FOUNDATIONS OF BANKING COURSE

STUDENT WORK BOOK – MODULE 1

TABLE OF CONTENTS

Sl.No. Chapter Page Number

1 Introduction to FOB course 2

Mutual Introduction 7
Evolution of Money and Banking 11

2 Overview of Banking 16
3 Business Mathematics 32
4 Financial Accounting 44
5 Customer Service 49
6 Types of Customers 73
7 Banker Customer Relationship 80
8 Types of Deposits 88

1
Session I - Introduction to the Foundations of Banking course

Welcome to the Foundations of Banking Course Program. We have great pleasure in

bringing the Foundations of Banking course Student Workbook to make learning of
banking exciting as well as relevant.

Background

The Banking Industry requires employees with knowledge of practical aspects of banking
and skills to handle customer requests whereas graduates from colleges come with only
theoretical knowledge of banking. ICICI Bank has designed the Foundations of Banking
course to enhance the banking knowledge and skills of students in undergraduate
colleges to bridge the gap between theory and practice.

Foundations of Banking Course

The Foundations of Banking course has been designed to introduce the students to the
practical aspects of banking. The course covers the need to know aspects of banking
which would be relevant in day to day operations for non-managerial entry level
personnel.

The Foundations of Banking course has a blend of self learning, classroom discussion and
activities to make learning fun and exciting for students. E-learning modules, projects and
game based learning would support the self-learning part. The courseware contains a core
module with approximately 65 hours of classroom facilitation, and 65 hours of self
assignments. The e-learning linked component would comprise of about 165 hours

2
BLENDED COURSE

What is the objective of the course?

The objective of the course is to help you learn not only the “What and Why” of banking
but also the “How”. This prepares you to take up jobs in the banking industry or to handle
the banking transactions effectively in whatever business or function you get into.

Course Structure

The course structure is divided into three sections:

Section 1 – Basics of Banking

Section 2 – Banking Operations

Section 3 - Banking Environment

3
Where do we get the Course Content?

The course content is covered in the book “Banking Principles and Operations” by Mr. M.
N. Gopinath, member of our Academic Council. This book is recommended for the course
as it is keeping with the structure and has been written with the objective of imparting
practical knowledge on banking.

What is the Learning Methodology?

The Student Workbook indicates the recommended reading, e-Learning, assignments,

projects and group work relevant for each topic in addition to “Check your understanding”
questions at the end of each chapter. We have also included some stories and caselets to
add to your excitement.

4
Sources of Knowledge and Learning

• E-Learning

• Books

• Websites

• Visits

• E-learning
Students can have access to e-Learning modules through the website
www.learningmatrixatcampus.co.in. The college administrator needs to send the details of
the students to us for creation of their login ids.

e-Learning modules have been mapped to the course topics. You would be better
prepared for the classroom if you can complete the e-learning module before the topic is
taken up in the class.

Activities outside the classroom

Assignments, projects and visits have been suggested to widen the knowledge of the
students enabling them to understand the big picture as well as understand the practical
aspects of banking.

Presentation in class

Students are advised to work in groups and prepare on the topics, and present them in
the class room. The role of the faculty will be to facilitate and guide the students in the
learning process.

We have included different forms of presentations and group exercises in the workbook.
5
Some of the group exercises suggested includes:

• Presentations
• Charts
• Scrap Books
• Role Plays
• Case Studies / Caselets

• Group Discussion
• Games

These exercises help students to learn to work in groups as well as to present before an
audience.

Role Plays

Role plays are an exciting way of learning. The students wear different hats – the role of a
banker, customer and observer and apply the concepts that they have learnt. It helps
students to practice customer service behaviors as well as compliance with banking
procedures in a safe environment.

Gaming Modules

The gaming modules have been designed for students to acquire learning skills in a fun
yet challenging manner. Students can repeatedly practice until they master the game and
get skilled in the application.

How do we evaluate the students doing the course?

The college assigns weightage for the following in the evaluation process :

• e-Learning
• Project Presentations
• Continuous Evaluation

• Final Evaluation

6
Each e-Learning module has a learning confirmation test – the student has to secure a
minimum of 80% to clear the test and complete the module.

MUTUAL INTRODUCTION

It is important to connect to people whom we interact with. This fun activity will help you
connect with each other in class and build a bond of trust.

Instructions for students:

Please do write a short introduction about yourself and share it with a friend! Please
interview your friend to know him/her better. Then introduce your friend to the class and
he/she will introduce you.

Make your mutual introduction different – funny/creative/special/touching… First go ahead

and write your story…

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My Story

My Name
My School
My home town

Here are some ideas …You could use these or have your own creative introduction

• Moments that I cherish

• Family Life
• School Life
• College Days

My Dream destination – I would love to travel to

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

………………………………………………………………………………………………………………………

Ten things that make me happy

•
•
•
•
•
•
•
•
•

My favourites:

• Books………………………………………………………………………………………………………

• Movies……………………………………………………………………………………………………..

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 • Music………………………………………………………………………………………………………

• Sports……………………………………………………………………………………………………..
.

• Hobbies……………………………………………………………………………………………………

• Colours……………………………………………………………………………………………………

People who are important to me

• Best Friend
• Most inspiring Teacher
• Loving Family member
• Inspiring personality ( could be teacher, family, or national leaders)

My passion
…………………………………………………………………………………………………………………..

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

My goals

Goals in my personal life :

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

Goals for a career :

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…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

I would like to be remembered for…

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

Interesting piece of information, which could be something like..

• I hate………….
• My secret wish………….
• I am scared of…………..

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 EVOLUTION OF MONEY - STUDENT WORKBOOK

Have you wondered how money has evolved over time – from grains, cattle,
coins, paper, plastic to electronic – the journey is exciting. Wouldn’t you
like to know about the story of money and banking?

Objective:

At the end of the session you will be able to explain the evolution of money and banking.

Sub Topic

• Evolution of Money
• Evolution of Banking
• Banking in India

Training sequence

Activity Duration
(in
hours)
E Learning Evolution of Money and Banking e-learning module to be 1
completed before the session
Website - www.rbi.org.in/commonman/ in this go to the
financial education section for games and more learning
Pre- Assignment-Check RBI website for history of money and 1
classroom banking.
activity
Classroom Presentation 1
Activity
Quiz
Check your understanding & Puzzle
Reference Banking Principles and Operations- Mr. M N Gopinath
book

CLASSROOM ACTIVITY

11
 Form groups by giving your group a name
You are required to present your learning group wise on the e-learning modules
and the RBI website

List the learning from the presentations made by the participants

Quiz Time

Rapid fire questions for your group. So put on your thinking caps and get ready!!

CHECK YOUR UNDERSTANDING

Fill in the blanks

1. The acceptance of any object as money involves the consent of the ___ as well as the
____

2. Coins were widely accepted as money due to the convenience of ________ rather than
weighing.

3. Paper currency was discontinued in China due to _________

4. ______________ were accepted as settlement of debts and evolved as “Bank Notes”

5. The main functions of money were ________and ___________ and later evolved
into__________

6. Development of _______________ by Italians helped their ascent as Bankers

7.The first banking institution in India, started in the year 1809, was __________

8. The Bank started by the Government of India in the year 1921 was ________. It was later
rechristened ___________ in the year 1955, under an act of Parliament.

9. Fourteen Banks were nationalized in the year 1969 to promote _________ and __________

10. The Government permitted setting up of Banks in the private sector in 1994 to
________________

Indicate whether the following statements are true or false

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• Money is important only because of its economic value.

• Cattle represented ownership of wealth and hence were used as a medium of

exchange

• Money deposited with banks is called intangible money

• Banks create money by lending, thereby fueling economic growth

• Government can influence the policies of nationalized banks

• Coins and currency notes are issued by Reserve Bank of India

• New private sector banks have brought in technology and management practices
to improve the banking system in India

• The Government’s share in nationalized banks has got diluted since 2000

• The Government has brought about an improvement in the functioning of

nationalized banks by introducing the element of competition from new private
sector banks

• The financial health of the Banking industry in India has improved in the last
decade due to the efforts of RBI

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 Your Crossword Puzzle

1 2 3
4

5 6
7

ACROSS DOWN

3. First people to use paper money 1. Medium of exchange

4. Made of gold and silver 2. Goddess of warning
5. Value of goods and services- 6. Chinese used
7. Origin of Banking (city)
8. Coins and currency notes, when
deposited into accounts with banks,
become

Notes :

14
15
 OVERVIEW OF BANKING - STUDENT WORKBOOK
Objective: To understand the power of banking, the role of banks in the
economy, and the products and services offered by banks.

