What is banker, banking and customer ?

BANKER: Sec 5 (b) of Banking Regulation Act-1949 defines a

banker as a person undertaking business of banking.

Banking means (SECTION 6 of BR Act) accepting deposits from

public, for the purpose of lending, repayable on demand .

Customer There is no legal/statutory definition of the customer

a customer means a person who seeks to open account which
bank accepts with proper introduction.
 BANKER CUSTOMER RELATIONSHIP in different transactions:
The primary relationship between a banker and customer is that of a debtor and
creditor (Reason: on opening the SF/CA/Term/any deposit account the banker
becomes a debtor).
Apart from the primary relationship, there can be other legal relationship between a
banker and customer depending up to the transaction as given hereunder:
Type of transaction Relationship
Bank Customer
Acceptance of Deposits debtor creditor
Loan from bank Creditor Debtor
Collection of cheque on behalf of customer Agent Principal
Sale/purchase of securities/shares on behalf of Agent Principal

customer
Safe Custody of articles Bailee Bailor
Safe deposit locker Lessor Lessee

( Licensor) (Licensee)
Payee of a Draft & Issuing Bank Trustee Beneficiary
Articles left by Mistake Trustee Beneficiary
Carrying on standing instruction Agent Principal
BANKERS OBLIGATIONS:
DUTY TO MAINTAIN SECRECY OF ACCOUNTS:
In addition to implied contract between bank and customer not to disclose the
affairs of the customers,
Disclosure is compulsion of law e.g.
(i) Companies act U/s 235/237 to inspector appointed by Central Govt for
investigating the company concerned ;
(ii) Bankers Book evidence act U/s 4 to court for legal proceedings;
(iii) Code of civil procedure act u/s 94(3) to Police inspector for investigation;
(iv) U/s 12(2) of FEMA for making inspection of books
Interest of Bank require disclosure e.g.
(i) disclosure to guarantor to recover dues;
(ii) disclosure to Bank Lawyer to file suit;
(iii) disclosure to other banks to ascertain credit worthiness of borrower as per
IBA guidelines
Disclosure to Incharge of Police Station , a police officer can seize a stolen
property (including money lying in a Bank).
Disclosure to Income tax authorities .
Submitting return to RBI of accounts not operated for the last 10years
DIFFERENT TYPE OF CUSTOMERS & different types of accounts
1 )MINORS
A minor (of Indian domicile) is a person who has not completed 18 years of age.
MINORS AGREEMENT
A minor is not competent to enter into a contract.].
The guardian to a minor can be a: (a) Testamentary Guardian, or (b) Legal Guardian, or
(c) Natural Guardian.

Testamentary Guardian
Guardian appointed by the will of the minor's father is called testamentary guardian.
Such guardian acts only after the death of the father & mother of the minor child.

Legal Guardian
Where there is no natural guardian, or testamentary guardian, the Court can appoint a
guardian.

Natural Guardian
boy or unmarried girl, the father and after his death the mother shall be the guardian
of both person and property of the minor.
After the death of both father and mother, a minor can be represented only through a
legal guardian.
Step father/step mother cannot act as natural guardian.
In case of an illegitimate minor child, his/her mother is the natural guardian.
The natural guardian of an adopted son is his adoptive father/mother.
TYPE OF DEPOSIT ACCOUNT FOR MINORS
Account can be opened in the name of a minor are broadly the following:
(I) Minors Account to be operated by guardian
(ii) Minors Account to be operated by mother.
(iii) Minors Account to be operated by himself/herself.

Minors Account Opened and Operated by Guardian Single or Joint A/c.

When Minor Attains Majority
From the date the minor becomes a major, he has the sole right to operate
the account (not the guardian).
Advance against Minors Deposit
Should be sanctioned only for the benefit of the minor.
Death of Minor
Balance is payable as a claim case.
Death of Guardian
The balance is treated as a Trust and is paid to the minor upon his attaining
majority. During his minority it can be paid only to his guardian appointed by
Court.
Self Operated Minor Account
Minors who have completed 10 years of age, who are literates
and can sign uniformly are permitted to open S.F. or F.D./RD
account (not Current Account) in their own name and operate
the same.

