PROJECT REPORT ON

AXIS BANK
TOPIC COVERED DURING INTERNSHIP GENERAL BANKING

SUBMITTED BY ALEX KUREEKAT (ROLL NO: 10) MMS III SEMESTER (FINANCE)

FOR THE MASTERS DEGREE IN MANAGEMENT (MMS) FINANCE BATCH 2010 2011

DON BOSCO INSTITUTE OF TECHNOLOGY MMS VIDYAVIHAR, MUMBAI 400 070

Axis Bank

Declaration

I Alex Kureekat a student of MMS (FINANCE) (Semester III) of the University of Mumbai of 2010 2012 batch at Don Bosco Institute of Technology MMS do hereby declare that this Project entitled General Banking has been carried out by me under the guidance of Kavita Mishra as per the norms prescribed by the University of Mumbai. And that I have not engaged in plagiarism of any kind from published / non published works

I further declare that the information presented in this project is true and original to the best of my knowledge

Date: Place: Mumbai (ALEX KUREEKAT)

Axis Bank

Certificate on Project Completion

We Axis Bank Dahisar (West) Branch hereby certify that Mr. Alex Kureekat a student of MMS (Finance) (Semester III) of the University of Mumbai of 2010 2012 batch at Don Bosco Institute of Technology MMS has completed the project on General Banking under our guidance of as per the norms prescribed by the University of Mumbai.

I further certify that the information presented in this project is true and original to the best of my knowledge and belief

Date: Place: Mumbai (Axis Bank Dahisar West)

Axis Bank

INDEX
SR. NO. TOPIC PAGE NO. CHAPTER 1 COMPANY PROFILE 1.1 Introduction of axis bank 1.2 History of Axis bank 1.3 Management of Axis bank 1.4 Organization Structure of Axis Bank 1.5 Financial Analysis CHAPTER 2 PROJECT INTRODUCTION 2.1 Project Introduction 2.2 Meaning of Wholesale Banking operations 2.3 Definitions of Banking 2.4 Meaning of Banking CHAPTER 3 PROJECT RESEARCH 3.1 Product of Axis Bank 3.2 Customer Service in Banking Operation 3.3 Traditional Banking Activities 3.4 Accounting for Bank Account 3.5 Economic Function 3.6 Banking Channels 3.7 Types of Investment Bank 3.8 Mortgage Banking 3.9 KYC (Know Your Customer) CHAPTER 4 TRAINING CONCEPT 4.1 Saving Account Information 4.2 Current Account Information 4.3 Training in Wholesale Banking Operations 4.4 Training on Clearing of Cheques CHAPTER 5 FINDINGS AND SUGGESTIONS 5.1 Findings 5.2 Suggestion 5.3 Competitors CHAPTER 6 CONCLUSION CHAPTER 7 BIBLIOGRAPHY Axis Bank

CHAPTER 1 COMPANY PROFILE

1.1 Introduction of Axis bank:
Commercial banking services which includes merchant banking, direct finance infrastructure finance, venture capital fund, advisory, trusteeship, forex, treasury and other related financial services. As on 31-Mar-2011, the Group has 1281 branches, extension counters and 6270 automated teller machines (ATMs). Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd, The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank today is capitalized to the extent of Rs. 410.54 crores with the public holding (other than promoters) at 53.60%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1281 Branches and Extension Counters (as on 31th March 2011). The Bank has a network of over 6270 ATMs (as on 31th, March 2011) providing 24 hrs a day banking convenience to its customers. This is One of the largest ATM networks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.

1.2 History of Axis bank:

1993: The Bank was incorporated on 3rd December and Certificate of Business on 14th December. The Bank transacts banking business of all description. UTI Bank Ltd. was promoted by Unit Trust of India, Life Insurance Corporation of India, General Insurance Corporation of India and its four subsidiaries. The bank was the first private sector bank to get a license under the new guidelines issued by the RBI. 1997: The Bank obtained license to act as Depository Participant with NSDL and applied for registration with SEBI to act as `Trustee to Debenture Holders. Rupees 100
Axis Bank

crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC and its four subsidiaries Rs 1.5 crores each. 1998: The Bank has 28 branches in urban and semi urban areas as on 31st July. All the branches are fully computerized and networked through VSAT. ATM services are available in 27 branches. The Bank came out with a public issue of 1,50,00,000 No. of equity shares of Rs 10 each at a premium of Rs 11 per share aggregating to Rs 31.50 crores and Offer for sale of 2,00,00,000 No. of equity shares for cash at a price of Rs 21 per share. Out of the public issue 2,20,000 shares were reserved for allotment on preferential basis to employees of UTI Bank. Balance of 3,47,80,000 shares were offered to the public. The company offers ATM cards, using which account-holders can withdraw money from any of the bank's ATMs across the country which is interconnected by VSAT. UTI Bank has launched a new retail product with operational flexibility for its customers. UTI Bank will sign a co-brand agreement with the market, leader, Citibank NA for entering into the highly promising credit card business. UTI Bank promoted by India's pioneer mutual fund Unit Trust of India along with LIC, GIC and its four subsidiaries. 1999: UTI Bank and Citibank have launched an international cobranded Credit card. UTI Bank and Citibank have come together to launch an international co-branded credit card under the MasterCard umbrella. UTI Bank Ltd has inaugurated an offsite ATM at Ashok Nagar here, taking the total number of its offsite ATMs to 13.m 2000: The Bank has announced the launch of Tele-Depository Services for Its depository clients. UTI Bank has launch of `iConnect', its Internet banking Product. UTI Bank has signed a memorandum of understanding with equitymaster.com for e-broking activities of the site. Infinity.com financial Securities Ltd., an e-broking outfit is Typing up with UTI Bank for a banking interface. Geojit Securities Ltd, the first company to start online trading services, has signed a MoU with UTI Bank to enable investors to buy\sell demat stocks through the company's website. India bulls have signed a memorandum of understanding with UTI Bank. UTI Bank has entered into an agreement with Stock Holding Corporation of India for providing loans against shares to SCHCIL's customers and funding investors in public and rights issues. ICRA has upgraded the rating UTI Bank's Rs 500 crore certificate of deposit programmed to A1+. UTI Bank has tied up with L&T Trade.com for providing customized online trading solution for brokers. 2001: UTI Bank launched a private placement of non-convertible debentures to rise up to Rs 75 crores. UTI Bank has opened two offsite ATMs and one extension counter with an ATM in Mangalore, taking its total number of ATMs across the country to 355. UTI Bank has recorded a 62 per cent rise in net profit for the quarter ended September 30, 2001 at Rs 30.95 crore. For the second quarter ended September 30, 2000, the net profit was Rs 19.08 crore. The total income of the bank during the quarter was up 53 per cent at Rs 366.25 crore. 2002: UTI Bank Ltd has informed BSE that Shri B R Barwale has resigned as a Director of the Bank w.e.f. January 02, 2002. A C Shah, former Chairman of Bank of Baroda,
Axis Bank

also retired from the banks board in the third quarter of last year. His place continues to be vacant. M Damodaran took over as the director of the board after taking in the reins of UTI. B S Pandit has also joined the banks board subsequent to the retirement of K G Vassal. UTI Bank Ltd has informed that Shri Paul Fletcher has been appointed as an Additional Director Nominee of CDC Financial Service (Mauritius) Ltd of the Bank. And Shri Donald Peck has been appointed as an Additional Director (nominee of South Asia Regional Fund) of the Bank. UTI Bank Ltd has informed that on laying down the office of Chairman of LIC on being appointed as Chairman of SEBI, Shri G N Bajpai, Nominee Director of LIC has resigned as a Director of the Bank. 2002: B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.UTI Bank Ltd has informed that in the meeting of the Board of Directors following decisions were taken: Mr. Yash Mahajan, Vice Chairman and Managing Director of Punjab Tractors Ltd were appointed as an Additional Director with immediate effect. Mr. N C Singhal former Vice Chairman and Managing Director of SCICI was appointed as an Additional Director with immediate effect. ABN Amro, UTI Bank in pact to share ATM. UTI Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank is scheduled to be held on October 24, 2002 to consider and take on record the unaudited half yearly/quarterly financial results of the Bank for the half year/Quarter ended September 30, 2002. UTI Bank Ltd has informed that Shri J M Trivedi has been appointed as an alternate director to Shri Donald Peck with effect from November 2, 2002. 2003: UTI Bank Ltd has informed BSE that at the meeting of the Board of Directors of the company held on January 16, 2003, Shri R N Bharadwaj, Managing Director of LIC has been appointed as an Additional Director of the Bank with immediate effect. - UTI Bank, the private sector bank has opened a branch at Nellore. The bank's Chairman and Managing Director, Dr P.J. Nayak, inaugurating the bank branch at GT Road on May 26. Speaking on the occasion, Dr Nayak said. This marks another step towards the extensive customer banking focus that we are providing across the country and reinforces our commitment to bring superior banking services, marked by convenience and closeness to customers. -UTI Bank Ltd. has informed the Exchange that at its meeting held on June 25, 2003 the BOD have decided the following: 1) To appoint Mr. A T Pannir Selvam, former CMD of Union Bank of India and Prof. Jayanth Varma of the Indian Institute of Management, Ahmedabad as additional directors of the Bank with immediate effect. Further, Mr. Pannir Selvam will be the nominee director of the Administrator of the specified undertaking of the Unit Trust of India (UTI-I) and Mr. Jayanth Varma will be an Independent Director. 2) To issue Non-Convertible Unsecured Redeemable Debentures up to Rs.100 crs, in one or more tranches as the Bank's Tier II capital. -UTI has been authorized to launch 16 ATMs on the Western Railway Stations of Mumbai Division. -UTI filed suit against financial institutions IFCI Ltd in the debt recovery tribunal at Mumbai to recover Rs.85cr in dues. -UTI bank made an entry to the Food Credit Programme; it has made an entry into the 59 cluster which includes private sector, public sector, old private sector and cooperative banks. -Shri Ajeet Prasad, Nominee of UTI has resigned as the director of the bank. -Banks Chairman and MD Dr. P. J. Nayak inaugurated a new branch at Nellore.-UTI bank allots shares under Employee Stock Option Scheme to its employees. -Unveils pre-paid travel card 'Visa
Axis Bank

