7/27/2019 Banking Operations Process Flow6 http://slidepdf.com/reader/full/banking-operations-process-flow6 1/47 1 Indian Institute of Banking & Finance,Mumbai Diploma in Banking & Finance JOB CARDS (Process Flow for select banking transactions with brief comments on Core Banking Solutions) Index Sl No Subject Page no 1 Opening of Savings Account 1 2 Opening Recurring Deposit Account 5 3 Opening Term Deposit Account 9 4 Opening Current Account 14 5 Procedure for letting out Safe Deposit lockers 18 6 Opening Safe Custody Accounts 22 7 Issue and Payment of Drafts 26 8 Inward and Outward bills for collection 31 9 Procedure for loan against deposits 36 10 Procedure in cash department 40 11 Procedure in foreign currency deposits 43 12 Procedure in advances 45 13 Procedure in forex dept 52 14 Procedure for credit cards 56 15 Procedure for ATM cards 58 16 Procedure for demat accounts 59 Copy right with IIBF. Not to be used for any purpose other than Diploma in Banking & Finance Course of IIBF
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1) Receive Account opening form from the prospective customer/s along withfollowing details:a) Full names of Individual/s (IN BLOCK LETTERS) with dates of birth and
Nationality of Individual/s.b) Recent photograph/s affixed at appropriate place in the form.c) PAN/GIR Number (if assessee) or Form No.60/61 of Income-Tax Rules.d) Address/es of Individuals Telephone / Fax / Mobile Number with E-mail
Identification details. Take details of addresses of place of residence as well asplace of work of the individuals. Occupation of the applicants also should berecorded in the form. Details of account with other banks, employment details,source of income, assets, qualifications and marital status.
e) Specimen signature/s at appropriate place in the form.f) Mode of operation of the account.
i) For single accounts – self only.ii) For accounts of two individuals (either or survivor / former or survivor /
jointly or survivor) [For explanation of these terms, please see Glossary of
Banking Operations]
iii) For accounts of more than two individuals: (i) Anyone or anyone of thesurvivors or the last survivor or (ii) jointly by all or jointly by survivors orthe last survivor.
iv) Mandate, Power of Attorneyg) An agreement duly signed by all the individuals with following description:
i) "I/We agree to abide by the Bank's rules relating to the conduct of theabove account"
ii) "I/We authorize the Bank / their representative to verify the details given.(In case of minor accounts Natural Guardians / Legal Guardians will signon behalf of minor).
h) Particulars of Introduction / Identification (A or B or C):-
(A) If the applicant(s) are already having account/s with the Bank, details of suchaccount/s.(B) i) Name and address of Introducer.
i) Introducer's account number.ii) Since when.iii) Certificate from the introducer as under : "I certify that I have known Mr./
Mrs. / Miss ________________________ for the last ____ months / yearsand confirm his/her/their occupation and address stated in his/her/theirapplication to open the account".
iv) Signature of introducer.(C) Only for personal segment customers at Metro and Urban Centers.
i) Passport ALONE where the address on the passport is the same as theaddress on the account opening form for Photo ID and also proof of residence.
ii) Anyone document from each of the under noted two lists for a Photo ID
and a proof of residence.
List I. List II.
i) Passport where the address differs i) Credit Card Statement (Latest)
ii) Election ID-Card. ii) Salary Slip (Latest)
iii) PAN Card. iii) Income-Tax / Wealth Taxassessment order (Latest).
iv) Government / Defense ID-Card. iv) Electricity Bills (Latest).
v) ID-Cards of reputed employers. v) Telephone Bills (Latest).
vi) Driving License
(With a self-signed cheque drawn on existing Bank of the applicant/s).(Ration Card is not to be used as a document for establishing identity or proof of residenceas per recent directives of Government of India).(Take copies of the relevant documents on record after verifying the details with theoriginal).
(i) Declaration from the applicants whether they require nomination facility for theaccount.2) If the applicants require nomination, Form No.DA-1 is to be filled in and signed by
the applicants with the following details:i) Names and addresses of the applicants.ii) Details of deposit account.iii) Name and address of the nominee, relationship with the depositor, age of
the nominees with date of birth if the nominee is the minor.iv) If the nominee is a minor the name of the guardian who is to receive theamount of deposit on behalf of the nominee in the event of death of depositor/s.
v) If the applicant/s are illiterate, obtain their thumb impression instead of signature/s. The thumb impression is to be witnessed by two persons givingtheir names, addresses and signatures.
(There can be only one nominee for a deposit account as per nomination rules. Thenomination form is to be signed by all the depositors). In case of minor accounts,Natural Guardian/s / Legal Guardian will sign the form on behalf of the minor).
3) Obtain from applicant/s paying-in-slip for paying initial deposit in cash.4) Obtain cheque book Requisition Slip for issue of cheque book. This can be a part
of account opening form.5) Send the form duly filled and signed, Paying-in-slip and cheque book requisition
slip to the official for verification and approval to open a savings account. Theofficial will sign the form after verification and give approval with his ID number.He will also initial. Paying-in-slip in token of approval and authorize issue of acheque book.
6) Retain the account opening form and request the applicant to pay the initial depositto the Cashier (Amount will change from bank to bank).
7) After you receive the Paying-in-slip duly receipted from the cash department, giverunning account number and record the particulars in Ledger / ALPM, (AdvancedLedger Posting Machine). CBS Back Office - Centralized Processing Unit: In thiscase branch will collect the forms (i.e. account opening, cheque book requisitionetc.) and sent to CPU for data entry. After account opening at CPU, CPU willinform account number and send cheque book etc. to the customers. Then
customer can do financial transaction.8) Post Paying-in-slip (which is now a credit voucher) in Ledger / ALPM. CBS-
Decentralised process: - Where there is no centralized process, branch will do dataentry for account opening and do financial transaction immediately and can issuecheque book and pass book immediately.
9) Send letter of thanks to the introducer requesting him to acknowledge. Afterreceiving the acknowledgement, record date of acknowledgement. This willconfirm the introduction.
10) Send letter of thanks to the Customer (now the applicant has become yourcustomer) requesting him to acknowledge. After receiving the acknowledgementrecord the same in Registrar / ALPM. This will authenticate the address given bythe customer. This is essential as per KYC (Know Your Customer) norms of
Reserve Bank of India.11) Issue cheque book to the customer and record particulars in the Ledger / ALPM.12) In case of minor accounts, note the date of attaining majority for follow-up action.13) In case of illiterate customers, make a prominent note in the Ledger / ALPM. Ask
for additional photograph to affix on Pass Book.14) Prepare a Savings Bank Account Pass Book for the customer giving details of the
account as well as particulars of initial deposit.15) Deliver Pass Book and Cheque Book to the customer or authorized representative
against acknowledgement.16) Signature scanning.
This completes the job of opening a Saving Bank Account.
(B) Opening Recurring Deposit Account for Individuals
1) Receive Account opening form from the prospective customer/s alongwithfollowing details:a) Full names of Individual/s (IN BLOCK LETTERS) with dates of birth and
Nationality of Individual/s.
b) Recent photograph/s affixed at appropriate place in the form.c) PAN/GIR Number (if assessee) or Form No.60/61 of Income-Tax Rules.d) Address/es of Individuals Telephone / Fax / Mobile Number with E-mail
Identification details. Take details of addresses of place of residence as well asplace of work of the individuals. Occupation of the applicants also should berecorded in the form.
e) Specimen signature/s at appropriate place in the form.f) Mode of operation of the account.
i) For single accounts – self only.ii) For accounts of two individuals (either or survivor / former or survivor /
jointly or survivor) [For explanation of these terms, please see Glossary of
Banking Operations]
iii) For accounts of more than two individuals : (i) Anyone or anyone of thesurvivors or the last survivor or (ii) jointly by all or jointly by survivors orthe last survivor.
g) An agreement duly signed by all the individuals with following description:i) "I/We agree to abide by the Bank's rules relating to the conduct of the
above account"ii) "I/We authorize the Bank / their representative to verify the details given.
