Customer

A customer is a person who has some kind of account, such as deposit or current with a bank
and from this it follows that any person may become a customer by opening a deposit or current
account or having some similar relation with a bank.
To constitute a customer, there must be some identifiable course or habit of dealing in the
nature of regular banking business. It is difficult to settle the idea of a single transaction with that
of a customer. A customer is a person; he should have some kind of an account with the bank.
The initial transaction in opening an account will not create the relation of a banker and
customer. According to the duration theory the relation of a banker and customer begins as
soon as the first cheque is paid in and accepted for collection.
In simple words a customer can be any person for whom the bank agrees to conduct an
account.
Legal Requirements to be qualified as Customer:

Customer should be a major

Customer be of sound mind
He should not be debarred under any law
There must be an offer and acceptance of the proposal.
Different types of Customers
- Lunatics
- Drunkards
- Undischarged Bankrupts
- Minors
- Married Woman
- Agents
- Partnership
- Joint Stock Companies
- Local Authorities
- Trust Accounts
- Unincorporated Bodies
- Joint Accounts

- Joint Hindu Families

Different Types of Bank Customers

Accounts of Minors:
Who is a Minor?
As per sec.4 of The Guardian and Wards Act, 1890, Minor means a person who, under the provisions
of Indian Majority Act, 1875(9 of 1875) is to be deemed not to have attained his majority.
As per Sec3 of Indian Majority Act, 1875, every other person domiciled in India shall be deemed to have
attained his majority when he shall have completed his age of eighteen years and not before. Thus a
Minor is a person who has not completed the age of eighteen years. Where a legal guardian is appointed
by a court of law the person attains majority on completion twenty-one years of age and not before (Sec3
of Indian Majority Act, 1875). According to the Indian Contract Act, 1872, a minor is not capable of
entering into a valid contract and a contract entered into by a minor is void. A minor after attaining majority
cannot ratify the contract made by him during his minority since agreement made by him as a minor is
void.
However, section 26 of NI Act provides that a Minor may draw, endorse, deliver and negotiate a cheque
so as to bind all parties except himself. Of Course the minor is not bound by the terms and conditions of
Bank Account. A question may obviously arise that in spite of above-mentioned disabilities, why banks are
allowing opening an account in the name of Minor. The main reason for this is that in this age of cutthroat
competition for deposit mobilization
Who is a Guardian?
As per Sec.4 of The Guardians And Wards Act, 1890 "guardian" means a person having the care of the
person of a minor or of his property or of both his person and property.
Guardians may be categorized into following three types:
(i) Natural guardian,
(ii) Testamentary Guardian: -Guardian appointed by the will of the minor's father or
mother,
(iii) Guardian appointed by a court under the Guardians and Wards Act, 1890.
Natural Guardians in Different Religions:
a) Hindu
According to Sec.6 of Guardians and Wards Act, 1890,the natural guardian of a Hindu minor, in respect of
the minors person as well as in respect of the minors property (excluding his or her undivided interest in
joint family property), are(a) In the case of a boy or unmarried girl- the father, and after him, the mother,
provided that the custody of a minor who has not completed the age of five
years shall ordinarily be with the mother;
(b) In the case of illegitimate boy or an illegitimate unmarried girl- the mother,
and after her, the father;
(c) In the case of married girl -the husband:
(Note: The expression father and mother do not include a step- father and a
stepmother.)
b) Muslim: Under the Mohammedan Law, father is the natural
guardian of the property of a minor. A mother of a Muslim minor is not a natural
guardian of her child.
A Muslim minors natural guardian in the order of preference is as under:
oFather

oExecutor appointed by fathers will

oGrandfather
oExecutor appointed by grandfathers will
oIf there is no guardian from any of the four categories mentioned above,
then guardian will have to be appointed by the court.
c)Christians & Parsis:
The natural guardian of a minor child is father during his lifetime and after him, the mother. In respect of
child born out of wedlock registered under The Special Marriage Act, 1954 the Guardian and Wards Act,
1890, govern guardianship.
Opening of Minors Account:
Generally, banks are reluctant to open deposit account in the name of minor, with mother as a guardian.
Probably it may be due to the provisions of Sec. 6 of the Hindu Minority and Guardianship Act, 1956.
According to which mother is not a guardian when the father is alive. During his lifetime, father alone is
the natural guardian of a Hindu minor.
After examining the legal and practical aspects of problem, the Reserve Bank of India has permitted
banks to open fixed, recurring deposit and savings banks accounts, mother as a guardian. Although there
is no legal protection provided to the accounts opened in the name of minor with mother as guardian
banks have been permitted to open accounts in the names of minors with mother as guardian.
RBI has advised banks to take adequate safeguards in allowing operations in the accounts by ensuring
that minors' account opened with mothers as guardians are not allowed to be overdrawn and that they
always remain in credit. By not allowing the account to be overdrawn the minor's capacity to enter into
contract would not be a subject matter of dispute.
RBI has also advised banks that in cases where the amount involved are large, and if the minor is old
enough to understand the nature of the transaction, the banks could take his acceptance also for paying
out money from such account.
The account of minor can be opened in any one of the following modes.
i) By a natural guardian, i.e., father or mother on behalf of the minor:
ii) By a natural guardian, i.e., father or mother in the joint names of
himself/herself and the minor, payable to either or survivor;
iii) By a person in the name of any minor of whom he or she is the guardian
appointed by a competent Court under any enactment for the time being in force;
iv) By a minor of age 10 and above in his/her single name to be operated upon by
himself/herself, provided he/she can put uniform signatures.
Funds for opening Account:
oGuardian can open accounts from own funds. If guardians intention is to
utilize the money for the benefit of the minor and to eventually make the money
lying to the credit of the account available to minor or his/her attaining
majority, in that case from the date of the minor attaining majority the account
is to converted as a joint account (either or survivor) and can be operated upon
by the minor.
oIn a case where the funds with which the account in the name of the minor is to
be opened devolve upon him/her by gift, inheritance etc., or where the bank, at
its discretion, to consider it necessary, the account in the name of the minor
will be permitted to be opened only by a guardian appointed by a Court and the
guardianship certificate must embody an express authority to open and operate an
account with the Bank.
oOn attaining majority, the erstwhile minor has to confirm the balance in his/her
account and if the account is operated by the natural guardian / guardian, fresh
specimen signature of erstwhile minor duly verified by the natural guardian

are obtained and kept on record for all operational purposes.

According to age accounts of minor can be classified in to three categories.
o Below 10 years of age.
o Between 10 to 14 years of age
o 14 years of age and above
A legal guardian appointed by a Court to deal with the property of a minor can open an account in the
name of the minor. Legal guardian cannot join as an accountholder in his individual capacity with the
minor. All operations in such an account have to be for and on behalf of the minor in the capacity of a
legal guardian.
Banks do not open accounts in the names of two or more minors either jointly between themselves or with
the natural guardian/s or with any other person/s.
Third party cheques are not collected for the credit of any type of account in the name of a minor either
solely in his/her name or jointly with his/her guardian/s or other person/s.
Essential requirements for opening Minors Account:
For opening the account of a minor bank requires:
o Minors date of birth. The birth date of is ascertained and verified from
the Municipal Birth Certificate or Birth Certificate issued by the School
Authority where the minor is studying.
o Recording the date of birth and date of maturity in the
o Account opening form, specimen signature card and the ledger folio. Since
banks have computerized their operations the date of birth should be
recorded in the records maintained on computer.
o Date of birth to be recorded in the passbook and in all types of account
such as Current, Savings Bank, Term Deposit Receipt in case of Term Deposit
Accounts or Recurring Deposit maintained by the minor.
On the minor attaining majority necessary steps are taken to ensure that the account is properly
reconstituted if the account of a minor is held jointly with guardian/s or other person/s.
(1) Minors below 10 years of age:
Savings bank account can be opened in the name of a minor below 10 years of age in his own name, but
the minor cannot operate the account. The account is to be operated by father as natural guardian or
mother as guardian or by both of them. For all practical purposes, such accounts are treated as a single
account. The date of birth of minor is recorded on the application form. Signatures of the guardian
obtained even though he/she is not a joint accountholder.
In such cases, the account is styled as:
"Master ABC (Minor) through his Father and Natural Guardian Mr.XYZ." The mode of signatures in such
account is as under:
For Master ABC
XYZ
Father and Natural Guardian and/or Mother and Natural Guardian
Signatures of the natural guardian are obtained even though he/she is not a joint accountholder.
oOn attaining majority, the erstwhile minor is required to confirm the balance
in his/her account and if the account is operated by the natural guardian /
guardian, fresh specimen signature of erstwhile minor duly verified by the
natural guardian/ guardian is obtained and kept on record for all operational
purposes.
(2) Minor between the age of 10 to 14 years:
A minor of the age of 10 years and above can open Savings Bank and all types of term deposit accounts
in his sole name and can also operate the account. Many banks have fixed a limit of maximum balance in
accounts of minors, between the ages of 10-14 years.

