SUMMER INTERNSHIP PROJECT REPORT

ON

A STUDY ON OVERALL BANKING OPERATIONS

At

The Bhuj Mercantile Co-operative Bank Limited

Submitted To

Tolani Motwane Institute Of Management Studies (836)

PB NO.11, Lilashah Kutiya Road, Adipur-370205 (Kachchh)

Ph No: (02836) 261466, Email: info@tims.ac.in

Under the Guidance of

(Professor Sagar Tanna)
(Assistant Professor)
In partial Fulfilment of the Requirement of the award of the degree of
Master of Business Administration (MBA)

Offered By
Gujarat Technological University
Ahmedabad

Prepared By:
JETUN KHOJA
(208360592007)
MBA (Semester-III)
October 2021
 Student’s Declaration

I hereby declare that the Summer Internship Project Report titled “A study on overall
banking operations” In (The Bhuj Mercantile Co-operative Bank Limited) is a result
of my own work and my Indebtedness to other work publications, references, if any, have
been duly acknowledged. If I am found guilty of copying from any other report or published
information and showing as my original work, or extending plagiarism limit, I understand
that I shall be liable and punishable by the university, which may, include ‘Fail’ in
examination or any other punishment that university may decide.

Enrollment no. Name signature

208360592007 Jetun khoja

Place: ………. Date:

…………

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 Plagiarism Report

Tolani Motwane Institute Of Management Studies 3

 Organization Certificate

Tolani Motwane Institute Of Management Studies 4

 Institute Certificate

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 Acknowledgement

A summer project is a golden opportunity for learning and self-development. I consider

myself very lucky and honored to have so many wonderful people lead me through the
completion of this project.

With this acknowledgement I express my sincere gratitude towards all the people who have
helped me throughout the project.

I am privileged to have a precious opportunity to undertake my summer Internship project

with the most reputed bank in co-operative sector i.e The Bhuj Mercantile Co-operative
Bank Limited.

I am very much thankful to Mr. Gopal pancholi the manager of The Bhuj mercantile co-
operative bank ltd for allowing me to undertake my SIP in The Bhuj mercantile co-
operative bank ltd and to assistant manager Mr. jai johney & officer Ms ankita pandya for
their valuable time and mentorship.

I wish to express my indebted gratitude and special thanks to Professor Sagar Tanna for
his guidance and constant supervision and for his support in completing the project.

I am grateful to the director of Tolani Motwane Institute of Management Studies Dr.

Sampada Kapse for giving such a great opportunity.

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 Executive summary

The study is done with an objective to get knowledge about overall banking operations.

Basic operation in The Bhuj Mercantile Co-operative Bank limited are transfer of funds,
clearing cheques, fixed deposits, opening accounts ( saving and current), etc.

The bank takes deposits from the public and lends the same to the public in form of loans
and in this process it also earns some profit which helps the bank in maintaining liquidity.
However, the primary objective of the co-operative bank is not to earn profit but to help
the society and the community by providing various services of the bank.

This study even includes the most risky department of bank that is cash department. Cash
department performs the work like receipts and payments, proper counting of notes, sorting
of notes, cash remittance.

I observed a very calm and friendly atmosphere in bank and I have seen that customers are
very well satisfied with the services of bank.

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Contents
Acknowledgement ........................................................................................................................... 6
Executive summary .......................................................................................................................... 7
Chapter-1 Introduction .................................................................................................................. 12
1.1 INTRODUCTION TO THE BANKING INDUSTRY.......................................................................... 12
1.2 CO-OPERATIVE BANK ............................................................................................................... 15
1.3 RESERVE BANK OF INDIA.......................................................................................................... 17
1.4 INTRODUCTION TO THE BHUJ MERCANTILE COOPERATIVE BANK LIMITED ........................... 20
1.5 LITERATURE REVIEW ................................................................................................................ 22
Chapter – 2 Objective .................................................................................................................... 25
2.1 OBJECTIVES .............................................................................................................................. 25
Chapter – 3 Methodology .............................................................................................................. 27
3.1 Data collection method............................................................................................................ 27
Chapter – 4 Finding & analysis ....................................................................................................... 29
4.1 Overall banking operations ...................................................................................................... 29
4.2 TRANSFER OF FUNDS ............................................................................................................... 30
4.3 NEFT & RTGS ............................................................................................................................ 31
4.4 DEMAND DRAFT ....................................................................................................................... 33
4.5 Clearing department ................................................................................................................ 34
4.6 Depository Services .................................................................................................................. 36
4.7 Types of Account ...................................................................................................................... 41
4.8 Statement of Accounts ............................................................................................................ 46
4.9 Cheque Book Issue Request ..................................................................................................... 47
4.10 Loan and advances ................................................................................................................. 48
4.11 Locker Service ........................................................................................................................ 55
4.12 Cash department ................................................................................................................... 58
Chapter – 5 conclusion & recommendations ................................................................................ 64
Chapter – 6 BIBLIOGRAPHY............................................................................................................ 66
6.1 Bibliography ............................................................................................................................. 66
References ..................................................................................................................................... 66

