Principles and Practices of Banking Notes
Subject Overview
The first Banking and Insurance elective, covering banking structure, retail/
Subject at a glance
4
Units
33
Topics
4
Credits
4
Infographics
Unit-wise Syllabus
4 units — open any unit for detailed topic-wise notes, diagrams and important exam questions
- Commercial and co-operative bank structure
- private/public/foreign banks
- regional rural banks
- retail/wholesale/international banking products
- universal banking
- CIBIL and fair practices code for debt collection
Scheduled commercial banks
Public, private, foreign, small finance, payments
Regional rural banks
Co-operative banks
Urban and rural
Development banks
NABARD, SIDBI, EXIM
Study guide
This unit covers the structure of commercial and co-operative banks, private, public, foreign and regional rural banks, retail, wholesale and international banking, universal banking, CIBIL and the fair practices code. Compare the types of bank.
- Debtor-creditor relationship
- bank as trustee
- anti-money laundering
- deposit products
- mandate/POA/garnishee orders/banker's lien/right of set-off
- COPRA Act and Banking Ombudsman Scheme
- payment and collection of cheques and negotiable instruments
- opening and maintaining customer accounts
- remittances and safe deposit lockers
Debtor-creditor
Deposits: bank owes the customer
Creditor-debtor
Loans: customer owes the bank
Trustee
Holding valuables for a purpose
Agent
Collecting cheques, paying bills
Bailee
Safe custody of goods
Study guide
You study the banker-customer relationship (debtor-creditor, trustee), anti-money laundering, deposits, mandates, power of attorney, garnishee orders, lien and set-off, COPRA and the Banking Ombudsman, cheque payment and collection, account opening, remittances and lockers. Know the rights and duties on each side.
- ALM significance
- process and techniques
- credit/operational/market/liquidity risk management
- corporate treasury management
- Basel norms and capital adequacy
- documentation and modes of charging securities
- NPA definition
- classification
- provisioning and recovery
- investment management
- financial inclusion and literacy
- Capital conservation buffer
2.5% of RWA
- Tier 2 capital
Up to 2%
- Additional Tier 1
1.5%
- Common equity Tier 1
5.5% in India (4.5% globally)
Study guide
You study asset-liability management, credit, operational, market and liquidity risk, treasury management, Basel norms, documentation and charging of securities, NPAs, investment management and financial inclusion. Learn NPA classification and provisioning.
- Electronic banking and payment systems
- EFT systems and SWIFT
- technology upgradation trends and impact on banks
- security risk types and control mechanisms
- IS audit
- Gopalakrishna Committee recommendations
- preventive vigilance against phishing
NEFT
Half-hourly batches, 24x7
Any amount, non-urgent
RTGS
Real-time
₹2 lakh and above
IMPS
Instant, 24x7
Up to ₹5 lakh
UPI
Instant, 24x7
Everyday mobile payments
Study guide
You study electronic banking and payment systems, EFT and SWIFT, technology trends, security risks and controls, IS audit, the Gopalakrishna Committee and phishing prevention. Understand common frauds and how to prevent them.
Why Principles and Practices of Banking Matters
Banking is a major employer of commerce graduates, and this paper supports JAIIB, CAIIB and bank recruitment exam preparation.
How to Prepare for Principles and Practices of Banking
- Learn the banker-customer relationship, lien and set-off with examples.
- Prepare notes on Basel norms and NPA provisioning.
- Follow digital banking trends and fraud prevention advisories.
Principles and Practices of Banking: Frequently Asked Questions
What is banker's lien?
Banker's lien is a bank's right to retain a customer's securities or goods as security for money the customer owes.