3) Minor of 14 years of age and above:

There is no limit to maximum balance for savings bank accounts of minors above-14-years. A minor of 14
years of age and above can also open current account in his sole name, subject to following terms and
conditions:
o The minor should be able to read and write and in the opinion of the bank
officials is capable of understanding what he/she does.
o The account opening form, the application form, specimen signature card
etc., to be signed by the minor in the presence of a branch official and the
minor should be properly introduced by the guardian.
Joint Accounts of Minors:
Joint account in the names of two or more minors either jointly between themselves or with the natural
guardian/s or with any other person/s is not opened.
Account of Minor by legal guardian:
A legal guardian authorized by an order from the Court to specifically deal with the property of a minor,
can open an account in the name of the minor. All operations on such an account by the legal guardian
has necessarily to be for and on behalf of the minor in the capacity of a legal guardian. A legal guardian
cannot open account jointly with the minor in his personal capacity.
Accounts of Hindu minors where persons other than the guardians place deposits:
Deposits in the name of a Hindu minor placed by any person other than the natural guardian, as guardian,
is accepted only on the condition that the deposit would be payable to the minor on attaining majority.
Bank exercises proper care in such accounts.
.On minors attaining the age of majority i.e. 18 years:
.On attaining the majority the old Savings Bank account is closed and a new
account is opened wherein the name of the person who has attained majority is
included as one of the joint Account Holders and fresh operational instructions,
specimen signatures etc., are obtained.
2. Accounts of Married Women:
Marriage of woman does not affect any right of her separate property (Streedhan). Section 14 of the
Hindu Succession Act, 1956 provides that property of a Hindu female shall be her absolute property. A
Married woman has a legal entity of her own, which is separate from her husband. According to the Hindu
Marriage Act 1956,Hindu married women can have separate property in her own name. A married woman
can open accounts in her own name, operate freely and enjoy overdraft limit as long as the liabilities are
met out from her own property. At the time of opening the account in the name of a married woman the
name and occupation of her husband, details of his employer is obtained and recorded. Some banks also
obtain the maiden name of the married women.
A married woman can make her husband liable for the overdraft enjoyed by her
o If she borrows money for the necessities of her life,
o If she borrows for the necessaries of her house hold,
o If she acts as agent of he husband.
The status of the married women is governed by the following Acts:(a) Hindu Succession Act, 1956
(b) Married Women's Property Act, 1874
(c) Indian Succession Act, 1925
3. Account of Pardanasheen Women:
A pardanasheen women is a women who puts a veil and does not show her face to people /outsiders and
observes complete seclusion. Even they do not pose for photographs. Contract entered into by a
Pardanasheen Woman is not a contract free from all defects. Banks generally refuse to open accounts in
the name of Pardanasheen Women, because identity of Pardanasheen Women cannot be ascertained as
she observes complete seclusion.

However, if under special circumstances, such an account is opened, two respectable persons known to
the branch invariably attest the signatures on the account opening form and on the withdrawals by
withdrawal slips.
4.Accounts of the disabled persons with autism, cerebral palsy, mental retardation and multiple
disabilities:Banks can open account by the legal guardian and permit them to operate the account as
long as he remains the legal guardian appointed by the Local Level Committees set up under the
Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.
Vide circular No. RBI /2009-10/142 DBOD.No.Leg.BC. 37 /09.07.005/2009-10 dated September 2, 2009
Reserve Bank has advised banks to rely upon the Guardianship Certificate issued either by the District
Court under Mental Health Act or by the Local Level Committees under the above Act for the purposes of
opening / operating bank accounts. Banks have also been advised to give proper guidance so that the
parents / relatives of the disabled persons do not face any difficulty in this regard.
Appointment of guardian:
As per the Act, a parent or relative of a person with disability may apply to the Local Level Committee for
appointment of a guardian/or a person with disability. A registered organisation can also make such an
application with consent of the natural guardian of the disabled person. The Local Level Committee will
examine whether the person with disability needs a guardian and for what purpose and also lay down the
duties of the guardian. The guardian will be responsible for the maintenance of the person with disability.
5. Accounts opened by Illiterates:
Those who are unable to sign but use thumb impression are illiterates for banks. Illiteracy does not make
a person incompetent to contract. Therefore an illiterate person can open and operate a bank account.
However, banks do not open current account of illiterate person. For opening an account the person has
to come to bank personally along with a witness who is known both to the depositor and to the bank.
While opening an account banks obtain left hand thumb impression of illiterate men and right hand thumb
impression of illiterate female. The thumb impression is obtained in the presence of a person known to
the bank and the depositor.
The thumb impression is to be witnessed by a customer of the bank and noting to this effect is done
(left/right thumb impression of Mr./Ms. affixed in my presence). Photograph of the account holder is
obtained which is affixed on the ledger folio, account opening form and pass book.
Normally, no chequebook is issued to the account holder. The account holder has to come to the bank for
operating the account. After proper identification banks pay the amount to the account holder. All other
terms and conditions applicable for opening an account also apply in this case. Banks are required to
explain the terms and conditions governing the account to the illiterate.
6.Opening of accounts by a person who can not sign due to loss of both hands:
A handicapped person is not barred from opening an account. Bank branches entertain the requests from
handicapped persons for opening their accounts. After observing all account opening norms and obtaining
the photograph of the handicapped person, bank opens account.
IBA has advised banks In terms of the General Clauses Act, the term Sign with its grammatical
variations and cognate expressions, shall with reference to a person who is unable to write his name,
include mark with its grammatical variations and cognate expressions. The Supreme Court has held in
AIR 1950 Supreme Court, 265 that there must be physical contact between the person who is to sign
and the signature can be by means of a mark. This mark can be placed by the person in any manner. It
could be the toe impression, as suggested. It can be by means of mark which anybody can put on behalf
of the person who has to sign, the mark being put by an instrument which has had a physical contact with
the person who has to sign.
In case the person has lost both hands bank obtains his/her toe impression (either right or left) on the
relevant forms in presence of bank officials and a witness. As an alternative, the person is also advised to
give a suitable power of attorney to a person of his/her confidence.
7. Opening of Accounts by visually impaired (blind) person:

A blind person is legally competent to enter into a contract or to open and operate an account. The risks
in case of such an account arises due to the physical inability of the person to see. For opening an
account, the person has to personally come to the bank along with a witness known to both the depositor
and the bank.
While there is no legal provision for the appointment of a guardian of a blind person, banks prefer a
properly constituted attorney to operate the account on behalf of the accountholder. Attested copies of the
photograph of the blind person are obtained (attested by someone well known to the branch) and a copy
of each is affixed on the account opening form/specimen signature card, ledger folio and pass book. Both
the signature and thumb impression of the blind person are obtained on the specimen signature card
along with the signatures of witnesses known to the bank. A rubber stamp indicating that the
accountholder is a blind customer, is affixed on the account opening form, specimen signature card,
ledger folio, pass book, paying- in-slip, withdrawal form, chequebook etc. This enables bank officials in
exercising caution in the transactions with the blind customers. Bank is required to explain the terms and
conditions governing the account to the blind person. In general the blind customers are given special
attention whenever they come to the bank.
Precautions:
o While opening an account the blind person has personally to come to bank.
o He can open all types of accounts either singly or jointly with any other
person, which he considers to be reliable.
o While opening the account, rules, regulations, terms and conditions are read
out and explained to him in the presence of a witness and the signature of
the witness of having done this is obtained on the account opening form.
Operations in accounts by blind persons:
o Banks allow the next of kin of a blind customer to operate his account as a
guardian or a representative of the blind person.
o Generally no chequebook is issued. Where chequebooks are issued, the blind
person is advised to issue only crossed and order cheques and not to issue
bearer cheques so that payees could always be traced.
o Cash payments to blind person are made in person in the presence of a
witness (preferably an account holder) who signs the cheque/withdrawal
form/voucher etc., as witness. Branch official, other than paying cashier,
also signs as a witness.
o Cash deposited by the blind customer is accepted in the presence of a
witness (an account holder or an officer of the branch other than the
receiving cashier) and the amount deposited is informed orally to him. This
fact is noted on the pay- in -slip/voucher and under signature of a witness.
o The blind account holder is required to bring passbook for withdrawal and
the entries and balance are read out to him in confidence
RBI guidelines for providing banking facilities to Visually Impaired Persons:
RBI has advised banks to offer banking facilities including cheque book facility / operation of ATM, Net
banking facility, locker facility, retail loans, credit cards etc. to the visually challenged without any
discrimination as they are legally competent to contract.
In the Case No. 2791/2003, the Honourable Court of Chief Commissioner for Persons with Disabilities
had passed Orders dated 05.09.2005 that banks should offer all the banking facilities including cheque
book facility, ATM facility and locker facility to the visually challenged and also assist them in withdrawal of
cash. In the above Order, the Honorable Court has observed that visually impaired persons cannot be
denied the facility of cheque book, locker and ATM on the possibility of risk in operating / using the said
facility, as the element of risk is involved in case of other customers as well.
8.Accounts by Old & Incapacitated Persons:

It is possible that with aging or due to sickness or a person becoming is incapacitated he /she is unable to
operate account and is not willing to open and operate joint accounts. RBI has advised banks to extend
the facility offered to sick/old/incapacitated pension account holders to non-pension account holders also.
Types of sick / old / incapacitated account holders:
Sick / old / incapacitated account holders fall into following categories:
(a) An account holder who is too ill to sign a cheque / cannot be physically present
in the bank to withdraw money from his bank account but can put his/her thumb
impression on the cheque/withdrawal form
(b) An account holder who is not only unable to be physically present in the bank
but is also not even able to put his/her thumb impression on the
cheque/withdrawal form due to certain physical incapacity.
Operational Procedure:
With a view to enabling the old / sick account holders operate their bank accounts, banks may follow the
procedure as under: (a)Wherever thumb or toe impression of the sick/old/incapacitated account holder is
obtained, it should be identified by two independent witnesses known to the bank,
one of whom should be a responsible bank official.
(b)Where the customer cannot even put his / her thumb impression and also would not
be able to be physically present in the bank, a mark can be obtained on the
cheque / withdrawal form which should be identified by two independent witnesses,
one of whom should be a responsible bank official.
(c)The customer may also be asked to indicate to the bank as to who would withdraw
the amount from the bank on the basis of cheque / withdrawal form as obtained
above and that person should be identified by two independent witnesses. The
person who would be actually drawing the money from the bank should be asked to
furnish his signature to the bank.
9.Accounts of Lunatics:
As per Contract Act, a person of unsound mind is not capable of entering into a valid contract. Banks
therefore, do not knowingly open an account in the name of a person of an unsound mind.
In case of an existing account, as soon as the information about insanity of the accountholders is
received, banks suspend / stop operations in the account and do not pass cheques. When the proof of
customer's sanity is received, operations in the account are resumed.
An account in the name of a lunatic person can be opened or operated only by a guardian appointed by a
competent Court and the balance of such accounts is paid to the person appointed by the competent
court.
10.Accounts of Insolvents:
A person when fails to pay his debts is declared insolvent by the court. As soon as a person is declared
insolvent, operations in his existing account is stopped forthwith and balance of such accounts are
disposed as per the instructions of the Official Receiver. Insolvency of an accountholder revokes the
bank's authority to pay the cheques drawn by him and the balance at credit of the account and the entire
estate of the insolvent vests in the official receiver appointed by the court.
Declaration of insolvency renders invalid all the transactions entered into subsequently and already
entered into within six months. Banks do not open insolvents account nor advance money to an undischarged insolvent. During the pendency of insolvency proceedings, no creditor can have any remedy
against the property of the insolvent in respect of his debts or commence any suit or legal proceedings
against the property without the leave of the Court. Insolvency of an agent does not affect the relationship
of the principal and agent
11. Accounts of Drunkards:
Intoxicated person cannot take a rational judgment about his interest. State of intoxication renders a

