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KYC

The KYC procedure is completed by the banks while opening accounts and also banks periodicallyupdate the same.What documents come under completing KYC procedure?To open a bank account, one needs to submit a ‘proof of identity and proof of address’ togetherwith a recent photograph.Documents giving proof of identity are Passport, Driving Licence, Voter’s Identity Card, PAN Card,Aadhaar Card issued by UIDAI and NREGA Card which have been notified as ‘Officially ValidDocuments’ by the government.If the document also contains the address, it is valid as an address proof also, but if not then you need to provide another document as address proof. Like:(i) Telephone bill (ii) Bank account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) Ration card (vi) Letter from employer (subject to satisfaction of the bank) (vii) A rent agreement indicating the address of the customer duly registered with State Government or similar registration authority.(any one document which provides customer information to the satisfaction of the bank will suffice ).What is the need of KYC by the banks?It is a process by which banks obtain information about the identity and address of thecustomers. This process helps to ensure that bank’s services are not misused. It helps to stopmoney laundering.What is e-KYC?e-KYC refers to electronic KYC. e-KYC is possible only for those who have Aadhaar numbers.Use of e-KYC:People can register for e-KYC on the basis of their Aadhar Numbers. After the e-KYC procedure isdone, all information of the customer can electronically transfer to the banks. So in this case,there is no requirement of paper submission of proofs. So e-KYC process is permitted to betreated as an ‘Officially Valid Document’.Facts about KYC:If a person does not have any of the proofs, then also he can get his account open as a‘small account’.When someone transfers his bank account from one branch to another branch of the samebank, there is no need for going to KYC procedure again.However, if address is changed then the KYC procedure needs to be done again.In case you do not have a bank account, KYC procedure is also required for gettingcredit/prepaid cards, for remittances of Rs. 50,000 and above, for purchasing mutualfund/insurance products, etc.These ‘Know Your Customer’ guidelines have been revisited in the context of the Recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering (AML) standards and on Combating Financing of Terrorism (CFT) /Obligation of banks under Prevention of Money Laundering Act, (PMLA), 2002. # ARCHANA

Minting Coins In India

According to the Coinage Act, 1906, the Government of India has the sole right to mint coins.GOI supplies the coins to Reserve Bank of India which then circulates the coins.As per the Coinage Act, 1906, coins can be issued up to the denomination of Rs.1000. Coins inIndia are presently being issued in denominations of 50 paise, one rupee, two rupees, five rupeesand ten rupees. Coins up to 50 paise are called ‘small coins’ and coins of Rupee one and aboveare called ‘Rupee Coins’. Coins in the denomination of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise,20 paise and 25 paise have been withdrawn from circulation with effect from June 30, 2011 andare, therefore, no more legal tender.DistributionCoins are received from the Mints and issued into circulation through its Regional Issueoffices/sub-offices of the Reserve Bank and a wide network of currency chests and coin depotsmaintained by banks and Government treasuries spread across the country. These offices issuecoins to the public directly through their counters and also send coin remittances to the currencychests and small coin depots. There are 4422 currency chest branches and 3784 small coindepots spread throughout the country. The currency chests and small coin depots distribute coinsto the public, customers and other bank branches in their area of operation.Coins are minted at the four India Government Mints atMumbai, Maharashtra – established in 1929 by the British GovernmentAlipore (Kolkata), West Bengal – established in 1929 by the British GovernmentSaifabad and Cherlapally (Hyderabad), Telangana – established in 1903 by theGovernment of the erstwhile Nizam of Hyderabad and was taken over by the Government ofIndia in 1950 & started minting since 1953.Noida, Uttar Pradesh – set up in 1986 and started minting ferritic stainless steel coinsfrom 1988.Each mint has its mark on the coin minted by it as shown below:Mumbai Mint: The Bombay Mint has a small dot or diamond mint mark under Date of theCoin asmumbai mint  Kolkata Mint: The Calcutta Mint has No Mint Mark beneath the date of coin asKolkta mint     Hyderabad Mint: The Hyderabad Mint has five pointed STAR Under the date of coin ashyd mint         Noida Mint: The Noida Mint has a small or thick dot under the date of the Coin asnoida mint      # ARCHANA

Business Correspondents (BC)

