What is an RFC Savings Account?

 An RFC (Resident Foreign Currency) Savings Account is a savings account maintained in foreign
currencies - USD and GBP - for NRIs who have returned to India and hold funds in foreign currency.

Why choose an RFC Savings Account?

 An RFC Savings Account provides safe parking for your foreign currency funds. It can be funded with
any convertible foreign currency. Most important, if you change status to NRI again, this money can be
transferred to an NRE/FCNR account.

Overview
Features and Benefits
 Simple eligibility: Account can be opened by any returning Indian.
 Flexibility in currency: Open your account with any convertible foreign currency; maintain it in 2
foreign currencies: USD, GBP.
 Joint holder: Resident relative can be joint holder in RFC account on 'former or survivor' basis.
 Cash withdrawal: In rupees from your branch.
 Easy movement: Balance in the account including interest earned is fully repatriable.
 Easy change of status: If you change your status to NRI, the funds parked in RFC account can be
transferred to NRE/FCNR account.

The full form of SWIFT is Society for Worldwide Interbank Financial Telecommunications. SWIFT is a
member-owned cooperative that offers secure and safe money transfers for its representatives. The total
payments services allow people and businesses to consider taking card & electronic payments even though
the client or vendor uses a different bank that perhaps the payee. SWIFT consists of assigning every other
participant organization an id Number that recognizes not just the bank name but also branch, city & country.
SWIFT owners initially developed the network primarily to promote correspondence about Treasurer &
correspondence payments. The robust nature of the message format provided for enormous optimization via
which SWIFT slowly expanded to involve the following areas.

 Banks
 Securities Dealers
 Asset Management Companies
 Depositories
 Corporate Business Houses
 Foreign Exchange and Money Brokers
 Clearing Houses
 Exchanges
 Treasury Market Participants and Service Providers
 Brokerage Institutes and Trading Houses.

Lower Circuit: It is an Minimum Range in which a Stock Can Move on a Daily Basis.

Upper Circuit: It is an Maximum Range in which a Stock Can Move on a Daily Basis.
CIBIL is the short form of the Credit Information Bureau (India) Limited is a premier agency to provide CIBIL
score and reports of the individuals. A CIBIL or credit score is basically 3 digits numeric summary of whole
credit history of an individual.

IFSC is short for Indian Financial System Code and represents the 11 digit character that you can
usually see on your bank’s cheque leaves, or other bank sponsored material. This 11 character
code helps identify the individual bank branches that participate in the various online money
transfer options like NEFT and RTGS.

HDFC- Housing Development Finance Corporation.

ICICI is Industrial Credit and Investment Corporation of India.

 An ISIN is a code that uniquely identifies a specific securities issue.

 The numbers are allocated by a country's respective national numbering agency
(NNA).
 An ISIN is not the same as the ticker symbol, which identifies the stock at the
exchange level. The ISIN is a number assigned to a security that is universally
recognizable.

Types of endorsement- Blank or General Endorsement

It is a type of endorsement when the endorser just signs on the instrument without
mentioning the name of the person in whose favour the endorsement is made.

Special or Full Endorsement

In this type of endorsement contains not only the signature of the endorser but also
the name of the person in whose favour the endorsement is made, then it is an
endorsement in full.

Partial Endorsement
A partial endorsement is a type of endorsement in which purports to transfer to the
endorsee a part only of the amount payable on the instrument
Conditional or Qualified Endorsement
A type of endorsement where the endorsee limits or negatives his liability by putting
some condition in the instrument is called a conditional endorsement.

MICR code is a nine-digit code that recognises the bank and branch involved in an ECS (Electronic Clearing
System) uniquely. The MICR code is written next to the cheque number, at the base of a cheque leaf. It can
also be found printed on the very first page of a bank savings account passbook. MICR is Magnetic Ink
Character Recognition

CTS or Cheque Truncation System is a process of clearing cheques through image-based

verification. The electronic version of the cheque is sent for clearance with all necessary details
such as MICR code, date and name of presenting bank.

Advantages of CTS to Customers

 Faster clearing of cheques since there is no physical movement involved
 It is a more cost effective process
 This improves the quality of service for customers and hence money is credited to the
beneficiary account faster than before
 Cheques following this system generally get cleared within a 24-hour window

A liquidity adjustment facility (LAF) is a tool used in monetary policy, mainly by the Reserve
Bank of India (RBI), which enables banks to borrow money through repurchase agreements
(reposals) or banks to lend to the RBI using reverse repo contracts.

This arrangement manages liquidity pressures and ensures basic financial-market stability.
The Reserve Bank of India transacts repositories and reverse repos within its open market
operations in India. Facilities for liquidity adjustment are used to help banks overcome any
short-term cash shortages during periods of economic uncertainty or any other stress caused
by circumstances beyond their control. Different banks use eligible securities as collateral
through a repo agreement and utilize the funds to ease their short-term requirements, thus
remaining constant.
Moral hazard is the risk that a party has not entered into a contract in good faith or has
provided misleading information about its assets, liabilities, or credit capacity. In
addition, moral hazard also may mean a party has an incentive to take unusual risks in
a desperate attempt to earn a profit before the contract settles. Moral hazards can be
present at any time two parties come into agreement with one another. Each party in
a contract may have the opportunity to gain from acting contrary to the principles laid
out by the agreement.

