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Banking Ombudsman
1. What is the Banking Ombudsman Scheme?
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.
2. Who is a Banking Ombudsman?
The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services.
3. How many Banking Ombudsmen have been appointed and where are they located?
As on date, fifteen Banking Ombudsmen have been appointed with their offices located mostly in state capitals. The addresses and contact details of the Banking Ombudsman offices have been provided in the annex.
4. Which are the banks covered under the Banking Ombudsman Scheme, 2006?
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.
2. Who is a Banking Ombudsman?
The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services.
3. How many Banking Ombudsmen have been appointed and where are they located?
As on date, fifteen Banking Ombudsmen have been appointed with their offices located mostly in state capitals. The addresses and contact details of the Banking Ombudsman offices have been provided in the annex.
4. Which are the banks covered under the Banking Ombudsman Scheme, 2006?
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
Foreign Exchange reserves
Total of a country's gold holdings and convertible foreign currencies held in its banks, plus special drawing rights (SDR) and exchange reserve balances with the International Monetary Fund (IMF).
Foreign Exchange reserves are maintained primarily to protect a country’s domestic currency from losing its value or, in other words, to avoid a currency crisis.
Just like other goods, a country’s currency can lose its value when demand for it falls or when there is excess supply of it. Such a situation may arise when investors do not want to stay invested in that country and want to transfer their funds out of that country or from the currency of that country. For example, suppose due to any reason a foreign investor wants to sell out his equity holdings in Indian companies and want to transfer these funds to the USA. In this case, he or she would convert the Indian rupees received by selling the equities into US dollars. If a large number of investors do this simultaneously while the reverse (fresh investments by foreign investors into Indian equities) is not happening, it will lead to a fall in the value of the rupee. Which is to say, it would lead to the depreciation of the Indian rupee against the dollar and there is a net outflow of dollars. Sometimes this depreciation (or need for devaluation) could be large in magnitude. Such instability in exchange rates and loss of confidence in the currency have an effect on the economy. So to avoid such sudden changes and to maintain confidence in the currency, reserves are maintained.
CASA
CASA ratio is the ratio of the deposits in the form of Current Account & Savings Account to the total deposits.. it should be higher for a bank because interest paid on savings account is very low and no interest is paid on current account deposits. In this way, the banks get money at low cost..
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How is CASA different from term and demand deposits?
Current and saving accounts remain operational. Depositors don't need to give prior notice to withdraw money, however, in case of term deposits, the money is locked in for a specific period. If a depositor wishes to withdraw the money before maturity, he may have to pay a fine. Usually, an overdraft facility is available with the current account deposit. Demand deposit gives you the facility to withdraw your money anytime.
Current and saving accounts remain operational. Depositors don't need to give prior notice to withdraw money, however, in case of term deposits, the money is locked in for a specific period. If a depositor wishes to withdraw the money before maturity, he may have to pay a fine. Usually, an overdraft facility is available with the current account deposit. Demand deposit gives you the facility to withdraw your money anytime.
How is it important for banks?
Islamic banking
Concepts of Islamic bank
Islamic bank is purely based on Islamic law. The most important feature of Islamic bank is prohibition on interest. According to Islamic law, accepting of interest is Haraam (means forbidden). Interest is represented as riba in Arabic language. Quran has a strong words (2: 275-279) against the acceptance of interest on the use of money capital.
Islamic banking does not allow charging of interest for loan. In Islamic banking, instead of giving the money to buyer for buying an item, the bank can directly buy the item from the seller and can resell to buyer with a profit. In case there is an delay in payment of monthly rentals, the bank can accept fine from borrower and can be used for public welfare. This concept is called Murabaha. They can also accept service charge from loan.
In the case of deposits, the bank can give rewards to person who puts their money on bank. It is known as Hibah. But this reward is not guaranteed. The bank has a choice to give this reward. Bank has a responsibility to give the exact amount back to the depositor.
Progress of Islamic bank in India
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Islamic bank has not yet started in India. Many advocates are trying their best to create an Islamic bank in India. Under the legal formalities of RBI it is little bit difficult. Recently Prime Minister Manmohan Singh has asked the RBI to take a look at the demand for creating Islamic banking in India. In Kerala the first Islamic bank is going to start with good assistance from Kerala Government. Now it is running as non-banking finance company (NBFC).