(In case of minor accounts Natural Guardians / Legal Guardians will signon behalf of minor).
h) Particulars of Introduction / Identification (A or B or C).
(A) If the applicant(s) are already having account/s with the Bank, details of suchaccount/s.
(B) i) Name and address of Introducer.ii) Introducer's account number.i) Since when.ii) Certificate from the introducer as under: "I certify that I have known Mr./
Mrs. / Miss ________________________ for the last ____ months / yearsand confirm his/her/their occupation and address stated in his/her/theirapplication to open the account".
iii) Signature of introducer.(C) Only for personal segment customers at Metro and Urban Centres.
i) Passport ALONE where the address on the passport is the same as the
address on the account opening form for Photo ID and also proof of residence.ii) Anyone document from each of the undernoted two lists for a Photo ID and
a proof of residence.
List I. List II.
i) Passport where the address differs i) Credit Card Statement (Latest)
iv) Government / Defense ID-Card. iv) Electricity Bills (Latest).
v) ID-Cards of reputed employers. v) Telephone Bills (Latest).
vi) Driving License
(With a self-signed cheque drawn on existing Bank of the applicant/s).(Ration Card is not to be used as a document for establishing identity or proof of residence
as per recent directives of Government of India).(Take copies of the relevant documents on record after verifying the details with theoriginal).
(i) Declaration from the applicants whether they require nomination facility for theaccount.2) If the applicants require nomination, Form No.DA-1 is to be filled in and signed by
the applicants with the following details:i) Names and addresses of the applicants.ii) Details of deposit account.iii) Name and address of the nominee, relationship with the depositor, age of
the nominees with date of birth if the nominee is the minor.iv) If the nominee is a minor the name of the major person who is to receive
the amount of deposit on behalf of the nominee in the event of death of depositor/s.
v) If the applicant/s is/are illiterate, obtain their thumb impression instead of signature/s. The thumb impression is to be witnessed by two persons givingtheir names, addresses and signatures.
(There can be only one nominee for a deposit account as per nomination rules. Thenomination form is to be signed by all the depositors). In case of minor accounts,Natural Guardian/s / Legal Guardian will sign the form on behalf of the minor).
3) Obtain from applicant/s Paying-in-slip for paying first month's instalments in cashor by transfer cheque.
4) Note on the account opening form the following details:i) Monthly instalment of Recurring Deposit Account.ii) Date of last instalment.iii) Maturity date of the account.iv) Maturity value.
5) Send the account opening form duly filled in and signed by the customer togetherwith Paying-in-slip for paying first month's instalment to the authorized official forverification and approval to open a Recurring Deposit Account. The official willsign the form after verification and give approval with his identification number.He will initial the signatures of the applicant on the account opening form and willalso initial Paying-in-slip in token of his approval to open the account.
6) When account opening form and Paying-in-slip for the first instalment come to
you, retain the account opening form with you and request the applicant to pay theinitial deposit to the cashier.
7) After you receive the Paying-in-slip duly receipted from the cash department, giverunning account number and record all the particulars on the account opening formin Recurring Deposit Ledger / ALPM.
8) Post Paying-in-slip (which is now a Credit Voucher) in Ledger / ALPM. Posttransaction in computer.
9) Send letter of thanks to the introducer requesting him to acknowledge. Afterreceiving the acknowledgement, record date of acknowledgement in relevantregister/ ALPM. This will confirm the introduction.
10) Send letter of thanks to the customer (now the applicant has become yourcustomer) requesting him to acknowledge. After receiving the acknowledgement,record the same in register/ALPM.
This will authenticate the address given by the customer. This procedure isessential for the Bank as per KYC (Know Your Customer) norms announced byReserve Bank of India.
11) In case of minor accounts note the date of attaining majority in relevant Register / ALPM for follow-up action, if any. If date of attending majority falls before thematurity date, the money will have to be paid on maturity to the account holderwho has now attained majority.
12) In case of illiterate customers, make a prominent note in the Ledger / ALPM.13) Prepare a Recurring Deposit Pass Book for the customer giving details of the
account as well as particulars about amount of instalment, number of instalmentsas well as due date for payment of last instalment and maturity date for the accountand maturity value.
14) The Ledger / ALPM details as well as Pass Book issued will be verified by official,who will sign the passbook also.
15) Deliver Recurring Deposit Pass Book to the customer or authorized representativeagainst acknowledgement.
16) Obtain – set up – standing order.17) Signature capture.
This completes the job of opening a Recurring Deposit Account.
1) Receive Account opening form from the prospective customer/s alongwithfollowing details:a) Full names of Individual/s (IN BLOCK LETTERS) with dates of birth and
Nationality of Individual/s.
b) Recent photograph/s affixed at appropriate place in the form.c) PAN/GIR Number (if assessee) or Form No.60/61 of Income-Tax Rules.d) Address/es of Individuals Telephone / Fax / Mobile Number with E-mail
Identification details. Take details of addresses of place of residence as well asplace of work of the individuals. Occupation of the applicants also should berecorded in the form.
e) Specimen signature/s at appropriate place in the form.f) Mode of operation of the account.
i) For single accounts – self only.ii) For accounts of two individuals (either or survivor / former or survivor /
jointly or survivor) [For explanation of these terms, please see Glossary of
Banking Operations]
iii) For accounts of more than two individuals : (i) Anyone or anyone of thesurvivors or the last survivor or (ii) jointly by all or jointly by survivors orthe last survivor.
g) An agreement duly signed by all the individuals with following description:i) "I/We agree to abide by the Bank's rules relating to the conduct of the
above account"ii) "I/We authorize the Bank / their representative to verify the details given.
(In case of minor accounts Natural Guardians / Legal Guardians will signon behalf of minor).
h) Particulars of Introduction / Identification (A or B or C).
(A) If the applicant(s) are already having account/s with the Bank, details of suchaccount/s.
(B) i) Name and address of Introducer.ii) Introducer's account number.iii) Since when.iv) Certificate from the introducer as under : "I certify that I have known Mr./
Mrs. / Miss ________________________ for the last ____ months / yearsand confirm his/her/their occupation and address stated in his/her/theirapplication to open the account".
iv) Signature of introducer.(C) Only for personal segment customers at Metro and Urban Centres.
i) Passport ALONE where the address on the passport is the same as the
address on the account opening form for Photo ID and also proof of residence.ii) Anyone document from each of the undernoted two lists for a Photo ID and
a proof of residence.
List I. List II.
i) Passport where the address differs i) Credit Card Statement (Latest)
iv) Government / Defense ID-Card. iv) Electricity Bills (Latest).
v) ID-Cards of reputed employers. v) Telephone Bills (Latest).
vi) Driving License
(With a self-signed cheque drawn on existing Bank of the applicant/s).(Ration Card is not to be used as a document for establishing identity or proof of residence
as per recent directives of Government of India).(Take copies of the relevant documents on record after verifying the details with theoriginal).
(i) Declaration from the applicants whether they require nomination facility for theaccount.2) If the applicants require nomination, Form No.DA-1 is to be filled in and signed by
the applicants with the following details:i) Names and addresses of the applicants.ii) Details of deposit account.iii) Name and address of the nominee, relationship with the depositor, age of
the nominees with date of birth if the nominee is the minor.iv) If the nominee is a minor the name of the major person who is to receive
the amount of deposit on behalf of the nominee in the event of death of depositor/s.
v) If the applicant/s are illiterate, obtain their thumb impression instead of signature/s. The thumb impression is to be witnessed by two persons givingtheir names, addresses and signatures. Additional photograph to affix onpass book.
(There can be only one nominee for a deposit account as per nomination rules. Thenomination form is to be signed by all the depositors). In case of minor accounts,Natural Guardian/s / Legal Guardian will sign the form on behalf of the minor).