Electron Travel Currency Card' -Allotment of 58923 equity shares of Rs 10 each under ESOP. -UTI Bank ties up with UK govt fund for contract farm in -Shri B S Pandit, nominee of the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I) has resigned as a director from the Bank i.e. November 12, 2003. -UTI Bank unveils new ATM in Sikkim. 2004: Comes out with Rs. 500 mn Unsecured Redeemable Non- Convertible Debenture Issue, issue fully subscribed -UTI Bank Ltd has informed that Shri Ajeet Prasad, Nominee of the Administrator of the Specified Undertaking of the Unit Trust of India (UTI - I) has been appointed as an Additional Director of the Bank w. e. f. January 20, 2004.UTI Bank opens new branch in Udupi-UTI Bank, Geojit in pact for trading platform in Qatar -UTI Bank ties up with Shri Ram Group Cos -Unveils premium payment facility through ATMs applicable to LIC UTI Bank customers Metal junction (MJ)- the online trading and procurement joint venture of Tata Steel and Steel Authority of India (SAIL)has roped in UTI Bank to start off own equipment for Tata Steel. DIEBOLD Systems Private Ltd, a wholly owned subsidiary of Diebold Incorporated, has secured a major contract for the supply of ATMs and services to UTI Bank -HSBC completes acquisition of 14.6% stake in UTI Bank for .6 m -UTI Bank installs ATM in Thiruvananthapuram Launches Remittance Card' in association with Remit2India, a Web site offering money transfer services 2005: UTI Bank enters into a banc assurance partnership with Bajaj Allianz General for selling general insurance products through its branch network. -UTI Bank launches its first Satellite Retail Assets Centre (SRAC) in Karnataka at Mangalore. 2006: UBL sets up branch in Jaipur - UTI Bank unveils priority banking lounge. 2007: AXIS Bank Ltd has informed that consequent upon handing over charge as Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), Shri. S B Mathur, the Nominee Director of SUUTI has resigned as a Director of the Bank w.e.f. December 06, 2007. -AXIS Bank Ltd has informed that Fitch Ratings on December 14, 2007, has upgraded the Bank's National Long-term rating to AAA (ind)' from AA+ (ind)'. -AXIS Bank Ltd has appointed Shri K N Prithviraj as an Additional Director on the Board at Directors of the Bank. - Company name has been changed from UTI Bank Ltd to Axis Bank Ltd. 2008: Axis Bank launches Platinum Credit Card, India's first EMV chip based card - Axis Bank set up its branch at Llanji at Meenakshi Nagar on the Coutralam-Madurai road on April 16. 2009: Axis Bank today said its board has recommended the appointment of Shikha Sharma, currently chief of ICICI group's life insurance business, as its next managing director and CEO. - Axis Bank has set up a new branch at Perumbavoor. The bank has a network of 832 branches along with 8 extension counters and 3622 ATMs across the country.
Axis Bank

- Axis Bank, on Wednesday entered into a strategic alliance with Motilal Oswal, the financial services firm, in order to facilitate the online trading for the bank's customers. - AXIS Bank Ltd has informed that the Board of Directors of the Bank at its meeting held on June 01, 2009, inducted Smt. Shikha Sharma as an Additional Director of the Bank. - Axis bank has received final clearance from the Securities and Exchange Board of India (SEBI) to begin its mutual fund operations and will launch debt and equity schemes soon whereas IDBI Bank is awaiting the regulator's permit for an entry. - Axis Bank opened the new branch at Irinjalakuda while it has a network of 892 branches, 8 extension counters and 3,806 ATMs across the country. 2010: Axis Bank Limited has informed that at the meeting of the Board of Directors held on January 15, 2010, the following decisions were taken: (1) To appoint Dr. Adarsh Kishore, former Finance Secretary, Government of India and former Executive Director, International Monetary Fund representing Bangladesh, Bhutan, India and Sri Lanka, as the Non-Executive Chairman of the Bank, subject to RBI approval; (2) To appoint Shri S.B. Mathur, former Chairman, LIC and the National Stock Exchange of India, as an Additional Independent Director, with immediate effect. - AXIS Bank Ltd has appointed Shri M. S. Sundara Rajan, former CMD, Indian Bank as an Additional Independent Director with immediate effect.

1.3 Management of Axis bank

Promoters: Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 Crore, LIC - Rs. 7.5 Crore and GIC and its four subsidiaries contributing Rs. 1.5 Crore each. SUUTI - Shareholding 23.08% Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59 crores. The Government of India has currently appointed Shri K. N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes under UTI where Government has continuing obligations and commitments to the investors, which it will uphold.

Axis Bank

1.4 ORGANIZATION STRUCTURE OF AXIS BANK

Axis Bank

1.5 FINANCIAL ANALYSIS OF AXIS BANK

HIGHLIGHTS Profit after tax up 34.76% to `3,388.49 crores Net Interest Income up 31.14% to `6,562.99 crores Fee & Other Income up 32.39% to `4,135.16 crores Deposits up 33.93% to `189,237.80 crores Demand Deposits up 17.78% to `77,767.40 crores Advances up 36.48% to `142,407.83 crores Retail Assets up 33.32% to `27,759.23 crores Network of branches and extension counters increased from 983 to 1,390 Total number of ATMs went up from 4,293 to 6,270 Net NPA ratio as a percentage of net customer assets down to 0.26% from 0.36% Earnings per share (Basic) increased from `65.78 to `82.95 Proposed Dividend up from 120% to 140% Capital Adequacy Ratio stood at 12.65% as against the minimum regulatory norm of 9%

Axis Bank

SNAP SHOT OF KEY FINANCIAL INDICATORS: 2007 2011

FINANCIAL HIGHLIGHTS

2006 2007

2007 - 2008

2008 - 2009

2009 - 2010

2010 - 2011

CAGR (5 Years)

Total Deposits - Saving Bank Deposits - Current Account Deposits Total Advances - Retail Advances Total Investments Shareholder s' Funds Total Assets/Liabil ities Net Interest Income Other Income Operating Revenue Operating Expenses Operating Profit Provisions and Contingenci s Net Profit

58,785.60 12,125.88

87,626.22 19,982.41

117,374.11 25,822.12

141,300.22 33,861.80

189,237.80 40,850.31

36.38% 38.33%

11,304.31

20,044.58

24,821.61

32,167.74

36,917.09

35.88%

36,876.48 8,927.54 26,897.16 3,393.23 73,257.22

59,661.14 13,591.68 33,705.10 8,768.50 109,577.85

81,556.77 16,051.78 46,330.35 10,213.59 147,722.05

104,340.95 20,820.73 55,974.82 16,044.45 180,647.85

142,407.83 27,759.23 71,991.62 18,998.83 242,713.37

44.87% 33.73% 27.31% 45.92% 37.31%

1,468.33 1,010.11 2,478.44 1,214.59 1,263.85 604.82

2,585.35 1,795.49 4,380.84 2,154.92 2,225.92 1,154.89

3,686.21 2,896.88 6,583.09 2,858.21 3,724.88 1,909.52

5,004.49 3,945.78 8,950.27 3,709.72 5,240.55 2,726.02

6,562.99 4,632.13 11,195.12 4,779.43 6,415.69 3,027.20

43.51% 44.72% 44.00% 42.48% 45.21% 42.86%

659.03

1,071.03

1,815.36

2,514.53

3,388.49

47.52%

Axis Bank

FINANCIAL RATIOS Earnings Per Share (Basic) (in `) Book Value (in `) Return on Equity Return on Assets Capital Adequacy Ratio (CAR) Tier I Capital (CAR) Dividend Per Share (in `) Dividend Payout Ratio

2006 - 2007 23.50 120.50 21.84% 1.10% 11.57% 6.42% 4.50 22.58%

2007 - 2008 32.15 245.14 16.09% 1.24% 13.73% 10.17% 6.00 23.49%

2008 - 2009 50.61 284.50 19.93% 1.44% 13.69% 9.26% 10.00 23.16%

2009 - 2010 65.78 395.99 19.89% 1.67% 15.80% 11.18% 12.00 22.57%

2010 - 2011 82.95 462.77 20.13% 1.68% 12.65% 9.41% 14.00 19.78%

Axis Bank

AXIS BANK LIMITED - BALANCE SHEET

BALANCE SHEET AS AT 31 MARCH, 2011 Schedule No. As at 31-03-2011 ( ` in Thousands) 1 2 17 (5.15) 4,105,458 185,882,797 1,734 As at 31-03-2010 ( ` in Thousands) 4,051,741 156,392,749

CAPITAL AND LIABILITIES Capital Reserves & Surplus Employees Stock Options Outstanding (Net) Deposits Borrowings Other Liabilities and Provisions TOTAL ASSETS Cash and Balances with Reserve Bank of India Balances with Banks and Money at Call and Short Notice Investments Advances Fixed Assets Other Assets TOTAL

3 4 5

1,892,378,010 262,678,824 82,088,627 2,427,133,716

1,413,002,175 171,695,512 61,334,608 1,806,478,519

138,861,630

94,820,456

7 75,224,929

57,218,631

8 9 10 11

719,916,208 1,424,078,286 22,731,456 46,321,207 2,427,133,716

559,748,156 1,043,409,464 12,224,199 39,057,613 1,806,478,519

Contingent 12 4,539,973,284 3,182,812,023 liabilities Bills for collection 324,731,072 192,928,684 Significant Accounting Policies and Notes 17 & 18 to Accounts Schedules referred to above form an integral part of the Balance Sheet

Axis Bank

CHAPTER 2 PROJECT INTRODUCTION

2.1 PROJECT INTRODUCTION
As a part of curriculum the students of MBA have to undergo Summer Internship Program (SIP). Where in a student gets the knowledge about practical life, how the work is done in companies, how to get acquainted with working conditions and other many such things, etc. the main aim behind this program is that students get some experience with which he could get assistance while searching the job. This program is generally provided by a company and it lasts for at least two months. Students as per their specializations could apply for SIP and get the opportunity to work in a company, which the college suggests. As a management student I also have to undergo SIP. I got the opportunity to complete this program in AXIS BANK LTD. for two months. Axis bank is one of the leading BANKS in banking sector in India. First of the two months was devoted to training. Our training started with the session of information about bank product and sales and - what is the meaning of the concepts, importance of sales and marketing was taught. The second part was about open an account why we open an account in bank, about the banking sector- as avenue for investment, how banking sector is Better Avenue for investment. The next session was about detailed knowledge about banking sector how to sell these products in market. The last session was about the practical knowledge about how to get appointment of customers and how to convince them to take the product. In the second month we have sell the products directly in the market, procedure of selling the products etc.

2.2 MEANING OF WHOLESALE BANKING OPERATIONS

The Wholesale Banking contains products sold to large and middle market commercial companies, as well as to consumers on a wholesale basis. This includes lending, treasury management, mutual funds, asset-based lending, commercial real estate, corporate and institutional trust services, and investment banking through Wells Fargo Securities. The company also owns Baring ton Associates, a middle market investment bank. Wells Fargo historically has avoided large corporate loans as stand-alone products, instead requiring that borrowers purchase other products along with loans which the bank sees as a loss leader. One area that is very profitable to Wells, however, is asset-based lending: lending to large companies using assets as collateral
Axis Bank

that are not normally used in other loans. This can be compared to subprime lending, but on a corporate level. The main brand name for this activity is "Wells Fargo Foothill," and is regularly marketed in tombstone ads in the Wall Street Journal. Wells Fargo also owns Eastdil Secured, which is described as a "real estate investment bank" but is essentially one of the largest commercial real estate brokers for very large transactions (such as the purchase and sale of large Class-A office buildings in central business districts throughout the United States). The wholesale banking operations consist of the following transactions: 1. Opening of Account 2. Issue of Check book 3. International Debit / Credit Card 4. Issue of Demand Draft (DD) 5. Net banking 6. E-mail statement 7. Phone banking 8. Insta Query 9. Insta Alert 10. Bill pay 11. Passbook 12. Quarterly Account Statement 13. Loan Facility

2.3 DEFINITIONS OF BANKING

A bank is a financial institution licensed by a government. Its primary activity is to lend money. Many other financial activities were allowed over time. For example banks are important players in financial markets and offer financial services such as investment funds. Banking can also be defined as engaging in the business of keeping money for savings and checking accounts or for exchange or for issuing loans and credit. Transacting business with a bank; depositing or withdrawing funds or requesting a loan. Bank - a supply or stock held in reserve for future use (especially in emergencies)

2.4 MEANING OF BANKING

An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's
Axis Bank

checks; and issues drafts and cashier's checks.

