BFSI Training Manual - PDF - 20230810 - 164502 - 0000

Publisher of Monetary and Economic Data
RBI maintains and provides all the essential banking and other economic data with analysis
and evaluates the economic policies in India. To perform this function, RBI collects, collates,
and publishes these data regularly. Users can avail these data as well as the reviews,
comments and analysis of current policies from various publications of RBI. In addition, users
can visit the RBI website www.rbi.org.in.
Promotional role of RBI

In addition, RBI performs various other functions. Since independence, RBI has been actively
working in two main directions. These are –
Building up and strengthening the country’s financial infrastructure, filling up major

institutional gaps through the setting up of new financial institutions, and reorganising the
existing ones in the context of changing development and other policy needs of the
economy.
Devising new measures for influencing the allocation of credit in socially desired
directions.
RBI has several accomplishments to its credit and is continuously engaged in performing
non-traditional, promotional tasks as well. Some of these tasks relate to :
• Commercial banking
• Co-operative banking
• Industrial finance
• Export finance
• Credit guarantees
• Differential rate of interest scheme (loan to very poor people at a very low interest
rate)
• Credit to priority sectors (e.g. agriculture, small-scale industries, small business, micro and
small enterprises etc.) including weaker sections of society.
ASSIGNMENT:
Activity: Visit website of RBI www.rbi.org.in; check broad heads under which information
activities of RBI is available. Link the information available with the various functions of RBI.
ASSESSMENT:
A.State the objectives of establishment of RBI.
B.Choose the correct answer to the following statements.
1. RBI commenced its operations in the year –

a.1935
b.1947
c.1949
d.1955
2.As a banker to the government, RBI is responsible for :

a.Providing short term credit to the government
b.Managing all the new issues of government c.Servicing
the government debt outstanding
d.All of the above
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3.Which of the following is not the role of RBI as promoter :
a.Promotion of cooperative banking
b.Credit to Priority sector
c.Promotion of import credit
d.Promotion of export credit
4.Which of the following departments of RBI is responsible for managing the currency in circulation
and its withdrawal from circulation?
a.Banking Department
b.Issue Department
c. Circulation Department
d.All of the above
5.As a banker to the Government, RBI performs which of the following responsibilities?
a. Provides centralized clearing and
b.Manages new issues of government securities
c. Holds
d.Buys andsome
sellsofgovernment
the cash reserves of banks
securities
ANSWERS:
(1)-a
(2)-d
(3)-c
(4)-a
(5)-b
CHECK LIST FOR ASSESSMENT ACTIVITY

Use the following checklist to meet all the requirements for Assessment Activity.
PART – A
Learn objectives of establishment of Reserve Bank of India and describe it
functions.
PART –B
Learn the primary functions of RBI. Learn the regulatory functions of RBI.
Enumerate the steps taken by RBI since independence under its developmental role.
PART-C
Performance Standards Yes No
Able to state the objectives of establishment of

Reserve Bank of India
Able to enumerate the function of Reserve Bank of

India
Able to explain the regulatory function of Reserve

Bank of India
Able to explain the promotional role of Reserve

Bank of India and its contribution to the economic
development
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Homework
• Write 10-15 lines on a bank or
• Read a bank website
ASSIGNMENT
Activity: Visit a Bank. Go through the bank publicity material and displays of products and services
provided by the bank. List out the deposit and loan products and other services of the bank.
ASSESSMENT
State True or False –
1.The unorganised sector includes money lenders, nidhi funds, credit societies and indigenous private
bankers, who existed since long.
2.Post office savings bank, owned by Government of India, aims to direct small savings funds of
household sector to the Government.
3.Foreign banks operating in India are not commercial banks.
4.Central Bank of India is the monetary authority of the country.
5.R eserve Bank of India does not possess regulatory powers over functioning ofco-operative banks.
6.EXIM bank basically caters to the financial needs of foreign customers.
7.SIDBI is established for promoting, financing and assisting the development of industrial units in small
scale sector.
8.Some commercial banks of India do have joint ventures and representative offices at foreign Centres.
Answers : (1) True (2) True (3) False (4) False (5) False (6) False (7) True (8) True
CHECK LIST FOR ASSESSMENT ACTIVITY
Use the following checklist to see if you have met all the requirements for Assessment Activity.
PART – A
1 Learn about different types of banks.
2. Learn about the various financial institutions operating in the financial system of India.
PART –B
Identify and understand the main objectives of various types of banks and financial institutions in
India.
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exporter receives sale proceeds in foreign currency or if a person receives money in foreign currency
from his relative living abroad or if a foreign tourist travelling into India wants rupee in exchange of
foreign currency, the banks buy foreign currencies from these people and pay rupee. Thus through this
service banks help in promoting international trade, international tourism and movement of funds to
and from foreign countries.
4 Sale of Mutual Funds, Insurance Policies, etc : Banks are allowed to have tie- ups with mutual funds
. and insurance companies to sell their products (mutual fund schemes / Insurance policies) to their
retail (individual) customers. Banks also provide the facility of opening of DMAT account of company
shares. These services are offered to customers as an alternate channel of investment to the
traditional mode of investment, i.e. deposits. Many banks have their own subsidiary companies who
deal in life insurance, general insurance, mutual funds and capital market investments. The
customers of the banks are thus able get all the financial services need by them under one roof.
The above stated functions of the banks are only illustrative, and not exhaustive. The modern
banks perform many other functions like trusties, merchant bankers, under writers of capital
market issues, portfolio managers etc.
ASSIGNMENT
i)Enlist the various customer needs and relate it to various banking products and services.
ii)Activity: Visit a Bank. Go through the bank publicity material and displays of product and services
provided by the bank. List out the deposit and loan products and other services of the bank.
ASSESSMENT :
A. Identify main functions of the banks and their products and services Understanding of various of
functions of banks Features of various products of the banks and utility of their various services.
B. Choose the correct answer to the following statements.
1.
Which deposit provides no interest?
a) Current Deposit
b)Savings Deposit
c) Recurring Deposit
d)Term Deposit
2.In which deposit the amount of interest will be the highest at the end of one year?
a)
Rs.20000/- kept in Current Deposit for one year
b)Rs.12000/- kept in Savings Deposit for one year
c)Rs.12000/- kept in Term Deposit for one yeard)Rs.1000/-
deposited in each month for one year
3.Which statement is correct?
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i)Banks can do only those businesses which are permitted under Banking Regulations Act, 1949.
ii)Banks accept deposits from the public which are payable on demand.
a)Only (i) is correct.

b)Only (ii) is correct.
c) Both (i) and (ii) are correct.
d)Both (i) and (ii) are incorrect.
4.Which form of loans and advances is not for personal expenditure or creation of personal assets for
individuals?
a)Education loan
b)House Loan
c)Cash Credit
d)Loan against LIC policy
5.Which loan is repaid over a period of time?

a)Cash Credit
b)Overdraft
c) Term Loan
d)Bill Discounting
6 a) If bank details like account number, name of the bank etc. of the person to whom payment is to be
. made is not available and the person resides in another town, which is the most preferred method of
payment through bank.
a)Banker’s cheque
b)Draft
c)Electronic Funds Transfer
d)Debit Card
7. If the payment for the purchase is not to be made immediately, which is the most preferred mode of
payment
a)Draft
b)Debit Card
c)Credit Card
d)Electronic Funds Transfer
8.If an importer wants to pay for the goods imported, he is required to –

a)ask his bank / authorised dealer to sell foreign exchange to him and arrange to pay the same to the
exporter abroad
b)ask his bank/ authorised dealer to buy foreign exchange from him and arrange to pay the same to
the exporter abroad
c)buy foreign exchange from an exporter who gets foreign exchange from abroad.
d)ask his relative abroad to pay for the import and deposit money in his relative’s account.
9.Which facility is provided to the customer to keep a specific valuable in the bank
for safety?
a.Safe Deposit Locker
b.Safe Custody Facility
c.Safe Deposit Account
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d.Such facility is not available with the bank
10 Which facility is not provided in a modern large size bank? 2019

. a)Opening of Demat account of shares
b)Investment in mutual funds
c)Issue of Life Insurance Policies
d)All the above facilities are provided by the modern large size banks
Ans : 1.a, 2.c, 3.c, 4.c, 5.c, 6.b, 7.c, 8.a, 9.b, 10. d
Fill in the blanks :
1.“RTGS” stands for

_________________________________________________.
2. RTGS system is primarily meant for _______________value

transactions.3.In RTGS, beneficiary bank has to credit the beneficiary’s
account within _____ hour of receiving the funds transfer message.
4.The full form of NEFT is __________________
5.NEFT is an electronic fund transfer system that operates on a

_________basis which settles transactions in batches whereas in RTGS the
transactions are settled
___________.
6.The customer can make payments to the merchant

establishment/shopkeepers by swiping the debit/credit card through
___________ machine against the purchases from his account and there is no
need to carry the cash.
Answers: 1. Real Time Gross Settlement 2. Large. 3. 30 4. National Electronic

Funds Transfer 5. Deferred Net Settlement (DNS), & individually 6. POS
Terminal
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Staff to possess adequate job knowledge regarding their respective desks.
The Bank’s systems / procedures / instructions should be understandable.
Educating customers through pamphlets, etc. in local language.
Manning the counters/ desks continuously (not leaving the desks / counters unattended).
Reducing unnecessary delays.
Starting counters on time and availing of only prescribed lunch hours.
2.4 : CUSTOMER SERVICES: IMPORTANT DEFINITIONS
Customer:
As per KYC (Know Your Customer) Guidelines prescribed by the RBI (Reserve Bank of India), a
customer is :
a. A person or an entity (institution / organisation / company, etc.) that maintains an account and / or has a
business relationship with the bank.
b.One on whose behalf the account is maintained.
c.Beneficiary of transactions conducted by advocates, chartered accountants, etc. (as permitted under the
law).
d.Any person or entity connected with a financial transaction.
As per the “Oxford Advanced Learner’s Dictionary”, “a customer is a person or an organisation that
buys something from a shop/ store”.
Assignment
Activity
Visit a Branch. Interact with different categories of customers and know their wants and needs.
Assessment
1 Fill in the blanks.
. Code of Fair Banking Practice is also known as_________________.
1 Banks pay compensation to their customers as per the respective Bank’s
.
_______________ Policy.
2 KYC stands for __________________.
. The term “services” is defined in ________________ Act.
A _______________ is the most important person in any business.

