ACKNOWLEDGEMENT

It is a matter of immense pride and pleasure to submit this project to the

University of Mumbai as a part of curriculum of my banking course. I take this

opportunity to present before you this project on “SELECTIVE NON BANKING

SERVICES PROVIDED BY BANKS.A COMPARATIVE STUDY OF HDFC

AND ICICI BANK", which is a result of co-operation, hard work and good wishes

of many people.

The most pleasant part of any project is to acknowledge all the people who

have helped me in completing this project. I would like to thank God first and then

I would like to express my heartfelt gratitude to my guide Mrs. Mahek Mansuri for

her valuable suggestions and constant supervision in this project.

I am greatly thankful to Mrs. Mahek Mansuri, course coordinator (B& I) for

providing an opportunity to present a creative output in the form of this project.

I am greatly indebted to MISS Saumia Ashwin for her valuable suggestions

and guidance which was precious in accomplishment of this project.

I must mention here the help of all my classmates and colleagues as well as

efforts and active participation of my family members in smooth completion of this 1

project. Also I am thankful to Library Staff for providing me the valuable

information about the various reference books related to this project.

Last but not least. Thanks to all those who have helped me directly or

indirectly in accomplishing this project.

2

DESIGN OF STUDY

OBJECTIVE OF STUDY

To understand the importance and need of non-banking services.

To perceive the meaning of non- banking services.

Readers can see the article of HDFC bank.

SCOPE

The readers can come to know the various types of non-banking services by

banks.

The readers can come across the sample of letter of credit and bank

guarantee.

METHODOLOGY

Primary data is collected from HDFC and ICICI bank.

Secondary data is collected by referring books relating to banking also

referred to HDFC and ICICI bank, magazines and internet.

3

SUMMARY

Now a days commercial banks are very popular. They are business entities with

profit objectives. It provides numbers of banking functions as well as numbers of

other services to the public. They receive money in the form of deposits i.e. saving,

current etc. they provide advances for short periods in the form of c/c, o/d, loan etc.

They also give a number of agencies &general utility services to the customers.

They act as agents in the collectional payments of cheque, drafts, bill of exchange

etc. They also make payment on behalf of their customers eg. Electricity bills,

L.I.C premiums etc.They also act as executers & administrators of their customers.

They provide tremendous facilities to the customers. It is a bank which gives trade

references to the customers. It provides credit facilities to the customers in foreign

trade. They help in foreign exchange matters. They also issue travellers cheques,

credit cards etc. it also provides safe custody service.

4

CHAPTER -1

INTRODUCTION TO BANKS

The word bank is derived from the Italian banca, which is derived from German

and means bench. Typically, a bank generates profits from transaction fees on

financial services and on the interest it charges for lending.

An institution which accepts deposits, makes business loans, and offers related

services. Banks also allow for a variety of deposit accounts, such as current, fixed,

savings, and time deposit. These institutions are run to make a profit and owned by

a group of individuals, yet some may be members of the Federal Reserve System.

While commercial banks offer services to individuals, they are primarily concerned

with receiving deposits and lending to businesses.

A bank is a financial intermediary that accepts deposits and channels those

deposits into lending activities, either directly or through capital markets. A bank

connects customers with capital deficits to customers with capital surpluses.

The essential function of a bank is to provide services related to the storing of

value and the extending of credit. The evolution of banking dates back to the

earliest writing, and continues in the present where a bank is a financial institution

that provides banking and other financial services. Currently the term bank is

generally understood an institution that holds a banking license. Banking licenses

are granted by financial supervision authorities and provide rights to conduct the

most fundamental banking services such as accepting deposits and making loans.

There are also financial institutions that provide certain banking services without

5

meeting the legal definition of a bank, a so called non-bank. Banks are a subset of

the financial services industry.

Definition

A financial institution that is licensed to deal with money and its substitutes by

accepting time and demand deposits, making loans, and investing in securities. The

bank generates profits from the difference in the interest rates charged and paid.

6

BANKING

 Banking is one of the key drivers of the U.S. economy. Banking provides a safe

place to save excess cash, known as deposits. It also supplies liquidity to the

economy by loaning this money out to help businesses grow and to allow

consumers to purchase homes, cars and consumer products. Banks primarily make

money by charging higher interest rates on their loans than they pay for deposits.

Banking is the business activity of accepting and safeguarding money owned by

other individuals and entities, and then lending out this money in order to earn a

profit. The fundamental functions of a commercial bank during the past two

centuries have been making loans, receiving deposits, and lending credit either in

the form of bank notes or of "created" deposits.

Banking business" means the business of receiving money on current or deposit

account, paying and collecting cheques drawn by or paid in by customers, the

making of advances to customers, and includes such other business as the

Authority may prescribe for the purposes of the Act;

HISTORY OF BANKING7

There are three different phases in the history of banking in India.

Pre-Nationalization Era.

Nationalization Stage.

Post Liberalization Era.

1. Pre-Nationalization Era:

In India the business of banking and credit was practices even in very early times.

The remittance of money through Hundies, an indigenous credit instrument, was

very popular. The hundies were issued by bankers known as Shroffs, Sahukars,

Shahus or Mahajans in different parts of the country.

The modern type of banking, however, was developed by the Agency Houses of

Calcutta and Bombay after the establishment of Rule by the East India Company in

18th and 19th centuries.

During the early part of the 19th Century, ht volume of foreign trade was relatively

small. Later on as the trade expanded, the need for banks of the European type was

felt and the government of the East India Company took interest in having its own

bank. The government of Bengal took the initiative and the first presidency bank,

the Bank of Calcutta (Bank of Bengal) was established in 180. In 1840, the Bank

of Bombay and IN 1843, the Bank of Madras was also set up.

These three banks also known as “Presidency Bank”. The Presidency Banks had

their branches in important trading centers but mostly lacked in uniformity in their

operational policies. In 1899, the Government proposed to amalgamate these three

8

banks in to one so that it could also function as a Central Bank, but the Presidency

Banks did not favor the idea. However, the conditions obtaining during world war

period (1914-1918) emphasized the need for a unified banking institution, as a

result of which the Imperial Bank was set up in1921. The Imperial Bank of India

acted like a Central bank and as a banker for other banks.

The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of

the Country. In 1949, the Banking Regulation act was passed and the RBI was

nationalized and acquired extensive regulatory powers over the commercial banks.

In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of

India, Cooperative banks, Exchange banks and Indian Joint Stock banks.

2. Nationalization Stages:

After Independence, in 1951, the All India Rural Credit survey, committee of

Direction with Shri. A. D. Gorwala as Chairman recommended amalgamation of

the Imperial Bank of India and ten others banks into a newly established bank

called the State Bank of India (SBI). The Government of India accepted the

recommendations of the committee and introduced the State Bank of India bill in

the Lok Sabha on 16th April 1955 and it was passed by Parliament and got the

president’s assent on 8th May 1955. The Act came into force on 1st July 1955, and

the Imperial Bank of India was nationalized in 1955 as the State Bank of India.

The main objective of establishing SBI by nationalizing the Imperial Bank of India

was “to extend banking facilities on a large scale more particularly in the rural and

semi-urban areas and to diverse other public purposes.”

