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Rationale & Situational Analysis. Banks can not sanction loans against their own shares Prohibited under Sec-20 (b) of BR Act Prohibited under Sec-20.

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Presentation on theme: "Rationale & Situational Analysis. Banks can not sanction loans against their own shares Prohibited under Sec-20 (b) of BR Act Prohibited under Sec-20."— Presentation transcript:

1 Rationale & Situational Analysis

2 Banks can not sanction loans against their own shares Prohibited under Sec-20 (b) of BR Act Prohibited under Sec-20 (b) of BR Act Prohibited Under Sec- 34(1-b) of SBI Act Prohibited Under Sec- 34(1-b) of SBI Act This tantamount to reduction in capital of the Bank This tantamount to reduction in capital of the Bank

3 Partnership letter (COS-37) is obtained while opening accounts for Partnership firms It gives particulars of all the partners It gives particulars of all the partners The partners undertake that whenever any changes occurs in the said firm to give notice thereof to the Branch of the Bank at once in writing. The partners undertake that whenever any changes occurs in the said firm to give notice thereof to the Branch of the Bank at once in writing. It also gives all the partners who have authorised to sign on behalf of the firm It also gives all the partners who have authorised to sign on behalf of the firm

4 Bank is not responsible for any wrong entry made in the account through internet banking. Bank is not responsible for any wrong entry made in the account through internet banking. The transaction is being done by the customer himself The transaction is being done by the customer himself It gives the right to authorise/ approve or disapprove the transactions/ entry to the customers themselves. It gives the right to authorise/ approve or disapprove the transactions/ entry to the customers themselves. The branch is not having any possibility to approve/ disapprove the transaction. The branch is not having any possibility to approve/ disapprove the transaction.

5 No death certificates are to be insisted for settlement of cases of Missing persons up to Rs. 1 lac. No death certificates are to be insisted for settlement of cases of Missing persons up to Rs. 1 lac. RBI has come out with instructions to alleviate hardships faced by customers in getting the settlement for small value deposits without getting a valid presumptive death certificate. RBI has come out with instructions to alleviate hardships faced by customers in getting the settlement for small value deposits without getting a valid presumptive death certificate. Our Bank instructed that the claims up to a threshold limit of Rs.1,00,000/- (Rs. One Lac only) will be entertained without insisting for valid death certificate. All such claims in respect of missing persons, reported missing for a minimum period of one year, shall be settled on production of the following documents. Our Bank instructed that the claims up to a threshold limit of Rs.1,00,000/- (Rs. One Lac only) will be entertained without insisting for valid death certificate. All such claims in respect of missing persons, reported missing for a minimum period of one year, shall be settled on production of the following documents. 1. FIR 1. FIR 2. Non-traceable report issued by the police authorities. 2. Non-traceable report issued by the police authorities. 3. Indemnity from the claimant 3. Indemnity from the claimant

6 Bank Guarantees should be classified properly Bank guarantees attract capital provisioning on Risk Weight based on Credit Conversion Factor Bank guarantees attract capital provisioning on Risk Weight based on Credit Conversion Factor Performance Bank guarantee attracts a CCF of 50% Performance Bank guarantee attracts a CCF of 50% Financial guarantee attracts a CCF of 100%. Financial guarantee attracts a CCF of 100%. So if wrongly classified, wrong CCF will be applied, resulting in higher provision of capital. So if wrongly classified, wrong CCF will be applied, resulting in higher provision of capital. This results in opportunity loss of profitable deployment of capital This results in opportunity loss of profitable deployment of capital

7 Your branch maintains a current account of a partnership firm M/s. Singh Firm with Sanjay Sign & Rahul Singh as partners. Your branch maintains a current account of a partnership firm M/s. Singh Firm with Sanjay Sign & Rahul Singh as partners. Master Sandesh Singh (Son of Sanjay Singh) is also admitted to the firm for benefits. Master Sandesh Singh (Son of Sanjay Singh) is also admitted to the firm for benefits. In order to meet the financial requirements of the firm, Mr. Sanjay Singh approaches your bank branch to sanction a demand loan against an TDR in the name of Master Sandesh, FNG- Mr. Sanjay Singh. In order to meet the financial requirements of the firm, Mr. Sanjay Singh approaches your bank branch to sanction a demand loan against an TDR in the name of Master Sandesh, FNG- Mr. Sanjay Singh. How will you deal with this situation? How will you deal with this situation?