Answers: (1) Citizen’s Charter
3 (2)Compensation (3) Know Your
Customer
(4) Consumer Protection(5) customer.
.
4
.
b Say YES or NO
5
.
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1.The BCSBI imposes penalties on Banks in case of deviation from the Citizen’s charter.
2.Time test norms for different Banking transactions have been prescribed by the RBI.
3.The officials of RBI pay secret visits to bank branches.
4.The KYC Guidelines have been prescribed by the Indian Banks’ Association.
5.Customer orientation relates to Banks’ launching products / schemes / services to meet the
customer’s specific needs.
Answers: (1) Yes (2) No (3) Yes (4) No (5) Yes
Checklist for Assessment Activity
Use the following checklist to see if you have met all the requirements for assessment activity.
Part A
1.
Learn about different steps taken by RBI to improve customer services in Banks.
2.Learn about different steps taken by different banks to improve customer services in Banks.
2.5 : CHECK-LIST FOR RENDERING EFFICIENT CUSTOMER SERVICES
Activity:
Activity: Make a check-list for rendering efficient customer services. Divide the activities in
daily, fortnightly, monthly and quarterly timeframe.
DAILY
Service with smile : courteous behaviour by staff.

Enforcing punctuality / discipline.
Propagating Nomination facility (display of a suitable notice board).
Prompt updating and delivery of passbooks (savings book, recurring deposit etc.).
Prompt despatch of statement of accounts to customers.
Prompt despatch of Debit / Credit advices to customers.

Immediate credit of eligible outstation cheques (up to the prescribed amount).
Staff concerned to perform duties as per the Bank’s / RBI instructions.
Prompt transfer of deposit accounts (SB / RD) , etc.
Advance intimation to be sent to depositors regarding due dates (maturity dates).
Propagating Bank’s schemes / products and services.
Prompt payment of periodical interest on deposit accounts (savings bank accounts, fixed / term
deposits.
Prompt settlement of claims of legal heirs of deceased customers
Prompt collection of outstation cheques through courier / speedpost.
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Branch Managers and other Managers are positively available at the Branches at the prescribed
hours on the customer day.
Deputy General Managers and Zonal / Regional Managers are also available on the customer day at
their respective offices.
On this day, customers and user public may call on any executive / official of the bank (with or without
appointment).
A suitable indication board about the customer day is displayed prominently / invariably in the
banking hall, for the information of the general public.
It is mandatory for all top functionaries at the head office, zonal / regional offices and the Branch Managers
to make themselves available for a minimum of two hours on the prescribed day(s) of every
month for customers (to attend to their grievances and listen to their suggestions).
Assignment
Activity
Visit a Branch. Study the way the Branch staff deals with different categories of customer.
Assessment
a.Fill in the blanks.
a.“May I Help You” counters are also known as _____________.

b.The customer should be treated ______________.
c.In respect of complaints, etc. the Banker should try to find a _________ term solution.
d.“Anger” is one letter shorter than ______________.

e.In dealing with a customer, a Bank employee is a representative of
____________.
Answers: (1) Grahak Mitra / Grahak Dost (2) nicely / properly (3) long (4
danger (5) his bank. )
b Say YES or NO
1.No
. desk should remain unmanned.
2.Different types of banking transactions should generally be completed within the time test norms
prescribed for them.
3.Treat the complainant / customer as you would like to be treated.
4.In his capacity of a Bankman, winning an argument is important.
5.In dealing with a customer, a Bankman can get personal.
Answers: (1) Yes (2) Yes (3) Yes (4) No (5) No
Part A
a. Learn about customer’s expectations from the banks’ staff regarding discipline and punctuality.
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Don’t give your account details, password or other security information to anyone.
(Giving your card and disclosing PIN to someone is like giving a blank signed cheque).
Don’t write down or record your PIN, password or other security information.
Don’t allow anyone else to use your card, PIN, password or other security information.
In any case, do not keep PIN and the card together.
Don’t issue cheques without maintaining sufficient funds in the account.

Frequent dis-honour/ returning of cheques due to insufficient funds may lead to closure of an
account. (It is also a offence).
Assignment
Activity
Visit a Branch. Have a look at different notice-boards educating customers about safety of their
interests.
Assessment
Fill in the blanks.
1 An important precaution to be taken by customers before sending the cheques / drafts by post / courier
. __________________.
2.PIN is the abbreviation for ________________.
3.The document informing the customer about his PIN is called ____________.
4.Returning of cheques due to insufficient funds is known as _____________.
5.The cheque book issued to customers should always be kept under __________.
Answers: (1) cross the cheques / drafts (2) Personal Identification Number
(3) PIN mailer (4) bouncing of cheques (5) kept under lock and key.
b Say YES or NO
1.A.customer should immediately inform the Bank when his ATM card, cheque book, pass book, blank
cheque is stolen or lost.
2.It is not necessary to change the PIN periodically.
3.A customer should record his PIN in his diary.
4.Any change / alteration in a cheque must be verified by the initials of the customer / drawer.
5.In no case the customer can keep PIN and the Debit Card (ATM card) together.
Answers: (1) Yes (2) No (3) No (4) No (5) No

Part A
a.Learn about different precautions to be taken by customers for safeguarding their interests.
b.Learn about some of the activities which the customer should not do so as to safeguard his
interests.
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ASSESSMENT
Part A
Fill in the blanks:
1. A_____________, is a box-usually located inside a bank-which is used to store

valuables.
2. The contents of a safe deposit box are not ________in the same way as bank
deposits are.
3. _______________Banking is a system that allows customers of a financial

institution to conduct a number of financial transactions through a mobile device such as a
mobile phone or tablet.
4. A_______________ is an automated banking machine that enables the customer of a

financial institution to perform financial transactions without the need for human cashier,
clerk or bank teller.
5. In a ATM card, authentication is provided by the customer entering a

____________________.
6. ______________alert messages are received in the mobile of the customer which

is registered with the Bank.
7. ______________enables customers to make payments for purchases made through
cards without the need of carrying cash.
Answers:
1 Safe deposit 2. Insured 3. Mobile 4. ATM(automated teller machine) 5. Personal

identification number (PIN) 6. SMS 7. POS Terminal
Part B
-Describe the concept of safe deposit vault
-What is meant by ATM?
-Differentiate between Internet banking and Mobile banking.
CHECKLIST FOR ASSESSMENT
Use the following check list to see if you have met all the requirements for the
Assessment Activity.
-Learn the various service products offered by a Bank
-Learn the working of ATM and Internet Banking
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charges nominal higher rate than the rate payable on deposit. This loan is not required to be
repaid and usually adjusted on the maturity date of the deposit.
Bank also sanctions loans against securities like NSC, surrender value of LIC policy and
selectively against shares of blue chip/reputed companies.
Non Performing Assets (NPA)
NPAs are those loans or advances in which there have been no repayment of interest or
principal for a period of 90days or more. There are broadly four types of assets, in terms of the
repayment done by borrowers:
Standard Assets are those where the principal and interest get serviced regularly and even if
there is a default once in a while, the outstanding period has never been for 90days or more.
Sub Standard Assets are those loans which are overdue for 90days to one year.
Doubtful Assets are outstanding for more than a year and hence leave very little hope for
recovery.
Loss Assets are those which have been identified as a loss and may get written off by the bank.
Activity:
The facilitator should distribute the bank loan forms and ask the aspirants to fill up the forms
without extending any help . The facilitator should also ask each one of the aspirants to get the
KYC documents within one or two days to complete the KYC formalities for their form. The
facilitator may make Peers of the aspirants and ask the opposite person to check the
application form to see whether it is complete.
EXERCISE
Have a group discussion on types of credit facilities extended by a bank. Summarize

the essential features of it.
List out various loan products under personal segment. Summarize the essential
features.
ASSESSMENT
Part A
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___________ the banker advances a lump sum for a certain period at an agreed
rate of interest repayable in installments.
__________________ is an arrangement by which the customer is allowed to

borrow money up to a certain limit.
______________is an arrangement between a banker and his customer by which

the customer is allowed to withdraw over and above the credit balance in the current
account up to an agreed limit.
Overdraft facility may be either _________ or ______________.
_________ bills are payable on demand whereas ______________ bills are

payable after expiry of credit period.
Answers: 1. Term Loan 2. Cash Credit 3. Overdraft 4. Personal security , assets 5. Demand,
usance
Part B.
Write notes on what is meant by term loan, demand loan, cash credit and
overdraft.
Checklist of Assessment
Use the following check list to see if you have met all the requirements for the Assessment
Activity
Learn the basic lending facilities.
Learn the loan products available to individuals under Personal Segment.
PERFORMANCE STANDARDSYes No
Able to state the various credit facilities

