Banking Project

A

Sectoral Analysis Project

On

Understanding the Dynamics

Of

Banking System

Submitted by:

Touseef Rasool Bhat
ID: - 09PR001014B062
Sen Hall,
PROTON business school.

Submitted to:
Academics,
PROTON business school.

1 Introduction

2 Banks

3 Comparative study of Accounts

4 Comparative study of services

5 Other Banking Details

7 Summary

8 Conclusion

Introduction:

Banking in India originated in the last decades of the 18th century. The oldest bank in existence
in India is the State Bank of India, a government-owned bank that traces its origins back to June
1806 and that is the largest commercial bank in the country. Central banking is the responsibility
of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the
then Imperial Bank of India, relegating it to commercial banking functions. After India's
independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the
government nationalized the 14 largest commercial banks; the government nationalized the six
next largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is
with the Government of India holding a stake), 31 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They
have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

By the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer, and a

debate had ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-
then Prime Minister of India expressed the intention of the GOI in the annual conference of the
All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The
paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and
the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from
the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the
step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August, 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery. With
the second dose of nationalization, the GOI controlled around 91% of the banking business of
India. Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalized banks and resulted in the reduction
of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized
banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

The nationalized banks were credited by some, including Home minister P. Chidambaram, to
have helped the Indian economy withstand the global financial crisis of 2007-2009.

The Banking sector in India has always been one of the most preferred avenues of employment.
In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the

McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded
annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the
market index during the same period. It is projected that the sector has the potential to account
for over 7.7 per cent of GDP with over Rs.7, 500 billion in market cap, and to provide over 1.5
million jobs.

Today, banks have diversified their activities and are getting into new products and services that
include opportunities in credit cards, consumer finance, wealth management, life and general
insurance, investment banking, mutual funds, pension fund regulation, stock broking services,
custodian services, private equity, etc. Further, most of the leading Indian banks are going
global, setting up offices in foreign countries, by themselves or through their subsidiaries.

The banking sector will have to raise Rs. 60,000 crore as additional capital in the next five years,
as said by Finance Minister, P. Chidambaram.

Inaugurating the two-day bankers' conference `Bancon 2005' in Kolkata, Mr. Chidambaram said
it was important to increase the capital base of the banks and urged the industry to gear up itself
to raise Rs. 60,000 crore capital in the next five years. He said the issue would be discussed at
the meeting of the bank CMDs convened on November 18.

Scope for raising capital:

Banks, which do not have the scope to raise Tier-I capital, would have to go in for Tier-II capital,
he said, adding that the additional capital could be raised by way of improved profitability, by
better recovery or by raising from the market.

Stating that the contribution of the banking sector to gross domestic product (GDP) was low at
35 per cent, the Finance Minister said the sector should set the goal for raising the contribution to
GDP to 50 per cent and it would be only possible by raising the size of the banks.

Mr. Chidambaram said for banks to raise their share to 50 per cent, bank credit had to grow at a
much faster pace. He said the size of Indian banks was a limiting factor.

Indian Banking Sector in next 5 years:

The last decade has seen many positive developments in the Indian banking sector. The policy
makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance and related
government and financial sector regulatory entities, have made several notable efforts to improve
regulation in the sector. The sector now compares favorably with banking sectors in the region
on metrics like growth, profitability and non-performing assets (NPAs). A few banks have
established an outstanding track record of innovation, growth and value creation. This is
reflected in their market valuation. However, improved regulations, innovation, growth and
value creation in the sector remain limited to small part of it. The cost of banking intermediation
in India is higher and bank penetration is far
Lower than in other markets. India’s banking industry must strengthen itself significantly if it
has to support the modern and vibrant economy which India aspires to be. While the onus for this
change lies mainly with bank managements, an enabling policy and regulatory framework will
also be critical to their success. The failure to respond to changing market realities
has stunted the development of the financial sector in many developing countries. A weak
Banking structure has been unable to fuel continued growth, which has harmed the long-term
health of their economies it emphasize the need to act both decisively
and quickly to build an enabling, rather than a limiting, banking sector in India.

BANKS:

Public Sector Banks are the banks. These banks are:

1. The State Bank of India Group (Total:8 Banks) namely SBI (State Bank of India), State Bank
of Indore, SBBJ (Bikaner & Jaipur), SBH (Hyderabad), SBM (Mysore), SBP (Patiala), SBS
(Saurashtra), and SBT (Travancore).