The Reserve bank of India along with the government of India work time to time to promote financial inclusion in the country. The ideaof Business Correspondents (BC) is also the one among the financial inclusion process in the country started by RBI.For the financial inclusion, the rural people play a very important role.But there are many villages or areas in the country where settingup a physical bank is not easy. The reasons for this are:The business of banks in remote areas is very low, so the banks will not get any profit, and if they do not get any profit, shutting ofbank branch is very obvious.And since no profits, so employing people, safety guard, building rent, etc., will give a huge burden on bank.There are many problems in remote areas like electricity, internet facility, telephone lines, etc.Employees also do not want to work in remote areas.So to cope up with these problems, a BC model was initiated by RBI.In this individuals or any other entities can become the business correspondents just like insurance agents and reach the people in far flung or remote areas.They are called bank representatives.They help the people in any banking activity like opening accounts, depositing money, withdrawing money, give away loan, or any other transaction.Who can become Business Correspondent?Some of the entities who can become Business Correspondent are:NGOs/ MFIs set up under Indian Societies/ Trust Acts.(Care: excluding NBFC), Post Offices, Retired Bank employees, Ex-Service men,Retired Govt. Employees, Individual kirana/ medical/fair price shop owners, Individual who own petrol pumps, Retired teachers, SelfHelp Groups (SHGs) linked to banks, Individual member of Farmer’ss Clubs, Individual operators of Rural Multipurpose kiosks,Individuals/ proprietors/ owners who manage Agri Clinics/ Agri Business Centres., Retired Post Masters, Individuals such as autodealers, tractor dealers and FMCG stockists, Insurance agents including of private insurance companies (IRDA certified) and postalagents, Any other individual considered suitable by the selection committee, etc. #Saarumathi

SEBI

The Securities and Exchange Board of India (SEBI) was established in the year 1988and given statutory powers on 12 April 1992 through the SEBI Act, 1992. SEBI was set up to regulate the functions of securities market.Its headquarters is in Mumbai, and has Northern,Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively. There are local officesalso.Earlier SEBI was set up to only observe the activities of the market but in May 1992 it was granted legal status. It is known as themarket watchdog.The Board consists of the following members, namely:a Chairman;two members from amongst the officials of the ministry of the Central Government dealing with FinancE.one member from amongst the officials of the Reserve Bank;five other members of whom at least three shall be the whole-time membersto be appointed by the central Government.SEBI has to be responsive to the needs of three groups, which constitute the market:the issuers of securities: SEBI provides a place to issuers where they can raise their finance fairly and easily.the investors: SEBI provides investors from any fraudulent activities and provide them with the accurate information.the market intermediaries: SEBI provides the market intermediaries a competitive professional market.Some facts about SEBI:It regulates the business in stock exchanges and any other securities markets;It promotes and regulating self-regulatory organizations;It prohibits fraudulent and unfair trade practices relating to securities markets;It prohibits insider trading in securities;It approves the appointments of chairman in the Exchanges in the country like NSE, BSE, etcA company should register with SEBI when it wants to go for an IPO (Initial Public Offering).Securities Appellate TribunalSecurities Appellate Tribunal is a statutory body established under the provisions of Section 15K of the Securities and Exchange Boardof India Act, 1992 to hear and dispose of appeals against orders passed by the Securities and Exchange Board of India. Complaints against companies registered with SEBIIf one has any complaint against a listed company/ intermediary registered with SEBI, he should first approach the concerned company/intermediary against whom he has a complaint. If one is not satisfied with the response, he can turn to SCORES (Sebi COmplaintsREdress System). SCORES facilitates you to lodge your complaint online with SEBI and subsequently view its status#Saarumathi

