Mbn f658 - Banking Management Master Key

8/3/2019 Mbn f658 - Banking Management Master Key

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MBN F658 - BANKING

MANAGEMENT

SEMESTER III


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MBN F658 - BANKING

MANAGEMENT

SEMESTER III


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Introduction to Banking

Banking means the accepting, for the purpose of

lending or investment, of deposits of money from

the public, repayable on demand or otherwise and

withdrawable by cheque, draft, order or otherwise.

Banking Company means any company which

transacts the business of banking.

A bank is a financial institution that serves as a

financial intermediary. Banking Management provides a comprehensive

knowledge about the managerial skills required for

effectively managing the banking sector and the

related industries.


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Types of Banks

Banking institutions of a country can beclassified in to the following types on the basis

of their functions:

1) Central Bank

2) Commercial Banks

3) Industrial Banks

4) Exchange Banks

5) Co-operative Banks

6) Agriculture Land Mortgage Banks

7) Indigenous Banks

8) Regional Rural Banks


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Role of Banks

Banks play a vital role in modern economy

- by accepting deposits the banks promote the habit ofsaving among the people.

- the banks encourage industrial innovations and

business expansion through funds provided toentrepreneurs

- the banks exercise considerable influence on the levelof economic activity through their ability to create ormanufacture money in the economy.

- through their lending policy the banks can influencethe course and direction of economic activity.

- the various utility functions performed by the banksare of great economic significance for the economy.


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Role of Banks for a Developing Country

Capital Formation

Monetisation

Innovations Finance for priority sector

Provision for Long-Term Finance

Cheap Money Policy

Need for a Sound Banking System


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Functions of Banks

The fundamental functions of a bank are : Acceptance of deposits

- Savings Bank Account

- Current Account

- Fixed Deposit Account

Advancing of Loans

- Making Ordinary Loans- Cash Credit

- Overdraft, Discount of BOE

Promote the use of Cheques

Agency functions of the Bank- Transfer of funds

- Collecting Customers funds

- Purchase and Sale of Shares and Securities

- Collecting Dividends on the Shares of the Customers

- Payment of Premium

- The bank acts as a Trustee and the Executor

- Income Tax Consultant

- Act as Correspondent


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Functions of Banks

Purchase and Sale of Foreign Exchange

Financing Internal and Foreign Trade

Other Functions of the Bank

- Safe Custody of Valuable Goods- Issuing Travellers Cheque

- Giving Information about its Customers

- Collection of Statistics

- Underwriting of Company Debentures

- Accepting Bills of Exchange on behalf of Customers

- Giving advice on Financial Matters

Creation of Credit


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Banking Structure

The different types of Banking Structure are :

Branch Banking Unit Banking

Group Banking

Chain Banking


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Banking Structure

Branch Banking a typical commercial bank in most countries having anetwork of branches scattered all over the country.Advantages

- Economies of large scale operation

- Economy of Reserves

- Remittance Facilities

- Spreading of Risks- Increasing Mobility of Capital

- Clearing of Cheques made easy

- Service of Powerful and affluent banks

- Good Social relation with Customers

Disadvantages

- Need to consult the Head Office- Transfer of Managers

- Lack of Effective Control

- Economic Repurcussions of Failure

- Lack of Initiative and Personal touch


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Banking Structure

U

nit Bankingsystem of banking in which the banks operations

are in general confined to a single office.

Advantages:

- Catering of Local needs

- Knowledge of local Industries and Conditions

- Effective Management and Supervision

- Elimination of Bad Debts

Disadvantages:

- Limited Financial Resources and Vulnerability to Failure

- Limited scope for offering Customer services

- Difficulty in assessing Loan Applications


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Banking Structure

Group Banking is a legal form of bank organisation in which two ormore independently incorporated banks are controlled by a HoldingCompany.

A holding company is a corporate body which owns stock in other corporation.

There are no restrictions as regards the types of banks which may belong tothe group these may be either unit banks or branch banks.

Advantages:

- Centralised management and control of group units by a holding company.

- Chief merit of this banking system lies in economising in the maintenance of

large cash reserves.- all members of the group can pool their resources to finance largeburrowers.

- advantages of economies of scale

- better and extensive customer services


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Banking Structure

Disadvantages:- it is difficult to exercise a direct control over the member units

- the failure of one member of the group affects all others.

- it is difficult to supervise all units simultaneouly and the holding

company may utilise the surplus reserves of the group for furthering its

own economic interests.

- the group banking system lends to monopoly thereby restricting

efficiency which grows as a consequence of healthy competition among

banks.


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Banking Structure

Chain Banking is a variant of Group Banking System. Thissystem of banking is similar or group banking except that theholding company technique is not used.

- the main feature of the chain banking is the control of two ormore banking companies by a single person, by members of thesame family, by the same group of persons through ownership of

stock, through common membership on the board of directors ofthe banks.

- chain banking system are small confined to two or threebanks, although some chains involve substantially large number ofbanks.

- the extent of centralisation shows wide variations.

- the chain banking has also developed as a substitute forbranch banking and has more or less the same advantages anddisadvantages of group banking system.


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RBI act, 1934

The objective of The Reserve Bank of India Act, 1934 is toregulate the issue of bank notes and keeping of reserve with a

view to secure monetary stability in India and generally to

operate the currency and credit system of the country to its

advantage.

In 1935, the Reserve Bank of India was established under the

Reserve Bank of India Act as the central bank of India.

the Reserve Bank of India was nationalized in 1949 and given

wide powers in the area of bank supervision through the

Banking Companies Act As a central Bank, the main function of RBI is to regulate the

monetary mechanism comprising of the currency, banking

and credit systems of the country.


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Functions of the RBI

Monopoly of Note issue

Monetary policy Bank rate, Open Market

operations, Variable reserve ratio method Bankers Bank

Lender of the Last Resort

Banker to the Government Exchange Control

Development Role


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RBI

Legal RequirementsCash Reserve Ratio (CRR) - Banks in India are required statutorily

to hold cash reserves, called cash reserve ratio (CRR), with the

RBI. Increase/decrease in CRR is used by the RBI as an

instrument of monetary control.Statutory Liquidity Ratio (SLR) - Banks are required under law to

invest prescribed minimum proportions of their total

assets/liabilities in government securities and other approved

securities.

PrimeLending Rate (PLR) - The interest rate charged by banks to

their largest, most secure, and most creditworthy customers

on short-term loans.