2. Nationalized Banks (Total: 19 Banks) namely Allahabad Bank, Andhra Bank, Bank of
Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation
Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab &
Sind Bank, Punjab National Bank, Syndicate Bank, UCO Bank, United Bank of India, Union

Bank of India and Vijaya Bank.

3. Other Public Sector Bank i.e. IDBI Bank Limited.

4. Private Sector Banks (Total: 27 Banks). The major recruiters in the private sector include the
ICICI Bank, HDFC Bank, Axis Bank, Federal Bank, Centurion Bank of Punjab, Indusind Bank,
Kotak Mahindra Bank, Yes Bank, ING Vysya Bank, Bank of Rajasthan, Karur Vysya Bank,
Karnataka Bank, Jammu & Kashmir Bank, South Indian Bank, Bharat Overseas Bank, etc. These
banks conduct their own exams, but normally follow patterns similar to those of the exams of the
public sector banks.

5. Co-operative Banks: All major National and State Co-operative Banks and Scheduled Urban
Co-operative Banks conduct their own exams to recruit staff. Their recruitment exams, too, are
generally similar to the exams of the public sector banks.

The three banks I visited are:

The Jammu & Kashmir Bank Limited
C-lal chowk Okhla Industrial Phase II, NewDelhi, 1100024.
Web: www.jkbank.net.
Branch Head (Forex) - Mr. Ankur Sharma.
E-mail:ankursharma@jkbmail.com

Kotak Mahindra Bank
C-lal chowk Okhla Industrial Phase II, New Delhi, 1100024.
Web: www.kotakmahindrabank.com.
Phone: 011-40515349
Service Manager- Mrs. Joti Pasricha.

The Saraswat Co-operative Bank Limited
20A, Lajpat Nagar-4, New Delhi, 1100024
Web: www.saraswatbank.net.
Phone: 011-26422100.
Branch Manager- Mr.Vikas Mehra

COMPARATIVE STUDY OF ACCOUNTS:
Type of account The J&K Bank Ltd. Kotak Mahindra Saraswat Bank
Savings Salient Features Savings Accounts
Edge Savings with various schemes
• Account can be AccountPro
opened with a Savings Account • Saves time and
minimum initial money
Classic
deposit of • Affordable
Rs.100/- to Savings Account
Rs.500/- Nova Savings
• Convenient and Account Ace Savings
easy to operate
account to save Account Easy
time and money. Savings Account (No
• Suitable for Frills
irregular income Account)Corporate
group No time Salary Account
bar on depositing
or withdrawing
money.

SB Ujala -No Frills
Account
Main Features

• A variant of
Saving Bank
account to
ensure financial
inclusion and to
strive for making
banking services
easily accessible
to all segments
of society.
• Minimum initial
deposit is
Rs.50/-.
However,
customers also
allowed to open
the account with
banking
instruments like
Banker's cheque,
etc. However,

minimum
balance of Rs
50/- is
mandatory to
keep the account
operational.

Current Purpose This account is mainly
New Current Account used by the bank for
• Business Edge business and
account. operational purposes
Current Account
Pro Current
Validity
Account Elite
• Six months. Current
However,
revalidated for Ace Current
further 3 months. Account

Variants

• Platinum Current
Account
• Gold Current
Account
• Premium Plus
• Current Account
• Premium
Current Account
• Basic Current
Account

Fixed deposits Term Loans & Deposits Term Loans & Foreign Currency
Deposits Accounts in 9 Major
Term deposit through Currencies of the
Phone Banking or Net World.
Banking. Correspondent
relationship with 125
Banks spread over 45
Countries.
11 Forex Centers in
Maharashtra & Goa
and Specialized NRI
Centre.
Well Equipped
Treasury Department
Member of SWIFT
Network for speedy &
accurate Funds
Transfer.
All types of Forex
services rendered to
many other
Cooperative Banks.
NRE/NRO/FCNR. For the purpose of Remittance facility is Account is maintained
opening a new account available up to USD 1 in Indian Rupees.
and for million per financial Accounts can be
augmenting/replenishing year subject to opened/credited with
your existing account, prescribed legitimate local funds
you may choose any of documentation of the non-resident;
our NRI branches Proceeds of demand foreign exchange funds
convenient to you and drafts/ banker's may also be credited
any one or more of the cheques issued against into the accounts. –
following modes of encashment of foreign
remittance. currency can be Accounts can be
• A demand draft credited to NRE opened jointly with
drawn in any accounts where such non-
freely instrument issued is residents/residents.
convertible supported by an Funds held in NRO
foreign currency. Encashment accounts, can be
• Your personal Certificate issued by repatriated outside
cheque in AD category I/ India with an overall
foreign currency category II limit of USD one
drawn on your Overdraft limit against million per calendar
account abroad. NRE and FCNR year including sale of
• Drafts drawn Deposits enhanced to assets held by NRI’s in
abroad in Indian Rs.100 Lakhs against India, on production of
Rupees by the previous overdraft an undertaking and