Financial ratios
The overall financial health of a company can be captured by eight primary financial parameters: capital structure, interest coverage, debt service coverage, net worth, profitability margin, return on capital employed, net cash accrual to debt ratio and current ratio
. Other financial ratios such as asset turnover ratio, inventory turnover ratio, dividend pay out, debtor levels, and return on net worth are also important but the eight parameters are sufficient for a primary definition of a company’s overall financial risk profile.
. Other financial ratios such as asset turnover ratio, inventory turnover ratio, dividend pay out, debtor levels, and return on net worth are also important but the eight parameters are sufficient for a primary definition of a company’s overall financial risk profile.A company’s capital structure commonly referred to as gearing, leverage, or debt/equity ratio, reflects the extent of borrowed funds in the company’s funding mix. The equity component in a company’s capital employed has no fixed repayment obligations; returns to investors depend on the profits made by the company. Debt, on the other hand, carries specified contractual obligations of interest and principal. These will necessarily have to be honoured, in full, and on time, irrespective of the volatility witnessed in the business. A company’s capital structure is invariably a function of the strategy its management adopts.
Interest coverage represents the extent of cushion that a company has in meeting its interest obligations from surpluses generated from its operations. The interest coverage ratio links a company’s financial charges to its ability to service them from cash generated from operations.
The Debt service coverage ratio (DSCR) indicates a company’s ability to service its debt obligations, both principal and interest, from earnings generated from its operations. The textbook definition of DSCR assumes that debt repayment gets higher priority over working capital expansion. In practice, however, the priority is often reversed: working capital funding takes priority over other payments. Low DSCRs may not necessarily have an unfavourable impact on ratings; the company’s ability to replace its existing debt with fresh funds may act as a favourable factor.
A company’s net worth represents shareholders’ capital that does not have fixed repayment or servicing obligations. It therefore provides a cushion against adverse business conditions.
iSocial:create ur own network
For other important Key banking ratios CLICK HERE
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iSocial:create ur own network
For other important Key banking ratios CLICK HERE
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Wholesale Banking
Wholesale banking is the provision of services by banks to the like of large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, institutional customers (such as pension funds and government entities/agencies), and services offered to other banks or other financial institutions. In essence, wholesale banking services usually involve high value transactions.
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Wholesale banking contrasts with retail banking, which is the provision of banking services to individuals.
(Wholesale finance means financial services, which are conducted between financial services companies and institutions such as banks, insurers, fund managers, and stockbrokers.)
Modern wholesale banks are engaged in: finance wholesaling, underwriting, market making, consultancy, mergers and acquisitions, fund management.
Universal Banking includes not only services related to savings and loans but also investments. However in practice the term ‘universal banks’ refers to those banks that offer a wide range of financial services, beyond commercial banking and investment banking, insurance etc. Universal banking is a combination of commercial banking, investment banking and various other activities including insurance. If specialised banking is the one end universal banking is the other. This is most common in European countries.
DEPOSITORY
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A Depository is like a bank where securities are held in electronic (dematerialised) form. In India, currently there are two Depositories -National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL). Under the Depositories Act, investors can avail of the services of the Depositories through Depository Participants (DP). DP's are like bank branches wherein legible securities in physical form need to be deposited for converting the same to electronic (demat) form. |
E-Banking
"E-Banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution."
Online banking or Internet banking
In simple terms it does not involve any physical exchange of money, but it’s all done electronically, from one account to another, using the Internet.
From a personal computer, you can access your bank account information, and perform many banking functions, like transferring money, making a loan payment.Once you register yourself on a bank website, you can view your accounts, credit card & home loan balances,Accrued interest, fees and taxes,Transaction details of each account,Pay bills,Transfer funds to third party accounts which you nominate,Open a deposit right from the terminal you are sitting at.However, till now Internet services in India only allows for a minimum level of interactivity such as answering e-mail queries,Feedback forms,Articles asking for readers’ opinion at the end
An accountholder, armed with a password, can use the Net to order a cheque book, stop payment of a cheque and spot the balance and individual operations in the account and transfer funds.
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