Sub Topic
• Overview of banking
• Definition of Banking
• Roles of Banks-Banking a Business of Trust
• Banking Services and
• Products-Banking Channels

Training Sequence
Activity Duration
(in
hours)
Overview of Banking e-learning module to be completed before 4
E-learning
the class
Group assignment 6
1. Prepare a scrap book on the assigned topics taking inputs from
print media - cut and paste articles and advertisements from
newspapers, magazines.
• Banks contribute to economic growth of a region in their
role as intermediaries
Pre • Economy will come to a halt without the payment
Classroom mechanism of banks
• Allied services offered by banks add value to the Banks and
to customers
• Banking is a business of trust
Also use pamphlets / brochures brought out by Banks.
2. Prepare a power point presentation highlighting the key points.
3.Prepare a role play to bring out the essence of your topic
Classroom Activity I - Presentation, Role play - Power of Banking
Activity Activity II – Banking is a business of Trust 4

Activity III – Identify the features and benefits of banking products

Activity IV – Check your Understanding

Reference Banking Principles and Operations by Mr.M N Gopinath

16
CLASSROOM ACTIVITY I

1. Presentation and role play

a) Display the scrap book prepared by your group. Go around the classroom and
review the scrap books of other groups and note down the interesting points. Share
the learning with your group leader.

Group leader to compile the points brought out by the team members.

b) You are now required to present your topic along with your group in the class.
(Have you gone through the presentation tips?). Each student has to participate in
the presentation.

List down your learning from the presentations made by other groups.

Points Ideas Query (?)

Role Play: Now for some action and fun in the class room

Script a role play to bring out the essence of the topic assigned to your group. Enact the
role play in class.

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Some tips to the groups for coming up with role plays

Banks as intermediaries
Roles – Banker, depositor, borrower.

(Hints – Sheela gives a loan of Rs. 1 lakh to her friend Mala. After two months Sheela
needs the money urgently, but Mala has invested the money in her business and is able
to give back the money only after a month. Next time Mala comes for a loan, Sheela
refuses.)

Scene 2: Sheela deposits money with the Bank and withdraw money at her convenience.
Mala applies to the Bank for a loan. What are the checks that the Bank does before
sanctioning the loan?

Each participant in the role play should display emotions as appropriate. Exaggerated
reactions can be used to bring in humour.

Pen down your learning from the role plays

CLASSROOM ACTIVITY II - BANKING IS A BUSINESS OF TRUST

Draw your thoughts

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- Draw a picture/cartoon to show what “Trust” means to you.

- Whom do you trust the most? Why?

-
-
-
-
-
-
-
- Why is Banking called a “Business of Trust”? Discuss

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-

CLASSROOM ACTIVITY III – IDENTIFY THE FEATURES AND

BENEFITS OF BANKING PRODUCTS AND SERVICES

What is the difference between feature and benefit?

Features and Benefits: A feature is a characteristic of the product. A

benefit is the value of the feature to the customer.
Customers buy products/service for the benefit they offer and not for
their features.
Eg. The feature of a bath soap is that it contains rose essence – the
benefit is the fragrance as well as the freshness it offers.
Eg. The feature of an ATM is that it offers 24X7 access. The benefit is
that you have the convenience to withdraw money any time at any
place.

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Identify the features and benefits of the following products and services

Savings account

CHEQUE BOOK INTERNET BANKING

ATM MOBILE BANKING

CUMULATIVE FIXED DEPOSIT

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Recurring Deposit

MONTHLY INTEREST PAYOUT ON FIXED DEPOSIT

22
LIFE INSURANCE

HOME LOAN

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REMITTANCE FACILITIES FOR
NRI CUSTOMERS

24
BUSINESS CREDIT

25
CHECK YOUR UNDERSTANDING :

A. Choose the correct answer(s)

1. The primary activity of Banks

• Accepting deposits from the public
• Lending money
• Investment of money
• All of the above

2. The important roles played by Banks in the economy are

• Intermediaries
• Payment Mechanism
• Financial Services
• All of the above

3. Customers deposit money with Banks because

• Their money is stored in a safe place
• They get higher returns by way of interest
• They have the option to withdraw the money whenever they require
• Transactions through banks are convenient than handling cash
• All of the above

4. Individuals who have surplus money are unwilling to lend directly to entrepreneurs
because

 They do not have the expertise to assess the credit worthiness of the borrower
 They do not have the capacity to recover the money in case the borrower fails
to repay
 They might not be able to recall the loan immediately for their urgent
requirements
 All of the above

5. The payment mechanism of Banks is important for the economy because

a) It generates profits for the banks

26
 b) It enables huge volumes of transactions through cheques
c) It enables movement of funds from place to place
d) All of the above
e) Only b and c

6. ABC & Co has a current account with First Union Bank Andheri Branch. It has paid
salary to its employees through cheques. Meera has her bank account with First Union
Bank, Andheri Branch. She deposits the salary cheque in her account.

a) This is a CMS transaction

b) Meera’s account will be debited as a transfer entry
c) Meera’s account will be credited as a transfer entry
d) None of the above

7. Bill of Exchange is a

a) Document of title to goods

b) Bundle of RR and invoice
c) Instruction to exchange the bill for invoice

8 Ashish lives in Bombay. He needs to remit Rs.1000/- to IGNOU Delhi for obtaining their
prospectus.

a) He has to go to Delhi and pay cash at IGNOU

b) He can send a cheque from his Bank account at Mumbai
c) He can send a Banker’s cheque payable at Mumbai
d) He can send a Demand draft payable at Delhi

9. Raj is planning to visit various cities in the south for business promotion. He needs
money for his expenses during the month long tour.

a) He should withdraw cash Rs.1 lakh and carry it with him

b) He should have an ATM card and withdraw cash wherever there are ATMs.
c) He should use his debit card at ATMs as well as merchant establishments for his
purchases and expenses
d) He should use his credit card
e) c and d

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10. Mr.Viswam has retired from office and has Rs.5 lakhs in hand.

- He should deposit in a savings account for safety and convenient withdrawal

- He should place a fixed deposit in a bank to earn higher interest
- He should invest in shares and earn higher returns
- He should have a portfolio of savings, fixed deposits, mutual funds and bonds to
increase returns as well as diversify risk

11. Sharon earns a salary of Rs.40000/- per month. His dream is to buy a car and go for a
drive with family on weekends.
a) He can save regularly every month and build a lump sum in three years to buy a
car
b) He can use his credit card to buy a car and repay after three years
c) He can avail a car loan from a Bank and repay in monthly installments
d) He can take a loan from his friends and relatives and give them a drive every
weekend.

12. Shekar & Co has a credit limit of Rs.5 lakhs with a Bank against the security of its
stock. The type of loan facility it enjoys is called:

a) Overdraft
b) Demand Loan
c) Cash Credit
d) Bill Purchase

13. Heera has bought a diamond necklace worth Rs.1 lakh. She wants to keep it safe. She
should

a) Hire a safe deposit locker with a Bank and place the necklace in the locker.
b) Keep it locked in her Godrej cupboard at home
c) Keep it in her friend’s locker and share the rent
d) Wear it all the time so that she has control

14. Sriram would like to have Rs.5 lakhs ready for his daughter’s higher education .His
daughter is 6 years old. He earns Rs.40000/- per month and has invested all his surplus
funds in buying a home.

1. He should start a recurring deposit for Rs. 5000/- per month for 10
years
2. He should invest in a fixed deposit after 5 years

28
 3. He should take a loan after 10 years
4. He should sell his house, so he need not save
5.

15. Stanley has a savings account with a Bank. He is always on the move and would like
to transact his account at his convenience. The channels available to him are:

• ATM
• Phone banking
• Mobile Banking
• Internet Banking
• All of the above

B. Indicate whether the following statements are True or False

a) Transfer transactions can take place between branches of a bank without

centralized systems.

b) Clearing can take place only in cities where Reserve Bank offices exist.

c) Recurring Deposits are ideal for salaried people to save regularly

d) Retail loans are given to individuals for their requirements like buying a home, car,
vehicle etc.

e) Multi-city cheques are payable at any branch of the Bank

C. Fill in the blanks

a) Ashok has a savings account in his name with X Bank. His wife Beena also has a
savings account with the same bank branch. He issues a crossed cheque from his
account favouring Beena. Beena deposits the cheque into her account. Bank will
treat this transaction as __________ and will give credit to ______account by debiting
________account.

b) Beena issues a cheque for Rs.1000/- from her savings account to her brother
Mitesh. Mitesh deposits the cheque in his account with Y Bank. Y Bank will collect
the funds from X Bank through_______________________

c) __________will act as clearing house where RBI has a branch and where RBI is not
having a branch, generally _____ or _________ as mutually agreed by banks in that
29
 centre will act as a clearing house.

d) For safety and protection purposes_________ _________ is affixed by the collecting

banker.

e) Cheques drawn on a branch in Chennai when deposited by a customer in a Bank in

Delhi will go under _________ clearing.

f) CMS facilitates _________ and ___________ efficiently in order to improve

______________ of a corporate.

g) ECS _____________ facilitates large service providers to collect their periodic dues
from users.

h) ECS is operated through _________.

i) ECS _______ is used for making payments of _____amounts in ________volumes.

j) For amounts of higher value (say Rs.1 lakh and above), ________clearing is used.

k) ________________________ risk is the possibility of a loss due to change in the interest

rates in the market

l) _______________________ risk is the possibility that the borrower may not have funds
to repay the loan immediately on demand, even though he is credit worthy

m) Banks have a duty of _________________________ to customers, to maintain

confidentiality of the customer’s accounts.

n) ____________________ and ________________________ are inversely related and Banks

have to find a balance between the two

o) Banks have to ensure that they maintain _____________________ ____________________

in customer interactions and transactions.

p) Banks earn fee income by selling ________________ Products

q) Banks pay higher interest on _______________ deposits than _________________

deposits and zero interest on ___________________________

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r) De mat accounts maintained by banks are very similar to savings accounts.
Whenever an account holder buys shares, the number of shares will be
_____________to his account and when he sells it, his account will be ________________

s) The amount up to which the credit cardholders can make purchases or withdrawals
is called the ________________and it is fixed according to the ______________ capacity
of the person

t) Funds required for acquiring fixed assets are given ________________ which are
repaid in instalments from the profits of the company

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 BUSINESS MATHEMATICS - STUDENT WORKBOOK

Objective:

To understand how the concepts of business mathematics are relevant for bankers and
customers

Sub Topics:

• Basic
- Simple and Compound Interest
- Fixed and Floating rates of interest

• Advanced
- Methods of Repayment
- Time Value of Money
- Bonds

Training sequence

Activity Duration
(in
Hours)
E-learning Complete the e-learning module on Business Mathematics - 3
basic
Classroom Exercise -Check your understanding 1
Presentation 2
Question for discussion
Reference Accounting and Finance for Bankers - Macmillan
books

32
 Would you like to be well prepared on the topic before the classroom session?

PART 1: ANSWER THE FOLLOWING

1) What is the method of calculation of interest payable quarterly?

