Module 1

ORIGIN AND DEVELOPMENT OF BANKING

There seem so be no uniformity amongst the economist about the origin of the word ‘Bank’. It is
believed that the word ‘Bank’ has been derived from the German word ‘Bank’ which means joint stock
of firm or from the Italian word ‘Banco’ which means a heap or mound. The development of commercial
banking in ancient times was closely associated with the business of money changing. In simple words,
bank refers to an institution that deals in money. This institution accepts deposits from the people and
gives loans to those who are in need.

Meaning of Banking

We know people earn money to meet their day to day expenses on food, clothing, education of children,
etc. They also need money to meet future expenses on marriage, higher education of children housing
building and social functions. These are heavy expenses, which can be met if some money is saved out
of the present income. With this practice, savings were available for use whenever needed, but it also
involved the risk of loss by theft, robbery and other accidents. Thus, people were in need of a place
where money could be saved safely and would be available when required. Banks are such places where
people can deposit their savings with the assurance that they will be able to with draw money from the
deposits whenever required. Bank is a lawful organization which accepts deposits that can be withdrawn
on demand. It also tends money to individuals and business houses that need it.

Definitions of Bank Indian Banking Companies Act - “Banking Company is one which transacts the
business of banking which means the accepting for the purpose of lending or investment of deposits
money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or
otherwise”. .

Dictionary meaning of the Word ‘Bank’ -The oxford dictionary defines a bank as “an establishment for
custody of money received from or on behalf of its customers. It’s essential duty is to pay their drafts on
it. It’s profits arises from the use of the money left employed by them”.
The Webster’s Dictionary Defines a bank as “an institution which trades in money, establishment for the
deposit, custody and issue of money, as also for making loans and discounts and facilitating the
transmission of remittances from one place to another”.

According to Crowther, a bank “collects money from those who have it to spare or those who are saving
it out of their incomes, and it lends this money to those who require it.” The above definitions of bank
reveal that bank is a Business institution which deals in money and use of money. Thus a proper and
scientific definition of the bank should include various Modern Banking & Insurance functions
performed by a bank in a proper manner. We can say that any person, institution, company or
enterprise can be a bank. The business of a bank consists of acceptance of deposits, withdrawals of
deposits, Making loans and advances, investments on account of which credit is exacted by banks.

A Brief History of Banking of the World Banking activities were sufficiently important in Babylonia in the
second millennium b.c. that written standards of practice were considered necessary. These standards
were part of the Code of Hammurabi – the earliest known formal laws. Obviously, these primitive
banking transactions were very different in many ways to their modern-day counterparts. Deposits were
not of money but of cattle, grain or other crops and eventually precious metals. Nevertheless, some of
the basic concepts underlying today’s banking system were present in these ancient arrangements. A
wide range of deposits was accepted, loans were made, and borrowers paid interest to lenders. Similar
banking type arrangements could also be found in ancient Egypt. These arrangements stemmed from
the requirement that grain harvests be stored in centralized state warehouses. Depositors could use
written orders for the withdrawal of a certain quantity of grain as a means of payment. This system
worked so well that it continued to exist even after private banks dealing in coinage and precious metals
were established. We can trace modern-day banking to practices in the Medieval Italian cities of
Florence, Venice, and Genoa. The Italian bankers made loans to princes, both to finance wars and their
lavish lifestyles, and to merchants engaged in international trade. In fact, these early banks tended to be
set up by trading families as a part of their more general business activities. The Bardi and Peruzzi
families were dominant in Florence in the 14th century and established branches in other parts of
Europe to facilitate their trading activities.. Both these banks extended substantial loans to Edward III of
England to finance the 100 years war against France. Banks became an integral part of the US economy
from the beginning of the Republic. Five years after the Declaration of Independence, the first chartered
bank was established in Philadelphia in 1781, and by 1794, there were seventeen more. At first, bank
charters could only be obtained through an act of legislation. But, in 1838, New York adopted the Free
Banking Act, which allowed anyone to engage in banking business as long as they met certain legal
specifications. As free banking quickly spread to other states, problems associated with the system soon
became apparent. For example, banks incorporated under these state laws had the right to issue their
own bank notes. This led to a multiplicity of notes – many of which proved to be worthless in the all too
common event of a bank failure. With the Civil War came legislation that provided for a federally
chartered system of banks. This legislation allowed national banks to issue notes and placed a tax on
state issued bank notes. These national notes came with a federal guarantee, which protected the note-
holder if the bank failed. This new legislation also brought all banks under federal supervision. In
essence, it laid the foundations of the present-day system. Evolution of Banking in India From the
ancient times in India, an indigenous banking system has prevailed. The businessmen called Shroffs,
Seths, Sahukars, Mahajans, Chettis etc. had been carrying on the business of banking since ancient
times. These indigenous bankers included very small money lenders to shroffs with huge businesses,
who carried on the large and specialized business even greater than the business of banks. 

The origin of western type commercial Banking in India dates back to the 18th century. The story of
banking starts from Bank of Hindustan established in 1770 and it was first bank at Calcutta under
European management. It was liquidated in 1830-32. 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  The foundation of Indian Banking dates back to 1770 when the India’s first bank
‘Bank of Hindustan‘was established in Calcutta (Kolkata) under European Management. 

The second in line was ‘General Bank of India‘that was established in 1786.  .

Later, three Presidential Banks were set up in India. These were – Bank of Calcutta (1806), Bank of
Bombay (1840) and Bank of Madras (1843).

Of all these banks, Bank of Calcutta was quite prominent because of strategic location of Calcutta as the
international trade hub of British Empire in India. These Presidential Banks were set up by the East India
Company. 
In 1809, Bank of Calcutta was renamed as ‘Bank of Bengal‘.  In 1839, some Indian merchants in
Calcutta started a new venture ‘Union Bank‘ but the bank failed in 1848 due to economic crisis of 1848-
49. 

In 1863, India’s first joint stock bank was launched. It was called ‘Upper Bank of India‘.  In 1865,
Allahabad Bank was established and is currently the oldest existing Joint Stock Bank in India.  In 1881,
‘Oudh Bank‘was established that was entirely managed by Indians. 

In 1895, Punjab National Bank was founded that exists even today.  In 1911, a commercial bank
named Central Bank of India was established that was wholly owned and managed by Indians.  In
1921, the three Presidential Banks were merged to form ‘Imperial Bank of

In 1926, Young Hilton committee was set up to suggest guidelines for forming a central bank in India. 
In 1935, Reserve Bank of India was formed on recommendation of Young Hilton committee, and was
regulated by RBI Act, 1934.  Reserve Bank of India was later nationalized in 1949 following India’s
independence.  In 1955, Imperial Bank was nationalized as ‘State Bank of India‘ This was the first phase
of Indian banking which was a very slow in development. This era saw many ups and downs in the
banking scenario of the country. .  Government of India came up with the Banking Companies Act
1949. This act was later changed to Banking Regulation (Amendment) Act 1949.  The Banking
Regulation (Amendment) Act of 1965 gave extensive powers to the Reserve Bank of India. The Reserve
Bank of India was made the Central Banking Authority.  The banking sector reforms started
immediately after the independence. These reforms were basically aimed at improving the confidence
level of the public as most banks were not trusted by the majority of the people. Instead, the deposits
with the Postal department were considered safe.  . The first major step was Nationalization of the
Imperial Bank of India in 1955 via State Bank of India Act. State Bank of India was made to act as the
principal agent of RBI and handle banking transactions of the Union and State Governments.  1969
Phase II: From Nationalization of India banks,

In a major process of nationalization, 7subsidiaries of the State Bank of India were nationalized by the
Indira Gandhi regime. In 1969, 14 major private commercial banks were nationalized. These 14 banks
Nationalized in 1969 are as follows:

Central Bank of India

 Bank of Maharastra

Dena Bank

Punjab National Bank

Syndicate Bank

Canara Bank

Indian Bank

Indian Overseas Bank

Bank of Baroda

Union Bank

Allahabad Bank

Union Bank of India

United Ccommercial Bank of India.  The above was followed by a second phase of nationalization in
1980, when Government of India acquired the ownership of 6 more banks, thus bringing the total
number of Nationalized Banks to 20. The private banks at that time were allowed to function side by
side with nationalized banks and the foreign banks were allowed to work under strict regulation.  .
After the two major phases of nationalization in India, the 80% of the banking sector came under the
public sector / government ownership.

The third phase of development of banking in India started in the early 1990s when India started its
economic liberalization.

Currently there are following 19 nationalised banks in India as per the RBI website.
• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab & Sind Bank
• Punjab National Bank
• Syndicate Bank
• UCO Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank

COMMERCIAL BANKS

The Banks which perform all kinds of banking business and generally finance trade and commerce are
called commercial banks. Since, their deposits are for a short period, these banks normally advance
short term loans to businessmen and traders and avoid medium and long term and long term lending.
However, recently. Commercial banks have also extended their areas of operation to medium term and
long term finance

A commercial bank is a financial intermediary.

Its central objective is commercial that is, profit making.

It takes money from a surplus unit by paying a low rate of interest and lends the same fund to a deficit
unit at a higher rate of interest and thus makes profit.

It is said to be a dealer in credit.

It may be organized privately or by the Government.

Functions of Commercial Banks:

I. Primary Functions: 1. Accepting of deposits

The following are the types of deposits:

a) Current deposits account: They are, generally opened by trading and industrial concerns, public
authorities, etc. Current accounts are active or running accounts which are continuously in operation.
Customers can deposit any amount of money and any number of times and there is no restriction on the
number of withdrawals. Current deposits are repayable on demand. It is for this reason, they are also
called demand deposits or demand liabilities. So, banks are required to keep the major portion of the
current deposits in liquid form. Generally no interest is allowed on current deposits.

b) Fixed deposit account: They are opened by small investors who do not want invest their money in
risky industrial securities, but wish to deposit their money in banks and earn good and steady income.
No introduction is necessary for opening the fixed deposit accounts, as they are not operated by
cheques. Fixed amounts are deposited by customers for fixed periods at fixed rate of interest. The fixed
deposits can be withdrawn, not on demand, but only after the expiry of fixed periods. It is for this
reason known as time deposits.

c) Savings deposit account: They are opened by middle and low income groups who wish to save a part
of their current incomes for their future needs and earn fair interest on their deposits. Customers can
deposit any amount of money and any number of times. There are restrictions on the number as well as
the amount of withdrawals from these accounts.

d) Recurring deposit: It is meant for people who have regular monthly incomes. They are intended to
encourage the habit of saving among the depositors on a regular basis. The depositor deposits a fixed
sum of money every month for an agreed period, and at the end of the specified period, he gets back
the amount deposited together with the interest accrued thereon.

