CLERK Study Material-2017

Basic Study Material For Desktop Viewing only For internal Circulation
RBI Monetary Policy Statement, 2017-18
On the basis of an assessment of the current and evolving

macroeconomic situation, the Monetary Policy Committee (MPC), at its
meeting held on August 2, 2017, decided to reduce the policy repo rate
under the liquidity adjustment facility (LAF) by 25 basis points from 6.25
per cent to 6.0 per cent with immediate effect.
Consequently, the reverse repo rate under the LAF stands adjusted to
5.75 per cent, and the marginal standing facility (MSF) rate and the Bank
Rate to 6.25 per cent.
The decision of the MPC is consistent with a neutral stance of monetary policy
in consonance with the objective of achieving the medium-term target for
consumer price index (CPI) inflation of 4 per cent within a band of +/- 2
per cent, while supporting growth.
High Level Task Force on Public Credit Registry for India
• To constitute a High-level Task Force comprising experts as well as major
stake-holders to (i) review the current availability of information on credit
in India; (ii) assess the gaps that could be filled by a comprehensive
Public Credit Registry (PCR); (iii) study international practices; and, (iv)
suggest a roadmap, including the priority areas, for developing a
transparent, comprehensive and near-real-time PCR for India.
Issue of Comprehensive CIRs by CICs
• The Reserve Bank to direct Credit Information Companies (CICs) to
incorporate all the credit information available in the CIC database in the
Credit Information Reports (CIRs) furnished to Credit Institutions (CIs).
RBI’s Surveys of Households
• The Reserve Bank to expand the coverage of Inflation Expectation
Survey of Households (IESH) to rural and semi-urban areas; and increase
the coverage from 6 cities to 13 cities, in case of the Consumer
Confidence Survey (CCS).
Tri-party Repo
• The Reserve Bank to introduce tri-party repos, that will likely contribute
to better liquidity in the corporate bond repo market, thereby providing
markets an alternate repo instrument to Government securities repo.
Tri-Party Repo (Reserve Bank) Directions, 2017

To promote the development of the financial system of the country, the
Reserve Bank, on August 10, 2017, issued the Tri-Party Repo (Reserve
Bank) Directions, 2017. Tri-party repo is a type of repo contract where a
third entity (apart from the borrower and lender), called a Tri-Party Agent,
acts as an intermediary between the two parties to the repo to facilitate
services like collateral selection, payment and settlement, custody and
management during the life of the transaction. The draft tri-party
directions were released for public comments on April 11, 2017. Based on
[Type text] Page 1

the feedback, the Tri-Party Repo (Reserve Bank) Directions, 2017 have
been finalised.
Simplified Hedging Facility

• The circular to operationalise the scheme of simplified hedging facility
that aims to simplify the process for hedging exchange rate risk by
reducing documentation requirements and avoiding prescriptive
stipulations regarding products, purpose and hedging flexibility, has
been finalised.
Reserve Bank Commercial Paper Directions, 2017

To promote the development of the credit and financial system of the
country to its advantage and in public interest, the Reserve Bank on
August 10, 2017, issued the Reserve Bank Commercial Paper Directions,
2017 after taking into account the public comments on the draft
guidelines on Commercial Paper issued on February 2, 2017.
Form
• A Commercial Paper (CP) shall be issued in the form of a promissory
note and held in a dematerialised form through any of the depositories
approved by and registered with SEBI.
• A CP shall be issued in minimum denomination of ` 5 lakh and
multiples thereof.
• A CP shall be issued at a discount to face value.
• No issuer shall have the issue of a CP underwritten or co-accepted.
• Options (call/put) are not permitted on a CP.
Issue of Comprehensive Credit Information Reports
The Reserve Bank on August 2, 2017, directed all credit information companies
to ensure that the credit information report (CIR) in respect of a borrower,
furnished to the credit institutions (CIs), incorporates all the credit
information available in all modules, for example, consumer, commercial
and micro finance institutions (MFIs), etc., in respect of the borrower.
Basel III Framework on Liquidity Standards

The Reserve Bank on August 2, 2017, amended certain provisions of
Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio
(LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards
guidelines.
Level 1 assets of banks would now comprise of the following and these
assets can be included in the stock of liquid assets without any limit as
also without applying any haircut:
(i) Cash including cash reserves in excess of required CRR.
(ii) Government securities in excess of the minimum SLR requirement.
[Type text] Page 2

(iii) Within the mandatory SLR requirement, Government securities to the

extent allowed by the Reserve Bank, under Marginal Standing Facility
(MSF).
(iv) Marketable securities issued or guaranteed by foreign sovereigns
satisfying select conditions.
Natural Calamities Portal – Monthly Reporting System

The Reserve Bank on August 3, 2017, directed all commercial banks to
upload the actual data on relief measures extended during April - June
2017 immediately and thereafter from July 2017 onwards every month by
the 10th of the following month, on the dedicated portal, developed for
collection and compilation of data on natural calamities on a real time
basis through a centralised system.
The State Level Bankers’ Committee (SLBC) convener banks are also
requested to upload the notifications issued by state/ district authorities
for declaration of natural calamities for which relief measures were
implemented by SLBC/banks from April 2017 onwards. The subsequent
notifications are to be uploaded as soon as the notifications are issued.
Interest Subvention Scheme for Short Term Crop Loans
The Reserve Bank on August 16, 2017 conveyed to the commercial banks that
the Government of India has approved the implementation of the Interest
Subvention Scheme for the year 2017-18 for short term crop loans up to `
3.00 lakhs with certain stipulations. All lending banks are, therefore,
advised to send the eligible pending audited claims of 2015-16 latest by
August 31, 2017 and give adequate publicity to the ‘Interest Subvention
Scheme for Short Term Crop Loans’ so that the farmers can avail the
benefits.
Issue of Letters of Credit and Bank Guarantee
After a review, it has been decided that the Reserve Bank will continue not to
issue LCs on behalf of the government and will not act as an issuing or
advising bank for government as far as transactions related to BGs are
concerned. The government department concerned would be directly
taking up the matter with any commercial bank identified by them and all
matters concerned with the issuances of LC should be dealt with by the
government and the commercial banks, without involving the Reserve
Bank. The role of the Reserve Bank is strictly limited to reimbursement of
payments made by the banks for such LCs/BGs on behalf of the
government, after satisfying itself with the debit mandate given by the
government. Further, the Reserve Bank may not issue any letter
[Type text] Page 3

advising/recommending opening of LC/BG to the commercial banks on

behalf of government department.
RBI introduces `200 and `50 Denomination Banknotes in Mahatma Gandhi (New)
Series
The Reserve Bank of India introduced `200 and `50 denomination bank notes in
the Mahatma Gandhi (New) Series, on August 25, 2017 and August 18,
2017, respectively. Banknotes of both the denominations have the
signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India.
Rs. 200
Size: 66 mm × 146 mm
• Theme: Motif of Sanchi Stupa on the reverse, depicting the country’s
cultural heritage
• Colour: Bright Yellow
• For visually impaired: Intaglio or raised printing of Mahatma Gandhi
portrait, Ashoka Pillar emblem, raised Identification mark H with micro-
text `200, four angular bleed lines with two circles in between the lines
both on the right and left sides
Rs. 50
Size: 66 mm x 135 mm.
• Theme: Motif of Hampi with Chariot on the reverse, depicting the
country’s cultural heritage.
• Colour: Fluorescent Blue
MONETARY AND LIQUIDITY MEASURES:

On the basis of an assessment of the current and evolving macroeconomic
situation, RBI has announced following in its third bi-monthly monetary
policy review of financial year 2017-18, on 3rd August, 2017:
 REPO RATE: The policy Repo rate under the Liquidity Adjustment
Facility (LAF) reduced by 25 basis points from 6.25 per cent to 6.0 per
cent with immediate effect. The policy rate corridor continues to be +/-
25 bps.
 REVERSE REPO RATE: The Reverse repo rate determined with a spread of 25
bps below the repo rate, stands adjusted to 5.75 per cent.
 MARGINAL STANDING FACILITY (MSF): The MSF rate (an emergency funding
window) stands adjusted to 6.25%.
 BANK RATE: The Bank Rate stands adjusted to 6.25 per cent. The MSF rate and
the Bank Rate are recalibrated to 25 basis above the repo rate.
 CASH RESERVE RATIO (CRR): CRR of scheduled banks unchanged at 4% of
their NDTL. Effective from the fortnight beginning April 16, 2016, the minimum daily
maintenance of the CRR of 90% remains unchanged.
STATUTORY LIQUIDITY RATIO (SLR): The SLR of scheduled commercial
[Type text] Page 4

banks reduced by 50 bps points to 19.50%.

TERM REPOS: To continue to provide liquidity under overnight repos at 0.25% of
bank-wise NDTL and liquidity under 7-day and 14-day term repos ofup to 0.75% of
NDTL of the banking system through auctions. Further, RBI has decided to continue
with daily one-day term repos and reverse repos to smooth
liquidity.
LIMITING LIABILITY OF CUSTOMERS
a) Zero Liability of a Customer:

A customer’s entitlement to zero liability shall arise where the unauthorised
transaction occurs in the following events:
 Contributory fraud / negligence / deficiency on the part of the bank (irrespective of

whether or not the transaction is reported by the customer).
 Third party breach where the deficiency lies neither with the bank nor with the
customer but lies elsewhere in the system, and the customer notifies the bank within
three working days of receiving the communication from the bank regarding the
unauthorised transaction.
b) Limited Liability of a Customer: A customer shall be liable for the loss occurring
due to unauthorised transactions in the following cases:
 In cases where the loss is due to negligence by a customer, such as, where he
has shared the payment credentials, the customer will bear the entire loss until he
reports the unauthorised transaction to the bank. Any loss occurring after the
reporting of the unauthorised transaction should be borne by the bank.
 In cases where the responsibility for the unauthorised electronic banking

transaction lies neither with the bank nor with the customer, but lies elsewhere in the
system and when there is a delay (of four to seven working days after receiving
the communication from the bank) on the part of the customer in notifying the bank
of such a transaction, the per transaction liability of the customer should be limited to
the transaction value or the amount as prescribed, whichever is lower.
[Type text] Page 5

REPORTING BEYOND 7 DAYS:

If the delay in reporting is beyond seven working days, the customer liability should
be determined as per the bank’s Board approved policy. Banks should provide the
details of their policy in regard to customers’ liability formulated in pursuance of these
directions at the time of opening the accounts. Banks should also display their
approved policy in public domain for wider dissemination. The existing customers
must also be individually informed about the bank’s policy.
BURDEN OF PROOF:
The burden of proving customer liability in case of unauthorised electronic banking
transactions should lie on the bank.
BALANCES IN CUSTOMER ACCOUNTS WITH PAYMENTS BANKS
Based on the comments/proposals received from the Payments Banks (PBs), and
keeping in view the financial inclusion objective of the Payments Bank model, the
RBI has advised the Chief Executive Officers of PBs to follow the instructions as
mentioned below:
 Payments Banks are permitted to act as Business Correspondents (BCs) of other
banks. Under the BC arrangement and with prior specific or general consent of the
customer, PB may effect the transfer of funds deposited by a customer into own
account with another eligible bank, so that the balance in the customer’s account
with the PB does not exceed Rs.100,000 or any such lower amount as specified by
the customer.
 At any time, PB shall not have rights to operate or have realtime access to the
funds available in the account of the customer at any other bank, including the
transferee bank. However, as a BC of a bank, PBs may facilitate withdrawals and
transfers by the customer from her account with the bank of which it is the BC.
 A PB shall neither arrange nor avail of intraday funding facilities for its customers,
based on the balances available in the customer’s account with any other bank, or
otherwise.
[Type text] Page 6

 PBs are required to closely monitor the accounts of their customers, to identify and
report suspicious transactions, when the deposit / transaction volumes are not
commensurate with the customer’s profile.
PMVVY
(PRADHAN MANTRI VAYA VANDANA YOJANA)
The Government has launched Pradhan Mantri Vaya Vandana Yojana (PMVVY),
a pension scheme exclusively for senior citizens aged 60 years and above.
Under this scheme, senior citizens will get a guaranteed interest of 8% for 10
years depending upon the investment made by them.
This PMVVY scheme is available till May 3, 2018. Life Insurance Corporation of
India (LIC) has been given the sole privilege to operate the scheme.
BENEFITS OF THE SCHEME:

PENSION PAYMENT: On survival of the Pensioner during the policy term of 10
years, pension in arrears (at the end of each period as per mode chosen) shall be
payable.
DEATH BENEFIT: On death of the Pensioner during the policy term of 10 years,
the Purchase Price shall be refunded to beneficiary.
MATURITY BENEFIT: On survival of the pensioner to the end of the policy term
of 10 years, Purchase price along with final pension installment shall be payable.
ELIGIBILITY CONDITIONS:
MINIMUM AND MAXIMUM AGE FOR ENTRY: Minimum age for investment is
60 years and there is no maximum age for entry.
POLICY TERM: The policy term is 10 years.
RATE OF RETURN: The Scheme provides an assured return of 8% p.a. payable
monthly (equivalent to 8.30% p.a. effective) for 10 years.
UIDAI LAUNCHES ‘mAADHAAR’ APP FOR AADHAAR DATA ON

PHONE:
The Unique Identification Authority of India (UIDAI) has launched ‘mAadhaar’, a new
mobile application for syncing Aadhaar data on mobile phones. The app allows users
to carry their unique Aadhaar information including name, date of birth, gender,
address, and the linked photograph, on their smartphones. The
app also allows users to lock or unlock biometrics data.
EPFO SIGNS AGREEMENT WITH FIVE BANKS:

The Employees’ Provident Fund Organisation (EPFO) has inked an agreement
with four private banks and Bank of Baroda for the purpose of collection of provident
fund dues from the employers and payments to its subscribers.
This is the first time the EPFO has roped in private banks, namely, ICICI Bank,
HDFC Bank, Axis Bank and Kotak Mahindra Bank. Earlier, the EPFO was making
use of the services of only the state-run banks.
‘MULTICURRENCY FOREX CARD’:

Standard Chartered Bank has launched a ‘Multi currency Forex Card’ to offer a
seamless experience for overseas travelers. This card allows customers the
[Type text] Page 7

convenience of loading upto 20 widely used currencies on one card with an online
reload facility during the overseas travel.
Rest and Rotation Policy in respect of appointment of Statutory Central

Auditors
(SCAs)
RBI decided (Jul 27, 2017) that, henceforth, an audit firm, after completing its four year
tenure in a particular private/foreign bank, will not be eligible for appointment as SCA of the
same bank for a period of six years.
These guidelines are also applicable to foreign banks.
Payment and Settlement Systems in India: Vision-2018
Facilitating faster payment services
The payments eco-system in the country provides multiple options to different segments of
users for funds transfer as well as for making payments in exchange of value for goods and
services. With increasing adoption of electronic payments, particularly those driving e-
commerce and m-commerce, there is a growing demand for „faster‟ payment services which,
in turn, facilitate ease in doing financial transactions. Towards this end, the measures that will
be initiated will include:
a. National Electronic Funds Transfer (NEFT): The growing adoption of NEFT by

individuals, businesses and government agencies/departments, necessitate a review of
the system to enable faster payment processing through introduction of more frequent
settlement cycles. Similarly, the feasibility of adopting ISO messaging format for
NEFT will be explored.
b. Mobile Banking: The high mobile density in the country is being increasingly
leveraged to offer payment services by a wide range of payment service providers so
as to enable an on-the-go, faster payment experience to the customers. In addition to
the efforts to on-board or increase customer registration level for mobile banking
through simplified registration process and increasing the access points for same
(through authorised ATM networks), the policy efforts will also focus on ensuring that
access to mobile banking services is seamlessly provided to the large number of users
of non-smartphone handsets in multiple languages.
c. Service providers will be encouraged to adopt technology to provide innovative easy
to use mobile based payment solutions in an interoperable environment without
compromising on security.
Promoting interoperability
The ability of customers to use and re-use a set of payment instruments seamlessly across
different segments to meet a variety of payment requirements should not be constrained by a
„silo‟ approach to developments in the payments eco-system. The requirement of users for
seamless payment experience are met only when the payment systems are inter-operable and
are able to communicate within their own segments on the basis of common standards
adopted by all providers of these services. Vision-2018 envisages promoting interoperability
[Type text] Page 8

in areas which have a high potential for driving electronic payments, including for small
value transactions, such as the following:
a. Unified Payment Interface (UPI): At present although a large number of banks are
offering mobile banking services these are not completely inter-operable, especially
for merchant transactions. This, in turn, has impacted the use of mobile payments for
merchant / P2B (Person to Business) transactions. Full operationalisation of UPI,
which aims at this customer convenience, will provide the standard interface for
communication across different mobile-banking applications of banks thus facilitating
inter-operability in P2B payments.
b. Toll Collections: Collection of toll, largely done in the form of cash payments, is
another segment where efforts to migrate to electronic payments have been sporadic
and isolated. Such disparate developments have led to the propagation of different
systems across different parts of the country, not only causing confusion and
inconvenience to the customers, but also pushing them further into cash payments.
Hence, electronification of the toll collection systems on a pan-India basis in an
interoperable environment will be encouraged.
c. Payments for Mass Transit Systems: Another segment which has a huge potential
for migrating large number of small value cash transactions to electronic payments, is
in the area of mass transit (road transport, metro rail, etc.). Though there have been
developments in recent times in different parts of the country to put in place
automated fare collection for mass transit systems all of them work on proprietary
systems and standards, thus coming in the way of inter-operability. Hence, the focus
will be to ensure that the payment mechanisms being put in place in this segment are
interoperable and built on open standards, preferably using open system payment
instruments.
Enhancing Safety and Security
Safety and security of payment systems and transactions is an important factor that helps in
boosting the trust and confidence of the customers in using electronic payment mechanisms.
Towards this end, Bank will continue to adopt and implement international standards and best
practices that enhance payment systems security. Some of the measures envisaged include:
a. Migration of cards to EMV Chip and PIN: Banks have been advised that all new
cards issued by them should be EMV Chip and PIN cards. A roadmap for migration of
all existing magnetic stripe cards to EMV Chip and PIN cards has also been laid
down. Bank will continue monitoring the progress made by the banks so as to ensure
adherence to the timelines.
b. EMV card processing at ATMs: Presently the ATMs in the country read and process
the card transactions only on the basis of data contained in the magnetic stripe, even
though the card may be a Chip and PIN card. With the roadmap in place for issuance
of EMV Chip and PIN cards, the aim will be to ensure that all the ATMs in the
country migrate to processing of EMV Chip and PIN cards on the basis of Chip data
rather than magnetic stripe data.
c. Security of ATM transactions: Although ATM infrastructure is widely used for
meeting cash requirements of the customers, it is increasingly being used as a channel
for carrying out other non-financial transactions and delivering value-added services.
As such, the operational and logical access security aspects of ATMs assume
[Type text] Page 9

significance, and any shortcomings in these areas make the systems vulnerable to
attacks by fraudsters, thus impairing customer confidence and trust. The Bank will,
therefore, examine holistically the physical and logical safety and security
requirements of ATMs infrastructure and issue necessary guidelines to strengthen
them.
d. Aadhaar-based authentication: Examine the technical, operational and business
feasibility of using Aadhaar as a factor of authentication for payment transactions.
e. Large-value payment systems: On-site inspection of FMIs and System-Wide

Important Payment Systems SWIPS would be carried out periodically with self-
assessment to be carried out by FMI / SWIPS on a more frequent basis.
f. Retail payment systems: A detailed framework on oversight of retail payment
systems would be framed. The focus would continue to be on off-site surveillance,
regular self-assessment and need based inspection of retail payments. As these
systems are largely driven by changes in technology, an appropriate framework for IS
Audit would also be put in place
g. Bharat Bill Payment System (BBPS): An oversight framework to cover both Bharat
Bill Payment Central Unit (BBPCU) and Bharat Bill Payment Operating Units
(BBPOUs) will be put in place to ensure the safety, security and resilience of the
BBPS.
h. Trade Receivables Discounting System (TReDS): The TReDS will also be
functioning as pan-India system. Therefore, a comprehensive oversight framework to
ensure the smooth functioning of TReDS and its resilience, including the risk
management framework as required, would be put in place.
i. Electronic Banking Awareness And Training (e- BAAT)
Reimbursement of Merchant Discount Rate (MDR) Charges for Government

transactions up to Rs.1 lakh through debit cards
1. It is again clarified that the full amount paid to the Government by the customers / through
debit / credit cards should be remitted to the concerned Government Ministry / Department.
The reimbursement of MDR charges on debit card use (up to Rs.one lakh) can be claimed
from RBI separately as per extant guidelines. Deduction of MDR charges from the receipts of
government is not permissible at all.
2. Please note that MDR charges on debit card transactions above Rs.one lakh and on any
credit card transaction are not being absorbed by Government of India and hence will not be
reimbursed by RBI. Accordingly, agency banks should not deduct MDR charges from the
receipts of the government in these cases also.
Government transactions eligible for agency commission
1. Transactions relating to the following government business undertaken by agency banks

are eligible for agency commission:
[Type text] Page 10

a. Revenue receipts and payments on behalf of the Central/State Government

b. Pension payments in respect of Central / State Governments
c. Special Deposit Scheme (SDS) 1975
d. Public Provident Fund (PPF) Scheme, 1968
e. Senior Citizen Savings Scheme (SCSS), 2004
f. Kisan Vikas Patra, 2014 and Sukanya Samriddhi Account
g. Any other item of work specifically advised by Reserve Bank as eligible for agency
commission (viz. Relief Bonds/ Savings Bonds etc. transactions)
Rates for agency commission
Sr.
Type of Transaction Unit Revised Rate
No.
Receipts - Physical
a. (i) Per transaction ₹ 50/-
mode
(ii) Receipts - e-mode Per transaction ₹ 12/-
b. Pension Payments Per transaction ₹ 65/-
Payments other than
c. Per ₹ 100 turnover 5.5 paise
Pension
Goods & Services Tax at a Glance
The Article 246 of Constitution of India read with schedule VII (3 Lists i.e Union List, State
List and Concurrent List) provides for the division of taxation powers between the Center and
States. Till June 30, 2017, indirect taxes were imposed in the form of excise duty, service tax,
custom duty by Central Govt. and sales tax, octroi and entry tax by States. There are 5 Acts
namely CGST Act, UTGST Act, IGST Act, SGST Act and GST Compensation Act. GST
levied by the Center is called Central GST (CGST) and by the States, is called State GST
(SGST). Integrated GST is for inter- State supply.
While the Base Year of old GDP Series is 2011-12, the Base Year has been fixed as 2017-
18 for- New GDP Series.
The GST regime implemented from July 01, 2017 has subsumed the following taxes:
Central taxes : Central Excise duty, Duties of Excise (Medicinal and Toilet Preparations),
Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise
(Textiles and Textile Products), Additional Duties of Customs (commonly known as CVD),
Special Additional Duty of Customs (SAD), Service Tax, Cesses and surcharges insofar as far
as they relate to supply of goods or services
State taxes : State VAT, Central Sales Tax, Purchase Tax, Luxury Tax, Entry Tax (All forms),
Entertainment Tax (not levied by the local bodies), Taxes on advertisements, Taxes on
lotteries, betting and gambling, State Cesses and surcharges insofar as far as they relate to
supply of goods or services
Items still outside GST regime: Excise duty on petroleum products (Union), Tax on sale of
petroleum
[Type text] Page 11

products (State), Tax on alcoholic liquor for human consumption (State), Tax on
entertainment and
amusement levied and collected by Panchayat/ Municipality/ Regional Council/ District
Council, Stamp
Duties
Salient Features of GST
The Constitution (101st Amendment) Act received assent of the President on 8th September,
2016, which paved the way for implementation of GST.
Destination based tax : GST is applicable on supply of goods or services (compared with on
manufacture
or sale of goods or on services, which was the position till June 30, 2017). As a result, the
consuming State
stand to gain due to this shift from origin based taxation to destination based taxation.
Provision has been made for compensation to States for loss of revenue arising on account of
implementation of GST upto 5 years.
Dual Taxing Structure: Concurrent powers are available to Union and State legislatures to
make laws with respect to GST. The power to make laws in respect of supplies in the course
of inter-state trade or commerce will be vested only in the Union Government. States can
levy GST on intra-state transactions including services.
Integrated GST is levied on inter-State supply (including stock transfers) of goods or
services. This is collected by the Centre so that the credit chain is not disrupted
GST Rates : Consolidated rates of GST for 1211 Goods and 568 Services :
Goods : 0%, 5%, 12%, 18%, 28% and 28% + Compensation Cess*
Services : 5%, 12%, 18% and 28%
*It is on certain specified luxury and demerit goods 5years to compensate States for revenue
loss on account of implementation of GST.
Administration of GST : GST Council has been notified w.e.f Sep 12, 2016 to administer
GST. It is assisted by a Secretariat.. It is apex policy-making body for GST.
Members of GST Council : These are Central and State Ministers in-charge of the Finance
Portfolio. Center has a one-third vote and all states combined have two third vote. Quorum is
50% of total members and for majority decisions, 75% of the weighted votes of the members
present and voting.
Exemption limit : It is Rs. 20 lakh. For special category States the threshold exemption limit
is Rs. 10 lakh.
Composition threshold limit : It is Rs. 75 lakh. [Composition scheme is not available to
inter-State
suppliers, service providers (except restaurant service) and specified category of
manufacturers].
Administrative control over 90% of taxpayers with turnover below Rs. 1.5 crore is vested
with State Govt.
and 10% with Central Govt. All administrative control over taxpayers having turnover above
Rs. 1.5 crore shall be divided equally for the Central and State tax administration.
Returns under GST : There different types of returns to be filed on monthly, quarterly or
annual basis on form No. GSTR-1 to GSTR-11
TDS on GST : There is obligation on certain persons including Govt. departments, who will
receive supply, to deduct tax @ 1% from the payment due to the supplier where total value of
the supply exceeds Rs.2.50 lac.
GST Appellate Tribunal : Constituted by Central Govt., this Tribunal would entertain the
appeals against the orders passed by Appellate Authority.
[Type text] Page 12

Goods & Service Tax (GST) One Nation One Tax

Goods & Service Tax (GST) is the boldest reform of the tax regime after independence. GST
replaces the various Indirect Central and State Government Taxes. GST is governed by a GST
Council and its Chairman is the Finance Minister of India. Under GST, goods and services are
taxed at the following rates – 0%, 5%, 12%, 18% and 28%. There is a special rate of 0.25% on
rough precious and semi-precious stones and 3% on gold. In addition a cess of 15% or other
rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco
products.
There are 3 modes of payment available to the dealer - Online, Over the Counter (OTC) and
through NEFT/RTGS. How can I pay GST ONLINE? Customers having Internet Banking Facility
(both Retail and Corporate) can make the GST payment online. Customer is to first visit the
GST website https://www.gst.gov.in/ and Login to GST portal using his GST Number and
password, create the challan, select the e-payment mode and select Dena Bank for online
Payment. Tax payer will be redirected to the Dena Bank Internet Banking site. On successful
validation of transaction password tax payer will be redirected to the GST portal wherein
final status of the transaction will be displayed.
Customers who do not have Internet Banking Facility can make the GST payment through
any Dena Bank Branch. Customer is to first visit the GST website https://www.gst.gov.in/ and
log in to the GST portal using his GST Number and password, create the challan, and select
the Over the Counter Mode and select Dena Bank for over the counter payment. Tax payer
will receive the provisional challan. Customer is to take the print of the challan and visit his
nearest Dena Bank Branch and submit the challan along with tax amount. Amount can be
paid through Cash, Transfer or Clearing Cheque. Bank official will process the GST payment
and will provide the Final Challan containing the Challan Identification Number (CIN
Number). Over the counter payment can be made up to Rs. 10,000/- (Rupees Ten Thousand
Only).
Customers who do not have Internet Banking Facility and wants to make a GST payment of
above Rs. 10,000/- (Rupees Ten Thousand) can make the GST through NEFT/RTGS from any
Dena Bank branch. Customer is to first visit the GST website https://www.gst.gov.in/ and log
in to the GST portal using his GST Number and password, create the challan, select the
NEFT/RTGS Mode and select Dena Bank for payment. Tax payer will receive the provisional
challan. Customer is to take the print of the challan and visit the nearest Dena Bank Branch
and submit the challan along with the tax amount. Amount can be paid through Cash or
Transfer along with NEFT/RTGS Mandate. Bank official will initiate the NEFT/RTGS
remittance.
GST tax paid challan WILL BE available for generation at THE GST website
https://www.gst.gov.in/ under menu Services--Track Payment Status>Payments
CIN stands for Challan Identification Number. It is a 17 digit number that is 14-digit CPIN
plus 3- digit Bank Code. CIN is generated by the authorized banks/ Reserve Bank of India
(RBI) when payment is actually received by authorized banks or RBI and credited in the
relevant government account. It is an indication that the payment has been realized and
credited to the appropriate government account.
[Type text] Page 13

CPIN stands for Common Portal Identification Number (CPIN) given at the time of generation
of challan at GST portal. It is a 14 digit unique number to identify the challan. Validity of the
CPIN is 15 days from the generation of the challan.
ALL BANKS TO FACILITATE AaDHAR ENROLMENT:

All Banks including Private Sector Banks will have to provide Aadhar enrolment and update
facility to their customers who have been asked by the government to link their bank
accounts with the Unique Identification Number by December 31 or face blocked access.
This comes in the wake of the country facing a gigantic task of linking all bank accounts to
Aadhar after due verification, as mandatory by a June 1 Notification of the Finance Ministry
that amended the Prevention of Money Laundering Act (PMLA).
KNOWLEDGE EACH BANKER NEED TO KNOW
RESERVE BANK OF INDIA ACT 1934

The act was amended during 1997 to give proper coverage to nbfcs also.
Sec 2(e) Scheduled Bank means a Bank whose name is included in the 2nd schedule of RBI
Act 1934. Only that Bank is included in the 2nd schedule which satisfies the conditions laid
down in sec 42(6) which inlcude paid up capital and Reserves requirement of not less than
Rs.5 lac satisfaction of RBI that the affairs will not be conducted by the Bank in a way to
jeopardize the interests of the depositors, and it may be a state co-operative Bank, a
company defined in companies act 1956, an institution notified by central govt for the
purpose and a corporation or a company incorporated by or under any law in force, in any
place outside india(commercial, rural and many state co-operative Banks are classified as
scheduled Banks)
Any Bank that is not included in the 2nd schedule of RBI is called non scheduled Bank
Sec 17 defines various types of business which RBI may transact, which include acceptance
of deposit without interest from central/state government, any other person/ institution,
purchase/ sell foreign exchange, securities, rediscount the bills/ promissory notes, grant
loans etc.
Sec 18 RBI provides emergency loans to Banks on liberal terms
Sec 19 describes business, which RBI may not transact
Sec 20 Banker to govt. It performs various functions for the government, it transacts govt
business and manages public debt of the central govt.
Sec 21 RBI has the right to transact govt. Business in india i.e. Remittance, exchange, keeping
deposit free of int. Etc.
Sec 22 sole right to issue Bank notes
Sec 23 Bank notes shall be issued by issue deptt
Sec 24 denomination of notes (2,5,10,20,50,100,500,1000,5000,10000) central govt may
direct discontinuance or non issue of Bank note of any denomination (2 & 5 already
discontinued)
Sec 26 Bank notes issued by RBI shall be legal tender and shall be guaranteed by central
govt.
[Type text] Page 14

Sec 28 RBI can frame rules for refunding value of mutilated soiled or imperfect notes as a
matter of grace. Rupee coin and one rupee note shall not be currency note for any of the
purposes of this act
Sec 29 Bank note shall be exempted from stamp duty under Indian stamp act
Sec 31 prohibits issue of note payable to bearer. No person in india other that RBI or central
govt. Shall draw accept make or issue any bill of exchange, hundi or promissory note for the
payment of money payable to bearer on demand.
33: Assets of issue deptt of RBI shall consist of gold coins, gold bullion and foreign securities
not at anytime be less than Rs. 200 cr of which gold coin and gold bullion not less than
Rs.115 cr
42: cash reserve ratio (CRR) of scheduled banks to be kept with RBI as s daily balance (details
given separately)
42 (c ) empowers RBI to add or delete the name of any bank in 2nd schedule of RBI act 1934
43 : RBI to publish every fortnight a consolidated statement showing aggregate liabilities
and assets of all SCBs
45-A to F: Empowers RBI to collect credit information. (section 45-C-Return as on last Friday
of April & October every year giving information on borrowers enjoying secured credit limits
of Rs.10 lac and above and unsecured limits of Rs. 5 lac and above). RBI also collects details
(1/2 yearly March/Sept) of all doubtful, loss and suit filed accounts with aggregate
outstanding of Rs. 100 lac and above and circulates the information amongst banks and
financial institutions. Besides, banks submit Basic Statistical Returns i.e. BSR-1 (details
regarding borrowal accounts of above Rs. 3 lac) and BSR-2 (information about deposits with
break up in to current, savings and term deposits)
45H-45T: Regulations relating to non bank finance companies. Section 45-S puts banks on
acceptance of deposits from public by individual or any unincorporated body, as per an
amendment in 1997.
48: Exemption to RBI from paying income tax or super tax
49: Announce/punish Bank rate .(bank rate as per this Section is ‘the standard rate at which
RBI is prepared to buy or rediscount bills of exchange or other commercial papers eligible for
purchase under this act)
BANKING REGULATION ACT 1949 - IMPORTANT PROVISIONS
Sec.5(a) approved securities :such securities authorized by the central government or

securities in which a trustee may invest money of trust under indian trust act 1882.
Sec. 5(b) Banking :acceptance of deposit for the purpose of lending or investment, the
deposits of money from the public repayable on demand or otherwise and withdrawal by
cheque, draft, order or otherwise.
Sec. 5(c) :Banking company means any company which transacts the business of Banking .
Sec. 5(e) :transact Banking business in india
[Type text] Page 15

Sec. 5(f) : demand liabilities are the liabilities which must be met on demand and time
liabilities means liabilities which are not demand liabilities
Sec. 5(n) : secured loan or advances means a loan or advance made on the security of asset,
the market value of which is not at any time less than the amount of such loan or advances
and unsecured loan or advance which means a loan or advance, not secured
Sec. 6(1) : Banking company may be engaged in accepting deposits, borrowing money,
lending money , dealing in bills, collection of bills, buying/ selling foreign exchange, lockers,
issuing letter of credit, travelers cheques, mortgages, insurance business, acting as trustee
etc., or any other business which central govt. May notify in the official gazette.
Sec. 6(2) : restriction on business – no banking company shall engage in any form of business
other than those referred in subsection 6(1)
Sec. 7 use of words of Banking – Bank, Banker, Banking or Banking company: a Banking
company carrying on Banking business in india must use the word ‘Bank’, ‘Banker’, ‘Banking
company’ in its name. No other organization permitted to use these names.
Sec. 9 disposal of non Banking assests: no Bank shall hold any immovable property
howsoever acquired (except for its own use) for a period exceeding 7 years.
Sec. 10 employment of manaigng agents: the period of office of an md/whole time chairman
cannot exceed 5 years at a time (may be renewed or extended by further periods not
exceeding 5 years on each occasion).
Sec. 11 paid up capital and Reserve requirement: domestic Banks: minimum paid up capital
and Reserves Rs 5 lac.
Foreign Banks: minimum Rs 15 lac (it is Rs. 20 lac where the Bank has place of business in
mumbai or calcutta or both)
Sec. 12 capital structure: the ratio of authorized, subscribed and paid up capital must be
minimum 4:2:1. Voting right cannot be more than 10% by a single shareholder irrespective
of holding of the shareholder.
Sec. 13 restriction on commission, brokerage, discount :Bank not to pay commission,
brokerage, discount, etc. More than 2.5% of the paid-up value of one share.
Sec. 17(1) Reserve fund: stipulates that a Bank must create Reserve fund equivalent to not
less than 20% of profits out of the balance of profit of each year, before any dividend is
declared (RBI has enhanced it to 25% of net profit w.e.f. March 31, 2001)
Sec. 18- cash Reserve : non scheduled Banks to maintain 3% of the demand and time
liabilities by way of cash Reserves with itself or by way of balance in a current account with
RBI.
Sec. 19 subsidary company : permits Banks to form subsidiary company for certain purposes.
Sec. 19(2) no Banking company shall hold shares in any company, whether as pledge,
mortgagee or absolute owners of any amount exceeding 30% of its own paid up share
capital + Reserves or 30% of the paid up share capital of that company , whichever is less.
Sec. 20 restriction on advances against own shares:no Banking company grant
loans/advances on the security of its own shares.
[Type text] Page 16

Sec. 21(a) rate of interest charged by Banks not to be subject to scrutiny by courts :a
transaction between the Banking company and its debtor shall not be reopened by any court
on the ground of excessive charging of rate of interest.wef feb 15,1984
Sec.22 licencing of Banking companies: obtaining of licence from RBI is essential.
Sec. 23: restriction on opening of new and transfer of existing place of business :prior
permission of RBI is required for opening of new branch, sub-office, sub pay office and
extension counter etc. Except for one month. Setting up of obu’s, guidelines of doorstep
Banking, etc.
Sec. 24 maintenance of slr: every Bank to maintain a percentage of its total net demand and
time liabilities by way of cash, gold, and unencumbered approved securities maximum 40%
as on last friday of the second preceding fortnight. Minimum floor limit abolished and
maximum 40% to be maintained.
Sec. 26 return of unclaimed deposits :every Bank shall within 30 days after the close of each
calendar year submit a return as on 1st december to RBI on all deposit accounts which have
not been operated upon for 10 years (unclaimed accounts). In case of fds, this period will
start from due date i.e. Date of expiry of such fixed period.
Sec. 29 a/cs & balance sheet:balance sheet and p&l account must be prepared as on last
working day of march every year in the format given in schedule iii of the act.
Sec.30-i Audit : Balance sheet is to be got audited from qualified auditors.
Sec. 31 submission of returns:the a/cs and b/s together with the auditors report shall be
published in the prescribed manner and 3 copies of the same shall be furnished to RBI
within 3 months from the end of the period to which the balance sheet pertains.
Sec. 35 Inspection: Empowers RBI to undertake inspection of Banks and give decision as
deemed appropriate. RBI has directed Banks to round off the transactions to nearest rupee
under section 21 & 35..
Sec. 35(a) RBI has been given powers to give directions to the Banks in the public interest or
in the interest of Banking policy.
Sec. 36(a) powers to remove managerial or other person: where the RBI is satisfied that in
the public interest, RBI may remove from office any chairman, director or other officers or
employees of the Banking company.
Sec. 45 amalgamation of Banking companies: RBI has powers to apply to central govt.for
suspension of business by a Banking company and prepare a scheme of reconstitution or
amalgamation.
Sec. 45y preservation of Bank records: central government in consultation with RBI has
power to frame rules regarding preservation of books, accounts and other documents.
Sec. 45za nomination for nomination in deposits accounts
[Type text] Page 17

Sec. 45zc nomination for nomination in safe custody accounts

Sec. 45ze nomination for nomination in locker accounts.
Sec. 45 z return, of paid instruments to customer:guidelines for returning the paid
instruments to customer by keeping a true copy.customers obtaining a original instruments
have to undertake to preserve the instruments as prescribed by central govt. Under section
45 y .
Sec. 46 penalties:whoever in any return, b/s or other documents willfully makes a statement
which is false, or willfully omits to make a material statement, shall be punishable with
imprisonment upto 3 years and shall also be liable to fine.
Sec. 47-a violation of KYC:RBI to impose penalty on Banks for violation of KYC norms or non
reporting of frauds.
Sec. 49-a other than a Banking company / RBI /sbi, no person can accept deposits of money
withdrawable by cheque .
Sec. 52 central govt.can make rules for all matters.

