PROJECT REPORT ON BANKER – CUSTOMER RELATIONSHIP Through Products & Services Offered

PROJECT REPORT ON

BANKER – CUSTOMER RELATIONSH I P Through Products & Services Offered

TO WHOMSOEVER IT MAY CONCERN This is to certify that Ms. XYZ, student of XYZ of Management & Information Technology, pursuing MBA course from XYZ University, has undergone On the Job Training from Punjab & Sind Bank, B.O H- Block, Connaught Circus, New Delhi for a period of Four Weeks with effect from July 5, 2010 to July 31, 2010 with complete attendance as per rules.

She took keen interest in studying the Banker – Customer Relationship through the products & services offered by the Bank.

Her conduct during the Training was exemplary.

We wish her All the Best in pursuit of her studies and career.

(XYZ) Asst. Gen. Manager

ACKNOWLEDGEMENT

I hereby acknowledge with gratitude the contribution made and help rendered by my project guide Mr. XYZ, Asst. Gen. Manager, B.O. H- Block, Punjab & Sind Bank, where I completed my On the Job Training under his able guidance and path showing.

My sincere thanks to Mr. XYZ, my revered coordinator, teacher, guide for the immense help and guidance rendered by him.

I will fail in my duty if I do not mention the immense support and help rendered by some staff members of PSB, B.O. H- Block, namely, Mr. XYZ and many more.

XYZ

TABLE OF CONTENTS 1.

Introduction

2. Overview of PSB • • •

Background, Position of the Bank, Vision & Mission

3. Objectives & Methodology 4.

Rights As A Customer of PSB

5.

Common Practices Followed by the Bank

6. PSB – Area of Banker – Customer Relationship • • • •

Deposits Loans & Advances Services RTGS

7. Findings & Recommendations 8. Bibliography

INTRODUCT ION 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.

Thus the banker is the one who is entrusted with the above mentioned valuable items, while the person who entrust the items with a view to retrieving it on demand is called the customer.

In my project, I have attempted to study the Banker – Customer Relationship through the products and services offered by Punjab & Sind Bank.

OVERVIEW OF PUNJAB & SIND BANK

Background

Founded in 1908, Punjab and Sind Bank started its operations with the objective of enhancing the standard of living of the poor people. The bank has gradually grown into a financial giant with 918 branches and 61 ATMs throughout the country.

The founders of Punjab and Sind Bank were visionaries like Sir Sunder Singh Majitha, Bhai Vir Singh and Sardar Tarlochan Singh. The bank is committed to assist the economically weaker segment of the society and has made significant achievements regarding this commitment.

Currently, the Chairman & Managing Director of the bank is Sardar G.S.Vedi.

Position of Bank The total Deposits of the Bank stood at Rs. 491550856Thousands as on March 31’2010.

The Bank earned a Net Profit of Rs. 5088017Thousands for the year ended March 31’2010.

The Bank has 919 branches as on date.

The Total Advancesstood at Rs. 326391078Thousands as on March 31’2010.

The Bank has opened an exclusive Housing Finance Branch in order to cater the credit need of the house aspirants.

The bank has opened Corporate Office to create new financial products as per the needs and requirements of customers.

With a firm belief that customer is King, we have a full-fledged customer service division at Corporate Office as well as Zonal offices to deal with customer complaints.

Bank has its own Hockey Academy at Jalandhar to groom the youngsters. It has sponsored 58th National Junior Hockey Championship and the Junior Hockey Team which has done miracles by winning the prestigious Silver Medal in the 6th Junior World Cup Hockey Championship at Milton Keyenses,England.

VISION & MISSION

Corporate Vision :Â We envision to emerge as a strong vibrant Bank through synchronization of the human, financial and technological resources.Â

Corporate Mission: 1. To put in place the effective Risk Management and Internal Control Systems.

2. To adopt and operationalise high-level technology standards.

3. To strive to achieve excellence in Customer Service.

4. To achieve the highest standards of transparency and accountability in the conduct of

banking business.

5. To adopt professional approach in effectively managing financial as well as non-

financial risks.

6. To maximize profitability and profits of the Bank with due compliance of prudential

guidelines.

7. To maximize competitive risk adjusted return on capital, through planned reduction in

the average cost of funds, increased yield on advancesand investments besides reduction in cost of operations.

Branch Network

The corporate office of the bank is situated at Rajendra Place, New Delhi with 19 Zonal Offices (as on 31-07-2010) scattered in various States controlling the branches.

The bank has vast network of 920 branches and 63 ATMs across India. Punjab and Sind Bank staffs more than 10,000employeesdedicated to the banking services and customer care.

States

Number Of Offices

Andhra Pradesh Assam Bihar Chandigarh Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Nagaland Orissa Punjab Rajasthan Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal Total

04 06 06 22 05 113 01 07 50 11 11 08 05 03 26 26 02 01 04 404 22 08 01 129 23 22 920

OBJECTIVES & METHODOLOGY OF THE PROJECT UNDERTAKEN Objectives  To

study and analyse the Banker – Customer Relationship through products and services offered by Punjab & Sind Bank to its customers and schemesthere under.

 To study and analyse actual functioning of Banker – Customer Relationship in the in H-Block, Connaught Circus, New Delhi Branch.

 To find out the effectivenessof such schemesin the branch.  To find

out the deficiencies and adequacies in the Banker – Customer Relationship through so offered products and services.

Methodology While undergoing On the Job Training Programme for 4 (four) Weeks at PUNJAB& SINDBANK (A Govt. Of India Undertaking), Branch Office, H-Block, Connaught Place, New Delhi, the study was conducted and analysed on the:

 Products of Bank  Schemesthere under  Methodology adopted by the bank in serving the customers  Data of the bank was analysed  Customers of the Bank were contacted to study their awarenessof availability of Bank’s Products & Services and also their expectations from the Bank and their satisfaction level.

Your Right as A Customer of Punjab & Sind Bank!

As our valued customer, you enjoy the following rights from our Branches network through out the country:

TIME SCHEDULE 1.

Receipt of Cash

10-15 Minutes

2.

Encashment of Cheques

10-15 Minutes

3.

Issue of Cheque-Book/DDs/POs

15-20 Minutes

4.

Opening of an Account

15-20 Minutes

5.

Payment of DDs/POs

10-20 Minutes

6.

Payment/Renewal of FDRs

20-25 Minutes

7.

Retirement of Bills

20-30 Minutes

8.

Updation of PassBook/ Issue of Account Statement

05-10 Minutes

9.

Statement of Account to be issued regularly

On every 5th of the Month.

10.

Collection of ChequesLocal :

2-4 days

11.

Outstation:

10-14 days

COMMON PRACTICES FOLLOWED BY THE BANK FOR YOUR CONVENIENCE

1. Display of businesshours.

2. Attend to all customers present in the banking hall at the close of businesshours and rendering of courteous service.

3. Provide separate 'Enquiry' or 'May I Help You' at large Branches.

4. Offer nomination facility to all deposit accounts (i.e. account opened in individual capacity) and all safe deposit hirers (i.e. individual hirers).

5. Display interest rates for various deposit schemesfrom time to time.

6. Notify change in interest rates on advances.

7. Display of Service Chargeson issue of Demand Drafts, Pay Orders, Duplicate Drafts, Cancellation of Drafts, Collection of Documents, etc.

8. Display Time - Norms for various Banking Transactions.

9. Pay interest for delayed credit of outstation cheques, as advised by Reserve Bank of India (RBI) from time to time.

10.Display of availability of Locker facility at the Branch.

11.Display of Tax Collection facility at the Branch.

12.Accord immediate credit in respect of outstation and local cheques upto a specified limit subject to certain conditions, as advised by RBI from time to time.

13.Provide complaint/suggestion box in the Branch premises.

14.Display addressof Zonal & Head Offices, as well as Nodal Officer dealing with customer grievances/complaints.

15.Name and addressof the concerned banking ombudsman.

16.Corruption free service to all customers.

17.We have extended businesshours in our fully computerized branches in Delhi.

PUNJAB & SIND BANK AREAS OF BANKER- CUSTOMER RELATIONSH I P Where service is the way of life...

