BANKING BUSINESS STRATEGY

BANKING BUSINESS STRATEGY

BRANCH LEVEL BUSINESS STRATEGY CASA STRATEGY _ To undertake massive CASA Campaign across the country to mobilize new accounts _ Focus on relationship building and posting of relationship officer/manager at least at district level & relationship manager of Scale IV/V at state level to have good liaison with government departments/corporate. _ To have School/College teachers account to boost our retail liability/retail asset products portfolio. _ Allocation of Publicity budget to identified block level branches for increasing visibility. Conduct of Regular CASA Campaigns during each quarter with specific emphasis on CASA Accounts mobilization from HNI / Payroll accounts, Government Departments ( Panchayat, Block level, District level and state level accounts, RUSA,Govt. school & Colleges, MP/MLA accounts/ TASC account _ Revival of Inoperative / Dormant accounts _ Focus on New Branches for exponential growth in CASA of new branches _ Organizing HNI / NRI Meets at frequent intervals at all major centers. _ Transformation of additional Shikhar branches with a view to enhance customer service resulting in higher CASA growth. ( we have seen 20% CASA growth in these branches) COMPETITION WITH PAYMENT BANK _ New banks will offer interest higher than PSBs hence retail depositors will move to payment bank, have impact on CASA of banks, tighten NIM of banks, _ Customer will open account with payment banks for small ticket payments _ Customer will get newest / easy technology for their payments _ If will have less impact if they offer easy payment options for their small tickets payment by offering new tech based App _ Step to minimize impact on PSBs: _ New technology for payments need of customers, provide better platform for mobile payments, _ improve customer service, Banks need to understand their customers, in order to understand the current market trends and predict the future trends, segmentation of customers and specific / appealing products for a particular segment, rewards/points for making payments, privacy and security _ collaborate with them to create a partnership model CUSTOMER SERVICE _ In order to achieve the set goals, Customer Service needs to be given adequate attention. Following customer centric initiatives undertaken to reduce customer complaints and enhance business:- _ Counter service to be improved. _ Rude behavior of staff to be eliminated and Zero tolerance level for rude behavior. During FY15-16, 131 cases of rude behavior were reported. _ Timely and Speedy redressal of customer complaints. _ Providing priority services to the Senior Citizens and Pensioners. _ Motivating customers as well as staff for usage of Tech products. _ Popularizing Missed Call Facility, Internet and Mobile Banking, Canara e-info book, Canara Easy Cash etc. _ Sensitization of staff to improve our position in BCSBI rating amongst all Banks. _ Steps initiated towards Information dissemination, Transparency, Customer Centricity, Grievance Redressal, Customer feedback etc. LOSS MAKING TURNAROUND _ Stress on improving net interest income _ Increasing the CD ratio _ Reduction in cost of deposits by increasing CASA ratio and reducing Bulk deposit _ Reducing / eliminating NPA _ Containing the operating expenses

RETAIL LENDING _ Retail Lending by every branch and aim to achieve NIL lending branches. _ Task force to be made in each Circle for branches having CD Ratio less than 50% in order to improve the CD Ratio to minimum 70%. _ Marketing of Online Instant In-principle Sanction for Housing Loan and Car Loan on digital platform throughout the year. _ Wide publicity of Housing Loan and Car Loan products especially during festival time to increase the visibility. _ Focus on reduction in turnaround time at RAH from 9 days to 7 days. _ Tie up with premier education institutions Viz. IIMs, IITs, NITs & other Premier institutes _ Extending the services of Direct Selling Agents to all the Circles. _ Chalking out quarterly schedule of Campaigns targeting different segments viz. Housing, Vehicle coinciding with festival season and Education coinciding with Admission period. MSME _ Each ELB/ VLB to identify and finance at least one Small & Medium Enterprises Unit every month. _ All branches to source and refer minimum one Credit proposal per quarter to their respective SME Sulabh for sanction. _ Focus on “PRODUCT SPECIFIC MONITORING”. _ MSME CONNECT- Mega Credit camps will be continued in each quarter of 2016-17 at all Circles on a single day to create and sustain awareness and pool sources for increased flow to MSME sector. _ Regular Camps & Cluster meets for sourcing the proposals will be conducted at Sulabhs and cluster of branches. _ START UP SUMMIT – Summits will be arranged at all centres for Start up Entrepreneurs inviting _ Distinguished guests from Government departments and local industrial bodies/organizations for necessary inputs and guidance for successful entrepreneurship. BANKING BUSINESS STRATEGY STRATEGY TO REDUCE NPA / STRESS ASSETS ACTION PLAN: Before formulating the strategy for reducing NPA's, a diagnostic study must be conducted to ascertain the reasons for high percentage of non-performing advances (NPAs). Thereafter, ABC analysis should be undertaken to identify the critical areas, which should focus the activities to be monitored by the Branch Head and those activities which can be delegated to the Asst Manager and Loans Officers. Positive Intentions (+ive), Negative Intentions (-lye) The information collected in the above formats will be converted into intelligence for drawing out the strategies and the action plan. TWO PRONGED STRATEGY: a) Increasing fresh advances and ensuring that they remain performing advances i.e. checking the slippage into nonperformance category. b) Recovery and adjustment of non-performing advances. A) INCREASING FRESH ADVANCES: SWOT analysis will be undertaken to aSsess the potential of credit off-take and also identify the industries / business ventures on the basis of products and services and also the changing environment. The survey done by Development Financial Institutions will be consulted as these provide adequate information. STEPWISE ACTION PLAN a) Scanning the area and preparing the profile of existing units / potential - sunrise areas in agriculture, industry, infrastructure, housing, retail.lending. b) Identifying Govt. agencies where there can be bulk credit off-take i.e., Indirect financing through corporations, boards and other agencies. c) Credit off-take through automobile financing and financing to consumers for white good durables d)Lending to stock brokers / investors against shares of blue chip companies in demat form. e) All existing A - Category ( high value standard category) borrowers will be contacted and motivated for introducing new borrowers / facilitating switch over to our banks. f) Quantitative targets will be fixed and progress reviewed on monthly basis. B) RECOVERY AND ADJUSTMENT OF NON - PERFORMING ADVANCES:

Since Head Office has fixed the targets for reducing the NPA percentage, as such the strategy at the branch level should clearly spell out the time frame. The target will be bifurcated on monthly basis so that corrective steps can be taken if the degree of variation in actual results and targets fixed is large. STEP - I : SEGMENTATION OF BORROWAL ACCOUNTS a) Experience indicates that the number of accounts in the category of Rs.50 lac and above is very small but percentage of amount involved in this category is very high. As such, this category of accounts will be monitored at personal level on daily / weekly basis. Accounts in the category of below Rs. 50 lac but up to Rs. 10 lac are small but amount involved will be high Accounts in the category of below Rs. 10 lac will be very large but percentage of amount involved will be less. As such, loan officer will be assigned the task for recovery and overall review will be undertaken by the manager and senior manager on personally level on monthly basis. The.theme behind the above strategy /classification is that, even if by monitoring and follow up, few very large accounts are shifted into performing category, the percentage of NPA's will reduce substantially. STEP - II: CLASSIFICATION OF ACCOUNTS ON THE BASIS OF VIABILITY AND INTENTION OF THE BORROWER The underlying idea is to develop structured action approach so that broad guidelines are provided to the manager and the loan officer for monitoring and follow-up. For this purpose the NPA accounts will be classified into four heads: a) NPA accounts which are viable and intention of the borrower is positive. b) NPA accounts which are non-viable and intention of the borrower is positive c) NPA accounts which are viable but intention of the borrower is negative. d) NPA accounts which are non-viable but intention of the borrower is negative. STEP - III: STRUCTURED ACTION APPROACH A) NPA ACCOUNTS WHICH ARE VIABLE AND INTENTIONS ARE POSITIVE. a) Reschedulement / restructuring and where enhancement of limit is required, the same will be done on priority basis. b) Need - based enhancement be done by taking adequate collaterals / third party guarantee. B) NPA ACCOUNTS WHICH ARE NON-VIABLE AND INTENTIONS ARE POSITIVE Borrowers will be encouraged for compromise / one time settlement (OTS). C) NPA ACCOUNTS WHICH ARE VIABLE BUT INTENTIONS ARE NEGATIVE Efforts will be made through guarantors / other influential person for regularisation of the account and thereafter adjustment of the accounts. 13) NPA ACCOUNTS WHICH ARE NON-VIABLE BUT INTENTIONS ARE NEGATIVE Here bank has no options but to go in for recovery through following actions: a) Criminal Action - Where security has been sold / misappropriated. b) Civil Suit / Debt Recovery Tribunal / Actions under SARFAESI Act for possession of the securities and thereby liquidation of outstandings. HOW TO INCREASE PROFITABILITY With the entry of Foreign / Private sector banks, competition in the banking sector has intensified putting a severe pressure on profitability. The 'Spread' or NIM (Net interest margin) is shrinking. As such, it has become necessary to focus on profit as a key to survival in the competitive environment. Profitability = 'SPREAD' + Other Income - Other Expenses,Where Spread = Interest Charged - Interest Paid Any exercise on increasing profitability has essentially to concentrate on following critical areas: a) Increasing Interest charged. b) Reducing Interest paid. c) Increasing Other Income / fee based income. d) Reducing or rationalisation of expenditure. STRATEGIES FOR INCREASING INTEREST CHARGED: a) Change in Advances - Mix: Lending to those sectors / segments where bank can charge higher rate of interest. b) Reducing NPA and recovery of Bad debts. c) Compromise / One Time Settlement (OTS) for recovery of non-viable cases. d) Plugging of revenue leakages. STRATEGIES FOR REDUCING INTEREST PAID: a) Change in Deposit-Mix (Increasing low cost deposits i. e, saving and current deposit)

b) Increasing float / pipe line deposits (as remittance etc.) STRATEGIES FOR INCREASING OTHER INCOME: a) Increasing non-fund based / fee based business. b) Cross-Selling of the products. c) Effective Cash management d) Investment in high-yielding securities. e) Handling of Merchant Banking business with focus on Issue Management / float funds and fee based income. STRATEGIES FOR REDUCING OR RATIONALISATION OF EXPENDITURE: Rationalizing of expenses such as telephone, electricity, stationery etc. CUSTOMER RELATIONSHIP MANAGEMENT ACTION PLAN : Customer Relationship Management (CRM) is a customer driven business strategy designed to optimize profitability,revenue and customer satisfaction. CRM is also a paradigm shift from "product centric and mass marketing" to "customer centric" way of business. CRM involves relationship marketing, which is to establish, maintain, enhance (long term) the relationship with the customers and other partners so that the objectives of the parties involved are met. This is achieved by mutual exchange and fulfilment of promises. CRM is based on the short-term orientation of the management with focus on achieving the following objectives: a) Attract new Customers. b) Increase Sales per customer. c) Reduce Costs through optimization of business process. d) Improve Customer relationship/increase loyalty. CRM has a number of positive effects on the running of a bank. It provides management with a clear picture of the business, facilitating decision-making. Using a common architecture and data mode, customer information can be shared faultlessly between front-end staff facing the customers to deliver services and the back-office staff who structure the deals. Front-end staff of a bank can profile a customer, create and maintain a customer account with contacts, manage activities, and explore business development possibilities. Similarly, a call center agent can maintain client data / information, produce call notes, replies to customer inquiries, and address and track customer service requests. In a nutshell, implementation of the CRM concept in banks can result in the following advantages: a) Speed and accuracy in information analysis. b) Foundation for organization-wide data and information. c) Understanding customer behaviour. d) Facilitating Business process re-engineering. e) Multiple products — credit deposits, investment, insurance etc. f) Multiple distribution channels — branch, Internet, call center, field sales etc. g) Multiple customers group — customers, small business, corporation etc. IMPLEMENTATION STRATEGY: a) Motivation for Bank staff The first step in implementation of CRM in banks is to motivate and train the staff to do so. The motivation must come from the side of the management in the form of regular training in behavioural and functional aspect of banking. b) Change of Mind-set and Customer Classification Change of mind-set of staff members is very important. It should be realized that all customers are not equal. Customer profitability varies from person to person/context to context and not all customers are evenly desirable for the banks. Banks must differentiate their customers based on the 'value criteria' i.e. how valuable the customer is? Value is nothing but the profit the customer adds to the bank's account. Put simply, a more profitable customer is a 'high value' customer and a less profitable customer is a 'low value' customer. A bank's CRM system must also capture customers' taste, preference, behaviour, living style, age, education, cultural background, and physical and psychological characteristics, sensitivity etc., while differentiating them by the value criteria into low 'and high value customers. By combining the profitability potential of a given customer and his/her personality profile including their expectations, customers can be grouped into four categories as follows: 1) Low value / less profitable customer desiring high-grade service. 2) Low value / less profitable customer with potential to become high value in incoming days. 3) High value ! more profitable customer desiring high-grade service.