3) Obtain from Applicant/s Pay-in-Slip for the amount of Short Deposit / Fixed
Deposit / Monthly Income Deposit / Quarterly Income Deposit / ReinvestmentDepositNote: i) Short deposit is for short period say up to six months.ii) Fixed Deposit is for more than six months but not more than 10 years.iii) Monthly Income Deposit, are where interest is paid every month by credit
to customer's account.iv) On quarterly Income Deposits, Interest is paid every three months by credit
to customer's account.v) In reinvestment deposit, quarterly interest on the term deposit is reinvested
making the term deposit grow. The term deposit together with reinvestedinterest is paid to the depositor on the maturity date. This deposit is known
by different names in different banks but is essentially a reinvestmentdeposit.
4) The following particulars be recorded on account opening form.i) Period for which the deposit is to be kept with the bank and its maturity
date.ii) In case of monthly Income deposits, the amount of monthly interest to be
paid to the customer is to be noted on the account opening form, togetherwith account number, where the interest is to be credited every month
(monthly income amount is discounted amount and is less than quarterlyinterest amount).
iii) In case of Quarterly Income deposit – the amount of quarterly interest to bepaid to the customer together with the details of the account number, whereamount of the interest is be credited.
iv) In case of Reinvestment Deposit, the maturity amount of the deposit is to
be prominently written.v) In case of Short deposit and Fixed Deposit amount of interest is be paid
quarterly or six monthly by credit to customer account or by bankers’cheque as per instructions received from the customer.
5) Send the account opening form duly filled in and signed by the customer togetherwith Pay-in-Slip to the authorized official for verification and approval to open aTerm Deposit Account. The official will sign the form after verification and giveapproval with his identification number. He will initial the signatures of theapplicant/s on the form and will also initial Pay-in-Slip in token of his approval foropening the account.
6) When the account opening form and Pay-in-Slip duly approved come to you, retainthe account opening form and request the applicant/s to pay the term deposit
amount to the Cashier.7) After receiving the amount of the term deposit in cash from the applicants, the
cashier will send the receipted Pay-in-Slip to you for doing the needful. Thisreceipted Pay-in-Slip is now a Bank Voucher.
8) Sometimes the applicant/s want to pay the amount of term deposit by a transfercheque. In that case, get the cheque debited to the relevant account and get thetransaction confirmed by the authorized official, before proceeding further.Transfer Pay-in-Slip will also serve as bank voucher, after the required procedure,as explained earlier.
9) Give running account number and record all the particulars written on the accountopening form in term deposit registrar and ledger or in ALPM (Advanced LedgerPosting Machine).
10) Post Pay-in-Slip (which is now a Voucher) in Ledger / ALPM.11) If the term deposit account has been introduced by another account holder, send
letter of thanks to him, requesting him to acknowledge. After receivingacknowledgement, record date of acknowledgement in relevant register / ALPM.This will confirm the introduction.
12) Send letter of thanks to the applicant/s also on his recorded address, requestinghim/them to acknowledge. After receiving the acknowledgement, record the samein register / ALPM. This will authenticate the address given by the customer. Asper KYC (Know Your Customer) norms of R.B.I., this procedure is absolutelyessential for the bank.
13) In case of minor accounts, note the date of attaining majority in relevant register /
ALPM for follow-up action, if any. If date of attaining majority falls before thematurity date of the term deposit, the money will have to be paid to the namedaccount holder, who has attained majority.
14) If the account holders are illiterate, make a prominent note in the Ledger / ALPM.15) Now prepare a term deposit receipt either manually, if the term deposit work is not
computerized, or with the help of ALPM, electronically. Generally different receiptbooks are used for Short Deposit, Fixed Deposit, Monthly Income Deposit,Quarterly Income Deposit or Reinvestment Deposit by banks. Use the relevantReceipt Book for preparing the Term Deposit Receipt as per Banks procedure. All
the particulars, including amount of deposit, date of maturity, amount of maturity,term amount of monthly income, quarterly income, etc. Mode of payment of interest will have to be noted on the Term Deposit Receipt. These particulars alsohave to be recorded in relevant register / ALPM. Generally there is separateregister, ALPM file, for recording all the due dates of term deposits.
16) The Ledger / Register or ALPM will have to be verified by Official, who after
verification of the relevant records will sign the Term Deposit Receipt, under hisidentification code.
17) Note the particulars in Master Index for Term Deposit / ALPM.18) Deliver Term Deposit Receipt to the customer or authorized representative against
acknowledgement.19) TDS details: 15G Form, 15H Form.20) Signature capture.21) Note down the mode of interest remittance in case of MIPD, QIPD schemes.
This completes the job of opening a Term Deposit Account.
(1) Receive Account opening form from the prospective customer/s alongwithfollowing details:a) Full names of Individual/s (IN BLOCK LETTERS) with dates of birth and
Nationality of Individual/s.
b) Recent photograph/s affixed at appropriate place in the form.c) PAN/GIR Number (if assessee) or Form No.60/61 of Income-Tax Rules.d) Address/es of Individuals Telephone / Fax / Mobile Number with E-mail
Identification details. Take details of addresses of place of residence as well asplace of work of the individuals. Occupation of the applicants also should berecorded in the form.
e) Specimen signature/s at appropriate place in the form.f) Mode of operation of the account.
i) For single accounts – self only.ii) For accounts of two individuals (either or survivor / former or survivor /
jointly or survivor) [For explanation of these terms, please see Glossary of
Banking Operations]
iii) For accounts of more than two individuals : (i) Anyone or anyone of thesurvivors or the last survivor or (ii) jointly by all or jointly by survivors orthe last survivor.
g) An agreement duly signed by all the individuals with following description:i) "I/We agree to abide by the Bank's rules relating to the conduct of the
above account"ii) "I/We authorize the Bank / their representative to verify the details given.
(In case of minor accounts Natural Guardians / Legal Guardians will signon behalf of minor).
h) Particulars of Introduction / Identification (A or B or C).
A) If the applicant(s) are already having account/s with the Bank, details of suchaccount/s.
B) Name and address of Introducer.a. Introducer's account number.b. Since when.c. Certificate from the introducer as under: "I certify that I have known Mr./ Mrs.
/ Miss ________________________ for the last ____ months / years andconfirm his/her/their occupation and address stated in his/her/their applicationto open the account".
d. Signature of introducer.iii) Only for personal segment customers at Metro and Urban Centres.
a. Passport ALONE where the address on the passport is the same as the address
on the account opening form for Photo ID and also proof of residence.b. Anyone document from each of the under noted two lists for a Photo ID and aproof of residence.
List I. List II.
i) Passport where the address differs i) Credit Card Statement (Latest)
ii) Election ID-Card. ii) Salary Slip (Latest)
iii) PAN Card. iii) Income-Tax / Wealth Taxassessment order (Latest).
iv) Government / Defense ID-Card. iv) Electricity Bills (Latest).
v) ID-Cards of reputed employers. v) Telephone Bills (Latest).
vi) Driving License
(With a self-signed cheque drawn on existing Bank of the applicant/s).(Ration Card is not to be used as a document for establishing identity or proof of residenceas per recent directives of Government of India).
(Take copies of the relevant documents on record after verifying the details with theoriginal).
i) Declaration from the applicants whether they require nomination facility for theaccount.(2) If the applicants require nomination, Form No.DA-1 is to be filled in and signed by
the applicants with the following details:i) Names and addresses of the applicants.ii) Details of deposit account.iii) Name and address of the nominee, relationship with the depositor, age of
the nominees with date of birth if the nominee is the minor.iv) If the nominee is a minor the name of the major person who is to receive
the amount of deposit on behalf of the nominee in the event of death of depositor/s.
v) If the applicant/s are illiterate, obtain their thumb impression instead of signature/s. The thumb impression is to be witnessed by two persons givingtheir names, addresses and signatures.
(There can be only one nominee for a deposit account as per nomination rules. Thenomination form is to be signed by all the depositors). In case of minor accounts,Natural Guardian/s / Legal Guardian will sign the form on behalf of the minor).
