FOUNDATIONS OF BANKING COURSE
STUDENT WORK BOOK – MODULE 1
TABLE OF CONTENTS
Sl.No.
1
Chapter
Introduction to FOB course
Page Number
2
Mutual Introduction
7
11
Evolution of Money and Banking
2
3
4
5
6
7
8
Overview of Banking
Business Mathematics
Financial Accounting
Customer Service
Types of Customers
Banker Customer Relationship
Types of Deposits
16
32
44
49
73
80
88
1
Session I - Introduction to the Foundations of Banking course
Welcome to the Foundations of Banking Course Program. We have great pleasure in bringing the
Foundations of Banking course Student Workbook to make learning of banking exciting as well as
relevant.
Background
The Banking Industry requires employees with knowledge of practical aspects of banking and skills
to handle customer requests whereas graduates from colleges come with only theoretical knowledge
of banking. ICICI Bank has designed the Foundations of Banking course to enhance the banking
knowledge and skills of students in undergraduate colleges to bridge the gap between theory and
practice.
Foundations of Banking Course
The Foundations of Banking course has been designed to introduce the students to the practical
aspects of banking.
The course covers the need to know aspects of banking which would be
relevant in day to day operations for non-managerial entry level personnel.
The Foundations of Banking course has a blend of self learning, classroom discussion and activities
to make learning fun and exciting for students. E-learning modules, projects and game based
learning would support the self-learning part. The courseware contains a core module with
approximately 65 hours of classroom facilitation, and 65 hours of self assignments. The e-learning
linked component would comprise of about 165 hours
2
BLENDED COURSE
What is the objective of the course?
The objective of the course is to help you learn not only the “What and Why” of banking but also
the “How”. This prepares you to take up jobs in the banking industry or to handle the banking
transactions effectively in whatever business or function you get into.
Course Structure
The course structure is divided into three sections:
Section 1 – Basics of Banking
Section 2 – Banking Operations
Section 3 - Banking Environment
3
Where do we get the Course Content?
The course content is covered in the book “Banking Principles and Operations” by Mr. M. N.
Gopinath, member of our Academic Council. This book is recommended for the course as it is
keeping with the structure and has been written with the objective of imparting practical
knowledge on banking.
What is the Learning Methodology?
The Student Workbook indicates the recommended reading, e-Learning, assignments, projects and
group work relevant for each topic in addition to “Check your understanding” questions at the end
of each chapter. We have also included some stories and caselets to add to your excitement.
Sources of Knowledge and Learning
4

E-Learning

Books

Websites

Visits

E-learning
Students
can
have
access
to
e-Learning
modules
through
the
website
www.learningmatrixatcampus.co.in. The college administrator needs to send the details of the
students to us for creation of their login ids.
e-Learning modules have been mapped to the course topics. You would be better prepared for the
classroom if you can complete the e-learning module before the topic is taken up in the class.
Activities outside the classroom
Assignments, projects and visits have been suggested to widen the knowledge of the students
enabling them to understand the big picture as well as understand the practical aspects of banking.
Presentation in class
Students are advised to work in groups and prepare on the topics, and present them in the class
room. The role of the faculty will be to facilitate and guide the students in the learning process.
We have included different forms of presentations and group exercises in the workbook. Some of
the group exercises suggested includes:




Presentations
Charts
Scrap Books
Role Plays
5

Case Studies / Caselets


Group Discussion
Games
These exercises help students to learn to work in groups as well as to present before an audience.
Role Plays
Role plays are an exciting way of learning. The students wear different hats – the role of a banker,
customer and observer and apply the concepts that they have learnt. It helps students to practice
customer service behaviors as well as compliance with banking procedures in a safe environment.
Gaming Modules
The gaming modules have been designed for students to acquire learning skills in a fun yet
challenging manner. Students can repeatedly practice until they master the game and get skilled in
the application.
How do we evaluate the students doing the course?
The college assigns weightage for the following in the evaluation process :

e-Learning

Project Presentations

Continuous Evaluation

Final Evaluation
Each e-Learning module has a learning confirmation test – the student has to secure a minimum of
80% to clear the test and complete the module.
MUTUAL INTRODUCTION
6
It is important to connect to people whom we interact with. This fun activity will help you connect
with each other in class and build a bond of trust.
Instructions for students:
Please do write a short introduction about yourself and share it with a friend! Please interview your
friend to know him/her better. Then introduce your friend to the class and he/she will introduce
you.
Make your mutual introduction different – funny/creative/special/touching… First go ahead and
write your story…
7
My Story
My Name
My School
My home town
Here are some ideas …You could use these or have your own creative introduction




Moments that I cherish
Family Life
School Life
College Days
My Dream destination – I would love to travel to
………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………
Ten things that make me happy









My favourites:

Books………………………………………………………………………………………………………

Movies……………………………………………………………………………………………………..
8

Music………………………………………………………………………………………………………

Sports……………………………………………………………………………………………………...

Hobbies……………………………………………………………………………………………………

Colours……………………………………………………………………………………………………
People who are important to me




Best Friend
Most inspiring Teacher
Loving Family member
Inspiring personality ( could be teacher, family, or national leaders)
My passion
…………………………………………………………………………………………………………………..
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
My goals
Goals in my personal life :
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
Goals for a career :
9
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
I would like to be remembered for…
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………
Interesting piece of information, which could be something like..



I hate………….
My secret wish………….
I am scared of…………..
10
EVOLUTION OF MONEY - STUDENT WORKBOOK
Have you wondered how money has evolved over time – from grains, cattle, coins, paper,
plastic to electronic – the journey is exciting. Wouldn’t you like to know about the story of
money and banking?
Objective:
At the end of the session you will be able to explain the evolution of money and banking.
Sub Topic



Evolution of Money
Evolution of Banking
Banking in India
Training sequence
E Learning
Activity
Duration
(in hours)
Evolution of Money and Banking e-learning module to be completed
before the session
Website - www.rbi.org.in/commonman/ in this go to the financial
education section for games and more learning
1
Pre- classroom Assignment-Check RBI website for history of money and banking.
activity
1
Classroom
Activity
1
Presentation
Quiz
Check your understanding & Puzzle
Books- and
Tannon
ChapterMr.
1 M- NIntroduction
Reference book Reference
Banking Principles
OperationsGopinath -page 1 to 7;
Tannon - page 9 to 18; Varshney Chapter 1- Banking system in India. V
1.3 -1.26
CLASSROOM ACTIVITY
11
Form groups by giving your group a name
You are required to present your learning group wise on the e-learning modules and the
RBI website
List the learning from the presentations made by the participants
Quiz Time
Rapid fire questions for your group. So put on your thinking caps and get ready!!
CHECK YOUR UNDERSTANDING
Fill in the blanks
1. The acceptance of any object as money involves the consent of the ___ as well as the ____
2. Coins were widely accepted as money due to the convenience of ________ rather than weighing.
3. Paper currency was discontinued in China due to _________
4. ______________ were accepted as settlement of debts and evolved as “Bank Notes”
5. The main functions of money were ________and ___________ and later evolved into__________
6. Development of _______________ by Italians helped their ascent as Bankers
7.The first banking institution in India, started in the year 1809, was __________
8. The Bank started by the Government of India in the year 1921 was ________. It was later
rechristened ___________ in the year 1955, under an act of Parliament.
9. Fourteen Banks were nationalized in the year 1969 to promote _________ and __________
10. The Government permitted setting up of Banks in the private sector in 1994 to
________________
Indicate whether the following statements are true or false

Money is important only because of its economic value.
12

Cattle represented ownership of wealth and hence were used as a medium of exchange

Money deposited with banks is called intangible money

Banks create money by lending, thereby fueling economic growth

Government can influence the policies of nationalized banks

Coins and currency notes are issued by Reserve Bank of India

New private sector banks have brought in technology and management practices to improve
the banking system in India

The Government’s share in nationalized banks has got diluted since 2000

The Government has brought about an improvement in the functioning of nationalized banks
by introducing the element of competition from new private sector banks

The financial health of the Banking industry in India has improved in the last decade due to
the efforts of RBI
13
Your Crossword Puzzle
1
2
3
4
5
6
7
8
ACROSS
DOWN
3. First people to use paper money
4. Made of gold and silver
5. Value of goods and services7. Origin of Banking (city)
8. Coins and currency notes, when
deposited into accounts with banks,
become
1. Medium of exchange
2. Goddess of warning
6. Chinese used
Notes :
14
15
OVERVIEW OF BANKING - STUDENT WORKBOOK
Objective: To understand the power of banking, the role of banks in the economy, and the
products and services offered by banks.
Sub Topic

Overview of banking

Definition of Banking

Roles of Banks-Banking a Business of Trust

Banking Services and

Products-Banking Channels
Training Sequence
Activity
Duration
(in hours)
E-learning
Overview of Banking e-learning module to be completed before the class 4
Pre
Classroom
Group assignment
6
1. Prepare a scrap book on the assigned topics taking inputs from print
media - cut and paste articles and advertisements from newspapers,
magazines.