Able to understand what is term loan
Able to understand what is cash credit
Able to understand important loan products available to personal segment
Customers
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Threshold Limit of Transactions
At the time of opening of the account, based on customer's category (individual, firm,
company etc.) and profile, a threshold limit of transaction is to be determined. The limit is
to be reviewed and revised from time to time. Any transaction beyond this limit should be
looked into with extra caution.
Activity monitoring should cover all accounts including existing accounts for which profile
should be available with the Branch/Bank. Managers should use reasonable judgment in
determining the suspiciousness of the transaction. The accounts, wherein the suspicious
transactions are found, should to be closely monitored at the branches, so that the
documentary evidence upon which a suspicion is aroused is not lost.
Risk Management
All Banks are required to put in place an effective KYC programme by establishing
appropriate procedures and ensuring their effective implementation. It should cover proper
systems and controls, segregation of duties, training and other related matters.
Responsibility of each officer/ employee should be clearly allocated within the bank. The
nature and extent of due diligence at the time of opening of account and permitting
operations therein will depend on the risk perceived by the bank.
Bank’s internal audit and compliance functions have an important role in evaluating and
ensuring adherence to the KYC policies and procedures. The compliance function should
provide an independent evaluation of the bank’s own policies and procedures, including
legal and regulatory requirements. Internal Inspectors should specifically check and verify
the application of KYC procedures at the branches/offices and comment on the lapses
observed in this regard. The compliance in this regard may be put up before the Audit
Committee of the Board by HO (Inspection) on quarterly intervals.
EXERCISE
Visit RBI website/ a Bank website and go through the KYC norms. Prepare a chart listing
the key requirements as mentioned in the website.
ASSESSMENT
Part A
Fill in the blanks:
1. ____________is the process used to verify the identity of their clients.
2. The objective of KYC guidelines is to prevent banks from being used,
intentionally or unintentionally, by criminal elements for _______ _________
activities.
3. Bank should develop a _______________ Policy laying down explicit criteria for
acceptance of customers.
4. Banks should prepare a _________ for each new customer based on risk
categorisation.
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5. ____________________ means identifying the customer and verifying his/ her
identity by using reliable, independent source documents, data or information.
6. The Customer profiles incorporated in the opening forms have to be reviewed
once in ________ years.
7. Banks are required to record and report all individual cash deposits and withdrawals of
Rs. _______ lac and above in deposits, cash credit and overdraft
accounts etc, at fortnightly intervals to their respective Zonal Offices.
8. The customer profile will be a ____________ document.
Answers
1.KYC or Know Your Customers2. Money laundering 3.Customer Acceptance
4. profile 5. Customer identification 6.Three 7. 10.00 8. confidential
Part B
1. Explain what you understand by KYC. What are its objectives?
2 What are the key elements in KYC policy. Write note on Monitoring of
Transactions?
.

1. Understand the concept of KYC
2. Learn the key elements under it.
3. Know the process of classifying, reporting, threshold of limit etc.
Able to explain what is KYC and it’s objectives.
Able to understand the concept, purpose and implementation of Customer

Acceptance Policy
Able to understand the concept, purpose and implementation of Customer
Identification Procedures
Able to understand purpose and related guidelines in respect of Monitoring
of Transactions and Risk Management
Able to state the threshold of transaction limit under suspicious nature and
it’s reporting process
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the pensioner. Any revision in pension including payment of family pension, transfer of
accounts is also done by banks. A commission is paid to banks for these pension-
payment related jobs. A pensioner can draw his/ her pension from a bank even earlier,
treasury was making payment of pension. A pensioner has to present himself before
start of pension- payment for identification. Pension sanctioning authority is the
ministry/ department/ office, where the employee served last before retirement.
Pension can be credited in existing savings account of the pensioner. There is no need
to have a separate account for this purpose. Pensioner can open a joint account with
spouse, with ‘either or survivor’ or ‘former or survivor’ operational instructions. The
same account can be continued for payment of family pension after the death of the
pensioner, if the joint account holder is authorized as per PPO and is survivor. No power
of attorney to operate pensioner’s account is acceptable to banks. Pensioner has to
abide by rules for minimum balance as framed by his bank. Pension payment account
can be transferred to other bank/ branch .The bank official visits the residence of the
pensioner or hospital, incase pensioner is not in a position to come to bank, to obtain
specimen signatures or thumb/toe impression. A detailed record of pension payments
is maintained by the banks. Banks also obtain an authority from the pensioner, to
recover any excess payment, if made. Every pensioner is required to submit life
certificate/ non- employment/ employment certificate to the pension paying bank, in
the month of November every year. Pension paying bank is responsible to deduct
income tax at source.
A pensioner, not able to put his signatures or thumb/toe impression or unable to come to
bank can also draw his/her pension by putting a mark on cheque/ withdrawal slip indicating
a person to receive payment. This person needs to be identified by two independent
witnesses. The person, actually, drawing money has to submit his/ her specimen
signatures for the purpose. Banks are required to pay interest for the delayed credit of
pension/ arrears@8% p.a. without waiting for a claim from the pensioner. For any
deficiency in services rendered, pensioner can approach to bank Manager/ higher
authorities of bank/ banking ombudsman for redressal for other matters pension paying
authority is to be approached.
EXERCISE
1. Have a group discussion on different types of individual customers of a bank.
Write a note on minor customers.
2. Visit to a nearby branch and observe various types of customers. Note down,
how the senior citizens and illiterates do banking.
ASSESSMENT
Part-A
Fill in the blanks:
1. A person is a ------------ whose money has been accepted on the basis that the
banker will--------- drawings up to the amount standing to his credit irrespective of
his connections being short or long term.
2. A-----------can be defined as a user or potential user of bank services.
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3. A contract with a minor is----------, abinitio.
4. A minor’s nomination is ----------.
5. Facility of cheque book to blind customers---------- given, by banks.
6. A minor can open self operated account with a bank after completing------ of
age.
7.A person not having both the hands, is permitted by banks, to put his/ her
-------------on withdrawal form, for withdrawing money from his account.
Answ
ers 1. Customer, honour
2. Customer
3. Null & void
4. Valid
5. Can be
6. 10 Years
7. Toe impression.
Part-
B 1. Explain who is customer for a bank.
2. List down the different types of individual customers of a bank with two features
of each.
3. Write important points on operation of the account by blind persons.
Use the following checklist to see if you have met all the requirements for the assessment
activity.
Understand a customer of the bank.
Learn the various types of individual customers and their special features.
Performance standards Yes No
Able to define a customer of the bank.
Able to understand a minor customer.
Able to understand a senior citizen and pensioner
customers.
Able to understand blind/ physically challenged customers.
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Banking 2019 the Indian Succession Act. Probated will and letter of administration issued
by the
competent court, are the basic documents for banks to deal with such customers.
EXERCISE
1. Write a short note on Self Help Group.
2. Have a group discussion on Limited Liability partnerships and prepare
a note on its similarities with partnership firm and a company.
ASSESSMENT
Part-A
Fill in the blanks:
1. The members of an HUF are called-----------and the manager is known as-----
-- .
2. All major members are required to sign on-------------- for opening an account
with bank.
3. An---------------- is a person appointed by central government and is attached to
a High Court.
4. Maximum number of partners in a partnership firm can be-----.
5. An ------------- is the person named in a will to manage estate of the deceased.
6. An ------------- is the person appointed by the court to manage the estate of
deceased , who died intestate.
7. Model bye-laws for Self Help Group have been drafted by-------------.
8. Probate is an order of-----------.
ANSWERS
1. Coparceners, karta
2. HUF letter
3. Official liquidator
4. 100
5. Executor
6. Administrator
7. NABARD
8. The court
Part B
Define the following and list out two important features of each.
i. Partnership firm
ii. Hindu Undivided Family
iii. Self Help Group
iv. Official liquidator
9
6
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Loan facilities are not afforded by banks to unregistered bodies even having provisions of
borrowing in their bye-laws.
Local Authority and Government Department

The authorities such as Municipal Corporation, Zila Boards, Notified Area Council etc. are
established under statute of state/ central legislature. The relevant statute is the basic
document of establishment of these bodies. These establishments can open and operate bank
accounts as per the provisions of the relevant statute. In case of a Government Department,
Government Notification and rules and regulations, form the base, to open and operate the
account. Head of the Department authorizes the signatories for the purpose. Banks exercise
due caution in dealing with the accounts of such customers. No overdraft or finance is allowed
to such authorities unless the relevant statute permits specifically.
EXERCISE
Have a group discussion different type of customers viz. trust, society, club and association of
persons. List out the features of these customers.
Fill in the blanks:
1. Basic document for creation and functioning of a trust is ---------.
2. Public trusts are created for the benefit of-----------.
3. --------controls trusts of Muslims.
4. The activities of society and association of persons are controlled by rules and
regulations mentioned in their--------.
5. Societies other than cooperative societies are required to be registered
under-------------.
6. Banks need to obtain permission from Registrar of Cooperative Societies, for
opening an account of a ------------------.
7. Cheques received in the name of any office bearer of society/ club/ association for
the purpose of society/ club/ association---------- collected in the personal account of
the office bearers.
8. A trustee---------delegate the powers vested in him by a trust deed to others.
Answ
ers 1. trust deed
2. public
3. Wakf Act
4. bye-laws.
5. Societies Registration Act 6.
Cooperative society.
7. can not be
8. can not.
Part-
B 1. Define the following and list out two important features of each.
i. Trust
ii. Society
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may commence its business immediately after obtaining the certificate of incorporation from the
registrar of companies. Now certificate of commencement of business is to be obtained from
registrar of companies by all newly incorporated public and private companies having share
capital, before commencing the business or exercise of borrowing powers.
Resolution
A company makes decision and speaks by resolution
The copy of the resolution submitted to bank for opening of accounts or for any other purpose
should be signed by the chairman of the meeting (in which it is passed) and countersigned by
the company secretary.
A company cannot pursue an activity which is not mentioned in its memorandum of