4) High value more profitable customer requiring low-grade service. Once the banks differentiate their customers vis-a-vis the profitability and their other traits, it becomes easy for banks to customize their services and offerings to maximize the overall value of their customer portfolio. c) Ambiance for Banking The customers are comfortable going to banks that have a customer friendly environment. It may be due to the vast expansion of the premises, personal cubicles created, plush interiors, soft furniture, etc. Some banks go to the extent of playing soft music, setting up coffee shops, display work of art, etc., to create the right ambiance for a perfect CRM. d) Customer Retention Retention of old customers is more profitable than acquiring new ones. Happy and satisfied old customer brings in many other new customers. It has been realised that it pays more to keep your existing customer content, which results in cross selling and purchase of products. SUGGESTIONS: a) The banks can be made more customers friendly. b) Top management and senior executives must be committed and dedicated so that the lower employees are adequately motivated to implement better CRM. c) More funds to be allotted for implementation of IT, which not only speeds up transactions for customers but also avoids unnecessary friction between employees and customers. d) It pays to appoint well-educated, young, smart, highly trained and motivated relationship managers. e) The bank employees must be informed about new products and services at regular intervals. The communication channel needs to be more efficient between the management and employees. Handbooks can be printed and circulated for this purpose. f) The preparation of customers profile is very necessary to have a customer data base. g) Data mining needs to be dope at regular intervals for effective cross selling of products. h) Bank employees of all cadres need to be trained in effective implementation of CRM. i) The net banking concept needs to be tapped fully by banks. Computerisation needs to be done in more and more branches and they also should be connected through computer network, e-mail, etc. j) The belief that banks have poor customer relationship needs to be shattered by improving their image, wide publicity and campaigning by the media which will help to a great extent. k) The efficient employees who have effectively implemented CRM need to be rewarded within the limits of the management. It has been revealed that untimely transfers and lack of rewards are the main factor that discourages practicing better CRM by employees. The management can work up schemes to award cash prizes or give additional points for promotion to those employees maintaining good relations with customers. I) New products are to be lalinched keeping in view the services offered by foreign banks. m) Unlike the traditional approach where customers are acquired through mass media advertising, CRM normally gets its customers through referrals. CREDIT OFF – TAKE AT BRANCH LEVEL BACKGROUND : Budget is not just allocation or fixing targets. It is consultative and participative exercise done by the Head Office and concerned Branch Managers in an open atmosphere. Lot of home -work goes into the whole exercise. Branch Head, is supposed to have good idea of business environment and potential of his target area. Apart from this, past performance is also available in the form of statements. Historical data on recovery, quality, NPAs, court cases, compromises etc. is also available. The most important information that is crucial in business performance is the quality of staff and management of personnel, which depend to a large extent, on the attitude of Branch Head, Zonal Head, and other officers as well as the status of industrial relations at the branch. OBJECTIVES: To ensure credit off-take to the targeted level, the principle underlined is that the Decision should transcend: a) The Safety and Security of advances. b) Profitability aspect of advances. c) Spread of risk branch wise, product wise, area wise and customer wise for reducing concentration of risk exposure. HOME WORK BEFORE TAMING BECOSION : The ABC analysis will be undertaken with the focus on the past data of the existing branches regarding both quantity and quality of advances and also the potential available, product-wise and customer-wise and area-wise.

The first step in the analysis of data will be to identify top hundred borrowers who are in the Standard category. They can be classified into manufacturers, exporters, wholesalers, retailers and others. A meeting/calls will be conducted / made, with these 100 borrowers with the purpose of assessing their future business requirements i.e. the enhancement of limits required by them. Even top 100 depositors will be identified and honored. Their business requirements will be assessed. The services of these 100 top borrowers will be utilized in identifying a chain. of new trade borrowers who have good reputation in the market and are also availing huge limits from other banks. The existing borrowers will also be used to persuade / motivate the new chain of borrowers to switch over to our bank. Different trade associations dealing in different products will be contacted through the top 100 trade borrowers and potential borrowers having huge borrowings with other bank will be identified for take-over. Identification of potential traders / dealers, through professionals such as Chartered Accountants, Cost Accountants, Tax Consultants etc., who are not dealing with our bank. The capacity, expertise and experience of. the staff dealing in advances will be assessed. If need be, a workshop for reinforcement of advances skills will be organized for the dealing staff. FIXATION OF TARGETS: The allocation of the targets will be done on the basis of mix of Customer-wise, Product-wise, Area-wise and Branch-Wise to ensure spread of risk. CUSTOMER WISE: Customer specific targets can be set on the basis of the homework undertaken. While allocating targets, it will be broadly kept in mind that 60% of the targets should be earmarked for the existing top good borrowers and 40% for new borrower identified through existing top borrowers, trade associations and by the branch managers. PRODUCT WISE: While allocating the targets, the nature of the product will be kept in view on the basis of characteristics such as perishability, price fluctuation, and demand forecasts. Further, a balance will be maintained so as to ensure against overexposure in a particular product segment. It has to be ensured that adequate collaterals/third party guarantees are taken invariably. In exceptional cases, the specific clearance will be necessary from the region. AREA WISE: There are some trading activities confined to some areas. For example, apple, potato, kinnow, vegetables like tomato, cauliflower, onion, garlic, ginger etc., such areas may have a number of wholesale dealers, commission agents, arhtias. The budget can be conveniently allocated to the branches in those areas. Past experience, NPAs and other qualitative aspects would of course be kept in view. BRANCH - WISE: There may be branches where specific products are traded like steel, furniture, construction material, timber, horticulture products and cash crops. Products specific budgets can be considered if past data about quality and recovery etc. is available. Some branches have predominance of wholesale traders, being historically established at the towns/ cities to serve as the source of supply to the remote places. These branches are having potential provided the past experience of trade advances has been satisfactory. While selected branches, specific areas and specific products would always be in sharp focus, no branch would be allowed to feel neglected and, similarly, no branch having no potential would be unnecessarily burdened. So, while all the above three considerations will be kept in mind, selectivity will guide the exercise. MARKETING OF RETAIL BANKING PRODUCTS Retail Banking is a composite activity encompassing the banking products and services specially designed for meeting the ongoing requirements of 'individual' customer. An individual customer develops banking habit mainly for three purposes,namely: a.For making Investments, b. For raising loans, and For availing any of the subsidiary services. Retail banking, therefore, becomes complete only when all these financial needs of an individual customer are met to his utmost satisfaction under one roof. Retail Banking is being increasingly focused in Indian. Banking industry today mainly due to high margin and low risk nature of the business coupled with the, increasing pace of consumerism in India. Other factors, such as, increased' economic activity, increase in purchasing power of the consumers, especially that of the younger generation, a huge middle class population, innovations in technology and low interest rate regime have contributed to growth of retail financing. With increasing competition, 'spread' in the Indian banking industry is under strain. As such, banks need to shift their

focus to innovative products and services, which are profitable. If banks intend to prosper, profitability of products and customer should become buzz word for them. MARKETING STRATEGIES 'Marketing' is a composite activity, which includes market study, designing of products, delivering and ensuring proper after sales services. In a 'race' it is the 'pace' that counts and for attaining a 'winning pace', marketing strategies have to be designed. Latest technology can be used by banks to target products to the right potential customers, by maintaining a database of customer profiles and their likely financial needs. Data mining has to be strengthened, as it will help banks in formulating products for specific set of customers. The first step in designing the strategy is to identify the target customers and target products for which market segmentation exercise has to be undertaken. a) Market Segmentation: Segmentation of existing as well as potential retail clientele into housewives, professionals, salaried personnel, workers, company executives, businessmen, farmers be done to identify the needs of the target group and facilitate structuring financial products I services to match their needs. Further, the same data can be utilized for evolving different techniques of marketing depending on the target groups. b) Central Data Base: Bank should build up a central database to contain the profile of all high value retail clientele. Communication (either as seasonal greetings or for highlighting the significant measures for improved services, new products) through 'e' mail / postal mode should be sent at regular intervals from the corporate office itself directly to those high value customers identified by the marketing team stationed at all key delivery units. c) Financial Super Market: In view of the exposure of Indian customers to global products and services they have become more demanding, and they want fast, convenient and hassle-free services from banks in India. The traditional loyalty and inertia associated with the Indian consumer is changing very fast. As such the success of retail marketing largely depend on how banks understand its customers and the market. Development of skills for managing customers has become of crucial importance,if banks of today have to survive. Bank should become a 'one stop shop' for all the banking needs and services. For the retailers investing in low cost deposit schemes, add-on benefits like demand drafts, funds transfer facility, Anywhere Banking, ATM cards, name printed cheque books, monthly statement of accounts (direct to residence / office), Customer terminal (installed at their. premises),concessional collection charges, Mobile Banking, Internet Banking, Depository services, Portfolio Management Service,standing instructions, Insurance products should be extended either at concessional or nil cost. A cost study should be conducted to introduce a business linked tariff structure for all these services. All these services with technology should instill in the customer a sense of pride in banking with us. d) Retail Financing as Core Activity: Banks should prepare a list of preferred areas of retail finance town-wise, keeping the potential in view. SWOT analysis will help in identifying high profile towns from retail lending point of view. This will help in making focussed attention on retail financing by banks in specific potential areas. Ground work required for retail financing will involve: • Operational Manuals: To ensure uniformity and facilitate faster appraisal and decision making, operational manual has to be developed by banks. With this staff members at the grass roots level will not violate norms and by pass systems and procedures. • Credit Scoring & Loan Pricing model: To enable the frontline staff to take quick credit decisions, an efficient credit scoring and loan pricing system has to be designed. This will strengthen credit appraisal and post- sanction monitoring systems. • Centralised Processing: To have a competitive edge and gain the critical mass in the high volume game, the processing activity can be centralized. Processing excellence is crucial to sales and service quality. e) Portfolio Management Services: A retail investor still prefers 'safety' to 'returns' and hence Banks are the ultimate choice. Series of failures elsewhere have already made the investors lean towards the Banks. Bank can have portfolio management services for the retail investors so that they can have all investment options under one roof. • Target Approach: Targets can be fixed for all the units & teams dispensing retail banking products. • Well-Trained Marketing Teams: A product can be got sold in this highly competitive environment only through committed well-trained marketing teams. Exclusive marketing teams specially trained for this purpose should be stationed in all key places to ensure market presence and penetration. In all other places, the people at the delivery unit themselves should form the marketing team. • Brand Equity: Customer preference, under the present environment, is towards branded items. Brand equity should be created for all retail banking products and services through regular road shows, seminars, advertisements, exhibitions, market penetration.

• Pricing of Products and Services: For retail lending schemes, it is always the "cost" and 'care' that counts and these two aspects haunt the minds of retail borrowers. Rate of interest for the loans under retail lending should be rather based on the risk profile and where the credit risk is low or nil, the rate of interest should be the lowest and for others uniform guidelines for graded interest rates be introduced. • Feedback: A system for regular interaction and feedback from the retail 'customers be evolved to facilitate constant review and fine-tuning of strategies. • Non-Cash Incentives: Norms for non-cash incentives be evolved for the teams doing excellent business in retail banking. • Frill Benefits / Add-ons: All schemes under 'Retail lending" be insurance linked and procedural formalities to be reduced. Norms for 'Back ended interest rebate' for prompt repayments be also evolved to make the schemes still more attractive and customer friendly. TURN AROUND OF A BRANCH MIND SET – UP : The first step is to undertake the diagnostic study of the reasons the branch is running into loss. This will include scanning of the environment identifying the business potential and drawing up a strategy for turn-around of the branch.The ABC analysis both for deposits and advances will be undertaken. The target area will be scanned and all business potential entities I groups will be identified and quantified. Different associations / agencies will be used as a business promotion vehicle. Micro-analysis will be undertaken on a time frame 'basis. Target will be fixed and efforts made to achieve the same in the time schedule. STEP - WISE ANALYSIS WILL FOCUS ON: a) Scanning the area and preparing the profile of existing units / potential - sunrise areas in agriculture, industry,infrastructure, housing, retail lending. b) Identifying Govt. agencies where they can be bulk credit off-take i.e., Indirect Financing through corporations, boards and other agencies. c) Credit off-take through automobile financing and financing to consumers for white good durables, Lending to Stock Brokers / investors against shares of blue chip companies in demat form. d) All existing 'A' — Category (standard category) borrowers will be contacted and motivated for introducing new borrowers /facilitating switch over to our banks. e) Quantitative targets will be fixed and progress reviewed on monthly basis. The profitability could be achieved in two ways. Firstly, by earning more income, and secondly, by reducing or rationalizing expenditure. We can work on the following lines, keeping in mind our location. A) Income Oriented Activities; B) Expenditure Saving Activities;, C) Generation of Income through competitive services; D) Recovery Aspect. A) INCOME ORIENTED ACTIVITIES: The first step is to short list income generating sectors. The target area will be scanned and business potential activities such as schools, colleges, universities, .trade associations, industries, business ventures etc., will be listed. The activities should be focused keeping in mind following features: (a) Identification of existing SMALL/Medium Industrial Unit Situated in the Area. We should identify the SSI and other medium industries, which are working successfully in the area and are having their accounts with other banks. The details can be obtained from District Industries Centre. A list of successful small and medium industries working in the area could be obtained. The existing 'A category borrowers be pursued to introduce new good borrowers so that bank can facilitate them to switch over to your bank. (b) Facilities to Road Transport Operators: In the similar way, automobile dealers of buses; trucks and auto rickshaws could be contacted. If possible, a small advertisement display of the bank could be placed near their showrooms, with their consent. Assistance could be given to such road transport operators of the area. The well-established schools and colleges working in the area could also be contacted. Such institutions require vehicles for transporting their students. (c) Assistance to Distributors and Wholesale Traders Bank can approach various authorized dealers, distributors and other wholesale traders who have well-established business. They

