IMPORTANCE OF INVESTMENT :

Today we will talk about investing your money which is the only way to gain financial freedom in the long term.
Investing is the best way to make your money earn more money for you and secure your future in the process.
We sincerely hope that you have already started investing. If not, then you must start today to get the following
compelling benefits.
1. It is a great source of passive income:

One thing that the ongoing corona virus crisis has taught us is that we cannot solely rely on your regular income. If
we Are unable to earn our regular income for some reason, we can land up in immense hardships.
To mitigate this risk, you will need to have a second line of income which will help you to sustain yourself in times of
such crisis. This can be your investments in Fixed deposits, equities, Mutual Funds, properties, and other assets. These
investments will continue to earn returns for you even when your regular income stops and enable you to tide over
the situation comfortably.
2. Brings financial Independence:

Are you afraid of becoming dependent on others after retirement for your monetary needs? Do not worry. You can
get financial freedom in your old age by investing regularly to create a retirement Corpus. The passive income you will
earn from this corpus will enable you to take care of your monthly expenses and other needs comfortably after
retirement.
3. It lets you follow your passion:

Do you dream of retiring early to pursue a passion that you have? If yes, then your investments are the key to
achieving your dream. Your strategy should be to invest and accumulate wealth in a planned way in your early years
and when you accumulate a sizable wealth, retire early.
The passive income you earn from those investments will help you to meet your expenses thereafter while you are
busy in actively pursuing your passion.
4. Helps to beat inflation:

Inflation is a fact of life which none of us can avoid. It reduces the purchasing power of money we have and makes us
poorer as time passes by. Unless you take steps to address this problem, you can be in serious trouble.
The best way to combat the negative effect of inflation is to invest the money that you have in your hands today.
Investing regularly will enable you to beat inflation and your purchasing power will not go down.
5. Get tax benefits:

Did you know that your investments can get you tax benefits too? Various investment products like PPF, ELSS, Tax
Saving Bonds and long-term fixed deposits offer tax benefits under section 80C of the Income Tax Act 1961. Invest in
them wisely to reduce your tax burden.
You need to start investing regularly in a disciplined way to get the benefits I have talked about. Let your money turn
into a sizable wealth over time and gain the financial freedom that you dream of.

Principles of investment report:

Investing your money can be a fantastic way of building a better financial position for yourself and your family. Here we
explain the 5 key principles that should form any sound strategic investment plan.

1. Know the risks

Investing your money can be a rewarding experience because of the risk involved in the process. Generally speaking, the greater
the risk, the greater the reward. However, an acceptable risk for one person may not be an acceptable risk for the next. While
investing your money may sound daunting, you don’t have to manage your portfolio yourself – as long as you understand the
risks behind investing your money, you can hire a portfolio manager to do the legwork for you.

2. Rules are important

If you’re looking to manage your own portfolio, the greatest success tends to come when the investor sticks to a clear-cut set of
rules. Wishy-washy rules like “A part of my investment should be real estate” and “I’ll think about selling if the value starts to
drop” aren’t good enough – set specific values for how much of your portfolio should be a given investment and set specific rules
for when you want to sell.
However, because of the amount of time, knowledge and skill required to do this successfully, many people opt to use a
discretionary investment management company instead. Your portfolio manager will still follow a clear set of rules over your
investment mandate, though the individual buying and selling of investments will be done entirely at the portfolio manager’s
investment.

3. Set yourself realistic ROI goals

Everyone wants the highest possible ROI for the lowest possible risk. Unfortunately with minimal risk comes minimal rewards,
and vice versa. If you’re looking for safe investments that guarantee a return of 12% or higher, you’re going to be disappointed –
those kind of investments simply don’t exist. If you only want safe investments that’s one thing, but don’t expect a massive ROI.
Set yourself objectives and a realistic time horizon before you start investing your money.

4. Know your financial limitations

There is a very real risk to investing more than you can afford. If you want to make the most of your investments, your money
shouldn’t be keeping you up at night. Instead, it is far better to invest an amount each month which is appropriate to your
financial situation.