person incapable of understanding the nature of his action. Therefore, the law provides that all the
contracts made by a person in a drunken state are void.
When a drunkard approaches the branch of a bank for opening an account, the branch if satisfied that the
person is incapable of entering into a contract refuses to open the account as a precautionary measure.
In case of an existing account, payment of a cheque to a drunkard is done after taking proper witness.
12. Accounts of Hindu Undivided Families (HUF):
The Hindu Succession Act 1956 governs HUF. The HUF carries out ancestral business and possesses
ancestral properties.
As per Hindu Law two schools of thought, Dayabhaga and Mitakshara govern Hindu undivided family. In
west Bengal Dayabhaga is followed and in the rest of the country Mitakshara is followed. In Dayabhaga
the father acquires absolute right and sons do not acquire any right by birth in Mitakshara a male member
acquires the right by birth. Female members are not co-parceners except in Tamil Nadu and Andhra
Pradesh.
The eldest male member is called as a Karta and all other male members are called as co-parceners. The
right to manage HUF property vests in the 'Karta' of the family. Karta is either the father or the senior most
male member of the family. All other male members are called coparceners.
In the interest of the family and family business, only the Karta can create a charge over the ancestral
property. However, he cannot make a contract, which binds the other member personally. Other members
are responsible to the extent of their share in the ancestral property.
HUF is not dissolved In the event of death of one of the members of the joint Hindu family. It differs from
the partnership firm as on the death of one of the partners, the firm is dissolved. On the death of karta the
senior most co-parcener becomes karta.
A coparcener continues to be a member of HUF, even after his migration outside India and acquiring
status of NRI or taking citizenship of another country.
If the Karta himself migrates, an alternative Karta of the HUF is appointed by the HUF with consent from
all coparceners.
Opening of Account of HUF:
The account is opened in the name of the Karta and family business. The Karta and all the adult
members of the HUF are required to sign the account opening form. Banks do not open Savings Bank
account of HUF engaged in trading and business activities
Operations in account:
The operations in the account are normally restricted to Karta of the family. The Karta can appoint any of
the adult coparceners to operate the bank account as 'Manager' if HUF carries out business at various
places through its branches.
HUF accounts can also be operated by coparcener and /or other adult members of HUF also, against a
letter of authority and against a stamped letter of indemnity cum undertaking give by the Karta. Since
female members in an HUF are not coparceners, they cannot be authorised to operate bank account. If
there is no adult coparcener, a mother is allowed to manage the property of HUF and operate the
account.
13. Account of Sole Proprietary Concerns:
Banks do not open savings bank account in the name of a proprietorship firm but open current account in
the name of the sole proprietary concerns. Accounts in the name of a sole proprietary concern are treated
like individual accounts. The account can be operated either by the proprietor himself or by a person duly
authorised to operate the account on his behalf. Banks exercise caution while accepting cheques drawn
in favour of the sole proprietary concern and deposited in personal account of the proprietor.
When the sole proprietor of the firm deposits cheque payable to the firm for credit of his personal account
bank obtains a declaration from him to the effect that he is the sole proprietor of the firm.
14.Accounts of Unincorporated Associations:
Banks open accounts of unincorporated associations and clubs started for purposes of sports, recreation,

promotion of fine arts, education etc. Accounts are opened for reliable ad reputed parties. These
unincorporated associations have no legal entity. While opening the account in the name of the
association, bank makes detailed inquiry into the existing rules, regulations and byelaws governing such
associations. All usual formalities for opening the account are adhered by the bank viz. obtaining accountopening form, specimen signature card etc.
Bank also obtains certified copy of the resolution passed by the Governing Body or the Managing
Committee of the club/ association for opening of the account in the bank and names of the office bearers
authorised to open and to operate the account on behalf of the club/ association duly certified by the
Chairman are obtained.
Banks generally do not permit account to go into debit, even for temporary period. Bank does not collect
cheques in the personal accounts of the office- bearers, payable to associations.
15.Accounts of registered societies, clubs and Associations:
A club or a society gets legal entity only when it is incorporation under Companys Act, 1956 or under
Cooperative Societies Act, 1860.Byelaws of the society, clubs, and association contain rules, regulations
or conduct and activities of the association. While opening account banks obtain:
o Copy of the byelaws;
o Copy of resolution passed by the managing committee regarding opening and
conduct of account,
o Certificate of registration in original,
o A list of the Managing Committee members
o Copies of resolutions electing them as Committee members duly certified by
the Chairman
Bank keeps a copy of the above-mentioned document for its record.
16.Account of Partnership Firms:
According to Section 4 of the Indian Partnership Act, a partnership is the relationship between persons
who have agreed to share the profits of a business carried on by all or any of them acting for all.
The Supreme Court has held that the word "persons" in Section-4 contemplates only natural or artificial
persons i.e., legal persons. Since a firm is not a person, is not entitled to enter into partnership with
another firm or Hindu undivided family or individual. Therefore, banks do not open account where a firm is
a partner in another firm. As Joint stock companies and statutory bodies constitute "artificial or legal
persons" therefore, they can be partners in a partnership firm.
As per the Indian Partnership Act, minimum number of partners can be two and maximum twenty. The
number of partners is restricted to 10, if the partnership firm carries out business of banking. Minors can
be admitted as partner only to the benefits of the partnership.
Registration of partnership firm:
A partnership firm can be registered with Registrar of Firms. However, as per law, it is not compulsory to
register a partnership firm. Non-registered partnership firm have certain disabilities. Such firms cannot
sue others to enforce a right arising out of a contract. A suit filed by an unregistered partnership firm is not
maintainable, even after its subsequent registration. Even partners of an unregistered firm cannot sue
other partners or his firm, for their rights.
Opening of Account:
A partnership firm can open all types of accounts except savings bank account. Bank opens account of a
partnership firm in the name of the firm and not in the names of partners individually or jointly. The
account opening form is signed by all the partners in their individual capacity as well as in the capacity of
a partner to ensure joint and several liabilities. While opening the account banks verify the partnership
deed to examine whether any clause of the deed is detrimental to the interest of bank. Since bank would
not like to be bound by the terms of the partnership deed, banks do not accept the partnership deed even
if offered.
In case of registered firm, banks obtain registration certificate. The account is opened in the name of the

firm and all the partners are required to sign account opening form.
Operations in account:
Bank obtains operational instructions i.e. who will operate the account and how it is to be operated. In
case a minor is also a partner in the firm his birth certificate is obtained to ascertain the date of birth,
which is recorded in the account opening form.
Who can operate?
o All partners jointly
o One of the named partners
o Two / three of the named partners
o A third party under a mandate letter or a power of attorney signed by all
the partners.
A partner authorised to operate the firm's account cannot delegate his authority to another person unless
all other partners agree. The authority given to operate the account can be withdrawn by any of the other
partners including dormant or sleeping partner by giving notice to the bank. Each partner, whether he/she
is operating the account or not, has powers to countermand payment of the cheques drawn by another
partner or by an attorney on behalf of the firm.
Partnership firms with illiterate partners:
Current accounts of partnership firms, where a partner is illiterate and affixes thumb impression, can be
opened provided a Magistrate attests the thumb impression affixed on the account opening form.
Implied authority:
A partner acts as an agent of the firm for the purpose of the business of the firm. He binds the firm and
also other partners by his acts. An authority to bind the firm by his acts is called the implied authority of a
partner.
Operations in the accounts:
Without proper inquiry with the other partners, bank does not accept cheque drawn in favour of the firm
for credit to the personal account of a partner. Failure to make proper inquiries would deprive the bank of
the protection afforded under Section-131 of the Negotiable Instruments Act on grounds of negligence.
Cheques payable to a partner are not be credited to the firms account without proper inquiry being made
with the other partners.
Retirement of a partner:
On notice of retirement of a partner, the bank closes the existing account and opens a new account of the
firm with the remaining partners or along with the new partner if admitted to the new firm.
Death of a partner:
o Death of a partner dissolves the partnership. However, for the purpose of
winding up of the firm, the bank may allow the surviving partner(s) to
operate the firm's account, if the account is in credit.
o Cheques drawn by a partner before his death and presented for payment are
honoured after obtaining confirmation of the surviving partners.
Dissolution of a partnership firm:
Dissolution of a firm amounts to the breaking up of relation of partnership between all the partners. In the
event of dissolution banks do not permit operations in the account. A partnership firm may be dissolved by
any of the following modes
(a) By mutual agreement between all the partners.
(b) By notice of dissolution in case of partnership at will.
(c) By operation of law or compulsory dissolution of the firm.
(d) By happening of certain contingencies such as death or insolvency of a partner.
(e) Dissolution by Court of Law in cases like insanity, permanent incapacity,
misconduct of a partner affecting business etc.
17.Accounts of Co-Operative Societies & Co-Operative Banks:

Co-operative institutions are authorised to open accounts under the Cooperative

Societies Act only with banks, which are recognised for the purpose. Our Bank has been recognised for
accepting funds of co-operative societies. It is, however, for the co-operative society or the co-operative
bank to obtain permission from the Registrar of Co-operative Societies in the State concerned to invest
their funds in the Bank. The bank is not affected by the omission on the part of the society or the cooperative bank to obtain the Registrar's permission to open the account or even to observe the limits
imposed on it by the Registrar on the amount and period of the deposit lodged with the Bank. These are
matters of internal routine of the co-operative institution, whose compliance can be presumed by the
Bank. While opening the account, the branch should call for the following documents:
(i) Certificate of registration of the society or the Bank;
(ii) Certified copy of the byelaws of the society or the Bank;
(iii) Resolution of the managing committee appointing the Bank as its banker and
stipulating the conditions for the conduct of the account.
(iv)List of members of the managing committee with the copy of the resolution
electing them to the committee.
In case of accounts of co-operative banks, bank obtains a copy of the licence issued by RBI.
18.Accounts of Joint Stock Companies:
A joint stock company is constituted under company Act 1956. Company is an Artificial person with
perpetual succession. It is a voluntary association of persons formed for some common purpose with
capital divisible into parts known as share. It has separate legal entity and corporate personality. It is
separate from the shareholders constituting it.
The company can own assets; contract debts and can sue and be sued in its own name. The property of
the company is not the personal property of its shareholders nor the company's liability is the liability of its
shareholders/directors, unless they consent to be personally liable for the company's debts.
Company can be classified into three categories:
1.Public Ltd. Co.:
It can issue shares to public.
Minimum number of shareholders required is 7.
There is no restriction in the maximum number of shareholders.
Shares can be freely transferred.
Minimum number of directors required is 3
Requires certificate of commencement of business.
2.Private Ltd.Co.:
It can not issues shares to public.
Shares are not freely transferable.
Minimum number of shareholder required 2 and maximum number of share holders can
be 50.
Minimum number of directors required 2.
It does not require certificate of commencement of business.
3.Government Co.:
A company where not less 51% of the share capital is held by the government.
Depending upon the liability of shareholders the Company it may be limited or
unlimited.
Documents required for opening an account:
1. Account opening form
2. Certified copies of memo of association and articles of association
3. Copy of certificate of incorporation

4. Certificate of commencement of Business

5. Up-to-date list of directors with name and address
6. Certificated copy of a resolution of the Board of directors for opening and
conducting the account.
Documents obtained by bank:
For opening an account of a joint stock company bank obtains following documents:
(i) Certificate of incorporation:
The Registrar of Joint Stock Companies issue this certificate. It is a
conclusive proof that all the requirements under the Companies Act have been
complied with.
(ii) Certificate of commencement of business:
This certificate is essential in the case of public limited companies. A
public limited company cannot borrow until this certificate is obtained.
(iii) Memorandum and Articles of Association:
The bank obtains a certified copy of the Memorandum and Articles of Association
of the company to satisfy that the conduct of the account is in conformity with
the provisions. Certificates signed by the Chairman or one of the authorised
directors of the company stating that the Memorandum and Articles of Association
are true and up-to date.
(iv) Board Resolution:
A copy of the resolution of the Board of Directors of the company, certified as
true by the Chairman of the meeting, requesting the Bank to open an account in
its name and specifying the instructions regarding the conduct thereof, is
obtained. Instructions in the resolution regarding conduct of the account have to
be in strict conformity with the provisions of companys Articles of Association.
The resolution is to be countersigned either by the company's secretary or any of
the other directors.
(v) List of the present directors:
A list of the present directors of the company is obtained under the signature of
the Chairman, accompanied by a certified copy of the resolution of the general
body of the shareholders appointing them as directors.
(vi) Reference to the company's previous bankers:
Banks also ascertain the names and addresses of the companys previous bankers,
if any, and get a report on the company and its directors and keep it along with
the account opening form.
Memorandum of Association:
The memorandum of association contains name and address of the registered office of the company,
name and addresses of the directors, objectives and powers of the company. Any act done or contract
entered into by the company, which is outside the scope of these objectives becomes ultra vires (i.e.
beyond the powers of the company) and, therefore, is not binding on it.
The Memorandum and Articles of Association of the company is studied to find out the extent of the
powers of its directors, its powers to borrow and mortgage property or to give guarantees and the
provisions relating to the conduct of its bank accounts
Articles of Association:
The Articles of Association contain the rules regulations regarding company's internal affairs.
Conversion of cheques payable to companies:
Cheques payable to or endorsed by limited companies should not be collected for the personal accounts
of their directors, managers and other employees. Ordinarily, cheques payable to limited companies are
to be credited to companys account.

Insolvency of a director:
In case one of the directors becomes insolvent or an un-discharged bankrupt, he cannot act as a director
of a limited company. The bank does not permit operations in the account by the insolvent director.
Winding up of a company:
Winding up of a joint stock company is deemed to have commenced from the date on which petition for
such winding up is presented, or in the case of voluntary winding up from the date on which an extra
ordinary resolution to this effect is passed. With commencement of winding up of a joint stock company,
the Directors cease to have powers to operate on the account and the authority stands vested with the
liquidator appointed for the purpose. Therefore banks do not pay cheques signed by the directors after
the commencement of the winding up proceedings. Liquidator should furnish evidence of his appointment
by sending a certified copy of the Court Order, or a certified copy of the resolution of the general body in
case of a voluntary winding up. If required, he may be furnished with details of the company's accounts,
securities etc., and should be allowed to operate upon the accounts of the company only for the purpose
of winding up of its affairs.
19.Accounts of Private Companies:
A private limited company is a company, which have a minimum 2 and maximum 50 shareholders. Shares
of these companies are not sold in the public and cannot be transferred. Banks are cautious while
opening accounts of Pvt. Ltd.Co. Bank obtains all documents as required while opening accounts of a
joint stock company.
20. Accounts of Trusts:
As per Sec.3 of Indian Contract Act, 1882 A trust is an obligation annexed to the ownership of property,
and arising out of a confidence in and accepted by the owner, or declared and accepted by him, for the
benefit of another, or of another and the owner.
Bank opens trust accounts for good parties. A trust can be public or private. All public trusts are required
to be registered with the Charity Commissioner under Public Trust Act of the respective state.
Before registering a public trust, the office of the Charity Commissioner makes necessary enquiries
regarding the trust, its trustees, the mode of succession of trusteeship etc., and after proper enquiries
makes entries in the register, which are final, conclusive and are binding on all concerned. Banks open
trust accounts after taking all precautions.
While opening account of a trust bank obtains
o Copy of constitution of the trust
o Trust deed if available,
o Certificate of registration and/or a certified copy of the entry of the
public trusts register
o Public Trust Register No
o A list of the current trustees and the authority appointing them as trustees.
o The necessary resolution passed by the trustees for opening the account
with the bank.
o Certified copy of the resolution signed by all the trustees in regard to
the conduct of the account.
Trusts which have no constitution, instruments of trust or scheme:
While opening accounts of such trusts bank obtains following documents:
A certificate of registration issued by the office of the Deputy/Assistant
Charity Commissioner (Where it is so possible, under the relative law).
A certified copy of the latest entry in the public trusts register (Public
Trust Registration), which shows the name of the trust, the Public Trust
register No of the Trust, at which it is registered and name/s of the
trustee/s.
A declaration and an indemnity from are obtained all the trustees.

 A resolution passed by the trustees relating to the opening of the account

Operations:
Trust accounts must be opened and conducted strictly in accordance with the terms of the trust deed. All
the trustees are required to act jointly by the persons so authorised by the registered trust deed. Trustees
have no powers to delegate their authority to one or more unless the power of delegation is authorised by
the trust deed or is in accordance with the directions of the court on an application made by the trustees.
Trustees have no implied authority to borrow or pledge trust property, unless so provided for in the trust
deed.
Death of a trustee:
On the death of one of the trustees, the trust property passes to the other trustees as per the provisions of
the trust deed. If the deceased is the sole trustee, his executor has no right to recover the trust money.
The executor, however, has the right to appoint a new trustee, provided the deceased trustee has in his
will specifically authorised such an appointment.
21. Accounts of Religious and Charitable Trusts:
To regulate public religious and charitable trusts some States have passed Acts. These charitable trusts
are registered with the Charity Commissioner or the Assistant Charity Commissioner of the region
concerned. A Certificate of registration is issued to these trust by the authorities. Mostly these trusts do
not have a properly written trust deed. Bank opens account of religious and charitable trusts on merits
and on being satisfied as to the integrity of the trustees and their status.
Opening and operations of account:
While opening account bank obtains following documents in addition to account opening form duly signed
by the trustees.
A resolution specifying the name of the bank passed in a proper meeting held
by all the trustees.
Indemnity signed by all the trustees, indemnifying the bank for having
allowed operations on the trust account.
Banks do not permit operations in the account by one person.
Reasonable number of members is required for opening and operating the
account.
If the number of trustees is larger, then the number of person operating the
account has to be large.
Bank periodically obtains confirmation of balance in the account, signed by
all the trustees.
Wherever possible, order or direction from the Charity Commissioner is
obtained, permitting the bank to allow operations on the trust account in the
manner approved by the trustees.
22.Provident fund Accounts:
Provident fund accounts are treated as trust accounts. In case a provident fund is recognised by the
income tax authorities, a certificate to that effect issued by the concerned Commissioner of Income Tax,
should be obtained for registration with the Bank. It should be recorded in the Power of Attorney Register.
This certificate is to be obtained in addition to all other credentials mentioned earlier.
23.Accounts of Executors and Administrators:
Executors and administrators are persons appointed by a person through a will to mange the affairs of his
estate after his death. The person appointing an executor in his will is known as testator. There can be
more than one executors or administrators. Sec.311 of Indian Succession Act, 1925 deals with the powers
of several executors or administrators exercisable by one.
If the person has not appointed any one to manage the affairs of his estate after his death court appoints
administrator for the purpose.
An administrator drives power to deal with the estate of the deceased from the letters of administration

