimum balance requirement varies from bank to bank and can differ for urban and rural branches. 5. Signature Verification: Your bank may ask for a signature verification, where you will be asked toprovide your specimen signature on a designated form. 6. Nominee Information: You will be asked to nominate someone to receive the funds in case of your demise. Provide the nominee's details. 7. Additional Documents: For certain types of accounts or if you are opening a joint account, the bank may require additional documents, such as partnership deeds or trust documents. 8. Submit the Application: Submit the filled-out application form, along with all the required documents, to the bank's representative. 9. Acknowledgment: The bank will issue an acknowledgment receipt or an account number once your application is accepted. 10. Activation of Account: The bank will review your application and documents. Once the account isapproved, it will be activated, and you will receive a checkbook, debit card, and passbook (if applicable).  Nomination Nomination requirements in Indian banks refer to the process by which a bank accountholder can designate a nominee who will receive the account's assets and balances in the event of the account holder's death. It is essential for account holders to keep their nomination details up to date and review them periodically to ensure they reflect theircurrent intentions. The key points to know about nomination requirements in Indian banks: Who can be a nominee: A nominee can be any person, including a family member, friend, or relative, chosen by the account holder. In the case of a joint account, all account holders can nominate a person as the nominee. Nominee details: To nominate a person, the account holder needs to fill out a nomination form provided by the bank. It is generally a part of the account opening form. The nominee's name, address, date of birth, and relationship with the account holder must be mentioned in the form. Multiple nominees: Account holders can nominate more than one person, and they can specify the percentage share each nominee is entitled to receive. Minor as a nominee: A minor can be nominated as a beneficiary, but a guardian must be appointed on behalf of the minor until they reach the age of 18. Revoking or changing nomination: The account holder can change or revoke the nomination at any time by filling out a new nomination form. In the case of a joint account, all joint account holders must sign the nomination form for changes or revocation. Consent of the nominee: The nominee's consent is not required at the time of nomination. However, it isadvisable to inform the nominee about the nomination. Settlement of the account: In the event of the account holder's death, the bank will transfer the account'sbalance and assets to the nominee. If there are multiple nominees, the bank will distribute the assets as per the percentage share specified. Legal implications: Nomination is a facility to simplify the process of transferring assets to the nominee and does not create ownership rights or legal claims by the nominee over the assets. In case of disputes or legal issues, the nominee may need to transfer the assets tothe legal heirs or beneficiaries through the appropriate legal process.  Soiled notes Soiled notes refer to currency notes that are torn, discolored, scribbled upon, or otherwise damaged to the extent that they are no longer suitable for circulation. The Reserve Bank of India (RBI) has established provisions and guidelines related to the handling and disposal of soiled notes by banks. These provisions are designed to maintain the quality of currency in circulation and ensure that only clean and fit notes are in circulation. Key provisions related to soiled notes are:  Soiled notes Notes that are dirty or slightly cut, or notes with numbers on both ends that are in two pieces. Here are some things to know about exchanging soiled and mutilated notes:  Exchange at any bank Individuals can exchange soiled or mutilated notes at any bank branch in India.  Exchange without an account Individuals do not need to open an account to exchange soiled or mutilated notes.  Exchange value The value of the exchange depends on the note's condition and may result in full, half, or no value.  Exchange for excessively soiled notes Notes that are excessively soiled, brittle, or burnt can only be exchanged at the Issue Office of the RBI.  Exchange for notes in bulk The rules for exchanging notes differ for small amounts and in bulk.  Counterfeit notes Counterfeit notes are fake or forged currency notes that are created and circulated with theintent to deceive and defraud people and institutions. These counterfeit notes are designed toimitate genuine currency issued by a country's central bank or government, and they are typically produced with the aim of passing them off as legitimate money in financial transactions. Such notes are of significant concern for banks as it can impair the integrity ofthe currency system and result in financial losses. The Reserve Bank of India (RBI) has established provisions and guidelines related to counterfeit notes as follows: 1 Detection of Counterfeit Notes: Banks are required to implement robust systems and procedures to detect counterfeit currency notes during cash transactions. Counterfeit detection methods may include theuse of counterfeit detection machines, ultraviolet (UV) lamps, watermark detection, and other security features verification. 