5. It’s never too early to start investing

Because of the way that compound interest works, it’s never too early to start investing your money. You don’t need to wait until
you have hundreds of thousands of pounds to hand before you start investing. Compound interest is a tremendously powerful
thing – in many cases the sooner you start investing, the larger your overall profit. Feeding your investments little by little can
help your portfolio grow substantially over the years
Sec /B N0-03 : Traditionally bank deposit :
Traditionally there are Four types of bank deposits in india .each type has its own advantages.
They are as follows:

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1.Savings Bank Account:
As the name of this deposit suggests, it is suitable for those who have a definite
income and want to save some money. To understand this let us take an example:
the regular salaried people incline savings account and it is best suited for them as
well. Generally, for opening a savings bank account, you have to deposit a small
amount as an initial deposit, which varies from bank to bank.

You can deposit money at any time in your savings account. The interest is earned as
per the rate of interest offered by the bank and is paid on the balance in your
account. You can deposit money in this account anytime. For withdrawing money
from this account, you can either use an ATM card, issue a cheque, or sign a
withdrawal form. Generally, there is a restriction on the number and amount of
withdrawal from the savings account.

2. Current Account :

A type of bank account that has lesser restrictions than a savings account in terms of
transactions and withdrawals is known as a current account. Another name of the
current account is a demand deposit account and is most of the opted by the
businessmen for conducting their transactions smoothly.

You should select this account type only if you are a businessman (even if an owner
of a small business) who has to perform multiple transactions daily. There is no limit
on the number of transactions from this account in one day. The overdraft facility is
also offered by the banks to its account holders.

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This means, as an account holder of such an account, you can withdraw more money
than that is in your account. In addition to this, there is no restriction to maintain a
minimum balance in this account. The biggest disadvantage of having a current
account is that the banks do not pay any interest on them and for maintenance and
service bank charges hefty fees.

3.Recurring Deposit:

A special type of account wherein you do not have to deposit a lump sum amount
rather you have to deposit a fixed amount every month. This fixed amount can be as
low as Rs. 100 every month. When you want to incorporate a habit of savings, then
you should open this account. The rate of interest offered on a current deposit varies
from bank to bank and may range from 5% to 7% and different rates are provided to
the senior citizens.

A recurring deposit can have different maturity ranges that may vary from six months
to 120 months. You can give an order to your bank for withdrawing a specific
amount every month, and this amount can be credited to the Recurring Deposit
account regularly. However, the bank can charge some penalty for delay in an
installment payment.

Another special feature of an RD account is that you can take a loan up to 80% to
90% of your deposit by the use of this deposit. There is no facility for premature
withdrawal, and if you close your recurring deposit account before the date of
maturity, then you have to pay the penalty.

4.Fixed Deposit:

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The fixed deposit is a type of investment instrument offered by banks, other financial
institutions, non-banking financial companies. With a fixed deposit, your money is
deposited for a fixed tenure and you get guaranteed returns. The interest on fixed
deposits ranges from 5% to 9%. The rate of interest offered in a fixed deposit
account is higher than what is provided in a savings account.

The tenure for which your money gets deposited in a fixed deposit ranges from
seven days to 10 years. You may or may not have to have a separate account for
opening a fixed deposit account with a bank. Some banks these days offer fixed
deposits that provide tax exemption of up to Rs. 1, 50,000. You can use this tax
exemption every year U/S 80C of the Income Tax Act, 1961.

Another advantage of opening a Fixed Deposit account is that the interest amount
below Rs. 40,000 is free from tax. The interest amount is more than Rs. 40,000 is
subject to TDS (Tax Deduction at Source). Same as recurring deposit, you cannot
perform a premature withdrawal, however, you can shut-down the FD account
prematurely.You can be charged a penalty in case of closing the FD account early.
You must opt for a fixed deposit account when you are building a habit of saving.
This is one of the safest investment portfolios as it offers guaranteed returns.

With day-to-day advancement in technology and advancements in digital payments,

banks provide the facility of online banking. You can open any of the
aforementioned bank types online and as well as deposit and withdraw money
through the internet. You do not have to go to the bank every month to see the
balance in your account or update your passbook.