Camel approach is significant tool to assess the relative financial strength of a bank and to suggest necessary
measures to improve weaknesses of a bank.. "CAMELS" ratios are calculated in order to focus on financial
performance. The CAMELS stands for Capital adequacy, Asset quality, Management, Earning and Liquidity
and Sensitivity. In this study some important ratios are chosen and calculated to evaluate bank's performance

Capital Adequacy: Capital adequacy has emerged as one of the major indicators of the financial health of a
banking entity. It is important for a bank to maintain depositors’ confidence and preventing the bank from
going bankrupt. Capital is seen as a cushion to protect depositors and promote the stability and efficiency of
financial system.

Assets Quality: The quality of assets is an important parameter to gauge the degree of financial strength. The
prime motto behind measuring the assets quality is to ascertain the component of Non-Performing Assets
(NPAs) as a percentage of the total assets. This indicates what types of advances the bank has made to
generate interest income. Thus, assets quality indicates the type of the debtors the bank is having.

Management Efficiency: Management efficiency is another vital component of the CAMEL Model that
ensures the survival and growth of a bank. The ratios in this segment involve subjective analysis and
efficiency of management. The management of the bank takes crucial decisions depending on the risk
perception. It sets vision and goals for the organization and sees that it achieves them. This parameter is used
to evaluate management efficiency as to assign premium to better quality banks and discount poorly
managed ones

Earning Quality Earning quality reflects quality of a bank’s profitability and its ability to earn consistently. The
quality of earning is a very important criterion that determines the ability of a bank to earn consistently,
going into the future.
Liquidity: Liquidity is very important for any organization dealing with money. For a bank, liquidity is a crucial
aspect which represents its ability to meet its financial obligations. It is of utmost importance for a bank to
maintain correct level of liquidity, which will otherwise lead to declined earnings. Banks have to take proper
care in hedging liquidity risk, while at the same time ensuring that a good percentage of funds are invested in
higher return generating investments, so that banks can generate profit while at the same time provide
liquidity to the depositors.

What are the three steps/stages of Money Laundering

Placement:
The process begins with the introduction of illegal money through cash deposits or any other means into
the financial system. The cash or funds when infused into the financial system are easy to move around
and thus turn liquid. This is the first stage of the washing cycle. Money laundering is largely used by
criminals involved in illegal activities like company frauds and dealing with drugs. The main aim of the
launderers in this stage is to hide the illegal sources of cash/ funds and move them away from these
sources.

Layering:
It is a process of separating the funds from the points of their introduction in the financial system, and
to cover these effectively with different techniques to layer the funds. The main intention of layering is
to confuse any criminal investigation and create distance between the source of the illicit gains and its
present appearance. Other forms used by the launderers are complex dealing with stocks and
commodities. The volume of these transactions is huge, and hence the chances of tracing their sources
are difficult.

Integration:
In this stage, the laundered money is merged into the legitimate economy. Integration is the final stage
of the process where the illicit funds are assimilated with other assets like stocks, bonds, jewelry, etc. in
the economic cycle. This 'integration' of clean money into the economy is successfully accomplished by
the launderer making it appear to have been legally earned. Now, it is almost impossible to identify legal
and illegal wealth. Not all money laundering activity goes through the same process. Some may overlap.

Financial sector regulators (viz. SEBI, RBI, IRDA, OFRDA, etc.)) have issued guidelines to their regulated
entities for taking various measures to curb Money laundering. AML compliance is essential mitigating
ML/TF risks and keeping the organization safer.

Liberalisation Period (1991-Till Date)

Once the banks were established in the country, regular monitoring and regulations need to be
followed to continue the profits provided by the banking sector. The last phase or the ongoing phase
of the banking sector development plays a significant role.
To provide stability and profitability to the Nationalised Public sector Banks, the Government decided
to set up a committee under the leadership of Shri. M Narasimham to manage the various reforms in
the Indian banking industry.
The biggest development was the introduction of Private sector banks in India. RBI gave license to
10 Private sector banks to establish themselves in the country. These banks included:

1. Global Trust Bank

2. ICICI Bank
3. HDFC Bank
4. Axis Bank
5. Bank of Punjab
6. IndusInd Bank
7. Centurion Bank
8. IDBI Bank
9. Times Bank
10. Development Credit Bank

The other measures taken include:

 Setting up of branches of the various Foreign Banks in India

 No more nationalisation of Banks could be done
 The committee announced that RBI and Government would treat both public and private
sector banks equally
 Any Foreign Bank could start joint ventures with Indian Banks
 Payments banks were introduced with the development in the field of banking and
technology
 Small Finance Banks were allowed to set their branches across India
 A major part of Indian banking moved online with internet banking and apps available for
fund transfer