2 Reporting to RBI: Banks must immediately report any counterfeit notes detected to the local police and thenearest RBI office. Banks are expected to maintain records of counterfeit notes detected, including details such as serial numbers, denominations, and the circumstances in which they were received. 3 Handling and Preservation: Counterfeit notes should be separated from genuine currency and clearly marked as "Counterfeit" to prevent them from re-entering circulation. Banks should ensure the preservation of counterfeit notes as evidence for law enforcement agencies. 4 Training and Awareness: Banks are responsible for training their staff, including cashiers and tellers, in counterfeit note detection techniques. Staff members should be vigilant and knowledgeable about the security features of genuine currency notes. 5 Cooperation with Law Enforcement: Banks are expected to co-operate fully with law enforcement agencies during investigations related to counterfeit currency. They may be required to provide evidence and information about the source of counterfeit notes. 6 Disposal of Counterfeit Notes: Counterfeit notes should be securely stored until handed over to the authorities for investigation and evidence. Once the legal process is complete, the counterfeit notes are usually destroyed.  Pay-in-slip A pay-in slip, also known as a deposit slip, is a form that a bank provides to customers so they can deposit money into their account. The depositor fills out the form with details about the deposit, such as the account number, date, and amount deposited. Here are some things to know about pay-in slips:  Parts A pay-in slip has two parts: a counterfoil and a longer component. The depositor receives the counterfoil as a receipt, while the bank keeps the longer part to make entries in their records.  Purpose Pay-in slips are used to document the items in a deposit transaction, such as cash, checks, or cash back.  When to use You can fill out a pay-in slip before visiting the bank, or use it when transporting money. You also need a pay-in slip if you want cash back from your deposit.  Withdrawal Slip A withdrawal slip is a bank document that allows you to withdraw money from your bank account:  What it contains A withdrawal slip includes the account number, date, and amount of money being withdrawn.  Where to get it You can get a withdrawal slip from the bank branch where you deposited your money.  How to fill it out You need to fill out the slip with accurate and understandable information. This includes your name, account number, date, and the amount you want to withdraw. You'll also need to sign the slip.  What happens next You give the withdrawal slip to the bank teller, who will ask for identification. They will then give you the cash you requested.  Why it's important The withdrawal slip helps the bank keep track of your withdrawal and ensure that you receive the correct amount.  What it's not A withdrawal slip is not a negotiable instrument or a check because it can't be used for anyone other than the account holder.  Cheque A cheque is an instrument with an unconditional order in writing, addressed to the bank to pay a specific sum of money to the bearer or to the person or entity named as the payee. A cheque can be issued for a current account or a savings account and can be used to deposit or pay money to other people through the bank account. Every cheque is unique and contains a unique cheque number, MICR, and IFSC code. The issuing party is called the drawer of the cheque, and the one it is issued to is called the payee. Given below are the important details that are present in a cheque: Drawer : The person who writes the cheque and has the account from which the funds are drawn. Drawee: The bank that is instructed to pay the funds. Payee: The person or entity to whom the funds are to be paid. Amount: The sum of money to be paid. Date: The date on which the cheque is written. Signature: The drawers signature, which authorizes the bank to pay the funds. Open cheque An open cheque is a form of leaf that can be used to obtain payment from a bank or to put into one's own account. This cheque can also be issued to another person by the bearer Bearer cheque A bearer cheque is one in which the payment is paid to someone acting on behalf of the payee/beneficiary for whom the cheque was issued. In order to process this type of cheque - the word 'carrier' must be included in the leaf. Crossed cheque An account payee cheque is another name for a crossed cheque. It's a bearer's cheque with the words "account payee" inscribed in two parallel lines on the top left-hand corner. It's the safest type of cheque to write because only the person whose name appears on the cheque will have money sent to their account. Order cheque An order cheque is a cheque that can only be issued to the person whose name is mentioned on the cheque. Post-dated cheque A post-dated cheque is a crossed or accounts payee cheque with a future date to meet a financial obligation in the future. It is valid for the tenure of three months from the date of issuance.  