_________________________________________________________________________________ BANKING AWARENESS Contents

Sr. No. 1 2 3 4 5 6 Banking system in India Crucial Facts about Indias Banking System Brief introduction to banks Monetary Policy Governors E-banking Topic

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_________________________________________________________________________________ INDIAN BAKING SYSTEM A DETAILED STUDY 1. Banking system in India

Banking system occupies an important place in a nation's economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalisation of 14 major private banks of India. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below Early phase from 1786 to 1969 of Indian Banks Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. EARLY PHASE OR PHASE I The General Bank of India was set up in the year 1786, next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 2 3 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. NATIONALISATION OF BANKS OR PHASE II Government took major steps in this Indian Banking Sector Reform after independence. The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: The Reserve Bank of India, India's central banking authority, was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."

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The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. Considering this, the Government of India issued an ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. The following are the steps taken by the Government of India to regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalisation of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalisation of seven banks with deposits over Rs. 200 crore.

FINANCIAL OR BANKING SECTOR REFORMS OR PHASE III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalisation of banking practices. In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more.

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Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. At present, the country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are introduced. The entire system became more convenient and swift. Time is given more importance than money. NATIONALISATION OF BANKS IN INDIA The nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi, the then Prime Minister. These banks were mostly owned by businessmen and even managed by them. Central Bank of India Bank of Maharashtra Dena Bank Punjab National Bank Syndicate Bank Canara Bank Indian Bank Indian Overseas Bank Bank of Baroda Union Bank Allahabad Bank United Bank of India UCO Bank Bank of India Before the steps of nationalisation of Indian banks, only State Bank of India (SBI) was nationalised. It took place in July 1955 under the SBI Act of 1955. Nationalisation of Seven State Banks of India (formed subsidiary) took place on 19th July, 1959. The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide.

It serves 90 million customers through a network of 9,000 branches and it offers - either directly or through subsidiaries - a wide range of banking services. The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over Rs. 200 crores. Till 2006, approximately 80% of the banking segment in India was under Government ownership. The commercial banking structure in India consists of: Scheduled Commercial Banks in India + Unscheduled Banks in India Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. The following are the Scheduled Banks in India (Public Sector): State Bank of India State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore

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State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank

The following are the Scheduled Banks in India (Private Sector): ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd ICICI Bank Ltd South Indian Bank HDFC Bank Ltd Centurion Bank Ltd Bank of Punjab Ltd IDBI Bank Ltd Jammu & Kashmir Bank Ltd

Following are the Scheduled Foreign Banks in India: American Express Bank Ltd ANZ Gridlays Bank Plc Bank of America N?T & SA Bank of Tokyo Ltd Banque Nationale de Paris Barclays Bank Plc Citi Bank N.C. Deutsche Bank A.G. Hongkong and Shanghai Banking Corporation

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Standard Chartered Bank The Chase Manhattdftank Ltd Dresdner Bank AG. Public Sector Banks in India

Non-scheduled bank in India means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

2.

Crucial Facts about Indias Banking System

Canara Bank

The first bank in India to be given an ISO Certification.

The first bank in Northern India to get ISO 9002 certification for its selected Punjab and Sind Bank branches. The first Indian bank to have been started solely with Indian capital. Punjab National Bank

The first among the private sector banks in Kerala to become a scheduled South Indian Bank bank in 1946 under the RBI Act. India's oldest, largest and most successful commercial bank, offering the widest possible range of domestic, international and NRI products and State Bank of India services, through its vast network in India and overseas. India's second largest private sector bank and is now the largest scheduled The Federal Bank commercial bank in India. Limited Bank which started as private shareholders banks, mostly Europeans Imperial Bank of India shareholders. The first Indian bank to open a branch outside India in London in 1946 and the Bank of India, founded first to open a branch in continental Europe at Paris in 1974. in 1906 in Mumbai The oldest Public Sector Bank in India having branches all over India and Allahabad Bank serving the customers for the last 132 years. The first Indian commercial bank which was wholly owned and managed by Central Bank of India Indians. TAG LINES OF SOME BANKS T

Banks Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank A tradition of trust

Tag Line

Much more to do with you in Focus India's International Bank Relationships beyond Banking One family one bank Its easy to change for those who you, Love together we can do Build a better life around us