Punjab and Sind Bank has an array of services to fulfil various needs of the customers. The innovative products and services of the bank are listed below:

DEPOSITS

1) Savings Deposits Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. Savings account funds are considered one of the most liquid investments outside of demand accounts and cash. Savings accounts are generally for money that you don't intend to use for daily expenses. To open a savings account, simply go down to your local bank with proper identification and ask to open an account. Punjab & Sind Bank offers 3.5%interest rate to the customers for deposit in savings account. It is a form of demand deposit which is subject to restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by the Bank during any specified period.

1. Saral Savings Scheme 2. Saving Bank account

1. Theseaccounts are designed to help the individuals (personal customers) to inculcate habit of saving money and to meet their future requirement of money. The amount can be deposited / withdrawn from these accounts by way of cheques/ withdrawal slips. The withdrawals are restricted to 50 entries each half-year in the S.B.Account.

2. Saving Bank accounts are very popular. These accounts can be opened by eligible person(s) and certain organization(s) / agencies as approved by the Reserve Bank of India (RBI).

3. As required by law, while opening this account, we satisfy ourselves about the identity, including verification of address, of a person(s) seeking to open an account and to assist in protecting our prospective customer(s) and ourselves against fraud and other misusesof the banking system.

4. We are required to obtain two recent photographs of the person(s) opening the account, as per R.B.I. directives.

5. We are required to obtain Permanent Account Number (PAN) or alternatively obtain declaration in Form No. 60 or 61 as per the Income Tax Act (vide Section 139 A) from the person(s) opening the account.

6. We provide to the prospective customers details of the documents required for identification of the person(s) opening the account in addition to satisfactory introduction. Documents normally accepted are the current, gas / telephone / electricity bill / ration card / voter's identity card / driving license / passport, etc.

7. You are required to maintain certain minimum balance in the account, as specified by the Bank from time to time, separately for computerized and non-computerized Branches and also depending on, whether account holder wants to avail the cheque book facility or not. Non-compliance of this would attract service charges. Interest at 3½%p.a. is processedrate, as per presently paid on half yearly basis depending on minimum balance between the 10th day and last day of the months, provided it works out to minimum Re. 1/-

8. Cheques,dividend warrants drawn in the name of account holder(s) will only be collected through this account. Financial instruments endorsed in favour of the account holder(s) will not be collected through savings bank account.

9. Get your passbook updated on presentation legibly with full entries. If the number of entries to be made is large, kindly leave the passbook against receipt showing the date when it can be collected back. You can obtain the statement of account indicating full details by 5th of every month in caseyou have not been issued a passbook.

10.You can obtain a new cheque book when your requisition slip appears next in the current cheque book.

2) Current Deposits Account

An active account at a bank or building society into which deposits can be paid and from which withdrawals can be made by cheque (see also cheque account). Banks make no charges and pay interest on balances maintained in a current account. a form of demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposit nor Term Deposit.

1. Current Accounts can be opened by individuals, partnership firms, private and public limited companies, HUFs/specified associates, trusts, etc.

2. As required by law, while opening this account, we satisfy ourselves about the identity, including verification of address, of a person(s) seeking to open an account to assist in protecting the right of customer(s) and ourselves against fraud and other misusesof the banking system.

3. We also require a satisfactory introduction of the person(s) opening the account by a person acceptable to the Bank and will require to obtain two recent photographs of the person(s) opening/operating the account, as per RBI directives.

4. You are required to give Permanent Account Number (PAN) or alternatively obtain declaration in Form No. 60 or 61 as per the Income Tax Act (vide Section 139A) from the person(s) opening the account (i.e. including partners of Registered/Unregistered partnership as also Registered / Incorporated bodies / companies).

5. We provide to our prospective customers details of the documents/required for identification of the person(s) opening the account in addition to a satisfactory introduction. Documents normally accepted are the current, gas/telephone/electricity bill/ration card/voter's identity card/driving licence/passport, etc.

6. Minimum balance as stipulated from time to time is required to be maintained and no interest is paid on credit balanceskept in current account

7. Services charges are levied for: Ledger folio used.

Cheque Books issued.

Non-maintenance of minimum balance.

Return of cheques etc.

Other facilities as required by the Current Account Customer.

8. For opening special types of current accounts like for Executors Administrators, Trustees, Liquidators, etc., the Branch Manager may be contacted who will help in opening these type of accounts.

9. As per RBI directives, the applicant (i.e. account opener) should declare in the account opening form or separately that he is not enjoying any Credit facility with any Bank and if he does enjoy any facility/facilities he should declare full particulars therefore indicating the name of the Bank and name of the Branch, wherefrom he has availed these facilities.

3) Term Deposits Account

A deposit at a bank or other financial institution that has a fixed return (usually via an interest rate) and a set maturity. That is, the depositor does not have accessto the funds until maturity; in exchange, he/she is usually entitled to a higher interest rate. One of the most common examples of a term deposit is a certificate of deposit. It is also called a time deposit. It is deposit received by the Bank for a fixed period withdrawable only after the expiry of the fixed period.

1. Fixed Deposit Scheme Ordinary

2. Saving With Smile Deposit Scheme

3. Short Term Deposit Scheme

4. Capital Gain Deposit Scheme

5. Harhi Savni (Rabi Kharif) JamaYojna

6. PSBFixed Deposit Tax Saver Scheme

Both senior citizens and Staff/ex-staff members of the bank are going to get additional benefits and extra interest from the fixed deposit schemes.

1. We have tailored various deposit schemesto suit the needs and expectations for investing in every walk of life, which are prominently displayed at our branches for your convenience. We welcome you to seek more details and shall also be glad to assist in the area of investment in various deposit schemesvis-a-vis your requirement.

2. Term Deposit accounts can be opened by individuals, partnership firms, private and public limited companies, HUFs/specified associates, etc.

3. As required by law, while opening this account, we satisfy ourselves about the identity, including verification of address, of a person(s) seeking to open an account, to assist in protecting the prospective customer(s), members of the public and ourselves against fraud and other misusesof the banking system.

4. We require a satisfactory introduction of the person(s) opening the account by a person acceptable to the Bank and will obtain two recent photographs of the person(s) opening the account, as per R.B.I. directives.

5. We also require to obtain Permanent Account Number (PAN) or alternatively obtain declaration in Form No. 60 or 61 as per the Income Tax Act (vide Section 139 A) from the person(s) opening the account.

6. Premature withdrawals are allowed, unless specified otherwise, at the rate of interest applicable for the period, for which the deposit has run or the contracted rate whichever is lower, subject to penalty, if any prescribed by the Bank. No interest will be paid on premature withdrawals of deposit which has remained with the Bank for less than 15 days. For more details of interest rates, pleasecontact our Branch Manager.

7. Generally loans/overdrafts against deposits are allowed, except on Certificates of Deposit (CD). Such loans are sanctioned by charging interest at rates directed by RBI from time to time or as prescribed by the Bank and automatic renewal of FDRsare also available. Interest on overdue deposit is paid, if the deposit is renewed, as decided by the Bank from time to time

8. Interest on deposits is payable either monthly at discounted value or quarterly or compounded quarterly (i.e. reinvestment of interest) or on the date of maturity at the option of the depositor as applicable under particular deposit scheme.

9. Interest on Bank deposit is exempted from Income Tax upto a limit, specified by Income Tax authorities from time to time, as per Govt. Norms.

10.We accept the declaration in Form No. 15 H preferably at the commencement of the Financial Year for receiving interest on deposits without deduction of tax.

11.We issue TDSCertificate for tax deducted, within time schedule as per law.

12.Transfer of funds on maturity of terms deposits as well as periodical interest on such deposits to another branch of the Bank is done at par.

Rate of Interest offered by Punjab & Sind Bank on Term Deposits:

Time period

Amt. less than 15Lakhs

Rs.15lakhs- 1 crore Amt. More than Rs.1crore

7 – 14 Days

1%

1%

1%

15 – 30 Days

2%

2%

2%

31 – 45 Days

2%

2%

2%

46 – 59 Days

3%

3%

3%

60 – 90 Days

3%

3.5%

3%

91 – 179 Days

5%

4.5%

4%

180 – 269 Days

5.5%

5%

4.5%

270 – 364 Days

5.75%

5.75%

5.25%

12 – 18 Months

6.5%

6.25%

6%

2 – 3 Years

6.75%

6.75%

6%

3 – 10 Years

7%

7%

6%

4) Recurring Deposits Account

The Recurring deposit account is an account in the bank (or a Post office in some countries) where an investor deposits a fixed amount of money every month for a fixed tenure (mostly ranging from one year to five years). This scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum after some years. The small monthly savings in the Recurring Deposit scheme enable the depositor to accumulate a handsome amount on maturity. Interest at term deposit rates is computable on quarterly compounded basis.