__________

Customer deposited Rs.10000/- and got Rs.12100/- at the end of two

2) years. What is the method of calculation of interest if the rate is 10 %
p.a.?

__________

3) At what frequency is the interest compounded in Bank's cumulative

deposit plan?

___________

4) What is the simple interest on a fixed deposit of Rs.100000/- for 12

months at 6 % p.a.?

___________

5) What is the interest that would be paid every quarter in the above case?

___________

Customer deposited Rs.5000/- on January 1st.He withdrew entire money

6) on Jan 2nd. He deposited again Rs.5000 /- on March 31st .Has he
maintained average quarterly minimum balance of Rs.5000?

___________

7) What is the average quarterly balance maintained by the customer?

33
 ___________

8) What is the rate of interest paid on savings account?

___________

9) Savings interest is calculated on the basis of

___________

A customer had an overdraft of Rs.15000/- in his current account on

10) April 10th. He deposited Rs.10000/- in to the account on April 15th,
Rs.2000 on April 20th and Rs2000/- on April 25th. How much amount
should he pay with interest on April 30th to close his overdraft?

___________

PART 2: CALCULATION OF INTEREST - Exercises

1) Gita deposited Rs.1, 00,000/- for a period of 24 months at 7% p.a. under Quarterly
Interest scheme with a Bank. What is the interest amount she will receive every quarter?

2) What is the total interest earned by Gita on the fixed deposit?

34
3) Sheeba had placed a cumulative fixed deposit of Rs.13, 00,000/- with the Bank on 5th
May 2006, at 8 % interest p.a. find out the maturity value of the deposit that she will
receive on 5th May 2007?

4) Seetha needs Rs.10, 00,000/- at the end of 5 years .Find the principal she must invest
to get this maturity value, assuming the rate of interest to be 7 % p.a.

5) Arjun had a savings account with a Bank. His transactions in the Bank account for the
six months October 1, 2006 to March 31, 2007 are given below. What is the savings
account interest that will be credited to his account on March 31st?

Amount
Date Transaction
(Rs.)

Oct. 1 Opening balance 10000

Oct. 2 Salary credit 60000
Oct. 5 Cash withdrawal 20000
Oct. 12 Recurring deposit 5000
Nov. 2 Salary credit 50000
Nov. 3 Cash withdrawal 8000
Nov. 5 Cash withdrawal 15000
Nov. 12 Transfer to RD 5000
Dec. 1 Salary 50000
Dec. 2 Cash withdrawal 20000
Dec. 12 Transfer to RD 5000
Jan. 9 PF credited 400000
Jan. 12 Transfer to RD 5000
Feb. 12 Transfer to RD 5000
Mar. 12 Transfer to RD 5000

Hint: Draw up a savings bank account of Arun .The first three transactions are
entered to give you a start. Go ahead and enter all the transactions in Arun's

35
savings account. On which balance will you pay interest. Check and calculate
the interest.

Date Particulars of Debit Credi Balance

transactions t
Oct 1 By Balance brought forward 10000
Oct 2 By Salary 6000 70000
0
Oct 3 To cash withdrawal 20000 50000

Date Particulars Debit Credit Balance

PART 3 - CHECK YOUR UNDERSTANDING

Choose the correct answer (s) :

1. Interest rates on floating rate fixed deposits are

1. floating every year

2. reset every quarter
3. fixed for the first year
4. reset every year

• Fixed rate home loans are profitable to customers

1. When interest rates are on the increase every year

2. When interest rates are declining year on year

36
 • Vimal has taken a home loan in year 2004 at the rate of 7 % p.a. fixed, repayable in
120 months. The home loan rates have increased to 10 % p.a. in 2007.

1. The home loan deal is profitable to the Bank

2. The home loan deal is profitable to Vimal

• Deepak took a home loan in year 2000 at the rate of 12 % p.a., fixed rate,
repayable in 180 months. The interest rate offered by the Bank reduced to 7 %
p.a. in 2004 and increased to 10 % p.a. in 2007.

At present, the deal is profitable

1. To the Bank
2. To Deepak

• Under what circumstances will the home loan deal be profitable to Deepak?

Bank’s rate of interest increases for the remaining period to:

1. 11 %
2. 15 %
3. 12%
4. Decreases to 8%

• Equated monthly instalment is a method of repayment

1. Where interest is paid every month

2. Where only Principal is paid every month in equal instalments
3. The repayment is allocated into Principal and interest every month
4. The amount paid by the customer every month does not vary

Session II - Advanced Business Maths

Activity Duratio
n (in
Hours)
E-learning Complete the e-learning module on Business Mathematics - 3
Advanced
Classroom Exercise 1
Presentation 2
Question for discussion

37
Additional Reference Books - Accounting and Finance for Bankers -
Reading Macmillan

Read the Amortisation Chart given below and fill in the blanks. Discuss the
distinct features of the EMI scheme.

Enter loan amount 200000

ROI (p.a.) 9.00%
Term in years 1

EMI (monthly rest) 17,490.30

Amortization
schedule

Months Opening Interest Principal Closing

1 ? 1500 15990 ?
16789
2 184010 1380 16110 9
15166
3 167899 ? 16231 8
13531
4 151668 1138 16353 6
11884
5 135316 1015 ? 0
10224
6 118840 891 16599 1
7 102241 767 16723 ?
8 85518 641 16849 68669
9 68669 515 16975 51694
10 51694 ? 17103 34591
11 34591 259 17231 17360

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 12 17360 130 17360 ?

MATCH THE PAIRS

Part A Part B
1. Yield to maturity 1.Interest rate offered on the bond

2. Price of the bond 2. Bonds Issued by Government

3. Par value of the bond 3. Coupon /market price *100

4. Interest rate is not specified on the bond. Maturity

4. Current Yield value is specified

5. Rate of interest which equates discounted value of

5. Amortisation cash flows to the current market price

6. Deep discount bond 6. Face value of the bond

7. The value that the bondholder will get on

7. Coupon rate redemption

8. Maturity value 8. Present value of future cash flows

9. Cash inflows 9. Annual interest + maturity value

10. Risk free Bonds 10. Repayment of principal every year

A bond certificate picture is given. Identify the various features of the bond
certificate

• Who is the issuer of this bond?

• What is the face value of this bond?
• What is the maturity value?
• What is the maturity date?
• What is the interest rate?
• When is the interest paid to the bondholder?
• Can this bond be sold in the market?

39
40
CLASS ACTIVITY

Presentation

• Participants to form four groups and present on the learning from the e-
learning modules

• Topics will be allotted to groups on the day of presentation. 15 minutes will be

given to the teams for preparation and then to each team to present. After all the
teams have presented, important points can be discussed

Topics can be

- Simple Interest
- Compound Interest
- Fixed & Floating rates
Methods of repayment
Amortisation
Rescheduling
Discounting
- Time Value Of Money
Future Value
Present value
Annuity
Net Present Value
Internal Rate of Return

Examples on each topic to be highlighted by the participants to get a clear

understanding of the subject matter

Summarise your learning from the entire session

Story Time – One grain of rice and then double…

41
When the creator of the game of chess showed his invention to the ruler of the country,
the ruler was so pleased that he gave the inventor the right to name his prize for the
invention. The man, who was very wise, asked the king this: that for the first square of
the chess board, he would receive one grain of rice, two for the second one, four on the
third one, and so forth, doubling the amount each time. The ruler, arithmetically unaware,
quickly accepted the inventor's offer, even getting offended by his perceived notion that
the inventor was asking for such a low price, and ordered the treasurer to count and hand
over the rice to the inventor. However, when the treasurer took more than a week to
calculate the amount of rice, the ruler asked him for a reason for his tardiness. The
treasurer then gave him the result of the calculation, and explained that it would be
impossible to give the inventor the reward.

Can you guess why the treasurer said that it would be impossible to give the reward?