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Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab National Bank Syndicate Bank State Bank of India Union Bank of India UCO Bank United Bank of India Vijaya Bank OLDER PRIVATE SECTOR BANKS Bank of Rajasthan Federal Bank J & K Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank Tamilnad Mercantile Bank Nainital Bank NEW PRIVATE SECTOR BANKS HDFC Bank ICICI Bank Yes Bank INTERNATIONAL BANKS HSBC Citibank BNP Parisbas Lloyds TBS. The world's local bank Citi never sleeps (not used on the Indian website though) The bank for a changing world ...for the journey We understand your world Hum Hai Na ............ Experience our expertise Dare to dream Your perfect banking partner Serving to empower Your family bank across India Smart way to bank The changing face of propserity Customer oriented and committed to excellence Banking with personal touch Trusted Family Bank Taking banking technology to the common man Good people to grow with Where every individual is committed The name you can bank on Your faithful & friendly financial partner With you all the way Good people to bank with Honours your trust The Bank that begins with U A friend you can bank on

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_________________________________________________________________________________ 3. Brief introduction to banks

RESERVE BANK OF INDIA (RBI) The central bank of the country is the Reserve Bank of India (RBI). Reserve Bank of India (RBI) is the central bank of the country and is different from Central Bank of India. It was established in April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of the Hilton Young Commission. Reserve Bank of India was nationalised in the year 1949. The general superintendence and direction of the Bank is entrusted to Central Board of Directors of 20 members, the Governor and four Deputy Governors, one Government official from the Ministry of Finance, ten nominated Directors by the Government to give representation to important elements in the economic life of the country, and four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai, Kolkata, Chennai and New Delhi. The Bank was constituted for the need of following: To regulate the issue of banknotes To maintain reserves with a view to securing monetary stability. To operate the credit and currency system of the country to its advantage.

COMMERCIAL BANKS Meaning of Banks: Banks are the institutions that mobilise the savings of the community and make them available to the entrepreneurs. They act as a bridge between the users of capital and those who save but can't use the funds themselves. Functions of a bank: (a) Receipt of Deposits: Bank collects 3 types of deposits - Current Deposits, Saving Deposits and Fixed Deposits. (b) Lending of Money: These are of different forms - lending cash credits, overdrafts, loans and advances or discounting of bills of exchange (c) Agency Services (i) Collection of bills, promissory notes and cheques (ii) Collection of interest, dividends, premium etc. (iii) Purchase and sale of shares and securities (iv) Acting as a trustee (d) General Services (i) Issue of letters of credit, travellers cheques, bank drafts and circular notes (ii) Safety Deposits (iii) Supplying trade information

4.

Monetary Policy
Monetary policy means the policy of the central bank which it introduces with the object to administer and control the country's money supply including currency, demand deposits and foreign exchange rates.

OBJECTIVES OF MONETARY POLICY Different economists have different views on the objectives of monetary policy because they keep on changing from time to time as per the change in business activities and the level of economic development. The main objectives of the monetary policies are as follows: (1) Stability of exchange rates

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(2) Full employment (3) Price stability (4) Neutrality of money (5) High rate of economic growth (6) Encourages saving and capital formation LIMITATION OF MONETARY POLICY Though, the monetary policy is very important for the development of the country, but it has got certain limitation too. These limitations are as follows: (1) Underdeveloped capital and money market (2) No integrated rate of interest structure (3) Illiteracy and social obstacles. (4) Lack of cooperation among the banks (5) Banking habits (6) Existence of black money (7) Government policies Monetary policy is implemented by the RBI through the instruments of credit control. Generally 2 types of instruments are used to control credit. 1. Quantitative Measures: (i) Bank Rate: Bank Rate is the minimum rate charged by the bank for discounting approved bills of exchange. It is a rate at which the Central Bank is prepared to rediscount the bill or lend money to the commercial bank or other financial institutions. By effecting a change in the bank rate, the Central Bank can effectively control the credit system. Open market operation: Open market operations have been defined as the purchase and sale of government and other eligible securities by the Central Bank in order to check the flow of credit. As an instrument of monetary policy, the purpose of open market operations are to contract or expand the supply of reserves of banks, thus contract their power to expand credit and to provide an orderly market for government securities or to influence the interest rates through the quantitative effect on reserves. Change in reserve requirements: The two types of reserves that banks need to maintain. (i) CRR: Cash Reserve Ratio refers to that portion of total deposits which a commercial bank (ii) has to keep with the Central Bank in the form of cash reserves. SLR: Statutory Liquidity Ratio refers to that portion of total deposits which a commercial bank has to keep with itself in the form of cash reserves. This will tend to contract credit in the system and vice versa.