Pay order A pay order is a financial instrument that allows you to make a secure payment to a specific person in the same city as you: How it works The bank issues the pay order on your behalf, and the payment is made from your account How to get one You can give the bank the required amount in cash or cheque to generate a pay order Features Non-negotiable, prepaid, and valid for three months from the date of issue Where it can be Payable only at the issuing bank branch in the same used city Security Only the beneficiary can receive payment, and it's more secure than a check because it can only be credited to a specific account What happens if If the pay order is lost or stolen, you can only be it's lost or stolen reimbursed under indemnity Process of Obtaining a Pay Order: To obtain a Pay Order from a bank, the account holder typically follows these steps: 1. Visit the bank branch where you hold an account. 2. Fill out the Pay Order application form, providing details such as the payee's name,the amount to be paid, and any other required information. 3. Pay the applicable fee, if any, for issuing the Pay Order. 4. The bank will debit the specified amount from your account and issue the Pay Order in favor of the payee. 5. The Pay Order can then be handed over to the payee, who can deposit it into theirbank account for credit.  Demand Draft Similar to a Pay Order a Demand Draft (DD) is also widely used financial instrument issued by banks that allows one party to make a payment to another. It is a secure and guaranteed means of transferring funds and is often used for transactions where the payee requires assurance of payment. Demand draft is used for a wide range of transactions, including educational fees, real estate transactions, payment for goods and services, and other intercity or interstate payments. Where the key features of the Demand Draft is similar to that of a Pay Order, there are some distinguishing features as follows: 1. It is used for making payments to recipients in other cities or regions, as they can bepresented to any branch of the issuing bank or another bank for collection. 2. It is valid for a longer period, usually 6 months from the date of issuance.  NEFT NEFT stands for National Electronic Funds Transfer. It is an electronic payment system in India that enables individuals, companies, and organizations to transfer funds from one bank account to another. NEFT transactions are processed in batches and settled in hourly intervals throughout the day. It is a secure and convenient method for transferring money, widely used for various purposes such as salary payments, bill payments, and online purchases. Features and Advantages of NEFT  NEFT allows individuals, corporations, and organizations to easily transfer funds electronically between bank accounts.  NEFT transactions are processed in batches throughout the day, ensuring prompt processing and transfer of funds.  You can initiate NEFT transactions through internet banking, mobile banking, or by visiting the bank branch, providing flexibility and convenience.  NEFT allows transfers of any value, making it suitable for both small and large transactions.  NEFT transactions have strong security measures and authentication mechanisms to keep your funds safe during the transfer process. How does NEFT Work? NEFT (National Electronic Funds Transfer) is a payment system that allows individuals and organizations in India to electronically transfer funds between bank accounts. Here’s how NEFT works:  Initiation: The sender initiates an NEFT transaction by providing the necessary details such as the beneficiary’s account number, bank branch, and the amount to be transferred. This can be done through various channels such as internet banking, mobile banking, or by visiting the bank branch.   Beneficiary Addition: If the beneficiary is not already added to the sender’s account, they need to add the beneficiary’s details, including the account number and bank branch, to their account. This is a one-time process and ensures that future NEFT transfers to the beneficiary can be made easily.  Transaction Processing: Once the NEFT transaction is initiated, the sender’s bank sends the transaction details to the NEFT clearing center. The clearing center then sorts and batches the transactions received from various banks.  Settlement in Batches: NEFT transactions are settled in hourly batches throughout the day. The clearing center processes the transactions in the batches and sends the settlement files to the respective banks.  Fund Transfer: After the settlement files are received by the beneficiary’s bank, the funds are credited to the beneficiary’s account. This usually happens on the same day or on the next working day, depending on the timing of the transaction.  