could be requested to switch over to our bank. Their proposal could be got sanctioned frOm the higher authorities, if not within the vested powers of the branch manager. Such finance carry higher rate of interest and is collaterally well secured. The traders are financially sound and the possibility of the accounts becoming sticky, is very less because they have a wide spread network of retail outlets for their sales. (d) Assistance for Housing Housing loan is yet another important segment. It is a long-term income-yielding sector. Well reputed contractors; builders and architects could be contacted to know about the prospective customers. Municipal authorities could also be helpful in this purpose. Subsequently, the parties could be contacted to avail housing finance from our branches. B) EXPENDITURE SAVING ASPECTS: it is very common phrase that penny saved is the penny earned. We may have to put some extra efforts for earning extra income: But we can save a lot with a bit of care and proper management. The things, which appear very minor and petty in nature, go a long way in lot of savings. These even, are capable to turn loss-bearing units into profit earning units. Some of the important aspects where wastage could be avoided are as follows: a) Over staffing could be avoided. b) Staff should be properly utilized. c) Switches of fans and tubes should be at the nearest point to the working officer so that lights could be switched off as soon as the staff leaves. d) Misuse of Bank's vehicles should be checked. e) Proper log registers should be maintained and checked immediately on the return of the concerned employees. Vehicles should be properly got serviced at regular intervals so that wear and tear is reduced and fuel consumption is optimum. f) The articles, which are not in use, should be disposed-off with the prior sanction of the higher authorities. These should not be dumped unnecessarily. g) Record keepers and other subordinate staff members should be advised to maintain stationery properly. h) The sub standard article should not be purchased because they require regular repairing, and ultimately result into loss and inconvenience. i) The expenditure bearing articles should be replaced with new economical gadgets and articles. C) COMPETITIVENESS IN BANK'S SERVICES: Within the prescribed limit, branch can bring competitiveness in some of the services. For example, with prior permission, bank draft charges, lockers charges etc. could be conveniently re-fixed which may yield more income but do not effect service. If the charges levied by the bank are on higher side with comparison to other banks operating in the area, the case could be taken up with the higher authorities for the reduction of the same. D) RECOVERY ASPECT: Recovery of sticky and overdue loan accounts should be given top priority. Such accounts affect adversely the working of the branch in two ways. Such accounts should be short listed and field staff be given necessary instructions to maintain a regular and constant touch with the defaulters. Legal aspects should also not be delayed. Efforts should be made to get the recoveries through compromise. Such proposals should be forwarded to the higher authorities at priority level HOW TO IMPROVE INSPECTION / AUDIT GRADATION OF YOUR BRANCH The first step to handle the audit / inspection report is to prioritise the irregularities / discrepancy. Irregularities 1 discrepancies which are of serious and very sensitive nature and can cause financial loss to the bank, has to be given the top most priority and efforts will be made to rectify the same instantly. The monitoring and follow - up of irregularities has to be done on daily basis by the branch head himself. The irregularities be classified as follows: a) Section wise listing of irregularities: First of all the irregularities should be sorted out section wise. The departments, like deposits and advances, which are looked after by more than one officer, the lists of the irregularities should be made as per sub sections or as per work handled by the different officers. This would make it convenient to refer to the records, recording the irregularities removed and in some other aspects as well. b) Picking up the Experienced Staff for Removal of Irregularities: Well -experienced staff members should be listed, sector or business wise for removal of the irregularities. Technical officers or field staff could be taken up for irregularities related to the field job where we have to approach the customers.
c) Prioritizing the Irregularities: All the irregularities should be separately listed according to the gravity or the seriousness. Top priority irregularities pertaining to limitation, wrong documentation, stock

reports, cash department and so on should be given personal attention. A proper follow up should be maintained. d) Issue of Office order for removal of irregularities; A proper office order be issued to get the irregularities removed in a time bound frame. The officer order should also indicate the time for submission of progress made in this effort, i.e. weekly,fortnightly etc. FOLLOW – UP : a) Monitoring: The concerned employees be asked to submit their report to the Assistant Manager, who, in turn will submit the consolidated report to the incumbent incharge. The incumbent incharge may submit the progress report to the controlling officer accordingly. b) Instructions for Future: It is more important that the irregularities are not repeated in future. The staff members working on different seats should be asked in writing to follow the prescribed procedure strictly in letter and spirit. This will reduce the number of irregularities to a considerable low. The checking officials or officers should be asked to do proper checking. c) System of individual diarising the pendencies: A system should be adopted that pendencies pertaining to incomplete work be diarised by the individual Officers seat wise. The officer working on the seat should maintain the dairy on daily basis. The same should be completed at the particular date noted in the diary. Most of the irregularities occur because they slip out of mind. HUMAN RESOURCE MANAGEMENT Human Resource Management (HRM) broadly refers to a positive approach to the management of an organization's people who individually and collectively contribute to the achievement of sustainable competitive advantage. It basically refers to the management and development of the employees, to match with the business strategy of the organization. The FIRM philosophy is based on positive commitment towards the development of employees for ensuring their growth,development and performance to enhance human capital in the bank. The HRM model is composed of policies that promote mutual growth for achieving mutual goals coupled with mutual responsibilities and rewards, which in turn will yield both better economic performance and greater human development. AIMS OF HRM IN CHANGING ENVIRONMENT • HRM is seen as a partner aligned to business strategy, not only participating in setting performance objective of any employee but also creating development opportunity to achieve them. • To enable management to achieve organisational objectives through its workforce. _ To foster commitment in employees which will facilitate to gain competitive advantage. _ To establish an environment in which the latent creativity of the workforce will be unleashed. _ To achieve "strategic fit" between business strategy and HRM so that there is consistency between policy goals of HRM and that of the business. KEY STRATEGIC ISSUES IN HRM From the intervention strategy perspective, HRM must contextually respond to the following issues: ORGANISING PEOPLE TO WORK EFFECTIVELY A key starting point for effective human resource management is to build an organisational structure that is designed specially to carry out the bank's mission and strategy. The first and foremost task of HRM in banks, therefore, would be to organize its people so as to enable them to work effectively. OPTIMIZE THE ORGANISATION STRUCTURE - UP GRADATION OF TECHNOLOGY The technology up-gradation in the wake of competition has the effect of taking banks to become more efficient and capable of responding to the market conditions. The business strategies and technology up-gradation has a direct impact on the organisational structure. HRM must be able to re-design organisational structure as per external changes, business strategies and one step ahead of the competitor. Work process re-engineering to achieve greater efficiency and cost effectiveness must be attempted. BUILD THE RIGHT SKILLS AND WORK CULTURE Banks must have employees who offer the necessary range of job specific skills and whose attitude towards their work and,colleagues enable them to channel their skills and energies into performing productively for bank and its customers. ELIMINATING SKILL GAP Introduction of newer technologies by itself does not improve performance of banks. Introduction of new technologies necessarily involve re-examination of the existing human process so as to deliver better results. New technologies need new skills

but they do not replace human skills. The centralised core banking solution package being introduced in banks would necessitate far reaching changes in managerial practices besides rendering surplus age of employees. RE-LOCATION OF SURPLUS EMPLOYEES Focus of HRM should be to plan for effective relocation and utilisation of displaced employees and effective use of back office data. BUSINESS PROCESS OUTSOURCING Outsourcing, which is quite simply the transfer of operational responsibility of business processes, infrastructure management of an IT application to a third party for a fee, is gaining, acceptance amongst corporates globally so that they can concentrate on their core business i.e. banking. TOTAL ENTERPRISE TRANSFORMATION: Optimal results of technology implementation can be achieved with proper grooming, placements, training, rotation and changing the mind-set of the staff. HR is the key element in implementation of technology since men have to run, manage, operate and command the technology. BENEFITS OF TOTAL ENTERPRISE TRANSFORMATION Public Sector Banks will have the following tangible business benefits by total enterprise transformation. e Enhanced Competitiveness 0 Enhanced Operational Efficiency 0 Enhanced Customer Satisfaction. Enhanced Accountability • Better Financial management 0 Better Risk management MANAGERIAL ROLES Role is a position, which a person occupies in an organization, defined by the expectations of others (significant groups or individuals), and by himself. Role should be properly defined to avoid ambiguity, overlapping, transgression & stress. AS A PLANNER: A manager undertakes planning, which envisages goal setting and resource mobilization, essential for achievement of pre-determined and thoughtfully scheduled organisational goals. Appropriate strategies are worked out with periodical review if and when warranted by environment, particularly competition. AS A PERFORMER: A manager shows commitment and devotion. He sets example by bringing about congruence between personal objectives and organizational goals: He identifies Key Performance Areas (KPAs). His performance is quantifiable and visible. He lays down challenging tasks for himself, aims high, puts in hard work and becomes a trailblazer. AS AN ORGANIZER: A manager is an effective organizer of material and human resources. He ensures to utilize resources economically to give optimum results. He cares for human resources, plans training & development, motivates people,establishes instant and spontaneous rapport with others and creates conducive working climate. He infuses values and reinforces concepts like cost consciousness, total quality management leadership, responsibility to society, loyalty to organization, fellow feeling among the staff, zeal for intrapreneurship and innovation. AS A LEADER: A manager develops team, energizes organization and team members, motivates staff, shares knowledge, acts only after full investigation, invites suggestions, accepts change and enforces change through consultation and persuasion, keen on creativity and encourages creativity in the organisation, skilled in negotiation and communication. He is also self-confident, obeys codes of ethics & morality, shows high maturity, good listener and skilled in resolution of conflicts. He treats colleagues with respect. He acts in the true spirit of friend, philosopher and guide (counselor). AS A MOTIVATOR: A manager knows that people are invaluable resources of the organization. He keeps them motivated to accomplish goals. He knows that motivation is the resultant behaviour propelled by need arousal. People move from lower level (basic) needs to higher level needs (status and social recognition); they desire to reach a level of self-actualization. A manager, therefore, uses tact and philosophy to create a desire in his colleagues to have a vision of attaining higher goals and work for the same with dedication. AS A COMMUNICATOR: Makes clear and understandable communications, down the line. Informs Controller with facts and convincing logic. His communication is effective. He insists on feed-back. He gladly gives clarification, if sought. His communications are polite but firm and specific. He prefers discussing subjects threadbare in meetings. He does not take offence if opposite views are expressed; he removes fear in meetings. AS A MONITOR: He ensures compliance through statements and returns. He insists on feedback. Achievement of budgeted levels is appreciated liberally and negative variance is taken as opportunity to look into the environmental / hindering factors for suitable remedial actions, which he suggests. He offers support, if any, required.

AS A CHANGE AGENT & CATALYST: Changes take place regularly, sometimes abruptly, both internally and externally. He explains changes and their consequences; invites reactions, allays fears and persuades to accept changes for better results. Rationale is explained, holistic position described in global context, ensures acceptance of change willingly. AS A VISIONARY: Only a visionary manager thinks of extra-ordinary possibilities, he experiments on new possibilities and allows his subordinates to do likewise. He excuses routine and genuine mistakes. Vision brings about super synergy in the team, which is a force to meet and beat competition and become a winner. Vision infuses confidence and encourages killing instinct, and this is required in today's competitive environment. AS A IMAGE BUILDER: A manager represents an organisation. He builds its image, conducts him self-well, he projects his organization by his good deeds and actions. He has to ensure good working climate,. courtesy on the part of the staff, helpful & supportive attitude of all in the organisation towards the public calling at the premises or contacting on telephone etc., prompt & efficient customer service, zero mistake operations, prompt reply to communications, tailor-making schemes for certain target groups and sense of discipline on the part of all. He ensures that visit to the organisation is a delight indeed. AS A COORDINATOR: It is the responsibility of the manager to coordinate different aspects of an organisation. It is necessary to create the harmony between manpower, available resources and decides targets for effectiveness, efficiency and growth. All these roles culminate into the role of developer and this role can be achieved only by having the concept of 'leading by example'. WHAT MAKES A GOOD MANAGER PROBLEM SOLUTION (CONFLICT RESOLUTION) • JUDGEMENT SKILL — Distinguishes between what's important or controllable, and between what is not important or uncontrollable. Identifies who is skilled enough to handle an issue or reconcile a conflict situation. Ensures and priorities within time-frame work. • ANALYTICAL SKILL & INTEGRATIVE ABILITY— Identifies inconsistency in message contents and subtle relationships in information. Identifies facts from various and unconnected sources, and relates them to arrive at conclusions. Familiarizes with concepts. • DECISION MAKING AS CORE ACTIVITY— Considers the relevant facts for developing and evaluating all possible alternatives for solving a problem, habitually draws upon colleagues for suggestions, affords opportunity to the subordinates to develop. Realistic, practical constraints are considered and helping factors identified. • ADAPTABILITY — According to Charles Darwin, "it is not the strongest nor the ablest who survive, but it is the one who adapt to change that survive". A manager performs under less than optimum conditions e.g. unstructured problems, too little time and/or resources, insufficient information, mismatch between individual's skills and job requirements. • PERSONAL IMPACT— Affects others, convinces those holding opposing or neutral positions, push through interest or ideas despite opposition due to personal influence, style, endeavour, and ability to carry along colleagues. Takes charge of situation quickly, decides. INTER-PERSONAL SKILLS • COMMUNICATION: Communication instructions and proposals with facts and in clear and understandable language, avoids ambiguity, ensures feedback, listens patiently and carefully, holds meeting in cordial and encouraging manner and invites suggestions. • MANAGING INDIVIDUALS — Understands management principles and concepts, assists subordinates and peers involving management experts, to achieve their business and career objectives. Listens to others, acknowledges their strengths, and volunteers to remove their weaknesses. Ensures support and guidance, and understands individual differences. • PLANNING AND MANAGING GROUP PERFORMANCE — Formulates participative plans to achieve job objectives as part of organisational objectives, undertakes mid-term review of business plan, if found unrealistic or unreasonable due to environmental changes, sensitive to group co-operation, productivity and profitability. Sets up quality•circles and pushes forward through team spirit towards zero defect operations. • CONFLICT MANAGEMENT — Objectivity despite stress. Addresses conflict directly and tactually. • DIPLOMACY — Negotiates with win-win situation. Tailors approach to take into account the perceptions, needs or motivation of others, giving reasons and explanations for requests. PERSONAL ATTRIBUTES • COMMUNICATION — Speaks and writes well. Adapts communication style to suit the audience. Is easily understood. Ensures two-way communication. Gives clarification, if wanted.