2. Forms of advances

a) Loans: The banker advances a lump sum for a certain period at an agreed rate of interest. The entire
amount is credited to loan a/c, interest is charged on entire amount whether the borrower withdraws in
full or part. The loan may be repaid in installments or at the expiry of a certain period. The loan may be
made with or without security. Loan may be a demand loan or a terms loan

Demand loan is payable on demand, it is for meeting the working capital needs of the borrower.
Term loans may be medium term or long term loan.
 Medium term loans are granted for a period of one year to 5 years for the purchase of vehicles,
tools and equipments. Long term loans are granted for a period of more than 5 years for capital
expenditure such as purchase of land, building, new machinery etc.

b) Cash credit: This a permanent arrangement by which the customer is allowed to borrow money upto
a certain limit, here the borrower withdraws the money as and which he requires and interest is charged
only on the amount actually withdrawn. Cash credit arrangements are usually against pledge or
hypothecation of goods. Cash credits are the most favourite mode of borrowing by large commercial
and industrial concerns.

c) Overdrafts: Overdraft is an arrangement between a banker and his customer by which the latter is
allowed to withdraw over and above his credit balance in the current account upto on agreed limit. This
is only a temporary accommodation/arrangements usually granted against securities. Interest is charged
on the amount overdrawn.

d) Bills discounted and purchased :While the traders opt for credit transaction the debtors accepts the
bill drawn upon him to pay certain sum money on certain specified date by the credit-BOE. The banker
discounts the BOE and credits the customer a/c, here the banker receives the interest in advance.
Sometimes banks purchase the bill instead discounting them. But in almost all cases the bank holds the
bill only as a security for the advance

3. Creation of credit: Credit creation is an important function of commercial banks. When a commercial
bank advances a loan to its customers, liquid cash will not be lent. Instead it opens an account in the
borrower's name and credits his account with the amount of loan. Such a deposit is indeed credit
creation .and this deposit is called secondary or derivative deposit. Thus credit creation helps to increase
the money supply so as to promote economic development in the country.

4. Use of cheque system: Commercial banks perform the unique function of issuing and collecting
cheques. Deposits can be withdrawn with the help of a cheque as it is a negotiable instrument. It can be
transferred easily from one person to another. It becomes the most developed credit instrument. In
modem business world the use of cheques to settle debts is found to be more convenient form than the
use of liquid cash.
5. Remittance of funds: Banks help their customers in transferring funds from one place to another by
issuing bank drafts, mail transfers, telegraphic transfers and electronics transfers on nominal
commission charges.

II. Secondary Functions: The secondary functions of a modern banker may be classified into:

1. Agency functions

2. Miscellaneous functions /General utility functions.

1. Agency functions: The banker acts as an agent to his customers.

i) Payment and collection of dividends, salaries, pensions, telephone bills, insurance premium etc...:
Customers can leave standing instructions with the banker for various periodic payments ensuring the
regular payments and avoiding the trouble of performing it themselves.

ii) Purchase and sales of securities: They simply perform the function of a broker and undertake the
purchase and sale of various securities like shares, stocks, debentures etc., on behalf of their customers.
iii) Acting as executor, administrator and trustee: An executor is a person appointed by a testator by a
will to execute his will. When no will is prepared by the testator or when no executor is named in the
will or when the executor named in the will is not available or willing to act as such, the court appoints a
person called as administrator A trustee is a person who is entrusted with some property by the settler
of the trust for the benefit of another person called the beneficiary. A modern bank serves as a trustee
of its customer.

iv) Acting as attorney: An attorney is a person appointed by another person by a power of attorney to
act on his behalf. As an attorney of a customer, the banker is empowered to sign transfer forms in
respect of sales and purchases of securities made by him on behalf of his customers.

2. Miscellaneous functions:

i) Safe custody of valuables: There are 2 ways through which a banker ensures safety of its customer's
valuables. a. By accepting valuable for safe custody. b. By hiring out safe deposit lockers to the
customers.
ii) Letter of credit: Letter of credit assumes great importance in international trade. Letter of credit
assures payment to an exporter soon after he parts with the goods and enables the importer to make
payment only after he receives the goods or the document title to goods. Thus, letters of credit facilitate
foreign trade.

iii) Traveler's Cheques: A traveler's cheque can be purchased by anyone, are issued in different
denominations. No commission is charged on the sale of traveler's cheque, the purchaser has to deposit
the money in the issuing bank equivalent to the amount of traveler's cheque, at the time of purchase as
well as at the time of encashment he has to sign in the cheque. There is no expiry period, refundable,
issued in single name only and not in joint names, clubs, Societies etc.

iv) Merchant Banking:It covers a wide range of activities such as management of customers services,
portfolio management, credit syndication, counseling, assisting companies in matters relating to
restructuring, amalgations, mergers and take over etc., preparation of project reports, project
counseling, corporate counseling, issue management, pre-investment and feasibility.

v) Dealing in foreign exchange business: It includes, export finance, forward contract, issue of solvency
certificates, banks get trade information and disseminate.

vi) Leasing Finance:The banking laws (Amendment) act, 198, enables commercial banks to carry on
equipment leasing business and set up subsidiaries for carrying on such business.

vii) Factoring: Factoring is a ‘continuing arrangement between a financial institution say, a commercial
bank (called the factor) and the business concern (called the customer) selling goods and services to
trade customers in which the factor purchases the book debts of his client and immediately pay the
client either the full value or a substantial part of the book debts, and thereafter collects the book debts
from the debtors of the client on the due dates.

vii) Housing Finance:

ix)Tax Consultancy: Banks advices on income tax and other taxes, preparing customers annual
statements, claiming allowances file appeals etc.,

x) Underwriting of securities: Every modem banker underwrite the shares and debentures of trading
companies. He also underwrites the securities of government and semi government institutions.
xi) Credit cards: Credit cards are issued to customers having current / saving stock. It enables a customer
to purchase the goods and services upto a certain limit without making immediate payment.

xii) Gift cheques: The purchaser of the cheque need not be an account holder, it has no negotiability and
its payment is made only to the payee, gifted on occasions such as wedding, birthday etc.,

xiii) Consultancy Function: The consultancy service covers technical, financial, managerial and economic
aspects. This service is provided small scale industries.

xiv) Teller System: Under this system, the teller is authorized to receive cash and make payments upto
limited amounts without reference to the ledger balance or the specimen signature. Now it is
automated teller system.

TYPES OF BANKS

There are various types of banks which operate in our country to meet the financial requirements of
different categories of people engaged in agriculture, business, profession etc. Banks can be classified
into various types on the bases of their functions, ownership, domicile, etc
I. Classification on the Basis of functions
• Central Bank: A central bank functions as the apex controlling institution in the
banking and financial system of the country. It functions as the controller of credit,
banker’s bank and also enjoys the monopoly of issuing currency on behalf of the
government. A central bank is usually control and quite often owned, by the
government of a country. The Reserve Bank of India (RBI) is such a bank within an
India.
• Commercial Banks. It operates for profit. It accepts deposits from the general public
and extends loans to the households, the firms and the government. The essential
characteristics of commercial banking are as follows: - Acceptance of deposits from
public - For the purpose of lending or investment - Repayable on demand or lending
or investment. - Withdrawal by means of an instrument, whether a cheque or
otherwise. Another distinguish feature of commercial bank is that a large part of
their deposits are demand deposits withdrawable and transferable by cheque.
• Industrial Banks: Industrial banks also known as investment banks mainly meet the
medium term and long term financial needs of the industries. The main functions of
Industrial banks are: a. They accept long term deposits b. They grant long term loans
to industrialists to enable them to purchase land, construct factory buildings,
 purchase heavy buildings, etc. c. They help sell or underwrite the debentures and
shares of industrial firms. d. They can also provide information about the general
economic position of the economy: Example: Industrial Development bank of India
(IDBI); Industrial Finance Corporation of India (IFCI); State Finance Corporations
(SFC)
• Agricultural Banks: Agricultural credit needs are different from those of Industry and
Trade. The Agriculturists require:  Short term credit to buy seeds, fertilizers and
other inputs.  Long Term credit to purchase land, to make permanent
improvements on land, To purchase agricultural machinery and equipment, etc In
India Agricultural Finance is generally provided by co-operative institutions.
Agricultural co-operatives provide short-term loans and Land Development banks
provide Long term credit to the agriculturists
• Specialized Banks: These banks are established and controlled under the special act
of parliament. These banks have got the special status. One of the major bank is
‘National Bank for Agricultural and Rural development’ (NABARD) established in
1982, as an apex institution in the field of agricultural and other economic activities
in rural areas. In 1990 a special bank named small industries development Bank of
India (SIDBI) was established. It was the subsidiary of Industrial development Bank
of India. This bank was established for providing loan facilities, discounting and
rediscounting of bills, direct assistance and leasing facility.
• Exchange Banks: Exchange banks Deal in foreign exchange and specialize in
financing foreign Trade. They facilitate international payments through the sale and
purchase of bills of exchange and thus play an important role in promoting foreign
trade.
• Savings Bank: The main Purpose of saving banks is to promote saving habits among
the general public and mobilize their small savings. In India, postal saving banks do
this job. They open accounts and issue postal cash certificates.
• World Bank: World Bank refers to an institution which provides financial assistance
to the member countries of the world. After the world wide depression and World
War II, two institutions were founded in 1944, a) International Monetary Fund
(IMF), b) International Bank of Reconstruction and development (IBRD) or popularly
known as the World Bank. While the IMF was established to provide short-term
loans to overcome the balance payments difficulties, the World Bank aimed at
providing long term loans for the purpose of (a) reconstructing the war- damaged
economies and (b) developing the less developed economies.
II. Classification on the Basis of Ownership:
On the basis of ownership, banks can be classified into three categories:
• Public Sector Banks: These are owned and controlled by the government: In India,
the nationalized banks and the regional rural banks come under these categories.
• Private Sector Banks: These banks are owned by the private individuals or
corporations and not by the government or co- operative societies.
 • Co-operative Banks: Cooperative banks are operated on the co-operative lines. In
India, co-operative credit institutions are organized under the co-operative societies
law and play an important role in meeting the financial needs in the rural areas.