In 1959, the SBI (Subsidiary Bank) act was proposed 9

On 19th July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the

nationalization of 14 major scheduled Commercial Banks each having deposits

worth Rs. 50 crore and above. This was a turning point in the history of

commercial banking in India.

Later the Government Nationalized six more commercial private sector banks with

deposit liability of not less than Rs. 200 crores on 15th April 1980, viz.

Andhra Bank.

Corporation Bank.

New Bank if India.

Oriental Bank of Commerce.

Punjab and Sind Bank.

Vijaya Bank.

In 1969, the Lead Bank Scheme was introduced to extend banking facilities to

every corner of the country. Later in 1975, Regional Rural Banks were set up to

supplement the activities of the commercial banks and to especially meet the credit

needs of the weaker sections of the rural society.

Nationalization of banks paved way for retail banking and as a result there has

been an alt round growth in the branch network, the deposit mobilization, credit

disposals and of course employment.

The first year after nationalization witnessed the total growth in the agricultural

loans and the loans made to SSI by 87% and 48% respectively. The overall growth

in the deposits and the advances indicates the improvement that has taken place in 10

the banking habits of the people in the rural and semi-urban areas where the branch

network has spread. Such credit expansion enabled the banks to achieve the goals

of nationalization, it was however, achieved at the coast of profitability of the

banks.

3. Post-Liberalization Era—Thrust on Quality and Profitability:

By the beginning of 1990, the social banking goals set for the banking industry

made most of the public sector resulted in the presumption that there was no need

to look at the fundamental financial strength of this bank. Consequently they

remained undercapitalized.

The need for restructuring the banking industry was felt greater with the initiation

of the real sector reform process in 1992. The reforms have enhanced the

opportunities and challenges for the real sector making them operate in a

borderless global market place. However, to harness the benefits of globalization,

there should be an efficient financial sector to support the structural reforms taking

place in the real economy. Hence, along with the reforms of the real sector, the

banking sector reformation was also addressed.

In this context, the recommendations made by a high level committee  on financial

sector, chaired by M. Narasimham, laid the foundation for the banking sector

reforms. These reforms tried to enhance the viability and efficiency of the banking

sector. The Narasimham Committee suggested that there should be functional

autonomy, flexibility in operations, dilution of banking strangulations, reduction in

reserve requirements and adequate financial infrastructure in terms of supervision,

audit and technology.

11

CHAPTER-2

BANKING SERVICES

Banks play an important role in the field of trade, commerce and industry. They

promote and mobilize savings by providing safety, confidentiality and attractive

rate of interest. Banks inspire confidence in people and help in creating banking

habits in them. This promotes saving. Savings by individuals are made available to

those who wish to invest them in developmental activities. Banks are business

entities with profit objectives. It provides numbers of banking functions as well as

numbers of other services to the public. They receive money in the form of

deposits i.e. saving, current etc. they provide advances for short periods in the form

of c/c, o/d, loan etc. They provide tremendous facilities to the customers. It is a

bank which gives trade references to the customers. It provides credit facilities to

the customers in foreign trade. They help in foreign exchange matters.

The primary functions of the banks may be summarized as ‘Accepting of deposits’

and ‘lending of money’.

ACCEPTING OF DEPOSITS

Accepting deposits is one of the two major activities of the Banks. Banks are

also called custodians of public money. Basically, the money is accepted as

deposit for safe keeping. But since the Banks use this money to earn interest

from people who need money, Banks share a part of this interest with the

depositors. The quantum of interest depends upon the tenor - length of time

for which the depositor wishes to keep the money with the Bank - and the

ease of withdrawal. The thumb rule is, longer the tenor, higher the rate of

12

interest and lesser the restrictions on withdrawal, lesser the interest.

Exceptions, however, exist. Deposits are accepted from both resident

(domestic) or non-resident Indian customers. It is the business of the banker

to accept deposits so that he can lend it to others and earn interest. Depending

upon the liquidity position of the market and the size of deposit, the earnings

can vary and if the size of the deposit is big enough, it is advisable to shop

around and get the best rate.

A bank normally accepts the following types of deposits:

Current deposit

Fixed deposit

Saving deposit

Recurring deposit

LENDING MONEY

Banking is essentially dealing with money. A bank has to invest funds in different ways to earn income. The bulk of income is derived from lending funds. Banks provide loans and advances to traders, industrialists against the security of some assets. They also advance loans to the people on personal security. In both the cases the banks run the risk of default in repayment. Therefore, the banks have to follow a sound lending policy. Banks in India have the responsibility of fulfilling social obligations.

Banks lends money to the public in the following ways:

1. Loans and advances 3. Bill discounting

2. Cash credit 4. Overdraft

13

CHAPTER-3

NON-BANKING SERVICES

Besides these two main functions, a bank also undertakes a variety of other

activities. These activities involve services offered by banks to help the customers

(account holders). Such activities include collection of cheques, dividend,

warrants, etc. on behalf of customers as well as effecting transfer of funds,

remittances by mail and telegram. In order to attract customers and make banking

services effective, banks always make efforts to diversify their activities. Such

diversification takes place by way of new service activities and schemes. These

services offered by banks are generally known as agency services. These are also

termed as nonbanking, general utility, and miscellaneous services. The relationship

between a customer and a bank is that of a ‘Principal’ and ‘Agent’. The bank acts

as an agent on behalf of the customer as principal. When any bank acts as an agent,

the services rendered by it are known as agency services. Under agency services,

the bank undertakes payment of subscriptions, premium on insurance, collection of

cheques, dividends, etc. It acts as a trustee, executor or administrator and an

‘agent’ for buying and selling shares, stocks, debentures on behalf of the customer.

General utility services refer to those non-bank services which are in the interest of

general public, i.e. the society at large. Such services are called ‘non-banking

services’ because they are not directly concerned with the main banking activities.

These services include issue of traveller’s cheques, credit cards, drafts, circular

notes, gift cheques and safe custody of valuables, like negotiable securities,

jewellery, documents of title to goods, etc. The range of services offered differs

from bank to bank, depending mainly on the size and type of bank, but the

14

acceptance of deposits from the public and lending operations form the main stay

of the banking business.

Non-banking services which may be divided into two categories:-

a) Services rendered by banks to their customers: These services are functions

performed by a bank as the agent of customers. Hence, these functions are also

known as ‘Agency functions’ of banks.

b) Services rendered to the general public/society: These functions are

essentially non-banking in nature and in addition to the main functions of a bank.

Let us enumerate the agency and non-banking functions undertaken by banks on

behalf of customers and for the benefit of the general public.

(a) Services to Customers:-

(i) Accepting and discounting bills of exchange.

(ii) Collecting cheques, bills, salaries, pension, dividends, Interest on investments,

etc. on behalf of clients.

(iii) Undertaking payment of subscriptions to clubs or other Associations,

insurance premium, rents, taxes, etc

(iv)Acting as an agent of customers for buying and selling Shares and debentures,

National Saving Certificates (NSCs), and dealing in government securities.