Association. It is called doctrine of ultra vires, It is assumed that any person dealing with the
company have read the basic documents viz. memorandum of association and articles of
association of the company. This is known as doctrine of constructive notice. Compliance of
internal rules by the management need not be checked by the outsiders dealing with the
company. This is stated as doctrine of indoor management.
Companies can open accounts with the bank as authorized by resolution, passed by the
company. Deposit accounts with exception of savings bank account can be opened in the
name of the company. Borrowal accounts depending upon the credit facility sanctioned by
bank, can also be opened. Banks do not require introduction while opening accounts in the
name of companies.
Even after the death or insolvency of an authorized signatory of the company, cheques signed by
him will be honored, if otherwise in order. Cash payment of a cheque (even a bearer cheque) in
the name of a limited company (payee) by bank is not in order. Bank will not collect a cheque
endorsed in favour of a director or any company official without proper enquiries. If a company is
not able to pay its debts, it will not be declared insolvent instead will go in liquidation. Liquidation or
windup is the process of dissolution of a company.
EXERCISE
1. Have a group discussion on private limited, public limited and Government
companies. Note down the salient features of these companies.
2. Have a class room debate on ‘Corporate Social Responsibility’ of companies.
ASSESSMENT
Part-A
Fill in the blanks:
1. A company is a------ entity.
2. The members liability in a limited company is limited to their ---------- in the company.
3. Company seal is the --------- of the company. Maximum number of members in a

private limited company can be ---
4. Paid up share capital of a public limited company is minimum -------.
5. There are ----------in memorandum of association of a company.
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6. Certificate of commencement of business is required in case of---------
companies.
7. Rules and regulations for internal management of the company are contained in
------------.
8. Certificate of incorporation is ----------------of companies.
Answers
1. Legal
2. Shareholding
3. Signatures, 200.
4. Rs. 5 lac
5. 6 clauses
6. All
7. Articles of Association
8. Birth certificate
Part-B
1. Explain the following type of companies.
(i) Private limited company
(ii) Government company
(iii) Public limited company
2.Explain the following.

(i) Doctrine of ultra vires.
(ii) Doctrine of indoor management
(iii) Doctrine of constructive notice

Use the following checklist to see if you have met all the requirements for the assessment
activity.
Understand the concept of company and learn various type of companies with
their special features.
Learn basic documents for creation and functioning of
companies. Understand doctrines concerning companies.
Able to understand concept of company and doctrines concerning its
functioning.
Able to know different type of companies.
Able to list special features of various type of companies.
Able to know basic documents for forming companies.
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EXERCISE
1. Visit a couple of nearby banks; enquire with the ‘help desk’ regarding the documents
required by the bank for opening current account for a partnership firm
and a company.
ASSESSMENT
Part A
Fill in the blanks:
1. Memorandum of Association is required to be obtained from the Company to
mainly verify ________________.
2. A Company gives authority to one or more of its directors/ managers to operate
bank account through ________________.
3. The terminology of beneficiary is associated with __________ (Company, Trust,
Firm, Association)
4. While opening an account Permanent Account Number (PAN) Card is obtained.
This is issued by _______________.
5. When a customer does not have a PAN card, ________________is obtained by the
bank in its place.
Answer
1) its Objectives (main activity) 2) Board Resolution 3) Trust
4) Income Tax authority 5) Form 60/ 61.
Part B
1. Describe the documents required to be obtained for opening an account of a
Partnership Firm.
2. Distinguish between the documents to be obtained from a Company and a
Society at the time of opening of their accounts.
Checklist of Assessment
1. Learn about the key documents required for banking operations
2. Know the contents of these documents and it’s specific usage.
EXERCISE
1. Collect 5 important specimen documents required by banks for individual savings
account bank.
ASSESSMENT
Part A
Fill in the blanks:
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1. Customer need to comply with the __________________ guidelines which are
mandatory
2. The ___________ will need to come to the branch, in person, for opening the
account.
3. Most of the banks follow the concept of ______________ during opening of new
bank accounts of a new customer.
4. The customer identification will be on the basis of documents provided by the
customer as (a) _________________ and (b) ______________.
5. Bank is required to obtain ___________________ of the customer or declaration in Form
No. ___________ as per the I.T. Act (vide Section 39A)
from the person opening the account.
6. In case of ________________, the proof of identity as well as that of the current
address is to be separately furnished by the applicants.
Answer
1. Know Your Customer (KYC) 2. Applicant(s) 3. Introducer
4. Proof of identity, Proof of address 5.Permanent Account Number (PAN), 60 or 61
6. Joint Bank Account
Part B
1. Describe in brief the concept of Proof of identity, Proof of address.
2. List out 5 important documents under Proof of identity.
3. List out 5 important documents under Proof of address.
CHECKLIST OF ASSESSMENT
1. Learn the concept of Proof of identity and Proof of address. Its importance.
2. Understand the documents required for opening of an account – Individual.
EXERCISE
1. Prepare a chart depicting the KYC documents required to be submitted by the
customer to the bank for
Partnership firm
Proprietorship
firm HUF
ASSESSMENT
Part A
Fill in the blanks:
1. Firms, trusts, companies, HUF etc. falls in category ______
2. Generally __________ account is opened for non-individuals.
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3. Certificate/licence issued by the Municipal authorities under Shop &
Establishment Act is required for ____________ firm.
4. ___________ deed is required for partnership firm.
5. Declaration from Karta is required as a document for ________ .
Answer
1. Non Individuals 2. current 3. proprietorship
4. Partnership5.HUF
Part B
1. List out 5 important documents required for proprietorship firm during opening of
bank account.
2. List out 5 important documents required for partnership firm during opening of
bank account.
1. Understand the documents required for partnership, proprietorship and HUF
accounts.
2. Learn the significance of these documents.
EXERCISE
Prepare a chart depicting the KYC documents required to be submitted to the bank for
Companies
Trust
ASSESSMENT
Part A
1. Certificate of incorporation and DIN are required as documents for
__________.
2. MOA is ______________
3. Documents required by the banks help it to identify that there are no gaps for
_____________________ .
4. List of directors and copy of Form 32 is required for a _____________ .
5. Certified true copy of Certificate of Commencement of Business is a
_________ obtained by banks from ___________ .
6. Resolution of the Managing Body of the Foundation is obtained by bank from
__________ .
7. Trust __________ is a document required during formation of a ______.
Answers
1. Companies 2. Memorandum of Association 3. fraud and money laundering
activities 4. company 5.Document , Companies. 6. Trusts 7. Deed , Trust
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Those who enter a joint account should be aware that all partners are liable for all
the dealings in an account as a single or joint entity. So joint accounts should be
opened only with the person one can trust.
Meaning of Nomination
Nomination is the facility given to a depositor, to authorize someone, who, incase of the
depositor’s death, can claim the funds lying in his/her account. There can be only one
nominee in an account and the nominee cannot operate the account during the life of
accountholder/s. Nomination facility is extended to individuals and proprietorship firm only
and not to partnership, company etc. It is advisable that the accountholder nominates
somebody so that the legal heirs don’t have to go through the hassle of paperwork and
documentation, incase the accountholder dies without nominating anyone to claim the
balance in the account. The accountholder has the right to change the nominee, anytime
he wants to.
Effect of Nomination in case of joint accounts
In hierarchy of powers, the nominee comes after each of the account holders. For
example, if a joint account is operated as ‘Former or survivor’ and the former is no
more, the survivor will have the right to receive the money first followed by the
nominee. If the survivor continues to operate the account and over time, he/ she
also dies, then the nominee would get the rights. Or on the other hand, as soon as
the former dies, the survivor can end the account and take out the money. In other
words, If there is a nominee to a joint account, the nominee gets access to the
account only when all the account holders cease to exist. In case of death of the
account holders as well as the nominee, the legal heirs of depositor/s will get the
funds.
Dormant /Inactive accounts:

An account becomes dormant or inactive if there are no customer initiated transactions in
the account for a long period of time, say two years. Such an account can be activated by
accountholder only on resubmission of KYC documents, along with a letter explaining the
reason for non operation in the account. It should be noted however, that even while the
account is in inactive/dormant status, the bank continues to pay interest to the depositor.
EXERCISE
1. Have a group discussion on the account operating instructions given by a
customer(s) to the Bank. List down the salient features of each type.
2. Collect the account opening form from a nearby bank. Identify the box where it
is written “ËorS”, “ForS”, “Any of us”
ASSESSMENT
Part A
Fill in the blanks:
1. Deposit accounts can be opened by an individual in his own name called ________
or by two or more individuals jointly called ___________ .
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2. E or S means ________________
3. A or S means ________________
4. F or S means ________________
5. L or S means ________________
6. A savings bank account can be opened in the name of a minor jointly with a
_____________.
7. If the survivor continues to operate the account and over time, he/she also dies, then
the_________ would get the rights.
8. In case of a joint account, all the depositors are singly and jointly liable for
_____________.
Answers
1. Single account , joint account 2. Either or Survivor
3. Anyone or Survivor 4. Former or Survivor
5. Latter or Survivor 6. Guardian 7. Nominee 8. Overdraft
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vii. Online request for issue of cheques: Customer can also request for issue of cheque
book through the internet (under internet banking), the ATM using his ATM card, or
his registered mobile (under Mobile Banking). In such cases the cheques are
dispatched through speed post or approved courier to his address registered with
the bank.
viii. As a matter of precaution, whenever a cheque book is issued to a third party
authorised to receive the same by the account holder or a cheque book is dispatched
through speed post/ courier, the customer is advised of the fact through a separate
letter/ message and is requested to acknowledge the receipt. This is to ensure that
the cheque book does not fall in the wrong hands.
EXERCISE
1. Obtain a pass book from your family member. Look out for the various transactions
done. List out 5 (minimum) features/ types of information observed in the pass
book.
ASSESSMENT
Part A
Fill in the blanks:
1. _________ records all deposits and withdrawals.
2. Pass book is supplied by the bank to its every __________ who opens an account.
3. The pass book is a copy of customer’s account in the bank’s ________.
4. _________________ is a document, issued by a bank/ financial institution to its
customer, listing transactions over a given period, normally monthly.
5. A bank account statement lists the _______________ that took place over the
relevant time period.
6. A ______________ is a pre-printed paper instrument issued to checking account
holders and used to pay for goods or services.
Answer
1. Passbook 2. customer 3. ledger
4. Statement of Account 5.debits and credits 6. cheque
Part B
1. Explain in brief the difference between a passbook and a statement of account.
2. What do you understand by the term “cheque”. What are the important points to be
noted while issuing a cheque
1. Understand the concept of passbook and statement of account.
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o Don’t violate the Bank’s prescribed instructions/ norms just to make the
complainant feel happy.
o Don’t be part of the problems; be part of the
solution. Don’t complete the sentences for the
complainant.
o Don’t engage with more than one customer at a
time. Don’t interrupt the customer.
o Don’t think that your politeness is a sign of your weakness.
MISCELLANEOUS
o Remember that as a bank employee, you are the representative of your
mother institution (and that you are not working in your personal capacity).
o Remember, “anger” is one letter shorter than “danger”.
o Different types of customers are required to be handled differently. (One shirt
does not fit all).
SUMMARY
o Difficult customers will always be there. Apologise (sincerely say
sorry).
Offer to help the complainant (or, to co-operate with him).
o
Listen to the customer.
Empathiseowith the customer.
o
o Understand the problems/ grievances
patiently.Take the problem seriously (but not
personally).
o Offer a practical/ reasonable/ workable/ realistic
solution. Ascertain customer’s satisfaction.
o The best way to get tough is to get tactful/ smart.
SHORTEST COURSE IN HUMAN BEHAVIOUR

6 Important words: I admit I made a mistake.
5 Important words: You did a good job.
4 Important words: What is your opinion?
3 Important words: Will you please?
2 Important words: Thank you.
1 Important word: We.
Least Important word: I.
EXERCISE
Have a group discussion on customer complaints. List down 5 important reasons why
customers complain and 5 important points towards resolving the complaints / grievances.
ASSESSMENT
Part A
Fill in the blanks:
1. An expression of dissatisfaction whether justified or not is called as a
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__________ .
2. Before filing a consumer complaint, it is a good idea to read the __________
carefully.
3. There are 4 main ways to complain (a) _______ (b) ________ (c) _______ (d)
___________.
4. Service providers need to encourage ________ complaints and discourage
________.
5. Everyone who complains on the telephone, by letter, or by e-mail should get a
______ and ___________ response.
6. In case of a genuine mistake / lapse,__________ to the complainant sincerely.
7. While dealing with a complainant, never use ____________ language.
8. The best way to get tough is to get __________ .
Answers
1. Complaint 2. Guidelines 3. In person, by telephone, by letter, by e-
mail / internet 4.Direct, Indirect 5. Rapid, appropriate 6. Apologise
7. Un-parliamentary 8. Tactful / smart.
Part B
1. Describe in brief what you understand by a complaint. List the 4 ways of
complaining.
2. Write a note on Complainant’s Psychology.
3. List the Do’s and DONT’s (5 points each) towards tactful handling of difficult
customers.
4. Narrate the shortest course in human behaviour.

Activity:
1. Understand what is meant by a complaint. Steps for making a complaint.
2. Learning the psychology of customer complaints.
3. Enlist the Do’s and Don’ts when handling a difficult customer.
4. Understand the process and actions to be followed when a complaint is

received.
Performance standards Yes No

Able to understand what is a complaint and why it happens
Able to understand the psychology of customer complaints

Able to recall the golden rules of handling – strategic and Process - Actions
Able to list out the Do’s and Don’ts when handling a difficult customer.
Able to understand the shortest course in human behaviour
9.3 : REDRESSAL MECHANISM
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Banking 2019
Mr. Kumar purchases a bond issued by a company with a maturity period of five years.
The issue price of the bond, known as the “face value” or “par value”, is Rs 5000. The
bond bears an interest rate of 15% per annum (known as the “coupon rate”) payable on an
yearly basis. Thus every year an amount of Rs 750 (15% of Rs 5000) will be paid to the
bond holder, Mr. Kumar. At the end of the fifth year, on maturity, an amount of Rs 5000
(face value) will be paid along with the interest for the fifth year. The cash flow would thus
be as follows:
At the end of1st Year2ndrdthth Year 3 Year 4 Year 5 Year

Cash Flow - Interest 750 750 750 750 750
Cash Flow - par - - - - 5000
value
Total Cash Flow 750 750 750 750 5750
The amounts received by the holder of the bond at the end of each year represent the
cash flow at the end of that year.
In the above example, we see five cash flows occurring at the end of various years. The
fifth cash flow is higher than others as the original amount of the bond, equal to the face
value (or par value) has been paid along with the interest for the fifth year.
THE CONCEPT OF INTEREST

Another concept that we must review for a better understanding of the time value of
money is that of interest, which is primarily of two types - simple interest and compound
interest. In this session, we shall be using only simple interest for calculating present
value and future value. The application of compound interest will be explained in the
subsequent sessions.
SIMPLE INTEREST
The following terms will be used while discussing simple interest:
Principal “P” is the original amount invested, taken as loan etc.
Rate of interest per annum is the rate at which the money grows every year. It can be
expressed either in terms or in decimal form. For example, if money is growing at a rate of
12% per month, rate of interest “r” can be written as
r = 12 % = 12/100 = 0.12
We shall be mostly using the decimal form of rate of interest.
The time for which an amount is invested or taken on loan etc will expressed in number of
years, “n”.
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Banking 2019
Simple Interest on an amount of “P” at the rate of r % per annum for a period of n years is
given by the formula
Simple Interest I = Pnr (“r” is in decimal form ) ----------------- (i)

Total amount after n years (Principal + Interest): A = P + I
or
A = P + Pnr = P(1+nr) ---------------------------------------------(ii)

From equation (ii), we get
P = A / (1+nr) ----------------------------------------------------(iii)
Example-4
A purchased a scooter by obtaining a loan of Rs 30000 at the rate of 15% simple interest
p.a. How much interest in total he will pay if the loan is taken for 3 years?
Solution: Principal P = Rs 30000, r = 15 % = 15/100 = 0.15, n = 3 years.

From formula (i), the total interest paid is
I = 30000 x 3x0.15) = 30000 x 0.45 = Rs 13,500
Example-5
Mr. A invests Rs 7000 at simple interest of 20 % for a period of four years. What amount
will he get after four years?
Solution:
Here P= Rs 7000, r = 20 % = 20/100 = 0.20, n = 4 years. From formula (ii), the amount
received after four years is
A = 7000 x (1+ 4x0.20) = 7000 x 1.80 = Rs 12,600
Example-6
The maturity value of a deposit is Rs 22,100 after 3 years at simple interest of 10% per
annum. What is the principal amount of the deposit?
Solution:
Here A= Rs 22,100, 1 = 20 % = 10/100 = 0.10, n = 3 years.
From formula (iii), the amount received after three years is
P = A / (1+nr) = 22,100 / (1+3x0.10) = 22,100 / 1.30 = Rs 17,000
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Banking 2019 CALCULATION OF PRESENT VALUE AND FUTURE VALUE USING SIMPLE
INTEREST
If present value of an investment made today is Vp and simple rate of interest “r” is
prevalent in the market, then the future value of this investment Vf will be
Vf = Vp (1+nr) -------------------------------------------------------(iii)
Here (1+nr) is called the compounding factor.

Conversely, if future value is known, the present value can be calculated using
the formula
Vp = Vf / (1+nr) ----------------------------------------------------(iv) In the above equation, 1/
(1+nr) is known as the discounting factor.
Let us now see some examples of present value and future value in a scenario where
simple interest is being applied.
Example-7
Mr. A has a surplus amount of Rs 15000 which he can invest in some deposit scheme. If a
simple interest of 12% per annum is being offered in the market, what would the value of
this money after 5 years?
Solution:
In this question a present value of Rs 15000 has been given, and we have to calculate its
future value, which will obviously be more than present value. Here r = 12 % = 12/100
=).12 and n = 5 years, Applying formula (iii), the future value is Vf = 15000/ (1 + 5 x0.12) =
15000 x 1.60 = Rs 24000
This example illustrates the fact that the value of an amount of money received today
increases in future as there is an opportunity to invest it at the interest rate prevailing in the
market.
Example-8
Mr. B has promised to Mr. C that he will give him Rs 12000 after two years. What is the
present worth of this amount, if a simple interest rate of 15 % is prevailing in the market?
Solution:
In this question a future value of Rs 12000 has been given, and we have to calculate its
present value, which will be less than future value. Thus the rate given here (15 %) is
discount rate, and we have to use the discounting factor for the purpose. Here r = 15 %
and n = 2 years, Applying the present value is
Vp = 12000 / (1 + 2x0.15) = 12000 / 1.30 = Rs 9231
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Banking 201
9
As may be observed from the above example, if some money received in future is, its
value today is less. than the amount actually received.
We have seen above that calculation of present value and future value depends on two
factors - interest rate/ discount rate “r” and time period “n”. We have assumed other
factors associated with the money market, i.e. inflation, fluctuation in currency prices
etc. to be constant, as they are highly unpredictable and involve complicated
calculations. For a basic understanding of the concept of time value of money (present
value and future value) learning about the impact 0f these two factors is adequate.
It is easy to see that both increase and decrease in time value of money are directly
proportional to both interest (and discount) rate and time period. Thus, the value of money
goes up or down to a larger degree with the increase in these factors.
In this session we have limited ourselves to calculations involving simple rate of interest
and a single cash flow for the sake of a basic understanding of time value of money.
However, in real life situations, we have to mostly deal with compound interest and
multiple cash flows. These will be discussed in detail in the subsequent Sessions.
ASSIGNMENT
Explain the concept of present & future value of money and interest giving examples of
practical situations.
ACTIVIT
Y
Prepare a chart showing year-wise growth of money with simple interest over the years.
You may calculate Simple Interest “I” and total amount “A” taking different values of
the
Principal Amount “P”, number of years “n” and annual rate of interest “r”
ASSESSMENT
A. Answer the following:
1. What do you mean by time value of money? Explain.