Scheduled Bank : the Banks that are included in the second schedule to the Reserve Bank of
india act, 1934, are called a scheduled Banks,entitled to facilities of refinance from rbi,
subject to fulfilment of the following conditions laid down in section 42 (6) of the act, as
follows:
It must have paid-up capital and Reserves of an aggregate value of not less than an amount
specified from time to time; and it must satisfy RBI that its affairs are not being conducted in
a manner detrimental to the interests of its depositors.the scheduled commercial Banks in
india comprise of state Bank of india and its associates (8), nationalised Banks (19), foreign
Banks (45), private sector Banks (32), co-operative Banks and regional rural Banks.
NEGOTIABLE INSTRUMENTS ACT, 1881 (IMPORTANT SECTIONS)

Sec. Contents
4 Definition of promissory note
5 Definition of bill of exchange
6 Definition of cheque
8 Definition of holder
9 Definition of holder in due course
10 Payment in due course
13 Meaning of negotiable instrument
[Type text] Page 18

15 Definition of endorsement
18 When there is difference in amount between the words and figures, the amount in
words is to be treated s the amount ordered by the drawer to pay
20 Inchoate instrument i.e. Incomplete instrument
22 Three days of grace for calculating the maturity date of usance instrument
25 Maturity date in holiday usane instrument is payable on next preceding business

day.
26 Minor may draw, endorse and accept a negotiable instrument so as to bind all
parties except himself.
31 Liability of drawee Banker : Banker to compensate for wrongful dishonor
45a Holder rights to get duplicate of lost bill
63 The drawee of a b/e has to accept it within 48 hours of presentation
80 If no rate of interest is mentioned in the p/n, interest @ 18% p.a. Is to be paid
85-a Protection to paying Banker in case of a bearer cheque.
85-(1) Paying Banker is protected by payment in due course of an order cheque which is
properly endorsed by the payee or his agent
85-(2) Protection to paying Banker in case of a bearer cheque
87 Material alteration of negotiable instrument renders it void
89 Paying Banker gets protection where a cheque is materially altered but does not
appear to have been altered
99 Noting & 100 protest
118 Presumptions as to negotiable instruments of consideration
123 Cheque crossed generally
124 Cheque crossed specifically
128 Payment in due course of crossed cheque
130 Not negotiable crossing – the transferee cannot have a better title to the cheque
than that of the transferor
131 Collecting Banker’s protection in respect of crossed cheques
138 Dishonour of cheque for insufficiency, etc. Of funds in the account
[Type text] Page 19

NEGOTIABLE INSTRUMENT ACT (NI Act) 1881 came into force wef Mar 01, 1882. Latest
amendment Dec 2002.Total sections 147 Applicable throughout India including J & K
Top of Form
STATUTE: Section 13 gives the meaning of Negotiable Instruments and states Negotiable Instruments means a
Promissory Note, Bill of Exchange or Cheque payable either to order or to bearer.
DEFINITION OF NI:
No direct definition of an NI is available. But as per Sec 13, NI means and include promissory
note (PN),
bill of exchange (BoE) and cheque.
Top of Form
TYPE OF NEGOTIABLE INSTRUMENTS:

(a) As per NI Act - 1:Promissory note, 2:bill of exchange, 3:cheque and 4:Demand draft
(b) As per Transfer of property Act (Sec 137) - Documents of title to goods such as Bill of
Lading, Rail Reciept, GR issued by transport operators approved by IBA, Warehouse receipt ,
AirWay Bill Dock Warrant, Delivery Order etc. also called Quasi Negotiable instrument.
(c) As per usage or practice - such as Certificate of Deposit , Commercial Paper , Treasury
Bills, Hundi, Govt. Promissary Notes.
RESTRICTION ON ISSUE OF BEARER PN & BOE:
As per NI Act, BoE and PN can be made payable to bearer.
But only Central Govt. and RBI, are permitted to draw PN & BoE payable to Bearer u/s 31 of
RBI Act 1934. Other persons in India can draw only payable to order.
DD is issued payable to ORDER due to this restriction.
Cheques can be issued as bearer or order, as this restruction is not applicable to cheques.
PRESUMPTIONS OF NIs:
U/s 118, NIs are presumed to be:
(a) made for consideration,
(b) bear date on which they are made.
(c) every holder is a holder in due course.
PROMISSORY NOTE (Section 4 NI Act):
PN is in an unconditional undertaking or promise, in writing signed by the maker (the
debtor), to pay a certain sum of money to or to the order of a certain person or to the
bearer thereof.
Promise is a compulsory condition, in a promissory note.
Acknowledgement is not a promissory note (example I owe you Rs.500 is an
acknowledgement and not a promissory note).
PARTIES: In PN there are 2 parties maker (debtor) & payee (creditor)
[Type text] Page 20

Top of Form
CURRENCY NOTES: Currency/bank notes are not promissory notes as these are excluded
from the definition of promissory notes.
CHEQUE: Cheque is a demand bill of exchange drawn on a specified bank. It also includes
truncated cheque (in case of CTS in NCR and Chennai) and electronic cheque. (Sec 6).
Cheque can be made payable to bearer or order (restriction of Section 31 of RBI Act on
issuing bearer is not applicable on cheque).
BEARER AND ORDER: If a cheque bears, the words bearer / order both, it is payable to
bearer. If does not bear such words it is payable to order.
TRUNCATED CHEQUE: It is a paper cheque, which is retained by the collecting bank. To
collect the payment, the collecting bank sends scanned image of the paper cheque to the
drawee bank + digital signatures of collecting bank.
ELECTRONIC CHEQUE : It is a scanned image of the paper cheque + digital signatures of the
drawer.
(Digital signature has two keys, public key (which is disclosed) and private key (which is kept
secret). Public key is used to verify the digital signatures and private key is used to sign.
FORMAT OF CHEQUE: Format is a practice. It is not prescribed in any Act.
POST DATED CHEQUE: Cheque bearing date subsequent to date of its presentment. It cannot
be paid before its date. Example - Cheque dated Jan 22, is presented on Jan 16. It will be
returned.
ANTE-DATED CHEQUE: A cheque bearing date prior to the date, when it was actually drawn.
Example - Cheque issued on Jan 22 but it is dated Jan 05, while the account was opened on
Jan 10. Such cheque can be paid.
IMPOSSIBLE DATE : If an impossible date is written (say Feb 29 in case of leap year, 31 Apr, 31
Jun, 31 Sep,Nov 31), the cheque would be paid on last day of month (Nov 30).
Top of Form
INCOMPLETE DATE: If date is not complete (say Jun 2010). It cannot be paid.
AMOUNT IN WORDS AND FIGURES DIFFERS (Sec 18):
Such cheque can be paid for amount written in words. Amount written in figures shall be
ignored.
If amount in words is written and in figures not given, it is incomplete cheque and cannot be
paid.
DIFFERENT HANDWRITINGS / INKS / SCRIPTS :A cheque drawn in different handwritings or in
different inks or different script would be paid.
FORGED CHEQUE: A forged cheque (where signatures of the drawer are forged) is not a
mandate of the drawer and in no circumstances it can be paid. If paid bank would be liable.
Top of Form
HOLDER (Sec 8): Holder is a person who is
[Type text] Page 21

(a) entitled to possession of the instrument

(b) entitled to receive or recover the due amount thereon.
Actual possession and consideration is not compulsory for a holder.
HOLDER IN DUE COURSE (Sec 9): It is a person who is
(a) entitled to possession of the instrument
(b) entitled to receive or recover the due amount thereon
(c) obtained the possession for consideration
(d) obtained the possession in good faith.
Payee or endorsee of a cheque is a holder in due course. But if the cheque is lost, he
becomes only a holder. Similarly, the payee of a gift cheque is only a holder and not a holder
in due course, as there is no consideration.
Holder or Holder in due course can
(a) complete an inchoate (incomplete) instrument,
(b) cross an uncrossed cheque,
(c) obtain a duplicate if original is lest and
(d) convert a bearer into order.
HOLDER ( Sec. 8 ) HOLDER IN DUE COURSE

(Sec.9 )
Consideration Not essential Essential
Actual Not essential Essential
Possession
Defective Title Will affect the instrument Will not affect the Instrument
RIGHTS OF HOLDER
a) Holder can obtain a duplicate of the lost Instrument (Section 45-A)
b) Holder can cross the cheque if not already crossed, convert a general crossing to a
special crossing, endorse and can negotiate If !tie negotiation is not restricted
c} Holder can sue in his own name In relation to the instrument
d} Holder can complete an Inchoate Instrument
e} Holder can give proper discharge to the person making the payment
RIGHTS OF HOLDER IN DUE COURSE
 Every prior party to a negotiable Instrument is liable thereon to a holder in due course
until the Instrument IS duly satisfied (Sec. 36).
 If a bill is drawn payable to the drawer's order In a fictitious name, the acceptor IS not
relieved from liability to any holder in due course, provided endorsement and the
drawer's signatures are in the same handwriting (Sec. 42).
 If a bill of exchange or promissory note IS negotiated to a holder in due course, the other
parties to the Instrument cannot escape liability on the ground that the delivery of the
instrument was conditional or for a special purpose only (Sec. 46)
[Type text] Page 22

INCHOATE INSTRUMENT: As per Section 20, it is incomplete instrument in which one or the
other particulars are not given (but it bears signatures of the drawer). It can be completed
by the Holder. These are, otherwise, valid instruments, but cannot be paid till completed. A
cheque date June 2012, is incomplete. It can be paid only when date is completed.
NEGOTIATION It means transfer of an instrument from one person to another to make the
transferee the holder thereof.
METHOD OF NEGOTIATION : BEARER-
Negotiation is completed by delivery only in case of bearer instruments (Sec 47).
ORDER: It is completed by endorsement followed by delivery by the same person (Sec 48) in
case of order instrument.
If endorser dies after endorsement but before delivery, the negotiation can be completed by
legal heirs, with fresh endorsement and then delivery.
ENDORSEMENT :As per Sec 15, endorsement means signing on the face or backside of an
instrument (or on a separate paper, called allonge) for the purpose of negotiation i.e.
transfer of cheque to next person. Person transferring the instrument is called endorser. He
can be drawer, payee or an existing endorsee. The person to whom it is transferred is called
an endorsee.
BEARER CHEQUES : On a bearer cheque endorsement is not required. If made, it will be

ignored, as a bearer is always a bearer (Sec 85-2).
U/s 35, liability of an endorser is similar to drawer of the cheque. If cheque is dishonoured,
the endorsee can recover the amount from the endorser or drawer.
TYPES OF ENDORSEMENT
BLANK ENDORSEMENT:
(Sec 16-1) : Signed without writing any instruction above the signature (as to whom to
pay).Such cheque becomes payable to bearer u/s 54.
Blank endorsement can be converted into full by writing name of a person, to whom to pay,
above the signatures.
ENDORSEMENT IN FULL : Where endorser writes the name of person to whom to pay above
signatures. Instruments becomes payable to endorsee. Such endorsement followed by an
endorsement in blank, makes the instrument payable to bearer.
RESTRICTED ENDORSEMENT (Sec 50):
Where endorser restricts further negotiation (pay to ….. only). In this case, the endorsee can
obtain payment but cannot endorse further.
FACULTAT1VE: Where an endorser waives the condition of notice of dishonour

SANS RECOURSE :
Where the endorser withdraws his liability by specifically writing so. (pay to X without my
liability). In this case, in case of dishonour, the endorsee cannot recover from the endorser.
FORGED :
[Type text] Page 23

When endorser's signatures are forged. Title does not pass to any person on the basis of
such endorsement and it remains with the payee or last endorsee. A person getting a
cheque after such endorsement, does not become holder as he gets no title to the cheque.
Paying bank is protected (u/s 85-1) on payment on the basis of forged endorsement if it is
regular.
ENDORSEMENT BY MINOR: Minor can endorse u/s 26. But he is not liable.
CROSSING OF CHEQUES
Crossing means putting two parallel lines across the face of a cheque or demand draft, with
or without words.
Parallel lines can be on any part or in any manner on the face, not necessarily transverse
lines.
BoE & PN : Crossing is applicable for cheques and demand drafts only. Promissory notes or
bill of exchange cannot be crossed.
WHO CAN CROSS :
Crossing can be done by drawer, holder payee or last endorsee or the bank (special crossing
by bank). A general crossing can also be converted into a special crossing by them.
DIRECTION: Crossing is direction of drawer to the paying bank that payment be made to the
payee through his bank account and not across the counter (i.e. in cash).
Payment to payee's bank, can be made in cash, through clearing or by way of transfer.
Top of Form
CROSSING TYPES: Crossing can be general crossing or special crossing.

GENERAL CROSSING : When two lines are put with or without words, it is general crossing
(Sec 123). Here lines are important, words are not important. (Cheque having the words
Mumbai within two lines, can be paid in Delhi or other place also).
SPECIAL CROSSING:When only name of the bank is written within the lines or without lines,
it is special crossing (Sec 124). In special crossing the words i.e. name of bank are important,
lines are not important.
As per Sec 126, specially crossed cheques can be paid to that bank only in whose favour it is
crossed. Cheque crossed in favour of 2 banks cannot be paid (Sec 127) unless one of them is
agent.
Two branches of a bank for this purpose, are only one bank and cheque can be paid to any
of these.
NOT NEGOTIABLE CROSSING - (Sec 130) : It does not restrict transferability (i.e. endorsement
is possible). But it takes away the important element of negotiation i.e. receipt of defect free
title by the transferee. This means that the transferee can not become holder in due course.
He is only a holder and not a holder in due course.
This crossing is direction to the collecting bank.
[Type text] Page 24

Paying bank has to pay such cheques in normal course, to get protection (Sec 128).
ACCOUNT PAYEE CROSSING: It is not defined and it is a banking practices. Such cheques
cannot be endorsed and these can be credited to account of the payee only.
CANCELLATION OF CROSSING: Crossing can be cancelled by drawer only under his full
signatures by writing the words crossing cancelled. It case of joint E/S account, this
instruction can be cancelled by any one, irrespective of who draw the cheque.
PROTECTION TO PAYING BANK: Paying bank gets protection on payment of crossed cheques
u/s 128 by ensuring that the payment is made in due course.
COLLECTION OF CHEQUE :Banks collect cheques as agents for their customers.
CONVERSION: In the process of collection, if they collect a cheque for a customer, of which
the customer is not true owner, it is called conversion. Conversion is an offence and
punishable.
PROTECTION AGAINST CONVERSION: U/s 131 for cheque and u/s 131A for demand draft,
banks gets protection against conversion, when they collect cheques subject to fulfillment of
the conditions that :
(a) cheques are collected for customers (as agents) in properly introduced accounts,
(b) cheques are crossed (generally or specially) before presentation to the paying bank and
(c) cheques are collected in good faith and without negligence.
Top of Form
PAYMENT OF CHEQUE
OBLIGATION OF BANKS: U/s 31 of NI Act, the banks are under statutory obligation to honour
cheques issued by the customer where:
(a) there are sufficient funds (in the same account on which cheque is drawn). If bank makes
payment by creating overdraft without customer consent, it is recoverable from the
customer, if customer has not objected to payment of cheque.
(b) funds are meant for payment of the cheque and
(c) there is proper demand to make the payment i.e. within business hours.
(d) signatures are as per record (if cheque is paid for signatures different from record, but
otherwise genuine, customer cannot ask for refund).
On payment in due course, bank will be discharged from obligation.
Top of Form
WHEN PAYMENT NOT TO BE MADE: Payment should not be made in case of:
(a) death, insolvency, insanity of customer OR insolvency of partner or firm OR liquidation of
company
(b) stop payment of cheque
(c) receipt of garnishee/attachment order
(d) post dated or mutilated or stale cheque.
(e) Insufficient balance
(f) Different signatures
[Type text] Page 25

(g) Material alteration

(h) Payment demanded by payee after business hours (payment to drawer after business
hours, can be made)
PAYMENT OF CHEQUES ISSUED BY AGENTS: Payment can be made in case of death of agent
(such as authorized signatory of a Company or Trust or Club or Society etc., agent appointed
by individual customers etc.) where cheque is not dated prior to date of authority given to
the agent and subsequent to date of death. (Example - Agent got authority on Jan 20.
Cheque signed and dated Jan 18, cannot be paid).
PAYMENT IN DUE COURSE :Banks get protection, if a payment is in due course. As per Sec 10,
a payment would be considered in due course if:
(a) Payment is as per apparent tenor of instrument.
(b) Payment is in good faith and without negligence
(c) Payment is to person in possession of instrument
(d) Payment under circumstances which do not afford a reasonable ground for believing that
he is not entitled to receive payment of the amount mentioned therein
(e) Payment must be made in money only.
PROTECTIONS TO BANKERS :85-1 : Paying banker is protected for payment of an endorsed

cheque if endorsement is regular endorsement (whether genuine or forged). Paying bank is
protected against forged endorsement but it should be regular.
85-2 :Payment to be made of a bearer cheque which is endorsed, by ignoring the
endorsement, as a bearer is always a bearer.
85-A: Protection to paying banker in case of Bank drafts, similar to a cheque u/s 85-1 above.
89 : Protection to paying bank for materially altered cheques, provided the alteration is not
visible even after careful examination of the cheque.
128: Protection for payment in due course of crossed cheques
131: Protection to collecting bank against conversion for crossed cheques subject to
compliance of certain conditions
131-A : Protection to collecting bank against conversion for crossed bank drafts.
DISHONOUR OF CHEQUE :If a cheque is dishonoured, the drawer is liable for legal action by
holder, u/s 138-147 of NI Act (wef 01.04.89) where:
1. Cheque is issued to discharge a liability (for gift cheque not liable).
2. Cheque presented within validity period (max restricted to 6 months/ 3 months from 1 st
April 2012)
3. Dishonour is due to insufficiency of funds or even for stop payment or closure of account.
a) The cheque should have been issued for discharge of lawful liability .Cheque should be returned with
the reason 'insufficient balance' but due to different judgments of Supreme Court reasons like Refer
to drawer, A/c closed, Exceeds arrangement, Payment stopped by drawer and effects not clear are
treated equal to insufficient balance.
[Type text] Page 26

b) The payee or holder in due course should give notice to drawer within 30 days of return of , cheque
with the reason 'insufficient balance' and demanding payment within 15 days of his receiving
information of dishonour.
c) The drawer can make payment within 15 days of the receipt of notice and only if he fails to do so
prosecution could take place.
d) The complaint is to be made within one month of the cause of action arising i.e, expiry of notice
period.
e) Summary Proceedings: Fine upto Rs, 5000 or imprisonment upto 1 year or both.
f) Regular Proceedings: Punishment is fine upto double the amount of cheque or imprisonment upto 2
years or both.
MATERIAL ALTERATION :An alteration that changes the basic direction of the drawer and is
not authenticated by him, is called material alteration which include:
1. Change in amount, name of payee or date
2. Mutilation of cheque
3. Cancellation of crossing or converting special crossing into general crossing.
4. Converting order into bearer.
Top of Form
WHAT IS NOT MATERIAL ALTERATION:

1. Completion of amount, name of payee or date by the holder.
2. Crossing of an uncrossed cheque
3. Cancellation of bearer or writing of order
PAYMENT OF MATERIALLY ALTERED CHEQUE:
Such payment cannot be made as per Section 87 of NI Act.
PROTECTION:
Bank gets protection u/s 89 where materially altered cheque is paid, if the alteration is not
visible even after careful examination of the cheque. (it is not compulsory to see the cheque
through ultra violet lamp).
LOCKER
RELATIONSHIP : The bank is lessor and customer is lessee.
TYPE OF ACCOUNT : Locker can be allotted in single name or in joint name (with joint
operations, either or survivor and former or survivor operations).
WAIT LIST: Where demand for locker is more than the availability, the banks to have wait list
for locker allotment.
Top of Form
CONDITION FOR DEPOSIT: Banks cannot keep deposit, as a pre-condition for allotment of
locker. But deposit equal to locker rent for 3 years and other charges (say breaking open
charges) can be taken.
[Type text] Page 27

PRECAUTION: Banks to ensure every day that all lockers operated during day time, are
locked.
NON-OPERATIONS OF LOCKERS: If locker is not operated for 1 year in case of High risk
customers (KYC definition) and 3 years in case of medium risk customer, notice to be sent for
operating the locker or surrender of locker. If no satisfactory reply, another notice for
breaking-open to be sent. If still no satisfactory reply, locker to be broken open in the
presence of 2 independent witnesses, one of which should be a bank officer.
Top of Form
IF KEY REPORTED LOST : In case of either or survivor joint lockers, if one locker holder
reports loss of key and the other comes to operate, only joint operation to be permitted.
LOCKER IS LEFT UNLOCKED: Bank to prepare inventory of articles in the presence of 2
independent witnesses, keep the articles in safe custody and inform the customer.
NOMINATION : The provisions are given in the nomination Section. If there is no nomination,
articles to be delivered on the basis of WILL to the executor. If there is no will, the articles
will be delivered to legal heirs on the basis of indemnity bond or if need be, on the basis of
letter of administration (succession certificate is not applicable).
Top of Form
SAFE DEPOSIT OF ARTICLES

1. The relationship is of bailee and bailor.
2. Bank has to take proper care of the articles.
NOMINATION : The provisions are given in the nomination Section. If there is no nomination,
articles to be delivered on the basis of WILL to the executor. If there is no will, the articles
will be delivered to legal heirs on the basis of indemnity bond or if need be, on the basis of
letter of administration (succession certificate is not applicable).
Lien is right of a creditor say bank, (which is given by the debtor), to retain the possession of
goods and securities, owned by the debtor till the loan has been paid.
Lien is not applicable on bank deposits such as FDR.
TYPES : There are 2 types of lien :
Particular Lien (u/s 170) available for a single loan (security can be used for a particular loan
only and not for other loans).
General Lien (u/s 171) available for a series of loans (security can be used for recovery of
other/all loans).
BANKER'S LIEN : Banker's lien is a general lien unless it is specifically created as a particular
lien. It is called implied pledge, due to which right of sale of goods and securities is available,
without court intervention.
WHERE AVAILABLE: Banker can exercise lien:
(a) where possession is given by borrower to secure the loan and possession is still with the
bank.
[Type text] Page 28

(b) loan is due/irregular and lawful (lien is available even for a time barred loan, where
limitation has expired).
(c) Reasonable period notice is to be given to the borrower. Sale of security without notice,
is illegal.
(d) the loan and security is in the same name and same capacity.
Example:
1. Loan in name of A and security in name of A
2. Loan in name of A and security in name of Guarantor who has given guarantee for A (but
after issue of notice to guarantor)
3. Loan in name of A and B or loan in name of a partnership firm in which A is partner and
security in name of A
WHERE NOT AVAILABLE : Lien is not available, where the goods or securities:
(a) are held inconsistent with the right, or
(b) held by bank in trust or
(c) held by bank as an agent, or
(d) held for a specific purpose, or
(e) owned by more than one persons, say loan in name of A and security in name of A & B or
security in name of ABC firm where A is a partner or
(f) held in safe custody or
(g) left in possession of the bank by mistake.
Top of Form
NEGATIVE LIEN : It is an undertaking given by the borrower (owner of assets) for not selling
assets or securities and for not creating any charge on these assets, without permission from
the creditor / bank.
If the borrower sells goods, the bank cannot file suit, as through negative lien, no legally
enforceable charge is created. It is of moral value only.
If lien is created by a company, it does not require registration of charge with RoC.
RIGHT OF SET-OFF :Set off is right of the bank to combine a loan account and a deposit
account, for settlement / adjustment of the loan account.
It is not defined in any Act.
Loan can be recovered by using right of set-off, if following conditions are satisfied:
1. Loan is due i.e. irregular (even time barred loan where limitation has expired can be
recovered).
2. Notice before recovery from deposit account
3. The deposit and loan should be in the same name and same capacity
4. Deposit of guarantor can be used for recovery of loan in the name of the borrower (but
after serving a recall notice on the guarantor).
5. On a term deposit which has not matured, right is available but it can be exercised only
when FDR matures.
[Type text] Page 29

6. Right can be exercised even where garnishee order or attachment order has been
received.
RIGHT OF LIEN, SET OFF & APPROPRIATION

PARTICULARS LIEN SET-OFF APPROPRIATION
Legal Statute Indian Contract Act Customs and Practice Indian Contract Act
(Sec 170,171) amongst bankers (Sec 59 50 and 61)
Meaning Right of creditor to Rights of the B;:Jnk ~o Method ][ crediting
retain possession of consolidate d:ffercf1f amount deposited
goods &. securities accounts ofsame by the customer to
until the debts have borrower to arrive at Its outstanding loan
been repaid the net sum due. in CC/Current (OD).
Banker Customer Creditor· Debtor Creditor - Debtor & Creditor - Debtor
Relationship Debtor- Creditor
Applicable on Goods & Securities Amount of claim Amount of claim
Applied to Alc In the same Alc In the same order Alc In the same
order same capacity same capacity order same capacity
Contingent No! applicable Not Applicable Not applicable
Debts
Quantum of Amount should be Amount should be Amount should be
amount specific specific. specific
Requirement of Required except in Required except in Not Applicable
legal notice case of death, case of death,
insolvency or Insolvency or receipt
receipt of a G.O. of a GO
Limitation No Limitation. Bank No limitation Bank No limitation Bank
can adjust lawful can adjust lawful time can adjust -lawful
time barred debts barred debts. time barred debts
Garnishee Banker's lien is a Bank should exercise Bk to exercise this
Order (GO) general lien is an this right for adjusting right for adjusting Its
implied pledge its own debts before own debts before
comp!yinq With GO complying With GO
Death of the Bank has automatic Bankhlas automatic Applicable
customer and Implied right and implied riqht
WHERE RIGHT IS AVAILABLE OR NOT
DEPOSIT LOAN RIGHT AVAILABLE OR NOT

IN THE NAME OF IN THE NAME OF
Sinqle person Jointly With others Available
Partner In a firm Partnership firm Available
Single name Same name Available
[Type text] Page 30

Proprietor Proprietorship firm Available

Joint - former I survivor Former Available
Joint account One of joint holders Not Available
Partnership firm One of partners Not Available
Trust Trustee Not Available
FD WHICH IS YET TO MATURE:

Right of set off is available but cannot be used before maturity. However, loan can be
recovered by issuing notice u/s 60 Indian Contract Act by using Right of Appropriation.
Top of Form
Garnishee Order is an attachment order of a court, issued u/s 60 of CPC 1908 (Order XXI and
Rule 46).
1. The order is issued on bank as Garnishee (garnishee means debtor of judgement debtor).
(Judgement debtor means the person declared debtor by a court).
2. It is issued in two stages (1st stage - order NISI and 2nd stage - order Absolute, which is a
payment order)
3. The order is applicable where relationship between bank and customer is that of Debtor &
Creditor (i.e. it is a deposit account and not a loan account or a locker account or a safe
deposit of articles account).
ACTION BY BANK ON RECIEPT OF Garnishee Order:
1. Stop payment, if balance is less than amount of order or amount is not mentioned.
2. Use right of set off, if some loan is due / irregular
ACCOUNTS WHERE APPLICABLE: SB, CA, RD/FD (matured and yet to mature, both), CC/OD
having credit balance.
WHERE NOT APPLICABLE: CC/OD with debit balance. Also not applicable on unused limit).
AMOUNT ON WHICH APPLICABLE: Amount available with the bank as Garnishee (i.e. deposit
account) at the time of receipt of order. Not applicable on amount received later on.
ATTACHMENT ORDER :Attachment Order is attachment order of Govt. authority for recovery
of Govt. dues. It is issued as per authority available under various Law including u/s 226 of
Income Tax Act 1961.
1. The order is issued on bank having deposit in the name of person who is liable to pay tax
(called assessee).
2. It is issued as a payment order.
3. The order is applicable where relationship between bank and customer is that of Debtor &
Creditor (i.e. it is a deposit account and not a loan account or a locker account or a safe
deposit of articles account).
ACTION BY BANK:
1. Stop payment, if balance is less than amount of order.
2. Use of right of set off, if some loan is due / irregular
[Type text] Page 31

ACCOUNTS WHERE APPLICABLE: SB, CA, RD/FD (matured and yet to mature, both), CC/OD
having credit balance.
WHERE NOT APPLICABLE: CC/OD with debit balance. Also not applicable on unused limit).
AMOUNT ON WHICH APPLICABLE: Amount available with the bank at the time of receipt of
order and also the amount received later on.
Nomination is available for
(a) all types of Deposit accounts - whether domestic or foreign currency,
(b) safe custody of article accounts in single name and
(c) all types of locker accounts.
Top of Form
LEGAL PROVISIONS:
Nomination provisions are as per Section 45-ZA&ZB of Banking Regulation Act, for deposits,
Sec 45-ZC&ZD for safe deposit of articles
and Sec ZE &ZF for locker accounts.
COMPULSORY NOMINATION: Nomination is compulsory for single name accounts. If
customer does not want nomination, he has to give in writing.
NAME OF NOMINEE: If customer wants name of nominee to be written on FDR or pass book,
banks to follow his instruction.
STATUS OF NOMINEE: A trustee for legal heirs.
OTHER IMPORTANT POINTS ABOUT NOMINATION:
1. Nomination can be for individual accounts only such as single name, joint name or
proprietorship accounts. It is not available for firms, companies, trusts, societies etc.
2.Who can be nominee: Only an individual can be a nominee. He can be Resident or Non-
resident, minor or even an insolvent person. (where nominee is a minor, the account holder
to disclose the name of person, who is to be obtain payment on behalf of the minor, in case
of customer's death)
3.Nomination can be made any time from opening of account to closure of account. It can
be cancelled and changed any time and any no. of times.
4. NO. OF NOMINEES: There can be one nominee in case of (a) a deposit account, (b) safe
deposit of article accounts, (c) locker accounts in single name or joint either or survivor
lockers.
But for joint operation locker account, each holder can have his own nominee. As per IBA,
max no. of nominees in joint lockers can be 2.
5. PAYMENT TO NOMINEE: On death of account holder bank to deal with only the nominee
and no one else (such as legal heirs) in any circumstances. However, in case of Court Orders,
paymet to be made as per court order.
If nominee does not come for 6 months for deposit accounts and 3 months, in other cases,
bank is to contact the nominee.
6. In case of FDR, if renewal is within same account, previous nomination continues.
[Type text] Page 32

7. JOINT ACCOUNTS - In case of joint deposit account and joint locker accounts nomination
to be made by all persons.
8. In case of jointly operated locker accounts, in case of death of any of locker holders, the
contents shall be delivered to the survivor locker holders and the nominee of the deceased
locker holder.
9. In case of jointly operated joint deposit accounts, the payment shall be made to survivor
and legal heirs of the deceased account holder. If all account holders die, the payment can
be made to nominee.
10. Nomination cannot be accepted in Joint safe deposit of article accounts.
11. Payment of FDR can be made to nominee. But he cannot give discharge for raising loan
against FDR.
KNOW YOUR CUSTOMER (KYC) :KYC guidelines have been issued by RBI u/s 35-A of B R Act.
In addition, the banks also have to comply with the provisions of Prevention of Money
Laundering Act 2002.
OBJECTIVE OF KYC: Preventing use of banks by criminals for money laundering purposes.
PRECAUTIONS: Banks to take precautions before opening and after opening of accounts.
1. Before opening the account, the banks are required to do proper verification through
introduction, proof of identity and proof of address of the customers.
2. Introduction can be taken from existing customer with 6 months' satisfactorily conducted
account or from persons known to the bank.
3. Documents for customer identity include passport, PAN card, Voter I-Card, driving license,
Identity card to bank's satisfaction, letter from recognized public authority.
4. Documents for proof of address include telephone bill, electricity bill (even in the name of
relative with whom living), bank a/c statement, letter from recognized public authority,
ration card, letter from employer.
5. Relaxation for small depositors: Simplified criteria of identification and introduction to be
followed where the balance shall not exceed Rs.50000 and total credit in a year does not
exceed Rs.1 lac. In these cases the certification of address and photograph by the introducer
is enough. However, if the amount of total credit exceed Rs.80000 or balance exceeds
Rs.40000, notice to be sent to the customer.
6. Monitoring of transactions : Transactions are to be monitored on the basis of customer
risk categorisation. The risk categories can be
(1) Low risk customers
(2) Medium risk customers
(3) High risk customers.
7. Risk review of customers : Risk review should be done periodically not less than once in 6
months. Change of risk category can be considered in not less than 5 years in case of low risk
customers and not less 2 years in case of medium / high risk customers.
8. Record of transactions: Banks to prepare a record of cash transactions of Rs.10 lac and
above.
[Type text] Page 33

9. Reporting of transactions : Banks to send report of transactions to Financial Intelligence

Unit - India.
Cash transaction report (CTR) covering cash transactions of above Rs.10 lac, to be sent on a
monthly basis, by 15th of the next month.
month. Individual transactions below Rs.50000 not to be
reported.
Suspicious transaction report (STR) to be submitted within 7 working days of occurrences in
case of suspicion about a chain of transactions of small amount.
10. Preservation of records: Banks to preserve records of these transactions for a period of
min 10 years from date of transaction. Record of documents to be kept for min 10 years
from date of termination of relationship.
11. Remittances in cash : Banks to issue TCs, DDs, MTs and TTs for Rs.50000 and above only
by debit to customers' account and not by accepting cash.
12. Principal Officer: Banks are to appoint a Sr. Mgmt. Officer, to be designated as Principal
Officer responsible for monitoring and reporting.
DOCUMENTATION
DOCUMENTS WITH 2 OR MORE DATES:
1. Such documents are valid.
2. Date of document will be the latest date on the document for the purpose of calculation
of due date or limitation or for filing charge with RoC.
(Example - Document bears two dates Jan 12 and Jan 14, 2010. Date of document is Jan 14,
2010)
Top of Form
DOCUMENTS WITH 2 OR MORE PLACES;

1. Such documents are valid.
2. Precaution: Stamp duty as applicable to these places must have been paid.
(Example - Documents is signed in Delhi and Mumbai. Stamp duty as applicable in Delhi and
in Maharashtra, should have been paid).
WHO IS TO SIGN THE DOCUMENTS:
1. Individual - Himself / his agent
2. Joint borrowers - All / their agent
3. Proprietorship firm - Proprietor / agent
4. Partnership firm - All partners jointly and severally
5. HUF - Karta. If coparceners are to be made personally liable, they are also to sign
6. Joints stock company - Person authorized by the resolution from Board of Directs
7. Trust / Club/ Societies - Trustee/persons authorized by their governing documents /
resolutions
[Type text] Page 34

STAMP DUTY RATES

1. Stamp duty is paid as per provisions of Indian Stamp Act 1899. The Act is not applicable in
J & K.
2. Duty rates are fixed by Central Govt. for 10 documents. Important among these are
Promissory note, bill of exchange, cheque, cash receipt, Letter of credit etc. Duty is uniform
at all places.
3. Duty rates are fixed by State Govt. for other 55 documents. Important among these are
power of attorney, mortgage deed, hypothecation agreement etc. Duty differs from State to
State in these cases.
4. Time for payment of duty - Duty should be paid before signatures OR at the time of
signature. If payment is after the signatures, the document is treated as unstamped.
5. Document signed outside India and to be used in India - Stamp duty to be paid within 3
months from date of entry of document in India. If it is negotiable instrument like bill of
exchange etc., duty to be paid before acceptance or before negotiation.
6. Effect of non payment of stamp duty - Suit cannot be filed on the basis of such document.
But it can be got validated before filing the suit.
7. How to validate documents which are unstamped or under-stamped - By paying difference
amount and fine (which is min Rs.5 and can be up to 10 times of difference amount) after
obtaining permission of State Govt. All documents including promissory note or bill of
exchange can be got validated in this manner.
8. Use of stamp papers and refund for non-use: Stamp paper once purchased can be used
any time. But if not to be used, refund can be claimed from Govt. within 6 months from
purchase (Sec 54).
9. Rates of stamp duty on certain important documents:
(a) Cash / money receipts- if amount exceeds Rs.5000 - Re.1.00 (no duty up to Rs.5000).
(b) Demand bill of exchange -Nil
(c) Usance bill of exchange - As per time and amount (called advalorem)
(Important note: In case of Usance Bill of exchange, duty has been remitted wef 1.8.89,
where the usance period is up to 90 days and bank is a party.
For usance export bills of exchange, no duty is payable, as per Central Govt. notification
dated July 08, 2004.)
(d) Cheque - Nil
(e) Demand promissory note:
-value not more than Rs.250 : 5 p
-value > Rs.250 but up to Rs.1000 : 10 p
-Value > Rs.1000: 15 p
(f) Usance promissory note - As per time and amount (called advalorem)
(g) Letter of credit 1.00
No stamp duty is payable on documents executed in demat format.
Top of Form
[Type text] Page 35

ASSET - LIABILITY MANAGEMENT IN BANKS

1. It has been implemented wef April 01, 1999.
2. What is ALM : ALM is the management of structure of balance sheet (liabilities and assets)
in such a way that the net earning from interest is maximised within the overall risk-
preference (present and future) of the institutions.
3. Residual maturity : It is the time period which a particular asset or liability will still take to
mature i.e. become due for payment (instalments, say in case of term loan).
4. Maturity buckets are different time intervals (10 for the time being, namely next day, 2-7
days, 8-14 days, 15-28, 29-90, 91-180, 181-365 days, 1-3 years, 3-5 and above 5 years), in
which value of an asset or liability is placed depending upon its residual maturity.
5. Mismatch position : When in a particular maturity bucket, the amount of maturing
liabilities or assets does not match, such position is called a mismatch position, which
creates liquidity surplus or liquidity crunch position and depending upon the interest rate
movement, such situation may turnout to be risky for the bank.
6. Ceiling on mismatch position : Mismatches for cash flows for next day to 15-28 days'
buckets to be kept to minimum (not to exceed 5% for next day, 10% for 2-7 days, 15% for 8-
14 days and 20% for 15-28 days, each of cash outflows for those buckets).
7. Role of ALCO : Asset-Liability Committee is the top most committee to oversee
implementation of ALM system, to be headed by CMD or ED. ALCO would consider product
pricing for both deposits and advances, the desired maturity profile of the incremental
assets and liabilities in addition to monitoring the risk levels of the bank. It will have to
articulate current interest rates view of the bank and base its decisions for future business
strategy on this view.
8. Benefits of ALM : It enables bank managements to take business decisions in a more
informed framework with an eye on the risks that bank is exposed to.
DEPOSIT PRODUCTS OF DENA BANK
The deposit products can be broadly classified into

1. Savings Bank Account
2. Current Account
3. Term/Time/Fixed Deposits
Top of Form
Savings Deposit Account can be opened for eligible person / persons and certain
organisation / agencies [as advised by RBI from time to time].These include
1.An Individual
2.An Individual with other person
3.An employee
4.A guardian on behalf of minor
[Type text] Page 36

5.Minor
6.HUF if not engaged in business
7.By institutions/ organisations as per the directives issued by RBI & IBA.
Cheque book facility is available for Savings Bank Account. The total number of
withdrawals /debits should not exceed 50 per half year .The debits include all types of
cheques , transfers and cash or in any other manner. In case the number of debits exceed
the limit , then incidental / service charges will be levied .
For SB accounts of individuals 50 cheque leaves will be free in a year.
The SB account will earn 4.00% interest .The interest will be allowed on daily product basis .
Interest will be calculated for six months period from March to August and September to
February and will be credited to the account on or before 30th September and 31st March
every half year.
Top of Form
WHO IS A CUSTOMER ?
A customer for the purpose of this policy on KYC/AML is defined as :
(i) a person or an entity that maintains an account and/or has a business relationship with
the Bank
(ii) one on whose behalf the account is maintained (i.e. The beneficial owner)
(iii) beneficiaries of transactions conducted by professional intermediaries, such as chartered
accountants, solicitors, stock brokers etc. Permitted under the law, and
(iv) any person or entity connected with w financial transaction which can pose significant
reputational or other risks to the Bank.
FIRST DEPOSIT IN THE ACCOUNT:

It can be cash or cheque. At times banks insist on first deposit as cash, due to practice only.
INTRODUCTION: Introduction is not compulsory now. It can be given by
(a) an existing customer with 6 months satisfactory conducted account.
(b) a person known to the bank.
LIABILITY OF INTRODUCER: Introducer is not liable for the fraud committed or any
irregularity by the customer. His obligation is to identify the customer, introduced by him.
BANKER-CUSTOMER RELATIONSHIP Customers undertake different types of transactions
with the bank, where the relationship is guided by the relevant Law.
BANKER CUSTOMER RELATIONSHIPS

Sl.no. Type of transaction Bank Customer
1 Deposit accounts, cc(with credit balance) Debtor Creditor
2 Od, cc, loan a/c (with debit balance) Creditor Debtor
3 Collection of cheque Agent Principal
4 Sale or purchase of securities Agent Principal
5 Issuing/purchasing of draft by purchaser Debtor Creditor
[Type text] Page 37