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 LIST OF ABBREVIATION
SR.NO ABBREVIATION FULLFROM
1 BMCB The Bhuj Mercantile Cooperative Bank
2 RBI Reserve bank of India
3 NBFC Non-Banking Finance Company
4 MFT Micro Finance Institutions
5 ARC Asset Reconstruction Company
6 SLR Statutory Liquidity Ratio
7 CRR Cash Reserve Ratio
8 IMF International Monetary Fund
9 FEMA Foreign Exchange Management Act
10 BOP Balance of Payment
11 BOT Balance of trade
12 NEFT National Electronic Funds Transfer
13 RTGS Real Time Gross Settlement
14 IMPS Immediate Payment Service
15 GUCBF The Gujarat Urban Cooperative banks federation
16 NADCUB National Federation of Urban cooperation Banks
and Credit Societies LTD.
17 NCCE National Centre for Cooperative Education
18 AMA Advanced Measurement Approach
19 DD Demand Draft
20 FD Fixed Deposit
21 IFSC Indian Financial System Code
22 OBC Outward Bill Collection
23 IBC Inward Bill Collection
24 CTS Cheque Truncation system
25 C-KYC Central Know Your Customer
26 ITR Income Tax Return
27 SOA Statement of Accounts
28 CMA Credit Monitoring Arrangement
29 CIBIL Credit Information Bureau India limited
30 NOC No Objection Certificate
31 MPBF Maximum permissible Banking Finance
32 UIN Unique Identification Number

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 LIST OF FIGURES
FIGURE 1 BANKING STRUCTURE IN INDIA 13
FIGURE 2 FUNCTIONS OF BANK 14
FIGURE 3 OVERALL BANKING OPERATIONS 29
FIGURE 4 TYPES OF DEPOSIT 36
FIGURE 5 TYPES OF ACCOUNT 41
FIGURE 6 TYPES OF LOAN 51

LIST OF TABLE
TABLE 1 DEMAND DRAFT CHARGES 33
TABLE 2 FD INTEREST RATES 37
TABLE 3 MINIMUM BALANCE IN CURRENT A/C 44
TABLE 4 DEBIT CARD CHARGES 45
TABLE 5 LOCKER CHARGES 55

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 CHAPTER-1
INTRODUCTION

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 Chapter-1 Introduction

1.1 INTRODUCTION TO THE BANKING INDUSTRY

In simple words banking can be defined as the business activity of accepting and
safeguarding money owned by other individuals and entities and then lending out this
money to earn profit.

It is well said that the banking plays a silent yet crucial part in our day to day life. The bank
performs financial intermediation by pooling savings and channelizing them into
investments thereby keeping economy’s growth engine reviving.

Banking business has done wonders for the world economy. The simple looking method
of accepting money deposits from savers and then lending the same money to borrowers,
banking activity encourages the flow of money to productive use and investments. This in
turn allows economy to grow. In absence of banking business , savings would sit idle in
our homes, the entrepreneurs would not be in a position to raise the money, ordinary people
dreaming for a new car or house would not be able to purchase new car or houses.

So we can say that bank is a financial institution that undertakes banking activity i.e, it
accept deposits and then lends the same to earn certain profit

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 BANKING STRUCTURE IN INDIA

Reserve bank
of India (
Apex bank)

scheduled
banks unscheduled
banks

commercial cooperative
banks banks

public sector Urban co- Rural co-

private Regional Foreign
banks operative operative
sector banks Rural banks banks
bank bank

Figure 1 Banking structure in India

The Bhuj mercantile co-operative bank limited comes under Reserve bank of India and
Urban cooperative bank.

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 Functions of bank

Secondary
Primary Functions
Functions

Accepting
Agency functions
deposits

Granting
Utility functions
Advances

Figure 2 Functions of bank

Functions of bank are divided into 2 categories:

(A) Primary functions:

 Accepting deposits : saving deposits, fixed deposits, current deposits, Recurring
deposits.
 Granting advances: overdraft, loans, Discounting bills.
(B) Secondary functions:
 Agency functions: Transfer of funds, periodic payments, collection of cheques.
 Utility functions: Draft, Lockers, welfare programmes, underwriting.

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 1.2 CO-OPERATIVE BANK

Co-operative banks are the banks whose main objective is to provide financial assistance
to economically weaker section of the society. Such banks are registered under the
cooperative societies Act. These banks are mostly small sized and are traditionally centred
around communities, localities and workplace groups as they essentially lend too small
borrowers and businesses. Those banks provides its customers a large range of services
such as loans, deposits, banking accounts. Though they are owned by communities and
others. The banking activities are still regulated by the RBI, governed by the banking
regulation Act 1919 and banking laws Act 1965.

The main objective of other banks are mostly profit maximization but in cooperative bank
this is not the case, they mostly focus on providing good and efficient services to its
customers which can fulfill their small needs. Easy to form, easy to fill basic necessities,
this resulted in excellent form of banking system.

There are 2 types of cooperative bank :

(1) Rural cooperative bank

(2) Urban cooperative bank

Rural cooperative bank plays an important role in day to day life of rural population. Rural
cooperative banks are also known as agriculture credit institutions. Rural cooperative banks
mainly finance agricultural based activities including farming, dairy, fish culture, along
with some small scale industries and self employment activities.

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 URBAN COOPERATIVE BANK

Urban co-operative banks is also referred as primary co-operative banks by the Reserve
Bank of India. Among the non-agricultural credit societies urban cooperative banks occupy
an important place. This bank is started in india with the object of catering to the banking
and credit requirements of the urban middle classes.

The RBI defines urban cooperative bank as “small sized cooperatively organized banking
units which operate in metropolitan, urban and semi urban centers to cater mainly to the
needs of small borrowers, viz. owners of small scale industrial units, retail traders,
professional and salaries classes.”