The number of grains of rice on the first half of the chessboard is 1 + 2 + 4 + 8 + 16 +

32 + 64 + 128 + 256 + 512 + 1024 + ... + 2,147,483,648, for a total of 232 − 1 =
4,294,967,295 grains of rice, or about 100,000 kg of rice, with the mass of one grain of
rice taken as 25 mg[2]. This amount is about 1/1,200,000th of total rice production in India
per annum (in 2005) [3].

While the number of grains on the first half of the chessboard is large, the amount on the
second half is vastly larger.

The number of grains of rice on the second half of the chessboard is 232 + 233 + 234 ... +
263, for a total of 264 − 232 grains of rice, or the square of the number of grains on the first
half of the board plus itself. (Indeed, the first square of the second half alone contains
more grains than the entire first half.) On the 64th square of the chessboard alone there
would be 263 = 9,223,372,036,854,775,808 grains of rice, or more than two billion times

42
as much on the first half of the chessboard.

On the entire chessboard there would be 264 − 1 = 18,446,744,073,709,551,615 grains of

rice, weighing 461,168,602,000 metric tons.

Moral of the story: Start saving early in life and use the power of
compounding to multiply your money a million times !

43
 FINANCIAL ACCOUNTING - STUDENT WORKBOOK
Objective:

At the end of this session, you will be able to understand the basic accounting
principles applied in banking.

Sub Topic

• Concepts of Accounting
• Double entry book keeping
• Types of accounts
• Accounting process
• Journal and Ledger
• Financial Statements-Trial Balance, Profit and Loss statement, Balance Sheet-
Adjustment entries
• Accounting Standards

Training sequence

Activity Duration
(In hours)
E-Learning Complete the e-learning module on Financial Accounting 4
Pre Classroom Check your understanding
Classroom Presentation 2
Reference Accounting and Finance for Bankers - Macmillan
Books

EXERCISE
A. Write the journal entries for the following transactions in Nurul Hassan's
books. The first entry is given here as an example.
Nurul Hassan starts a fresh paneer shop with Rs. 8000 as capital.
Cash A/c Dr. Rs. 8000
To Capital A/c Rs.8000

44
He borrows Rs. 2000 from his father-in-law Mr. Ahmed.

He opens a current account with Punjab National Bank (PNB) and deposits Rs. 5000.

He buys a fridge from Vijay Sales Co for Rs. 11000 with a loan of Rs. 10000 from Citi
Financials. For the balance money, he issues a cheque to Vijay Sales Co.

He buys furniture for Rs. 4000 from a carpenter Ramvilas and pays cash to him.

He buys a weighing machine for Rs. 2000 from Kirloskar and issues a cheque for it.

During the first month, he:

a.Purchases a total of 690 kilos of paneer for Rs. 69000.
b. Sells it for Rs. 86250. Although purchase and sales happens daily, Nurul
maintains only
one set of entries for convenience sake. There is no closing stock at the end of
the first
month.

45
 c. He pays cash of Rs. 800 for electricity.
d. He pays Rs. 1500 to Vincent, a helper as salary in cash
e. He deposits Rs. 10000 in the bank.
f. He issues a cheque for Rs. 2200 in favour of Citi Financials of which Rs. 2000 is
towards instalment and Rs. 200 is towards interest.
g. He issues a cheque for Rs. 2000 to Nagarajan towards rent.
h. He gives a loan of Rs. 1000 to Prabhu, a friend in cash.
i. He gives a donation of Rs. 100 to Sai Orphanage in cash.
j. He pays cash of Rs. 2000 to his wife, Noor for household expenses.

B. Based on the preceding transactions

1) Post the journal entries in ledger accounts
2) Balance each ledger account.
3) Prepare a Trial Balance.

• Prepare the Profit and Loss A/c and Balance Sheet.

46
CLASSROOM ACTIVITY

Presentation

• Present on the following topics in the class:

• Preparation and relevance of Journal & Ledger
• Preparation and relevance of Profit & Loss A/c and balance sheet

• Make a note of the important points from the presentation

STORY TIME
Great Waves

In the early days of the Meiji era there lived a well-known wrestler called O-nami, Great
Waves.

O-nami was immensly strong and knew the art of wresting. In his private bouts he
defeated even his teacher, but in public was so bashful that his own pupils threw him.

O-nami felt he should go to a Zen master for help. Hakuju, a wandering teacher, was
stopping in a little temple nearby, so O-nami went to see him and told him of his great
trouble.

"Great Waves is your name," the teacher advised, "so stay in this temple tonight. Imagine
that you are those billows. You are no longer a wrestler who is afraid. You are those huge
waves sweeping everything before them, swallowing all in their path. Do this and you will
be the greatest wrestler in the land."

The teacher retired. O-nami sat in meditation trying to imagine himself as waves. He
thought of many different things. Then gradualy he turned more and more to the feeling
of waves. As the night advanced the waves became larger and larger. They swept away

47
the flowers in their vases. Even the Buddha in the shrine was inundated. Before dawn the
temple was nothing but the ebb and flow of an immense sea.

In the morning the teacher found O-nami meditating, a faint smile on his face. He patted
the wrestler's shoulder. "Now nothing can disturb you," he said. "You are those waves. You
will sweep everything before you."

The same day O-nami entered the wrestling contests and won. After that, no one in Japan
was able to defeat him.

• What is your learning from the above story?

• Get creative- Suggest a different title for this story. Can you make it unique, yet
relevant to the story?

• What are your strengths? Talk about yourself/your strengths and the qualities that you
admire in others. (You could speak about your winning smile, and the patience of your
teacher...)

48
 CUSTOMER SERVICE – STUDENT WORKBOOK

Objective:

At the end of this session you will be able:

 To understand the concepts of customer service.
 To practice service attitude and professionalism
 To apply the customer service process through role plays

Sub Topics

• Customer Service Concepts

• Customer Service Process-Handling Complaints-Quality in Customer Service

Training Schedule

eLearning module Corporate Attire, grooming and etiquette to be completed

before the customer service session.

Activity Duratio
n
(in
Hours)
E-learning Customer Service 4
Mandatory
Recommended All about waste, Quality and Six Sigma for beginners, Quality
e-learning Toolbox, Five S
modules for
additional inputs
Pre Classroom 1.Visit to any bank to get the feel of customer service 6
2.Visit to any service organisation
Classroom Sharing experiences on customer service 5
activity View videos on customer service process and respond.
Practice customer service behaviours in the classroom

Presentation on Book Review (Fish ,Fish Tales, Raving

Fans,The Alchemist ,Customer First)
Role Play
Case let
Discussion
Attitude

49
 Story Time
Questions on 5S
Reference books Banking Principles and Operations - Mr M N Gopinath

Interesting 2. “Lions don’t need to roar” by D.A.Benton

books 3. “The Monk who sold his Ferrari” by Robin
Sharma
4. “The Greatness Guide” by Robin
Sharma
5. “Seven Habits of Highly Effective People” by Stephen
Covey
6. “Men of Steel” by VIR
Sanghvi
7. “The Alchemist” by Paulo Coelho
8. “Wise and Otherwise” by Sudha
Murthy
9. “Wings of Fire” by Abdul
Kalam
10.“Who moved my Cheese” by Spencer
Johnson
11.“Jonathan Livingston Seagull” by Richard
Bach
12.“The Present” by Spencer
Johnson
13.“You can Win” by Shiv Khera
14.“Customer First - A Strategy for Quality Service“ by
Dennis Walker

Have you read these books? Each of these books has made a difference to the
lives of many readers. Share your thoughts about these books with your
friends.

50
 Name Author
Wiseand Otherwise SudhaMurthy
Wings of Fire Abdul Kalam
TheAlchemist Paulo Coelho
Who moved my cheese Spencer J ohnson
J onathan Livingston Seagull Richard Bach
TheMonkwho sold his Ferrari Robin Sharma
TheGreatness Guide Robin Sharma
Men of Steel Vir Sanghvi
ThePresent Spencer J ohnson
You can Win Shiv Kera
Seven Habits of highly effectivepeople Stephen Covey

CLASSROOM ACTIVITY

- Draw the picture of anything that will bring a smile on your face.
For example,

Flower Ice cream

- How happy and contended did you feel when you were able to bring a
smile on anyone's face?
Mention your experience and your feelings below..

- Imagine you are a service provider. How would you bring a smile on the
face of your customer?

51
Form groups in the class to facilitate learning.

- Recall three different instances when you received

1. Excellent customer service. 2. Good service 3. Poor service

These experiences could relate to any service – for example -.restaurants, airports,
hotels, hospitals, travels, banks etc.

a) Write down what were your needs and expectations when you approached the
organization for service. Also write down what the organization/customer service
officer/manager did which made you feel that the service was excellent, good or
bad.

b) Write down any other aspects of the experience, which you think, contributed to
your perception of excellent, good or bad service.

c) Did you share any of these experiences with your friends/ family? Why?

52
 Customer Satisfaction results when

Perception of customer service = Expectation

Let us see this through certain examples below

Scenario 1:

You are a busy person and expect quick service wherever you go. You go to a popular
restaurant with your friend for dinner. Your friend tells you that the restaurant is famous
for their delicious north Indian dishes.

