A REPORT ON BFSI

A project submitted to PERIYAR UNIVERSITY, SALEM

BACHELOR OF COMMERCE - (COMPUTER APPLICATION)

Submitted by

AGALYA.P

REG NO : C21UG173CCA006

NM ID : D96851CA06B95E7A2D64993693CF6D32
Under the guidance of

Miss P. RAMYA BHARATHI & KIRUBAKARAN –BFSI TRAINER

AVS ARTS & SCIENCE COLLEGE, OMALUR.

(AFFLIATED TO PERIYAR UNIVERSITY, SALEM)

NOVEMBER 2023
 NAME AGALYA.P

DEPARTMENT 3rd B COM (CA)

NAN-MUDHALVAN ID D96851CA06B95E7A2D64993693CF6D32

REG NO C21UG173CCA006

COLLEGE CODE 214

PROJECT 1:KNOW YOUR

PROJECT TITLE CUSTOMER

PROJECT 7:FIXED DEPOSIT

PROJECT 8:HOUSING LOAN

&INTREST RATE

DATE 22.11.2023

SPOC R.RAVICHANDRAN
 ACKNOWLEDGEMENT

I wish to express my gratefulness to Mr. Dr M. MANIVANNAN Ph.D Principal

of AVS Arts And Science College Omalur, Salem.

I express my sinciere thanks to Mr. R. RAVICHANDRAN, SPOC of AVS Arts

And Science College Omalur, Salem.

I have absolutely no words to express my feelings of gratitude to the trainer

Miss P. RAMYA BHARATHI & Ms S.KIRUBAKARAN trainer from

TNASDC

for her Constant guidance during the project.

 DECLARATION

I here by Declare that this BFSI Training Report submitted to Periyar University

Salem for the academic year 2021-2024 is a record of my original work done under

the guidance of Miss P. RAMYA BHARATHI & Ms S.KIRUBAKARAN

Trainer.

DATE : Signature of the Student

PLACE : [AGALYA.P]
 Index
S.NO TITLE PAGE NO

1 INRODUCTION

2 PROJECT- 1

KNOW YOUR CUSTOMER

3 PROJECT-7

FIXED DEPOSIT

4 PROJECT- 8

HOUSING LOAN

5 CONCLUTION
 INTRODUCTION
KYC is the abbreviation for “Know Your Customer”. It is a part of a systemized process through
which the banks are able to procure information about the identity of their customers. Banking and
finance aspirants are expected to have a clear understanding of the Know Your Customer concept.
In this banking awareness study notes, we shall see more on the KYC with respect to its meaning,
objectives, benefits, norms, and more.

o The process of KYC and its guidelines were introduced by the Reserve Bank of India
(RBI) in 2002. These guidelines are issued under the Banking Regulation Act of 1949.
o KYC is generally completed by the banks while opening accounts for its customers. The
process helps the banks to ensure that their services are being used by the concerned
customers and that they are not misused.
o KYC details of the customers are also required to be updated frequently by the banks as
one of the norms.

Effective KYC processes are the backbone of any successful compliance and risk management
programme, and the demands of meeting KYC obligations are intensifying. With anti-money
laundering (AML) and KYC compliance growing in importance as more stringent regulatory
requirements come into force, banks and corporates are dedicating significant resources and time
to KYC compliance processes.

Although banks and regulators have indicated a willingness to move towards standardised KYC
requirements and align internal processes, there is still a way to go. A number of initiatives, both
global and local, aimed at improving the process on a global scale have come and gone.
Overcoming these challenges requires a proactive and collaborative approach to cultivate change.
KYC compliance also plays a critical role in real-time, cross-border payments, facilitating greater
levels of trust, transparency and collaboration, while mitigating risk. A community approach is
essential to accelerate the compliance process and create new, more collaborative ways to address
financial crime.

To date, almost 6,000 financial institutions are using the Swift KYC Registry to publish their KYC
data and receive data from their correspondent banks. It is recognised as the accepted standard
for correspondent banking due diligence. The registry has now been extended to corporate
customers of Swift to help simplify the KYC process between banks and corporates.
Conclusion
KYC is mandatory if you wish to conduct any type of financial transaction.
Completing your KYC in time helps you keep your bank account (or any other
account)safe. To prevent fraud, the RBI mandated that all transactions be carried out
only after a careful assessment of the customer's identity and address.
You can now complete your KYC process within minutes on most apps using
options like paperless KYC, and video KYC. So, don’t delay completing your KYC!
 PROJECT 7

FIXED DEPOSIT

Fixed deposits are a safe investment option that will assure a consistent interest rate, special interest
rates for senior citizens, multiple interest payment options, no market risks, and income tax
deductions.

Before forming a new FD or also renewing an existing one - it is critical to evaluate the most recent
fixed deposit rates offered by the country's top banks. Here are the most recent fixed deposit rates for
2023.