(3) Obtain from Applicant/s Pay-in-Slip for paying initial deposit amount in cash(Amount will change from bank to bank and even in different types of branches inthe same bank. For example, in Personal Banking Branches of some banks, this
initial deposit amount may be quite high).(4) Sometimes applicant/s wants to pay the initial amount of deposit by a transfercheque. In that case, alongwith Pay-in-Slip obtain transfer cheque also from theapplicant/s.
(5) Obtain cheque book requisition – slip duly signed by the applicant/s for issue of acheque book for operating current account. This requisition slip will also containthe number of cheque leaves required by the customer.
(6) Recheck that all the relevant particulars are available on the account opening formsuch as:a) Title of the accountb) Names of individuals and their signaturesc) Address
d) Nature of businesse) Operational instructionsf) Number of cheque leaves requiredg) Introducer's signature or other particulars as per bank's procedure.
(7) Send the form duly filled in and signed together with Pay-in-Slip and cheque book requisition slip to the checking official for verification and approval to open acurrent account. The checking official will sign the form after verification and giveapproval with his identification number. He will also initial Pay-in-Slip foraccepting initial deposit and authorize issue of a cheque book to the account holder.
(8) Retain the account opening form and request the applicant/s to pay the initialamount for opening current account to the cashier.
(9) After the applicant/s pay the amount of deposit in cash, the receipted Pay-in-Slipwill come to you from cash department for doing the needful. This receipted Pay-in-Slip is now a bank voucher.
(10) If the applicant has given a transfer cheque instead of cash deposit, get the cheque
debited to the relevant account and the transaction authenticated by the checkingofficial. The transfer vouchers also will have to be entered in Transfer Book in cashdepartment or ALPM (Advanced Ledger Posting Machine) used by cashdepartment.
(11) Give running account number and record all the particulars written on the accountopening form in Current Account Register and Ledger or in ALPM.
(12) Post Pay-in-Slip (which is now a voucher) in Ledger / ALPM.(13) If the current account has been introduced by another account holder, send letter of
thanks to him, requesting him to acknowledge. After receiving acknowledgement,date of acknowledgement is to be noted in relevant register / ALPM. This willconfirm the introduction.
(14) Send letter of thanks to the applicant/s also, requesting him/them to acknowledge.
After receiving the acknowledgement, record the same in register / ALPM. Thiswill authenticate the address given by the customer. As per KYC (Know YourCustomer) norms of Reserve Bank of India, this procedure is absolutely essentialfor the bank.
(15) Current Accounts for minors are not to be opened.(16) If the account holders are illiterate, make a prominent note in the Ledger / ALPM.(17) Some banks do issue passbooks for current accounts and others give only
statements of accounts. If your bank issues passbooks for current accounts to thecustomer (which are found very convenient for the customer) prepare a currentaccount passbook for this account.
(18) Prepare cheque book as per cheque book requisition slip duly authenticated by thechecking official.
(19) The Ledger / ALPM details as well as cheque book and pass book issued will theverified by the checking official, who will sign the passbook as well as chequebook at appropriate places.
(20) Note the relevant particulars in current account Master-Index for Current Accounts / ALPM.
(21) Deliver passbook and cheque book to the customer or authorized representativeagainst acknowledgement.
(22) Signature capture.(23) Mandate/Power of Attorney.(24) Obtain declaration that they are not enjoying any credit facility from any other
bank or branch.
This completes the job of opening a current account for individuals.
Note: One of the most important services rendered by a banker to customer is providingsafe deposit lockers on payment of hire charges, known as rent. Rent is different fordifferent sizes of lockers.
In this type of service, the relationship between customer and banker is that of Lessee andLessor, banker being the lessor. Lockers are given to customers on hire basis and bankerdoes not know contents of locker.
Locker can be opened only when operated by customer and banker jointly using theirrespective keys. If a customer wishes additional safety, bank can arrange for a third lock also on the locker. The key to this third lock will also be with the customer.
Brief procedure for letting out a Safe Deposit Locker:
(1) Applicant/s will fill in the necessary particulars and sign the SDV account openingforms with following details:
a) Full Names of Individual/s (IN BLOCK LETTERS) with dates of birth andnationality of individuals.
b) Recent Photograph/s affixed at appropriate place/s in the form.c) PAN/GIR number of applicant/s (Copy of PAN Card should be taken for
record).d) Address/es of individuals with Telephone / Fax / Mobile number with E-
mail identification details. Addresses of places of residence as well as placeof work to the taken.
e) Occupation of the applicant/s. Why it is not mandatory.f) Specimen signature/s at appropriate place in the form.g) Mode of operation of the account.
i) For single, applicant – Self onlyii) For accounts of two individuals:
Either or SurvivorOr Former or SurvivorOr Jointly or Survivor(Please refer to Glossary of Banking Operations for explanation of these terms).
iii) For accounts of more than two individuals:Anyone or anyone of the survivors on the last survivor
Or Jointly by all the hirers or Jointly by survivors or the lastsurvivor
Or Jointly by any two of the hirers or any two of the survivors
or the last survivor.(h) Declaration from the applicant/s that he has read all the rules andregulations relevant to the account and agrees to abide by the same.
(2) A stamped Memorandum of Agreement of Lease is to be executed by the applicantfor hiring out locker. This Memorandum of Agreement attracts Stamp Dutydifferently in different states. An unstamped copy marked 'Copy' should be givento the customer unsigned for his records. Cost of this document is to be borne bythe applicant.
(3) Write locker number as well as key number to the locker in the account openingform as well as Memorandum of Agreement.
(4) All the banks insist that the applicant/s must have a Savings Bank Account or acurrent account with the bank, before he is offered facility of safe deposit locker.Since the applicant/s already have an account with bank, introduction in theaccount is not necessary. Account number of the applicant/s is to be noted in the
SDV Account opening form. KYC norms are also already complied with by thebank.
(5) Declaration from the applicant/s whether they require nomination facility for theaccount.
(6) If the applicants require nomination facility relevant form is to be filled in andsigned by the applicant/s.i) Form No.SL-1 is for single individual hirers. This form will contain the
following information:-- Name and address of the individual hirer of locker.- Details of locker together with name and address of the bank where
locker is hired.- Name of the nominee with address and relationship with the
nominating person, if any.- Age of the nominee and date of birth in case of minor nominees.
Name of an adult person who will act on behalf of the minornominee is also to be mentioned.
- Signature or thumb impression of hirer- Names, Signatures and addresses, of two witnesses if Safe Deposit
locker hirer is illiterate and has affixed his thumb impression.ii) Form No.SL-1A is for Joint individual hirers. This form will contain the
following information:- Names and addresses of the joint hirers- Details of locker together with name and address of the bank where
locker is hired by the individuals.- Names and addresses of separate nominees for each hirer with age
of the nominees and relationship with the nominating person.- Ages of the nominees and dates of birth if they are minors.- If the nominee/s are minors, the name/s of adult person/s acting on
behalf of the nominee, jointly with the surviving hirers, in case of death of one of the hirers.
- Signature/s or thumb impression/s of the Jt. hirers.- If the applicant/s is/are illiterate and has/have put thumb impression
on the nomination form, signatures of two witnesses are required.(7) Prepare a voucher for payment of rent for the locker to the cashier. This rent can be
for one year, two years or three years as per Bank rules.
(8) Write password (secret word) of the applicant/s on the form for identification.(9) The SDV account opening form, nomination form, stamped agreement, as well asvoucher for payment of locker rent is to be forwarded to the authorized official,who will carefully scrutinize all the forms with particulars thereon and give hispermission to receive SDV rent from the applicant/s and to let out the allottedlocker. Number of the safe deposit locker is already mentioned on the accountopening form, nomination form, stamped agreement as well as voucher for payingthe rent for the locker.
(10) After the rent has been paid in cash, issue a rent receipt to the applicant/s.
(11) Sometimes the applicant/s would like to pay the rent by transfer cheques. Pleaseget this cheque posted and transaction authenticated before issuing a rent receipt.