III. Classification on the basis of Domicile On the basis of domicile, the banks are divided in to
two categories:
• Domestic banks: These are registered and incorporated within the country
• Foreign banks: These are foreign in origin and have their head offices in the country
of origin.
IV. Scheduled and Non-scheduled Banks: A Scheduled Bank is that which has been included in
the Second Schedule of the Reserve Bank of India Act, 1934 and fulfills the three conditions:
It has paid-up capital and reserves of at least of Rs 5 lakhs. It ensures the reserve bank that
its operations are not detrimental to the interest of the depositor. It is a corporation or a
cooperative society and not a partnership for single owner firm. The banks which are not
included in the Second schedule of the Reserve Bank of India Act are non- scheduled banks.
V. COMMERCIAL BANKING STRUCTURE The structure of baking is also called organization of
baking. It differs from country to another country, depending upon economic and political
conditions. Over the years, the structure of banking also has undergone tremendous
changes. The following are the several systems of banking.
VI. Unit Banking: Unit banking is a system in which a bank operates in a special area, which is
smaller and limited. It operates through a single office and functions within limited resource.
Unit banking is often referred to as localized banking. Unit banks may have link with a
correspondent bank in the city, this arrangement helps each bank to make remittances
through the correspondent banks.
VII. Branch Banking: Branch banking is a system in which every bank work is a legal entity,
having one board of directors and one of shareholders and operates through a network of
branches spread throughout the country. The head office of the bank is located in a big city
or state capital and the branches operate throughout the country.
VIII. Group Banking: In this system, two or three separately incorporated banks are brought
under the control of a holding company. The holding company controls effectively all the
units in the group but each bank has a separate entity. The holding company coordinates
the activities of the banks of the group. The banks so brought together may be unit banks or
branch banks or both.
IX. Chain Banks: In this system, separately incorporated banks are brought under the common
control by a device other than the holding company. For example, some group of persons
may own three / four banks or some persons may be directors of several banks. Though a
number of banks are brought under common control, each bank in the chain retains the
separate entity and carries out the functions without the interference of any body.
X. Correspondent Banking System: It is a system in which unit bank in small towns are linked
with big banks in bid cities and they act as correspondent banks to several unit banks. It
means that the unit banks maintain some deposits with big banks in the metropolitan cities.
The correspondent banks provide number of special services to unit banks such as accepting
the surplus reserves, remittances facilities to other banks collection of cheques, draft and
bills for the unit banks and so on
 MODULE II

USES OF BANKS IN BUSINESS

There are many functions that a commercial bank performs. The most important use of a
commercial bank is that it is be used to transfer money, as well as to accept deposits and lend
money to the public.

As of the present situation, there are many products and services offered by banks, which can
be summarized as follows:

1. Banks provide a wide variety of products and services round the clock.

The procedure to know about the various services is to log in to respective sites of their online
banking, e.g. Log in to https://retail.onlinesbi.com/personal/

Then click on services icon so that various products and services offered by banks will be
displayed.

e.g.
A. E DEPOSITS
Electronic term deposit receipt is a Multi option deposit scheme where you can
deposit money for 1 to 10 years. As a rule, the minimum tenure for a term deposit
is 7 days and the maximum is 10 years. However, Both TDR and STDR are bound by
the following minimum and maximum tenures. Minimum tenure is 7 days for TDR
and 180 days for STDR and Maximum tenure is 3650 days for TDR and STDR.
The interest rates vary from time to time. One can view the latest interest rates by
clicking on "View current interest rate" link provided in e-TDR/e-STDR request page.
One can open a term deposit with a nominal amount of Rs.1000/- , however
minimum & maximum amount limit may vary for different product codes.
We can also close our e-TDR/e-STDR instantly if request is initiated between 08:00
AM IST to 08:00 PM IST. Request initiated beyond this period will be scheduled for
next opening hours ie 08:00 AM IST.
TDR/STDR opened at branch can be closed at branch only.
B. FLEXI DEPOSIT SCHEME
Unlike Recurring Deposit account, Banks offer Flexi Deposit scheme in which there is
flexibility in choosing the deposit amount within the minimum and maximum limits
per financial year. The Minimum deposit amount is Rs. 5,000/- per Financial Year.
C. E.RECURRING DEPOSIT
The period of deposit shall be minimum 12 months and maximum 120 months. The
minimum amount of monthly installment shall be Rs 100.
D. SMART CARD : ACHIEVER
This is an ideal corporate product for making periodical payments of non-cash
nature like incentives etc,to their employees
E. eZ pay card
The State Bank eZ-Pay card, a prepaid card issued in Indian Rupees in association
with VISA international, is an ideal product for making periodical payments like
Salary, Wages, Commission, Scholarship, Old age pension, other Social benefits etc.
Payment of salaries to employees, who are located at different places, is generally a
difficult proposition for employers as a single banking arrangement cannot be made
for all employees.

2. Banks also provide many value added services as given below

 E.TICKETS

Please follow the under noted process for booking of railway tickets.
• Logon to the site of IRCTC www.irctc.co.in
• Register yourself on the site (if first time user) or log on with Username and Password (meant
for IRCTC site).
• Provide the requisite information i.e. stations (departure & arrival), date and class of the
journey under option of 'Plan My Travel and Book Ticket'.
• Select your train from the list of trains displayed by IRCTC and click on 'Book Ticket'
• Provide passenger details and confirm your address for getting delivery of tickets. The amount
of ticket will be displayed for payment.
• Choose payment option respective bank. You will be taken to our site of online banking .
• Log in with Username and Password (meant for online banking ) and confirm the payment.
• On successful transaction, you will be provided with Transaction Id and date of transaction.
• The ticket will be delivered by IRCTC at your place of choice. Delivery of ticket is sole
responsibility of IRCTC.
• For cancellation of ticket, submit your ticket at a computerized counter of Railways. On
cancellation of ticket by Railways, the amount shall be credited back to your account.
• Service charges @ Rs.10/- per transaction shall be levied w.e.f. 01.08.2006.

HOME LOAN PROVISIONAL INTEREST CERTIFICATES

Home loan borrowers can now view / download Interest Certificate (Provisional) of their home
loan account(s) using www.onlinesbi.com/personal. Just log on to Personal Banking section of
the Internet Banking site with your credentials and select the "Home Loan Int.Cert (Prov)" link
under "Enquiries" tab. Then select the account for which you require a Home Loan Interest
Certificate. The certificate can be viewed online, printed or downloaded in pdf.
 CREDIT CARD BILL PAY

• Credit Card (Visa) Bill Pay is a special service that allows you to transfer money online from
your SBI account to any VISA Credit Card issued in India.
• To use the service just log on to OnlineSBI.com using the Internet Banking Username and
Password, provided by State Bank of India.
• Click the Manage Credit Card (Visa) Bill Pay link in the Profile tab. Authenticate yourself with
the Profile Password.
• You can view a page to register the Payee Name and Card Number. Provide these details and
set a nickname for your Payee.
• Optionally you can set a transaction limit for this Payee. The Bank sets a per transaction limit
of Rs.25,000/- or a card. The per day limit for a user is Rs.50,000.
• On registration you will receive a high security password in your mobile number. This is done
basically to double check your identity. Provide the password to authorize the Payee. After a
payee is authorized you can start transferring funds to the Card.

VIEW TAX CFEDIT IN FORM 26AS

Users of www.onlinesbi.com/personal can view tax credit in form 26AS through Bank Login
Users having PAN number registered with their Home branch can avail the facility of online
view of tax credit in Form 26AS. The Form 26AS (Annual Tax Statement) is divided into three
parts.

TDS ENQUIRY
TDS enquiry is a facility to generate the details of tax deducted from your deposit account
during the previous financial year or projected tax for the current financial year. TDS is
deducted if the interest amount due to you exceeds Rs.10,000/- per annum.
TYPES OF ONLINE TRANSACTIONS
INTRA BANK FUND TRANSFER

• Transfer funds within your own accounts

• Transfer funds to third party account held in the same bank
• It is also of quick transfer, imps neft and rtgs.

Inter bank, RTGS, IMPS, NEFT

Inter Bank Transfer enables electronic transfer of funds from the account of the remitter in one
Bank to the account of the beneficiary maintained with any other Bank branch. There are two
systems of Inter Bank Transfer - RTGS and NEFT. Both these systems are maintained by Reserve
Bank of India.

RTGS - Real Time Gross Settlement - This is a system where the processing of funds transfer
instructions takes place at the time they are received (real time). Also the settlement of funds
transfer instructions occurs individually on an instruction by instruction basis (gross
settlement). RTGS is the fastest possible interbank money transfer facility available through
secure banking channels in India.

NEFT - National Electronic Fund Transfer - This system of fund transfer operates on a Deferred
Net Settlement basis. Fund transfer transactions are settled in batches as opposed to the
continuous, individual settlement in RTGS. Presently, NEFT operates in half hourly batches
currently there are 23 settlements on all working days including working Saturday (Excluding
Sundays / Holidays / second and 4th Saturdays): 08.00 AM to 07:00 PM.

IMPS- Immediate Payment Service -(IMPS) is an instant interbank electronic fund transfer
service through mobile phones. It is also being extended through other channels such as ATM,
Internet Banking, etc. Mobile Money Identification Number (MMID) is a seven digit number of
which the first four digits are the unique identification number of the bank offering IMPS.

Differences between RTGS IMPS NEFT

NEFT RTGS IMPS

Minimum
Rs.1 Rs.2 lakh Rs.1
transfer value

Maximum
10 Lakhs 10 Lakhs Rs.2 lakh
transfer value
Type of One-on-one
Batches One-on-one settlement
settlement settlement

Speed of 2 hours (subject to cut-off

Immediately Immediately
settlement timings and batches)

Weekdays: 12 batches
between 8:00 a.m. - 6:30
Service p.m. Saturday: 6 batches Working Days: 8:00 a.m. -
24/7
availability between 8:00 a.m. 1:00 6:00 p.m.
p.m. Sunday and bank
holidays: Unavailable

Online/Offline Both Both Online

PROCEDURE FOR ONLINE TRANSACTIONS:

a. Log on to respective online banking sites, eg. 'www.onlinesbi.com'.Enter user id and

password

b. Visit 'Profile' section and click on respective fund transfer as per the requirement.

C. if not a quick transfer Select to add Beneficiary'

d. Add details for the beneficiary

e. Approve the beneficiary using OTP (one time password) received on your registered mobile
number

The beneficiary details required are:

a. Name of the beneficiary

b. Account Number of the beneficiary

c. IFS Code of the beneficiary bank

f. click on payment details.

 MODULE III

USES OF CHEQUES AND FORMS

A cheque is an unconditional order addressed to a banker, signed by the person who has
deposited money with a banker, requesting him to pay on demand a certain sum of money only
to the order of the certain person or to the bearer of the instrument.

Sample cheque

TYPES OF CHEQUES-

1) Bearer Cheque

Bearer cheques are the cheques which withdrawn to the cheque's owner.Anybody who bears
the cheque can go to the Bank and present the cheque. These types of cheques normally used
for a cash transaction.

For example - Ram has a savings account in HDFC bank. He brought a cheque from his
chequebook to the HDFC bank branch where he has an account. He can present the cheque to
the bank and withdraw money from his account. This type of cheque is known as Bearer
Cheque.