Banks contribute to economic growth of a region in their role as
intermediaries

Economy will come to a halt without the payment mechanism of
banks

Allied services offered by banks add value to the Banks and to
customers

Banking is a business of trust
Also use pamphlets / brochures brought out by Banks.
2. Prepare a power point presentation highlighting the key points.
3.Prepare a role play to bring out the essence of your topic
Classroom
Activity
Activity I - Presentation, Role play - Power of Banking
Activity II – Banking is a business of Trust
4
Activity III
– Identify
the from
features
and benefits of banking products
– Draw,
identify
pictures
Activity IV – Check your Understanding
Reference
Banking Principles and Operations by Mr.M N Gopinath
16
CLASSROOM ACTIVITY I
1. Presentation and role play
a) Display the scrap book prepared by your group. Go around the classroom and review the
scrap books of other groups and note down the interesting points. Share the learning with
your group leader.
Group leader to compile the points brought out by the team members.
b) You are now required to present your topic along with your group in the class. (Have you
gone through the presentation tips?). Each student has to participate in the presentation.
List down your learning from the presentations made by other groups.
Points
Ideas
Query (?)
Role Play: Now for some action and fun in the class room
Script a role play to bring out the essence of the topic assigned to your group. Enact the role play in
class.
17
Some tips to the groups for coming up with role plays
Banks as intermediaries
Roles – Banker, depositor, borrower.
(Hints – Sheela gives a loan of Rs. 1 lakh to her friend Mala. After two months Sheela needs the
money urgently, but Mala has invested the money in her business and is able to give back the money
only after a month. Next time Mala comes for a loan, Sheela refuses.)
Scene 2: Sheela deposits money with the Bank and withdraw money at her convenience. Mala
applies to the Bank for a loan. What are the checks that the Bank does before sanctioning the loan?
Each participant in the role play should display emotions as appropriate. Exaggerated reactions can
be used to bring in humour.
Pen down your learning from the role plays
CLASSROOM ACTIVITY II - BANKING IS A BUSINESS OF TRUST
Draw your thoughts
-
Draw a picture/cartoon to show what “Trust” means to you.
18
-
Whom do you trust the most? Why?
Why is Banking called a “Business of Trust”? Discuss
19
-
CLASSROOM ACTIVITY III – IDENTIFY THE FEATURES AND BENEFITS OF
BANKING PRODUCTS AND SERVICES
What is the difference between feature and benefit?
Features and Benefits: A feature is a characteristic of the product. A benefit is
the value of the feature to the customer.
Customers buy products/service for the benefit they offer and not for their
features.
Eg. The feature of a bath soap is that it contains rose essence – the benefit is
the fragrance as well as the freshness it offers.
Eg. The feature of an ATM is that it offers 24X7 access. The benefit is that you
have the convenience to withdraw money any time at any place.
20
Identify the features and benefits of the following products and services
Savings account
CHEQUE BOOK
INTERNET BANKING
ATM
MOBILE BANKING
CUMULATIVE FIXED DEPOSIT
21
Recurring Deposit
22
MONTHLY INTEREST PAYOUT ON FIXED DEPOSIT
23
LIFE INSURANCE
HOME LOAN
24
REMITTANCE FACILITIES FOR NRI CUSTOMERS
25
BUSINESS CREDIT
26
CHECK YOUR UNDERSTANDING :
A. Choose the correct answer(s)
1. The primary activity of Banks
 Accepting deposits from the public
 Lending money
 Investment of money
 All of the above
2. The important roles played by Banks in the economy are
 Intermediaries
 Payment Mechanism
 Financial
Services
 All of the above
3. Customers deposit money with Banks because
 Their money is stored in a safe place
 They get higher returns by way of interest
 They have the option to withdraw the money whenever they require
 Transactions through banks are convenient than handling cash
 All of the above
4. Individuals who have surplus money are unwilling to lend directly to entrepreneurs because
They do not have the expertise to assess the credit worthiness of the borrower
They do not have the capacity to recover the money in case the borrower fails to repay
 They might not be able to recall the loan immediately for their urgent requirements
 All of the above


5. The payment mechanism of Banks is important for the economy because
a) It generates profits for the banks
b) It enables huge volumes of transactions through cheques
c) It enables movement of funds from place to place
d) All of the above
e) Only b and c
27
6. ABC & Co has a current account with First Union Bank Andheri Branch. It has paid salary to its
employees through cheques. Meera has her bank account with First Union Bank, Andheri Branch.
She deposits the salary cheque in her account.
a)
b)
c)
d)
This is a CMS transaction
Meera’s account will be debited as a transfer entry
Meera’s account will be credited as a transfer entry
None of the above
7. Bill of Exchange is a
Document of title to goods
b) Bundle of RR and invoice
c) Instruction to exchange the bill for invoice
a)
8 Ashish lives in Bombay. He needs to remit Rs.1000/- to IGNOU Delhi for obtaining their prospectus.
a)
b)
c)
d)
He
He
He
He
has to go to Delhi and pay cash at IGNOU
can send a cheque from his Bank account at Mumbai
can send a Banker’s cheque payable at Mumbai
can send a Demand draft payable at Delhi
9. Raj is planning to visit various cities in the south for business promotion. He needs money for his
expenses during the month long tour.
a) He should withdraw cash Rs.1 lakh and carry it with him
b) He should have an ATM card and withdraw cash wherever there are ATMs.
c) He should use his debit card at ATMs as well as merchant establishments for his purchases
and expenses
d) He should use his credit card
e) c and d
10. Mr.Viswam has retired from office and has Rs.5 lakhs in hand.
-
He should deposit in a savings account for safety and convenient withdrawal
28
-
He should place a fixed deposit in a bank to earn higher interest
He should invest in shares and earn higher returns
He should have a portfolio of savings, fixed deposits, mutual funds and bonds to increase
returns as well as diversify risk
11. Sharon earns a salary of Rs.40000/- per month. His dream is to buy a car and go for a drive with
family on weekends.
a) He can save regularly every month and build a lump sum in three years to buy a car
b) He can use his credit card to buy a car and repay after three years
c) He can avail a car loan from a Bank and repay in monthly installments
d) He can take a loan from his friends and relatives and give them a drive every weekend.
12. Shekar & Co has a credit limit of Rs.5 lakhs with a Bank against the security of its stock. The
type of loan facility it enjoys is called:
a)
b)
c)
d)
Overdraft
Demand Loan
Cash Credit
Bill Purchase
13. Heera has bought a diamond necklace worth Rs.1 lakh. She wants to keep it safe. She should
a)
b)
c)
d)
Hire a safe deposit locker with a Bank and place the necklace in the locker.
Keep it locked in her Godrej cupboard at home
Keep it in her friend’s locker and share the rent
Wear it all the time so that she has control
14. Sriram would like to have Rs.5 lakhs ready for his daughter’s higher education .His daughter is 6
years old. He earns Rs.40000/- per month and has invested all his surplus funds in buying a home.
-
He should
He should
He should
He should
start a recurring deposit for Rs. 5000/- per month for 10 years
invest in a fixed deposit after 5 years
take a loan after 10 years
sell his house, so he need not save
15. Stanley has a savings account with a Bank. He is always on the move and would like to transact
his account at his convenience. The channels available to him are:


ATM
Phone banking
29



Mobile Banking
Internet Banking
All of the above
B. Indicate whether the following statements are True or False
a) Transfer transactions can take place between branches of a bank without centralized
systems.
b) Clearing can take place only in cities where Reserve Bank offices exist.
c) Recurring Deposits are ideal for salaried people to save regularly
d) Retail loans are given to individuals for their requirements like buying a home, car, vehicle
etc.
e) Multi-city cheques are payable at any branch of the Bank
C. Fill in the blanks
a) Ashok has a savings account in his name with X Bank. His wife Beena also has a savings
account with the same bank branch. He issues a crossed cheque from his account favouring
Beena. Beena deposits the cheque into her account. Bank will treat this transaction as
__________ and will give credit to ______account by debiting ________account.
b) Beena issues a cheque for Rs.1000/- from her savings account to her brother Mitesh. Mitesh
deposits the cheque in his account with Y Bank. Y Bank will collect the funds from X Bank
through_______________________
c) __________will act as clearing house where RBI has a branch and where RBI is not having a
branch, generally _____ or _________ as mutually agreed by banks in that centre will act as
a clearing house.
d) For safety and protection purposes_________ _________ is affixed by the collecting banker.
e) Cheques drawn on a branch in Chennai when deposited by a customer in a Bank in Delhi will
go under _________ clearing.
f) CMS facilitates _________ and ___________ efficiently in order to improve ______________
of a corporate.
30
g) ECS _____________ facilitates large service providers to collect their periodic dues from
users.
h) ECS is operated through _________.
i) ECS _______ is used for making payments of _____amounts in ________volumes.
j) For amounts of higher value (say Rs.1 lakh and above), ________clearing is used.
k) ________________________ risk is the possibility of a loss due to change in the interest rates
in the market
l) _______________________ risk is the possibility that the borrower may not have funds to
repay the loan immediately on demand, even though he is credit worthy
m) Banks have a duty of _________________________ to customers, to maintain confidentiality
of the customer’s accounts.
n) ____________________ and ________________________ are inversely related and Banks
have to find a balance between the two
o) Banks have to ensure that they maintain _____________________ ____________________ in
customer interactions and transactions.
p) Banks earn fee income by selling ________________ Products
q) Banks pay higher interest on _______________ deposits than _________________ deposits
and zero interest on ___________________________
r) De mat accounts maintained by banks are very similar to savings accounts. Whenever an
account holder buys shares, the number of shares will be _____________to his account and
when he sells it, his account will be ________________
s) The amount up to which the credit cardholders can make purchases or withdrawals is called
the ________________and it is fixed according to the ______________ capacity of the person
t) Funds required for acquiring fixed assets are given ________________ which are repaid in
instalments from the profits of the company
31
32
BUSINESS MATHEMATICS - STUDENT WORKBOOK
Objective:
To understand how the concepts of business mathematics are relevant for bankers and customers
Sub Topics:

Basic
Simple and Compound Interest
Fixed and Floating rates of interest

Advanced
Methods of Repayment
Time Value of Money
Bonds
Training sequence
Activity
Duration
(in Hours)
E-learning
Complete the e-learning module on Business Mathematics - basic
3
Classroom
Exercise -Check your understanding
1
Presentation
2
Question for discussion
Reference books Accounting and Finance for Bankers - Macmillan
Would you like to be well prepared on the topic before the classroom session?
33
PART 1: ANSWER THE FOLLOWING
1)
What is the method of calculation of interest payable quarterly?
__________
2)
Customer deposited Rs.10000/- and got Rs.12100/- at the end of two years. What
is the method of calculation of interest if the rate is 10 % p.a.?
__________
3)
At what frequency is the interest compounded in Bank's cumulative deposit plan?
___________
4)
What is the simple interest on a fixed deposit of Rs.100000/- for 12 months at 6
% p.a.?
___________
5)
What is the interest that would be paid every quarter in the above case?
___________
6)
Customer deposited Rs.5000/- on January 1st.He withdrew entire money on Jan
2nd. He deposited again Rs.5000 /- on March 31st .Has he maintained average
quarterly minimum balance of Rs.5000?
___________
7)
What is the average quarterly balance maintained by the customer?
___________
34
8)
What is the rate of interest paid on savings account?
___________
9)
Savings interest is calculated on the basis of
___________
10)
A customer had an overdraft of Rs.15000/- in his current account on April 10th.
He deposited Rs.10000/- in to the account on April 15th, Rs.2000 on April 20th
and Rs2000/- on April 25th. How much amount should he pay with interest on
April 30th to close his overdraft?
___________
PART 2: CALCULATION OF INTEREST - Exercises
1) Gita deposited Rs.1, 00,000/- for a period of 24 months at 7% p.a. under Quarterly Interest
scheme with a Bank. What is the interest amount she will receive every quarter?
2) What is the total interest earned by Gita on the fixed deposit?
3) Sheeba had placed a cumulative fixed deposit of Rs.13, 00,000/- with the Bank on 5th May 2006,
at 8 % interest p.a. find out the maturity value of the deposit that she will receive on 5th May
35
2007?
4) Seetha needs Rs.10, 00,000/- at the end of 5 years .Find the principal she must invest to get this
maturity value, assuming the rate of interest to be 7 % p.a.
5) Arjun had a savings account with a Bank. His transactions in the Bank account for the six months
October 1, 2006 to March 31, 2007 are given below. What is the savings account interest that will be
credited to his account on March 31st?
Date
Oct. 1
Oct. 2
Oct. 5
Oct. 12
Nov. 2
Nov. 3
Nov. 5
Nov. 12
Dec. 1
Dec. 2
Dec. 12
Jan. 9
Jan. 12
Feb. 12
Mar. 12
Transaction
Opening balance
Salary credit
Cash withdrawal
Recurring deposit
Salary credit
Cash withdrawal
Cash withdrawal
Transfer to RD
Salary
Cash withdrawal
Transfer to RD
PF credited
Transfer to RD
Transfer to RD
Transfer to RD
Amount (Rs.)
10000
60000
20000
5000
50000
8000
15000
5000
50000
20000
5000
400000
5000
5000
5000
Hint: Draw up a savings bank account of Arun .The first three transactions are entered to give
you a start. Go ahead and enter all the transactions in Arun's savings account. On which balance
will you pay interest. Check and calculate the interest.
36
Date
Oct 1
Oct 2
Oct 3
Date
Particulars of transactions
By Balance brought forward
By Salary
To cash withdrawal
Particulars
Debit
Credit
60000
20000
Debit
Credit
Balance
10000
70000
50000
Balance
PART 3 - CHECK YOUR UNDERSTANDING
Choose the correct answer (s) :
1. Interest rates on floating rate fixed deposits are





Fixed rate home loans are profitable to customers



floating every year
reset every quarter
fixed for the first year
reset every year
When interest rates are on the increase every year
When interest rates are declining year on year
Vimal has taken a home loan in year 2004 at the rate of 7 % p.a. fixed, repayable in 120
months. The home loan rates have increased to 10 % p.a. in 2007.

The home loan deal is profitable to the Bank
37


The home loan deal is profitable to Vimal
Deepak took a home loan in year 2000 at the rate of 12 % p.a., fixed rate, repayable in 180
months. The interest rate offered by the Bank reduced to 7 % p.a. in 2004 and increased to
10 % p.a. in 2007.
At present, the deal is profitable



To the Bank
To Deepak
Under what circumstances will the home loan deal be profitable to Deepak?
Bank’s rate of interest increases for the remaining period to:





11 %
15 %
12%
Decreases to 8%
Equated monthly instalment is a method of repayment




Where interest is paid every month
Where only Principal is paid every month in equal instalments
The repayment is allocated into Principal and interest every month
The amount paid by the customer every month does not vary
Session II - Advanced Business Maths
Activity
Duration
(in Hours)
E-learning
Complete the e-learning module on Business Mathematics - Advanced
3
Classroom
Exercise
1
Presentation
2
Question for discussion
Additional
Reading
Reference Books - Accounting and Finance for Bankers - Macmillan
38
Read the Amortisation Chart given below and fill in the blanks. Discuss the distinct features
of the EMI scheme.
Enter loan amount
ROI (p.a.)
Term in years
200000
9.00%
1
EMI (monthly rest)
17,490.30
Amortization schedule
Months
Opening
Interest
Principal
Closing
1
2
?
184010
1500
1380
15990
?
16110 167899
3
4
5
6
7
8
9
10
11
12
167899
151668
135316
118840
102241
85518
68669
51694
34591
17360
?
1138
1015
891
767
641
515
?
259
130
16231
16353
?
16599
16723
16849
16975
17103
17231
17360
MATCH THE PAIRS
Part A
1. Yield to maturity
151668
135316
118840
102241
?
68669
51694
34591
17360
?
Part B
1.Interest rate offered on the bond
39
2. Price of the bond
2. Bonds Issued by Government
3. Par value of the bond
3. Coupon /market price *100
4. Current Yield
4. Interest rate is not specified on the bond. Maturity value
is specified
5. Amortisation
5. Rate of interest which equates discounted value of cash
flows to the current market price
6. Deep discount bond
6. Face value of the bond
7. Coupon rate
7. The value that the bondholder will get on redemption
8. Maturity value
8. Present value of future cash flows
9. Cash inflows
9. Annual interest + maturity value
10. Risk free Bonds
10. Repayment of principal every year
A bond certificate picture is given. Identify the various features of the bond certificate







Who is the issuer of this bond?
What is the face value of this bond?
What is the maturity value?
What is the maturity date?
What is the interest rate?
When is the interest paid to the bondholder?
Can this bond be sold in the market?
40
41
CLASS ACTIVITY
Presentation

Participants to form four groups and present on the
modules

Topics will be allotted to groups on the day of presentation. 15 minutes will be given to the
teams for preparation and then to each team to present. After all the teams have presented,
important points can be discussed
learning
from
the
e-learning
Topics can be
-
-
Simple Interest
Compound Interest
Fixed & Floating rates
Methods of repayment
Amortisation
Rescheduling
Discounting
Time Value Of Money
Future Value
Present value
Annuity
Net Present Value
Internal Rate of Return
Examples on each topic to be highlighted by the participants to get a clear understanding of
the subject matter
Summarise your learning from the entire session
Story Time – One grain of rice and then double…
42
When the creator of the game of chess showed his invention to the ruler of the country, the ruler
was so pleased that he gave the inventor the right to name his prize for the invention. The man,
who was very wise, asked the king this: that for the first square of the chess board, he would
receive one grain of rice, two for the second one, four on the third one, and so forth, doubling the
amount each time. The ruler, arithmetically unaware, quickly accepted the inventor's offer, even
getting offended by his perceived notion that the inventor was asking for such a low price, and
ordered the treasurer to count and hand over the rice to the inventor. However, when the treasurer
took more than a week to calculate the amount of rice, the ruler asked him for a reason for his
tardiness. The treasurer then gave him the result of the calculation, and explained that it would be
impossible to give the inventor the reward.
Can you guess why the treasurer said that it would be impossible to give the reward?
The number of grains of rice on the first half of the chessboard is 1 + 2 + 4 + 8 + 16 + 32 + 64 + 128
+ 256 + 512 + 1024 + ... + 2,147,483,648, for a total of 232 − 1 = 4,294,967,295 grains of rice, or
about 100,000 kg of rice, with the mass of one grain of rice taken as 25 mg[2]. This amount is about
1/1,200,000th of total rice production in India per annum (in 2005) [3].
While the number of grains on the first half of the chessboard is large, the amount on the second
half is vastly larger.
The number of grains of rice on the second half of the chessboard is 232 + 233 + 234 ... + 263, for a
total of 264 − 232 grains of rice, or the square of the number of grains on the first half of the board
plus itself. (Indeed, the first square of the second half alone contains more grains than the entire
first half.) On the 64th square of the chessboard alone there would be 263 =
9,223,372,036,854,775,808 grains of rice, or more than two billion times as much on the first half of
the chessboard.
43
On the entire chessboard there would be 264 − 1 = 18,446,744,073,709,551,615 grains of rice,
weighing 461,168,602,000 metric tons.
Moral of the story: Start saving early in life and use the power of compounding to
multiply your money a million times !
44
FINANCIAL ACCOUNTING - STUDENT WORKBOOK
Objective:
At the end of this session, you will be able to understand the basic accounting principles
applied in banking.
Sub Topic