No Cheque book should be issued to the minor customer.

The guardianship will continue (even after attaining the age of 18

years, in case of minor) as long as the disability continues.
No current account will be opened in the name or on behalf of
such persons and in no case such person will be allowed an
overdraft.
2). ILLITERATE PERSONS
i) Capacity to Contract
Persons who cannot read and write are called illiterates.
Like others, illiterate persons are fully competent to enter into contracts.
However, they can avoid the contract if they can prove that their consent was
obtained by misrepresenting the facts due to their incapability to read. Banks,
therefore, must create sufficient evidence to prove that the illiterate
understood the terms and conditions beyond doubt.
ii) Type of Account
No Current Account should be normally opened in the name of illiterate
persons as it would be difficult to identify his LTI in cheque issued by him.
- SF and Term Deposit Accounts can be opened with condition that
withdrawals will be allowed only in person.
iii) Joint Account
Joint Accounts in the name of two illiterates can be opened after observing
usual safeguards.
Joint account in the name of two illiterate and literate can not be opened
iv) Operation
No cheque book is to be issued.
3) BLIND PERSONS
Risks in Opening Account in the Name of Blind Persons
Blind persons are fully competent to enter into contract and there is no legal
bar in opening accounts in their name or getting loan documents executed by
them.
However, in case of dispute they can always argue that the terms and
conditions of the account and the amount paid were misrepresented to them.
They may dispute their signature at a later date. The courts may also believe
this on account of their blindness. For this reason banks should be extra
careful while opening and allowing operations in the accounts of blind
persons.

Type of Accounts
Current A/c.: Current account should not be opened in the name of a blind
person.
Joint Accounts
Joint Account in the name of two blind persons must not be opened.
 OPENING AND OPERATION OF ACCOUNT
A respectable person, who should certify that the contents are
explained to the blind person in his presence, must witness the
signature in the account opening form.
Photographs should be obtained and be used in the same way as is
done in case of illiterates.

The visually impaired customer may be allowed to use cheque book

provided the Incumbent Incharge is satisfied that the account
holder is capable of conducting his / her account satisfactorily.

The blind person must come in person to withdraw cash.

Cash payments and cash deposits should be made in presence of a

witness who should be preferably a customer of the bank.
4) PURDANASHIN LADIES
A purdanashin lady is a woman who remains in complete seclusion
and does not transact with people other than her family members.
Type of Account
No account should be opened in the name of a purdanashin lady who
is an illiterate.
No Current Account should normally be opened in the name of
purdanashin lady except in exceptional cases (special approval should
be obtained.
The signature of the purdanashin lady in the account opening form
should be attested by her husband and in case of unmarried, by her
natural guardian.
The cheques/withdrawal slips executed by her should be attested by
her husband or two account holders of the bank.
Photograph of the purdanashin must be obtained while opening
account in her name.
5) TRUST ACCOUNT.
Non profit organization such as church , school ,hospitals.

6) JOINT HINDU FAMILY

Joint Hindu Family or Hindu Undivided Family (HUF) is governed by Hindu
Law
Karta the eldest male member of the HUF is called Karta and other male
members are called co-parceners.
Ancestral Business
The HUF carries on the ancestral business and possesses ancestral
properties.

7) CLUBS, COMMITTEES, ASSOCIATIONS REGISTERED

CLUBS/ASSOCIATIONS
8) CO-OPERATIVE SOCIETIES
Generally co- operative societies are not permitted to open accounts in
banks other than co-operative banks unless specifically permitted by
Registrar of Co- operative Societies. Banks should ask for this permission
before opening the account.

9) LOCAL AUTHORITIES
Examples of local authorities are: (I) Municipal Corporation, (ii) Zilla Boards,
(iii) Notified Area Council, etc.

10) GOVERNMENT DEPARTMENTS

Obtain copy of the government Notification/order authorizing the concerned
person to open and operate account.