Confirmation and Tracking: Both the sender and the beneficiary receive confirmation messages or notifications from their respective banks once the NEFT transfer is successful. This provides assurance and transparency in the transaction. Additionally, the sender can track the status of the NEFT transaction through their banking channels. Information Required to Transfer Funds through NEFT The necessary details for remitting funds through NEFT include:  Beneficiary’s Name  Beneficiary’s Branch Name  Beneficiary’s Bank Name  Beneficiary’s Account Type  Beneficiary’s Account Number  Beneficiary’s Branch IFSC Code  Sender and Beneficiary Legal Entity Identifier (for eligible transactions)  RTGS RTGS stands for Real-Time Gross Settlement. It is a payment system that enables instantaneous and secure fund transfers between your bank account to the beneficiary account. It is widely used for high-value transactions due to its real-time processing and the system of processing transactions individually and not in batches. RTGS mode of payment can also be used for making your debit and credit card payments. One can either use the online mode or visit the bank branch to make RTGS transactions. This post discusses in detail about RTGS process, charges and benefits. What is the Use of RTGS? RTGS is used in the transfer of very large amounts and on a real-time basis. It is used by retail as well as corporate account holders to transfer instantly. Therefore - it helps to get you the money instantly. Features and Benefits of RTGS Here are the primary features of RTGS (Real Time Gross Settlement):  Real-Time Settlement: One of the key advantages of RTGS is that funds are transferred instantly, providing immediate availability of the funds to the recipient.  High Security: RTGS transactions are highly secure as they are settled individually and in real-time, reducing the risk of fraud or interception.  No Intermediaries: RTGS eliminates the need for intermediaries, ensuring direct and seamless transfers between banks and reducing delays and costs associated with intermediary banks.   High Transaction Limits: RTGS is particularly suitable for high-value transactions as there is usually no upper limit on the amount that can be transferred. The minimum transaction in this mode is Rs. 2 lakhs.  Improved Cash Flow: Businesses can benefit from RTGS by having better control over their cash flow, as payments are settled immediately.  To initiate an RTGS transaction, you need to provide the following details of the beneficiary: o Beneficiary's name o Beneficiary's bank name o Beneficiary's bank branch o Beneficiary's bank branch IFSC (Indian Financial System Code) - a unique code that identifies the branch o Beneficiary's account number o Amount to be remitted o Banks generally charge a fee for both incoming and outgoing RTGS transactions.The fee varies depending on the amount being transferred.  IMPS Immediate Payment Service, which is the IMPS full form in banking, is a payment service for instant money transfers. It is facilitated by NPCI (National Payment Corporation of India). Through IMPS, one can send or receive funds instantly and do inter-bank transactions using mobile or online banking. The IMPS services are available 24x7, thus, making it a highly flexible payment service. Check how to transfer funds using the IMPS platform. This page also includes information on IMPS charges, timings and transaction limits of Immediate Payment Services. Features of IMPS Here are the important features of IMPS in banking and money transfers:  Flexibility: IMPS allows users to transfer funds at any time and from any location online. This service runs smoothly throughout the year, even on public and bank holidays.  Fast and Easy Payment: IMPS allows for quick and easy fund transfers where the users can access bank accounts via mobile phones and make secure inter-bank fund transfers. As soon as the funds are transmitted, the sender and the receiver receive instant credit and debit notices.  Versatile Platform: The fundamental aspect of IMPS is its versatility, as it may be utilised in various modes. P2M (Person to Merchant) payments can also be made with IMPS. It can be used to pay for insurance premiums, internet shopping, over-the-counter purchases, utility bill payments, transport and ticketing, and school, college, and university fees.   Easy to use: IMPS is quite easy to use compared to other electronic fund transfer methods. For quick and simple transactions, IMPS necessitates mobile banking. To utilize these services, you must have a mobile facility in your associated bank account, as they work through the bank's mobile application. How to Transfer Money Through IMPS? IMPS transfers can be made using either Internet banking, m-banking or even through Pre-Paid Payments instrument issuer (PPI). Here are the steps that are to be followed while making an IMPS transfer: Step 1: Download the mobile banking app for your respective bank or log in to the bank’s online banking portal using your User ID and Password. Step 2: After login, click on “Transfer” and then select the option ‘add beneficiary’. You can also select the ‘One Time Transfer’ method. Step 3: Now, select the transfer method as ‘IMPS’. For P2P transfer (phone to phone), provide your MMID & mobile number details, whereas, for P2A transfer (phone to account), you must provide your bank account number & IFSC code. Step 4: Now, enter the required details of the beneficiary, such as name, registered mobile number, beneficiary MMID, and the amount to be transferred. Alternatively, you can also provide the account number and IFSC code if it is a P2A transfer. Step 5: Click on ‘Accept Terms of Service (Terms & Conditions)’ and confirm the transaction.  