CHAPTER 3 PROJECT RESEARCH

3.1 PRODUCT OF AXIS BANK
Easy Access Saving Account Saving Account for Women Prime Saving Account Senior Citizens Saving Account Priority Banking Corporate Salary Account Trust /NGOs Saving Account Resident Foreign Currency Account Online Trading Account Current Account Term Deposits Locker Facilities NRI Services Depository Services Financial Advisory Services Wealth Management Services Insurance Solutions Life and General Retail Loans Credit Loans Travel Currency Cards Remittance Cards Gift Cards

3.2 Customer service in Banking Operations

Cheque Drop Box Facility RBI's Committee on Procedures and Performance Audit on Public Services have recommended that both the drop box facility and the facility for acknowledgement of the cheques at the regular collection counters should be available to customers and no branch should refuse to give an acknowledgement if the customer tenders the cheques at the counters.

Axis Bank

Issue of Cheque Books: The Committee has observed that some banks do not allow depositors to collect their cheque book at the branch but insist on dispatching the cheque book by courier to the depositor. Further, it is stated by the Committee that the depositor is forced to sign a declaration that a despatch by the courier is at the depositor's risk and consequence and that the depositor shall not hold the bank liable in any manner whatsoever in respect of such despatch of cheque book. Committee has observed this as an unfair practice and advised banks to refrain from obtaining such undertakings from depositors. Banks should also ensure that cheque books are delivered over the counters on request to the depositors or his authorized representative. Statement of Accounts / Pass Books: The Committee has noted that banks invariably show the entries in depositors passbooks / statement of accounts as "By Clearing" or "By Cheque". Further, in the case of Electronic Clearing System (ECS) and RBI Electronic Funds Transfer (RBIEFTR) banks invariably do not provide any details even though brief particulars of the remittance are provided to the receiving bank. In some cases computerized entries use sophisticated codes which just cannot be deciphered. With a view to avoiding inconvenience to depositors, banks are advised to avoid such inscrutable entries in passbooks statements of account and ensure that brief, intelligible particulars are invariably entered in passbooks / statements of account. Banks may also ensure that they adhere to the monthly periodicity prescribed by us while sending statement of accounts.

3.3 Traditional banking activities:

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but nonbank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to customers.

Axis Bank

3.4 Accounting for bank accounts

Bank statements are accounting records produced by banks under the various accounting standards of the world. Under GAAP and IFRS there are two kinds of accounts: debit and credit. Credit accounts are Revenue, Equity and Liabilities. Debit Accounts are Assets and Expenses. This means you credit a credit account to increase its balance, and you debit a debit account to increase its balance. This also means you debit your savings account every time you deposit money into it (and the account is normally in deficit), while you credit your credit card account every time you spend money from it (and the account is normally in credit).However, if you read your bank statement, it will say the oppositethat you credit your account when you deposit money, and you debit it when you withdraw funds. If you have cash in your account, you have a positive (or credit) balance; if you are overdrawn, you have a negative (or deficit) balance. The reason for this is that the bank, and not you, has produced the bank statement. Your savings might be your assets, but the bank's liability so they are credit accounts (which should have a positive balance). Conversely, your loans are your liabilities but the bank's assets, so they are debit accounts (which should have a also have a positive balance).Where bank transactions, balances, credits and debits are discussed below, they are done so from the viewpoint of the account holderwhich is traditionally what most people are used to seeing.

3.5 Economic functions

1. Issue of money, in the form of banknotes and current accounts subject to cheque or

payment at the customer's order. These claims on banks can act as money because they are negotiable and/or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the payee may bank or cash.
2. Netting and settlement of payments banks act as both collection and paying

agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economies on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them.
3. Credit intermediation banks borrow and lend back-to-back on their own account

as middle men
4. Credit quality improvement banks lend money to ordinary commercial and

personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and
Axis Bank

deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position.
5. Maturity Transformation banks borrow more on demand debt and short term debt,

but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit quality than most other borrowers, banks can do this by aggregating issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes), maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets).

3.6 Banking channels

Banks offer many different channels to access their banking and other services:
A

branch, banking centre or financial centre is a retail location where a bank or financial institution offers a wide array of face to- face service to its customers.
ATM

is a computerized telecommunications device that provides a financial institution's customers a method of financial transactions in a public space without the need for a human clerk or bank teller. Most banks now have more ATMs than branches, and ATMs are providing a wider range of services to a wider range of users. For example in Hong Kong, most ATMs enable anyone to deposit cash to any customer of the bank's account by feeding in the notes and entering the account number to be credited. Also, most ATMs enable card holders from other banks to get their account balance and withdraw cash, even if the card is issued by a foreign bank.
Mail

is part of the postal system which itself is a system wherein written documents typically enclosed in envelopes, and also small packages containing other matter, are delivered to destinations around the world. This can be used to deposit cheques and to send orders to the bank to pay money to third parties. Banks also normally use mail to deliver periodic account statements to customers.
Telephone

banking is a service provided by a financial institution which allows its customers to perform transactions over the telephone. This normally includes bill payments for bills from major billers (e.g. for electricity).
Online

banking is a term used for performing transactions, payments etc. over the Internet through a bank, credit union or building society's secure website.
Mobile

banking is a method of using one's mobile phone to conduct simple banking transactions by remotely linking into a banking network.

Axis Bank

Video

banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a videoconference enabled bank branch

3.7 Types of investment banks

Investment

banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions. Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new Companies

3.8 Mortgage Banking

Mortgage banking deals primarily with originating mortgage loans and servicing them. Read more about it here as well as about what a career in mortgage banking involves. Mortgage banking is meant for a single purpose, to service the real estate finance industry. Mortgage banking deals specifically with originating mortgage loans as well as servicing them. Mortgage banks are state-licensed entities from which consumers can get mortgage loans directly. Usually, mortgage banks avail funds from the Federal National Mortgage Association, or FNMA, also known as Fannie Mae, the Federal Home Loan Mortgage Corporation, or FHLMC, also known as Freddie Mac, or any other large companies that service mortgages, which are related to the secondary mortgage market. Here are a few pointers about the nitty-gritty of mortgage banking. Mortgage Banks Specialize in Mortgage Loans: Unlike a savings bank that is federally chartered, in general mortgage banks specialize in only providing mortgage loans. Hence, customers do not deposit their money in these banks. As has been mentioned above, the secondary wholesale market is their primary source of funds. Freddie Mac and Fannie Mae are examples of the lenders in the secondary market. Mortgage Banks Differ in Size: While some mortgage banks can be nationwide, others can originate a volume of loan that can exceed that of a commercial bank that is nationwide. Many of these mortgage banks utilize specialty servicers like Real Time Resolutions to carry out tasks like fraud detection work and repurchase. Mortgage Banks have Two Sources of Revenue: The two main sources of income are from loan servicing fees (if they are into loan sevicing0, and fees from loan origination. Mortgage bankers, by and large, are choosing not to service the loans they
Axis Bank

have originated. That is because they are entitled to earn a service-released premium by selling them soon after the mortgage loans are closed and funded. The investor in the secondary market that purchases the loan has the ability of earning revenue for providing servicing of the loan ever month the borrower keeps the loan.

Different Banking Laws Apply to Mortgage Banks: Mortgage banks usually operate under banking laws that are quite different, according to the state they operate in. You will need to check each individual states financial department or state banking in order to get list of mortgage bankers in each state. While federal laws apply to the operation of a federal bank, in terms of consumer protection, usually consumers have additional rights, which are applicable according to each state. Mortgage Bankers can be More Competitive: Since they only specialize in lending and do not have to subsidize any of the losses that other departments may have incurred, as in regular banking, mortgage bankers have the ability of being really competitive when lending for mortgage. However, they usually do not have the advantage of accessing adjustable rate mortgages that are low cost, which federal banks are typically associated with, and federal money access. A Career in Mortgage Banking: Professionals in mortgage banking in the job market today need to have a college degree in business or finance, or some specific experience or training related to the field. Skills in good customer service, an inherent ability with numbers, and computer skills are also essential requirements for mortgage banking jobs. A mortgage banking professionals job involves reviewing credit scores, determining the kind of loan that is most beneficial for the customer and guiding them
Axis Bank

through the process of application as well as closing. The loan officer has to be very organized and detail oriented, and need to be able to handle the large amounts of paperwork and reporting that are required for getting loans approved, up to the closing. A mortgage banking professional also has to have thorough know-how about the regulations associated with federal mortgage as well as the various types.

3.9 KYC (KNOW YOUR CUSTOMER)

As per KYC guideline the RBI has advised banks to follow KYC guidelines of RBI mandates banks to collect three proofs from their customers they are (1) Photograph (2) Proof of Identity (3) Proof of address

Accordingly, Axis bank has framed its KYC procedure according to which, a photograph and documentary proof of personal identification and address proof are required t be provided. The account Opening form Provides the nature of documents required / procedure to be followed for opening a new account. You may also log in to our website www.axisbank.com for such information which is displayed product wise.

Axis Bank

CHAPTER 4 TRAINING CONCEPT

4.1 SAVING ACCOUNT INFORMATION
Definition: A deposit account at a bank or savings and loan which pays interest, but cannot be withdrawn by check writing.