2. How can we find the real worth of money that we are likely to receive on future date?
3. Write the formula for finding future value of a sum of money you are having today.
4. If P is the original amount invested (principal) for a period of n years with simple interest
at a rate r (expressed in decimal terms), and I is the interest accrued at the end of this
period, then which of the following equations is (are) correct?
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Banking 2019
(i) A = P + I (ii) A = P + Prn (iii) I = A - P (iv) A = P (1 + r n)

a) Only (i) b) Only (ii) c) Only (i) & (iv) d) All of these e) None of these
5. The simple interest rate prevailing in market is 10%.p.a. If you have a surplus amount of
Rs 17,000, and want to invest it, what amount you can expect to receive after four years?
6. With a simple interest rate of 12%.p.a. what is the present value of a sum of Rs 32,000
that would be received five years from now?
Answers:
4. d) 5. Rs 23,800 6. Rs 20,000
B. Fill in the blanks.

1. Money has a ------- value because it can be invested to make more money.
2. The process of finding the PV from the FV is called ________ ..
3. Cash flow means _________ or _________ of money on various dates.
4. The _______ the interest rate, the lower the PV and the higher the FV.
5. Two important factors on which the time value of money depends are _______
and ________.
Answers:
1. Time 2. Discounting 3. Receipt, payment
4. Higher 5. Rate of interest and time period of investment
CHECK LIST FOR ASSESSMENT
Activity.
Part A
1. Familiarity with the concepts of present and future value of money
2. Ability to work out present and future value of money based on simple interest
and discount
Part B
Discussed in the class following:
1. Calculation of present and future value of money
2. Problems relating to present and future value of money based
on simple interest and discount
PERFORMANCE STANDARDS . YES NO
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Able to understand the concept of interest and discount
Able to explain the relevance of time value of money
Able to work out present value from future value and vice
versa
10.2 : POWER OF COMPOUNDING
RELEVANT KNOWLEDGE
While calculating simple interest on a sum of money, at the end of every year interest is
calculated on the original amount only, that is, on the “principal” only. Thus the amount
of interest applied each year remains the same. In the case of compound interest, at the
end of each specified period interest is applied on the principal plus the entire interest
already accumulated.
The specified period for interest application (the interval at which interest is applied) can
be a year, six months, three months, one month, one day or any other interval. This
process of adding the interest already applied to the principal, before calculating further
interest, is known as compounding. Thus compounding can be yearly, half-yearly
quarterly, monthly, daily, and so on.
The difference between simple interest and compound interest can be understood easily
through the following example:
Example-1
Suppose a person invests Rs 10,000 for 4 years in deposit scheme “A” offering simple
interest at the rate of 12 % per annum. Simultaneously, he also deposits the same amount
for same period in another scheme “B” which offers the same rate of interest, but on yearly
compounding basis. The growth of money in the two schemes will be as follows:
Scheme-A:
Simple interest @ 12 % p.a. r = 12/100 = 0.12 Principal P = 10,000
AT THE END INTEREST APPLIED INTEREST APPLIED CUMULATIVE
OF ON (P’) (P’r) BALANCE
1st YEAR 10,000 1,200 11,200
2nd YEAR 10,000 1,200 12,400
3rd YEAR 10,000 1,200 13,600
4th YEAR 10,000 1,200 14,800
On maturity of the deposit: Amount received : Rs 14,800
Total interest received = 1,200 + 1,200 + 1,200 +1,200 = Rs 4,800
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Scheme-B:
Compound interest @ 12 % p.a. r = 12/ 100 = 0.12 Principal P = 10,000
AT THE END INTEREST APPLIED INTEREST APPLIED CUMULATIVE
OF ON (P’) (P’r) BALANCE
1st YEAR 10,000 1,200 11,200
2nd YEAR 11,200 1,344 12,544
3rd YEAR 12,544 1505.28 14049.28
4th YEAR 14049.28 1685.91 15735.19
On maturity of the deposit: Total amount received = Rs 15,735.19

Total interest received = 1,200 + 1,344 + 1,505.28 + 1,685.91 = Rs 5,735.19
Thus we see that

a) The total amount received after a number of years is more when compound
interest is applied instead of simple interest.
b) At the end of the first year, both the total amount and interest are same in the
two cases. However, second year onwards, these are more in the case of
compound interest.
The process used above for calculating compound interest is quite tedious. We shall be
using a simple formula for the purpose
AN IMPORTANT FORMULA USED IN THE COMPOUNDING PROCESS
For a clear understanding of the compounding process, let us consider the following
example:
Example-2
A quantity “P” increases by “p%” four times with compounding. What is the final value of
“Q”? You may express percentage increase in decimal form as r = p/100.
Solution:
We know that p% of Q is Q x p/100 = Qr where r = p/100 is the percentage increase in
decimal form. thus with p% increase once, the value of Q increases to P + Pr = P (1+r).
Thus to increase P by p % or p/100 = r, we have to multiply it by (1+r).
On increasing second time by the same percent, the value of P becomes
2
P (1+r)(1+r) = P(1+r)
On increasing third time by the same percent, the value of Q becomes
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P (1+r)(1+r)(1+r) = P(1+r)3
Finally, on increasing fourth time, the value of Q becomes
n
P (1+r)(1+r)(1+r)(1+r) = P(1+r)
Thus we have arrived at an important formula:

On increasing a quantity “P” successively “n” times by a percentage of “r”
n
(expressed in decimal terms), its final value becomes P(1+r) -------------- (v)
What is stated above is nothing but compounding effect. In each step, we have applied
the compounding factor (1+r) to the previous value to obtain the new value.
Example-3
The population of a metropolitan city is 70,00,000. If the population increases by 14%
every year, what would be the population after 3 years?
Solution:
Here percentage increase
p = 14%. The percentage increase in decimal terms r = p/100 = 14/100 =
0.14. The population after 3 years = 70, 00,000 x (1+0.14)3 = 70,00,000 x
1.143 = 103,70,808
Now we are in a position to understand the formulae used for calculating compound
interest.
CALCULATION OF COMPOUND INTEREST

The following parameters are relevant to the calculation of compound interest:
I. The original amount before application of interest is called the Principal, and will be
denoted by “P”
II. The applicable rate of interest per annum or per year will be denoted as “r”. We
shall be using r in decimal form. For example, if the rate of interest is 16 % per
annum, then r = 16% = 16/100 = 0.16
Although the periodicity of compounding rate can be of different durations (yearly, half
yearly etc.), the interest rate is generally given on an yearly basis. The rate of interest
applicable to various types of compounding, “i”, is calculated as shown in the table below:
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Suppose the given interest rate r = 24% = 24/100 =0.24 per annum (per year)
Type of Compounding Compounding APPLICABLE RATE OF
Compounding Period Periods Per Year INTEREST “i”
Yearly One Year 1 i = r = 0.24
Half-yearly 6 months =1/2 2 i = r/2 = 0.24/2 = 0.12
year
Quarterly 3 months =1/4 4 i = r/4 = 0.24/4 = 0.06
year
Monthly 1 month = 1/12 12 i = r/12 = 0.24/12 = 0.02
year
Thus we see that the rate of interest applicable to a compounding period
Rate of Interest per annum

i = --------------------------------------------------------
Number of Compounding Periods per year
ii. The total time period over which the calculations take place will be denoted by
number of years “n”.
ii. The compound interest accumulated over n years will be denoted by I.
ii. The total amount accumulated (principal+interest) over n years will be denoted
by A.
Thus, A = P + I ---------------------------------------------(vi)
In problems based on compound interest, it is more convenient to first calculate the total
amount “A”. The compound interest can thereafter be calculated using the formula:
I = A - P ----------------------------------------------(vii)
Now we are in a position to derive equations for calculating total amount and
CALULATION OF TOTAL AMOUNT WITH DIFFERENT TYPES OF COMPOUNDING