(v) Acting as a Correspondent or authorized representative of Customers in dealing

with other banks and financial Institutions.

15

(vi)Acting as an ‘executor’ or ‘administrator’ under power of Attorney and

carrying out the instructions of a deseased as expressed in his will.

(vii) Acting as attorney. When the bank acts as an attorney, it Is generally

authorized to receive dividends, interests on Securities, and to sign on behalf of

customers on transfer Forms etc. for sale and purchase of securities.

(viii) Arranging remittance of funds from one place to another on behalf of

customers.

(ix) Issuing letter of credit.

(x) Issuing credit cards, circular notes and traveller’s cheque for the convenience of

customers.

(xi) Giving guarantee against loans raised by customers.

(b) Services to the General Public:-

(i) Providing facility of lockers for the safe custody of Valuables.

(ii) Financial assistance for the establishment of trusts, association, clubs and

charitable institutions.

(iii) Performing such functions as are incidental or conducive to the promotion and

advancement of trade and commerce.

(iv) Extending financial help to the weaker sections of society For self-

employment.

(v) Issue of bank drafts, gift-cheques, banker's cheques, etc.16

CHAPTER-4

TYPES OF NON BANKING SERVICES

1) SAFE DEPOSIT VAULT

A bank undertakes the safe custody of the customer’s valuables and documents by

providing a safe deposit vault. These are kept in specially constructed strong

rooms. There are lockers available to the customer on nominal charge. There are

two keys for each locker, one is given to the customer and the other remains with

the Bank Manager. The locker is opened as well as close by both keys one after

another. Customer can keep valuables like jewellery and important documents for

safe custody. A register is maintained by the bank which all the particulars about

the valuables and documents are recorded in it. Banks provide the services of safe

deposit vault on hire basis to the customers.

Who can get it?

A locker can be assigned to any adult, firm or association, on a single or joint

basis. All you need to do is fill out a simple locker application form and locker

agreement, agreeing to abide by its terms and conditions, and pay the deposit and

the rent.

Most banks insist on some kind of financial collateral. So, they give a locker only

to their existing account holders, or to those who agree to open an account (savings

or current) or make a fixed deposit that covers rentals for three years and charges

for breaking open the locker in case of an eventuality.

17

2) LETTERS OF CREDIT

A standard, commercial letter of credit is a document issued mostly by a financial

institution, used primarily in trade finance, which usually provides an irrevocable

payment undertaking.

A letter from a bank guaranteeing that a buyer's payment to a seller will be

received on time and for the correct amount. In the event that the buyer is unable to

make payment on the purchase, the bank will be required to cover the full or

remaining amount of the purchase.

18

The letter of credit can also be source of payment for a transaction, meaning that

redeeming the letter of credit will pay an exporter. Letters of credit are used

primarily in international trade transactions of significant value, for deals between

a supplier in one country and a customer in another. In such cases the International

Chamber of Commerce Uniform Customs and Practice for Documentary Credits

applies. The parties to a letter of credit are usually a beneficiary who is to receive

the money, the issuing bank of whom the applicant is a client, and the advising

bank of whom the beneficiary is a client. Almost all letters of credit are

irrevocable, i.e., cannot be amended or canceled without prior agreement of the

beneficiary, the issuing bank and the confirming bank, if any. Typically, the

documents a beneficiary has to present in order to receive payment include a

commercial invoice, bill of lading, and documents proving the shipment was

insured against loss or damage in transit. However, the list and form of documents

is open to imagination and negotiation and might contain requirements to present

documents issued by a neutral third party evidencing the quality of the goods

shipped, or their place of origin.

19

3) COLLECTION OF CHEQUES, BILLS AND PROMISSORY

NOTES:

The customer deposit cheques, bills of exchange and promissory notes into their

accounts with the banks. These instruments are collected by the bank on behalf of

their customers and credited to their accounts. These services are provided by the

banks to their customers free of charge. However, the cheques, bills and

promissory notes issued on branches out of the city are collected with some

nominal charges for postage etc. this is a very popular and essential service

provided by the banks to their customers.

4) COLLECTION OF DIVIDEND AND INTEREST:

The customer can instruct the issuing companies to pay the interest or dividend

which is declared or payable from time to time to their own bank. The bank also

collect such dividend or interest on behalf of their customers and credit to their

respective accounts. This avoids the delay or misplacement of dividend or interest

warrants. Banks may charge some nominal amount of commission for this service.

5) TELEPHONE BANKING

20

Telephone banking is a service provided by a financial institution, which allows its

customers to perform transactions over the telephone.

Most telephone banking services use an automated phone answering system with

phone keypad response or voice recognition capability. To guarantee security, the

customer must first authenticate through a numeric or verbal password or through

security questions asked by a live representative .With the obvious exception of

cash withdrawals and deposits, it offers virtually all the features of an automated

teller machine: account balance information and list of latest transactions,

electronic bill payments, funds transfers between a customer's accounts, etc.

Usually, customers can also speak to a live representative located in a call centre or

a branch, although this feature is not always guaranteed to be offered 24/7. In

addition to the self-service transactions listed earlier, telephone banking

representatives are usually trained to do what was traditionally available only at the

branch: loan applications, investment purchases and redemptions, chequebook

orders, debit card replacements, change of address, etc.

Banks which operate mostly or exclusively by telephone are known as phone

banks. They also help modernize the user by using special technology.

6) AUTOMATED TELLER MACHINE

An automated teller machine (ATM), also known as automatic banking machine

(ABM), Cash Machine, or Cashpoint, is a computerized telecommunications

device that provides the clients of a financial institution with access to financial

transactions in a public space without the need for a cashier, human clerk or bank 21

teller. On most modern ATMs, the customer is identified by inserting a plastic

ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a

unique card number and some security information such as an expiration date or

CVVC (CVV). Authentication is provided by the customer entering a personal

identification number (PIN).

Using an ATM, customers can access their bank accounts in order to make cash

withdrawals, credit card cash advances, and check their account balances as well as

purchase prepaid cellphone credit. If the currency being withdrawn from the ATM

is different from that which the bank account is denominated in (e.g.: Withdrawing

Japanese Yen from a bank account containing US Dollars), the money will be

converted at a wholesale exchange rate. Thus, ATMs often provide the best

possible exchange rate for foreign travelers and are heavily used for this purpose as

well.

ATMs are known by various other names including Automated Transaction

Machine, automated banking machine, cashpoint (in Britain), money machine,

bank machine, cash machine, hole-in-the-wall, MAC Machine (in the Philadelphia

area), Bankomat (in various countries in Europe and Russia), Multibanco (after a

registered trade mark, in Portugal), and All Time Money in India.

22

CASH WITHDRAWALS FROM ATM

7) EXECUTION OF STANDING ORDERS:

A customer can give standing instruction in writing to his banker to pay rent,

telephone bills, loan installments or any other payments out of his account. Such

orders are normally in respect of insurance premium, subscriptions to club and

societies and some other recurring payments. Normally, no charges are levied on

these services. Some banks may charge nominal amounts as service charges.