• DECISIVENESS —Firm, chooses among alternatives, confronts higher management decisions. • CREATIVITY — Provides/anticipates new perspectives, approaches, experimentation. ENERGY • ACTIVITY LEVEL — Sustains high level of activity including speed, volume of work accomplished, endurance, balance, composure, civility, and enlightenedleadership. • FLEXIBILITY — Handles challenges. Copes with multiple changing demands and setbacks. STRATEGIC & OPERATIONAL CONTROL • STRATEGIC & ORGANIZATIONAL AWARENESS — Possesses awareness of interests and objectives of the organization, develops own plans and actions as part of overall organisational plan. Coordinates with and provides assistance to other units, keeps updated on changes. • ADMINISTRATIVE CONTROL— Prepares plans & tracks; documents the progress of programmes. Designs control systems. Keeps abreast of the details, which support them. • TECHNICAL MANAGEMENT — Ensures more technical expertise on the job than managerial expertise on the job. Provides current technical skills to subordinates and others to stay competitive in market. COMPETITIVE ANALYSIS & ASSESSMENT: Environment threat and opportunity analysis is required to know the strategy of the competitors and entry of new competitors and comparison of our resources and strategy with their plans. DELIVERING CUSTOMER DELIGHT Human beings are unique and complex entities. Each develops his/her own self-image, likes and dislikes. So is the case with our customers. Each of the customers has different features, characteristics and expectations - unique in one's own way: Global Customers: Often our customers operate in more than one country and their products, services, operations, and their end-users too are spread all over the world. To serve them means, 'thinking global". Technology Oriented Customers: Such customers focus on technology as their change agent which virtually governs the dynamics of their daily drills and they execute their plans with long-term leaps. For serving them we go by the dictum "thinking ahead, thinking competencies". Customers which are Demanding and Competitive:They judge themselves by making comparisons as to, what they can do better than their competitors do. How quickly and smartly they stay. They determine their success by positioning ahead in the market arena. In their case, it means to us "thinking business". Constantly Benchmarking Customers: They believe in setting standards not to stick to them as they consider them minimum, only to be raised consistently and quickly. Reaching global benchmarks is a given thing for them. Measuring quality, finding ways of removing or reducing defects and pursuing excellence constantly are ongoing commitment for them. They make us do "thinking metrics, thinking excellence'. Cost Focussed Customers: Business today is more conscious of pressure on bottom lines. Reducing costs, improving operational efficiencies are the things of the day. For such customers, we commit "thinking cost-effective solutions". HOW TO PROCEED TO SATISFY OUR CUSTOMERS? We must adopt a policy of collaboration / partnership with our customers to deliver the needed and perceived business solutions. The following propellers are indispensable in this regard: a) A matching mindset: We have to develop a mindset that not only brings about understanding of customers' needs and expectations but also dig deep to empathize with the customers' latent expectations needed relevant technologies and business goals. We can then succeed to deliver solutions with genuine passion. b) Honouring Delivery Schedule: Solutions have not only to be need-specific but also time-specific. Looking for ways to deliver solutions not just on time but ahead of time is the core of success in serving customers. c) Reservoir of Competencies to Lead: Highly competent professionals with rich domain competencies to understand the business of customers better must be in position. The technical team has to be supported to develop solutions for the customers, recognizing fully well that customers seek solutions, not technology. d) Cutting down on Cost: Rupee saved is rupee earned. The solutions, processes, and people should all be bottomline-focussed. Twin strategies of cost reduction and cost savings go hand-in-hand. These lead to. a discernible increase in operational efficiencies, resulting in increasing value for the customers' shareholders.

e) Value Addition: Adding value enhances customer delight. Endeavour to add value to every facet of the customer interaction has to be a permanent feature. Think of value addition to customer, relevant existing process, new plan, innovative idea etc. MEASURE AND DELIGHT APPROACH: Quality benchmarking being ongoing process means going beyond global benchmarks such as ISO 9001-2000, SEI-CMM Level 5 and other standard requirements. The goal should be to constantly raise the bar. Measurements monitoring, modifying and excelling help to apply the best quality practices for the customers. PROBLEM SOLVING & DECISION MAKING With the integration of Indian economy with the rest of the world, the pace of changes in the environment has increased, leading to an increase in organization problems. Dynamic management of an organization demands understanding the change, nature of change and the direction of the change. Manager by the process of decision-making undertakes to minimize the impact of changes and increase effectiveness for achieving organizational objectives. Decision-making is the process of selecting a course of action from among several alternatives. It is selection of the best possible alternative for the solution of a given problem. STEPS OF DECISION MAKING a) Problem Identification - Problems arise due to disparity between ' what is' and ' what should be'. The threats of environmental changes also create decision problem. A manager should identify and define the real problem in a straight way. A problem well defined is half solved. The problem should be classified on the following basis: • Nature of the decision, i.e. whether it is strategiINGc or routine. • Impact of the decision on the various functions of the business. • Futurity of the decision. • Periodicity of the decision, and • Limiting or strategic factors relevant to the decision. b) Diagnosing the Problem: Diagnosing the problem is knowing the real cause of the gap between what is and what should be. The problem should be understood in terms of its elements, its magnitude, its urgency, its course, and its relations with other problems. All pertinent facts and information must be collected and analysed to diagnose the problem quickly and correctly. c) Developing Alternatives: A manager, while making decision, should search for various alternatives, which should be identified and analysed. There is a no problem of decision making if there is only one way of solving a problem. A wide range of alternatives increases the freedom of decision maker. However such alternatives should not be considered which are not possible to be accomplished due to a limiting factors. d) Selection of Best Alternative: After evaluation of the various alternatives, the decision maker has to select the best alternative or that alternative which contributes maximum to the given objectives. It should be ensured that the decision taken is practicable, stable and it is not creating another problem. e) Implementation Decision: It implies laying down of derivative plans and their communication to all concerned who are responsible for its implementation within a given timeframe. f) Follow-Up: The implementation of the decision should be constantly monitored. No matter how scientific it is, decisionmaking has no guarantee that it is hundred percent correct. It may be defective and may cause loss to the organization. As such its progress should be watched carefully to minimise the chances of loss. If the decision taken is not yielding the desired results, necessary changes should be made in the decision or its implementation. Thus an effective follow-up may control the major deviation in time. One of the best ways to analyze the decision is to use the most common Decision Trees approach. Decision Trees depict, in the form of a tree, the decision points, chance events, and probability involved in various courses that might be undertaken. This approach makes it possible to see atleast the major alternatives and the fact that subsequent decision may depend upon events in the future.

TIPS & TECHNIQUES OF GROUP DISCUSSION

TIPS & TECHNIQUES OF GROUP DISCUSSION
Group Discussion Tips (GD) A group discussion (GD) is a simulated exercise. The note attempts to present a few tips on GD and how to handle them to ensure a positive outcome. Here's how most group discussions work: Normally groups of 8-10 candidates are formed into a leaderless group, and are given a specific situation to analyze and discuss within a given time limit. The group may be given a case study and asked to come out with a solution for a problem. The group may be given a topic and asked to discuss on the same. A panel will observe the proceedings and evaluate the members of the group. GD forms the primary stage of contact between the interviewer and interviewee. In this methodology, the group of candidates (may be in between 6 to 10 depends on the bank) given a topic or a situation, given a few minutes to think about the same, and then asked to discuss among themselves for about 10 minutes. The objective of GD is to judge the listening skills, attitude and confidence levels besides gauge analytical, leadership and decision making skills. Normally, the successful persons are one who communicate and interact with the group members with ease and clarity. The candidates need to inculcate the following traits for better results. 1. Listen carefully - Listen to the topic carefully and understand it. Be alert and vigilant. Sometimes, the topic may be really simple but the manner in which it is presented to you can be baffling. Make a rough sketch of the points that you would like to speak. Try and listen to the participants, respect their viewpoint too. This will also show that you are vigilant and are an active participant in the discussion. 2. Initiation – Take lead to initiate the Group Discussion, if you are happened to be the first speaker. But keep in mind that should have reasonable understanding of the topic. Speaking without proper subject knowledge may give poor impression. 3. Communication - Be well versed with topic and communication. You should have a good vocabulary and a good command over language. Rehearse well. 4. Simple & Sensible - Speak clearly and use simple and understandable words while speaking. Express your feelings calmly and politely. Be precise. Do not speak just to increase your speaking time. Even if you speak less but ensure that your thoughts are sensible and relevant. 5. Body Language: Besides what you are saying, remember that the panellists are observing your body language as well. Body gestures are very important because your body language says a lot about you. In a GD, sit straight; avoid leaning back on to the chair or knocking the table with a pen or your fingers. Do not look at the evaluators only. Keep eye contact with every team member while speaking. 6. Be accommodative - Speak less and listen more! Pay attention while others are speaking. Do not interrupt anyone in-between while speaking. If you do not agree with the other’s point of view, do not raise your tone in objection. Listen to his point of view and instead of dismissing it upfront, try and draw a common ground. Deviating from the main topic or passing strong statements like ‘I agree or disagree’ should be avoided. Your strategy should be to test the waters and make a generic statement relevant to the topic. 7.Formal dressing – Last but not the least, the dressing should be appropriate to the occasion and avoid fancy and funny dressing Top 10 basic group discussion tips Top basic Group Discussion tips include tips to Prepare For Group Discussions before and during the Group Discussion round and important Do’s and Don’ts. Below are shared the Group Discussion Tips to hone your Group Discussion skills: Do’s
1. Rich Content with good subject knowledge Having good subject knowledge and rich content is the first and foremost GD tip to enter the Group Discussion Round. Following are the key steps to improve your Group discussion skills in regard to GD content preparation: You should prepare on variety of topics as rich and right subject knowledge will be
required during GD round. You should have subject knowledge and be well aware of the latest happenings around you, not just in India but around the world as well. Subject knowledge is a pre-requisite while you are preparing for a group discussion because you will then have the power to steer the conversation to whichever direction you want to. If you can memorize some relevant data, it will be an added advantage. If you are a good reader and read on variety of topics, it will help you in group discussion round. There is no need for last minute preparation. You should read over a period of time. Reading not only adds to your knowledge database, but enhances your vocabulary skills as well. Always choose the magazines that are content rich and not just full of advertisements. Often magazines have columns which are promoting a particular institute etc. Avoid such magazines, do some research and buy the best that will be beneficial for you. 2. Be a Leader There is no doubt that to emerge a winner in GD round you should speak after getting a grasp on the given topic. But it also gives you opportunity to take lead. So be a leader to begin the Group Discussion. Key tips are: Usually when the moderator announces the GD topic, for a minute there is silence all round. If possible, gather your thoughts in a few seconds and start the Group discussion with positive impact and be a leader. If you find that it is taking time to gather ideas, let others begin, and then enter the GD round by agreeing/disagreeing with previous speakers. Beginning the Group Discussion gives the opportunity to make an impact but if you are not able to make your point well, it will create negative effect. Therefore, it is not necessary to speak first but it is necessary that when you speak you are heard and are able to make your point well.If you are able to speak out the name of your previous speaker and then present your views, it will mark a good impact. 3. Be relevant When you speak you should speak to the point without any ambiguity of thought Express your ideas at length. If you simply follow the other speaker or his ideas, remember your elimination is imminent Wherever possible, emphasize your point with facts and figures 4. Be a good Listener Learn to be a good listener. Listening Skills are Essential for GD round, so carefully listen to what others have to say. Just speaking throughout the discussion doesn’t make you better. You should learn to give others a chance to speak. Try and listen to others.If the speaker is making an eye-contact with you remember to acknowledge him by nodding your head, so that the speaker is aware that his listeners are listening to him and paying full attention. This will also show that you are vigilant and are an active participant in the discussion. Unless you listen well, it will not be possible for you to add value to your content and communication Listening offers you the opportunity to summarise the Group Discussion on each and every aspect. 5. Improve your Communication Skills You may have good and rich content with lot of ideas but if you are not able to communicate well your thoughts and opinions, all is useless. The need is now to improve your communication skills with following GD tips: Be well versed in your communication skills. You should have a good vocabulary and a decent command over English. Much before your actual group discussion, rehearse well. You can sit with a group of friends and choose a topic and indulge in a friendly GD. Not only will this increase your knowledge, you will be a better speaker by the time it is time for your GD. In case you are not sure about something, you can use phrases such as: “I think” or “Probably/Approximately” or “If I remember correctly” 6. Body gestures: Very important tool for Group Discussion The panelists observe the way you sit and react in the course of the discussion. Body gestures are very important, because your body language says a lot about you. In a GD, sit straight, avoid leaning back on to the chair or knocking the table with pen or your fingers. Also, do not get distracted easily. Nervous body movements, folding your hands across your chest, having skeptical expression, constantly moving, evading eye movements are the indicators of a negative personality and should be avoided at all costs. Don’ts 7. No Aggressive Move It is expected during the Group Discussion that you are firm on your ideas and are audible enough to make an impact on the group. But being aggressive, shouting and not allowing others in the group to speak, is not appreciated. So be careful and don’t be a bully.