Who can open an account: + An individual, who is not insolvent or insane, can open an account singly or jointly. + A minor can open Saving bank Account and the same can be ope rated by the natural guardian or by minor himself / herself, if he / she is above the age of 10 years. The account can also be opened jointly. + On attaining majority, the erstwhile minor should confirm the balance in his / her account and if the account is operated by the natural guardian / guardian, fresh specimen signature of erstwhile minor duly verified by the natural guardian / guardian would be obtained and kept on record for all operational purpose. + Such accounts can be opened by Individuals (singly or jointly), a firm, company, club, Association , Institution, Govt. or Semi Govt. Body, Co-operative societies, religious and charitable institutions etc.

Minimum deposit in the Account - Minimum of Rs.10/Maximum deposit in the Account- Maximum of any amount per month.

Minimum and Maximum tenure Minimum tenure - Minimum period six months.

Maximum tenure - Maximum 10 years.

Rate of Interest

+ As per rate applicable to fixed Deposit for the respective maturity period.

Periodicity of Interest

+ The interest is compounded at quarterly intervals but paid along with principal at the time of maturity of deposit.

ACCOUNT OPENING AND OPERATION OF DEPOSIT ACCOUNTS AND OTHER RELATED SERVICES PROVIDED BY THE BANK

A) The Bank before opening any deposit account will carry out due diligence as required under "Know Your Customer" (KYC) guidelines issued by RBI and or such other norms or procedures adopted by the Bank. If the decision to open an account of a prospective depositor requires clearance at a higher level, reasons for any delay in opening of the account will be informed to him and the final decision of the Bank will be conveyed at the earliest to him.

B) The Bank would provide the prospective depositor account opening forms and other materials. The same will contain details of information to be furnished and documents to be produced for verification and or for record. The Bank official opening the account will explain the procedural formalities and other clarifications sought by the prospective depositor at the time of opening a deposit account.

C) For deposit products like Savings Bank Account and Current Deposit Account, the Bank will normally stipulate certain minimum balances to be maintained as part of terms and conditions governing operation of such accounts.

Failure to maintain minimum balance in the account will attract levy of charges as specified by the Bank from time to time. For Saving Bank Account the Bank may also place restrictions on number of transactions, cash withdrawals, etc., for given period. Similarly, the Bank may specify charges for issue of cheques books, ATM & Debit Cards, additional statement of accounts, duplicate pass book, folio charges, tele-banking services etc. All such details, regarding terms and conditions for operation of the accounts and schedule of charges for various services provided will be communicated to the prospective depositor while opening the account.

D) Savings Bank Accounts can be opened for eligible person / persons and certain organizations / agencies (as advised by Reserve Bank of India (RBI) from time to time) Current Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies / HUFs/ Trusts, etc.

Term Deposits Accounts can be opened by individuals / partnership firms / Private and Public Limited Companies /HUFs / Trusts, etc.

E) While opening a deposit account due diligence will be exercised involving satisfaction about the identity of the person, verification of address, satisfying about his occupation and source of income. Obtaining introduction of the prospective depositor from a person acceptable to the Bank and obtaining recent photograph of the person/s opening / operating the account are part of due diligence process.

F) In addition to the due diligence requirements, under KYC norms the Bank will obtain Permanent Account Number (PAN) or General Index Register (GIR) Number or alternatively declaration in Form No. 60 or 61 as specified under the Income Tax Act / Rules.

G) Deposit accounts can be opened by an individual in his own name (status: known as account in single name) or by more than one individual in their own names (status: known as Joint Account). A minor can also open savings Bank account either jointly with natural guardian or with mother as t he guardian (status: known as Minor's Account). Minors above the age of 14 will also be allowed to open and operate saving bank account independently.

H) Operation of Joint Account - The Joint Account opened by more than one individual can be operated by single individual or by more than one individual jointly. The mandate for operating the account can be modified with the consent of all account holders. However, only natural guardian can operate Savings Bank account opened by a minor jointly with natural guardian / guardian.

I) Any of the following mandates can be given by joint account holders to dispose of balance in the above accounts: i. Either or Survivor: If the account is held by two individuals say, A & B, the final balance along with interest, if applicable, will be paid to survivor on death of anyone of the account holders. ii. Anyone or Survivor/s: If the account is held by more than two individuals say, A, B and C, the final balance along with interest, if applicable, will be paid to the survivor on death of any two account holders.

The above mandates will become operational/ applicable only on or after the date of maturity of term deposits. This mandate can be modified by the consent of all the account holders.

J) The Bank will register mandate / power of attorney given by the depositor authorizing another person to operate the account on his behalf.

K) The Term Deposit account holders at the time of placing their deposits can give instructions with regard to closure of deposit account or renewal of deposit for further period on the date of maturity. Automatic renewal of the deposit shall be undertaken as per the mandate given in the account opening form.

L) Nomination facility is available on all deposit accounts opened by the individuals.

Nomination is also available to a sole proprietary concern account. Nomination can be made in favour of one individual only. The account holder(s) can cancel or change nomination made by him/them at any time. The third party is required to witness the processof making

nomination, cancellation or change thereof. Nomination can be modified by the consent of account holder(s). Nomination can be made in favour of a minor also.

The bank recommends that all depositors avail nomination facility. In the event of death of the depositor(s), the nominee would receive the balance outstanding in the account as a trustee of legal heirs. While opening a deposit account, the depositor will be informed of the advantages o f the nomination facility.

M) The Bank will provide a statement of account to Savings Bank as well as Current Deposit Account Holders periodically as per terms and conditions of opening of the account.

Alternatively, the Bank may issue a PassBook to these account holders.

N) The deposit accounts may be transferred to any other branch of the Bank at the request of the depositor.

INSURANCE COVER FOR DEPOSITS All bank deposits are covered under the insurance scheme offered by Deposit Insurance and Credit Guarantee Corporation of India (DICGC) subject to certain limits and conditions. The details of the insurance cover in force will be made available to the depositor.

STOP PAYMENT FACIL I TY The Bank with due diligence will accept stop payment instruction from the depositors in respect of cheques issued by them. Charges, as specified, will be recovered.

DORMANT ACCOUNTS The bank may transfer all accounts not operated for a considerable period of time to a separate dormant / inoperative account status in the interest of the depositor as well as the bank. The charges, if any, levied by the bank on dormant / inoperative accounts shall be conveyed to the depositor. The depositor can formally request the Bank to activate the account for operating it.

SAFE DEPOSIT LOCKERS The safe deposit locker facility is not offered at all the branches. However, wherever the facility is offered allotment of safe deposit vault will be subject to availability and compliance with other terms and conditions attached to the service. An individual (being not a minor) may hire safe deposit lockers singly or jointly with another individual(s), HUF, firms, limited companies, associates, societies, trusts etc.

Nomination facility is available to individual (s) holding the lockers singly or jointly. Where the lockers are held in joint names, up to two nominees can be appointed. Joint locker holders can give mandate for accessto the lockers in the event of death of on e o f the holders on the lines similar to those for deposit accounts. In the absence of nomination or mandate for disposal of contents of lockers, with a view to avoid hardship to common persons, the bank will release the contents of locker to the legal heirs against indemnity on the lines as applicable to deposit accounts. The lockers shall be available to the lesseeson pre-determined rent depending upon the size of the locker and location o f branch notified by the bank from time to time in its Service Charges Schedule. The rentals/service charges o f locker shall be payable in cash and or debited to the account of the lesseewith the bank.

CAPITAL GAIN SCHEME - THE TAX SAVER SCHEME

Exemption of Capital Gain Tax under Section 54B, 54D, 54Fand 54Gof I.T. Act, 1961is available on amount deposited under Account 'A' (Saving Deposit) and/or Account 'B' (Term Deposit) with option to keep deposit on cumulative or non-cumulative basis at Branches.

PAYMENT OF BALANCE IN ACCOUNTS OF THE DECEASED CUSTOMERS TO SURVIVORS / CLAIMANTS:

As directed by the RBI, we do not insist on succession certificate from legal heirs in accounts having survivorship / nominee irrespective of amount involved.