23

8) REMITTANCE OF FUNDS:

Banks provide the services of transfer to money/funds from place to place. They

have network of branches throughout the country. It is a safe, convenient simple

and economical method to transfer of funds. The following are the important

methods of transfer of funds from place to place:

a) Mail Transfer:

Banks provide the service of sending money to the post i.e. mail transfer to any

person at any place where the bank has branchand the person receiving the amount

has an account in other branch of the same bank. The sender should fill up a form

giving the details like name of beneficiary, his account number, the name of the

branch and the amount of transfer. The bank charges the commission to cover the

cost of postal services.

b) Telegraphic Transfer:

If the customer wants to send the money urgently, he can request the banker for

telegraphic transfer, on payment of nominal charge to cover the telegram charges.

However the facility of telegraphic transfer is available at selected branches only.

The cost of telegraphic transfer is higher than the cost of mail transfer. However,

the money is transferred quickly.

c) Bank drafts

A bank draft is an order from one branch to another branch of the same bank to pay

a specified sum of money to a person named therein or to his order. A draft is

24

always payable on demand. Banks issue drafts at the request of the customers on

their branches at the place of destination for remitting money from one place to

another place. Any person who wants to remit money has to purchase a draft from

the bank by paying the amount in advance to the bank. The purchaser of the draft

then sends the draft to the payee’s plase of residence by post or courier for the

purpose of encashment at the drawee branch of the bank. The bank issuing the

draft charges some commission for rendering this service. The amount of

commission depends upon the amount of the draft. The purchaser need not be a

customer of the bank.

The bank draft is like a bill of exchange payable on demand. Incase the draft is lost

by a purchaser he has to report to the issuing banker for loss of the draft without

any endorsement, the banker may safely reuse to pay the amount of the draft. The

bank should take all the precautions and payment of the draft should be made only

when the banker is fully satisfied about the valid title of the holder. The banker

should take an indemnity bond and then issue a duplicate draft to the purchaser.

The draft may be cancelled by the bank if it is not delivered to the payee.

9) INTERNET BANKING

Internet banking is the easiest way to carry out banking transactions in today's

hectic schedule. Internet banking is used widely by masses, and has numerous

benefits to offer. Nowadays, all banks provide online banking facility to their

customers as an added advantage. Gone are the days, when one had to transact

with a bank which was only in his local limits. Online banking has opened the

doors for all customers, to operate beyond boundaries. Nowadays, people are so 25

busy in their work lives, that they don't even have time to go to the bank for

conducting their banking transactions. Internet banking enables people to carry out

most of their banking transactions using a safe website, which is operated by their

respective banks. It provides many features and functions to their customers, and

enables them to view their account balance, transfer money from their account to

another account (be it in their respective bank or any other bank), view their

account summary, etc.

In this procedure, many financial transactions can be carried out by simply

utilizing a computer with an Internet connection. The necessary things that a

person needs for using online banking are, an active bank account with balance in

it for transactions, debit or a credit card number, customer's user ID, bank account

number, the Internet banking PIN number, and a PC with access to the web. People

using Internet banking are certainly benefited by the online services their

respective banks are providing them with. The primary reason why it is so famous

and mostly used is that, customers are allowed to bank at non-working hours.

Banks create their banking interfaces and websites in a viewable and user-friendly

manner, which enable customers to conduct their financial transactions with ease.

If they are stuck in any process while performing their online transactions, banks

have another helpful facility that is 'phone banking', wherein customers can call the

banks toll-free number and get assistance in completing their transactions.

Electronic bill payment, viewing and downloading financial records, and money

transfers are some of the general transactions which the customers generally carry

out. All online banking services, provided by some banks, are free of cost.

26

When a customer views the bank's website, there are many options available, but to

execute those transactions, he would obligatorily need to log into his virtual

account. Without logging in, he won't be allowed to carry out any kind of the

transactions. Initially, when he opens an account with the bank, the bank gives a

welcome kit which contains important documents that include the checkbook; a

document on which the customer's user ID, online banking password, phone

banking password, and account number is embedded. The kit also contains some

other confidential data, the credit or debit card, and the card details. The website

will prompt the user to enter the necessary details like the Internet banking

password and account number, and then will display his account information. In

this stage, he can carry out all functions that are available on the website.

With regards to the password authentication and encryption, high security is

maintained, as there is a chance of hackers getting unauthorized access to the

customer's account and performing malpractices. However, banks keep their online

security systems up-to-date to prevent such scenarios. Moreover, banks also

suggest their customers to keep on changing passwords periodically. They also

implement some security measures like using unique login IDs, transaction codes,

using two passwords, security tokens which generate automatically changing

passwords, etc.

10) DEBIT CARD

A debit card (also known as a bank card or check card) is a plastic card that

provides an alternative payment method to cash when making purchases.

Functionally, it can be called an electronic cheque, as the funds are withdrawn

directly from either the bank account, or from the remaining balance on the card.

27

In some cases, the cards are designed exclusively for use on the Internet, and so

there is no physical card.

In many countries the use of debit cards has become so widespread that their

volume of use has overtaken the cheque and, in some instances, cash transactions.

Like credit cards, debit cards are used widely for telephone and Internet purchases

and, unlike credit cards, the funds are transferred immediately from the bearer's

bank account instead of having the bearer pay back the money at a later date.

Debit cards may also allow for instant withdrawal of cash, acting as the ATM card

for withdrawing cash and as a cheque guarantee card. Merchants may also offer

cashback facilities to customers, where a customer can withdraw cash along with

their purchase.

The debit card has limited popularity in India as the merchant is charged for each

transaction. The debit card therefore is mostly used for ATM transactions. Most of

the banks issue VISA debit cards, while some banks (like SBI and Citibank India)

issue Maestro cards. The debit card transactions are routed through the VISA or

MasterCard networks rather than directly via the issuing bank.

28

11) BANK GUARANTEES

Bank Guarantee is a contract to perform the promise or discharge the liability of a

third person in case of his default. It is customary for the bank in normal course of

Business, to issue and execute guarantees in favour of third parties on behalf of the

customers. The Bank guarantees are governed by various provisions as contained

in the Indian Contract Act, 1872. The commercial transactions, banks customers

are sometimes required to give a bank guarantee. This is mostly as an alternate to

keep cash as a security deposit. The 3rd party who seeks the guarantee, not being

aware of the customer’s financial standing prefers a bank guarantee. In turn the

bank, which very well understands the financial standing of the customer,

undertakes the guarantee of the customer’s financial commitments or performance

of the contracts by him. The bank charges commission for this service, which

depends on the security available and financial stability of the customer.

Contract of guarantee: Section 126 of the Indian Contract Act, 1872, defines a

“Contract of guarantee” is a contract perform the promise, or discharge the liability

(enforceable at law) of a third person in case of his default. In a contract of

guarantee given by bank there are three parties. One surely i.e. the bank issuing the

guarantee, second is the participal debtor i.e. the bank’s customer, one whose

behalf the guarantee is issued and third is the creditor i.e. the beneficiary of the

guarantee i.e. to whom the guarantee is issued

29

12) ONLINE BANKING

Online banking allows customers to conduct financial transactions on a secure

website operated by their retail or virtual bank, credit union or building society.