8. Don’t Crisscross on your Ideas Don’t crisscross your ideas. The topics given in Group Discussion are debatable, you might like to speak for or against the topic and while speaking don’t forget that you may be crossing your own lines. It gives a bad impact and you are judged a person who has no stand for his own thought. 9. Don’t be a part of fish market As a team player, your ability to lead and play in team is measured in the GD. During the Group Discussion there are many instances where you will find every one is saying something and no one is heard. It is better to be quiet for a while and then after gathering your thoughts, raise your voice initially and make your point. 10. Don’t give up: Make multiple entries Don’t be content with one round of one minute or half a minute speaking in the group. Focus on key points, form the ideas and opinions to enter again based on the views presented by others to further strengthen your view point. The Group Discussion round passes through highs and lows. So it is a good opportunity to re-enter the Group Discussion after gathering more ideas coming out of others’ view and make an entry when the noise level is low in Group Discussion. Group Discussion(GD) - Skills Evaluated Group discussion is an important dimension of the selection process. Any organization requires students to work with others for effective functioning. In today's context, the educational institutes and organizations are interested in team players rather than individual contributors. During the Group Discussion, the panel essentially evaluates the candidate's potential to be a leader and also his/her ability to work in teams. Remember that organizations are typically on the look out for candidates who will inspire to lead and succeed and for that you need to be a good team player. Here is a sample list of skills assessed during a group discussion: Leadership skills: Ability to take leadership roles and ability to lead, inspire and carry the team along to help them achieve group's objectives.Example: To be able to initiate the group discussion, or to be able to guide the group especially when the discussion begins losing relevance or try to encourage all members to participate in the discussion. Communication skills: The participating candidates will be assessed in terms of clarity of thought, expression and aptness of language. One key aspect is listening. It indicates a willingness to accommodate others views. Example: To be able to use simple language and explain concepts clearly so that it is easily understood by all. You actually get negative marks for using esoteric jargons in an attempt to show-off your knowledge. Interpersonal skills:This is reflected in the ability of the individual to interact with other members of the group in a brief situation. Emotional maturity and balance promotes good interpersonal relationships. The person has to be more people centric and less self-centered. Listening skill is an important requisite. Example: To remain cool even when someone provokes you with a personal comment, ability to remain objective, ability to empathize, non-threatening and more of a team player. Persuasive skills: Ability to analyze and persuade others to see the problem from multiple perspectives without hurting the group members. Example: While appreciating someone else's point of view, you should be able to effectively communicate your view without overtly hurting the other person. Problem solving skills:Ability to come out with divergent and offbeat solutions and use one's own creativity.Example: While thinking of solutions, don't be afraid to think of novel solutions. This is a high- risk high-return strategy. Conceptualizing skills :The ability to grasp the situation, take it from the day to day mundane problem level and apply it to a macro level.Example: At the end of the discussion, you could probably summarize the findings in a few sentences that present the overall perspective. Group Discussion(GD) - Common Mistakes Wise men learn from others mistakes, while the less fortunate, from their own. Here's a list of the most common mistakes made during group discussions:
Emotional outburst : Simran was offended when one of the male participants in a group discussion made a statement on women generally being submissive while explaining his point of view. When Simran finally got an opportunity to speak, instead of focusing on the topic, she vented her anger by accusing the other candidate for being a male chauvinist and went on to defend women in general. What Simran essentially did was to Deviate from the subject Treat the discussion as a forum to air her own views. Lose objectivity and make personal attacks. Her behaviour would have been perceived as immature and de-motivating to the rest of the team. TIPS FOR PARTICIPATING IN GROUP DISCUSSION Group Discussion is relavely a new concept introduced by our bank to assess the potenal of the employee. Following potenal competencies shall be assessed by the group discussion : 1. Managerial Competencies - Planning, Organizing, Decision making, Risk taking, Delegaon & Control 2. Client Management - Customer Orientaon, Quality Consciousness Markeng & Profit orientaon 3. People Related - Leadership, Team Building and Communicaon Skills 4. Personal Competencies - Iniaves, Resilience (Self renewing capability) Organizaonal Sensivity HOW GROUP DISCUSSION IS CONDUCTED? 1. Each group consists of minimum 8-12 parcipants but it can go more than 20 also. 2. Parcipants taking part in group discussion are seated in a semi-circular seang arrangement. 3. There will be 4 observers (one Observer may be as Guest Observer) who will keenly observe and rate the parcipants on pre-idenfied parameters. 4. Group discussion will be held as below : A Topic is given with 8-10 aributes, it can be more than 20 parcipants which are to be priorized individually at the first instance; Then group has to discuss and priories and try to arrive at a consensus. Time allowed for this exercise is about 20-30 minutes. Parcipant's performance will be observed and recorded by the Observers Tips on Subject You should be well aware of the latest happenings around you, not only pertains to our Bank but also banking industry as a whole. To be in a better position, make sure that you have in-depth knowledge on the topic. Often, the GD topics are generic banking topics with contemporary flavours. There are topics which re-appear with minor variations. Be aware of such topics well in advance so that you have ample time to prepare for the same. The indicative topics are Stressed Assets, Strategies to augment profit, Alternate Delivery Channels, Digital Payments, Challenges before Public Sector Banks, Opportunities in Gen-Y Banking, Risk Management, HR issues in Banking, Life Cycle Product approach, Consolidation of Banks, Branch Profit Planning, etc., often appear as GD topics. Make sure you know these topics well and can come up with some unique, insightful points along with dates, stating facts. Subject knowledge is a pre-requisite while you are preparing for a group discussion because you will then have the power to steer the conversation to whichever direction you want to. If you can memorise some relevant data, it will be an added advantage. Indeed, initiation of discussion is an advantage and closing it too also adds brownie points. If you can grab the opportunity to close the discussion, then you should summarise it. If the group has not reached a conclusion try concluding it. Accomplishing in a group discussion is like driving a car and should aware when to apply brakes or accelerate depends on the conversation to turn onto your side

Managing Stress

MANAGING STRESS ::

Adult life seems to be full of fun and unlimited possibilities. You can go wherever you want, do whatever you want, and never think about consequences. But when you grow up, you understand that there is nothing fun about being an adult. You have thousands of responsibilities, hundreds of daily tasks to accomplish, and the consequences are the only thing you can think about. You may live in the state of permanent stress. You have no right for a mistake. You have no time for having rest. You can’t tell someone that you cannot handle your problems. You need to be strong, you need to work hard, and you need to find a solution to every problem that appears.

Stress in Modern Life

With every year, the level of stress increases. Unfortunately, no one is surprised today when a 30-years old person has a stroke. The situation becomes worse: even children suffer from stress. They have sleep disorders, problems with concentration and nutrition, and they do not even understand that the reason for this lies in the habits of their parents and surrounding society. It seems that for the next generation stress will be the next cancer.

Still, today we can handle the stress. It requires time, attention, and effort, but the results – strong mental and physical health – are totally worth it. There are several approaches to stress management. These approaches can be divided into two large groups: something that you can do to decrease stress level at the current moment and methods that you need to introduce into your life and make them your habits.

Change Your Life to Get Rid of Stress

Of course, you cannot eliminate stress from your life for good. For our bodies, a stressful situation is everything that makes us feel uncomfortable. Your stress management will be more effective if you build stamina and make your

body and mind strong. Thus, you can prevent the negative effects of stress.

Everyone will experience stress in different aspects of their lives; it may be at work, with their family, or with their health. However, whatever might be the cause of your stressful day, it creates the same effect on your body, mood, and even on other people.

Life is full of hassles, demands, and if people don’t meet expectations or deadlines, the tendency is that our mind will be exposed to chaotic thinking and tiredness. This is how stress come out that can generally invade and ruin the enjoyment of your life. For many people, stress is a normal part of life that usually appears in everyday situations. Stress isn’t always bad; however, dealing with stress is usually not good. Mild stress can help you deal with pressure and motivate you to do your best and finish your work before the deadline.

Stress is a normal physical response to events that make you feel threatened, upset, and anxious. It may seem that there’s nothing you can do about stress. However, difficulties in dealing with this emotion may result in risk and danger to your health, physically and mentally.

Anyone experiencing stressful situation may be at risk of losing control of their emotions, which sometimes could ruin your ability to make decisions rationally. How to know if the anxiety is too much in dealing with your stress? How important is it to gain a deeper understanding about stress and what are the necessary things to do when dealing with such emotion? Feelings such as worry, and anxiety are just some of the common results of stress. Being stressed is sometimes healthy in order for a person to be alert and act. However, there are certain points in human life, where people cannot manage dealing with their stress.

Stress management effectively starts with identifying the sources of stress in your life. At first, it may not be easy as you may tend to overlook your own stressful feelings and behaviour. However, providing a solution to a problem always starts with identifying the problem or cause. The best

remedy for stress is self-examination and taking significant actions that can definitely help you lessen your worries and fears. Examples include taking a break for a few minutes to practice some deep-breathing exercises, relaxation, and entertaining yourself like going for a walk or going shopping. These are just a few examples that can usually help people ease their stressful day. In addition, if you cannot remove the stress, remove yourself. If you are not getting along with your company, it is important to slip away and find a new sanctuary to work in.

There are several negative effects of stress on your health such as an upset stomach, recurring colds, headaches and insomnia. If you are having difficulty dealing with stress, it would also be best to seek professional help from a doctor or therapist.

TIPS FOR REDUCING THE STRESS

Below are a few tips on what we can do to reduce stress in our life.

1. Healthy Nutrition

We are what we eat. If your daily meals consist of fries and other fast food, you have severe problems with nutrition. A person needs to consume not only enough calories (fast food has too many of them, causing obesity) but also enough elements and vitamins. When you consume good food, your body receives enough energy to be productive all day long and build the important connections between your blood, cells, and the nervous system.

2. Regular sports

If you suffer from stress regularly, you need to change your daily activities. The best way to get rid of stress (and prevent it) is regular sports classes. It does not matter what type of class you choose, swimming, gym or yoga, you just need to make your body move. While moving, our endocrine system starts to produce hormones helping to lower the impact of stress. Besides, if you feel stressed right here and now, you

can also use sports as the way to manage stress.

3. Meditation

If you are looking for simple ways to fight stress, then regulating your breathing can help. Our breath is a natural and most important function of life and carries vital life energy. It is a known fact that if we stop breathing for long enough, then we die. Despite this fact, most of us take our breathing for granted and rarely stop to think about it. Find out how breathing properly can help to relieve symptoms of stress and calm and relax your mind.

When we are stressed, our body responds in preparation for "fight or flight" and we suffer various symptoms such as sweating, increased pulse rate, racing heart, and fast, shallow breathing. In earlier times this was necessary for our survival when hunting or protecting ourselves. However today it is usually only our perception of danger or negative thoughts that produce this reaction, so the body has few ways to deal with the effects.

Regular attacks of stress and anxiety start to turn our fast, shallow breathing into a habit. They may decrease our ability to breathe properly and could leave us with breathing difficulties such as asthma. Often in today's society, we do little aerobic exercise and therefore we rarely breathe deeply. Our breathing simply becomes shallower than it needs to be as a matter of habit.

Just as stress and other states of mind affect our breathing, the way that we breathe affects our state of mind. When we breathe, we are taking in oxygen through the lungs to the brain and the cells in the body. Shallow breathing can affect the amount of oxygen circulating in the body. This makes us feel sluggish. The way we breathe also affects the amount of energy in our bodies. When our breathing is irregular and erratic, we are likely to feel lacking in energy.

Of course, it is not just the body that is affected by the way that we breathe but the mind also. For centuries disciplines such as yoga and meditation have involved using the breath as part of their

techniques. Use of the breath is an important part of performing yoga postures. Breathing meditation is common to calm the mind as part of preparative practices for meditation. Breathing meditation consists of watching the breath as we breathe in and out whilst trying to ignore all other distractions to the best of our ability. Concentrating on the breath has long been known to quiet and calm the mind.

In the same way as used in meditation, breathing exercises can be used to fight stress and quiet the mind and body. These are great because they are simple and free, and you can do them anywhere. Simply concentrating on our breathing whilst drawing deeper, slower breaths can help us to relieve stress and relax our minds. Breathe deeply through your nose and feel your diaphragm move. Watch the breath coming in and going out. Try to ignore all other distractions.

When you breathe, allow yourself to enjoy the experience of being a living being. Mostly we forget to do this and move through life very unconsciously. When we can quiet our minds, we can find peace and receive insights and access to our subconscious. Only when we become conscious of how we breathe, can we start to correct this.

So, to fight stress and find more energy, try watching your breath to make sure you are breathing efficiently. Get into the habit of taking deeper breaths. Improve your breathing through breathing exercises and regular aerobic exercise. Breathing properly will help you to cope with stress and improve your well-being.

Ability to calm down your mind and keep your emotions under control is precious. Regular meditations help to find out methods to remain calm and preserve a clear mind in different life situations. Meditation is the habit that will change your life even more dramatically than quitting smoking or drinking alcohol. First of all, it will help you release your hidden potential. You will be able to find answers to the questions that have been bothering you for a long time. You will be able to understand what exactly you want. You will learn how to listen to yourself and how to use this knowledge in your further life.

4. Sleep at Night

Night sleep is a key element of your strategy to prevent negative effects of the stress. At night, our bodies produce the most important hormones that help us beat stress. If you sleep in the daytime, your body cannot sufficiently perform its functions. Besides, you need to sleep at least 6 hours to give yourself time to have a rest and relax.