Types of Saving Account in Axis Banking

Savings Account At Axis Bank it has been constant endeavor to create products specifically catering to your needs. The account while offering a whole range of services also addresses your latent need of having an account with maintaining an average quarterly balance. Features: - 1. Average Quarterly Balance requirement minimum Rs 5,000 2. International Debit Card with an Accidental Insurance cover up to Rs 2 lakhs* (charges for the primary holder) 3. Free mobile banking facility 4. Access through more than 1281 branches and more than 6270 ATMs 5. At-Par cheque facility with the clearing limit of Rs 50,000 6. 24x7 Tele Banking & Internet banking 7. Free quarterly statements 8. Free monthly e-statement Conditions Apply:1. Initial funding of Rs. 5,200. 2. Account maintenance fee of Rs. 750 per annum Krishi Savings Account (Kheti Ho Khushahali ki) Axis Bank offers a unique savings account which is easy to operate and allows you to transact immediately. This product has been specially designed keeping in mind the unique requirements of a farmer and true to its nature has been called the Krishi Savings Account. Some of the features of our new product are: Average Balance Requirement: This account is offered with the requirement of maintaining the half-yearly average balance of Rs 1000 only.
Axis Bank

International Master Debit Card The Krishi Savings Account entitles you to an International Master Debit Card with which you can access your account anytime through the Axis Bank ATM network free of cost. This card comes with a cash withdrawal limit of Rs 25,000 per day. Free Accident Insurance cover of Rs 2 lakhs. Anywhere Banking Being a Krishi account holder, you are entitled to access our wide network of more than 1000 branches and 4055 ATMs across 440 cities. You can now easily carry out your transactions through any of the branches or ATMs. At Par Cheque Book Your Krishi Savings Account comes with the At-Par Cheque facility. This facility enables you to encash the cheques as local instruments at any of the 440 centers where the Bank has its presence, at no extra cost. Moreover, you can also issue cheques at other centers up to the limit of Rs 50,000. Easy Access Savings Account (Banking made easy) A: Accessibility C :Convenience C :Comfort E :Earnings S :Speed S :Service Want a savings account that transcends geographical boundaries? Presenting, Axis Bank's Easy Access Savings Account. The account is an endeavor by the Bank to understand the consumers' needs and redefine banking to suit your requirements for a truly comfortable banking experience. Easy Access Savings Account gives you instant access to your money anywhere, anytime. Possessing a range of unmatched features, it has been devised to better suit the convenience of our eclectic client base. You can avail of all these services with a minimum quarterly average balance of Rs. 5,000 in metro or urban centers, Rs. 2,500 in semi urban centers and Rs. 1,000 in rural centers. At-par cheque ATM Network Anywhere Banking Tele Banking iConnect Mobile Banking Quarterly account statement Quarterly interest @ 4 % per annum Free Monthly E-statement.
Axis Bank

 Corporate Salary Account: Our Corporate Salary Power Offering is designed to offer payroll solutions through in a 24 X 7 environment. We leverage on our extensive network of distribution channels spread across 5000 centers through a network of more than 1281 branches and 6270 ATMs besides our superior service delivery model and product features, as a strong differentiator, to provide value to the end user. Benefit to Employers: Efficient salary disbursal Web Upload Transfer salaries/reimbursements directly from your current account with Axis Bank to your employee's accounts using I Connect from your office. Single-instruction salary credit - Same day salary credits for all companies having Corporate Account with Axis Bank. Dedicated Relationship Manager at metro locations to understand the financial requirements of your employees. Benefit to Employees: No minimum balance criteria. Unparalleled Access - Anywhere banking facility through our network of Branches, ATM and Internet banking facility. AT Par cheque books payable locally at all Axis Bank locations. International Debit cum ATM cards with enhanced Cash withdrawal facility and other value add-ons. Online banking with funds transfer, online shopping and bill payment options. Depository services with free online trading accounts. Meal Cards on a master card platform. Employee Reimbursement accounts as a savings account variant. Preferential pricing on loan products and credit cards and other banking products & services.

Prime Savings Account: Want a customized savings account to suit your specific financial requirements? At Axis Bank, we have always strived to pace our products with the growing needs of our customers. The Prime Savings account has therefore been created with your specific financial requirements in mind. Through the 'At Par' cheque facility, you have the unique advantage to encash your cheques as a local cheque at more than 330 centers where the bank has a presence at no extra cost. In addition the account enables you to issue cheques up to Rs. 1 lakh, which will be treated as 'At Par' across these locations. You can avail of all these services with a minimum average balance of Rs 25,000 in metro/urban/semi-urban centers and Rs 10,000 in rural centers.

Axis Bank

 Womens Saving Account :( for the woman of today) In today's busy world it's tough being a working woman. Right from shuttling between a job and family to taking care of her finances she has to be on her toes all the time. Keeping this in mind, we at Axis Bank have designed a savings account best suited for the woman of today. With the Womens Saving Account, you can manage your money and your life and as well as enjoy a host of lifestyle privileges. Furthermore Axis Bank's Smart Privilege Account ensures that you have enough time for all the important things in life. Senior Privilege (Because life begins at sixty) Presenting, Axis Bank's Senior citizen Savings Account. The account is an endeavor by the Bank to understand the consumers' needs and redefine banking to suit your requirements for a truly comfortable banking experience. Senior citizen Savings Account gives you instant access to your money anywhere, anytime. Axis Bank's Senior Citizen Savings Account has been designed keeping in mind the fact that a Senior citizen's banking requirements are wholly different and require special consideration. A free senior citizen card is given to the customer.

Special Privilege (A Privilege assures the care you deserve): We have introduced Senior Citizen ID card for our Senior Privilege patrons. Let us briefly introduce the wide range of advantages it hold for you. Avail of Great benefits with Senior Citizen ID card ID card acts as an age proof. Enabling you to redeem every advantage that you are eligible for, this card will soon help you avail of certain never-before Senior-citizen benefits at various stores, service providers and installation across the nation. Feel safe Everywhere Apart from provide you with the power to claim great benefits, card also act as emergency information medium. In case of emergencies, it provides the doctors and authorities with vital data like your blood group, allergies, illnesses, address and emergency contact details. This ensures that you are well looked after in any situation, no matter where you are. Always a Privilege It will help in strengthen the bond with us and to be of assistance to you at all the times, no matter what your need be. Whether its loan, a savings account or any financial services that you wish to avail of, we will make sure that we're always be there by your side.

Axis Bank

 Power Salute (Salute to the defense forces) Are you looking for an account that fits with your life in the Defence Forces? Defense Salary Account from Axis Bank is a product designed keeping in mind how tough a life in the Defense Forces is. Not only does it come to you absolutely free, no minimum balance is required either. You can also access the entire Axis Bank network, including more than 4055 ATMs and 896 branch offices (and growing) no matter where you are posted. With the complete gamut of banking services (including overdrafts, loans and zero-balance requirements) you can now rest assured about your family and all their financial needs. It's our way of showing our appreciation to your work. Banking Privileges: At-par Cheque Facility: Your job involves constant transfers across the country. With the at-par cheque facility it will no longer be necessary to set up new bank accounts with each transfer. Additional Debit Card: Along with a free International Debit Card, you also get a free card for the joint account holder. This means that your child or spouse also enjoy the same benefits of banking with Axis Bank. Financial Advisory Services: Our solutions answer to the twin goals of meeting your requirements and to diversify and spread the risk of your investment portfolio, so you can look forward to a comfortable and worry-free life. We first understand your exact investment needs and then design the perfect investment plan for you.

Trust/NGO Savings Account: Thoughtful banking for people who spend their lives thinking of others Need special banking for special causes? Axis Bank's Trust Account is an effort to offer thoughtful banking for people who spend their lives thinking of others. It is a complete banking solution for Trusts, Associations, Societies, Government Bodies, Section 25 companies and NGOs, so that the organizations can devote all of their time to their noble motivations. Features: A Savings Account for your Trust with a concessional Average Quarterly Balance. A multi-city at-par cheque facility with no limit on clearing payments at centers across the country wherever we are present.
Axis Bank

Free anywhere banking across all our Branches and Extension Counters and over all our ATMs. Free Demand Drafts or Pay Orders as and when required by you to remit funds. Free collection of cheques at outstations locations Free monthly e-statement. Monthly Statement of Account delivered at your doorstep. Facility for collecting donations in your account through our network of Branches and extension counters across the country, as well as through iConnect - our Internet Banking facility. Also, Axis Bank can offer the facility to donate funds to your Trust through our Internet Banking facility iConnect to its customers. An Axis Bank customer can donate any amount to your Trust through the Internet. In such cases, the savings account of the customer gets debited and the savings account of your Trust gets credited with the amount of donation at the same time. At the end of every month, the Bank will provide an MIS giving details of the amount of donations and the name of donor. This will enable the Trust to issue receipts to the donors. Free Internet Banking facility that enables you to view the status of your account, transfer funds and carry out a number of banking activities from the comfort of your home or office.

Investment Advice: Our Financial Advisory Desk will provide portfolio management advice as well as help you undertake investments. Free Demat: To facilitate your investments, we offer a free Demat Account (charges due to NSDL must still be levied) to our esteemed account holders in the Trust or Society segment. Foreign Contribution (Regulation) Act [FCRA] accounts: The FCRA account enables approved organizations to receive foreign contributions for utilization in their activities in India. The Bank will provide assistance in the process of documentation and obtaining necessary approvals from Ministry of Home Affairs at New Delhi.

4.2 CURRENT ACCOUNT INFORMATION

CHANNEL ONE (FOR SUCCESSFUL BUSINESSES): The Channel One Current Account is an effort in that direction where we take care of your day to day banking requirements leaving you with more time for your business. Channel One Current Account is most appropriate choice of successful businesses. At a Monthly Average Balance (MAB) of Rs.10000. FEATURES: 1. Relationship Manager 2. Doorstep Banking 3. Anywhere Banking
Axis Bank

4. Free Internet Banking 5. Free 24 hour Tele Banking 6. Mobile Banking Service 7. International debit card 8. Cheque Protection Facility 9. Free 24 hour cheque deposit facility 10. Payment of Government Taxes/ Dues 11. Foreign exchange services. ZERO Hassle Balance: Small businesses rising on the growth graph need the right of nurturing and appropriate solution for their growing banking requirements. Recognizing these needs, Axis Bank present you the Local Current Account geared to answer all kinds of local business requirements. At a Monthly Average Balance (MAB) of Rs. Nil. Features: 1. Zero Balance facility 2. 75 free transactions every month 3. Rebate on Annual Charges 4. Upfront Annual Fee 5. Mobile Banking 6. ATM cum International Debit Card 7. Free Internet Banking 8. Tele Banking 9. Free Monthly Account Statement BUILDERS AND REAL ESTATE: Axis Bank understands the increasing demands on businesses in this segment .Heres presenting the Axis Bank Builder & Real Estate Current Account a current account with unparalleled product features built to suit Builders & Realtors exclusively. This account offers you unmatched convenience while adding financial value to your businesses spread over geographies. . At a monthly Average Balance (MAB) of Rs. 5 Lacs this account comes loaded with special facilities and benefits, most appropriate for your business. Features: 1. Home Branch Cash Deposit 2. Non Home Branch Cash Withdrawal 3. Free Anywhere Banking 4. Cluster facility 5. Zero Balance account for Vendors and Suppliers 6. Franking Facility 7. Customer cheque printing 8. Internet Banking 9. Free 24-hour Phone banking
Axis Bank