11) PROVIDENT FUNDS

Accounts in the name of provident funds are similar to the account opened
in the name of trusts.
 DIFFERENT TYPES ACCOUNTS
Saving accounts
Mitra- Savings Fund A/c for
Financial Inclusion
Smartroamer
Prudent Sweep account
Vidyarthi Savings Fund
Account
Total Freedom Account
Senior Citizen Savings
Scheme
Current accounts
Floating Rate Fixed Deposit
Scheme
Tax Saver-Fixed Deposit Scheme
Fixed Deposit Scheme
Ordinary Fixed Deposit Scheme
Multi Benefit Term Deposit
Anupam Term Deposit
Sugam Term Deposit
Balika Shiksha Fixed Deposit
Scheme
Flexi RD Scheme
Recurring Deposit Scheme
Capital Gains Account Scheme
1988
 DIFFERENT TYPES OF OPERATION

The different types of authorities which can be given

to a bank for operating a joint account are the
following:

(i) By all depositors jointly,

(ii) By both or survivor,
(iii) By either or survivor,
(iv) By former or survivor, and
(v) By any one/two persons named by them.
 OPENING OF NEW ACCOUNTS
Criteria for proper introduction

It is necessary that the person introducing the prospective customer to the

Bank must himself be a respectable person of the local community who is
known to the bank or he should be a customer of the bank for minimum six
months and conduct of his account must be satisfactory.

The introducer should know the prospective customer well.

The introducer should sign bank's prescribed form(s) in token of his having
verified the identity, address and occupation of the prospective customer.

Liabilities of the Introducer

While introduction is not a guarantee by the introducer for the prospective

customer's transactions with the Bank, he should be in a position to identify /
trace the account holder in case of need.
PAN / GIR NUMBER:--
The customer is required to quote his / her permanent account holder /
General index number for opening an account.

PHOTOGRAPH
Two recent photographs of the account holder should be obtained for all
categories of accounts. For this purpose accounts of local bodies / Banks /
Govt. departments (Excluding public sector undertakings or Quasi govt.
bodies) are exempted.

Minimum balance to be maintained . varies from bank to bank.

INDEPENDENT VERIFICATION OF ADDRESS:

Address and ID proof
(a) passport, (b) voter identity card, (c) driving licence, (d) telephone bill, (e)
bank account statement, (f) letter from any recognized public authority, (g)
electricity bill, (h) ration card, (i) letter from employer (subject to satisfaction
of the branch official authorized to open the account
MONITORING OPERATIONS IN NEWLY OPENED ACCOUNT:
A newly opened account shall remain under close watch at least for an initial
period of three months or any period which may be decided by the bank

NOMINATION FACILITY FOR DEPOSIT ACCOUNTS

Banks can provide nomination facility for deposit accounts, safe custody of
articles and safe deposit lockers.
Banks cannot provide nomination facility in respect of Jewel Loans, Cash
Credit Account or any such account other than the three mentioned above.

What Type of Accounts: Nomination facility is available only in respect of a

deposit account held in individual capacity (including sole prop. CA account)
of the depositor(s) and not in any representative capacity.
As such no nomination can be made in case of accounts in the name of a
company, firm HUF, association trust, etc.

Minors Account: Where the deposit is the name of a minor, the nomination will
be made by his legal guardian. In case of self operated minor accounts no
nomination can be accepted.

Non-resident Accounts: Nomination facility is available.

Joint Account: Nomination should be made jointly by all joint account holders
even if the account is operated by either or survivor or former or survivor.
Who can be appointed as nominee?
Only Individuals can be appointed as nominee. Nomination cannot be made in
favour of firms/companies/H U F or any representative body.

Cancellation and Variation of Nomination

An existing nomination can be cancelled by the sole depositor (or by all the
depositors in a joint account).

Change in the style of the account

Where the style of the account is changed, or some addition/deletion in the
name of depositors is made, the nomination stands cancelled.

