FEE BASED AND FUND BASED SERVICES FUND BASED SERVICES Fund based service is where bank makes

s money out of the funds that a customer keeps with the bank

FEE BASED SERVICES Any service provided by bank that charges upfront fees is called fee based service Fee based is when the banks provide only some services for which they get some income.Also known as non-fund based services. A bank lends money belonging to a third party and earns interest as the middle man. Banks money is not involved. Types of Fund Based Service Letter of credit, Bank guarantee, Coacceptance of-bills/deferred payment guarantees for example DD making charges bank charges some amount to make a demand draft

Fund based services offered by banks are those which deal with actual cash credits ,term loans

Banks give their money out on loan and they earn interest from it.

Here, the banks money is involved Types of Fund Based Service working capital finance, short term finance, export finance, term lending , etc. for example Any income arising out of loans given by banks , i.e. , interest is known as fund based income & loan is nothing but customers fund

DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION (DICGC) India was the second country in the world to introduce Deposit Insurance in 1962. The Deposit Insurance Corporation (DIC) commenced functioning on January 1, 1962 under the aegis of the Reserve Bank of India (RBI). 1971 witnessed the establishment of another institution, the Credit Guarantee Corporation of India Ltd. (CGCI). In 1978, the DIC and the CGCI were merged to form the Deposit Insurance and Credit Guarantee Corporation (DICGC). DICGC is a wholly owned subsidiary of the Reserve Bank of India, Since 1962, it is engaged in providing deposit insurance for depositors of banks against loss of part or all of their deposits arising from bank failures. Deposit Insurance is compulsory as well as automatic for the bank and thus no bank can remain uninsured by the DICGC except those cooperative banks where the concerned State Governments are yet to pass the required legislation.

Bank deposits up to Rs.100000.00 (Rupees One Lakh Only) in respect of each depositor are fully protected by the Deposit Insurance and Credit Guarantee Corporation under the Deposit Insurance Scheme. The Scheme covers all commercial banks (including Regional Rural Banks) operating in India and also co-operative banks in States and Union Territories to which the Scheme has been extended by the Central Government. These Banks are registered as insured banks with the Corporation. All commercial banks, including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by DICGC. Banks have right to set off their dues from the amount of deposits. The deposit insurance is available after netting of such dues

When is DICGC liable to pay? If a bank goes into liquidation: DICGC is liable to pay to each depositor through the liquidator, the amount of his deposit up to Rupees One Lakh within two months from the date of receipt of claim list from the liquidator. If a bank is reconstructed or merged with another bank:DICGC pays the bank concerned, the difference between the amount due to depositor under the insurance scheme and the amount received by him under the reconstruction scheme within two months from the date of receipt of claim list from the transferee bank/Chief Executive Officer of the insured bank as the case may

India has a large number of development banks. Some of them are as follows: NABARD (National bank for Agriculture & Rural Development) 1. National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India. It has been accredited with matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India. 2. NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India and Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere agencies to provide credit in rural areas. 3. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts. It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas. 4. It provides short term finance assistance for period of 18 months to state co-operative banks, commercial banks, RRBs, and so on for wide range of activities in the areas of production, trading, marketing and storage. 5. It also gives loans up to 20 years of maturity to the state government to enable them to subscribe to the share capital of co-operative credit societies. NABARD serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.

6. NABARD takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. 7. NABARD co-ordinates the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation and also undertakes monitoring and evaluation of projects refinanced by it. 8. NABARDs refinance is available to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial institutions approved by RBI. 9. While the ultimate beneficiaries of investment credit can be individuals, partnership concerns, companies, State-owned corporations or co-operative societies, production credit is generally given to individuals. NABARD provides: Long term finance for minor irrigation facilities, plantations, horticulture, land development, farm mechanizations, animal husbandry, fisheries etc. Short term loan assistance for financing of seasonal agricultural operations, marketing of crops, purchase/procurement/distribution of agricultural inputs etc. Medium loan facilities for approved agricultural purposes; Working capital refinance for handloom weavers Refinance for financing government- sponsored programmes such as IRDP, RozgarYogna etc.

EXIM BANK OF INDIA The Export-import bank of India (EXIM Bank) was set up in January 1982 as a statutory corporation wholly owned by central government. Its paid up capital in 1988-89 was Rs 220.50 crores. Activities performed by EXIM Bank: It grants direct loans in India and outside for the purpose of imports and exports; Refinances loans to banks and other notified financial institutions for the purpose of international trade ; Rediscounts usance export bills for banks; Provide overseas investment finance for Indian companies toward their equity participation in joint venture abroad and guarantees, along with banks, obligations on behalf of project exporters; It is also a co-coordinating agency in the field of international finance and it undertakes development of merchant banking activities in relation to export oriented industries; Thus it provides fund based as well as non fund based assistance in the foreign trade sector. The main objective of Export-Import Bank (EXIM Bank) is to provide financial assistance to promote the export production in India. The financial assistance provided by the EXIM Bank widely includes the following: Direct financial assistance Foreign investment finance Term loaning options for export production and export development

Pre-shipping credit Buyers credit Lines of credit Re-loaning facility Export bills rediscounting Refinance to commercial banks The Export-Import Bank also provides non-funded facility in the form of guarantees to the Indian exporters. Development of export makers Expansion of export production capacity Production for exports Financing post-shipment activities Export of manufactured goods Export of project