10. Mobile Alerts 11. ATM cum Debit Card 12. Free Monthly Account Statement

Axis Bank

4.3 Training in Wholesale Banking Operations

CORPORATES Corporate Banking reflects Axis Bank's strengths in providing our corporate clients in India, a wide array of commercial, transactional and electronic banking products. We achieve this through innovative product development and a well-integrated approach to relationship management. Funded Services: Working Capital Finance, Bill Discounting, Export Credit, Short Term Finance, Structured Finance, Term Lending Non Funded Services: Letter of Credit, Collection of Documents, Bank Guarantees Value Added Services: Syndication Services , Real Time Gross Settlement, Cash Management Services, Corporate Salary Accounts, Reimbursement Account, Bankers to Right/Public Issue, Forex Desk, Money Market Desk, Derivatives Desk, Employees Trusts, Cash Surplus Corporates, Tax Collection Internet Banking: Supply Chain Management, Corporate Internet Banking, Payment Gateway Services SMALL AND MEDIUM ENTERPRISES: At Axis Bank we understand how much of hard work goes into establishing a successful SME. We also understand that your business is anything but "small" and as demanding as ever. And as your business expands and enters new territories and markets, you need to keep pace with the growing requests that come in, which may lead to purchasing new, or updating existing plant and equipment, or employing new staff to cope with the demand. That's why we at Axis Bank have assembled products, services, resources and expert advice to help ensure that your business excels. Solutions are designed to meet your varying needs. The following links will help you identify your individual needs. Funded Services: Funded Services from Axis Bank are meant to directly bolster the day-to-day working of a small and a medium business enterprise. From working capital finance to credit substitutes; from export credit to construction equipment loan - we cater to virtually every business requirement of an SME. Click on the services below that best define your needs Non-Funded Services: Under Non-Funded services Axis Bank offers solutions that act as a catalyst to propel your business. Imagine a situation where you have a letter of credit and need finance against the same or you have a tender and you need to equip yourself with a guarantee in order to go ahead. This is exactly where we can help you so that you don't face any roadblocks when it comes to your business. The following are the services that will precisely tell you what we can do Business Accounts, Letters of Credit, Collection of Documents, Axis Bank Trade, Guarantees, Cash Management Services, Money Market Desk, Derivatives Desk, Services to Cash Surplus Corporate, Services to Employee Trusts, Bankers to Rights/Public Issue, Tax Collection.
Axis Bank

Specialized Services: Axis Bank is one of the most trusted entities when it comes to specialized services like selling of precious metals to customers. Under specialized services you can also avail customized control of your value chain through our internet banking platform. Value Added Services: There is a plethora of services that we offer under value added services. There's corporate salary account which ensures smooth payment methods to your staff. You can avail an assortment of credit cards and debit cards from our merchant services. The following are the highlights of this service: Real Time Gross Settlement, Reimbursement Account, Custody Services, Corporate Salary Accounts, Merchant Services, Axis Bank Gold Business Credit Card Internet Banking: Internet banking is a revolutionary service under the banking sector and Axis Bank is a forerunner in providing you with this service. We provide state-ofthe-art payment gateway services to industries and companies in order to ease transaction processing. This in turn enhances the credibility of your business and makes banking extremely cost-efficient. GOVERNMENT SECTOR: Axis Bank acts as an active medium between the government and the customers by means of various services. These services include: Tax Collection wherein customers can directly pay their taxes like Direct taxes, Indirect taxes and Sales Tax collections at their local Axis Bank E-Ticketing - Helps the customer by providing him a direct access to book a Railway Ticket online and get it home delivered Opening of L/C's is done by the bank on behalf of Government of India, Mints and Presses, thus facilitating imports for the Government. Collection of levies and taxes on behalf of Municipal Corporations i.e. Kalyan Dombivli Municipal Corporation, is undertaken by the Bank. Collection of stamp duty is done via franking mode in the states of Maharashtra & Gujarat. The Stamp Duty, Franking Facility is available at following branches in Maharashtra Fort, Chembur, Lower Parel, Mira Road, Borivali, Thane (Talao Pali), Panvel, Ratnagiri, Pune (FC Road), Kolhapur, Nagpur, Pimpri. The Stamp Duty Franking Facility is available at following branches in Gujarat Ahmedabad (Navrangpura), Kutch (Mundra), Baroda (Gotri Road), Surat (Ring Road), Bhavnagar & Vapi (GIDC).
Disbursement of Pension to retired Employees of Central Govt and Defence is

directly done by Axis Bank along with the disbursement of pension to the members of EPFO (Employees Provident Fund Organization) Electronic Collection of fees on behalf of DGFT is done by the bank too
Axis Bank

Ministry of Corporate Affairs - Collection of ROC fees for the Ministry through

authorized Branches and Net Banking. Collection of Property Tax through Selected Branches on behalf of Municipal Corporation of Delhi

4.4 Training on Clearing of Cheques

Introduction Although Cheques are less popular now than in the 1990s, they are still used by many thousands of businesses every day to settle payments; as well as by many thousands of the public to buy goods and services. While over 99% of cheques clear successfully, there are still over 30,000 which bounce every single day. Each bounced cheque you receive costs you money, as well as creating a gap and uncertainty in your cash flow. If you keep getting bounced cheques, it could also point to flaws in your credit policy and credit control. The group set up to manage cheque handling is called APACS, and they provide information on the clearance systems; which we have summarized for you below. You can use this to help ensure that you give cheques the appropriate amount of time to clear. Day One The cheque is paid into the bank, and is usually processed by the bank that evening. At the collecting banks clearance centre the cheque information is passed through a secure electronic exchange to the paying banks clearance centre. Day Two The cheque is delivered to an exchange centre, where each banks delivers cheques they have received, and collects cheques drawn from their accounts.

Axis Bank

Day Three In the morning, bank staff review the cheques presented for payment and decide whether to pay them or return them. Before the end of the day each bank settles the amounts that they owe each other for the total value of cheques. Bounces Cheques that are not honoured (bounced) are sent back to the bank by first class post on the third (sometimes the fourth) day. This means that the earliest a bank will know about a bounced cheque is day 4. If there are postal delays this could be even longer; although bounced cheques over Rs 360/- will be notified to the collecting bank before 12pm on the fourth day. Be aware that in the event of fraud or deception, a cheque can be withdrawn at almost any time even if it has passed the normal clearing system. Access The amount of time it takes for you to be able to access the money from a cheque varies according to the bank or institution. Most will be 4-5 days, once they know it has probably cleared the system; but some may offer quicker withdrawal terms to reliable customers. There are also two other forms of cheque payment that you may wish to consider, details of these are as follows: Bankers Drafts Bankers Drafts are similar to cheques, except that the amount is debited from the account before the draft is issued; meaning it is certain to be paid. Drafts go through the clearing system in the same way as normal cheques. They provide better security as they are very unlikely to be returned (as the money has already been deducted from the paying account). However, bankers drafts are not risk free; they still carry the same risk of being lost, stolen, or used fraudulently. If this happens, a draft will be rejected in exactly the same way as a cheque.

Axis Bank

Special Clearance A special clearance is where the bank sends the cheque directly to the paying bank, and they are contacted on the following day to confirm that it will be paid. You are likely to receive payment at about the same time, but you can be sure that the money will not be withdrawn afterwards. As with other cheques, if found to be fraudulent or stolen; special clearance cheques can still be rejected even after they have cleared. Recent banking changes may have changed timings check with your bank.

Clearing Timings The Cheque Truncation System is capable of supporting different types of clearing. Each type of clearing will have a separate clearing window known as clearing session. Initially there will be two presentation clearing sessions and two corresponding return clearing sessions per day. The clearing timings for these sessions are as follows: Weekdays Saturdays Clearing Session Presentation Clearing Session-I Presentation Clearing Session-II 09.30 to 11.00 hrs 11.00 to 15.30 hrs Timings 09.30 to 10.00 hrs 10.00 to 13.30 hrs

Chapter A Presentation Clearing Procedure at the Presenting Branch a.1 Preliminary Verification As the payment processing is done on the basis of images, the onus of due diligence shifts to the Presenting Bank, as provided under explanation II to Section 131 of Negotiable Instruments Act. The member banks have to enforce KYC (Know Your Customer) norms in letter and spirit. The banks should observe all precautions which a prudent banker does under normal circumstances, e.g., to check the apparent tenor of the instrument, physical feel of the instrument, any tampering visible to the naked eye with reasonable care, etc. For enhanced attention, based on exceptions, the banks may employ suitable risk management techniques like scrutiny of high value transactions, limit based checking by officials, new accounts alerts, etc. The presenting bank takes
Axis Bank

full responsibility for collecting on behalf of the intended payee and exercises due diligence as per the conditions laid down in the amended Negotiable Instruments Act. a.2 Sorting of Instruments Drawn on self or On-Us instruments should be settled internally. The CHIs are configured to reject On-Us items. However, certain CHIs handling indirect members and sub-members may be allowed On-Us items. Apart from segregating drawn on self cheques, the banks should also segregate instruments which are being re-presented (primarily for adjusting endorsement at the back of the instrument (Refer to a.9, b.3), as also the instruments which are required to be sent physically to the drawee banks (Paper to Follow - Refer to a.24), as these categories of instruments would require separate process of handling by the bank. a.3 Crossing All cheques received for collection over the banks counters are required to be branded with the banks special crossing stamp prior to scanning. The suggested dimension and the position of the Special Crossing Stamp are given in Annexure II. Banks should take care so as not to interfere with any material portion of the cheque, and the drawee banks are able to process their inwards without any undue problem on this account.

a.4 Capture of Images and Data The images of all the instruments in a batch / file must be duly captured along with MICR data using scanners set up for the purpose. The amount needs to be captured/ keyed in to complete the data record. The ideal number of instruments in one capture file should be about 200 for easier balancing. a.5 Reject Repair and Balancing The banks should have proper systems and procedures in place to ensure that the rejects of the MICR line are appropriately repaired and the batch file is balanced before the same is uploaded from the capture system to the CHI. Banks are required to pass on the value in the MICR repair tag for any correction / changes / rejects on the MICR band of the cheques in the capture files. a.6 Endorsement At the time of scanning the instruments, the reader sorter / scanner will print a single line endorsement on the back of each instrument which shall be the unique identifier for the instrument. It shall consist of Presentment Date of the item (8 digit) in DDMMYYYY format, the Clearing Type (2 digit), Item Sequence Number (14 digit consisting of Sorter ID 6 digit, Run Number 2 digit, Sequence Number 6 digit), MICR Code of the Branch of First Deposit (9 digit) and IFSC Code of the Presenting Branch (11 digit) of the
Axis Bank

Presenting CHI. It is optional for the bank to use the MICR and IFSC code of the presenting branch or branch where truncation is done; however in case instruments belonging to another bank is scanned for presentation in the clearing (who is participating as an indirect member), the MICR / IFSC code of the Branch of First Deposit (i.e., indirect member) should be used. a.7 The printing of the endorsement implies that the collecting bank undertakes to credit the payees account on realisation of the cheque and that the instrument deposited is a genuine one and is being collected for a bonafide customer of the bank. a.8 As regards the confirmation / certification of endorsements, the attention of the member banks is invited to the provisions of URRBCH providing that the clearing stamp affixed would be considered as the collecting banks confirmation of all the previous endorsements and that it undertakes to credit the beneficiaries account on realization and no additional / specific endorsement / certificate of confirmation to this effect on the instrument is considered necessary. a.9 Represented Cheques In the case of represented instruments (i.e. after having been returned once), the endorsement will be made in a different position to avoid overlapping. Stickers may be used to cover the previous endorsement to avoid smudging. The capture systems should have control procedure to monitor such representations, as a fraud prevention measure. The first/ original presenting bank has to cancel the earlier stamps by marking All our Stamps Cancelled. a.10 Validations The data captured by the banks capture system should be validated using the CHM generated by the CHI to avoid rejection at the CHI. a.11 Government Cheque Validation The capture system must detect the special case for Government Cheque account numbers as detailed in the Clearing House Interface Specification document. The special cases are: 7 digit account number and a 3 digit transaction code 6 digit account number and transaction code in the range 20-27 and 49. a.12 Capture shall ensure appropriate doctype i.e., Paper to Follow is attached to such instruments and arrangements are made to deliver it to the drawee bank / branch as per the Clearing House rules.