Payment to Nominee
Nominees right to receive payment arises only on the death of the sole
depositor or on the death of all depositors in a joint account.
Nominee has the only right to receive the deposit proceeds on the
depositors) death. He has no right to operate the account, to renew the same
or to avail loan against it or to substitute his name in place of depositor or to
add his name in the deposit.
 e-cheque or cheque in electronic form?
A cheque is a bill of exchange, drawn on a specified banker and payable on
demand.
No specific form is defined for cheque in NI Act . Cheques also mean &
include the cheques issued in electronic form.
Language of cheque:
Can be drawn in any language even partly in one language and partly in
another language.
Post dated cheque: - is like a bill of exchange which is payable on certain date,
thus it is a negotiable instrument.
Payment of post dated cheque before the date mentioned there on, is not
payment in due course, and banker cannot debit customers a/c.
Cheque dated on Sunday/ Holiday: - is paid on the following business day.
Cheques Bearing non-existing (impossible dates) :- cheques dated 31st Sept , 30th
Feb will be paid on last day of that month i.e. 30th Sept , 28/29 Feb etc.
Validity period of cheques: - Normally valid for a period of 3 months. Drawer may
restrict the period shorter than 3 months, but he cannot extend the period
beyond 3 months
Amount of cheque:- if amount in words and figures differs, amount stated in
words be paid.
Cheque issued in foreign currency is a valid instrument and payment should
be made at the rate of exchange prevailing at the time of presentation.

Inchoate (incomplete) cheque: (sec-20)

Holder gets the authority to complete the cheque for any amount

Bearer or order cheque: If nothing is mentioned, a cheque is to be treated as

order cheque. Any further conversion of an order cheque into bearer,
requires full signatures of drawer.

Cheque payable jointly: Cheque can be made payable to two or more persons
jointly
Forged Signatures:
When signatures are forged, paying banker has no right to debit the account
of a customer even if the forged signatures exactly match with the original
signatures.
In case of joint accounts (operated jointly) all signatures must be genuine.
Cheque with no date/Incomplete date: A cheque presented for payment
without date or incomplete date is to be returned.
STOP PAYMENT
In PARTNERSHIP FIRM any partner, whether authorized to operate a/c or
not, may issue stop payment instruction.

In case of JOINT ACCOUNTS OPERATING JOINTLY OR WITH E/S OPTIONS,

any of theJoint account holders may give instructions for stop payment.

Cheques payable to an illiterate person should be endorsed with his left

hand thumb impression, which should be witnessed by an individual well
known to both the parties.

A cheque in the name of the deceased person must be endorsed by his legal
representative.

A cheque payable to impersonal payees, e.g. income tax, must be endorsed

by the authority in relation to the impersonal payee.

All endorsement must be done in ink only. Even though, endorsement in

pencil is not prohibited by law, the possibility of alteration/obliteration
cannot be avoided in case of endorsement in pencil.
 CROSSING (SECTION 123 TO 131 OF NI ACT)

1. Crossing is a direction by the drawer to his banker to make payment of

a cheque drawn by him. In general crossing, payment can be made
through any bank,
while in special crossing; it can be made only through a specified banker.
However in any case, payment can be made through a bank account only.

General Crossing: (Sec 123): Important aspect in a crossing is two parallel

lines, with or without the words & CO., Not negotiable etc

Special crossing: (Sec 124): Where a cheque bears across its face, an
additional name of banker with or without transverse lines, cheque is
deemed to be crossed specially to that bank. Such cheques should be paid
to that banker or to his agent for collection (sec. 126).

A/C payee crossing: It is not defined by NI Act. It is a direction to

collecting banker, that such cheques should be collected only for the
named payee. This cheque cannot be endorsed further.
BANK DRAFT (SEC 85 (A) OF NI ACT)
It is a bill of exchange, drawn by a bank on another bank or on its another
branch.
IMPORTANT GUIDELINES:
DDs/MTs/TTs ` 50000 & above should not be issued/paid against cash.

Cancellation:- May be got cancelled by the purchaser before its delivery to the
payee (draft should not have any sign of negotiation.

Stop payment:-Payment cannot be countermanded by the purchaser.

Validity: All Drafts are valid uniformly for a period of 3 months.

Validity can be extended further by the issuing branch on the request of the
purchaser or the payee.