(ii)

(iii)

2.

Qualitative Measures: (i) Moral suasion: This method involves advice, regulation and persuasion by the Central Bank to the commercial banks to cooperate with the Central Bank in implementing the credit policy. The Central Bank in this method merely uses its moral influence on commercial bank and acts as a supplement to other methods of credit control. (ii) Fixation of margin requirement: The margin is the difference between the loan value and the market value. The Central Bank fixes the margin rate. If it is 40% that means that the commercial bank can lend only up to 60% of the market value of the securities. Thus, by changing the margin rate the Central Bank controls credit.

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(iii) Credit rationing: It means that the central bank fixes a limit upon its rediscounting facilities for any bank. It also means that Central Bank fixes the quota of every affiliated bank for financial accommodation from the central bank. Regulation of consumer credit: This method proves useful when economy faces the problem of inflation. Under this method the Central Bank curtails or extends the limit to which commercial banks can provide credit/finance facility to the consumers or durable goods. Publicity: Under this method the Central Bank gives wide publicity to what is good and what is bad in the credit system of the country. Direct actions: This method involves issuing general instruction by the Central Banks to all the commercial banks and implies the use of coercive action against those commercial banks whose credit policies do not confirm to the policies directed by Central Bank

(iv)

(v) (vi)

5.
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Governors (Reserve Bank of India)

1. 2. 3. 4. 5. 6. 7. 8. 9. Sir O.A. Smith : 1935 - 30.06.1937 Sir J.B. Tailor : 01.07.1937 - 17.02.1943 C.D. Deshmukh : 11.08.1943 - 30.06.1949 Sir B.R. Rao : 31. 06. 1949 - 14.01.1957 K.G. Ambeygaonkar : 14.01.1957 - 28.02.1957 H.B.R. Ayengar : 01.03.1957 - 28.02.1962 P.C. Bhattacharya 01.03.1962 - 30.06.1967 L. K. Jha : 01.07-1967 - 03.05.1970 B.N. Agarkar : 04.05.1970-15.05.1970

10. S. Jaganathan 16.05.1970 - 19.05.1975 11. N.C. Sengupta : 19.05.1975 - 19.08.1975 12. R. Puri : 20.08.1975 - 02.05.1977 13. N. Narasimhan : 02.05.1977 - 30.11.1977 14. Patel : 01.12.1977 - 15.09.1982 15. 16. 17. 18. 19. 20. 21. 22. Dr. Manmonhan Singh : 16.09.1982 - 14.01.1985 A. Ghosh : 15.01.1985 - 04.02.1985 R.N. Malhotra : 04.02.1985 - 22.12.1990 S. Venkataraman : 22.12.1990 - 21.12.1992 C. Rangarajan :22.12.1992-22.11.1997 Dr. Bimal Jalan : 22.11.1997-05.09.2003 Y.B. Reddy : 05.09.2003 - 05.09.2008 D. Subba Rao : 05.09.2008 - Till date 10

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_________________________________________________________________________________ 6. E-BANKING GLOSSARY