STANDI NG INSTRUCT IONS

Standing instructions can be given to the Bank for transfer/remittance of funds from one account to other account(s) maintained in the same Branch, any other Branch of the bank or any other Bank or any other third party.

LOANS & ADVANCES

LOANS & ADVANCES

Meaning :

An arrangement in which a lender gives money or property to a borrower and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk). Written or oral agreement for a temporary transfer of a property (usually cash) from its owner (the lender) to a borrower who promises to return it according to the terms of the agreement, usually with interest for its use.

If the loan is repayable on the demand of the lender, it is called a demand loan. If repayable in equal monthly payments, it is an instalment loan. If repayable in lump sum on the loan's maturity (expiration) date, it is a time loan. Banks further classify their loans into other categories such as consumer, commercial, and industrial loans, construction and mortgage loans, and secured and unsecured loans. A written promise to repay the loan is called a promissory note. Sums paid or received before the fulfilment of an obligation, such as supply of goods or provision of services.

The term ‘loan’ refers to the amount borrowed by one person from another. The amount is in the nature of loan and refers to the sum paid to the borrower. Thus, from the view point of borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’. Loan may be regarded as ‘credit’ granted where the money is disbursed and its recovery is made on a later date. It is a debt for the borrower. While granting loans, credit is given for a definite purpose and for a predetermined period. Interest is charged on the loan at agreed rate and intervals of payment. ‘Advance’ on the other hand, is a ‘credit facility’ granted by the bank. Banks grant advances largely for short-term purposes, such as purchase of goods traded in and meeting other short-term trading liabilities. There is a sense of debt in loan, whereas an advance is a facility being availed of by the borrower. However, like loans, advances are also to be repaid.

Thus a credit facility- repayable in instalments over a period is termed as loan while a credit facility repayable within one year may be known as advances. However, in the present lesson these two terms are used interchangeably.

Utility of Loans and Advances:

Loans and advances granted by commercial banks are highly beneficial to individuals, firms, companies and industrial concerns. The growth and diversification of business activities are effected to a large extent through bank financing. Loans and advances granted by banks help in meeting short-term and long term financial needs of businessenterprises.

We can discuss the role played by banks in the business world by way of loans and advances as follows: (a) Loans and advances can be arranged from banks in keeping with the flexibility in business operations, Traders may borrow money for day to day financial needs availing of the facility of cash credit, bank overdraft and discounting of bills. The amount raised as loan may be repaid within a short period to suit the convenience of the borrower. Thus business may be run efficiently with borrowed funds from banks for financing its working capital requirements. (b) Loans and advancesare utilized for making payment of current liabilities, wage and salaries of employees, and also the tax liability of business. (c) Loans and advances from banks are found to be ‘economical’ for traders and businessmen, because banks charge a reasonable rate of interest on such loans/advances. For loans from money lenders, the rate of interest charged is very high. The interest charged by commercial banks is regulated by the Reserve Bank of India. (d) Banks generally do not interfere with the use, management and control of the borrowed money. But it takes care to ensure that the money lent is used only for businesspurposes. (e) Bank loans and advances are found to be convenient as far as its repayment is concerned.

This facilitates planning for future and timely repayment of loans. Otherwise business activities would have come to a halt. (f) Loans and advances by banks generally carry element of secrecy with it. Banks are dutybound to maintain secrecy of their transactions with the customers. This enhances people’s faith in the banking system.

There are Two Types of Loan Available from Banks: (a) Demand loan (b) Term loan

Demand Loans: A loan which is repayable on demand by the bank is called Demand Loan. In other words, it is repayable at short-notice. The entire amount of demand loan is disbursed at one time and the borrower has to pay interest on it. The borrower can repay the loan either in lump sum (one time) or as agreed with the bank. For example, if it is so agreed the amount of loan may be repaid in suitable instalments. Such loans are normally granted by banks against security. The security may include materials or goods in stock, shares of companies or any other asset.

Demand loans are raised normally for working capital purposes, like purchase of raw materials, making payment of short-term liabilities.

Term Loans: Medium and long term loans are called Term Loans. Term loans are granted for more than a year and repayment of such loans is spread over a longer period. The repayment is generally made in suitable instalments of a fixed amount. Term loan is required for the purpose of starting a new businessactivity, renovation, modernization, expansion/ extension of existing units, purchase of plant and machinery, purchase of land for setting up of a factory, construction of factory building or purchase of other immovable assets. These loans are generally secured against the mortgage of land, plant and machinery, building and the like.

IMPORTANT LOAN SCHEMES OF THE BANK

1. Credit Facilities for Agriculturists: There are number of credit schemesfor farmers which are liberally available to our rural and semi urban branches. The Bank has very attractive Kisan Credit Card Scheme for meeting the credit needs of the farmers with provision of personal accident insurance coverage of KCCholders.

The Bank has introduced a unique P&SBank Diamond Krishi Card (DKC)Scheme to provide more credit and better facilities to A Classfarmers.

For tractor financing Bank has made TIE-UP arrangement with Punjab Tractor, Eicher Tractor, Bajaj Tempo and Escorts whereby borrower gets incentives.

Besides,there are schemesfor:

o Purchaseof agriculture land for small, marginal borrowers and agricultural labourers. o Purchaseof new/old tractors, farm machinery. o Composite loan scheme Kheti Udyog Khazana Yojana. o Purchaseof Harvester Combine. o Purchaseof Two Wheelers by the farmers.

Bank has introduced a Joint Mortgage deed for the convenience of farmers to facilitate availment of agriculture loans without having to execute the deed every now and then.

2. Small Scale Industries: We extend credit to SSIfor meeting financial requirements for purchase of machinery and equipment, for construction of building, for working capital requirements. There is provision of collateral free credit upto Rs. 25.0 lac to SSIunits which are covered under credit guarantee fund trust scheme. Upfront Guarantee fee under this scheme is borne by the bank for credit facilities up to Rs.2.0 lac.

3. LUCC/KVIC Scheme: The bank encourageslanding under KVIC Scheme and other Govt. sponsored schemes.We have introduced LAGHUUDYAMI CREDITCARDSCHEME(LUCC)for working capital loan upto Rs.10.0 lac to our existing eligible borrowers under SSI, Retail Trade and small business/Self employed persons under priority sector.

4. ACC Scheme: Under Artisans credit card scheme hassle free credit facility upto Rs.2.0 lac is provided to artisans for their investments needs as well as working capital requirement.

5. Housing Finance: We have very liberal policy for housing finance to the members of the public. Special Scheme have been floated for Govt./PSU employees, Professional and self employed persons, as also for general public for construction, purchase and renovation/repair of houses/flats. For Govt./PSU employeesno processing charges are taken.

6. Car Loan: Under this scheme a borrower can get a loan to buy a car on very attractive terms for personal use. An individual can club his/her income with that of his/her spouseto avail higher loans.

Minimum formalities, simple paperwork and effortless procedure are the main attraction of this scheme.

7. Professional Loan: A loan for professional like Doctors, Engineers, Chartered Accountants, Lawyers, Architects, etc., to meet their professional needs is given. One can avail loan for purchase of all types of medical equipments, machineries, items to start clinics, acquiring or renovating business premises, air conditioners, generators, refrigerators, computers, etc.

8. Educational Loan: To encourage the youth in attaining expertise in educational and professional fields, our bank is making available finance upto Rs.7.50 lac for studies in India and upto Rs.15.0 lac abroad.

Bank has formulated a revised education loan policy whereby education loans upto Rs.7.50 lac are granted without collaterals and with third party guarantee only. For education loan upto Rs.4.0 lac rate of interest is charged @11.0%p.a. and no margin is required.

9. Loan against own Deposit/Govt. Securities: We offer loan against bank's own deposit and Govt. Securities like NSCs,IVP/KVC, etc., for personal use or businesspurpose. A margin of 25%is to be maintained on the principal investment.

10. Personal Clean Loan Facility: We offer personal clean loan facility to officials of Govt. and Public sector undertaking, local bodies, reorganised universities and schools run by Govt./Local bodies with confirmed service of at least 5 years. The loan amount ranging from Rs.50000/- to Rs.1.0 lac can be availed for purchase of consumer durables or for any consumption/personal use or purchase of vehicle, etc.

