Foundations of Banking Blended course
Student Workbook Module 2
Table of Contents
Sr No
1
2
3
4
5
Topic
Account Opening
Account Operations
Payment and Remittances
Collection Services
Service Channels
1
Page number
2
10
28
35
39
ACCOUNT OPENING - STUDENT WORKBOOK
Suman, a young college graduate, had joined XYZ Bank and was asked to report at
KR Nagar branch which was yet to be opened. She found that KR Nagar was a residential
locality with a few shops and one or two schools.
Suman walked in to the branch to find only the branch manager Mr.Ranga and a senior officer
Mr.Jagan. There were no customers at all!
After a brief introduction, Suman learnt that the branch would be opened in a week’s time and
they need to bring in new customers and open accounts for them.
Suman: What is my role Sir?
Ranga: We would like you to meet prospective customers and help them open accounts.
We have advertised in newspapers and also sent our sales people to the housing societies to
invite the residents to our branch inauguration. You can meet the walk in clients as well as go
out and meet our neighbours.
Suman: What are the forms and formalities for opening accounts? How do I know whether a
client is eligible to open an account with us?
Ranga: Please read this chapter on Account Opening from the book “Banking Principles and
Operations”. The most important points you need to understand are:
Know Your Customer Guidelines (KYC) and Anti Money Laundering Perspective
Well friends, would you like to join Suman in the journey of understanding how banks open
accounts for customers? Go on and take up the learning activities in this chapter.
2
Objective:
At the end of this session you will be able to:



Explain the KYC requirements to customers for opening accounts
Apply the KYC principles in letter and spirit while opening accounts
Scrutinize account opening forms and KYC documents with speed and accuracy
Sub Topics:




KYC and AML guidelines,
KYC Policy - KYC documents
Opening Accounts of Individuals - Opening accounts of firms, companies, societies, trusts
General precaution - Annexure -Fiduciary accounts, other types of accounts. Gaming module
AOF
Training sequence:
Activity
Duration
(in hours)
E-learning
E-learning modules to be completed
1.Know Your customer for retail branch banking
2.Retail Branch Operations Account Opening
6
Pre Classroom
activity
1.Visit a Bank branch and check the formalities for account opening, 7
collect an account opening form for the Role play .Check out the KYC
2.Prepare a Role play on Account opening
Classroom
activity
Role play
Facilitation, Case study & Summary
Check your understanding
2
Post classroom
Gaming module on Account opening form-Advanced Outbreak force
1
Reference books Banking Principles and Operations by Mr.M.N.Gopinath
CLASS ACTIVITY
3
Role play
Form four groups.
You are a banker and would be required to address customers who walk into the branch with their
queries pertaining to account opening
Each group need to take any one of the following type of customers and enact a role play. Some
customers can be favourable customers i.e. fulfilling the required norms and some unfavourable.
How would you deal with an unfavourable customer?
Type of customers – Individuals








Housewife (not having relevant documents)
Student
Salaried individual
An HNI
Blind / Illiterate person
Senior citizen
Parent wants to open account for his child
An army / navy personnel
Groups should keep the following points in mind while preparing the role play






To practice the role of a banker
Recall the customer service skills
Ensure compliance to regulations while handling different situations
You would be required to make relevant and logical assumptions
To understand the emotions and expectations of a customer
To display customer service skills as well as provide correct solutions to customers in
compliance with rules and regulations
Hint: You are Mr. Govind Tukaram Pendse and you with your sister Ms Kusum Tukaram Pendse have
come to the branch to open a joint SB Account operable by “E or S”. Chalk out a role play in and
around this situation which you as a banker will face in the branch
Participants to make a note of the learning from each role play
Note



Customer service skills of the banker and response of customer
Whether correct or incorrect information/ guidance is given to the customer
Emotional behaviour of banker and customer
4

Timelines for the activity
Discuss your learning

What is KYC?

Why is KYC required?

How does it benefit the Bank and the customer?

How does it build relationship between the customer and the bank?
CHECK YOUR UNDERSTANDING
1. The objective of KYC requirement as stated in RBI guidelines are:
5
a. To be aware of the identity of the customer
b. To be aware of the communication address of the customer
c. Manage risks associated with customers
d. Prevent account opening by anti social/criminal elements
2. Which of the following can be taken as an identity proof for opening an account.
a. Driving licence
b. Telephone bill
c. PAN card
d. Voter ID card
3. Which of the following can be taken as address proof
a. Telephone bill
b. Gas connection card
c. LIC premium receipt
d. Letter from employer
4. Which of the following can be taken as both identity and address proof
a. Passport
b. Printed ration card
c. Driving licence
d. PAN card
Match the following
A
a)
Certification from municipal ward
b)
Pension payment order
B
1
Low Risk, Medium Risk and High Risk and
non-acceptable categories
2
Certificate of Incorporation
6
3
Only address proof
4
Decision to be taken at a senior level
5
Not permitted to operate in India
Accounts of Politically Exposed Persons
6
Partnership letter on firm’s letterhead
Shell banks
7
Identity and address proof
c)
Customer Acceptance Policy
d)
Partnership Firms
e)
Private and Public Limited Companies
f)
g)
Case scenarios ( can be used for your role plays)
Here are a few customers who would like to open accounts with the bank. You must help Suman
decide whether they satisfy the KYC requirements.
Arul, a business man who is travelling most of the year. He has a Passport with
Delhi address. He currently lives in chennai and has a telephone bill as proof for the current
address.
Jenifer, a housewife. She has no documents in her name. She lives with her
husband George in government staff quarters. George is a state government employee.
7
Mr.Gupta, a senior citizen, lives with his grand daughter. He has a voter id
card. He does not have any telephone bill or electricity bill in his name. He however, has a pension
payment order.
Mr.Mehta has lots of cash and offers to deposit Rs.1 crore cash on the branch
opening day. He has a driving licence and a telephone bill for proof. He says he is working as a
manager in a School.
8
Pen down your learnings from this session :
GAMING ZONE
Time now for some exciting and fun packed game. Go through our gaming module of
Advance Outbreak Force. A game that will test and enhance your identification skills. Find out
the various defects in an account opening form.
Storyline:
The AOF’s are under attack by bugs. Your mission is to trace the bugs and stop the infestation. You
will assess the infestation rate by checking the meter and identifying bugs in the forms. You can get
rid of the bugs by selecting error instances in the form from the panel. The Robot Helper will spray
the bugs. If you make an error, the bug will attack more forms and increase the game time.
Functionality:
The game is for learners to practice scrutiny of account opening forms along with KYC documents.
The Account Opening Form (AOF) verification process is central to this game. The learner has to
identify the missing entries or errors in the form and the supporting KYC documents.
9
ACCOUNT OPERATIONS - STUDENT WORKBOOK
Objective:
This session will enable you to
1. Explain the important regulations of NI act relating to account operations.
2. Ensure compliance and customer service while handling transactions
Sub Topics