2) Order Cheque

Order cheques are the cheques which are withdrawn for the payee(the person whose name is
written on the cheque). Before making payment to that payee,cross-checks check the identity
of the payee.
For example - Ram has a savings account in HDFC bank. He wanted to make payment of
Rs.100,000 to Sham. Ram gave a cheque to Sham, writing his name on the cheque. Sham will
present the cheque to HDFC bank and he will get the cash.
3) Crossed Cheque

On the Crossed cheques, two lines are made on the top right of the cheque. Amount mentioned
on the cheque is only transferred to the bank account of the payee. No cash payment is made.
4) Account Payee Cheque

On the Account payee cheque, two lines are made with the word "account payee" on the top
right of the cheque. Amount mentioned on the cheque is only transferred to the bank account
of the payee whose name is mentioned on the cheque. No cash payment is made. This cheque
can not be endorsed to the third party.

Difference between Crossed cheques and Account payee cheques

Crossed cheques can be endorsed to other parties while the Account-payee cheques can't be
endorsed and funds are only transferred to the account whose name is mentioned on
thechequee.

Types of crossing

General Crossing :-
Generally, cheques are crossed when
1. There are two transverse parallel lines, marked across its face or
2. The cheque bears an abbreviation "& Co. "between the two parallel lines or
3. The cheque bears the words "Not Negotiable" between the two parallel lines or
4. The cheque bears the words "A/c. Payee" between the two parallel lines.

A crossed cheque can be made bearer cheque by cancelling the crossing and writing that the
crossing is cancelled and affixing the full signature of drawer.
Specimen of General Crossing ↓

2. Special or Restrictive Crossing :-

When a particular bank's name is written in between the two parallel lines the cheque is said to
be specially crossed.

Specimen of Special or Restrictive Crossing ↓

In addition to the word bank, the words "A/c. Payee Only", "Not Negotiable" may also be
written. The payment of such cheque is not made unless the bank named in crossing is
presenting the cheque. The effect of special crossing is that the bank makes payment only to
the banker whose name is written in the crossing. Specially crossed cheques are more safe than
a generally crossed

5) Stale Cheque

In India, if a cheque is not presented to the bank within 3 months from the date written on the
cheque is known as a stale cheque.

For example - On 10 January 2019, If the cheque is presented to the bank on 10 April 2019, the
chque will be returned by bank stating that cheque is stale.
6) Post Dated Cheque

If any cheque issued by a holder to the payee for the upcoming withdrawn date, then that type
of cheques are called post-dated cheque.

For example - On 10 January 2019, Ram issued a cheque to Sham. Date written on the
cheque is 10 February 2019.
7) Ante Dated Cheque

If date entered on the cheque is prior to the current date, that type of cheque is known as
Ante-dated cheque.

For example - On 10 January 2019, Ram issued a cheque to Sham. Date written on the
cheque is 10 December 2018.

BLANK CHEQUE

A cheque in which the payee indicates no specific amount so that it is left for the determination
by the drawee is known as blank cheque. It is used when high level of trust is afforded. In this
type of cheque, only signature is entered, all the other columns remain vacant.

MUTILATED CHEQUE

A cheque is an unconditional order addressed to a banker, signed by the person who has
deposited money with a banker, requesting him to pay on demand a certain sum of money only
to the order of the certain person or to the bearer of the instrument.
USES OF CHEQUES

• Cheques can be payable to order or bearer.

 • It is freely transferable. cheque is negotiable by endorsement and delivery.
• Cheques can be made to the title holder or holder in due course, holder in due course is
the person who has possessin of the instrument at the time of maturity.
HOW TO PREPARE A CHEQUE
1. Go to Gateway of Tally > F11: Accounting Features
2. Set Enable Cheque Printing to Yes
3. Set/Alter Cheque Printing Configuration to Yes.

The screen appears as shown.

Once the option Set/Alter Cheque Printing Configuration is activated to Yes, you will get the
below screen.

• Enable the option Set/Alter Cheque Printing Configuration

The Cheque Format Selection screen appears with the various formats available for the
selected bank and a preview of the cheque for the selected format is also displayed. Here, the
cheque displayed is as per Format 1 for State Bank of India.

• Press Enter on any of the available formats to view their respective Cheque Dimensions
• Press Alt+P for a print preview of the cheque format
CHEQUE ISSUE REGISTER

Go to Gateway of Tally > Banking > Cheque Register to view the Cheque Register report.
CHEQUE CANCELLATION,CLEARANCE
To cancel a cheque that has not been issued,

1. Go to Gateway of Tally > Banking > Cheque Register

2. Select Available column and press Enter to drill down to Cheque Range Register screen.

3. Select the required cheque range and drill down.

4. Select the required instrument number by using Spacebar.

5. Click A: Alter Status button or press Alt+A and select the option Cancel Cheque.
In Tally.ERP 9, you can cancel a cheque that has been already issued, by cancelling
the voucherrecorded for the cheque.

To cancel a voucher:

1. Go to Gateway of Tally > Display > Day Book

2. Press Spacebar to select the required voucher.
3. Click X: Cancel button or press Alt+X.
4. A confirmation message is displayed. Click Yes or press Y.

VARIOUS FORMS USED IN BANK TRANSACTIONS

• PAY IN SLIP

A pay-in slip sounds like another term for what is more commonly called a deposit slip. When a
person wants to deposit checks or cash in his bank account, he customarily fills out a slip to
show the number of his account, the date, and the details of the deposit.

• D.D

A demand draft or a DD is a negotiable instrument issued by the bank. The meaning of

negotiable instrument is that it guarantees a certain amount of payment mentioning the name
of the payee. It cannot be transferred to another person in any situation.

The bank issues the draft to a client (drawer) directing another bank or own branch to pay the
specific amount to the payee. Demand drafts can be compared to cheques but these are hard
to counterfeit and more secure. This is because the drawer has to pay before issuing a demand
draft to the bank whereas cheque can be issued without ensuring the sufficient funds in your
bank account. Therefore, cheques can bounce but drafts assure a safe and on-time payment.
 • Account Opening Form, Various loan application form

Application Form” means our Application Form which You sign to open an Account.

• KYC

KYC means “Know Your Customer”. It is a process by which banks obtain information about the
identity and address of the customers. This process helps to ensure that banks' services are not
misused. The KYC procedure is to be completed by the banks while opening accounts and also
periodically update the same.

• FORMS FOR DEMATRIALIZATION

Dematerialisation. Dematerialisation is the process by which a client can get physical
certificates converted into electronic balances. An investor intending todematerialise its
securities needs to have an account with a DP. The client has to deface and surrender
the certificates registered in its name to the DP. One can get and fill the form online.
• Transposition application form

Changing the order of names in which a security is held is called transposition.

Sometimes, a shareholder owns physical certificates jointly but the names are in a
different order. Since jointly held physical shares can be dematerialised and held in the
same demat account only when the order of names is identical, the investor would have
to open as many multiple demat accounts as the different name orders.

To avoid this, the investor could use the transposition-cum-demat facility offered by
CDSL/NSDL. This helps a customer to transpose the names of joint holders in the desired
order while processing the dematerialization of certificates. So if A and B hold a demat
account and some certificates are held in the names of B and A and others in the names
of A and B, the shares can be dematerialised in the demat account of A and B through
this facility.
 • Pledge and hypothecation form
These terms are used for creating a charge on the assets which is given by the borrower
to the lender as a security for any loan. 1) Pledge is used when the lender (pledgee)
takes actual possession of assets (i.e. certificates, goods ). Such securities or goods are
movable securities. In this case the pledgee retains the possession of the goods until
the pledgor (i.e. borrower) repays the entire debt amount. In case there is default by
the borrower, the pledgee has a right to sell the goods in his possession and adjust its
proceeds towards the amount due (i.e. principal and interest amount). Some examples
of pledge are Gold /Jewellery Loans, Advance against goods,/stock, Advances against
National Saving Certificates etc.

(2) Hypothecation is used for creating charge against the security of movable assets, but
here the possession of the security remains with the borrower itself. Thus, in case of
default by the borrower, the lender (i.e. to whom the goods / security has been
hypothecated) will have to first take possession of the security and then sell the same.
The best example of this type of arrangement is Car Loans. These forms are also
available online.

• Freezing and defreezing of accounts forms

An account freeze is an action taken by a bank or brokerage that prevents any
transactions from occurring in the account. Typically, any open transactions will be
cancelled, and checks presented on a frozen account will not be honored.

OTHER FORMS

Go to online banking site.

Click on forms, u can see various application forms displayed for that particular bank.
 MODULE IV

BANKING APPLICATIONS

Payment of direct and indirect taxes online.

Types of taxes

Direct taxes are obligatory and have to be directly paid to the Government of India. There has
been a gradual and steady increase in the direct tax collections in the recent years in India. The
increase in collection of direct taxes is indeed a positive sign, showing more people are earning
taxable incomes. Some of the direct taxes made obligatory by Government of India are:

Income Tax

If money is earned then tax has to be paid – if it crosses a particular slab of income received.
Income tax returns have to be filed in different forms for different types of businesses and
individuals. There are different ITR forms available for salaried, self employed, partnership firms
and more. Checkout this article for more information about the different types of ITR forms.

Capital Gains Tax

The profit you make on sale of a property attracts capital gains tax. For e.g If a property worth
30 lakhs is sold for an amount of 80 lakhs then capital gains tax is applicable on the 50 lakhs
difference amount including the 3% education cess, 20% on the long terms capital gains tax and
inflation index of the year the property was purchased plus and the inflation index of the year
the property was sold.

Securities Transaction Tax

This type of tax is applicable when customer purchases or sells equity shares, derivative
instruments, equity oriented mutual funds. This tax cannot be avoided as it is added during the
transaction itself. MoSt often this tax goes unnoticed because only a small amount is what gets
deducted.
Fringe Benefit Tax or Perquisite Tax

Fringe benefit tax was abolished in the year 2009. It used to be applicable on non-monetary
benefits offered to employees like cars, club memberships etc. Presently all of these benefits
are taxable under perquisite tax.

Corporate Tax

If a corporate organisation (Eg: Private Limited Company or Limited Company) is operating in

India then corporate taxes is applicable on the income generated by the company. Unlike,
individuals taxation, there are no slabs and income tax is applicable on the total taxable profits
of the company.

Types of indirect tax in India

Indirect taxes are levied on individuals but paid by another individual or company. For e.g. value
added tax, sales tax etc are all indirect taxes. Wherein, a customer makes service tax payment
on a restaurant bill, its collected by the restaurant and remitted to the Government.