Urban cooperative banks mobilize savings from the middle and lower income groups and
purvey credit to small borrowers, including weaker sections of the society. These banks
organize on a limited liability basis, generally extend their area of operation over a town.

The main functions of these banks are to promote thrift by attracting deposits from
members and nonmembers and to advance loans to the members. It is registered under
cooperative societies Act of the respective state governments. Prior to 1966 urban
cooperative banks were exclusively under the purview of state government. From March
1, 1966 certain provisions of Banking Regulation Act have been made applicable to these
banks. Consequently, the RBI became the regulatory an supervisory authority of Urban
cooperative banks for their related operations. Managerial aspects of such banks continue
to remain with state governments under the respective cooperative societies Act.

The objectives and functions of the urban cooperative banks:

Primarily, to raise funds for lending money to its members.

 To attract deposits from members as well as nonmembers.

 To encourage thrift, self-help and mutual aid among members.
 To draw, make, accept, discount, buy, sell, collect and deal in bills of exchange,
drafts, certificates and other securities.
 To provide safe deposit vaults.

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 1.3 RESERVE BANK OF INDIA

Reserve bank of India is also known as India’s central Bank. It was established on 1st April
1935. Although the bank was initially owned privately, it has been taken up by the
government of India ever since, it was nationalized. The bank has been vested with
immense responsibility of reviewing and reconstructing the economic stability of the
country by formulating economic policies and ensuring a proper exchange of currency. In
this regard, the Reserve Bank of India is also known as the banker of banks. The central
office of the Reserve Bank was initially established in Calcutta but was permanently moved
to Mumbai in 1937. The central office is where the governor sits and where policies are
formulated.

The RBI has four zonal offices at:

 Chennai
 Delhi
 Kolkata
 Mumbai

It has 20 regional offices and 11 sub office

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 Functions of Reserve Bank of India
1] Issuing, printing and circulation of currency notes:

Issuing, printing and circulation of currency notes are the most significant functions
performed by the Reserve Bank of India. It is the responsibility of a central bank/ RBI to
print and circulate the denominations of India.

2] Licensing:

The Reserve Bank of India is the Apex body of different financial institutions in India.
Therefore the licensing procedure of those financial institutions is under the RBI. In other
words, it is the RBI who approves the license of these institutions such as:

 Commercial banks
 Cooperative banks
 NBFCs ( Non- Banking finance company)
 MFI ( Micro finance institutions)
 Authorised Dealers of Forex
 Recovery agents
 ARC (Assets reconstruction company) etc.

3] Act as a monetary authority:

RBI implements different monetary policies such as a SLR (Statutory Liquidity Ratio),
CRR (Cash reserve ratio), Repo rate and reverse repo rate to stabilize the banking system.
It also decides how much money is to be circulated in the market to maintain financial
stability, to stabilize the exchange rates and control inflation rate in the country.

4] Government’s Banker:

RBI is the representative of the government of India in the World Bank and IMF
(International monetary fund). It is the financial advisor of the government of India and
helps in implementing various financial schemes of the central as well as state government.
The Reserve bank also provides short term credit to both central and state governments.

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5] Foreign Exchange Management:

RBI is authorised to regulate and monitor foreign exchange in India by FEMA (Foreign
exchange management Act). It also provides guidelines regarding the balance of payment
(BOP), the balance of trade (BOT), limitations of forex reserve, gold reserve.

6] Controls credits and supply of money:

RBI regulates and supervises the supply of money and credits as per government
guidelines. Since it directly impacts the balance of economy of a country, therefore the
government has control over these phenomena through the Reserve Bank of India.

(7) Regulators of payment and settlement system:

RBI regulates and supervises the payment and settlement system. It works as a clearing
house such as the settlement of ownership of clearing, NEFT, RTGS, IMPS and other
electronic gateway payment mechanisms are some significant examples of the functions of
RBI.

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 1.4 INTRODUCTION TO THE BHUJ MERCANTILE
COOPERATIVE BANK LIMITED

The Bhuj mercantile cooperative bank was formed in 1994 by founder chairman CA
mahendra morabia. The bhuj mercantile cooperative bank is a pioneer in introducing many
innovative concepts in banking for the first time in gujarat. Bank is having the inter branch
connectivity since 1997. It provides 24x7 365 days non stop complete banking from the
year 2003. The bhuj mercantile cooperative bank limited has won NO. 1 best performing
bank of the country award in 2009 by Hon. Judge shri P. dalgado, CGM, RBI (UBD) retd.
Bank is having the outstanding goodwill amongst the customers at all its centers.

Managerial staff of bank attends various training programs organised by GUCBF,

NAFCUB, NCCE, AMA, etc as per the importance , necessity and content. Bank provide
proper and adequate on the job training to new employees for smooth functioning and to
make them familiar with prevailing systems and procedures at bank. Bank has professional
recruitment policy. It recruits CA, MBA’S for better development of branches.

Bank is fully enabled IPv6 CBS networking security. The bank now has a pan India
presence with the introduction of RUPAY ATM CUM debit card. Bank uses “ EASY
BANK CORE” software to run their day to day operations.

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SAILENT FEATURES OF THE BHUJ MERCANTILE CO-OPERATIVE BANK
LIMITED:

 Assuring best customer services since inception.

 CASH working hours 10am to 6pm
 NET NPA 0% since inception
 Real time core banking at all branches
 RTGS/ NEFT/ DD/ CASH/ Bank charges NIL
 SMS/ E-mail alerts free- Free balance alert- 08030636350
 Variety of deposit schemes for all age groups.
 Insurance cover on all deposits upto upto RS. One Lakhs
 High quality safe deposit lockers available
 One of the most modernized co-operative bank in gujarat

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 1.5 LITERATURE REVIEW

(1) MD. Ashabur Rahman (2019):

Researched on “A practical approach to cash department of a bank”. Cash department is
very important department in any banks. Cashier has to manage the cash carefully. Cashier
has to perform various task such as cash receipts, cash payments, remitting of excess cash
to feeding branch, to tally the cash position. Cash management is very much necessary so
proper training should be provided to the employees. Documents that are relevant to cash
department are bank credit/ debit notes, bank deposit slipts, cheques, bank drafts, bank
reconcilliations, pay order, etc. cash department also performs the functions like selling
lottery ticket, purchasing and selling prize bonds, receiving various utility bills. Cash
department is positively contributing to the development of banks by providing innovative
services.

(2) Saba Abid (2016)

Elaborated on the “electronic payment system: an evolution in Indian banking system”.
The “Reserve bank of India” as the central bank of India took various steps to make the
payment process safe and authorized. So RBI introduced various E-payment methods
namely NEFT, RTGS, ECS, CBC. The National Electronic Fund Transfer (NEFT) was
implemented in November 2005 and the Real Time Gross Settlement in March 2004.
Through this e-payment methods, transfer of funds has become easy and faster. It was
observed in the study that NEFT has gained popularity because it saves time and in the
year 2008, 42% electronic transactions were NEFT transactions. RTGS is cleared
immediately there is no waiting period for RTGS so it is used for high value transactions.

(3) Dr. Krishna A goyal & vijay joshi (2012):

Researched on “Indian banking industry: challenges and opportunities”. Banking industry
in India functions under the guidance of Reserve bank of India. Banking structure of india
includes commercial bank and cooperative bank. Indian banking industry faces many
challenges such as management of risk, growth of banking, market discipline and
transparency, social and ethical aspects, etc. and the biggest challenge is to serve the large

Tolani Motwane Institute Of Management Studies 22

population of India. Author suggests that Indian banking industry should use some
innovative ideas inspite of using traditional banking services, to compete in this era of
competition and also suggest that Indian nationalized and private banks should expand in
global market.

(4) Bhadrappa Haralayya (2021):

Researched on “Banking services provided by banks in India”. Indian banks provide
various services such as payment and remittance services, overdraft, currency exchange,
consultancy, online banking, mobile banking, home banking, credit and debit cards,
lockers, money transfer, investment banking, wealth management. Some banks even
provide some extra services to its customers such as solvency certificate, shared finances,
etc. study concluded that Indian banking industry is developing tremendously.

(5) Bhatia (1978):

Elaborated on “A case study of the Indian banking system” objective of the study was to
analyse the economic performance of cooperative banking system regarding output, price
and profitability during the period 1950-68 also to study the banking structure of
cooperative banks and services provided to its customers. Author concluded in his research
that the performance of the bank in interest of its customer keeping in view its dealing at
no profit no loss.

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 CHAPTER - 2

OBJECTIVES

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 Chapter – 2 Objective

2.1 OBJECTIVES

 To understand overall banking operations at The Bhuj mercantile cooperative bank

limited.
 To understand how cash management is done.
 To understand core and advanced banking services and ancillary services offered by
the bank.
 To get practical exposure by performing the banking operations.

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 CHAPTER - 3

METHODOLOGY

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 Chapter – 3 Methodology

3.1 Data collection method

PRIMARY DATA:

The primary data has been collected from the branch manager, officers and other
employees of BMCB bank by asking queries and by daily observation.

SECONDARY DATA:

Secondary data has been collected through internet and website of the Bhuj mercantile
cooperative bank limited.

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 CHAPTER - 4

FINDINGS

&

ANALYSIS

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 Chapter – 4 Finding & analysis

4.1 Overall banking operations

Transfer of
funds
Cash NEFT &
department RTGS

Locker Demand
service draft

overall
operations
Loan clearing
department department

providing Fixed
statements deposit
Opening
accounts

Figure 3 Overall banking operations

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 4.2 TRANSFER OF FUNDS

Transfer is a basic operation of bank. It is performed on daily basis. It is the process of

transferring the amount from one account to another account, it can be of same party or
different parties but both the parties should have the account in BMCB Bank than only it
is called transfer. The party who gave the cheque is called drawer, the party whose account
is credited is called payee and the bank is called drawee.

Procedure to be followed for fund transfer:

 Transfer counter is where all cheques are received and stamped.

 Party fills the slip kept on transfer counter. For transfer in current account purple
colour slip is filled and for transfer in saving account green colour slip is filled.
 Employee verifies the details and stamp it (cheque and slip) and counterfoil is
returned to the party.
 Officer in the transfer department pass the entry in “EASY BANK CORE” software
under the head Transfer batch entry.
 After the entry is passed, manager or assistant manager authorize the entry.
 If manager approves the entry then cheque would be passed and effect would appear
in both the accounts.

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 4.3 NEFT & RTGS

 NEFT- National electronic fund transfer & RTGS- Real time gross settlement
 For NEFT & RTGS Bank requires the following details:
 Full name of beneficiary and remitter
 Account number of beneficiary and remitter
 Benificiary bank name and branch name
 Account type of beneficiary
 Benificiary bank IFSC Code
 Amount to be remitted
 RTGS is faster than NEFT because there is no waiting period in RTGS whereas
NEFT is settled in batches.
 Minimum amount for NEFT & RTGS:

NEFT 1/-

RTGS 200000/-

 RTGS & NEFT are usually settled immediately, if not than inquiry for RTGS can
be made in 2 hours and for NEFT in 24 hours.
 BMCB bank does not take any charges for NEFT/ RTGS.
 Party has to attach “ YOUR SELF” cheque with the form for NEFT/ RTGS.

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 RTGS/NEFT FORM:

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 4.4 DEMAND DRAFT

 Demand draft is popularly known as DD

 Demand draft is a prepaid negotiable instrument.
 In BMCB bank cash DD is not allowed party has to compulsory deposit the cheque for
DD. Cheque given by the customer is in the name of “YOURSELF FOR DD”.
 DD never gets bounced as the amount gets deducted from customers account in
advance.
 Charges for DD.

Up to 500 /- 15/-
RS 501 to RS 5000 25/-
RS 5001 to RS 20000 50/-
RS 20001 to RS 200000 100/-
Above 200000 150/-
Table 1 Demand Draft charges

 There is a simple process for demand draft, customer has to fill the DD slip in that he
has to mention the name of the party in whose favor DD has to be issued, amount and
deposit a cheque in the name of “Yourself for DD”
 After that entry is passed in “EASY BANK CORE” under the head “pay slip issue
entry”
 After passing the entry demand draft is generated by the system in the name of payee.

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 4.5 Clearing department

When the person who receive the cheque and the person who gave the cheque have the
accounts in different banks than the cheque is sent for clearing. Clearing of cheques in
BMCB Bank is done through CTS. BMCB has tie up with HDFC bank for clearing of
cheques.

WHAT IS CTS?

CTS stands for cheque truncation system. It is a process of clearing cheques electronically
rather than processing the physical cheque. The presenting bank en-route to the paying
bank branch. It is a step undertaken by the Reserve Bank of India for quicker cheque
clearance.

OUTWARD BILL COLLECTION (OBC):

o When customer of BMCB Bank receives the cheque of any other bank and wants
to deposit that cheque in his account in BMCB Bank then it is sent outward for
collection so it is called outward bill collection.
o Employee stamp the cheque and slip as clearing and pass it to the officer. Officer
pass the entry in the software “EASY BANK CORE” under the head CTS o/w
clearing.
o Manager or Assistant manager authorize the entry.
o Every day at 12:45 pm all the clearing cheques are sent to HDFC for clearing.
o HDFC Bank sends the details of cheque return to BMCB Bank through mail.
o Officer has to update the cheque return entry in the software along with the reason
for return of cheque.
o Bank levies the charge of Rs 150 + 18% gst for cheque return.
o Bank returns the cheque to the party along with cheque return memo which includes
the reason of cheque return.
o The cheque which is cleared under CTS clearing will be credited in the party’s
account when bank pass the cheque under the head “centralized add clearing”.

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INWARD BILL COLLECTION (IBC):

When the customer of BMCB bank give cheque to anyone and he/she deposit the cheque
in his bank than cheque is sent to BMCB bank for collection it is called inward bill
collection.

Bank receives the Inward error log report which includes the cheque that cannot be cleared
due to the reason of insufficient balance.

Bank informs the party to deposit the money or else the cheque will be returned.

Bank receives the scanned copy of cheque under the head “ CTS inward confirmation” for
confirmation of collection cheques.

Officer has to check the signature on the cheque. If there is any mismatch in signature then
cheque is rejected.

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 4.6 Depository Services

The Bhuj mercantile co-operative bank ltd offer two types of deposits.

Types of deposit

Fixed deposit Recurring deposit

Figure 4 Types of deposit

Fixed deposit

 Fixed deposit allows you to earn interest on the amount deposited. At the end of the FD
tenure you will get back the principal as well as the interest earned on it.
 It is Non-Transferable instrument
 BMCB provides accumulative interest when FD is kept for year or more than that
 If FD is kept for less than a year than simple interest is given
 Interest is provided on monthly or quarterly basis

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 FD interest rates

Days General public Senior citizen

Up to 45 days 4.50% 5%
46 to 100 days 5% 5.50%
101 to 332 days 5.25% 5.75%
333 to 730days 6.50% 7%
731 to 1095 days 6.75% 7.25%
1096 to 1825 days 6.52% 6.75%
Table 2 FD Interest rates

 Process:
 To keep the money as fixed deposit customer needs to have bank account.
 Customer needs to fill FD card only, no other documents are required.
 Customer has to give the cheque in the name of “yourself for FD”
 And the entry is made by employee in the software under the head “FD entry”
 FD receipt is generated that is given to the customer.
 Bank maintains the FD register when customer receives the FD receipt he/she has to
sign in that register.

 Maturity:
 Bank registers customer’s mobile number at the time of opening the FD so customer
receives the notification on their registered mobile number before 4 days of maturity.
 Customer can either renew the FD or can break the FD at the time of maturity.
 If customer want to break the FD than the amount (principal + interest) is transferred
to their account.

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 When interest amount is more than 50000:
 If the interest amount exceeds 50000/- than customer has to fill TDS to avoid filling
TDS form G and form H is provided to the customer by bank.
o Form H is filled by senior citizen.
o Form G is filled by normal people to avoid TDS.

 Renewal:
 If the party wants to renew the FD than it can be done by either principal amount or by
principal + interest amount.
 If party want to renew the FD by principal amount than interest amount is transferred
to party’s account.
 At the time of renewal new fixed deposit receipt is given to the customer in which
account number and nominee remains the same only the FD no changes.

 Pre mature withdrawal of FD:

If the customer want to break the fixed deposit before the maturity date than bank cut 1%
on interest amount and transfer the remaining amount in customers account.

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 Sample of FD Receipt

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 Recurring deposit

 Recurring deposit is done on monthly basis.

 Customer has to deposit specific amount of money monthly minimum for 12 months.
 Amount to be deposited is decided by the customer and it has to be kept fixed till the
maturity date.
 Simple interest is given on recurring deposit.
 Bank provides 6.50% interest on recording deposit.

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 4.7 Types of Account

Types of Account

Saving A/C Current A/C

Figure 5 Types of Account

 Saving account
 In simple language saving account is a bank account in which party can deposit their
funds, withdraw funds anytime, keep it safe and earn interest on it
 BMCB Bank is providing 3% rate of interest quarterly in saving account.
 Customer needs to maintain minimum balance of 1000/- in saving account.
 For opening saving account customer need to feel 2 physical forms:
(1) KYC form
(2) Saving a/c form
 Documents required for opening a saving account
1. pan card
2. Aadhar card
3. Light bill
4. Two photographs

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• Processes for opening a saving A/C.
 For opening a saving account first C-KYC processes is done it includes the following
details under the head C-KYC entry.
Personal details:-Prefix, name, father and mother name, date of birth, gender, marital
status, nationality, residential status, occupation, community
Proof of address:-Permanent and correspondence address is to be mentioned and
Aadhar card has to be attached as address proof.
 After updating all these details documents are uploaded, size of document is kept less
than 50 KB.
 After proceeding customer ID is generated by the system here C-KYC process ends
 Now under the head Account master customer ID is entered.
 In account master mode of operation is selected, details of nominee is entered, mobile
number is registered.
 After proceeding account number is generated by the system and the whole process is
authorised by manager.
 After authorization account is successfully opened.

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 Sample of Saving A/C slip

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 Current A/c.
 Current accounts are opened for business use.
 Any individual, private or public company, partnerships firm, trust can open current
A/c.
 In BMCB Bank there are three types of current A/c.
1. Current general
2. Current exclusive
3. Current Vishesh
(1) Different codes are given to each current A/c.
1. current general-114
2. current exclusive-112
3. current vishesh-122
(2) Documents required for opening current A/C.
1. Property tax bill
2. GST certificate
3. Aadhar card
4. PAN card
5. Municipality license
6. Food license (for hotels)
7. 2 photographs
(3) For opening current account proprietor stamp is compulsory along with signature on
the form.
(4) Minimum balance that customer need to maintain in current account:
Account name Amount
Current general 2500
Current exclusive 25000
Current vishesh 50000

Table 3 Minimum balance in current a/c

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 Sample of Current A/C slip.

Application for Debit Card

 First the customer has to fill the application form for debit card
 The account in which customer is applying for a debit card must be operative with its
minimum balance or else bank can reject all the transitions that are done by the debit
card
 Application form filled by the customer is send to head office at Ahmedabad
 Bank receives the debit card from Ahmedabad that it is hand delivered or courier by
branch to the registered address of customer
 Customer can withdraw maximum 25,000/- daily and can make maximum purchase of
rupees 250,000 daily.
Charges of debit card

One time card issue charges 100 + 18% GST = 118

Annual fees 100 + 18% GST = 118
Card replacement fees 150 + 18% =177
Pin replacement charges 50 + 18% GST = 59
Table 4 Debit card charges

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 4.8 Statement of Accounts

As parties transact from their accounts so they need to know the receipts and payments
made in their accounts and for that they require a statement it can be daily, monthly,
quarterly and yearly as per the customer need. Customer has to give an application for
statement. To take out statement customer A/C number is to be entered and from which
date up to which date the customer needs the statement is entered and statement is
generated by the system under the head Statement of A/C normal.

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 4.9 Cheque Book Issue Request

 For receiving cheque book customer has to fill cheque book issue request form.
 Customer can receive minimum 15 and maximum 60 cheque
 At the time of opening the account customer does not have to pay any charges for
cheque book but after that 2 rupees is charged for one cheque.
 Customer receive the cheque book within one day of applying for cheque book.

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 4.10 Loan and advances

Procedure to be followed for loans and advances:

 First the customer has to fill the loan application form and has to submit the documents
mentioned in KYC
Documents required are as follows
(1) Individual
 Aadhar card
 Pan card
 Electricity bill
 3 years ITR
 4 photos
 Any other loan’s statement of account (SOA)
(2) Properitorship
 Aadhar card
 Pan card
 Electricity bill
 3 years ITR
 4 photos
 Any other loans statement of accounts in firm’s name.
 Network and CMA data
(3) Partnership firm.
 All partners Aadhar card
 All partners pan card
 All partners 4 photos
 Electricity bill
 3 years ITR
 Any other loans SOA in firms name
 Network and CMA data

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 (4) private ltd companies
 All directors pancard
 All directors aadhar card
 All directors 4 photos
 Electricity bill
 3 years ITR
 Any other loans SOA in firms name
 Net worth and CMA data

 Manager generates CIBIL report of individual / partners / directors as applicable

 Loan is sanctioned by general manager / chairman of loan committee and board of
directors.
 After the loan is Sanctioned, sanction letter will be prepared
 Separate customer ID has to created
 If loan is in individual's name saving account is opened and if loan is in Proprietor,
partnership or private limited firms name current Account is opened.
 At last the sanction loan amount is released in the account of individual or firm whoever
has applied for loan.

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 Loan rules and regulations

 If loan amount is above 1000000/- than Bank needs to obtain audited financial
statement from all borrowers
 If loan amount is 1000000/- or above then party needs to get the No objection certificate
(NOC) form other bank or financial institution
 There should be any purpose behind taking the loan and it should be made sure that
borrower use the amount for specified purpose only and not for the purpose other than
permitted.
 If loan amount is more than 40, 00,000 than bank need to obtain IT return of last three
years as well as audited financial statements from the party.
 Bank will not release the loan if:
 Party has taken any loan previously and has not repaid the loan till date than bank
will not release the new loan.
 The party who is acting as guarantor has made any defaults in repayment of loan
than bank will not release the loan to the party who has applied for loan.

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 Types of Loan

Housing Loan Vehicle Loan Cash credit loan

Figure 6 Types of loan

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(1) Housing loan
 Bank provides loan for purchase or construction of house/flats, takeover of Housing
loans.
 Loan ROI, margin and repayment period:
Particular Interest rate Margin Repayment period
Commercial and 9.90% 15-20% 15-20 years
residential

 Documentation process for housing loan

• Loan application.
• Income proof:
ITR of last 3 years if occupation is business & salary slips if occupation is
service.
• Municipality tax bill of Applicant property.
• Net worth statement.
• KYC of proprietor/ all partners/ all directors.
• Bank statement of Last 6 months.
• Collateral property sale deed
• Valuation report.
• Title clearance certificate.
• In case of takeover NOC form previous banker.
• Guarantor documents.

 Loan limit is 70-100% of cost of house property/ sale agreement.

 Businessman/ salaried employees/ professionals can apply for housing loan.

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 (2) Vehicle loan.
• BMCB provides vehicle loan for purchase of personal or commercial vehicle.
• Vehicle type – two wheeler, three wheeler, four wheeler.
• Limit of loan is 90% of Ex-showroom cost.
• For vehicle loan 2 guarantors are mandatory.
• Documentation process for vehicle loan:
 Loan application
 KYC
 ITR for last 3 years
 CIBIL report
 Guarantor documents
 Quotation
 Promissory note
 Vehicle agreement
 Insurance of vehicle in favour of bank till repayment of loan
 Vehicle charges form
 Revenue stamp 5 of Rs 1 each

• Loan ROI, margin and repayment period:

Particular Interest rate Margin Repayment period

Personal 11% 25% 60 months
Commercial 11% 15% 60 months

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(3) Cash credit loan
• BMCB provides cash credit loans to the companies/ firms/ proprietors/
professionals to meet the working capital requirements for their business.
• Bank provides initial limit 50% of property out of which 75% of stock and 50%
of receivable is usable.
• Cash credit is given on yearly renewal basis
• Rate of interest on cash credit is 15%
• For cash credit loan there should be minimum one guarantor.
 Documentation process for cash credit loan:
 Loan application form
 KYC
 GST registration certificate
 Any one government certificate of business
 ITR return of last 3 years
 Net worth statement
 MPBF calculation sheet
 CMA data
 CIBIL report
 Insurance of stock and book debt with banker lien on it
 All bank statement of last 6 months
 Stock/ book debts statement
 Guarantor documents.

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 4.11 Locker Service

• Locker service is a value added service provided by banks that can be availed by an
individual having accounts in the bank.
• In BMCB bank it is mandatory to have current or saving A/C. in BMCB bank to avail
locker services.
• Bank is having total 200 lockers.
• Bank collects the locker rent from the customers annually.
• There are three categories of lockers.
• Customer can select the locker size as per their requirements and the availability of
lockers.
• Charges of locker
Type Locker size charges
A Small 590/-
B Medium 1180/-
C large 1770/-
Table 5 Locker charges

• Procedure for locker

 Party has to fill the locker form and submit the required documents.
 Party can operate the locker individually or either jointly.
 Maximum 4 person can operate one locker.
 Employee opens the accounts and provide keys to the customer
 Documents required for locker service
 Locker form
 E-stamp certificate
 2 photos of each person
 ID proof
 Address proof

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• At the time of operating locker
 Locker can be opened by two keys master key and locker key. Locker key is given to
the customer and master key is with bank employee.
 Bank maintain the locker album which includes the detail like locker number, name,
photo, and signature. So when customer wants to operate the locker bank employee
verifies the detail from the album and take the signature of customer in locker operate
register.
 Employee has to mention the time when customer went inside the locker room and
when came outside the locker room in the software under the head locker operate
transaction.

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 CASH
DEPARTMENT

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 4.12 Cash department

Introduction

Cash is the most volatile and liquid current asset of bank’s balance sheet and as such
demands special attention of efficient management. Cash department plays a paramount
role in creating good perception among customers about the service quality of a bank. Cash
department can be considered as reflector of banks competency, credibility and its
trustworthiness.
Cash management is very important part for bank, business and particularly for everything.
Cash is the basic input which runs every business on a continuous basis. The bank has to
keep the cash safe and as well as at the same time provides services to the customer and
also lends money to them whenever the need. To meet daily obligations the bank has to
maintain certain amount of cash on hand neither more nor less because it is essential to
maintain sound cash flow position.
Functions of cash department
1. Receiving of cash
2. Payment of cash
3. Daily balancing of cash
4. Scrutiny of cash
5. Safe keeping of cash
6. Cash remittance

Cash summary Register.

This register is maintained manually and also in computer. First the opening balance is
written in register after that total cash received during that day is added and payment made
during that day is deducted from the total opening balance like this closing balance of that
day is calculated which becomes the opening balance of next day and it even show the total
number of notes available in the bank along with the bifurgations of note.

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 Cash details Amount
Opening cash balance -
Total cash receipt -
Total cash payment -
Closing balance -

Notes: Denomination Closing cash

2000 Note 0 -
500 Note 0 -
200 Note 0 -
100 Note 0 -
50 Note 0 -
20 Note 0 -
10 Note 0 -
5 Note 0 -
2 Note 0 -
1 Note 0 -
10 Rupee coin 0 -
5 Rupee coin 0 -
2 Rupee coin 0 -
1 Rupee coin 0 -
50 paisa 0 -
Total -

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 Cash Exchange
• Every day in the morning officer exchange the cash to cashier under the head exchange
cash to cashier
• Officer exchange the previous day’s closing balance so it becomes opening balance for
that day.
• Cashier has to confirm the cash exchange entry under the head “ cash exchange
confirmation”
• A cashier can use the cash only after confirming the cash exchange entry.

 Receipts counter
• If a customer wants to deposit their money in the bank, they have to deposit their cash
to the receipt of cash counter.
• Customer has to fill different types of slips to deposit amount in different account.
• Customer has to fill green colour slip for depositing money in saving A/C. and purple
colour slip for depositing money in current A/C.
• Cashier verifies all the details filled by the customer and if any information is left
unfilled by the customer than cashier return the slip to customer to fill it completely.
• Slip contains details like name, account number, which denominations notes are
deposited, total amount, signature of depositor, amount in words.
• While taking cash cashier has to check the amount deposited by the customer carefully
and also check that number of notes of a particular denomination mentioned in slip do
match with real cash or not.
• He has to check that notes of denominations 100, 500, 2000 given by customers are
neither duplicate nor toned out.
• For counting the notes, deposited by the customers, cashier uses digital counting
machine
• After counting the notes properly and checking all the details in slip cashier pass the
entry in the software under the head cash receipt and payment entry and manager
authorize the entry.

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 Cash payment counter.
• Payment counter is the counter where cash is paid to the parties who come to withdraw
cash.
• For withdrawal purpose customers have to fill a cheque.
• If the customer does not have a cheque book then he cannot withdraw cash he has to
compulsory submit the cheque book request.
• If the customer writes self or any third party’s name in the cheque then he has to sign
on both the sides of the cheque and party who presents the cheque in the bank has to
write his name, sign and mobile number on the back side of the cheque.
• After checking all the details in cheque cashier pass the entry in the software under the
head cash receipt and payment entry. If party gives the multiple cheques than cashier
pass the entry under the head multiple cash receipt payment entry.
• If third party comes to take the payment and amount is big than he has to submit the
identify proof than only bank can give payment to him otherwise if party claims after
sometime that he did not ask for payment than bank can be liable so for that bank take
the identity proof from third party.

 Exchange of notes:
• When customer want to exchange the notes than cashier has to pass the entry in the
software under the head exchange to customer cashier adds the denomination of note
given by customer and deducts the denomination of notes given by the bank to
customer.

 Safe custody:
• The bank is expected to maintain some cash balance in hand to make its day to day
obligations, each day’s closing cash is deposited in safe and on the next day the cash is
withdrawn as per requirement (fully or partially).

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 Cash Remittance:
• Bank is allowed to keep the cash upto 1 crore if cash increase than this limit than bank
remit the excess cash to gandhidham branch.
• Cashier has to sort the notes properly and make the bundle of 100 notes and cover the
bundle with slip and write his name on slip.
• For cash remittance three persons should go compulsory.
1. Manager or officer.
2. Peon.
3. Security guard.
• If any of the person is absent and any fraud happens while going for the remittance than
insurance become void ab initio.

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 CHAPTER – 5
CONCULSIONS
&
RECOMMENDATIONS

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 Chapter – 5 conclusion & recommendations

5.1 Conclusion

It was a great experience for me to learn overall operations of the bank as a part of my
summer training at the Bhuj mercantile co-operative bank limited. I came to know how
Bank performs all basic operations and I got in-depth knowledge of cash department and
also a practical exposure which might help me in 2nd year as well as in future

5.2 Recommendations

• The objective of this project was to understand various banking operations and to get
practical exposure for the same as per my understanding the banking operations are
performed efficiently and effectively
• However the following is the recommendation for BMCB bank
• In order to provide more convenience and satisfaction to the customer BMCB bank should
also provide ATM facility to its customers like other co-operative banks
• Bank should increase the number of lockers

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 CHAPTER-6
BIBLIOGRAPGY

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 Chapter – 6 BIBLIOGRAPHY

6.1 Bibliography

References
abid, s. (2016). electronic payment system: an evolution in indian banking system. IOSR Journal
of economics and finance, 30.

Bhatia. (1978). A case study of the Indian banking sector. Theoretical economics letters, 30.

haralayya, B. (2021). Banking services provided by banks in India. International research journal
of humanities and interdisciplinary studies, 12.

KA Goyal, V. j. (2012). Indian banking industry: challenges and opportunities. International

journal of business reserach and management, 28.

rahman, m. a. (2019). A practical approach to cash department of a bank. Banking & insurance
ejournal, 15.

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