Impotant banking terms

 Banking Ombudsman: Banking Ombudsman is a quasi-judicial authority, which functions under India’s Banking Ombudsman Scheme 2006. It was created by Government of India with a purpose to deal with the complaints of customers of the banks related to various services rendered by the banks.    Deflation: It is a decrease in the general price level of goods and services.    Inflation: It can be defined as a sustained increase in the general level of prices for goods and services.    Liquidity: Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.    Merchant Banking: It is a combination of Banking and consultancy services.   Monetary Policies: It refers to the use of instruments by Reserve Bank of India (RBI) to regulate the availability, cost and use of money and credits.    Plastic Money: It is a term used in reference to the hard plastic cards we use every day in place of actual bank notes.     Direct Instruments:-    Cash Reserve Ratio (CRR): Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI.    Refinance Facilities: RBI offers refinance facility to help out the exporters by replacing an existing debt obligation with another.    Statutory liquidity ratio (SLR): SLR is the minimum proportion of their Net Demand and Time Liabilities, which every bank maintains in the form of cash, gold and securities, at the close of business every day.     Indirect Instruments:-    Bank rate: The rate of interest which the RBI charges on the loans and advances to a commercial bank.    Liquidity adjustments facility (LAF): It’s a monetary policy tool which allows banks to borrow money through repurchase agreements and adjusting the day to day mismatches in liquidity.    Marginal standing facility (MSF): It’s a window for banks to borrow from the RBI in an emergency situation when inter-bank liquidity finishes completely.    Market Stabilization scheme (MSS): Securities that are issued with the objective of providing a stock of securities to the RBI to intervene in the market for managing liquidity.    Open Market Operations (OMO): It’s an activity by a RBI to give or take liquidity in its currency to or from a bank or a group of banks.    Repo rate: The rate at which the RBI lends money to commercial banks in the event of any shortfall of funds.    Reverse Repo Rate: The rate at which the RBI borrows money from commercial banks within the country.    Term Repo: A repurchase agreement with a term of more than one day.     Money Market Instruments:-    Authorized Capital: The authorized capital/ registered capital/nominal capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders.    Bonds: It is an instrument of indebtedness of the bond issuer to the holders.    Call Money: Money loaned by a bank or other institution which is repayable on demand.    Commercial Bills: A bill of exchange issued by a commercial organization to raise money for short-term needs.    Commercial Papers: An unsecured, short-term debt instrument issued by a corporation for the financing of accounts receivable, inventories and meeting short-term liabilities.    Certificates of deposits (CD): A savings certificate entitling the bearer to receive interest.    Dated government securities: These are long-term securities and a fixed or floating coupon/interest rate which is paid on the face value, payable at fixed time periods.    Debentures: A long-term security bearing a fixed rate of interest, issued by a company and secured against assets.    Issued Capital: The share capital that has been issued to shareholders.    Mutual Funds: It is a professionally managed investment fund that pools money from many investors to purchase securities.    Net Asset Value (NAV): A mutual fund’s price per share or exchange-traded fund’s (ETF) per-share value.    Paid up Capital: The amount of a company’s capital that has been funded by shareholders.    Treasury bills: A short-dated UK/US government security, bearing no interest but issued at a discount on its redemption price.#RAJKUMAR

NEFT and RTGS

The paper instruments popular for transfer of funds are cheques and demand drafts. There are also systems which provide youpaperless transactions. A customer just has to give some details for the funds transfer to a bank. The beneficiary or the drawee ofpayment does not have to move to a bank branch for depositing the paper instruments. The one transferring funds can also initiate theprocess at home using internet banking. Transactions are secured. The two popular systems NEFT and RTGS for funds transfer are explained in this article.National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under thisScheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporatehaving an account with any other bank branch in the country participating in the Scheme.It is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches.By the word ‘batches’ it mean that instructions received for transferring the money will not be done as soon the request is received. So,the settlement takes place with all transactions received till the particular cut-off time. From July 10, 2017 settlements of fund transfer requests in NEFT system is done on half-hourly basis. There are twenty three half-hourly settlement batches run from 8 am to 7 pm on all working days of week (Except 2nd and 4th Saturday of the month).This can be explained by an example: If you submit your request of transfer of payment at say, 1: 10 PM on any of the week day, the settlement will get started at next batch i.e. 1:30 PM to 2 PM batch along with all the requests which were submitted in the 1 PM to 1:30 PM batch. Not every bank can transfer or receive money through NEFT system. For this the bank should be NEFT enabled. A list of NEFTenabled bank branches is available on RBI website, and also you can obtain this information from your bank.There is no minimum or maximum limit for opting for a NEFT payment system. However, if you do not have an account in a bank,then you can only transfer up to Rs 50,000 per transaction.NEFT payment system is also available to transfer funds to Nepal under Indo-Nepal Remittance Facility scheme. Whiletransferring funds to Nepal, there is a maximum limit of Indian Rupees 50,000 and the beneficiary in Nepal will get them inNepalese Rupees. Any customer of bank or walk-in-customer can do a transfer of up to Rs 50,000 to Nepal.Banks charge Processing Charges / Service Charges for NEFT transaction. Details you need to give while requesting for NEFT transfer: Your bank account number with bank, so that bank can debit amount from that account.The amount to be remitted.Beneficiary’s name.Beneficiary’s bank’s and branch’s name (Bank branch should be NEFT enabled).Beneficiary’s account number.IFS code of bank branch of beneficiary. (IFS Code of all bank branches is available on RBI website ,in the users bank passbook.) The Indian Financial System Code (IFS Code or IFSC) is an alphanumeric code that facilitates electronic fund transfer in India. A code uniquely identifies each bank branch participating in the NEFT , RTGS and IMPS.  The IFSC is an 11-character code with the first four alphabetic characters representing the bank name, and the last six characters (usually numeric, but can be alphabetic) representing the  branch. The fifth character is 0 (zero) and reserved for future use. Bank IFS Code is used by the NEFT & RTGS systems to route the messages to the destination banks/branches. The format of the IFS Code is shown below. 1234567891011Bank Code0Branch Code RTGS The acronym ‘RTGS’ stands for Real Time Gross Settlement. Real Time means that the processing of instructions start at same timewhen they are received and not at some later time. Gross settlement means that the settlement of funds transfer instructions occursindividually (on an instruction by instruction basis).Not every bank can transfer or receive money through RTGS system. For this the bank should be RTGS enabled. A list ofRTGS enabled bank branches is available on RBI website, and also you can obtain this information from your bank.So this is in contrast with the NEFT system in which settlements take place in batches.In contrast with NEFT system, there is a minimum limit of Rs 2,00,000 to be transferred through RTGS. Though there is nomaximum limit.Banks charge Processing Charges / Service Charges for RTGS transaction. Details you need to give while requesting for RTGS transfer: Your bank account number with bank, so that bank can debit amount from that account.The amount to be remitted.Beneficiary’s name.Beneficiary’s bank’s and branch’s name (Bank branch should be NEFT enabled).Beneficiary’s account number.IFS code of bank branch of beneficiary.  bank charges for outward transactions: Inward transaction– no charge to be levied. # ARCHANA