issued by the Court. The estate of the deceased vests in the executor from that date of letters of
administration. Banks generally do not permit an executor to deal with the moneys or securities of the
deceased until he produces the probate as the evidence for his title. In law, executors and administrators
constitute a single person. In the absence of any mandate to the contrary, either or any one of the two or
more executors or administrators can open and operate the account and deal with the estate of the
deceased without a written authority from the others.
Opening of Account of Executors and Administrators: Bank obtains account opening form duly
signed by all the executors or administrators and obtains clear instructions as to the manner in which the
account will be operated.
Bank also obtains copy of probate or letters of administration in original
for scrutiny and registration in their books.
Bank ascertains identity of executors or administrators for their
satisfaction. (KYC norms)
An executor or administrator has no right to delegate his authority to an outside party, not being coexecutor or administrator. Any one of the executors or administrators can countermand the actions of the
others. Cheques drawn or payable to the executor or administrator's account are not collected for credit of
their personal accounts without inquiry.
24.Accounts of Liquidators:
A company can go into liquidation either voluntary or by the orders of court. Incase a company goes in to
liquidation by the orders of court, it appoints a liquidator Under Section 552 of the Companies Act, 1956.
The liquidator so appointed by courts is known as official liquidator. When a company goes into voluntary
liquidation, it appoints liquidators at its extraordinary general meeting convened for the purpose. Official
liquidators have to deposit the moneys only into the public account of the Government of India with the
Reserve Bank of India. Official liquidator cannot open accounts with scheduled banks. In case of
voluntary winding up, authority to operate account by the liquidator is passed in the general meeting.
Opening of account:
While opening account of liquidators bank requires:
o True copy of the resolution passed in the extraordinary general meeting.
o The resolution has to be certified by the Chairman of the extraordinary
general meeting
o Signature of the liquidator is required to be verified by one of the
authorised officials of the company concerned.
o Liquidators cannot delegate their powers to third parties
o The account is styled as "The Liquidation Account of ........"(name of the
company).
26. Accounts of local bodies:
Banks open accounts of local bodies include Municipal Corporation, Panchayat, Board etc., created by
special act of the parliament or legislative Assembly.
a) Accounts of Village Panchayats:
Banks open accounts of village panchayats/district/taluka after getting a copy of the resolution passed by
the Panchayat of the Village or Taluka of the District concerned.
In various states the village panchayat are governed by the Panchayat Raj Acts passed by the respective
state governments.
While opening such accounts banks refer to the Act for ascertaining the nature of transactions permitted
by the Act. The accounts of village panchayats are operated only bythe President or Sarpanch. The VicePresident (Vice Sarpanch) of thePanchayat can operate the account only in the absence of the President
(Sarpanch) only after the written authority of the sarpanch.
Accounts of village panchayats/district/taluka are opened and styled as
"President (or Sarpanch).........Gram/Panchayat".

b) Accounts of Local Authorities/bodies:

Banks open accounts of local authorities like municipalities, district boards, port trust, state financial
corporations and such bodies created by statute. These are considered as local bodies or quasigovernment institutions. While opening accounts of such authorities banks go through the municipal
enactments and regulations. Transactions in account are permitted strictly in accordance with the
statutory provision.

Know Your Customer

Know Your Customer (KYC) is the due diligence and bank regulation that financial
institutions and other regulated companies must perform to identify their clients and
ascertain relevant information pertinent to doing financial business with them.
Know your customer policies are becoming increasingly important globally to prevent
identity theft fraud, money laundering and terrorist financing.
A key aspect of KYC controls is to monitor transactions of a customer against their
recorded profile, history on the customers account(s) and with peers.
The objective of KYC guidelines is to prevent banks from being used, intentionally or
unintentionally, by criminal elements for money laundering activities.
Banks should frame their KYC policies incorporating the following four key elements:
Customer Acceptance Policy
Customer Identification Procedures
Monitoring of Transactions
Risk management
Know Your Customer processes are also employed by regular companies of all sizes, for
the purpose of ensuring their proposed agents', consultants' or distributors' anti-bribery
compliance.

Anti Money Laundering

Money laundering is the practice of disguising the origins of illegally-obtained money.
Money laundering often occurs in three steps:

cash is introduced into the financial system by some means (placement)

the second involves carrying out complex financial transactions in order to

camouflage the illegal source (layering)

the final step entails acquiring wealth generated from the transactions of the illicit
funds (integration).
Anti money laundering (AML) is a term mainly used in the financial and legal industries to
describe the legal controls that require financial institutions and other regulated entities to
prevent or report money laundering activities.
Today, most financial institutions globally, and many non-financial institutions, are required to
identify and report transactions of a suspicious nature to the financial intelligence unit in the
respective country.
A bank must perform due diligence by verifying a customer's identity and monitor
transactions for suspicious activity.

CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship management (CRM) is an approach to managing a companys
interaction with current and future customers. It often involves using technology
to organize, automate, and synchronize sales, marketing, customer service,
and technical support.
CHARACTERISTICS
CRM is a customer-oriented feature with service response based on customer input,
one-to-one solutions to customers' requirements, direct online communications with
customer and customer service centers that are intended to help customers solve their
issues. It includes the following functions:

Sales force automation, which implements sales promotion analysis, automates

the tracking of a client's account history for repeated sales or future sales, and
oordinates sales, marketing, call centers, and retail outlets.
Data warehouse technology, used to aggregate transaction information, to merge
the information with CRM products, and to provide key performance indicators.

Opportunity management which helps the company to manage unpredictable

growth and demand, and implement a good forecasting model to integrate sales
history with sales projections.

CRM systems that track and measure marketing campaigns over multiple
networks, tracking customer analysis by customer clicks and sales.

IMPACT ON CUSTOMER SATISFACTION

According to Bolton, customer satisfaction has significant implications for the economic
performance of firms,because it has been found to increase customer loyalty and usage
behavior and reduce customer complaints, and the likelihood of customer defection.
The implementation of CRM is likely to have an effect on customer satisfaction for at
least three reasons:
Firstly, firms are able to customize their offerings for each customer. By accumulating
information across customer interactions and processing this information to discover
hidden patterns, CRM applications help firms customize their offerings to suit the
individual tastes of their customers.This customization enhances the perceived quality
of products and services from a customer's viewpoint, and because perceived quality is
a determinant of customer satisfaction, it follows that CRM applications indirectly affect
customer satisfaction.
Secondly, CRM applications enable firms to provide timely, accurate processing of
customer orders and requests and the ongoing management of customer accounts. For
example, Piccoli and Applegate (2003) discuss how Wyndham uses IT tools to deliver a

consistent service experience across its various properties to a customer. Both an

improved ability to customize and a reduced variability of the consumption experience
enhance perceived quality, which in turn positively affects customer satisfaction.
Thirdly, CRM applications also help firms manage customer relationships more
effectively across the stages of relationship initiation, maintenance, and termination.
Customer Relationship Management in Banks

Customers tend to have products and services from multiple product areas across a
Bank. It is important to bridge these divisions both from the Banks perspective so that
a group wide view of customer risk can be assembled and from a customer
perspective so that a single customer isnt faced with myriad service personnel.
Given these requirements CRM is a vital part of Banking Operations. We have
disaggregated this operational area into three key units.
Customer Risk
Customer Static
Contact Management

Customer Risk
For Credit Products this relates to how much the Group is owed by a customer and
what the risk of default is. This should be managed outside of the individual lending
product areas;
Personal Banking, Credit Cards, Mortgages
Business Banking, Asset Finance, Capital Markets

Similarly once a customer is in default, the recovery process should be undertaken on a

Group-wide view.
For Insurance products this relates to the expected value of claims aggregated over the
different insurance products.
For both classes of product there is also an assessment as to the likelihood of fraud.
Customer Static
Master information relating to customer data ought to be clearly known.
Personal e.g. name and address, relationships
Business e.g. legal entity hierarchies
This data is typically stored many times in many product engines in a large financial
services group, normally incorrectly in some of them.
Contact Management
An individual customer talks to one institution/brand about a number of products and
services and will do so through several delivery channels and will probably have to talk
to multiple departments. Furthermore, things may happen to the customer (e.g. receipt

of a very large payment). Bringing together the entire customer contacts and events
into a group level customer contact system is an important aspect of providing service.
PORTFOLIO AND WEALTH MANAGEMENT
What is a Portfolio ?
A portfolio refers to a collection of investment tools such as stocks, shares, mutual
funds, bonds, cash and so on depending on the investors income, budget and
convenient time frame.
Following are the two types of Portfolio:
1. Market Portfolio
2. Zero Investment Portfolio
What is Portfolio Management ?
The art of selecting the right investment policy for the individuals in terms of minimum
risk and maximum return is called as portfolio management.
Portfolio management refers to managing an individuals investments in the form of
bonds, shares, cash, mutual funds etc so that he earns the maximum profits within the
stipulated time frame.
Portfolio management refers to managing money of an individual under the expert
guidance of portfolio managers.
In a laymans language, the art of managing an individuals investment is called as
portfolio management.
Need for Portfolio Management
Portfolio management presents the best investment plan to the individuals as per their
income, budget, age and ability to undertake risks.
Portfolio management minimizes the risks involved in investing and also increases the
chance of making profits.
Portfolio managers understand the clients financial needs and suggest the best and
unique investment policy for them with minimum risks involved.
Portfolio management enables the portfolio managers to provide customized
investment solutions to clients as per their needs and requirements.

Types of Portfolio Management

Portfolio Management is further of the following types:

Active Portfolio Management: As the name suggests, in an active portfolio

management service, the portfolio managers are actively involved in buying and
selling of securities to ensure maximum profits to individuals.
Passive Portfolio Management: In a passive portfolio management, the
portfolio manager deals with a fixed portfolio designed to match the current
market scenario.

Discretionary Portfolio management services: In Discretionary portfolio

management services, an individual authorizes a portfolio manager to take care
of his financial needs on his behalf. The individual issues money to the portfolio
manager who in turn takes care of all his investment needs, paper work,
documentation, filing and so on. In discretionary portfolio management, the
portfolio manager has full rights to take decisions on his clients behalf.

Non-Discretionary Portfolio management services: In non discretionary

portfolio management services, the portfolio manager can merely advise the
client what is good and bad for him but the client reserves full right to take his
own decisions.

Who is a Portfolio Manager ?

