Banking Practice and Procedure Chapter Eight
Banking Practice and Procedure Chapter Eight
Banking Practice and Procedure Chapter Eight
Learning Objectives: After studying this lesson, students will be able to:
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.
8.1 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.
Loan Options:
Loan Account Details: You can view the details of the loan account selected and
print these details using “print” option. You can also go to “Account Summary”,
‘Early and Final Settlement” and “Loan Repayment” options from here.
Loan Account Activity: You can view the details of transactions for the selected
account for any specified period. The details of transactions can be directly printed
using ‘print’ option or can be downloaded and saved as a file using “download”
option.
The facility of Safe Deposit Lockers is an ancillary service offered by the Bank. The
Bank's branches offering this facility will indicate/display this information.
Secrecy and Confidentiality:
The Bank will ensure utmost secrecy of the Safe Deposit Lockers hired by the
customer and will not divulge any information about hiring of lockers, mode of
operation etc. to anyone, except when the disclosure is required to be made with the
clear consent of the hirer(s) or in compliance of the orders of a competent authority
having statutory powers.
Bank’s lockers will be available to any person, having contractual capacity i.e.
capacity to enter into a contract. Thus locker can be hired by an individual singly
and / or two or more individuals jointly as well as firms, limited Companies,
Societies, Associations, Clubs etc.
Allotment of locker
Allotment of lockers shall be based on the duly (properly) filled in application of the
prospective hirers on the printed format provided by the bank. Lockers will be
allotted by the branches on first come first served basis.
Providing a copy of the agreement:
Branches will give a copy of the agreement to the locker-hirer at the time of
allotment of the locker, if preferred by the customer.
Recovery of rent from hirer(s)
Safe Deposit Locker rent will be payable in advance and in the event of locker rent
remaining unpaid, when due, the Bank will have the right to refuse access to the
locker hirer(s). Locker rent will be recovered on annual basis. The lease period of
one year will start from the date of hiring the locker and will continue till the
preceding day of the corresponding date in the subsequent year.
Operations of Safe Deposit Vaults/Lockers:
Branches will exercise due care and necessary precaution for the protection of the
lockers provided to the customer. The Hirer/s can operate the Safe Deposit Locker
only on the Bank’s working days and during the business hours of the Bank.
Before operating the locker, the hirer/s should sign the attendance register which shall
be kept at the bank.
Surrender of Locker:
Locker can be surrendered by the hirer/s at any time during the contract period
through a written application and handing over of keys to the Bank Officials.
Bank can also request for surrender of locker with due notice.
The major aspects governing the locker services are:
The Bank will hire locker only to properly introduced persons.
Lockers are rented out for a minimum period of one year. Annual rent is payable in
advance.
Withstanding instruction, the rent may be paid from the deposit account of the hirer.
Merchant banking is the financial intermediation that matches the entities that need
capital and those that have capital for investment.
Services of merchant bankers
Merchant banking
a business and helps to raise finance marketing, managerial and legal matters
In short, merchant banking provides a wide range of services for starting until running
a business. It acts as Financial Engineer for a business.
Merchant banking primarily involves financial advice and services for large
corporations and wealthy individuals. The important functions of merchant
banking are depicted below.
1. Raising Finance for Clients: Merchant Banking helps its clients to raise
finance through issue of shares, debentures, bank loans, etc. It helps its clients to
raise finance from the domestic and international market. This finance is used for
starting a new business or project or for modernization or expansion of the business.
2. Project Management: Merchant bankers help their clients in the many ways.
For e.g. advising about location of a project, preparing a project report,
conducting feasibility studies, making a plan for financing the project, finding out
sources of finance, advising about concessions and incentives from the
government.
3. Advice on Expansion and Modernization: Merchant bankers give advice for
expansion and modernization of the business units. They give expert advice on
mergers and acquisition, takeovers, diversification of business, foreign
collaborations and joint-ventures, technology up-gradation, etc.
4. Special Assistance to Small Companies and Entrepreneurs: Merchant banks
advise small companies about business opportunities, government policies,
incentives and concessions available. It also helps them to take advantage of these
opportunities, concessions, etc.
5. Services to Public Sector Units: Merchant banks offer many services to
public sector units and public utilities. They help in arranging long-term finance
from term lending institutions, marketing of securities.
6. Revival of Sick Industrial Units: Merchant banks help to revive (cure) sick
industrial units.
7. Portfolio Management: A merchant bank manages the portfolios
(investments) of its clients. This makes investments safe, liquid and profitable for
the client. It offers expert guidance to its clients for taking investment decisions.
8. Money Market Operation : Merchant bankers deal with and underwrite
short-term money market instruments, such as:
i. Government Bonds.
ii. Commercial paper issued by large corporate firms.
iii. Treasury bills issued by the Government
Activity 8.1
Students! Please go to your nearest banks and indentify which services are major and
ancillary to the bank you visited?
Summary
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.
The facility of Safe Deposit Lockers is an ancillary service offered by the Bank. The
Bank's branches offering this facility will indicate/display information as Secrecy
and Confidentiality, Allotment of locker, Providing a copy of the agreement,
Recovery of rent from hirer(s), Operations of Safe Deposit Vaults/Lockers, and
Surrender of Locker.
Review Questions