11. Clean Loan Scheme for Retired Personnel/Pensioners: Who have retired from Central/State Govt. or any PSUand should be drawing his/her pension through our bank. The age of pensioners should not exceed 70 years at the time of applying of loan. The loan upto 10 times the monthly pension subject to maximum of Rs.1.0 lac can be granted for any personal need without collateral. However, guarantee of the family pension nominee or major son of a third party acceptable to the bank is to be obtained.

12. ODP Scheme for Traders/Retailers: Under this scheme credit is available to traders/retail traders who are in businessfor at least 5 years. The loan/limit to the extent of 50%of the property offered as security subject to a maximum of Rs. 15.0 lac. No stock statement/No bills required by the bank.

13. Loan against Rent Receivables: We offer this scheme to land lords/owners of commercial, residential property who have rented their premises to Govt. Deptt./PSUs/Pvt. Ltd. Cos./MNCs/Embassyor any other organization of repute. Loan to the extent of 80%of rent receivable during the period of tenancy or 60 months whichever is lower, less income tax payable and any other local tax/maintenance charges to be paid by tenants. Amount of credit should not exceed 40%of the market value of the property to be mortgaged.

14. ODP Scheme for Contractors: Who are registered and are income tax payee, having minimum three years of experience in his business(Contractorship), credit upto Rs. 25.0 lac can be extended subject to a maximum of 50%of the value of contracts in hand against the mortgage of property valuing at least double the amount of ODPLimit.

15. Festival Loan Scheme: Under festival loan scheme clean loans are granted upto Rs.1.0 lac to meet special expenditure for festival celebration such as furnishing of house/shop/office, consumer goods, personal expenditure.

16. Udyogini Scheme: Under udyogini scheme credit facilities are granted to women entrepreneurs to avail the loans on liberal terms and exclusive catering of credit under direct agriculture activities. Tiny SSI sector, businessenterprises, Retail traders, Professional and self employed, etc.

17. Club Loan Scheme: Under club loan scheme employees of reputed clubs in metropolitan/urban centres are granted credit facility for purchase of consumer items/for personal use.

Further loan applications of Education, Housing, Agriculture, SHGs,SSIhave been simplified and revised for the benefits of borrowers.

18. Golden Jubilee Rural Housing Scheme (GJRHS): Under this scheme, borrower residing in rural/semi urban areas can avail loan (i) upto Rs.5 lac for construction of new house and (ii) Rs.3 lac for repair/upgradation of existing house (iii) Maximum period for repayment is 15 years against mortgage of property or other security such as LIC Policy, Govt. Promissiory Note, share/debentures, gold ornaments or any other security.

19. Swarnjayanti Shahri Rozgar Yojana (SJSRY): To be eligible under this scheme (i) a person with an annual family income of less than Rs. 11859/ as per 1991-92 prices and (ii) should not be defaulter to any nationalized bank & financial institution/Co-op. Bank. The loan is given for any town services requiring special skills. Maximum unit cost Rs. 50000/-.

20. Swaranjayanti Gram Swarozgar Yojana (SGSY): Under this scheme, the persons below the BPLlevel such as rural poor land, land less educated unemployment, rural artisans, disabled handicapped, SHGsconsisting of 10 to 20 members can be benefited. The amount of loan is given as per cost prescribed by NABARD.Repayment of loan in 5 to 9 years.

21. Prime Minister Rozgar Yojana (PMRY): The objective of the scheme is to provide sustained employment to educated unemployed urban youth in micro enterprises. These enterprises will cover manufacturing, service & businessventures. The borrower age should be 18 to 35 years and for SC/ST/OBC/Women/Exserviceman/Physically handicapped/disabled Maximum age 45 years. Loan can be given upto Rs.1 lac for businessand Rs. 2 lac for manufacturing industry. In caseof group maximum Rs. 10 lacs (each member should be individually eligible). The repayment period is 3 to 7 years.

Govt. subsidy in the project is limited to maximum 15%.

22. Differential Rate of Interest (DRI) Scheme: This scheme is to assist poorest of the poor so as to bring them above BPL. The eligibility criterion for allowing loan is as under: (i) Individual whose family income does not exceedsRs.6400/- P.A. in rural areas and Rs. 7200/- p.a. in semi urban areas. (ii) Individual whose land holding does nto exceed 1 acre of irrigated and 2.5 acres of unirrigated land, (iii) SC/ST/Physically handicapped persons/indigent students (iv) Orphanagesand women's home (v) State owned corporation/co-operative societies including State Corporation for SC/STs (vi) Coperative societies, large and adivasis multi-purpose, co-op. societies for tribal areas (LAMPS) (vii) People engaged in cottage and rural industries. Maximum loan upto Rs.6500/- as term or working capital or both for productive purpose, in addition to advance Rs. 5000/- for purchase of artificial limbs/Braille typewriter. Rate of interest 4%p.a. simple.

23. Scheme of Liberation Rehabilitation of Scavengers (SLRS): The main objective of the scheme is to assist eligible families living in urban & Rural areas identified by local bodies by providing alternative, viable trade/occupation to each scavenger & dependents. Bank gives loan to persons who have completed 18 years of age on the date of application Maximum bank loan Rs. 32000/- on a project of Rs.50000/- The scheme covers 50% subsidy with a ceiling of Rs. 10000/.

24. Khadi & Village Industries Commission (KVIC) Margin Money Scheme: KVIC formulated this scheme for accelerated rural industrialization and rural employment generation. Assistance is available for any village industry projects set up in rural areas(except Khadi & Polyvastra projects). Any viable village industry must fulfil the following four stipulations of the scheme i.e. Village Industry, Rural Area, Per Capita Fixed Investment & Own contribution per capita fixed investment, prescribed by KVIC is Rs. 50000/- i.e. by every Rs. 50000/- investment, one job to be created. Loan Limit is Rs.25 lacs, loan can be availed by individual proprietary entrepreneurs’ firms/Trusts/SHGS/ Companies registered under companies act.

CASH CREDIT

Cash credit is a flexible system of lending under which the borrower has the option to withdraw the funds as and when required and to the extent of his needs. Under this arrangement the banker specifies a limit of loan for the customer (known as cash credit limit) up to which the customer is allowed to draw. The cash credit limit is based on the borrower’s need and as agreed with the bank.

Against the limit of cash credit, the borrower is permitted to withdraw as and when he needs money subject to the limit sanctioned.

It is normally sanctioned for a period of one year and secured by the security of some tangible assets or personal guarantee. If the account is running satisfactorily, the limit of cash credit may be renewed by the bank at the end of year. The interest is calculated and charged to the customer’s account.

Cash credit, is one of the types of bank lending against security by way of pledge or / hypothetication of goods. ‘Pledge’ means bailment of goods as security for payment of debt.

Its primary purpose is to put the goods pledged in the possession of the lender. It ensures recovery of loan in caseof failure of the borrower to repay the borrowed amount. In ‘Hypothetication’, goods remain in the possession of the borrower, who binds himself under the agreement to give possession of goods to the banker whenever the banker requires him to do so. So, hypothetication is a device to create a charge over the asset under circumstances in which transfer of possession is either inconvenient or impracticable.

OVERDRAFT Overdraft facility is more or less similar to ‘cash credit’ facility. Overdraft facility is the result of an agreement with the bank by which a current account holder is allowed to draw over and above the credit balance in his/her account. It is a short-period facility.

This facility is made available to current account holders who operate their account through cheques. The customer is permitted to withdraw the amount of overdraft allowed as and when he/she needs it and to repay it through deposits in the account as and when it is convenient to him/her.

Overdraft facility is generally granted by a bank on the basis of a written request by the customer. Sometimes the bank also insists on either a promissory note from the borrower or personal security of the borrower to ensure safety of amount withdrawn by the customer. The interest rate on overdraft is higher than is charged on loan. The following are some of the benefits of cash credits and overdraft:I. Cash credit and overdraft allow flexibility of borrowing, which depends upon the need

of the borrower.

II. There is no necessity of providing security and documentation again and again for

borrowing funds.

III. This mode of borrowing is simple and elastic and meets the short term financial needs

of the business.

DISCOUNT I NG OF BILLS

Apart from sanctioning loans and advances, discounting of bills of exchange by bank is another way of making funds available to the customers. Bills of exchange are negotiable instruments which enable debtors to discharge their obligations to the creditors. Such Bills of exchange arise out of commercial transactions both in inland trade and foreign trade. When the seller of goods has to realise his dues from the buyer at a distant place immediately or after the lapse of the agreed period of time, the bill of exchange facilitates this task with the help of the banking institution.

