Bankers Notebook by -Anuj Kumar

  A cheque is an unconditional order addressed to a banker, signed by the person who has deposited money with a banker, requesting him to pay on demand a certain sum of money only to the order of the certain person or to the bearer of the instrument. TYPES OF CHEQUES- 1) Bearer Cheque Bearer cheques are the cheques which withdrawn to the cheque's owner. These types of cheques normally used for a cash transaction. For example  - Ram has a savings account in HDFC bank. He brought a cheque from his chequebook to the HDFC bank branch where he has an account. He can present the cheque to the bank and withdraw money from his account. This type of cheque is known as Bearer Cheque. 2) Order Cheque Order cheques are the cheques which are withdrawn for the payee(the person whose name is written on the cheque). Before making payment to that payee,cross-checks check the identity of the payee. For example  - Ram has a savings account in HDFC bank. He wanted to make payment o...

  Introduction Nowadays loan is a common word because everyone is familiar with it in one or other way. In simple language loan is an amount which is lending from one person, entity or a financial institution to another person, entity or financial institutions. Meaning: A loan is the lending of money from one source to another source for a specified period. A loan is a debt given by an organization to another organization with an interest rate. In a loan, a borrower borrows money from the lender with a certain rate of interest and pay back it in future. The main activities of financial institutions like banks, NBFC, is to provide a loan to the customer. Types of loan There are mainly five types of loan. 1) Secured loan In a secured loan, a borrower pledges some asset as collateral like property, car etc. A mortgage loan is a type of secured loan used by a customer. In a secured loan, a money is using to purchase a property. If in case the borrower fails to pay back the loan amount ...

  What is Banking Ombudsman (BO)? He hears customers’ complaints against banks. BO was first setup in UK. In India, RBI started this scheme in 1995. Appointment & Tenure Earlier RBI used to appoint reputed persons from banking, finance, management, legal etc. sectors as Banking Ombudsmen (BO). But now RBI has reserved this BO post for its own Chief General Managers and General Managers. Tenure: 3 years at a time. Reappointment: yes possible. Jurisdiction of Banking Ombudsman? Banking Ombudsman (BO) Scheme applies to whole of India (including Jammu and Kashmir). Banking Ombdusmen have jurisdiction over All commercial banks (scheduled and non scheduled, public and private) Regional rural banks scheduled primary co-operative banks NBFCs (BO’s Jurisdiction limited to “loan” part.) Banking Ombudsman is not a replacement of Consumer forum/courts. He merely supplements them. Banking Ombudsman deals with matters less than or equal to Rs.10 lakhs. Here are some examples situation where ...

  What is CRR? CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their total deposits with RBI in cash form. Right now, CRR is about 4.75% that means if people deposit total Rs.100 in SBI, then SBI would have to deposit Rs.4.75 in RBI. This is CRR or Cash Reserve Ratio. CRR rule  doesnot  apply to  Non Banking Financial Companies (NBFC), Mutual funds or insurance companies. What is Scheduled Commercial Bank? Scheduled banks are those banks which have been included in the second schedule of the Reserve bank of India act of 1934. The banks included in this schedule list should fulfill two conditions. The paid capital and collected funds of bank should  not be less than Rs. 5 lakhs . Any activity of the bank will not adversely affect the interests of depositors [ hahaha, does it mean Non-scheduled banks are allowed to adversely affect the interests of depositors !? ] Examples of Scheduled Commercial Banks Public Sector Privat...

  Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Suppose, Mr.Paraajay has opened factory with Rs.100 crores. He financed this, via mixture of Debt + equity in following way. Holder Rupees in Cr. Equity (IPO->Shares) Paraajay and his family 20 Juntaa (public) 30 Debt (loans, Bonds) Business loan from SBI 40 Bonds 10 Total 100 Initially the company runs well and good. But then Mr.Paraajay doesn’t revise his MBA books often, so he forgets the business concepts. His company starts making losses. He fails to pay loan EMIs for many months. SBI gives him notice to correct his behavior. Still, he doesn’t start paying money. SBI declares this Rs.40 crores loan NPA (Non-Performing Asset). Once a loan is declared as non-performing asset, SBI can take actions under SARFAESI act, to recover the loan money. Bank have following powers under SARFAESI Act Take possession of Mr.Paraajay’s assets without requiring court order. (Commericial or ...