FEATURES

Online banking solutions have many features and capabilities in common, but

traditionally also have some that are application specific.

The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to

account transfer, paying a bill, wire transfer... and applications... apply for a

loan, new account, etc.)

Electronic bill presentment and payment - EBPP

Funds transfer between a customer's own checking and savings accounts,

or to another customer's account

Investment purchase or sale

Loan applications and transactions, such as repayments of enrollments

Non-transactional (e.g., online statements, check links, cobrowsing, chat)

Bank statements

Financial Institution Administration –

30

Support of multiple users having varying levels of authority

Wire transfer .

13) CORE BANKING

Core Banking is normally defined as the business conducted by a banking

institution with its retail and small business customers. Many banks treat the retail

customers as their core banking customers, and have a separate line of business to

manage small businesses. Larger businesses are managed via the Corporate

Banking division of the institution. Core banking basically is depositing and

lending of money.

Nowadays, most banks use core banking applications to support their operations

where CORE stands for "Centralized Online Real-time Exchange". This basically

means that all the bank's branches access applications from centralized datacenters.

This means that the deposits made are reflected immediately on the bank's servers

and the customer can withdraw the deposited money from any of the bank's

branches throughout the world. These applications now also have the capability to

address the needs of corporate customers, providing a comprehensive banking

solution. A few decades ago it used to take at least a day for a transaction to reflect

in the account because each branch had their local servers, and the data from the

server in each branch was sent in a batch to the servers in the datacenter only at the

end of the day .

31

Normal core banking functions will include deposit accounts, loans, mortgages and

payments. Banks make these services available across multiple channels like

ATMs, Internet banking, and branches.

Core Banking Solutions

Core Banking solutions are banking applications on a platform enabling a phased,

strategic approach that lets people improve operations, reduce costs, and prepare

for growth. Implementing a modular, component-based enterprise solution ensures

strong integration with your existing technologies. An overall service-oriented-

architecture (SOA) helps banks reduce the risk that can result from multiple data

entries and out-of-date information, increase management approval, and avoid the

potential disruption to business caused by replacing entire systems.

Core Banking Solutions is new jargon frequently used in banking circles.The

advancement in technology, especially internet and information technology has led

to new ways of doing business in banking. These technologies have cut down time,

working simultaneously on different issues and increasing efficiency. The platform

where communication technology and information technology are merged to suit

core needs of banking is known as Core Banking Solutions. Here, computer

software is developed to perform core operations of banking like recording of

transactions, passbook maintenance, interest calculations on loans and deposits,

customer records, balance of payments and withdrawal. This software is installed

at different branches of bank and then interconnected by means of communication

lines like telephones, satellite, internet etc. It allows the user (customers) to operate

accounts from any branch if it has installed core banking solutions. This new

platform has changed the way banks are working.

32

14) CREDIT CARDS

A credit card is an instrument of payment. It is a source of revolving credit. The

cards are plastic cards issued by the banks to their customer; card number and

expiry date are printed on the plastic cards. Some banks also use the photographs

of the customer on the credit cards. The card holder can buy goods or services

from various merchant establishments where such arrangements exits. The card

issuing bank makes the payment to the supplier or seller. The outstanding amount

on account of use of the credit card is payable by the card holder to the bank over a

specific period which carries a fixed amount of interest. A debit card is a payment

card used to obtain cash, goods and services automatically debiting the payments

to the card holder’s bank account instantly, in which credit balance exits.

15) MERCHANT BANKING

Banks are also providing various services relating to capital market and finance to

companies which are known as Merchant Banking services. It also includes 33

arranging funds from outside the country. Merchant Banking is organization in

which underwrites securities for companies, advises in various activities. Any

person who is engaged in the business of issue management either by making

arrangements regarding selling buying or subscribing to securities or acting as

manager, consultant, adviser or rendering corporate advisory services in relation to

issue management is known as a merchant banker. No person is allowed to carry

out any activity as a Merchant Banker unless he holds a certificate granted by

SEBI. The following services are offered by the merchant bankers:

1. Project consulting.

2. Loan syndication.

3. Technology tie-ups.

4. Mutual funds.

5. Portfolio management.

6. Bought out deals.

7. Raising funds from capital market.

8. Rehabilitation of sick units.

9. Mergers and acquisitions

For this purpose banks have create separate merchant banking divisions and

appoint experienced managers to carry out these functions.

Banks have funds with them which are mobilized through deposits and borrowing

or other ways and deploy these funds. They also have the expertise and access to

various sources of funds as per needs of client.

34

CHAPTER-5

HDFC BANK

INTRODUCTION

HDFC Bank Ltd. is a major Indian financial services company based in Mumbai,

incorporated in August 1994, after the Reserve Bank of India allowed establishing

private sector banks. The Bank was promoted by the Housing Development

Finance Corporation, a premier housing finance company (set up in 1977) of India.

HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779 cities in India, and

all branches of the bank are linked on an online real-time basis. As of 30

September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year

2008-09, the bank has reported net profit of 2,244.9 crore (US$ 487.14 million), up

41% from the previous fiscal. Total annual earnings of the bank increased by 58%

reaching at 19,622.8 crore (US$ 4.26 billion) in 2008-09.

HDFC Bank started its operations in India in the year 1994. This new generation

tech-savvy bank was promoted by a leading housing finance company of the

country – the Housing Development Finance Corporation Limited or HDFC.

HDFC offers a number of banking products and services to its clients. The loan

services of this bank are highly appreciated by the customers. HDFC Bank is

currently having 753 branches and 1,716 ATMs across 320 cities of India. All the

35

branches of this bank operate on the online real-time basis. HDFC is also famous

for offering innovative financial products and services to the individuals, trusts,

corporates, partnerships, mutual funds, financial institutions and insurance

companies.

HISTORY

HDFC Bank was incorporated in 1994 by Housing Development Finance

Corporation Limited (HDFC), India's largest housing finance company. It was

among the first companies to receive an 'in principle' approval from the Reserve

Bank of India (RBI) to set up a bank in the private sector. The Bank started

operations as a scheduled commercial bank in January 1995 under the RBI's

liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was

merged with HDFC Bank Ltd., in 2000. This was the first merger of two private

banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for

every 5.75 shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches

to more than 1,000. The amalgamated bank emerged with a base of about Rs.

1,22,000 crore and net advances of about Rs.89,000 crore. The balance sheet size

of the combined entity is more than Rs. 1,63,000 crore.

BUSINESS FOCUS

HDFC Bank deals with three key business segments - Wholesale Banking

Services, Retail Banking Services, Treasury. It has entered the banking consortia

of over 50 corporates for providing working capital finance, trade services, 36

corporate finance and merchant banking. It is also providing sophisticated product

structures in areas of foreign exchange and derivatives, money markets and debt

trading and equity research.

1. WHOLESALE BANKING SERVICES

The Bank's target market ranges from large, blue-chip manufacturing companies in

the Indian corporates to small & mid-sized corporates and agri-based businesses.