Negotiable Instruments
Payment and collection of cheques
Special Requests
Special Situations - Anti Money Laundering
Gaming Module - Cheque Mate and Rad Alert
Training Schedule
Activity
E learning
Duration
(in hours)
Retail Branch Operations- Cash
Negotiable Instruments Act
Special Requests and Special Situations
Anti Money Laundering India
Finacle – Introduction
Finacle – cash receipts and payments
Finacle – Issue of DD
Finacle- Transactions and processes
Classroom activity Role play
28
3
Presentation
Group discussion
Check your understanding
Post classroom
Gaming-Cash detectives & RAD Alert
Reference: Banking Principles and Operations by Mr.M.N.Gopinath
Role Play:
10
4

Enact role plays as advised by the faculty
Topics for role play:
1.
2.
3.
4.
Wrongful dishonour of cheques
Criminal liability of customer for cheque return
Importance of KYC - case of a collecting banker
Cash Receipt
Hint Situation - You are Mr. Hegde, owner of a petrol pump and hold an account no.
xxxxxxxxxxxx. You wish to deposit Rs.10,000 in the account of mix denominations as below
100*50 = 5000
50*50 = 2500
25*100 = 2500
Total= 10, 000
Mr. Hegde hands only Rs.9900 to the cashier. Notes are not tendered denomination wise but in
a jumbled way. Two of 100 rupee notes are soiled and non-issuable. Pay-in-slip not signed by
you and it also does not have the denomination wise break up.
Develop a similar situation for cash payments also.

Groups should keep the following points in mind while preparing the role play
To practice the role of a banker
Recall the customer service skills
Ensure compliance to regulations while handling different situations
You would be required to make relevant and logical assumptions
To understand the emotions and expectations of a customer
To display customer service skills as well as provide correct solutions to customers in
compliance with rules and regulations

List your learning and observations on the role play below
Presentation
11

Present on the following topics as allotted by the facilitator
-
Bank's responsibility to honour cheques of customers
Reasons for rejection of cheques
Cases of cheques dishonoured by customers
Protection available to a collecting banker

List down your learning from the presentation

Be ready to discuss on the following questions with your facilitator
-
How is the Bank's responsibility to honour cheques related to the concept of trust?
When should a Bank return the customer's cheques?
Can returning customer's cheques lead to trust and good customer service?
Discuss the legal implications in payment of cheques.
Make points for discussion
List down your learning from this session
12
CHECK YOUR UNDERSTANDING
Session: Cheques
1. A cheque presented for cash payment has no date written on it. Who, from the following,
can insert a date ?
a)
b)
c)
d)
The holder
The banker
The original payee only in case of an endorsed cheque
Only the drawer
2. What is the period after which a cheque becomes stale?
a)
b)
c)
d)
1
2
4
6
month
months
months
months
3. Why should a bank not pay a post dated cheque?
a) Payment of a post dated cheque has the effect of accelerating the payment
b) It is a refusal by the drawer to pay debt
c) Post dated cheque does not confer any right to debit the customer’s account till the
arrival of the date mentioned on the cheque
d) Post dated cheque has no legal effect
4. A cheque for Rs 18000 has been presented for payment. The amount stated in words is
Rs.1800/-.
a) Pay the lesser of the two figures
b) Ask the presenter to get the cheque corrected
c) Though payment of the amount stated in words will discharge the bank, in terms of
the practice followed, the cheque will be returned
d) I will get in touch with the drawer of the cheque, apprise him about the cheque and
take appropriate action.
13
5. Which one of the following methods of signature on a cheque will bind the Company?
a) For ABC Ltd
B Bajera
Managing Director
b) Balraj Bajera
Managing Director
c) B Bajera
Managing Director
ABC Ltd
d) B Bajera
6. A cheque has been presented to you in clearing which is crossed to two banks – i.e. Modern
Bank and Central Bank of India. The cheque has been presented in clearing by the Central
Bank of India. What are your views?
a) The cheque can be paid to either of the two banks on whom it is crossed
b) As per law, cheques crossed to two banks should not be paid
c) As per law, cheques crossed to two banks should not be paid and if one of the banks
is acting as an agent for collection, then it could be paid
d) Educate the drawer of the cheque on drawing a cheque
7. Why the return of an unpaid cheque to the lodger assumes importance?
1.
2.
3.
4.
The cheque is the property of lodger
The Bank will be unable to balance its book if it is not returned
With the lapse of time, the cheque may get misplaced
To enable the lodger of the cheque to pursue his legal remedies on the dishonoured
cheque.
8. A cheque originally issued for Rs,40000/- has been altered in words and figures to
14
Rs.4,40000/- .The drawer has initialled the alteration.Cheque is presented by a bearer
a)
b)
c)
d)
The cheque can be paid
Cheque cannot be paid as material alteration requires drawer’s full signature
Cheque can be paid if bearer signs on the reverse, and submits an id proof
Cheque cannot be paid as the amount is large
Session: Payment of Cheques
1) Which of the following payments are in due course?