8 Minors can be inducted into partnership for the benefits of the partnership only. Minors can be inducted into partnership for the benefits of the partnership only. Loan against TDR in the name of Minor can be sanctioned, if the loan is for the personal maintenance of minor. Loan against TDR in the name of Minor can be sanctioned, if the loan is for the personal maintenance of minor. Here the loan is going to be utilised for the benefit of business & not for the benefit of minor. Here the loan is going to be utilised for the benefit of business & not for the benefit of minor. So we can not sanction the loan against the TDR So we can not sanction the loan against the TDR

9 Mr. Subramaniam and Mr. Muralidhar have a savings bank a/c, with style of operations as- “Either or Survivor”. Mr. Subramaniam and Mr. Muralidhar have a savings bank a/c, with style of operations as- “Either or Survivor”. Your branch has received a cheque issued by Mr. Subramaniam and the has some alterations. Your branch has received a cheque issued by Mr. Subramaniam and the has some alterations. These alterations have been duly authenticated by Mr. Muralidhar. These alterations have been duly authenticated by Mr. Muralidhar. The SWO, who is a newly joined Assistant, comes to you seeking directions. The SWO, who is a newly joined Assistant, comes to you seeking directions. How will you guide him? How will you guide him?

10 The mandate permits operation by both persons on either or survivor basis. The mandate permits operation by both persons on either or survivor basis. So both can independently operate the account. So both can independently operate the account. The alterations can be authenticated by any one as both have mandate to operate the account. The alterations can be authenticated by any one as both have mandate to operate the account. Hence the cheque can be paid if otherwise in order. Hence the cheque can be paid if otherwise in order.

11 Your branch opens a fixed deposit of Rs in the joint name of Mr. Anil Kumar and Mr. Suhail Kumar payable to either or survivor. Your branch opens a fixed deposit of Rs in the joint name of Mr. Anil Kumar and Mr. Suhail Kumar payable to either or survivor. They also nominate Miss.Konica, a minor daughter of Mr. Suhail Kumar with the provision that the payment can be claimed by Mrs.Suhail Kumar on behalf of the minor. They also nominate Miss.Konica, a minor daughter of Mr. Suhail Kumar with the provision that the payment can be claimed by Mrs.Suhail Kumar on behalf of the minor. Unfortunately, Mr. Suhail Kumar expired and Unfortunately, Mr. Suhail Kumar expired and Subsequently Mr. Anil Kumar decides to change the nomination from Miss. Konica to his own son. Subsequently Mr. Anil Kumar decides to change the nomination from Miss. Konica to his own son. To this, Mrs. Suhail Kumar objects and asks your branch not to accept the instruction of Mr. Anil Kumar. To this, Mrs. Suhail Kumar objects and asks your branch not to accept the instruction of Mr. Anil Kumar. How will you deal with the situation? How will you deal with the situation?

12 As per the mandate of E or S, the survivor gets the right to operate / change the account as if it were operated by only the survivor. As per the mandate of E or S, the survivor gets the right to operate / change the account as if it were operated by only the survivor. The nomination is effective only after the death of both depositors. The nomination is effective only after the death of both depositors. Hence the request for change of nomination has to be accepted and carried out as per his wish. Hence the request for change of nomination has to be accepted and carried out as per his wish. The nominee / her mother’s request can not be entertained. The nominee / her mother’s request can not be entertained.


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