(12) Many banks also insist on a term deposit from the applicant/s to ensure that theSDV rent is paid in time. In this case, the applicant/s will have to open a termdeposit account and obtain a term deposit receipt for lodgement with the SafeDeposit Lockers Department. A receipt for custody of this term deposit will also be
given to the applicant/s.(13) After ensuring that all formalities for letting out a locker are completed and all
transaction are authenticated, take out the relative key from the key cabinet andremove the seal on the key in the presence of applicant/s.
(14) Ask the hirer to sign in the attendance register, to enable him to have access to thelocker hired by him. His signature in the attendance register is to be authenticatedby the authorized official who will also give an access slip for giving access to thelocker.
(15) Take the hirer to the locker, demonstrate to him the procedure for operation of thelocker. After opening of the locker with hirer's key and your master key, leave thelocker open and hand over the hirer's key to him. Now, the locker will be closedwith single key of the hirer. Take care that no other customer / staff is near the safe
deposit locker when the locker is being operated.(16) Make the necessary entries in the following books:
a) Open an account of the hirer with full particulars in safe – ledger / ALPM.b) Make entry of the rent collected in safe deposit rent register / ALPM.c) Due date for renewal of the locker is to be noted in due date register /
ALPM.d) Take a diary note for sending a reminder to the locker hirer in SDV Diary /
ALPM. A reminder is to be sent to the hirer for payment of rent atleast 15days before the due date of payment of rent.
e) Note the number of key against Safe Deposit Locker number in key to Lock Register / ALPM.
f) Note the number of locker against the key number in locker to key Register / ALPM.
(17) The authorized official has to check and authenticate all the particulars in therelevant registers / ledgers or ALPM files by putting his identification code as perprocedure.
(18) Arrange to file the SDV account opening form, term deposit receipt, nominationform and stamped agreement at proper places and send the voucher for safe depositrent to proper department for balancing purpose.
(19) Standing order for recovery of rent.(20) Mandate or Power of Attorney.(21) Capture details of daily transaction like Date, Time, Name, Signature and Limit on
access for locker operation in a day.
(22) Put a remark on FDR which is taken for rent recovery.
This completes the job of letting out safe deposit locker to individuals.
Note: Traditionally, bankers receive valuables such as negotiable securities, jewellery anddocuments of title to property for safe custody. Being equipped with safes and storagerooms for the purchase of banking business, a modern bank is naturally a safe andconvenient place to keep valuables in safe custody.
Customer may deliver to banker articles for safe custody either openly, declaring fullparticulars of the articles or in sealed covers, packets or in sealed boxes. The relationshipbetween the customer and banker in these accounts is that of bailor and bailee. Thecustomer who delivers the security articles for safe custody is called bailor and the bankerwho accepts the security articles for safe custody is called the bailor.
Brief procedure for opening a safe custody account for individuals.
1) Applicant/s will fill in the necessary particulars and sign the safe custody accountopening form with following details.a) Full names of individuals (IN BLOCK LETTERS) with dates of birth and
Nationality of Individuals.b) Recent photograph/s affixed at appropriate place/s in the account opening
form.c) PAN/GIR Number/s of Applicant/s (Copy of PAN Card/s should be taken
on record).d) Addresses of individual/s with telephone / fax / mobile number and E-mail
identification details. Addresses of place of residence as well as place of work to be advised by the applicant/s for bank records.
e) Occupation/s of the applicant/s.f) Specimen signature/s at appropriate place in the form.g) Mode of opening of the account.
i) For accounts opened by single individuals– Self onlyii) For accounts of two individuals:
Either or SurvivorOr Former or SurvivorOr Jointly or Survivor(Please refer to Glossary of Banking Operations for explanation of these terms).
iii) For accounts of more than two individuals:Anyone or anyone of the survivors or the last survivor
Or Jointly by all the hirers or Jointly by survivors or the lastsurvivor
Or Jointly by any two of the account holders or any two of the
survivors or the last survivor.2) Declaration from the applicant/s that they have read the relevant rules of the bank for opening safe custody account and they agree to abide by the rules.
3) All the banks insist that the applicant/s must have a duly introduced Savings Bank Account or a current account, before opening a safe custody account. Since theapplicant/s already have an account with Bank, introduction in the account is notnecessary. Account number of the applicant/s is to be noted in the safe custodyaccount opening form. KYC norms of Reserve Bank of India are also already
complied with by bank while opening savings bank or current account for theapplicant/s earlier.
4) Ensure that the earlier Savings Bank Account or Current account is in the samename/s and style as the new safe custody account to be opened.
5) Take a declaration form from the applicant/s whether they require nominationfacility for the account, which is available since 1985. The nomination facility for
safe custody articles is available only for an individual in Form SC1. This facilityis not available to joint account holders of safe custody account. in the event of death of one of the account holders, the surviving account holder is entitled toreceive the articles in safe custody account.
6) Form No.SC1 for nomination by individual Safe custody account holder willcontain the following information:i) Name and address of the safe custody account holder.ii) Details of safe custody account with name and address of the bank where
account is being opened.iii) Name and address of the nominee (only one nominee is permitted) with age
of the nominee and relationship with the account holder. If nominee is aminor, Date of Birth of the nominee is also to be mentioned and also the
name of a major person who will act on behalf of the minor nominee duringthe period of his minority.
iv) If the applicant/s are illiterate and have put thumb impression on thenomination form, signature of two witnesses are also required.
7) The Applicant/s should complete and sign the form of lodgement of securities orwrite a letter to the Bank giving full particulars of shares, debentures or othersecurities to be lodged with the bank in safe custody account. If they are lodging asealed cover, packet or box, the specification of the same should be advised tobank. Securities standing in the name of third parties cannot be accepted for safecustody.
8) Prepare a voucher for payment of safe custody charges to the cashier or accept atransfer cheque from the applicant for the charges.
9) The safe custody account opening form, nomination form, safe custody lodgementform as well as voucher for payment of safe custody charges is to be forwarded tothe authorized official, who will carefully scrutinize, all the forms with relevantparticulars and give his permission to open the account and receive safe custodyarticles from the applicant/s.
10) Write number of safe custody account in the account opening form, nominationform as well as voucher for payment of safe custody charges.
11) Now applicant/s will pay the safe custody charges in cash or his transfer cheque isto be debited to the appropriate account and authenticated by an official.
12) After you receive the credit voucher duly receipted for the safe custody charges,and ensuring that all the formalities for opening a safe custody account are
complete, open a safe custody account in Safe Custody – cum – Register / ALPM.A separate page in safe custody Ledger – cum – Register / ALPM is to be allottedfor each account and instructions regarding delivery of articles or securities shouldbe noted in the Ledger – cum – Register / ALPM under initials of authenticatingofficer.
13) When receiving sealed packets / covers / boxes for safe custody, ensure that thepackets received are sealed with the account holders own seal. Bank cannot use itsown seal for customers packages.
14) A safe custody Receipt, giving description of the securities lodged or specificationsof sealed packets / cover / boxes lodged by the customer should be delivered tohim/them.
15) A label indicating name of the account, serial number of the account in the safecustody Ledger – cum – Register / ALPM and safe custody Receipt number is tobe properly fastened on the sealed packets / covers / boxes lodged.
16) "Contents Unknown" should be prominently written in red ink in safe custodyreceipt as well as bank's counterfoil for safe custody receipt.
17) Write full particulars in the description of securities column in the safe custodyLedger – cum – Register / ALPM under initials of authenticating official.
18) Keep the articles accepted in safe custody account for safe keeping under dualcontrol.
This completes the job of opening a safe custody account for individuals.
(i) Take the application for issue of Demand Draft from the customer in duplicate(Front page of application will serve as Branch Voucher and second as applicationfor Demand Draft) with following particulars.
a) Name of your Bank and Branchb) With words at the top 'Application for issue of a Demand Draftc) Date of Applicationd) Demand Draft to be issued in favour of (Payee's name)e) For Rupees.....f) Payable at Branch with Code Number of the Paying Branchg) Exchange (Fee payable for issue of Demand Draft)h) Total amount payable to cashier (or amount of the transfer cheque)i) Name and address of the applicant with details of account with your bank,
if any j) Signature of the applicantk) Columns for Cashier's initials / Cash Official's initials / Checking Official's
initialsl) Applicant's signature for having received the Demand Draft (To be signed
by applicant after the Demand Draft is delivered to him).m) A Counterfoil attached to the application form which is to be given to the
applicant after receipt of amount of Demand Draft with Exchange (Fees)payable.
n) Space for PAN number.