Let “P” be the principal amount and “r” the rate of interest per annum expressed in
decimal
terms.
a) Annual Compounding:
Then as per formula (v), the total amount after “n” years
n
A = P (1+r) ----------------------------------------------(viii)
Compound interest accumulated in “n” years
I=A-P
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b) Half Yearly Compounding:
In half yearly compounding, interest is applied (i.e. compounding is done) every six
months i.e. two times per year. Thus in “n” years, compounding is done “2n” times.
Since “r” percent in decimal terms is the interest for one year, the interest factor to
be applied every six months is “r/2” and the compounding factor is (1 + r/2). Hence,
the total amount after “n” years
r
/2nA = P (1 + 2 ) ---------------------------------------(viii)
I=A-P
c) Quarterly Compounding:
In half quarterly compounding, interest is applied (i.e. compounding is done) every
three months i.e. four times per year. Thus in “n” years, compounding is done “4n”
times. Since “r” percent in decimal terms is the interest for one year, the interest
factor to be applied every three months is “r/4” and the compounding factor is (1 +
r/4). Hence, the total amount after “n” years
r4n
A = P (1 + /4 ) ---------------------------------------(ix)
I=A-P
c) Monthly Compounding:
In monthly compounding, interest is applied (i.e. compounding is done) every month
i.e. 12 times per year. Thus in “n” years, compounding is done “12n” times. Since “r”
percent in decimal terms is the interest for one year, the interest factor to be applied
every month is “r/12” and the compounding factor is (1 + r/12). Hence, the total
amount after “n” years
r12n
A = P (1 + /12 ) --------------------------------------(ix)
I=A-P
d) Weekly Compounding:
In weekly compounding, interest is applied (i.e. compounding is done) every week
i.e. 52 times per year. Thus in “n” years, compounding is done “52n” times. Since “r”
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total
amount after “n” years
r52n
A = P (1 + /52 ) --------------------------------------(ix)
I=A-P
e) Daily Compounding:
In daily compounding, interest is applied (i.e. compounding is done) every day i.e.
times per year. Thus in “n” years, compounding is done “365n” times. Since “r”
every is “r/365” and the compounding factor is (1 + 1r/365). Hence, the total amount
after “n” years
r36
A = P (1 + /5n365 ) ------------------------------------(x)
I=A-P
Now let us take up an example to illustrate calculation of the final amount received on
application of simple interest and different types of compound interest
Example-4
Mr. Harish Kumar invests Rs 20,000 in each of the five schemes I, II, III, IV and V. Interest
rate offered in all the schemes is 12% per annum and the time period of investment is five
years. Scheme I offers simple rate of interest, while schemes II, III, IV and V offer interest
compounded at yearly, half-yearly, quarterly and monthly intervals respectively. Calculate
the final amount and accumulated interest received at the end of five years in each of the
schemes.
Solution:
We shall be solving this problem in a tabular form. In all the schemes, P = Rs 20000, r =
12% = 12/100 = 0.12 per annum and n = 5 years
SchemeInterest Offered Total Amount “A” after 5Accumulated Interest (A
years - P)
I Simple P(1+nr) = 20000(1+ 5x0.12) 32000 - 20000
= Rs 32000 = Rs 12000
II Compounded Yearly 35247 - 20000
(once a year)
P (1+r) n = 20000(1+ 0.12)5 = Rs 15247
III Compounded Half- = Rs 35247
yearly 35817 - 20000
( 2 times in a year ) P ( 1 + 2 )2n r / = 20000( 1 + )= Rs 15817
0.122/
10
= Rs 35817
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IV Compounded r4
36122 - 20000
Quarterly P(1+/ ) 4 = 20000( 1 + = Rs 16122
n
( 4 times in a year ) 0.12/4 )

20 = Rs 36122
V Compounded 36344 - 20000
Monthly r
/
12 0.1212
==20000(1
Rs 16334+ /
)
12
( 12 times in a year) P (1 + n
)
60
= Rs 36334
The following conclusions may be drawn from the above example:
a) The total amount received after an years is higher when compound interest is
applied as compared to the amount received on application of simple
interest.
b) The total amount increases with the increase in the frequency of
compounding.
This example thus demonstrates adequately the power of compounding.
GENERAL FORMULA FOR COMPOUNDING

We are now in a position to write down a general formula for compounding.
If the principal amount is “P”, rate of interest in decimal terms is “r” per annum and
compounding is done “m” times per year , then the total amount “A” after “n” years is
rmn
A = P (1 + /m ) --------------------------------------(xi)
Here r/m is the interest rate per compounding period, which we shall be denoting by “i”.
Thus the above formula can also be written as
A = P ( 1 + i ) mn where i = r/m ----------------------(xii)
Example-5
Find the total amount and interest on Rs.50000 invested for two years at 10% p.a, interest
being compounded annually
SOLUTION:
n
Total Amount A = P(1+r) = 50000 (1+0.10)2 = Rs 60500
Compound Interest = A - P = 60500 - 50000 = Rs 10500
Example-6
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Find the total amount and interest on Rs.11000 invested for two years at 8% p.a, interest
being compounded half yearly.
SOLUTION:
2x2
Total Amount A = P (1+r/2)2n = 11000 (1+0.08/2) =11000
4
(1.04) = Rs 12868.44
Compound Interest = A - P = 12868.44 - 11000 = Rs 1868.44
Example-7
Find the total amount and interest on Rs.7, 00,000 invested for two years at 10% p.a.,
interest being compounded quarterly.
SOLUTION:
Total Amount A =
4x28
P(1+r/4)4n = 7,00,000 (1+0.10/4 ) = 7,00,000 (1.025) = Rs 8,52,882
Compound Interest = A - P = 8,52,882 - 7,00,0000 = Rs 1,52,882
CALCULATING FUTURE VALUE OF MONEY WITH COMPOUNDING EFFECT

Let the present value of a sum of money be Vp. If the compound interest rate prevailing in
the market (expressed in decimal form) is r with a compounding frequency of n times in a
year. Suppose this money is invested in some scheme at this rate and it grows to an
amount Vf after n years. Then Vf, which is nothing but future value, can be calculated using
formula (xii):
rmn
Vf = Vp ( 1 + /m ) --------------------------------------(xi)
or
mnr
Vf = Vp ( 1 + i ) where i = /m ----------------------(xii)
Thus in n years, the value of money equal to Vp (present value) increases to Vf (future
value) due to compounding effect.
Example-8
The prevailing market rate at which investments can be made is 12% per annum. You
have a spare amount of Rs 6000 which can be invested. Find the future value of this
amount after four years.
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a) Yearly compounding b) Half-yearly compounding
Solution:
Here the present value Vp = Rs 6000, r = 12% = 12/100 = 0.12 and n = 4 years. We shall
be using formula (xii) for calculating future value VF after 4 years
a) In the case of yearly compounding, frequency of compounding m = 1 and the

compounding rate i = r/m = 0.12/1 = 0.12. Thus the value after 4 years Vf =
mn 1x4 4
Vp ( 1 + i ) = 6000 ( 1 + 0.12 ) = 6000x( 1.12 ) = Rs 9441
b) In the case of half-yearly compounding, frequency of compounding m = 2 and

the compounding rate i = r/m = 0.12/2 = 0.06. Thus the value after 4 years V f
mn 2x4 8
= Vp ( 1 + i ) = 6000 ( 1 + 0.06 ) = 6000x( 1.06 ) = Rs 9563
THE CONCEPT OF DISCOUNTING
While the compounding an amount leads to an increase in its value, discounting of an
amount leads to a reduction in its value. In the discounting process is the opposite of the
compounding process. Let us take a simple example.
Example:
Let
(in an amount of “P” (original amount) be invested today for “n” years at the rate of “r”
decimal form) compounded annually. Suppose in n years it grows to an amount “A” (final
amount). Then we have
n
A = P (1+r)
Now, in the same problem, if we have been given the final amount after n years as A, the
original amount can be calculated using the formula
n n
P = A / (1+r) or P = A x 1/ (1+r)
Here 1/ (1+r) n is known as the discounting factor.
n
Hence we see that if after applying the compounding factor (1+r) the final value is “A”,
n
we can obtain the original value by multiplying “A” by the discounting factor 1/ (1+r)
FINDING PRESENT VALUE USING THE CONCEPT OF DISCOUNTING
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Let the present value of a sum of money be Vp. If the compound interest rate prevailing in
the market (expressed in decimal form) is r with a compounding frequency of n times in a
year. Suppose this money is invested in some scheme at this rate and it grows to an
amount Vf after n years. Then from formula (xi), Vp, the current value, can be calculated
using formula:
rmn
Vp = Vf ( 1 + /m ) ---------------------------------------------------(xiii)
or
mn
Vp = Vf (1 + i) where i =r /m --------------------------------(xiv)
Example-9
The prevailing market rate at which investments can be made is 8 % per annum. There is
a likelihood of your receiving an amount of Rs 11000 three years from now. Find the
present value of this amount..
a) Yearly discounting b) Quarterly discounting
Solution:
Here the future value Vf = Rs 11000, r = 8% = 8/100 = 0.08 and n = 3 years. We shall be
using formula (xiv) for calculating the present value Vp .
a) In the case of yearly compounding, frequency of compounding m = 1 and the

compounding rate i = r/m = .08/1 = 0.08. Thus the present value
11000 11000
Vp = ---------------------- = ---------- = Rs 8732
1x33
(1 + 0.08) (1.08)
b) In the case of quarterly compounding, frequency of compounding m = 4 and
the compounding rate i = r/m = .08/4 = 0.02. Thus the present value
11,000 11,000
Vp = ----------------- = -------------- = Rs 8673
4x3 12
(1 + 0.02) (1.02)
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From the above example, we see that with the increase in the frequency of compounding,
the present value decreases. That is, the frequency of compounding and the present value
are inversely proportional to each other.
In this session we have learnt the methods of calculating future value and present value of
single cash flows. The same methods apply to multiple cash flows. This will be explained
in detail in Session 3.
ASSIGNMENT
Taking the principal amount = P, rate of interest = r per annum (in decimal form) and time
period = n years, write down formulae for calculating the total amount after 6 years with
the following compounding frequencies:
a) Yearly b) Half-yearly c) Quarterly d) Monthly
ACTIVIT
Y
Make a chart on present and future value of a series of cash flows based on different
compounding frequencies.
ASSESSMENT
A. Fill in the blanks.
1. Compound interest is calculated each period on the original principal and all
_________ accumulated during past periods.
2. Present value of a future single sum of money is the value that is obtained
when the future value is _________ at a specific given rate of interest.
3. Future value of a future single sum of money is the value that is obtained when
the present value is _________ at a specific given rate of interest.
4. If “i” is the interest rate per compounding period, “r” is the interest rate per
annum and “m” is the frequency of compounding per year then i = _____ .
5. The future value of a single sum of money is calculated by using the following
formula
Future Value Vnmf = __________ × (1 + i) , where i = interest rate per
compounding period n = number of years
Answers
1. 2. discounted 3. compounded
interest 5. Present Value Vp
4. r/m
Answer the following questions.
B.
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1. Find the value that Rs.10000 would amount to under compound interest at 20% p.a.,
interest being compounded quarterly in 3 years. (a) Rs 1750
(b) Rs 17958 (c) Rs 16751 (d) Rs 18908
2. If Rs.3000 amounts to Rs.3630 in two years under, interest being compounded