Bearer Cheque for Rs 1000 issued favouring Krishna, Cash paid to bearer Ram.
Crossed cheque for Rs 5000 favouring Radha, Cash paid across the counter.
Bank branch works from 8 a.m to 8 p.m. Cash payment of Rs 12000 for a cheque favouring
Sita, paid to bearer at 9 p.m for an emergency.
Cash cheque of Rs 200000 paid to the bearer. Cheque shows alteration in five places, but
with signature of the drawer. Bearer did not furnish ID proof.
Cheque for Rs 100000, torn at the left corner. Cash paid to Payee Ashok, a nineteen year
old. Company ID card given as ID proof. Photo not clear in the ID card.
2) Multiple Choice Questions
1) Cheque presented for payment should not be:




Undated
Post dated
Dated more than six months old
All the above
2) A cheque crossed generally can be paid:




Only at cash counter
Only through a bank account
Only to the payee
Only through clearing
3) Special crossing on a cheque is an instruction to:
Pay only to the banker mentioned in the crossing
Pay only to special customers
Pay only through clearing
15
Pay only to the customers of the bank
4) Sec 31 of the NI Act defines responsibility of
a.
b.
c.
d.
Undated
Post dated
Dated more than six months old
All the above
5) Payment in due course means payment
According to apparent tenor of the instrument
In good faith and without negligence
To the person in possession of the instrument
Under circumstances that do not give any ground for suspicion
All the above





6) If amount in words and figures in a cheque differ
a.
b.
c.
d.
Amount in figures can be paid
Amount in words can be paid
In practice, cheque is returned
Both b and c
7) A bearer cheque favouring Ram is paid to Sita
a.
b.
c.
d.
Bank is responsible if there is a problem
Bank is liable to compensate the drawer for the mistake
Bank can make payment if Ram has endorsed the cheque
Bank can pay bearer cheque to anyone who presents the cheque
8) Bearer cheque is transferred by
a.
b.
c.
d.
Endorsement and delivery
Endorsement
Delivery
None of the above
9) Order cheque can be paid only
a. To the payee
b. To the payee after identification
16
c. Can be paid with endorsement by drawer
d. Cash cannot be paid to order cheques
e. Both b and c
10) When a bank pays a cheque after banking hours it is
a.
b.
c.
d.
Excellent customer service
Special service to important customers
Not a payment in due course
Payment in due course
11) Sec 85 of the NI Act gives protection to paying bank relating to
a.
b.
c.
d.
Endorsement of bearer and order cheques
Payment of crossed cheques at counter for emergency
Payment to third parties
Exceptional payments not as per rule
12) Signature should be verified
a. For high value cheques
b. Cheques for Rs 5000 and above
c. For all cheques
d. Only for cheques presented for cash payment
13) Customer can stop payment of a cheque
a.
b.
c.
d.
e.
By giving a letter mentioning the account number and cheque number to be stopped
By giving a letter for stopping a series of cheques in an account
Calling up the branch
Both a and b
Both a and c
14) If the signature of the customer is forged
a. Bank gets protection if payment is in due course
b. Bank gets protection if forgery is cleverly done and payment is in due course
c. Bank cannot get protection as they are supposed to know their customer’s signature,
even if the forgery is not easily detectable
d. Bank cannot debit the account as the cheque with a forged signature is a nullity
e. Both c and d
15) If the bank dishonours a cheque by mistake, when there are sufficient funds in the drawer’s
account, Bank is liable
17
a.
b.
c.
d.
To the holder of the cheque
To the drawer and the payee of the cheque
Only to the collecting bank
Only to the drawer for loss or damage suffered due to dishonour
16) Protection to paying banker is given if payment is in due course:
a. Under Sec 85 for payment of bearer and order cheques with endorsement
b. Under sec 89 if the material alteration is not apparent
c. Under Sec 89 for cash payment of a cheque which did not appear to be crossed or had
a crossing which was removed
d. All of the above
17) Payment in due course is payment
a.
b.
c.
d.
e.
In accordance with apparent tenor of the instrument
In good faith and without negligence
To the person in possession of the cheque
Under circumstances which did not give rise to suspicion
All the above
18) Protection to collecting banker is given under Sec 131 of NI act for collection of
a.
b.
c.
d.
Crossed cheques
On behalf of a customer
In good faith and without negligence
All the above
19) Ashok had issued a bearer cheque favouring Ram for Rs 5000. Ram had signed behind the
cheque and given it to Krishna. Krishna did not sign on the reverse. The cheque was encashed
by Radha.
a.
b.
c.
d.
Bearer cheque can be paid to anyone who presents the cheque
Bank gets protection under Sec 85 of NI Act
Once a bearer, always a bearer, irrespective of subsequent endorsement
All the above
20) Duty of the collecting banker to exercise diligence
a.
b.
c.
d.
At the time of account opening
Monitoring operations in the account
Scrutiny of instruments presented for collection
All the above
18
Session: Collection of Cheques - Caselets
Ace Bank has received queries from the internal audit department regarding the following five
cheques collected in the last one month. Read the caselets relating to the five cheques and specify
whether the bank has taken the necessary precautions to get protection as a collecting banker
1) Cheque favouring Rathna Bai for Rs. 1000000/- collected and credited to the account of
B.Rathna.
Rathna had opened an account three days back with cash Rs.1000/- as she did not have any
other bank account. Rathna is 18 years old and is working as a nurse in a small private hospital.
She had submitted her voter’s id card and gas connection book for identity and address proof.
2) Cheque for Rs.600/- favouring Suresh Kumar credited to the account of K Suresh.
K.Suresh has an account with the bank for the past five years and maintains a balance of
Rs.50000/- in his savings account. Suresh has given an explanation that the drawer of the
cheque has issued the cheque in his full name, “Kumar Suresh” being expansion of his initials.
3) Cheque favouring Catherine Arul for Rs.200000/- credited to the account of Katherine
Vijaykumar.The account was opened one year back with Rs,5000 and the entire amount was
withdrawn in a week’s time.There have been no other transactions in the account for the past
one year.
4) Salman Ahmed has a savings account with the Bank for the past two years. He is employed in a
small restaurant in the locality as a supervisor.He has maintained an average balance of Rs.6000
in his account. He has deposited a cheque for Rs.20 lakhs favouring Salman Mohammed into his
account. The cheque bears an “Account Payee” crossing
5) Sukhbir Singh has deposited a cheque for Rs.1000/- in his account. The cheque is favouring
Sukhvir Singh.He maintains a balance of Rs.2 lakhs in his account which he has been holding with
the bank for the past two years. He also has fixed deposits amounting to Rs.5 lakhs in the names
of his children.
Special Requests and Situations
19
CHECK YOUR UNDERSTANDING
Choose the correct answer (s)
1) Gita has a savings account with ABC Bank, at the Chennai Main branch. She has got transferred
to Mumbai recently.
a. Gita has to close the Chennai account and open a new savings account at Mumbai
b. Gita can continue to operate her Chennai account subject to limitations
c. Gita can get the Chennai account transferred to Mumbai,she will get a new account
number
d. Gita can continue to use her existing debit card as the new account will be linked to the
card
2) On transfer of savings account, customer will get a new
a. Account number
b. Cheque book
c. Debit card, infinity user id and password
d. Nominee
3) The following formalities are required for adding a name to an existing account in the single
name of a customer.
a. Fresh account opening form signed by both the applicants
b. KYC documents for the second applicant
c. Consent letter from the nominee in the single account
d. Letter of request for addition of name signed by both applicants
4) State whether the following statements are true or false, with respect to deletion of name in
savings account
a. Deletion of name in an E or S account can be done at the request of either of the
account holders
b. Deletion of name cannot be done in overdraft/loan accounts
c. Deletion of name cannot be done for NRI accounts
d. The applicant whose name is being deleted must surrender his ATM card
20
5) A closure can be initiated by the Bank in the following cases:
a.
b.
c.
d.
e.
Customer frequently requests for stop payment of his cheques
Cheques issued by the customer are dishonoured due to insufficient funds
Customer does not maintain minimum balance in the account even after repeated
reminders
Customer is guilty of committing fraud
6) On the death of a single account holder, balance in the account is paid to the:

Nominee, after proper identification

In case nominee is a minor, to the guardian named in the nomination form

Legal heirs , in case there is no nomination

None of the above
7) Anil and Sunil are partners in a textile firm operating the current account jointly.They have an
average balance of Rs.5 lakhs in their account.The Bank has received a cheque in clearing for
Rs.50000/- favouring a Travels and tours company. On scrutiny they find that the signature of
Sunil does not match as per the records. Bank passes the cheque as the signature of Anil
matches perfectly.
a. The Bank will be liable if Sunil claims that he had not signed the cheque
b. Bank cannot make payment even if one of the signatures does not tally
c. Bank is right in making payment as one of the partner’s signature is perfect.
d. Sunil has to sort out the issue with Anil and cannot claim against the Bank
8) Transactions in dormant accounts have to be passed with caution because:
a. Fraudsters might try to withdraw money, knowing that the customer is not operating
the account/checking his statement
b. Credits into dormant accounts may also be part of fraud to divert large amount of
funds from another account for subsequent withdrawal
c. Change of address, request for cheque book, change in signature request should also be
verified with caution to prevent subsequent frauds
d. Accounts could be used for money laundering transactions for a specific period and
allowed to remain dormant. Any subsequent transaction in such accounts could be to
21
revive the deals.
9) Suman has a current account with your branch for the past two years. There have been several
instances of cheque returns in his account and the average balance is very low. Shekhar, an
advocate, who also holds a savings account with you, inquires about the nature and background
of Suman’s account with the Bank. He tells you that the information is required by the local
police inspector
a. No information can be shared with the advocate
b. The inspector needs to send a written communication under his seal, requesting for
specific information
c. The branch has to refer the query to Regional office and give the reply in consultation
with legal/regional office experts
d. The Bank has to ensure that the legal rights of the customer are not violated
10) The income tax officer has visited you with a letter requesting for attachment of the savings
accounts of one of your high net worth customers for an amount of Rs.10 lakhs. Steps to be
taken are:
a.
b.
c.
d.
Inward the attachment letter with date, time and seal
Customer should be informed about the Income-tax notice
Amounts due to the Bank from the customer need to be recovered
From the balance amount, amount attached should be remitted to IT authorities under
intimation to the customer.
CASELET
Anti Money Laundering
Shivik was the Branch Head of a new branch opened in a residential cum commercial area. The
branch was just twenty days old and there was a huge campaign by the sales team to invite people
in the neighbourhood to open accounts with the Bank.Shivik had a target of garnering 1000
accounts/ deposit business of Rs.5 crores in the first month. Shivik has received a query from
Corporate Office regarding the following accounts to confirm that there is no money laundering.
1) Mr.Santhosh Raj savings account number 987801000012 – balance Rs.510000
2) Mr.Raj Kant - SB 987801000024 - balance Rs. 7 lakhs
3) Ms.Apoorva - SB 987801000018 - balance Rs.15 lakhs
4) Mr.Akbar Ali - SB 987801000002 - balance Rs.12 lakhs
5) Akbar Ali Trust - SB 987801000013 - balance Rs.26 lakhs
22
Shivik checked with his sales team and operations manager and got the following information about
the accounts.
1) Mr.Santhosh Raj
Mr.Santhosh had walked into the branch on the inauguration day and opened a savings account
with cash Rs.40000/-. He had submitted his passport and telephone bill as id and address proof.
He had signed form 60 stating that he had applied for a PAN number but had not received the
card/number. He had introduced himself as a businessman who had come recently to the city to
set up a new hotel. He had been depositing cash Rs.95000/- into his savings account every
alternate day. Shivik could not reach the customer on phone, so he sent his sales person to the
customer’s residence. The door was locked.
Make your note –
2) Mr.Raj Kant
Mr.Raj had opened his savings account with a cheque issued on ABC Bank account for Rs.1 lakh.
He had submitted his PAN card and telephone bill for id and address proof. After 4 days, he had
deposited another cheque for Rs.6 lakhs issued by LIC of India in his name. He has given a
request for creating a fixed deposit of Rs.5 lakhs for a period of 5 years with interest payout
every month into his savings account. After 2 days he has submitted another cheque for Rs.8
lakhs from XYZ Bank.The cheque had the legend “Privileged Banking” on top. He has mentioned
to the CSO that this was the maturity proceeds of his fixed deposit and he wanted to consolidate
all his funds at this branch.
Make your note -
23