5. Positive Thinking

Stress ruins our mental health. To prevent that, you need to teach your mind to be strong and believe in the best outcomes. Positive thinking is an easy and effective way to enhance your mental health and make it ready to beat any complication or challenge. If you feel that you can no longer take your emotions under control, give yourself a break. Try to get rid of all negative thoughts and start thinking about positive moments. Imagine that you are sitting on the shore of the ocean, observing the waves and listening to nature. Or remember your childhood when mom’s smile made you the happiest person in the world.

6. Be Pro-Active

Lazy people suffer from stress more frequently than those who have an active life. If you have something to do, you do not have time to make up problems and think about them. Each time you notice that stress level is rising, start doing something that requires effort and concentration from you. For some people, the best solution for stress is to work with their hands. Other people prefer to delve into studying or investigation. Try different methods to understand what works perfectly for you.

Another approach that will help you beat the stress is to learn something new. However, you need to be careful with this approach. First of all, the theme should be interesting, and

secondly, you should not get irritated when you cannot cope with some new tasks

7. Do What You Like

It has been noticed that students who admire writing do not suffer from writing an essay. They do it easily in comparison to the students who do not love what they do. If you notice that everything in your life creates additional stress, change what you do. If you admire writing but work as an accountant (and you actually hate your job), quit it and give a try to writing different types of thesis statements for a magazine. If you cannot quit the job, introduce your hobbies to your life and make them more important than the things you do not like at all. Of course, it is difficult to change your approach to life in a couple of days. But you need to work on it to get rid of the stress and make your life more comfortable.

Stress should not be your friend. It should not guide you through your life and spoil its best moments. You need to take your life under control and make it better. Develop a habit to fight against stress and find the ways to eliminate it from your life. These 7 tactics will help you choose the right way to beat this problem and enhance the quality of your life.

Mortgage

Mortgage

1. Mortgage is defined in Section 58 of the Transfer of Property Act.

2. Mortgage is the transfer of interest in a specific immovable property, for the purpose of securing an existing or future debt or

for the performance of an engagement which may give rise to a pecuniary liability. The person creating the mortgage is called as

the mortgagor and the person in whose favour mortgage is created (bank) is called as the mortgagee.

3. Immovable property, means land and things attached or permanently fastened to the earth.

4. Types of Mortgage: There are six types of mortgages namely (i) Simple Mortgage (ii) Mortgage by Conditional Sale (iii)

Usufructuary Mortgage (iv) English Mortgage (v) Mortgage by Deposit of title Deeds (Equitable Mortgage) and (vi). Anamalous

Mortgage. Of these, all • mortgages except Equitable Mortgage require registration with the Registrar of Assurances.

5. Registered Mortgage: In the case of registered mortgage (also called legal mortgage) first a mortgage deed is written which is

stamped as per Stamp Act of the concerned state. The deed is then executed in the presence of two witnesses. Thereafter, in

terms of the Indian Registration Act 1908, it is to be registered with the Registrar of Assurances (Sub Registrar) within 4 months of

the execution.

6. Simple Mortgage: In simple mortgage the mortgagor makes himself personally liable to pay the debt and agrees that in the

event of failing to pay according to his contract, mortgagee can get the property sold through the intervention of the court. If after

sale of property some debt is still outstanding, the borrower shall be- personally liable for the outstanding amount. Neither the

possession nor ownership of the property is transferred to the mortgagee. The mortgagee cannot exercise the right of foreclosure.

7. Mortgage by Conditional Sale: The mortgagor ostensibly sells the property to the mortgagee upon the condition that if the

debt is paid in time the property will be transferred back to him and in case of nonpayment within the specified time the

transaction would become a real sale. There is no personal liability of the mortgagor. In case of default, the mortgagee can exercise

his right of foreclosure through court.

8. Usufructuary Mortgage: In this mortgage, possession of the property is transferred to the mortgagee. The mortgage money is

recovered through income of the mortgaged property. There is no personal liability of mortgagor.

9. English Mortgage: As in the case of simple mortgage, the mortgagor undertakes personal liability to pay the debt. He transfers

the ownership of mortgaged property to the mortgagee upon a condition that property must be transferred back to him on

payment of debt. Mortgagee can sell the mortgaged property even without the intervention of court.

Equitable Mortgage

1. Equitable Mortgage is called as Mortgage by Deposit of Title Deeds.

2. It can be created by mere deposit of title deeds of property with intention to borrow.

3 a.Title deeds should be deposited at Mumbai, Kolkata, Chennai ( Presidency Towns) or any other town notified by the State

Government in this regard. It is not necessary that the title deeds should be deposited with the branch or at the place where the

loan is being raised.

3 b.These can be deposited anywhere in India at a notified place.

it is not necessary that it should be within bank branch premises. Mortgagor can deliver the title deeds to an authorized

representative of the bank at mortgagor's residence or other place provided it is in a Notified Centre.

4. The property to be mortgaged may be located anywhere in India (For example, for property located in Delhi, title deeds can be

deposited at Chennai.

5. Equitable Mortgage does not require registration with Registrar of Assurances. But in case of a limited company, charge in

yespect of equitable mortgage under Section 125 of the Companies Act, 1956 must be registered with Registrar of Companies.

6. A title deed can be a sale deed, lease deed, partition deed, gift deed, deed of assignment, deed of relinquishment, or such

other documents. Agreement to sale is not a title deed.

7. Normally a bank should insist for original title deeds but in exceptional cases equitable mortgage can be. created even by

certified copy of the title deeds.

8. Property located in cantonment areas should not be accepted for equitable mortgage, without clearance from cantonment

authorities.

10.The bank should not part with the title deeds even for a short duration at the request of the mortgagor because if some other

creditor is induced to finance on the basis of title deeds, the bank may Lose priority over the mortgaged property.

11. No registration with Registrar of Assurance is required. For a company, registration with ROC within 30 days is required u/s

87 of Companies Act 2013. Under SARFAESI Act, registration with CERSAI.

12.Deposit can take place within Municipal limits of Presidency Towns (Kolkata, Chennai or Mumbai) or State Govt. Notified Towns.

It is not necessary that the place for deposit of title.deeds, should be bank branch premises

Legal Opinion and Search Report: Before accepting mortgage of immovable property, legal opinion should be

obtained that the property is fit for mortgage and search should be conducted in the records of Registrar /Sub

Registrar for at least 12 years to ensure that the property is free from prior encumbrance.

Priority of Mortgage: The priority of the mortgage is considered from the date of execution of the mortgage deed (in the case of

registered mortgage) or from the date of creation of mortgage by deposit of title deeds and not with reference to the type of

mortgage or date of registration.

Right of Redemption: Right of the mortgagor to get back his mortgaged property on repayment of the loan, is called as the right of

redemption. This is available in all types of mortgages.

Right of foreclosure: The right of the mortgagee to deny the mortgagor of the property to exercise his right of redemption i.e.

debarring the mortgagor for ever to get back the mortgaged property is called as the right of foreclosure. This right is available to

the mortgagee in case of mortgage by conditional sale.

Trade finance

Trade finance

Trade finance is the financing of international trade flows. It exists to mitigate, or reduce, the risks involved in an international trade transaction.

There are two players in a trade transaction: (1)an exporter, who requires payment for their goods or services, and (2)an importer who wants to make sure they are paying for the correct quality and quantity of goods.

WHAT ARE THE RISKS?

As international trade takes place across borders, with companies that are unlikely to be familiar with one another, there are various risks to deal with. These include:

Payment risk: Will the exporter be paid in full and on time? Will the importer get the goods they wanted?

Country risk: A collection of risks associated with doing business with a foreign country, such as exchange rate risk, political risk and sovereign risk. For example, a company may not like exporting goods to certain countries because of the political situation, a deteriorating economy, the lack of legal structures, etc.

Corporate risk: The risks associated with the company (exporter/importer): what is their credit rating? Do they have a history of non-payment?

To reduce these risks, banks – and other financiers – have stepped in to provide trade finance products.

TYPES OF TRADE FINANCE PRODUCTS

The market distinguishes between short-term (with a maturity of normally less than a year) and medium to long-term trade finance products (with tenors of typically five to 20 years)

                       

Trade finance signifies financing for trade, and it concerns both domestic and international trade transactions. A trade transaction requires a seller of goods and services as well as a buyer. Various intermediaries such as banks and financial institutions can facilitate these transactions by financing the trade.

While a seller (or exporter) can require the purchaser (an importer) to prepay for goods shipped, the purchaser (importer) may wish to reduce risk by requiring the seller to document the goods that have been shipped. Banks may assist by providing various forms of support. For example, the importer's bank may provide a letter of credit to the exporter (or the exporter's bank) providing for payment upon presentation of certain documents, such as a bill of lading. The exporter's bank may make a loan (by advancing funds) to the exporter on the basis of the export contract.

Other forms of trade finance can include Documentary Collection, Trade Credit Insurance, Finetrading, Factoring or Forfaiting. Some forms are specifically designed to supplement traditional financing.

Secure trade finance depends on verifiable and secure tracking of physical risks and events in the chain between exporter and importer. The advent of new information and communication technologies allows the development of risk mitigation models which have developed into advance finance models. This allows very low risk of advance payment given to the Exporter, while preserving the Importer's normal payment credit terms and without burdening the importer's balance sheet. As trade transactions become more flexible and increase in volume, demand for these technologies has grown.

Products and services
Banks and financial institutions offer the following products and services in their trade finance branches.

· Letter of credit: It is an undertaking/promise given by a Bank/Financial Institute on behalf of the Buyer/Importer to the Seller/Exporter, that, if the Seller/Exporter presents the complying documents to the Buyer's designated Bank/Financial Institute as specified by the Buyer/Importer in the Purchase Agreement then the Buyer's Bank/Financial Institute will make payment to the Seller/Exporter.

· Bank guarantee: It is an undertaking/promise given by a Bank on behalf of the Applicant and in favour of the Beneficiary. Whereas, the Bank has agreed and undertakes that, if the Applicant failed to fulfill his obligations either Financial or Performance as per the Agreement made between the Applicant and the Beneficiary, then the Guarantor Bank on behalf of the Applicant will make payment of the guarantee amount to the Beneficiary upon receipt of a demand or claim from the Beneficiary.

Bank guarantee has various types like 1. Tender Bond 2. Advance Payment 3. Performance Bond 4. Financial 5. Retention 6. Labour

· Export

· Import

· Collection and discounting of bills: It is a major trade service offered by the Banks. The Seller's Bank collects the payment proceeds on behalf of the Seller, from the Buyer or Buyer's Bank, for the goods sold by the Seller to the Buyer as per the agreement made between the Seller and the Buyer.

Supply Chain intermediaries have expanded in recent years to offer importers a funded transaction of individual trades from foreign supplier to importers warehouse or customers designated point of receipt. The Supply Chain products offer importers a funded transaction based on customer order book.

New developments
Trade finance is going through a revolution. New technologies and development are energizing traditional players, transforming their offerings and pulling trade into the 21st century. One of the main developments is the introduction of blockchain technology into the trade finance ecosystem. The promise of blockchain is that it has the ability to streamline the trade finance process. In the past, trade finance has been provided primarily by financial institutions, unchanged for years, with many manual processes on old-legacy systems that are expensive and costly to update. Such structures are mostly managed manually or through antiquated systems, which are not scalable and result in higher operational costs for financial institutions.

Blockchain technology can provide enormous benefits to solve these technological challenges in trade finance. It can be used to provide the basic services that are essential in trade finance. At its core, blockchain relies on a decentralized, digitalized ledger model, which by its nature is more robust and secure than the proprietary, centralized models which are currently used in trade finance. As a consequence, blockchain can lead to radical simplification and cost reduction for large parts of transactions in trade finance, whilst making it more secure and reliable. It keeps an immutable record of all the transactions, back to the originating point of a transaction, also known as the provenance, which is essential in trade finance as it allows financial institutions to review all transaction steps and reduce the risk of fraud. One of the blockchain’s advantages is the speeding up of transaction settlement time which currently takes days, increasing transparency between all parties, and unlocking capital that would otherwise be tied up waiting to be transferred between parties in the transaction. Several companies are working on trade finance solutions leveraging blockchain technology such as the R3 consortium, which brings together the world's biggest financial institutions and TradeIX, which developed a connected and secured platform infrastructure for corporates, financial institutions, and B2B networks through standard communication channels (APIs) leveraging blockchain technology.


Methods of payment
International trade financing is required especially to get funds to carry out international trade operations. Depending on the types and attributes of financing, there are five major methods of transactions in international trade. In this chapter, we will discuss the methods of transactions and finance normally utilized in international trade and investment operations.

International Trade Payment Methods
The five major processes of transaction in international trade are the following −

Prepayment
Prepayment occurs when the payment of a debt or installment payment is done before the due date. A prepayment can include the entire balance or any upcoming part of the entire payment paid in advance of the due date. In prepayment, the borrower is obligated by a contract to pay for the due amount. Examples of prepayment include rent or loan repayments.

Letter of Credit
A Letter of Credit is a letter from a bank that guarantees that the payment due by the buyer to a seller will be made timely and for the given amount. In case the buyer cannot make payment, the bank will cover the entire or remaining portion of the payment.

Drafts
Sight Draft − It is a kind of bill of exchange, where the exporter owns the title to the transported goods until the importer acknowledges and pays for them. Sight drafts are usually found in case of air shipments and ocean shipments for financing the transactions of goods in case of international trade.