Service Tax

Most of the services offered in businesses such as software companies, restaurant, travel
agents, etc charge service tax for offering paid services. Service provided by businesses such as
travel agents, tour operators, health center, banking and financial services and more are liable
to pay service tax. The current rate of service tax in India is 14%

Value Added Tax (VAT)

VAT or Value Added Tax is an important tax for State government, as its a major source of
revenue for State Governments. VAT is applicable on the sale of goods and products. Every
state has their respective Sales Tax or VAT Act. The VAT rates also differ based on the item in
India from one state to another.

Custom Duty

Goods imported into India from a foreign country will attract custom duty. Customs duty is
collected at the port of entry by the Customs Department.
Central Excise

Central Excise Duty is a form of Indirect Taxation levied through the Central Excise Act, 1944.
The Central Excise Duty is levied on Goods and Products, which are manufactured or produced
in India. Excise duty is levied when the goods are manufactured or produced in India and is
payable when the goods are removed from the manufacturing premises.

PROCEDURE FOR FILING DIRECT TAXES

Visit the 'e-Filing'

Portal www.incometaxindiaefiling.gov.in

Click 'Login Here' button located at right

Step 2
side of the Home Page.

Enter 'User ID*' (Note: The User

Step 3 Id differs based on the user type. Click
here to know more.)

Enter 'Password*' (Note: The password

is set at the time of registration in the e-
Filing portal)
Step 4

Note: If you have forgotten

password, Click here to know more.

Enter the value of 'Captcha*' as

Step 5 displayed on the screen. (If the image is
not visible properly, the image can be
 changed by clicking on refresh button
beside) ⇒ Click 'Login'

The user can file the Income Tax Return (ITR) in two ways:
1. Offline: Download the applicable ITR, fill the form offline, save the generated XML file and
then upload it.
2. Online: Enter the relevant data directly online at e-filing portal and submit it. Taxpayer can
file ITR-1 and ITR-4 online
Click on the 'e-File' menu and click 'Income
Tax Return' link.

On Income Tax Return Page:

• PAN will be auto-populated
• Select 'Assessment Year'
Step 1 • Select 'ITR form Number'
• Select 'Filing Type' as 'Original/Revised
Return'
• Select 'Submission Mode' as 'Upload XML'

Choose any one of the following option to verify

the Income Tax Return:
• Digital Signature Certificate (DSC)
• Aadhaar OTP
• EVC using Prevalidated Bank Account Details
• EVC using Prevalidated Demat Account Details
• Already generated EVC through My Account ⇒
Generate EVC Option or Bank ATM. Validity of
such EVC is 72 hours from the time of
Step 2
generation.
• I would like to e-Verify later. Please remind
me.
• I don’t want to e-verify this Income Tax Return
and would like to send signed ITR-V through
normal or speed post to "Centralized
Processing Center, Income Tax Department,
Bengaluru – 560500" of such EVC is 72 hours
from the time of generation

Step 3 Click 'Continue'

Step 4 Attach the ITR XML file.

 On choosing,

• DSC as verification option, Attach the

signature file generated from DSC
management utility.
• Aadhaar OTP as verification option, Enter the
Aadhaar OTP received in the mobile number
registered with UIDAI.
• EVC through Bank account, Demat account or
Bank ATM as verification option, Enter the EVC
received in the mobile number registered with
Bank or Demat Account respectively.
• Other two verification options, the ITR will be
submitted but the process of filing the ITRs is
not complete until it is verified. The submitted
ITR should be e-Verified later by using 'My
Account ⇒ e-Verify Return' option or the
signed ITR-V should be sent to CPC, Bengaluru.

Step 5 Submit the ITR.

Click on the 'e-File' menu and click 'Income

Tax Return' link.
 MODULE 5

BANK LOANS

What are the Types of Government Loan Schemes?

The government schemes are to aid the entrepreneurs in financing their businesses. These
schemes are specific towards the need of the enterprise and all of them can be categorized
under the following types of business loans:

1. Working Capital Loan

Working capital is the type of capital that a business requires to conduct its day to day
activities. These activities are “business expenses” like utility bills, debt management, inventory
management, operating costs, salaries for the workers and others. To be clear, a working
capital entails all types of operating costs and several loan schemes cater to this very need.
There can be two types of working capital loans: Secured and Unsecured.

2. Corporate Term Loan

The government loan scheme or schemes within a corporate term loan are many. Corporate
term loans are meant as a way for business expansion. Therefore, it is considered to be one of
the major loan categories that startups should consider. The money involved in these types of
termed loans usually is large and is expected to be paid over a longer period. This type of term
loan has a negotiable interest rate.

3. Term Loan

Term loans enable the businessmen to buy fixed assets. For example, if a businessperson sets
up an office then that he shall count on loans to set up the office as a term loan.

Government Loan Schemes for Business: Features and Benefits

There are more than ten different business startup loan schemes that the government provides
to the budding entrepreneurs. The features and benefits of top 3 among them are given below:

MUDRA Loan:

MUDRA is an acronym for Micro Units Development and Refinance Agency.The government has
set up this scheme to provide finance to non-corporate, non-farm small/micro enterprises. You
can avail Mudra loan from commercial banks, RRBs, small finance banks, corporate banks, MFIs
and NBFCs. Interested applicants can approach any of the lending institutions or apply online
through the official website of MUDRA. Its features are:
 1. Loan Amount: The loan scheme offers the applicants loans of up to Rs. 10 Lakhs.
2. Approval and Disbursement: This loan is approved and disbursed through several types
of banks.
3. Schemes: MUDRA loans are a culmination of three different schemes: Shishu, Kishor and
Tarun.
4. Aid to Micro Financ.e: For the Micro Businesses, this scheme provides maximum
Finances and Minimum Risks.
5. Business under surveillance: Under the scheme, the small businesses shall constantly be
scrutinised so that they can be motivated into performing better.

MSME Business Loans

On Nov 5, 2018, our PM, Mr. Narendra Modi, unveiled a dedicated digital platform to enable
loans of up to Rs. 1 crore in just 50 minutes. The government launched this business loan
scheme to provide financial assistance to the Micro, Small and Medium Enterprises throughout
India. Some of the great features about this facility are:

1. Fast access to financial assistance: Usually such loan processes take about 8 to 12 days
to complete. However, the loan approval process takes in just 59 minutes.
2. Loan amount: The loan amount offered under this loan will be between rs. 10 Lakhs and
Rs. 1
3. Rate of interest: The rate of interest of the loan starts from 8%.
4. Quick disbursal: After the loan gets approved in an hour, you can expect the money to
reach in your bank account in 7-8 working days.
5. Collateral-free: To avail the loan, collateral is not mandatory as the online portal is
directly linked to the Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) scheme.

National Small Industries Corporation Subsidy:

The government aids the small business under this scheme (NSIC) with a focus on two financial
benefits: marketing assistance and raw material assistance. Its benefits are the following:

1. Cost-free tenders: Under the marketing assistance program, the small-scale industries
shall have access to the tenders without any costs.
2. No security deposit requires: The SSI (Small Scale Industries) are exempted from paying
a security deposit for availing finances.
3. Land and building financing: For the SSI units with the project cost not exceeding INR 25
Lakhs, the scheme provides a financial facility for land and building department.
Documents Required to Avail the Government Loan Schemes

The documents required for these government schemes may vary from one scheme to another.
However, to give you an idea of what documents might be required when applying for the
schemes; we have listed a few common documents:

1. GST Identification number

2. Details of income tax paid over the last 3 to 5 years.
3. Bank statements of the last six months.
4. Details of the type of loan that you want
5. List of company Directors or partners of the company/partnership firm
6. E-KYC: All the documents that the applicant would use to apply for E KYC are needed
here as well. These include personal ID, address proofs, and premise proof, Aadhar
number

Procedure to Register with the Loan Schemes

1. Go to the online portal associated with the scheme that you are looking for
2. Register at the portal and then log in through the one-time password authentication
3. Agree to the terms and conditions of the scheme
4. Enter your financial credentials and other information required
5. Proceed further and continue with filling the forms and uploading the required
documents

Government Business Loans: Eligibility Criteria

The documents that the scheme bodies ask to provide them all the information they need to
evaluate if the applicant is deserving of the schemes. The factors of eligibility Criteria involve
the following:

1. Type of business
2. Credit Rating
3. Annual turnover
4. Capital Invested

Industrial subsidies

Government Subsidy for Small Business for Cold Chain, Ministry of Food, Prime Minister
Employment Generation Programme and Other Credit Support Schemes, Development of
Khadi, Village and Coir Industries, Micro & Small Enterprises Cluster Development (MSE-CDP)etc
What is a Credit Score?

A credit score is a 3-digit number that reflects the likelihood that a consumer will repay his
debts. With so many scoring methods used to determine your credit score, the variety of
models means your score can vary several points, depending on whose model is used and what
type of business (department store? car dealership? bank?) is asking for it.

A credit score is a numerical expression based on a level analysis of a person's credit files, to
represent the creditworthiness of an individual. A credit score is primarily based on a credit
report, information typically sourced from credit bureaus. Credit scoring is not limited to banks.
Other organizations, such as mobile phone companies, insurance companies, landlords, and
government departments employ the same techniques.

The most recognized credit score is the FICO score, which comes from the Fair Isaac Company.
FICO has more than 50 different versions of your score that it sends to lenders. The score may
change, depending on what company asks and what was important to that company in
calculating your score.

That means your FICO score for a department store might be slightly better (or worse) than
your FICO score for a bank considering you for an auto loan. And that will be slightly different
from your FICO score for insurance, which could vary from your score for a mortgage loan.

What is a Credit Scoring Model?

Credit scoring models are statistical analysis used by credit bureaus that evaluate your
worthiness to receive credit. The agencies select statistical characteristics found in a person’s
credit payment patterns analyze them and come up with a credit score.

Scoring calculations are based on payment record, frequency of payments, amount of debts,
credit charge-offs and number of credit cards held. A weight is assigned to each factor
considered in the model’s formula, and a credit score is assigned based on the evaluation.

Scores generally range from 300 (low end) to 900 (top end).
Credit Rating Agencies in India are:
1. Credit Rating Information Services of India Limited (CRISIL)

CRISIL is one of the oldest credit rating agencies in India. It was launched in the country in 1987
following which the company went public in 1993. Headquartered in Mumbai, CRISIL ventured
into infrastructure rating in 2016 and completed 30 years in 2017. CRISIL acquired 8.9% stake in
CARE credit rating agency in 2017. It launched India's first index to benchmark performance of
investments of foreign portfolio investors (FPI) in the fixed-income market, in the rupee as well
as dollar version in 2018. The company’s portfolio includes, mutual funds ranking, Unit Linked
Insurance Plans (ULIP) rankings, CRISIL coalition index and so on.
2. ICRA Limited

ICRA Limited is a public limited company that was set up in 1991 in Gurugram. The company
was formerly known as Investment Information and Credit Rating Agency of India Limited.
Before going public in April 2007, ICRA was a joint venture between Moody’s and several Indian
financial and banking service organizations. The ICRA Group currently has four subsidiaries -
Consulting and Analytics, Data Services and KPO, ICRA Lanka and ICRA Nepal. At present,
Moody’s Investors Service, the international Credit Rating Agency, is ICRA’s largest shareholder.
ICRA’s product portfolio includes rating for - corporate debt, financial rating, structured finance,
infrastructure, insurance, mutual funds, project and public finance, SME, market linked
debentures and so on.