a.13 Master Table Synchronization

Axis Bank

The master table information, such as sort codes, transaction codes, branch codes, bank codes, city codes, calendar, and designated branches, etc., of the capture system should be synchronized with that of Clearing House Master Table. Any changes in the clearing house table shall get automatically updated on the online CHIs, and it shall be the banks responsibility to update its capture system immediately. CHI supervisors should monitor whether the CH Table has been updated successfully or not. Any error related to CH Table updates is reflected in the system monitor screen of the CHIs. It will be the responsibility of the offline CHIs (CHIs which are not connected to CH over network) to ascertain any updating in the Master Tables, before the commencement of any session. Offline CHIs may have to approach the Clearing House for any updates. a.14 Image Quality Checking The banks need to perform IQA validations at the capture system. Each image shall have an IQA indicator tag indicating the outcome of the IQA test carried out by the capture system. The threshold values for different IQA parameters shall be intimated to the banks by the Clearing House from time to time. The banks should take care to synchronize the IQA parameters at the capture system, to avoid excessive rejection at the CHI. a.15 Handing IQA Failure Instruments that fail IQA test may be rescanned. Instruments (images) which do not pass the IQA test need to be handled through Paper to Follow model, with IQA indicator flag off. (Refer a.24 on Paper to Follow) However, this option should be used only in extreme circumstances when it is not possible to meet the IQA standards by rescanning and not as a matter of routine. The IQA Fail & IQA Pass report is made by CHI as a daily report. The capture system of the bank may also generate an IQA report for its enhanced control. The President of the Clearing House retains the right to define threshold limits on items failing IQA, and invoke penal provisions for its violations. a.16 Use of PKI The banks are required to apply digital signatures to individual images and MICR data at the point of capture. They should also ensure that the digital signatures used for the processing activity has unexpired life of at least one month. a.17 Transmission of Image / Data The capture system will transmit the MICR data and images of the cheques to its Clearing House Interface electronically and/or on the media. Banks may have procedures in place to optimize bandwidth and ensure that the branches upload their presentation in over a period of time rather than sending all the images and data relating to the days clearing of the branch at the end of the day or at a given point of time.
Axis Bank

a.18 Service Bureau In case the services of a Service Bureau are utilized for capturing images and MICR data by any bank / branch, there would be appropriate controls and agreement between the concerned Service Bureau and the concerned bank/s. The scope of the services undertaken by the Service Bureau would have to be agreed upon between the bank and the Service Bureau by way of a contract. The internal security including the digital signatures is left to the agreement between the Service Bureau and the banks while that used for transmission of the file/s from the CHI to the CH shall follow the prescribed standards as per the Clearing House Interface Specifications document. a.19 Return Processing Presenting bank CHI shall receive the return exchange file/s for each return session containing the returns on the presentation lodged by them. As per system design, a return session may not necessarily have a direct one-to-one corresponding relationship to any particular presentation session. An item may be returned as long as its clearing length has not expired, and a session is available for the particular clearing type. The return file shall contain the item detail and return reason code. It shall be the responsibility of the presenting bank to generate the return memo from the information in the return file. a.20 Post Return Clearing After completion of the return settlement, the passed / paid instruments are required to be branded CLEARED boldly on the face of the instrument. The stamping / branding in the bottom middle portion of the instrument (above the MICR line) should be done in such a way that no material part of the cheque is affected in order to ensure that the material portions of the cheque are appropriately preserved for any future use. a.21 Storage of Physical Instruments The presenting banks need to put in place arrangements to physically archive the cleared instruments for ready retrieval, whenever required at a later date. The physical instruments must be stored for the required statutory period a.22 Posting of Transaction / Crediting Customers Account The banks should pass debit/ credit to their customers on the Value Date of the transaction (the date on which the settlement is posted in the settlement banks account). However, permitting the customers to utilize the proceeds would be subject to internal rules of the presenting banks. As mentioned in a.19 above, in CTS, the return sessions need not correspond to any particular presentation session. The drawee bank may return an item provided the
Axis Bank

clearing length for the item has not expired and there exists an appropriate return session for returning the item. Before releasing the credit to the customer, the presenting bank should ensure that either the clearing length of the item has expired or there is no appropriate return session available to the drawee bank to return it, within the clearing length of the item, (For clarifications on clearing length please refer to section b.5). a.23 Extension Handling The Cheque Truncation System supports extension requests for bank/branch. The clearing length of the item/s, for which extension has been given, increases by extension hours. Such items can be returned in any of the return session, supporting the same clearing type, within the extended period. (Refer d.8 for extension handling). The CHI of the presenting bank shall receive inward extension exchange file/s containing list of items for which extension has been given to the drawee banks, the reason code and the extension hours. CHI in turn will generate extension files for use of the capture system. It is the responsibility of banks capture system to track those items for further processing/ action.

a.24 Paper to Follow The banks would be required to send paper along with the scanned images in the following situations: (a) Government Cheques (a.11 & a.12) (b) IQA Failure (a.15) (c) When the instrument has been returned by the drawee bank with reason code 39 (Image not clear, present again with paper) or reason code 40 (Present with document) (Refer to d.9 for details) The physical instruments, along with separate bank wise lists, should be dropped in the respective drawee banks receptacles at the clearing house, within half an hour after the close of session. (Refer to Annexure-V for details on the Clearing Session timings and exchange of Paper to Follow items.) a.25 A record of instruments transmitted with paper to follow model shall be maintained by both the banks, in order to have appropriate control over the movement of paper instruments. As per the provisions of the N.I.Act, the drawee bank shall retain and preserve the physical instrument after making the payment thereof.

Axis Bank

a.26 Internal Control The banks should document the process flow and ensure that the adequate control mechanisms are in place. Special care and adequate physical checks should be taken during rescanning of instruments and representation of instruments. The banks must have a mechanism to generate internal control reports at the end of the session/ day to effectively reconcile the presentation made it and the credit received by it from the CH. In case of any discrepancy, the same should be sorted out immediately. The service branches of the banks following distributed outward model may keep the branch clearing control reports for verification of actual credit received from the Clearing House.

Chapter B Processing at Clearing House Interface Outward Clearing b.1 Clearing House Interface (CHI) The CTS Clearing House Interface (CHI) provides connectivity between the capture / drawee bank systems of a Bank on the one hand and to the RBI Clearing House (CH) on the other. It provides a gateway for transmission of data and images. It does the required validations to ensure that the data entering the CH from the banks capture system is free of operational errors. b.2 Receiving Outward Presentment CHI will receive the duly balanced outward clearing cxf files (containing MICR data) and cibf files (containing images) from the capture system of the bank. b.3 Image Quality Analysis and Failure Handling The incoming images are subjected to IQA validations. The images which fail IQA validations are rejected with an appropriate response file. The bank may rescan the instrument and present under the same UDK (Unique Document Key) or a changed/ different UDK depending upon banks internal processes/ control procedures. The member banks have to maintain control over such re-presentments. b.4 Item Processing The CXF and CIBF files presented by the capture system are validated by the CHI against the file and item level validations indicated in the CHI Specifications, as released by the Clearing House from time to time. The CHI after validations generates response files which contain information related to acceptance or rejection of each file and the items present in each file with appropriate reason codes. Sometimes there may be multiple response files for a CXF and CIBF file. It is the responsibility of the capture system to take these response files and take appropriate actions.
Axis Bank

The CHI then sorts the MICR data and their related images into bundles as per drawee bank and bundle collection type and creates exchange files internally and validates these bundles against the session window to which they will be attached at the CH. CHI before attaching the items to the session, signs MICR data as well as image views. It also signs and encrypts the exchange files before transmission to CH.

b.5 Clearing Length The clearing length of a session is calculated from the close receiving time defined for a presentment session irrespective of when the session is actually closed. The clearing length of the item is dependent on the bundle collection type, and other factor like holidays, extension granted to the drawee bank / branch, general extension granted to a session, extension resulting from blockage and any other activity by Clearing House. b.6 Establishment of Session The session information is configured in the Master Tables. The scheduled sessions for the day are displayed on the Session Monitor Screen at the CHI. However, in case of version mismatch of CHT (at CH and CHI), exchange files cannot be uploaded to CH and the same would be rejected. In that case the CHI operator shall update the Clearing House Table of CHI, unbuild the exchange files and then revalidate the items for onward processing. b.7 Session Attachment The items are assigned to an appropriate clearing session that is open based on parameters fixed for a session by the CH. These parameters are passed on to the capture system through the CHI. The item inherits session date that is the business date of the session. If there is no appropriate session that is open, the items/ bundles wait at the CHI until such a session opens. A validation of the items Presentment Date versus the items Session Date is performed and items that exceed a prescribed limit (7 working days) shall be rejected by the Clearing House. The Clearing House shall from time to time prescribe this parameter. CHI will build exchange files for the MICR data and the cheque images for onward transmission to Clearing House. b.8 Transmission of Files to Clearing House Each exchange file is digitally signed and encrypted before it is transmitted to the CH. b.9 Banks should plan transmission of their outward presentation by taking into account presentation volume, the bandwidth of network with the Clearing House, and the session window. Invariably, the time demarcation at the CHI shall be in synchronization with the CH in order to avoid the rejection of clearing files by the CH due to closure of a session. However, it may sometimes happen that a bundle/ exchange file, after being
Axis Bank

transmitted within a session time, gets delayed in transit due to unforeseen circumstances like network congestion, etc., and is not able to reach the CH system before close of the session. In such a situation, the CHI will need to unbuild the exchange file, and reattach to a new session. It shall be the responsibility of the Presenting Bank to verify and ensure that all the items presented / transmitted by it have been included in the settlement and reconcile the total credits with the presentation made by it. b.10 Use of PKI The PKI standards used are in accordance with the appropriate Indian Acts and practices of IDRBT, which is the certifying authority for banks and financial institutions in India. There will be two different certificates one for encryption and one for signing. The standards defined for the PKI are as follows: hash algorithm SHA-1 padding algorithm pkcs#1 RSA asymmetric encryption with 1024 bit key length Triple DES (3DES, TDES) symmetric encryption with 168 bit key length Certificates in x.509v3 format It shall be the responsibility of bank to monitor the expiry period of digital certificates used by the CHI. They shall initiate action for renewal of digital certificates at least one month prior to expiry date of digital certificates as indicated in a.16. b.11 Downloading the CRL CH shall download the Certificate Revocation List from the certifying authority i.e., IDRBT on a regular basis. CH shall in turn update the Working Certificate Store which contains all the certificate related information and distribute among the CHIs. b.12 Media Based Transmission of Exchange Files: In the event of a network failure or in case of an offline CHI, the application allows for data and image files to be exchanged with the CH using different types of Electronic medium. The same PKI infrastructure that is used during network transmission is used to create the files for transfer using physical media options. b.13 Regional Holiday and Blockage The NCR jurisdiction falls under different states, and they have different holiday calendar. Blockage function in the system has been designed to handle different state holidays, for a value date. The blockage prevents other banks to present any cheques on the branch / bank put under blockage. In addition, it gives extension to all unexpired items drawn on such branches and banks for the blockage period. The branches / banks under blockage cannot lodge any fresh presentation during the blockage period. Banks seeking to block their branches or the entire bank may request the CH for doing so.