(ii) Ensure that centre on which draft is to be issued has branch of your Banks. If thereis no branch of your Bank, Demand Draft cannot be issued. (Sometimesarrangement is there with another Bank then follow agreed procedure).
(iii) Ensure that correct amount of exchange payable is mentioned on the voucher-cum-application form and prepare a voucher for payment of this amount to Profit andLoss Account Exchange.
(iv) Note down the draft number on the voucher-cum-application with the help of carbon impression (Take great care to see that Demand Draft number is incontinuation).
(v) Retain the application form with remark "voucher passed" under the initial of checking official and hand over the voucher together with credit voucher for Profitand Loss Account Exchange to the applicant for paying required amount in Cash.In case applicant gives transfer cheque for the amount, get the cheque debited,entered in transfer book and get the transaction authenticated by an authorizedofficial.
(vi) After the cash receipted voucher / transfer voucher comes to you, use leaf fromMICR / Non-MICR series Draft Book depending upon the centre on which thedraft is to be issued. At bigger centres like Mumbai, Delhi, Chennai, Kolkata,Ahmedabad, Bangalore, Hyderabad, Bhopal, etc. The Service Branch is authorizedto pay the draft. In that case Demand Draft should be issued at Service Branch of that centre like Service Branch, Mumbai, Service Branch, Bangalore, etc.
(vii) Ensure that issuing (your branch) name and alpha code is printed / stamped on thedraft leaf.
(viii) Prepare Demand Draft from particulars available on the application form.
(ix) Take care to prepare Demand Draft without any alteration either manually or withthe help of ALPM / Printer, as per practice at your branch. If there is any alterationon the Demand Draft, it should be properly authenticated by authorized officialwith full signatures and code number.
(x) If Demand Draft is to be prepared manually a pin-point typewriter should be usedand a reverse carbon should be placed behind the draft. If pin-print typewriter is
not available, use protectograph machine which can punch the amount in figuresand the words such as "Not over Rs......".
(xi) Demand Draft should always be issued "Crossed and A/c. Payee".(xii) Punch the draft in correct boxes as per range of amount of Demand Draft.(xiii) Ensure that cash is paid / transfer cheque is debited, vouchers are duly stamped
with cash / transfer stamp. Now send the application form receipted voucher aswell as Demand Draft completed in all respects to the authorized official forchecking and signing.
(xiv) Make necessary notings in Demand Draft Issue Register / ALPM.(xv) Prepare Draft Issue Advice, called Advice of Drawing for the paying branch /
centre with all the particulars of draft issued either manually or with help of ALPMand Printer. This advice of drawing also should be sent to checking official for his
authentication. Put signature id number.(xvi) After the Demand Draft is duly checked and signed, it will be forwarded to you
together with Drawing Advice duly authenticated and signed.(xvii) Hand over the Demand Draft to the applicant against his signature at appropriate
place in the application form.(xviii) Send the advice of drawing to Paying Branch / Centre.
This completes the job of Issue of Demand Draft to a customer.
Precautions:
1) Blank Demand Draft should always be kept under lock and key to avoid frauds.2) When a Draft form is spoiled in preparation the word 'Cancelled' should be
prominently written thereon and portion of amount and signature should be torn / defaced to avoid use by unscrupulous person/s and paste it on the counterpart / record slip of Demand Draft with signature of the officer.
GB) ISSUE OF DUPLICATE DEMAND DRAFT
i) On receipt of application for issue of Duplicate Demand Draft, ask forconfirmation from the drawee branch (Paying branch) that the Demand Draft isoutstanding in their books and loss of the draft has been noted in their books.
ii) Verify signature of the purchaser of the Demand Draft.iii) Obtain confirmation from the payee of the Demand Draft that the payee has not
received the draft.iv) Insist on a definite reply from postal authorities about the delivery of draft, if sentby registered post. If the draft is sent by courier, courier company should give adefinite reply about delivery of Demand Draft.
v) Obtain stamped Indemnity Bond duly executed by the purchaser and also by thepayee if the draft is lost at payee's end. If the amount of Demand Draft is large,obtain signature of a suitable surety as per Bank's guidelines.
vi) After approval from authorized official, prepare a Duplicate Demand Draft withlegend "Duplicate Draft Issued in lieu of Original Lost" prominently at the top of the Duplicate Demand Draft.
vii) Make necessary notings in the Demand Draft Issue Register / ALPM and DrawingAdvance Register / ALPM.
viii) Send the Duplicate Demand Draft for verification, signature to the authorized
official with all the relevant papers.ix) After receiving back the Duplicate Demand Draft from the authorized official (who
has signed the Draft together with his signing code number), hand over the same tothe customer after taking acknowledgement.
This completes the Job of Issue of Duplicate Demand Draft.
GC) REVALIDATION OF DEMAND DRAFT
Note:
• Demand Drafts like cheques are valid for six months from date of issue. Thereafter,the Drafts are considered stale.
• If the Demand Draft is presented to drawee branch after six months from issue, thedrawee branch will return the same with the remarks "Draft is Stale, requiresrevalidation by the issuing branch".
• When the draft is presented to issuing branch (Your branch) for revalidation act asfollows:
i) Obtain a suitable letter from the Customer requesting revalidation of the stale draft.ii) Verify signature of the applicant on the letter with the one on the original
application form for issue of Demand Draft.iii) After authentication on the application form from the authorized official, type on
the draft "Revalidation for 6 months on......." (put today's date) by using reverse
carbon and send the draft for authentication and signature to the authorized official.iv) Note the revalidation of the draft in Demand Draft Issue Register / ALPM forfuture reference.
v) After the draft is sent to you by the authorized official after putting his signatureand code number, hand over the same to the customer against hisacknowledgement.
This completes the job of Revalidation of a Stale Demand Draft.
GD) PAYMENT OF DEMAND DRAFT BY PAYEE BRANCH / CENTRE
Note: Drawee branch should take utmost care while making payment on Demand Drafts.Remember that many Banks are defrauded by unscrupulous elements by encashing fakeDemand Drafts.
Demand Draft should be paid to:i) The Payee on proper identification.ii) The payee's banker who should certify that the amount of Demand Draft has been
placed to payee's credit or certifies that "Disbursement is Guaranteed".
Take following steps while paying a Demand Draft which is payable at your branch /
centre.i) Verify that the draft is complete in all respects and properly signed by the
authorized officials with signature code numbers.ii) Please note that an unsigned Demand Draft is not a draft at all. Hence, always
bring such instances to the notice of Official Incharge / Manager of your branch / centre.
iii) Demand Draft is valid for 6 months from the date of issue, therefore, alwayscarefully verify the date appearing on the Demand Draft.
iv) Verify whether Advice of Drawing is received from the draft issuing branch andrelative credit has appeared in the draft payable Ledger/ALPM. Also verify stoppayment register of drafts / ALPM before payment. How DD can stop.
v) After posting the draft in the Drafts Paid Register / ALMP, send the draft for
verification to the authorized official.vi) While making payment of the draft, write 'P' (Denoting Draft paid) against the
relative credit to avoid duplication.vii) If advice of Drawing is not received from the draft issuing branch, take extreme
care and write to the draft issuing branch for confirmation of genuineness of theDemand Draft, by fastest available mode of communication i.e. by Telephone / E-mail and seek urgent confirmation.
viii) If the confirmation is not received for any reason, draft can be paid if otherwise inorder, but keep trying to get confirmation at the earliest.
ix) Issue / Payment of Demand Drafts for Rs.50,000/- and above should be done onlyby debit / credit to the customer account as per KYC (Know Your Customer)norms of Reserve Bank of India.
x) Maintain upto date stop payment Register / ALPM for recording particulars of lost / misplaced drafts and always refer to this register / ALPM when paying anyDemand Draft. How DD can stop.