3) Ms.Apoorva
Ms. Apoorva had submitted her voter id card and electricity bill as KYC documents. She had also
submitted a cheque for Rs.50000/- drawn on her Bank account with FJK Bank.
The communication address given in the form was in a locality considered unsafe .
Her date of birth mentioned in the form was 1.4.1987. It was a single account in her name and
she had not given any nomination. There was no other information about Apoorva in the
account opening form.
After a week, she had deposited a cheque in her name for Rs,10 lakhs issued by Contact
Foundation Trust
There were subsequent cash deposits of Rs.2 lakhs, Rs.1 lakh , Rs.50000/-, Rs.50000/- and Rs.1
lakh into her account on consecutive dates .The cash deposit slips were signed by a different
person on each day, Shivik called the mobile number given in the form and got a message that
it had been disconnected.
The sales manager visited the communication address and found the door locked. He checked
with the neighbours and found that Apoorva was working in a small textile shop at the other
end of the city.
Make your note -
4) Mr.Akbar Ali
Mr. Akbar Ali is the partner of a big textile store in the city. The store has 12 branches all over
the city, one store being the next door neighbour to the bank branch. Mr.Akbar Ali’s great grand
father had started the business 100 years ago and the entire family is into this business.
Mr.Akbar Ali has five brothers and all of them are partners in the textile business. Mr.AkbarAli
had a Private Banking account with another branch of the bank from which he had transferred
the money to this branch. Shivik had met him personally and got his account opening form and
documents.
Make your note -
24
5) Akbar Ali Trust
The Trust account had been opened with all the necessary KYC documents. Mr.Akbar Ali, a
Private Banking customer, is the managing trustee of the Trust and also the authorised
signatory. The communication address of the trust and the managing trustee are the same. The
opening cheque was issued from the Trust’s account with XYZ Bank for Rs.1 lakh. Subsequently
there was a remittance of Rs 25 lakhs from Dubai directly into the account.
Make your note -
Discuss what precuations, inquiries and stand needs to be taken regarding each of the accounts
and which of these accounts can be confirmed to corporate office that the transactions are
genuine.
Your final decision
Time now for some fun filled games!!
CASH DETECTIVE
Storyline:
The Counter Strike Initiative (CSI) has alerted Interpol that a consignment of counterfeit currency
notes has landed in India to fund terror. Currency note samples have been collected from across the
country. You have to use the Advance Tracking System – Super Computer to detect fake currency
notes. CSI supercomputer has been closely monitoring occurrences of counterfeit notes across the
country. You play a role of an intelligence operative responsible for tracking down the outfit. You
would identify and trace recurring instances of a particular security feature error. The goal is to
narrow down the search to a specific locality of a city in three levels within a stipulated time. You
will receive a series of messages about the movement of the outfit’s mission, and each fake note
25
detected takes you closer to the source of terror.
Functionality:
This game is for cashiers at branches. This game enables learners to test their awareness of the
security aspects of currency notes. Security features that need to be checked, while accepting
currency notes (Rs.100 and Rs. 500 denominations), are shown to the learner.
RAD Alert
Storyline:
The main nuclear reactor in India’s space city – ‘Robocity’ is damaged. Deadly radiation is pouring
out. Your mission is to save Robocity. To repair the radiation leak, you have to build a bridge across
the chasm. To build the bridge, you need to review the key fields in the cheque, and decide
whether to pay, reject or refer it. Accurate assessment of the key fields gives you an Indimium
coated pillar. Inaccurate decisions and taking more than the stipulated time for a cheque costs you
a life (robot) and you have only 5 of them! There are two gameover conditions - the pillar strength
being lower than the threshold defined (inaccurate assessment) or you losing all 5 robots (incorrect
decisions) during the course of the game. To win, you will have to ensure Robocity’s fate, which
depends upon your ability to take judicious decisions that will enable the last surviving robot to
cross over to repair the leak!
Functionality:
The game is for tellers handling cash payment at retail branches. Cheques are presented to the
learner. The learner reviews the key fields in a cheque against Finacle details and anywhere
banking. The learner needs to decide on whether to pay, reject or refer the cheque
26
PAYMENT AND REMITTANCE SERVICES - STUDENT WORKBOOK
Objective:


To explain the different types of remittance transactions
To offer the right solution to customers and ensure compliance and customer service while
executing customer requests
Sub Topics:



Pay orders
Demand Drafts - Features, issue, payment, cancellation, issue of duplicate, revalidation,
legal aspects
Electronic Funds transfer - Intra branch, inter branch, Interbank, NEFT, RTGS
Training Sequence
Activity
E Learning
Duration
(in hours)
Retail Branch Operations-Remittances
Classroom activity Presentation
2
2
Role Play
Caselets
2
Check your understanding
Reference Books
Banking Principles and Operations by Mr.M.N.Gopinath
CLASSROOM ACTIVITY
27
Presentation:
Students to form groups discuss and present on the following lines as per their understanding from
the learning



Remittances - Demand drafts
Pay orders
Instant funds transfers
List down your learning from each of the presentation below
Role Play:
Ask the participants to enact role plays for different types of remittances bringing out the benefits
for the bank, customer and beneficiary, while ensuring compliance and customer service.
List down your observations and learning about the role play below
CASELETS
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1. Siddharth has approached the Bank for issue of a pay order for Rs.300000/- favouring
Amarkant & Sons. He requests the pay order to be given urgently as he has to meet his client
in an hour’s time. The Customer Service Officer processes the transaction and prints the pay
order in a hurry, only to find that the printer is not aligned. He sets aside the badly printed
pay order and prints a fresh pay order, takes it up for signature of his verifying officer. The
Verifying officer signs the pay order and passes the same to the Branch Head for second
signature as the amount is large. The Branch Head is in a hurry to go out to meet a client
and signs the pay order in a hurry and delivers to Siddharth. Siddharth is so angry about the
mess and delay that he expresses his disappointment to the Branch Head. The Branch Head
calls the CSO to advise him to service customers’ promptly. The CSO comes back to his
counter, but is not able to find the discarded pay order. In the meantime there are more
customers waiting for pay orders so he gets on with his transactions.
The processing center calls up the branch the next day - they have received two pay orders
for Rs.300000/- favouring Amarkant & Sons in inward clearing, while there is only one pay
order for Rs.300000/- shown as issued by the branch. Which pay order should they pay ?
The Branch Head checks the transaction and finds that Siddharth had zero balance in his
account and had deposited cash that morning towards the pay order and charges. Siddharth’s
account is again in zero balance.
Discuss the caselet –What in your opinion were the gaps in the transaction. What are
the precautions required to prevent such frauds.
2. Sajan has a balance of Rs 100000 in his account with ABC Bank, Pune. He has given a request
at Pune Branch for transferring Rs 100000 to his father’s account at ABC Bank Mumbai. He
wants the transfer to be done immediately, so that his father can withdraw the money at
Mumbai.
a. What is the TAT for effecting this transaction?
b. How beneficial is this facility to the customer and the Bank?
c. What are the risks in this transaction and what precaution should the branch take?
3. Access Ltd has a current account with ABC, Bank Baroda. They have sales managers working
in various cities. They have given a cheque for Rs 12 lakhs for payment of salaries for 20
sales managers who have accounts with different branches of ABC Bank across India. What
are the details to be given by Access Ltd for processing the transaction? Can the Bank
29
process this request within a day?
4. Saket is a high net worth customer with a balance of Rs.12 lakhs in his account with Bank A
in Mumbai. He needs to transfer Rs.2 lakhs urgently to his colleague who has an account with
Bank B in Delhi. How can the Bank help him make the transfer? Discuss.
CHECK YOUR UNDERSTANDING
1. Who is the drawee in a PO issued by ICICI Bank, Chennai branch favouring University of Madras?
2. What is the benefit to the bank in issuing POs?
a)
b)
c)
d)
e)
It is a social service
Bank gets float money
Bank earns income- exchange on PO.
Both a and b
Both b and c
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3. What is the maximum amount up to which POs and DDs can be issued against cash?
50000
100000
20000
49999 i.e <50000
4. PO has to be surrendered for cancellation.
a) True
b) False
5. For cancellation:
a)
b)
c)
d)
e)
PO has to be discharged on the reverse over revenue stamp
Applicant of PO has to sign on the reverse
Signature on the reverse should match with signature of customer in credit account.
Signature should match with signature in the pay in slip
All the above
6. DD is issued payable at:
a)
b)
c)
d)
e)
The same branch
At a different branch in the same city
At a branch in another city
At a correspondent bank branch in another city
Both c and d
7. Accounting entry for issue of DD is: debit customer and credit
a)
b)
c)
d)
e)
Funds payable account FP/
Drafts payable account DP/
Inter branch DDs IB/DD
EX/DD and SL/Tax
Both c and d
8. Intra branch transfer means:
a) Transfer between accounts in the same branch
b) Transfer between accounts in different branches of the same bank
9. The payee name on the cheque:
a) Should match exactly with customer’s name in finacle credit account.
31
b) Should match with name written on payinslip
c) Cannot differ even by one alphabet or initial
d) All the above
10. Funds transfer within the bank can be done through infinity when:
a)
b)
c)
d)
e)
f)
Both remitter and beneficiary have an account with the bank
Remitter has an internet banking user id and password
Beneficiary is registered as a payee
Both remitter and beneficiary have internet banking access
All the above
Options a, b and c
11. EFT through Reserve Bank of India offers:
a)
b)
c)
d)
Instant credit to beneficiary
Same day credit to beneficiary
Credit to beneficiary in two days
Credit within a week
12. NEFT can be done only through the bank’s Internet banking:
a) True
b) False
13. Special facility under NEFT:
a)
b)
c)
d)
Credit to beneficiary account on the same day
No upper limit for individual transactions
Three clearing cycles in a day, including Saturdays
All the above.
14. EFT is done through:
a)
b)
c)
d)
Upload of transfers in RBI EFT package by remitting bank
Download from RBI site by beneficiary bank
Transfer of files in encrypted form
All the above
15. Payment of DD is done at the drawee branch after:
a)
b)
c)
d)
e)
Scrutiny of instrument for signature, date, amount in words and figures
Matching the date, amount, and payee name in Finacle for the DD number
Checking the security punches/crossings on left and right side of the DD
Verification of signature of bank official on DD
All of the above
32
COLLECTION SERVICES - STUDENT WORKBOOK
Objective
To explain the process of clearing and the precautions to safeguard the interests of the banker
and customer
Sub Topics