annually, what is the annual rate of interest?
(a) 10% (b) 21% (c) 11% (d) 10.5%
Hint: From formula (viii), 3000 (1 + r)2 = 36302 or (1 + r) = 3630/3000
=121/100 or (1+r) = √(121/100) = 11/10 = 1.10 or r = 1.10 - 1 = 0.10 = 0.10 x
100 % = 10 %)
3. A sum amounts to Rs.28800 in two years and to Rs.34560 in three years, interest being
compounded annually. Find the sum and the rate of interest
(a) Rs 20000, 20% (b) Rs. 25000, 15% (c) Rs 18000, 20% (d) Rs. 17500, 20%
(Hint: From formula (viii), P (1 + r)2 = 28800 -- (1) and P (1 + r)3 = 34560 -- (2)
Dividing (2) by (1), we get (1+r) = 34560/28800 = 6/5 = 1.20 Thus r = 0.20 =
0.20x100 % = 20 %
Put r = 0.20 in equation (1) above to get the value of P.)
4. If the market rate of interest is 14% per annum compounded half yearly, and you
deposit Rs 70,000 in a scheme. Find the future value of this amount after two years.
(a) Rs 83450 (b) Rs 89958 (c) Rs 91756 (d) Rs 96876
5. The prevailing market rate at which investments can be made is 12 % per annum. If
someone promises to pay you Rs 18000 three years from now, what will be the present
value of this amount with quarterly discounting? (a) Rs. 10450 (b) Rs. 13958 (c) Rs. 11751
(d) Rs. 12625
Answers:
1. (b) 2. (a) 3. (a) 4. (c) 5. (d)

CHECKLIST FOR ASSESSMENT ACTIVITY
Use the following checklist to see if you’ve met all the requirements for assessment
activity.
Part-A
Differentiating between calculation of present and future value of money
Working out total amount and accrued compound interest with monthly, quarterly, half
yearly and annual compounding.
Applying compounding and discounting factors for time value calculations
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many people you can get to smile back at you, just by putting your best face
forward.
ASSESMENT
1. Answer the following:
a) What is a workplace?
b) What is communication at workplace?
c) Which organisation is considered to be successful?
d) How the leader of a team should communicate with the team members?
e) What is Internal Communication?
f) What is External Communication?
g) How the quality of communication at the workplace be improved?
Mention any five of them.
2. Fill in the Blanks

a) In fact, __________ flow is crucial to any organisation and the better the flow,
the more successful the company or organisation is.
b) Communication with colleagues is a vital _____.
c) External communication should preferably be _______ in nature.
d) Informal communication involves _________, grape vine talks and chit chats.
e) Body language is an important part of __________.
3. True or False?
a) Communication is important in workplace.
b) Body language can tell you just as much as what a person says, if not more.
c) The problem with email and social media is that it can be difficult to determine
the tone.
d) Face to face communication helps with building trust and openness.
e) An Internal communication should be by all means formal in nature.
Answers
No. 2.
a. Information b) Skill c) Formal d) Gossip e) Communication
No. 3
a. True b) True c) True d) True e) False
CHECKLIST FOR ASSESMENT ACTIVITY

Use the following checklist to see if you have met all the required assessment activities:-
Part – A
The students have learnt to-
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Many people do not listen with the intent to understand, they listen with an intent to
reply. Many people keeps themselves busy in preparation of the reply rather than
listening to the speaker and understand thoroughly what the speaker wants to
convey.
13. Repeating the Message or Paraphrase

Another listening technique that is very useful is distilling what you just heard and
repeating it back to the speaker in short form. Paraphrase this with "So, what you
are saying is..." and recap what he just told you. This truly shows that you were
listening and paying attention. It also signifies that you care about the message the
speaker is trying to impart and that you want to make sure you heard them
correctly. If a conversation with an unhappy customer includes paraphrasing what
you think you understand so you can help solve a problem. Thus, the customer
feels validated and understood. This often diffuses a situation.
EXCERCISE / ASSIGNMENT
1. Prepare a story, call a student out of the class and narrate the story to him/her. Then
call another student out of the class and tell the 1st student to narrate the same story
to this student. Let the 1st student sit inside the class without talking. Call the 3rd
student and let the 2nd student narrate the same story to this student. Let the 2nd
student sit inside the
class without talking.
Now, the teacher can read the story before the students of the class. Call the 3rd student
inside the class and tell him/her to narrate the story before all the students. Now, the
students will find how much the story has been shifted from the original story. All these
happened because of lack of listening skill of the students narrating the story.
ASSESMENT
1. Answer the following:

a) What is listening?
b) If listening is same as hearing? If not, how it is different?
c) What are the different types of listening?
d) What a listener actually does during listening?
f) What are the factors that affect the listening process?
f) Define at least 5 principles of listening.
2. Fill in the blanks.
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a) _____ is an active process of selecting and interpreting information from the

auditory and visual clues.
b) When somebody else is _______ listen to what they are saying.
c) ________ - try to understand the other person’s point of view.
d) Interrupting and judging are two behaviors that have no place in _______.
e) Volume and ___ both add to what someone is saying.
f) We don’t just listen with our ____ but also with our eyes.
3. True or False?
a) Paraphrasing is repeating it back to speaker you just heard.
b) A listener should be interested in the topic and understand the topic to make
the listening effective.
c) Listening as an observer to the whole process – is not a type of listening.
d) Making the speaker comfortable to speak – is not the duty of the listener.
e) Many people do not listen with the intent to understand, they listen with intent
to reply.
f) Listening is the ability to accurately receive and interpret messages in the
communication process.
Answers to Question
No. 2.
a. Listening b) Talking c) Empathise d) Listening e) Tone f) ears
No. 3
a) True b) True c) False d) False e) True f) True
CHECKLIST FOR ASSESMENT ACTIVITY
Use the following checklist to see if you have met all the required assessment activities:-
Part – A
The students have learnt to-
Understand what is listening
Understand how listening is different from hearing
Understand the four different types of listening
Understand the factors those affect the listening process
Understand the 12 principles to follow to make listening effective
Part – B
154 V1_002051
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Publisher of Monetary and Economic Data

Promotional role of RBI

Building up and strengthening the country’s financial infrastructure, filling up major

A.State the objectives of establishment of RBI.

B.Choose the correct answer to the following statements.

1. RBI commenced its operations in the year –

2.As a banker to the government, RBI is responsible for :

CHECK LIST FOR ASSESSMENT ACTIVITY

Able to state the objectives of establishment of

Able to enumerate the function of Reserve Bank of

Able to explain the regulatory function of Reserve

Able to explain the promotional role of Reserve

State True or False –

CHECK LIST FOR ASSESSMENT ACTIVITY

1 Learn about different types of banks.

B. Choose the correct answer to the following statements.

3.Which statement is correct?

a)Only (i) is correct.

5.Which loan is repaid over a period of time?

8.If an importer wants to pay for the goods imported, he is required to –

10 Which facility is not provided in a modern large size bank? 2019

Fill in the blanks :

1.“RTGS” stands for

2. RTGS system is primarily meant for _______________value

4.The full form of NEFT is __________________

5.NEFT is an electronic fund transfer system that operates on a

6.The customer can make payments to the merchant

Answers: 1. Real Time Gross Settlement 2. Large. 3. 30 4. National Electronic

2.4 : CUSTOMER SERVICES: IMPORTANT DEFINITIONS

A _______________ is the most important person in any business.

Checklist for Assessment Activity

2.5 : CHECK-LIST FOR RENDERING EFFICIENT CUSTOMER SERVICES

Service with smile : courteous behaviour by staff.

Prompt despatch of statement of accounts to customers.

Prompt despatch of Debit / Credit advices to customers.

a.“May I Help You” counters are also known as _____________.

d.“Anger” is one letter shorter than ______________.

Checklist for Assessment Activity

Don’t issue cheques without maintaining sufficient funds in the account.

Fill in the blanks.

Answers: (1) Yes (2) No (3) No (4) No (5) No

Checklist for Assessment Activity

Fill in the blanks:

1. A_____________, is a box-usually located inside a bank-which is used to store

3. _______________Banking is a system that allows customers of a financial

4. A_______________ is an automated banking machine that enables the customer of a

5. In a ATM card, authentication is provided by the customer entering a

6. ______________alert messages are received in the mobile of the customer which

1 Safe deposit 2. Insured 3. Mobile 4. ATM(automated teller machine) 5. Personal

-Describe the concept of safe deposit vault

-What is meant by ATM?

-Differentiate between Internet banking and Mobile banking.

CHECKLIST FOR ASSESSMENT

-Learn the various service products offered by a Bank

-Learn the working of ATM and Internet Banking

Non Performing Assets (NPA)

Have a group discussion on types of credit facilities extended by a bank. Summarize

Fill in the blanks :

__________________ is an arrangement by which the customer is allowed to

Overdraft facility may be either _ or ______.

_ bills are payable on demand whereas ______ bills are