You take the menu card on the table and find the following statement on the first page:

“North Indian Dishes will take 20 minutes from the time the order is taken “

What do you think the restaurant is communicating to the customers? Do you think you
can complain when the server takes 20 minutes to bring your order?

Scenario 2:

A signboard, at the passport office, said - “Expected turn around time – one month. For
urgent processing in a week’s time, apply through TATKAL with an additional fee.”
What will you do if you need a passport in ten days? What is the effect of this notice on
customer service?

Scenario 3:

You are a customer service officer at the account-opening desk of a bank branch. The turn

53
around time (TAT) for activation of a new account is 4 working days but you have a
customer demanding that he needs his account to be activated by end of day. He tells
you that your sales person had promised that he could open the account and start
operating immediately. You know that it will take a minimum of 3 days to process the
account opening form even on priority. What will you do?

REMEMBER

The basic expectations of a customer are:

• Value me, my time, my business

• Understand me
• Be reliable in delivery
• Provide solutions not excuses
• Advise me on alternatives and possibilities

While interacting with customers remember the four steps in customer

interaction are:

• Welcome
• Understand
• Serve
• Close

Situation

Have you experienced waiting at a restaurant, with waiters walking past you without eye
contact? When they act as if you are non-existent, you would either create a noise
demanding attention or walk out.

How do you feel when the waiter looks at you, and nods that he would be coming to you?
You are prepared to wait for ten minutes once your presence has been acknowledged. Eye
contact makes people feel comfortable.

Do you have any such experience of feeling welcome/not welcome in a

shop/office? Share your thoughts. What would you do differently in such a
situation?

54
Presentation 1

Each group has to present on any of the books of “FISH”.

Other participants must make a note of the learning from each group.

SMILE

“A smile is a curved line that puts everything straight”

As she entered the elevator, she noticed Bill right behind her. That will save me the trip to
his office, she thought. The car was crowded so they didn't converse, but, when the door
opened on her floor, she turned to Bill and handed her boss her bag, which had a distinct
odour emanating from it. “A gift for you!” It's called a smiling sushi”. As the door closed
she heard a loud, “Mary Jane!”

A few seconds after she was at her desk the phone rang. “Strange gift, Mary Jane.” said
Bill with the hint of a smile in his voice. She told him what she had done on Saturday.
”Stay with it ,Mary Jane. I don't know what a fish market has to do with First Guarantee,
but if you can make me smile with the day I have ahead, you may be on to something.”

Read on more in the book “FISH” ... what happens next after she hangs up on the phone..

Words that work like magic are:

• Good Morning...
• Have a nice day...

55
 • Have a great day...
• Thank you
• Please
• We understand
• What can I do for you?
• We assure you

PRACTICE YOUR UNDERSTANDING

Activity 1 : Visit to a Bank

Visit a bank and request for information on opening an account. Observe the body
language, words used, attitude and attire of the staff. Observe how they interact with
different customers. Write down how important it is to create a positive impact on clients.

Activity 2 - Practice Self-talk

Listen to your self-talk at different times of the day, when you interact with different
people. Are you positive or negative? Imagine others can hear your self-talk. Would you
like them to listen to your negative talk while you are trying to communicate goodwill
through smile and greeting?

Have you heard people barking “Good Morning” without meaning it?

Imagine you are meeting your best friend. Track the self-talk that runs in your mind. Your
self-talk could be “It is great to meet you. I really enjoy spending time with you. I would
like to do anything to make you happy.” Can you practice this self-talk with the first
person you meet today? Check what effect it has on your body language, your smile and
the impact on the person whom you interacted with.

Activity 3 - Eye contact

Practice eye contact with your friends and check if you are able to communicate better.
Try maintaining eye contact when you meet seniors, top professionals. It will increase
your confidence level and create a favourable impact.

Activity 4 - Greeting

Practice wishing your friends “Good Morning”. Check whether your voice conveys cheer
and goodwill. Repeat the exercise again and again till you get the right tone. Practice the
tone everyday and make it a habit.

ROLE PLAY

Group to prepare a role play on a given situation at the bank they observed. Incorporate
the above qualities discussed for customer service to enable a happy customer

56
E.g. Two customers visit the branch to modify the nomination in their accounts. One
customer has got married recently and wishes to make her spouse the nominee in her
account. Your tone should be cheerful while you assure the customer that the nomination
would be altered as per request.

The second customer wishes to change the nomination as the nominee has passed away.
You need to alter your tone to respond to the customer’s grief and convey that you would
take care to change the nomination.

If the customer is disturbed, you show concern and care. If the customer is enthusiastic,
you reflect energy and enthusiasm. If the customer is angry, you maintain your poise
while reflecting concern in solving his problem.

• How was his query resolved?

• What was his reaction?
• Was he assisted in time?
• Why had he come to the branch for placing the request? Was there an alternate
which could be promoted or customer being educated on?
• What was the customer’s reaction at the end of the conversation?
• Was the sequence of handling his query appropriate?(Listen-Probe-Understand-
Give Solution-Alternative-Educate-Thank)

List down your learning from the role play

You can also enact role plays as administered by the faculty.

57
DISCUSS IN YOUR CLASS:

• What are our expectations as customers when we buy a product or service? List
them down

• Why is it important for businesses to have satisfied customers? List them down

• How can businesses increase their market share and profits by providing
excellent customer service? List them down

• What are the behavioural and technical aspects that contribute to good
customer service? List them down

EXERCISE
Recall any incident where you experienced bad service. What did you do? Did you go up
to the manager and complain or did you just walk away deciding never to return?

58
CUSTOMER SERVICE

ROLE PLAY ACTIVITY

59
INSTRUCTIONS FOR STUDENTS PLAYING THE ROLE OF CUSTOMERS:

You will enjoy playing the role of a customer because “Customer is the king” in any
service organization. You can express your banking requirements and the banker has to
satisfy your needs.

Your objectives in this role play:

• Experience how a customer feels when his banking needs are met/ not met.

Now I understand
• Give opportunityhow
to the banker
anxious a to practice customer service behaviours
customer would be
when a debit card
is lost

Should I bowl a
googly or a full
toss? I need to
give him batting
practice…

Preparation for the role play

• Study the background information about the customer, jot down the behaviours
appropriate to your character
o Eg., Senior citizen – Anxious, careful, systematic, talk in detail about a
problem
o Businessman – In a hurry, expect quick service, assertive , demand good
service etc

60
 • Jot down the questions that you need to ask the banker based on the given
scenario.

Enacting the role play

• Behave like a customer appropriate to the given situation

• Ask appropriate questions and respond to the banker’s questions
• You could bring in subtle humour but don’t overact
• You should give the banker opportunity to practice customer service skills
• Feel free to make up an answer to take the act forward

61
INSTRUCTIONS FOR STUDENTS PLAYING THE ROLE OF BANK OFFICIALS:

Good service is not just smiling at customers

Good service is getting the customers to smile at you

• The purpose of this role-play is to provide you with the practice of interacting with
the customers who come to the bank.

• Firstly welcome the customer as your welcome a guest at home

• Listen to the customer and understand the customer’s needs.

• Then formulate the strategy that you will use to handle the customer.

-What are the needs of the customer?

- What additional information will you need to uncover the needs?
- What information do you need to resolve the customer’s issue?
- What is the best possible solution that you can give the customer?
- Is the customer satisfied with your service?

• If the customer asks you questions for which you do not have background
information, feel free to make up answers that are consistent with the role-play
situation.

62
INSTRUCTIONS FOR THE OBSERVER:

• Observe the actions and reactions of the Bank officer when the customer
approaches; does the officer establish eye contact, does he smile and greet
appropriately?

• What is the expression of the Bank officer while listening to the customer's issue?

• How does the Bank officer handle the customer's complaint?

• Does the Bank officer successfully satisfy the customer query?

• Note down meticulously on the observer’s sheet all the details of the interaction,
the feelings, expressions etc.

• As an observer you need to understand the “Customer Interaction Cycle”.

Refer the recap session.

63
OBSERVER’S SHEET

Welcome

1. Eye contact: Did the Bank officer maintain eye contact?

2. Smile: Did the Bank officer smile?

3. Greet: Did the Bank officer greet the customer?

4. Offer help: Did the Bank officer offer to help the customer?

Understand

5. Listen: Did the Bank officer interrupt the customer when the customer was talking
about his issues?

6. Acknowledge: Did the Bank officer acknowledge all the facts & feelings displayed
by the customer when he was explaining his query

7. Probe for more: Was the Bank officer able to obtain more relevant information from
the customer by asking more questions?

8. Confirm understanding: Once the Bank officer has received all the information, was
he able to confirm the understanding of the problem with the customer?

Serve

9. Provide solution: Was the Bank officer able to arrive at a solution & inform the
customer of the same?

10.Activate resolution: Was the Bank officer able to start the process of resolving the
complaint?

11.Confirm satisfaction: Did the Bank officer confirm with the customer the
satisfaction regarding the resolution of the complaint?

Close

12.Propose next step: Did the Bank officer inform the customer about the steps
involved in the resolution of the complaint?

