As a matter of fact, banking business can be divided into two broad categories:
- Basic Banking, and
- Advanced Banking.
The activities that can be classified under Basic Banking are:
- Opening, maintaining and closing of Current Accounts and Savings Accounts (CASA),
- Taking Term Deposits (Fixed Deposits and Recurring Deposits) and
- Adhering to all the internal and external policy guidelines of Know Your Customer (KYC) norms in addition to follow up of Prevention of Anti Money Laundering Act (PMLA, 2002) provisions
- Branch Management, CASA client relationship management
- Management of cash retention limit at the branch, ATM management
Fundamental banking activities such as:
- assessment, documentation, security creation, disbursal and subsequent recovery in case of personal loans, education loans, home loans, automobile loans, gold loans and all other such similar retail loans also fall into the category of Basic Banking.
- Issuance and monitoring of credit cards also falls into the category of Basic Banking.
- Primary customer services such as providing digital banking to the customer, issuance of cheque books and demand drafts, ATM services, cash delivery and cash acceptance across the counter falls under Basic Banking
- Safe Custody Vaults, Locker Service, inward and outward remittances, issuance of foreign currency in physical and digital forms and cheque clearance etc fall under the bracket of Basic Banking.
- Passing on of the customer requests / requirements for deposit accounts and loan facilities (known as LEADS) to the respective department is also in the domain of Basic Banking.
The people who facilitate Basic Banking are generally located in the bank branch premises. These include:
- Branch Manager
- Assistant Branch Manager
- Welcome Desk
- Personal Banking Relationship Managers
- Branch Operations Manager
- Personal Banker Sales
- Third Party Products Sales
There is also an activity which is known as Third Party Products (TPP). These are the products which are not the proprietary property of the bank but are owned by some affiliate, associate or independent companies. Life Insurance, General Insurance, Mutual Funds, Stock Market activities, FINTECH, Co-Sponsored cards and on-line commerce fall into this category.
Then what is categorised under Advanced Banking? Advanced Banking contains those areas of banking which are generally not handled at the branch level and which require specialised knowledge. Often, these are centralised activities and are handled by middle or senior management officials. Examples of Advanced Banking are:
- Treasury (Rupee and Forex), maintaining CRR and SLR
- Priority Sector Lending (PSL) which includes export finance and renewable energy
- Agricultural Banking
- Risk Management at the Client and the Portfolio level
- Management of the Core Banking Solutions by the Operations Department
- Trade Finance, Letters of Credit and Bank Guarantees
- Project Finance (including Greenfield and Brownfield Projects),
- Foreign Currency Management,
- Merchant and Investment Banking (including IPOs, FPOs, Mergers and Acquisitions),
- Corporate Banking,
- Government Business,
- Compliances and RBI Reporting,
- Management of Non-Performing Assets,
- Product Development,
- Secretarial Activity and Shareholder Relations,
- SEBI Reporting related to banking performance
- Legal Support and
- Balance Sheet Management by Finance Control Department
- Human Resource Management
- Information Technology Management
Advanced Banking also includes internal policy making, strategies for meeting the competition, safeguarding bank’s interest in all aspects and respecting the local and the global regulatory aspects. Preparing bank’s financial statements as per GAAP, keeping sufficient provisions, paying taxes in a timely manner and being prepared for any exigencies also fall under the activities of Advanced Banking.
Advanced Banking requires deep subject matter knowledge. Reason being:
- The transaction amounts pertaining to Advanced Banking are from large to very large
- The compliance requirements are very serious. Lack of compliance may result in huge losses for the bank. For example implementation of SOX guidelines or BASEL norms will fall under Advanced Banking
- Risk of losing institutional customer and chances of litigation against the bank are also real
We have included chapters and modules on arriving at the Maximum Permissible Bank Finance (MPBF) and Trade Finance in our Advanced Banking course. Apart from this we have a full-fledged course in Trade Finance management. Both these courses fall under Advanced Banking. Our advanced Banking course serves the required purpose for a fresher.