Reserve Bank of limit of Rs.20 Lakhs. certificate by a person
India authorized making remittance in
Exchange Form and application
Houses. for remittance as given
• International under section 195 of
Money Orders in the Indian Income-Tax
foreign currency. Act. Interest is subject
• Transfers from to deduction of tax at
existing FCNR/ source at the rate of
Non-Resident 30% plus surcharge if
External Rupee any for the financial
Accounts with year 2006-07.
us.
Loans against the
deposits can be availed
of for purposes other
than relending,
carrying on agricultural
/ Plantation activities /
real estate business.

Studying the operating policies of all the banks mentioned above, the banks are providing the
same but differentiated services to the customers. In case of J & K Bank ltd. They have divided
savings account into two categories:
• Urban Accounts
• Rural Accounts.

In Case of Kotak Mahindra their all accounts are divided into sub categories:

• Edge Savings AccountPro

• Savings Account Classic

• Savings Account Nova Savings Account Ace Savings

• Account Easy Savings Account (No Frills Account)Corporate Salary Account

Saraswati Bank has different strategy in handling deposits and NRO accounts. There are some
fixed terms and conditions for NRO accounts which other banks do not have.

Bank in the year 2008 launched the Branding Initiative .The purpose of such an exercise was to
reconfirm the thrust of Bank on its core values, which can be summed up as "Sense of Belonging
".The name of the Bank should always inspire the Sense of Belonging in all its stakeholders and
that Bank continues to fulfill the changing needs and expectations of the customer with
unflinching gusto and aplomb for improving the customer satisfaction

Indian banks have compared favorably on growth, asset quality and profitability with other
regional banks over the last few years.

The Jammu & Kashmir Bank Limited claims the 100% transparency in their operations and is
one of the most recognized banks in India which pays the highest dividend to its shareholders.

Kotak Mahindra Bank claims better and quick services to the customers which makes hem
different from other banks Kotak has a new customer service department which provides useful
information to the customers without standing in the queue.

The Saraswat Co-operative bank ltd. gives more emphasis on highest standards of
professionalism and excellence in all the areas of working, which gains the interest and faith of
the customer

THE JAMMU & KASHMIR BANK LIMITED:

Serve to empower

The Jammu & Kashmir Bank limited was established in ______ with the purpose to provide
financial help to the local industries and inhabitants of Jammu and Kashmir. It is the only Private
bank whose 51% of the shares are held within the government. The Headquarters are located in
Srinagar (summer) & Jammu (winter).The Jammu & Kashmir Bank limited ranked 163 among
all corporate in India and it gives highest dividend to its customers. The present chairman of the
bank is Mr.Haseeb Drabu.

The Corporate Social Responsibility (CSR) of the J&K Bank seeks to recognize obligations
towards society and aims to integrate the CSR ideals into its mission for optimizing both
business and social performance. It stresses on promoting work life balance, give attention to
social and environmental concerns and host of factors that facilitate business pursuits and
accomplishment of economic goals. The CSR is not just recognized as promulgating the Bank's
own values and principles of philanthropy but also the values and principles of all those who
have a stake in it or are affected by its operations. By supporting social cause aligned to the
mission the CSR strategy differentiates the Bank's brand and enhances its reputation. The Bank
manages social issues in the same manner as any other strategic business issues.

Core Banking Details:
At the time of Incorporation the bank was following traditional method to handle its operations
and later on in 1996 the bank adhered to the Core banking system. The bank invested huge
capital on information technology and adapted thereby to the new system. The bank had given
contract to an IT company and local experts to get system changed which helped the bank in
focusing their day-day-operations effectively. Also the government of the state helped out the
bank in re structuring and becoming computer friendly. The Okhla branch was changed at the
same time.