Clearing of local cheques
National Clearing
ECS
Upcountry Cheque Collection
Training sequence
Activity
Duration
(in hours)
E-learning
Clearing
10
Pre - classroom
activity
Visit the processing center of a Bank, observe the clearing
process, interact with team leaders to understand the
important aspects of processing
4
Classroom Activity




2
Post classroom
Gaming Zone - Checkmate
Presentation
Charts
Match the following
Questions for discussion
1
CLASS ACTIVITY
The class will be divided in to 3 groups. Ask the groups to present on the following topics
Group 1
Local Cheque clearing
a. Instruments settled through Clearing House
33
b. Service Branch or Processing Centre
c. Clearing process
d. Learning from the visit
Group 2

National Clearing

Electronic Clearing Services (ECS)
a. Credit ECS
b. Debit ECS
c. Learning from the visit
Group 3
Upcountry Cheque Collection
a. Immediate credit for collection cheques and compensation for delays
b. Cheque Purchase
c. Learning from the visit
Summarise
Clearing process



Inward and outward
Impact of technology on transaction processing
Precautions to be taken by Bankers and Customers
Questions for facilitation
-
What are the technological changes that have improved the clearing process?
What is the role of RBI in clearing?
What is the impact of failure of one bank to honour payments under clearing?
CHECK YOUR UNDERSTANDING
34
Complete the cheque clearing process
Match the following
A
B
1 Bank managing the Clearing house operation
a 9 digits - the paying bank and branch are
debited based on this code
2 Cheque number
b Amount Rs.100000 or above
3 Sort Code
c
4 High Value clearing
d Inward clearing
5 ECS
e Settlement bank
6 Cheque purchase
f Outward clearing
7 If cheque is issued by the customer it will
g 6 digits- unique cheque number
8 If cheque is deposited of other bank in your
then it is
h
Kite Flying
Where clearing is managed by RBI
GAMING ZONE
Checkmate
Enter the magical land of Moolagadh , get the help of local tribals , take decisions based on their
credentials and become the monarch.
35
Storyline:
You are transported to the magical land of Moolagadh. The last serving monarch had cast a spell
making the palace grounds inaccessible. Your mission would be to gain entry into the palace of
Moolagadh. The locals aid you in your mission - provided you identify their credentials (cheque
fields) correctly. You have the twin task to review the credentials (key fields in a cheque) and take
the decision (pass, reject or refer). An accurate assessment (cheque fields) earns you a ruby. The
locals reward you with metal needed to make the key to the palace for a correct decision. A wrong
decision costs you a life.
Functionality:
This game is for staff responsible for cheque clearance. Cheques are presented to the learner. The
learner needs to decide whether to pass, reject or refer the cheque. This decision is based on
review of certain key fields in the cheque.
36
SERVICE CHANNELS & CENTRALISED OPERATIONS
PARTICIPANT WORKBOOK
Objective
a. To explain the benefits of different channels as well as the precautions to protect the
customer's and the bank's interest.
b. To appreciate the importance of service delivery through multiple channels
Sub Topics
a. Introduction
b. Alternate channels: ATM - Internet Banking - Phone Banking – POS - Branch Banking
c. Centralised Operations
Training sequence Activity
E-learning
Duration
(in hours)
1. Service Channels & Operations Management
2. Currency Management
12
Pre
Classroom Students are required Visit ATMS of different Banks. Check
activity
websites of Banks from the link in RBI website. Call up call centres
of different banks asking for information. Check icicibank.com
website for inputs on channels and safe banking
4
Classroom activity
4
Presentation
Discussion
Exercise
Check your understanding
Post Classroom
Gaming Zone - Aero Command
Presentation
37
1
Form groups and present your learning from the RBI web site and the visits made to various channels
of banking on the lines of
 Services offered at various channels and explain
 To bring out the security and the technological aspects involved in the channels.
Pen down the learning from the presentation
Presentation and discussion

Which is the most preferred channel?

Each group to take up one channel (ATM, Phone banking, Internet Banking, Mobile Banking)
and prove that your channel is the best medium for banking. You can draw / prepare charts
for a better presentation effect.