6 Payee of drafts at paying branch Trustee Beneficiary

7 Mail transfers, telegraphic transfers Agent Principal
8 Complying with standing instructions Agent Principal
9 Providing various services to non a/c holders Agent Principal
10 Cheques deposited pending instructions for Trustee Beneficiary
disposal thereof
11 Safe custody of articles Bailee Bailor
12 Leasing of locker Lessor, landlord, Lessee,
licensor tenant,
licensee
13 Mortgage of immovable property Mortgagee Mortgagor
14 Pledge of securities/shares Pledgee Pledgor
15 Hypothecation of securities Hypothecate Hypothecator
16 Sale/purchase of shares, etc. Agent Principal
17 Maintaining currency chest(rbi’s property) Agent Principal
18 A wrong credit given by the Bank where the Beneficiary Trustee
amount has not so far been recovered
BANK's OBLIGATIONS: Bank has 2 types of obligations towards the customer which include:
(a) obligation to make payment of cheque issued by customer (Sec 31 of NI Act).
(b) obligation to maintain secrecy of customer account (even when it is closed) due to
implied contract and also u/s 13 of Banking Companies (Acquisition and Transfer of
Undertakings) Act 1970 / 1980.
DUTIES OF BANK
(a) Duty of Secrecy: Recognized in Sec 13 of Banking Co's. (Acquisitions & Transfer of
Undertakings) Act; 1970. Banks to maintain secrecy as per Implied Contract.
(b) Duty to Honour Cheque Sec 31 of NI Act
(c) Duty to Supply Periodical Statement of Account
(d) Duty to Collect Payment
RIGHTS OF BANK
(a) Right of General Lien, Set-Off, Appropriation.
(b) Right to act according to the mandate given by the customer.
Under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002
banks can exercise the right of private sale.
DISCLOSURE OF INFORMATION:
Customer information, if disclosed and customer suffers loss, bank is liable.
Information can be disclosed in following circumstances:
(a) with consent of customer (example customer requests for writing name of nominee on
FDR. Bank shall comply)
(b) in public interest and in the interest of the bank
[Type text] Page 38

(c) practice between banks (i.e. exchange of customer information which should be general
and not specific and should be provided with disclaimer clause)
(d) provisions of law.
DISCLOSURE UNDER PROVISIONS OF LAW:
(1) Banker's Book Evidence Act 1891 : Court may order inspection / take copies of entries in
bank's books.
U/s 4, a certified copy of an entry in a banker's book is received as prima facie evidence.
(2) Code of Civil Procedure (CPC): Civil court can issue summon to bank to produce
documents.
(3) Criminal Procedure Code 1973: Court may, by warrant, authorise a police official to
conduct search and take possession of stolen property, counterfeit currency notes, forged
documents (cheques). U/s 102, a Police Officer can seize a stolen property (including money
lying in bank a/c).
(4) Companies Act 1956 : U/s 235/237, Central Govt. may authorise an Inspector to call for
any information, books, documents, relevant to his investigation in case of a company.
(5) Income Tax Act 1961 : U/s 131 of Income Tax Act, bank officer can be examined on oath
and can be told to produce books of account and other documents concerning the
transactions of a customer.
Further, u/s 133 providing (general information) enquiries can be made for cash transactions
of Rs.1 lac and above
TERMINATION OF RELATIONSHIP
The relationship terminates :
(a) when the customer closes the account after giving suitable notice wherever required
(b) when bank closes the account after due notice of reasonable period, which is compulsory
and failing which, the banker may be held accountable for damage, if any, due to dishonour
of cheques;
(c) with knowledge of the death, insanity and insolvency of the customer
(d) on receipt of garnishee order and attachment order, where balance in the account is less
than amount of order.
MINOR's ACCOUNT
In India, in all cases (including court appointed guardian), minor is a person with less than 18
years of age.
As per Sec 11 Indian Contract Act, a minor is not competent to contract. Suit cannot be filed
on the basis of a contract with a minor as it is illegal contract from the very beginning (called
void ab initio).
PROPERTY OF MINOR : His guardian has the authority to deal with his property (including
bank account), for minor's benefit.
TYPE OF GUARDIANS :
Natural guardian, OR
Testamentary guardian (appointed by will of the father/mother) OR
Legal guardian (appointed by the court).
[Type text] Page 39

Top of Form
GUARDIAN IN CASE OF HINDU MINOR:

1. For Son/unmarried daughter: Father and after his death OR if father changes religion,
then mother.
2. For Married daughter : Husband, if major. If husband is minor or has died, father in
law and after his death mother in law
MINOR's STATUS IN DIFFERENT TRANSACTIONS
1. Partnership: Minor cannot become partner but can be admitted for benefits of
partnership. On majority if he becomes a partner, his liability begins from the date when he
was originally admitted for benefits (i.e. when he was minor).
2. Nomination: He can become nominee but cannot nominate. On his behalf, his guardian
can nominate in guardian- operated accounts. When minor is nominated, the account
holder is to name a person, who is to obtain payment, on behalf of the minor.
3. Agent - He cannot appoint agent, but he can be appointed agent by some other person.
The principal will remain liable for actions of minor as agent.
4. Loan to minor: Minor is not personally liable. The guarantor is also not liable for such loan.
5. Ratification by minor : Minor cannot ratify (confirm) the contracts entered during minority
when becomes major. (on becoming major if he agrees to pay a loan raised by him when he
was a minor and later on refuses to pay, he is not liable).
6. Section 26 of NI Act: Minor can draw, endorse, negotiate and give discharge on getting
payment from bank but without any personal liability.
BANK ACCOUNTS OF MINOR

Minor can have two kinds of bank accounts i.e. self operated and guardian operated.
SELF OPERATED ACCOUNT: his age should be at least 10 years and he should be able to sign.
1. If account is in single name, no nomination, no power of attorney, no mandate and no
agent can be appointed.
2. In case of death of minor, the balance payable to his legal heirs as a claim case.
3. In joint account with another minor of same family, only joint operation to be allowed. No
either/survivor OR former/survivor operation to be allowed. In case of death of one of them,
balance is payable to survivor and legal heirs of deceased minor. In case of death of both of
them, the balance is payable to legal heirs of both of them jointly.
4. If joint account with his guardian, the guardian can make nomination.
5. In joint account with guardian, if guardian dies, payment to minor and legal heir of
guardian. If minor dies, guardian to withdraw the money and account closed.
UNDER GUARDIANSHIP ACCOUNTS:
1. During minority account to be operated by guardian. Guardian can make nomination also.
2. If guardian dies, next guardian to operate the account and if minor dies, the balance to be
withdrawn by guardian and account to be closed.
[Type text] Page 40

3. On attaining majority account to be operated by the account holder (who has become
major) and not by the guardian. No cheque signed by the guardian to be paid, irrespective of
date.
ACCOUNT BY MOTHER :
During life time of father, mother can open the account without consent of father, as per
Supreme Court judgement. Father not to intervene.
NATURAL GUARDIANS OF A MINOR

a) Hindu Father and after the death of Father, the Mother of minor
b) Married Hindu Girl Husband
c) Widow Hindu Girl Guardian of the husband.
d) Minor with Step Father Mother and after her father
e) Minor with Step Mother Father and after him mother
f) Muslim Father and after him executor of fathers 'Will' except
mother and after him fathers father.
Top of Form
Loan against FD:

No loan in case of self-operated account of minor.
Premature payment can be made to minor.
In guardian operated account, loan can be for benefit of minor.
JOINT STOCK COMPANY ACCOUNT

Companies are regulated by Companies Act 1956.
1. Company is a legal person (without physical presence), created through process of
incorporation for which RoC (Registrar of Companies) issues Certificate of Incorporation.
2. Shareholders are the owners of the company.
3. Board of directors - BoD, (representing the shareholders) have the responsibility of
management.
TYPES OF COMPANIES :
1. Private Company : It is a company whose Articles of Association restrict (a) making of
public issue (b) transfer of shares (c) no. of members
2. Public Company : It is a company which is not a private company.
3. Govt. company : It is a company, whose at least 51% share holding is held by Govt.
PARTNERSHIP PVT LTD PUBLIC LTD
MEMBERS MIN TWO TWO SEVEN
[Type text] Page 41

MEMBERS MAX 10 BANKING 200 NO LIMIT

100 OTHERS
DIRECTORS N. A. MIN. 2 MIN. 3
MAX NO LIMIT MAX NO LIMIT
COMPARISON OF LLP, PARTNERSHIP FIRM AND A COMPANY:

Features Company Partnership firm LLP
Registration Compulsory Not compulsory. Compulsory registration
registration required Unregistered required with the roc
with the roc. partnership firm will
Certificate of not have the ability
incorporation is to sue.
conclusive evidence.
Name Name of a public No guidelines. Name to end with “llp””
company to end with limited liability partnership”
the word “limited” and
a private company
with the words
“private limited”
Capital contribution Private company Not specified Not specified
should have a
minimum paid up
capital of Rs. 1 lakh
and Rs.5 lakhs for a
public company
Legal entity status Is a separate legal Not a separate legal Is a separate legal entity
entity entity
Liability Limited to the extent Unlimited, can Limited to the extent of the
of unpaid capital. extend to the contribution to the llp.
personal assets of
the partners
No. Of shareholders Minimum of 2. In a 2- 100 partners Minimum of 2. No maximum.
/ partners private company
maximum 15 Directors,
maximum of 50
shareholders
Foreign nationals as Foreign nationals can Foreign nationals Foreign nationals can be
shareholder / be shareholders. cannot form partners.
partner partnership firm.
Taxability The income is taxed at The income is taxed Not yet notified.
[Type text] Page 42

30% + surcharge+cess at 30% +

surcharge+cess
Meetings Quarterly board of Not required Not required.
directors meeting,
annual shareholding
meeting is mandatory
Annual return Annual accounts and No returns to be Annual statement of accounts
annual return to be filed with the and solvency & annual return
filed with roc registrar of firms has to be filed with roc
Audit Compulsory, Compulsory Required, if the contribution is
irrespective of share above Rs.25 lakhs or if annual
capital and turnover turnover is above Rs. 40 lakhs.
How do the bankers High creditworthiness, Creditworthiness Perception is higher compared
view due to stringent depends on goodwill to that of a partnership but
compliances and and credit lesser than a company.
disclosures required worthiness of the
partners
Dissolution Very procedural. By agreement of the Less procedural compared to
Voluntary or by order partners, insolvency company. Voluntary or by order
of national company or by court order of national company law
law tribunal tribunal
Whistle blowing No such provision No such provision Protection provided to

employees and partners who
provide useful information
during the investigation
process.
MEMBERS/SHAREHOLDERS AND DIRECTORS:

1. Private Company: Min 2 members and max 200.
Min 2 directors and max. no restriction.
2. Public Company: Min 7 members and max no limit.
Min 3 directors and max. no restriction. But if the no. of directors is more than 15, Central
Govt. permission required.
3. A particular person cannot have >20 directorship concurrently (Sec 275).
DEALING WITH A COMPANY:
1. Banks deal with companies through Authorised person/s given authority by Board of
Directors through resolution passed in a meeting.
2. For this purpose, 5 important documents are obtained which are:
(a) Memorandum of Association-MoA (i.e. Charter of Company or document of outdoor
management) prepared by Shareholders.
[Type text] Page 43

(b) Articles of Association-AoA (i.e. internal rules of the company) prepared by shareholders.
(c) Certificate of incorporation-CoI (Birth certificate of company) issued by Registrar of
Companies.
(d) Certificate of commencement of business CCB (required by Public Companies only and
not by private companies) issued by Registrar of Companies.
(e) Resolution passed by Board of Directors in a meeting (Section 292), which authorises its
official to deal with the banks.
BORROWING POWERS:
1. Company's borrowing powers arise from Memorandum of Association. Hence
shareholders have unlimited borrowing powers.
2. Board's borrowing powers are stated in the Articles of Association prepared by
shareholders. Where it is not mentioned, the powers are equal to paid up capital and
reserves of the Company.
3. Where Board wants to borrow beyond powers mentioned in AoA, it has to seek
authorization from shareholders (u/s Sec 293-d-i) by way of resolution in annual general
meeting.
4. Co. can raise loans for activities stated in object clause of MoA. Any borrowing outside
objects, is ultra-vires. Loan for such activity is not recoverable from the company.
BANK ACCOUNTS OF COMPANIES
1. To open bank account, MoA, AoA, Certificate of incorporation (CoI), Certificate of
commencement of business (CCB) (only for public company), Board Resolution are required.
2. No introduction is required as CoI is enough introduction.
3. Account opening Form (AOF) signing and account operation is by Authorised persons (AP),
who is to provide photographs as per KYC guidelines.
4. On death of AP, cheques dated prior to death, to be paid.
5. Authorised person cannot appoint agent.
6. Stop payment can be made by AP and payment of a stopped cheque can also be allowed
by any AP.
Top of Form
PARTNERSHIP FIRMS
Partnerships are regulated by Indian Partnership Act 1932.
1. Partnership is a contract between 2 or more persons, to share profits from business to be
conducted by all or any of them, for all (Sec 4). This agreement can be in writing (called
Partnership Deed) or an oral agreement.
2. Partnership is not a separate legal entity and the collective name of partners is called firm.
Hence 2 firms having all common partners, are one firm.
NO. OF PARTNERS:
[Type text] Page 44

3. As per Sec 11, Companies Act 1956, maximum no. of partners can be 10 for banking
business and 20, for other business. No. of partners beyond this, makes the firm, an illegal
association and firm is dissolved.
WHO CAN BE AND WHO CANNOT BE PARTNERS?
4. Only a person competent to contract, can become a partner. Hence, minor, insolvent and
insane cannot become partner.
5. HUF cannot become partner as per Supreme Court judgement, as HUF cannot be created
through an agreement and HUF cannot make itself liable for actions of 3rd persons.
6. A company and a firm can become partner in another firm. If a firm becomes partner in
another firm, the no. of partners in both the firms should not be more than 10 or 20.
AUTHORITY OF PARTNERS:
7. Partners are principals & agents of each other. Authority of partners is called implied
authority. All actions of a partner in ordinary course of business are actions of all partners
for which all are liable.
8. There are restriction on use of implied authority by a partner u/s 19. All partners have to
join in case of:
(a) opening of bank account,
(b) Sale, purchase, mortgage, lease of firm's immovable property,
(c) Contracting liability (such as giving guarantee unless giving guarantee is the business of
the firm)
(d) Appointment of an agent (i.e. giving power of attorney or mandate to operate the
account)
(e) filing or withdrawing a suit or compromising a claim or referring a matter for arbitration.
Top of Form
STATUS OF MINOR IN A FIRM

9. A minor can be admitted for sharing the benefits of the firm. He has no personal liability.
On attaining majority, minor gets 6 months (from date of majority or date of his knowledge
about his admission for benefits, whichever is later), to decide, to be a partner. If he chooses
to be a partner, his liability begins from date of his admission for benefits i.e. when he was
minor.
DISSOLUTION OF FIRM
10. With death, insolvency or insanity or retirement of a partner, the partnership firm gets
dissolved.
11. Assets of the firm are first used to meet the liability of the firm. Surplus if any, can be
distributed and used to meet the personal liability of the partners. Assets of the partners are
first used to meet the liability of the partner. Surplus if any, can be used to meet the liability
of the firm.
REGISTRATION:
[Type text] Page 45

Registration of a firm with Registrar of Firms is not compulsory (Sec 69). But a registered firm
has the advantage that it can file suit for recovery of its debts. An unregistered firm cannot
do so. But banks can file suit on both type of firms.
BANK ACCOUNT:
1. To open bank account, copy of p/ship deed or p/ship letter required.
2. All partners including sleeping or dormant, are to sign AOF. (Minor not to sign)
3. Operations of account shall be by all partners jointly. But the partners can give authority
to one or more partners or agent to operate the account.
4. Any partner can stop payment of operations or stop payment of cheque. Restoration of
operations is possible with consent of all partners only. Payment of cheque (which is
stopped from payment) can be allowed by any partner authorised to operate the bank
account.
5. Cheque signed by the agent appointed by all partners and dated till date of agent's death,
would be paid, if agent dies.
6. On death, insolvency, insanity of a partner, operations are stopped. In that case, cheques
drawn by any partner or agent, shall not be paid, irrespective of date of cheque.
7. If it is loan account, recall notice will be sent to surviving partners and legal heirs of the
deceased partner for adjustment of account. Bank can also decide to continue the loan by
sanction of loan in favour of remaining partners.
8. If there is credit balance and the surviving partners want to close down the business of
the firm and need bank account for that purpose, operations on the basis of fresh mandate
from them can be allowed.
Top of Form
JOINT ACCOUNTS
1. These are opened to facilitate operations and are governed u/s 45 of Indian Contract Act
1872 (Devolution of Joint Rights).
2. The balance in these account is joint property of the account holders irrespective of style
of operations and can be disposed off as per instructions of joint account holders only.
3. No. of account holders can be at discretion of banks.
4. Operations can be
(a) joint operations (if nothing is stated) or
(b) either or survivor and
(c) former or survivor (as per mandate given by all).
5. Garnishee order and right of set off is not applicable on a joint account, if the order is
name of a single person. But attachment order is applicable on pro-rata basis.
Top of Form
Names can be added, deleted or substituted any time and on any no. of times subject to the
condition that at least one of the original account holders, should continuously remain
account holder from opening of account till its closure.
[Type text] Page 46

(X and Y want to add name of A and B. It can be done. Later on all the four wants to delete
name of X and Y both, it cannot be allowed).
[Type text] Page 47

[Type text] Page 48

DOCUMENTS FOR CLAIMS WITH PRODUCTION OF LEGAL REPRESENTATION

Succession Certificate or Probate or Letter of administration from a competent court
Settlement of claims in HUF Accounts – Death of Karta In the event of death of a Karta, HUF
account may be settled as under : a) Obtaining affidavit cum indemnity from surviving
members and legal heirs with two guarantors confirming their acceptance to one of the
members as a new karta. Banks shall allow the new Karta to continue to operate the existing
account on the basis of such documents, in HUF accounts. b) Similar procedure to be
followed in cases where account is to be closed and balance in the account to be paid to the
new Karta.
SOME CLARIFICATIONS REGARDING PROVISIONS IN NOMINATION RULES (i) Nomination

facility is intended only for individuals including a sole proprietary concern. (ii) There cannot
be more than one nominee in respect of single / joint deposit account. (iii) The Bank shall
allow variation/cancellation of a subsisting nomination by all the surviving depositor(s)
acting together. This is also applicable to deposits having operating instructions "Either or
Survivor". While making nominations, cancellation or change thereof, it is required to be
witnessed. (iv) In the case of a joint deposit account the nominee's right arises only after the
death of all the depositors.
SETTLEMENT OF CLAIMS IN RESPECT OF MISSING PERSONS
[Type text] Page 49

The settlement of claims in respect of missing persons would be governed by the provisions
of Section 107 / 108 of the Indian Evidence Act, 1872. Section 107 deals with presumption of
continuance and Section 108 deals with presumption of death. As per the provisions of
Section 108 of the Indian Evidence Act, presumption of death can be raised only after a lapse
of seven years from the date of his/her being reported missing. As such, the nominee / legal
heirs have to raise an express presumption of death of the subscriber under Section 107/108
of the Indian Evidence Act before a competent court. If the court presumes that he/she is
dead, then the claim in respect of a missing person can be settled on the basis of the same.
Considering the legal opinion and taking into account the facts and circumstances of each
case, Bank will settle the claim in respect of missing persons on the basis of each case. In
addition to the documents required under the Death Claim Policy as per threshold limits
of claim, Claimant/s will submit FIR and the non-traceable report issued by Police
Authorities and letter of indemnity.
TIME NORMS FOR SETTLEMENT OF CLAIMS:

Bank will settle the claim in respect of deceased depositor with nomination/survivor clause
within a period not exceeding 15 days from the date on which the requisite documents &
prescribed application form have been submitted to the Branch in full and identity of the
applicant has been established. In case of a/cs without nomination/survivor clause, the
claim would be settled within 1 month from the date on which the requisite documents and
prescribed application form have been submitted to the Branch in full and identity of the
applicant has been established.
TRUST ACCOUNT
1. Individual Trust is regulated by the Trust Deed.
2. Trustee can be a single trustee or more than one trustees.
3. Authority to open the bank account and operate the bank account, to be used by the
Trustee/s, as per provisions of Trust Deed.
4. Trustee/s cannot delegate the powers given to them i.e. they cannot appoint an agent or
give mandate.
5. If a trustee dies, account operations will continue by other authorised or next authorised
trustee. Cheques signed by deceased trustee but dated up to date of his death, shall be paid.
6. Loan can be allowed to a trust for the objective of trust, only if the Trust Deed specifically
provides for such loans.
Top of Form
HUF ACCOUNTS
1. Hindu Undivided Family (HUF) is not defined. It is a practice under Hindu Succession Act.
[Type text] Page 50

2. HUF deals with joint business owned by members of a family called co-parceners (each
having equal share). They have a common ancestor.
3. A person becomes coparcener due to birth or adoption by the family. The senior most
coparcener is called Karta or Manager. Female can also become Karta.
4. If minor is the senior most coparcener, he becomes Karta and his functions are discharged
by his/her guardian.
5. In case of death of Karta, next senior most becomes Karta.
6. If Karta goes abroad or on a pilgrimage, he continues to be Karta, unless he relinquishes
his right of Karta.
Top of Form
AUTHORITY OF KARTA: Karta can:

1. Conduct the HUF business without intervention of the coparceners.
2. Raise loan for HUF business and create charge on HUF assets to secure the HUF loan.
3. Liability of Karta for such loan is personal liability also but the coparcerns are not
personally liable. Only their share in the HUF business is liable.
4. Appoint agent for HUF business.
BANK ACCOUNT:
1. Account can be opened on the basis of HUF declaration letter signed by all major
coparceners.
2. AoF can be signed by Karta and operations can be by Karta or agent appointed by Karta.
3. Stop payment by Karta alone and not by Coparceners.
4. In case of death of Coparcener, operations will continue. In case of death of Karta,
operations will be by next Karta. Cheque signed by deceased Karta, can be paid, with
consent of next Karta.
Top of Form
BLIND OR ILLITRATE PERSONS

Banking facilities as available to other customers are also available to such persons and
banks cannot make discrimination. However, banks can take suitable precautions.
Top of Form
INOPERATIVE ACCOUNTS
1. The savings /current account to be treated as inoperative / dormant if there are no
customer generated transactions for over a period of two years.
2. Banks to make an annual review of accounts in which there are no operations for more
than one year.
3. If on an enquiry with the customer, the reply given by the account holder is satisfactory,
banks can continue classifying the same as an operative account for one more year
4. For classifying an account as 'inoperative', debit as well as credit transactions induced at
the instance of customers as well as third party should be considered. If bank is crediting
[Type text] Page 51

interest on FD as per customer instructions to a saving bank or current account, it will be

treated as customer induced transaction.
5. Interest: Interest on savings bank accounts should be credited on regular basis whether
the account is operative or not. If a Fixed Deposit Receipt matures and proceeds are unpaid,
the amount left unclaimed with the bank will attract savings bank rate of interest.
Top of Form
UNCLAIMED DEPOSITS : Except for drafts, cash orders, RTC/Gift cheques all other accounts
in in-operative (others) category remaining in-operative for period of 10 years or more, are
to be transferred to In-operative (10 years and over) on 1st day of December each year.
Pursuant to the amendment of the Banking Regulation Act, 1949, section 26A has
been inserted in that Act, empowering Reserve Bank to establish The Depositor
Education and Awareness Fund (the Fund). Under the provisions of this section
the amount to the credit of any account in India with any bank which has not been
operated upon for a period of ten years or any deposit or any amount remaining
unclaimed for more than ten years shall be credited to the Fund, within a period of
three months from the expiry of the said period of ten years. The Fund shall be
utilized for promotion of depositors’ interest and for such other purposes which may
be necessary for the promotion of depositors’ interests as specified by RBI from time
to time. The depositor would, however, be entitled to claim from the bank her deposit
or any other unclaimed amount or operate her account after the expiry of ten years,
even after such amount has been transferred to the Fund. The bank would be liable
to pay the amount to the depositor/claimant and claim refund of such amount from
the Fund.
DEPOSIT INSURANCE
1. Deposit Insurance is compulsory for all banks in India (except Primary agricultural
societies).
2. Each depositor in a bank is insured to max extent of Rs.1 lac for principal and interest held
in same right same capacity (account of A& B are separate from account of B & A) on date of
liquidation/cancellation of bank's licence or date of amalgamation /merger / reconstruction.
3.Separate insurance cover up to Rs.1 lac each is available for separate banks.
4. Premium - 10P per Rs.100, per annum. Payable 5P on half-yearly basis in advance within 2
months of beginning of the half year.
5. Balance for premium payment, to be the balance on the last day of the previous half year
(e.g. for Apr-Oct HY, balance would be as on last day of March).
6.Banks to submit return on DI-01 while paying the premium.
PUBLIC PROVIDENT FUND (1968)

1. It is operated by SBI/selected banks and post offices.
2. Account can be opened by Individuals (no joint account - HUF, Trust etc. not allowed since
13.3.05).
[Type text] Page 52

3.Minimum contribution: Rs.500 and maximum Rs.1,50,000 p.a. The investments can be
made in multiples of Rs. 5, either as a whole sum, or in installments (not exceeding 12 in a
year, though more than one deposit can be made in a month).
4. Period: Minimum tenure15 years. It can be extended in blocks of 5 years each for any
number of blocks in blocks of 5 years each for any number of blocks.
5. Interest and deposit qualify for income tax rebates.
6.Interest on the minimum balance between 5th and last day of the month.
7. Withdrawal after 6th year allowed subject to max 50% of the balance at the end of 4 th
preceding financial year.
8. Loan : Allowed after 3rd year of opening of account upto 5th financial year .
9. Nomination in favour of one or more persons allowed.
PENSION PAYMENTS
1. The banks are making payment of pension to the pensioners on the authority letter or
pension payment order (PPO) or relative papers received by their branches from the
treasury through the link branch.
2. Type of account : Normally single named account. Joint account with spouse (having
authorization for family pension in PPO) could be opened including in E/S or F/S operation.
3. Credit of account : Account to be credited 3-4 days before close of the month (to be paid
in advance for the following month). However, for March, it is to be credited on 1st working
day of April.
4. PoA: Pension account is not to be operated by an attorney.
5. Income tax is to be deducted at source from the pension payment and deposited in
Govt.'s account, as per Income Tax Rules.
6. Life certificate will be obtained from the pensioner once a year in the month of
November.
7. Non-employment certificate: To be submitted in Nov each year.
8. Commutation: It can be done within one year of retirement. Commuted portion is
restored after 15 years from date of payment of commuted amount.
SENIOR CITIZEN'S SAVING SCHEME 2004

1. It is operated through those banks and Post Offices through which PPF is operated.
2. Persons of 60 years and above and in case of VRS persons of 55 years and above are
eligible.
3. Joint account with spouse is allowed. Nomination facility available.
4. Maximum amount of deposit - Rs.15 lac
5. Tenor is 5 years that can be extended by 3 years.
6. RoI is on simple basis, but payment is on quarterly basis. Intt. is taxable. TDS provisions
applicable.
7. No loan is allowed on the collateral security of the deposit.
8. Premature closure with penalty after one year allowed.
9. Inter-deposit office transfers are permitted.
[Type text] Page 53

10. In case of death, pre-mature payment can be made to legal heirs at SB rate from date of
death to date of payment.
Top of Form
OFFICIAL LANGUAGE
1. Public Sector Banks follow Official Language Act 1963 and Official Language Rules 1976
while using Hindi as official language.
2. Progress of use of Hindi is monitored by RBI (DBOD)
3. States/UTs are classified into 3 categories for the purpose of Official Language Policy
Region-A : HP, Haryana, Rajasthan, MP, UP, Bihar, Uttarakhand, Jharkhand, Chhatisgarh and
UT of Delhi, Andaman/Nicobar.
Region-B : Maharashtra, Gujarat, Punjab and UT Chandigarh
Region-C : All other States and UTs.
4. Official language implementation committee : At HQs and all branches. Committee to
meet once in a quarter to review.
5.Hindi divas - To be observed on Sept 14.
6. Target for correspondence in Hindi: (by A Region - 100% for A and B and 65% for C. By B
Region - 90% for A and B and 55% for C. By C Region - 55% each in A, B and C Region).
Reply : 100%
CASH RESERVE RATIO

1. Objective & purpose: It is a quantitative tool to regulate money supply and lendable funds
of banks. Thus to keep the inflation under control.
2. Applicable Act : Sec 42 (1) RBI Act 1934
3. Min & Max range of CRR : At RBI discretion
4. Maintained as: Cash balance with RBI
5. Maintain on the basis of : As % of NDTL at fortnightly average basis.
6. Min daily balance should not be less than 70% of fortnightly average balance.
7. Interest: Nil wef 31.3.07
8. Penalty : For shortfall below 70% of average on a particular day,3% above bank rate
and 5% above bank rate for default on next day onwards. For default in average CRR, as per
Sec 42(3) of RBI Act
9. Return to RBI : Form A (fortnightly)
10. At present CRR is : 4.00% (see RBI website www.rbi.org.in for latest updation)
STATUTORY LIQUIDITY RATIO
1. Objective & purpose: A quantitative tool to ensure that banks have liquid funds / assets to
meet urgent liquidity needs.
2. Applicable Act : Sec 24 (2-a) Banking Regulation Act 1949
3. Min & Max range of SLR : Min RBI discretion and max 40%
4. At present SLR is : 21.5% (see RBI website www.rbi.org.in for latest updation)
[Type text] Page 54

5. Maintained in the form of : Cash in hand or with banks including balance in CRR account
above the required CRR level, gold and investment in approved securities.
6. It is maintained as % of NDTL on a daily basis on NDTL on last Friday of 2nd preceding
fortnight.
7. Interest : As per investment made in different securities.
8. Penalty : Penal intt. for the day on which not maintained at 3% p.a. above bank rate. For
next day 5%.
9. Return to RBI : Form VIII (20th of every month)
The Marginal Standing Facility (MSF)
Under the MSF, scheduled commercial banks could borrow overnight up to one per
cent of their respective NDTL below the prescribed SLR, at a rate determined with a
spread of 100 basis points above the repo rate.
BANKING SUPERVISION & CAMELS RATING CRITERIA

1. Banking supervision is carried by RBI on on-site basis (actual inspection as per Sec 35 of B
R Act) and off-site supervision (through DSB returns).
2. Based on that, rating of bank is carried by RBI on parameters.
RATING PARAMETERS DOMESTIC BANKS:
C: Capital adequacy ratio
A: Asset quality
M: Management Effectiveness
E: Earning (i.e. profitability)
L: Liquidity (asset-liability management)
S: System and controls
RATING PARAMETERS FOREIGN BANKS:
C: Capital adequacy ratio
A: Asset quality
C: Compliance
S: System and controls
MONETARY & LIQUIDITY AGGREGATES (YV Reddy Committee)
These aggregates, reflect the form of money supply. These are indicators of money and
liquidity.
Top of Form
MONETARY AGGREGATES
M 0- (weekly report): Currency in circulation + bankers' deposits with RBI + other deposits
with RBI (including primary dealers' balance)
[Type text] Page 55

M 1 - (called Narrow money) - (fortnightly) : currency with public + current deposits with
banking system + 15% of demand liabilities portion of saving deposits with banking system +
other deposits with RBI.
M 2 - fortnightly report : M 1 + time liabilities portion (i.e. remaining 85%) of saving deposits
with banking system + certificates of deposits issued by banks + term deposits (excluding
FCNR-B deposits) with a contractual maturity of up to and including one year with banking
system
M 3 - (Called Broad money) - fortnightly report: M 2 + term deposits (excluding FCNR-B)
with a contractual maturity of over one year with the banking system + call borrowings from
non-depository financial corporations by the banking system.
Top of Form
LIQUIDITY AGGREGATES
L I : M 3 + deposits with post office saving banks (excluding NSCs)
L 2 : L 1 + term deposits with financial/ refinancing institutions + term borrowing by FIs +
certificate of deposits issued by FIs and
L 3 : L 2 + public deposits of NBFCs
UNIVERSAL BANKING
Universal banking (Khan Committee) means to undertake all kinds of activity of banking or
development financing activity, subject to compliance of statutory and other requirements
prescribed by RBI, Govt. and related legal Acts.
Activities include low risk activities (like acceptance of deposits and investing in securities),
medium risk activities (like granting of home loans), high risk activities (like credit cards,
forex and insurance, project financing).
Objective - To help offer world class financial services to the clients by using information
technology and cross selling with a view to (a) reduce per customer cost and (b) increase per
customer revenue, (c) take benefit of economies of scale and (d) compete with international
banks by expanding business beyond the boundaries of the countries.
CROSS SELLING
Cross selling is a marketing tool where efforts are made to sell to the customers, more than
one product. It leads to per customer (a) reduction in operational cost and (b) increase in
business and profits.
SECURITISATION
1. Securitisation is the process by which the selected loans of a bank are purchased by a
trust or company called Special Purpose Vehicle. (say, SBI sells a part of its housing finance
loans to the SPV).
[Type text] Page 56

2. The SPV in turn, issues marketable paper securities (called Pass Through Certificates which
is something like debentures) against the backing of such assets and sells the same to
prospective investors.
3. The major advantage or objective of securitisation is (a) recycling of funds (b)
concentration risk management.
FACTORING
1. Factoring is an arrangement under which a FACTOR company purchases a seller firm's
short term domestic receivables/book debts arising on account of credit sale to a large firm.
2. The seller firm is paid around 80% of the book debt amount immediately by the FACTOR.
The balance amount is released later on.
3. On due date, the FACTOR recovers the amount of book debt from the buyer firm. The
factor's revenue is interest and collection charges.
4. Functions of a FACTOR include
(a) financing the seller firm by purchasing its book debts
(b) keeping record of book debts and their follow-up and
(c) collect the payment on due date.
5. In case of default by the buyer firm, if the loss is borne by the factor itself, it is called
without recourse factoring. But if the loss is recovered from the seller firm, it is called with
recourse factoring.
FORFAITING
Forfaiting is on the pattern of factoring. In forfaiting there are long term and medium export
receivables (deferred payment exports) while in factoring there are short terms receivables.
Top of Form
TAKE OUT FINANCE

1. It is a mechanism through which the large size projects with long gestation period and
long repayment period, can be financed by different banks and institution by providing funds
on a medium term basis.
2. Under the process, a part of the cost is financed by one bank for a limited period under an
arrangement with a financial institution, which takes out the account from the financing
bank, at the pre-agreed stage.
3. The risk remains with the financing bank till the account is taken over by the institution.
Top of Form
MONEY LAUNDERING
1. Money laundering means acquiring, owning, possessing or transferring any proceeds (of
money) of crime or knowingly entering into any transaction related to proceeds of the crime
either directly or indirectly or concealing or aiding in the concealment of the proceeds or
gains of crime, within or outside India.
[Type text] Page 57

2. It is a process for conversion of money obtained illegally to appear to have originated from
legitimate sources.
3. Indian Parliament passed `The Prevention of Money Laundering Act 2002' during
December 2002.
4. The Offences are cognizable/non-bailable.
5. Financial Intelligence Unit-India (FIU-India) is the authority to track money laundering.
6. Punishment would be rigorous imprisonment for not less than 3 years but up to 7 years
and fine up to Rs.5 lac.
7. Under provisions of the Act, the banks are required to send CTR (on monthly basis within
15 days) and STR (within 7 days when occasion arises).
WAYS & MEANS ADVANCES (WMA)

1. It is temporary overdraft that RBI allows to Govt. u/s 17 of RBI Act, to cover the mismatch
between Govt. receipt and payment.
2. For Central Govt. it is for max. 10 days and for State govt. for 14 days.
4. Interest is Repo Rate.
4. The limit is fixed by RBI and Govt. in the beginning of a financial year.
LIQUIDITY ADJUSTMENT FACILITY

1. It is short term loan that RBI allows to a commercial bank to cover the short term liquidity
problem.
2. It is done through repo-reverse repo mechanism at Repo rate (i.e. RBI purchases govt.
securities from the bank with the condition of re-purchase by the bank at the end of loan
period).
Top of Form
REPO / REVERSE REPO

1. Repo : When RBI purchase govt. securities from banks to inject liquidity in the banking
system. It increases the liquidity with banks. It is done at Repo Rate changed from time to
time by RBI.
2. Reverse Repo : When RBI sells govt. securities to banks to absorb liquidity. It reduces
liquidity with banks and done at reverse Repo Rate.
CERTIFICATE OF DEPOSIT & COMMERCIAL PAPER
Features Common of CD & CP
1. Premature cancellation not allowed
2. Transfer by endorsement & delivery. Any time
3. Instrument: Usance Promissory note. Can be issued in Dematerialisation form only
4. Loan : No loan can be given on security of these documents
5. If payment day is holiday, paid on next preceding business day
6. Issued at a discount to face value
[Type text] Page 58

CERTIFICATE OF DEPOSIT
1. Who can issue: Scheduled commercial banks (except RRBs) and All India Financial
Institutions within their `Umbrella limit'.
2. CRR/SLR: Applicable on the issue price in case of banks
3. Investors: Individuals (other than minors), corporations, companies, trusts, funds,
associations etc
4. Maturity: Min: 7 days Max : 12 Months (in case of FIs minimum 1 year and maximum 3
years).
5. Amount: Min: Rs.1 lac, beyond which in multiple of Rs.1 lac
COMMERCIAL PAPER
1. Who can issue: Financial Institutions, Primary dealers & reputed companies
2. CRR/SLR: Not applicable
3. Investors: Individuals (other than minors), corporations, companies, trusts, funds,
associations etc
4. Maturity: Min: 7 days Max : 12 Months
5. Amount: Min: Rs.5 lac, beyond which in multiple of Rs.5 lac
6. Issue of commercial paper by a company : 4 conditions are to be satisfied
(a) Net worth Rs.4 cr,
(b) sanctioned working capital,
(c) their loan accounts in standard category and
(d) credit rating of P2 from CRISIL or equivalent from others.
FAIR PRACTICES CODE (wef Apr 01, 2003)
1. Purpose - To spell out obligation of lenders towards borrowers.
2. Obligations of banks include:
(a) Contents of Loan application form
(b) Time period for disposal of loan application
(c) Assessment of limits
(d) Terms and conditions of the loan
(e) reasons for rejection.
BANKING CODES & STANDARDs BOARD OF INDIA

Based on the recommendations of Committee on Procedures and Performance Audit on
Public Services (Tarapore Committee), RBI set up Banking Codes and Standards Board of
India (BCSBI) on the lines of a similar set up in UK
Objectives: The main objectives of the BCSBI would be to plan, evolve, prepare, develop,
promote and publish voluntary comprehensive codes and standards for banks for providing
fair treatment to their customers.
BANKS' CODE FOR CUSTOMER SERVICE
Banking Codes and Standards Board of India, (on July 03, 2006) released the Banks' Code for
Customer Service which is a voluntary Code. The code sets minimum standards of banking
[Type text] Page 59

practices for banks to follow when banks are dealing with individual customers. It provides
protection to the customers and explains how banks are expected to deal with the
customers for their day-to-day operations.
OMBUDSMAN
Objective of OMBUDSMAN
To settle customer grievances, preferably through mutual consent.
1. Scheme announced by RBI u/s 35A of Banking Regulation Act wef June 1995 (revised in
June2002 & Jan 01, 2006)
2. Applicable to all banks including RRB/Coop Banks through out India including in J&K State.
3.RBI appoints its own Chief General Manager / General Manager, as Ombudsman for 3
years at a time. Scheme expenses are funded by RBI.
4.Scope - Complaints relating to deficiency in service in deposit, ancillary/ advances area
including fair practice code & credit card. Loans related complaints relate to non-observance
of RBI directives, delay in sanction or disbursement, time schedules.
5. Complaints can be made in paper format or in electronic format (eMail).
6. Role of Ombudsman is similar to an Arbitrator.
Top of Form
Other Information about OMBUDSMAN :