For these customers, the Bank provides a wide range of commercial and

transactional banking services, including working capital finance, trade services,

transactional services, cash management, etc. The bank is also a leading provider

of structured solutions, which combine cash management services with vendor and

distributor finance for facilitating superior supply chain management for its

corporate customers. HDFC Bank has made significant inroads into the banking

consortia of a number of leading Indian corporates including multinationals,

companies from the domestic business houses and prime public sector companies.

It is recognized as a leading provider of cash management and transactional

banking solutions to corporate customers, mutual funds, stock exchange members

and banks.

2. RETAIL BANKING SERVICES

The objective of the Retail Bank is to provide its target market customers a full

range of financial products and banking services, giving the customer a one-stop

window for all his/her banking requirements. The products are backed by world-

class service and delivered to customers through the growing branch network, as

well as through alternative delivery channels like ATMs, Phone Banking, Net

Banking and Mobile Banking. HDFC Bank was the first bank in India to launch an

37

International Debit Card in association with VISA (VISA Electron) and issues the

MasterCard Maestro debit card as well. The Bank launched its credit card business

in late 2001. By March 2009, the bank had a total card base (debit and credit cards)

of over 13 million. The Bank is also one of the leading players in the “merchant

acquiring” business with over 70,000 Point-of-sale (POS) terminals for debit /

credit cards acceptance at merchant establishments. The Bank is well positioned as

a leader in various net based B2C opportunities including a wide range of internet

banking services for Fixed Deposits, Loans, Bill Payments, etc.

3. TREASURY

Within this business, the bank has three main product areas - Foreign Exchange

and Derivatives, Local Currency Money Market & Debt Securities, and Equities.

These services are provided through the bank's Treasury team. To comply with

statutory reserve requirements, the bank is required to hold 25% of its deposits in

government securities. The Treasury business is responsible for managing the

returns and market risk on this investment portfolio.

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank has an network of 1,725

branches spread in 771 cities across India. All branches are linked on an online

real-time basis. Customers in over 500 locations are also serviced through

Telephone Banking. The Bank has a presence in all major industrial and

commercial centres across the country. Being a clearing/settlement bank to various

leading stock exchanges, the Bank has branches in the centres where the NSE/BSE

have a strong and active member base.

38

The Bank also has 3,898 networked ATMs across these cities. Moreover, HDFC

Bank's ATM network can be accessed by all domestic and international

Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express

Credit/Charge cardholder

PRODUCTS&SERVICES

1) PERSONAL BANKING

Savings Accounts

Salary Accounts

Current Accounts

Fixed Deposits

Demat Account

Safe Deposit Lockers

Loans

Credit Cards

Debit Cards

Prepaid Cards

Investments & Insurance

Forex Services

Payment Services

39

Net Banking

InstaAlerts

MobileBanking

InstaQuery

ATM

Phone Banking

2) NRI BANKING

Rupee Savings Accounts

Rupee Current Accounts

Rupee Fixed Deposits

Foreign Currency Deposits

Accounts for Returning Indians

Quickremit (North America, UK, Europe, Southeast Asia)

IndiaLink (Middle East, Africa)

Cheque Lockbox

Telegraphic / Wire Transfer

Funds Transfer through Cheques / DDs / TCs

Mutual Funds

Private Banking

40

Portfolio Investment Schemes

Loans

Payment Services

NetBanking

InstaAlerts

Mobile Banking

InstaQuery

ATM

Phone Banking

CHAPTER-6

ICICI BANK

INTRODUCTION

ICICI Bank( Industrial Credit and Investment Corporation of India) is a major

banking and financial services organization in India. It is the second largest bank in

India and the largest private sector bank in India by market capitalization. The

bank also has a network of 2,016 branches (as on 31 March 2010) and about 5,219

ATMs in India and presence in 18 countries, as well as some 24 million customers

41

(at the end of July 2007). ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of delivery

channels and specialization subsidiaries and affiliates in the areas of investment

banking, life and non-life insurance, venture capital and asset management. (These

data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India.[4]

ICICI Bank's shares are listed on the stock exchanges at BSE, NSE, Kolkata and

Vadodara ; its ADRs trade on the New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international

balance sheet among Indian banks. ICICI Bank now has wholly-owned

subsidiaries, branches and representatives offices in 19 countries, including an

offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada,

Russia and the UK ,offshore banking units in Bahrain and Singapore, an advisory

branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and

representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa,

Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the

NRI (Non-Resident Indian) population in particular.

HISTORY

In 1955, The Industrial Credit and Investment Corporation of India Limited

(ICICI) was incorporated at the initiative of World Bank, the Government of India

and representatives of Indian industry, with the objective of creating a

development financial institution for providing medium-term and long-term project

financing to Indian businesses. In 1994, ICICI established Banking Corporation as

a banking subsidiary. Formerly known as Industrial Credit and Investment

Corporation of India, ICICI Banking Corporation was later renamed as 'ICICI

42

Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake

normal banking operations - taking deposits, credit cards, car loans etc. In 2001,

ICICI acquired Bank of Madura . Bank of Madura was a Chettiar bank, and had

acquired Chettinad Mercantile Bank ( 1933) and Illanji Bank (established 1904) in

the 1960s. In 2002, The Boards of Directors of ICICI and ICICI Bank approved the

reverse merger of ICICI, ICICI Personal Financial Services Limited and ICICI

Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory

approvals, ICICI integrated the group's financing and banking operations, both

wholesale and retail, into a single entity. At the same time, ICICI started its

international expansion by opening representative offices in New York and

London. In India, ICICI Bank bought the Shimla and Darjeeling branches that

Standard Chartered Bank had inherited when it acquired Grindlays Bank.

In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and

in the UK it established an alliance with Lloyds TSB. It also opened an Offshore

Banking Unit (OBU) in Singapore and representative offices in Dubai and

Shanghai. In 2004, ICICI opened a representative office in Bangladesh to tap the

extensive trade between that country, India and South Africa. In 2005, ICICI

acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn

in assets, head office in Balabanovo in the Kaluga region, and with a branch in

Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a

branch in Dubai International Financial Centre and in Hong Kong. In 2006, ICICI

Bank UK opened a branch in Antwerp, in Belgium. ICICI opened representative

offices in Bangkok, Jakarta, and Kuala Lumpur. In 2007, ICICI amalgamated

Sangli Bank, which was headquartered in Sangli, in Maharashtra State, and which

had 158 branches in Maharashtra and another 31 in Karnataka State. Sangli Bank

43

had been founded in 1916 and was particularly strong in rural areas. With respect

to the international sphere, ICICI also received permission from the government of

Qatar to open a branch in Doha. Also, ICICI Bank Eurasia opened a second

branch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted

ICICI to convert its representative office in New York into a branch. ICICI also

established a branch in Frankfurt. In 2009, ICICI made huge changes in its

organisation like elimination of loss making department and restreching outsourced

staff or renegotiate their charges in consequent to the recession. In addition to this,

ICICI adopted a massive approach aims for cost control and cost cutting. In

consequent of it, compesation to staff was not increased and no bonus declared for

2008-09.