FD INTEREST RATE

One of the best ways to secure your money is by investing in fixed deposits which not only helps you
to save money but also helps you to earn a substantial interest in it. Competitive Bank FD interest
rates help the depositor to get a good Return on Investment over a fixed tenure. Under the fixed
deposit scheme, the depositor deposits the money only once at the time of opening the account. The
interest rates offered depends on the bank, deposit amount and the tenure you choose.

At the end of the tenure, the interest accrued is calculated on the principal amount and the total
amount is paid back to the depositor. The tenure of fixed deposits may range from 7 days to 10 years.
In the next section, we have enlisted some of the banks that offer competitive interest rates.

Banks provide a comparatively lower rate of interest on bulk deposits exceeding Rs. 1. crore and
higher rates on deposits less than 1 crore. DHFL Bank is one of the highest interest offering banks
and provides an interest rate of up to 9.25% for fixed deposits. The fixed deposit interest rates are
determined by changes in the RBI monetary policy such as the repo rate, base rate, internal liquidity
position of banks, credit demand, economic conditions, etc. The factors on which the bank FD rates
vary are the deposited amount, deposit tenure, and the type of depositor.
Small Finance Banks and NBFCs offer the highest FD interest rates. Following them are PSU Banks
and large Private Sector Banks. However, Private Sector Banks like Bandhan Bank, DCBBank,
Tamilnad Mercantile Bank, RBL Bank, IDFC First Bank, IndusInd Bank, Yes Bank, SBMBank,
CSB Bank and Federal Bank offer higher FD slab rates than the fixed deposit rates offeredby other
Private Sector Banks. FD interest rates of scheduled banks range from 2.50% p.a. to 9.00% p.a. for
the regular depositors for tenures ranging from 7 days to 10 years. Senior citizens are usually offered
an additional interest of 0.50%-0.75% p.a. above the applicable FD card rates.

GUARANTEED RETURNS ON INVESTMENT

FD interest rates booked at the time of opening an Fixed Deposit account remains the same till its
maturity, regardless of any changes in the banks’ FD card rates in the interim. For instance, ifan
individual opens a bank fixed deposit of 3 years tenure at 6% p.a., the interest rate will remainthe
same till the completion of its 3 years tenure. This offers a high degree of income certainty inFDs,
even higher than those offered by most small saving schemes.

CAPITAL PROTECTION

Fixed deposits booked with the scheduled banks are covered under the deposit insurance program of
DICGC, a subsidiary of RBI. The insurance cover is applicable on cumulative bankdeposits, which
include fixed deposits, savings account, recurring deposits and current account,of up to Rs 5 lakh per
bank per depositor, in case of bank failure.
TAX DEDUCTION UNDER SECTION 80C

Many banks and NBFCs offer 5-year tax-saving FD scheme with lock-in period of 5 years. The
principal component of up to Rs 1.5 lakh each financial year can be claimed as tax deductions u/s
80C of the Income Tax Act. However, the interest component is taxed as per the tax slab of the
depositor.

LOAN AGAINST FIXED DEPOSIT (FD)

Depositors can leverage their FDs to avail loans. Loans against FD are usually offered in the form of
overdraft facility, wherein the credit limit is sanctioned on the basis of the Fixed Depositamount
pledged as collateral and the interest is also levied only on the amount drawn till its repayment.
Moreover, the borrower continues to earn interest on the pledged FDs during the loantenure.
Withdrawals can be made anytime up to the credit limit from their overdraft account and repay it as
per their repayment capacity. These features of loans against FDs make them an excellent tool for
mitigating frequent liquidity and cash flow mismatches, without requiring prematurely closing FDs
and incurring premature withdrawal penalties.

In India, Fixed Deposits are one of the most popular ways to save money. They are a safeinvestment,
offer good returns, and are easy to open.

So, what exactly is a Fixed Deposit?

In a Fixed Deposit, you put a lump sum in your bank for a fixed tenure at an agreed rate of interest.
At the end of the tenure, you receive the amount you have invested plus compoundinterest.
Here I’ll deposit 2lakh given to me in different banks to find where I can get highest return

RETURN AFTER 24
ORGANIZATION AMOUNT INTEREST RATE
MONTHS

GOVERNMENT BANKS 50000 6.50% 16,250

PRIVATE BANKS 40000 7.60% 47,500

NON BANKING FIN

50,000 8.35% 58,986
COMPANIES

POST OFFICE SCHEME 75,000 7.6% 87,188

GOVERNMENT BANK PRIVATE BANK

Bank : Bank of Baroda Bank : Axis Bank

Type of customer : Normal Type of customer : Normal

Type of fixed deposit : Cumulative Type of fixed deposit : Cumulative

Amount : 50,000 Amount : 40,000

Date of deposit : 19/03/2023 Date of deposit : 19/03/2023

Date of maturity :19/03/2028 Date of maturity :19/03/2028

Tenure : 5 years Tenure : 5 years

Interest Rate : 6.50% Interest Rate : 7.60%

Total Interest : 66,250 Total Interest : 7,352

Maturity Value : 16,250 Maturity Value : 47,500

[Total amount I get after 5 years] [Total amount I get after 5 years]
NBFC SUKANYA SAMRIDDHI SCHEME