An individual who understands the clients financial needs and designs a suitable
investment plan as per his income and risk taking abilities is called a portfolio manager.
A portfolio manager is one who invests on behalf of the client.
A portfolio manager counsels the clients and advises him the best possible investment
plan which would guarantee maximum returns to the individual.
A portfolio manager must understand the clients financial goals and objectives and offer
a tailor made investment solution to him. No two clients can have the same financial
needs.
WEALTH MANAGEMENT
Wealth management as an investment-advisory discipline incorporates financial
planning, investment portfolio management and a number of aggregated financial
services. High-net-worth individuals (HNWIs),small-business owners and families who
desire the assistance of a credentialed financial advisory specialist call upon wealth
managers to coordinate retail banking, estate planning, legal resources, tax

professionals and investment management. Wealth managers can have backgrounds

as independent Chartered Financial Consultants, Certified Financial
Planners or Chartered Financial Analysts (in the USA), Chartered Strategic Wealth
Professionals (in Canada), Chartered Financial Planners (in the UK), or any
credentialed (such as MBA) professional money managers who work to enhance the
income, growth and tax-favored treatment of long-term investors.
Private wealth management is delivered to high-net-worth investors. Generally this
includes advice on the use of various estate planning vehicles, business-succession or
stock-option planning, and the occasional use of hedging derivatives for large blocks of
stock.
Traditionally, the wealthiest retail clients of investment firms demanded a greater level of
service, product offering and sales personnel than that received by average clients.
With an increase in the number of affluent investors in recent years, there has been an
increasing demand for sophisticated financial solutions and expertise throughout the
world.

Non fund based facilities

The credit facilities given by the banks where actual bank funds are not
involved are termed as 'non-fund based facilities'.
Letter of Credit
Guarantee
Pledge
Mortgage
Hypothecation

Letter of Credit

Article 2 of UCPDC defines a letter of credit as under:

The expressions "documentary credit(s) and standby letter(s) of credit used
herein (hereinafter referred to as "credit(s)" means any arrangement,
however, named or described whereby a bank (the issuing bank), acting at
the request and on the instructions of a customer (the applicant of the credit)
or on its own behalf.
Letter of credit is a written undertaking by a bank (issuing bank) given to the
seller (beneficiary) at the request and in accordance with the instructions of
buyer (applicant) to effect payment of a stated amount within a prescribed
time limit and against stipulated documents provided all the terms and
conditions of the credit are complied with".
Letters of credit thus offers both parties to a trade transaction a degree of
security.

1.
2.
3.

Parties to a Letter of Credit

The buyer
The beneficiary
The issuing bank
The notifying bank
The negotiating bank
The confirming bank
The paying bank
Letter of Credit Mechanism
Issuing of Credit
Negotiation of Documents by beneficiary
Settlement of Bills Drawn under Letter of Credit by the opener.

Guarantee

A contract of guarantee can be defined as a contract to perform the promise,

or discharge the liability of a third person in case of his default.
Bank provides guarantee facilities to its customers who may require these
facilities for various purpose. The guarantees may broadly be divided in two
categories as under :
Financial guarantees

- Guarantees to discharge financial

obligations to the customers.

Performance guarantees - Guarantees for due performance

of a contract by customers.
The banker has to assess the character, capacity and capital of the guarantor

Pledge
Transfer or assignment of assets to secure payment of an obligation.
The borrower assigns an interest in the property to the lender, which
becomes a lien on the collateral.
If the borrower offers stocks, bonds, or other securities as collateral, the
lender generally takes possession or is assigned ownership of the collateral
until the loan is paid.
Essential features of pledge
There must be a bailment of goods
The bailment must be by way of security
The security must be for payment of debt or performance of a promise

Mortgage
A mortgage is the transfer of an interest in a specific immovable property for
the purpose of securing the payment of money advanced or to be advanced
by way of loan, an existing or future debt or the performance of an
engagement which may give rise to pecuniary liability
The essentials of a mortgage are

1) There must be a transfer of interest in an immovable property

2) The immovable property must be a specific one
3) The consideration of a mortgage may be either money advanced or to be
advanced by way of loan, or the performance of a contract.
Hypothecation
A mortgage of movables where no possession is given.
A document known as letter of Hypothecation is executed.
The main contents of the letter of hypothecation are
1) Affirmation by the borrower that the goods are free from encumbrances, that
further encumbrances will not be created on them and he is the absolute
owner of the goods.
2) Undertaking by the borrower that proceeds arising from the sale of the
hypothecated goods will be utilised for the repayment of the advance
3) Undertaking by the borrower to meet all expenses relating to the safe
custody of the hypothecated goods
4) Provision to the effect that the banker has the right to take possession of the
hypothecated goods and realize them in the event of the borrower making
default in the repayment of the advance.

E- Banking

Internet banking (or E-banking) means any user with a personal computer and a browser
can get connected to his bank -s website to perform any of the virtual banking functions.

Internet banking in india

The Reserve Bank of India constituted a working group on Internet Banking. The group
divided the internet banking products in India into 3 types based on the levels of access
granted. They are:
i) Information Only System: General purpose information like interest rates, branch location,
bank products and their features, loan and deposit calculations are provided in the banks
website.

ii) Electronic Information Transfer System: The system provides customer- specific
information in the form of account balances, transaction details, and statement of accounts.
iii) Fully Electronic Transactional System: This system allows bi-directional capabilities.
Automated Teller Machine (ATM)
Credit Cards/Debit Cards
Smart Card
Bill payment service
Fund transfer
Credit card customers
Investing through Internet banking
Recharging your prepaid phone
Shopping

Core Banking

Core banking is a general term used to describe the services provided by a group of
networked bank branches. Bank customers may access their funds and other simple
transactions from any of the member branch offices.
Core Banking is normally defined as the business conducted by a banking institution
with its retail and small business customers.
Banks treat the retail customers as their core banking customers.
Larger businesses are managed via the corporate banking division of the institution.
Most banks use core banking applications to support their operations where CORE
stands for "centralized online real-time exchange".
The bank's branches access applications from centralized datacenters.
Normal core banking functions will include deposit accounts, loans, mortgages and
payments.
Banks make these services available across multiple channels like ATMs, Internet
banking, and branches.

Electronic funds transfer (EFT) is the electronic transfer of money from one bank
account to another, either within a single financial institution or across multiple
institutions, through computer-based systems and without the direct intervention of bank
staff. EFTs are known by a number of names. In the United States, they may be referred
to as electronic checks or e-checks.
The term covers a number of different payment systems, for example:

cardholder-initiated transactions, using a payment card such as a credit or debit

card
direct deposit payment initiated by the payer
direct debit payments for which a business debits the consumer's bank
accounts for payment for goods or services
wire transfer via an international banking network such as SWIFT

electronic bill payment in online banking, which may be delivered by EFT or

paper check

transactions involving stored value of electronic money, possibly in a private

currency.

An automated teller machine (ATM) is an electronic banking outlet, which allows

customers to complete basic transactions without the aid of a branch representative or
teller. Anyone with a credit card or debit card can access most ATMs. Using a
Automated teller machine, customers can access their bank deposit or credit accounts
in order to make a variety of transactions such as cash withdrawals, check balances, or
credit mobile phones. If the currency being withdrawn from the cash machine is different
from that in which the bank account is denominated the money will be converted at an
official exchange rate. Thus, cash machines often provide the best possible exchange
rates for foreign travellers, and are widely used for this purpose.
Most cash machines are connected to interbank networks, enabling people to withdraw
and deposit money from machines not belonging to the bank where they have their
accounts or in the countries where their accounts are held (enabling cash withdrawals in
local currency). Some examples of interbank networks
include NYCE, PULSE, PLUS, Cirrus, AFFN, Interac,
Interswitch, STAR, LINK, MegaLink and BancNet.
Cash machines rely on authorisation of a financial transaction by the card issuer or
other authorising institution on a communications network. This is often performed
through an ISO 8583 messaging system.
Many banks charge cash machine usage fees. In some cases, these fees are charged
solely to users who are not customers of the bank where the cash machine is installed;
in other cases, they apply to all users.

There are two primary types of ATMs. Basic units allow customers to withdraw cash and
receive reports of their account balances only. The more complex machines accept
deposits, facilitate line of credit payments and report account information. To access the
advanced features of the complex units, a user must be an account holder at the bank
that operates the machine.

Analysts anticipate ATMs will become even more popular and forecast an increase in
the number of ATM withdrawals. ATMs of the future are likely to be full-service terminals
instead of or in addition to traditional bank tellers.
ATM Ownership
In many cases, banks and credit unions own ATMs. However, individuals and
businesses may also buy or lease ATMs, on their own or through an ATM franchise.
When individuals or small businesses such as restaurants or gas stations own ATMs,
the profit model is based on charging fees to the machine's users. Banks also own
ATMs with this intent, but in addition, the convenience of an ATM is a service banks use
to attract clients. ATMs also take some of the customer service burden off bank tellers,
saving banks money in payroll costs.
TYPES OF CHARGES LEVIED IN A BANK
The term bank charge covers all charges and fees made by a bank to their customers. In common
parlance, the term often relates to charges in respect of personal current accounts or checking
account. These charges may take many forms, including:

monthly charges for the provision of an account

charges for non maintenance of the prescribed balance in the account

charges for specific transactions (other than overdraft limit excesses)

interest in respect of overdrafts (whether authorised or unauthorised by the bank)

charges for exceeding authorised overdraft limits, or making payments (or attempting to
make payments) where no authorised overdraft exists

Some of the common charges include:

Issue of Duplicate Statement
Issue of pass book

Rs.100 per statement at branch or Customer Care (non-IVR), Rs. 50 per statem
through Net banking
Nil on request at base branch where account is maintained.