Banks invest a good percentage of their funds in discounting bills of exchange. Thesebills may be payable on demand or after a stated period.

In discounting a bill, the bank pays the amount to the customer in advance, i.e. before the due date. For this purpose, the bank charges discount on the bill at a specified rate. The bill so discounted is retained by the bank till its due date and is presented to the drawee on the date of maturity. In casethe bill is dishonoured on due date the amount due on bill together with interest and other charges is debited by the bank to the customers account.

PROCEDURE OF GRANTI NG CASH CREDIT, OVERDRAFT AND DISCOUNT I NG BILLS

We have studied in this lesson that banks provide financial assistance to its customers in the form of loans, advances, cash credit, overdraft and through the discounting of bills. The procedure of applying for and sanction of loans and advances differs from bank to bank.

However, the steps which are generally to be taken in all cases are as follows:–

(I) Filling up of loan application form Each bank has separate loan application forms for different categories of borrowers. When you want to borrow money from a bank, you will have to fill up a loan application form available with the bank free of cost.

The loan application form contains different columns to be filled in by the applicant. It includes all information required about the borrower, purpose of loan, nature of facility (cash-credit, overdraft etc) required, period of repayment, nature of security offered, and the financial status of the borrower. A running business limit may be required to furnish additional information in respect of: — Assets and liabilities — Profit and loss for the last 2 to 3 years.

— The names and addresses of three persons (which may include borrowers, suppliers, customers and bankers) for reference purposes.

(ii) Submission of form along with relevant documents The loan application form duly filled in should be submitted to the bank along with the relevant documents.

(iii) Sanctioning of loan The bank scrutinizes the documents submitted and determines the credit worthiness of the applicant. If it is found to be feasible, the loan is sanctioned. If the loan is for Rs 5000 or less, normally the Branch Manager himself can take the decision and sanction the loan. In case the amount of loan is more than Rs. 5000, the application is considered at regional, zonal or head office level, depending on the amount of loan.

(iv) Executing the Agreement When the loan is sanctioned by the bank and the borrower is informed about it, he will have to execute an agreement with the bank regarding terms and condition for the amount of loan raised.

(v) Arrangement of Security for Loan The borrower will now arrange for security against the loan.

These securities may be immovable properties, shares, debentures, fixed deposit receipts, and other documents, like, Kisan Vikas Patra, National Savings Certificate, as per agreement.

When the borrower completes all the formalities, he is allowed to get the amount of loan/advance/ over draft as sanctioned by the bank. In case of ‘discounting of bills’, the bank credits the amount of bill to the customer’s account before the realization of the bill and thus, makes available the fund. In case, the bill is dishonored on due date, the amount due on the bill together with interest and other charges are payable by the party whose bill is discounted.

PENSION PAYMENTS Pensioners of Central and State Governments can open a separate pension account in any of our Branches.

Pensioners are requested to produce the life certificate once in a year (i.e. in the month of November) to enable the Branches to pay pension without interruption/delay.

The pension will be credited by the Branch to the Pensioner's savings or current account during the last four working days of the month. The pension for the month of March will be credited on or after 1st working day of April. The pension will not be paid in cash or through a joint account. Every pensioner is required to submit life/marriage/remarriage/unemployment certificates periodically.

EXEMPTIONS:Exemptions of minimum balance, incidental charges, withdrawal of pension by withdrawal form to the pensioner's dependent are available.

RE MITTANCE Customers may remit funds from one centre to another centre by Demand Draft or Telegraphic Transfer (TT) etc. by paying specified charges as per the Bank's rules.

The customers can utilize the facility of Electronic Funds Transfer (EFT) System operated through RBI for transferring funds to and from Delhi, Kolkata, Chennai, Mumbai, Jaipur, Chandigarh, Kanpur, Patna, Guwahati, Ahemadabad, Bhuvneshwar, Nagpur, Hyderabad, Bangalore and Tiruvanantapuram, Upto Rs.2 crores per remittance.

Demand Drafts, telegraphic and pay orders for Rs.50,000/- and above will be issued by the Banks only by deposit to the Customer's account or against cheques or other instruments tendered by the purchaser and not against cash payment. Similarly such payments for Rs. 50,000/- and above will be made through banking channels and not in cash.

ISSUE OF DUPLICATE DEMAND DRAFT WITHOUT RECEIPT OF NON- PAYMENT ADVICE As directed by the RBI, we will issue duplicate demand draft upto Rs.5000/- on the basis of adequate indemnity and without obtaining Non-Payment Advice from the drawee Branch.

TIME FRAME FOR ISSUE OF DUPLICATE DRAFT As directed by the RBI, we will issue duplicate demand draft to the customer within a fortnight from the receipt of request. For delay in issuing duplicate draft beyond the above stipulated period, we will pay interest at the rate applicable for fixed deposit of corresponding maturity in order to compensate the customer for such delay.

SERVICE S

Services Offered By PSB

1. Policy on collection of cheques payable locally The Customer’s account shall be credited in respect of local cheques deposited at the counters / dropped in drop boxes within the time indicated for local clearing, on the same day when the bank’s account is credited in the clearing house. Each branch would specify its own cut-off time depending upon its working hours and distance from the clearing house. The branch shall permit usageof the shadow credit afforded to the customer accounts immediately after closure of relative return clearing, subject to usual safeguards.

2. Force Majeure The Bank shall not be liable to compensate customer for delayed credit if some unforeseen event (including but not limited to civil commotion , sabotage, lockout, strike or other labour disturbances , accident ,fires, natural disaster or other " Acts of GOD" , war damageto the bank's facilities or of its correspondent bank(s), absenceof the usual means of communication or all types of transportation ,etc) beyond the control of the bank prevents it from performing its obligations within the specified service delivery parameters

3. Outstation Cheques

(i) Time frame for affording customer's Account

Chequesto be collected at State Capital in 7 days, major Metropolitan centers in 10 days and at other centers in 14 days. (ii) Policy of compensation on Delayed collection

The bank will pay interest to its customers on delayed collection as applicable on saving bank deposit for the delayed period beyond the prescribed period i.e 7/10/14 days as the casemay be . Such interest shall be paid without demand from the customers in all types of accounts.

(iii) Procedure for handling the dishonoured chequesor lost in transit

In the event a cheque or an instrument accepted for collection is lost in transit or in clearing processor at the paying bank's branch, the bank shall immediately on coming to know of the loss , bring the same to the notice of account holder so that the account holder can inform the drawer to record stop payment and also take care that cheques, if any, issued by him/ her are not dishonored due to non- credit of the amount of the lost cheque / instruments. The bank would pay interest at saving bank rate if the notice of the cheque / instrument having been lost is given after the maximum prescribed period for the collection of outstation cheques i.e 7/10/14 days, as applicable. Such interest will be paid for the number of days the delay occurred in giving notice to the customer beyond these prescribed 7/10/14 days as applicable.

4. Facility of Immediate credit of cheques sent for collection local and outstation.

The instant credit of outstation / local cheques are permitted only up to Rs.5000/-, subject to usual safeguards as conveyed earlier for permitting such credit, which are as under :

i)Bank should be satisfied about the proper conduct of the account of customer. (ii)The Bank will extend the facility to all individual depositors without making a distinction about their status i.e Saving Bank , Current or Cash credit. iii) The Bank should not lay any separate stipulation for minimum balance for extending the facility. (iv)The facility is also to be allowed to the customers at the Bank’s Extension Counters subject to usual precautions taken by the banks. (v)The handling charges for local cheques and outstation cheques will be as per Service Chargesof the bank. (vi)In casewhere the instrument of face value exceeding Rs. 5,000/- is received for clearing and the proceeds of the instrument are credited to the account, in whatever manner, in advance of the date or actual realization of the account, interest at the stipulated rate (in addition to the usual service charges prescribed by the Bank), shall also be charged for the period for which outlay of funds is involved. (vii)If cheques / instrument for which immediate credit has been afforded is returned unpaid bank shall recover interest at clean overdraft rate for the period bank remained out of funds and recover prescribed cheque returned charges subject to the following:

1) No interest will be charged to the customer for the period between the date of credit of the outstation cheque lodged and its return, unless the bank had remained out of funds on account of withdrawal of funds.

2) Bank will charge interest from the date of return of the cheque till reimbursement of money to the bank.