Axis Bank

Alternatively, the banks may themselves put their branches in blockage from CHI. The CHI in turn will send these requests to CH for its approval. The information related to blockage is passed on to other CHIs using the CHT updation. This functionality may also be extended to address other operational situations as deemed necessary by CH. b.14 Reconciliation of Outward Presentation After End of Session at the CH, CHI generates an OACK file containing the details of Items that have been taken up for settlement at the CH. It shall be the responsibility of presenting bank to reconcile their entire presentation by collating the information from OACK file and various response files.

Chapter C Processing at Clearing House Interface - Inward Clearing c.1 Receipt of Inward Data / Images The Inward processing deals with accepting inward presentment data and images from the CH and providing data in the form of files for use within the banks in-clearing (drawee bank) system. The CHI receives digitally signed inward financial data exchange files and image exchange files from the CH. c.2 Validation The CHI shall authenticate and load the exchange file data into the system and send an error exchange file to the CH if the inward financial data exchange file or image exchange file failed decryption or authentication. The CHI will send an acknowledgement exchange file to the CH if the inward financial data exchange file or image exchange file gets successfully loaded. The CHI will also validate the digital signatures on the MICR and Image Data. c.3 Control Mechanism The Service / Main Branch should verify that all the inward bundles/ items have been received by it to ensure that there has been no data loss in the transmission from Clearing House to the CHI. The CHI supervisor may compare the relevant information available at the Clearing House Processing Monitor and Inward Exchange File Screen for the purpose. The drawee bank would not be able to generate pxf/posting files unless all the inward bundles/ items have been actually received at the CHI. If any files are lost in transmission the bank may request the Clearing House for retransmission of images and data.

Axis Bank

c.4 Generation of Posting File CHI, for each session, shall generate files for interfacing with the banks in-clearing or exception processing system. CHI is capable of creating posting files (both image and data files) for payment processing in one of the following three ways: i. Bank wise for the entire bank ii, Branch wise within each bank iii. Branch and transaction code wise for each branch. The type of posting file drawee bank requires is configurable at CHI. c.5 Posting Files for Designated Branches The drawee bank may designate any particular branch for receiving transactions that do not pertain to any sorted category. Besides drawee bank may also designate any particular branch for different transaction codes. By default, the service branch is considered as a designated branch also for all purposes.

Chapter-D Processing at Branches / Banks In-clearing System d.1 Transmission of Posting Files It will be the responsibility of the drawee bank module to fetch the posting files from CHI and do the payment processing. d.2 Duplication Checking The CH detects duplicate items based on MICR code line on the data for the configured number of days. The duplicate items are indicated in the posting (pxf) files generated by the drawee banks CHI, and it is the responsibility of drawee bank module to have processes in place to take necessary caution/control while processing such items. Additionally, CH also generates a report of duplicate items for each CHI after each session, and is available for CHIs to access the same and download, if required. d.3 Digital Signature Validation CHI shall verify the digital signature of presenting CHI. Where as it has been made mandatory for presenting banks to apply digital signatures at the capture point itself; it is left to the drawee banks to decide whether they want to validate the digital signature coming from capture system of the presenting bank. In case validation of digital signature of presenting bank fails, drawee bank may return such items with appropriate return reason codes. d.4 Payment Processing: The banks shall do the payment processing based on images of the instruments following all the prudent practices.
Axis Bank

d.5 Return Request File It will be the responsibility of the drawee bank in-clearing system to collate all the return items from different branches and create Return Request File/s as per specifications provided in CHI Specification document. The drawee bank in-clearing system shall put such Return Request File/s to CHI for onward transmission to the CH. d.6 Return Processing at CHI CHI shall receive RRF/s from drawee bank system containing all the outgoing returns along with return reason codes (Annexure-III). CHI shall validate the file for file integrity and data integrity. CHI then processes the data and generates exchange file for the CH. (Refer a.19 for details) During return clearing images would not travel. The return clearing is based on the UDK (Unique Document Key). Each exchange file is digitally signed and encrypted before it is transmitted to CH. Physical instruments will have to be returned in case the same have been received by the bank, under Paper to Follow type. d.7 Transmission Discipline CHI shall transmit the Outward Return Exchange Files within the given return window. As there may be a time lag during transmission of a file from CHI to CH, the drawee bank should ensure that the return exchange files reach the Clearing House within the timeframe before the closure of the return session. d.8 Extension Request for Returns A drawee bank can request an extension on the return period for a branch / bank by requesting the Clearing House. The Clearing House, depending upon the situation, may grant extension as per the request. On grant of extension to a bank/branch, the clearing length of all the items drawn on it would increase by extension hours. Extension can be requested/ granted before the cut off time for seeking extension, which is configured for each session (max. extension hours). Extension requested beyond the configured period cannot be accepted. The CH shall provide an extension exchange file to each CHI listing all of its items affected by the extension, along with extension time and reason. (Refer 3.23 for details) d.9 Requests for Paper In terms of Section 64(2) of the Negotiable Instruments Act, where an electronic image of a truncated cheque is presented for payment, the drawee bank is entitled to demand any further information regarding the truncated cheque from the bank holding the truncated cheque in case of any reasonable suspicion about the genuineness of the apparent tenor of instrument, and if the suspicion is that of any fraud, forgery, tampering or destruction of the instrument, it is entitled to further demand the presentment of the

Axis Bank

truncated cheque itself for verification. The cheque so demanded will be retained by the drawee bank if the payment is made accordingly. However, for operational reasons, the banks requiring physical instruments may return the item through the appropriate return clearing with the return reason code- 39 or 40, as the case may be. The presenting banks will re-present such instruments with document type C (Paper to follow). For details on exchange of instruments please refer to section 3.24. d.10 Along with the inward data / image files containing the appropriate flags for paper to follow instruments, a separate report as a part of Branch-wise Clearing Report having details of such instruments, will be received at the drawee bank CHIs. The drawee bank would be entitled to lodge return in the Clearing House, if the instrument in the paper to follow mode has not been delivered within the stipulated time, as mentioned in a.24. In case a Paper to Follow item gets returned due to reason Paper not received, the flag would be removed automatically by the system. However, as mentioned in d.6, physical instruments will have to be returned in case the same have been received by the bank, under Paper to Follow type. d.11 Internal Control While handling the inward clearing, the banks should keep into account the feature/ functionality off duplicate MICR checking, as mentioned in detail in d.2 above. The banks would also need to reconcile/ track the receipt of paper in case of Paper to Follow model, as mentioned in detail in a.24 earlier. In addition to the inward instruments drawn on branches of a bank, the reports generated by the Clearing House would contain the summary position of the total number of instruments and the total value thereof. After the processing of inward clearing, branches should verify the inward clearing figures branch-wise. d.12 Reconciliation of Clearing Differences In CTS Clearing the images and data will be received together in the same envelope and hence the possibility of a bank being debited without receiving an image shall not normally arise. In the case of a bank being debited with the cheque image of another bank (on account of data entry error or so) the same should be returned to the presenting bank with appropriate return reason code. In case of a cheque listed for a value different from the actual value of the cheque (on account of data entry error), the cheque should be passed, if otherwise in order, and debited to the customers account for the actual value of the cheque and difference between the actual amount and listed amount should be sorted out with the presenting bank. An instrument shall not be rejected only for the reason of wrong encoding/ listing of the amount.

Axis Bank

Chapter E Special Processing at Clearing House e.1 Session Extension Under exceptional circumstances, the clearing house may use the session extension feature resulting in extension of the clearing length for that session, under exceptional circumstances, the value date may also be changed i.e., the day on which banks account with settlement bank will be operated. Such extensions shall be passed on to the CHIs along with the posting file and no separate extension files will be generated. e.2 Regional Holiday Regional holiday shall be handled using blockage facility. (Covered in detail in b.13) e.3 Return by CH Under special circumstances, the Clearing House may return items to the presenting bank before the final settlement for the session is generated. Such returns are called pre-settlement returns. There shall be specific return reason code reserved for marking such returns. e.4 Bank Exclusion Under exceptional circumstances, the Clearing House may exclude a bank from settlement. The bank exclusion may be of three types - All, Debit Only, Credit Only. In exclude All, all items presented by and drawn on the bank (for which exclusion is being done) are excluded from the settlement and returned. In Debit Only exclusion, all the items drawn on the bank (for which exclusion is being done) will be excluded from the settlement and returned. In Credit Only exclusion, all the items presented by the bank (for which exclusion is being done) will be excluded from the settlement and returned. Exclusion shall generate RF (Return files) for all the presenting banks with reason code bank excluded by CH. e.5 Different Status of CHI / Bank Suspended: CH shall change the status of a bank from in clearing to suspended under exceptional circumstances like moratorium or unwinding, etc. In such a scenario, the suspended bank shall not be able to participate in any clearing. But banks may return and seek extension on items presented by the suspended bank in the suspended period. Not in Clearing: CH shall put a bank in not clearing mode when a bank does not participate in clearing. Once set as not clearing the bank cannot make or receive any

Axis Bank

presentations during the not clearing period. Other banks also cannot return and seek extension on items presented on/by the bank. e.6 Unwinding The CH shall perform unwinding on a bank under rule 11 of URRBCH. The banks will receive the item details from the CH, listing the items presented by the presenting banks on the (drawee) bank, which has been unwound under rule 11. The banks account will be debited in the settlement banks books for these items.

Annexure I Legal status for Cheque Truncation derives from the amendments that were made to the Negotiable Instruments Act, 1881. The following are the relevant clauses of the amended NI Act Section 6 6. Cheque - A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Explanation I. - For the purposes of this section, the expression (a) a cheque in the electronic form means a cheque which contains the exact mirror image of a paper cheque, and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics signature) and asymmetric crypto system; (b) a truncated cheque means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing. Explanation II - For the purposes of this section, the expression clearing house means the clearing house managed by the Reserve Bank of India or a clearing house recognized as such by the Reserve Bank of India..