Automated Teller Machine (ATM) It is an electronic banking device that allows customers to perform various financial transactions without the need for a human bank teller. Some common actions that can be performed at an ATMinclude: 1. Cash Withdrawal: Customers can use their debit or credit cards to withdraw cash from their bank accounts. They can choose the amount they want to withdraw, and the machine dispenses the appropriate denomination of currency. Banks allows customers to make five withdrawals at no additional charges in a month. 2. Balance Inquiry: You can check your account balance to see how much money you have in your account. This is often displayed on the screen or printed on a receipt. 3. Deposit: Some ATMs allow users to deposit cash or checks into their bank accounts. You insertthe funds and follow the on-screen prompts. 4. Transfer Funds: Many ATMs permit customers to transfer money between their differentaccounts, such as from savings to checking. 5. Change PIN: You can change your Personal Identification Number (PIN) for security purposes. 6. Mini Statements: ATMs can provide a mini statement showing the most recent transactions on your account. 7. Bill Payments: In some regions, you can pay bills or buy prepaid mobile phone credits using an ATM.  Debit Card A debit card is a payment card that deducts money directly from your checking account. Also called “check cards” or "bank cards," debit cards can be used to buy goods or services or to get cash from an ATM. Debit cards can help you reduce the need to carry cash, although using these cards can sometimes entail fees. KEY TAKEAWAYS  Debit cards are payment cards that reduce the need to carry cash or physical checks to make purchases.  You can use debit cards at ATMs to withdraw cash.  Debit card purchases may require a personal identification number (PIN), but some purchases can be made without one.  You may be charged an ATM transaction fee if you use your debit card to withdraw cash from an ATM that's not affiliated with your bank.  Some debit cards offer rewards, similar to credit card rewards, such as 1% back on purchases. A debit card is a card linked to your checking account. The amount of money you can spend on a debit card is determined by the amount of funds in your account, not by a credit limit such as credit cards carry. You can use a debit card to get cash from an ATM, or you can make purchases with it like you make purchases with credit cards. With debit cards, you may need to enter your PIN (personal identification number), although many debit cards can be used to make purchases without a PIN. Pros and Cons of Debit Cards Pros  Safer than cash  Doesn't incur debt  Easier qualifications than credit cards Cons  Limits expenditures to cash in bank and/or a daily amount  Could incur fees  Fewer perks than credit cards  Fewer protections than credit cards  Credit Card A credit card is a financial tool that allows cardholders to borrow money up to a certain credit limit to make purchases or pay for services. Unlike debit cards, which are linked to a person's bank account and draw from their own funds, credit cardsessentially provide a short-term loan. Following are the features of credit cards: 1. Credit Limit: Every credit card has a predefined credit limit, which is the maximum amount of money a cardholder can borrow using the card. The credit limit is determined by the card issuer (usually a bank or financial institution) based onthe cardholder's creditworthiness. 2. Borrowing: When you make a purchase using a credit card, you are essentially borrowing money from the credit cardissuer. You are expected to repay this borrowed amount later. 3. Minimum payment and Interest Charges: While you are required to pay at least a minimum amount by the due date,you can choose to pay the full balance or a partial amount. However, if you don't pay the full balance, you will be charged interest on the remaining balance. 4. Credit Score Impact: Responsible use of a credit card can help build or improve your credit score, which can have implications for your ability to get loans, mortgages, and other forms of credit in the future. 5. Rewards and Benefits: Many credit cards offer rewards programs, such as cashback, travel rewards, or points for specific purchases. Cardholders can benefit from these rewards by using the card for everyday spending. 