Concepts of Accounting
Double entry book keeping
Types of accounts
Accounting process
Journal and Ledger
Financial Statements-Trial Balance, Profit and Loss statement, Balance Sheet-Adjustment
entries
Accounting Standards
Training sequence
Activity
Duration
(In hours)
E-Learning
Complete the e-learning module on Financial Accounting
4
Pre Classroom
Check your understanding
Classroom
Presentation
Reference Books
Accounting and Finance for Bankers - Macmillan
2
EXERCISE
A. Write the journal entries for the following transactions in Nurul Hassan's books. The first
entry is given here as an example.
Nurul Hassan starts a fresh paneer shop with Rs. 8000 as capital.
Cash A/c
To Capital A/c
Dr. Rs. 8000
Rs.8000
45
He borrows Rs. 2000 from his father-in-law Mr. Ahmed.
He opens a current account with Punjab National Bank (PNB) and deposits Rs. 5000.
He buys a fridge from Vijay Sales Co for Rs. 11000 with a loan of Rs. 10000 from Citi Financials.
For the balance money, he issues a cheque to Vijay Sales Co.
He buys furniture for Rs. 4000 from a carpenter Ramvilas and pays cash to him.
He buys a weighing machine for Rs. 2000 from Kirloskar and issues a cheque for it.
During the first month, he:
a.Purchases a total of 690 kilos of paneer for Rs. 69000.
b.
Sells it for Rs. 86250. Although purchase and sales happens daily, Nurul maintains
only
one set of entries for convenience sake. There is no closing stock at the end of the first
month.
c. He pays cash of Rs. 800 for electricity.
d. He pays Rs. 1500 to Vincent, a helper as salary in cash
46
e. He deposits Rs. 10000 in the bank.
f. He issues a cheque for Rs. 2200 in favour of Citi Financials of which Rs. 2000 is towards
instalment and Rs. 200 is towards interest.
g. He issues a cheque for Rs. 2000 to Nagarajan towards rent.
h. He gives a loan of Rs. 1000 to Prabhu, a friend in cash.
i. He gives a donation of Rs. 100 to Sai Orphanage in cash.
j. He pays cash of Rs. 2000 to his wife, Noor for household expenses.
B. Based on the preceding transactions
1) Post the journal entries in ledger accounts
2) Balance each ledger account.
3) Prepare a Trial Balance.

Prepare the Profit and Loss A/c and Balance Sheet.
CLASSROOM ACTIVITY
47
Presentation

Present on the following topics in the class:

Preparation and relevance of Journal & Ledger

Preparation and relevance of Profit & Loss A/c and balance sheet

Make a note of the important points from the presentation
STORY TIME
Great Waves
In the early days of the Meiji era there lived a well-known wrestler called O-nami, Great Waves.
O-nami was immensly strong and knew the art of wresting. In his private bouts he defeated even his
teacher, but in public was so bashful that his own pupils threw him.
O-nami felt he should go to a Zen master for help. Hakuju, a wandering teacher, was stopping in a
little temple nearby, so O-nami went to see him and told him of his great trouble.
"Great Waves is your name," the teacher advised, "so stay in this temple tonight. Imagine that you
are those billows. You are no longer a wrestler who is afraid. You are those huge waves sweeping
everything before them, swallowing all in their path. Do this and you will be the greatest wrestler in
the land."
The teacher retired. O-nami sat in meditation trying to imagine himself as waves. He thought of
many different things. Then gradualy he turned more and more to the feeling of waves. As the night
advanced the waves became larger and larger. They swept away the flowers in their vases. Even the
Buddha in the shrine was inundated. Before dawn the temple was nothing but the ebb and flow of
an immense sea.
48
In the morning the teacher found O-nami meditating, a faint smile on his face. He patted the
wrestler's shoulder. "Now nothing can disturb you," he said. "You are those waves. You will sweep
everything before you."
The same day O-nami entered the wrestling contests and won. After that, no one in Japan was able
to defeat him.

What is your learning from the above story?

Get creative- Suggest a different title for this story. Can you make it unique, yet relevant to the
story?

What are your strengths? Talk about yourself/your strengths and the qualities that you admire in
others. (You could speak about your winning smile, and the patience of your teacher...)
49
CUSTOMER SERVICE – STUDENT WORKBOOK
Objective:
At the end of this session you will be able:
 To understand the concepts of customer service.
 To practice service attitude and professionalism
 To apply the customer service process through role plays
Sub Topics


Customer Service Concepts
Customer Service Process-Handling Complaints-Quality in Customer Service
Training Schedule
eLearning module Corporate Attire, grooming and etiquette to be completed before the
customer service session.
Activity
Duration
(in
Hours)
E-learning
Mandatory
Customer Service
4
Recommended elearning modules
for additional
inputs
All about waste, Quality and Six Sigma for beginners, Quality
Toolbox, Five S
Pre Classroom
1.Visit to any bank to get the feel of customer service
2.Visit to any service organisation
6
Classroom activity Sharing experiences on customer service
View videos on customer service process and respond.
Practice customer service behaviours in the classroom
5
Presentation on Book Review (Fish ,Fish Tales, Raving Fans,The
Alchemist ,Customer First)
Role Play
Case let
Discussion
Attitude
50
Story Time
Questions on 5S
Reference books
Banking Principles and Operations - Mr M N Gopinath
Interesting books
2. “Lions don’t need to roar”
by D.A.Benton
3. “The Monk who sold his Ferrari”
by Robin Sharma
4. “The Greatness Guide”
by Robin Sharma
5. “Seven Habits of Highly Effective People” by Stephen Covey
6. “Men of Steel”
by VIR Sanghvi
7. “The Alchemist”
by Paulo Coelho
8. “Wise and Otherwise”
by Sudha Murthy
9. “Wings of Fire”
by Abdul Kalam
10. “Who moved my Cheese”
by Spencer Johnson
11. “Jonathan Livingston Seagull”
by Richard Bach
12. “The Present”
by Spencer Johnson
13. “You can Win”
by Shiv Khera
14. “Customer First - A Strategy for Quality Service“ by Dennis
Walker
Have you read these books? Each of these books has made a difference to the lives of many
readers. Share your thoughts about these books with your friends.
51
Nam e
Wise and Otherwise
Wings of Fire
The Alchem ist
Who m oved m y cheese
Jonathan Livingston Seagull
The M onk who sold his Ferrari
The Greatness Guide
M en of Steel
The Present
You can Win
Seven Habits of highly effective people
Author
Sudha M urthy
Abdul Kalam
Paulo Coelho
Spencer Johnson
Richard Bach
Robin Sharm a
Robin Sharm a
Vir Sanghvi
Spencer Johnson
Shiv Kera
Stephen Covey
CLASSROOM ACTIVITY
- Draw the picture of anything that will bring a smile on your face.
For example,
Flower
Ice cream
How happy and contended did you feel when you were able to bring a smile on anyone's
face?
Mention your experience and your feelings below..
-
-
Imagine you are a service provider. How would you bring a smile on the face of your
customer?
52
Form groups in the class to facilitate learning.
-
Recall three different instances when you received
1. Excellent customer service.
2. Good service
3. Poor service
These experiences could relate to any service – for example -.restaurants, airports, hotels,
hospitals, travels, banks etc.
a) Write down what were your needs and expectations when you approached the organization
for service. Also write down what the organization/customer service officer/manager did
which made you feel that the service was excellent, good or bad.
b) Write down any other aspects of the experience, which you think, contributed to your
perception of excellent, good or bad service.
c) Did you share any of these experiences with your friends/ family? Why?
53
Customer Satisfaction results when
Perception of customer service = Expectation
Let us see this through certain examples below
Scenario 1:
You are a busy person and expect quick service wherever you go. You go to a popular restaurant
with your friend for dinner. Your friend tells you that the restaurant is famous for their delicious
north Indian dishes.
You take the menu card on the table and find the following statement on the first page:
“North Indian Dishes will take 20 minutes from the time the order is taken “
What do you think the restaurant is communicating to the customers? Do you think you can complain
when the server takes 20 minutes to bring your order?
Scenario 2:
A signboard, at the passport office, said - “Expected turn around time – one month. For urgent
processing in a week’s time, apply through TATKAL with an additional fee.”
What will you do if you need a passport in ten days? What is the effect of this notice on customer
service?
Scenario 3:
You are a customer service officer at the account-opening desk of a bank branch. The turn around
time (TAT) for activation of a new account is 4 working days but you have a customer demanding
54
that he needs his account to be activated by end of day. He tells you that your sales person had
promised that he could open the account and start operating immediately. You know that it will
take a minimum of 3 days to process the account opening form even on priority. What will you do?
REMEMBER
The basic expectations of a customer are:





Value me, my time, my business
Understand me
Be reliable in delivery
Provide solutions not excuses
Advise me on alternatives and possibilities
While interacting with customers remember the four steps in customer interaction are:




Welcome
Understand
Serve
Close
Situation
Have you experienced waiting at a restaurant, with waiters walking past you without eye contact?
When they act as if you are non-existent, you would either create a noise demanding attention or
walk out.
How do you feel when the waiter looks at you, and nods that he would be coming to you? You are
prepared to wait for ten minutes once your presence has been acknowledged. Eye contact makes
people feel comfortable.
Do you have any such experience of feeling welcome/not welcome in a shop/office? Share your
thoughts. What would you do differently in such a situation?
55
Presentation 1
Each group has to present on any of the books of “FISH”.
Other participants must make a note of the learning from each group.
SMILE
“A smile is a curved line that puts everything straight”
As she entered the elevator, she noticed Bill right behind her. That will save me the trip to his
office, she thought. The car was crowded so they didn't converse, but, when the door opened on
her floor, she turned to Bill and handed her boss her bag, which had a distinct odour emanating
from it. “A gift for you!” It's called a smiling sushi”. As the door closed she heard a loud, “Mary
Jane!”
A few seconds after she was at her desk the phone rang. “Strange gift, Mary Jane.” said Bill with
the hint of a smile in his voice. She told him what she had done on Saturday. ”Stay with it ,Mary
Jane. I don't know what a fish market has to do with First Guarantee, but if you can make me smile
with the day I have ahead, you may be on to something.”
Read on more in the book “FISH” ... what happens next after she hangs up on the phone..
Words that work like magic are:






Good Morning...
Have a nice day...
Have a great day...
Thank you
Please
We understand
56


What can I do for you?
We assure you
PRACTICE YOUR UNDERSTANDING
Activity 1 : Visit to a Bank
Visit a bank and request for information on opening an account. Observe the body language, words
used, attitude and attire of the staff. Observe how they interact with different customers. Write
down how important it is to create a positive impact on clients.
Activity 2 - Practice Self-talk
Listen to your self-talk at different times of the day, when you interact with different people. Are
you positive or negative? Imagine others can hear your self-talk. Would you like them to listen to
your negative talk while you are trying to communicate goodwill through smile and greeting?
Have you heard people barking “Good Morning” without meaning it?
Imagine you are meeting your best friend. Track the self-talk that runs in your mind. Your self-talk
could be “It is great to meet you. I really enjoy spending time with you. I would like to do anything
to make you happy.” Can you practice this self-talk with the first person you meet today? Check
what effect it has on your body language, your smile and the impact on the person whom you
interacted with.
Activity 3 - Eye contact
Practice eye contact with your friends and check if you are able to communicate better. Try
maintaining eye contact when you meet seniors, top professionals. It will increase your confidence
level and create a favourable impact.
Activity 4 - Greeting
Practice wishing your friends “Good Morning”. Check whether your voice conveys cheer and
goodwill. Repeat the exercise again and again till you get the right tone. Practice the tone everyday
and make it a habit.
ROLE PLAY
Group to prepare a role play on a given situation at the bank they observed. Incorporate the above
qualities discussed for customer service to enable a happy customer
E.g. Two customers visit the branch to modify the nomination in their accounts. One customer has
got married recently and wishes to make her spouse the nominee in her account. Your tone should
be cheerful while you assure the customer that the nomination would be altered as per request.
57
The second customer wishes to change the nomination as the nominee has passed away. You need to
alter your tone to respond to the customer’s grief and convey that you would take care to change
the nomination.
If the customer is disturbed, you show concern and care. If the customer is enthusiastic, you reflect
energy and enthusiasm. If the customer is angry, you maintain your poise while reflecting concern in
solving his problem.






How was his query resolved?
What was his reaction?
Was he assisted in time?
Why had he come to the branch for placing the request? Was there an alternate which could
be promoted or customer being educated on?
What was the customer’s reaction at the end of the conversation?
Was the sequence of handling his query appropriate?(Listen-Probe-Understand-Give SolutionAlternative-Educate-Thank)
List down your learning from the role play
You can also enact role plays as administered by the faculty.
58
DISCUSS IN YOUR CLASS:

What are our expectations as customers when we buy a product or service? List them
down

Why is it important for businesses to have satisfied customers? List them down

How can businesses increase their market share and profits by providing excellent
customer service? List them down

What are the behavioural and technical aspects that contribute to good customer
service? List them down
EXERCISE
Recall any incident where you experienced bad service. What did you do? Did you go up to the
manager and complain or did you just walk away deciding never to return?
59
CUSTOMER SERVICE
ROLE PLAY ACTIVITY
60
INSTRUCTIONS FOR STUDENTS PLAYING THE ROLE OF CUSTOMERS:
You will enjoy playing the role of a customer because “Customer is the king” in any service
organization. You can express your banking requirements and the banker has to satisfy your needs.
Your objectives in this role play:

Experience how a customer feels when his banking needs are met/ not met.
Now I understand how
anxious a customer
would be when a debit
card is lost

Give opportunity to the banker to practice customer service behaviours
Should I bowl a
googly or a full
toss? I need to give
him batting
practice…
61
Preparation for the role play

Study the background information about the customer, jot down the behaviours appropriate
to your character
o Eg., Senior citizen – Anxious, careful, systematic, talk in detail about a problem
o Businessman – In a hurry, expect quick service, assertive , demand good service etc

Jot down the questions that you need to ask the banker based on the given scenario.
Enacting the role play





Behave like a customer appropriate to the given situation
Ask appropriate questions and respond to the banker’s questions
You could bring in subtle humour but don’t overact
You should give the banker opportunity to practice customer service skills
Feel free to make up an answer to take the act forward
62
INSTRUCTIONS FOR STUDENTS PLAYING THE ROLE OF BANK OFFICIALS:
Good service is not just smiling at customers
Good service is getting the customers to smile at you

The purpose of this role-play is to provide you with the practice of interacting with the
customers who come to the bank.

Firstly welcome the customer as your welcome a guest at home

Listen to the customer and understand the customer’s needs.

Then formulate the strategy that you will use to handle the customer.
-What are the needs of the customer?
- What additional information will you need to uncover the needs?
- What information do you need to resolve the customer’s issue?
- What is the best possible solution that you can give the customer?
- Is the customer satisfied with your service?

If the customer asks you questions for which you do not have background information, feel
free to make up answers that are consistent with the role-play situation.
63
INSTRUCTIONS FOR THE OBSERVER:

Observe the actions and reactions of the Bank officer when the customer approaches; does
the officer establish eye contact, does he smile and greet appropriately?

What is the expression of the Bank officer while listening to the customer's issue?

How does the Bank officer handle the customer's complaint?

Does the Bank officer successfully satisfy the customer query?

Note down meticulously on the observer’s sheet all the details of the interaction, the
feelings, expressions etc.

As an observer you need to understand the “Customer Interaction Cycle”. Refer the recap
session.
64
OBSERVER’S SHEET
Welcome
1. Eye contact: Did the Bank officer maintain eye contact?
2. Smile: Did the Bank officer smile?
3. Greet: Did the Bank officer greet the customer?
4. Offer help: Did the Bank officer offer to help the customer?
Understand
5. Listen: Did the Bank officer interrupt the customer when the customer was talking about his
issues?
6. Acknowledge: Did the Bank officer acknowledge all the facts & feelings displayed by the
customer when he was explaining his query
7. Probe for more: Was the Bank officer able to obtain more relevant information from the
customer by asking more questions?
8. Confirm understanding: Once the Bank officer has received all the information, was he able
to confirm the understanding of the problem with the customer?
Serve
9. Provide solution: Was the Bank officer able to arrive at a solution & inform the customer of
the same?
10. Activate resolution: Was the Bank officer able to start the process of resolving the
complaint?
11. Confirm satisfaction: Did the Bank officer confirm with the customer the satisfaction
regarding the resolution of the complaint?
Close
12. Propose next step: Did the Bank officer inform the customer about the steps involved in the
resolution of the complaint?
13. Offer further resistance: Did the Bank officer offer further assistance to the customer?
65
14. Thank: Did the Bank officer thank the customer after the interaction?
FEEDBACK FROM THE OBSERVER AND DISCUSSION WITHIN THE GROUP
Observers are requested to share their feedback with the banker and customer.