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Banking Regulation Act, 1949

The Banking Regulation Act was passed as the Banking

Companies Act 1949 and came into force wef 16.3.49.

Subsequently it was changed to Banking Regulations Act 1949

wef 01.03.66.

Objectives of the Banking Regulation Act broadly are:

to safeguard the interest of depositors;

to develop banking institutions on sound lines; and

to attune the monetary and credit system to the largerinterests and priorities of the nation.


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Modern Banking in India As a rule, banking systems are adopted to the

structure and needs of the particular economy theyexist in.

The concept of banking has undergone a dynamic

change in keeping with the need to achieve rapid

socio-economic progress.

In such way Indian Banking System has several

outstanding achievements to its credits,

its reach its network

in terms of no. of branches

close association of banks with the countrys

development efforts


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Breakthroughs in Indian Banking

Industry

From Security Orientation to Purpose Orientation

Correction of Regional Imbalances

Development of Banking habit

Attitudinal change in the part of Banks

Emergence of Retail Banking

Breakthru in Virtual Banking

Move towards Universal banking

From Money Lending to Development Banking

Establishment of Specialised branches

Customer Focus


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E- Banking

Internet banking (or E-banking) means any user with apersonal computer and a browser can get connected to his

bank -s website to perform any of the virtual banking

functions.

Internet banking in indiaThe Reserve Bank of India constituted a working group on

Internet Banking. The group divided the internet banking

products in India into 3 types based on the levels of access

granted. They are:

i) Information Only System: General purpose information like

interest rates, branch location, bank products and their

features, loan and deposit calculations are provided in the

banks website.


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E - Banking

ii) ElectronicInformation Transfer System: The systemprovides customer- specific information in the form ofaccount balances, transaction details, and statement of

accounts.

iii) Fully Electronic Transactional System: This systemallows bi-directional capabilities.

Automated Teller Machine (ATM)

Credit Cards/Debit Cards

Smart Card

Bill payment serviceFund transfer

Credit card customers

Investing through Internet banking

Recharging your prepaid phone

Shopping


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Core Banking

Corebanking is a general term used to describe theservices provided by a group of networked bank

branches. Bank customers may access their funds

and other simple transactions from any of the

member branch offices. Core Banking is normally defined as the business

conducted by a banking institution with its retail and

small business customers.

Banks treat the retail customers as their core bankingcustomers.

Larger businesses are managed via the corporate

banking division of the institution.


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Core Banking

Most banks use core banking applications to supporttheir operations where CORE stands for "centralized

online real-time exchange".

The bank's branches access applications from

centralized datacenters.

Normal core banking functions will include deposit

accounts, loans, mortgages and payments.

Banks make these services available across multiplechannels like ATMs, Internet banking, and branches.


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Reforms in Banking SystemsVarious reform measures introduced in India have indeed

strengthened the Indian banking system in preparation for the

fresh global challenges ahead.

The Narasimham Committee had proposed wide-ranging

reforms for:

1. Improving the financial viability of the banks;

2. Improving the macroeconomic policy framework for banks;

3. Increasing their autonomy from government directions;

4. Allowing a greater entry to the private sector in banking;

5. Liberalizing the capital markets;

6. Improvement in the financial health and competitive position

of the banks;

7. Furthering operational flexibility and competition among the

financial institutions.


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Reforms in Banking Systems

A number of reforms initiatives have been taken to removeor minimize the distortions impinging upon the efficient and

profitable functioning of banks. These include the followings:

1. Reduction in SLR & CRR

2. Transparent guidelines or norms for entry and exit of private

sector banks

3. Public sector banks have been allowed for direct access to

capital markets

4. The regulated interest rates have been rationalized and

simplified.

5. Branch licensing policy has been liberalized

6. A board for Financial Bank Supervision has been established to

strengthen the supervisory system of the RBI.


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Reforms in Banking Systems

The second report was submitted on 23rd April, 1998,

which sets the pace for the second generation of banking

sector reforms. These include:

1. Merge strong banks, close weak banks unviable ones

2. Two or three banks with international orientation, 8 to 10national banks and a large number of local banks

3. Increase Capital Adequacy to match enhanced banking risk

4. Rationalize branches and staff, review recruitment

5. De-politicize Bank Boards under RBI supervision

6. Integrate NBFCs activities with banks.


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Best Practiced Code

RBI with other 11 banks in India set up the Banking codes and

Standards Board in Feb 2006 to monitor and ensure that

banking codes and standards voluntarily adopted by banks are

adhered to, while providing service to customers.

Code of Banks commitment to Customers came in to

existence in July 2006.

The individual customer has been provided with a charter of

rights which he can enforce against his bank.

The code sets minimum standards of banking practices for

banks to follow and emphasize transparency in bank dealings

with its customers.


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Best Practiced Code

Some features of Code:

Documentation of Banks fees and service charges in form of a

tariff schedule.

Banks to set a cheque collection policy, compensation policyand a security repossession policy.

To provide full information to the customer before a product

or service is sold to him.

Banks should not rely on implicit consent from customers. Provisions of code are applicable to third party products sold

thru bank branches.


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Corporate governance in Banks

The Corporate Governance refers to conducting the affairs of

a banking organisation in such a manner that gives a fair deal

to all the stake holders i.e. shareholders, bank customers,

regulatory authority, society at large, employees etc.

The system of corporate governance is important for banks in

India because, majority of the banks are in public sector,

where they are not only competing with one another but with

other players in the banking system as well as in financialservices system including Financial Institutions, Mutual Funds

and other intermediaries, in a new environment of

liberalization and globalization.


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The concept of corporate governance, which emerged as a

response to corporate failures and widespread dissatisfaction

with the way many corporates function, has become one of

the wide and deep discussions across the globe recently.

It is about the value orientation of the organisation, ethicalnorms for its performance, the direction of development and

social accomplishment of the organisation and the visibility of

its performance and practices.

Corporate Governance is different from day to day

management of a bank, which is the basic responsibility of the

operating management.


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Corporate governance covers a variety of aspects such asprotection of shareholders' rights, enhancing the

shareholders' value, issues concerning the composition and

role of the Board of directors, deciding the disclosure

requirements, prescribing the accounting systems, putting in

place effective monitoring mechanism etc.

There are a number of parameters on the basis of which the

level of corporate governance can be judged for a banking

organisation. It includes the suggested model code for best

practices, preferred internal system, recommended disclosurerequirements including the level of transparency, role of

Board of directors and committees, reporting system to the

Board of directors, policies formulated by the Board and

monitoring of performance.