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Everything can be performed online very easily. You can check the transaction details
as well as the account balance online. With investment options like fixed deposits
wherein you get a good rate of interest, you can save your money and get
guaranteed returns. Fixed deposits are good for those who want to invest money for
fulfilling their long-term goals. Even with a savings account, you get a respectable
rate of interest, and you can save money. Recurring deposits are good for those who
want to invest a fixed amount in a regular interval.

So, every account has its advantages and disadvantages and it is up to you which
account type you need.

Insurance Contract is not a wagering agreement but it is like wagering agreement.

Both, Insurance Contract and wagering agreement depend upon a future uncertain
event. There are differences between the wagering agreement and Insurance
Contract are as follows:

Sec 03 /No:2

Insurance Contract & Wagering Agreement :

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1) Insurance Contract is an agreement between the parties in which one party, the
Insurer accepts significant insurance risk from another party, the policyholder to
compensate the policyholder if uncertain future event impacts the policyholder.

. Wagering Contract is one by which two persons, professing to hold opposite views
touching the issue of a future uncertain event mutually agreed dependent upon the
determination of the event that one shall win from the other a sum of money, neither
of the contracting parties having any other interest.

2)Insurance Contract is Valid Contract

.According to Section 30 of the Indian Contract Act, 1872 wagering agreements are
void.

3)Parties will have Insurable interest.

.In case of Wagering, Agreement parties do not have insurable interest.

4)In Insurance Contract risk of loss is not created but natural.

.In wagering agreement risk of loss or gain is created by the parties.

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5)Insurance of Contract Protects the Economic Interest of the Parties.

.Wagering agreement affects the interest of the parties.

6)In Insurance Contract the amount agreed is enforceable.

.In case of wagering agreement, the amount agreed is not enforceable.

N03

Importance of CRM in banking sector :

1:Better Segmentation for Customers:

Banks need to work towards a customer-centric business model which is

needs-based. CRM in banking enables banks to correctly stratify their
customers based on a variety of factors such as:

 Gender
 Demography
 Age
 Income
 Credit rating and so on.

Moreover, it will also allow segmentation based on investment scheme

preference, investment size, customership duration, and more.

2.Boosted Sales:

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 By implementing the right BFSI CRM, banks will be able to provide the digital-
first banking experience that consumers expect. A Mobile CRM can help banks
launch digitization across both online and mobile banking experiences, just
from simple onboarding to real-time service solutions. The tool will help
identify, nurture and convert leads for the better and enhanced functioning of
the banks.

3. 360- Degree of View for Every Customer:

A banking CRM is a unified system that combines with banking software

applications to provide you a single picture of all of your customers’ accounts.

Every predetermined action a consumer makes can be logged in the CRM,

from making an ATM transaction to requesting information about a specific
sort of loan. This makes gaining deeper insights into their habits and personal
preferences quick and straightforward, which can help banks match particular
goods to their financial goals.

4.Personalize Customer Journey

With the end number of private banks available, as customers, we all use multiple
banks for varied requirements instead of just one. Therefore, a personalized
customer experience can make their banking experience stand out from the crowd.

5.Insights that help improve Sales and Marketing:

Data available through the CRM tool can be compiled into reports which in turn give
a strategic and deeper understanding of your customers. Bankers can then easily
identify trends, campaigns, and areas for improvement that will help them implement
new strategies and tailor future marketing campaigns accordingly.

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Banks can also use the information in their customer profiles to identify potential
cross-selling and upselling opportunities.

6.Improved Customer Retention:

A CRM tool best offers real-time data that helps banks evaluate the next- course of
action. One always needs to remember that the more effective strategy, the happier
the customer. With a customer-oriented strategy and on-time resolution, your bank
will outperform your competitors.
7.Inter-Department Data Tracking:
With all the data available in one place, the CRM tool can make any banker’s life easier than ever before. CRMs can assist banks
in keeping all departments on the same page so that customers do not have to move from department to department. It can
also provide a digital experiencee that matches what customers would anticipate from a face-to-face encounter with their
banker.
8.Train your Workforce
One of the key benefits of CRM in the banking sector is the elimination of repetitive administrative activities when all customer
information is stored in one system. This allows employees to spend less time trawling through data and more time nurturing
client relationships. Conduct monthly training sessions for your employees in order to make them more efficient and
productive.

