Banking services provided to individuals is known as Retail Banking. This is the banking which you and I and our neighbour experiences when it transacts with the bank. Retail Banking is again divided into three main parts: Liabilities side banking, Asset side banking and Usage of Bank Products. Because a customer can be a depositor, a borrower (or both) or be a mere buyer of a bank product such as locker, demand draft, credit card, travellers’ cheques etc.
The concept of our video training is different. Our training is based on ‘experience banking’. Banking, the way it happens in the ‘work place’ and not in the text books or in the power point slides. We found that if our trainee or the learner wants to train into banking, let his start with building his own bank. Let’s Build a Bank! discusses step by step banking. As to how a few enterprising young people of a town get together showing entrepreneurship. The town economy has been explained: primary, secondary and the tertiary sectors, i.e., agriculture, manufacturing and services sectors. There were savings by the people, hence, money was available in the town. But the bank, as a financial intermediary was not available.READ MORE
These young entrepreneurs pool in their financial resources (Capital) together and form a Public Limited Company under Indian Companies Act, 1956 (the most suited way of doing banking business which limits their liability to the extent of capital only which is Rs.10 cr here). We compare various ways to form a business arrangement: proprietary, partnership, limited liability partnership, private limited company before closing on to public limited company form of doing business. We introduce Registrar of Companies (ROC) and Ministry of Corporate Affairs (MCA). Also, Institute of Chartered Accountants of India (ICAI) which determines the way accounting and audit is done in India under Generally Accepted Accounting Principles (GAAP).
The capital comes in. At each stage we build and show the balance sheet (liabilities and assets of the bank). The promoters build the required bank building (Fixed Asset). This helps the beginner with the method of Double Entry Book Keeping. The bank is now ready to do business.
Even before a single person becomes a customer, implementation of Know Your Customer (KYC) norms and Anti Money Laundering (AML) is mandatory. No carelessness in establishing proper identification of the customer can be tolerated. A violation can be heavily penalised by RBI and can put the employee’s and the bank’s future in danger.
Customer is the Purpose of Banking. All banks have started their banking with the Retail Banking. It is challenging to handle a customer and its requirements. Savings Accounts (SA) constitute the largest chunk of banking business. These are also known as Demand Deposits and along with Current Accounts (CA) make the famous and a most well-known acronym CASA. Deposits are liabilities and in this bank such transactions are booked as, ‘Debit-Cash; Credit-Customer Savings Account’. Suppose a customer withdraws cash from his savings account, transaction under Double Entry Book Keeping will be, ‘Debit-Customer Savings Account; Credit-Cash.
SA deposits require interest to be paid to the customer. This requires pay-out. Hence, Profit and Loss account is constructed and shown. As there is no income at this point in time, the bank will incur loss. The concept of ‘loss’ as well as ‘profit’ is shown. The business of retail banking is not limited to opening CASA accounts and offering lockers. The income of Retail Banking comes from lending. There are many types of loan offerings to customers. Credit Cards, Overdraft (line of credit) and Personal Loans (Equated Monthly Instalment or EMI based) are in huge circulation and demand. Personal Loans have many variants to suit customer needs. These are: Home Loans (also known as mortgage loans), Auto Loans (for four and two wheelers), Gold Loans (against gold ornaments), Loans for Consumer Durables (for purchase of fridge, TV, mobile phones etc), Education Loans (for higher education), Loan Against Property (LAP)and Loan Against Shares (against listed, tradeable shares) etc are commonplace. Though the size of these loans may be smaller but the rate of interest on personal loans (barring Home Loans) is higher than that of Wholesale Banking loans.
RBI requires certain cushion to be maintained for the depositors. Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are too such cushions in the hand of RBI. Apart from acting as security buffers for the depositors, the time to time announced increase and decrease in these ratios also regulates money supply.
By this time our trainee very well knows that the banks are in the business of accepting deposits from public and lending money to public. RBI expects the banks to have an in-house committee to monitor that demand deposits (source of funds) which are of short term nature, are lent for short term purposes (use of funds). Similarly, long term deposits should be lent for long term loans. This activity is known as Asset Liability Management (ALM) and is an integral part of any bank’s internal management.
Proper channelizing of money is like a disease. It spreads. But for good. A satisfied depositor tells many people about the good that happened to him. Same thing about the borrowers. End result is: a satisfied customer introduces many new customers to the bank. This is known as ‘Multiplier Effect’.
All banks and NBFCs use a network of computers and servers, connected to each other and responding on line, real time basis. This ‘Network’ which allows any customer to be serviced from anywhere is known as Core Banking Solutions (CBS). LESS
|Let’s Build a Bank!|
|RBS1U1 – Let’s Build a Bank 1 Details||00:10:40|
|RBS1U2 – Let’s Build a Bank 2 Details||00:09:40|
|RBS1U3 – Let’s build a bank 3 Details||00:13:35|
|RBS1U4 – Let’s Build a Bank 4 Details||00:09:43|
|RBS1MCQ1 – Quiz||00:30:00|
|RBS1R1 – Reference Document Details||00:00:00|
|Know Your Customer & Anti Money Laundering (KYC & AML)|
|RBS2U1 – Understanding & Compliance of KYC/AML Details||00:03:55|
|RBS2U2 – Definition Of A Customer Details||00:03:21|
|RBS2U3 – Policy, Documentation, Monitoring and Risk Management Details||00:12:10|
|RBS2U4 – Definition, Money Launderes, Sources Details||00:10:18|
|RBS2U5 – Steps, Tools, Preventive measures and FATF for AML Details||00:11:09|
|RBS2MCQ1 – Quiz||00:30:00|
|RBS2R1 – Reference Document Details||00:00:00|
|Customer Is the Purpose of Banking|
|RBS3U1 – Customer Is The Purpose Of Banking: 1 Details||00:11:47|
|RBS3U2 – Customer Is The Purpose Of Banking: 2 Details||00:11:54|
|RBS3U3 – Customer Is The Purpose Of Banking: 3 Details||00:18:45|
|RBS3U4 – Customer Is The Purpose Of Banking: 4 Details||00:12:01|
|RBS3MCQ1 – Quiz||00:37:00|
|RBS3R1 – Reference Document Details||00:00:00|
|RBS4U1 – Retail Banking – Part 1 Details||00:11:03|
|RBS4U2 – Retail Banking – Part 2 Details||00:12:33|
|RBS4U3 – Retail Banking – Part 3 Details||00:08:01|
|RBS4MCQ1 – Quiz||00:15:00|
|RBS4R1 – Reference Document Details||00:00:00|