This completes the job of payment of Demand Draft by drawee branch.
Note: Bills received for collection can be documentary bills for collection, wheredocuments to title of the goods like Motor Transport Receipt, Railway Receipt, Bill of Lading etc. are attached with bills alongwith bills of exchange, invoices, etc. And wheresuch documents of title are not attached, bills are called clean bills for collection. Bills also
are classified as bills payable on demand / sight and bills payable after certain periodcalled as usance bills. One more classification can be made on the basis of delivery of documents to title of goods. If the documents are delivered on acceptance of the bill (Incase of usance bills), it is called a D.A. Bill (Documents on acceptance bill). If thedocuments can be handed to the drawee only against payment (In case of demand bills andsometimes even in case of usance bills), it is called a D.P. Bill (Documents againstpayment bills).
(HA) Job Card for Inward Bills for Collection1) When the bill is received for collection either from your Bank's branch or branch of
another bank or from your or customer, first ensure that all documents mentionedin the covering schedule are enclosed and also scrutinize whether they are in order.
Please also ensure that proper instructions are given for collection.2) Ensure that insurance bills (bills payable after certain period) are adequately
stamped.3) Documents received from branches of other banks should be suitably endorsed in
your bank's favour.4) Particulars of bills received for collection from our branches are to be entered in
inward bills for collection in a separate section from the bills received forcollection from other banks.
5) Give proper serial number to the bills after putting your bank's round stamp on allthe documents / papers received.
6) Read the instructions on the covering schedule carefully about delivery of documents, collection and recovery of our charges, instructions in case of non-payment or non-acceptance etc. and enter the same in inward bills for collectionregister.
7) Drawee of the bill is to be intimated about receipt of the bill and accompanyinginstructions in the appropriate forms.
8) Liability vouchers are to be passed only for bills received for collection from otherbanks. Generally the following set of vouchers are passed.Debit : G/L A/c. Inward bills for collection.Credit : G/L A/c. Liability for inward bills for collection
9) Send the register with the bill, intimation advice, liability vouchers passed etc. tothe checking official.
10) In case of usance bill, advise the drawee to come to the bank for acceptance of the
bill. If the documents are to be delivered on acceptance (D.A. Bill) as perinstructions, please hand over the documents upon acceptance of the bill by thedrawee.
11) If the documents are to be delivered on payment (D.P. Bills) retain the documentswith you till payment even after acceptance.
12) File the bills serially and carefully in a box file.13) Advise acceptance / non-acceptance of a usance bill to the branch / bank from
14) Calculate the bank charges including collection charges and postages, etc. on thebill, write the particulars of the retirement such as date of payment, commission / postages to be collected etc. in credit note sent to your bank branches. In case of bills received from other banks we have to remit the proceeds by Demand Draft.Please prepare appropriate vouchers for preparation of Demand Draft, after receiptof cash or realization of cheque. Our customer's account is to be credited with
advice if bill is received from our customer.15) Prepare vouchers for our commission, postages etc. and also reverse the liability
voucher for bills received from other banks.16) Send the entire set of bill, vouchers, register, etc. to the checking official.17) On receipt of cash / realization of cheque, we have to hand over the documents like
Railway Receipt, Lorry Receipt / Post Parcel / Bill of Lading etc. to the customer,after obtaining due instructions from the checking official. Put stamp as paymentreceived.
18) After the credit note / Demand Draft are checked and signed by the checkingofficial, send the credit note to the branch from where the bill is received and sendthe Demand Draft to the branch of other bank from whom the bill is received forcollection together with a covering letter giving particulars of the realization.
19) Inward bills for collection outstanding in the general ledger account should bebalanced at least once in a month by jottings from the register.
20) It is essential to check physically the bills / documents on hand and with theoutstanding bills in the register.
21) In case of non-payment of usance bill where name of drawee in case of need ismentioned, refer the non-payment to the 'drawee in case of need' and advise thecollecting branch/bank accordingly by seeking instructions.
22) In case of other bills which remain unpaid on presentation / due date, send non-payment reminder to the drawee and seek disposal instructions from the drawer'sbank/ branch or drawer if bills is sent by drawer.
23) Our commission, postages, safe custody charges for post parcels etc. as well asother bank's commission and out of pocket expenses are to be recovered by useither from the bills proceeds or from the drawees at the time of retirement.
24) ‘C’ Form or amount in lieu of ‘C’ form
This completes the Job Card for Inward Bills for Collection.
(HB) Job Card for Outward Bills for Collection
When the bills are received by us from our own customers for collection at other centres,we call them outward bills for collection. We shall note the important steps for thisactivity as under:
(1) Scrutinize the bills very carefully and verify that :a) All documents mentioned in the covering letter by the customer areenclosed and are in order.
b) The bills have been correctly and properly drawn.c) If it is a usance bill, it is correctly stamped.d) Invoices should cover full particulars of the goods sent to the drawees. In
case of bills covering post parcels, full particulars of number of parcels,name of drawer, drawee etc. should be mentioned in invoices.
e) All relevant documents such as Bill of Exchange, documents to title of goods should be endorsed in favour of your bank.
f) Full instructions for collection of commission, out of pocket expenses atyour end as well as at drawee's end should be given by your customer.
g) Instructions for disposal of the bill in case of non-acceptance / non-paymentmust be clear. Generally there is an appropriate form to be filled in by the
customer giving required instructions.(2) Prepare covering schedule of instructions to the drawee bank with copy for our
records.(3) All the details of documents etc. sent for collection are to be entered in outward
Bills for collection.(4) Your Bank's round stamp with serial number of the bill as per register should be
put on all the documents.(5) In case the bill is sent for collection to your own branch, no endorsements on the
documents is necessary. In case the bill is sent to other bank, necessaryendorsements on Bill of Exchange, Document to title of goods are to be made bythe checking official.
(6) Generally following set of liability vouchers are prepared.
Debit : G/L A/c. Outward bills for collection.Credit : G/L A/c. Liability for outward bills for collection
(7) Send the register with the bill, covering schedule and voucher set to the checkingofficial.
(8) The bill with relevant documents is to be dispatched promptly and office copies tobe filed appropriately.
(9) In case of non-receipt of payment within reasonable period send a reminder andseek drawers instructions for further action to be taken. In case the non-acceptanceadvice is received seek instructions of the drawer.
(10) On receipt of proceeds of the bill check with the copy of your covering schedulewhether the amount of the credit note / Demand Draft is correct as to the billamount less discount / plus our charges and amount in lieu of "C" Form, if "C"Form is called for and is not received.
(11) Credit the proceeds to customer's (drawer's) accounts after recovering yourcommission, postages, out of pocket expenses, etc.
(12) Reverse the liability vouchers as under:Debit : G/L A/c. Liability for outward bills for collectionCredit : G/L A/c. Outward bills for collection.
(13) Make appropriate entries regarding realization of the bill in the outward bills forcollection and send the Register, vouchers etc. to the checking official.
(14) In case of return of bill without payment, return the documents to the drawer aftermaking suitable entries in the register, reverse the liability vouchers afterrecovering your charges as well as drawee bank's charges.
(15) Ensure that outward bills for collection outstanding in the General Ledger arebalanced periodically with the entries in the Register for Outward Bills forcollection.
Section 22 of Negotiable Instrument Act makes any usance bill entitled to three days of grace period unless the bill excludes the days of grace by putting words similar to"Without days of Grace" or "Without grace".