3) Where the cheque is credited to a Saving Bank Account, no interest will be payable on the amount so credited if the cheque is returned.

4) The proceeds are credited in overdraft / Loan account, interest would be recovered at applicable rate on the amount of returned cheque / instrument .

The salient features of the Bank’s policy with regard to the collection period of outstation cheques and interest payable in caseof delay should be prominently displayed in each branch.

A copy of the complete policy shall be made available by the Branch Manager, if the consumers require the same for reading.

The salient features highlighting the rights of the consumers shall also be displayed on the notice board of each branch of the Banks.

Branches are advised to ensure that the chequesare collected within the given time frame so that bank is not required to pay any penal interest for delayed collection.

Zonal Managers are advised to ensure that each branch under their jurisdiction displays its own cut-off time for acceptance of cheques at the counters / deposited in drop – Boxes for clearing on the same day on the Drop – Box of the Branch / on the Notice Board. BesidesZonal Managers are to monitor and ensure compliance of above in all the branches under their jurisdiction.

5. COLLECTION OF GOVT. DUES The Bank handles collection of various taxes, electricity, telephone bills on behalf of Govt. of India Public undertaking through selected designated Branches, which will be displayed at the Branch. We are collecting Direct Taxes presently through 209 authorized branches with group wise connectivity.

6. EXCHANGE OF SOILED/SLIGH TLY MUTILATED CURRENCY NOTES We freely exchange soiled/slightly mutilated currency notes and certain other types of mutilated currency notes of all denominations.

7. INTEREST ON DEPOSITS For your convenience, the prevailing rates on deposits are displayed prominently at each branch, which are subject to revision from time to time.

8. SERVICE CHARGES We provide various services to customers, for which service charges are levied. The charges are reviewed/revised from time to time.

9. MARKETING & INSURANCE PRODUCTS (i) Non Life Products: We are agent of M/s Bajaj Allianz General Insurance Company and sell all their non-life products through our network of branches across the country. (ii) Life Products: Our bank has tie up arrangement of Life Insurance businesswith M/s Aviva Life Insurance Company India Pvt. Ltd. We are offering their following three products: (a) Life Bonds (b) Easy Life Plus (c) Pension Plus The Customers may consult our branches for more details.

10. NRI ACCOUNT & FOREIGN EXCHANGE FACILIT IES

Our Bank has nine specialized International banking Divisions (IBDs) and 26 other Authorised Branches to handle Foreign Exchange Business.Besidesthis, we have a Global Banking Centre at Connaught Place, New Delhi to provide services to Non-Resident Indians with regard to deposit account.

We have various exclusive deposit schemesfor Non-Resident Indians living abroad as well as returning back to India after their venture abroad.

Theseschemesare:(i) NRE,(Non-Resident External Account) (ii) FCNR(Foreign Currency Non-Resident) (iii) RFC(Resident Foreign Currency) Accounts, available for various durations from 6 months to 3 years as per RBI guidelines from time to time.

FCNRaccount can be opened in US Dollar, GBPound and Euro. The account is maintained in foreign currency and the risk of exchange rate fluctuation is borne by the bank.

The IBDsand authorized branches cater to the needs of exporter and importer clients for various services such as: 1. Providing fund based finance for exports at concessional rate of interest at pre-shipment as well as post-shipment stage.

2. Providing non-fund based facilities i.e. opening of import letter of credit to enable import of raw materials and machinery, issue of bank guarantees, etc.

3. Negotiation of export bills under letter of credit.

4. Collection of export/import documents.

5. Advising of letter of credit with or without adding conformation.

6. Remittance of funds through SWIFT, foreign currency drafts, etc.

7. Issue of Traveler Cheques,foreign currency notes within the framework of exchange control guidelines.

8. The Bank also grants loan against the security of deposits receipts of NRIs. We have a network of correspondent banks acrossthe Globe in almost all the major foreign currencies.

11. OUR SPECIALISED BRANCHES Name and addressesof all our specialized branches are given in Schedule-VII at the last.

12. CHECK LIST REQUIREMEN TS FOR AVAILI NG DIFFERENT CREDIT FACILIT I ES The requirements for availing different credit facilities from the Bank are given in Schedule-V at the last.

13. CREDIT FACILIT IES TO AGRICULTUR ISTS Zamindara Credit Card, KVIC, Financial Assistance against old Tractors & Other consumer facilities for Agriculturists are available at our Rural/Semi Urban Branches.

14. IMPORTANT LOAN SCHEMES OF THE BANK We have the attractive loan schemessuitable to different segment of customers. The details of important loan scheme of our bank are given in Schedule-IV at the last.

15. CONSUMER CREDIT We assist our customers to uplift the standard of their living, you may increaseyour purchasing power by availing consumer credit facilities at all our Branches to purchase Television, VCR,VCP,VCD, DVD, Stereo, Washing Machine, Refrigerator, Air-Conditioner, Microwave Oven, Dish Washer, Cooking Range, Genset, Invertors, Computer, etc., at very low margin of 10%only. An individual can club his/her income with that of his/her spouseto avail higher amount of loan. The group of employeesworking in an Institution/Organization in private/Public Sector undertaking can also avail loan on very attractive terms.

16. HOUSING LOANS

To build your dream house, pleaseavail Housing Loan at attractive rates from our Branches/Housing Finance Branches in selected cities. The list of our Housing Finance branches is given in Schedule-VI at the back.

17.THE WORKING HOURS FOR THE PUBLIC FOR ALL THE BRANCHES / EXTENSION COUNTERS OF THE BANK HAVE BEEN EXTENDED BY ONE & A HALF HOURS EXCEPT SATURDAYS OR ANY OTHER WORKING DAYS WHICH HAVE BEEN DECLARED AS "HALFDAY" THE WORKING HOUR HAVE BEEN EXTEND I NG BY ONE HOUR.

18. THE TIME FOR DISPOSAL OF LOAN PROPOSAL The time frame for disposal of credit proposal is given as under: B.O.Level Z.O. Level (i) Fresh/Enhancement Proposal10 days 10 days (ii) Renewal/Reviewal Proposal 07 days 07 days (iii) Adhoc 05 days 03 days

19. ISSUE OF IDENT I TY CARDS TO CUSTOMERS HAVING CURRENT/CASH CREDIT ACCOUNTS Identity Cards valid for one year are issued to those having Current/Cash Credit Accounts as well as to their authorised representatives at a fee of Rs.100/-.

20. VALUE- DATING OF MAIL/TELEGRAPH IC TRANSFER Credit is given for Mail Transfer within seven days (ten days in the caseof North-Eastern States) from the date of deposit of funds.

Telegraphic Transfers issued from and payable at State Capitals and Centres having population above 12 lakhs will be value-dated from third day.

In caseof delays, Bank will pay interest at the rate applicable on Saving Bank Deposit for the period of delay.

21. PAYMENT OF INTEREST ON DEPOSIT MATURING ON A HOLIDAY When due date of a term deposit happens to be a holiday or a non-businessworking day, then you are paid interest for the intervening holiday/non-businessworking day.

22. CONCESSIONS TO RELIGIOUS, WELFARE, SERVICE, CHARITABLE INSTIT UT I O NS Collection of instruments favouring religious, welfare, service and charitable institutions is done at par. Issue of drafts, pay orders, mail/telegraphic transfers of these institutions is done at par. However, postage is recovered, institutions exempted from payment of Income Tax are only eligible.

23. CONCESSIONS TO DEFENCE PERSONNEL Concessions are extended to Defence Personnels in active service only. Collection of outstation cheques/drafts, etc., as well as issue of drafts, pay-orders, mail-telegraphic transfers in their account is done at par but postage is recovered.

24. CONCESSION TO BLIND, PHYSICALLY HANDICAPPED, DISABLED INDIV I D UALS AND INSTIT U T I O NS SET UP FOR THEIR BENEFIT Institutions set up for the benefit of blind, physically handicapped and disabled individuals are allowed, collection of up-country instruments at par. Similarly, payments made by these institutions to their own beneficiaries by way of drafts, pay orders, mail/telegraphic transfers are allowed, free of charge. However, postage cost is recoverable. Theseinstitutions to be eligible for concessions should be exempted from levy of Income Tax. The individual accounts of the above categories of persons are identified by the Branch Managers at the time of opening the accounts, banking services such as issue of drafts, pay orders, mail/telegraphic transfers are rendered to the debit of the personal account only and not against Cash, Postage expensesare however recovered separately.