2019
01. Banking Regulation Act, 1949
 Introduction :
Different types of banks, such as commercial banks, cooperative banks, rural banks, and private sector banks
exist in India. The Reserve Bank of India (RBI) is the governing body for regulating and supervising the banks.
Banking Regulation Act, 1949 is an Act that provides a framework for regulating the banks of India. The Act came
into force on 16th March 1949. This Act gives RBI the power to control the behaviour of bank s. This Act was
passed as Banking Companies Act, 1949. It did not apply to Jammu and Kashmir until 1956. This Act monitors the
day-to-day operations of the bank. Under this Act, the RBI can licence banks, put regulation over shareholding
and voting rights of shareholders, look over the appointment of the boards and management, and lay down the
instructions for audits. RBI also plays a role in mergers and liquidation.

 History of the Banking Regulation Act, 1949:

The concept of banking started in India with the establishment of the Bank of Hindustan. Before nationalisation
took place in India, the banking system of India was more of a private nature. Banks were struggling to keep their
branches open. Low capital and reserves and greed for obtaining high profits became a reason for the failure of
the banking system. The banks were supervised under the Companies Act, 1913, but this Act was not sufficient to
regulate banks. The economy was not performing well, and this started to damage the banks. Also, the concept
of banks was mostly used by the upper-class people. Frauds were also one of the reasons for the decline in the
usage of banks. This gave a need to regulate the banking system of India. As a result, the Banking Regulation Act
was introduced in 1949. It was initially applicable to banking companies, but after the Amendment in 1965, the
Act was also applicable to cooperative banks.

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  Objectives of the Banking Regulation Act, 1949:
The objectives of the Banking Regulation Act are stated below:

To meet the demand of the depositors and provide them security and guarantee.
To provide provisions that can regulate the business of banking.
To regulate the opening of branches and changing of locations of existing branches.To prescribe minimum
requirements for the capital of banks.
To balance the development of banking institutions.

 Scope and applicability of the Banking Regulation Act, 1949 :

The sections under this Act are to be interpreted along with the sections of the Companies Act, 1956, or any other
laws prevalent in the banking system. This Act applies to banking companies and cooperative banks. It will not apply
to a primary agricultural credit society or a cooperative land mortgage bank, or any other co-operative society, except
mentioned in Part V of the Act.

 Features of the Banking Regulation Act, 1949:

The Act has been divided into five parts comprising 56 sections.

The main features of the Act are mentioned below:

Non-banking companies are forbidden to receive money deposits that are payable on demand.
Non-banking risks are reduced by prohibiting trading by banking companies.
Maintaining minimum capital standards.
Regulation on the acquisition of shares of banking companies.
Power of the Central Government to make schemes for the banks.
Provisions regarding liquidation proceedings for banking companies.

 Licensing of banking companies:

Section 22 of the Act provides that no banking company is permitted to carry on the banking business in India unless
it holds a license issued on behalf of the Reserve Bank. Such a license is issued only when the RBI is satisfied that all
the conditions are satisfied. Since the banking is the backbone of the Indian Economy, so for the smooth conduct of
the banking business in India is it important that no unscrupulous element is added to this banking industry. So the
licensing system makes sure that no undesirable element is taking part in the Indian banking system.

Procedure: Every company desiring to start a banking company shall before commencing the banking business in
India, shall apply in writing to the Reserve Bank of India.

Condition: Section 22(3) states that the Reserve Bank is required to be satisfied with the following conditions before
granting license:

That the company will be in a stance to pay its present and future depositors;
That the affairs of the company are not conducted in a manner which is detrimental to the banking business;
That the management structure of the company is not prejudice to public interest;
That the company has adequate capital as prescribed under the statute and prescribed by RBI;

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 That the public interest will be served if the license is granted;
That adequate facilities are available in the proposed business area of the firm.
Cancellation of License: Section 22(4) states the situations where the RBI is entitled to cancel a banking business:

If the company ceases to carry on the business of banking;

If the company fails to comply with the conditions mentioned under the Act.

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