RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

send out alerts regarding possible fraud and/or updates and maintenance
of service provision.

Examples can be a text message from a bank, notifying users that

their ATMs or apps will not be accessible during a particular time period
due to system maintenance, or a confirmation text from the bank
regarding a transfer carried out by the client via the mobile app.

Types of Mobile Banking Services

Mobile banking services can be categorized into the following:

1. Account information access

Account information access allows clients to view their account balances

and statements by requesting a mini account statement, review
transactional and account history, keep track of their term deposits,
review and view loan or card statements, access investment statements
(equity or mutual funds), and for some institutions, management of
insurance policies.

2. Transactions

Transactional services enable clients to transfer funds to accounts at the

same institution or other institutions, perform self-account transfers, pay
third parties (such as bill payments), and make purchases in collaboration
with other applications or prepaid service providers.

3. Investments

Investment management services enable clients to manage their

portfolios or get a real-time view of their investment portfolios (term-
deposits, etc.)

4. Support services

Support services enable clients to check on the status of their requests for
loan or credit facilities, follow up on their card requests, and locate ATMs.
RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

5. Content and news

Content services provide news related to finance and the latest offers by
the bank or institution.

CHALLENGES ASSOCIATED WITH MOBILE BANKING

Some of the challenges associated with mobile banking include (but are
not limited to):

• Accessibility based on the type of handset being used

• Security concerns
• Reliability and scalability
• Personalization ability
• Application distribution
• Upgrade synchronization abilities

Q3.RELATIONSHIP BETWEEN BANKER AND CUSTOMER

RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

Relationship as Debtor and Creditor

On the opening of an account, the banker assumes the position of a

debtor. A depositor remains a creditor of his banker so long as his
account carries a credit balance.

The relationship with the customer is reserved as soon as the customer

account is overdrawn.

The banker becomes a creditor of the customer who has taken a loan
from the banker and continues in that capacity fills the loan is repaid.

Banker as a Trustee

Ordinally a banker is a debtor of his customer in the report of the

deposit made by the letter, but in certain circumstances, he acts as
trustee also.

A trustee holds money or asset and performs certain functions to

benefit some other person called the beneficiary.

If the customer deposits securities or other values with the banker for
safe custody, the letter acts as a trustee of his customer.

Banker as an Agent

A banker acts as an agent of his customer and performs a number of

agency functions for the convenience of his customer.
RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

For example, he buys or sells securities on behalf of his customer,

collects checks/cheques, and pays various customer dues.

Special relationship with customer/obligation

of a banker:

The primary relationship between a banker and his customer is a

debtor and a creditor or vice versa. The special features of this
relationship, as a note above, impose the following additional
obligations on the banker.

The obligation to honor the Check/Cheques

The deposit accepted by a banker is his liabilities repayable on

demand or otherwise. Therefore, the banker is under a statutory
obligation to honor his customer’s check/cheque in the usual course.

According to section 31 of the negotiable instruments. Act 1881, the

banker is bound to honor his customer’s check/cheque provided by
following conditions are fulfilled:

• Availability of sufficient funds of the customer.

• The correctness of the check/cheque.
• Proper presentation of the check/cheque.
• A reasonable time for collection.
• Proper drawing of the check/cheque.

The obligation to maintain the secrecy of the

customer accounts

The banker is obligated to take the utmost care in keeping secrecy

about his customer’s account.
RINCIPLES AND PRACTICES OF MODERN BANKING QP 2018-2021

By keeping secrecy is that the account books of the bank will not be
thrown open to the public or government officials if the following
reasonable situation does not occur,

1. Discloser of information required by law.

2. Discloser permitted by bankers’ practice and wages. The practice
and wages are customary amongst bankers to permit disclosure
of certain information and the following circumstances.
o With express or implied consent of the customer.
o Banker reference.
o Duty to the public to disclose.

Q4. ANCILLARY SERVICES OF A BANKER

Ancillary services are other services that banks offer to common men along with the
necessary banking services. These ancillary services form a very minuscule of the
services offered by the banks. Some of the ancillary services provided by the banks are:
a) Funds transfer service: Useful for sending and receiving money from all over the
world.
b) Forex service: You can buy the foreign exchange for any purpose of expenditures
like travel, buying merchandise, etc. and sell the same to the bank when you earn or
receive from abroad.
c) Custodial Service: You can keep your valuables like jewels, documents, etc. Under
this service, this is commonly known as Locker facility (Safe Deposit Vaults).
d) Gold sale: only a few selected branches of banks or banks are allowed to provide
this.
e) e Banking: also known as Net banking or Internet banking is the latest and most
convenient facility of the banks .You can get id and password to operate your account
online : for transfer of funds to another account in the same bank or another bank. You
can keep the surplus funds in fixed deposit by using this facility.
Remittance of funds
Some default funds transfer limits are given to customers based on the type of account.
In case you wish to raise the limits per day), you may give a written request to your
branch.

• Beneficiary Maintenance: You can maintain a “Beneficiary” for whom you

normally wish to transfer funds. You have to give a “Payee ID” for each of the
beneficiary and should attach a valid Account for each of the beneficiary
maintained by you.