Finance : Shriram Finance Type of customer : Senior citizen

Type of customer : Normal Type of fixed deposit : Cumulative

Type of fixed deposit : Cumulative Amount : 75,000

Amount : 50,000 Date of deposit : 19/03/2023

Date of deposit : 19/03/2023 Date of maturity :19/03/2028

Date of maturity :19/03/2028 Tenure : 5 years

Tenure : 5 years Interest Rate : 7.6%

Interest Rate : 8.35% Total Interest : 28,174

Total Interest : 18,974 Maturity Value : 87,188

Maturity Value : 58,986 [Total amount I get after 5 years]

[Total amount I get after 5 years]

THE FORMULA TO DETERMINE FD MATURITY AMOUNT

There are two types of FD that you may avail of – simple interest FD and compound interest FD

Grow has calculators for both types of FD.

The fixed deposit calculator for simple interest FD uses the following formula –M = P + (P x r x
t/100), where –

• P is the principal amount that you deposit

• r is the rate of interest per annum
• t is the tenure in years
For example, if you deposit a sum of Rs. 1,00,000 for 5 years at 10% interest, the equation reads

M= Rs. 1,00,000 + (1,00,000 x 10 x 5/100)

= Rs. 1,50,000

For compound interest FD, the FD return calculator uses the following formula –M= P + P {(1 +
i/100) t – 1}, where –

• P is the principal amount

• i is the rate of interest per period
• t is the tenure
For example, if you take the same variables, the compound interest FD will accrue,M= Rs. 1,00,000
{(1 + 10/100) 5-1} Or, Rs. 1,61,051
ADVANTAGES OF THE FIXED DEPOSITS

• EASY AVAILABILITY
The Fixed Deposit scheme is available to all the public and private sector banks in India.
You can open the FD, through internet banking as well. There is no need to go to the bank
for opening FD if you have the KYC or "Know Your Customer" formalities done at the bank.

• GUARANTEED RETURNS
FD offer greater interest than the saving accounts. The rate varies between 7 % to 8 %. The
interest gains of an FD also vary with its tenure, so that a long-term FD accrues better
interest gains. The fixed deposit interest rate comparison charts, available online, will revealto
you which bank is offering the greatest of returns.

• TAX EXEMPTION
The original monetary amount, which the depositor deposits in the FD, is exempt from
taxation, under the Section 80C of the Income Tax Act. FDs are a widely used tax saving
option by both salaried individuals and workers, and the business persons. The section offers
an exemption of up to Rs 1.5 lakhs, towards an FD deposit.

• PROVIDES FOR PARTIAL WITHDRAWALS

Some banks offer the FD schemes that provide for the partial withdrawals. The balance that
remains in the FD account after withdrawal gets the same interest. These FDs are hence more
lucrative and can be used to withdraw money, in times of need and crisis.
 • LOAN FACILITY
An FD can also be used for getting a loan. The loan facility helps the depositor to get the
finances when he or she requires them. The loan may extend up to 90% of the principal and
the interest that has been accrued on it.

.DISADVANTAGES OF THE FIXED DEPOSITS

• INTEREST ARE TAXED UPON

All interest gained on the fixed deposits are fully taxed upon. The income is denoted under
the head “Income From The Other Sources" when you file your ITR to Income Tax Returns.

There are other financial instruments available, which provide you the benefit of tax-free
savings. The PPF and the government bonds, are a few of them.

• TDS TAXATION
Interests gained from a FD are also charged with TDS. Banks reduce it from the interest
accrued at the end of each year. However, the depositor has the option to opt out of TDS, and
pay all the interest at the maturity. The form 26 AS, is linked to the PAN card of the
depositor and shows all the TDS deductions made towards the FD.
 PROJECT - 8

HOUSING LOAN & INTREST

A housing loan, also known as a mortgage, is a type of loan that allows you to borrow money
from a bank or financial institution to purchase a home. The loan is typically repaid over a fixed
period, usually 15 to 30 years, at a predetermined interest rate. You make monthly payments to
the lender, and the amount of your payment is based on the loan amount, the interest rate, and the
loan term.

Purpose of Housing Loans:

Housing loans are primarily used to purchase a primary residence, but they can also be used to:

• Refinance an existing mortgage to secure a lower interest rate

• Purchase a second home or investment property
• Make renovations or repairs to a home