Duplicate Draft : -
Issued after getting indemnity from purchaser.
In case original and duplicate drafts are presented for payment, duplicate be
paid and original be returned with remarks about loss of draft /payment on
collecting banks Guarantee.
 TECHNOLOGY INITIATIVES OF THE BANK
Alternate Delivery Channel Products including various types of Cards
New Age payment and settlement mechanisms e.g. RTGS, NEFT, ECS, CTS etc.
Other initiatives e.g. ASBA. Xpress money transfer, CMS, CRM.
BCP Guidelines

Alternate Delivery Channel Products: The alternate delivery channel products are
those products using which we can offer the banking services to our customers
outside the brick and mortar bank premises, i.e. the customer need not visit
the branch for banking needs.

Various Types of Cards: The IT enabled cards include

ATM Cards
Debit cards
Credit Cards and
Smart card
 Biometric ATM Makes it possible for illiterate or barely literate population to become
Cards part of the banking user community. The salient features of these cards
are as under:
. Card is not enabled for POS / e-commerce transactions.
The regular PIN based transaction authorization and
In addition to PIN based transaction,
1. Debit Cards
Types of Debit 1. Non personalized cards (Cards without name and / or photo)
cards: The debit 2. Personalized cards (Cards with name and / or photo)
cards in general Under both the above broad categories we can have following two sub
have a validity of 7 categories:
years and are
1. PIN Based Cards: In order to make transactions at POS using these
broadly classified
cards the cardholder has to punch PIN
under 2 categories
2. Signature Based Cards: In these cards the POS transactions can be
done by signing the charge slips and punching of PIN is not required.
However, in order to withdraw from ATMs the functionality is same
for both types of cards. Another difference between PIN based and
signature based cards is that the latter can be used for making e
Banking transactions over Internet whereas the former cannot be
used for the same. There are 2 types of signature based cards:
Eligibility for issuance Classic Debit Cards:
of Debit cards
All the Customers, who maintain Current / Saving Fund / Overdraft account
with our Bank.
The card will not be issued to firms, HUFs and Corporate bodies.
Platinum Debit Cards:

any other customer, who in the opinion of Incumbent is a valued customer

for the Bank.
Add On cards and Customer can avail facility of 2 additional cards for his/her family member
Add On accounts All cards work on main account of primary card holder.
Transfer of Funds Transfer of Funds through ATM facility has a limit of ` 1 lac per transaction
for transfer of funds to accounts linked to the ATM/ Debit Card being used.
Reward Point Scheme Under this scheme, , Reward Points would automatically accrue to Debit Card
on Debit Cards users, in proportion to the amount spent through their Debit Cards at POS
(Point of Sale swipe machines)
Inter-bank ATM Free First 5 Transactions(Financial/and or Non-financial) at other banks ATMs for
Transactions Saving Fund A/c holders are free per calendar month .Transactions
exceeding the prescribed limit would be chargeable @ ` 20/- for financial
transaction and @` 9/- for non-financial transaction each.

In case of other than Saving Fund A/cs, all transactions will be chargeable @
` 20/- for financial transaction and @ ` 9/- for non-financial transaction
each.
 CREDIT CARD
Types of Credit 1. Credit Card for Individuals:
cards: The credit i. Classic cards
cards are broadly ii. Gold Cards
classified under 2 1. Credit Card for Corporates:
categories i. Classic cards
ii. Gold Cards

Eligibility for 1. The application should be literate, i.e. 10th standard pass
issuance of Credit 2. The applicant should have independent financial means
cards for individuals 3. The applicant should be between the age of 21 years and up to 65
years (@). For add-on cards minimum age will be 18 yea`
4. The applicant should be residing/working within the city limits of
identified centre
5. Minimum Annual Income (` Per Annum)

Documents to be 1. The applicant should have PAN card or should submit the
submitted application with self attested copy of Form 60/61 (with Photo ID).
2. Income Proof i.e. copy of Form 16/Income Tax Return or Salary
Certificate.
 4. PNB BIZ MERCHANT ACQUIRING BUSINESS
THROUGH POINT OF SALE (POS) TERMINALS
Point of Sale The usage of Plastic money is growing at steady pace with ease of operation
Terminal: and convenience for the consumer. In line with the acceptable trends and to
address customers emerging needs in using card instead of hard currency,
Introduction
Point of Sale (PoS) terminal or Electronic Data Capture (EDC) machine
popularly known as Swipe machine at the merchant establishment facilitates
the card payments at Merchant establishments.

