FUNCTIONS OF BANK

ANCILLARY SERVICES

REMITTANCES: Remittance means, transfer of funds from one bank branch to

another branch of the same bank or a different bank.
Customers can remit through bankers cheque, demand drafts, national electronic
clearing (NEFT), RTGS (Real Time Gross Settlement) at a specified charges.
DEMAND DRAFT AND BANKERS CHEQUE:
Most common form of transfer of funds.
Application for purchase of DD is made to Bank, signed by the applicant giving
address and full particulars of the draft intended to be purchased.
DD/BC is a negotiable instrument and payable to the order of the beneficiary.
DD/BC is valid for three months,
Purchaser of DD/BC has no authority to countermand the payment after it has
been delivered to the payee. However bank will exercise caution if reported lost
Purchase/payment of DD/BC for Rs.50000 and above will be only through a/c

FUNCTIONS OF BANK
ANCILLARY SERVICES
ISSUANCE OF A DUPLICATE DD/BC
Customer is entitled to issuance of Duplicate DD
To be intimated to Bank
Payment of DD/BC has not been made by the drawee bank/branch
Letter of indemnity to be executed by the purchaser of DD.
Applicable service charges to be paid.
MAIL TRANSFER
Amount remitted by a customer or non-customer is directly credited to the a/c of
the beneficiary with another branch of the bank.
The concept of MT has no relevance after the advent of core banking system.
TRAVELLERS CHEQUES
TCs are issued to any individual and he has to sign in the space provided in the
presence of bank official.
On presentation he has to sign on the reverse in the space provided for in the
presence of the bank official.
Introduction is not insisted. If the signature tallies the payment is made.

FUNCTIONS OF BANK
ANCILLARY SERVICES
NATIONAL ELECTRONIC FUNDS TRANSFER SYSTEM
Amounts inclusive of paisa component can be put through
Facilitates economical, reliable, efficient and expeditious funds transfer
No upper ceiling for the amount
Avoidance of paper based transfer system
Remitting bank prepares SFMS and sends to service centre of NEFT
RBI is the clearing centre sorts out bank wise and prepares the accounting entries.
REAL TIME GROSS SETTLEMENT
It is an electronic payment.
Processed on a continuous or real time basis
Settled on Gross or individual basis without netting debits against credits
Payments effected are final and irrevocable
Allows transfer of funds across banks almost instantaneously
It reduces credit risk

FUNCTIONS OF BANK
ANCILLARY SERVICES

SAFE DEPOSIT LOCKERS

Facility extended to the customers to enable them to keep their valuables/documents etc
in a specially designed lockers on payment of a prescribed fee.
Can be hired by an individual, firm, company, specified associations and societies.
Nomination facility is available to the individual hirer.
Different types of locker available. Fees payable in advance.
Bank will hire out the locker only to the properly introduced person.
Bank reserves the right to break open the locker in case of non payment of rent despite
notice, as per bank rules and recover the charges.
KYC assessment should be done while hiring lockers.
If the locker remains not operated for a period of more than one three years for high
and medium risk categories, notice to be sent to the hires either to operate the locker or
surrender the same. In case of non response, bank should consider opening the same
with the help of police after giving sufficient notice in this regard.
In case of death of the sole locker hirer, the access will be given to the nominee.
Death certificate and identification of nominee is sufficient.
In case of joint hiring if nomination has been provided the nominee along with the
existing hirer can operate the locker.

FUNCTIONS OF BANK
ANCILLARY SERVICES

Where both the hirers die, and if nomination is available, their nominees may be
permitted to operate
In case of joint locker hiring, in the contract for hiring there is a survivorship
clause is available, and in the absence of joint operation condition, the survivor is
permitted to operate.
PORTFOLIO MANAGEMENT
Management of combination of securities to get the most efficient portfolio in
terms of return, safety and liquidity.
Basic principles
It is the portfolio that matters not the individual security
Large portfolio returns come only with a larger portfolio risk.
Diversification works.
Each portfolio is tailored to the particular need of its owner.

FUNCTIONS OF BANK
ANCILLARY SERVICES

P M S - RBI GUIDELINES
PMS service is provided at customers risk without guaranteeing a pre
determined rate of return.
Services are provided related to their long term investible funds.
Minimum period for which the funds are placed by clients is one year
Transactions are booked at market rates only
Proper accounting and documentation has to be made
Funds accepted should not be entrusted with another bank for management
Definite fee is charged for the services independent of the return
The undeployed funds are the same as outside borrowings of the bank and
CRR/SLR to be maintained on them also.
Banks liability to the clients towards funds accepted for portfolio
management has to be properly reflected in the published accounts.