WHEN COMPLAINT CAN BE MADE: If one month lapsed after lodging complaint with bank
and no reply received OR reply received but not satisfactory, a complaint can be made within
one year.
WHERE COMPLAINT CANNOT BE MADE: Cases pending in court or already decided by
court/Ombudsman not eligible.
ACTION BY OMBUDSMAN :On receipt of complaint views of bank to be called to promote
settlement by agreement. If not settled within 1 month, Ombudsman shall announce Award.
AWARD: Ombudsman can direct the bank for specific performance in addition to
compensation for actual loss, up to Rs.10 lac against indemnity.
IMPLEMENTATION : Award is binding on the bank only if customer gives acceptance within
30 days from receipt of Award. Bank to implement the award within 1 month of receipt of
acceptance from customer.
APPEAL - Customer can appeal against the Award or against grounds of rejection of
complaint, within 30 days on receiving the Award / rejection of complaint, to Dy. Governor
RBI. Appeal by banks against Award can be made within 30 days of date of receipt of
customer acceptance, with permission of CMD or ED or CEO.
NON-IMPLEMENTATION : If award is not implemented by banks report to Customer service
committee of Board of Directors, at HO to be sent.
Internal Ombudsman :
[Type text] Page 60

 The complaints received by Bank shall be examined as per its internal grievance
redressal mechanism. In case the bank decides to reject a complaint and/or decides
to provide only partial relief to the complainant, it should forward such cases to IO
for further examination.
 Replies to complaints on receipt of IO comments shall be addressed by bank
mentioning explicitly that the complaint has also been examined by the IO and
complainant can approach the Banking Ombudsman with his case.
 IOs are independent authority placed at apex position in the internal grievance
redressal machinery of the banks. The references made by banks to IOs (ie. the
rejected and partially accepted complaints) for examination should, therefore,
emanate primarily from the highest level of bank's internal grievance redressal
machinery only, which has operational role in grievance redressal, i.e. Principal
Nodal officer (PNO)/ Nodal Officer, as the case may be.
 Cases to be examined by IO are those listed in clause 8 of Banking Ombudsman
Scheme. The other grievances can also be dealt with by him after they have been
examined by Bank's internal grievance redressal mechanism.
 While awarding compensation, IOs would be guided by the compensation policy of
respective bank and extant regulatory guidelines.
CONSUMER PROTECTION ACT (CPA)

1. CPA implemented wef Apr 15, 1987. Amendments implemented wef Mar 15, 2003. (Act is
not applicable in J&K)
2. Suit can be filed by consumer in a consumer court if deficiency in service is not removed
by the service provider including banks even after a reasonable period given by the
customer (bank customer falls under definition of consumer).
3. Limitation period is 2 years from date of cause of action.
4.Pecuniary jurisdiction of consumer courts -
Distt Forum (up to Rs.20 lac),
State Commission (> Rs.20 lac but upto Rs.100 lac) and National Commission (> 100 lac)
5. Time limit for consumer courts : For admitting the complaint 21 days. For decision on
complaint 3 months in normal cases and 5 months in cases involing analysis/investigation.
6. Relief by courts : Removal of defect, replacement, refund, award of compensation.
7. Punishment for frivolous complaint - Imprisonment 1 month to 3 years and fine Rs.2000
to Rs.10000.
8. Appeal - Period for appeal 30 days from date of order. Appeal against Distt Forum to State
Commn (if appeal is by the liable party it has to deposit 50% of amount max Rs.25000),
against State Commn to National Commission (if appeal is by the liable party it has to
deposit 50% of amount max Rs.35000) and against National Commn to Supreme Court (if
appeal is by the liable party it has to deposit 50% of amount max Rs.50000).
GST:Goods and Service Tax
[Type text] Page 61

Question Answer
1 What would the process of registration be under the proposed GST

regime for new businesses/applicants?
Each taxpayer will be allotted a state-wise Permanent Account Number (PAN)

based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).
Those tax payers who are already registered under the current state or central
tax regime, are migrated to the common portal and granted GST registration
suomotu with a request to provide additional information where required.
A new applicant would be allowed to apply for registration on the common
portal without prior enrolment.
GSTIN is a 15 digit unique code which is will be assigned to each taxpayer,

which will be State-wise and PAN-based. The structure or format of 15 digit
GSTIN (Goods and Services Tax Identification Number) is as under:
First two Digits-The first digit of GSTIN is state code as per Indian Census
2011 except Telengana and Andhra Prades.
Next 10 Digits-It is the PAN number of a business entity like your shop, mall or
company
13th Digit-It indicates the number of registrations as a business entity has
within a state for the same PAN. It will be an alpha-numeric number (first 1-9
and then A-Z) and will be assigned on the basis of the number of registrations a
legal entity (having the same PAN) has within one state.
14th Digit-It will be by default as Z.
15th Digit-The last digit will be a check code which will be used for detection of
errors.
2
What if the dealer migrated with wrong PAN as the status of firm was changed from
proprietorship to partnership?
New registration would be required as partnership firm would have new PAN.
3 A taxable person’s business is in many states. All supplies are below 10 Lakhs. He
makes an Inter State supply from one state. Is he liable for registration?
He is liable to register if the aggregate turnover (all India) is more than 20 lacs (Rs. 10
lacs in Special Category States) or if he is engaged in inter-State supplies.
4 Can we use provisional GSTIN or do we get new GSTIN? Can we start using
provisional GSTIN till new one is issued?
Provisional GSTIN (PID) should be converted into final GSTIN within 90 days. Yes,
provisional GSTIN can be used till final GSTIN is issued. PID & final GSTIN would be
same.
5 Whether trader of country liquor is required to migrate to GST from VAT as liquor is
out of GST law?
[Type text] Page 62

If the person is involved in 100% supply of goods which are not liable for GST, then no
registration is required.
6 Whether civil contractor doing projects in various states requires separate
registration for all states or a single registration at state of head office will suffice?
A supplier of service will have to register at the location from where he is supplying
services.
7 Whether aggregate turnover includes turnover of supplies on which tax is payable
by the recipient under reverse charge?
Outward supplies on which tax is paid on reverse charge basis by the recipient will be
included in the aggregate turnover of the supplier.
8 Is an advocate providing interstate supply chargeable under Reverse Charge liable
for registration?
Exemption from registration has been provided to such suppliers who are making only
those supplies on which recipient is liable to discharge GST under RCM.
9 When is registration in other state required? Will giving service from Nasik to other
state require registration in other state?
If services are being provided from Nasik then registration is required to be taken only
in Maharashtra and IGST to be paid on inter-state supplies.
10 I have migrated under GST but want to register as ISD. Whether I can apply now &
what is the procedure?
A separate & new registration is required for ISD.
11. I have enrolled in GST but I forgot to enter SAC codes. What should I do? The status
is migrated.
The same can be filled while filing FORM REG-26 for converting provisional ID to final
registration.
12 I have ST number on individual name and have migrated to GST.I wish to transfer
this on my proprietorship firm.
This conversion may be done while filling FORM REG-26 for converting provisional ID
to final registration.
13 Please tell if rental income up to 20 lacs attracts GST or attracts any other charge?
GST is leviable only if aggregate turnover is more than 20 lacs. (Rs. 10 lacs in 11 special
category States). For computing aggregate supplies turnover of all supplies made by
you would be added.
14 If someone trades only 0% GST items (grains, pulses) then is it necessary to register
for GST, if the turnover exceeds ₹20 lacs?
A person dealing with 100% exempted supply is not liable to register irrespective of
turnover.
[Type text] Page 63

15 Is it correct that person dealing exclusively in NIL rated or exempt goods/ services
liable to register if turnover > 20/10 Lakh?
There is no liability of registration if the person is dealing with 100% exempt supplies.
16 If I register voluntarily though turnover is less than 20 Lakhs, am I required to pay
tax from 1st supply I make post registration?
Yes, you would be treated as a normal taxable person.
17 Whether a separate GSTIN would be allotted to a registered person for deducting
TDS (he has PAN and TAN as well)?
Separate registration as tax deductor is required.
18 Is separate registration required for trading and manufacturing by same entity in
one state?
There will be only one registration per State for all activities. But, you have the option
to be registered as a separate business vertical.
19 I am registered in TN and getting the service from unregistered dealer of AP, should
I take registration in AP to discharge GST under RCM?
Any person who makes make inter-state taxable supply is required to take registration.
Therefore in this case AP dealer shall take registration and pay tax.
20 Is there any concept of area based exemption under GST?
There will be no area based exemptions in GST.
21 If a company in Maharashtra holds only one event in Delhi, will they have to
register in Delhi? Will paying IGST from Maharashtra suffice?
Only if you provide any supply from Delhi you need to take registration in Delhi. Else,
registration at Mumbai is sufficient (and pay IGST on supplies made from Mumbai to
Delhi)
22 How long can I wait to register in GST ?
An unregistered person has 30 days to complete its registration formalities from its
date of liability to obtain registration.
23 What If I am not liable to register under GST but I was registered under Service tax ?
You can apply for cancellation of Provisional ID on or before 31st July 2017.
24 When turnover of agents will be added to that of the principal for registration?
No.
25 If I am not an existing taxpayer and wish to newly register under GST, when can I do
so?
You would be able to apply for new registration at the GST Portal gst.gov.in
26 If I buy raw material from supplier unregistered in GST, do I have to pay GST in RCM
[Type text] Page 64

and can I avail ITC of the same?

Yes, you have to pay GST via RCM. You can avail ITC of the GST so paid if you are
otherwise eligible.
27 Can an unregistered dealer supply goods to other States if his turnover is below Rs.
20 lakhs?
No. The supplier would be liable to obtain registration in case of inter-State supplies
irrespective of his turnover.
28 Existing taxpayer registering a branch office in another state comes under fresh
registration or under existing tax payer registration?
The registration in other State would come under fresh registration.
29 Is registration necessary if only interstate supply of Nil rated goods is being made?
If exclusively making supplies of Nil rated supplies, registration is not compulsory.
Kindly refer section 23 of CGST Act.
30 Whether franchisor company will have to take registration in each state where
outlets are located?
No, a franchisor company need not take registration in a state where only its
franchisee is located.
31 If I’m starting new business today, still need to get TIN and then apply for GST? Or
can I directly register with GST?
You may directly take GST registration on www.gst.gov.in
32 A firm dealing exclusively in exempted products has GST registration; does it need
to file return?
If registered, then you need to file returns. You may choose to cancel your registration
since you are dealing only in exempted products.
33 My all outward supplies are export services. In this case is it compulsory to register
under GST?
Yes. Since, exports are zero rated, one needs to register for GST to claim refunds.
34 Can a person operating two different companies with different names but with
same PAN get two GST registrations?
One PAN holder gets one registration in every state, but he has the option of getting
different registrations for different business verticals.
35 Whether job worker is required to register? Whether composition scheme is
available to a job worker?
Job workers making taxable supplies above the threshold aggregate turnover need to
register. Composition scheme is not available to job-workers. They, however, can avail
benefit of section 143 of the CGST Act.
[Type text] Page 65

36 I am a service provider with turnover of Rs. 50 lakhs in one state only. Am I eligible
for the composition scheme?
Service providers, except restaurants/caterers, are not eligible for composition
scheme.
37 I am an ice cream manufacturer with No. The following three classes of persons,
sales in one state only. Can I avail the namely
option of composition? - Ice cream and other edible ice, whether or
not containing cocoa.
- Pan masala
- All goods, i.e. Tobacco and manufactured
tobacco substitutes are not eligible for benefit
of composition scheme.
38 If I register under the composition scheme, can I opt out of it later? What happens
to my stock if I do so?
Those availing composition can exit and opt for normal tax scheme anytime. They
would be eligible for ITC on stocks available on the date of switchover in terms of
section 18(1)(c ) of CGST Act, 2017.
39 Can I register as a normal taxable person now and avail of the composition scheme
later?
You can opt for composition scheme from the beginning of the next financial year on
submitting the option to avail composition scheme before beginning of the financial
year. It may please be noted that composition scheme cannot be availed from the
middle of a financial year.
40 I have registered as a composition dealer. If my turnover crosses Rs. 75 lakhs, can I
continue in the scheme for the remaining financial year?
No, taxpayer becomes ineligible for composition scheme on the day the turnover
crosses Rs. 75 lakhs.
41 If I was registered earlier but am not required to register under GST, what to do
about provisional ID and accumulated ITC?
Please apply for cancellation of registration under Section 29(1) of the CGST Act, 2017
read with Rule 24(4) of CGST Rules, 2017. You will be required to calculate and pay ITC
availed on goods held in stock on the date of cancellation of registration.
42 I was registered under Central Excise or Service Tax, but could not migrate and
therefore have taken a new registration. Will I be eligible for transitional credit?
In your new registration application, if you have referred to your past registration no.
of Central Excise or Service Tax, you will be eligible for transitional credit under Section
140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017.
43 I have migrated and received provisional ID but not GSTIN, how do I supply goods or
services or both?
[Type text] Page 66

Provisional ID (PID) will be your GSTIN. You can supply goods or services or both
specifying PID as your GSTIN on Invoice.
44 I have not received ARN or have received ARN but not GSTIN, how do I supply goods
or services or both?
You can supply goods or services or both on bill of supply without mentioning GSTIN
and/or ARN. On receipt of GSTIN, you will need to issue revised invoice mentioning
GSTIN. You are required to reflect this supply in your return and also pay tax thereon.
45 I am a supplier of exempted goods based out of Delhi and procure raw material
from Kerala. My supplier from Kerala insists that I have to be registered in Delhi for
procurement of Inter-State goods. Is he right ?
No, if you are dealing in 100% exempted supplies you are not liable to be registered in
GST. There is no requirement of registration for making inter-state purchases.
46 Is GST registration mandatory for small retailers to buy from dealers/wholesalers?
There is no such requirement under GST law.
47 I have a pending export refund in Service Tax. What will happen?
Refunds under earlier laws will be given under the respective laws only
48 As an exporter, how do I ensure that my working capital is not blocked as refunds?
Appropriate provisions have been made in the law by providing for grant of 90%
refund on provisional basis within 7 days from filing of registration.
49 What will be the impact of GST on coal? Will the clean energy Cess on coal go or will
it stay?
Clean Environmental Cess on coal will be replaced by GST Compensation Cess.
50 Suppose I am in composition scheme in GST. If I purchase goods from unregistered
person, then GST will be paid to Government by me or not?
Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered
person.
51 What duties will be levied on import of goods?
Customs duty and cess as applicable + IGST+ GST compensation cess. IGST and GST
compensation cess shall be paid after adding all customs duty and customs cess to the
value of imports.
52 Present Procedures have Service Tax on Nepal, But no Goods Tax on Nepal. But,
With GST, what tax will apply?
The export procedure for Nepal would be same as that to other Countries.
53 How would the sale and purchase of goods to and from SEZ will be treated? Will it
be export / input?
Supply to SEZs is zero rated supplies and supplies by SEZs to DTA are treated as
[Type text] Page 67

imports.
54 When goods are being imported from SEZ who will pay IGST?
Such supply is treated as import and present procedure of payment of duty continues
with the variation that IGST is levied in place of CVD.
55 Who will pay IGST when goods are procured from SEZ? Today importer is paying
both BCD and CVD.
Such supply is treated as import and present procedure of payment continues with the
variation that IGST is levied in place of CVD.
56 Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize
for payment of SGST in Madhya Pradesh?
SGST of one State cannot be utilized for discharging of output tax liability of another
State.
57 How one can use SGST credit for the payment of IGST on another state?
SGST Credit can be used for payment of IGST liability under the same GSTIN only.
58 Can one State CGST be used to pay another state CGST?
The CGST and SGST Credit for a State can be utilized for payment of their respective
CGST/SGST liabilities within that State for the same GSTIN only.
59 In case of service supplied, should the credit be given to the state where it is billed
or the state it is rendered?
Tax will be collected in the State from which the supply is made. The supplier will
collect IGST and the recipient will take IGST credit.
60 Company is engaged in manufacturing of cement & power. Which rule to be
referred for reversal of credit related to power business?
Detailed rules for reversal of ITC when the supplier is providing exempted and non-
exempted supplies have been provided in ITC Rules.
61 How will the credit / debit note from unregistered supplier be reported to GSTN
and ITC claimed in the same?
Like invoice, credit/debit notes on behalf of unregistered person will be given by
registered person only. Further, GSTR2 provides for reporting of same by the recipient.
62 A shop sells taxable & exempt products to the same person (B2C), is it required to
issue tax invoice and bill of supply separately?
In such a case the person can issue one tax invoice for the taxable invoice and also
declare exempted supply in the same invoice.
64 All expenses like freight / transport / packing which are charged in Sales Invoice are
taxable in GST? How to charge in bill?
[Type text] Page 68

All expenses will have to be included in the value and invoice needs to be issued
accordingly.
65 Can we move construction material to builders on delivery challan and issue tax
invoice post completion of activity?
If the goods are meant to be supplied in the course of construction an invoice is
necessary. If the goods are tools which are to be used for construction then delivery
challan should be issued.
66 How to treat following transaction in GST (i) Delivered supply shortages in Transit.
(ii) Customer gets less quantity and pays less.
The supplier may issue credit note to the customers.
67 Should we issue Self Invoice for GST liability discharge on RCM or GST can be
discharge through expenses booking voucher?
For RCM liabilities tax invoice has to be issued on self.
68 What would be done on tax paid on advance receipt if advance has to be refunded
in any circumstance
Advance refunded can be adjusted in return.
69 Do registered dealers have to upload sale details of unregistered dealers also in
GST?
Generally not. But required in case of inter-State supplies having invoice value of more
than Rs 2.50 Lakhs.
70 How to incorporate two supplies in return for Pharma with same HSN code of four
digits but having different tax rates?
Returns provide for furnishing rate wise details.
71 Should we discharge GST liability for all reverse charge having small amounts of
Transaction or any amount limit is there?
It has been decided that Rs. 5000/- per day exemption will be given in respect of
supplies received from unregistered person. For supplies above this amount, a
monthly consolidated bill can be raised.
72 What is treatment of promotional item given free to end consumers by FMCG
companies?
Tax will be charged only on the total consideration charged for such supply.
73 Under supply from unregistered dealer the purchaser have to pay GST on RCM
basis.so whether stipend paid to intern will also come under RCM?
Stipend paid to interns will be employer-employee transactions. Hence, not liable for
GST.
74 Salary by partnership firm to Partners as per Income Tax Act liable to GST?
[Type text] Page 69

Salary will not be liable for GST.

75 What is the treatment of promotional item given free to end consumers by FMCG
companies? If taxable, whether ITC is allowed?
Tax is payable on consideration received for the supply and ITC will be available
accordingly.
76 Whether GST will be leviable in case of returnable packing material like drums
supplied with finished goods?
GST will be levied on the value charged for the supply only.
77 How will disposal of scrap be treated in GST?
If the disposal is in the course or furtherance of business purposes, it will be
considered as a supply.
78 I am from MP and providing service to a customer in Maharashtra. I outsource the
work to a service provider in Maharashtra, what tax i need to charge?
Generally these will be two supplies where the supplier from MP will charge IGST from
the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge
IGST from the recipient in MP.
79 If address of buyer is Punjab and place of supply is same state of supplier
(Rajasthan), then IGST will apply or CGST/SGST?
If the place of supply and the location of the supplier are in the same State then it will
be intra-State supply and CGST / SGST will be applicable.
80 Why is bifurcation of cash deposit as CGST-SGST-IGST required? Is cash held against
a GSTIN, to be adjusted via return u/s 39
Three levies are under three different statutes and are required to be separately
accounted for.
81 What is the difference in between 'Nil rated', 'taxable at 0%' and exempted goods
and services? Especially in relation with ITC
Exempt supply includes Nil rated (taxable at 0%) and non-Taxable supplies and no ITC is
available for such supplies.
82 Will professional tax will be abolished in Maharashtra after introducing of GST?
Professional tax is not a tax on supply of goods or services but on being in a profession.
Professional tax not subsumed in GST.
83 Employer provides bus service, meal coupon, telephone at residence, gives vehicle
for official and personal use, uniform and shoes, any GST?
Where the value of such supplies is in the nature of gifts, no GST will apply till value of
such gifts exceeds Rs. 50000/- in a financial year.
84 Salary by Partnership firm to Partners as per Income Tax Act liable to GST? Partners
[Type text] Page 70

are not employees of the firm.

Salary will not be leviable of GST.
85 How do I avail transition credit ?
Transition credit can be availed by filing the respective forms under Transition rules.
86 Please provide the clarity on area based exemption 50/2003 in UK & HP.
Area based exemptions will not be continued under GST. It will be operated through
the route of reimbursement as prescribed.
87 Is the full excise credit also available to traders who purchases directly from
manufacturers and excise is separately shown in invoice?
Full transition credit of such duty will be available on stock in hand in respect of which
you have duty paying excise document subject to conditions under Section 140(3) of
the CGST Act.
88 In June 17 Vat return no amount carried forward & held stock of Rs. 50 lakhs. Then
can we take credit of that stock or not?
The supplier would be eligible to carry forward the closing balance of ITC from VAT
return for June 17.
89 What will be the impact of closing stock which has been already paid vat on 1st
July?
The supplier would be eligible to carry forward ITC on such stock from VAT return for
June 17.
90 If in Vat return refund claimed in June 17 & no balance credit in GST. Then what's
the position of submission of Form C
Refund claimed under existing law will be handled as per the provisions of the existing
law. Form C to be submitted in terms of provision of Rule 1(1) of Transition Rules of the
respective State SGST Rules.
91. Some service was provided on 28.06.2017 but Invoice will be raised on 05.07.2017.
Whether we have to charge Service Tax or GST?
If Point of Tax arises after appointed date, then GST will be chargeable on such supply.
92 Would we be eligible for credit on Capital Goods in transit and received post GST?
No provision for such credit is there in GST law.
93 How will we get input credit on stock in hand for spare parts billed from other state,
excise, CST and entry tax paid?
For all inputs with duty paying documents available respective CGST / SGST credit will
be available. But credit of CST will not be available.
94 Whether we will be eligible for credit of duty paid on Capital Goods in transit and
received post GST?
[Type text] Page 71

No such provision in GST.

95 Can ITC of Swach Bharat Cess or KrishiKalyanCess be carried forward under GST?
No
96 Whether closing balance of educess and secondary higher education cess prior to
1st Mar 2015 can be carried forward in GST?
No it will not be carried forward in GST as it is not covered by definition of “eligible
duties and taxes” under Section 140 of the CGST Act.
97 Can a spice manufacturer take ITC of central excise paid on packing material lying in
stock as on 30/06/17?
If he has duty paying documents then he will get full credit of central excise duty paid
on stock held by him.
98 I made booking for hotel for a trip in October. Invoice raised already. Would I need
to pay GST if payment will be done on 15 July?
If the invoice has been raised and payment made before the 1st of July 2017 then GST
will not be applicable.
99 If rent received in advance before appointed day and person not liable to service tax
then does RCM liability arise?
The liability of RCM under GST will arise only after 1st of July 2017.
100 Is there any format for invoice under GST? If yes, please provide the link of the
same.
No there is no particular format. Rule 46 of the CGST Rules, 2017 prescribes the
particulars to be contained in Invoice.
101 Whether from 1st July sequence of invoice no. will change? Or can we follow the
same sequence?
Same sequence can be followed provided conditions laid down in the CGST Act, 2017
read with CGST Rules, 2017 are met.
102 If my turnover is less than 1.5 crores, do I need to mention HSN code on my invoice?
Specifying HSN code on invoice is optional for taxpayers having turnover upto 1.5
crores.
103 For taxpayers with centralized registration under Excise/ST, what is to be treatment
of CENVAT after migration?
CENVAT credit lying in balance in the return filed for period upto 30.06.17 is to be
allowed as CGST credit as per Section 140(8) of the CGST Act, 2017 read with Rule
117(2) of CGST Rules, 2017.
104 Will there be GST in A&N Islands as previously there was no VAT
Yes. For supplies within A&N, CGST plus UTGST would be leviable.
[Type text] Page 72

105 Whether IGST would be levied twice on high seas sales? First on high seas sales and
second on custom clearance. IGST paid on 1 available as ITC?
IGST shall be levied only once on imports.
106 Will KrishiMandi Fee (imposed in U.P.) be waived off in GST?
GST does not concern such fee so GST does not affect it.
107 Is E-Way Bill applicable from 1st July 2017
The present system for E-way Bill in States to continue, till the E-Way Bill procedures
are finalized.
108 Is there a sunset clause for Anti-Profiteering law?
Yes, the sunset clause for Anti-profiteering Authority is of two years.
109 Which documents should be used in case of inter-state supply of goods until e-way
bill rules are notified?
The documents specified under Rule 48 of the CGST Rules, 2017 may please be
referred. Triplicate copy of invoices for supply of goods and duplicate copy of invoice
for supply of services may be used.
110 If I use my credit card to pay utility bills, will I end up paying GST twice; once for the
service and second time for the credit card bill?
No, GST is not leviable on the entire credit card bill; it is charged only on the
fee/commission charged by the credit card company.
111 We currently transport material on delivery challan and make a single bill at the end
of the month. Can the same be done under GST?
If on every instance you are making a supply then an invoice needs to be issued. For
any other movement of goods other than supply (as specified in Rule 55 of CGST Rules,
2017), a delivery challan may be issued.
112 Will service charge, as charged by some restaurants, be treated as consideration for
a supply and hence considered liable for tax?
There is no distinction between goods or services under GST. Service charge like any
other supply will be leviable to GST. It is also clarified that service charge is not a
statutory levy. It is not levied by the Government.
113 What to do with stock lying with me on 1.07.2017. Do I need to charge GST?
Yes, you need to charge GST but you can use transition credit, if available on the said
goods.
114 I am a small manufacturer who supplies cycle parts to two manufacturing units in
the same area. For every supply, I generate an invoice and take 500 Rs. flat for
cartage and loading charges. What tax rate to be charged on the cartage and
loading expenses?
This will be a composite supply where the principal supply (the goods) cannot be
[Type text] Page 73

supplied without the cartage / unloading / transportation expenses. Therefore, the

GST rate applicable will be the same as that of the principal supply, i.e, cycle parts, as
provided under Section 8 of the CGST Act, 2017.
115 I run a restaurant where I serve alcohol and provide food etc. How do I generate my
invoices. What will attract GST and what will attract VAT?
Since, you are providing both taxable and non-taxable supply. You will charge VAT on
the non-taxable supply (which is alcohol for human consumption) and GST on all other
taxable supplies.
116 In big bazaar, if I purchase some vegetables and one bottle of coke where one of
them is exempt and the other is to be charged with 40% GST. Will I be charged 40%
on the whole amount?
No, these are two independent supplies at two different prices, they will be charged at
the GST rate applicable to them even if they are purchased on the same invoice.
117 I am going to a jewelry shop and selling 10 gm gold and purchasing a 20 gm set in
return. GST will be charged on 10 gm or 20 gm?
The value to be charged on such transaction will be the open market value of the
entire transaction as per Rule 27(a) of the CGST Rules, 2017. Therefore, GST be
charged on entire 20 gm.
118 As a composition dealer, will I have to issue a self invoice if I purchase goods from
an unregistered person?
Yes, a composition dealer will issue a self invoice as he is required to pay GST. He will
not be eligible for ITC also.
119 Can I use my CGST/SGST credit to set off my IGST liability?
CGST credit can be first used to set off CGST liability. Whatever is left can be used to
set off IGST liability. It cannot be used to set off SGST liability. Similarly, SGST credit can
be used to set off SGST and IGST liability, in that order. It cannot be used to set off
CGST liability. Please see Section 49 of the CGST Act, 2017.
120 Can tax paid in one state be used as ITC by the same firm in another state?
No, if a firm is registered in more than one state, then each such registration will be
treated as a separate registered person. Cross utilization of credit available with two
different registered persons is not allowed.
What will be the mechanism to tax inter-state transactions?
121
All inter-state supply of goods and services will be taxed under an Integrated
GST (IGST) Act. The rate of GST under the IGST Act would broadly be equal
to the sum total of CGST plus SGST rates added together. The IGST is to be
deposited into an IGST Account administered by the central government and
will be distributed between the central government and the consuming states
on a mutually-agreed formula.
The collection mechanism of IGST is as under:
 The inter-State seller may utilise the input tax credit of IGST, CGST and
[Type text] Page 74

SGST on his/her purchases to pay IGST.
What are the goods/sectors that will be out of purview of GST?

122
The goods/sectors that will be out of the GST ambit include alcohol and
specified petroleum products i.e. petroleum crude, high speed diesel, motor
spirit, aviation turbine fuel and natural gas. Petroleum products will be inducted
into GST at a later date. Alcohol will continue to attract state excise duty and
VAT. Tobacco and tobacco based products will attract both excise duty and
GST. Taxes such as stamp duty, toll tax, road tax, electricity duty etc. will not
bepart of GST.
What are the contents of a tax invoice to be issued under GST regime?
123
A registered assessee supplying taxable goods/services shall issue at the time

of supply, a tax invoice showing complete details of the transaction viz., name,
address and GSTIN of the assessee’s name, address and GSTIN of the
buyer/service recipient, date of invoice, value of goods/service, description of
goods/service, rate and value of CGST, SGST or IGST, signature of taxpayer,
etc.
Where the supplier of taxable service is an insurer or a banking company or a

financial institution, including a non-banking financial company, the said
supplier shall issue a tax invoice or any other document in lieu thereof, by
whatever name called, whether issued or made available, physically or
electronically whether or not serially numbered, and whether or not containing
the address of the recipient of taxable service but containing other information
as prescribed above.
What is the mode of payment of tax?

124
The payment of tax is in electronic mode with a common ‘challan’ (i.e.

document for payment of taxes) for all the taxes under three different modes of
payment:
 * Internet banking including credit card/debit cards
 * Payments through RTGS/NEFT
 Over the counter payments (for payments up to INR10,000/- per tax
period) in cash cheque or Demand Draft (DD)
The Government Business Department has been issuing guidelines and circulars in
regard to collection of GST challans on behalf of customers. One of the modes of
collection is the Over The Counter (OTC) mode for customers who do not have
Internet Banking facility with our Bank and wish to deposit GST challans of up to Rs
10000/- only.
[Type text] Page 75

PENALITIES:
Banks not to make cash payments of FOR plus Interest of Rs 20.000 and above, If bank pays cash, penalty is
equal to sum of cash so paid. (Sec. 271 E). NO imprisonment
Failure to furnish AIR: Penalty of Rs, 100 for each day during which the failure continues (Sec. 271 FA. IT Act)
Failure to Deposit Tax with Central Govt. UIS 276 (B): imprisonment from 3 months to 7 years. '
TDS: Failure to deduct TDS - Tax + 18% interest + Penalty not exceeding tax amount
TDS: Delay In deposit of TDS deducted: 18%p,a',lnterest from the date the tax was deductible and actually paid.
.
PAN I TAN: Failure to comply with provision of PAN /TAN: Rs.10,000
TDS PROVISIONS
Legal Provisions: Section 194 of Income Tax
Act
Type of interest: On Term Deposits excluding
RD
Amount: Where Interest paid/payable is above Rs 10,000 (wef 1-6-2007) in financial year
Tax Rates: Resldents-l0% + surcharge (10.25% ) .. Corporate -20% (No surcharge) NRO (No surcharge)
Minor Account: To be clubbed with guardian
Joint Account: Deduction in the name of 1st I account
holder
NRI Account: TDS applicable only on NRO account
TDS Certificate: TDS certificate to be Issued on Form No 16-A within 1 month from end of
month during which deduction made, or within 30 days from date of close of financial year
Exemption from Deduction: Declaration on form NO 15-G For Senior Citizen ( 60 years and
above) the declaration IS on Form No. 15-H.
Submission: To Income Tax Deptt. within 7 days of the following month and within two month
If deduction is made on last day of the accounting year
[Type text] Page 76

Payments to Contractors: Where amt of single payment exceeds Rs 30,000 or total amount
exceeds Rs 75.000 during financial year
Rent payments: Where amount exceeds Rs 1,80,000 In a financial year
Professional Fee: Where payment exceeds Rs 30,000 In a financial year
Penalty: Interest @ 1.5% pm Penalty equal to amount of tax, Imprlsonment-3 mts to 7 yrs
INSURANCE BUSINESS
Insurance business can be:
(a) Bancassurance (selling policies of other companies for commission as corporate agent -
called without risk)
(b) underwriting (risk based).
Licence from IRDA required for both. RBI permission not required for Bancassurance.
Underwriting business: (with risk insurance business).:
1. Business can be done through a separate subsidiary company as a joint venture.
2. Maximum investment of the bank can be 50% of the capital of the company.
3. Permission to be obtained from RBI, if following parameters are complied with.
(a) Net worth: 500 cr
(b) Profits: 3 years
(c) Net NPAs: Reasonable
(d) Capital adequacy ratio: 10%
(e) Performance of subsidiaries: Satisfactory
In the 2013-14 budget , Bank can be agent for various insurance companies .
RIGHT TO INFORMATION ACT

1. Information can be obtained by Indian Citizen only. Reasons for obtaining information, are
not required to be given.
2. Information can be obtained from Public Information Officer, appointed by each
organization for that purpose.
3. Time for providing information : 30 days
4. Fine for delay in providing information: Per day Rs.250 and total maximum fine Rs.25000
5. Record preservation time : 5 to 8 years as fixed by Central Govt.
6. Fee is Rs.10.
Top of Form
Bottom of Form
COMPULSORY ELECTRONIC TRANSACTION SIZE:

1. Effective April 1, 2008 all payment transactions of Rs. 1 cr and above (Rs.10 lac and above
from 1.8.2008) in the money, Government securities and foreign exchange markets and the
regulated entities (banks, PDs and NBFCs) have been made mandatory to be routed through
[Type text] Page 77

the electronic payment mechanism.

2. E-PAYMENT OF TAXES MANDATORY: The Central Board of Direct Taxes (CBDT) has made E-
Payment of taxes mandatory for all deductors effective April 1, 2009. Accordingly all
categories of non-corporate tax payers with turnover less than Rs.40 Lakh or gross receipts
less than Rs.10 Lakh will have to make electronic payment to the exchequer the income tax
that they deduct at source.
TERMS RELATING TO MONEY MARKET

CALL MONEY: Money lent for one day (RoI market determined)
NOTICE MONEY: Money lent for a period of 2-14 days (RoI market determined)
TERM MONEY : Money lent for 15 days or more in Inter-bank market (RoI market
determined)
HELD TILL MATURITY (HTM): Govt. securities which are not meant for sale and shall be kept
till maturity by the banks.
HELD FOR TRADING (HFT): Govt. securities acquired by the banks with the intention to trade
by taking advantage of the short-term price/ interest rate movements.
AVAILABLE FOR SALE (AFS): Govt. securities which do not fall within the above two
categories i.e. HTM or HFT.
YIELD TO MATURITY : Expected rate of return on a security during the period, it is held by an
investor which may include capital gains and losses also.
COUPON RATE: Specified interest rate on a fixed maturity security, fixed at the time of issue.
TREASURY OPERATIONS :Investment and trading decisions of a bank in government
securities in the market including deployment of surplus funds.
GILT EDGED SECURITY : Government security. It is a secured financial instrument which
guarantees certainty of both capital and interest. These securities are free of default risk or
credit risk, which leads to low market risk and high liquidity.
DATED SECURITIES : Instruments which have tenure over one year. The returns on dated
securities are based on fixed coupon rates akin to corporate bonds. These are considered risk
free.
TREASURY BILLS : These are instruments for borrowing by Govt. with a maturity period of 91
days, 182 days and 364 days. The minimum amount is Rs.1 lac. The interest rates are as per
market conditions.
CASH MANAGEMENT BILLS: These are similar to Treasury Bills issued with the objective of
cash management by Govt. The maturity period could be less than 91 days and interest rate
as per market conditions.
PRUDENTIAL LIMITS FOR CALL & NOTICE MONEY :

(a) Borrowing : On a fortnightly basis, maximum 100% of capital fund of latest audited
[Type text] Page 78

balance sheet. It can go up to 125% on any particular day during a fortnight period.
(b) Lending: On a fortnightly basis, maximum 25% of capital fund of latest audited balance
sheet. It can go up to 50% on any particular day during a fortnight period.
SHORT SELLING: Short Sale is the sale of securities which a bank does not own i.e. a bank
sells to another bank, a govt. security (say treasury bill or dated securities) which the selling
bank does not own presently, with the understanding to deliver the security on a fixed future
date. The facility is to enhance the liquidity in the G-sec markets and to provide participants
with a tool to express two-way view on interest rate.
WHEN AS AND IF ISSUED SECURITIES : Commonly known as 'when-issued' security refers to

a security that has been authorized for issuance but not yet actually issued. When issued
trading takes place between the time a new issue is announced and the time it is actually
issued. All 'when issued' transactions are on an 'if' basis, to be settled if and when the actual
security is issued.
MERCHANT BANKING
Merchant banking stands for providing various services relating to capital market and finance
to corporate sector.
FOREIGN INSTITUTIONAL INVESTORS:
FIIs are corporates/funds/trust who propose to invest their proprietary funds or on behalf of
funds or on of foreign corporate and individuals. They require registration with SEBI.
GDR / ADR:
A GDR or ADR means any instrument in the form of a Depository receipt or certificate
created by the Overseas Depository Bank (ODB) outside India and issued to non-resident
investors against the issue of ordinary shares or foreign currency convertible bonds of issuing
company in India. These are negotiable instruments denominated in US $.
While ADRs are listed on the US stock exchanges, the GDRs are usually listed on a European
stock exchange.
INDIAN DEPOSIT RECEIPTS:
IDR is an instrument in the form of a Depository Receipt created by the Indian depository in
India against the underlying equity shares of the issuing company. The foreign companies
issue shares, to an Indian Depository, which in turn issues depository receipts to investors in
India. The actual shares underlying the IDRs are held by an Overseas Custodian.
IDRs can be listed on Indian stock exchanges and would be freely transferable.
DEMATERIALISATION:
It is a process by which the paper certificates of an investor are taken back by the
company/registrar and actually destroyed and an equivalent number of securities are
credited in electronic holdings of that investor. Depository is like a bank, where securities
are held in electronic form, scrips are collected and receipts and record of the account are
given, to the investor.
Banks are Depository Participant.
BOOK BUILDING:
[Type text] Page 79

Book building is the process to assess demand for a particular public issue at within a range
of prices, based on which the issue is priced and sold to the investors. The book runner (lead
manager) collects orders from various investors through other participating members.
Thereafter he decided the yields to be offered based on the orders received and the yields
quoted for them.
DERIVATIVES PRODUCTS
DERIVATIVE:
A derivative is a financial contract that derives its value from another financial
product/commodity (say spot rate) called underlying (that may be a stock, stock index, a
foreign currency, a commodity). Forward contract in forex, a simple form of a derivative.
OPTION: It is contract that provides a right but does not impose any obligation to buy or sell
a financial instrument, say a share or security. It can be exercised by the owner. Options offer
the buyers, profits from favourable movement of prices say of shares or foreign exchange.
VARIANTS OF OPTIONS: There are two variants of options i.e. (a) EUROPEAN OPTION (where
the holder can exercise his right on the expiry date) and
(b) AMERICAN OPTION (where the holder can exercise the right, anytime between purchase
date and the expiry date).
COMPONENTS: Options have 2 components i.e. call option and put option. Owner's liability
is restricted to the premium he is to pay.
(a) CALL OPTION : Owner (buyer), has the right to purchase and the seller has the obligation
to sell, a specified no. of instruments (say shares) at a specified rate during the time prior to
expiry date.
(b) PUT OPTION : Owner or the buyer has the right to sell and the seller has the obligation
to buy during a particular period.
IN THE MONEY UNDER AN OPTION : Where exercising the option provides gain to the buyer,
it is called in the money. It happens when the strike price is below the spot price, in case of a
call option OR the strike price is above the spot price, in case of a put option.
AT THE MONEY: Where exercising the option provides no gain or loss to the buyer, it is called
at the money.
OUT OF THE MONEY: Where exercising the option results into loss to the buyer, it is called
out of the money. It is better to let the option expire.
FUTURES:
The futures are the contracts between sellers and buyers under which the sellers (termed
'short') have to deliver, a pre-fixed quantity, at a pre-fixed time in future, at a pre-fixed price,
to the buyers (known as 'long').
The main features of a futures contract are that these are traded in organised exchanges,
regulated by institutions such as SEBI, they need only margin payment on a daily basis.
Futures contract are made primarily for hedging, speculation, price determination and
allocation of resources.
FORWARDS:
[Type text] Page 80

The forward on the other hand is a contract that is traded off-the-stock exchange, is self
regulatory and has certain flexibility unlike future which are traded at stock exchange only,
do not have flexibility of quantity and quality of commodity to be delivered and these are
regulated by SEBI, RBI or other agencies.
SWAPS :
It stands for simultaneous sale of foreign currency in spot and purchase of foreign currency
forward OR purchase of foreign currency in spot and sale of foreign currency forward. In
other words, it is exchange of foreign currency flows taking place at different times.
INCOME RECOGNITION , ASSET CLASSIFICATION , NPA MANAGEMENT &

