Banking Allied Services

REPORT ON BANKING ALLIED SERVICES

Submitted By:-

S.Upendra P.Srinivasula reddy R.Hemanth kumar Arun Sanghi Shreyas Manoj reddy

Banking Allied Services Banks offer other services apart from its core services and they are mainly categorized into these types

 Personal banking services  Corporate banking services  Business banking services  SME banking services  Mutual fund services  Other services

A. Personal Banking Services: Forex services  Wealth management services  Demat services  Cards  Insurance  Gold banking

1. Forex Services  The banks and other official institutions facilitate the buying and selling of foreign currencies.  FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another.  The foreign exchange market that we see today started evolving during the 1970s when world over countries gradually switched over floating exchange rates.

These are the Forex Services  Competitive exchange rates  Export finance  Import finance  All types of Inward and Outward remittances  Foreign Currency TC

 Exchange rate counseling  Derivatives to Hedge Forex risks offered  Foreign Currency Loans  Fast and efficient services  Wide correspondent bank network all over the Globe  Full fledged state of art fully loaded Modern Dealing Room

2. Wealth management services  Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services.  High net worth individuals, small business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management.  Wealth managers can be independent certified financial planners, MBAs, CFAs or any credentialed professional money manager who works to enhance the income, growth and tax favored treatment of long-term investors. One must already have accumulated a significant amount of wealth for wealth management strategies to be effective.  Wealth management can be provided by large corporate entities, independent financial advisers or multi-licensed portfolio managers whose services are designed to focus on high-net worth customers.

3. Demat services  Demat refers to a dematerialized account.  Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a Demat account if you want to buy or sell stocks.

 Banks are offering Demat services to its customers enabling them trade and ensure free transferability of securities with speed accuracy and security.  SBI,ICICI,HDFC and all other major commercial banks are offering these

services.  Demat account allows you to buy, sell and transact shares without the endless paperwork and delays. It is also safe, secure and convenient.

4. Cards  All the major banks offer credit and debit cards which enables us to cash free shopping , mobile recharges , payments of bills , donations etc.  Banks along with other brands introduce cards in order to provide convenient services and will reward you with reward points which you can redeem for products or services.  Apart from this you can withdraw money at any of the ATM’s at your

convenience.

5. Insurance Services  All the major banks offers insurance services in the field of life insurance ,

general insurance , motor insurance , ULIPs etc.  The Bank Insurance Model (BIM), also sometimes known as Bancassurance, is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products.

6. Gold banking  Gold Deposit Scheme (GDS) is in the nature of a fixed deposit in gold. The customers can deposit their idle gold under GDS which will provide them safety, interest earnings, tax benefits and a lot more.

B.

Corporate Banking Services:•

Banks offer these services to the corporates in the country .

These services include: • Project Finance • Corporate Accounts Groups • Merchant Banking 1. Project Finance:• It is a method of financing very large capital intensive projects, with long gestation period, where the lenders rely on the assets created for the project as security and the cash flow generated by the project as source of funds for repaying their dues. • Project finance is the financing of long-term infrastructure and industrial projects based upon a complex financial structure where project debt and equity are used to finance the project, rather than the balance sheets of project sponsors. • Usually, a project financing structure involves a number of equity investors, known as sponsors, as well as a syndicate of banks that provide loans to the operation. 2. Corporate Accounts Group:• CAG is Strategic Business Unit of Banks, set up exclusively to cater to the specialized banking needs of top corporate clients of the country. It was the direct outcome of SBI's structural reorganization in the light of Deregulation, Globalization & Liberalization of the Banking Industry. Created in the year 1995, CAG's'' mission is to : ○ Focus on top corporate clients ○ Establish itself as the most professional outfit of its kind in the country ○ Render world class and cost effective financial services ○ Evolve new products on a sustained basis-customized to the changing needs of the corporates ○ Stay ahead of competitors 3. Merchant Banking:• Banks provide the resources, convenience and services to meet your needs by arranging Foreign Currency credits through: • Commercial loans • Syndicated loans • Loans from Export Credit Agencies • Financing of Imports.

C.

Business Banking Services: Cash management  Trade services  Transaction banking  Investment banking  Custodial services  Online Services 1. Cash Management Services:• Cash Management is a marketing term for certain services offered primarily to larger business customers. • It may be used to describe all bank accounts provided to businesses of a certain size, but it is more often used to describe specific services such as cash concentration, zero balance accounting, and automated clearing house facilities. • Sometimes, private banking customers are given cash management services. It includes account reconciliation , balance reporting , sweep accounts , wire transfer etc.