Word List On RC

Word List  (  To improve Vocabulary) desertion (noun) – abandonment, an act of deserting/leaving a person.disgruntled (adjective) – aggrieved, dissatisfied, discontented.aggrieved (adjective) – distressed, upset, unhappy.averse (adjective) – opposed to, against, hostile to.cosy up to (phrasal verb) – ingratiate/intimate oneself with; try to become a friend to oneself (for some advantage).aggravate (verb) – worsen/make worse, exacerbate, provoke.sought after (adjective) –  in favour, in demand, desired.suitor (noun) – admirer, beau, follower.morph (verb) – gradually change, transform, alter.loom (verb) – be imminent, impend, be close.jockey (verb) – compete, contend, vie.dividend (noun) – benefit, advantage, gain.assertion (noun) – declaration, contention, statement.marginalisation (noun) – an act of making a group of people to feel isolated/insignificant/unimportant.cede (verb) – surrender, concede, relinquish/yield.#FancyJ

IMPS

Immediate Payment Service (IMPS) is a tool through which one can transfer money instantly within banks across India throughmobile, internet , ATMs ,SMS, Branch and USSD(*99#) which is not only safe but also economical both in financial and non-financial perspectives. This facility isavailable 24x7x365. The IMPS facility is provided by National Payments Corporation of India (NPCI). Why IMPS was started? Before IMPS system, the transactions could be done either by NEFT or by RTGS. And this can IMPS also happen in NEFT and RTGS working hours. So NPCI along with some banks like SBI, BOI, UBI and ICICI in 2010 conducted a pilotstudy to create a system that works 24×7. As a result, IMP public launch happened on 22nd November 2010 by Smt. ShyamalaGopinath, DG RBI at Mumbai and this service is now available to the Indian public. The participants for IMPS are: Remitter (Sender)Beneficiary (Receiver)BanksNational Financial Switch by NPCI Objectives of IMPS To be customer friendly so that customers do not have to wait for tomorrow to make remittances.To make the payment simpler just with the use of mobile number.To achieve digitization in doing retail payments.To build the foundation for a full range of mobile based Banking services. Some important facts: The bank should have an approval from RBI for Mobile Banking Service to be eligible to participate in IMPS.Customer should do Mobile Banking Registration if he wants to transact through mobile.The customer gets a unique Mobile Money Identifier (MMID) which is one of the inputs to start the transaction. It is a 7 digitnumber issued by banks.Every mobile phone be it a basic phone or smartphone is eligible for IMPS.There is no need of bank account to avail IMPS.More than one account can be linked to single mobile number.The recipient is not required to register for IMPS.Individual banks can also charge money for IMPS as per bank policy. # ARCHANA