The problems faces by the bank were:
• Huge money invested
• No awareness among customers
• The whole organization was restructured
• Hiring of technically expert professionals
Besides these problems faced by the bank, the bank today says that the change was very positive
in nature. From this new system we handle the operations effectively and sufficiently, time is
saved ad customer is very much satisfied. The whole information lies on the website, online
forms can be submitted, accounts can be operated which saves time and money of the customer
as well of the bank
• Saraswati Co-operative Bank - It provides core banking facility to its customer at every point
of time. It has a heavy network of ATM established all over , various other facility like
internet banking , mobile banking etc are also being provided to the customer .

• Kotak Mahindra Bank - It provides core banking facility to its customer at every point of
time. It has a heavy network of ATM established all over , various other facility like internet
banking , mobile banking etc are also being provided to the customer .

The Bank has done no underwriting so far in this branch.

Comparative study of the types of services provided by the Bank:
Investment
• Mutual Funds:
The Banks has entered into the Mutual fund distribution business 5 years back and today
we have a successful tie up with 21 fund houses with total funds invested at around Rs
100 crores.

The major fund houses where our Bank has tie up are as follows:

Birla Sun life Mutual Fund.
HDFC Mutual Fund.

MetLife Mutual Fund.

• PPF:

BANK Amount of deposit Time period
The J & K Bank Ltd Max.1 lakh deposit in every Max.7 years
year

Kotak Mahindra Bank Particularly only for
employees only

Saraswati Co-operative Bank Not applicable Not applicable

• Insurance:
The Bank diversified its operations when it ventured into the insurance business, both life
and non-life segments.

The Bank has entered into an alliance with Bajaj Allianz to distribute their non-life
products.

These products are available at all branches of the bank across India.

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and
was incorporated as a joint venture between MetLife International Holdings, Inc., The
Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and others.

Banks Process
The J & K bank limited On one lakh loan they provide 99 thousand ,
one thousand will give for insurance

Kotak Mahindra Bank All type of insurance services are being
provided by the bank like ---
1. Life insurance
2. General insurance
3. Fire insurance etc.
Saraswati Cooperative Bank Not applicable

• D-mats:

D-mats service is provided by the bank for trading. The customer applying for D-mat
must have account with the bank . The brokerage charge per share is 0.25.

• Portfolio management services

Banks
The Jammu & Kashmir Bank Limited Wealth Management

Kotak Mahindra Bank Limited Available for Wealth Management clients


Electronic clearing Services:

ECS is a mode of electronic fund transfer from one bank account to another using the services of
a clearing house. It is normally used for bulk or repetitive transfers. While ECS (credit) is used
sassy institutions for distributing dividend, salary or pension, ECS (debit) is used by individuals
to make regular payments to utility or insurance firms, or to repay bank loans via EMIs.

Banks Process
The J & K Bank Limited

Kotak Mahindra Bank ECS is a one-time instruction to debit the EMI
to your bank account when your account is
with another bank.

Saraswati Cooperative Bank Instead of cheque they issue list of the
customer by which cheque were cleared

High Value Clearing Services

Banks Process

Kotak Mahindra Bank ECS is a one-time instruction to debit the EMI
to your bank account when your account is
with another bank.

Saraswati Cooperative Bank Instead of cheque they issue list of the
customer by which cheque were cleared

Types of Loans and services:

JK BANK
• Term Loans

Domestic Term Deposits up to Rs.1.00 Crore, w.e.f 19.10.2009.
Maturity Period Revised Interest Rates Per Annum
7 days to 30 days 2.75%
181 days to less than 1 years 5.75%
1 year to less than 2 years 6.75%
2 years to less than 3 years 7.25%
3 years to less than 5 years 7.75%
5 years and above 7.25%

o The above rates are applicable for fresh deposits and renewal of maturing
deposits.
o The Term Deposits of Senior Citizens of over 60 years of age shall earn 0.50 %
additional rate across all maturities.