Time Draft − It is a type of foreign check guaranteed by the bank. However, it is not payable in full until the duration of time after it is obtained and accepted. In fact, time drafts are a short-term credit vehicle used for financing goods’ transactions in international trade.

Consignment
It is an arrangement to leave the goods in the possession of another party to sell. Typically, the party that sells receives a good percentage of the sale. Consignments are used to sell a variety of products including artwork, clothing, books, etc. Recently, consignment dealers have become quite trendy, such as those offering specialty items, infant clothing, and luxurious fashion items.

cash with order(CWO)-the buyers pay cash when he places an order.

cash on delivery(COD)-the buyer pays cash when the goods are delivered.

documentary credit(L/C)-a Letter of credit (L/C) is used; gives the seller two guarantees that the payment will be made by the buyer:one guarantee from the buyer's bank and another from the seller's bank.

bills for collection(B/E or D/C) -here a Bill of Exchange (B/E)is used; or documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of the payment for a sale to its bank (remitting bank), which sends the documents that its buyer needs to the importer’s bank (collecting bank), with instructions to release the documents to the buyer for payment.

open account-this method can be used by business partners who trust each other; the two partners need to have their accounts with the banks that are correspondent banks.

Methods of payment: Cash in Advance (Prepayment) Documentary Collections Letters of Credit Open Account Combining Methods of Payment Summary Resources Activities Assessment

Open account is a method of making payments for various trade transactions. In this arrangement, the supplier ships the goods to the buyer. After receiving and checking the concerned shipping documents, the buyer credits the supplier's account in their own books with the required invoice amount.

The account is then usually settled periodically; say monthly, by sending bank drafts by the buyer, or arranging through wire transfers and air mails in favor of the exporter.

Trade Finance Methods
The most popular trade financing methods are the following −

Accounts Receivable Financing
It is a special type of asset-financing arrangement. In such an arrangement, a company utilizes the receivables – the money owed by the customers – as a collateral in getting a finance.

In this type of financing, the company gets an amount that is a reduced value of the total receivables owed by customers. The time-frame of the receivables exert a large influence on the amount of financing. For older receivables, the company will get less financing. It is also, sometimes, referred to as "factoring".

Letters of Credit
As mentioned earlier, Letters of Credit are one of the oldest methods of trade financing.

Banker’s Acceptance
A banker’s acceptance (BA) is a short-term debt instrument that is issued by a firm that guarantees payment by a commercial bank. BAs are used by firms as a part of the commercial transaction. These instruments are like T-Bills and are often used in case of money market funds.

BAs are also traded at a discount from the actual face value on the secondary market. This is an advantage because the BA is not required to be held until maturity. BAs are regular instruments that are used in international trade.

Working Capital Finance
Working capital finance is a process termed as the capital of a business and is used in its daily trading operations. It is calculated as the current assets minus the current liabilities. For many firms, this is fully made up of trade debtors (bills outstanding) and the trade creditors (the bills the firm needs to pay).

Forfaiting
Forfaiting is the purchase of the amount importers owe the exporter at a discounted value by paying cash. The forfaiter that is the buyer of the receivables then becomes the party the importer is obligated to pay the debt.

Countertrade
It is a form of international trade where goods are exchanged for other goods, in place of hard currency. Countertrade is classified into three major categories – barter, counter-purchase, and offset.

· Barter is the oldest countertrade process. It involves the direct receipt and offer of goods and services having an equivalent value.

· In a counter-purchase, the foreign seller contractually accepts to buy the goods or services obtained from the buyer's nation for a defined amount.

· In an offset arrangement, the seller assists in marketing the products manufactured in the buying country. It may also allow a portion of the assembly of the exported products for the manufacturers to carry out in the buying country. This is often practiced in the aerospace and defense industries.

MSME

MSME FOR BANKERS (EXAM DATED 27.04.2019)

1. MSME represent ------- policies of Government of India which emphasized to use foreign exchange for imports etc (Ans: Socio Economic)

2. Objectives of MSME identification which among is not an objective (Page 4 of Text Book)

3. Limitations of MSME. Identify which among is correct (Page 4 of Text Book)

4. The MSME is made important subject in development in (Ans: Worldwide including countries like USA, Japan)

5. The classification of industries is based on different factors. Which among the following is wrong (Ans: Loan Amount)

6. Explanation of export oriented Unit (Ans: Industry that undertakes to export 30% of annual production at the end of third year)

7. Which among the following is not falls in Small Business (Ans: Wholesale Trade)

8. For the transport operator is categorized as MSE, if total vehicle owned does not exceed (Ans: 10)

9. The de reservation of items as per Sec 29 B of Industries act 1951. Find out wrong features (Page 10 of Text Book)

10. Micro Enterprises Manufacturing & service investment criteria (Ans. 25 Lacs & 10 lacs)

11. Which among the following is the example of indirect finance (Ans: MFI lending to co-operatives of producers)

12. Which among the following is not a feature of Sole Proprietary firm (Ans: Income is distinguished for taxation)

13. Mr. Ram a minor turned major on 01.02.2016, who was admitted to a partnership firm during his minority. What is the maximum time before which he can repudiate his liability (Ans: 6 months from date )

14. Which among the following is not a feature of partnership firm (Ans: A partnership firm can be a partner in another firm)

15. Which among the following is a feature of partnership firm (Ans: A partnership firm not require compulsory registration of deed)

16. The usage of common seal is explained in which document. (Ans: Articles of Association)

17. Maximum number of share holders in Private Limited Company is (Ans: 200)

18. Which among the following is not a feature of Public Limited Company (Ans: The shares are freely not transferrable)

19. For getting environmental clearance for the setting up of an enterprises one must (Ans: Obtain clearance from the pollution board)

20. If the ownership of any enterprise is individually or jointly hold by women above 51%, the same is termed as (Ans: Woman Enterprises)

21. The gender discrimination in Market is by (Ans: Differential wage for the same work)

22. Which among the following is not a classification of categories of Women Entrepreneurs (Ans: Literate and illiterate women)

23. Exclusive scheme to provide equity support to women entrepreneurs (Ans: Mahila Udhyam Nidhi)

24. Which among the following is not a supportive measures for Women’s economic activities (Ans: Refer Page ; 24 in text book)

25. MSME DO is earlier known as (Ans; Small industries Development Organization)

26. The development of MSME is a (Ans: State Subject )

27. An industrial undertaking, a company with interests in industry can invest up to _____ in a MSE unit (Ans; 24%)

28. Similarity features identification between LLP & a Private Limited Company (Ans: Refer Page ; 45 in text book)

29. TReDS full form (Ans: Trade Receivables Discounting system )

30. Which among the features pertains to Priority Sector Lending Certificates

31. CERSAI is formed as per the (Ans: SARFAESIA act of 2002)

32. Calculation for maximum CGTMSE coverage available for unit with Rs 30.00 Lacs fund based & 15 Lacs non fund based limit.

33. The current liability is 50000. The current ratio is 2.5. calculate Current asset

34. The CLSS scheme gives subsidy of ( 15% or 0.15)

35. Which among the given option is not a rating agency (Ans; NSIC)

36. Which among the following is give overall guidelines of SIDO (Ans; Directorate of industries)

37. Features of HUDCO. Select the one wrongly explained (Ans: Refer Page ; 61 in text book)

38. Activities of TCO. Which among is correct combination (Ans: Refer Page ; 62 in text book)

39. Which among the following is features of KVIC (Ans: Refer Page ; 63 in text book)

40. The credit limit up to 5 Lacs to be disposed in maximum of (Ans; 2 Weeks)

41. Which among the following is wrongly stated regarding the functions of SIDBI (Ans: Refer Page ; 70 in text book)

42. Major problems faced by MSME in the given option (Ans: Refer Page ; 92 in text book)

43. Which among the following is not a feature for commercial banks or promoting the MSE advance portfolio (Ans: Low NPA)

44. Identify which are the following is bill financing

45. Which among the following is example of post shipment finance (Ans: Refer Page ; 109 in text book)

46. RED Clause LC Feature (Ans: Refer Page ; 111 in text book)

47. Specialized MSME branch (Ans: if advance is 60% MSE portfolio)

48. BCSBI guidelines for MSE regarding acknowledgement of application & issuance of rejection letter with reason

49. Which among the given option is not associated with 5 Cs of the borrower (Ans: CIBIL score )

50. Identify and add the total assets from the given balance sheet component

51. What is the implication and effect in increase of Sundry Debtors or creditors (Ans; Refer Page ; 124 in text book)

52. Maximum Limit of loan that can be sanctioned under Turnover method (Ans: Rs 500.00 Lacs)

53. Factors affecting/determine the working capital limit (Ans: Refer Page ; 138 in text book)

54. Calculation using II method of lending (Ans; Refer Page ; 143 in text book)

55. Overview of Risk features , by way of match the following (Ans: Refer Page ; 145 in text book)

56. Features and requirement of credit rating (Ans: Refer Page ; 148 in text book)

57. Economic benefits of MSME. Identify the features (Ans: Refer Page ; 165 in text book)

58. The common parlance and practices of BDS is (Ans: Operational)

59. Identify the support by BDS (Ans: Refer Page ; 170 in text book)

60. Nature of deficiencies and remedial measures in cluster development (Ans; Refer Page ; 198 in text book)

61. Growth phase of MSE cluster features

62. Role of CDE in the cluster (Ans; Refer Page ; 209 in text book)

63. Why agricultural land is not taken as collateral security for securing the loan

64. Delayed payment of the bill raised by the MSE entrepreneur is compensated by (Ans: 3 times of bank rate announced by RBI)

65. RBI definition of Sick unit

66. Identify which among the following is external cause of sickness (Ans: Power Shortage)

67. When long term source is used for short term uses, the same is amounts to (Ans; Diversion of funds)

68. Feature of an enterprises tending towards sickness (Ans: Refer Page ; 242 in text book)

69. Symptoms of incipient sickness in activity (Ans; Refer Page ; 243 in text book)

70. Explanation of SICK GREY AREA

71. Hand holding stage features (Ans: Refer Page ; 253 in text book)

72. The account of NPA with dues of Rs 2.00 lacs, who will finalize the viability (Ans: Branch manager)

73. Viability criteria (Ans: Refer Page ; 256 in text book)

74. Primary purpose of secured creditors with NPA asset is (Ans; To sell off for the purpose of loan)

75. The 13(2) notice to be given as per SARFAESIA for how many days (Ans: 60 days )

76. Asset Reconstruction companies are registered with (Ans: RBI)

77. The reason for the existence of MFI (Ans: Refer Page ; 273 in text book)

78. Multiple lending and over indebtedness of MFI (Ans: Refer Page ; 276 in text book)

79. Primary Objectives of Mudra Bank (Ans: Refer Page ; 279 in text book)

80. Primary security & Collateral security features

81. Customer DNA means

82. Insolvency & Bankruptcy difference between two

83. Features of Bank’s Board Bureau

84. Impact of WTO agreements in domestic industry (Ans: Refer Page ; 305 in text book)

85. Which sector among the given option is contributing to exports (Ans: Textile)

86. Calculation of Plant & machineries value from given options (Ans: Not to include Jigs, generator sets etc)

87. Which among the following is not a participant of importance/much role in an LC? (Ans: Beneficiaries’ Bank)

88. Explanation of LC, which among the given options is correct

89. Which among is pre shipment finance?

90. Which among the following is not correct for loan sanction in MSME segment (Ans: Compulsory to give collateral free loan till 100 lacs)

THE FATF RECOMMENDATIONS:: Total 40

THE FATF RECOMMENDATIONS:: Total 40

A – AML/CFT POLICIES AND COORDINATION

1 - Assessing risks & applying a risk-based approach *
2 - National cooperation and coordination

B – MONEY LAUNDERING AND CONFISCATION

3 Money laundering offence *
4 Confiscation and provisional measures *

C – TERRORIST FINANCING AND FINANCING OF PROLIFERATION

5 Terrorist financing offence *
6 Targeted financial sanctions related to terrorism & terrorist financing *
7 Targeted financial sanctions related to proliferation *
8 Non-profit organisations *

D – PREVENTIVE MEASURES

9 Financial institution secrecy laws
Customer due diligence and record keeping
10 Customer due diligence *
11 Record keeping
Additional measures for specific customers and activities
12 Politically exposed persons *
13 Correspondent banking *
14 Money or value transfer services *
15 New technologies
16 Wire transfers *

Reliance, Controls and Financial Groups

17 Reliance on third parties *
18 Internal controls and foreign branches and subsidiaries *
19 Higher-risk countries *
Reporting of suspicious transactions
20 Reporting of suspicious transactions *
21 Tipping-off and confidentiality

Designated non-financial Businesses and Professions (DNFBPs)

22 DNFBPs: Customer due diligence *
23 DNFBPs: Other measures *

THE FATF RECOMMENDATIONS
INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION
 2012 OECD/FATF 5

E – TRANSPARENCY AND BENEFICIAL OWNERSHIP
OF LEGAL PERSONS AND ARRANGEMENTS

24 Transparency and beneficial ownership of legal persons *
25 Transparency and beneficial ownership of legal arrangements *

F – POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision

26 Regulation and supervision of financial institutions *
27 Powers of supervisors
28 Regulation and supervision of DNFBPs
Operational and Law Enforcement
29 Financial intelligence units *
30 Responsibilities of law enforcement and investigative authorities *
31 Powers of law enforcement and investigative authorities
32 Cash couriers *
General Requirements
33 Statistics
34 Guidance and feedback

Sanctions

35 Sanctions

G – INTERNATIONAL COOPERATION

36 International instruments
37 Mutual legal assistance
38 Mutual legal assistance: freezing and confiscation *
39 Extradition
40 Other forms of international cooperation

Caiib ABM recollected questions 2019

Re-collected questions posted by our members Caiib ABM recollected questions 2019

--------------------------------------------

1. Case Study on Demand Supply curves with graph

2. Match the following about Horn effect, leniency error, central tendency error etc

a. The halo effect — a tendency to allow one trait or characteristic of an employee to influence the assessment. The halo is to rate an employee consistently high or low.

b. The leniency or strictness tendency of the superior interferes with the appraisal and accordingly the assessment gets influenced. The superior is unable to come out of these tendencies.

c. The central tendency problem refers to assigning average ratings to all the employees without properly evaluating each aspect of appraisal carefully and fearlessly.

d. Similar error is the tendency of comparing the employee with oneself on various traits and parameters. Those who show the similar characteristics are normally rated high.