READING COMPREHENSION

Sometimes, the opponent is less important than the rival. The decision of the Telugu Desam Party to leave the National Democratic Alliance is more about its competition with the YSR Congress Party and less about its conflict with the Bharatiya Janata Party. The desertion of the NDA happened alongside the announcement of a no-confidence motion against the NDA government. But importantly, the TDP moved it separately, independent of the one served by the YSRCP. Clearly, the effort was not to join hands with other parties against the BJP, but to isolate the YSRCP politically. The TDP wants to demonstrate that it is prepared to do more than the YSRCP in taking on the BJP, and winning concessions for Andhra Pradesh from the Centre. In all this, there is no danger to the NDA government. The BJP has the numbers to survive a no-confidence vote even without any help from the other disgruntled allies such as the Shiv Sena. But the attempt of the TDP is to show itself as the aggrieved party, as being more aggressive than the YSRCP, rather than bring down the BJP-led government. Electorally, the BJP has been a good fit for the TDP so far. The vote banks added up very well against the Congress, which was the TDP’s main rival until 2014. The emergence of the YSRCP after a split in the Congress, however, has thrown in a new variable: unlike the Congress, the YSRCP is not averse to a tie-up with the BJP, and the TDP did not like the BJP cosying up to the YSRCP. In aggravating its conflict with the BJP, the TDP was following the YSRCP’s lead. From being a sought-after suitor in the eyes of both the TDP and the YSRCP, the BJP in Andhra Pradesh seems to have morphed into the villain. With an Assembly election looming next year, neither the TDP nor the YSRCP can afford to be seen as an ally of the BJP. No matter what the Centre does in terms of special packages for the State, both regional parties will jockey in demanding more rather than settle for what is given. Chief Minister N. Chandrababu Naidu must be calculating that any loss in votes because of the exit from the NDA will be more than compensated for by the political dividends from taking a tougher stance against the Centre. Indeed, the assertion that the Centre is diverting tax revenues collected from the southern States for the development of the northern States is part of the competitive regional politicsthat the TDP is forced to play with the YSRCP. Whether this will see the marginalisation of the national parties, as happened in Tamil Nadu, is not clear. But those in the BJP who see in the TDP’s decision an opportunity similar to the one in Maharashtra, where the Shiv Sena ceded space after breaking the alliance, might be mistaken. For the moment, the BJP looks like the biggest loser in the competitive regional politics of the TDP and the YSRCP.#FancyJ

TYPES OF INSURANCE

Life InsuranceLife insurance as the name suggests is insuring your life. But it is not insurance for yourself but for your family members. With the lifeinsurance policy, after the death of the policy holder, the sum assured is given to the beneficiary. Death can be by any means, like anyailment, because of old age, any accident, or any other mishap.A life insurance policy ensures that the persons family members lead a near-normal life as far as the household finances go.It’s basically a long term investment and requires periodic payments, either monthly or quarterly or annually. The insurance companiesprovide different policies or schemes that every individual can take benefit of.Basic types of Life Insurance policies:Term Plans: These plans are for specific period i.e. the life is insured in only that particular period. After that the policy ends evenif the person is alive. It does not offer any profits. If the person dies in the period specified in the policy, the beneficiary gets thesum assured but if the person survives, there is no pay out. It has lower premiums.Endowment Plans: They differ from Term Plans in the way that they have maturity benefit. These plans pay out the sum in bothcase – death and survival. They have higher premiums as compared to Term Plans.Whole Life Policy:As the name suggests, this policy is for the whole life of the person i.e. the validity is not defined. The premiumsare paid until the death. The policy expires on the event of death of policyholder.Money Back Policy: In this policy, regular premiums are paid. After some time, a portion of sum assured is paid out at regularintervals. In case the policyholder survives, he gets the balance sum assured. And in case of death, the beneficiary gets the fullsum assured. General InsuranceOther than life insurance, all other insurances come under General Insurance like property insurance, automobiles insurance, healthinsurance, theft insurance, etc.Nothing can be predicted on this unpredictable planet so the general insurance aims to protect the economic value of your assets.Basic types of General Insurance policies:Property Insurance: The home is most valuable possession for everyone. With this insurance you can get insured your house. Thepolicy covers the risks in case of any natural calamity like earthquake, floods, fire, etc. It also insures other valuable properties.Travel Insurance: It covers all the risks which can happen while travelling abroad. Like when you are on a family or business trip,any mishap can happen to your property, also in the event of loss of your luggage, passport, etc.Motor Insurance: According to Motor Vehicle Act, every motor vehicle running on the road has to be insured. It insures yourvehicles and thus covers the risk in case of any damage to vehicle, loss of vehicle, etc. Health Insurance: It covers all medical expenses in case of any ailments from paying your medicine bills to pay the hospitalizationcharges. Of all the forms of general insurance, only Health Insurance comes with tax benefits. As per section 80D of the incometax act 1961, the premium paid for a health insurance plan qualifies for tax deduction from your total income.#Saarumathi

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