High Value Deposits -Above Rs. 1 Crore to less than Rs.5 crore, wef 19.10.2009.
Maturity Period

Revised Interest Rates Per Annum (%)


181 days to 270 days 4.50%

271 days to 1 year 5.50%

Above 1 year up to 3 years (Maximum) 6.75%

Agriculture & Allied activities

1% below the rate prescribed for each Rating Grade

SMEs

0.50% below the rate prescribed for each Rating Grade

Agri Term Loans

a) Up to Rs.0.50 lacs

10.00 %

b) Above Rs.0.50 laces

11.00 %

Banks Proesss
The J & K Bank Limited On one lakh loan they provide 99 thousand ,
one thousand will give for insurance

Kotak Mahindra Bank All type of insurance services are being
provided by the bank like ---
4. Life insurance
5. General insurance
6. Fire insurance etc.

Bank Overdrafts
Banks Loan limit Interest charged
The J & K Bank 12%
Limited

Kotak Mahindra Bank OD is provided 2 % more then the interest rate
against FD up to 90% applicable in FD
of the value of FD
The Saraswat Maximum 11 lakh 13%
Cooperative Bank

Cash Credits

No limit 11%
The J & K Bank
Limited

Kotak Mahindra Bank No limits 13%

The Saraswat No limit 13%
Cooperative Bank

Housing:
Quantum of loan

• For Construction /Purchase 60 months net salary or 75.00 Lacs whichever is lower.
• For repairs/renovation 20 months net salary, subject to a maximum of Rs.10.00 Lacs.
• For purchase of land: 20 months net salary/income subject to maximum of Rs.5 Lacs
within J&K and Rs10.00 Lacs outside J&K.
• Also as an incentive for small borrowers, the loans upto Rs. 1.5 Lacs granted for
repairs/renovations of existing houses would now be secured by third party guarantee of
two persons or such other security as is deemed appropriate by the Bank.

Eligibility

• Employees of Govt. , Semi-Govt. Dept., Civic Bodies, PSU's with minimum 5 years
service.
• Reputed Businessmen with minimum 5 years standing.
• Professionals & Self employed like Doctors ,Engineers , CA's , Advocates with minimum
5 years standing

The Jammu & Upto-5 yrs 8%
Kashmir Bank 5-10 yrs 10%
Limited More than 10 yrs 12%

Kotak Mahindra Upto – 2 yrs 8.25%
Bank 2 yrs to 10 yrs 10.5%
More then 10 yrs 12.5%
Saraswati Cooperative 1 .Upto 2 lakhs 9.50%
Bank 2. 2 lakh-10 lakhs 10.5%

Vehicle:-
Eligibility

• Permanent Employees of State / Central Government, Employees of Government / Semi-
Government Undertakings & Autonomous Bodies
• Employees of Private Limited Companies, Private Organizations, Reputed
Establishments & Employees on contractual basis with Central/State Govt, Government/
Semi-Government Undertakings& Autonomous bodies*
• Businessmen, Professionals and self employed individuals.

Security

• Primary
Hypothecation of vehicle to be purchased & Bank’s charge to be registered with RTO.
• Collateral
o No third party guarantee required in respect of permanent employees of State and
Central Government, employees of State / Central Government Undertakings &
Autonomous bodies drawing salary through our Bank and where letter of
undertaking from employer is available.
o Guarantee of one person for all other applicants of the bank.

Repayment

• Flexible repayment options ranging from 12 to 84 months in equal monthly installments.

The Jammu & For 1 year 8%
Kashmir Bank 1-3 year 10%
Limited 3-7 year 12%

Kotak For 1 yrs 8.25%
MahindraBank 1-3 year 10.25
3-7 yrs 12.25%
Saraswati 1. Upto 2 lakhs 11.50%
Cooperative Bank 2. 2 lakhs-10 lakhs 12%

Education:
Cal of Finance

• Rs.10.00 Lacs for studies in India .
• Rs.20.00 Lacs for studies abroad.

Eligibility

• Should be an Indian National
• Should have secured admission to professional/technical courses through entrance
test/selection process.
• Should have secured admission to foreign universities/institutions
• Should have passed the qualifying examination for admission to the courses.

• Employed person intending to improve their educational qualification and/or receive
training in modern technology in India or abroad can also be assisted under this scheme
provided training offers prospects of better placement.

Security

• Personal guarantee of borrower/ 's
• Collateral security equal to amount of loan.


