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A commercial bank can be defined as a financial institution that has the responsibility of providing services like acceptance of deposits, dispersing loans for business purposes as well as auto loans and also mortgage lending along with basic products of investment such as “certificates of deposit” and “savings accounts”.
The commercial bank that traditionally exists is an institution of “brick and mortar” which consists of safe deposit boxes, ATMs, tellers and vaults. In certain cases the physical branches are not present for the commercial banks and the consumers are required to complete all their transactions either through the internet or over the phone. High rates of interest are usually paid on the investments as well as the deposits in exchange and fees charged are low.
Thus, it can be said that commercial banks are financial institutions that provide services such as offering saving, deposit and current account and giving loans for individuals, organisations and businesses. This is in contrast to the investment banks, the main role of which is underwriting of securities, M & A advisory, securities trading and asset management.
The profits in case of the commercial banks are made by taking short term and small deposits that are relatively liquid and these are then transformed into longer as well as larger maturity loans. The asset transformation process leads to the generation of net income in cases of the commercial banks. Some of the commercial banks also perform the business of the investment banking but it is not the major area of business of the commercial bank.
While there has been a consolidation in the banking sector, it should be noted that many more people are working and have jobs in the sector of commercial banking in comparison to any other part of the industry of financial services. Banking jobs can be exciting and at the same time offer opportunities that are excellent for learning about the business, interacting with the people and also building up a clientele.
The diversity that the commercial banks possess in the modern age is more than ever before. A wide range of opportunities exist in the sector of commercial banking that start from the level of the branch where a person might begin the career as a teller and then move on to a number of other services like trade credit, international finance, credit card banking and leasing. In case you have the enthusiasm to enter this field and are prepared well, you have chances of finding a large number of jobs related to commercial banking that will be open for you.
Commercial Banking Course Description
The curriculum for the Commercial Banking Module has been designed keeping in view the various aspects of the commercial banking in India and the rules and regulations that are needed to be followed in the commercial banking sector of India as laid down in the guidelines of the RBI. The origin and evolution of commercial banking is also taken into consideration.
Introduction – This section introduces you to Commercial Banking and various other aspects of such as
- Introduction about the Commercial Banking course
- How can banking be defined?
- How has the evolution of banking taken place?
- What are the functions that the Commercial Banks perform?
- The competitive landscape related to the Banks
The Structure of Banking in India
- The Scheduled Banks that are present in India
- Role that is played by the Reserve Bank of India
Bank Deposit Accounts
- Introduction of the various Bank Deposits
- The different kinds of Deposit Accounts
- Strategies that can be employed for mobilizing deposits
- Guidelines for the Deposit Accounts
- Guidelines for the Deposit Accounts – Operations
- Services which are related to the deposits
- Other services related to the deposits
- The services related to the deposits for the NRIs
- Deposit Insurance
Basics of Bank Lending
- Lending principles
- Policy for Loans
- Guidelines of the RBI – Stipulation of Credit and Adequacy of Capital
- Limits of Credit Exposure
- Rates of lending
- Fair Practice Codes related to the lenders
- Basics related to loan appraisal
- Working Capital Finance
- Kinds of advances
- Project Finance
- Loans to rural areas as well as the SMEs
- Directed Lending
- NPA Classification
- Retail Loans
- Restructuring of Debts and other options related to recovery
- SARFAESI Act 2002
- Introduction to the topic of bank investments
- Requirements related to Statutory Reserves
- RBI Guidelines as well as Non SLR investments
- Classification of Investments and Norms related to valuation
- Treasury Measurement
Other Activities that are performed by the Commercial Banks
- Government Services and Foreign Exchange
- Clearing system that is paper based
- Electronic Systems of Payment
- Para Banking activities and NRI Remittances
- Merchant Banking and Primary dealership
- Pension Funds and Mutual Funds
- Other activities related to Para Banking
Bank – Customer Relationship
- Strategy for the expansion of the customer base
- Services for the different groups of customers
- Competition among the Banks
- “CRM and Banking Ombudsman Scheme”
- Norms of KYC along with PMLA
The Trends that are evolving in Modern Banking
- Outsourcing of the non core activities
- Financial Inclusion – SHG as well as Micro Credit
- Financial Inclusion – RBI Initiatives
Questions and Answers
- Q & A 1
- Q & A 2
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