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Need for Corporate Governance in Banks:o Since banks are important players in the Indian financial

system, special focus on the Corporate Governance in the

banking sector becomes critical.

o The Reserve Bank of India, as a regulator, has the responsibilityon the nature of Corporate Governance in the banking sector.

o To the extent that banks have systemic implications, Corporate

Governance in the banks is of critical importance.

o Given the dominance of public ownership in the banking

system in India, corporate practices in the banking sector

would also set the standards for Corporate Governance in the

private sector.

o With a view to reducing the possible fiscal burden of

recapitalising the PSBs


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Prerequisites for Good Governance

There are some pre-requisites for goodcorporate governance. They are:

o A proper system consisting of clearly defined and adequate

structure of roles, authority and responsibility.

o Vision, principles and norms which indicate development path,normative considerations and guidelines and norms for

performance.

o A proper system for guiding, monitoring, reporting and control.

The success of corporate governance lies in minimising the

regulatory norms and adoption of voluntary codes.


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Universal Banking

Universal banking' refers to those banks that offer a

wide range of financial services, beyond the

commercial banking functions like Mutual Funds,

Merchant Banking, Factoring, Credit Cards, Retailloans, Housing Finance, Auto loans, Investment

banking, Insurance etc.

A Universal Banking is a superstore for financial

products under one roof.


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Narrow Banking

Narrow banking is a proposed type of bank called a narrowbank also called a safe bank.

System of banking under which a bank places its funds in risk-

free assets with maturity period matching its liability maturity

profile, so that there is no problem relating to asset liability

mismatch and the quality of assets remains intact without

leading to emergence of sub-standard assets.

The concept is practically being implemented by the Indian

banking system partly, as a large part of the deposits

mobilised (i.e. more than 46%) by the banks, has beendeployed in Govt. securities (against a prescription of 25% in

the form of SLR) as it provides a safe avenue of investment

but at a very low return.


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Narrow Banking

Key attributes ofnarrow banks include -

1. no lending of deposits (reducing a key risk materially but

constraining return on investment for depositors andshareholders alike)

2. extremely high liquidity (typically short-term assets e.g.

bonds)

3. extremely high asset security (typically government bonds)

4. lower interest rates paid to depositors (as a function of the

no lending and other constraints)

5. possibly specific regulatory framework with higher level of

scrutiny and operational/investing restrictions


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Investment Banking

An investment bank is a financial institution that assists

individuals, corporations and governments in raising capital by

underwriting and/or acting as the client's agent in the

issuance of securities.

An investment bank may also assist companies involved in

mergers and acquisitions, and provide ancillary services such

as market making, trading of derivatives, fixed income

instruments, foreign exchange, commodities, and equity

securities. Unlike commercial banks and retail banks, investment banks

do not take deposits.


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Investment Banking

There are two main lines of business in investment banking,

Trading securities for cash or for other securities or the

promotion of securities is the "sell side.

Dealing with pension funds, mutual funds, hedge funds, andthe investing public constitutes the "buy side".

Main activities

Investment banks offer services to both corporations issuing

securities and investors buying securities.

For corporations, investment bankers offer information on

when and how to place their to an investment bank's

reputation, and hence loss of business.


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Private Banking

Privatebanking is a term for banking, investment and other

financial services provided by banks to private individuals

investing sizable assets.

The term "private" refers to the customer service being

rendered on a more personal basis than in mass-market retail

banking, usually via dedicated bank advisers.

The word "private" also alludes to bank secrecy and

minimizing taxes through careful allocation of assets or by

hiding assets from the taxing authorities.

A high-level form of private banking (for the especially

affluent) is often referred to as wealth management.


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Private Banking

For wealth management purposes, HNWIs have accrued far

more wealth than the average person, and therefore have the

means to access a larger variety of conventional and

alternative investments.

For private banking services clients pay either based on the

number of transactions, the annual portfolio performance or

a "flat-fee", usually calculated as a yearly percentage of the

total investment amount.

Services include: protecting and growing assets in the present,providing specialized financing solutions, planning retirement

and passing wealth on to future generations.


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Private Sector Bank Guidelines

Private Sector Banks gained dominance after the economic

reforms in 1991.

It is general principle that greater financial depth, stability and

soundness contribute to economic growth.

But broadening and deepening the reach of banking is the

important factor for growth to be truly inclusive.

In spite of crossing such long steps in resource mobilization,

geographical and functional reach, financial viability,

profitability and competitiveness, vast segments ofpopulation, especially the underprivileged sections of society

have still no access to formal banking services.


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Private Sector Bank Guidelines

RBI is therefore taking into account granting licenses to alimited number of new banks.

A large number of banks would foster greater competition

and thereby reduce costs, and improve quality of service.

The objective of guidelines issued in january 1993 andsubsequently revised in January 2001 was to instill greater

competition in banking system to increase productivity and

efficiency.

Formation of Banks

Capital

Operations

Opening of Branches


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Know Your Customer

Know Your Customer (KYC) is the due diligence and bankregulation that financial institutions and other regulated

companies must perform to identify their clients and

ascertain relevant information pertinent to doing financial

business with them.

Know your customer policies are becoming increasingly

important globally to prevent identity theft fraud, money

laundering and terrorist financing.

A key aspect of KYC controls is to monitor transactions of a

customer against their recorded profile, history on thecustomers account(s) and with peers.


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Know Your Customer

The objective of KYC guidelines is to prevent banks from beingused, intentionally or unintentionally, by criminal elements for

money laundering activities.

Banks should frame their KYC policies incorporating the

following four key elements:

Customer Acceptance Policy

Customer Identification Procedures

Monitoring of Transactions

Risk management

Know Your Customer processes are also employed by regular

companies of all sizes, for the purpose of ensuring their

proposed agents', consultants' or distributors' anti-bribery

compliance.


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Anti Money Laundering

Money laundering is the practice of disguising the

origins of illegally-obtained money.

Money laundering often occurs in three steps:

cash is introduced into the financial system by some

means (placement)

the second involves carrying out complex financial

transactions in order to camouflage the illegal source

(layering)

the final step entails acquiring wealth generated from the

transactions of the illicit funds (integration).


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Anti Money Laundering

Anti money laundering (AML) is a term mainly used in the

financial and legal industries to describe the legal controls

that require financial institutions and other regulated entities

to prevent or report money laundering activities.