3. Credit Analysis and Research limited (CARE)

Launched in 1993, CARE offers credit rating services to areas such as corporate governance,
debt ratings, financial sector, bank loan ratings, issuer ratings, recovery ratings, and
infrastructure ratings. Headquartered in Mumbai, CARE offers two different categories of bank
loan ratings, long-term and short-term debt instruments. The company also offers ratings for
Initial Public Offerings (IPOs), real estate, renewable energy service companies (RESCO),
financial assessment of shipyards, Energy service companies (ESCO) grades various courses of
educational institutions. C

How does one check credit score?

You have to go through a CIBIL check.

Firstly, let’s get some insight as to what is CIBIL (Credit Information Bureau (India) Limited. CIBIL
is a leading credit rating agency in India that reflects your creditworthiness. Due to CIBIL, one
can easily say that India is a financially literate nation. It has made the financial markets more
transparent, reliable and structured to spread awareness among financial institutions and
business to manage risks and control bad loans.

A CIBIL check is performed online. We shall look at the step by step guide of how to check CIBIL
score a little later.

Banks and financial institutions check CIBIL score formerly before granting any loan.

The CIBIL check generates a credit score, which is a 3-digit number usually ranging between 300
and 900. A score below 300 is poor whereas the score of 900 is ideally the best.

Every month, various banks and NBFC’s furnish their reports to check CIBIL score for multiple
individuals and businesses. This, in turn, assists them to choose the appropriate customers and
monitor the repayment patterns of existing customers.

When the banks and financial institutions check credit score, it would be adequate to keep in
mind that the score should be above 700.

Now, let’s get to the central aspect of -check my CIBIL score. Surely, by now you have
understood what a credit score is and what CIBIL is.

So How to check credit score is the question?

Follow our step-by-step guide of check CIBIL score.

How to check credit score for free :

Since January 2017, the Reserve Bank of India has mandated that all the four licensed credit
information companies enable you to check credit score online and provide one free credit
score and credit report every year.

Here is how to get a free CIBIL report once a year.

Step 1: Go to the CIBIL website

Step 2: Fill out the provided form that requires your necessary information such as name,
contact number, email address and click continue to step 2

Step 3: Fill out the additional details about you including your Pan number. Make sure to enter
your Pan details correctly to proceed to the next step.

Step 4: Answer all the questions correctly about your loans and credit cards, based on which
your CIBIL score will be calculated, and your completed credit report generated.

These are the four main steps to be performed to check CIBIL score
However, the ones below are a continuation of the above listed main steps.

Step 5: You will be suggested various paid subscriptions ( if you need more than one report in a
year). If you require only a one-time, free credit score and report, then proceed to select No
Thanks at the bottom of the page.

This is the stage where your account is created, and a confirmed message is displayed on the
following page.

Step 6: Using your login and password that was created in Step 2, you can log in to your
account.

To proceed further, you need to authenticate yourself. You will receive an email on your
registered account. Click on the link and enter the one – time password provided in the email.

You will be prompted to change your password and login again.

Step 7: Once you log in, all your personal details will be auto-populated by default ( please
provide the accurate information if the fields are not auto-populated). Please enter your
contact number and click submit.

Step 8: Once you submit that form your dashboard will be revealed with your CIBIL score.
Additionally, you can get your credit report on the dashboard.

However, it’s not advised to only check credit score once. One needs to monitor the ups and
downs in your report as the banks, financial institutions and various credit agencies renew the
report on a month on month basis.

To maintain a good credit score let’s look at the constraints, factors and overall
recommendations that impact your CIBIL score.

Constraints Factors Recommendations

- Percentage of secured loans

Loan portfolio mix - Keep your CIBIL report error free.
- Percentage of unsecured loans
- Do not neglect or defer your
payments
- Credit limit utilisation
Credit Utilisation
- Do not revolve your credit card
- The number of loans.
balance

Former repayment - Well-timed loan payments, - Limit the utilisation of your credit
track- record limit.
- Loan evasions and defaults
 - Excessive over dues. - Avoid multiple loan applications

- Number of pipeline applications

Other constraints
- Number of loans

CIBIL is one of four credit rating agencies in India.

You can get a credit report from the other agencies from the links below:

Experian

Highmark

Equifax

What is a CIBIL Score and what factors affect my CIBIL Score?

CIBIL Score is a 3 digit numeric summary of your credit history, derived by using details found in
the 'Accounts' and 'Enquiries' sections on your CIBIL Report and ranges from 300 to 900. The
closer your score is to 900, the higher are the chances of your loan application getting
approved.

How can I improve my CIBIL Score?

You can improve your CIBIL Score by maintaining a good credit history, which is essential for
loan approvals by lenders. Follow these 6 steps which will help you better your score:

1. Always pay your dues on time:

Lenders view late payments negatively.

2. Keep your balances low:

Always be prudent to not use too much credit, control your utilization.

3. Maintain a healthy credit mix:

 It is better to have a healthy mix of secured (such as home loan, auto loan) and
unsecured loans (such as personal loan, credit cards). Too many unsecured loans may be
viewed negatively.

4. Apply for new credit in moderation:

You don't want to reflect that you are continuously seeking excessive credit; apply for
new credit cautiously.

5. Monitor your co-signed, guaranteed and joint accounts monthly:

In co-signed, guaranteed or jointly held accounts, you are held equally liable for missed
payments. Your joint holder's (or the guaranteed individual) negligence could affect
your ability to access credit when you need it.

6. Review you credit history frequently throughout the year

Monitor your CIBIL Score and Report regularly to avoid unpleasant surprises in the form of a
rejected loan application.

How to read and interpret your Credit Information Report (CIR)

We are all familiar with the fear and anxiety that we feel when applying for a loan. After all, it's
the lender who decides whether we can own our dream home, our first car, or whether our
children can pursue higher education. In a nutshell, a better life depends on the lender's
decision.

We are unsure of the lender's criteria to evaluate our application. Is it the size of our income,
the number of assets (fixed deposits and investments), or is it our past performance regarding
payments with lenders we have a credit facility with? While other factors do play a part in the
lender's decision, our CIBIL Score plays a pivotal role. CIBIL Score is a 3 digit summary of your
CIR. Currently, almost all lenders access your CIBIL Score prior to approving loan applications.
Naturally, it's critical that you get a copy of your CIBIL Score and Report and understand it well
before applying for a loan.

So, what exactly does your CIR contain?

Personal Information

This section provides the lender your name, date of birth, gender, an identifier (such as PAN,
Voter ID or Passport Number, etc.). Go through this information to ensure that key identifiers
such as PAN or Passport Number is mentioned correctly.
Contact Information

Your addresses and telephone numbers are provided in this section. Up to 4 addresses are
provided on the CIBIL Report. Both the Personal and Contact information sections provide
details that indicate who the information on that CIR pertains to.

Employment Information

The employment section provides the lender with your monthly or annual income details as
reported by our Members. The reported income is generally one of the first figures reported by
a credit institution and not necessarily the updated one.

Account Information

This section contains the details of your credit facilities like name of the lender/s, the type of
credit facilities (home loan, auto loan, credit card etc.), the account number/s, whether single
or jointly held, when each account was opened, date of the last payment, loan amount, current
balance and most importantly, a month on month record of up to 3 years of your payments. We
will cover this more in detail below.

• Check your account details-This contains details such as the lenders name, account
number, account type (is it a credit card, personal loan etc), ownership
(single/joint/guarantor), date the account was opened/closed and the last date when
these details were reported to CIBIL. What to look out for is, if there are any details
reflecting in the account that is not factually correct or have never been applied for.
• Check status of the account- The status of the account is mentioned in the Account
Information section. Written off/settled/suit filed cases are not looked upon
favorably by the lender. It is always advisable to have a clean account status.
It is very important to understand the "Settled" and "Written off" terminology.
Settled means where there is partial payment (in consent with the lender) made
against the total outstanding. Once this is done that means there is no outstanding
against your name by that lender. You will notice your amount over due and current
balance would have changed to zero.
When one is not able to make payments against the outstanding loan/credit card
amount for more than 180 days, the lender is required to "write-off" the amount in
question. The lender then proceeds to report this on your CIR.
• Check dates-
It is better to have a healthy mix of secured (such as home loan, auto loan) and
unsecured loans (such as personal loan, credit cards). Too many unsecured loans may
be viewed negatively.
• Check your payment history (Days Past Due-DPD) for every loan or credit card
availed-The DPD indicates how many days a payment on that account is late that
 month. Anything other than "000" or "STD" is considered negative by the lender.
Below are the types of asset classification that can appear in the DPD section:

DPD Denotes Explanation

STD Standard Payments are being made within 90 days

Special Mention Special account created for reporting standard account, moving
SMA
Account towards Sub-Standard

SUB Sub-Standard Payments are being made after 90 days

The account has remained a Sub-Standard account for a period of

DBT Doubtful
12 months

An account where loss has been identified and remains

LSS Loss
uncollectible

• On occasion you may also notice "XXX" reported for your DPD on a certain account
which implies that information for these months has not been reported to CIBIL by
the Banks.
If there is a number in the DPD column, then it means that the payment is late by
that many days. So for example if it is 050, then it means the payment is late by 50
days. If it is 000 then it means the payment is as per the due date, so there is no
deviation or late payment.

Enquiry Information

This section provides details regarding loan applications you have made. An enquiry means that
a credit institution has requested your credit details from CIBIL. Lenders may tread with caution
considering your multiple enquiries in a short span of time, which shows a behaviour of seeking
excessive credit. The enquiries made are captured for a period of 7 years.

Things to do while preparing for a Loan Application: Eligibility Check

Applying for a loan can be a very unnerving and anxious process. You fill in lengthy forms,
collect and submit various documents to multiple banks and then find yourself waiting with
bated breath for loan approval while your plans for that dream home, your first car or your
child's education are kept waiting.

1. Your CIBIL Score

The first thing you should do is get your CIBIL Score and Report from a Credit Bureau. Usually, a
CIBIL Score of 750 or more puts you in contention for a loan approval but does not guarantee it.
Of course, if your score is below 750, all is not lost. There are financial institutions who will lend
to individuals with a low score.