Account number: A unique sequence of numbers assigned to a Cardholder account, which identifies the Credit Card issuer and type of financial transaction Card. Acquire: The act of a bank receiving payment transaction information from a merchant and passing it on to the issuer of the Credit Card. Acquirer: A financial institution that supports merchants by providing services for processing payment Card transactions. Acquiring financial institution: A financial institution enables you to accept Credit Card transactions. You must maintain an account with an acquiring financial institution to be able to process credit for Credit Card transactions. The acquiring financial institution deposits the daily Credit Card sales into your account, minus applicable fees. Agreement: A contract set forth to explain terms of business between a company and its customers. Approval: On acceptance of payment, a code is issued by a Card-issuing bank allowing a sale to be charged against a Cardholder's account. The amount is within the Cardholder's remaining credit limit and that the Card has not been reported lost or stolen. Approvals are requested via an authorization. Asynchronous: A method of transmitting data in which the data elements are identified with special start and stop characters. An asynchronous modem cannot communicate with a synchronous modem. Balance: Used as a noun, it's the adjusted total of differences between debits and credits within an account. Used as a verb, it's to adjust the total of differences between debits and credits within an account. Bank: An institution that handles savings and current accounts, issues loans and credit, and deals in government and corporation-issued securities. Bank Identification Number (BIN): The digits of a Credit Card that identify the issuing bank. The first six digits of a Card number are often referred to as a BIN. Bank account: An account that holds funds within a ban and is subject to additional deposits and withdrawals. Batch: An accumulation of Credit Card transactions that are awaiting settlement. Batch processing: A type of data processing where related transactions are transmitted as a group for processing. Capture: A process in which a Credit Card sale or return transaction is submitted for financial settlement. Authorized Credit Card sales must be captured and settled for you to receive the funds. Clearing: The process of exchanging financial details between an acquirer and an issuer to facilitate posting of Cardholder's account and reconciliation of a customer settlement position. Configuration: The specification of physical and/or functional items in the software or service. This can include the look of the user interface and the way information is processed and/or displayed. Credit: The extension of funds issued by a bank that allows a consumer to buy goods or services. The consumer then pays back the bank either in full or in instalments, at an interest rate determined by the bank. Credit Card: A bank-issued Card that allows consumer to purchase goods or services on credit. Custodian: An organisation, usually a bank or any other approved institutions, that hold the securities and other assets of mutual funds and other institutional investors. Debit: To subtract from the balance of an account. Debit Card: An ATM bank card used to purchase goods and services and to obtain cash, which debits the Cardholder's personal deposit account. Requires a PIN (Personal Identification Number) for use. Decline: A response to a transaction request meaning that the issuing bank will not authorize the transaction. Deposit: The aggregate of sales records and refunds submitted to a bank processor for processing. Digital signature: A way to ensure that a message was actually sent by the person who claims to have sent it. The sender's private key encrypts the signature, and the recipient decrypts the signature with the sender's public key.

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Discount rate: The percentage of Credit Card sales amounts the acquiring financial institution charges the merchant for the settlement of the transaction. Depository: A system of organisation, which keeps records of securities, deposited by its depositors. The records may be physical or simply electronic records. Depository Participant: An agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI. E-commerce (electronic commerce): The conducting of business transactions via remote electronic means. EFT (Electronic Funds Transfer): A method of incrementing or decrementing an account through electronic means, eliminating the need for paper checks or withdrawal slips. Encrypt: To scramble a message so that a key, held only by authorized recipients, is needed to unscramble and read the message. When the encrypted data is routed through a gateway, it is decrypted and processed. All processed information (approved/declined transactions) is then re-encrypted and sent securely back to the merchant's web site. Once at the web server, it is decrypted and displayed to the consumer. Expire: To become void after a specified period of time. Export: To back up a file or a group of files to another database. Failed transaction: A transaction that has been denied approval for completion. Financial institution: An institution that obtains capital from individuals, businesses, and other organizations and invests it in various financial assets. Future fulfillment: The sale of physical goods that do not always ship on the same day the order was received. Also referred to as delayed fulfilment. Contrast immediate fulfilment. Foreign institutional investor: An institution established or incorporated outside India which proposes to make investment in India in securities; provided that a domestic asset management company or domestic portfolio manager who manages funds raised or collected or brought from outside India for investment in India on behalf of a sub-account, shall be deemed to be a Foreign institutional investor. Gateway: An interface that links the Internet shopper, the online merchant and banking systems in a secure environment. The Gateway contains the bulk of the logic for handling processor business rules, processor time-outs, and so on. Hard goods: Tangible products that are distributed through the postal or other delivery service. Imprint: A form of proof that the Credit Card was present for the transaction. It can be electronic (by swiping a Card through a Card reader) or manual (by obtaining a physical imprint using an imprinter), but one of the two is always required. Incentive: A reduction in price given to customers after a purchase has been made. Insufficient funds: The available and/or cash reserve balance is not sufficient to cover the debit entry. Interchange: The flow of information between issuers and acquirers (for example, transactions, retrieval requests, and chargeback). Interchange fee: The fee that your bank pays the consumer's bank for each Credit Card transaction that is settled. Issuing: Providing a bank Card to a Cardholder and authorizing that person to use it to complete financial transactions. Issuing financial institution: The financial institution that extends credit to a consumer through Credit Card accounts. The financial institution issues a Credit Card and bills the consumer for purchases against the Credit Card account. Also referred to as the Cardholder's financial institution or issuer. Live: (1) To be present and responsive, (2) To have your business present and responsive online. Logs: Records of network activities. Activities can include access records, errors, and financial transactions.