Issue of duplicate pass book

Rs 100 for issuance and Rs 25 per page for updation

Issue of loose cheque leaves

Rs 125 for cheque book of 5 leaves (Rs 25 per leaf)

Remittance Facilities through own bank

DD- Issue
DD- Issue by deposit of cash
DD - Cancellation / Duplicate /

Rs.50 per D.D. up to Rs.10,000;Rs.3 per thousand rupees or part thereof for DD
more than Rs.10,000, subject to a minimum of Rs.75 and maximum of Rs. 15,0

Rs.4 per thousand rupees or part thereof, subject to a minimum of Rs.100 an

maximum of Rs. 15000
For Instrument value upto Rs.200 Nil

Revalidation

For Instrument value above Rs.200 - Rs.100

Rs.50 for PO of upto Rs.10,000, For PO above Rs.10,000- Rs.2.50 per thousa
rupees or part thereof, subject to a minimum of Rs.75 and maximum of Rs.150
PO-Issue

PO - Issue by deposit of cash

PO - Cancellation / Duplicate /
Revalidation
NEFT Charges - Inward

NEFT Charges - Outward

RTGS-Outward

For Senior Citizen, Student & Rural locations : For amounts upto Rs.10,000
Rs.40, For amounts above Rs.10,000 till Rs.50,000 Rs.60, For amounts abo
Rs.50,000 Rs.2.50 per thousand rupees or part thereof (maximum of Rs.15,00

Rs.150 per PO for amounts up to Rs.50,000, For PO above Rs. 50,000 Rs.4 p
thousand rupees or part thereof, subject to a minimum of Rs.150 and maximum
Rs.15000
For Instrument value upto Rs.200 Nil
For Instrument value above Rs.200 - Rs.100
Nil
Upto Rs.10,000 Rs. 2.50 per transaction.
Rs.10.001 to Rs.1 lakh Rs. 5 per transaction.
Above Rs. 1 lakh to Rs. 2 lakhs Rs. 15 per transaction.
Above Rs. 2 lakhs - Rs. 25 per transaction.
Rs. 2 lakhs to Rs.5 lakhs Rs. 25 per transaction.
Above Rs. 5 lakhs Rs. 50 per transaction

RTGS-Inward

Nil

IMPS-Outward

Upto Rs.1 lakh Rs. 5 per transaction.

Rs. 1 lakh to Rs. 2 lakhs Rs. 15 per transaction.
( Max limit per transaction - Rs. 2 lakhs)

IMPS-Inward

Nil

Remittance Facilities through other bank

DD- Issue

DD- Issue by deposit of cash

DD - Cancellation / Duplicate /
Revalidation

Rs.
50
per
DD
for
amounts
upto
Rs.10,
For DD above Rs.10,000 - Rs.3 per thousand rupees or part thereof subjec
minimum
of
Rs.
and maximum of Rs. 15000
For Rural locations - For amounts upto Rs.10,000-Rs.40, For amounts ab
Rs.10,000 till Rs.50,000-Rs.60, For amounts above Rs.50,000-Rs.3 per thousan
part thereof (maximum of Rs.15,000)

Rs.5 per thousand rupees or part thereof, subject to minimum of Rs.100 and
maximum of Rs. 15000
Rs 100 per DD

Additional charges for DD issued on Correspondent Banks when the amount of DD purchased by a single purchaser in a
day at a single location exceeds certain limits:

DD greater than Rs. 10 lac, payable at

semi-urban location

Re. 1 per thousand rupees

DD greater than Rs. 20 lac, payable at

urban location

Re. 1 per thousand rupees

DD greater than Rs. 50 lac, payable at

RBI centres

Re. 1 per thousand rupees

EFT Charges- inward

Nil

EFT Charges- outward

Nil

ECS charges
ECS Debit Returns

Rs.350 for one return in a month; thereafter, Rs.750 per return (financial reason
the same month.

ECS Credit Returns

Nil

Charges for certifying or verifying

customer mandates

Nil

Cheque Collection Local

Nil

Cheque Returns
Local cheque deposited by customer
Cheque issued by customer
Outstation cheque deposited by
customer

Rs.100 for every cheque return for financial reasons

Rs.350 for one cheque return per month; Thereafter, Rs.750 per return in the sa
month for financial reasons Rs.50 for non-financial reasons except for signatu
verification
Rs.150 plus other bank charges at actuals per cheque.

Debit Card
Enrolment fee

For Coral Debit Card Joining Fee of Rs 499/- plus service tax and annual fee of
499/- plus service tax
Nil For All Other Debit Card

Late Payment Charges

NA

Replacement Card fees (Lost /

Damaged card)

Rs 200 per card

Surcharge on Fuel purchases

At HPCL outlets: (Only HPCL Debit Card)

Nil for transactions above Rs. 400; 2.5% subject to a minimum of Rs. 2 for
transactions up to Rs. 400 (Applicable only when ICICI Bank HPCL Debit Car
is swiped on ICICI Bank terminals)
At non-HPCL outlets:

2.5 % of Purchase or Rs. 10 per transaction whichever is higher

Debit Card PIN re-generation Charges
Decline of transaction at other bank
ATMs or point of sale (POS) due to
insufficient balance in the account
Debit Card de - hotlisting
Cash@POS

Rs. 25. [Not applicable if request through Instapin at Branch / Customer Care (IV
Rs. 25 per transaction
Rs. 100 per request
Rs. 10 per transaction

Rs. 50 per certificate for balance in Savings Account and Fixed Deposit Accou
Balance Certificate

Interest Certificate
Account closure
Retrival of old transactional
documents / Enquiries related to old
records
Use of Fax/Telephone/Modem

Rs.100 per certificate for balance in INR and the equivalent amount in USD in
Savings Account and Fixed Deposit Account
Rs 50 per certificate for more than one copy for a financial year.

Nil for closure within 30 days of account opening, Rs.500 for closure during 31 d
to one year, Nil after one year of account opening

Upto 1 year old Rs 50/- per record; More than 1 year old Rs 100/- per record
Rs 100 or actuals whichever is higher

Photo attestation

Rs 100 per application/letter

Signature attestation

Rs 50 per application/letter

Address confirmation

Rs.50 per request

Inoperative account

Penalty on Deposit of cash in collector

box

Stop Payment charges

Lien marking and unmarking of
savings account
Reissue of Internet user id or
password (Branch or non IVR
Customer Care)

Nil

A charge of Rs. 100/- will be levied. The charge will be Rs. 300/- in case the dep
amount is above Rs. 500/-. Repeat instances of cash deposits through cheque d
box will attract an enhanced charge of Rs. 500/- for any amount. For any othe
exceptional transactions which are not part of the services offered by ICICI Ban
charge will be levied as specified by the bank from time to time.

Rs 50 per cheque and Rs100 for range of cheques covered in single mandate.
charge is levied if stop payment request is made through Internet Banking an
Customer care (IVR).
Rs.50 for marking of lien. Rs 50 for unmarking of lien.

Rs.50 per request

Standing Instructions
Setting-up-charge

Rs. 150 per standing instruction

Amendment charge
Execution charge involving payment
through DD/PO, etc.

Speed clearing charges

Rs 25 per amendment
As per remittance, plus Rs. 25 towards out-of -pocket expenses

Upto Rs 1 Lakh Nil; above Rs 1 Lakh Rs 150/- per instrument

CODE OF BANK COMMITMENT TO CUSTOMERS

This is a voluntary Code, which sets minimum standards of banking practices for banks
to follow
when they are dealing with individual customers. It provides protection to you and
explains how
banks are expected to deal with you for your day-to-day operations.
In the Code, 'you' denotes the customer and 'we', the bank the customer deals with.
1.1 Objectives of the Code
The Code has been developed to
a. promote good and fair banking practices by setting minimum standards in dealing
with you;
b. increase transparency so that you can have a better understanding of what you can
reasonably
expect of the services;
c. encourage market forces, through competition, to achieve higher operating
standards;
d. promote a fair and cordial relationship between you and your bank;
e. foster confidence in the banking system.
The standards of the Code are covered by the key commitments in Section 2.
1.2 Application of Code
Unless it says otherwise, all parts of this Code apply to all the products and services
listed below,
whether they are provided by branches or subsidiaries across the counter, over the
phone, by post, through interactive electronic devices, on the internet or by any other
method. However, all products discussed here may or may not be offered by all banks.

a. Current accounts, savings account, term deposits, recurring deposit, PPF accounts
and all other deposit accounts.
b. Payment services such as pension, payment orders, remittances by way of Demand
Drafts and wire transfers.
c. Banking services related to Government transactions.
d. Demat accounts, equity, government bonds.
e. Indian currency notes exchange facility.
f. Collection of cheques, safe custody services, safe deposit locker facility
g. Loans and overdrafts.
h. Foreign exchange services including money changing.
i. Third party insurance and investment products sold through our branches.
j. Card products including credit cards, debits cards, ATM cards and services (including
credit
cards offered by our subsidiaries/companies promoted by us).
The meanings of (key )words in bold black have been given in the Glossary.
KEY COMMITMENTS

2.1 Our key commitments to you

2.1.1 To act fairly and reasonably in all our dealings with you by:
a. Providing minimum banking facilities of receipt and payment of cash/ cheques at the
bank's counter.
b. Meeting the commitments and standards in this Code, for the products and services
we offer, and in the procedures and practices our staff follow.
c. Making sure our products and services meet relevant laws and regulations in letter
and spirit.
d. Ensuring that our dealings with you rest on ethical principles of integrity and
transparency.
e. Operating secure and reliable banking and payment systems.
2.1.2 To help you to understand how our financial products and services work by:
a. Giving you information about them in any one or more of the following languages:
Hindi, English or the appropriate local language.
b. Ensuring that our advertising and promotional literature is clear and not misleading
c. Ensuring that you are given clear information about our products and services, the
terms and conditions and the interest rates/service charges, which apply to them.
d. Giving you information on what are the benefits to you, how you can avail of the
benefits, what are their financial implications and whom you can contact for addressing
your queries and how.
2.1.3 To help you use your account or service by:
a. Providing you regular appropriate updates.
b. Keeping you informed about changes in the interest rates, charges or terms and
conditions.
2.1.4 To deal quickly and sympathetically with things that go wrong by:
a. Correcting mistakes promptly and cancelling any bank charges that we apply due to
our mistake.
b. Handling your complaints promptly.
c. Telling you how to take your complaint forward if you are still not satisfied (see para
No. 7).