DETERMINING YOUR CREDIT ELIGIBILITY

2. Your Credit Eligibility

Your credit eligibility is the second criteria reviewed by a lender. Your credit eligibility is
determined using your CIBIL Score and Report and your bank statements as follows:

• Review for payment irregularities:As a first step, lenders will review your CIBIL Report
for abnormalities in your payment patterns. Missed payments, overdue amounts and
settled accounts in the recent past indicate financial duress and are likely to result in a
 loan rejection. If you see any of these conditions on your CIBIL Report, it would be
better to pay all your dues consistently for 12 months before applying for a loan.
• Calculation of Debt Burden Ratio: The next criterion that the lender considers is
whether you will be able to meet any additional payments given your current financial
condition. In the diagram above, the individual has an in-hand net income of INR
1,00,000, while his EMIs total INR 25,000. This places his Debt Burden at 0.25. Typically,
a lender will reject your application if your Debt Burden Ratio exceeds 0.50. The
assumption is that you will need at least half your salary to sustain normal expenses
(utilities, entertainment, etc.). The difference between these two figures, i.e., 0.25, is his
Borrowing Capacity, which amounts to INR 25,000. Assuming he takes a loan for 15
years at interest rate of 10%, this indicates a Credit Eligibility of INR 25,00,000.
• Outstanding Credit Card Payments: If you have 3-4 Credit Cards and have utilized a very
high percentage of your credit limit, this may negatively affect your loan application.
Interestingly, unused Credit Cards may be viewed positively.

As you can see, you have all the tools required to figure out your credit eligibility. So, before
you apply for a loan, ensure that you make these simple calculations to not only save yourself
the embarrassment of being rejected but also to put yourself in a better position to bargain for
a better deal.

Revenue documents:

Indemnity Bond

An indemnity bond is a bond that is intended to reimburse the holder for any actual or claimed
loss caused by the issuer’s conduct or another person’s conduct. An indemnity bond acts as
coverage for loss of an obligee when a principal fails to perform according to the standards
agreed upon between the obligee and the principal.
 Sale deed

Sale deed is a legal document describing the transfer of right title and ownership of the
property by a seller to a purchaser at a price either fully paid or to be paid in installments at a
future date. It is governed by registration of property act 1908. It should be done after creating
an agreement to sell as it would contain the provisions and conditions of sale.

Initially the Sale Deed document is prepared as a draft which both the parties will agree to and
approve to proceed. This draft Sale Deed document will contain details with regard to the
property in question like the following:-

• The details of both parties

• The details of property in question
• Sales consideration that is agreed upon.
• What is the amount paid in advance
• Mode of payment
• Time limits or time frame consideration for making relevant payments
• The time when the original document is to be handed over etc.
• Indemnity Make sure that title of the property is free from any charge or encumbrances i.e. any
other person does not have the right to the property to be transferred to the buyer. In case
such situation arises, the seller shall be made liable to indemnify the buyer against any loss.
• Registration: A sale deed is not legally binding unless it is registered in the sub-registrar office.
Both the buyer and the seller along with their witness must be present at the registrar office on
the fixed date for the registration of deed. The stamp duty and registration fees have to be paid
for getting the registration done.

The draft of Sale Deed is written and prepared on a non judicial stamp paper by “stamp act” of
whichever state the property is in. The liability is of the buyer to pay for stamp duty according
to the rules of the stamp. After completion of all these formalities the final main Sales Deed
document is prepared. Which will transfer the rights of a seller to the buyer of the property?
Following are some legal formalities:-

• All the pages of Sale Deed should be signed

• The sales deed shall be witnessed by two witnesses giving their full names and ids and
signatures
• The property requires to be registered under the judiciary sub registrar’s office.
• All the involved and concerned parties must be present at the time of registration.
• All documents must be presented in their original form
• The identities of the buyer to authenticate the document like his photos, signatures, and thumb
impressions are to be stamped onto the document.
• The original document must be registered within four months from the date of execution or
else as penalty ten times the charges of original registration charges may be taken.

The liability of payment for the stamp duty, as well as registration charges, lie onto the
purchaser.
THIS DEED OF SALE was made and executed at _____________on ________ day of
_______________ month, ______________ years by: Sri.__________________ aged about
_______ years, S/o._______________ residing
at___________________________________hereinafter called the SELLER.

In favour of Sri. __________________ aged about _______ years, S/o._______________

residing at___________________________________hereinafter called the PURCHASER. The
term SELLER and PURCHASER, unless repugnant to the context, shall mean and include their
respective heirs, successors, executors, administrators, trustees, legal representatives and
assigns WITNESSTH: WHEREAS the SELLER herein is the sole and absolute owner of immovable
property being Flat / Apartment No.______ on the _______Floor of the building known as
“________________”situated at _________________and bearing Corporation No.________,
_________________Road, Division No._____, with a super built-up area of _____ sq.ft.
together with _____% share of undivided interest in the land equivalent to _______ sq.ft. along
with common areas and facilities including car parking lot in the basement, which Flat /
Apartment is morefully described in the schedule hereunder and hereinafter called the
Schedule. WHEREAS the SELLER of the Flat / Apartment, he having purchased the same from
Sri.______________ in terms of Sale Deed dated _________duly registered as Document
No._________ Book – I, Volume ________at Pages ________on date ________at the Office of
the Sub-Registrar, _____________since then the SELLER has been in possession and enjoyment
of the Schedule Flat / Apartment on getting the bifurcated khata from the Corporation of the
City of ______________duly transferred in his name bearing No.________ vide Khata
No._______________ dated ____________and on payment of taxes and levies thereon as sole
and absolute owner thereof. WHEREAS the SELLER herein being desirous of selling the Schedule
Flat / Apartment, offered the same to the Purchaser and the Purchaser has agreed to purchase
the Schedule Flat / Apartment in terms of an oral agreement for a total sale consideration of
Rs.___________ (Rupees _________________only) and the Purchaser in terms of the aforesaid
oral agreement agreed to pay the entire sale consideration at the time of execution of the sale
deed. IN CONSIDERATION of the Purchaser having paid the entire sale consideration of
Rs._____________ (Rupees ______________________only) as aforesaid, the receipt of which
has been duly acknowledged by the SELLER, who acquits the Purchaser from making any further
payments towards sale consideration, the SELLER, as beneficial owner, DOES HEREBY GRANT,
CONVEY, TRANSFER BY WAY OF SALE AND ASSIGN unto and in favour of the Purchaser the
Schedule Flat / Apartment and every part thereof together with the right, title and interest
therein, with all the benefits, advantages, concessions, licenses, hereditaments, easementary
rights, equities, claims, demands etc., attached to belonging to and reputed to belong to the
Schedule Flat / Apartment TO HOLD, TO POSSESS AND TO ENJOY the same for ever free from all
encumbrances, subject to common rights of owners of remaining shares of undivided interest
in the land and the Flat / Apartments attributable thereto. The SELLER hereby declares and
covenants with the Purchaser that he is the sole and absolute owner of the Schedule Flat /
Apartment and has a clear, legally valid and marketable title thereto and therefore an absolute
right to sell and convey the same to the Purchaser in terms of this Deed. The SELLER further
declares that he has not done any acts, deeds or things so as to curtail, restrict or prejudice his
right to convey or prevent him from selling the Schedule Flat / Apartment in terms of this Deed.
WHEREAS the Purchaser having now paid the entire sale consideration as detailed below, has
requested the SELLER to execute the Sale Deed in his favour and the SELLER has duly agreed
thereto, NOW THEREFORE THIS DEED OF ABSOLUTE SALE WITNESSETH AS HEREUNDER: 1. The
SELLER hereby confirms that the Purchaser has paid the entire sale consideration as under: (a)
Amount paid by Cheque No._____________ Dated_____________ drawn on
_____________________ Bank, Rs.__________ (b) Amount paid by Cheque No._____________
Dated_____________ drawn on _____________________ Bank, Rs.__________ Total
Rs.__________ Rupees ________________________Only. The SELLER hereby further declares
that the Schedule Flat / Apartment is free from all encumbrances, lien, charge, mortgage, lease,
court or other attachments, lis-pendens, acquisition and requisition proceedings, minor’s claims
or any other adverse proceedings or claims from third parties which are in any way detrimental
to the interest of the Purchaser. The SELLER hereby assures the Purchaser that all taxes and
levies on the Schedule Flat / Apartment have been paid up to date and arrears if any, till the
date of the Sale Deed shall be duly paid by him and future taxes in respect of the Schedule Flat /
Apartment shall be paid by the Purchaser. The SELLER hereby declares and covenants with the
Purchaser that he shall do or cause to be done all acts, deeds and things which are legally and
reasonably required to be done at the instance of the Purchaser for morefully and perfectly
assuring the right, title and interest of the Purchaser in the Schedule Flat / Apartment herein
conveyed and the Purchaser shall bear such expenses. The SELLER hereby indemnifies and shall
keep the Purchaser or his successorsin-title fully indemnified against any loss or liability, cost or
claims, action or proceedings, if any should arise, at any time in future against him owing to any
defect in or for want of clear and marketable title or due to any default, violation or non-
compliance of any of the declarations or covenants herein. The Purchaser shall be the sole and
absolute owner of the Schedule Flat / Apartment with attendant rights of ownership,
possession, enjoyment and shall be entitled to deal with or dispose off the Schedule Flat /
Apartment as he deems fit without any interference, obstruction or hindrance from the SELLER
or anyone claiming under, through or in trust from him. The Stamp duty, Registration charges
and other incidentals have been borne by the Purchaser. The SELLER has this day delivered the
vacant possession of the Schedule Flat / Apartment to the Purchaser along with all the available
original title deeds and documents which are in his possession pertaining to or relating to the
Schedule Flat / Apartment. The Purchaser shall be bound to become Member of the Association
of Apartment Owner’s and duly comply with the provisions of Karnataka Apartment Ownership
Act, 1972 and the rules thereunder and shall abide by the bye-laws and majority decisions of
the said Association to be formed and comply with other requirements of the aforesaid Act.
SCHEDULE OF FLAT / APARTMENT (Conveyed under this deed) All that piece and parcel of
immovable property being Flat / Apartment No.______, __________Floor of the building
known as “_____________”, situated at and bearing Corporation No.___________,
___________Road, Division No.________, with a super built up area of ______sq.ft. together
with _____% share of undivided interest in the land equivalent to ______sq.ft. along with
common areas and facilities attributable thereto which area includes one car parking lot in the
basement and the composite property is bounded by:

On the East: On the West: On the North: On the South:

Market Value property is Rs._____________ (Rupees ________________only) The Stamp duty
is paid on the market value as computed above.