Ask the bank official
How comfortable were you in resolving the customer's query?
What are the things that you did well while handling the customer?
What are the things that you feel you could have done more effectively?

Ask the Customer


What are the things that you feel the Bank officer did well while handling your query?
What are the things that you feel the Bank officer could have done more effectively while
dealing with you?
How would you rate the service of the bank officer – Excellent/Good/Average/Bad?
How did you feel while the bank officer interacted with you?


OUR LEARNING FROM THE ROLE PLAY
66
Reflect on the experience. What did you learn? What are your areas of improvement? Jot
down your learning from the role play
Discuss the learning with the entire class.
Students can write your own role play scripts and practice again and again to improve
customer service skills.
67
Role Play Scenarios – Student Notes
Scenario 1
Ms.MoneyBag says “give me more interest”
1. Ms.Moneybag is a finance executive with Mehta and Co.,
2. She visits the bank branch of ICICI Bank to inquire about placing a fixed deposit with the
Bank.
3. She already has an existing savings account with the bank.
4. She wants to place a fixed deposit of Rs.40000/- for 5 years and is interested in getting a
high return.
5. Her mother has advised her to place the deposit in a cooperative bank as they offer higher
rate of interest.
Hints for Customer: Make enquiries regarding rate of return, type of fixed deposit, nomination
facility, safety, money to be withdrawn incase of emergency
Hints for Banker: Be prepared with information about fixed deposits, interest rates, returns at
compounded rates etc. Build a rapport with the customer, offer the best option and convince the
customer to place the deposit with your bank quoting safety of investment.
68
Scenario 2
“I would like to save before I spend “, says Mr.Savesmart






Mr.Savesmart is a young executive with a software company in Mumbai
He is earning Rs.25000/- per month.
He visits the branch to deposit his first salary cheque into his savings account.
He wants to take a demand draft for Rs.10000/- favouring his mother payable at Chennai
He inquires about the deposit schemes in the branch
He estimates that he would need to send Rs.10000 every month to his mother and spend
another Rs.5000/- towards his monthly expenses
Hints for the customer: - Express your anxiety whether your money would be safe, whether you can
commit to saving Rs.5000/- per month, can the bank automatically transfer from savings to RD
every month ?, What is the penalty if the deposit is discontinued, can you withdraw the money in an
emergency etc.?
Hint for the banker: Read up the provisions of recurring deposit and check the rates of interest from
the website. See if you can calculate the maturity value for the RD to attract the customer. Try and
build a rapport with the customer by using your customer service skills.
69

Scenario 3
“I want someone to listen to me “says Mr.Careful








Mr.Careful is a senior citizen having an E or S account with his wife Mrs.Kind at the Main
branch.
He visits the branch for a cash withdrawal of Rs.10000/- from his account.
He wants denominations of 100s, 50s and 10s.
The cashier offers him one section of 100 rupee notes – Mr.Careful is upset and demands
smaller denomination as he has to pay the labourers who are working on renovation of
his house.
Mr.Careful is already upset that he had to wait for half an hour before he was called for
cash payment – he is in a hurry to reach home by lunch
He needs to pay the weekly wages to the labourers by evening.
He is expecting his daughter, son-in-law and grandchildren from abroad next month and
he is anxious to complete renovation work within the next week.
Mr.Careful shares that he is also the secretary of his housing colony and most of his
neighbours also dislike visiting banks because they are crowded.
Hints for the customer – Just go on and on about all the problems that a senior citizen could have –
including health issues, attitudes of youngsters etc( remember any comments from your grand
parents/ elderly neighbours?)
Hints for the Banker – How will you pacify the customer, build trust and resolve his requirement to
the best of your ability. What other products can you offer, references, businesses can you get
through Mr.Careful?
70

Scenario 4
“I have got married recently – Delete my sister and add my wife’s name to the account” says
Mr.Handsome.
Mr.Handsome has a savings account with the Bank jointly with his sister Ms.Intelligent to be
operated by either or survivor. He has got married recently and wants to delete his sister’s name
and add his wife Ms.Beautiful’s name in the account. He wants to get this done without the
knowledge of his sister, so he visits the bank alongwith his wife. He had got Rs.3 lakhs in his
account which he claims is totally from his salary savings. He would like to place a fixed deposit
of Rs.2 lakhs for 2 years. As per bank’s procedures, Ms.Intelligent’s signature is required for
deletion of her name
Hints for customer: Try to get the Bank to agree to your request to delete your sister’s name – try to
prove that it is your money and convince the banker
Hints for the banker: Check out the topic types of customers to understand the provisions of an E or
S account. Be convincing in your reply to the customer, while maintaining good rapport.
71
ATTITUDE:
“The most significant change in a person's life is a change of attitude.
Right attitudes produce right actions “
“You can't always change your situation,
but you can always change your attitude “
“Ability is what you're capable of doing.
Motivation determines what you do.
Attitude determines how well you do it “
“If a man empties his purse in his head, no one can take it away from him.
An investment in knowledge always pays the best interest”
“Challenge each problem you face with purposeful thought and determined action.
Resolve that 'every' situation you encounter will make you better, stronger,
wiser, more skilful and more loving”
“There is a little difference in people,
but that little difference makes a big difference.
That little difference is attitude.
The big difference is whether it is positive or negative”
“A happy person is not a person in a certain set of circumstances,
but rather a person with a certain set of attitudes”
STORY TIME
72
One day, a poor boy who was selling goods from door to door to pay his way through school, found
he had only one thin dime left, and he was hungry. He decided he would ask for a meal at the next
house.
However, he lost his nerve when a lovely young woman opened the door. Instead of a meal he asked
for a glass of water. She thought he looked hungry so brought him a large glass of milk He drank it
slowly, and then asked, "How much do I owe you?"
"You don't owe me anything," she replied "Mother has taught us never to accept payment for
kindness."
He said, "Then I thank you from my heart."
As Howard Kelly left that house, he not only felt stronger physically but his faith in God and
man was strong also. He had been ready to give up and quit.
Years later that young woman became critically ill. The local doctors were baffled. They finally
sent her to the big city, where they called in specialists to study her rare disease. Dr. Howard Kelly
was called in for the consultation.
When he heard the name of the town she came from, a strange light filled his eyes. Immediately he
rose and went down the hall of the hospital to her room. Dressed in his doctor's gown he went in to
see her. He recognized her at once. He went back to the consultation room determined to do his
best to save her life. From that day he gave special attention to the case.
After a long struggle, the battle was won. Dr. Kelly requested the business office to pass the final
bill to him for approval. He looked at it, then wrote something on the edge and the bill was sent to
her room.
She feared to open it, for she was sure it would take the rest of her life to pay for it all. Finally, she
looked, and something caught her attention on the side as she read these words.
“Paid in full; with one glass of milk.” (Signed) Dr. Howard Kelly.
Tears of joy flooded her eyes as her happy heart prayed: "Thank You GOD, that your love has spread
abroad through human hearts and hands."
TYPES OF CUSTOMERS- STUDENT WORKBOOK
73
Objective:
At the end of this session you will be able to
Explain the various modes of operations by different types of customers,
The importance of the regulations to protect the customer's as well as the bank's interest
Sub Topics:



Introduction
Modes of Operation
Individuals – Proprietorship – Partnership - Joint stock Company - Trusts, Societies, ClubsGovernment bodies-others
Training Sequence
Activity
Duration
(in hours)
E-learning
Types of Customers - Part I and II
8
Pre Classroom
1.Groups to script and enact role plays for different types of 1
individual customers
2. Prepare a chart on the mode of operation of non individual
customers
Classroom
Presentation or Role play
2
Discussion
Role Play
Reference Books
Banking Principles and Operations by Mr. M.N.Gopinath
Types of Accounts for customers
Single Account
74
Mandate holder
Nomination
Joint Account
Mode of operation
Special Instructions
Minor's
Mode of operation
Illiterate, visual and hearing challenged, aged
Mode of operation
Executor and Administrator
Hindu Undivided Family
Proprietorship
Partnership
Joint Stock Companies
Mode of operation
Official Liquidator
Trusts
Societies / Associations
Clubs
Self Help Groups
PRESENTATION OR ROLE PLAY
Role plays:
You can enact role plays to bring out the emotions of customers as well as the duty of the banker to
handle the requests with courtesy. The banker also needs to comply with regulations to protect the
Bank's as well as customer's interests.
CASELET
75
Read the case-lets given below and discuss the implications. You can enact these case-lets as role
plays or script your own role plays.
Caselet 1
Consider the following scenario:
Sudhir has opened a savings account in his name. He has deposited Rs. 5 lakhs in the account. He is
planning to go abroad to attend a conference.
Sudhir (to his wife Sushma): “Sushma, please go to the bank and withdraw Rs. 1, 00,000. Here is
the cheque. Also, please get a statement of my account.”
Sushma goes to the bank and presents the cheque to the Customer Service Officer (CSO).
CSO: “Madam, can you please get this cheque signed?”
Sushma (takes a look at the cheque): “Oh God! Sudhir has forgotten to sign the cheque. It is okay. I
am his wife. You can make the payment to me. I will sign it now. I am also the nominee in this
account.”
CSO (smiling politely): “Sorry Madam. This is a single account in the name of Sudhir. We need the
customer’s signature to debit his account and pay cash.”
Sushma (annoyed): “Sudhir is always forgetful. Give me a statement of his account.”
CSO: “Madam, can you please get a request signed by Mr Sudhir? We will issue a statement on
receiving his request or he can also place a request with the call centre.”
Sushma (over the phone): “Sudhir, can you please come down to the bank, sign the cheque and
take cash? It is all yours. Thank you.”
Discuss the caselet 1. What were the banking transactions, queries that the customer’s wife had come for?
2. Do you think the Bank was right in refusing her requests? What was the risk to the bank if they
had acceded to the request?
3. How effective was the CSO in handling the service denial? (Relate to the customer service
chapter done earlier)
Caselet 2
Sudhir opens a joint account with Sushma with the mode of operation being Either or Survivor (E or
S means either of them can sign or withdraw cash).
Sudhir (to the Customer Service Manager (CSM)): “Hi! I have just returned from my US trip. I want
to place a fixed deposit of Rs. 8 lakhs from my account. Here is the account number.”
CSM: “Mr Sudhir, the balance in your account is Rs. 7 lakhs. What amount would you like to place
76
as deposit?”
Sudhir (shocked): “What? I had remitted Rs. 10 lakhs into the account last month. I had issued a
cheque for Rs. 2 lakhs, so I must have Rs. 8 lakhs in my account.”
CSM (politely): “Yes Mr Sudhir. There is a credit of Rs. 10 lakhs on April 2nd. There is also a
withdrawal of Rs. 1 lakhs on April 12th.”
Sudhir: “I would like to know how you paid the money without my signature. It is my money.”
CSM (after checking the transaction): “Mr Sudhir, the cheque has been signed by your wife, Mrs
Sushma. The mode of operation in the account is Either or Survivor (E or S).”
Sudhir (calling from his mobile): “Sushma, have you withdrawn Rs. 1 lakh from the bank?”
Sushma: “Yes. The service in the bank is really good.”
Sudhir (getting angry): “What did you do with the money?”
Sushma (in an excited voice): “It is a surprise for your birthday. I will show you when you come
home.”
Seething with anger, Sudhir returns home.
Sushma: “Here is the diamond necklace I gifted myself for your birthday. Isn’t it beautiful?”
The next day, Sudhir goes to the bank.
Sudhir: “I would like to delete the second name from the account.”
CSM: “Mr Sudhir, deletion of the name can be done if both of you sign the request for deletion.”
Sudhir: “Okay. Close this account. I will open a fresh account.”
CSM: “The closure request should also be signed by both the account holders.”
Sudhir: “It is an E or S account, so, can’t I give instructions?”
CSM: “The E or S mode is only for normal transactions in the account. We require the signatures of
all the applicants for instructions such as addition, deletion of names, change of nomination, and
closure of accounts.”
Sudhir: “In that case, I will give a letter to stop my wife from operating the account.”
CSM: “Mr Sudhir, we will take this instruction, but after you place the request, the account can be
operated only by both of you jointly.”
Sudhir: “You mean I cannot operate the account singly even if I want to?”
CSM: “If one of the account holders requests for stopping operations in the account by the other,
the account becomes operable jointly.”

Each group to enact the role plays as per guidance from the leader on the topics
Individuals
1. Single or Joint Account
77
2. Minors
3. Illiterates, sick, old customers
Group 1 - Role play of a family that has a minor, illiterate servant, aged persons etc. Show a bank
scenario where these people come to open an account and the branch official is giving the
information about account operation to them
Hint – Situation: One participant will enact as Mr. Kisan Ramchandra Bhogale, an illiterate who
walks into your branch (other participant as the banker) at your desk and wants to open an account.
Think of the possible type of questions he might ask. His gestures, voice and understanding level
needs to be kept in mind while enacting the role play. Try and make it a fun and learning activity
Similar kind of situation can be generated for a minor, senior citizen etc.
Role play should highlight the roles in terms of




Documentation
Product information
Type of account offered
Facilities , mode of operation
Non individuals
1. Sole Proprietorships
2. HUF
3. Partnership
4. Joint Stock Companies
5. Trust, Association, Societies and Clubs (TASC)
Role play should highlight the roles in terms of




Documentation
Product information
Type of account offered
Facilities , mode of operation
DISCUSSION
Write down your response to the questions given below and discuss in the class

What is the importance of the regulations governing the mode of operations of bank
78
accounts by different types of customers?
PLAN while others are playing.
STUDY while others are sleeping.
DECIDE while others are delaying.
PREPARE while others are daydreaming.
BEGIN while others are procrastinating.
WORK while others are wishing.
SAVE while others are wasting.
LISTEN while others are talking.
SMILE while others are frowning.
COMMEND while others are criticizing.
PERSIST while others are quitting
And thus, WIN while others are losing.
15. H
o
w
d
o
e
s
a
d
h
e
r
e
n
c
e
t
o
t
he regulations protect the bank's and customers' interest?

Can a banker deviate from the rules to satisfy a customer request?
Good to know…
79
80
BANKER CUSTOMER RELATIONSHIP - STUDENT WORKBOOK
Objective:
This session will enable you to
Explain the rights, duties and responsibilities of bankers
Identify the different roles played by the banker while offering different products and services
Sub topics:



Definition of a customer
Relationship between banker and customer
Rights and obligations of Banker
Training Sequence
Activity
Duration
(in Hours)
E-learning
Banker Customer Relationship
2
Classroom Activity
Case-let
2
Match the following
Reference: “Banking Principles and Operations” by Mr.M.N.Gopinath
CLASSROOM ACTIVITY
Can you list down some products and services offered by banks where the relationship is in the
nature of:

Debtor – Creditor

Pledgee – Pledgor

Agent – Principal

Agent of Third Parties

Lessor – Lessee
81

Advisor – Advisee
Discuss and list down what is the relationship between the banker and the customer in the following
cases:

Sheela places a fixed deposit with the Bank.

Bank has given car loan to Naresh.

Sriram has deposited a cheque for collection.

Sheela has bought insurance from the bank.

Bank has sold Government of India Bonds to Sri.Viswanathan.

Bank has given a home loan to the Rajeshkumar.

Shridhar has borrowed money for business by pledging his securities with the bank.

Srilekha has taken a locker in the bank for the safekeeping of her jewels.
Write a story:
The Banker is a debtor when he accepts deposits from customers. How is this different from
normal debtor – creditor relationship? Can you think of a humorous story to bring out the
difference?
82
Case-let I
Answer the questions individually and then discuss the issues and implications for the Banker with
your group members.
1. Sudhakar opens a savings account with the bank in his single name, Mrs. Sudhakar calls up
the branch to enquire the balance in his account. She insists that she can answer all the
verification queries about her husband and that she is handling his account. She threatens to
get the account closed if the bank does not give her the information.
Can the bank officer give the information? State the reasons for your answer.
2. Mr. Sasikanth has guaranteed a loan sanctioned by the Bank to his friend Mr. Sashidhar. Mr.
Sashidhar does not maintain his accounts properly and has not been able to honour the
monthly repayement for the past 2 months. Mr. Sasikanth visits the Bank to enquire about
the balance in the account of Mr. Sashidhar.
Can the Bank give the information? State reasons

Mr. Ramachandran has been maintaining a savings account and a current account with your
bank for the past 10 years. He has approached ABC Bank for an overdraft limit for a new
business. ABC Bank has written to you asking for the credit worthiness of Mr. Ramachandran.
Mr. Ramachandran had already mentioned to you that he is approaching the other bank for
loans.
Can you share the account information of Mr. Ramachandran with ABC Bank?

Mr. Seetharaman had a savings account with your branch which he had closed one month
83
back. One of your valued customers Mr. Dhandapani requests for information on Mr.
Seetharaman's account. He tells you that he is considering a marriage proposal for his
daughter with Mr. Seetharaman's son and your inputs would be very important in finalising
the marriage. Mr.Dhandapani has a relationship of Rs.30 lakhs with you and has introduced
several customers to the Bank. You check Mr.Seetharaman's account and find that he had not
maintained the minimum balance for the last one year. There were also numbers of cheque
bounces in his account. What would you do now? Your colleague suggests that since Mr.
Seetharaman has closed his account, the Bank has no relationship with him , hence you can
give the details to Mr.Dhandapani.
Discuss in your group how each of the above situations is different and what is the Bank's duty in
each case?
Case-let II

Ms. Sitalakshmi has a loan account with the Bank where the interest payment is overdue for
three months. She visits the Bank along with her sister to operate her locker and
inadvertently leaves a bag containing gold jewellery on the Branch Manager's table. Can the
Branch Manager retain the jewels till the interest is regularised? Why?
16. Bank has given a jewel loan to Mr.Rajappa against pledge of his wife's jewellery valued at
Rs.1 lakh. Rajappa has defaulted in repayment of the loan. Does the bank have a lien on the
jewels?
84

Sujitha has a fixed deposit in the Bank for Rs. 10 lakhs in the joint names of herself and her
husband Kumar. Kumar has borrowed Rs.4 lakhs from the Bank as personal loan and has
defaulted in payment of EMI for two months. Can the Bank set off the fixed deposits of
Sujitha against the loan of Mr. Kumar?