25. SENIOR CITIZE NS Additional Interest and Incentives are available for Senior Citizens. The Bank has special schemesfor the Senior Citizens, As of now, the Bank is offering extra rate of interest of 0.50% as applicable on different maturity. They can also avail free facility of collection / remittance of funds upto certain limit, latest details are available with the branches of the Bank.

26. FREE CHEQUE BOOKS For Saving Bank Accounts of individuals' one chequebook of 20 leaves free of charge in a calendar year shall be supplied. A service charge @Rs. 2/- per leaf shall be levied for cheque books supplied over and above the aforesaid limit. Service charges are subject to change without notice.

27. CORRUPT ION FREE SERVICE We will provide all the services and honour the commitment to the clients without payment of any bribe.

28. TRANSFER OF ACCOUNTS IN THE BANK If deposit account is transferred within the bank from one Branch to another and there is continuity in the account, then interest is payable for the transit period as well.

29. WE HAVE 80 FULLY COMPUTER IZE D BRANCHES & 811 PARTIALLY COMPUTERIZED BRANCHES OUT OF TOTAL NO OF 891 BRANCHES. IN ADDIT ION TO ABOVE 7 SERVICE BRANCHES (RCCs) ARE ALSO FULLY COMPUTERIZED.

30. FAIR BANKING PRACTICES We request you as our customers to pleasenote the following duties to enable us to serve you better.

1. Ensure safe custody of cheque book and passbook.

2. Preferably use reverse carbon while writing a cheque.

3. Issue crossed/account payee cheques as far as possible.

4. Check the details of the cheque, namely, date, amount in words and figures, crossing, etc., before issuing it. As far as possible, issue cheques are rounding off the amount to nearest rupee.

5. Not to issue cheque without adequate balance, maintain minimum balance as specified by the Bank.

6. Send cheques and other financial instruments by Registered Post or by courier.

7. Bring passbook while withdrawing cash from Saving Bank account through withdrawal slip.

Get passbook updated from time to time.

8. Use nomination facility in all deposits accounts & locker facility.

9. Note down account numbers, details of FDR,locker numbers, etc., separately.

10. Inform change of address, telephone number etc., to the Branch.

11. Inform loss of demand draft, fixed deposit receipt, cheque leave(s) /book, key of locker, etc., immediately to the Branch.

12. Avail standing instructions facility to repeat transactions.

13. Provide feedback on our service.

14. Pay interest, instalments, locker rent and other dues on time.

15. Avail services such as ATM, EFT,etc., if offered by the branch.

16. Bring any deficiency in services to the notice of the Branch Manager.

17. Not to sign blank cheque(s). So also do not record your specimen signature either on pass book or on cheque book.

18. Not to introduce any person, who is not personally known to you for the purpose of opening account.

19. Not to bribe any staff member, to avail corruption free service.

31. REDRESSAL OF COMPLAIN TS/GRIEVANCES "Customer day" is observed at all the offices of the Bank across the Organisation covering branches, Zonal Offices and Head Office on 15th of every month (next day, if 15th is a holiday or a half day). On this day any customer can meet Senior/Top Executives of the Bank, including Chairman & Managing Director without prior appointment.

In caseof any complaint, the matter may first be brought to the notice of concerned Branch Manager for immediate redressal. If the complaint is not redressed to the satisfaction of the customer, the matter may be taken up with the Zonal Manager.

If the complainant still feels unsatisfied with the response received, he can addresshis complaint to bank's Nodal Officer designated to deal with Customers' Complaints/ Grievances giving full details of the case.

After exhausting all the above machinery/channels, if the customer is still not satisfied, he may write to Chairman & Managing Director of the Bank.

If still not satisfied, he is free to take recourse to the followings: - Office of the Banking Ombudsman located in State Capitals under RBI Ombudsman Scheme, 2006.

- Directorate of Public Grievances, Govt. of India, Cabinet Secretariat, SansadMarg, New Delhi.

- Distt. Consumer Forum, under Consumer Protection Act, 1985,

32. GRIEVANCE REDRESSAL MECHAN ISM, IN RESPECT OF WILLFUL DEFAULTERS The Bank has formed two committees of higher functionaries for redressal of the grievancesof the defaulting borrowers. (i) Before classifying any borrowers as wilful defaulter their loan casewill be reviewed by the committee. The borrowers are then advised the reason for classifying them as wilful defaulter. (ii) The second committee has been formed in respect of Grievance Redressal Mechanism which is headed by CMDand includes two other General Managers. The concerned borrowers are provided a reasonable time of 15 days for making representation against bank's such decision for declaring them wilful defaulters.

PSB e-Funds TRANSFER

1) The Bank has introduced this Intra Bank Funds Transfer facility (within the bank) for the customers of the bank at the networked branches.

2) This is a safe, secure and efficient funds transfer system.

3) SERVICECHARGESFORPSB-eFunds TRANSFER (i) Outward Remittance : Rs.10/- per transaction. (ii) Inward Remittance : NIL

REAL TIME GROSS SETTLEMEN T ( RTGS) 1) The Bank offers its customers instant transfer of funds to other banks (Inter Bank). This is made possible through Real Time GrossSettlement (RTGS)System, which is an online system set up, operated and maintained by Reserve Bank of India to enable funds settlement on realtime basis across banks in the country.

2) The RTGSservice window for customer's transactions is available from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 12.00 noon on Saturdays.

Days

Customer Transaction Interbank Transaction

Monday to Friday 9:00 am to16:30 hours Saturday 9:00 am to12:00 am

9:00 am to18:00 hours 9:00 am to14:00 hours

3) Minimum / maximum amount stipulation for RTGStransactions.

The RTGSsystem is primarily for large value transactions. The minimum amount to be remitted through RTGSis Rs.1lakh. There is no upper ceiling for RTGStransactions.

4) SERVICECHARGESFORRTGS (i) Outward Remittance: Rs. 1 Lac to 5 Lacs Rs5 Lacs and Above

Rs.25/- Per Transaction Rs.50/- Per Transaction

(ii)Inward Remittance: NIL

NATIONAL ELECTRON IC FUNDS TRANSFER (NEFT) 1) RBI has introduced this funds transfer systems called RBI-NEFTSystem.

This is an Inter-bank electronic funds transfer system to facilitate an efficient, secure, economical, reliable and expeditious transfer of funds and clearing in the Banking sector in India.

The account holders with the branch can use the NEFTfacility which is available between all the Cities and the designated branches of Banks in India.

NEFTsettlement takes place 6 times a day during the week days (9.30 am, 10.30 am, 12.00 noon.

1.00 pm, 3.00 pm and 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am and 12.00 noon).

2) No Minimum or Maximum amount stipulation for NEFTtransactions.

3) SERVICECHARGESFORNEFT (i) Outward Remittance : Up to Rs1 Lac Rs1 Lac and Above

Rs.5/- Per Transaction Rs.25/- Per Transaction

(ii) Inward Remittance : NIL

Findings & Recommendations

Findings

 A varied large number of products & services are offered by the Punjab & Sind Bank but some of those are not received/ offered in B.OH-Block mainly due to its location in commercial hub of the city. As such, no agricultural advanceshave been made, not much of customer loans have been given and which is also true about housing loans.

 The awarenessof the products and services on offer is not much to the customers which leads to a constraint in enhancing the Banker – Customer Relationship.

 There is a huge scope of small consumer loans keeping in view a large number of employeesof so many commercial establishments working in the area.

 Most of the staff has been found in rendering services in a very personal manner which was very heartening to note.

Recommendations

 Banker – Customer Relationship could be enhanced through more of interaction with customers in regards to their needs & there by satisfying it by offering the relevant products or services.

 Although a very large number of pamphlets etc. with details about the product & services offered have been printed & distributed but still it has to be seen that they reach customers both existing & prospective and hit in right way to their minds.

 Professional Training should be rendered to the staff to successfully establish a healthy Banker – Customer Relationship and environment within the Bank for good health of the branch as well as the entire Bank & so the entire Banking Sector.

Bibliography

 Google.co.in  Psbindia.com (Punjab & Sind Bank’s Website).  Banking Practisesby N.S.Toor.  Various Circulars/ Circulatory Letters/ Guidelines issued by various Departments of PSB.