d. Providing suitable alternative avenues to alleviate problems arising out of

technological failures.
2.1.5 To treat all your personal information as private and confidential
We will treat all your personal information as private and confidential subject to matters
mentioned in para number 5 below.
4 ADVERTISING. MARKETING AND SALES
5 PRIVACY AND CONFIDENTIALLY
6 COLLECTION OF DUES
2.1.6 To publicise the code we will
a. provide you( existing customer) with a copy of the Code
b. provide you ( new customer) with a copy of the Code when you open your account;
c. make this Code available on request either over the counter or by electronic
communication or mail;
d. make available this Code at every branch and on our website; and
e. ensure that our staff are trained to provide relevant information about the Code and to
put the Code into practice.
2.1.7 To adopt and practice a Non - Discrimination Policy
We will not discriminate on the basis of age, race, gender, marital status, religion or
disability.
3 INFORMATION
You can get information on interest rates, common fees and charges through any one of
the
following:
a. Looking at the notices in our branches ;
b. Phoning our branches or help-lines;
c. Looking on our website;
d. Asking our designated staff/help desk ;or
e. Referring to the service guide/Tariff Schedule.
3.1 Before you become a customer we will:
a. give you clear information explaining the key features of the services and products
you tell us you are interested in;
b. give you information on any type of products and services which we offer and that
may suit your needs;
c. tell you if we offer products and services in more than one way [for example, through
ATMs, on the Internet, over the phone, in branches and so on] and tell you how to find
out more about them;
d. tell you what information we need from you to prove your identity and address, for us
to comply with legal, regulatory and internal policy requirements.
3.2 When You Become a Customer we will:
a. give you more information on the key features of the product, including applicable
interest rates/ fees and charges;
b. give you extra information on your rights and responsibilities especially regarding
availing of nomination facility offered on all deposit accounts, articles in safe custody
and safe deposit vaults;
c. automatically register your name under 'Do Not Call ' Service. We will not
inform/extend to you through telephone calls/SMSs/ emails any new product / service

unless and until you inform us in writing that you consent to avail of this information /
service.
3.3 Interest Rates
We will give you information on
a. the interest rates which apply to your accounts, both deposit and loan.
b. when we will pay interest on your deposits, or charge interest on your loan accounts.
c. how we apply interest to your account and method of calculation of interest.
Changes in interest rates
We will inform you when we change interest rates on our product..
3.4 Tariff Schedule
Fees & Charges
a. We will display in our branches :
I) a notice about the Tariff Schedule and that you can ask to see this free of cost ;
ii) a list of services which are rendered free of charge.
iii) a notice incorporating charges leviable for non maintenance of minimum balances in
the savings bank account, collection of outstation cheques, issue of Demand Draft and
cheques books, account statement, account closure and charges for deposit/withdrawal
at ATM locations .
b. We will give you details in our Tariff Schedule of any charges applicable to the
products and services chosen by you .
c. We will also provide you information about the penalties liable in case of no
observance/violation of any of the terms and conditions governing the product/ services
chosen by you.
Changes in Fees & Charges
If we increase any of these charges or introduce a new charge, it will be notified one
month prior to the revised charges being levied / becoming effective.
3.5 Terms and Conditions
a. When you become a customer or avail of a product/ service for the first time, we will
advise you the relevant terms and conditions for the service you have asked us to
provide.
b. All terms and conditions will be fair and will set out respective rights especially with
regard to nomination facility and liabilities & obligations clearly and as far as possible in
plain and simple language.
Changes to Terms and Conditions
a. When you become a customer, we will tell you of changes to terms and conditions
through any of the following channels :i) Account statements/ Pass book
ii) ATMs
iii) Notice Board at each branch
a. We will make sure that all advertising and promotional material is clear, and not
misleading.

b. In any advertising in any media and promotional literature that draws attention to a
banking service or product and includes a reference to an interest rate, we will also
indicate whether other fees and charges will apply and that full details of the relevant
terms and conditions are available on request .
c. If we avail of the services of third parties for providing support services, we will
require that such third parties handle your personal information (if any available to such
third parties) with the same degree of confidentiality and security as we would.
d. We may, from time to time, communicate to you various features of our products
availed by you. Information about our other products or promotional offers in respect of
our products/services, will be conveyed to you only if you have given your consent to
receive such information/ service either by mail or by registering for the same on our
website or on our phone banking/customer service number.
e. We have prescribed a code of conduct for our Direct Selling Agencies (DSAs) whose
services we may avail to market our products/ services which amongst other matters
requires them to identify themselves when they approach you for selling our products
personally or through phone.
f. In the event of receipt of any complaint from you that our representative/courier or
DSA has engaged in any improper conduct or acted in violation of this Code, we shall
take appropriate steps to investigate and to handle the complaint and to make good the
loss.
We will treat all your personal information as private and confidential [even when you
are no longer a customer], and shall be guided by the following principles and policies.
We will not reveal information or data relating to your accounts, whether provided by
you or otherwise, to anyone , including other companies entities in our group, other than
in the following exceptional cases:
a If we have to give the information by law
b If there is a duty towards the public to reveal the information
c. If our interests require us to give the information (for example, to prevent fraud) but
we will not use this as a reason for giving information about you or your accounts
[including your name and address] to anyone else, including other companies in our
group, for marketing purposes
d. If you ask us to reveal the information, or if we have your permission
e. If we are asked to give a banker's reference about you, we will need your written
permission before we give it.
f. We, will explain to you the extent of your rights under the existing legal framework for
accessing the personal records that we hold about you
g. We will not use your personal information for marketing purposes by anyone
including ourselves unless you specifically authorize us to do so.
5.1 Credit Reference Agencies
a. When you open your account, we will tell you when we may pass your account
details to credit
reference agencies and the checks we may make with them..
b. We may give information to credit reference agencies about the personal debts you
owe us if:
I) You have fallen behind with your payments;

ii) The amount owed is not in dispute; and

iii) You have not made proposals we are satisfied with for repaying your debt, following
our formal demand
c. In these cases, we will intimate you in writing that we plan to give information about
the debts you owe us to credit reference agencies. At the same time, we will explain to
you the role of credit reference agencies and the effect the information they provide can
have on your ability to get credit.
d. We may give credit reference agencies other information about the day-to-day
running of your account if you have given us your permission to do so.
e. We will provide you with a copy of the information that we have given to the credit
reference agencies about you, or provide their leaflets that explain how credit
referencing works. Whenever we give loans, we will explain to you the repayment
process by way of amount, tenure and periodicity of repayment. However if you do not
adhere to repayment schedule, a defined process in accordance with the laws of the
land will be followed for recovery of dues. The process will involve reminding you by
sending you notice or by making personal visits and/ or repossession of security if any.
Our collection policy is built on courtesy, fair treatment and persuasion. We believe in
fostering
iv) Internet, including email and website
v) Newspaper
b. Normally, changes will be made with prospective effect giving notice of one month.
c. If we have made any change without notice we will notify the change within 30 days .
If such change is to your disadvantage, you may within 60 days and without notice close
your account or switch it without having to pay any extra charges or interest.
d. If we have made a major change or a lot of minor changes in any one year, we will,
on request give you a copy of the new terms and conditions or a summary of the
changes.

Adoption of banking technology

The IT revolution had a great impact in the Indian banking system. The use of
computers had led to introduction of online banking in India. The use of the modern
innovation and computerisation of the banking sector of India has increased many fold
after the economic liberalisation of 1991 as the country's banking sector has been
exposed to the world's market. The Indian banks were finding it difficult to compete with
the international banks in terms of the customer service without the use of the
information technology and computers.
The RBI in 1984 formed Committee on Mechanisation in the Banking Industry (1984)
whose chairman was Dr C Rangarajan, Deputy Governor, Reserve Bank of India. The
major recommendations of this committee was introducing MICR Technology in the all
the banks in the metropolis in India. This provided use of standardized cheque forms
and encoders.
In 1988, the RBI set up Committee on Computerisation in Banks (1988) headed by Dr.
C.R. Rangarajan which emphasized that settlement operation must be computerized in

the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and

Thiruvananthapuram. It further stated that there should be National Clearing of inter-city
cheques at Kolkata,Mumbai,Delhi,Chennai and MICR should be made Operational.It
also focused on computerisation of branches and increasing connectivity among
branches through computers.It also suggested modalities for implementing on-line
banking. The committee submitted its reports in 1989 and computerisation began form
1993 with the settlement between IBA and bank employees' association.
IN 1994, Committee on Technology Issues relating to Payments System, Cheque
Clearing and Securities Settlement in the Banking Industry (1994) was set up with
chairman Shri WS Saraf, Executive Director, Reserve Bank of India. It emphasized on
Electronic Funds Transfer (EFT) system, with the BANKNET communications network
as its carrier. It also said that MICR clearing should be set up in all branches of all banks
with more than 100 branches.
Committee for proposing Legislation On Electronic Funds Transfer and other Electronic
Payments (1995) emphasized on EFT system. Electronic banking refers to DOING
BANKING by using technologies like computers, internet and networking,MICR,EFT so
as to increase efficiency, quick service,productivity and transparency in the transaction.
Apart from the above mentioned innovations the banks have been selling the third party
products like Mutual Funds, insurances to its clients.Total numbers of ATMs installed in
India by various banks as on end March 2005 is 17,642. The New Private Sector Banks
in India is having the largest numbers of ATMs which is followed by SBI Group,
Nationalized banks, Old private banks and Foreign banks. The total off site ATM is
highest for the SBI and its subsidiaries and then it is followed by New Private Banks,
Nationalised banks and Foreign banks.
The Private sector banks introduced the concept of online banking in India. This was
mostly because the private banks were technologically well equipped. Online banking is
extremely common today since you can sit anywhere and go ahead with your banking
transactions. You do not have to personally visit your bank.
The Private sector banks were using state of the art technology and fully computerized
systems since the time they entered the Indian market whereas the Public sector banks
were not.
However despite the technological challenges the public sector banks in India are still
the preferred destinations for many as they are considered as safer options for money
deposit.