Others to pen down their learning and defend their own channel.
.
38
EXERCISE
What are the services which are offered through each channel which you observed? List them down
ATM -
-
What is the maximum no. of notes that can be dispensed by an ATM at a time ?
-
What is the procedure to do a mobile TOP up through an ATM?
-
How can we offer our donation to temples like Vaisnav Devi and Tirupati Balaji?
-
How can we make payment of our bills through ATM?
Phone banking
-
How can we place a request for the DD immediately?
-
What services are offered by the phone banking? List them down.
39
-
Which is the option you need to select to place a request for bank@home service , Cheque
book, Fund transfer and, Mobile registration?
-
How is Debit card PIN generated through phone banking?
-
Do you think the verifications taken at phone banking are valid and what is their purpose?
-
What has been your good and bad experience about phone banking?
Internet Banking
-
Locate the demo for Internet banking
-
How will you locate an ATM/ Branch from the website?
-
How will you register for the Do not call list?
40
-
Through which link will the youngstar account holders log in ?
-
Which link will enable you to appreciate the service of ICICI Bank?
-
How would NRI's be able to transfer funds do fund transfer from this website?
-
Where will you get information about Wealth Management?.
-
If you wish to apply for a new product, how can you do that through our website?
-
What are the steps to do fund transfer through internet banking? (to self a/c in I-bank, to third
party holding a/c in I-bank, to third party holding a/c in some other bank)
Mobile banking
-
What services can you avail through mobile banking? List them.
41
-
Which are the mandatory requirements to avail a mobile banking facility?
-
What is the exact procedure to do a fund transfer through mobile banking?
-
What are the precautions one needs to take while transacting through mobile banking?
CASELET
Mr. Suresh calls up the call centre by entering the debit card number and the 4 digit pin number.
His call is directed to lands up on the line of Ms. Anita. Anita greets the customer but identifies that
the account belongs to someone by the name of Ms. Archana Gupta. Mr. Suresh, wants to know what
has been the last transaction in her account and from where? Mr. Suresh insists that he wants to
know the details as he has dialled her card and pin. Anita informs Mr. Suresh that even though they
have received the authentication of Ms. Arachana, she has to speak to her. Mr. Suresh informs that
he is her father. The conversation proceeds as below:
Mr. Suresh: Look madam, I am her father and have the full right to know about her account details.
If you still feel doubtful, you can ask me any questions on her a/c?
Officer: Sir, I am extremely sorry, but the account information can be shared only with the
account holder. May I speak to Ms. Archana?
Mr. Suresh: See madam, let me explain. My daughter has gone missing since the last two days and I
need to trace her. I have already filed a police complaint in this regards. Hence, now at least can
you tell me?
Officer: I am extremely sorry to hear that sir. In, in this case may I suggest you to visit our nearest
branch with the FIR copy and to check if the branch can help you further.
Mr. Suresh: You fail to understand madam. I need the information. Do you understand my plight?
42
Please for heaven’s sake, tell me! Tell me where is my daughter? Has she done any cash withdrawal
lately? Has she paid any bill or swiped her card any where? Don’t tell me where she has done it but
just let me know if she has done a transaction in the last two days. Just say YES or NO softly. I am
sure no one, not even your neighbour will be able to hear it. I will also not let anyone know that you
have given me this information.
Officer: I am very sorry Sir, but I am helpless and cannot provide you with the information on
security grounds. You may kindly, visit our nearest bank branch and they will surely try to help you
Sir.
Mr. Suresh: I am not satisfied with your services. I will complain to your manager about this.
Definitely!
(Hangs up)

What is your learning from the above case-let?

What the officer did - was right or wrong? And why?

What would you do if you were in a similar situation?
43
Tickle your brain
Five seconds, what's a two-word expression for this?
Answer - ?????
CHECK YOUR UNDERSTANDING
1. Match the following
1. ATM
a) Helps to increase effectiveness in centralisation
2. POS transaction
b )Sorting of cash into issuable & non-issuable
3. Workflow management
c) PIN, Password, customer id
4. Integrated Currency Management Centres
d) Fund transfer
5. Security
e) Signature verification
2. Drag and drop the correct answer.
1. Retail credit customers are encouraged to use----------- for queries and complaints.
2. Branches are service as well as ______________ channels.
44
3. Imaging helps in completing the centralised activities with a short ----- .
a) Use of alternate channels _______________ service efficiency and ____________costs
b) Frauds targeting customers using internet are called_______________
3. Multiple Choice Questions
1. Identify the type of notes that needs to be delivered to the branches.
e. ATM usable
f. Issuable
g. Non-issuable
h. Soiled
2. Facilitating implementation of clean note policy is the function of -------------.
 RBI
 Replenishment agency
 ICMC
 Zonal centres
3. Identify the currency note processing centres.
 Currency chests
 ICMC
 RBI
 Regional processing centre
4. Identify the first bank in India to start 8 to 8 banking.
 ICICI Bank
 HDFC Bank
 Nationalised bank
 Foreign bank
5. Identify the channel that has a provision for paying tips at restaurant.
 ATM
 POS
 Phone banking
 Mobile banking
6. Identify who recovers an interchange fee from the merchant for facilitating the transaction.
Acquiring bank
Issuing bank
Visa/MasterCard
Customer
45
7. Identify the electronic device that reads the information encoded in the magnetic stripe behind
the card and transmit it to the acquiring bank.
e. ATM
f. Mobile
g. Credit card
h. POS terminal
8. Identify the term for making the customers reveal their internet banking id and password by
tricking them with unauthorised mails.
a) Hacking
b) Packing
c) Phishing
d) Fishing
9. The internet banking system is protected with ------- to prevent unauthorised access, hacking
and virus infection.
a) Virus
b) Firewalls
c) Encryption
d) Security
10. Now India is one of the fastest growing --------------market in the world.
e. Mobile banking
f. ATM
g. Internet banking
h. Home banking
11. The ------- system is programmed to identify the callers by their category.
e. Call centre
f. IVR
g. Phone banking
h. Mobile banking
12. With -------- and phone banking combined ,almost all the services provided at a branch can be
provided through phone banking.
e. Mobile banking
f. Internet banking
g. Home banking
h. POS
46
13. All the value added services can be utilised by a customer when using the -----of his bank only.
a) Account
b) ATM
c) Credit card
d) Debit card
14. For a value added transaction, the customer authorises transfer of funds from his account to the
account of the -----.
f. Dealer
g. Agent
h. Service Provider
i. Bank
15. Identify the number of pieces currency notes that majority of ATMs can dispense at one time.
f. 40
g. 45
h. 35
i. 50
Pen down your learning from this session
GAMING ZONE
AERO COMMAND - is a game which will tickle your brain and put you in charge of an aerodrome.
Make arrangements to accommodate the different airways, keeping the profit of you aerodrome
maximum. How will you do this? Check in the game!
47
48