6. Travel Benefits: Some credit cards offer travel-related perks like travel insurance, airport lounge access, and rental carinsurance. Monthly Statements: Credit card companies provide monthly statements detailing all the transactions made with thecard during that billing cycle. These statements show the total amount owed, minimum payment due, and the due datefor payment.  Charge Card A "charge card" is a type of payment card that is similar to a credit card but with a few distinct differences. Charge cards are issued by financial institutions, including banks, and they allow cardholders to make purchases and pay bills with the understanding that the full balance must be paid by the end of the billing cycle. Here aresome key characteristics and features of charge cards in the context of banks: 1. No Revolving Credit: The primary difference between a charge card and a credit card is that charge cardholders are required to pay the entire balance in full at the end of each billing cycle. There is no option to carry a balance from one month to the next with interest, as is the case with credit cards. 2. No Preset Spending Limit: Charge cards often don't have a preset spending limit like credit cards. Instead,the spending ability is determined based on the cardholder's creditworthiness, financial history, and spending patterns. It can change over time as the cardholder's financial situation evolves. 3. Annual Fees: Charge cards frequently come with annual fees, and these fees can be substantial. In return,cardholders may receive various perks and benefits, such as travel rewards, concierge services, and access to airport lounges. 4. Strict Payment Requirements: Cardholders must pay the full statement balance by the due date, without the option to pay just a minimum amount. Failing to do so can result in late fees, and the cardholder may losetheir charging privileges. 5. Strong Credit Score Required: To qualify for a charge card, applicants typically need a good or excellentcredit history and a strong credit score. Card issuers often target more affluent customers who are less likelyto carry balances. 6. No Interest Charges: Since the full balance is due each month, charge cardholders do not incurinterest charges on carried balances. This can make charge cards a good choice for those who want to avoid interest expenses. 7. Rewards and Benefits: Charge cards often come with generous rewards programs, similar to some premium credit cards. These rewards can include travel points, cashback, or other exclusive benefits. 8. Global Acceptance: Charge cards issued by major financial institutions are usually widely accepted for purchases and bill payments around the world. E.g. American express cards  INTERNET BANKING Internet banking, also known as online banking or e-banking, is a service provided by banks and financial institutions that allows customers to conduct various financial transactions and access banking services over the internet. Internet banking has become increasingly popular due to its convenience, accessibility, and a wide range of features. Some key aspects of internet banking are: 1. Account Access: Internet banking provides customers with secure access to their bank accounts and financial information 24/7. 2. Fund Transfers: Customers can transfer money between their own accounts, pay bills, make person-to-person payments, and send money to others using online banking. This is often done through services like Automated Clearing House (ACH) transfers or wire transfers. 3. Bill Payment: Most internet banking platforms offer bill payment services, allowing customers to pay bills to various companies and organizations electronically. This can include utilities, credit card payments, loan payments, and more. 4. Account Management: Customers can manage their accounts by setting up account alerts, ordering cheques and managing account preferences through internet banking platforms. 5. Cheque Deposits: Some banks offer remote check deposit services, allowing customers to deposit cheques by taking photos of them with a mobile device and uploading the images through the internet banking app. 6. Transaction History: Internet banking allows customers to search for and review past transactions, making it easy to monitor spending and reconcile accounts. 7. Secure Access: Internet banking platforms use strong security measures to protect customer information and transactions. This often includes encryption, multi-factorauthentication, and monitoring for suspicious activity. 8. Customer Support: Many internet banking platforms provide customer support options,such as live chat, email, or phone support, to assist customers with any issues or questions. 9. E-statements: Customers can often opt for electronic statements (e- statements) instead of receiving paper statements by mail. E-statements are typically more eco-friendly and can be accessed online. 10. Loan and Credit Card Management: Some internet banking platforms allow  customersto apply for loans or credit cards, check their credit card statements, and manage their credit accounts online. 