Note for Principles and Practices of Banking - PPB By JNTU Heroes

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Principles And Practices Of Banking 14MBAFM301 Subject Code : 14MBAFM301 No. of Lecture Hours / Week : 04 Total Number of Lecture Hours : 56 Practical Component : 01 Hour / Week IA Marks : 50 Exam Hours : 03 Exam Marks : 100 Syllabus Module 1 Banking system and structure in India - Evolution of Indian Banks-Types of banks –Public Sector, Regional Banks, Performance of Public Sector banks, Private Sector Banks. Commercial banking: Structure, Functions - Primary & secondary function, Role of commercial banks in socio economic development, Services rendered. Credit creation and Deployment of Funds.-Role of Reserve Bank and GOI as regulator of banking system – Provisions of Banking Regulation Act & Reserve Bank of India Act Module 2 Banker and customer – Types of relationship between banker and customer – Bankers obligations to customers – Right of lean, setoff, appropriation–Bankers legal duty of disclosure and related matters Customers` accounts with banks – Opening- operation – KYC norms and operation – Types of accounts and customers – Nomination – Settlement of death claims Module 3 The Negotiable Instruments Act 1881-Features of Negotiable instruments-Important concepts and explanations under the Negotiable Instruments Act- The Paying Banker- Dishonour of cheques-Negotiation-Endorsement- The Collecting Banker-Negligence-Bills of exchange and promissory note-Discharge of Negotiable instruments -Hundis. Module 4 Banking Technology - Concept of Universal Banking-Home banking – ATMs- Internet banking – Mobile banking- Core banking solutions – Debit, Credit, and Smart cards – Electronic Payment Systems-MICR- Cheque Truncation-ECS- EFT – NEFT-RTGS Module 5 International banking – International Banking: Exchange rates and Forex Business, Correspondent banking and NRI Accounts, Letters of Credit, Foreign currency Loans, Facilities for Exporters and Importers, Role of ECGC, RBI and EXIM Bank DEPARTMENT OF MBA- SJBIT 1

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Principles And Practices Of Banking 14MBAFM301 Module 6 Banker as lender – Types of loans – Overdraft facilities – Discounting of bills – Financing book Debts and supply bills- Charging of Security bills- pledge – mortgage – assignment. Module 7 Asset Liability Management (ALM) in banks: Components of Liabilities and Components of Assets, Significance of Asset Liability management, Purpose and objectives. Prerequisites for ALM, Assets and Liabilities Committee (ALCO) - Activities of ALCO DEPARTMENT OF MBA- SJBIT 2

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Principles And Practices Of Banking 14MBAFM301 TABLE OF CONTENT Module Particular Page No. I Banking system and structure in India 4-21 II Banker and customer 22-41 III The Negotiable Instruments Act 1881 42-50 IV Banking Technology 51-68 V International banking 69-83 VI Banker as lender 84-93 VII Asset Liability Management (ALM) in banks 94-99 DEPARTMENT OF MBA- SJBIT 3

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Principles And Practices Of Banking 14MBAFM301 Module 1 Banking system and structure in India Evolution of Indian Banks • Banking in India originated in the last decades of the 18th century. • The first bank was The General Bank of India, which started in 1786. • Bank of Hindustan was the 2nd bank, which started in 1790; both are now defunct. • The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. • The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. • During the First World War (1914–1918) through the end of the Second World War (1939–1945), and two years thereafter until the independence of India were challenging for Indian banking. From Bank of Hindustan in 1770, the evolution of banking in India can be divided into three different periods as follows: Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969 Phase II: From Nationalization of India banks in 1969 up to advent of liberalization and banking reforms in 1991 Phase III: From Indian Financial and Banking Sector Reforms 1991 onward Post Independence • India observed the emergence of large number of institutions for providing finance to different sectors of the economy. • The entry activities of private sector and foreign banks were restricted through branch licensing and regulation norms. • Steps taken by Indian Govt. to regulate banking are: Reserve bank of India was nationalized on January 1, 1949 under the terms of Reserve bank of India. DEPARTMENT OF MBA- SJBIT 4