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Magnetic stripe: A stripe on the back of a bankcard that contains magnetically encoded Cardholder account information. The name of the Cardholder is stored on Track I, the account number and expiry date is stored on Track II. Also referred to as MAG stripe. Member: A financial institution that is a member of Visa and/or MasterCard International. A member is licensed to issue Cards to holders and/or accept merchant drafts. Merchant: A retailer, or any other entity (pursuant to a merchant agreement), that agrees to accept Credit Cards, debits Cards, or both, when properly presented. Merchant account: An account that you have with an acquiring bank to enable you to accept Credit Cards: The account facilitates financial settlement of Credit Card transactions. Merchant agreement : A written agreement between a merchant and a bank containing their respective rights, duties, and warranties with respect to acceptance of Credit Card and matters related to bank card activity. Merchant bank: A bank that has entered into an agreement with a merchant to process bank card transactions. Offline capture: A payment capture method used by merchants who ship an order one or more days after they receive it. The payment is captured when the merchant ships the order and sends a post-authorization message. PIN: A personal identification number, typically a short alpha-numeric character string, used as a password to gain access to bank or credit accounts. A PIN is usually required when performing financial transactions using a debit or Credit Card. Pending transaction: A transaction that has not yet been settled. Point-of-sale (POS): The place and time at which a transaction occurs. This term also refers to the devices or software used to capture transactions. Post Auth: A transaction that has been submitted for completion and has completed a payment. Queries: Inquiries about transactions, databases, or other records. Receipt: A hard copy description of the transaction that occurred at the point of sale. The minimum information contained on a receipt is as follows: date, merchant name and location, account number, type of account used (for example, Visa, MasterCard, AMEX, and so on), amount reference number and/or authorization number, and action code. Reconciliation: Balancing debits, credits, and totals between two systems. Recurring transaction: A transaction, for which permission has been granted by a Cardholder to a merchant that is charged at a specified interval to the Cardholder's account. Refund: A return of funds to a consumer for a returned product. Retrieval request: A request to a merchant for documentation concerning a transaction, usually a Cardholder dispute or suspicious sale or return. A retrieval request can lead to a chargeback. Return: A transaction in which a consumer wants to return a purchase and receive his or her money back. Session: In terms of the payment system, a session manages the exchange of money. Settlement: A process in which a Credit Card transaction is settled financially between your acquiring financial institution and the consumer's Credit Card issuing financial institution. The acquiring bank credits the merchant's account for the Credit Card sale and the sale is posted to the consumer's Credit Card account. SIC (Standard Industry Classification) code: A four-digit code assigned to a merchant to identify the merchant's principle line of business. Soft goods: Products that can be distributed electronically, such as a text file or a graphic. Surcharges: Any additional charges to a merchant's standard processing fees. They are a result of non-qualified transactions of different communications methods. Swiped entry: Credit Card information that is read into the software directly as a result of swiping (or sliding) the Credit Card through a Card reader. The information magnetically encoded in the magnetic stripe is transmitted. This information includes secret data that helps validate the Card.

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Share transfer agent: Any person, who on behalf of any body corporate maintains the record of holders of securities issued by such body corporate and deals with all matters connected with the transfer and redemption of its securities. It can also be a department or division (by whatever name called) of a body corporate performing the above activities if, at any time the total number of the holders of securities issued exceed one lakh. Sub-broker: Any person not being a member of a stock exchange who acts on behalf of a stock-broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock-brokers. Transaction fee: A "per transaction" charge incurred by merchants who are on scale pricing. This is in addition to the percentage discount fees. Transaction flow: The process of completing a transaction. Underwriter: A financial organisation that handles sales of new securities which a company or municipality wishes to sell in order to raise money. Typically the underwriters will guarantee subscription to securities say, an issue of equity from the company at a stated price, and are under an obligation to purchase securities up to the amount they have underwritten, should the public not subscribe for the issue. Visa: An association of banks that governs the issuing and acquiring of Visa Card transactions. Void: A correction transaction used by a merchant. There is only a small period of time in which a purchase can be cancelled. Voids are typically handled by issuing credit to the consumer's account. Venture capital fund: A fund established in the form of a trust or a company including a body corporate and registered under the SEBI venture capital fund regulations which - has a dedicated pool of capital, raised in a manner specified in the regulations and invests in venture capital undertaking in accordance with the regulations. Written authorization: The authorization provided to the merchant by a consumer to electronically debit his or her account. Zip: To compress a file to take up less disk space and allow for faster electronic transmission.

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