11. Investment and Trading Services: In addition to basic banking services, some internet banking platforms offer customers the ability to access investment and trading accounts,monitor stock portfolios, and execute trades online.  Mobile Banking Mobile banking refers to the use of a mobile device to carry out financial transactions. The service is provided by some financial institutions, especially banks. Mobile banking enables clients and users to carry out various transactions, which may vary depending on the institution. Mobile banking services can be categorized into the following: 1. Account information access Account information access allows clients to view their account balances and statements by requesting a mini account statement, review transactional and account history, keep track of their term deposits, review and view loan or card statements, access investment statements (equity or mutual funds), and for some institutions, management of insurance policies. 2. Transactions Transactional services enable clients to transfer funds to accounts at the same institution or other institutions, perform self-account transfers, pay third parties (such as bill payments), and make purchases in collaboration with other applications or prepaid service providers. 3. Investments Investment management services enable clients to manage their portfolios or get a real-time view of their investment portfolios (term-deposits, etc.) 4. Support services Support services enable clients to check on the status of their requests for loan or credit facilities, follow up on their card requests, and locate ATMs. 5. Content and news Content services provide news related to finance and the latest offers by the bank or institution.  Safe Deposit Vault Services Safe Deposit Vault Services also known as safe deposit lockers, are provided by banks to offer secure storage for valuable items and important documents. These services are typically offered to both individuals and businesses. Key features of safe deposit lockers are as follows: 1. Secure Storage: Safe deposit vaults are secure storage boxes or lockers located within the bank's premises. They are designed to protect valuable items, documents, and sensitive information from theft, fire, and other damage. 2. Various Sizes: Banks offer different sizes of safe deposit lockers to accommodate various storage needs. Customers can choose a locker size based on their requirements and budget. 3. Access Control: Only the authorized lessee or individuals listed on the safe deposit account have access to the locker. This access is usually granted through the use of two keys: one held by the bankand the other by the customer. Both keys are required to open the locker. 4. Privacy and Confidentiality: The contents of the safe deposit locker are private and confidential. Bank employees do not have access to the contents, and banks have strict privacy and confidentialitypolicies in place. 5. Rental Fees: Customers are required to pay annual rental fees for the safe deposit lockers. The costvaries depending on the size of the locker and the bank's policies. 6. Access Hours: Safe deposit vaults usually have specific access hours, and customers can visit during those hours to add or retrieve items from their lockers. Some banks may offer extended hours or 24/7 access in certain branches. 7. Documentation: Customers are required to provide identification and completedocumentation to open a safe deposit locker account. 8. Loss or Damage: Banks usually do not take responsibility for the loss or damage of itemsstored in a safe deposit locker. Customers are encouraged to purchase their own insurancefor the stored items.  Customer grievance and Banking Ombudsman What is The Banking Ombudsman Scheme? The Banking Ombudsman Scheme is a grievance redressal scheme implemented by RBI to resolve complaints about certain services rendered by banks. As a customer, when you face hassles in your day today banking services such as failed ATM withdrawal transactions due to non –dispensation of cash, levy of charges without prior notice, credit card related issues, etc. , contact your bank officials to resolve the issue. If unresolved, follow the below process to get your complaints redressed. Fill in your complaint in the complaint register in your bank branch. If not available around, ask for it or fill it up online on the bank’s website. Ask for names of officials who can be contacted for resolution of complaints, if they are not displayed in the branch. Banks have a nodal officer for complaint redress. If your bank does not resolve your complaint within a month, approach RBI’s Banking Ombudsman. RBI’s Banking Ombudsman scheme resolves your complaint speedily and free of cost. Simply write on plain paper or send an email. The address and email ids of the Banking Ombudsman offices can be found by logging into https://bankingombudsman.rbi.org.in and then clicking on “Address of Banking Ombudsman. The decisions of the Banking Ombudsman are final and the bank is required to comply with the Ombudsman's orders. If the customer is not satisfied with the Ombudsman's decision, they may choose to seek legal recourse.