FUNCTIONS OF BANKANCILLARY SERVICES

• REMITTANCES: Remittance means, transfer of funds from one bank branch to • REMITTANCES: Remittance means, transfer of funds from one bank branch to another branch of the same bank or a different bank.

• Customers can remit through banker’s cheque, demand drafts, national electronic • Customers can remit through banker’s cheque, demand drafts, national electronic clearing (NEFT), RTGS (Real Time Gross Settlement) at a specified charges.

• DEMAND DRAFT AND BANKERS’ CHEQUE:

• Most common form of transfer of funds.• Most common form of transfer of funds.

• Application for purchase of DD is made to Bank, signed by the applicant giving address and full particulars of the draft intended to be purchased.address and full particulars of the draft intended to be purchased.

• DD/BC is a negotiable instrument and payable to the order of the beneficiary.

• DD/BC is valid for three months,

• Purchaser of DD/BC has no authority to countermand the payment after it has • Purchaser of DD/BC has no authority to countermand the payment after it has been delivered to the payee. However bank will exercise caution if reported lost

• Purchase/payment of DD/BC for Rs.50000 and above will be only through a/c• Purchase/payment of DD/BC for Rs.50000 and above will be only through a/c

FUNCTIONS OF BANKANCILLARY SERVICES

• ISSUANCE OF A DUPLICATE DD/BC• ISSUANCE OF A DUPLICATE DD/BC

• Customer is entitled to issuance of Duplicate DD

• To be intimated to Bank• To be intimated to Bank

• Payment of DD/BC has not been made by the drawee bank/branch

• Letter of indemnity to be executed by the purchaser of DD.• Letter of indemnity to be executed by the purchaser of DD.

• Applicable service charges to be paid.

MAIL TRANSFER

• Amount remitted by a customer or non-customer is directly credited to the a/c of • Amount remitted by a customer or non-customer is directly credited to the a/c of the beneficiary with another branch of the bank.

• The concept of MT has no relevance after the advent of core banking system.• The concept of MT has no relevance after the advent of core banking system.

TRAVELLERS CHEQUES

• TCs are issued to any individual and he has to sign in the space provided in the presence of bank official.presence of bank official.

• On presentation he has to sign on the reverse in the space provided for in the presence of the bank official.presence of the bank official.

• Introduction is not insisted. If the signature tallies the payment is made.

FUNCTIONS OF BANKANCILLARY SERVICES

NATIONAL ELECTRONIC FUNDS TRANSFER SYSTEMNATIONAL ELECTRONIC FUNDS TRANSFER SYSTEM

Amounts inclusive of paisa component can be put through

Facilitates economical, reliable, efficient and expeditious funds transferFacilitates economical, reliable, efficient and expeditious funds transfer

No upper ceiling for the amount

Avoidance of paper based transfer system

Remitting bank prepares SFMS and sends to service centre of NEFTRemitting bank prepares SFMS and sends to service centre of NEFT

RBI is the clearing centre sorts out bank wise and prepares the accounting entries.

REAL TIME GROSS SETTLEMENT

It is an electronic payment.

Processed on a continuous or real time basisProcessed on a continuous or real time basis

Settled on Gross or individual basis without netting debits against credits

Payments effected are final and irrevocable

Allows transfer of funds across banks almost instantaneouslyAllows transfer of funds across banks almost instantaneously

It reduces credit risk

FUNCTIONS OF BANKANCILLARY SERVICES

• SAFE DEPOSIT LOCKERS• SAFE DEPOSIT LOCKERS

Facility extended to the customers to enable them to keep their valuables/documents etc in a specially designed lockers on payment of a prescribed fee.

Can be hired by an individual, firm, company, specified associations and societies.

Nomination facility is available to the individual hirer.

Different types of locker available. Fees payable in advance.Different types of locker available. Fees payable in advance.

Bank will hire out the locker only to the properly introduced person.

Bank reserves the right to break open the locker in case of non payment of rent despite notice, as per bank rules and recover the charges.notice, as per bank rules and recover the charges.

KYC assessment should be done while hiring lockers.

If the locker remains not operated for a period of more than one three years for high If the locker remains not operated for a period of more than one three years for high and medium risk categories, notice to be sent to the hires either to operate the locker or surrender the same. In case of non response, bank should consider opening the same with the help of police after giving sufficient notice in this regard.

In case of death of the sole locker hirer, the access will be given to the nominee.

Death certificate and identification of nominee is sufficient.

In case of joint hiring if nomination has been provided the nominee along with the In case of joint hiring if nomination has been provided the nominee along with the existing hirer can operate the locker.

FUNCTIONS OF BANKANCILLARY SERVICES

• Where both the hirers die, and if nomination is available, their nominees may be • Where both the hirers die, and if nomination is available, their nominees may be permitted to operate

• In case of joint locker hiring, in the contract for hiring there is a survivorship • In case of joint locker hiring, in the contract for hiring there is a survivorship clause is available, and in the absence of joint operation condition, the survivor is permitted to operate.

• PORTFOLIO MANAGEMENT

Management of combination of securities to get the most efficient portfolio in Management of combination of securities to get the most efficient portfolio in terms of return, safety and liquidity.

Basic principles

It is the portfolio that matters not the individual securityIt is the portfolio that matters not the individual security

Large portfolio returns come only with a larger portfolio risk.

Diversification works.Diversification works.

Each portfolio is tailored to the particular need of its owner.

FUNCTIONS OF BANKANCILLARY SERVICES

• P M S - RBI GUIDELINES• P M S - RBI GUIDELINES

– PMS service is provided at customers risk without guaranteeing a pre determined rate of return.determined rate of return.

– Services are provided related to their long term investible funds.

– Minimum period for which the funds are placed by clients is one year

– Transactions are booked at market rates only

– Proper accounting and documentation has to be made

– Funds accepted should not be entrusted with another bank for management– Funds accepted should not be entrusted with another bank for management

– Definite fee is charged for the services independent of the return

– The undeployed funds are the same as outside borrowings of the bank and – The undeployed funds are the same as outside borrowings of the bank and CRR/SLR to be maintained on them also.

– Bank’s liability to the clients towards funds accepted for portfolio management has to be properly reflected in the published accounts.management has to be properly reflected in the published accounts.