Example 1 : Due date of a Bill of Exchange, dated 31st
January, 2007 drawn at twomonths after date can be calculated as under:
a) Date of Bill of Exchange : 31st January, 2007b) Maturity date two months : From 31st January, 2007 –
31st March 2007c) Add days of grace : 3 daysd) Due date : 3rd April, 2007
Example 2 : Bill of Exchange, dated 15th January, 2007 payable three months after sightand accepted on 20th February, will be payable on 23rd May, 2007 as per followingprinciple:
a) Date of Bill of Exchange : 15th January, 2007b) Date of Acceptance / Sight : 20th February, 2007c) Add three months : 20th May, 2007d) Add days of grace : 3 daysd) Due date : 23rd May, 2007
This completes the job card for outward bills for collection.
Advance against Bank's own Term Deposit Receipt is very safe and relatively easyadvance for a banker.
In these paragraphs we shall discuss grant of Demand loan to an individual against Bank'sown Term Deposit Receipt (T.D.R.).
Suppose Mr.A comes to your Bank requesting for Demand Loan against your Bank'sT.D.R. for Rs.1,00,000/- maturing after four years, you should follow the followingprocedure.
1) Application-cum-Proposal : You shall ask Mr. A to fill in and sign, application-cum-proposal for Demand loan which also contains the list of documents to beobtained for grant of this facility. Mr. A fills all the relevant particulars, includinghis name, address, purpose of advance, amount of advance required by him, type of
advance as well as full particulars of T.D.R. such as Receipt No., Date, Amount,Beneficiary's Name, Due date, etc. and hands over the application-cum-proposalform to the bank.
2) Term Deposit Receipt : He discharges the T.D.R. on a revenue stamp and handsover the same to the Bank, as per your requirements.
3) Margin on Demand Loan : Although R.B.I. has allowed Banks to keep margin onT.D.R. advances, as per their requirements generally margin of 5% to 15% is kept.In this case the bank decides to keep margin of 10%.
4) Rate of Interest and Instalments: Rate of interest will be as per your banksnorms. The loan is repayable in 36 equal monthly instalments. Usually banksallows term up to 12 months or due date of deposits whichever is earlier.
5) Documents: After scrutiny of the application-cum-proposal and verifying theparticulars as per Bank's ledger, register, verify the signature of the applicant onTerm Deposit Receipt surrendered and application form. Other documents to betaken are already mentioned in the application-cum-proposal form, which you willtake before disbursement of loan. You will take the following document from Mr.A.(i) Demand Promissory Note signed on appropriate Revenue Stamp.(ii) Term Deposit Receipt duly discharged by Mr. A (As already done).(iii) Unstamped letter of set off and appropriation. (This document with help
you to recover your demand loan on maturity, or even earlier, in case of need).
(iv) Bank's lien to be noted in Red on the Term Deposit Receipt and in Ledgers
and Registers.After you get the above documents duly filled in and signed by Mr. A, you shallscrutinize the documents and put your initials or at the back of the documentswithin a round rubber stamp of your bank, signifying that the documents areverified and certified by you. (This job should be done by an authorized official).Now the proposal is to be sanctioned by appropriate authority.
6) Credit to Account : A credit and a debit voucher (Credit customer's savingsaccount Rs.90,000/-, debit customer's demand loan account Rs.90,000/-) isprepared (Rs.1,00,000/- amount of T.D.R. less 10% margin fixed by the Bank), and
signed by an official, and sent to transfer department for entry in transfer register,credit voucher is then posted in Savings Bank Account of Shri A which he aalready advised in application form. Debit voucher is posted in new Demand LoanAccount of Shri A. Now, Mr. A can withdraw this amount whenever he wants.
7) Entry of Documents in Register: The documents already obtained are entered ina Register, known as security register and verified by an official.
8) Safe Keeping of Documents: After entry of documents in the register andverification by an official, all the documents are kept in a safe under the Jt. custodyof two authorized officials.
9) Extra precaution on duplicate TDR.
This completes the job for granting Demand loan to Mr. A on the security of our BanksTerm Deposit Receipt.
Note: In case of T.D.R. of another branch of your Bank, confirm from the branch that nolien against the T.D.R. exists and that no duplicate T.D.R. is issued. Notice of our lien isalso to be advised to that branch.
Let us take another example to understand Job of granting demand loan to a partnershipfirm against Bank's Term Deposit Receipt.
Now suppose A,B,C & Co. approaches your bank for grant of a Demand loan of Rs.2,00,000/- against their Term Deposit Receipt of Rs.2,50,000/-. This receipt was takenlast year with cumulative interest payment and is due on 1-5-2010.
A,B,C & Co. is registered partnership and they already have a current account with yourbank. They do not enjoy any other loan / advance facility with your bank.
The bank shall proceed as follows:1) Application-cum-Proposal : As in the case of individual request for demand loan
against your banks Term Deposit Receipt (T.D.R.), the partners have to sign theapplication-cum-proposal form after filling in all the particulars. As this is a loan to
a partnership, all the partners have to sign the application form jointly andseverally i.e. first signing on behalf of the partnership firm (having put the rubberstamp of the partnership firm), and also signing in their individual capacity so thatthe Bank can proceed against the individual partners also in case of default.
2) Term Deposit Receipt : after handing over the application-cum-proposal formduly filled in and signed by them, the partners also hand over to the bank theT.D.R. for Rs.2,50,000/- duly discharged by them on the revenue stamp; first intheir capacity as partners and then in their individual capacity.
3) Margin on Demand Loan : As the loan requested is Rs.2,00,000/- against T.D.R.of Rs.2,50,000/- the margin is 20%.
4) Rate of Interest and Instalments : This is a request to grant them loan forbusiness requirements and the rate of interest will be as per bank's norms. The loanwill be repayable in 36 equal monthly instalments. Usually banks allows term upto12 months or due date of FDR, whichever is earlier.
5) Documents : The following documents will be obtained :i) Demand Promissory note signed on revenue stamp.ii) Term Deposit Receipt duly discharged (As already done).iii) Unstamped Letter of set-off and appropriation.iv) Banks lien to be noted in red ink on the Term Deposit Receipt and in Term
Deposit Ledger and Register.All the above documents are to be signed by the partners on behalf of firm aspartners and also as individuals, jointly and severally, as already explained.
After receipt of the documents, Bank will scrutinize the documents. The officialwho makes scrutiny puts his initials at the back of the documents within the rubberstamp of the bank and takes sanction of proper authority and passes on the set tothe concerned staff member for passing necessary vouchers.
6) Credit to Account : The concerned staff member prepares vouchers as under:Cr. Current Account of M/s A,B,C & Co. – Rs.2,00,000/-.Dr. Demand Loan A/c. of M/s A,B,C & Co. – Rs.2,00,000/-.After verification and signature, the vouchers are sent to transfer departments forbeing entered in transfer register and then credit voucher goes to current
department for being credited to A,B,C & Co's Current Account and DebitVoucher goes to Loan Department for being posted as debit to a new demand loanaccount of M/s. A,B,C & Co.
7) Entry in Documents Register: As in the case of individual loan account, thedocuments will be entered in documents register and checked and initialed by aresponsible official.
8) Safe Keeping of Documents: All the documents obtained are now kept in a safeunder due control of two responsible officials.
9) Extra precaution on Duplicate TDR
Note: In case the Term Deposit Receipt belongs to another branch, you shall take usualprecautions of finding out whether any money is paid against the receipt, whether anyduplicate receipt is issued by the branch and also advising your branch's lien which willalso be noted on Receipt and in Ledger and Register.
This completes the job for granting Demand Loan to Partnership Firm against Bank’sTerm Deposit Receipt.
ACTIVITIES OF DEPARTMENTS
Cash Department
Cash payment and receipt is by far the most basic activity of any bank is moving. There
are several issues that need to be addressed if the branch functioning cash department is to
be rendered efficient and smooth such as safety of cash, accuracy of transactions, speed of
service, reliability of personnel and their unwavering concentration in the job, and so on.
There are time honoured procedures which are followed scrupulously. A brief about the
procedures generally adopted is given below:
a) Adequate cash is taken out of the strong room( which is burglar proof, fire proof )
by the manager/accountant, for the day, under dual control( the drawing of cash
from and its return to the safe has to be controlled by 2 designated officials) .