Today, most financial institutions globally, and many non-

financial institutions, are required to identify and report

transactions of a suspicious nature to the financial intelligence

unit in the respective country.

A bank must perform due diligence by verifying a customer's

identity and monitor transactions for suspicious activity.


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Role of Bank as Financial Intermediary and

Constituent of Payment System

A financial intermediary is a financial institution that

connects surplus and deficit agents.

Financial intermediaries provide 3 major functions:

Maturity transformation

Risk transformation

Convenience denomination

There are 2 essential advantages from using financial

intermediaries:1. Cost advantage

2. Market failure protection


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Role of Bank as Financial Intermediary and

Constituent of Payment System

Banks enjoy the benefit of being the only institutions through

which the money can be transferred from one person to

another and from one place to another.

Therefore, banks become the constituent of the payment

system of the economy.

Banks, because of their reach, trust of the people, and other

roles that they play, have enabled them to emerge as the

largest financial intermediaries of the world.

Banks are able to lend a major portion of their deposits, and

play the role of a financial intermediary and constitute the

payment system because of the understanding that banks will

honor the commitments that they have made to the people.


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Bank as Financial Service Provider

Financial services refer to services provided by the finance

industry.

The finance industry encompasses a broad range of

organizations that deal with the management of money.

Financial Service providers are those who provide financial

services to customers.

Among these organizations are credit unions, banks, credit

card companies, insurance companies, consumer finance

companies, stock brokerages, investment funds and some

government sponsored enterprises.


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Banking of Business Mathematics

Business mathematics is mathematics used

by commercial enterprises to record and manage

business operations.

Commercial organizations use mathematicsin accounting, inventory management, marketing,

sales forecasting, and financial analysis.

The practical applications typically include checking

accounts, price discounts, markups and

markdowns, payroll calculations, simple and

compound interest, consumer and business credit,

and mortgages.


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Banking of Business Mathematics

WHY MATHEMATICS REQUIRED IN BANKING

To calculate interest on deposits and advances

To calculated yield on bonds in which banks have to

invest substantial amount.

To calculate depreciation

To decide on buying/selling rates of foreign

currenciesTo calculate minimum capital required by the bank

To appraise loan proposals


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Money Market Operations

Money market is a place where short term surplus investible

funds at the disposal of many financial institutions and

individuals are borrowed by various commercial institutions

and also the government inself who are in need.

Money Market is a market for lending and borrowing of short

term loans.

Not dealing in money but in trade bills, promissory notes and

treasury bills which are drawn for short periods.

Funds can be borrowed for a day, week, month or 3 to 6months against different types of securities such as BOE,

Bonds, etc.


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Dealers in Money Market

Consists of the government, commercial and

industrial concerns, stock exchange brokers, dealer in

govt. securities, merchants, commercial banks and

central bank, financial and insurance companies.

Borrowers

Traders, brokers, speculators, manufacturers, govt.

who need funds to meet their current requirement.Institutions

Central Bank, Commercial Banks, Institutional

investors, private individuals


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Composition of Money Market

Call Money Market

Collateral Loan Market

Acceptance Market

Bill Market

Discount Market

Functions of Money Market

Outlets to commercial banks, non-bank finance concerns,

investors

Short term funds to businessmen, industrialist, traders to

meet day to day requirements

Short term funds to govt. and govt. agencies

Medium which have control on the creation of credit


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Money Market OperationsCharacteristics of a developed Money Market:

Highly organised commercial banking system

Presence of a central bank

Availability of proper credit instruments

Mobility of funds

Existence of sub markets

No. of dealers in sub market

Availability of ample resources, frequent transactions

Other conditioning factors:

Habits of commercial practices in the community

Industrial development and corporate organization

Development of related markets

Monetary policy of the govt.


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Profitability of Banks

How does a bank make profit?

Bank profits are derived from the spread between the rate

they pay for funds and the rate they receive from borrowers.

Basically, when the interest that a bank earns from loans isgreater than the interest it must pay on deposits, it generates

a positive interest spread or net interest income.

The size of this spread is a major determinant of the profit

generated by a bank.

Banks face expenses (salaries, rent, etc.)

other sources of income are fees and services.


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Negotiable Instrument Act

A negotiable instrument is one which represents contractual

rights that are generally accepted as money.

It is written contract evidencing a right to receive money and

it may be transferred by negotiation.

Accr. To NI Act, 1881 A Negotiable Instrument means a

promissory note, BOE, Cheque payable either to order or to

bearer.

Negotiable Instruments share warrants, dividends, demand

draft, treasury bills, etc.

Non Negotiable Instruments bill of lading, LC, deposit

receipts, share or stock certificates, etc.


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Negotiable Instrument Act

Essential features ofNegotiableInstruments: Can be transferred from one person to another like cash

A bonafide transferee for value of NI gets complete,

independent title

Certain presumptions apply to all NIs. (Example Consideration)

These instruments are in writing and signed by the parties,

they are used as evidence of the fact of indebtedness because

they have special rules of evidence.

These instruments relate to payment of certain money in legal

tender.

These instruments can be transferred in infinitum till they are

at maturity.


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Collection of Cheques A chequeis a document/instrument (usually a piece of paper)

that orders a payment of money from a bank account.

Cheques are a type of bill of exchange and were developed as

a way to make payments without the need to carry around

large amounts of gold and silver.

Technically, a cheque is a negotiable instrument instructing afinancial institution to pay a specific amount of a specific

currency from a specified transactional account held in the

drawer's name with that institution.

Any cheque crossed with two parallel lines means that thecheque can only be deposited directly into an account with a

bank and cannot be immediately cashed by a bank over the

counter.


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Collection of ChequesCheques can be of two types:-

1. Open or an uncrossed cheque - An open cheque is a chequewhich is payable at the counter of the drawee bank.

2. Crossed cheque - A crossed cheque is a cheque which is

payable only through a collecting banker.

Types of Crossing General Crossing

Special Crossing

Account Payee or Restrictive Crossing

'Not Negotiable' Crossing

-A bank's failure to comply with the crossings amounts to a

breach of contract with its customer. The bank may not be

able to debit the drawer's account and may be liable to the

true owner for his loss.


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Collection of ChequesCheque collection policy of the Bank is a reflection of on-

going efforts to provide better service to customers and sethigher standards for performance.

Local Cheques

All cheques and other Negotiable Instruments payable locally

would be presented through the clearing system prevailing atthe centre.

Bank branches situated at centres where no clearing house

exists, would present local cheques on drawee banks across

the counter and it would be the banks endeavour to credit

the proceeds at the earliest.

For local cheques presented in clearing credit will be afforded

as on the date of settlement of funds in clearing and the

account holder will be allowed to withdraw funds as per

return clearing norms in vogue.


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Collection of Cheques

Outstation Cheques Cheques drawn on other banks at outstation centres will

normally be collected through banks branches at those

centres.

Where the bank does not have a branch of its own, the

instrument would be directly sent for collection to the drawee

bank or collected through a correspondent bank.

Cheques presented at any of the four major Metro Centres

(New Delhi, Mumbai, Kolkata and Chennai) and payable at any

of the other three centres : Maximum period of 7 days.

Metro Centres and State Capitals (other than those of North

Eastern States and Sikkim): Maximum period of 10 days.

In all other Centres : Maximum period of 14 days.


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Collection of Cheques

Cheques payable in Foreign Countries Cheques payable at foreign centres where the bank has

branch operations (or banking operations through a

subsidiary, etc.) will be collected through that office.

Cheques drawn on foreign banks at centres where the bank or

its correspondents do not have direct presence will be sent

direct to the drawee bank with instructions to credit proceeds

to the respective Nostro Account of the bank maintained with

one of the correspondent banks.

Such instruments are accepted for collection on the best ofefforts basis. Bank would give credit to the party on credit of

proceeds to the banks Nostro Account with the

correspondent bank after taking into account cooling periods

as applicable to the countries concerned.


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Dishonour of Cheques A dishonoured cheque cannot be redeemed for its value and

is worthless

The NI Act makes the drawer of cheque liable for penalties

in case of dishonour of cheques due to insufficiency of funds

or for the reason that it exceeds the arrangements made by

the drawer. The NI Act also contains sufficient safe guards to protect the

drawer of cheques by giving him an opportunity to make good

the payment of dishonoured Cheque when a demand is

made by the payee.

In case of dishonour, the main thrust of the amendment of NI

Act is to provide for a speedy and time bound

trial, punishment of 2 years and double the amount of the

cheque as fine.


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Dishonour of Cheques

Offenceunder theNIAct:

Offence under Section 138 of the N I Act shall be deemed

to have been committed, if the following conditions are

satisfied:

a) Cheque must have been drawn by a person(the drawer) infavour of a payee on his bank account for making payment

b) Such payment must be either in whole or partial discharge

of a legally enforceable debt

c) Cheque must have been returned by the Banker to the

payee or holder in due course due to insufficient balance in

the account of the drawer or it exceeds the

arrangement he had with the bank


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Dishonour of Cheques

Proviso requires fulfillment following additional

conditions:

a) Cheque must be presented within a period of 6 months

from the date of cheque or its validity period which ever is

earlier.

b) The payee or holder in due course must demand payment

of the cheque amount by written notice within 15 days of

receipt of notice

c) Such notice must be issued within 30 days from the date of

receipt of intimation of dishonour from bank andd) The drawer of cheque fails to pay demanded sum within 15

days from the date of receipt of the notice


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Bank Customer Relationship

Banker customer relationship,is just a special contract where a

person entrusts valuable items with another person with an

intention that such items shall be retrieved on demand from

the keeper by the person who so entrust.

It begins as soon as the acceptance of cash or a cheque for

collection on an understanding that relations will continue if

references are found to be satisfactory.

The relationship can be suspended or rescinded by (1) mutual

assent, (2) giving notice by one party to the other and (3)operation of law in as in the case of death, insanity,

insolvency, war, liquidation of the bank itself, etc.


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The legal relationship between a banker and a customer is oftwo kinds,

1) The General or Primary relationship

- The general relationship between a banker and a customer

is that of a debtor and creditor.

- Thus the customer is the creditor who has the right of

demand on the money from the banker.As long as the

banker is keeping the customer items,the banker is indebted

to the customer.

- The terms and conditons governing the relationship should

not be leaked to a third party,particularly by the banker.Also

the items kept should not be released to a third party

without due authorisation by the customer.


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2) Special or Subsidiary relationship

- The first special relationship between the banker and the

customer is that of an Agent and Principal, where the banker

performs a number of agency services for his customer by

charging a very nominal commission.- The next is that of Trustee and Beneficiary relationship that

arises when the banker accepts valuables or securities from

the customer for safe custody.

- This relationship gives the customer a right to claim any duesfrom his banker or recovering the debt due to him from the

bank when goes into liquidation.


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Bankers Obligation

Acceptance of deposit

Honouring of cheques

Maintenance of secrecy of the accounts Notice to be given in case of closure of

accounts

Payment of interest Furnishing statement

Providing services


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Right of Appropriation Lien is the right of the creditor to retain goods belonging to

the debtor until the amount due to the former is completely

discharged.

Bank can transfer money from the customers personal

account into a joint account, to cover a debt on an account

held jointly by the customer, without the permission of thecustomer.

If the account is overdrawn, the customer can choose how

any further money paid into the account is used (for example

to pay mortgage or rent). This is called Right of appropriation.

The customer need to write to the bank with new instructions

each time he makes a deposit.

Under common law customer have a right of appropriation

over his own money and money he pays to another.

Different types of Customers


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Different types of Customers- Lunatics

- Drunkards- Undischarged Bankrupts

- Minors

- Married Woman

- Agents

- Partnership

- Joint Stock Companies

- Local Authorities

- Trust Accounts

- Unincorporated Bodies

- Joint Accounts

- Joint Hindu Families

Ch C itt R t


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Chore Committee Reports Financing of working capital had always been an exclusive

domain of commercial banks. Projects promoted by technically qualified entrepreneurs with

no tangible security to offer found it difficult to raise finance

for the working capital required by them from banks.

Small sector and other segments of priority sector were to be

the major beneficiary of nationalisation and were preferred

claimants of credit.

The factor which called for reforms was the inbuilt weakness

in the cash credit system linked with emphasis on security.

A major part of credit limits sanctioned by the bank remainedunutilised and there was a strong tendency within the banks

to oversell the credit.

h


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Chore Committee Reports In 1973 when a sudden demand on bank credit was made due

to unprecedented rate of inflation and the banks had toarbitrarily freeze the credit limits of their borrowers.

In view of such a situation obtaining at that time, Reserve

Bank of India constituted a 'Study Group' with Shri Prakash

Tandon as Chairman in July, 1974 to frame necessary

guidelines on bank credit with the following terms of

reference :

To suggest guidelines for commercial banks to follow up and

supervise credit from the point of view of ensuring proper

end-use of funds and keeping a watch on the safety of theadvances and to suggest the type of operational data and

other information that may be obtained by banks periodically

from such borrowers and by the, Reserve Bank of India from

the lending banks,


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Chore Committee Reports

To make recommendations for obtaining periodical forecastsfrom borrowers of (a) business/production plans, and (b)

credit needs,

To make suggestions for prescribing inventory norms for

different industries both in the private and public sectors and

indicate the broad criteria for deviating from these norms,

To suggest criteria regarding satisfactory capital structure and

sound financial basis in relation to borrowings,

To make recommendations regarding the sources for financing

the minimum working capital requirements,

To make recommendations as to whether the existing pattern

of financing working capital requirements of cash

credit/overdraft system etc., requires to be modified, if so, to

suggest suitable modifications, and


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To make recommendations on any other related matter as the

Group may consider relevant to the subject of enquiry or any

other allied matter which may be specifically referred to it by

the Reserve Bank of India.

Based upon these terms of reference the Group attempted to

identify the various constituents of working capital that could

be financed by the banks and suggested norms for build up of

inventory. Far reaching recommendations on the style of

lending and improvement in the present system of CashCredit were also made. These recommendations were mostly

accepted by Reserve Bank and were referred to banks for

implementation in late 1975. Many modifications have since

been suggested by 'Chore Committee'.


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The quality of lending improved considerably but the

cash credit system continued to pose few difficulties.

Bifurcation of working capital limit in two parts as

demand loan and a fluctuating cash creditcomponent, as suggested by Tandon Group, was not

done by many banks.

Reserve Bank to review the system of cash credit in

all its aspects and for this purpose a 'Working Group'headed by Sh. K. B. Chore was appointed in 1979.

Ch C i R


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Chore Committee ReportsThe terms of reference to the 'Group' were as follows:

To review the operation of cash credit system in recent years,particularly with reference to the gap between sanctioned

credit limits and the extent of their utilisation;

In the light of the review, to suggest:

(a) modifications in the system with a view to making the systemmore amenable to rational management of funds by

commercial banks, and/or

(b) alternative types of credit facilities, which would ensure

greater credit discipline and also enable banks to relate creditlimits to increases in output or other productive activities, and

To make recommendations on any other related matter as the

'Group' may consider germane to the subject.

The 'Group' gave its recommendations in 1979.


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Important recommendations which are accepted

by Reserve Bank and have a direct bearing on credit

limits of the borrowers are

No Structural Change-Continuation of Cash Credit, Loan andBills Facilities

Review of Borrowal Accounts

Bifurcation of Cash Credit Limit

Application of 2nd Method of Lending Working Capital Term Loan

'Peak Level' and 'Normal Non-Peak Level' Limits

(Contd..)


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Adhoc or Temporary Limits

Fixation of Operative Limits

Cash Credit Limits against Book Debts

Drawee Bill Scheme - Acceptance system, Bill discountingsystem

Non Submission of QIS statements

Slip Back in Current Ratio

Diversion of working capital finance

C di Ri k M


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Credit Risk Management Due to regulated environment, banks could not afford to take

risks.

But of late, banks are exposed to same competition and hence

are compeled to encounter various types of financial and non-

financial risks.

Risk is associated with uncertainty and reflected by way ofcharge on the fundamental/ basic i.e. in the case of business it

is the Capital, which is the cushion that protects the liability

holders of an institution.

Risk Management system is the pro-active action in thepresent for the future.

As per the Reserve Bank of India guidelines issued in Oct.

1999, there are three major types of risks encountered by the

banks and these are Credit Risk, Market Risk & Operational

Risk.

C di Ri k M


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Credit Risk Management

Credit Risk is the potential that a bank borrower/counterparty fails to meet the obligations on agreed terms.

Credit risk is inherent to the business of lending funds to the

operations linked closely to market risk variables.

The objective of credit risk management is to minimize the

risk and maximize banks risk adjusted rate of return by

assuming and maintaining credit exposure within the

acceptable parameters.

The process of credit risk management needs analysis of

uncertainty and analysis of the risks inherent in a creditproposal.

Credit risk consists of primarily two components, viz Quantity

of risk and the quality of risk.

d k


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Credit Risk ManagementThe management of credit risk includes

a) measurement through credit rating/ scoring,

b) quantification through estimate of expected loan losses,

c) Pricing on a scientific basis and

d) Controlling through effective Loan Review Mechanism and

Portfolio Management.

Tools of Credit Risk Management

Exposure Ceilings

Review/Renewal

Risk Rating Model

Risk based scientific pricing

Portfolio Management

Loan Review Mec

hanism

b i


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Corporate Debt Restructuring Inspite of their best efforts and intentions, sometimes

corporates find themselves in financial difficulty because offactors beyond their control and also due to certain internal

reasons.

For the revival of the corporates as well as for the safety of

the money lent by the banks and FIs, timely support throughrestructuring in genuine cases a Corporate Debt Restructuring

System was evolved, and detailed guidelines were issued vide

circular DBOD No. BP.BC. 15/21.04.114/2000-01 dated August

23, 2001 for implementation by banks.

The objective of the Corporate Debt Restructuring (CDR)

framework is to ensure timely and transparent mechanism for

restructuring the corporate debts of viable entities facing

problems, outside the purview of BIFR, DRT and other legal

proceedings, for the benefit of all concerned.


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Principles of Lending

There are certain precautions and principles

the banker needs to follow while granting

advances in relation to specific securities.

Liquidity

Profitability

Safety and Security

Purpose

Social Responsibility

Industrial and Geographical Diversification

Recommendations of the Talwar


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Committee It was observed that the problems peculiar for borrowers

arise due to difficulties in attitudinal adjustment of bank staff

to the new client and new environments and inadequate job

knowledge coupled with inexperience.

The committee made some recommendations with a view tobringing about a measure of improvement.

Each bank should immediately undertake a sample study of

the information and data sought for examination of small loan

proposals from clients in the priority sector.

The task of simplification and consolidation of documentsand

bringing them out in regional languages.

Banks must enjoin on their operating staff to call for

information data, etc., for examination of loan applicatons



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Committee

In considering loan applications for small amounts in prioritysectors, especially from small agriculturists, artisans, etc., loan

officers should be encouraged to adopt flexible approach.

Repayment installments in regards to small loans should be in

relation to applicants paying capacity.

Controlling offices of banks should advice their branches

detailed reasons for rejection of loan proposals.

Customers should be advised of the reasons for rejection of

their loan applications backed by counseling in appropriate

cases.

At every office of each bank, a separate record, in appropriate

form, should be maintained of all loan applications received,

their disposal and full reasons for delay in sanctions and for

rejections.


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Types of Capital

Fixed capital

This is money which is used to purchase assets that will

remain permanently in the business and help it to make a

profit.

Factors determining fixed capital requirements

Nature of business

Size of business

Stage of development Capital invested by the owners

location of that area

Types of Capital


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Types of CapitalWorking capital

Working capital is that part of capital invested which is usedfor running the business such like money which is used to buy

stock, pay expenses and finance credit.

Factors determining working capital requirements

Size of business

Stage of development

Time of production

Rate of stock turnover ratio

Buying and selling terms

Seasonal consumption

Seasonal product

profit level

growth and expansion

production cycle

general nature of business

business cycle


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Non fund based facilities

The credit facilities given by the banks where

actual bank funds are not involved are termed

as 'non-fund based facilities'.

Letter of Credit

Guarantee

Pledge

Mortgage

Hypothecation

Letter of Credit


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Letter of Credit Article 2 of UCPDC defines a letter of credit as under:

The expressions "documentary credit(s) and standby letter(s)

of credit used herein (hereinafter referred to as "credit(s)"

means any arrangement, however, named or described

whereby a bank (the issuing bank), acting at the request and

on the instructions of a customer (the applicant of the credit)

or on its own behalf. Letter of credit is a written undertaking by a bank (issuing

bank) given to the seller (beneficiary) at the request and in

accordance with the instructions of buyer (applicant) to effect

payment of a stated amount within a prescribed time limit

and against stipulated documents provided all the terms and

conditions of the credit are complied with".

Letters of credit thus offers both parties to a trade transaction

a degree of security.

Letter of Credit


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Letter of Credit Parties to a Letter of Credit

The buyer

The beneficiary

The issuing bank

The notifying bank

The negotiating bank

The confirming bank

The paying bank

Letter of Credit Mechanism1. Issuing of Credit

2. 2. Negotiation of Documents by beneficiary

3. Settlement of Bills Drawn under Letter of Credit by the

opener.

Guarantee


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Guarantee A contract of guarantee can be defined as a contract to

perform the promise, or discharge the liability of a thirdperson in case of his default.

Bank provides guarantee facilities to its customers who may

require these facilities for various purpose. The guarantees

may broadly be divided in two categories as under :

Financial guarantees - Guarantees to discharge financial

obligations to the customers.

Performance guarantees - Guarantees for due performance

of a contract by customers.

The banker has to assess the character, capacity and capital of

the guarantor

Pledge


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Pledge Transfer or assignment of assets to secure payment of an

obligation. The borrower assigns an interest in the property to the lender,

which becomes a lien on the collateral.

If the borrower offers stocks, bonds, or other securities as

collateral, the lender generally takes possession or is assignedownership of the collateral until the loan is paid.

Essential features of pledge

There must be a bailment of goods

The bailment must be by way of securityThe security must be for payment of debt or performance of a

promise


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Mortgage

A mortgage is the transfer of an interest in a specific

immovable property for the purpose of securing the payment

of money advanced or to be advanced by way of loan, an

existing or future debt or the performance of an engagement

which may give rise to pecuniary liabilityThe essentials of a mortgage are

1) There must be a transfer of interest in an immovable

property

2) The immovable property must be a specific one3) The consideration of a mortgage may be either money

advanced or to be advanced by way of loan, or the

performance of a contract.

Hypothecation


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Hypothecation A mortgage of movables where no possession is given.

A document known as letter of Hypothecation is executed.The main contents of the letter of hypothecation are

1) Affirmation by the borrower that the goods are free from

encumbrances, that further encumbrances will not be

created on them and he is the absolute owner of the goods.

2) Undertaking by the borrower that proceeds arising from the

sale of the hypothecated goods will be utilised for the

repayment of the advance

3) Undertaking by the borrower to meet all expenses relating

to the safe custody of the hypothecated goods

4) Provision to the effect that the banker has the right to take

possession of the hypothecated goods and realize them in

the event of the borrower making default in the repayment

of the advance.

Predential Norms


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Predential Norms As per recommendations by the Narasimham committee, the

RBI introduced in a phased manner, prudential norms forIncome Recognition, Asset Classification and Provisioning for

the advances portfolio of the banks so as to move towards

greater consistency and transparency in the published

accounts.

Income Recognition

The policy of income recognition has to be objective and

based on the record of recovery.

Income from NPAs is not recognised on accrual basis but

is booked as income only when it is actually received.

The banks should not charge and take to income account

interest on any NPA.

Predential Norms


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Predential Norms

Asset Classification Banks are required to classify NPAs based on the period for

which the asset has remained non performing and the

realisability of the dues

1) Sub standard assets

2) Doubtful Assets

3) Loss Assets

Classification of assets into above categories should be donetaking into account the degree of well defined credit

weaknesses and the extent of dependence on collateral

security for realization of dues.

Predential Norms


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Predential NormsAsset classification

Accounts with Temporary Deficiencies

Accounts regularised near the Balance sheet date

Asset classification to be Borrower-wise and not Facility-wise

Advances under Consortium Arrangements

Accounts with Erosion in the Value of Security

Advances to PACS/ FSS Ceded to Commercial Banks

Advances against Term Deposits, NSCs, KVP, etc

Loans with Moratorium for Payment of Interest

Agricultural Advances

Government Guaranteed Advances

Predential Norms


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Predential Norms Provisioning

In conformity with the prudential norms, provisions should bemade on the NPAs on the basis of classification of assets.

Taking in to account the time lag between an account

becoming doubtful of recovery, its recognition as such, the

realisation of the security and the erosion overtime in the

value of security charged to the bank, the banks should make

provision against sub-standard assets, doubtful assets and loss

assets.

Loss assets

- the entire asset should be written-off

- If the assets are permitted to remain in the books for any

reason, 100% of the outstanding should be provided for.

Predential Norms


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Doubtful Assets

- 100% to the extent to which the advance is not covered by

the realisable value of the security

- In regard to the secured portion, provision may be made on

the following basis

upto one year 20%

One to three years 30%

More than three years 50%

- Banks are permitted to phase the additional provisioning

consequent upon the reduction in the transition perion from

substandard to doubtful asset from 18 to 12 monthsSub-standard Assets

- A general provisioning of 10% on total outstanding should be

made without making any allowance for DICGC/ ECGC

guarantee cover and securities available.

b l


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Asset Liability Management

Asset and liability management is the practice of managing

risks that arise due to mismatches between the assets and

liabilities (debts and assets) of the bank.

It is the management of structure of balance sheet (liabilities

and assets) in such a way that the net earning from interest ismaximised within the overall risk-preference (present and

future) of the institutions.

The ALM functions extend to liquidly risk management,

management of market risk, trading risk management,funding and capital planning and profit planning and growth

projection.



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The ALM process rests on three pillars:

ALM Information Systems

Management Information Systems

Information availability, accuracy, adequacy and expediency

ALM Organisation

Structure and responsibilities

Level of top management involvement

ALM Process

Risk parameters

Risk identification Risk measurement

Risk management

Risk policies and tolerance levels.

C i l Ad i B k


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Capital Adequacy in Banks

The capital requirement is a bank regulation, which sets a

framework on how banks and depository institutions must

handle their capital.

Regulators try to ensure that banks and other financial

institutions have sufficient capital to keep them out ofdifficulty.

Capital adequacy requirements have existed for a long time,

but the two most important are those specified by the Basel

committee of the Bank for International Settlements.

C i l Ad i B k


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Basel 1

The Basel 1 accord defined capital adequacy as a single

number that was the ratio of a banks capital to its assets.

There are two types of capital, tier one and tier two.

The first is primarily share capital, the second other types

such as preference shares and subordinated debt.

The key requirement was that tier one capital was at least 8%

of assets.

C i l Ad i B k


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Basel 2

The Basel 1 accord has largely been replaced by new rules.

Basel 2 is based on three pillars: minimum capital

requirements, supervisory review process and market forces.

The first "pillar" is similar to the Basel 1 requirement, the

second is the use of sophisticated risk models to ascertain

whether additional capital (i.e. more than required by pillar 1)

is necessary.

The third pillar requires more disclosure of risks, capital andrisk management policies. This encourages the markets to

react to the taking of high risks.

CAMELS Rating of Banks


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The CAMELS rating is a United States supervisory rating of the

bank's overall condition and to identify its strengths and

weaknesses: Financial, Operational, Managerial

This rating is based on financial statements of the bank and

on-site examination by regulators.

The scale is from 1 to 5 with 1 being strongest and 5 being

weakest.

The components of a bank's condition that are assessed:

(C) Capital adequacy

(A) Asset quality (M) Management

(E) Earnings

(L) Liquidity and

(S) Sensitivity to market risk



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CAMELS Rating of Banks Capital Adequacy - The capital requirement is a bank

regulation, which sets a framework on how banks anddepository institutions must handle their capital.

Asset Quality - Asset represents all the assets of the bank,

current and fixed, loan portfolio, investments and real estate

owned as well as off balance sheet transactions. Management - Management includes all key managers and

the Board of Directors.

Earnings - All income from operations, non-traditional

sources, extraordinary items.

Liquidity - The ability to generate cash or turn quickly short

term assets into cash.

Sensitivity to market risks is not taken into consideration at

present.

Credit Risk, Market Risk & Operational


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, p

Risk

Credit risk is an investor's risk of loss arising from a borrowerwho does not make payments as promised. Such an event is

called a default. Another term for credit risk is default risk.

Market risk is the risk that the value of a portfolio, either an

investment portfolio or a trading portfolio, will decrease due

to the change in value of the market risk factors. The four

standard market risk factors are stock prices, interest rates,

foreign exchange rates, and commodity prices.

Operational Risk is a risk arising from execution of a

company's business functions. It is a very broad conceptwhich focuses on the risks arising from the people, systems

and processes through which a company operates. It also

includes other categories such as fraud risks, legal risks,

physical or environmental risks.

B ki O b d S h


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Banking Ombudsman Scheme

Banking Ombudsman is a quasi judicial authority functioning

under Indias Banking Ombudsman Scheme 2006, and the

authority was created pursuant to the a decision by the

Government of India to enable resolution of complaints of

customers of banks relating to certain services rendered bythe banks.

The Banking Ombudsman Scheme was first introduced in

India1 in 1995, and was revised in 2002. The current scheme

became operative from 1st January 2006, and replaced and

superseded the banking Ombudsman Scheme 2002. From

2002 until 2006, around 36,000 complaints have been dealt

by the Banking Ombudsmen.



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Banking Ombudsman SchemeThe Banking Ombudsman Scheme consists of several chapters :

CHAPTER I - PRELIMINARY1. Short Title, Commencement, Extent and Application

2. Suspension of the Scheme

3. Definitions

CHAPTER II- ESTABLISHMENT OF OFFICE OF BANKINGOMBUDSMAN

4. Appointment & Tenure

5. Location of Office and Temporary Headquarters

6. Secretariat

CHAPTER III- JURISDICTION, POWERS AND DUTIES OF

BANKING OMBUDSMAN

7. Powers and Jurisdiction



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g CHAPTER IV- PROCEDURE FOR REDRESSAL OF GRIEVANCE

8. Grounds of Complaint9. Procedure for Filing Complaint

10. Power to Call for Information

11. Settlement of Complaint by Agreement

12. Award by the Banking Ombudsman13. Rejection of the Complaint

14. Appeal Before the Appellate Authority

15. Banks to Display Salient Features of the Scheme for

Common Knowledge of Public CHAPTER V- MISCELLANEOUS

16. Removal of Difficulties

17. Application of the Banking Ombudsman Schemes, 1995

and 2002

SARFAESI Act, 2002


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SARFAESI Act, 2002 The Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002, allows banks andfinancial institutions to auction properties when borrowers

fail to repay their loans. It enables banks to reduce their non-

performing assets (NPAs) by adopting measures for recovery

or reconstruction.

If a borrower defaults on repayment of his/her home loan for

six months at stretch, banks give him/her a 60-day period to

regularise the repayment, that is, start repaying. On failure to

do so, banks declare the loan an NPA and auction it to recover

the debt. Auction price depends on the market value of the property. If

the price fetched exceeds the banks dues, the excess amount

i i t th b

Mbn f658 - Banking Management Master Key

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