IN WITNESS WHEREOF the parties herein have affixed their respective signatures to this Sale
deed at ______________on this _________ day of _________ month of _____________years
in the presence of the witnesses: WITNESSES:
1. SELLER.
2. PURCHASER.

What is a Patta?

A Patta is a crucial document which tells about the ownership of a particular property. It
indicates about the person who has the rights to the property. For this reason, it is also known
as “Record Of Rights (ROR)”. The person who has his name registered in the Patta is considered
to be the owner to be that property.
 • Patta is a legal document which has been issued by the appropriate government
• Patta establishes the ownership of a person over a particular piece of land
• The name on a Patta Land is a sufficient document to prove that the land belongs to
the named person and that the owner of that property.

What type of properties need Patta?

Although all the properties can be registered under Patta Land, the properties which are not
visited quite frequently by the owner must be compulsorily registered.

• The plots which are left out without any construction needs the Patta document the
most.
• The buildings or any other property on which construction has been done can also
get a Patta land registration.
• The question of ownership can be answered by possession or any other document
proving that the property is in possession for a long time, but that is not the case
with unconstructed plots.

How to get your name registered under Patta Land?

• A Patta is registered by the Tehsildar of that particular area.

• To get your name registered under the Patta, you have to make an application to
the Tehsildar, requesting him to get your name registered.
• He could after examining the application either accept the application or will reject
it.
• He could either ask you to show the property and would investigate the property by
himself or may ask you to provide certain documents which could prove that the
 new owner of that property is you and then match those with the ones which are
available in the revenue office and then change it.

The prescribed procedure hardly happens. The Tehsildar rarely makes any attempt to make
your name registered. Instead, you have to make an effort yourself to repeatedly ask him to do
your work. He may also ask to survey the property to ensure its ownership, and it is your
responsibility to make him do so if he has asked for it.

Transfer of Patta

A Patta shall be transferred as soon as the property is sold. The proceedings for the transfer to
Patta do take time that is why it is necessary that the procedure shall start as quickly as
possible.

• The process for transferring of Patta is the same as that of registering a Patta Land.
• The person who has bought the land must make an application to the Tehsildar
regarding the transfer of name in the Patta.
• The Tehsildar may either reject or may accept the application after examination of
the property and the documents which have been submitted by the appellant.
• The transfer of a Patta of a person who has died either leaving a will or not leaving a
will, the Patta needs to be transferred as soon as possible.
• The legal heirs, if any, shall approach the Tehsildar with the documents proving to
be his legal heirs and make an application for the transfer of Patta Land.
• If the person has left a will then the ones who are allotted that property under the
will shall approach the Tehsildar as soon as possible to get their name registered
under Patta Land, providing him with the copy of the original will and identity proof
that you are the beneficiary who has been allotted the property by the testator.
Important points regarding Patta

• A Patta is one of the best proofs of ownership of a particular property. If any person
has a Patta Land registered under his name, then he is the legal owner of that
particular land.
• For the evidence of ownership in a vacant land, the Patta is the most important
document. As for a vacant land or plot, there is no other document which can prove
the possession of that land.
• The buyer or the beneficiary himself has to make a move and approach the
Tehsildar Office and shall not wait for the revenue department or the Tehsildar to
contact him.
• There are individual states which have started online Patta registration. Karnataka
was the first state to start online Patta registration.
• The State Governments are trying to make the process easy and convenient for the
buyers so that they are not supposed to rush to the Tehsildar to get their name
registered under Patta Land.
• The charges which the buyer or the beneficiary has to pay for the transfer of Patta
Land is different in different states. The State Governments have the power to
regulate those charges.

Prior Deeds
It means those deeds delivered to any Company by any Seller, any Non-Company Affiliate, any
Shareholder, any Cowford Member or any Affiliate of any Seller, Shareholder or Cowford
Member in respect of any Owned Real Property.
Examples of Prior Deeds in a sentence
Prior to the date of this Agreement, the Loan has been secured by the Prior Deeds of Trust (as
defined in the 2008 Nominee Deed of Trust described below). WITNESSETH: WHEREAS,
Beneficiary is, on the date of delivery hereof, the owner and holder of the following deeds of
trust (hereinafter referred to as Prior Deeds):
Encumbrance certificate
 ENCUMBERANCE CERTIFICATE
The encumbrance certificate contains all the transactions registered relating to a particular
property for a period (as required). It will help to know the proper entitlement of a particular
property.

PROCEDURE

Go to E-Registration portal or E District portal

Select ‘Encumbrance Certificate’ from the Certificate menu and select ‘Submit Application for
EC.

‘Application for Encumbrance Certificate’ window opens

Enter all the mandatory fields up to ‘Previous Document Details’ and click Save/Update button

Now window changed and you can see the saved details

Enter the Property Details and Boundary of the property and click Save/Update button

Enter the search period and click Calculate Fee button

Enter all the mandatory fields and click Submit Application
Your application has been submitted successfully. Take a print of the acknowledgement
POWER OF ATTORNEY (P.O.A)

A power of attorney (POA) is a legal document giving one person (the agent or attorney-in-fact)
the power to act for another person (the principal). The agent can have broad legal authority or
limited authority to make legal decisions about the principal's property, finances or medical
care. The power of attorney is frequently used in the event of a principal's illness or disability,
or when the principal can't be present to sign necessary legal documents for financial
transactions.
A general power of attorney acts on behalf of the principal in any and all matters, as allowed by
the state. The agent under a general POA agreement may be authorized to take care of issues
such as handling bank accounts, signing checks, selling property and assets like stocks, filing
taxes, etc.
A limited power of attorney gives the agent the power to act on behalf of the principal in
specific matters or events. For example, the limited POA may explicitly state that the agent is
only allowed to manage the principal's retirement accounts. A limited POA may also be limited
to a specific period of time, e.g., if the principal will be out of the country for, say, two years.
PROCESS
Put it in writing. While some regions of the country accept oral POA grants, verbal instruction is
not a reliable substitute for getting each of the powers of attorney granted to your agent
spelled out word-for-word on paper. Written clarity helps to avoid argument and confusion.

Use the proper format. Many variations of power of attorney forms exist. Some POAs are
short-lived; others are meant to last until death. Decide what powers you wish to grant and
prepare a POA specific to that desire. The POA must also satisfy the requirements of your state.
To find a form that will be accepted by a court of law in the state in which you live, perform an
internet search, check with an office-supply store or ask a local estate-planning professional to
help you. The best option is to use an attorney.

Identify the parties. The term for the person granting the POA is the "principal." The individual
who receives the power of attorney is called either the "agent" or the "attorney-in-fact." Check
whether your state requires that you use specific terminology.

Detail the powers you want to delegate. A POA can be as broad or as limited as the principal
wishes. However, each of the powers granted must be clear, even if the principal grants the
agent "general power of attorney." In other words, the principal cannot grant sweeping
authority such as, “I delegate all things having to do with my life.”

Specify whether your POA is durable. In most states, a power of attorney terminates if the
principal is incapacitated. If this happens, the only way an agent can keep his or her powers is if
the POA was written with an indication that it is "durable," a designation that makes it last for
the principal's lifetime unless the principal revokes it.

Notarize the POA. Many states require powers of attorney to be notarized. Even in states that
don't, it is potentially much easier for the agent if a notary’s seal and signature are on the
document.

Record it. Not all powers of attorney must be recorded formally by the county in order to be
legal. But recording is standard practice for many estate planners and individuals who want to
create a record that the document exists.

File it. Some states require specific kinds of POAs be filed with a court or government office
before they can be made valid. For instance, Ohio requires that any POA used to grant
grandparents guardianship over a child must be filed with the juvenile court. It also requires a
POA that transfers real estate to be recorded by the county in which the property is located.

TYPES OF ATTORNEY
 TYPES OF ATTORNEY
1. General Power of Attorney

2. Special or Limited Power of Attorney

3. Durable Power of Attorney

4. Healthcare or Medical Power of Attorney

Possession Certificate in Kerala

Possession certificate is a document which a property seller gives to a buyer stating the
possession date of the property. Possession certificate is issued by concerned Tahsildar in Rural
areas and RDO in urban areas. Possession is mandatory to include the property in the
revenue records. Further, possession certificate is required to secure a loan. In this article, we
look at Kerala Possession certificate application procedure in detail.
Uses of Possession Certificate

The certificate can be used for any of the following purposes.

• To obtain subsidy provided by Government.

• To apply for housing loan.

Documents Required

The following documents need to be furnished to obtain possession certificate in Kerala.

• Proof of ownership of property

• Encumbrance certificate
• Identity proof – Aadhaar Card
• Details of Land Tax
• Voters ID
step 1: Visit main page of e-District portal of Government of Kerala.

Step 2: To avail e-District certificate services, you have to register in this web portal.

Register in e-District Portal

Step 3: To register in e-District portal, click on ‘Portal user registration’ option from the main
page. The page will redirect to next page.

Step 4: You need to fill personal details and Select your login name & password.

Step 5: Select Password recovery question & provide answer for selected question.

tep 6: Click on validate button and further to register button.

Now you can avail online certificate services by login to the e-district portal using your
username and password.

One Time Registration

Step 7: After login to the portal, do a onetime registration to apply for Possession certificate.

Step 8: Click on one time registration button. Fill all mandatory details and Click on the
duplicate button.

Note: One time registration process is to find out whether you have already registered through
any Akshaya Centers i.e. duplicate check.

Step 9: After the successful duplicate check, the submit button will be enabled. You can click
on submit button to register.

Step 10: Click on Applicant registration link, in the new page select the duplicate link, the
system will automatically check the duplicate application if any.
Step 11: After verification, Click on Submit to proceed to apply.

Enter Detail

Step 12: Enter all details for the certificate such as, e-District registration number, Name,
Certificate type and purposes.

Step 13: To save details, click on save button. You will be redirected to the new page for
uploading documents.

Upload Documents

Step 14: Upload all required documents (mentioned above) in PDF format with 100KB.

Step 15: After uploading all required documents make payment.

Note: Before making payment, check all entered data.

Make Payment and Generate Receipt

You can see the fee for the certificate; it will be shown in the screen.

Step 16: You can pay fee by any of the following method.

• Debit card payment

• Credit Card Payment
• IMPS
• Wallets
• Net banking
• Cash-card prepaid

Step 17: After successful payment of fee, you can print receipt and the certificate application.
Download Certificate

Status of Possession application will be displayed on the transaction history tab in e-District
portal also you will get SMS regarding status of your application.

Step 18: After receiving the ‘Your Possession Certificate has been issued’ SMS on the registered
mobile number, again login into e-District portal. Download and take print out of your digitally
signed certificate.