On 23 May ICICI Bank announced merger with Bank of Rajasthan with it through

share-swap in a non-cash deal that values the Bank of Rajasthan at about Rs 3,000

crore. Each 118 shares of Bank of Rajasthan will be converted into 25 shares of

ICICI. It is said that this merger will also expand ICICI Bank's branch network by

25%

PRODUCTS AND SERVICES

1) PERSONAL BANKING

Deposits

Loans

Cards

44

Investments / Insurance

Demat Services

Wealth Management

2) NRI BANKING

Money Transfer

Bank Accounts

Investments

Property Solutions

Insurance

Loans

3) BUSINESS BANKING

Corporate Net Banking

Cash Management

Trade Services

SME Services

Online Taxes

Custodial Service

ANNEXURES

45

ANNEXURE-1

SAMPLE LETTER OF CREDIT

Name and Address of Bank

Date: __________________Irrevocable letter of Credit No. ______________

Beneficiary: Commodity Credit Corporation Account Party: Name of Exporter

Address of Exporter

Gentlemen: We hereby open our irrevocable credit in your favor for the sum or sums not to exceed a total of _______________dollars ($__________), to be made available by your request for payment at sight upon the presentation of your draft accompanied by the following statement:

This Letter of Credit is valid until _____________________/3, provided, however, that this Letter of Credit will be automatically extended without amendment for _________________/4 from the present or any future expiration date thereof, unless at least thirty (30) days prior to any such expiration date the Issuing Bank provides written notice to the Commodity Credit Corporation at the U.S. Department of Agriculture, 14th and Independence Avenue, S.W., Stop 1025, Washington, D.C. 20250-1025, of its election not to renew this Letter of Credit for such additional ______________________/5 period. The notice required hereunder will be deemed to have been given when received by you.

This letter of Credit is issued subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce Publication No. 600

(Name of Bank)

By: _______________________

46

ANNEXURE-2

SAMPLE BANK LETTER OF

GUARANTEE

First Capitol Auction

50 Solano Avenue

Vallejo, CA 94590

RE: ______(Bidder's Name)______

Dear Sirs:

This letter will serve as your notification that ______(Bank Name)______ will irrevocably honor and guarantee payment of any check(s) written by ______(Customer's Name)______ up to the amount of ______(Amount Guaranteed)______ and drawn on account number: ______(Customer's Account

Number)______.

This guarantee is for the purpose of our customer purchasing vehicles or other property in connection with the auction to be held at 50 Solano Ave., Vallejo, CA 94590. This letter of guarantee is good until ______(At least 15 days)______. If further information is required, please feel free to contanct this office.

Sincerely,

______(Bank Officer's Signature and Title)______

______(Customer's Signature)______47

ANNEXURE-3

ARTICLE

JEWELLERY WORTH RS54 LAKH STOLEN FROM BANK LOCKER

Khar Police and the HDFC Bank management were baffled when they came to

know that gold and diamond-studded ornaments, worth Rs 54 lakh, had been stolen

from a bank customer’s safe deposit vault.

The news came into light when a First Information Report (FIR) was lodged at

Khar police station on Saturday by Ms N Agarwal of Bandra. She stated that

earlier in the day she had gone to HDFC Bank, Pali Hill Branch, where she had a

safe deposit vault (No 48).

On opening it, she discovered that several of her ornaments kept in the vault were

missing. She immediately informed the bank authorities; then lodged a complaint

with the police.

Five diamond-studded necklaces, 16 pairs of earrings, three gold necklaces with

gold pendants, seven diamond-studded bangles, a gold set, bracelet and rings were

found stolen from the locker.

Khar police were trying to find out how the high-security vault was breached.

48

“Prima facie, it seems that the ornaments were taken out of the locker by using

duplicate keys. We asked the complainant whether she had ever given the keys to

the vault to someone for duplication; she said no. Investigations are on into the

matter. We will be conducting a detailed inquiry,” Additional Commissioner of

Police (West) Archana Tyagi told DNA.

Neeraj Jha, head of corporate communications, HDFC Bank, said it was

impossible that such a breach of security would happen. “Security at our bank is on

a par with the international standards. This kind of incident has never happened

before. The bank too will initiate an investigation into the case…. As I do not have

details of the complaint lodged with the police, it will be difficult to comment any

further on this issue,” he said.

49

ANNEXURE-4

QUESTIONER

1. What transactions can one perform using my ATM / Debit card?

2. Are there any charges if i use other bank ATM?

3. What benefits customer gets by using Net banking?

4. What are the measures that customer can take to ensure greater security in case

of net banking?

5. How to pay credit card bills online?

6. Which types of credit cards are available in your bank?

7. What are the charges applicable for safe deposit vault and do the charges on

safe deposit vault depend on its size?

8. Do we need to deposit some amount before taking locker on rent?

9. In which foreign currency your bank issue bank draft?

10. what are the charges for issuing bank draft?

50

FINDINGS

1) HDFC BANK

You can perform the following transactions at our ATMs across the country:

Cash Withdrawals

View Account Balance

Request a mini-statement

Request for a Mini-Statement

Change your ATM PIN

Request for a Cheque Book

Request for an Account Statement (for the period from the date of the

'Last Statement' to the date on which request has been made.)

Funds Transfer within accounts linked to the same card

Pay your HDFC Bank Credit Card Bills

Refill your Prepaid Mobile

Deposit Cheque or Cash

Request for your Net Banking Password

51

ICICI BANK

Cash withdrawal up to Rs. 25,000/- per day from your account

Check your ledger balance and available balance

Print out your Mini Statement which displays your last 8 transactions and

the current balance

Deposit Cash / Cheques

Transfer funds from one account to another linked account in the same

branch.

Change the Personal Identification Number (PIN) of your ATM or Debit

card

Pay bills, make donations to temples / trusts, buy internet packs,

Request for a chequebook

Mobile prepaid card recharge

Internet Packs (ATN - Any Time Net) .

Mutual Funds Transactions .

52

Bill Payments

Flexi Top Up

Calling Cards .

2) HDFC BANK

Yes there are charges applicable if one uses other bank ATM. The first 5

transactions are free and than from sixth transaction the charge is 20rs. Per

transaction.

ICICI BANK

Yes there are charges applicable if one uses other bank ATM. The first 5

transactions are free and than from sixth transaction the charge is 18rs. Per

transaction.

3) HDFC BANK

Benefits customer gets by using Net Banking are:-

Queries -

Check your Balance

See your Statement

Inquire about cheque status

Ask for a Statement

Ask for a Cheque Book53

Inquire about your Fixed Deposit

Inquire about your TDS details

See your Demat Account

Update your profile

View HDFC bank Credit card bills

View your Mutual funds portfolio

Transactions -

Stop a Cheque

Pay your Bills

Ask for a Demand Draft

Transfer funds between your accounts

Transfer funds to a third party

Request for a new Fixed Deposit

Shop Online

Pay HDFC Bank Credit Card Dues

Buy and sell Mutual Funds.

ICICI BANK

Account Information

eCheques (Online Funds Transfer)

Bill Payment

Communication with your Account Manager

Customize ICICIBank.com

Disclaimer

54

Requests and intimations

Cheque-book

Stop payment instruction

Quantum Optima - value added savings account

Opening a fixed deposit

Opening a recurring deposit

Intimate us for loss of your ATM card

Register ONLINE for phone banking and mobile commerce

Cheque Status

Online application for a Debit Card etc.