13.Offer further resistance: Did the Bank officer offer further assistance to the

64
 customer?

14.Thank: Did the Bank officer thank the customer after the interaction?

FEEDBACK FROM THE OBSERVER AND DISCUSSION WITHIN THE GROUP

Observers are requested to share their feedback with the banker and
customer.

• Ask the bank official

• How comfortable were you in resolving the customer's query?

• What are the things that you did well while handling the customer?
• What are the things that you feel you could have done more effectively?

• Ask the Customer

• What are the things that you feel the Bank officer did well while handling your
query?
• What are the things that you feel the Bank officer could have done more effectively
while dealing with you?
• How would you rate the service of the bank officer – Excellent/Good/Average/Bad?
• How did you feel while the bank officer interacted with you?

65
OUR LEARNING FROM THE ROLE PLAY

Reflect on the experience. What did you learn? What are your areas of
improvement? Jot down your learning from the role play

Discuss the learning with the entire class.

Students can write your own role play scripts and practice again and again to
improve customer service skills.

66
 Role Play Scenarios – Student Notes

Scenario 1

Ms.MoneyBag says “give me more interest”

1. Ms.Moneybag is a finance executive with Mehta and Co.,

2. She visits the bank branch of ICICI Bank to inquire about placing a fixed deposit
with the Bank.
3. She already has an existing savings account with the bank.
4. She wants to place a fixed deposit of Rs.40000/- for 5 years and is interested in
getting a high return.
5. Her mother has advised her to place the deposit in a cooperative bank as they
offer higher rate of interest.

Hints for Customer: Make enquiries regarding rate of return, type of fixed deposit,
nomination facility, safety, money to be withdrawn incase of emergency

Hints for Banker: Be prepared with information about fixed deposits, interest rates,
returns at compounded rates etc. Build a rapport with the customer, offer the best option
and convince the customer to place the deposit with your bank quoting safety of
investment.

67
Scenario 2

“I would like to save before I spend “, says Mr.Savesmart

• Mr.Savesmart is a young executive with a software company in Mumbai

• He is earning Rs.25000/- per month.
• He visits the branch to deposit his first salary cheque into his savings account.
• He wants to take a demand draft for Rs.10000/- favouring his mother payable at
Chennai
• He inquires about the deposit schemes in the branch
• He estimates that he would need to send Rs.10000 every month to his mother
and spend another Rs.5000/- towards his monthly expenses

Hints for the customer: - Express your anxiety whether your money would be safe,
whether you can commit to saving Rs.5000/- per month, can the bank automatically
transfer from savings to RD every month ?, What is the penalty if the deposit is
discontinued, can you withdraw the money in an emergency etc.?

Hint for the banker: Read up the provisions of recurring deposit and check the rates of
interest from the website. See if you can calculate the maturity value for the RD to attract
the customer. Try and build a rapport with the customer by using your customer service
skills.

68
 • Scenario 3

“I want someone to listen to me “says Mr.Careful

• Mr.Careful is a senior citizen having an E or S account with his wife Mrs.Kind at

the Main branch.
• He visits the branch for a cash withdrawal of Rs.10000/- from his account.
• He wants denominations of 100s, 50s and 10s.
• The cashier offers him one section of 100 rupee notes – Mr.Careful is upset and
demands smaller denomination as he has to pay the labourers who are working
on renovation of his house.
• Mr.Careful is already upset that he had to wait for half an hour before he was
called for cash payment – he is in a hurry to reach home by lunch
• He needs to pay the weekly wages to the labourers by evening.
• He is expecting his daughter, son-in-law and grandchildren from abroad next
month and he is anxious to complete renovation work within the next week.
• Mr.Careful shares that he is also the secretary of his housing colony and most of
his neighbours also dislike visiting banks because they are crowded.

Hints for the customer – Just go on and on about all the problems that a senior citizen
could have – including health issues, attitudes of youngsters etc( remember any
comments from your grand parents/ elderly neighbours?)

Hints for the Banker – How will you pacify the customer, build trust and resolve his
requirement to the best of your ability. What other products can you offer, references,
businesses can you get through Mr.Careful?

69
 • Scenario 4

“I have got married recently – Delete my sister and add my wife’s name to
the account” says Mr.Handsome.

Mr.Handsome has a savings account with the Bank jointly with his sister Ms.Intelligent
to be operated by either or survivor. He has got married recently and wants to delete
his sister’s name and add his wife Ms.Beautiful’s name in the account. He wants to get
this done without the knowledge of his sister, so he visits the bank alongwith his wife.
He had got Rs.3 lakhs in his account which he claims is totally from his salary savings.
He would like to place a fixed deposit of Rs.2 lakhs for 2 years. As per bank’s
procedures, Ms.Intelligent’s signature is required for deletion of her name

Hints for customer: Try to get the Bank to agree to your request to delete your sister’s
name – try to prove that it is your money and convince the banker

Hints for the banker: Check out the topic types of customers to understand the provisions
of an E or S account. Be convincing in your reply to the customer, while maintaining good
rapport.

70
 ATTITUDE:

“The most significant change in a person's life is a change of attitude.

Right attitudes produce right actions “

“You can't always change your situation,

but you can always change your attitude “

“Ability is what you're capable of doing.

Motivation determines what you do.
Attitude determines how well you do it “

“If a man empties his purse in his head, no one can take it away from him.
An investment in knowledge always pays the best interest”

“Challenge each problem you face with purposeful thought and determined action.
Resolve that 'every' situation you encounter will make you better, stronger,
wiser, more skilful and more loving”

“There is a little difference in people,

but that little difference makes a big difference.
That little difference is attitude.
The big difference is whether it is positive or negative”

“A happy person is not a person in a certain set of circumstances,

but rather a person with a certain set of attitudes”

STORY TIME

71
One day, a poor boy who was selling goods from door to door to pay his way through
school, found he had only one thin dime left, and he was hungry. He decided he would ask
for a meal at the next house.

However, he lost his nerve when a lovely young woman opened the door. Instead of a
meal he asked for a glass of water. She thought he looked hungry so brought him a large
glass of milk He drank it slowly, and then asked, "How much do I owe you?"

"You don't owe me anything," she replied "Mother has taught us never to accept payment
for kindness."

He said, "Then I thank you from my heart."

As Howard Kelly left that house, he not only felt stronger physically but his faith in God
and
man was strong also. He had been ready to give up and quit.

Years later that young woman became critically ill. The local doctors were baffled. They
finally
sent her to the big city, where they called in specialists to study her rare disease. Dr.
Howard Kelly was called in for the consultation.

When he heard the name of the town she came from, a strange light filled his eyes.
Immediately he rose and went down the hall of the hospital to her room. Dressed in his
doctor's gown he went in to see her. He recognized her at once. He went back to the
consultation room determined to do his best to save her life. From that day he gave
special attention to the case.

After a long struggle, the battle was won. Dr. Kelly requested the business office to pass
the final bill to him for approval. He looked at it, then wrote something on the edge and
the bill was sent to her room.
She feared to open it, for she was sure it would take the rest of her life to pay for it all.
Finally, she looked, and something caught her attention on the side as she read these
words.

“Paid in full; with one glass of milk.” (Signed) Dr. Howard Kelly.

Tears of joy flooded her eyes as her happy heart prayed: "Thank You GOD, that your love
has spread abroad through human hearts and hands."

72
 TYPES OF CUSTOMERS- STUDENT WORKBOOK

Objective:

At the end of this session you will be able to

Explain the various modes of operations by different types of customers,
The importance of the regulations to protect the customer's as well as the bank's
interest

Sub Topics:

• Introduction
• Modes of Operation
• Individuals – Proprietorship – Partnership - Joint stock Company - Trusts, Societies,
Clubs-Government bodies-others

Training Sequence

Activity Duration
(in hours)
E-learning Types of Customers - Part I and II 8
Pre 1.Groups to script and enact role plays for different types of 1
Classroom individual customers
2. Prepare a chart on the mode of operation of non individual
customers
Classroom Presentation or Role play 2
Discussion
Role Play

Reference Books

Banking Principles and Operations by Mr. M.N.Gopinath

73
Types of Accounts for customers

Single Account
Mandate holder
Nomination
Joint Account
Mode of operation
Special Instructions
Minor's
Mode of operation
Illiterate, visual and hearing challenged, aged

Mode of operation
Executor and Administrator
Hindu Undivided Family
Proprietorship
Partnership
Joint Stock Companies
Mode of operation
Official Liquidator
Trusts
Societies / Associations
Clubs
Self Help Groups

PRESENTATION OR ROLE PLAY

Role plays:

You can enact role plays to bring out the emotions of customers as well as the duty of the
banker to handle the requests with courtesy. The banker also needs to comply with
regulations to protect the Bank's as well as customer's interests.

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CASELET

Read the case-lets given below and discuss the implications. You can enact these case-
lets as role plays or script your own role plays.