RECOVERY (IRAC norms)
CLASSIFICATION OF LOAN A/Cs

Assets are classified into 4 categories namely Standard (including Special Mention category),
sub-standard, doubtful and loss. But NPAs are classified into 3 categories i.e. Sub-standard,
Doubtful and Loss.
ASSETS CLASSIFICATION
INITIATION OF NPA SYSTEM The process of prudent guidelines on NPA was initiated by RBI in
the year 1992-93, on recommendations of Narasimham Committee.
WHEN ACCOUNT BECOMES NPA DUE TO PROBLEM IN RECOVERY / REPAYMENT :
1. Term Loan : interest and/or instalment of principal remain overdue for a period of more
than 90 days (Due date of instalment payment was Dec 12, 2009 which borrower failed to
pay. Account becomes irregular from Dec 13 and NPA after 90 days (i.e. 19+31+28+12) on
Mar 13, 2010.
2. Bills account: Bill remains overdue for a period of more than 90 days (Due date of bill was
Dec 12, 2009. The drawee failed to pay. Bill becomes overdue on Dec 13 and NPA after 90
days (i.e. 19+31+28+12) on Mar 13, 2010.
3. Other loans : Any amount to be received remains overdue for a period of more than 90
days
4. Cash credit / Over draft : The account remains out of order for a period of more than 90
days. (Account became out of order as balance exceeded the sanctioned limit wef Dec 12,
2009. Account becomes NPA after 90 days (i.e. 20+31+28+11) on Mar 12, 2010.
5. Out of order is an account
(a) where the balance is more than sanctioned limit or drawing power (Balance exceeded
the limit on Dec 12, 2009. Account became out of order on Dec 12, 2009). OR
(b) balance is within limit or drawing power but
(i) where as on date of balance sheet, there is no credit in the account for 90 days or
(ii) credit is less than interest debited or
[Type text] Page 81

(iii) where stock report has not been received for 3 months or more.
Further, if the sanction of limit is not renewed on due date, the account becomes sub-
standard after 6 months (Date of sanction - Jan 10, 2008. Due date of renewal - Jan 09, 2009.
If limit not renewed for 6 months, account becomes NPA on Jul 10, 2009).
6. Special mention account (SMA): During period of irregularity up to 90 days, before
becoming NPA, the account is called SMA, which is part of Standard account.
GROUP DEFINITION
STANDARD Accounts which are in order
SUB Accounts which have been classified as NPAs for a period not exceeding 12
STANDARD months
DOUBTFUL Sub standard accounts, which have remained NPAs for a period exceeding 12
months
LOSS ASSETS Accounts which have become unrealizable, where losses have been
identified by the bank / internal / external auditor / RBI Inspectors.
SMA Special mentioned assets: RBI has instructed banks to identify a/cs which are
overdue/out of order but not NPA & maintain a special watch.
CATEGORY PROVISION REQUIREMENTS
STANDARD Direct Agri & SME All other loans & Commercial Real Teaser Rate –
ASSETS sectors Advances Estate Housing Loan
0.25% 0.40% 0.75% 2%
Residential)
1%
( Commercial)
SUB- Secured Sub-standard Unsecured Sub-standard : Where the value of
STANDARD security is not more than 10% right from the
ASSETS beginning i.e. ab-initio
15% of outstanding 25% of outstanding dues*
dues *20% for Infrastructure Loans with escrow
arrangement
DOUBTFUL D1 D2 D3
ASSETS First 12 months Next 24 months Over 36 months
RVS Shortfall in RVS Shortfall in 100% Uniformly
Security Security
25% 100% 40% 100%
LOSS ASSETS The entire assets should be written off. If permitted to remain in the books
for any reason, 100% of the outstanding should be provided for.
PERIOD OF CLASSIFICATION IN DIFFERENT CATEGORIES:

The time period of their classification is restricted as under:
[Type text] Page 82

1. Standard - Regular : No restriction on the time period

1a. Standard - Irregular (called Special Mention Account,SMA) : 90 days (If account became
SMA on Dec 12, 2009, it will remain SMA up to Mar 11, 2010).
2. Sub-Standard : 12 months (This account becomes sub-standard on Mar 12, 2010 and
remains sub-standard up to Mar 11, 2011).
3a.Doubtful- up to one year : 12 months (This account becomes D-1 on Mar 12, 2011 and
remains D-1 up to Mar 11, 2012)
3b. Doubtful - above one year but up to 3 years : 24 months (This account becomes D-2 on
Mar 12, 2012 and remains D-2 up to Mar 11, 2014)
3c. Doubtful - above three years : Uncertain period (This account becomes D-3 on Mar 12,
2014 and remains D-3 for uncertain period)
4. Loss: Account is a loss account when security loss is 90% or more. The period is uncertain.
[Type text] Page 83

[Type text] Page 84

1. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest

Act (SARFAESI Act) came into force wef Aug 23, 2002 in entire India, including J&K. Act was
amended in 2004 on intervention of Supreme Court in Mardia Chemicals vs Union of India
and others.
2. Court jurisdiction : Cases under SARFAESI Act can be referred to DRT and appeal to DRAT
only
3. Rights of banks as creditor - To take possession, take over management, appoint manager,
recover money receivable from 3rd parties, sale of securities charged to the bank, without
court intervention.
4. Designated officer who can initiate action under the Act - Scale IV and above in banks OR
officers approved by BoD of the bank.
Top of Form
5. Consortium/BIFR cases : In case of joint/consortium financing, consent of banks with 75%

share by value required for action. BIFR cases can be recalled back with consent of banks
holding 75% share.
6. Loans not eligible -
(1) Balance up to Rs.1 lac,
(2) if the security agricultural land,
(3) pledge & lien and loan against bank deposit)
(4) where recovery up to 80% of due amount already affected
(5) where limitation has expired
(6) if security is not charged to bank - say hypothecated, mortgaged etc.
7. Sale of securities charged to bank : If there is default, the security can be sold without
court intervention after possession of the security.
8. Possession - 60 days notice to be served by bank before possession.
9. Remedy with borrower - If borrower objects to possession, bank to justify the possession
by sending reply within one week. If borrower still not satisfied, it could approach DRT
within 45 days without deposit of any amount
(Earlier provision Sec 17 to deposit 75% amount was deleted in 2004 on Supreme Court
intervention in Mardia Chemicals vs Union of India and others).
10. DRT's decision is appealable (within 30 days) to DRAT by bank or borrower. Borrower can
appeal after deposit of 50% of amount that could be reduced to 25% by DRAT.
11. Sale - Before sale, 30 days notice to be served on the borrower.
12. Sale price : Sale cannot be below the reserve price to be fixed by bank. For sale below
reserve price, consent of the borrower is required.
13. Method of sale: Sale can be by tenders or through public auction. If sale is through public
auction, public notice in two news papers (one of which to be regional) to be given.
14. Purchase price : Sale is confirmed by bank on receipt of 25% amount immdly. Balance is
payable in 15 days.
[Type text] Page 85

15. DRT pending case: Banks can make use of SARFAESI Act for sale of security for such
pending cases as per Supreme Court judgement in Transcore vs Union of India).
DEBT RECOVERY TRIBUNAL

1. Created under Recovery of Debt Due to Banks & FIs Act 1993 (except JK).
2. These are like other civil courts for a special purpose of helping in quicker NPA recovery in
large loan accounts.
3. DRT headed by Presiding officer who is assisted by Registrar and Recovery Officer. DRAT is
headed by Chairperson.
4. Eligible account - Loans of banks and FIs with recoverable dues of Rs.10 lac or more.
5. Jurisdiction : No other court has jurisdiction over such cases.
6. Time limit - On receipt of application, show cause notice will be served on borrower
within 30 days. Disposal by DRT is expected in 180 days. Disposal of appeal by DRAT is
expected in maximum 180 days.
7. Appeal - Order by DRT appealable to DRAT within 45 days from date of receipt. If
borrower has to appeal, deposit of 75% of decree amount is mandatory. DRAT may reduce
or waive the deposit of this amount.
8. Order- After claim is upheld, Recovery certificate is issued. Recovery officer is to make the
recovery. He has powers such as take possession of assets, sale of securities, attachment etc.
as per provisions of Sec 226 of Income Tax Act.
9. Complaint can be made to presiding officer of DRT against order of Recovery Officer
within 30 days and against Registrar within 15 days, if need be.
10. Fee - Min Rs.12000. For each additional Rs.1 lac Rs.1000. Max 1.50 lac. For appeal - Min
Rs.12000 for decree of less than Rs.10 lac, 20000 (10 lac to less than Rs.30 lac) and Rs.30000
(Rs.30 lac & above).
ASSET RECONSTRUCTION COMPANIES

1. Set up for taking over distressed assets from banks/FIs and reconstruct or re-pack for sale.
(First ARC - ARCIL).
2. Recovery plan should be for a maximum period of 5 years (2 year extension given in Apr
2009).
3. To be set up as a joint stock company.
4. RBI registration must before commencement for business as ARC. Business to be
commenced within 6 months of registration with RBI. RBI can extend it by another 1 year in
aggregate.
5. Net worth not less Rs.100 cr or 15% of acquired assets, whichever lower.
6. Capital adequacy ratio min 15% of Risk Weighted Assets.
7. Asset would be classified as sub-standard for 12 months, doubtful for 12 months and loss
account if remains NPA for more than 36 months.
[Type text] Page 86

8. Provision on sub-standard 10%, on unsecured portion of doubtful 100% and secured

portion of doubtful 50%. On loss accounts 100%.
9. ARC to invest at least 5% in security receipts created out of each securitization of debt.
CORPORATE DEBT RESTRUCTURING SYSTEM

1. A mechanism prescribed by RBI outside BIFR or DRT for restructuring of loan account. It is
not a judicial system. It is based on mutual agreement between borrower and banks.
2. Structure : CDR is a 3-tier structure.
(a) CDR Forum (at top - the policy making body, having Chairman of banks as members -
meets at least once in 6 months),
(b) CDR Empowered Group (sanctioning authority having EDs of banks as members - has 90
days to take decision on case. In exceptional case up to 180 days) and
(c) CDR Cell (operating wing to prepare the proposals within one month from reference).
3. Eligible account - Multi-lender a/cs only (such as consortium, multiple banking etc). Fund
and non-fund exposure of Rs.10 cr or more.
4. Reference to CDR in case of Category I accounts (i.e. Standard & Substandard accounts) by
a bank /FI with 20% share (by value). Borrower can also make a reference with support of a
bank / FI having 20% share by value.
5. Category II accounts (Doubtful account) can be referred jointly by banks / FIs having 75%
shares by value & 60% in number.
6. Suit filed a/c eligible with consent of banks / FIs having 75% shares by value & 60% in
number.
7. Fraud and willful default cases are not also eligible. Large value BIFR cases, can be taken
up on specific recommendation of CDR core group.
8. Stand still clause - Borrower and banks/FIs to sign Debtor-Creditor agreement, for no legal
action for 90 days (extendable to 180 days), when case is pending with CDR.
Creditors to enter into Inter-creditor Agreement, valid for 3 years. It can be extended for 3
years.
9. Time schedule: Preliminary restructure case to be prepared by lead institution within one
month for submission to CDR Cell. CDR cell to prepare restructure plan within 30 days for
decision by CDR Empowered Group within 90 days (180 days in special circumstances).
10. Decision criteria followed by CDR - (1) Unit to become viable in 7 years. (2) Restructured
debt should be paid within 10 years. (3) Return on capital employed, DSCR and IRR should
be acceptable (4) Promoter should contribute 15% of sacrifice of creditors.
11. Asset classification of restructured loans : Account classification to be changed to
standard category only after 12 months regular repayment as per the revised due date
schedule. Fresh loans to remain standard for one year. After one year, the classification will
be according to record of recovery.
12. Asset classification for the period when case was pending with CDR : If approved package
implemented within 4 months, asset classification at the time of reference, to be restored.
[Type text] Page 87

13. Implementation on approval : Decision binding on all creditors where 75% by value and
60% in number, agree. Provision shall be made for this in the inter-creditor agreement.
1. DEPOSITS
One of the important functions of the Bank is to accept deposits from the public for the
purpose of lending.
TYPES OF DEPOSIT ACCOUNTS:

While various deposit products offered by the Bank are assigned different names, they
can be categorized broadly into Savings, Current and Term Deposits.
DEMAND DEPOSITS
It means a deposit received by the Bank, which is withdrawable on demand. (Current
and Savings Account Deposits are Demand Deposits)
1. "Savings Deposits" means a form of demand deposit which is subject to restrictions
as to the number of withdrawals permitted by the Bank during a specified period.
2. "Current Account" means a form of demand deposit where from withdrawals are
allowed any number of times depending upon the balance in the account or up to a
particular agreed amount and will also include other deposit accounts which are neither
Savings Deposit nor Term Deposit like margin deposits where no interest is payable.
3. Overdue Term Deposits : Term Deposits on maturity if not renewed or encashed,
will be treated as Overdue Term Deposit and it will be classified as Demand Deposits.
TIME DEPOSITS :
"Term Deposit" means a deposit received by the Bank for a fixed period generally
withdrawable only after the expiry of the fixed period and include deposits such as
Fixed Deposits, Samruddhi Deposits, Recurring Deposits, Loan linked Recurring
Deposits / insurance linked R.D., Dena Freedom Deposit, and Dena Savifix.
 Minimum period of 7 days and for a maximum period of 10 years. However, as per
mandate of the customer, Term Deposit can be renewed on the date of maturity for
the period mentioned in the mandate at the rate prevalent on the date of maturity.
Dena Bank Deposit schemes
1. Dena Savifix Deposit Scheme

Dena Savifix Account as the name denotes acts primarily as a savings account and doubles
up as fixed deposit A/c.
When the balance in the savings account exceeds Rs. 25,000/-, the exceeding amount in
multiples of Rs. 5000/- is automatically converted to Fixed Deposit. Conversely, if funds in
[Type text] Page 88

the savings account is insufficient for withdrawal or to honour a cheque, the requisite
amount will be automatically transferred from the fixed deposit account to Savings Account
in units of Rs. 5,000/-( Card rate of interest applicable for the period the deposit remained in
Fixed Deposit would be credited in the Savings Account)
Salient Features:Minimum period of deposit: 15 days,Maximum period of deposit 1 year

Rate of Interest : Card rate.
2. Basic Savings Bank Deposit Account

-Available to all Indian Residents.
-There is no requirement of maintaining any minimum balance and no minimum
balance charges are levied.
-The services available in the account will include deposit and withdrawal of cash at
branch as well as ATM; receipt/credit of money through electronic payment channels or
by means of deposit/collection of cheques drawn by Central/State Government agencies
and departments;
-There is no limit on the number of deposits that can be made in a month.
-Account holder/s is/are allowed a maximum of four withdrawals in a month, including
ATM withdrawals.
-The facility of ATM card or ATM-cum-Debit Card can be availed. Nomination facility can
also be availed.
3. Dena Minor Savings Scheme

A special savings scheme, for minors. Minors who have attained 10 years of age and
above, who can read & write can open Minor Savings Scheme account in their own
singly or jointly. No cheque book is issued to Minor Savings Account holder, however a
minor is allowed to withdraw the money from his account by withdrawal slip.
Minor Savings Scheme is a product developed for children. it inculcates saving habit in
the minors and also it helps them in becoming responsible by allowing them to partially
operate this account , independently. Minors who have attained 10 years of age and
above, who can read & write, can open Minor Savings Scheme account in their own
name singly or jointly. No cheque book is issued to Minor Savings Account holder;
however a minor is allowed to withdraw the money from his account by withdrawal slip
or ATM card
4. Dena Recurring Deposit Scheme enables the depositor to save in fixed monthly
installments. One can choose different maturity plans depending on one's saving goals
desired.
5. Dena Premium Savings Account Scheme
-Quarterly Average Balance: Rs.50000/-

-Offers concessions on all service charges, if Quarterly Average Balance of Rs.50000/- is
maintained in Savings Account.
The 100% concessions are provided on following services.
•Cash Handling Charges•Intersol /Clearing Charges•ATM-cum-Debit
cardCharges•Internet Banking/NEFT/RTGS•DD/MT/POCharges•Cheque book issue
Charges• Cheque ReturnCharges •Collection of outstation cheque (one Branch to other
[Type text] Page 89

of the Bank)•Ledger Folio Charges•Stop Payment Charges•Standing Instructions

Charges •No penalty will be charged for non-maintenance of Minimum Balance however
for the Closure of Account within one year, a Charge of Rs.200/- to be levied as per
service charges circular.
6. Dena Stree Shakti deposit Scheme
Target Clientele: Women in the age group of 18 years and above, including Salaried
Employees [Govt/PSU/Private Sector/MNCs], Doctors, Advocates,
Entrepreneurs,Women with independent source of income,Housewives,Students
Any New saving account opened by women either singly or jointly.
First account holder should belong to the target group.
Initial Deposit
• Zero Balance
• No Daily Minimum Balance Requirement,
• Quarterly Average Balance (QAB) of Rs. 2500/- or above maintained in Rural/ Semi
Urban
• QAB of Rs. 5,000/-or above is maintained in Urban/ Metro
 Platinum RuPay Card, Free- Personalized Cheque book (50 leaves) per annum,
 FREE Internet / Mobile Bkg/ Monthly A/c Statement NEFT/ RTGS through Internet
Bkg/Passbook / Utility Bill Payments
 Auto Sweep in / out (Savifix Facility)
 Linked family Account :Two Zero Balance Family accounts with zero balance facility
only.
*Family- Spouse & Children
7. Corporate Salary Account - New Saving Bank Scheme
With an objective to enhance our Low Cost Deposit clientele base and to increase CASA
Deposits, a new Saving Bank Account Scheme named as “Corporate Salary Account” has
been designed. The targeted clientele for the scheme are employees working in Central /
State Government/ PSUs/ Reputed Public Limited Companies/ MNCs/ Reputed Educational
Institutions (Govt. recognized/ aided Schools/ Colleges/ Universities/ Research Institutes
who have more disposable income and capable of maintaining large balance in Savings Bank
Account.
The main feature of the scheme is availability of an overdraft upto two months net salary of
the account holder which shall enable them to meet their urgent social
obligation/requirement such as medical/educational expenses etc.
The salient features are as follows:
Eligibility The permanent employee of Central / State Government/ PSUs/ Reputed
Public Limited Companies/ MNCs/ Reputed Educational Institutions (Govt.
recognized/ aided Schools/ Colleges/ Universities/ Research Institutes and
[Type text] Page 90

all existing account holders working for above offices or Companies, upon
their request, are eligible under the Scheme.
Minimum The account can be opened and maintained at Zero Balance. The account
Balance holder will be allowed to maintain at zero balance as long as he/she
associated with that organization. In case of Retirement, switch over to
other organization the Account will be treated as Regular Savings Bank
Account wherein he/she will have to maintain the required minimum
balance. (minimum balance charges)
Interest As per the extant Rates for Saving bank A/c
offered
ATM cum Free
Debit Card
Internet Free
Banking
CBS Free, within the bank (InterSOL Transactions)
Transactions
Cheque Book Free 3 Cheque Books of 20 leaves(per annum)
RTGS/NEFT Free
Pass book Available
Facility
Transactions at Account holder can withdraw upto maximum of Rs 20,000/- per day
ATM through ATM & Rs 50,000/- through Gold Debit Card.
There are no restrictions on number of withdrawals from Dena Bank ATM
as per existing Policy of the Bank. Withdrawals from other bank’s ATM will
attract applicable charges from time to time.
Add on facilities other Deposit products
Online Tax/ Utility Bill Payment Available
SMS Alerts on Transaction Free as per extant guidelines
Overdraft Facility Limit of Overdraft: Upto Two months’ Net Salary
Rate of Interest: Applicable to temporary overdraft facility/
clean loan
Documents : As per overdraft facility
Review of facility: Every year
Retail Loan Facility Available, as per extant guidelines
The other terms and Conditions of the eligibility for overdraft are as follow:
1) The conduct of the account is to the satisfaction of Sanctioning Authority and free from
any adverse CIBIL Report.
2) The account should be at least 3 months old.
3) The account holder should have minimum 6 months of completed service and/or he
should be a permanent employee. However, considering business potential, Zonal
Manager can waive these conditions.
[Type text] Page 91

4) An undertaking to be obtained from employer that salary of the employee will not be
shifted to other bank without NOC from our Bank. However NOC may be given on
recovering entire dues payable to our Bank.
5) The latest salary certificate duly attested by the Employer to be obtained.
6) The end use of the overdraft is to meet the contingencies need/ requirement of the
account holder. The request letter to be obtained from the account holder and to be kept
on record.
It will also boost our Retail Banking Products
8. Premium Current Account Scheme
Minimum Balance: Rs 5000/- to be maintained at any point of time,

Monthly Average Balance: Rs. 1 Lac per month
1. Free of commission Demand Drafts/MT/Pay Orders up to an aggregate amount of Rs.
1.00 lac per month
OR
Free collection of outstation cheques up to Rs. 50000/- per month on the centre where
we have branches. Actual postage and out of pocket expenses shall be borne by the
account holder. Where we have no branch, only our commission will be waived. The
account holder has to bear the commission of the agent bank in addition to postage and
out of pocket expenses.
The above facility is subject to a maximum of 10 DDs / MTs / Pay Orders/ Outstation
cheques per month.
If the account holder maintains more than Rs. one lac balance in his account then the
concessions will be increased proportionately in multiples of Rs. One Lac.
2. If the Minimum balance / Monthly average balance is not maintained penalty will be
charged
The Scheme is optional.
9. Dena Platinum Current Account Scheme
As per the guidelines of this scheme, the concessions are offered on all service charges
to customers if quarterly average balance in their current is in excess of Rs. 2.50 lacs and
50% concessions if the quarterly average balance is more than Rs.1.25 lac but less than
Rs.2.50 lacs, for Metro and Urban Branches.
Similarly, 100% concessions are offered on all service charges if quarterly average
balance in their current is in excess of Rs. 1 lacs and 50% concessions if the quarterly
average balance is more than Rs.50000/- but less than Rs. 1 lac, for Semi-urban and
Rural Branches.
The Dena Platinum Current Account Scheme will be as under:
Dena Platinum Current Account Scheme

METRO/ METRO/ SEMI-URBAN/ SEMI-URBAN/
URBAN URBAN RURAL RURAL
[Type text] Page 92

Rs.
Rs. 2.50 1.25lacsand Rs. 0.50 lac and
QUARTERLY AVERAGE Rs. 1 lac and
lacsand above but above but less
BALANCE above
above less than than Rs.1lac
Rs.2.50 lacs
Intersol Charges 100 % Free 50 % Free 100 % Free 50 % Free
Cheque Book 100 % Free 50 % Free 100 % Free 50 % Free
Cheque Return Charges 100 % Free 50 % Free 100 % Free 50 % Free
Collection of outstation
100 % Free 50 % Free 100 % Free 50 % Free
cheque
Cash Handling 100 % Free 50 % Free 100 % Free 50 % Free
Folio Charges 100%Free 100%Free
Commission on
100 % Free 50 % Free 100 % Free 50 % Free
DD/MT/PO
ATM-cum-Debit card 100%Free 100%Free
Standing Instruction 100 % Free 50 % Free 100 % Free 50 % Free
Stop Payment Charges 100 % Free 50 % Free 100 % Free 50 % Free
NEFT/RTGS 100%Free 100%Free
10. Dena Super Premium Current Account
A. Monthly Average Balance: Rs 2 lacs with Minimum Balance: Rs. 5000/-

B. Eligibility:
a. Existing Customers who are already maintaining the monthly average balance of Rs.2
lacs& above and the minimum balance of Rs.5000 for one full calendar month will be
eligible to avail of the scheme with immediate effect.
b. Existing customers who are not maintaining the monthly average balance of Rs.2 lacs
and the minimum balance of Rs. 5000 in their Current account shall be eligible for the
scheme only if they maintain the required average balance and minimum balance for
one full calendar month.
c. The new customers who want to avail this facility will open the account and maintain
the required monthly average balance of Rs.2 lacs and the minimum balance of Rs. 5000
for one full calendar month after opening the account, to be eligible to avail the facilities.
C. Facilities provided:
a. Sweep in and sweep out facility: Automatic transfer of balance from Current
Account in excess of Rs. 200,000/- to Fixed Deposit, in multiples of Rs. 25000/- and
re-transfer of funds from the Fixed Deposit to Current Account in multiples of Rs.
25000/- only in “First in First out” basis.
b. EITHER
Free Demand Drafts up to an aggregate amount of Rs. 2 lac per month
OR
Free collection of Outstation cheques up to Rs. 1 Lac per month on the centers where we
have branches. Actual postage & out of pocket expenses shall be borne by the account
holder. Where we do not have a branch, only our commission will be waived. The
account holder has to bear the commission of the agent bank in addition to postage &
out of pocket expenses.
[Type text] Page 93

c. The above facility is subject to a maximum of 20 DDs or Outstation cheques per month
as per month as per the option chosen by the customer at the time of opening the
account or the system will choose the first transaction done by the customer as the
option by default
d. Free Debit card e. Free Internet Banking f. Free RTGS/NEFT g. TDS will be
deducted as per extant guidelines.
D. Minimum & maximum period of fixed Deposit

a. At present, the minimum period of deposits of Rs.1 lac and above is seven days and
that of others is 15 days. Therefore, the minimum period of term deposit (on sweep
out ) will be 7 days for deposits of Rs. 1 lac and above, and 15 days for deposits below
Rs.1 lac, which is subject to change from time to time.
b. The maximum period of term deposit (for the amount in excess of Rs. 2 lac
transferred from Current Account) would be 181 days.
E. Conditions:
a. Monthly average balance of Rs.2 lac is to be maintained for one full calendar month.
b. A minimum balance of Rs.5000/- has to be maintained in the account at any point of
time.
c. Card rate will be applicable for units converted to term deposits if the aggragate
amount of adeposit so converted to term deposit is less than Rs. 1 crores per day.
d. Bulk deposit rate on term deposit to be announced by the Treasury Department every
day would be applicable for units converted to term deposits if the aggregate amount of
deposit so converted to term deposit is Rs.1 crore and above per day.
F. Penalty for not maintaining the Minimum balance / Monthly average balance
a. Rs. 500 to be recovered at the end of the month.

b. All concessions shall be automatically withdrawn and normal charges will be levied.
c. The facilities will be restored only after the depositor maintains the minimum
prescribed balance as stipulated in the scheme.
11. Dena Samruddhi Deposit Scheme

The interest amount is compounded on the quarterly rests, effectively yielding higher
return than the contracted rate.
Minimum Deposit : Rs. 100/- Deposit Period : 6 months - 120
months.
12. Dena Fixed Deposit Scheme

Customer can choose the intervals of receiving the interest. Yearly, Half-yearly, Quarterly
or even Monthly interest payments according to the needs of income.
Duration : The deposit is accepted under this scheme for any period from 7 days to 10
years.
13.Dena Recurring Deposit Scheme :The scheme enables the depositor to save in fixed
monthly installments with different maturity plans depending on the need of the
[Type text] Page 94

customer.By depositing a little amount every month, the depositor gets a tidy lump-sum
amount of principal plus interest at the end of the chosen period. Minimum monthly
installment amount: Rs.50/- and in multiples of Rs. 5/- thereafter.As the old adage goes
"little drops of water, makes a mighty ocean". This scheme is ideally suited for young salaried
people to inculcate a regular and compulsory saving habit.
14. Dena Freedom Deposit Scheme :Dena Freedom Deposit Scheme, is offered with
cheque book facility to enable the customers to withdraw upto 90% of the initial deposit
amount as overdraft.This Deposit scheme ensures that the money of the deposit is neither
blocked nor are depositors stuck with time consuming paperwork.Minimum Deposit : Rs.
10,000/-, which is automatically renewed in multiples of Rs.1,000/-. Deposit Period: 1 - 5
years, compounded interest payable on maturity on the deposit amount.
Rate of Interest: Card rate.
15. Dena Fixed Deposit Scheme :Dena Fixed Deposit Scheme allows the customer to
choose the intervals of receiving their interest. They can choose yearly, half-yearly, quarterly
or even monthly interest payments according to their needs of income.Duration : The
deposit is accepted under this scheme for a minimum period of 7 days to a maximum period
of 10 years.
Rate of Interest: Card rate of interest applicable.
16.Dena Maha Tax Bachat Yojana : A Deposit scheme to avail Income Tax benefit u/s
80C: Any Individual or a Hindu Undivided Family [HUF] can invest a minimum amount of Rs
100/- or multiples thereof, to avail Income tax benefit u/s 80C of the Income Tax Act subject
to a maximum of Rs 1,50,000/- in a financial year.
Rate of Interest :Card rate of interest applicable for deposits of 5 years and above.
Interest Payment: Option available to receive interest either at the time of maturity with
Quarterly Compounding [cumulative] OR at Monthly / Quarterly / Half-yearly / Yearly rests
[non- cumulative].
Period of Deposit: Fixed maturity period of 5 years. Premature withdrawal is not permitted
Deduction under section 80C: In case of joint holder type deposit, the deduction from
income under section 80C of the Act shall be available only to the first holder of the deposit.
Nomination Facility: Available, except in the case of term deposit held by or on behalf of
minor.
Permanent Account Number [PAN]: PAN is mandatory to invest in this scheme.
17. DENA CASH CERTIFICATE “DCC”("Mould Your Future")

"YOU decide How much money you need on maturity."
Who can purchase Cash Certificate can be purchased by any individual in

her/his own name or jointly with other person/s, by a
parent/guardian on behalf of a minor, proprietorship
firms, Hindu Undivided Families, Partnership Firms,
[Type text] Page 95

Limited companies, Clubs, Associations etc.

Maturity Amount Rs. 1000 and in multiple of thousand.
Tenor 7 years from the date of investment.
Rate of Interest Card Rate (similar to the Domestic Term deposits for a
period of 7 years and above).
Initial Deposit Amount This will depend on maturity value selected and rate of
interest applicable at the time of purchase.
Premature withdrawal Available
Loan/Overdraft facility Available
TDS Wherever applicable, TDS will be deducted from maturity

value.
Nomination Available
18. Dena Senior Citizen Scheme :

Dena Bank Senior Citizen's Scheme is open to individuals, who have completed 60 years of age.The
account can be opened in the sole name of the individual (with nomination facility) and/or in joint
name. In case where joint account holder is a person below the age of 60 Years, the name of
Senior Citizen to be given as first name in the application form.The depositor can open Fixed
Deposit (Dena Senior Citizen Fixed Deposit) account where monthly /quarterly/ half yearly/yearly
interest would be paid. The period of such deposit will be minimum 15 Days to maximum 10 years.
For cumulative deposit scheme, (Dena Senior Citizen Samruddhi Deposit) the period of deposit
should be minimum 6 months to maximum 10 years.
Proof of Age. At the time of opening of a new deposit account, Senior Citizens are required to
provide any of the following documents as proof of age.
 Secondary School leaving Certificate indicating date of birth.
 LIC Policy.,Voters Identity Card/ Ration Card.Pension Payment Order.
 Birth Certificate issued by the competent authority.
 Passport.Driving Licence.Superannuation / retirement certificate of Central/State
Governments and Central/State Government Undertakings
Minimum Deposit Amount.Minimum amount of deposit should be Rs. 1,000/- per deposit receipt
and in multiple of Rs.1000/- with no maximum deposit ceiling.
Rate of Interest.Under Dena Senior Citizen Deposit Scheme, additional interest over and above
card rate will be paid @ 0.50% for all maturities.
Loan facility :Upto 85% of deposit amount. ,Free ATM Card facility during the first year
On line creation of Term Deposits :Term Deposit online can be opened by the Individual customers
who have registered for Internet Banking by logging through their Internet Banking user id and
password. The following types of deposits can be opened online
a. Cumulative Plan – Samrudhi Deposit Scheme ( SDR )
b. Non Cumulative Plan – Fixed Deposit Scheme ( FDR )
[Type text] Page 96

Deposit will be opened as per the existing details available with the Bank i.e. Name, constitution
for the logged in customer.System will not process the request, if account is Dormant / Inactive /
Frozen or if there is no sufficient available balance in the account. In respect of FDR, periodic
interest earned on the deposit and the deposit amount ( on maturity ) will be automatically
credited to the account from which the deposit is funded. The maturity value of the deposit will be
credited to the same account from which the is funded for cumulative deposit.Customer has to
deposit contact the account maintaining branch in person for Nominations / any updations in the
personal data.Date of Birth & PAN is mandatory and TDS will be deducted as per IT guidelines.
Depositor should submit form 15-G / 15-H to the branch where the deposit is maintained to avoid
deduction of TDS on the interest amount earned on the deposit. In case Form 15-G / 15-H is not
submitted, the maturity value will be reduced to the extent of TDS applicable on the deposit as per
extant guidelines . Depositor should print / save cyber receipt generated after opening the deposit
for record purposes. Customer has to contact the account maintaining branch in person along with
the cyber receipt for premature closure of the deposit.There is no need for the customer to visit
the branch either for creation or closure of the term deposit.it is convenient and easy to use with
24 * 7 availability.For creation of Term Deposits on line, users have to select Requests
----------Submit Requests------------FD Account Opening--------and fill up the relevant details and
submit. After successful creation, Cyber Receipt, with all the details about the term deposit, will
be generated which can be printed / retained by the customer for record purposes.
NRI DEPOSIT PRODUCTS
Features of various Deposit Schemes available for Non-Resident

Indians (NRIs)1
Status in current Financial Year
Have you gone out of India for : Have you to come to India for
Have you gone out of India for : Have you to come to India for:
Taking up Employment outside India, or Taking up employment in India, or

Carrying out business or vocation outside India or Carrying out business or vocation in India or,
Any other purpose for which stay outside India is Any other purpose for which stay in India is
uncertain uncertain
Yes No Yes No
Non resident Resident Resident Non Resident
[Type text] Page 97

Status in current financial year

A Non-Resident Indian means: - A person resident outside India who is a citizen of India or
is a person of Indian origin.
RESIDENT OUTSIDE INDIA
CITIZEN OF
INDIA FOREIGN
resident CITIZEN
OTHER
THAN
NEPAL OR Person of Non
BHUTAN Person of Indian Origin (he
Indian Origin is not NRI, he is
(PIO) (see next foreign national)
diagram)
For any of following purposes:
 Employment outside India or
 Carrying out business/
vocation outside India or comes to India for any purposes other than :
 Any other circumstances which 1. Employment in India
indicate his intention to stay 2. Carrying out business/ vocation In India
outside India for uncertain period 3. Any other circumstances which indicate his
intention to stay in India for uncertain period
PERSON OF INDIAN ORIGIN (PIO)
CITIZEN OF ANY COUNTRY OTHER THAN

BANGLADESH & PAKISTAN
(i) HE AT TIME HELD

(ii) HE OR EITHER OF HIS (iii) HIS SPOUSE IS AN
INDIAN PASSPORT
PARENTS OR GRAND PARENTS INDIAN CITIZEN OR A
; OR
WAS A CITIZEN* OF INDIA; PERSON AS PER (i) & (ii)
[Type text] Page 98
* AS PER CONSTITUTION OF INDIA OR THE CITIZENSHIP ACT 1955 (57 OF 1955)

Person of Indian Origin means: - A citizen of any country other than Bangladesh or
Pakistan, if
i) He/She at anytime held Indian passport; or
ii) He/She or either of his parents or any of his grand parents was a citizen of India
by virtue of the Constitution of 'India or the Citizenship Act, 1955 (57 of 1955);
or
iii) The person is a spouse of an Indian citizen or a person referred to in sub-clause
(i) or (ii).
NRIs / PIOs can open the following Non-Resident Deposit Accounts:
1.Dena FCNR(B) EDGE

Dena FCNR(B) EDGE is basically the standard Non-Resident Term Deposit and Forward Contract
combined into one. The product aims to provide hedge against foreign exchange fluctuations
along with the normal interest income.
The features of the new product shall be the same as for a regular FCNR(B) deposit. However, the
deposit shall be available only for the period of one year. In addition to that, a hedge option will
be inbuilt in the deposit account. The deposit amount shall be hedged on the date of opening of
the deposit.
Salient features:• Type of Account – FCNR(B) Deposit,• Tenor – One year only
• Minimum amount – USD 5,000 or equivalent,• Available in currencies – USD, EUR, GBP, CAD,
AUD
• Funds for opening of the account – Inward Remittance from Abroad / Conversion from NRE
Account / Proceeds of Foreign Currency Notes / Travelers Cheques,• Rate of interest – As
applicable to regular FCNR(B) deposit for one year,• Benefits – Assured amount in Indian Rupees
at maturity, Nomination – Allowed
• Repatriation – Allowed,• Joint Account – Permitted,• Power of Attorney – Permitted
• Loans Against Deposits – Maximum up to 85% of the deposit amount
• Premature withdrawal of deposit – Permitted.
* However, no interest shall be payable. The loss if any, on account of the cancellation of forward
contract shall be borne by the account holder.
• Premature cancellation of forward cover – Not Permitted.
• Tax benefits – Interest income exempted from Income Tax & Wealth Tax
• Charges – No charges for booking of forward cover.
2.Foreign Currency Non-Resident Accounts (Banks) Scheme – FCNR(B) :This account is

maintained in foreign currency and thus provides full cover against fluctuations in foreign
[Type text] Page 99

exchange rates.
Salient features:• The amount held is repatriable (Principal as well as Interest).• It can be opened
in Dena Bank in Seven currencies viz. US Dollars, Pound Sterling, Euro, Australian Dollar, Canadian
Dollar, Singapore Dollar and Hong Kong Dollar.• The interest earned in this account is not subject
to Income Tax and amount held is exempted from Gift tax/ Wealth tax.• This is maintained as a
term deposit for not less than 1 year and not exceeding 5 years.• Nomination facility is
available.• Joint account with NRIs is permitted.
• A loan against deposit is permitted.• A loan to depositor in foreign currency is permitted.
• Resident can operate the account under Letter of Authority or Power of Attorney.
3.Non-Resident Ordinary Rupee Account Scheme – NRO

This account is maintained in Indian Rupees and normally operated for crediting rupee earnings /
income such as dividend, interest etc. in India.
Salient features:
• This is maintained as Saving, Current, Term Deposits, and Recurring Deposits.
• The interest earned on this account is taxable under Indian Income Tax.
• Repatriation allowed up to USD 1 million, per financial year (Apr-Mar) subject to payment of
applicable taxes.
• Joint account with NRIs and Residents is permitted.
• A loan in India is permitted.
• This can be used for local disbursements and local receipts can be credited to this account.
• Resident can operate the account under Letter of Authority or Power of Attorney.
Dena Bank IT Products/Services/Facilities
1. Dena Debit cum ATM Card (Named / Unnamed , Rupay / VISA / EMV Card)
2. ATM withdrawal / Shop Purchases / Net purchases by Dena Debit Cards
3. Dena I-Connect (Dena Bank Internet / Net Banking services),
4. Utility Bill Payment by Dena Bank Net Banking
5. Online Term Deposit (FDR / SDR) Generation by Dena Bank Net Banking
6. Online Remittances by online NEFT / RTGS (by Dena Bank Net Banking)
7. Viewing 26AS (TDS statements) and e-Filing IT Return (by Dena Bank Net
Banking login )
8. Online purchases by Dena Bank Net Banking (through BillDesk )
9. Dena Alert Services by SMS
10. Dena Garima (CBS Project) , Anywhere Banking (Intersol transaction possible)
11. Dena RTGS/NEFT Facility
12. Dena Phone Banking
13. Dena NECS / ECS
14. Mobile Banking, Dena M-Connect, IMPS(Immediate Payment Service), USSD
(Unstructured suplimentary Service Data), SMS Based
15. Dena Miss call facility to know Balance and Mini-statement of max 5 operative
accounts at FREE of cost
[Type text] Page 100

16. Dena Bank app on Mobile services (ATM/E-lobby/Branch Locator, IMPS etc.).
17. Online Complaint Management on Dena Bank website (Branch uses CITRIX
CLIENT MANAGEMENT WEB SOFTWARE for updating complaints & Grievance
redressal)
18. Tracking AADHAR Seeding in Account (on Dena Bank website)
19. Online Request for AADHAR and LPG Seeding & track seeding status (on Dena
Bank website)
20. Dena e-Trade (Online Trading in shares)
21. Dena e-Tax Pay (e-Payment of Both Direct Taxes and Indirect Taxes like Customs
Duty, Excise Duty & Service Taxes)
22. E-payment to Govt Treasury Depts., Virtual Treasuries.
23. Prepaid Cards (Dena International Travel Cards / Gift Cards
24. Dena Demat Services / ASBA (Application supported by blocked application)
25. Online Donations / FREE Utility payments by VISA Bill Pay (by VISA Debit Cards)
26. Treasury Operation (Online Card Rates for current Date) (on Dena Bank website)
27. Bancassurance in Branches (Corporate agents for Life Insurance Corp LIFE and
United India Insurance Policies NON-LIFE)
28. Distribution of Mutual Funds (In branches) ( see list of Mutual Funds in
www.denabank.com )
29. PPF Account Opening and maintainance in 88 authorised branches ( see list of
authorized branches in www.denabank.com )
Dena Bank Net Banking (Dena I-Connect )
What is Dena I-Connect ? What are Benefits of Net-Banking ?

