JAIIB APRIL 02/2007 WELCOME TO VIRTUAL CLASS ROOM SESSSION

BANKER-CUSTOMER RELATIONSHIP DEBTOR-CREDITOR DEBTOR-CREDITOR CREDITOR-DEBTOR CREDITOR-DEBTOR AGENT-PRINCIPAL AGENT-PRINCIPAL LESSOR-LESSEE LESSOR-LESSEE BAILEE-BAILOR BAILEE-BAILOR

BANKER’S DUTIES & RESPONSIBILITIES BANKER’S DUTIES & RESPONSIBILITIES PAYING BANKER PAYING BANKER PAYMENT OF CHEQUES PAYMENT OF CHEQUES PAYMENT IN DUE COURSE APPARENT TENOR PAYMENT IN GOOD FAITH WITHOUT NEGLIGENCE NEGOTIABLE INSTRUMENTS

CHEQUES BEARER ORDER CROSSED OPEN

NEGOTIABLE INSTRUMENTS BANKER’S DUTIES & RESPONSIBILITIES BANKER’S DUTIES & RESPONSIBILITIES C0LLECTING BANKER C0LLECTING BANKER COLLECTION OF COLLECTION OF CHEQUES CHEQUES HOLDER IN DUE COURSE CONSIDERATION TITLE IBEFORE MATURITY

DEPOSIT ACCOUNTS DEPOSITS CURRENTSAVINGSFIXEDRECURRINGFLEXICERTIFICATE

CERTIFICATE OF DEPOSIT CD IS A MONEY MARKET INSTRUMENT CD IS A MONEY MARKET INSTRUMENT ISSUED AS A DISCOUNT INSTRUMENT ISSUED AS A DISCOUNT INSTRUMENT MINIMUM AMOUNT IS Rs. One LAKH MINIMUM AMOUNT IS Rs. One LAKH MINIMUM PERIOD OF CD 15 DAYS MINIMUM PERIOD OF CD 15 DAYS MAXIMUM PERIOD OF 1 YEAR MAXIMUM PERIOD OF 1 YEAR DIFFERS FROM FD DIFFERS FROM FD a) Prepayment not allowed a) Prepayment not allowed b) Loan is not allowed b) Loan is not allowed

CHARGES  HYPOTHECATION  PLEDGE  MORTGAGE  ASSIGNMENT  LIEN  SET OFF

FUND BASED FINANCE LOANS & ADVANCES CASH CREDIT OVERDRAFT RETAIL FINANCE TERM FINANCE BILLS FINANCE

Non-Fund Based Finance BANK GUARANTEE CO- ACCEPTANCE OF BILLS LETTERS OF CREDIT

Working Capital Cycle Cash Raw material Semi finished goods Finished goods sales Bills receivables

Non-Resident Indian Accounts Who is a Non Resident Indian? 1)An Indian citizen who resides outside India on account of a) Employment/business/vocation and and b) staying outside India for an uncertain period period 2)A person of Indian origin but a citizen in any other country except Pakistan/Bangladesh any other country except Pakistan/Bangladesh if at any time holding an Indian passport if at any time holding an Indian passport

6 Cs CHARACTER CHARACTER CAPTIAL CAPTIAL CAPACITY CAPACITY COLLATERAL COLLATERAL CONDITION CONDITION COMPLIANCE COMPLIANCE

Clayton’s Case Applicable only to a a) joint a/c and or a partnership a/c b) running c/c and o/d a/cs c) Not to two different a/cs (Right of set off is applicable) Based on the concept of Appropriation

FAQs Distinguish -Cash Credit and Overdraft Both CC and OD forms part of working capital finance CC is granted against moveable goods (inventory/semi finished goods/goods etc) OD is granted against paper security (Fixed deposit receipts/shares/book debts)

FAQs KYC: Know Your CustomerKYC: Know Your Customer Know your customer norms are applicableKnow your customer norms are applicable to all customer accounts. It deals with notto all customer accounts. It deals with not only to identify the customer but alsoonly to identify the customer but also to understand the activities of the customer,to understand the activities of the customer, to ensure that the operations in the customerto ensure that the operations in the customer account/s is/are for genuine purposeaccount/s is/are for genuine purpose

FAQs  Fund Based and Non Fund Based limits  Banks grants credit facilities to their clients to carry on with their trade activities.  These facilities are classified as Fund based/Non fund based depending upon the client’s business requirements.  Cash Credit/Overdraft/Loans are examples of fund based limits, where the bank allows the customer to withdraw funds against securities, whereas in respect of non fund based limits like Letters of Credit and Guarantees, the bank extend a comfort level to the clients to enable them to carry on with their business activities

THANKS & ALL THE BEST T.M.C.VARADARAJAN TEL : (R) (O) e.mail: