Banking Services and Operations

Reimbursing bank is one of the parties involved in an Letter of Credit. Reimbursing bank is the party who authorised to honor the the reimbursement claim of negotiation/ payment/ acceptance.

The maker of a bill of exchange or cheque is called the “drawer;” the person thereby directed to pay is called the “drawee.”

In 2006, Reserve Bank of India announced the revised Banking Ombudsman Scheme with enlarged scope that included customer complaints on certain new areas, such as credit card complaints, deficiencies in providing the promised services even by banks' sales agents, levying service charges without prior notice to the customer and non-adherence to the fair practices code as adopted by individual banks. The 2006 scheme provides a forum to bank customers to seek redressal of their most common complaints against banks, including those relating to credit cards, service charges, promises given by the sales agents of banks, but not kept by banks, as also, delays in delivery of bank services. 

The complaint can be filed by one's authorised representative (other than an advocate).

Retail banking, also known as consumer banking, is a typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs). In retail banking, the focus is on the individual consumer. 

As a part of business, banks issue guarantees on behalf of their customers for various purposes. The guarantees executed by banks comprise both performance guarantees and financial guarantees. The guarantees are structured according to the terms of agreement (security, maturity and purpose).

Cash management is the corporate process of collecting and managing cash, as well as using it for (short-term) investing. It is a key component of ensuring a company's financial stability and solvency.

Customer profitability (CP) is the profit that the firm makes from serving a customer or customer group over a specified period of time, specifically the difference between the revenues earned from and the costs associated with the customer relationship in a specified period.

As per Sec. 13 of “Banking Companies Acquisition and Transfer of Undertakings Act, 1970”, "every corresponding new bank shall observe, except as otherwise required by law, the practices and usages customary among bankers and, in particular, it shall not divulge any information relating to or to the affairs of its constituents except in circumstances in which it is, in accordance with law or practices and usages customary among bankers, necessary or appropriate for the corresponding new bank to divulge such information”. Maintaining secrecy is implied terms of the contract with the customer which bank enters into with the customer at the time of opening an account.

Letter of Credit is a type of non-funded service. Some of the value added services are

a. Syndication Services Forex Desk

b. Real Time Gross Settlement Money Market Desk

c. Cash Management Services Derivatives Desk

d. Channel Financing Employees Trusts

e. Corporate Salary Accounts Cash Surplus Corporates

f. Reimbursement Account Tax Collection

g. Bankers to Right/Public Issue Online payment of Gujarat VAT 

Basel II uses a "three pillars" concept

(1) Minimum capital requirements (addressing risk)

(2) Supervisory review

(3) Market discipline

Transaction of internet banking excludes withdrawal of cash anywhere in India.

Banks cannot use the services of village sarpanch as intermediaries in providing financial and banking services.

Under Section 5 (b) in the Banking Regulation Act,1949, “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise.

In case of loan/advance accounts, banker is the creditor and the customer is the debtor. It is because the customer owes money to the banker. The banker can demand the repayment of loan/advance on the due date and the customer has to repay the debt. Here, bank is crediting the amount in Y's account, thus the relationship is of creditor and debtor.