Kotak MahindraBank For 1 yrs 8.25%
1-3 year 10.25
3-7 yrs 12.25%
Saraswati 1. Up to 2 lakhs 11.50%

Mortgage loans:

Kotak MahindraBank For 1 yrs 8.25%
1-3 year 10.25
3-7 yrs 12.25%
Saraswati 1. Upto 2 lakhs 11.50%

Other Loans:
• Consumer Loan.
• SAHOLIAT/SARAL Finance Personal Loan to Pensioners.
• Mortgage Loan for Trade & Service Sector.
• Loans against Mortgage of Immovable Property Fair Price Shop Scheme
• Travel & Tourist Taxi Operators
• Craft Development Finance.
• Dastkar Finance

• Giri Finance Scheme
• Khatamband Craftsmen Finance
• Commercial Premises
• Finance Laptop/PC Finance
• Contractor Finance

Locker facilities:
Locker facility is available in the all three banks .lockers are given to the customers upon
verifying their nationship, income and all other mandatory things. The security of the lockers is
taken by the bank itself and if case of the theft, there are rules drawn for the customer to claim
liability.

Banks Type of account Amount charged Types of locker as per depth
The J & K Bank For Saving account 600 per annum Small
Limited 1200 per annum Medium
2500 per annum Large

Kotak Mahindra Bank For saving account 1200 per annum Lockers are available only in
one size.

Saraswati Cooperative For Saving account 600 per annum A- Small locker
Bank 1000 per annum B- Medium locker
1200 per annum C- Large locker

Rail Reservation & Mobile charging;
The mentioned facility is not available at this branch, but is available in regional and state
offices.

ATM & other facilities:
The JK Bank has more than 220 Atm in the state of Jammu and Kashmir. And outside the state
there is ATM facility at every branch in the country, Major railway stations, Shopping malls and
Airports. Kotak Bank also serves effectively by providing ATM with every new account.

On line Money transfer facility is also available in the branch.

The Bank provides all the types of Credit cards which depend upon the credibility of the
customer.

Debit cards are provided with each savings account.

Smart Cards are not available in this branch and they are going to provide such facility in the
coming year.

Credit card/debit card/smart card or any other types of card

Facilities
Bank: The J & K Bank Limited

Types of card Amount charged
Credit card 500
Smart card
Debit card 1500

Private bank: Kotak Mahindra Bank

Types of card Amount charged
Credit card 1000
Smart card 1200
Debit card 111

Saraswati Co-operative bank:

Co-operative Bank: Saraswati co-operative central bank

Process • Not applicable

RBI Policy:

• CRR PROJECT-

 I these project for example you have 10 lakh rupees for that project, out of these ¼ th of
the 10 lakh you have to save for kissan yojana.
 After deducting ¼ t from the total amount, In the remaining amount the bank only
provide 70% to the customer, ad 30% will save it.

Government policy:

• Swarnjayanti project

• chetriya and Gramin yojana project

• Prime minister rojgar yojana

• Minority yojana

Internal communication system of the Bank


-

Head Office- General Office Regional office

Staff Branch

• SOURCE ----------------- INTERNET
PHONE

Kotak Mahindra EVERY WEDNESDAY RECEIVED MAIL FROM HEAD OFFICE

BUSSINESS SOLUTION group CENTRAL TEAM Message (Ask Process)

• SOURCE ----------------- INTERNET
PHONE

FAX

POSTAL

For Internal communication the one CIRCULAR is issued from head
branch and it is Send in all the branches. And in the branches they again
Saraswati Co- circulate the circular for all the members or the employees of the branch.
Operative Bank-

Banking Ombudsmen

Banking Ombudsman is a quasi judicial authority functioning under India’s Banking
Ombudsman Scheme 2006, and the authority was created pursuant to the a decision by the
Government of India to enable resolution of complaints of customers of banks relating to certain
services rendered by the banks. The Banking Ombudsman Scheme was first introduced in India
in 1995, and was revised in 2002. The current scheme became operative from the 1 January
2006, and replaced and superseded the banking Ombudsman Scheme 2002. From 2002 until
2006, around 36,000 complaints have been dealt by the Banking Ombudsmen.

