BANKING

Author:Naveenkumar_DV Date: 9/7/2010 Keywords: Basics of Banking Target readers: ALL Project: BMCBFS2D Declaration: I/We hereby declare that this document is based on my/our personal experiences and/or experiences of my/our project members. To the best of my/our knowledge, this document does not contain any material that infringes the copyrights of any other individual or organization including the customers of Infosys.

DEFINITION
What is Banking? The Bank is systematically accepts the Deposits/Lends the money from/to the Public as it pays the interests to Deposits and Collects the interest for lending money (Or) Primary function of Banking is Lending the money to the public/Corporate with an intension of getting the interest and Deposit money from public/Corporate by providing some interest

The bank will lend the money to the public with high interest and deposit the money and provide the less interest as per the Bank regulations to get the profits All the Banking regulations are under RBI

TECHNICAL TERMS WE USED IN BANKING

Repo rate: if RBI lends the money to a bank then RBI will collect some Interest from the Bank then its called as Repo rate Reverse Repo rate: if a bank deposits the money in RBI then it will pay some interest to the Bank then its called as Reverse repo rate

Base Points: If there is any change in the Interest/Deposit rate then we will say it as Base points.
Ex: if a bank wants to increase the lending interest rates by 50 paise, then they will announces it as we are hiking the lending rates for loans as 50 base points

TYPES OF BANKING
Retail Banking

Retail banking refers to the mobilization of deposits from individuals and providing loans to individuals and small businesses. Retail banking is characterized by large volume of small value transactions. For example, the deposit accounts, personal loans to individuals, credit cards, home mortgage loans, etc come under retail banking.

Wholesale Banking Wholesale banking is also known as business to business banking. It refers to the transactions between banks and large customer like corporate and government involving large sums of money. It also includes the transactions between banks. It includes general lending to businesses as well specialized services like mergers and acquisitions advisory services, leasing, investment management services, etc.

Universal Banking

Universal banking is the combination of retail and wholesale banking. It includes activities like general deposit taking and lending, trading in financial assets, brokerage services, investment management, insurance, foreign exchange transactions, etc.

Online Banking Online Banking refers to do the all the Transactions from one bank to another as well as internally using the e-banking technology. Using this banking we no need to go to the bank for deposits Now a days this technology playing a key role in all the banking.

The Process involved in the e-banking while doing the transaction internally, then the money will directed through the same bank only. When we are doing the transaction from one bank to another then the money will goes to RBI then from there the money will be credited to the destination account holder.

The Retail banking provides loans to the customers and also offers the Deposits from customers. Note: the person should have account in the bank in which he is going to take the loan as well as for deposits also.

TYPES OF DEPOSITS

DESCRIPTION
Savings Account: The savings account is normally offered to the public /individuals those who wants to open an account. In this type of account the Bank will pay some interest to the account holder. There will be some limit for the transactions in this account on both withdraws and amount Current Account: The Current account is normally offered to the Corporates those who are needs to do large transactions. In this type of account the bank will not going to pay the interest for the money There will be no limit for transactions, since they need to do large amount transactions

SOME KNOWLEDGE THINGS

When u called a country is in Recession? A country is in recession when it posts its GDP as Negative continuously for 3 times . What are the different stages in Economy after coming from Recession? 1. Recession 2. DIP 3. Neutral 4. Recovery 5. Growth/Developed