5. World Travel Card

PNB World Travel Card (WTC) is a prepaid travel card just like our debit card denominated either in
USD/EURO/GBP for visitors going abroad. It will be on Master Card platform. The card holders will be
given facility of withdrawal through ATM/POS displaying Master card logo across the globe except India,
Nepal and Bhutan.
Eligibility Indian Nationals desirous of visiting abroad (except Nepal and Bhutan)
Foreign Nationals while on visit to India against FOREX brought in India & or
INR balance supported by encashment certificate.

Currency of Issue and USD, GBP & EURO
Expiry Of WTC The Cards will be printed with expiry date in mm/yy format and the expiry will
be 5 years from the month of printing.
Documents required Application form
Copy of valid passport,
Latest photograph of the customer and
Form A- 2 if currency sold exceeds USD5000 or equivalent.
 Internet Banking Services
Types of Internet Internet Banking service is available to the customers of CBS branches
Banking Services for accessing their accounts through Internet without coming to the
(IBS) branches. Internet Banking Service is of two types:
1. Retail IBS
2. Corporate IBS
Retail IBS Fund 1. Transfer of Funds through Retail internet Banking Within your own
Transfer limits Utility Bill payments.
RTGS `
NEFT
Time Limits for The funds can be transferred Inter Bank using the Internet Banking
remittance of Services. The time limit is as under:
Funds through RTGS)
RTGS/NEFT using Monday to Friday 9 AM to 3.45 PM
IBS. Saturday 9 AM to 12.45 PM
(The outer time limit is 15 minutes prior to the last close time in
branch)
Monday to Friday 6 AM to 6.45 PM
Saturday 6 AM to 12.45 PM
(The outer time limit is 15 minutes prior to the last close time in
branch)
 Mobile Banking Services
SMS Alert Facility Bank launched SMS alert facility for the customers, which can be
availed by customers by registering their mobile no. through either of the
following channels:

ATMs
Call Centre

Types of Mobile Presently the Mobile Banking Service is available only to Retail
Banking Services Customers.
(MBS) It will be launched for the corporate customers later.
This service will allow the customers to view their accounts and
make transactions through use of Mobile device.

Mobile Banking Separate passwords for login and transaction

Security Features Password is stored in one way encrypted form in the database
Mandatory change of password on first login
Password Expiry period System will force user to change password
mandatorily after every 180 days
User Expiry period User ID would get disabled if user does not
login for a period of 180 days
Disabling login-Id after 5 consecutive unsuccessful login attempts
RTGS (Real Time Gross settlement) is on line system through which inter-bank fund transfers
take place.
The transfer mechanism is controlled, monitored and settled by Reserve Bank of India.
Transactions are settled transaction by transaction throughout the day during stipulated
timings. RTGS is fastest mode of inter-bank transfer of funds and customer receives the
funds with certainty on the same day.
Types of R41 messages i.e. the messages to be sent on behalf of the customers in
messages sent which the debit A/c has to be a customer account.
through RTGS
R42 messages i.e. the messages to be sent by the Bank for Inter Bank
remittance purposes.
Amount Limit Minimum amount : ` 2.00 Lac
Maximum amount: No Limit
Concept of IFSC: It expands to Indian Financial System Code and it is uniformly 11
IFSC and UTR characters in length for the entire Indian Banking Industry. In case of our
no. Bank it is in the form of PUNB+0+Four digit D.No.+00i.e. for a branch
having distinctive no. 1874, the IFSC would be PUNB0187400.
UTR No.: It expands to Unique Transaction No. Once a message is created
the system generates one UTR No. which is unique to each and every
message and it is uniformly 16 characters in length for the entire Banking
industry.
 National Electronic Fund Transfer (NEFT)
NEFT is an application by which customers can transfer funds from one bank account
to another bank account in India in an efficient, secure, economical, reliable and
expeditious system. This mode is used to transfer funds of smaller amount.
The transfer mechanism is controlled, monitored and settled by Reserve Bank of
India. Transactions are settled in batches on the basis of net settlement, throughout
the day during stipulated timings.
Amount Minimum amount : No Limit
Limit
Maximum amount: No Limit
Timings of Remittance
Message Monday to Friday Saturday
Type RBIs Timings RBIs
Timing
s
N06 9 AM to 7.00 PM 9 AM to
1.00
PM
Through IBS NEFT can be done at 6 AM but it will take off only at 9 AM
The NEFT system works as under: Daily 11 Hourly settlements from 9.00 to
 Electronic Clearing Services (ECS)
Primarily, there are two variants of ECS:

1. ECS Credit: It is used for affording credit to a large number of beneficiaries having
accounts with bank branches at various locations within the jurisdiction of an ECS Centre
by raising a single debit to an account of a bank (that maintains the account of the user
institution).
2. ECS Debit: It is used for raising debits to a large number of accounts maintained with bank
branches at various locations within the jurisdiction of a ECS Centre for single credit to an
account of a bank (that maintains the account of the user institution). ECS Debit is useful
for payment of telephone / electricity / water bills, cess / tax collections, loan installment
repayments, periodic investments in mutual funds, etc.,

MICR is an acronym for Magnetic Ink Character Recognition.

The MICR Code is a numeric code that uniquely identifies a bank-branch participating in the
ECS Credit scheme.

This is a 9 digit code to identify the location of the bank branch; the first 3 characters represent
the city, the next 3 the bank and the last 3 the branch.

The MICR Code allotted to a bank branch is printed on the MICR band of cheque leaves
issued by bank branches.
 Cheque Truncation System (CTS)
Truncation is the process of stopping the flow of the physical cheque issued by a drawer to the drawee
branch. The physical instrument will be truncated at some point en-route to the drawee branch and an
electronic image of the cheque would be sent to the drawee branch along with the relevant information like
the MICR fields, date of presentation, presenting banks etc. Thus with the implementation of cheque
truncation, the need to move the physical instruments across branches would not be required, except in
exceptional circumstances. This would effectively reduce the time required for payment of cheques, the
associated cost of transit and delay in processing, etc., thus speeding up the process of collection or
realization of the cheques.
Some facts about 1. At present on PILOT basis the CTS project is implemented in NCR, New Delhi
CTS 2. Process Flow of CTS:
The CTS project envisages a safe, secured, faster and effective system for
clearing of the cheques.
The presenting bank captures the data in CBS & images of the cheques
using the Scanners / Software of Capture System.
The banks sends the captured images and data to the central clearing house
for onward transmission to the payee/drawee banks.
For that purpose RBI has provided the banks with a system /software called
the Clearing House Interface (CHI) that enables them to connect and transmit
data in a secure way using Digital signatures and with non-repudiation to the
Clearing House (CH).
The Clearing House processes the data and arrive at the settlement figure for
the banks and sends the required data to payee/drawee banks for processing
at their end.
The drawee /payee banks will use the same CHI mentioned earlier for
receiving the data and images from the Clearing House.
 RETAIL LENDING SCHEMES
ADVANCE AGAINST GOLD JEWELERY/ ORNAMENTS AND GOLD
COINS
PNB SARTHI (vehicle)
CAR LOAN
EDUCATION LOAN
CENTRAL SCHEME TO PROVIDE INTEREST SUBSIDY ON EDUCATION
LOAN
HOUSING FINANCE (PUBLIC)
PERSONAL LOAN FOR PENSIONERS
PERSONAL LOANS FOR PUBLIC
PNB BAGHBAN SCHEME
MORTGAGE LOAN AGAINST IP
 Other schemes [Guidelines now being framed by
SME / IRMD]
Scheme for Financing Traders
FINANCING OF STOCK/RECEIVABLES/ OTHER BLOCK
ASSETS
FINANCING RETAIL TRADERS-FOR PURCHASE OF SHOP
/ SHOW ROOM

SCHEME FOR FINANCING PROFESSIONALLY

QUALIFIED MEDICAL PRACTITIONERS

FINANCE AGAINST FUTURE LEASE RENTALS

Thank You