Dena I-Connect( Net Banking) is the Internet Banking Service provided by Dena Bank
for the customers of its all Core Banking (CBS) Branches. Net-Banking is the most
comfortable channel for experiencing 24X7X365 banking from any part of the world.
Very good Banking alternative Delivery channels for attracting YOUNG customers.
Who are eligible for DenaiConnect -Internet banking?

Internet Banking is available to all customers of Core Banking (CBS) branches. The
customers could be:
 Savings Account holders
 Current Account holders
 Cash Credit Account holders
 Overdraft Account holders
How a customer can get registered for Dena I-Connect ?
The customer of any of our Core banking (CBS) branches can contact any CBS branch
for a printed Application form. Alternately they may also download the application form
from Bank website: www.denabank.com . After branch receives the Dena I Connect
filled in form the entry is made in “BDTM” menu option in Finacle. After Day end
process the Internet Banking Cell in Data Center issues PIN Mailers (Sign-on and

for Sign-On Password and Transaction Password). These PIN Mailers have to be
issued to customer with acknowledgement.
*Personal and Corporate Login Option available
With a view to increase the customer registrations base for Internet Banking and Mobile
Banking applications, Information Technology Department, HO has developed an
application link which is hosted on Bank website i.e. www.denabank.com. Using the
link customer can apply for Internet Banking, Mobile Banking or both facilities.
To complete registration, customer needs to input his account details viz. Customer-ID,
Current / Savings Bank Account No, Registered Mobile No, Date-of-birth, Registered
email-id, Registered ID-Proof (PAN / Adhaar No), Facility Type (Internet Banking /
Mobile Banking / Both). On filling the account details, customer will get
acknowledgement regarding receipt of registration request.
Customer registrations are processed centrally within a time span for T+2 days at Data
Centre.
On completion of processing of registration requests, customer gets confirmation
about activation of the facility through SMS.
To use Internet Banking facility, customer can set his own Sign on and Transaction
Passwords using Debit card details in the Internet Banking Application link (First
Time Login).
In case the customer does not have Debit card, he needs to visit the branch. Branch
officials shall generate & print the Sign-on and Transaction Passwords and deliver it to
customer after obtaining acknowledgement.
What banking facilities are possible through Dena I-Connect ?

Balance Inquiry, Mini Statement (Last 9 transactions), Download and Viewing
Detailed Statement of Account in PDF/XLS format, Cheque Book inquiry,Cheque
Status Enquiry, TDS Enquiry by Viewing 26AS statement, Direct e-Filing of IT
Return with Personal Login,Fund Transfer (Self / Third Party within Dena Bank)
Funds Transfer (Third Party - Inter Bank using RTGS / NEFT facility). [only after
cool off period of 24 Hours of Registration of beneficiary ]
* The overall daily limit for all financial transactions except E-payment of taxes
but including RTGS / NEFT transactions is Rs. 10 Lakhs
Online Payment (E-tax payment) of Direct Taxes and Indirect Taxes,Online
payment of taxes (e-tax) to some state govt virtual treasury,Utility payment
through BillDesk payment Gateway (Start from Billers Website), Online
Purchases through BillDesk payment Gateway,Online Term Deposit (FDR / SDR)
Generation by Dena Bank Net Banking,Online Donations to PMRF, Siddhi Vinayak
Trust, etc.,Tracking AADHAR Seeding in Account , Online Request for AADHAR
and LPG ID Seeding & track seeding status,Online Loan application and tracking
system, Online Customer complaint

MOBILE BANKING
Dena Bank's offers Dena MConnect the convenient and secure way to conduct banking
transaction in your account using your mobile handset. A new revamped mobile
banking application is now available on smartphone versions i.e. Android, Windows and
iOS. The new mobile banking application is Simple, Attractive and User friendly. We are
confident that everyone would find the application is easy to use. New Mobile App can
be downloaded from application stores (Google Play (Android), AppStore (iOS) & Store
(Windows)).
Features available in new Mobile App are:
1. Balance Inquiry
2. Mini Statement
3. Fixed Deposit account inquiry
4. Fund transfer
a. Self-linked accounts
b. Third party fund transfer
c. IMPS through MMID (instant 24 X 7 fund transfer)
d. IMPS through Account number and IFSC Code (instant 24 X 7 fund transfer)
5. Beneficiary addition, deletion and inquiry.
6. Locate ATM and Branches
7. Change password and MPIN
8. Generate, retrieve and cancel MMID
9. Utility Bill payment, mobile/DTH recharge facility will be provided shortly.
Mobile Banking Registration

With a view to increase the customer registrations base for Internet Banking and Mobile
Banking applications, Information Technology Department, HO has developed an
application link which is hosted on Bank website i.e. www.denabank.com. Using the
link customer can apply for Internet Banking, Mobile Banking or both facilities.
To complete registration, customer needs to input his account details viz. Customer-ID,
Current / Savings Bank Account No, Registered Mobile No, Date-of-birth, Registered
email-id, Registered ID-Proof (PAN / Adhaar No), Facility Type (Internet Banking /
Mobile Banking / Both). On filling the account details, customer will get
acknowledgement regarding receipt of registration request.
Customer registrations are processed centrally within a time span for T+2 days at Data
Centre.
On completion of processing of registration requests, customer gets confirmation
about activation of the facility through SMS.
In the case of Mobile Banking, the MPIN will be generated from Project Office and
despatched to the base branch. The customer will have to collect the same from the
branch.
Registration facility through Bank web site improves convenience and there is no
requirement for the customer to visit the branch. However, for Mobile Banking
application, customer needs to visit branch for collecting the MPIN.

UPI (Unified Payment Interface)

The easiest way to think of UPI is that it is a payment method to transfer money between 2
parties. It is similar to NEFT or RTGS transfers in that way. BHIM can be used currently on all
handsets with iOS & Android OS version 4 and above In how many languages is BHIM
available? Currently it is available in 12 languages, i.e., Hindi, English, Tamil, Telugu,
Malayalam, Bengali, Odia, Kannada, Punjabi, Assamese, Marathi and Gujarati.
A Virtual Payment Address (VPA) is a unique identifier which you can use to send and
receive money on UPI. Think of it as an email ID which you can use to transfer money.
Currently, you can use BHIM only in India.
NPCI does not charge any user for transacting on BHIM. Kindly get in touch with your bank
to ask for their charges. UPI needs need a stable internet connecting to run the application.
BHIM is interconnected with every bank through the UPI ecosystem. Hence, you will not be
able to link your account on BHIM application.
BHIM: Bharat Interface for Money (BHIM) is an app that lets you make simple, easy and
quick payment transactions using Unified Payments Interface (UPI). You can make instant
bank-to-bank payments and Pay and collect money using just Mobile number or Virtual
Payment Address (VPA) *99# : *99# (BHIM without Internet), is an interoperable
infrastructure, comprising banks & telecom operators, using USSD technology to provide
banking services through a common platform. USSD technology, till now was used primarily
in the field of telecommunication, a user can access banking services by just pressing *99#
from his/her mobile phones. This service works across all GSM mobile handsets
UPI Features:
• Account Management – you can add your multiple bank accounts in a single app
• Beneficiary management – manage beneficiary using Aadhaar, VPA, MMID and IFSC &
Account No.
• Pay and Collect request
• Balance Inquiry
• Instant fund transfer
• Incident/Dispute can be raised in the App
• Instant UPIN generation/reset and account activation
• Pending Approval for collect request
• Works on single click 2 factor authentication
Transaction Limitations:
• The maximum limit per bank/Mobile is Rs. 1.0 Lakh per day.
• Maximum no of transactions allowed in a day are 20.
Benefits of the UPI:
UPI is built on top of the IMPS, immediate, 24x7, through the year, unlike NEFT or RTGS

UPI allows you to pay/receive directly from/to your Bank Account without revealing your
Account details& IFSC.
UPI can also be used for online shopping; recharges- enter your UPI VPA and get an alert on
your mobile device to authenticate the transaction using UPIN.
Dena Bank One Click Payment Facility
To provide seamless mobile digital payments facility to customers, Bank has made
operational “Dena Bank One Click Payment facility” in association with Reliance
JioMoney.
Customers will have ease of making digital payments like bill pay, IRCTC Railway
Ticket booking, DTH & Mobile recharge, Merchant Payments while shopping directly
from their Dena Bank Operative Accounts.
Making direct payments from Jio-Money Wallet account is first of its kind using
secure token authentication between the Bank and the JioMoney platform, ensuring
the highest level of security and safety of customer account details.
The users are not required to load the JioMoney wallet and therefore the specified
monthly limit of INR 20,000 for pre-paid wallets is not applicable.
Salient features:
 Customer can make payments across all JioMoney accepting Merchants

 Customer need not remember account details for day to day payments
 Secure OTP authenticated payments
 Recharge, Pay Bills, Book Railway Tickets or Pay at shops
 Customer need not refill wallet and can make payment directly from his Dena
Bank Account
 Bank customers can use JioMoney ecosystem and enjoy various offers and
benefits offered that also includes at local shops and merchants. Dena Bank
Customer will have the advantage of accessing these benefits through Dena
Bank Payment option without loading his Jiomoney wallet.
How it works:
Download the JioMoney Wallet App from GooglePay Store (Android) to set user
profile, password and MPIN for using JioMoney App.
After installation of the JioMoney app, customer can link his Dena Bank account
through Debit Card validation. Once registration process completes, customer will be
able to make the payments/purchases directly from his Dena Bank Account.
How to link Bank Account for one click payment facility:

To use Dena Bank Payment Option facility, a customer requires:
 An active Dena bank Debit Card

 Dena Bank Account No.

DENA EASYPOS - POINT OF SALE TERMINALS
DENA EasyPOS: Terminology for Dena Bank Point of Sale Terminals
 WHAT IS PoS (POINT of SALE) TERMINAL?
PoS or Swipe Machine as it is popularly known is a technological

instrument provided to a Merchant Establishment (ME) to carry out the
sale of goods or services to customers in a cashless environment. The
customer has to swipe his/her Debit, Credit or Prepaid Card in the PoS
or Swipe Machine
Give your business a professional touch by installing a PoS (Point of

Sale) terminal.
 FEATURES & BENEFITS:
• Faster application processing and terminal installation.

• Superior connectivity.
• Settlements on T+1 basis.
• Helpdesk with assured TAT.
• Nominal fee / Monthly charges
• No hidden charges
• cash@POS features available ( subject to activation)
 DENA EasyPOS accepts varieties of cards like Visa, Master( under

integration), RuPay card and Discovers cards
 ELIGIBILITY:
• The merchant should have a current account with a branch of the bank
with a satisfactory account operation.
• The merchant should be in retail/over the counter trade and shall not
be in the Visa/MasterCard negative list for malpractices.
• The merchant shall have a fixed landline connection for PSTN based
Terminal otherwise they will have to apply for GPRS based machine

 TYPES & FEATURES OF DENA EasyPOS TERMINALS:
TYPES OF POS POS TERMINAL MODEL FEATURES
Connect With Landline
(Merchant should have

PSTN ICT- 220 a working
landline connection)
Physical Print Invoice &

GPRS – based Handheld
PayTivo- 7210 model
with Battery SMS receipt invoice
(With inbuilt Battery &

SIM Card) PayTivo – 6210 model
SMS receipt invoice
(Digital POS)
Merchant Discount Rate or Merchant Service Fee:
We charge the most competitive MDR in the industry:
DEBIT CARD CREDIT CARD

MDR or
Merchant for trx amt
for trx amt for trx Super
Service Fee between 1001 Standard Premium
<1,000 amt>2000 Premium
to 2,000
Trx Charges 0.25% 0.50% 1% 1.50% 2.00% 2.25
DENA GIFT CARD
The Dena Bank Gift Card comes packed with a host of features:
Freedom of choice - A prepaid, non-reloadable card with three year validity which is
widely accepted across merchant outlets and online portals for shopping, dining,
online transactions at over 10 lakh stores and/or websites across India accepting
Visa cards

Flexible Amount - Flexibility of loading any amount ranging from Rs. 500 to Rs.
50,000 as per your requirement
Ideal Choice for Corporate Gifting – Reward& Recognition for your employees,
incentive for clients etc as per your requirements to strengthen your relationship
Instant Card, Sold over the counter

No hassle of opening an account with us
Can be used more than once till the amount of the card is exhausted
Pre-wrapped and ready for Gifting
PRIORITY SECTOR LENDING-TARGETS AND CLASSIFICATION
CATEGORIES AND TARGETS UNDER PRIORITY SECTOR
1. The categories under priority sector are as follows:
i. Agriculture
ii. Micro, Small and Medium Enterprises
iii. Export Credit
iv. Education
v. Housing
vi. Social Infrastructure
vii. Renewable Energy
viii. Others
The details of eligible activities under the above categories are specified
in Chapter III.
III.
2. Targets /Sub-targets for Priority sector
(i) The targets and sub-targets set under priority sector lending for all scheduled
commercial banks operating in India are furnished below:
Categories Domestic scheduled commercial Foreign banks with less

banks and Foreign banks with 20

branches and above than 20 branches
Total 40 percent of Adjusted Net Bank 40 percent of Adjusted Net

Priority Credit [ANBC defined in subBank Credit [ANBC defined
Sector paragraph (iii)] or Credit Equivalent in sub paragraph (iii)] or
Amount of Off-Balance SheetCredit Equivalent Amount
Exposure, whichever is higher. of Off-Balance Sheet
Exposure, whichever is
Foreign banks with 20 branches and higher; to be achieved in a
above have to achieve the Total phased manner by 2020 as
Priority Sector Target within aindicated in sub paragraph
maximum period of five years(ii) below.
starting from April 1, 2013 and ending
on March 31, 2018 as per the action
plans submitted by them and
approved by RBI.
Agriculture 18 percent of ANBC or CreditNot applicable
Equivalent Amount of Off-Balance
Sheet Exposure, whichever is higher.
Within the 18 percent target for

agriculture, a target of 8 percent of
ANBC or Credit Equivalent Amount of
Off-Balance Sheet Exposure,
whichever is higher is prescribed for
Small and Marginal Farmers.
Foreign banks with 20 branches and

above have to achieve the Agriculture
Target within a maximum period of
five years starting from April 1, 2013
and ending on March 31, 2018 as per
the action plans submitted by them
and approved by RBI. The sub-target
for Small and Marginal farmers would
be made applicable post 2018 after a
review in 2017.
##
Micro 7.5 percent of ANBC or Credit Not Applicable
Enterprises Equivalent Amount of Off-Balance
Sheet Exposure.
The sub-target for Micro Enterprises

for foreign banks with 20 branches
and above would be made applicable

post 2018 after a review in 2017.

Advances 10 percent of ANBC or CreditNot Applicable
to Weaker Equivalent Amount of Off-Balance
Sections Sheet Exposure, whichever is higher.
Foreign banks with 20 branches and

above have to achieve the Weaker
Sections Target within a maximum
period of five years starting from
April 1, 2013 and ending on March 31,
2018 as per the action plans
submitted by them and approved by
RBI.
## Additionally, domestic banks are directed to ensure that the overall lending
to non-corporate farmers does not fall below the system-wide average of the
last three years achievement. All efforts should be maintained to reach the
level of 13.5 percent direct lending to the beneficiaries who earlier constituted
the direct agriculture sector. The applicable system wide average figure for
computing achievement under priority sector lending will be notified every
year. For FY 20162016-17
-17, the applicable system wide average figure is
11.70
11.70 percent.
(ii) The Total Priority Sector target of 40

percent for foreign banks with less than 20
branches has to be achieved in a phased
manner as under:-
The Total Priority Sector as
percentage of ANBC or Credit
Financial Year Equivalent Amount of Off-
Balance Sheet Exposure,
whichever is higher
2015-16 32
2016-17 34
2017-18 36
2018-19 38
2019-20 40

The additional priority sector lending target of 2 percent of ANBC each year
from 2016-17 to 2019-20 has to be achieved by lending to sectors other than
exports. The sub targets for these banks, if to be made applicable post 2020,
would be decided in due course.
(iii) The computation of priority sector targets/sub-targets achievement will be

based on the ANBC or Credit Equivalent Amount of Off-Balance Sheet
Exposures, whichever is higher, as on the corresponding date of the preceding
year.
The outstanding deposits under RIDF and other funds with NABARD, NHB,
SIDBI and MUDRA Ltd. in lieu of non-achievement of priority sector lending
targets/sub-targets will form part of ANBC. Advances extended in India against
the incremental FCNR (B)/NRE deposits, qualifying for exemption from
CRR/SLR requirements
Computation of Adjusted Net Bank Credit (ANBC)
Bank Credit in India [As prescribed in item No.VI of Form

I
‘A’ under Section 42 (2) of the RBI Act, 1934].
Bills Rediscounted with RBI and other approved

II
Financial Institutions
Net Bank Credit (NBC)* III (I-II)
Bonds/debentures in Non-SLR categories under HTM IV

category+ other investments eligible to be treated as
priority sector +Outstanding Deposits under RIDF and
other eligible funds with NABARD, NHB, SIDBI and
MUDRA Ltd. on account of priority sector shortfall +
outstanding PSLCs
Eligible amount for exemptions on issuance of long-term V

bonds for infrastructure and affordable housing.
Eligible advances extended in India against the

incremental FCNR (B)/NRE deposits, qualifying for VI
exemption from CRR/SLR requirements.
ANBC III+IV-V-VI
* For the purpose of priority sector computation only. Banks should

not deduct / net any amount like provisions, accrued interest, etc.
from NBC.

It has been observed that some banks are subtracting prudential write off at
Corporate/Head Office level while reporting Bank Credit as above. In such
cases it must be ensured that bank credit to priority sector and all other sub-
sectors so written off should also be subtracted category -wise from priority
sector and sub-target achievement.
All types of loans, investments or any other items which are treated as eligible
for classification under priority sector target/sub-target achievement should
also form part of Adjusted Net Bank Credit.
CHAPTER - III
DESCRIPTION OF ELIGIBLE CATEGORIES UNDER PRIORITY SECTOR
3. Agriculture
The lending to agriculture sector has been defined to include (i) Farm Credit (which
will include short-term crop loans and medium/long-term credit to farmers) (ii)
Agriculture Infrastructure and (iii) Ancillary Activities. A list of eligible activities under
the three sub-categories is indicated below:
3.1 Farm A. Loans to individual farmers [including Self Help Groups

credit (SHGs) or Joint Liability Groups (JLGs), i.e. groups of
individual farmers, provided banks maintain disaggregated
data of such loans] and Proprietorship firms of farmers, directly
engaged in Agriculture and Allied Activities, viz., dairy, fishery,
animal husbandry, poultry, bee-keeping and sericulture. This
will include:
(i) Crop loans to farmers, which will include traditional/non-
traditional plantations and horticulture, and, loans for allied
activities.
(ii) Medium and long-term loans to farmers for agriculture and
allied activities (e.g. purchase of agricultural implements and
machinery, loans for irrigation and other developmental
activities undertaken in the farm, and developmental loans for
allied activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz.,
spraying, weeding, harvesting, sorting, grading and
transporting of their own farm produce.
(iv) Loans to farmers up to ₹50 lakh against
pledge/hypothecation of agricultural produce (including
warehouse receipts) for a period not exceeding 12 months.
(v) Loans to distressed farmers indebted to non-institutional
lenders.
(vi) Loans to farmers under the Kisan Credit Card Scheme.

(vii) Loans to small and marginal farmers for purchase of land

for agricultural purposes.
B. Loans to corporate farmers, farmers' producer
organizations/companies of individual farmers, partnership
firms and co-operatives of farmers directly engaged in
Agriculture and Allied Activities, viz., dairy, fishery, animal
husbandry, poultry, bee-keeping and sericulture up to an
aggregate limit of ₹2 crore per borrower. This will include:
(i) Crop loans to farmers which will include traditional/non-
traditional plantations and horticulture, and, loans for allied
activities.
(ii) Medium and long-term loans to farmers for agriculture and
allied activities (e.g. purchase of agricultural implements and
machinery, loans for irrigation and other developmental
activities undertaken in the farm, and developmental loans for
allied activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz.,
spraying, weeding, harvesting, sorting, grading and
transporting of their own farm produce.
(iv) Loans up to ₹50 lakh against pledge/hypothecation of
agricultural produce (including warehouse receipts) for a period
not exceeding 12 months.
3.2. i) Loans for construction of storage facilities (warehouses,

Agriculture market yards, godowns and silos) including cold storage units/
infrastructure cold storage chains designed to store agriculture
produce/products, irrespective of their location.
ii) Soil conservation and watershed development.
iii) Plant tissue culture and agri-biotechnology, seed production,
production of bio-pesticides, bio-fertilizer, and vermi
composting.
For the above loans, an aggregate sanctioned limit of ₹100
crore per borrower from the banking system, will apply.
3.3.Ancillary (i) Loans up to ₹5 crore to co-operative societies of farmers for

activities disposing of the produce of members.
(ii) Loans for setting up of Agriclinics and Agribusiness Centres.
(iii) Loans for Food and Agro-processing up to an aggregate
sanctioned limit of ₹100 crore per borrower from the banking
system.
(iv) Loans to Custom Service Units managed by individuals,
institutions or organizations who maintain a fleet of tractors,
bulldozers, well-boring equipment, threshers, combines, etc.,
and undertake farm work for farmers on contract basis.

(v) Bank loans to Primary Agricultural Credit Societies (PACS),

Farmers’ Service Societies (FSS) and Large-sized Adivasi
Multi-Purpose Societies (LAMPS) for on-lending to agriculture.
(vi) Loans sanctioned by banks to MFIs for on-lending to
agriculture sector as per the conditions specified in paragraph
19 of these Master Directions.
(vii) Outstanding deposits under RIDF and other eligible funds
with NABARD on account of priority sector shortfall.
For the purpose of computation of achievement of the sub-target, Small and

Marginal Farmers will include the following:-
 Farmers with landholding of up to 1 hectare (Marginal Farmers). Farmers

with a landholding of more than 1 hectare and up to 2 hectares (Small
Farmers).
 Landless agricultural labourers, tenant farmers, oral lessees and share-
croppers, whose share of landholding is within the limits prescribed for small
and marginal farmers.
 Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e.
groups of individual Small and Marginal farmers directly engaged in
Agriculture and Allied Activities, provided banks maintain disaggregated data
of such loans.
 Loans to farmers' producer companies of individual farmers, and co-

operatives of farmers directly engaged in Agriculture and Allied Activities,
where the membership of Small and Marginal Farmers is not less than 75 per
cent by number and whose land-holding share is also not less than 75 per cent
of the total land-holding.
4. Micro, Small and Medium Enterprises (MSMEs)
4.1. Limits for investment in plant and machinery/ equipment: The limits for
investment in plant and machinery/equipment for manufacturing / service enterprise,
as notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E)
dated September 9, 2006 are as under:-
Manufacturing Sector
Enterprises Investment in plant and machinery
Micro Enterprises Does not exceed twenty five lakh rupees
More than twenty five lakh rupees but does

Small Enterprises
not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not

exceed ten crore rupees
Service Sector
Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees
More than ten lakh rupees but does not

Small Enterprises
exceed two crore rupees
More than two crore rupees but does not

Medium Enterprises
exceed five crore rupees
Bank loans to Micro, Small and Medium Enterprises, for both manufacturing
and service sectors are eligible to be classified under the priority sector as per
the following norms:
4.2. Manufacturing Enterprises
The Micro, Small and Medium Enterprises engaged in the manufacture or

production of goods to any industry specified in the first schedule to the
Industries (Development and Regulation) Act, 1951 and as notified by the
Government from time to time. The Manufacturing Enterprises are defined in
terms of investment in plant and machinery.
4.3. Service Enterprises
Bank loans up to ₹ 5 crore per unit to Micro and Small Enterprises and ₹ 10
crore to Medium Enterprises engaged in providing or rendering of services
and defined in terms of investment in equipment under MSMED Act, 2006.
4.4. Factoring Transactions
(i) Factoring transactions on ‘with recourse’ basis by banks which carry out
the business of factoring departmentally, wherever the ‘assignor’ is a Micro,
Small or Medium Enterprise, subject to the corresponding limits for
investment in plant and machinery/ equipment and other extant guidelines for
priority sector classification. Such outstanding factoring portfolios may be
classified by banks under MSME category on the reporting dates.

(ii) Factoring transactions taking place through the Trade Receivables

Discounting System (TReDS) shall also be eligible for classification under
priority sector upon operationalization of the platform.
4.5. Khadi and Village Industries Sector (KVI)
All loans to units in the KVI sector will be eligible for classification under the
sub-target of 7.5 percent prescribed for Micro Enterprises under priority
sector.
4.6. Other Finance to MSMEs
(i) Loans to entities involved in assisting the decentralised sector in the supply
of inputs to and marketing of outputs of artisans, village and cottage
industries.
(ii) Loans to co-operatives of producers in the decentralis

decentralised sector viz.
artisans, village and cottage industries.
(iii) Loans sanctioned by banks to MFIs for on-lending to MSME sector as per
the conditions specified in paragraph 19 of these Master Directions.
(iv) Credit outstanding under General Credit Cards (including Artisan Credit
Card, Laghu Udyami Card, Swarojgar Credit Card, and Weaver’s Card etc. in
existence and catering to the non-farm entrepreneurial credit needs of
individuals).
(v) Overdrafts extended by banks after April 8, 2015 upto ₹5,000/- under
Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts provided the borrower’s
household annual income does not exceed ₹ 100,000/- for rural areas and ₹
1,60,000/- for non-rural areas. These overdrafts will qualify as achievement of
the target for lending to Micro Enterprises.
(vi) Outstanding deposits with SIDBI and MUDRA Ltd. on account of priority
sector shortfall.
4.7. To ensure that MSMEs do not remain small and medium units merely to
remain eligible for priority sector status, the MSME units will continue to enjoy
the priority sector lending status up to three years after they grow out of the
MSME category concerned.
5. Export Credit
The Export Credit extended as per the details below will be classified as priority
sector.

Foreign banks with

Foreign banks with 20
Domestic banks less than 20
branches and above
branches
Incremental export credit Incremental export creditExport credit will be

over corresponding date over corresponding date ofallowed up to 32
of the preceding year, up the preceding year, up to 2percent of ANBC or
to 2 percent of ANBC or percent of ANBC or CreditCredit Equivalent
Credit Equivalent Amount Equivalent Amount of Off- Amount of Off-
of Off-Balance Sheet Balance Sheet Exposure,Balance Sheet
Exposure, whichever is whichever is higher,Exposure, whichever
higher, effective from April effective from April 1, 2017is higher.
1, 2015 subject to a (As per their approved
sanctioned limit of up to plans, foreign banks with
₹25 crore per borrower to 20 branches and above are
units having turnover of allowed to count certain
up to ₹100 crore. percentage of export credit
limit as priority sector till
March 2017).
Export credit includes pre-shipment and post- post-shipment export credit

(excluding off-balance sheet items) as defined in Master Circular on Rupee /
Foreign Currency Export Credit and Customer Service to Exporters issued by
our Department of Banking Regulation.
6. Education
Loans to individuals for educational purposes including vocational courses

upto ₹10 lakh irrespective of the sanctioned amount will be considered as
eligible for priority sector.
7. Housing
7.1 Loans to individuals up to ₹28 lakh in metropolitan centres (with

population of ten lakh and above) and loans up to ₹20 lakh in other centres for
purchase/construction of a dwelling unit per family provided the overall cost of
the dwelling unit in the metropolitan centre and at other centres should not
exceed ₹35 lakh and ₹25 lakh, respectively. The housing loans to banks’ own
employees will be excluded. As housing loans which are backed by long term
bonds are exempted from ANBC, banks should either include such housing
loans to individuals up to ₹28 lakh in metropolitan centres and ₹20 lakh in

other centres under priority sector or take benefit of exemption from ANBC,
but not both.
7.2 Loans for repairs to damaged dwelling units of families up to ₹5 lakh in

metropolitan centres and up to ₹2 lakh in other centres.
7.3 Bank loans to any governmental agency for construction of dwelling units
or for slum clearance and rehabilitation of slum dwellers subject to a ceiling of
₹ 10 lakh per dwelling unit.
₹10
7.4 The loans sanctioned by banks for housing projects exclusively for the
purpose of construction of houses for economically weaker sections and low
income groups, the total cost of which does not exceed ₹10 lakh per dwelling
unit. For the purpose of identifying the economically weaker sections and low
income groups, the family income limit of ₹2 lakh per annum, irrespective of
the location, is prescribed.
7.5 Bank loans to Housing Finance Companies (HFCs), approved by NHB for
their refinance, for on-lending for the purpose of
purchase/construction/reconstruction of individual dwelling units or for slum
clearance and rehabilitation of slum dwellers, subject to an aggregate loan
limit of ₹10 lakh per borrower.
The eligibility under priority sector loans to HFCs is restricted to five percent
of the individual bank’s total priority sector lending, on an ongoing basis. The
maturity of bank loans should be co-terminus with average maturity of loans
extended by HFCs. Banks should maintain necessary borrower-wise details of
the underlying portfolio.
7.6 Outstanding deposits with NHB on account of priority sector shortfall.
8. Social infrastructure
8.1. Bank loans up to a limit of ₹5 crore per borrower for building social
infrastructure for activities namely schools, health care facilities, drinking
water facilities and sanitation facilities including construction/ refurbishment
of household toilets and household level water improvements in Tier II to Tier
VI centres.
8.2. Bank credit to Micro Finance Institutions (MFIs) extended for on-lending to
individuals and also to members of SHGs/JLGs for water and sanitation
facilities will be eligible for categorization as priority sector under ‘Social
Infrastructure’, subject to the criteria laid down in paragraph 19 of these
Master Directions.

9. Renewable Energy
Bank loans up to a limit of ₹15 crore to borrowers for purposes like solar
based power generators, biomass based power generators, wind mills, micro-
hydel plants and for non-conventional energy based public utilities viz. street
lighting systems, and remote village electrification. For individual households,
the loan limit will be ₹10 lakh per borrower.
10. Others
10.1. Loans not exceeding ₹50,000/- per borrower provided directly by banks
to individuals and their SHG/JLG, provided the individual borrower’s
household annual income in rural areas does not exceed ₹1,00,000/- and for
non-rural areas it does not exceed ₹1,60,000/-.
10.2. Loans to distressed persons [other than farmers included under

paragraph 6(6.1)(A)(v)] not exceeding ₹1,00,000/- per borrower to prepay their
debt to non-institutional lenders.
10.3. Loans sanctioned to State Sponsored Organisations for Scheduled

Castes/ Scheduled Tribes for the specific purpose of purchase and supply of
inputs and/or the marketing of the outputs of the beneficiaries of these
organisations.
11. Weaker Sections
Priority sector loans to the following borrowers will be considered under Weaker
Sections category:-
No. Category
(i) Small and Marginal Farmers
(ii) Artisans, village and cottage industries where individual credit

limits do not exceed ₹1 lakh
(iii) Beneficiaries under Government Sponsored Schemes such as

National Rural Livelihood Mission (NRLM), National Urban
Livelihood Mission (NULM) and Self Employment Scheme for
Rehabilitation of Manual Scavengers (SRMS)
(iv) Scheduled Castes and Scheduled Tribes
(v) Beneficiaries of Differential Rate of Interest (DRI) scheme
(vi) Self Help Groups
(vii) Distressed farmers indebted to non-institutional lenders

(viii) Distressed persons other than farmers, with loan amount not
exceeding ₹1 lakh per borrower to prepay their debt to non-
institutional lenders
(ix) Individual women beneficiaries up to ₹1 lakh per borrower
(x) Persons with disabilities
(xi) Overdrafts upto ₹5,000/- under Pradhan Mantri Jan-

DhanYojana (PMJDY) accounts, provided the borrower’s
household annual income does not exceed ₹100,000/- for rural
areas and ₹1,60,000/- for non-rural areas
(xii) Minority communities as may be notified by Government of

India from time to time.
In States, where one of the minority communities notified is, in fact, in

majority, item (xii) will cover only the other notified minorities. These States/
Union Territories are Jammu & Kashmir, Punjab, Meghalaya, Mizoram,
Nagaland and Lakshadweep.
CHAPTER IV
MISCELLANEOUS
12. Investments by banks in securitised assets
(i) Investments by banks in securitised assets, representing loans to various

categories of priority sector, except 'others' category, are eligible for
classification under respective categories of priority sector depending on the
underlying assets provided:
(a) the securitised assets are originated by banks and financial institutions and
are eligible to be classified as priority sector advances prior to securitisation
and fulfil the Reserve Bank of India guidelines on securitisation.
(b) the all inclusive interest charged to the ultimate borrower by the originating
entity should not exceed the Base Rate of the investing bank plus 8 percent
per annum.
The investments in securitised assets originated by MFIs, which comply with

the guidelines in Paragraph 19 of these Master Directions are exempted from
this interest cap as there are separate caps on margin and interest rate.

(ii) Investments made by banks in securitised assets originated by NBFCs,

where the underlying assets are loans against gold jewellery, are not eligible
for priority sector status.
13. Transfer of Assets through Direct Assignment /Outright purchases
(i) Assignments/Outright purchases of pool of assets by banks representing

loans under various categories of priority sector, except the 'others' category,
will be eligible for classification under respective categories of priority sector
provided:
(a) the assets are originated by banks and financial institutions which are
eligible to be classified as priority sector advances prior to the purchase and
fulfil the Reserve Bank of India guidelines on outright purchase/assignment.
(b) the eligible loan assets so purchased should not be disposed of other than
by way of repayment.
(c) the all inclusive interest charged to the ultimate borrower by the originating
entity should not exceed the Base Rate of the purchasing bank plus 8 percent
per annum.
The Assignments/Outright purchases of eligible priority sector loans from

MFIs, which comply with the guidelines in Paragraph 19 of these Master
Directions are exempted from this interest rate cap as there are separate caps
on margin and interest rate.
(ii) When the banks undertake outright purchase of loan assets from banks/
financial institutions to be classified under priority sector, they must report the
nominal amount actually disbursed to end priority sector borrowers and not
the premium embedded amount paid to the sellers.
(iii) Purchase/ assignment/investment transactions undertaken by banks with

NBFCs, where the underlying assets are loans against gold jewellery, are not
eligible for priority sector status.
14. Inter Bank Participation Certificates
Inter Bank Participation Certificates (IBPCs) bought by banks, on a risk

sharing basis, are eligible for classification under respective categories of
priority sector, provided the underlying assets are eligible to be categorized
under the respective categories of priority sector and the banks fulfil the
Reserve Bank of India guidelines on IBPCs.

With regard to the underlying assets of the IBPC transactions being eligible for
categorization under ‘Export Credit’ as per Para 8, the IBPC bought by banks,
on a risk sharing basis, may be classified from purchasing bank’s perspective
for priority sector categorization. However, in such a scenario, the issuing
bank shall certify that the underlying asset is ‘Export Credit’, in addition to the
due diligence required to be undertaken by the issuing and the purchasing
bank as per the guidelines in this regard.
15. Priority Sector Lending Certificates
The outstanding priority sector lending certificates bought by banks will be

eligible for classification under respective categories of priority sector
provided the assets are originated by banks, are eligible to be classified as
priority sector advances and fulfil the Reserve Bank of India guidelines on
Priority Sector Lending Certificates.
16. Bank loans to MFIs for on-lending
(a) Bank credit to MFIs extended for on-lending to individuals and also to
members of SHGs / JLGs will be eligible for categorisation as priority sector
advance under respective categories viz., Agriculture, Micro, Small and
Medium Enterprises, Social Infrastructure [mentioned in paragraph 11(11.2)]
and Others, provided not less than 85 percent of total assets of MFI (other than
cash, balances with banks and financial institutions, government securities
and money market instruments) are in the nature of “qualifying assets”. In
addition, aggregate amount of loan, extended for income generating activity,
should be not less than 50 percent of the total loans given by MFIs.
(b) A “qualifying asset” shall mean a loan disbursed by MFI, which satisfies the
following criteria:
(i) The loan is to be extended to a borrower whose household annual income

in rural areas does not exceed ₹1,00,000/- while for non-rural areas it should
not exceed ₹1,60,000/-.
(ii) Loan does not exceed ₹60,000/- in the first cycle and ₹100,000/- in the
subsequent cycles.
(iii) Total indebtedness of the borrower does not exceed ₹1,00,000/-.
(iv) Tenure of loan is not less than 24 months when loan amount
exceeds ₹ 30,000/- with right to borrower of prepayment without penalty.
₹30,000/-
(v) The loan is without collateral.

(vi) Loan is repayable by weekly, fortnightly or monthly installments at the

choice of the borrower.
(c) Further, the banks have to ensure that MFIs comply with the following caps
on margin and interest rate as also other ‘pricing guidelines’, to be eligible to
classify these loans as priority sector loans.
(i) Margin cap: The margin cap should not exceed 10 percent for MFIs having
loan portfolio exceeding ₹100 crore and 12 percent for others. The interest
cost is to be calculated on average fortnightly balances of outstanding
borrowings and interest income is to be calculated on average fortnightly
balances of outstanding loan portfolio of qualifying assets.
(ii) Interest cap on individual loans: With effect from April 1, 2014, interest rate
on individual loans will be the average Base Rate of five largest commercial
banks by assets multiplied by 2.75 per annum or cost of funds plus margin
cap, whichever is less. The average of the Base Rate shall be advised by
Reserve Bank of India.
(iii) Only three components are to be included in pricing of loans viz., (a) a
processing fee not exceeding 1 percent of the gross loan amount, (b) the
interest charge and (c) the insurance premium.
(iv) The processing fee is not to be included in the margin cap or the interest
cap.
(v) Only the actual cost of insurance i.e. actual cost of group insurance for life,
health and livestock for borrower and spouse can be recovered; administrative
charges may be recovered as per IRDA guidelines.
(vi) There should not be any penalty for delayed payment.
(vii) No Security Deposit/ Margin is to be taken.
(d) The banks should obtain from MFI, at the end of each quarter, a Chartered
Accountant’s Certificate stating, inter-alia, that the criteria on (i) qualifying
assets, (ii) the aggregate amount of loan, extended for income generation
activity, and (iii) pricing guidelines are followed.
17. Monitoring of Priority Sector Lending targets
18. Non-achievement of Priority Sector targets
Scheduled Commercial Banks having any shortfall in lending to priority sector

shall be allocated amounts for contribution to the Rural Infrastructure

Development Fund (RIDF) established with NABARD and other Funds with
NABARD/NHB/SIDBI/ MUDRA Ltd. , as decided by the Reserve Bank from time
to time. The achievement will be arrived at the end of financial year based on
the average of priority sector target /sub-target achievement as at the end of
each quarter.
While computing priority sector target achievement, shortfall / excess lending

for each quarter will be monitored separately. A simple average of all quarters
will be arrived at and considered for computation of overall shortfall / excess
at the end of the year. The same method will be followed for calculating the
achievement of priority sector sub-targets. The interest rates on banks’
contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed
by Reserve Bank of India from time to time.
Non-achievement of priority sector targets and sub-targets will be taken into

account while granting regulatory clearances/approvals for various purposes.
19. Common guidelines for priority sector loans
Banks should comply with the following common guidelines for all categories
of advances under the priority sector.
(i) Rate of interest
The rates of interest on bank loans will be as per directives issued by our
Department of Banking Regulation from time to time.
(ii) Service charges
No loan related and adhoc service charges/inspection charges should be

levied on priority sector loans up to ₹25,000. In the case of eligible priority
sector loans to SHGs/ JLGs, this limit will be applicable per member and not to
the group as a whole.
(iii) Receipt, Sanction/Rejection/Disbursement Register
A register/ electronic record should be maintained by the bank, wherein the

date of receipt, sanction/rejection/disbursement with reasons thereof, etc.,
should be recorded. The register/electronic record should be made available to
all inspecting agencies.
(iv) Issue of Acknowledgement of Loan Applications
Banks should provide acknowledgement for loan applications received under

priority sector loans. Bank Boards should prescribe a time limit within which
the bank communicates its decision in writing to the applicants.