Caselet 1

Consider the following scenario:

Sudhir has opened a savings account in his name. He has deposited Rs. 5 lakhs in the
account. He is planning to go abroad to attend a conference.
Sudhir (to his wife Sushma): “Sushma, please go to the bank and withdraw Rs. 1, 00,000.
Here is the cheque. Also, please get a statement of my account.”
Sushma goes to the bank and presents the cheque to the Customer Service Officer (CSO).
CSO: “Madam, can you please get this cheque signed?”
Sushma (takes a look at the cheque): “Oh God! Sudhir has forgotten to sign the cheque.
It is okay. I am his wife. You can make the payment to me. I will sign it now. I am also the
nominee in this account.”
CSO (smiling politely): “Sorry Madam. This is a single account in the name of Sudhir. We
need the customer’s signature to debit his account and pay cash.”
Sushma (annoyed): “Sudhir is always forgetful. Give me a statement of his account.”
CSO: “Madam, can you please get a request signed by Mr Sudhir? We will issue a
statement on receiving his request or he can also place a request with the call centre.”
Sushma (over the phone): “Sudhir, can you please come down to the bank, sign the
cheque and take cash? It is all yours. Thank you.”
Discuss the caselet -
1. What were the banking transactions, queries that the customer’s wife had come for?

2. Do you think the Bank was right in refusing her requests? What was the risk to the
bank if they had acceded to the request?

3. How effective was the CSO in handling the service denial? (Relate to the customer
service chapter done earlier)

Caselet 2

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Sudhir opens a joint account with Sushma with the mode of operation being Either or
Survivor (E or S means either of them can sign or withdraw cash).
Sudhir (to the Customer Service Manager (CSM)): “Hi! I have just returned from my US
trip. I want to place a fixed deposit of Rs. 8 lakhs from my account. Here is the account
number.”
CSM: “Mr Sudhir, the balance in your account is Rs. 7 lakhs. What amount would you like
to place as deposit?”
Sudhir (shocked): “What? I had remitted Rs. 10 lakhs into the account last month. I had
issued a cheque for Rs. 2 lakhs, so I must have Rs. 8 lakhs in my account.”
CSM (politely): “Yes Mr Sudhir. There is a credit of Rs. 10 lakhs on April 2nd. There is also
a withdrawal of Rs. 1 lakhs on April 12th.”
Sudhir: “I would like to know how you paid the money without my signature. It is my
money.”
CSM (after checking the transaction): “Mr Sudhir, the cheque has been signed by your
wife, Mrs Sushma. The mode of operation in the account is Either or Survivor (E or S).”
Sudhir (calling from his mobile): “Sushma, have you withdrawn Rs. 1 lakh from the
bank?”
Sushma: “Yes. The service in the bank is really good.”
Sudhir (getting angry): “What did you do with the money?”
Sushma (in an excited voice): “It is a surprise for your birthday. I will show you when you
come home.”
Seething with anger, Sudhir returns home.
Sushma: “Here is the diamond necklace I gifted myself for your birthday. Isn’t it
beautiful?”
The next day, Sudhir goes to the bank.
Sudhir: “I would like to delete the second name from the account.”
CSM: “Mr Sudhir, deletion of the name can be done if both of you sign the request for
deletion.”
Sudhir: “Okay. Close this account. I will open a fresh account.”
CSM: “The closure request should also be signed by both the account holders.”
Sudhir: “It is an E or S account, so, can’t I give instructions?”
CSM: “The E or S mode is only for normal transactions in the account. We require the
signatures of all the applicants for instructions such as addition, deletion of names,
change of nomination, and closure of accounts.”
Sudhir: “In that case, I will give a letter to stop my wife from operating the account.”
CSM: “Mr Sudhir, we will take this instruction, but after you place the request, the
account can be operated only by both of you jointly.”

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Sudhir: “You mean I cannot operate the account singly even if I want to?”
CSM: “If one of the account holders requests for stopping operations in the account by
the other, the account becomes operable jointly.”

• Each group to enact the role plays as per guidance from the leader on the topics

Individuals
1. Single or Joint Account
2. Minors
3. Illiterates, sick, old customers

Group 1 - Role play of a family that has a minor, illiterate servant, aged persons etc. Show
a bank scenario where these people come to open an account and the branch official is
giving the information about account operation to them

Hint – Situation: One participant will enact as Mr. Kisan Ramchandra Bhogale, an illiterate
who walks into your branch (other participant as the banker) at your desk and wants to
open an account. Think of the possible type of questions he might ask. His gestures, voice
and understanding level needs to be kept in mind while enacting the role play. Try and
make it a fun and learning activity

Similar kind of situation can be generated for a minor, senior citizen etc.

Role play should highlight the roles in terms of

• Documentation
• Product information
• Type of account offered
• Facilities , mode of operation

Non individuals

1. Sole Proprietorships
2. HUF
3. Partnership
4. Joint Stock Companies
5. Trust, Association, Societies and Clubs (TASC)

Role play should highlight the roles in terms of

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 • Documentation
• Product information
• Type of account offered
• Facilities , mode of operation

DISCUSSION

Write down your response to the questions given below and discuss in the class

• What is the importance of the regulations governing the mode of operations of

bank accounts by different types of customers?

15.How does adherence to the regulations protect the bank's and customers' interest?

• Can a banker deviate from the rules to satisfy a customer request?

Good to know…

78
PLAN while others are playing.

STUDY while others are sleeping.

DECIDE while others are delaying.

PREPARE while others are daydreaming.

BEGIN while others are procrastinating.

WORK while others are wishing.

SAVE while others are wasting.

LISTEN while others are talking.

SMILE while others are frowning.

COMMEND while others are criticizing.

PERSIST while others are quitting

And thus, WIN while others are losing.

79
80
 BANKER CUSTOMER RELATIONSHIP - STUDENT
WORKBOOK

Objective:

This session will enable you to

Explain the rights, duties and responsibilities of bankers

Identify the different roles played by the banker while offering different products and
services

Sub topics:

• Definition of a customer
• Relationship between banker and customer
• Rights and obligations of Banker

Training Sequence

Activity Duratio
n
(in
Hours)
E-learning Banker Customer Relationship 2
Classroom Activity Case-let 2
Match the following

Reference: “Banking Principles and Operations” by Mr.M.N.Gopinath

CLASSROOM ACTIVITY

Can you list down some products and services offered by banks where the relationship is
in the nature of:

• Debtor – Creditor

• Pledgee – Pledgor

• Agent – Principal

81
 • Agent of Third Parties

• Lessor – Lessee

• Advisor – Advisee

Discuss and list down what is the relationship between the banker and the customer in
the following cases:

• Sheela places a fixed deposit with the Bank.

• Bank has given car loan to Naresh.

• Sriram has deposited a cheque for collection.

• Sheela has bought insurance from the bank.

• Bank has sold Government of India Bonds to Sri.Viswanathan.

• Bank has given a home loan to the Rajeshkumar.

• Shridhar has borrowed money for business by pledging his securities with the bank.

• Srilekha has taken a locker in the bank for the safekeeping of her jewels.

Write a story:

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The Banker is a debtor when he accepts deposits from customers. How is this different
from normal debtor – creditor relationship? Can you think of a humorous story to bring
out the difference?

Case-let I

Answer the questions individually and then discuss the issues and implications for the
Banker with your group members.

1. Sudhakar opens a savings account with the bank in his single name, Mrs. Sudhakar
calls up the branch to enquire the balance in his account. She insists that she can
answer all the verification queries about her husband and that she is handling his
account. She threatens to get the account closed if the bank does not give her the
information.

Can the bank officer give the information? State the reasons for your answer.

2. Mr. Sasikanth has guaranteed a loan sanctioned by the Bank to his friend Mr.
Sashidhar. Mr. Sashidhar does not maintain his accounts properly and has not been
able to honour the monthly repayement for the past 2 months. Mr. Sasikanth visits
the Bank to enquire about the balance in the account of Mr. Sashidhar.

Can the Bank give the information? State reasons

• Mr. Ramachandran has been maintaining a savings account and a current account
with your bank for the past 10 years. He has approached ABC Bank for an overdraft
limit for a new business. ABC Bank has written to you asking for the credit
worthiness of Mr. Ramachandran. Mr. Ramachandran had already mentioned to you
that he is approaching the other bank for loans.

83
 Can you share the account information of Mr. Ramachandran with ABC Bank?

• Mr. Seetharaman had a savings account with your branch which he had closed one
month back. One of your valued customers Mr. Dhandapani requests for
information on Mr. Seetharaman's account. He tells you that he is considering a
marriage proposal for his daughter with Mr. Seetharaman's son and your inputs
would be very important in finalising the marriage. Mr.Dhandapani has a
relationship of Rs.30 lakhs with you and has introduced several customers to the
Bank. You check Mr.Seetharaman's account and find that he had not maintained
the minimum balance for the last one year. There were also numbers of cheque
bounces in his account. What would you do now? Your colleague suggests that
since Mr. Seetharaman has closed his account, the Bank has no relationship with
him , hence you can give the details to Mr.Dhandapani.

Discuss in your group how each of the above situations is different and what is the
Bank's duty in each case?

Case-let II

• Ms. Sitalakshmi has a loan account with the Bank where the interest payment is
overdue for three months. She visits the Bank along with her sister to operate her
locker and inadvertently leaves a bag containing gold jewellery on the Branch
Manager's table. Can the Branch Manager retain the jewels till the interest is
regularised? Why?