Sajid has a fixed deposit of Rs.1 lakh and a savings account balance of Rs.10, 000/- in the
Chennai main branch of ABC Bank. He has outstanding dues in his credit card to the amount
of Rs.50000/- due beyond 90 days and the Bank has not been able to collect the repayment
from him. The Bank part closes the fixed deposit and settles the credit card outstanding
under notice to Sajid. Sajid claims that he had taken his credit card from a different
department and they have no right to take money from his balance in a different branch.
Please comment

Lakshmi enterprises has an overdraft limit with the Bank for Rs.50000/-. The current
outstanding amount in the overdraft account has reached Rs. 75000/- debit balance and the
proprietor Mr. Lakshmikanth has been asking for extension of time to regularise the account.
You find out that Mr. Lakshmikanth has a fixed deposit in his name for Rs. 15000/- and a
fixed deposit in the name of his son Karthik for Rs. 2 lakhs. Can the Bank manager set off any
of the fixed deposits against the overdraft amount? Why?
Discuss the Case-let in your group. What are the rights available to a banker for recovering
outstanding loan amounts from a customer? What are the exceptions to this right? List them
down
85
List down your points for discussion
CHECK YOUR UNDERSTANDING
Match the following:
A - Bank
B - Relationship customer
1
Fiduciary Agent
a Recipient
2
Agent of Depository
b
3
Advisor
c Principal
4
5
General Lien
Right to set off
d
Right to retain any property of the debtor
Adjust the credit balance & debit Balance
e Customer of Depository
86
STORY TIME:
Sairam, the customer service officer at the Kanchi branch of ABC Bank was very busy that Monday
morning, handling cash receipts and payments. He had joined the bank a week back and everything
was new to him. He had been a class topper in B.Com but that didn’t seem to help him in counting
cash, handling irate customers as well as cross sell. Mr.Nagalingam, a HNI customer, walks in at that
moment. Mr.Nagalingam is six foot tall, well built, with a tough face highlighted by his bushy
eyebrows and big moustache.
Mr.Nagalingam: (In a booming voice) Hi, young man, where is your branch manager gone?
Sairam (slightly scared, in a timid voice) Sir, he has gone out to meet a customer.
Mr.Nagalingam (looking around) is there no body else?
Sairam (thinking…he looks like a movie villain) No Sir, What do you want?
Mr.Nagalingam: I want to know the balance in Lakshmi’s savings account
Sairam: (slightly relieved, politely) Who is Lakshmi sir? Can I have the account number?
Mr.Nagalingam: (angry) What! You dare to speak my wife’s name. Do you know who I am? I am the
panchayat president here.
Sairam: (scared) Sorry sir, can I have the account number?
Mr.Nagalingam: (Roughly) You don’t know the account numbers of important customers? You expect
us to remember the numbers?
Sairam: (backing out) Sorry Sir, I have just joined a week back. I do not know.
Mr.Nagalingam: Ok. Here is the number. Tell me the balance quickly.
Sairam: (checking the account number in the system, in a firm voice): Sorry Sir, this account is in
the name of Lakshmi. Your name is not in the account. So I cannot tell you the balance.
Mr.Nagalingam: (raising his voice) How dare you speak to me like this? I am the one who is putting
money in her account. Call your branch manager. I will get you transferred from here. What is
happening in this branch?
Sairam (in a shaking voice): As per Banking Regulation Act, we cannot share the balance of a
customer with another person. As a banker, I cannot violate the secrecy of a customer.
Mr.Nagalingam: (Pushing the table, shaking his fist) What! Is my wife keeping money secretly
without my knowledge? And you cannot tell ME her balance! I will take you all to court. I will see
that all the people in my village close their accounts with your bank
87
Learning
What went wrong in this interaction? Would you have acted differently if you were the service
officer?
88
TYPES OF DEPOSITS - STUDENT WORKBOOK
Objective:
To explain the features of different types of deposits and highlight the benefits to customers
Sub Topic:
Demand and Term Deposits
Two in one accounts
Recurring deposits
Training Schedule:
Activity
Duration
(in hours)
E learning
Deposits and Accounts
2
Pre classroom
Check websites and brochures of different banks Compare the
savings bank account and fixed deposit products offered by Banks
List down the products and services offered by ICICI Bank ( check
from ICICI Bank website)
2
Classroom
Charts
2
Presentation
Fun game – Act dumb!
Reference Books Banking Principles and Operations by Mr.M.N.Gopinath
CLASSROOM ACTIVITY
Charts
89
Prepare a comparative chart for the following and present

Demand and Term Deposits

Two in one accounts

Recurring deposits
List down your learning from the charts presented

What are the latest interest rates offered by ICICI bank on term deposits? Check on website
www.icicibank.com? What is b2 savings account? Click on b2 to hear what it is all about.

What are the best rates offered for particular period available in the market? Compare with
other banks like SBI, HDFC, Axis, Canara Bank. Prepare a comparative chart below. Check out
the RBI website path www.rbi.org.in/common man>Useful Information>Financial agents/
Banks in India.
Presentation
As you have visited the branches to know about fixed deposit, highlight the various points of
difference you observed in different banks through a presentation/ role play. Your group could have
bankers from two different banks that try and sell their product to the customer.
90
Discussion
After forming of groups discuss on the below points and present
1. How do banks differentiate their offering to attract customers?
2. Analyze the difference in interest rates on fixed deposits offered by Banks?
3. Banks offering lower interest rate are also able to attract and retain customers. How?
Form groups and discuss on the topics given below: (What are the benefits to customers and to
the bank)





Saving account
Current account
Term deposit
2-in-1 account
Recurring deposit
Pen down your points on each of the above topic
91
Fun Activity in the class room: Act Dumb!
Each group in the class has to prepare cards containing names of the different products and services
offered by ICICI Bank. One participant from group 1 has to pick up a card from group 2 and act out
the product to his group. The participant pretends that he is dumb. Two points for each correct
identification within one minute. If group 1 is not able to identify, then any other group is given 30
seconds to give the answer.
For example, if the product is “Young Stars” then the student can act like a child
Fabulous Flags
Take a sheet of paper, pens, colour pencils, crayons, and/or markers .
You can now draw a flag that represents or symbolizes you. Please design your own flag - include
some symbols or objects that symbolize who you are or what you find enjoyable or important.”
For example, you could draw:




a
a
a
a
guitar (representing your passion for music)
tennis racket (someone who enjoys sports)
country like India (representing your affiliation with a country)
book ( for a book lover)
 a flower ( a nature lover)
Come up with your drawing in 10 minutes and then present your flag in class.
Variations
You can now get together with your classmates and draw the class flag which symbolises the ideals
of the class as a whole
Alternatively, you can collect the individual flags and paste them onto a board to create a “quilt”
of individual flags, representing unity.
92
STORY TIME
A professor stood before his philosophy class and had some items in front of him. When the
class began, he picked up a very large and empty mayonnaise jar and proceeded to fill it
with golf balls. He then asked the students if the jar was full.
They
agreed
that
it
was.
So the professor then picked up a box of pebbles and poured them into the jar. He shook
the jar lightly. The pebbles rolled into the open areas between the golf balls. He then
asked
the
students
again
if
the
jar
was
full.
They agreed it was. The professor next picked up a box of sand and poured it into the jar.
Of course, the sand filled up everything else. He asked once more if the jar was full.
The students responded with a unanimous "yes."
The professor then produced two cups of coffee from under the table and poured the entire
contents into the jar, effectively filling the empty space between the sand. The students laughed.
"Now," said the professor, as the laughter subsided, "I want you to recognize that this jar represents
your life in HR.
The golf balls are the important things – Business objectives, People aspirations, health – yours, your
organizations and everyone in it and your network -- things that if everything else was lost and only
they
remained,
your
life
would
still
be
full.
The pebbles are the other things that matter like Policies, Processes, and Procedures.
The sand is everything else -- the small stuff like beautiful office, cars, office trips etc."
"If you put the sand into the jar first," he continued, "there is no room for the pebbles or the golf
balls. The same goes for life. If you spend all your time and energy on the small stuff, you will never
have room for things that are important to you. Pay attention to the things that are critical to your
happiness
as
a
HR
Professional.
There will always be time to clean the house, and fix the disposal. Take care of the golf balls first,
the things that really matter. Set your priorities. The rest is just sand."
One
of
the
students
raised
her
hand
and
inquired
what
the
coffee
represented.
The professor smiled. "I'm glad you asked," he said. "It just goes to show you that no matter how full
your life may seem, there's always room for a cup of coffee with a friend or colleague."
What is your learning from the story?
93
Suggest a name for the story
______________________________________________________________________
Quiz Time Folks!!!!! Your Quiz master will shortly present to you the quiz questions
94