Priority Sector Lending –Targets and Classification- Bank loans to MFIs for on-
lending - Qualifying asset - Revised loan limit
1. The limit of the loans extended by Non-Banking Financial Company- Micro

Finance Institutions (NBFC-MFIs) for which the tenure of the loan shall not be
less than 24 months, has been raised to ₹ 30,000/- from the earlier limit of ₹
15,000/-.
2. “Tenure of loan is not less than 24 months when loan amount exceeds ₹
30,000/- with right to borrower of prepayment without penalty.”
No Dues Certificate
No Dues Certificate from the individual borrowers (including SHGs & JLGs) in Rural & Semi-
Urban Areas for all type of loans including Government Sponsored Schemes, irrespective of
the amount involved unless the Government Sponsored Scheme itself provides for obtention
of No Dues Certificate is to be dispensed with. Service Area Approach will continue to be
applicable for Government sponsored schemes
MARGIN NORMS FOR AGRICULTURE
(a) Margin norms for agricultural loans :
Particulars Norms
(i) Crop loans
Crop loans pto Rs 100000/- No margin
Crop loans above Rs. one lakh 15-25% depending upon the purpose & quantum of loan
(ii) Term loans
Term loans upto Rs 100000/- No margin
Term loans above Rs. one lakh 15-25% depending upon the purpose & quantum of loan
N.B : In case of agril. loans extended under Govt.sponosred programmes viz., SGSY, SJSRY
etc., existing norms applicable to respective schemes will continue till further instructions.
The amount of subsidy available in such cases will be taken to Subsidy Reserve Fund Account
(b) Security norms for agricultural loans:
Security : Revised norms

Size of loan Documents to be obtained
Crop Loans: Upto Rs. 1000/- : DP Note .
From Rs.1001/- to Hypothecation of crops
Rs.100,000 :
Over Rs. 100,000/- : i) Hypothecation of crops &
ii) Mortgage of Land */ charge over land / third party

guarantee
Investment Upto Rs. 100,000/- : Hyp. of assets
Credit Where
moveable Over Rs.100,000/- i) Hyp. of assets & ii) Mortgage of land* / charge over
assets are land or third party guarantee
created :
*Mortgage of land at bank's discretion. Where there are genuine difficulties in the creation
of mortgage / charge on lands wherever required, banks could take third party guarantee or
such other security as considered appropriate.
Particulars Revised norms

Size of loan Documents to be
obtained
Investment Credit Where moveable assets are not Rs.10000/- & Mortgage of Land
created:(e.g. dug well, development of land , etc.,) over Charge over land*.
In case of States, where Model Act based on the basis of Talwar Committee is enacted,
Banks charge over agricultural land of the farmer borrower should be created instead of
Mortgage with the designated Revenue Authorities in terms of the Provision of the Act of
respective State Governments.
Various schemes implemented in our Bank

i. DENA KISAN CREDIT CARD (DKCC) SCHEME
ii. Dena Bhumiheen Kisan Credit Card
iii. Dena rupay kcc debit cum atm card for dkcc holders
iv. Dena farm building finance scheme
v. Dena agriculture gold & silver loan scheme
vi. Dena kisan all purpose term loan scheme (modified Dena kisan gold credit card )
vii. Dena estate purchase loans
viii. Dena kisan tatkal scheme
ix. Dena Agriculture Seed Processors' Scheme (Dena ASPS)
x. Dena Shahari Bhagwan Yojana
xi. Scheme for financing farmers for purchase of land for agricultural purpose
xii. Tie-up with Tractor Mfg Companies
xiii. Scheme for providing finance to farmers / traders / processors / Arthiyas against
pledge of warehouse receipt issued by NBHC under tie-up arrangement with
National Bulk Handling Corporation Ltd. (NBHC) for Collateral Management
xiv. Tie-up with M/s Star Agri warehousing and collateral Management Limited
(Staragri) for rendering collateral manager & service provider
xv. Capital Subsidy – cum -Refinance Scheme for Installation of Solar Off-grid &
Decentralised applications
xvi. Model scheme on Solar Irrigation Pumpsets for Irrigation purpose
xvii. Capital Subsidy Scheme for Promoting Solar Photovoltaic Water Pumping Systems
for Irrigation Purpose.
xviii. Dena Kisan Swasthya Yojana –tie up with USGICL

xix. Rajiv Rinn Yojana (RRY)- Interest Subsidy Scheme for housing for Economically
Weaker Section (EWS) and Lower Income Group (LIG)
xx. Dairy Plus Scheme for financing village level milk cooperative societies
xxi. Tie up arrangement with Finolex Plasson Industries Pvt.Ltd for financing Micro
Irrigation Systems & other equipment
xxii. Tie up arrangement with M/S Jain Irrigation System for financing farm
implements
xxiii. Dairy Entrepreneurship Development Scheme (DEDS)
xxiv. Revised Dena General Credit Card Scheme
Govt.sponsored Programmes
PARTICULARS PRIME MINISTERS EMPLOYMENT DIFFERENTIAL INTEREST

GENERATION PROGRAMME (PMEGP) SCHEME
Launched 2008-09 (01.04.2008) a credit linked 1992
subsidy scheme
Main objective To generate employment opportunities in To assist poorest of the poor
rural & urban areas by setting up only new and to bring them above the
micro enterprises, for sustainable poverty line
employment to artisans and unemployed
youth.
Activity :- manufacturing, service &
business
Applicable Both urban & rural areas (rural areas with All over india
population upto 20000 and area classified as
villages in revenue record)
Eligibility norms Borrowers- individuals, SHGs (of BPL) Individuals whose family
charitable trusts, institutions under societies income not to exceed
registration act, production co-op societies. Rs.18000/- p.a. In rural areas
Existing unit and those who have borrowed and Rs.24000/- p.a. In urban
under some subsidy scheme, not eligible. and semi urban areas.
Age:- above 18 years ·
There is no income ceiling ·
8th pass only for manufacturing projects
costing above Rs.10 lac & service /
business projects abov
Implementing  Administration by Mministry of MSE. Banks
agencies
 Implementation by kvic at national
level.
 At state level by KVIC-board, DIC

and Banks scheme to be implemented

through PSBS, RRBS, SIDBI and co-op
Banks & private Banks approved by state
level TF
Quantum of  Project cost manufacturing sector: upto For productive activities,
loan & cost of Rs.25 lac business and service sector pursuing higher, education by
project Rs.10 lac . Project cost include capital indigent, students, purchase
expenditure and one cycle of working of artificial limbs, hearing
capital. aids, wheel chair by physically
 Projects without capital expenditure not handicapped.
eligible . Projects costing more than Max. Rs.15000 for physically
Rs.5 lacs but not requiring working handicapped additional loan
capital to be cleared by regional offices Rs, 5000/- for artificial
of the Bank. Cost of land is not part of limbs/ braille typewriter
project cost
 Amount of loan: composite loans can
be sanctioned to the extent of 90% of pc
Target The targets for margin money (subsidy) Min 40% to sc/st
will be allocated by kvic and in the state, by beneficiaries
slbc. 50% should be for rural areas 2/3rd to be routed through
projects. rural and semi urban
branches
Subsidy General borrowers 15% in urban and 25% -
in rural areas. For special category 25% in
urban and 35% in rural areas.subsidy to be
kept as interest free FD.
To be credited to loan account at the end
of 3rd year from date of 1st disbursement.
If loan becomes NPA, subsidy can be utilized
before 3 years. Use of working capital
component should be such that it touches
100% at one point of time, within 3 years of
lock in period of subsidy and not less than
75% of the sanctioned amount.
Margin 10% for general candidates and 5% of the No margin
project cost for special categories (as above)
Interest As per HO/ RBI 4% simple interest
Collateral Collateral security exemption is upto Rs.10 Hypothecation of assets
security lacs created out of Bank loan .no
collateral security.

Repayment 3 to 7 years. With moratorium as Depending upon income

prescribed. For composite loan, generated max 5 years
repayment to be fixed for TLcomponent including grace period upto 2
only. years
Misc. Defaulters of nationalized Bank/ financial Loans upto Rs 20000/- for
institution / co-op Bank not eligible housing to sc/st
Village industry is where fixed capital
investment per head of artisan/ worker does
not exceed Rs.1 lac (in hilly areas Rs.1.50
lacs)
Review of proposals and recovery of loans
on a quarterly basis by task force.
Restructuring of SGSY as National Rural Livelihood Mission (NRLM) - Aajeevika

The Ministry of Rural Development, Government of India has launched National Rural
Livelihood Mission (NRLM) by restructuring Swarnajayanti Gram Swarozgar Yojana (SGSY)
replacing the existing SGSY scheme, effective from April 1, 2013.NRLM is the flagship
program of Govt. of India for promoting poverty reduction through building strong
institutions of the poor, particularly women, and enabling these institutions to access a
range of financial services and livelihoods services. NRLM The implementation of NRLM is in
a Mission Mode. NRLM adopts a demand driven approach, enabling the States to formulate
their own State specific poverty reduction action plans.
Funding Pattern: NRLM is a Centrally Sponsored Scheme and the financing of the
programme would be shared between the Centre and the States in the ratio of 75:25 (90:10
in case of North Eastern States including Sikkim; completely from the Centre in case of UTs).
The Central allocation earmarked for the States would broadly be distributed in relation to
the incidence of poverty in the States.Key
States.Key difference from SGSY:
2.1 NRLM is promoting a major shift from purely ‘allocation based’ strategy to a ‘demand
driven’ strategy wherein states have the flexibility to develop their own plans for capacity
building of women SHGs and Federations, infrastructure and marketing, and policy for
financial assistance for the SHGs.
2.2 NRLM will identify the target group of poor through a ‘participatory identification of the
poor’ process instead of using the BPL list as was done in SGSY. This will ensure that the
voiceless, poorest of poor are not ignored. In fact under NRLM, the first preference is given
to the poorest of poor households.

2.3 NRLM will promote the formation of women SHGs on the basis of affinity and not on the
basis of a common activity, as it used to be under SGSY. It is definitely possible that members
who come together on the basis of affinity could be having a common activity.
2.4 Unlike SGSY, the NRLM has taken a saturation approach and will ensure all the poor in a
village are covered and a woman from each poor family is motivated to join the SHG.
2.5 SHG Federations:

Federations: All SHGs in a village come together to form a federation at the village
level. The village federation is a very important support structure for the members and their
SHGs. The cluster federation is the next level of federation. A cluster consists of a group of
villages within a block. The exact configuration will vary from State to State, but typically a
cluster consists of 25 - 40 villages. The Village federations and the Cluster federations are the
two critical support structures for the SHG s and their members in their long journey out of
poverty.
2.6 NRLM will provide continuous hand-holding support to SHGs, and their federations. This
was missing in SGSY. Under NRLM this support will be provided to a great extent by
capacitating the SHG federations and by building a cadre of community professionals from
among the poor women. The federations and the community professionals will be imparted
the necessary skills by the mission.
2.7 The objective of NRLM is to ensure that SHG s are enabled to access repeat finance from
Banks, till they attain sustainable livelihoods and decent living standards. This was missing in
SGSY, where the emphasis was on one time support.
3. Women SHGs and their Federations
3.1 Women SHGs under NRLM consist of 10-15 persons. In case of special SHGs i.e. groups
in the difficult areas, groups with disabled persons, and groups formed in remote tribal
areas, this number may be a minimum of 5 persons.
3.2 NRLM will promote affinity based women Self –help groups.
3.3 Only for groups to be formed with Persons with disabilities, and other special categories
like elders, transgenders, NRLM will have both men and women in the self-help groups.
3.4 SHG is an informal group and registration under any Societies Act, State cooperative Act
or a partnership firm is not mandatory vide Circular RPCD. No. Plan BC.13/PL-09.22/90-
91 dated July 24th, 1991.
1991. However Federations of SHGs formed at village level, cluster level,
and at higher levels are to be registered under appropriate acts prevailing in their States.
Financial Assistance to the SHGs

4 Revolving Fund (RF): NRLM would provide a Revolving Fund (RF) support to SHGs in
existence for a minimum period of 3/6 months and follow the norms of good SHGs, i.e they
follow ‘Panchasutra’ – regular meetings, regular savings, regular internal lending, regular
recoveries and maintenance of proper books of accounts. Only such SHGs that have not
received any RF earlier will be provided with RF, as corpus, with a minimum of Rs. 10,000
and up to a maximum of Rs. 15,000 per SHG. The purpose of RF is to strengthen their
institutional and financial management capacity and build a good credit history within the
group.
5. Capital Subsidy has been discontinued under NRLM:No Capital Subsidy will be sanctioned
to any SHG from the date of implementation of NRLM.
6. Community Investment support Fund (CIF) : CIF will be provided to the SHGs in the
intensive blocks, routed through the Village level/ Cluster level Federations, to be
maintained in perpetuity by the Federations. The CIF will be used, by the Federations, to
advance loans to the SHGs and/or to undertake the common/collective socio-economic
activities.
7. Introduction of Interest subvention: NRLM has a provision for interest subvention, to

cover the difference between the Lending Rate of the banks and 7%, on all credit from the
banks/ financial institutions availed by women SHGs, for a maximum of Rs 3,00,000 per SHG.
This will be available across the country in two ways:
i. In 150 identified districts, banks will lend to all the women SHGs @7% upto an
aggregated loan amount of Rs 3,00,000/- . The SHGs will also get additional interest
subvention of 3% on prompt payment, reducing the effective rate of interest to 4%.
ii. In the remaining districts also, NRLM compliant women SHGs will be registered with
SRLMs. These SHGs are eligible for interest subvention to the extent of difference
between the lending rates and 7% for the loan upto Rs. 3 lakhs, subjected to the
norms prescribed by the respective SRLMs. This part of the scheme will be
operationalized by SRLMs.
8. Role of banks –
8.1 Opening of Savings accounts: The role of banks would commence with opening of
accounts for all the Women SHGs, SHGs with members of Disability and the Federations of
the SHGs. The ‘Know Your Customer’ (KYC) norms as specified from time to time by Reserve
Bank of India are applicable for identification of the customers.
Loan amount: Emphasis is laid on the multiple doses of assistance under NRLM. This would
mean assisting an SHG over a period of time, through repeat doses of credit, to enable them

to access higher amounts of credit for taking up sustainable livelihoods and improve on the
quality of life. The amount of various doses of credit should be as follows:
 First dose: 4-8 times to the proposed corpus during the year or Rs. 50, 000 whichever
is higher.
 Second dose: 5-10 times of existing corpus and proposed saving during the next
twelve months or Rs. 1 lakhs, whichever is higher.
 Third dose: Minimum of Rs. 2 lakhs, based on the Micro credit plan prepared by the
SHGs and appraised by the Federations/Support agency and the previous credit
history
 Fourth dose onwards: Loan amount can be between Rs. 5-10 lakhs for fourth dose
and/or higher in subsequent doses. The loan amount will be based on the Micro
Credit Plans of the SHGs and their members.
The loans may be used for meeting social needs, high cost debt swapping and taking up
sustainable livelihoods by the individual members within the SHGs or to finance any viable
common activity started by the SHGs.(Corpus is inclusive of revolving funds, if any, received
by that SHG, its own savings and funds from other sources in case of promotion by other
institutes/NGOs.)
8.3 Type of facility and repayment:
8.3.1 SHGs can avail either Term loan or a CCL loan or both based on the need. In case of
need, additional loan can be sanctioned even though the previous loan is outstanding.
8.3.2. Repayment schedule could be as follows:
 The first dose of loan will be repaid in 6-12 instalments

 Second dose of loan will be repaid in 12-24 months.
 Third dose will be sanctioned based on the micro credit plans, the repayment has to
be either monthly/quarterly /half yearly based on the cash flow and it has to be
between 2 to 5 Years.
 Fourth dose onwards: repayment has to be either monthly/quarterly /half yearly

based on the cash flow and it has to be between 3 to 6 Years
8.4. Security and Margin:No collateral and no margin will be charged upto Rs. 10.00 lakhs
limit to the SHGs. No lien should be marked against savings bank account of SHGs and no
deposits should be insisted while sanctioning loans.

8.5. Dealing with Defaulters:8.5.1 It is desirable that wilful defaulters should not be financed
under NRLM. In case wilful defaulters are members of a group, they might be allowed to
benefit from the thrift and credit activities of the group including the corpus built up with
the assistance of Revolving Fund. But at the stage of assistance for economic activities, the
wilful defaulters should not have the benefit of further assistance until the outstanding loans
are repaid. Wilful defaulters of the group should not get benefits under the NRLM Scheme
and the group may be financed excluding such defaulters while documenting the loan.
8.5.2 Further, non-wilful defaulters should not be debarred from receiving the loan. In case
of defaulters due to genuine reasons, Banks may follow the norms suggested for
restructuring the account with revised repayment schedule.
NULM erstwhile SJSRY

Selection of Beneficiary: The Community Organisers (COs) and professionals from Urban
Local Body (ULB) will identify the prospective beneficiaries from among the urban poor.
Educational Qualifications and Training Requirement: No minimum educational qualification
is required for prospective beneficiaries under this component.
Pattern of Financial Assistance: The financial assistance available to urban poor in setting up
individual and group enterprises will be in the form of Interest subsidy on the bank loans.
Interest subsidy, over and above 7% rate of interest will be available on a bank loan for
setting up of individual or group enterprises. The difference between 7% p.a. and the
prevailing rate of interest will be provided to banks under NULM. Interest subsidy will be
given only in cases of timely repayment of loans. Suitable certification from banks will be
obtained in this regard.
Procedure for interest subsidy: After disbursement of loan to the beneficiaries, the
concerned branch of the bank will send details of disbursed loan cases to ULB along with
details of interest subsidy amount. The ULB will check the data at their end and will release
the interest subsidy amount (difference between 7% p.a. and prevailing rate of interest)on a
quarterly basis to the banks. Age: above 18 Years at the time of applying for loan.
Project Cost (PC): The Maximum unit Project Cost for individual micro-enterprises cases is
Rs 200,000 (Rs Two Lakhs)
Collateral on Bank Loan: No collateral required.
Repayment: Repayment schedule ranges from 5 to 7 Years after initial moratorium of 6-18
months as per norms of the banks.
Sub-Component -Group Enterprises (SEP-G) -Loan & Subsidy A Self Help Group (SHG) or
members of an SHG constituted under SJSRY/ NULM or a group of urban poor desirous of
setting up a group enterprise for self-employment can avail benefit of subsidised loans under
this component from any bank. The norms/ specifications for group micro-enterprise loans
are as follows
Eligibility: The group enterprise should have minimum 5 members with a minimum of 70%
members from urban poor families.

Project Cost (PC): The Maximum unit Project Cost for a group enterprise is Rs 10,00,000 (Rs
Ten Lakhs)
Loan: Project Cost less the beneficiary contribution (as specified by bank) would be made
available as loan amount to the group enterprise by the bank.
The beneficiaries desirous of seeking financial assistance for setting up an enterprise can
submit an application of intent to the concerned ULB officials on a plain paper with basic
details viz: Name, Age, Contact details, Address, Aadhaar details (if any), amount of loan
required, bank account number (if available), type of enterprise/ activity, category etc.
The intent could also be sent by mail /post to the ULB office. The ULB shall accept such
intents throughout the year. The ULB will issue an acknowledgement to the beneficiary with
a unique registration number, which may be used as a reference number for tracking the
status of application.
Banks may also identify beneficiaries as per the eligibility criterion and receive the intent
letter. The applications received directly by the banks will be referred to the ULB. The
applications in this case will also form a part of the waiting list.
An additional 3 percent interest subvention will be provided to all Women SHGs (WSHGs)
who repay their loan in time.
The Chief Executive Officer (CEO)/ Municipal Commissioner of ULB will constitute the Task
Force and will be The Chairman of the Task force.
Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)NOVEMBER, 2013.
The identified manual scavengers, one from each family, would be eligible for receiving Cash
Assistance of Rs. 40,000 immediately after identification. The beneficiary would be allowed
to withdraw the amount in monthly installments of maximum of Rs. 7,000. He/she would
also be eligible for Capital Subsidy, Interest Subsidy and Training with stipend at the rates
prescribed under the scheme. The dependents of manual scavengers would not be eligible
for initial Cash Assistance.
Loan upto a maximum cost of Rs. 10 lakhs will be admissible under the scheme, and Rs. 15
lakh in case of sanitation related projects like Vaccum Loader, Suction Machine with Vehicle,
Garbage Disposal Vehicle, Pay & Use Toilets etc., which are extremely relevant for the target
group, with high success rate and income.
The moratorium period to start the repayment of loan will be two years. The period of
repayment of loan, including moratorium period will be five years for projects upto Rs.
5,00,000 and 7 years for projects above Rs. 5,00,000. The SCAs would distribute the funds
within a period of three months after receiving the application from the eligible
beneficiaries.
The rate of interest chargeable from the beneficiaries will be as follows:-
(a) For projects upto Rs. 25,000/- - 5% per annum (4% per annum for women beneficiaries)

(b) For projects above Rs 25,000/- - 6% per annum.

Where the rate of interest chargeable by the banks on loans will be higher than the rates
prescribed in the scheme, interest subsidy to the extent of the difference will be given to the
banks by the respective State Channelising Agencies (SCAs).
SCAs would be required to pay this amount to banks on monthly basis so that there is no
case of charging of compound interest by banks on the interest subsidy portion.
Credit linked back-end capital subsidy will be provided to the beneficiaries in a scaled
manner, as follows:
Range of Project Cost (Rs.) Rate of Subsidy
Upto 2,00,000 50% of project cost
2,00,000 to 5,00,000 Rs.1 lakh + 33.3% of project cost between Rs. 2-5 lakh
5,00,000 to 10,00,000 Rs. 2 lakh + 25% of project cost between Rs. 5-10 lakh
10,00,000 to 15,00,000 Rs. 3,25,000/-
Retail Banking Products:

Definition: Retail Lending is basically lending to Individual Persons.
Retail banking Scenario: Due to change in economic scenario the focus of lending is
increasingly getting shifted from Industrial and commercial advancers to a diversified
portfolio of advance to retail, MSME & Agriculture. Retail Banking is one of the principal
growth engines for the banks in India and retail advances have been widely as the
driver of the Credit acceleration.
Why Retail Banking?
Banks today are concentrating on retail lending due to mainly due to the following
advantages:
1. Risk Concentration is better taken care

2. Lower incidence of NPA’s
3. Growing market on account of consumerism and rising income levels.
4. Reasonable yields.
5. Focus on Productivity and profitability.
6. Innovative of new products and services
7. Low risk weights for CRAR especially in Housing loan.
DENA RETAIL BANKING PRODUCTS:
1. DENA SUVIDHA (PERSONNEL LOANS/ OVER DRAFT AGAINST SALARY)

2. DENA SENIOR CITIZEN LOAN (PENSIONER’S LOAN)

3. DENA VEHICLE LOAN SCHEME ( TWO WHEELERS & FOUR WHEELERS)
4. DENA CONSUMER DURABLE LOANS (ELECTRICAL, ELECTRONICS AND HELATH
EQUIPMENTS)
5. DENA TRADE FINANCE (LOAN FOR BUSINESS PURPOSE- 100% MORTGAGE OF
IMMOVABLE PROPERTY).
6. DENA RENT (LOAN AGAINST RENT RECEIVABLE ON RENTAL PROPERTIES)
7. DENA VIDYA LAXMI (EDUCATION LOAN FOR STUDIES IN INDIA AND ABROAD)
8. DENA NIWAS LOAN (HOUSING LOAN FOR NEW/OLD FLAT AND CONSTRUCTION OF
NEW RESIDENTIAL).
9. DENA LOAN AGAINST PROPERTY (AGAINST IMMOVABLE PROPERTY OF
OVERDRAFT FOR 7 YEARS PERIOD).
10. GOLD LOAN (LOAN AGAINST GOLD ORNAMENTS AND NOT ON BULLIONS)
11. DENA DOCTOR + (LOAN FOR SETTING UP OF CLINICAL FOR MBBS & BDS
GRADUATES)
12. DENA PROFESSIONALS LOAN SCHEME FOR CA CS CFA
Before giving loan to any individual the first and foremost is to check out PAN details,
KYC norms, CIBIL for credit reports, Genuineness of Salary and other relevant issues of
papers like ITR, Pre-Sanction visit report, on confirming of sanctioning of loan Credit
Rating, Charging of all service charges with Service tax as applicable as per HO Circulars,
documentation with proper stamping, Execution of Documents, sanction letter duly
signed by borrower, proper execution of Documents , registration of charge on assets
created out of Bank finance with appropriate authorities as per Terms & Conditions of
sanction, Compliance of Terms and condition of sanction, Disbursement made
Invariably through RTGS / NEFT, On disbursement details of all loan be entered in
CIBIL, CERSAI for Housing, Registration / Mortgage at sub-registrar office on immovable
properties, Vehicle with RTO along with blank form 29 & form 30 to be signed by
borrower, In RC book the name of bank to appear, Insurance cover to be taken from
United India Insurance Company Limited, Post Sanction for end use of funds financed,
Monitoring of accounts, these are general guidelines /procedures to be followed while
sanctioning the proposals.
1.DENA SUVIDHA (PERSONAL LOAN)
Purpose of Loan
To meet genuine credit requirements for personal purpose like Marriage, Medical
Expenses, Family function, Festivals Educational expenses, Unforeseen Expenses etc.
Eligibility for Loan- For Whom?
 Permanent employees having completed 2 years of service in Central/ State
Govt./ PSU/ reputed Public Limited companies/ MNCs/ reputed Educational
Institutions (Govt. recognised / aided schools/ Colleges / Universities/ Research
Institutes).
 Age – 24 years to 55 years.
 Minimum Gross Monthly Income –Rs.15000/-
 Minimum Take Home: 40% of Gross
 Minimum Loan amount– Rs.15000/-

 Maximum Loan amount–

9 times of NMI* ( repayable in 36 months) /
6 times of NMI* ( repayable in 24 months) /
3 times of NMI* ( repayable in 12 months) or Rs.1.00 lac whichever is less.**
*NMI means Net Monthly Income i.e. Gross Salary – Deductions
 Margin – NIL
 Security – Third party guarantee is required
 Repayment – 36 EMIs
2.DENA SR. CITIZEN SCHEME(Pensioner’s Loan)
Purpose of Loan: Demand loan to meet any genuine credit requirement for personal
expense.
 Pensioners of State/ Central Govt./ PSUs/ our own ex-staff members/ VRS optees
whose pension accounts are being maintained with the branch.
 Age – Loan repayment must be before the applicant attains the age of 75 years.
 Minimum Take Home Pension should not be less than 60% of monthly pension.
 Loan Recovery Period and Loan Limit:
Category of
Age Loan limit
Borrower
Age of the pensioner on loan maturity not 12 months pension or Rs 3.00 lacs
Borrower is a pensioner exceeding 73 years whichever is lower.
and nominee for pension
eligible for family pension Age of the pensioner on loan maturity is 6 months pension or Rs 1.50 lacs
is alive. not exceeding 80 years whichever is lower.
Borrower is a pensioner
and nominee for Age of the pensioner on loan maturity is
6 months pension or Rs 1.50 lacs
pension eligible for beyond 73 years but not exceeding 80
whichever is lower.
family pension is not years
alive.
Age of the pensioner on loan maturity not 6 months pension or Rs 1.50 lacs
Family Pensioner Only
exceeding 73 years whichever is lower.
 Maximum - Rs.1,50,000/-
 Margin – Nil
 Upfront fee– nil
 Security – Nil
 Repayment – 36 EMIs
3.DENA VEHICLE LOAN FINANCE
Purpose of Loan
 For financing new Two-wheelers.
For financing new and old Cars.

Eligible Income:
1. For Motor Cycle / Scooter : Minimum Rs. 1. Lac per annum

2. For Four Wheeler :
For Individual / Proprietary Firm : Minimum Rs. 2.50 Lacs per annum
For Partnership Firm / Company : Minimum Rs. 3 Lacs per annum
Loan Amount:
•Upto Rs. 50 lakhs for purchase of a new two wheeler.
•Upto Rs. 200 lakhs for purchase of a new car.
Margin:
For New Vehicles : 15 % .
In case of Corporate Salary Arrangement, 10% of on road price for new car.
In case of Old Car 20% (up to 3 year old).
 Cost Price = Base Price of Vehicle + RTO + Ins.
Security:
1. Hypothecation of Vehicle purchased. 2. Hypothecation charge in RC Book.
Loan Repayment Period:
Maximum up to 84 months for new vehicle.
2nd hand four-wheeler (up to 3 year old)- Maximum up to 36 months.
4. DENA CONSUMER LOAN
Purpose of Loan
 For purchase of TV, Fridge, Washing Machine, PCs, Furniture, Music System,
Cooking Range etc.
 Also, for purchase of Health and Gym related products and all other consumer
products which are not specifically mentioned here.
 Minimum Gross Annual Income :Rs.75000/-
 Minimum Take Home: 60% of Gross Income
 Limit of Loan:
Gross Income between Rs.75000/- to Rs.150000/- :- Rs.50000/-
Gross Income above Rs.150000/- :- Rs.100000/-
 Margin : 20% of Cost Price.
 Upfront / Processing Fees
 For loan up to Rs.25,000/- = Rs.250/-
 For loan more than Rs.25,000/- = Rs.500/-
 Security
Hypothecation of goods purchased out of Bank’s Loan.
 Loan Repayment Period : Up to 3 years (36 EMI s)
5. DENA NIWAS
Purpose of Loan
1. Construction of house, acquisition / purchase of ready built house / flat or purchase

of flat / apartment under construction.
2. Extension of an existing house / flat.

3. Purchase of old house up to 50 years old, provided the remaining life of the house /
building is more than repayment period of the loan as per certificate of panel valuer /
architect.
4. Furnishing / Interiors.
5. Repairs/ renovation & Upgradation including furniture & fixture, cost of POP work,
retiling, fittings, etc. provided the age of the house/building should not be more than 40
years and the remaining life of the building (even after repairs/ renovation) should be at
least 25 years as per certificate of panel valuer / architect.
6. Purchase of plot, subject to the condition that:
 Construction of house should be completed within 18 months from date of first
disbursement, and
 A maximum of 75% of the loan amount can be utilized for purchase of plot.
 A declaration to be obtained from the borrower that he will construct house on

the plot purchased out of housing loan.
 If the borrower fails to construct house within stipulated period, interest @ one
year MCLR +8.30% to be charged considering it as a commercial loan from the
date of first disbursement.
7. Cost of Rooftop Solar PV can be considered for financing along with housing loan for
construction of house, purchase of house / flat or repairs / renovation & Upgradation.
(HO circular No. 325/07/2014 dated 11.12.2014).
 Treatment of Subsidy received for installation of Solar Water Heating Unit if any:
NABARD gives subsidy for installation of solar water heating system. The Subsidy
amount received from NABARD is to be kept in subsidy reserve account during
lock in period. After lock in period the subsidy amount is to be credited to
Housing Loan Account. Interest during lock in period is to be charged on net of
subsidy loan amount.
8. Takeover of existing Housing loan from other Banks/ Financial Institutions is

permitted subject to compliance of take-over norms as per loan policy from time to time
latest being HO circular No. 97/12/2015-16 dtd.01.07.2015 issued by Credit
Administration Department and loan policy guidelines from time to time.
Eligibility:
 Any major individual, including NRI, having regular source of income is eligible.
Income of spouse and children may be considered for repayment capacity
provided they are taken as co-borrowers, though they may not be co-owner.
Age of the applicant/s on loan maturity:
In case of salaried applicants loan maturity period may be considered up to 75

years. In such cases, while calculating MPBF, existing salary income up to retirement
and the proposed pension after retirement of the applicant to be considered.
In case of self-employed / businessmen/ professionals, the age of the applicant on

loan maturity should be up to 75 years.

In case of farmers, the age of the applicant on loan maturity should be up to 70
years.
The maximum age of applicant / co-applicant at loan maturity should not be

considered as deviation if the income of such applicants has not been considered for
calculation of MPBF.
In case housing loan is assessed considering pension of the applicant, family
member eligible for family pension / legal heirs to be made co-borrower/s.
If, at the time of sanctioning loan, apparently it is known that the borrower is
suffering from any major ailment, his legal heirs shall be made co-borrowers /
guarantors. To comply this condition, a medical checkup report not older than 3 months
should be kept on record. In such cases, the borrower should be insisted for obtaining
insurance policy under Dena Gruh Swami Insurance policy / Dena UNI home care policy.
Maximum loan limit: Maximum Loan Amount will be as under:

Location of the house property Maximum Loan amount
to be financed
Metro Centers Rs 10.00 crore
Urban & Semi urban Centers Rs 5.00 crore
Rural Centers Rs 1.00 crore
Maximum Loan for repairs / renovations:
The maximum loan amount should not normally exceed Rs 10 lacs. Such loans
exceeding the above ceiling amount will require prior administrative clearance
from the ZO-CAC.
Maximum loan amount will be lowest of loan amount assessed on the basis of following
or ceiling as mentioned above:
 Permissible EMI/ NMI ratio
 Maximum permissible LTV ratio
 Loan amount applied for
EMI/NMI Ratio (Repayment Capacity For Arriving At MPBF)

Net annual income ( Gross EMI / NMI Ratio not to exceed
annual income (-) statutory
Deductions such as Income
Tax/Provident Fund and
Profession tax)
Less than Rs 1.20 lacs 20%
Above Rs 1.20 lacs to less than 30%
Rs 3 lacs
Above Rs 3 lacs to less than 5 50%
lacs
Above Rs 5 lacs to less than 60%
8 lacs
Above Rs 8 lacs to less than 65%
10 lacs
Above Rs 10 lacs 70%

Margin:
Loan Limit Margin %

Up to Rs 20 lacs 10%
Above Rs 20 lacs to Rs 75 20%
lacs
Above Rs 75 lacs 25%
Repayment
Purpose of Loan Category of borrower Maximum repayment
period
For purchase of new flat / Salaried individuals 30 Years
house/construction/exten (Non CRE)
sion of house
Salaried individuals (CRE) 25 Years
For purchase of new flat / Individuals engaged in 25 Years
house/construction/exten business and farmers
sion of house (With or Without CRE)
For repairs, renovation & Salaried/ business men/ 10 Years
up-gradation professional/farmer
For agriculturist, repayment to be fixed either in monthly installments or quarterly /
half yearly / annual installments based on income generation pattern / crop
harvest of the agriculturist.
Security:
 Equitable mortgage of immovable property
 Process fee- 0.50%
 One time supervision charges Rs.500/-
 Penalty 2%
Other schemes under Dena Niwas Loan Scheme:

A) Dena Niwas Step-up Home Loan Scheme
B) Dena Top-up housing loan scheme (Term Loan & Overdraft)
C) Dena Gruh Swami Insurance Loan Scheme
d) Dena Furniture Loan Scheme
6. DENA VIDYA LAXMI
Purpose of Loan
 To provide financial support to deserving/meritorious students for pursuing
higher education in India and Abroad.
 No deserving student should be denied an opportunity to pursue higher
education for want of financial support.

Student Criteria
 Should be an Indian National.
 Should have secured admission to professional/technical courses in India or
Abroad through Entrance Exam/ Merit based selection process.
 Study in India:
Graduation courses, Post-Graduation courses, Masters & PhD, Professional
courses.