Type of complaints (Applicable in all banks)

• The type and scope of the complaints which may be considered by a Banking
Ombudsman is very comprehensive, and it has been empowered to receive and consider
complaints pertaining to the following:

• Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills,
etc.;

• Non-acceptance, without sufficient cause, of small denomination notes tendered for any
purpose, and for charging of commission for this service;

• Non-acceptance, without sufficient cause, of coins tendered and for charging of
commission for this service;

• Failure to issue or delay in issue, of drafts, pay orders or bankers’ cheques;

• Non-adherence to prescribed working hours;

• Failure to honour guarantee or letter of credit commitments;

• Failure to provide or delay in providing a banking facility (other than loans and advances)
promised in writing by a bank or its direct selling agents;

• Delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-
observance of the Reserve Bank directives, if any, applicable to rate of interest on
deposits in any savings, current or other account maintained with a bank ;

• Delays in receipt of export proceeds, handling of export bills, collection of bills etc., for
exporters provided the said complaints pertain to the bank's operations in India;

• Refusal to open deposit accounts without any valid reason for refusal;

• Levying of charges without adequate prior notice to the customer;

• Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on
ATM/debit card operations or credit card operations;

• Non-disbursement or delay in disbursement of pension to the extent the grievance can be
attributed to the action on the part of the bank concerned, (but not with regard to its
employees);

• Refusal to accept or delay in accepting payment towards taxes, as required by Reserve
Bank/Government.

• Refusal to issue or delay in issuing, or failure to service or delay in servicing or
redemption of Government securities.

• Forced closure of deposit accounts without due notice or without sufficient reason.

• Refusal to close or delay in closing the accounts.

• For handling the consumer grievances all the three Bank has established its own
customer service
center, where the services are available to the customer 24* 7.

Role of CIBIL

CIBIL - India's first credit information bureau- is a repository of information, which contains the
credit history of commercial and consumer borrowers. CIBIL provides this information to its
Members in the form of credit information reports

The Credit Information Companies (Regulation) Act, 2005, and various Rules and Regulations
issued by Reserve State bank of India has empowered CIBIL or (Credit Information Bureau
(India) Ltd to collect the data from various types of credit grantors (i.e. lenders). and then share
the same within the group.

MEMBERS OF CIBIL:

Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies,
Housing Finance Companies and Credit Card Companies are Members of CIBIL.

How Does CIBIL operates?

At present, CIBIL collects and updates the information about the borrowers from its Members
(who are actually credit grantors) only. (However, later on it is likely that this information will
be supplement by CIBIL with public domain information so as to create a truly comprehensive
snapshot of an entity’s financial track record)..

Then CIBIL allows the credit grantors to have access to its database to search and gain a
complete picture of the payment history of a credit applicant.

Thus, we can say that CIBIL collects commercial and consumer credit-related data and collates
such data to create and distribute credit reports to Members.

Type of Information Held by CIBIL
Type of information on a borrower is available in the CIR. The CIR includes the following
information: (ALL THE BANKS)

• Basic borrower information like:
i. Name
ii. Address

In case of individuals:
iii. Identification numbers
iv. Passport ID
v. Voters ID
vi. Date of birth

In case of non-individuals

vii. D-U-N-S® Number
viii. Registration Number
ix. Legal Constitution
• Records of all the credit facilities availed by the borrower
• Past payment history
• Amount overdue
• Number of inquiries made on that borrower, by different Members
• Suit-filed status

Type of information is NOT included in the credit information report (CIR)

The CIR does not contain:

• Income / Revenue details
• Amount(s) deposited with the bank
• Details of borrowers' assets
• Value of asset(s) mortgaged
• Details of investment(s)
• Benefits : A Borrower Get From CIBIL

CIBIL's CIRs are aimed at helping credit grantors make fast and objective lending decisions.
This will contribute to a more competitive credit marketplace among Credit Grantors. With a
Bureau in place, responsible customers can expect faster and more competitive services at better
terms from the Credit Grantors.

NPA’S In Banks and Their Rules

Non Performing Asset means a loan or an account of borrower, which has been classified by a
bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the
directions or guidelines relating to asset classification issued by RBI.

There are three major types of NPA:

Sub-standard: The account holder comes in this category when they don’t pay three installments
continuously after 90 days and up to 1year.

Doubtful NPA: Under doubtful NPA there are three sub categories:

• D1 i.e. up to 1 year : 20% provision is made by the banks
• D2 i.e. up to 2 year: 30% provision is made by the bank
• D3 i.e. up to 3 year : 100% provision is made by the bank

Loss Assets: Under this 100% provision is made. When account holder comes in this category
their account can be written off by the banks.

After this the assets are handed over to recovery agents for sale.