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16.Bank has given a jewel loan to Mr.Rajappa against pledge of his wife's jewellery
valued at Rs.1 lakh. Rajappa has defaulted in repayment of the loan. Does the bank
have a lien on the jewels?

• Sujitha has a fixed deposit in the Bank for Rs. 10 lakhs in the joint names of herself
and her husband Kumar. Kumar has borrowed Rs.4 lakhs from the Bank as personal
loan and has defaulted in payment of EMI for two months. Can the Bank set off the
fixed deposits of Sujitha against the loan of Mr. Kumar?

• Sajid has a fixed deposit of Rs.1 lakh and a savings account balance of Rs.10, 000/-
in the Chennai main branch of ABC Bank. He has outstanding dues in his credit
card to the amount of Rs.50000/- due beyond 90 days and the Bank has not been
able to collect the repayment from him. The Bank part closes the fixed deposit and
settles the credit card outstanding under notice to Sajid. Sajid claims that he had
taken his credit card from a different department and they have no right to take
money from his balance in a different branch. Please comment

• Lakshmi enterprises has an overdraft limit with the Bank for Rs.50000/-. The
current outstanding amount in the overdraft account has reached Rs. 75000/- debit
balance and the proprietor Mr. Lakshmikanth has been asking for extension of time
to regularise the account. You find out that Mr. Lakshmikanth has a fixed deposit in
his name for Rs. 15000/- and a fixed deposit in the name of his son Karthik for Rs. 2
lakhs. Can the Bank manager set off any of the fixed deposits against the overdraft
amount? Why?

Discuss the Case-let in your group. What are the rights available to a banker for
recovering outstanding loan amounts from a customer? What are the exceptions to

85
 this right? List them down

List down your points for discussion

CHECK YOUR UNDERSTANDING

Match the following:

A - Bank B - Relationship customer

1 Fiduciary Agent a Recipient
2 Agent of Depository b
Right to retain any property of the
debtor

3 Advisor c Principal
4 d
General Lien Adjust the credit balance & debit
Balance

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 e Customer of Depository
5 Right to set off

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STORY TIME:

Sairam, the customer service officer at the Kanchi branch of ABC Bank was very busy that
Monday morning, handling cash receipts and payments. He had joined the bank a week
back and everything was new to him. He had been a class topper in B.Com but that didn’t
seem to help him in counting cash, handling irate customers as well as cross sell.
Mr.Nagalingam, a HNI customer, walks in at that moment. Mr.Nagalingam is six foot tall,
well built, with a tough face highlighted by his bushy eyebrows and big moustache.
Mr.Nagalingam: (In a booming voice) Hi, young man, where is your branch manager
gone?
Sairam (slightly scared, in a timid voice) Sir, he has gone out to meet a customer.
Mr.Nagalingam (looking around) is there no body else?
Sairam (thinking…he looks like a movie villain) No Sir, What do you want?
Mr.Nagalingam: I want to know the balance in Lakshmi’s savings account
Sairam: (slightly relieved, politely) Who is Lakshmi sir? Can I have the account number?
Mr.Nagalingam: (angry) What! You dare to speak my wife’s name. Do you know who I am?
I am the panchayat president here.
Sairam: (scared) Sorry sir, can I have the account number?
Mr.Nagalingam: (Roughly) You don’t know the account numbers of important customers?
You expect us to remember the numbers?
Sairam: (backing out) Sorry Sir, I have just joined a week back. I do not know.
Mr.Nagalingam: Ok. Here is the number. Tell me the balance quickly.
Sairam: (checking the account number in the system, in a firm voice): Sorry Sir, this
account is in the name of Lakshmi. Your name is not in the account. So I cannot tell you
the balance.
Mr.Nagalingam: (raising his voice) How dare you speak to me like this? I am the one who
is putting money in her account. Call your branch manager. I will get you transferred from
here. What is happening in this branch?
Sairam (in a shaking voice): As per Banking Regulation Act, we cannot share the balance
of a customer with another person. As a banker, I cannot violate the secrecy of a
customer.
Mr.Nagalingam: (Pushing the table, shaking his fist) What! Is my wife keeping money
secretly without my knowledge? And you cannot tell ME her balance! I will take you all to
court. I will see that all the people in my village close their accounts with your bank

88
Learning

What went wrong in this interaction? Would you have acted differently if you were the
service officer?

89
 TYPES OF DEPOSITS - STUDENT WORKBOOK

Objective:

To explain the features of different types of deposits and highlight the benefits to
customers

Sub Topic:

Demand and Term Deposits

Two in one accounts
Recurring deposits

Training Schedule:

Activity Duration
(in
hours)
E learning Deposits and Accounts 2
Pre classroom Check websites and brochures of different banks Compare 2
the savings bank account and fixed deposit products offered
by Banks
List down the products and services offered by ICICI Bank
( check from ICICI Bank website)
Classroom Charts 2
Presentation
Fun game – Act dumb!
Reference Banking Principles and Operations by Mr.M.N.Gopinath
Books

90
CLASSROOM ACTIVITY

Charts

Prepare a comparative chart for the following and present

• Demand and Term Deposits
• Two in one accounts
• Recurring deposits

List down your learning from the charts presented

• What are the latest interest rates offered by ICICI bank on term deposits? Check on
website www.icicibank.com? What is b2 savings account? Click on b2 to hear what
it is all about.

• What are the best rates offered for particular period available in the market?
Compare with other banks like SBI, HDFC, Axis, Canara Bank. Prepare a
comparative chart below. Check out the RBI website path www.rbi.org.in/common
man>Useful Information>Financial agents/ Banks in India.

Presentation

91
As you have visited the branches to know about fixed deposit, highlight the various points
of difference you observed in different banks through a presentation/ role play. Your group
could have bankers from two different banks that try and sell their product to the
customer.

Discussion

After forming of groups discuss on the below points and present

1. How do banks differentiate their offering to attract customers?

2. Analyze the difference in interest rates on fixed deposits offered by Banks?

3. Banks offering lower interest rate are also able to attract and retain customers. How?

Form groups and discuss on the topics given below: (What are the benefits to
customers and to the bank)

• Saving account

92
 • Current account
• Term deposit
• 2-in-1 account
• Recurring deposit

Pen down your points on each of the above topic

Fun Activity in the class room: Act Dumb!

Each group in the class has to prepare cards containing names of the different products
and services offered by ICICI Bank. One participant from group 1 has to pick up a card
from group 2 and act out the product to his group. The participant pretends that he is
dumb. Two points for each correct identification within one minute. If group 1 is not able
to identify, then any other group is given 30 seconds to give the answer.
For example, if the product is “Young Stars” then the student can act like a child

Fabulous Flags

Take a sheet of paper, pens, colour pencils, crayons, and/or markers .

You can now draw a flag that represents or symbolizes you. Please design your own flag -
include some symbols or objects that symbolize who you are or what you find enjoyable
or important.” For example, you could draw:
• a guitar (representing your passion for music)
• a tennis racket (someone who enjoys sports)
• a country like India (representing your affiliation with a country)
• a book ( for a book lover)
• a flower ( a nature lover)
Come up with your drawing in 10 minutes and then present your flag in class.

93
Variations
You can now get together with your classmates and draw the class flag which symbolises
the ideals of the class as a whole
Alternatively, you can collect the individual flags and paste them onto a board to create a
“quilt” of individual flags, representing unity.

STORY TIME

A professor stood before his philosophy class and had some items in front of him.
When the class began, he picked up a very large and empty mayonnaise jar and
proceeded to fill it with golf balls. He then asked the students if the jar was full.

They agreed that it was.

So the professor then picked up a box of pebbles and poured them into the jar.
He shook the jar lightly. The pebbles rolled into the open areas between the golf
balls. He then asked the students again if the jar was full.

They agreed it was. The professor next picked up a box of sand and poured it into
the jar. Of course, the sand filled up everything else. He asked once more if the
jar was full.

The students responded with a unanimous "yes."

The professor then produced two cups of coffee from under the table and poured the
entire contents into the jar, effectively filling the empty space between the sand. The
students laughed. "Now," said the professor, as the laughter subsided, "I want you to
recognize that this jar represents your life in HR.

The golf balls are the important things – Business objectives, People aspirations, health –
yours, your organizations and everyone in it and your network -- things that if everything
else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like Policies, Processes, and Procedures.

The sand is everything else -- the small stuff like beautiful office, cars, office trips etc."

"If you put the sand into the jar first," he continued, "there is no room for the pebbles or
the golf balls. The same goes for life. If you spend all your time and energy on the small
stuff, you will never have room for things that are important to you. Pay attention to the
things that are critical to your happiness as a HR Professional.

There will always be time to clean the house, and fix the disposal. Take care of the golf

94
balls first, the things that really matter. Set your priorities. The rest is just sand."

One of the students raised her hand and inquired what the coffee represented.

The professor smiled. "I'm glad you asked," he said. "It just goes to show you that no
matter how full your life may seem, there's always room for a cup of coffee with a friend
or colleague."

What is your learning from the story?

Suggest a name for the story

______________________________________________________________________

Quiz Time Folks!!!!! Your Quiz master will shortly present to you the quiz
questions

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