4) HDFC BANK

The measures that customer can take to ensure greater security in case of net

banking are:-

You should log-out from the NetBanking when leaving your PC.

Always change your password continuously, choose "strong" 6 to 8 digit

passwords (alphanumeric) and change them regularly; avoid obvious

55

passwords (names of family members, pets, favourite musician etc), and

don't tell anyone else your passwords.

You should not write a password down on any paper which may be easily

accessible to anyone.

Put in a power-on password in your machine so that nobody else can switch

on your machine.

Have a screensaver password so that when you are away from your

workstation nobody else can access it.

If you think someone knows your password go online and change it

immediately

If you are using the Internet in a public place (e.g. a Cyber Cafe) do not

leave the PC unattended, and ensure that no-one is watching what you type

Logoff from Net Banking upon completion of your session. Use the Log-out

button to Log out so that the session closes and don't shut the window to Log

off. This will prevent the viewing of previous pages of your online session

via your PC.

You should consider running a Personal Firewall, which will prevent

unauthorized persons from accessing your computer and guard against the

introduction of malicious programs onto your PC

ICICI BANK

You need to enter your Internet Banking User id and password each time

you access your internet banking account. Since your access is protected by

56

this password it is very important that you protect your password, by making

it known ONLY to you.

The system prompts you to change the password on first time login. We

recommend that you change both login and transaction password.

Your password should be atleast 8 characters long. Passwords are case

sensitive.

Do not use your date of birth, telephone number, address, your name or the

name of a friend or relative in your password.

Your internet banking account is locked in case you enter wrong user id and

password 3 times.

Passwords are case sensitive.

Change your password regularly.

Ensure that you are not observed while entering the password.

Never leave your computer unattended while you are logged in to ICICI

Bank.com

Always logoff from Internet Banking upon completion of your session. Use

the Logout button for closing the session. It is preferable not to shut the

window to log off.

Disable the option on browsers for storing user names and passwords. You

can refer to the help section available on your browser for instructions

57

5) HDFC BANK

You can pay your monthly HDFC credit card bills online through the following

category:

ATMs:-The HDFC bank holders can go to HDFC ATM at anytime to

transfer the bill amount from your savings or even you can transfer the

current account to the credit card account.

NET BANKING:-This is similar to ATM but in this case you can transfer

the bill amount or current account to your credit card through online.

VISA MONEY TRANSFER:-VISA Credit Card members can transfer

their funds from any Visa debit card within India through HDFC Bank's Net

Banking facility according to their convenience.

STANDING INSTRUCTIONS:-If the people have an account with HDFC

Bank then you can automatically debit your bank account with either the

minimum amount due or total amount due on your credit card. Your account

with HDFC Bank should be a single account or a joint account with any

other bank.

NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT):

This is used to transfer funds from any other bank account to make

your card payments in HDFC bank. Then your Credit will reflect

within one day. So, in order to know how to pay HDFC Credit Card

Bills online you need to,

You need to stop writing cheque.

58

The credit is dependent on NEFT settlement schedule.

DROP BOX:

You can also drop the local cheque with the HDFC Bank Card account

followed by your 16-digit card number. It can be dropped in any of drop

boxes located in ATMs and branches in your city. The HDFC Bank has an

extensive network of 750 branches and 1600 ATMs across India.

BY CASH:

You people can also pay by cash at the nearest HDFC bank.

ICICI BANK

You can pay your monthly HDFC credit card bills online through the following

category:

NET BANKING:

This is similar to ATM but in this case you can transfer the bill amount or

current account to your credit card through online.

VISA MONEY TRANSFER:

VISA Credit Card members can transfer their funds from any Visa debit

card within India through HDFC Bank's Net Banking facility according to

their convenience.

STANDING INSTRUCTIONS:59

If the people have an account with HDFC Bank then you can automatically

debit your bank account with either the minimum amount due or total

amount due on your credit card. Your account with HDFC Bank should be a

single account or a joint account with any other bank.

NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT):

This is used to transfer funds from any other bank account to make your card

payments in HDFC bank. Then your Credit will reflect within one day.

6) HDFC BANK

Following are the types of credit cards available in HDFC bank

Classic card,

Special benefit card,

Premium cards

Commercial cards

ICICI BANK

Following are the types of credit cards available in ICICI bank

premium cards,

classic cards,

value for money cards,

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co-branded cards,

affinity cards

EMI cards

7) HDFC BANK

Yes, the charges applicable for safe deposit vault depend on its size and the

rentals vary from minimum 1,000 to maximum 9,000 rs. p.a. depending upon its

size.

ICICI BANK

Yes, the charges applicable for safe deposit vault depend on its size and the

rentals vary from minimum 1,525 to maximum 10,545 rs. p.a. depending upon

its size.

8) HDFC BANK

NO, we need not need to deposit any amount before taking locker on rent.

ICICI BANK

Yes, we need to deposit some amount before taking locker on rent i.e. it ranges

from 15,000 to 1,00,000 rs. Depending on its locker size.

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9) HDFC BANK

HDFC Bank offers the Foreign Currency Demand Draft in the following currencies:

USD

GBP

CAD

Euro

Miscellaneous currencies.

ICICI BANK

ICICI Bank offers the Foreign Currency Demand Draft in the following currencies:

USD

GBP

SGD

EURO

CAD

AUD.

10) HDFC BANK

The charges for making foreign currency demand drafts are Rs 200 for an

account holder and Rs300 for non account holder.

ICICI BANK

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The charges for making foreign currency demand drafts are Rs 200 for an

account holder as well as for non account holder.

CONCLUSION

Banks promote saving habit among people and inspire confidence in the general

public. Banks perform variety of functions. Apart from the two main functions of

mobilizing deposits and ‘lending’, a bank renders various services to the business

community and general public. These services offered by bank to customers are

generally known as agency services. These are termed ‘non-banking’ services,

when rendered to the general public.

Agency Services include payment of subscription, insurance premium, collection

of cheques and dividends, buying and selling shares and debentures on behalf of

customers.

Non-banking services are rendered in the interest of general public. Some of these

services are: issue of Traveller’s cheques, gift-cheques, Bank drafts, circular notes

and safe custody of valuable articles and documents in bank lockers, etc.

Commercial banks have proved to be very useful to the society in general and to

trade and industry in particular. The usefulness of the service functions of banks to

trade and industry and their significance to the general public are wide-ranging in

nature and variety. Banks offer attractive rates of interest on savings of customers

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and thus create the habit of thrift and savings in many people. They are very useful

in facilitating foreign trade activities. Besides acting as ‘agent’, referee, trustee,

‘executor’ and administrator banks render numerous other services like providing

locker facilities, payment of taxes, insurance premium, issuing drafts, arranging

remittances, etc.

BIBLIOGRAPHY

Book-Principles and practices of banking and insurance.

- (S.Y. banking and insurance)

Webliography

www.Google.com

www.Wikipedia.com

www.ICICI.com

www.HDFC.com

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