BANKING

SERVICES
Bank is an institution which
attracts money on deposits for
the purpose of being lent to
industry or trade. Bankers are
not merely money lenders.

A bank lends what it borrows

from others. A bank is buyer
and seller of money.

A bank earns a margin of profit

by lending money which it
borrows.

According to Indian Banking

Regulation Act, 1949 means:

“Accepting deposits of money

from the public for the purpose
of lending or investments.”
 Types of Accounts

01 02 03 04

SAVINGS DEPOSIT ACCOUNT CURRENT DEPOSIT ACCOUNT RECURRING DEPOSIT ACCOUNT FIXED DEPOSIT ACCOUNT
The aim of a saving account is to Current deposit accounts are A depositor can deposit a fixed A fixed deposit is repayable
mobilize savings of the public. A opened by businessmen. The amount say Rs 100 every month after the expiry of the specified
person can open this account by account holder can deposit and for a fixed period. The amount period. The period may vary
withdraw money whenever together with interest is repaid on from six months to five years.
depositing a small sum of money.
desired. Withdrawals are always maturity. The rate of interest on Longer the period of deposit,
He can withdraw money from his made by cheque. Overdraft and higher is the rate of interest.
recurring deposit is higher than
account and make additional credit limit facility is available in that on Savings Account. The banks issue a receipt to the
deposits at will. Account holder the account. depositor acknowledging the
also gets interest on his deposit in receipt called fixed deposit
this account though the rate of No interest is paid on current receipt. The rate of interest in
account rather some service FD is highest.
interest is lower than the rate of
charge is charged by bank for
interest on fixed deposit account. rendering services.
Depositor is issued a cheque book
and pass book.
 Types of Accounts (Contd.)

Savings
05

Types of Accounts
Current
MULTIPLE OPTION DEPOSIT
ACCOUNT

This account offers multiple

Recurring
options to depositors. This
account can be a combination
with Savings or Current Account.
In this account, the depositor can
enjoy the liquidity of savings and
current account and rate of
Fixed
interest of fixed deposit. When
the amount of deposit exceeds a
particular limit then automatically
the amount gets transferred into
fixed deposit. Multiple Option
Some Important Services Provided by Banks

Banker’s Cheque
(Pay Order) Overdraft
Bank Draft

Cash Credit Loans

 Services provided by Banks (Contd.)
This is a cheque drawn by one bank against funds deposited into its account at another bank,
Bank authorising the second bank to make payment to the individual whose name is written on the draft.
It is a financial instrument through which money can be remitted from one person to another and
Draft from one entity to another entity. A bank draft can be obtained from a bank after depositing the
required amount in the bank. The bank also charges some commission for issuing bank draft.

Banker’s This is a document which instructs a bank to pay a certain amount to a third party. Such orders are
Cheque normally acknowledged by bank which provides a guarantee that the payment will be made. It is a
(Pay Order) kind of bank draft which is payable within the town so it can be called as local bank draft. The
commission charged on pay orders is less than that on a bank draft.

Under this arrangement a customer having current account is allowed to withdraw more than the
Overdraft balance in his account. He can overdraw up to a specific limit and for an agreed period. Interest is
charged on amount virtually overdrawn.

Cash Credit Under this arrangement the borrower is allowed to withdraw up to a certain limit against security.

Loans A loan is lump sum advance repayable on expiry of a specified period. It may be secured or
unsecured. The loan ,may be paid back by the borrower in installment.
 Benefits of
e-banking
to customers

Digital Payment
and Financial Unlimited
Transparency Convenience Discipline Access Less Risk
24X7 Services

Customer can E-banking leads to

With e-banking make transactions greater customer
there is possibility anywhere like satisfaction by
of digital payment. office, home and offering unlimited
It promotes while travelling. access to the bank
transparency in not limited by the
E-banking E-banking walls of the There is greater
financial
provides twenty inculcates a sense branch. security to the
payments.
four hours, 365 of financial customers as they
days a year discipline by can avoid
services to the recording each travelling with
customer of a and every cash.
bank. transaction.
 Different methods of Digital Payments or
E-banking services
Debit Card: A Debit
Credit Card: Credit
Card is issued to a
card is like a bank
customer in lieu of
account without
his money deposited
having balance in it.
in the bank (i.e. up to
It enables the card
the credit balance
holders to have
available in the
overdraft facility up
account). The
to a fixed limit
customers can make
depending upon the
immediate payment
creditworthiness of
of goods purchased
the party. Credit is a
or services obtained
substitute of cash. It
from his or her debit
is a plastic card with
card provided the
the signature identity
point of sale terminal
of the owner. It also
facility is available
includes the name of
with the seller or
issuing bank and
receiver.
validity period of the
card.
 Different methods of Digital Payments or
E-banking services
National Electronic Fund Transfer (NEFT)

• NEFT refers to a nation wide system that facilitate individuals, firms and companies to
electronically transfer funds from any branch to any individual, firm or company having an
account with any other bank branch in the country. Under this the money is directly transferred
from one account to another and helps in avoiding the hassle of drawing cheques, depositing
cheques etc.

• NEFT settles transactions in batches. The settlement takes place at a particular point of time
for example, NEFT settlement takes place 6 times a day during the week days (9.30am, 10.30
am, 12.00 noon, 1.00 pm, 3.00 pm & 4.00 pm) and 3 times during Saturday 9.30 am, 10.30
am and 12.00 noon) Any transaction initiated after a designated settlement time is settled on
the next fixed settlement time.

• There is no minimum value for NEFT. This facility is available in 75,000 branches of banks.
 Different methods of Digital Payments or
E-banking services
Real Time Gross Settlement (RTGS):
• RTGS refers to a funds transfer system where transfer of funds takes place from one bank to
another on a “real time” and on “gross basis”.

• Settlement in real time means payment transaction is not subjected to any waiting period. The
transactions are settled as soon as they are processed.

• Gross settlement means the transaction is settled on one to one basis without bunching or
netting with any other transaction. Once processed, payments are final and irrevocable. This is
the fastest possible money transfer system through the banking channel.

• The RTGS service for customers is available from 9.00 am to 3.00 pm on week days and from
9.00 am to 12.00 noon on Saturdays. The basic difference between RTGS and NEFT is that
while RTGS transactions are processed continuously, NEFT settles transactions in batches.
 Different methods of Digital Payments or
E-banking services

Features of RTGS:
• This electronic system is controlled by RBI. There is no physical exchange of money. The RBI
makes adjustment in the electronic accounts of both the banks.

• The RTGS system is suited for high value transactions (minimum value of transaction should
be Rs 2,00,000)

• The payment is taken as final and irrevocable.

• Fees of RTGS vary from bank to bank. RBI has fixed upper limit of fees.

• To use RTGS the banks must use core banking. Core banking banks are assigned an eleven
digit code.
 Different methods of Digital Payments or
E-banking services
E-Cash/ Digital
Automated Teller Cash: It is a new
Machine (ATM): The concept of online
person who make payment system. E-
payments and Cash is used over
accepts deposits in internet, email or
bank is known as personal computer or
Teller. The ATM refers mobile. The word
to mechanical and digital cash is similar to
automatic teller that of electronic fund
which can do a transfers done
Teller’s job, 24 hours between banks. The
day at less than half user must have e-cash
the cost of human software programme
tellers. To use an (example paytm or
ATM, you require the Bhim etc.) and e-cash
debit card and bank account from
identification code. where e-cash can be
withdrawn or
deposited.