2. Trade Services:-

 Customers can effect remittances as well as get their applications for issuance of Letters of Credit and Bank Guarantees processed online.  This not only extends tremendous convenience to the entire process, but also allows the customer to enjoy the benefits of simplified documentation, online verification of status and savings in cost and time.  Other services include tracking of exchange rates, advisory services..etc

3. Investment Banking:-

• Banks assist public and private corporations in raising funds in the capital markets (both equity and debt), as well as in providing strategic advisory services for mergers, acquisitions and other types of financial transactions. • They also act as intermediaries in trading for clients which in general assist in the purchase and sale of stocks, bonds, and mutual funds.

4. Custodial Services:-

 Custody Services is one of the thrust areas of operations of the Banks and is a key product offered to Mutual Funds, Financial Institutions and Corporates etc.

 The Banks has set up the Custody Services group offering quality and reliable custody services to the clients and has in place a customized Information system, high security storage vaults and premises for processing / safekeeping securities.

5. Online Services:-

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D.

e-Transfer Tie – Up With all major shopping sites Train or Air Ticket Booking reservation facility Recharge prepaid mobile conveniently Trading in securities by integrating banking, broking and Demat accounts.

SME Banking Services:The Banks finances for Small Business activities which are of special significance to a large number of people as many of these activities can be started with relatively lower investment and with no special skills on the part of the entrepreneurs. ➢ Globally, Small and Medium Enterprises (SMEs) form the backbone of all economies in terms of contribution to economic growth, employment and promotion of entrepreneurship. ➢ In India, SME units account for nearly 40 per cent of industrial production, close

to 50 percent of exports and 45 per cent of industrial employment. The significance of this sector cannot be further emphasized. ➢ Concurrently, the importance of finance in escalating business growth of this sector cannot be ignored in any way. SMERA Rating •

SMERA Rating is an independent, third-party, comprehensive assessment of the overall condition of the SME,

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conducted by SME Rating Agency of India Limited

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It takes into account the financial condition and several qualitative factors that have bearing on credit worthiness of

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SMERA Rating categorizes SMEs based on size, so as to enable fair evaluation of each SME amongst its peers

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An SME unit having SMERA Rating would enhance its market standing amongst trading partners and prospective customers

E.

Mutual Funds:• A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. • The Mutual fund have a fund manager that trades the pooled money on a regular basis. • As early 2008 the world wide value of all mutual funds are more than $26 Million.

F.

Other Services: Locker facility  Demand drafts  e-Tax  e-Freight  Public provident fund  Centralized pension processing  Travelers cheques  Money transfer  RTGS / NEFT

1. Locker Facilities: It offer Invaluable safety for your valuables  Banks providing lockers for rent for that you need to open account and have to

pay rent for locker.

2. Demand Drafts:-

 Also called as DD  It is a Written Order for making Payments  Two Types ○ Sight Drafts:-It allow money transfer only when proper documents are produced on sight. ○ Time Drafts:-It allow money transfer after the specified time 3. e-Tax:-

 Retail and corporates pay direct and indirect taxes through online from

anywhere at any time from the comforts of your office/home without incurring any cost  It is saving time and  making available e-receipt for the tax paid instantly. 4. e-Freight: “e–Payment of Railway Freight Scheme” has been devised for corporates

regularly transporting goods (raw material/ finished goods) through the Railways and making payment of Railway freight. 5. Public Provident Fund:-

 This Scheme introduced by Central Government in 1968.  The Scheme enables the members of the public to make contributions to the Fund and obtain Income Tax rebate under the relevant provisions of the Income Tax.  The minimum amount is Rs.500 and the maximum amount is Rs.70,000 for a period of 15 years can be extended in multiples of 5.  Loans will arranged after first year. 6. Centralized Pension Processing: A pensioner can draw his/her pension from the banks if he/ she is a

Central/State Govt.  employee or Autonomous body which has arrangement for pension payment with the Banks. 7. Money Transfer: Banks are offering money transfer services which enables us to transfer the

money from other countries to India.  Sending remittances to India for credit to your account with banks or for your family is very simple and convenient with wide foreign offices network and correspondent banking arrangement with about 600 banks worldwide. 8. RTGS/NEFT:-

 Inter Bank Transfer is a special service that allows you to transfer funds electronically to accounts in other banks in India through:  National Electronic Funds Transfer: Funds are transferred to the credit account with the other participating Bank using RBI's NEFT service.  Real Time Gross Settlement: The RTGS system facilitates transfer of funds from accounts in one bank to another on a “real time” and on “gross settlement” basis.

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