 Study Abroad:
Graduation : For job oriented professional / technical courses offered by
reputed universities
Post Graduation : MCA, MBA, MS etc.
Courses conducted by CIMA-London, CPA in USA etc.
Limit of Loan:
A)For students admitted to full time courses conducted by IIT / IIM /ISB only: Full
course fee without any upper loan ceiling and without co-borrower, subject to margin
may be financed.
For Students admitted to Full time courses conducted by “A” rated Institutions
and Bank’s approved Educational Institutions:
Need based finance to meet the expenses to be worked out taking in to account margins
stipulated subject to the following ceilings:
 Studies in India Maximum up to Rs 15 lakhs
 Studies Abroad Maximum up to Rs 25 lakhs
B) For Students admitted to Full time courses conducted by other institutions (Other
than IIT / IIM / ISB / “A” rated Institutions and Bank’s approved Educational
Institutions) :
 Need based finance to meet the expenses to be worked out taking in to account
margins stipulated subject to the following ceilings:
 Studies in India Maximum up to Rs 10 lakhs
 Studies Abroad Maximum up to Rs 20 lakhs
Margin:
 Upto Rs.4 lac : NIL
 Above Rs.4 lac:
 In India - 5%
 Abroad -15%
Repayment Schedule:
 10 years for loans upto Rs. 7.5 lakhs
 15 years for loans above Rs. 7.5 lakhs
Collateral Security
For studies in India -
Upto Rs.7.5 Lacs Parents to be joint borrower (s).
All loans up to Rs.7.50 lacs are covered under Credit
Guarantee Scheme managed and operated by National Credit
Guarantee Trust Company Ltd (NCGTC).
> Rs. 7.5 Lacs Parents to be joint borrower(s). Tangible collateral security
of suitable value acceptable to bank, along with the
assignment of future income of the student for payment of
instalments. Security need not necessarily be belonging to
the joint borrower. However, the loan should be guaranteed
by the person in whose name such security exists.
Dena Vidya Laxmi Education loan scheme for Vocational courses


Student Criteria
 Should be an Indian National.
 Should have secured admission to a course run or supported by Ministry/Dept./
Organisation of the Govt. leading to a certificate /diploma/degree etc.
Limit of Loan depends upon the duration of course:
 duration upto 3 months : Rs 20,000/-

 duration 3 to6 months : Rs 50,000/-
 duration 6months to1 year : Rs 75,000/-
 duration above 1 year : Rs 1,50,000/-
Margin: NIL
Security: No security or 3rd party guarantee
Repayment Period:
Courses upto 1 year : 2 to 5 years
Courses above 1 year : 3 to 7 years
7. DENA RENT:
Loan against Future Rent Receivable

Purpose of Loan
 For financing against future rent receivables by discounting future Rental
income.
 Landlords – Individuals (Indian citizen including NRIs). Corporates, Trusts etc.
 Property should have been rented to Banks/ FIs/ PSUs/ reputed limited
companies
Limit of Loan:
Minimum : Rs.1 lac
 Maximum : Rs.500 lac
 Quantum of loan: 90% of Present value of rentals is to be calculated using
discounted method.
 Margin: 10%
 Security :Equitable Mortgage of property rented out.
8. DENA LOAN AGAINST PROPERTY:
General purpose loan upto Rs 500 Lacs for all categories of individuals against security
of immovable property.( Term Loan and Overdraft)
Limit of Loan:
 Minimum : Rs.2.00 lac.
 Maximum : Rs.500.00 lac.
 Sanction limit : 50% GMI for all.
 MPBF = 50% GMI
EMI Factor
Margin: 50% of realisable market value of the property.
 Valuation Report should not be more than 3 months old.
Repayment Period:

Repayment up to 10 years (120 EMIs.).
Security: Equitable Mortgage of property against which Mortgage facility has been
extended.
9. DENA TRADE FINANCE
Cash credit facility upto Rs 500 lacs for commodity traders , dealers, stockists against
stock and book debts.
Limit of Loan
 Minimum : Rs.2.50 lacs
 Maximum : Rs.500.00 lacs
Security: Hypothecation of stock and Book Debts.
10. DENA DOCTOR+
A specially designed loan facility for Medical Practioners to take their profession to next
level. The loan is available for :
1. Setting up clinic, expansion/ renovation/ modernisation of existing clinic, X-Ray
lab, pathological lab, etc
2. Purchasing medical equipments
3. Purchasing computer & other essential equipments for clinic
Minimum qualification :
 MBBS/ BDS
 Registered with respective Council
 Over 25 Years of age at the time of disbursement
 Not over 65 years at the time of loan maturity
Maximum loan : Rs.200.00 lac
11. DENA GOLD LOAN
Name of the Scheme : Dena Gold Loan Scheme (DGLS)

Purpose : Any personal purpose
Eligibility: 1. The scheme is open for all customers — existing and new (KYC norms to
be adhered to)
2. Only individuals who have attained majority are eligible ;
Co-obligation : Co-obligant is not compulsory; but may be encouraged (Preferably
spouse / parent / children who have attained majority)
Nomination : In case of single borrower, nomination is to be obtained. The borrower
can change the nominee as and when he desires (the nomination form to be used is the
existing nomination form (DA-1) in which the word "depositor" is to be replaced with
"borrower" and the words "amount of the deposit" are to be re- laced with "security”
Nature of Facility: Demand Loan
Scale of Finance: 70% of the market value of gold jewellery / gold coin / gold other
than bullion

Quantum of loan 1. The loan amount will be linked to the value of gold jewellery /
gold coin / gold (other than bullion) to be pledged.
2. Minimum Rs 10000/- & Maximum Rs 5.00 lacs
Maximum quantum of finance as Rs.1 crore stands revised as per
Circular No 16/01/2012-13 Dtd 12/04/2012.
Margin to be maintained @ 30% of the value of the Gold / jewellery / gold coin / gold
(other than bullion)
Repayment for loan Up to 24 months, to be repaid in EMIs or quarterly/ half-yearly/
annual installments or on lump sum basis, as may be agreed upon by the borrower/s.
Disbursement : The loan amount would be transferred to the S.B. Account of the
borrower and the borrower may be allowed to draw the loan amount by way of either
issuing cheques to the suplier or withdrawing money in cash.
Rate of Interest Upto Rs. 3 lacs : 12% (fixed)
Above Rs.3 lacs & upto Rs.5 lacs : BR+3.30%
Circular No 16/01/2012-13 Dtd 12/04/2012 introduced Overdraft facility under Dena
Gold Loan Scheme to individuals(other than farmers). Overdraft under the scheme may
be extended for any purpose other than speculative purposes.
Scheme Code under Finacle System is DLR27
12. DENA PROFESSIONALS LOAN SCHEME FOR CA CS CFA
Purpose: Construction/ purchase of Office premises, Furniture Fixture, Office

equipments, Finance against receivables.
Eligibility:
Whole time practicing Chartered Accountants, Company Secretary and Chartered
Financial Analyst, not employed elsewhere who are income tax assessee for last two
years are eligible.
Age: Minimum 21 Yrs at the time of Commencement of loan and 65 Yrs at the time of
Maturity of loan
Loan Limit: Rs. 2.00 Lacs to Rs. 100.00 lacs
Margin: 25%
Repayment period: 120 months
Pradhan Mantri Awas Yojna
Upto 2022 500 Cities
CSMC: Central Sanctioning and Monitoring Committee
STLC: State Level Technical Cell 5-10 Members
CTLC: City Level Technical Cell 2-4 Members
No. of members decided by CSMC
Members must include:

1.Urban Planning Specialist

2. Housing Finance Specialist
3.Building Technology Specialist
PMAY (URBAN) PMAY

MoHUPA: Ministry of Housing and Urban Poor Allevation (Grameen)
Ministry of
Earlier: Rajiv Awas Yojna Rural
Development
Earlier: Indra
Awas yojna
Slum Affordable Affordable Subsidy for
Rehabilitation housing for Housing for beneficiary
with weaker weaker led
participation section in section Individual
of Slum partnership through house
developers with Public Credit Linked construction
Private subsidy
Sectors scheme
Eligibility EWS: EWS: EWS: EWS: As decided by
Economically Economically Economically Economically Panchayat
weaker weaker weaker weaker
section section section section
LIG, MIG If individual
apply as a
Group/
Society only
Maximum 1 lac 1.5 Lac Interest 1.5 lacs 1,20,000/-
support Subvention Others
per family 1,30,000/- NE
States, Hilly
States
Under CLSS: Credit Linked Subsidy Scheme
Affordable Housing for weaker section through Credit PMAY (Grameen)

Linked subsidy scheme Ministry of Rural
Development
PMAY (Urban)
Group EWS LIG MIG-1 MIG-2 EWS

Family <=3 lacs 3-6 6-12 12-18 NA

Income
Loan 6 6 9 12 1,20,000/- Others
amount 1,30,000/- NE
covered for States, Hilly States
interest
subsidy
Maximum 10 Lacs No Limit
Loan Maximum EMI 30% of Maximum EMI as per
amount Gross Monthly Income Dena Niwas Loan
Scheme
Interest 6.5% 6.5% 4% 3% 12000/- for Toilet
Subsidy rate
Period of 20 Yrs 20 Yrs 20 Yrs 20 Yrs 90 days mandatory
Interest job under
Subsidy MNAREGA.=18000/-
Maximum 25 Yrs 25 Yrs 25 (Salaried) 25
Loan tenure /30 (Non- (Salaried)
Salaried) Yrs /30 (Non-
Salaried)
Yrs
Discounting 9% 9% 9% 9% If required, Loan
Rate for from bank upto
Subvention 70000/-
credit
CARPET 30 Sq. Mt 60 Sq. Mt 90 Sq. Mt110 Sq. 25 Sq mt
AREA Minimum Minimum Maximum Mt
Maximum
st
Benefit disbursement upfront after 1 disbursement by Bank.
Beneficiary will get Rs. 250/- for document expenses.
Bank will get Rs. 3000/- as process fee for loan upto 6 lac.in case of EWS& LIG ( Govt. Will
pay to Bank,Not to be recovered from customer)
Bank will get Rs. 2000/- as process fee for loan upto 12 lac. In case of MIG-I & II( Govt. Will
pay to Bank,Not to be recovered from customer)
For Loan above 6 lacs , Bank may recover Process fee on amount >6 Lac from customer.
If a private Project wants to be covered under PMAY :
a. Minimum total houses under the project must be 250
b. 35% of houses for EWS category
Smart City project must have 15% area earmarked for PMAY housing.

Negative list & Discretionary list :

At present, the Negative List comprises of following sectors / activities:
1. Plantation firms in the nature of NBFCs

2. Unregistered NBFCs
3. Partnership firm, where HUF is one of the partner
Discretionary List
Discretionary List shall comprise of following sector / activities in manufacturing:
1. Registered NBFCs
2. Chits/Chit Funds & Credit/Thrift Cooperative Societies
3. Film Industry
4. T V Serials
5. Entertainment & Amusement Parks
6. Jelly Filed Telecom Cables
7. Sugar Mills under co-operative sector
8. Share/Stock Brokers and Market Makers
(Gems & Jewellary sector is removed from Discretionary List. However, in view of current
scenario, discretionary power for sanctioning credit facilities to Gems & Jewellary sector will
be vested with FGMO-CAC & above.)
Exemption from Discretionary List Guidelines:
a) Proposal under Priority Sector is kept out of purview of discretionary list and respective
authority may consider credit proposal on merits.
b) If facility is secured by 100% liquid security viz. TDR, NSC, surrender value of LIP etc. In
such case, clearance from higher authority is not required.
Source : Loan Policy 2013-14 –page no.24-25
MSMED SECTOR

Tieup arrangements : Bank has entered into tie up arrangement with

TVS Motors for financing Auto Rickshaws/ three wheelers for carrying passengers / goods
 Tata Motors for financing commercial vehicles / equipments (other than three
wheelers)
 Bajaj Auto for financing commercial vehicles
Schemes in Brief are as under:
i. Channel Financing Scheme
a. Supplier Bill Discounting Scheme
b. Dealer Finance Scheme
ii. Rice Mill Scheme
iii. Wind Mill Scheme.
iv. Scheme for Textile units of ‘Bhilwara’
v. Scheme for Ceramic units of Morvi, Wankaner & Thangadh.
vi. Dena Artisan’s Credit Card (DACC)
vii. Scheme for Financing SMEs Engaged in Agro Processing & Cotton Ginning
viii. Scheme for Cluster Units as identified by UNIDO (United Nations Industrial
Development Organization) viz. Casting & Forging, Diesel Engines, Electric Motors,
Machine Tools, Diamond Processing & Wall Clocks (only for Rajkot Region)
ix. MOU with TATA Motors, TVS & Bajaj for financing commercial vehicles / three
wheelers
x. Financing of second hand commercial vehicles (other than three wheelers) upto 3
years old subject to Road Worthiness Certificate and Valuation from Regd. Auto.
Engineer / Surveyor at the sole discretion of the Bank.

TEV Study for MSME Accounts : Techno Economic Viability to be conducted in case of SME
projects having Term loan limit of Rs.10 Crs. and above for new projects and Rs. 15 crs and
above for expansion / diversification from TEV agencies as per loan policy.
Issue of Acknowledgement of Loan Applications
Branches / Regional Offices to give manual acknowledgement immediately on receipt of
MSME loan applications till the system of online submission and central registration of loan
application is put in place. Each branch may affix a running serial number on the main
application form as well as the corresponding portion for acknowledgement. (refer Circular
No.383/11/2011-12 dated 21.02.2012)
Disposal of Applications : All loan applications from MSME for a credit limit or enhancement
in existing credit limit up to Rs. 5 lacs should be disposed of within 10 days and for credit
limit up to Rs.. 25 lacs within 15 days, for credit limit upto Rs. 100 lacs within 21 days & for
credit limits above Rs. 100 lacs within 30 days from the date of receipt provided the loan
application is complete in all respects and is accompanied by documents as per 'check list'
provided.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Eligible account:
(a) loan up to Rs.100 lac (RRBs up to Rs.50 lac),
(b) no collateral security or 3rd party guarantee
(c) Any Credit facility with ROI 4% above Base Rate not eligible for coverage.
Composite all-in Guarantee Fee as % of sanctioned credit facility:
Credit facilty Women, Micro Ent. in NE Others

Region (incl Sikkim)
(AGF) (AGF)
Upto Rs.5.00 lakh 0.75 % 1.00 %
Above Rs.5.00 lakh & upto 0.85 % 1.00 %
Rs. 100 lakh
Non- payment of fee will not make guarantee available, the same can be continued
only if, Trust agrees with penal interest @ 4% over Bank Rate on the fee.
Extent of Guarantee Cover:
Women enterprises & North Eastern States:
Loan up to Rs.5 lac : 85%* max. Rs. 4.25

Loan up to Rs.50 lac: 80%* max. Rs. 40.00
Loan above Rs.50 lac to Rs.100 lac: 50%* 25.00
Total amount restricted to 50.00
Micro Enterprises:
Loan up to Fts.5 lac : 85%* 4.25

Loan up to Rs.50 lac: 75%* 37.50

Loan above Rs.50 lac to Rs.100 lac : 50%* 25.00
Other loans:
Loan up to Rs.50 lac : 75%* 37.50

Loan above Rs.50 lac to Rs.100 lac: 50%* 25.00
*As per % of outstanding balance on date of NPA or Date of lodgement of claim,
whichever is lower.
Claim amount and lock in period: Lock in period is 18 months from date of last
disbursement or payment of guarantee fee whichever is later.
The lending institution may invoke the guarantee in respect of credit facility,
Within a maximum period of two years from date of NPA, if NPA is after lock-in period
OR
Within two years of expiry of lock-in period, if the NPA is within loc-in period.
Initiation of legal proceedings as a pre-condition for invoking guarantee shall be

waived for credit facilities upto Rs. 50000/-subject to waiver of legal proceedings by
EC of MLI
While lodging a claim with CGTMSE, branches are required to submit appraisal/sanction
memorandum, sanction letter, acceptance letter from borrower, legal documents i.e copy of
petition etc. if credit guarantee claim is more than Rs. 20 lakhs.
Claim payment : On acceptance of claim 75% amount to be paid within 30 days (for
delay interest at bank rate to be paid) and balance on conclusion of recovery
proceedings or 3 years from date of decree, whichever is earlier.
Recovery after receipt of claim : After cost of recovery, amount to be shared pro-rata in
the ratio of claim payment. If sharing of recovery is delayed beyond 30 days, bank to pay
interest at bank rate + 4%
Minority Communities
The following communities have been notified as minority communities by the Government
ofIndia, Ministry of Welfare:
(a) Sikhs
(b) Muslims
(c) Christians
(d) Zoroastrians
(e) Buddhists

(f) Jains
Financial inclusion
Financial inclusion may be defined as the process of ensuring access to financial services and
timely and adequate credit where needed by vulnerable groups such as weaker sections and
low income groups at an affordable cost (The Committee on Financial Inclusion, Chairman:
Dr. C. Rangarajan).
1.2 Financial Inclusion, broadly defined, refers to universal access to a wide range of financial
services at a reasonable cost. These include not only banking products but also other
financial services such as insurance and equity products (The Committee on Financial Sector
Reforms, Chairman: Dr.Raghuram G. Rajan).
The essence of financial inclusion is to ensure delivery of financial services which include -
bank accounts for savings and transactional purposes, low cost credit for productive,
personal and other purposes, financial advisory services, insurance facilities (life and non-
life) etc.
Why Financial Inclusion ?
Financial inclusion broadens the resource base of the financial system by developing a
culture of savings among large segment of rural population and plays its own role in the
process of economic development. Further, by bringing low income groups within the
perimeter of formal banking sector; financial inclusion protects their financial wealth and
other resources in exigent circumstances. Financial inclusion also mitigates the exploitation
of vulnerable sections by the usurious money lenders by facilitating easy access to formal
credit.
Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Jan Dhan Yojana (Prime Minister Scheme for People's Wealth) is an
ambitious scheme for comprehensive financial inclusion launched by the Prime Minister of
India, Narendra Modi on 28 August 2014 He had announced this scheme on his first
Independence Day speech on 15 August 2014.
Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5
Crore (15 million) bank accounts were opened under this scheme. By September 2014,
3.02 crore accounts were opened, with around 1500 crore (US$250 million) were deposited
under the scheme, which also has an option for opening new bank accounts with zero
balance.
The scheme has been started with a target to provide 'universal access to banking facilities'
starting with "Basic Banking Accounts" with overdraft facility of Rs.5000 after six months
and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan
Card. In next phase, micro insurance & pension etc. will also be added
Under the scheme
1.account holders will be provided zero-balance bank account with RuPay debit card, in
addition to accidental insurance cover of Rs 1 lakh.

2. Those who open accounts by January 26, 2015 over and above the Rs1 lakh accident, they
will be given life insurance cover of Rs 30,000.
3. Six months of opening of the bank account, holders can avail Rs 5,000 loan from the bank.
4. With the introduction of new technology introduced by National Payments Corporation of
India (NPCI), a person can transfer funds, check balance through a normal phone which was
earlier limited only to smart phones so far.
5. Mobile banking for the poor would be available through National Unified USSD Platform
(NUUP) for which all banks and mobile companies have come together
DENA LAXMI SHIKSHA PROTSAHAN YOJANA

As a Corporate Social Responsibility measure, the Bank is implementing Dena Laxmi Shiksha
Protsahan Yojana since 2005. The girl students belonging to BPL family, who has secured the
highest / second highest marks (first and second) in class 7th, residing in village / studying in
the schools located in villages in service area (command area) of Branches are eligible for
grant of scholarship under this scheme.The scheme aims to provide scholarship to Girl
students from the BPL families for meeting the expenses for the purchase of books,
uniforms, school bag, stationery, payment of fees etc., so as to enable them to pursue their
studies.
The eligible girl students may apply on prescribed application form for grant of scholarship
to the nearest Branch of Dena Bank.

E PRODUCTS
Contents
E- PRODUCTS.................................................................................................................................................... 2
Dena Bak IT Products/Services/Facilities.................................................................................................... 2
PAYMENT AND SETTLEMENT SYSTEMS 3
Dena I-Connect( Internet Banking) 11
On line creation of Term Deposits : 11
Mobile Banking 12
Dena Alert Services : 13
App on mobile devices 14
Money Transfer Service Scheme 14
Dena ATM Services 15
What is “Verified By Visa”? 18
Demat Services-DENA LAXMI DEMAT 20
E PAYMENT OF TAXES 22
DENA e TRADE (On Line Trading in shares) 22
Application Supported by Blocked Amount (ASBA) 22
Prepaid Cards 24
Notice Board to Customers 25

PAYMENT AND SETTLEMENT SYSTEMS

Electronic Payments system is a payment mechanism, wherein payments take place
electronically without actual exchange of cash and cheques. Banks are the backbone of
payments systems as they act as a guarantor to the seller and recover money from the
buyer.
TYPE & MAIN FEATURES AMOUNT
REAL TIME GROSS SETTLEMENT (RTGS): Individual transaction

The RTGS system is primarily meant for large Minimum Rs. 2,00,000.
value transactions. It is a funds transfer No upper limit
mechanism where transfer of money takes place
from one bank to another on a "real time" and
on "gross" basis. Settlement in "real time" means
payment transaction is not subjected to any
waiting period. The transactions are settled as
soon as they are processed. RBI operationalised
the new RTGS system on October 19, 2013.
ELECTRONIC CLEARING SERVICES (ECS)

ECS is a electronic mode of payment / receipt for
transactions that are repetitive and periodic in
nature. ECS is used by institutions for making
bulk payment of amounts towards distribution of
dividend, interest, salary, pension, etc; or for bulk
collection of amounts towards telephone /
electricity / water dues, cess / tax collections,
loan installment etc.
ECS is a mode of electronic funds transfer from
one bank account to another bank account using
the mechanism of clearing house. ECS facilitates No limit
bulk transfers of money from one account to No limit
many accounts or vice-versa.
ECS has two variants:
a) Electronic Clearing Services – Credit (ECS –
Credit)
b) Electronic Clearing Services – Debit (ECS –
Debit) Account holder can set the
ECS Credit: limit in his mandate
ECS credit can be initiated by any institution
called ECS user that has to make either bulk

payments or repetitive payments to a large

number of beneficiaries. Electronics, bulk
transfers (one to many transfers), value in T+3.
Dates to be fixed in advance for bulk payments.
Only after the cycle is complete, the finality of
settlement could be known.
ECS – Debit:
ECS Debit is a scheme under which an account
holder with a bank can authorize an ECS user to
recover an amount at a prescribed frequency by
raising a debit in his account. The ECS user has to
collect an authorization that is called ECS
mandate for raising such debits. These
mandates have to be endorsed by the bank
branch maintaining the account. Electronic, bulk
transfers (many to one transfer), value in T+3.
Dates to be fixed in advance for bulk debits. Only
after the cycle is complete, finality of the
settlement could be known.
NATIONAL ELECTRONIC FUNDS TRANSFER No

(NEFT) Restrictions for Account
National Electronic Funds Transfer system is an holders. For Walk-in
electronic funds transfer system introduced by customers (including
RBI to facilitate banks to transfer funds Indo-Nepal Remitters),
electronically from one customer a/c of a the limit is Rs.50,000
participant bank branch to another customer a/c Banks may impose
of any other participant bank branch. Persons limits per transaction /
without an account also can initiate a NEFT per day transactions for
transfer but Beneficiary must have an account. security reasons
NEFT uses the Public Key Infrastructure (PKI)
technology to ensure end-to-end security and
rides on the Indian Financial Network (INFINET)
to connect the bank branches for electronic
transfer of funds.
SETTLEMENT PERIOD: There is a system of return

within two hours of completion of batch.
This B+2 discipline requires the bank to credit
beneficiary account immediately upon

completion of a batch or else returned the

transaction within 2 hours of completion of batch
settlement, if credits are unable to afforded.
Customers can complaint to Ombudsman if
complaint is not resolved within 30 days.
CHEQUE TRUNCATION SYSTEM (CTS): No amount restrictions.

In view of large scale of computerization and
networking, electronic cheques i.e. cheques in
electronic form as against usual paper
instrument in writing has become indispensable.
Truncated cheque implies generation of an
electronic image of the cheque. The Truncation
can be used by MICR data of by using image
processing. The entire MICR code laying can be
captured electronically. The electronic
information can be exchange with other banks
for clearing purpose.
Image specifications in the CTS The electronic
images of truncation cheques is in gray scale
technology. There are 3 images of the cheques
i.e. front grey, front back & white and back black
&white.
The specifications are:
Image Type: Minimum DPI Format Compression
Front Gray Scale : 100 DPI JFIF JPEG
Front Black & White: 200 DPI TIFF CCITT G4
Reverse Black & White: 200 DPI TIFF CCITT G4
The image quality of the Grey Scale image shall
be 8 bits / pixel (256 levels).
MODE Time of settlement at the Reserve Bank of

India
OF DAY
TXN From To
RTGS (R41) MON – FRI

08:00 hours 16:30 hours
(CUSTOMER) SAT(1st & 3rd )
RTGS (R42) 08:00 hours 19:45 hours MON – FRI

(INTERBANK) SAT(1st & 3rd )
MON – FRI
NEFT 07:00 hours 19:00 hours
SAT(1st & 3rd )
Dena ATM Services
Dena Bank Debit cum ATM Card offers an easy and convenient way to do all
transactions within a fraction of seconds. Presently 1432 * ATMs all across India .*as of
Dec 2014.
Dena Bank offers the following types of cards:

Dena Bank offers the following types of cards:
1. Dena Insta Card (Un-named Debit Card)-RuPay

2. Dena Debit cum ATM Card (Named Debit Card) -RuPay
3. Dena Platinum Debit cum ATM Card –RuPay
4. Dena RuPay KCC Debit cum ATM card for DKCC holder
5. Dena Stree Shakti International Rupay Debit Card
6. Dena Insta Card (Un-named Debit Card)-VISA

7. Dena Debit cum ATM Card (Named Debit Card)-VISA
8. Dena EMV Chip Debit cum ATM Card (Named Debit Card)-VISA
9. Dena EMV Chip International Gold Debit Card -VISA
1. Dena Insta Card (Un-named Debit Card)RuPay

This card can be used on Dena Bank & member Bank’s ATMs and POS Terminals
in India. This card will be issued at the counter along with the PIN. This card is also
called as Un-named card as name of the card holder is not printed on the card.
Card verification value (CVV2) enabled cards (printed on back side of card) can be
used for purchase of goods on internet including e-ticketing.
2. Dena Debit cum ATM Card (Named Card)-RuPay
in India. Dena Debit cum ATM card has name of the customer embossed on the

Debit card. Card verification value (CVV2) enabled cards (printed on back side of
card) can be used for purchase of goods on internet including e-ticketing..
3.Dena Platinum Debit Card- RuPay
card) can be used for purchase of goods on internet including e-ticketing.
Eligibility criteria : Average Quarterly Balance of Minimum Rs.10,000/- for issuing

RuPay Platinum Debit CardsBenefits
=> Cash Withdrawal - Up to Rs. 50,000/- per day
=> Purchase at Merchant Establishments - Up to Rs. 2,00,000/- per day
=> Accidental Insurance - Rs.2,00,000/-
=> Fund Transfer - Up to Rs. 1,00,000/- per day
Charges
Please click here to go to the Service charges section to view latest charges
applicable.
Eligibility criteria :
Average Quarterly Balance of Minimum Rs.10,000/- in Saving / Current

Account.
Activation offer
Offers at merchants: Café Coffee Day [Buy one get one cappuccino free]
Usage offers:
A. Cash Back offers
o Utility Cash back:

§ 5% cash back on utility bill payments
§ Customer can make 1 or more transaction. However the cash back is capped at Rs.
50/month)
o Fuel surcharge Cash back:

§ Zero fuel surcharge (Up to 1% cash back on fuel, capped at Rs. 75/month)
§ Customer can make 1 or more transaction. However the cash back is capped at Rs.
75/month
§ Minimum transaction amount Rs. 300 o IRCTC

§ Rs. 25 off on train ticket bookings on irctc.in

§ Capped at 1 transaction a month § Minimum eligible transaction amount Rs. 300
o Café coffee Day · 15% off on minimum billing of Rs. 300 & Above
B. List of value added services.
· Insurance- Personal Accident Insurance(accidental death or permanent disablement) of Rs

2 Lacs
· Lounge access- RuPay Platinum offers provides access to the participating lounge 2 times
per Calendar qtr. per Card in any of the 27 participating airport lounges. A nominal
transaction of Rs 2(non-refundable) per access will be charged to the card.
· Concierge services- concierge reservation · services will be available as a 24*7 service

across India on best effort basis.
The Services offered under the concierge service are detailed as under:
1. Gift delivery Assistance
2. Flower delivery Assistance
3. Restaurant referral and arrangement
4. Courier service Assistance
5. Car rental and Limousine referral and reservation assistance
6. Golf Reservation
7. Movie ticket sourcing Assistance
8. Car rental and sightseeing assistance
9. IT Return assessment and filling assistance
10. Investment Consultancy- Real estate, mutual funds, Equity, Debts, F & O
11. Insurance Consultancy- Life Insurance, General Insurance and Health Insurance
4.Dena RuPay KCC Debit cum ATM card for DKCC holder
This card can be used on Dena Bank & member Bank’s ATMs and can be used at
POS Terminals in India.. Card has name of the customer embossed on the Debit
card.
5. Dena Stree Shakti International Rupay Debit Card:

Specially Designed Personlaised RuPay Debit Card for Accounts opened under
Dena Stree Shakti Savings Scheme.
6. Dena Insta Card (Un-named Debit Card) VISA
in India. This card will be issued at the counter along with the PIN. This card is also
called as Un-named card as name of the card holder is not printed on the card.
Card verification value (CVV2) enabled cards (printed on back side of card) can be
used for purchase of goods on internet including e-ticketing. Click here to know
more about Verified by VISA services (VbV)..

7. Dena Debit cum ATM Card (Named Card)-VISA

card) can be used for purchase of goods on internet including e-ticketing.Click here
to know more about Verified by VISA services (VbV)
8. Dena EMV Chip Debit cum ATM Card (Named Card)
in India and abroad. Dena Debit cum ATM card has name of the customer
embossed on the Debit card. Card verification value (CVV2) enabled cards (printed
on back side of card) can be used for purchase of goods on internet including e-
ticketing.Click here to know more about Verified by VISA services (VbV).
9. Dena EMV Chip International Gold Debit Card
Dena International Gold Debit card offers higher cash withdrawal limit on ATM and higher
transactions limit on POS terminals. This card can be used on Dena Bank & member Bank’s
ATMs and POS Terminals in India and abroad. Card verification value (CVV2) enabled
cards (printed on back side of card) can be used for purchase of goods on internet including
e-ticketing. Click here to know more about Verified by VISA services (VbV).
Purchase at
Cash
Type of Card Merchant Fund Transfer
Withdrawal
Establishments
Up to Rs. Up to Rs.
Dena ATM Card 20,000/- per Not Applicable 1,00,000/- per
day day
Up to Rs. Up to Rs.
Up to Rs. 25000/-
Dena Insta Card 20,000/- per 1,00,000/- per
day per day day
Up to Rs. Up to Rs.
Dena Debit cum ATM Up to Rs. 25000/-
20,000/- per 1,00,000/- per
Card
day per day day
Up to Rs. Up to Rs.
Dena International Up to Rs. 1,50,000/-
50,000/- per 1,00,000/- per
Gold Debit Card
day per day day

Dena RuPay KCC Debit Up to Rs. Up to Rs.

Up to Rs. 1,000/-
cum ATM Card for 5,000/- per 1,00,000/- per
DKCC holder day per day day
Note: Multiple accounts can be linked at different branches of Dena Bank to a single
ATM / Insta / Debit cum ATM Card and Gold Card. The Account number of Debit cum
ATM Card issuing branches will be the Primary account number and account at other
Cards issuing branches link to the same card will be the Secondary account. Only
primary account will be linked for POS and VbV transactions.
Dena Bank has entered into a strategic tie up with WEIZMANN FOREX Ltd. agent of
M/s WESTERN UNION FINANCIAL SERVICES, USA for facilitating in bound

instantaneous inward remittance to our customers as well as non-customers under MTS
scheme of RBI. Scheme is launched & operationalised effective from 20.10.2004.
 Scheme facilitates instant payment of Foreign Inward Remittance, either in cash or by DD /
PO / Credit to savings A/c to individual beneficiaries in India in Indian Rupees within minutes
after the sender has effected the remittance.
 Service is a boon to the NRIs & their families in India as well as visiting foreign tourist &
foreign students who are studying in India.
 Hassle free instantaneous payment to beneficiary against photo identification.
 No charge is levied to Beneficiary.
 Credit to NRE / NRO account is not permitted.
Demat Services-DENA LAXMI DEMAT

Dena Bank apart from normal banking services also offers you the capital market
oriented product in the form of Demat account called -Dena Laxmi Demat Account.
Dena Bank is Depository participant of National Securities Depository Limited ( NSDL ).
since 1997 and is extending Depository services to the Demat Account holders of the
Bank.
T imely Disposal of Credit Applications

Sanction of Facilities:
The Bank will endeavor to dispose all credit applications by its operational units in
respect of various discretionary authorities as under:
Sr Category / Sector Maximum time
limit for sanction


CBDT clarified that disclosing overseas bank accounts in Income Tax Return by NRIs- Not
Mandatory.
01 As per Financial Literacy Camps guidelines of RBI of July 2017, FLCs and rural branches
of banks
are eligible for funding support from the Financial Inclusion Fund for the financial literacy
camps to
the extent of 60% of the expenditure of the camp subject to a maximum of ____ per camp.
a Rs.5000 b Rs.10000 c Rs.15000 d Rs.20000
02 As per Financial Literacy Camps guidelines of RBI of July 2017,funding for handheld
projectors and speakers would be provided from FIF to the extent of 50% of the cost incurred
on purchase of hand held projector and portable speaker (both put together) subject to a
maximum of ____ per rural branch / FLC on a reimbursement basis.
a Rs.5000 b Rs.10000 c Rs.15000 d Rs.20000
03 For ascertaining the investment in plant and machinery for classification of an enterprises
as Micro, Small and Medium, which of the following documents could
be relied upon:
a A copy of the invoice of the purchase of plant and machinery
b Gross block for investment in plant and machinery as shown in the audited accounts
c A certificate issued by a Chartered Accountant regarding purchase price of plant and
machinery.
d any of the above
04 For the investment in plant and machinery for the purpose of classification of an enterprise
as Micro, Small or Medium, which of the following is to be taken into account
a book value (purchase value minus depreciation) or the purchase value of the plant and
machinery, whichever is higher
b book value (purchase value minus depreciation)
c the purchase value of the plant and machinery
d book value (purchase value minus depreciation) or the purchase value of the plant and
machinery, whichever is lower
05 The limits for investment by foreign portfolio investors (FPIs) in Central Government
Securities and State Development Loans (SDLs) has been increased from Rs.2580 billion to:
a Rs.2680 billion
b Rs.2751 billion
c Rs.2781 billion
d Rs.2865 billion
06 An unauthorized electronic bank transaction has taken place by a 3rd party in the saving
bank account of Mr. Z. After receipt of bank notification about the transaction, the customer
notifies the bank within 2 days. Who will bear the loss of this transaction?
a bank concerned
b customer concerned
c bank and customer in the ratio of 50:50
d bank up to Rs.25000 and beyond that customer

07 If some unauthorized electronic bank transaction is noticed by the customer in his

accounts, he can provide information to the bank. Which of the following is not a correct
channel for this?
a report through website of the bank
b report to toll free helpline of the bank
c reporting to home branch
d report to any branch of bank.
08 In cases where due to unauthorized electronic bank transaction, the loss is due to
negligence by a customer, such as sharing the payment credentials. Who will bear the
loss:
a bank will bear the entire loss until he reports the unauthorised transaction to the bank
b loss occurring after the reporting of the unauthorised transaction shall be borne by the
customer
c all loss will be born by the customer
d until report to bank, customer and loss occurring after reporting by customer, bank.
09 In cases where the responsibility for the unauthorised electronic banking transaction lies
neither with the bank nor with the customer, but lies elsewhere in the system and when there
is a delay of 4 to 7 working days after receiving the communication from the bank, on the
part of the customer in notifying the bank of such a transaction, the per transaction liability of
the customer shall be limited to Rs._____ in case of a saving bank account?
a Rs.5000 b Rs.10000 c Rs.25000 d no liability
the customer shall be limited to Rs._____ in case of a basic saving bank deposit account?
the customer shall be limited to Rs._____ in case of a cash credit account with limit of Rs.40
lac.
12 On being notified by the customer, the bank shall credit (shadow reversal) the amount
involved in the unauthorised electronic transaction to the customer’s account within ____
days from the date of such notification by the customer (without waiting for settlement of
insurance claim, if any).
a 7 calendar days b 10 calendar days c 7 working days d 10 working days
13 Banks are to ensure that a complaint is resolved and liability of the customer, if any,
established within such time, as may be specified in the bank’s Board approved policy, but
not exceeding ____ days from the date of receipt of the complaint,
a 90 days b 60 days c 30 days d 10 days

14 In the account of Raja, your saving bank account holder, a cheque in which, the amount in
words indicated as Rupees five lac and in figures as Rs.5000 is presented for payment. How
would you make the payment of amount ?:
a the amount in words shall be paid
b the amount in figures shall be paid
c In words or figures whichever less shall be paid
d It is safe to return the cheque
15 A cheque issued by a director of a Limited Company is presented for payment after death
of the director which the bank pays. The company observed that the deceased director had
issued cheque to benefit himself. It raises the claim on the plea that bank cannot pay such
cheque after death of the director:
a Bank cannot pay the cheque as the drawer expired
b Bank can pay the cheque as the company is still a legally competent person to contract
and the director signed as agent of the company
c Bank should contact the Co. because loss will be of the company in case of dispute
d b and c
16 eTDS return for Sept is to be filed:

a by 7th Oct
b by 15th Oct
c by 31st Oct
d by 15th Nov
17 Renewal of a term deposit can be considered by banks from date of maturity in case the
request is received after maturity but the overdue period should not exceed
a 7 days b 10 days c 14 days d 30 days
18 As per RBI guidelines, the banks should impose ‘partial freezing’ on KYC non-compliant
accounts in a phased manner.Partial freezing after the first 6months period, includes:
a transactions at the discretion of the bank
b only credits to be permitted
c only debits to be permitted
d no debit and no credit to be permitted
19 In order to ensure that a coloured photo copy or scanned coloured image of the cheque is
not used, which of the following features is included in the cheque under CTS 2010
standards?
a ultra-violet ink
b intaglio
c void pantograph
d UV enabled scanning
20 What is the minimum value of stock of gold coins, bullion and foreign securities, which
RBI has to maintain at any point of time, against issue of currency?
a Rs.200 cr b Rs.215 cr c Rs.115 cr d Rs.500 cr e Rs.1000 cr
21 As per Income–tax (22nd Amendment) Rules, 2015 (Rule 114B), w.e.f. 1.1.2016, quoting

of permanent account number (PAN) is mandatory for depositing cash _____ with a bank, on
any one day:
a above Rs.10000 b above Rs.20000 c above Rs.25000 d above Rs.50000
22 The garnishee order is not applicable to:

a Amount lying in foreign accounts of the judgement debtor
b Articles of judgement debtor lying in the safe custody
c contents of the locker
d a to c only
e: a and b only
23 For a dishonoured cheque, the punishment provided under Section 138 of the Negotiable
Instruments Act to the drawer is in respect of the following:
a the cheque has been delivered as a gift by the drawer
b the cheque has been issued but the signatures do not tally
c the cheque has been presented with in the period stipulated by the drawer in the cheque
d the cheque has been dishonoured due to insufficiency of balance
e c and d above
24 Awards of Ombudsman that are not implemented by the bank for ___ are required to be
placed by a bank before ____ for examining the reasons for non-implementation and
initiating necessary remedial action :
a three months, CMD
b three months, Customer Service Committee of Board
c 2 months, Customer Service Committee of Board
d 6 months, Board of Directors
25 Hari had a saving bank account and a cheque issued by him is presented in clearing.
Meanwhile a garnishee order is received. If the cheque is to be returned, what should be the
reason:
a exceeds arrangement as garnishee order received
b exceeds arrangement
c garnishee order received, refer to drawer
d payment cannot be allowed.
e a or b
26 A has a current account with the bank and expires. The claim is settled in favour of his
heirs after six months. The legal heirs also claim interest. What would you do:
a Pay interest at SB interest rate
b Will not pay any interest, as the
balance was in current account.
c Pay FD rate for the relevant period
interest rate
d a or c whichever lower
27 The clearing house managing banks extending clearing related overdraft to member banks
can charge rate of interest on such overdraft which is related to which of the following?
a bank rate

b BPLR of the bank concerned

c Base of the bank concerned
d LAF Repo Rate
28 As per extant guidelines, which among the following can sign the notice for possession
under SARFAESI Act 2002, on behalf of the bank?
a Any official of the bank
b Any officer of the bank
c Any manager of the bank
d Any Law Officer of the bank
e An officer in Scale IV or above or approved by Board of the Bank
29 As per RBI guidelines, the banks should impose ‘partial freezing’ on KYC non-compliant
accounts in a phased manner. Partial freezing during the first 6 months period, includes:
a transactions at the discretion of the bank
b only credits to be permitted
c only debits to be permitted
d no debit and no credit to be permitted
30 Aggrieved party on the award of Ombudsman, can make application for review to
appellate authority ____ within 30 days of the date of receipt of award
a Governor RBI
b Dy. Governor RBI
c Chairman IBA
d Judge of Distt. Court
31 In case of crop loss, under Relief Measure, for all restructuring cases, the moratorium
period should be minimum ___:
a 3 months b 6 months c 12 months d 24 months
Answers
01 a 02 a 03 d 04 c 05 b 06 a 07 d 08 d 09 b 10 a 11 c 12 d 13 a 14 a 15 b 16 c 17c
18 d 19 c 20 c 21 d 22 d 23 d 24 b 25 c 26 a 27 d 28 e 29 b 30 b 31 c

CLERK Study Material-2017

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

CLERK Study Material-2017

Transféré par

Droits d'auteur :

Formats disponibles

Basic Study Material For Desktop Viewing only For internal Circulation

RBI Monetary Policy Statement, 2017-18

On the basis of an assessment of the current and evolving

Tri-Party Repo (Reserve Bank) Directions, 2017

[Type text] Page 1

Simplified Hedging Facility

Reserve Bank Commercial Paper Directions, 2017

Issue of Comprehensive Credit Information Reports

Basel III Framework on Liquidity Standards

[Type text] Page 2

(iii) Within the mandatory SLR requirement, Government securities to the

Natural Calamities Portal – Monthly Reporting System

Interest Subvention Scheme for Short Term Crop Loans

Issue of Letters of Credit and Bank Guarantee

[Type text] Page 3

advising/recommending opening of LC/BG to the commercial banks on

MONETARY AND LIQUIDITY MEASURES:

[Type text] Page 4

banks reduced by 50 bps points to 19.50%.

LIMITING LIABILITY OF CUSTOMERS

a) Zero Liability of a Customer:

 Contributory fraud / negligence / deficiency on the part of the bank (irrespective of

 In cases where the responsibility for the unauthorised electronic banking

[Type text] Page 5

REPORTING BEYOND 7 DAYS:

BALANCES IN CUSTOMER ACCOUNTS WITH PAYMENTS BANKS

[Type text] Page 6

BENEFITS OF THE SCHEME:

UIDAI LAUNCHES ‘mAADHAAR’ APP FOR AADHAAR DATA ON

EPFO SIGNS AGREEMENT WITH FIVE BANKS:

‘MULTICURRENCY FOREX CARD’:

[Type text] Page 7

Rest and Rotation Policy in respect of appointment of Statutory Central

Payment and Settlement Systems in India: Vision-2018

Facilitating faster payment services

a. National Electronic Funds Transfer (NEFT): The growing adoption of NEFT by

[Type text] Page 8

Enhancing Safety and Security

[Type text] Page 9

e. Large-value payment systems: On-site inspection of FMIs and System-Wide

Reimbursement of Merchant Discount Rate (MDR) Charges for Government

Government transactions eligible for agency commission

1. Transactions relating to the following government business undertaken by agency banks

[Type text] Page 10

a. Revenue receipts and payments on behalf of the Central/State Government

Rates for agency commission

Goods & Services Tax at a Glance

[Type text] Page 11

[Type text] Page 12

Goods & Service Tax (GST) One Nation One Tax

[Type text] Page 13

ALL BANKS TO FACILITATE AaDHAR ENROLMENT:

KNOWLEDGE EACH BANKER NEED TO KNOW

RESERVE BANK OF INDIA ACT 1934

[Type text] Page 14

BANKING REGULATION ACT 1949 - IMPORTANT PROVISIONS

Sec.5(a) approved securities :such securities authorized by the central government or

[Type text] Page 15

[Type text] Page 16

Sec. 45za nomination for nomination in deposits accounts

[Type text] Page 17

Sec. 45zc nomination for nomination in safe custody accounts

Sec. 52 central govt.can make rules for all matters.