3. Simple Question on Y = a +bx

4. Halo effect means positive attitude rating

5. Inflation change calculation

6. Leniency error

7. Type of inflation

8. Bond problem

9. Ratio analysis

10. Linear program 5 marks

11. Probability 5 marks - Z values given

12. Sampling related 5 marks

13. Money Supply/ Demand curve related 5 marks

14. Narrow Money, Broad Money related case study

15. Credit Monitoring questions

16. Debtors turnover ration

17. STOCK TURNOVER RATIO

18. CURRENT RATIO

19. QUICK RATIO

20. FV formula

21. Calculating LC 5 mark case study

22. LEI - The Legal Entity Identifier (LEI) code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. LEI is a 20-digit unique code to identify parties to financial transactions worldwide.

23. HRIS

24. Role erosion and role ambiguity

25. Net fiscal deficit

26. Green GDP

27. Real gross income

28. Standard estimate error

29. Regression/Coefficient

30. Interpretation of confidence interval

31. Simplex method

32. What is called broad money

33. In which phase price of commodity is lowest? Boom/Recession/Depression/Recovery

34. Question on cluster sampling

35. GDP deflator

36. Who said what definition of economics

37. Working capital

38. Business cycle

39. Linear programming, HR theories, sampling

40. What is 3Vs

41. Sample proportion calculate

42. Marshall definition

43. Credit delivery

44. Case study on money measurements

45. Motivation theories with their founders

46. Covariance was given and SD was given....we had to find correlation

47. Johari window 1qs

48. SMA1

49. Zero coupon bond

50. Mixed economy

51. Performance appraisal systems

52. NPV

53. Microeconomics

54. Compensation

55. National domestic product

56. Left brain

57. B Type personality

58. COGS = Opening Stock + Purchases during the period − Closing Stock

59. Around 10 questions on Standard Deviation

60. Bell curve

61. Interpretation of confidence interval

Match the following was atleast 5

Numerical are easy

Many case study or questions from HR module

LC problems calculations

Letter of credit problems steps

For Assessing LC Limit we have to take care of following thing .

1.what will be annual purchases.

2.Wht is EOQ-economic order quantity which is calculated by source of supply,means of transport and any discount.

3.Lead time- the time taken in recving the goods after LC opened

4.Transit time if any

5.Usance time- the time to make the payment at any future date accepted by buyer.

Nw he we calculate we hv to convert annual purchases in to months

Then decide whether LC is DA or DP

Da Lc- the LC for which payment is made by the buyer at any future date after its acceptance by him .this is also called usance LC

dP Lc- LC for which the payment is made on production of documents no further time is given.this is also called sight Lc

So It's clear if we talk about dP Lc- we don't count usance time while calcuting total time/LC cycle so it will be Lead time+transit time

If talk Da Lc- it will be Lead time+transit time +usance time

Hw LC limit is calculated on that basis

Monthly purchases*total timing

Total timing will depend on what LC is opened whether do or da

We assume that

-annual consumption of material to b purchased under LC .........C RS.

-Lead time ...L(months)

-transit time...T(months)

-usance period....U(minths/)

Purchase cycle=L+t+u ie.P(months)

LC limit=P*C/12

Why C/12 bcz C is annual purchasing we hv to convert it in months basis while calculating LC limit

TT Rates and Bill rates

TT Rates and Bill Rates

Following 4 types of buying and selling rates are important:
1. TT Buying rate
2. Bill Buying rate
3. TT Selling rate
4. Bill Selling rate
In Interbank market, exchange rate is quoted up to 4 decimals in multiples of 0.0025. e.g.
1USD=53.5625/5650
For customers the exchange rate is quoted in two decimal places i.e. Rupees and paisa. e.g. 1
USD =Rs. 55.54.
Amount being paid or received will be rounded off to nearest Rupee.

TT Buying Rate
It is required to calculate when our Nostro account is already credited or
being credited without delay e.g. Receipt of DD, MT, TT or collection of
Foreign bills. This rate is used for cancellation of Forward Sales Contract.
Calculation
Spot Rate – Exchange Margin
Bill Buying Rate Bill Buying rate is applied when bank gives INR to the customer before
receipt of Foreign Exchange in the Nostro account i.e. Nostro account is
credited after the purchase transaction. In such cases.
Examples are:
 Export Bills Purchased/Discounted/Negotiated.
 Cheques/DDs purchased by the bank.
Calculation
Spot Rate + Forward Premium (or deduct forward discount) – Exchange
margin.
TT Selling Rate Any sale transaction where no delay is involved is quoted at TT selling rate.
It is desired in issue of TT, MT or Draft. It is also desired in crystallization of
Export bills and Cancellation of Forward purchase contract.
Calculation
Spot Rate + Exchange Margin
Bill Selling Rate It is applied where handling of documents is involved e.g. Payment against
Import transactions:
Calculation
Spot Rate + Exchange Margin for TT selling + Exchange margin for Bill
Selling

Recent amendments in SARFAESI act

Recent Amendments in SARFAESI Act

On 24th day of January 2020 the Chapter IV –A of the SARFAESI Act, 2002 has come into force. Chapter IV A of the SARFAESI Act, 2002 inter alia contains the following important provisions.​

Notification of Chapter IV –A of the SARFAESI ACT​

i. Section 26 B: Attachment orders issued by any Government authority for​

recovery of Govt. dues may be filed with CERSAI.​

ii. Section 26 C: Security interest or attachment orders filed with CERSAIshall have priority over any subsequent security interest created uponsuch property​

iii. Section 26 C: Filing of security interest with CERSAI shall be deemed to​

constitute a Public notice from the date & time of filing with CERSAI.​

iv. Section 26 D: Secured Creditors shall be entitled to enforce securitiesunder SARFAESI Act only if the security interest is filed with CERSAI.​

v. Section 26E: After registration of security interest with CERSAI bySecured Creditors, their dues will be paid in priority over Govt. dues​

Implications for the Bank​

Bank can successfully desist the claims if any madeby the Tax Authorities, both State and Central Government Authorities on the assetsover which security interest has been created in favour of the Bank in pendingSARFAESI proceedings initiated by our Bank. Authorities cannot claim any priority over the amounts recovered by bank by sale of secured properties of the borrower/guarantor under SARFAESI Actprovided charge (mortgage & Hypothecation) created over the said properties in favourof the Bank is filed/registered before CERSAI. Further, the said provision of SARFAESIAct has overriding effect over all other enactments. Branches to ensure that mortgageand hypothecation created in its favour by way of security interest by the borrower(s) /guarantors should be filed before CERSAI

Treasury management

TREASURY MANAGEMENT ::

1. RBI pays interest on the cash balances in excess of which of the following to bank, of their
NDTL?
a) 2%
b) 3%
c) 5%
d) 6%
ans: b
2. while the exposure limits are generally left to the banks discretion. RBI has imposed
which ceiling of total business in a year with individual brokers.
a) 2%
b) 5%
c) 10%
d) 15%
ans : b
3. Ability of a business concern to borrow or build up assets on the basis of a given capital
is called.
a) debt service coverage ratio
b) good will
c) reputation
d) Leverage
ans: D
4. Protection of risk in a transaction usually through derevatives product is called.
a) insurance
b) swap
c) hedge
d) arbitrage
ans: c
5. For the organization point of view treasury is considered to be
a) Investment centre
b) Fund management department
c) service centre
d) commercial bank
e) Non of these

ans: c
6. A treasury transaction with a customer is known as…..
a) Marchant banking business
b) Trading business
c) investment business
d) commercial banking
e) Retail banking
Ans: a
7. Which act relating to foreign exchange has replace earlier one?
a) Foreign Exchange Management Act
b) Foreign Exchange Regulation Act
c) Both the above
d) none of these
ans :a
8. RBI has permitted banks to borrow and invest through their overseas correspondents
in foreign currency subject to which of the following ceilings.
a 25% of there Tier-I Capital
b 25% of there Tier-I Capital or USD 10 million
c 25% of there Tier-I Capital or USD 10 million whichever Is higher.
d 25% of there Tier-I Capital or USD 10 million whichever Is lower
ans-: c
9. The treasury is run by a few specialist staff engaged in high value transaction per trn size
generally not being below:
a Rs 10 million
b Rs 20 “
c Rs 50 “
d None of these
Ans : c
10 Treasury has open position which is also known as
a Trading position
b Open position
c Proprietary position
d) a & C both
e) a
ans : d

11. Security dealars deals with of the following market.
A primary mkt
B secondary mkt
C Open mkt
D OTC
E all of these
Ans: b
12. What is the minimum marketable investment in treasury…….
A Rs 5 crore
B Rs 10 “
C Rs 20 “
D Rs 50 “
E non of these
Ans ; A
13. which of the following is not a free currency in the foreign exchange market ?
A USD
B Rupee
C EUR
D All of these
Ans : b
14. which of following statement is not correct relating to TOD and TOM
A Rates are generally quoted at discount to the spot rate
B Rates are less favorable to the buyer of the currency
C Rates are generally quated at a premium to the spot rate
D Non of these
Ans : c
15 The interest rate differential is added to the spote rate of
A Low interest yielding currency
B high interest yielding currency
C Both
D non of these
Ans A
16. Buying of USD (with Rupees) in the market and selling same in forward market or vice
versa is called
A spot trn

B Forward tsn
C swap tsn
D convertible tsn
Ans: c
17 Call money refers to placement of fund……..
A same day
B overnight
C next day
D Two days
E Non of these
Ans: b
18. Notice money refers to placement of funds for period not exceeding……
A over night
B two days
C 7 days
D 10 days
E 14 days
Ans : e
19. Term money refers to placement of funds for period not exceeding…
A 01 yr
B 02 yr
C 03 yr
D 05 yr
 Ans ;A
20. Treasury Bills are issued by whom
A RBI
B State PSUs
C GOI
D IMF
E IRDA
Ans :C
21 treasury bill is issued for 91 days to 364 days by GOI 91 days t bill is auction on
weekly basis for amount Rs………….crore.
A 100

B 200
C 500
D 1000
Ans : c read qtn carefully total three qtns aare there..
22. 364 t bill is auction on fourthnightly basis for amt of RS ……….crore by GOI
A 500
B 1000
C 1500
D 2000
Ans : c
23. A commercial paper carried credit risk , issued for period of 14 days to 01 yr for
minimum amt of 05 lakh and face value of Rs 100 only by………………….and it
should be in D mat form. ( Read QTN care fully)
A RBI
B corporate
C commercial bank
D central govt
Ans : b
24. ECB( external commercial borrowings) indian companies can borrow ................without
approval of RBI
a. usd 500 mn up to minimum period of 5 yrs
b. usd 20 mn upto minimum period of 3 yrs
c. both a and b are correct
d. without RBI approval they cannot borrow at all
ans C
.page no 333 bfm
25individuals are now permitted to remit overseas freely without rbi approval upto
a. 100000 usd/year
b. 200000 usd/yr
c. 300000 usd/yr
d. not possible without rbi approval
 ans : b page 334 b pe
26. certificate of deposit is a negotiable debt instrument has maturity period of 07 to 1 yr
and minimum amt is Rs 01 lakh basically issued by……….
A RBI
B Banks
C Treasury
D Corporate
E None

Ans : b
27 the difference between buying and selling rate is called
a) spread
b) profit
c) a only
d) a& b
Ans:d
28 placement of funds for overnight is called
a) notice money
b) call money
c) term money
d) all the above
Ans : b
29. Treasury discount bills of exchange, of short term nature with a tenure of
A 1 to 3 month
B 3 to 6 m
C 6 to 9 m
D 9 to 12 m
Ans : b
30. govt security are issued by..
A central finance ministry
B ministry of commerce
C central govt
D RBI
Ans : d
31. The basis point value is associated with
A risk pricing
B risk measurement
C risk mitigation
D risk control
 Ans: b
32. Deventures are governed by
A Law of contract
B Company Law
C Negotiable instrument
D non of these
Ans: b
33. all exposure limit are reviewed ….
A once in a qtr
B once in half yr
C once in a yr
D no limit
Ans: c

34 interest cost of funds locked in a trading position is called
A swap
B pre-settlement
C carry
D speculation
E options
Ans:c
35. A situation where the depoiter of abank lose confidence in the bank and withdraw therir
balances immediately, is called
A liquidation of the bank
B falilue of bank
C run on the bank
D out of the money
Ans: c
36. The capacity of abank oa business organization to absorb losses on account of market
risk.
 A risk absorption capacity
B risk aversion capacity
C risk taking capacity
D risk appetite
Ans:d