Debt recovery tribunal

• It is the special court established by central government for the purpose of bank or any
financial institutions recovery.
• The judges of this court are the retired judges of high court.
• In this court only the recovery cases of 10 lakhs and above can be filed.

KYC norms:

KYC is the acronym for Know Your Customer, which in turn refers to the obligation of a
financial institution to know its customers and know who it is dealing with. The KYC
requirements are part of the anti-money laundering and anti-terrorist financing measures.

The J & K BANK LTD.

Documents required Process
1. Voter I.D. (1) By the help of these documents they renewal
the data of the customers,
2. PAN No. Update the account and open new account.
From last transaction statement.
3.Address proof (2)

Kotak Mahindra Bank

1. Voter I.D. (1) By the help of these documents they renewal
2.PAN No. or any I.D Proof Update the account and open new account.
From last few transaction statement.
3.Address proof (2)

Saraswat Cooperative Bank:

1. Voter I.D. By the help of these documents they renewal
2.PAN No. or any I.D Proof Update the account and open new account.

3.Address proof

Summary:
Dynamics of Banking Sector:

In terms of overall financial performance, CY04 turned out to be yet another commendable year
for the banking sector. Not only were banks able to expand their core business activities, but they
also strengthened their capital base, and improved asset quality and profitability during the year.
In more specific terms, the risk weighted capital adequacy ratio increased to 10.5 percent against
the minimum requirement of 8.0 percent

The aforementioned changes in the structure of banking sector deposits (liabilities), advances
and investments (assets), as examined from various dimensions, suggest that the risk profile of
the banking sector has substantially changed during the last three years. It then becomes
important to assess the evolving risk profile specifically in terms of credit, liquidity and market
risks, while the discussion in the preceding section demonstrates that the underlying risks to the
banking sector have increased during CY04, the financial soundness indicators clearly reflect
that their risk absorption capacity has also increased considerably during the same period.
Furthermore, there have been a number of developments that not only provide useful insights for
the prudent management of the overall risks of the banking sector, but also attest the
sustainability of this impressive growth.
The banks are today much concerned about raising the funds by meeting the customer’s
satisfaction.

Various services are provided which are too affordable and saves time to the customer.

In short the banking sector in India today has undergone a dynamic change to compete in the
domestic as well in the international market.

Conclusion:
The dynamics of banking sector deposits (liabilities), loans and advances and investments
(assets), indicate that banking sector risks have increased during the past three years. Fortunately,
due to prudent regulatory measures, the risk-taking capacity of the banking sector (as measured
by the capital to risk weighted assets ratio) has also witnessed a visible rise, or rather has
outpaced the increase in risks over the same period. Furthermore, a brief review of the various
regulatory measures indicates that banks are equipped with various policy tools to prudently
manage their risks. Finally, the regression analysis suggests that the banking sector has strong
links with the state of the economy. As the economy is now at a high growth trajectory and its
trickle down affects are likely to create more business activities in the future, the banking sector
will continue to receive the requisite vital support from the
Macroeconomic environment. Given these dynamics, the strong banking sector performance is
expected to uphold in the foreseeable future.
Management imperatives will differ by bank. However, there will be common themes across
classes of banks:
PSBs need to fundamentally strengthen institutional skill levels especially in sales and
marketing, service operations, risk management and the overall organizational performance
ethic. The last, i.e., strengthening human capital will be the single biggest challenge. Old private
sector banks also have the need to fundamentally strengthen skill levels. However, even more
imperative is their need to examine their participation in the Indian banking sector and their
ability to remain independent in the light of the discontinuities in the sector. New private banks
could reach the next level of their growth in the Indian banking sector by continuing to innovate
and develop differentiated business models to profitably serve segments like the rural/low
income and affluent HNI segments; actively adopting acquisitions as a means to grow and
reaching the next level of performance in their service platforms.

Attracting, developing and retaining more leadership capacity would be key to achieving this and
would pose the biggest challenge. Foreign banks committed to making a play in India will need
to adopt alternative approaches
to win the “race for the customer” and build a value-creating customer franchise in advance of
regulations potentially opening up post 2009. At the same time, they should stay in the game for
potential acquisition opportunities as and when they appear in the near term. Maintaining a
fundamentally long-term value-creation mindset will be their greatest challenge. The extent to
which Indian policy makers and bank managements develop and execute such a clear and
complementary agenda to tackle emerging discontinuities will lay the foundations
for a high-performing sector in 2010.

Banking Project

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