Section 64 Amendment of section 64 - Section 64 of the principal Act shall be renumbered as subsection (1) thereof, and after sub-section (1) as so renumbered, the following subsection shall be inserted, namely:(2) Notwithstanding anything contained in section 6, where an electronic image of a truncated cheque is presented for payment, the drawee bank is entitled to demand any further information regarding the truncated cheque from the bank holding the truncated cheque in case of any reasonable suspicion about the genuineness of the apparent tenor of instrument, and if the suspicion is that of any fraud, forgery, tampering or destruction of the instrument, it is entitled to further demand the presentment of the truncated cheque itself for verification:
Axis Bank

Provided that the truncated cheque so demanded by the drawee bank shall be retained by it, if the payment is made accordingly. Section 81 Amendment of section 81 - Section 81 of the principal Act shall be renumbered as subsection (1) thereof, and after sub-section (1) as so renumbered, the following subsections shall be inserted, namely: (2) Where the cheque is an electronic image of a truncated cheque, even after the payment the banker who received the payment shall be entitled to retain the truncated cheque. (3) A certificate issued on the foot of the printout of the electronic image of a truncated cheque by the banker who paid the instrument, shall be prima facie proof of such payment. Section 89 Amendment of section 89 - Section 89 of the principal Act shall be renumbered as subsection (1) thereof, and after sub-section (1) as so renumbered, the following subsections shall be inserted, namely:(2) Where the cheque is an electronic image of a truncated cheque, any difference in apparent tenor of such electronic image and the truncated cheque shall be a material alteration and it shall be the duty of the bank or the clearing house, as the case may be, to ensure the exactness of the apparent tenor of electronic image of the truncated cheque while truncating and transmitting the image. (3) Any bank or a clearing house which receives a transmitted electronic image of a truncated cheque, shall verify from the party who transmitted the image to it, that the image so transmitted to it and received by it, is exactly the same. Section 131 Amendment of section 131 - In section 131 of the principal Act, Explanation shall be renumbered as Explanation I thereof, and after Explanation I was so re-numbered, the following Explanation shall be inserted, namely: Explanation II. - It shall be the duty of the banker who receives payment based on an electronic image of a truncated cheque held with him, to verify the prima facie genuineness of the cheque to be truncated and any fraud, forgery or tampering apparent on the face of the instrument that can be verified with due diligence and ordinary care.. All the other related laws including the Bankers Book Evidence Act and the IT Act have been amended along with the Negotiable Instruments Act to support the cheque truncation process viz. enabling the banker to pay or reject the images of the cheques in lieu of the physical paper.

Axis Bank

Annexure II Special Crossing Stamp

(i) Dimension of Special Crossing Stamp Two parallel lines of length up to 2 inches at a distance of inch in between them. The name of the bank and branch to be incorporated in the enclosed space. (ii) Position of Special Crossing Stamp Preferably at the top left hand corner with a slanting of 60 degrees to the base. (iii) Suggested specimen

(iv) Additional Safeguard The crossing stamp should be affixed in such a manner that to the extent possible it does not deface any material information such as the name of the payee, `A/C payee' crossing, etc., made by the customer.

Axis Bank

Annexure III Code No. Reason for Return

(01-03) Funds 01 Funds insufficient 02 Exceeds arrangements 03 Effects not cleared, present again. (04) Reference to Drawer 04 Refer to drawer 05 Kindly contact Drawer/ Drawee Bank and please present again (10-19) Signature 10 Drawers signature incomplete 11 Drawers signature illegible 12 Drawers signature differs 13 Drawers signature required 14 Drawers signature not as per mandate 15 Drawers signature to operate account not received 16 Drawers authority to operate account not received 17 Alteration require drawers authentication (20-29) Stop Payment 20 Payment stopped by drawer 21 Payment stopped by attachment order 22 Payment stopped by court order 23 Withdrawal stopped owing to death of account holder 24 Withdrawal stopped owing to lunacy of account holder 25 Withdrawal stopped owing to insolvency of account holder (30-49) Instrument 30 Instrument post dated 31 Instrument out dated / stale 32 Instrument undated / without proper date 33 Instrument mutilated; requires Banks guarantee 34 Cheque irregularly drawn / amount in words and figures differ 35 Clearing House stamp / date required 36 Wrongly delivered / Not drawn on us 37 Present in proper zone 38 Instrument contains extraneous matter 39 Image not clear, present again with paper 40 Present with document 41 Item listed twice 42 Paper not received (50-59) Account 50 Account closed
Axis Bank

51 Account transferred to another branch 52 No such account 53 Title of account required 54 Title of account wrong / incomplete 55 Account blocked (situation covered in 21-25) (60-69) Crossing / Endorsement 60 Crossed to two banks 61 Crossing stamp not cancelled 62 Clearing stamp not cancelled 63 Instrument specially crossed to another bank 64 Amount in protective crossing incorrect 65 Amount in protective crossing required/ illegible 66 Payees endorsement required 67 Payees endorsement irregular / requires collecting banks confirmation 68 Endorsement by mark / thumb impression requires attestation by Magistrate with seal.

(70-79) RBI / Government 69 Advice not received 70 Amount / Name differs on advice 71 Drawee banks funds with sponsor bank insufficient 72 Payees separate discharge to bank required 73 Not payable till 1st proximo 74 Pay order / cheque requires counter signature 75 Required information not legible/ correct (80-89) Miscellaneous 80 Banks certificate ambiguous / incomplete / required 81 Draft lost by issuing office / confirmation required from issuing office 82 Bank/ Branch blocked 83 Digital Certificate Validation failures 92 Banks Excluded

Axis Bank

CHAPTER 5 FINDINGS AND SUGGESTIONS

5.1 FINDINGS:
1. Bank is having 1281 branches all over the country. 2. The limited branches. 3. Low marketing 4. Very good customer relations 5. Bank chargers are high 6. No Zero balance account 7. Targeting high end Customers mainly 8. Less of Rural banking

Axis Bank

5.2 SUGGESTIONS:1. Number of Branches should be increased covering a wider area in various states. 2. A wide publicity to be given about the organization and its products through various means of communications to keep growth moments. 3. More number of training and educational programmes should be included in Banks schedule. 4. Developing a learning culture through continuous learning process. 5. Should conduct programs which helps supports Investment. 6. Conducting proper Personal Relation so as to create loyal customers. 7. Focus further on corporate clients 8. Cheque Truncation speeds up collection of cheques and therefore enhances customer service, reduces the scope for clearing related frauds, minimizes cost of collection of cheques, reduces reconciliation problems, eliminates logistics problems. With the other major product offering in the form of RTGS, the Reserve Bank create the capability to enable inter-bank payments online real time and facilitate corporate customer payments. The other product, National Electronic Funds Transfer, is an electronic credit transfer system. Thus the benefits could be summarized as: a) Faster clearing cycle; b) Better reconciliation/verification process c) Better Customer Service . Enhnced Customer Window d) T+0 for Local Clearing and T + 1 for inter-city clearing. e) Elimination of Float . Incentive to shift to Credit Push payments. f) The jurisdiction of Clearing House can be extended to the entire country. g) Operational Efficiency will benefit the bottom lines of banks . Local Clearing activity is a high cost no revenue activity. h) Minimizes Transaction Costs. i) Reduces operational risk by securing the transmission route. 9. Every bank could ensure they have a special CRM on a part-time or a set no. of times in a week basis. This can work wonders in improving customer confidence in the bank and also ensure that employees do not take customer service lightly. An officer can be trained. It is already being done at Officers level. Complaints are being solved by the manager, but special training and designation can make a deeper impact. The CRM could also be responsible to promote better marketing strategies with the customer in the main focus and could arrange customer socials.

Axis Bank

10. A lot of branches, due to space, staff, and other operational constraints cannot provide all the services that the bank does. For example, the Foreign Exchange Department is limited to a few select branches. What functions are easy to re-create and be delegated, should be immediately handed over to the right authorities, so that every branch is able to be self-dependent. A good example can be Travelers Cheques. The current scenario of having a specialized branch for Forex holds good with other smaller branches only collecting BoE, LOC and forwarding it, since placing experts in each branch may not be feasible due to additional training costs and lack of requirements per month, besides an expert team would be well versed in handling all kinds of cases expertly and efficiently. 11. Door step banking (even from a central place) could be arranged for sick and homebound and persons with disabilities at a reasonable extra charge. It could be an add-on marketing feature and provide customer delight. 12. Promote RTGS/NEFT because of the numerous advantages for the bank: Freedom from paper handling and the resultant advantages of handling, presenting and monitoring paper instruments presented in clearing, had beneficiaries (having accounts with the destination bank branches) not opted for ECS Credit. Ease of processing and return for the destination bank branches. Smooth process of reconciliation for the sponsor banks. Cost effective. 13. Customers should be encouraged to use the ATM facility as far as possible for faster and easier money withdrawal. The bank also is at ease since the cheque/withdrawal slip does not have to do the rounds of entry by clerk, verification of officer etc. Besides, chances of fraud are far lesser since it requires the card as well as the PIN. ATM should be provided since it is handy to withdraw cash on Sundays, holidays, and in the non-working hours. A limit of say Rs. 1000/- can be set for security. Just as a person is capable of safeguarding gold in a safe, he can also keep the card in a secure place and reserve it only for emergencies, if he prefers the traditional method of withdrawing cash. The ATM can also be used for: Account information Cash Deposit Regular bills payment Purchase of Re-load Vouchers for Mobiles Mini / Short Statement Loan account enquiry. 14. The internet/mobile banking features should be widely promoted thus making the customers independent and thus reducing the bank workload. Technology today is far safer than what it used to be.

Axis Bank

15. More than microcredit, the banks should promote insurance since usually in villages there is just one sole working member in the family. 16. Procedure to have manual recording, or branch only backup in case of network failure. At least the last held balance could be checked for emergency cash withdrawals. 17. Restriction on the net is good. Data quite secure. Good net download speed. Frequent checks should be made to keep in touch with the latest anti-virus software and technology. 18. Make a compulsory password change necessary every month. Auto prompt by system.

5.3 COMPETETIORS
1. ICICI Bank Ltd. 2. HDFC Bank Ltd.

3. State Bank of India 4. HSBC Bank 5. RBS (Royal Bank of Scotland) 6. Maharashtra Bank of India 7. Canara Bank 8. Andhra Bank 9. IDBI bank 10. Bank of India 11. Punjab National Bank 12. Central Bank 13. Allahabad Bank 14. ING Vysya 15. Centurion Bank

Axis Bank

CHAPTER 6 CONCLUSION
6.1 CONCLUSION
My experience with Axis Bank Ltd. is outstanding. While working in Axis Bank I found that this bank has developed manifold in short period of time due to facilities and services provided to their customer and this growth rate can be keep it up if they start to go in semi-urban areas. In last couple of years they have opened new many branches and they should open many more. The working staff is very co-operative in nature and due to that the bank will also get good benefit. Axis Bank has provided their customer Net-banking facilities and due to that transactions are done fast.

Axis Bank

CHAPTER 7 BIBLIOGRAPHY
7.1 BIBLIOGRAPHY
SR. NO. REFERENCE

1. Reserve Bank of India 2. Bank Marketing: Concepts and Applications 3. Banking and Finance 4. Banking Developments in India 5. Basics of Banking 6. Bank leaflet and Boucher 7. Axisbank.com 8. Securities and Exchange Board of India (SEBI) 9. Internet

Axis Bank

Axis Bank