2023-24

Operations

18.10.2022
Contents
Banking System in India: - ........................................................................................................................................... 2
Functions of a Bank....................................................................................................................................................... 2
Banking Regulation Act 1949: ..................................................................................................................................... 3
Reserve Bank of India Act 1934: ................................................................................................................................. 6
Policy Rates .................................................................................................................................................................... 7
Types of Customers .....................................................................................................................................................11
Our Organization .........................................................................................................................................................21
Categories of Branches and Processing Centers ....................................................................................................23
What is KYC ? ................................................................................................................................................................32
Cheques .........................................................................................................................................................................49
Savings Deposit Products ...........................................................................................................................................56
Current Deposit Products ...........................................................................................................................................70
Term Deposits:.............................................................................................................................................................83
Term Deposit Products ...............................................................................................................................................89
Negotiable Instruments Act, 1881 ............................................................................................................................99
Indian Contract Act, 1872 ..........................................................................................................................................99
Sale of Goods Act, 1930 .......................................................................................................................................... 101
Indemnity & Guarantee ........................................................................................................................................... 103
Payment and Settlement System Act 2007: ........................................................................................................ 106
The Bankers’ Books Evidence Act 1891: ............................................................................................................... 106
Right to Information Act 2005: .............................................................................................................................. 106
Indian Partnership Act: ........................................................................................................................................... 107
The Companies Act 2013: ....................................................................................................................................... 107
Internal Ombudsman: .............................................................................................................................................. 114
Banking Ombudsman: .............................................................................................................................................. 114
Government Business Products .............................................................................................................................. 115
Settlement of Death Claim ..................................................................................................................................... 125
Staff Deposits & Payment of Additional Interest ................................................................................................ 132
Safe Deposit Vault (SDV) / Locker......................................................................................................................... 133
General Operations at Branch: .............................................................................................................................. 138

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Banking System in India: -

The formal Banking system in India comprises of the Reserve Bank of India (central Bank), Commercial
Banks, Private Banks, Regional Rural Banks and the Cooperative Banks. The apex institution in the
Banking System in India is the Reserve Bank of India which is a regulator of banking system in our
country.

Functions of a Bank
As per Section 5(b) of the Banking Regulation Act, 1949, "Banking" means accepting, for the purpose
of lending or investment, of deposits of money from the public, repayable on demand or otherwise,
and withdrawal by cheque, draft, order or otherwise.

Bank’s profit comprises interest income and non-interest income/fee-based income.

Besides this, Banks also undertake other financial services or para Banking activities i.e. credit cards,
primary dealer, leasing, hire purchase, factoring, selling of insurance and mutual fund products etc.
where Banks earns fee-based income.

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Beside Brick and Mortar Banking, now-a-day Banks made various alternate modes/channels available
to customers for carrying their Banking transactions through Paper-less Banking i.e. Internet Banking,
Mobile Banking, UPI, ATM, UVConn etc. Since present Banking Model offers Commercial Banking as
well investment Banking services in varying proportion, it is referred as Universal Banking Model.

Under sec 49A of BR Act, no person other than a Bank is authorized to accept deposits withdrawable
by cheque

Under Sec.7 of BR Act, every Banking company to use the word ‘Bank’ as part of the name and no
company other than a Banking company can use the words ‘bank’ ‘banker’ ‘banking’ as part of its
name.
Section 8 of BR Act prohibits a Banking company from engaging directly or indirectly in trading activity
and undertaking trading risks except realization of securities held by it.

Banking Regulation Act 1949:

Banking Regulation Act 1949 was enacted to consolidate and amend the law relating to banking and
to provide for a suitable framework for regulating banking companies. The provisions of the Act are
applicable to banking companies in addition to other laws applicable to such companies. The Act deals
with:
i. Regulation of business of banking companies
ii. Control over the management of banking companies
iii. Suspension and winding up of banking business and
iv. Penalties for violations of the provisions of the Act.

▪ Section 5 (b) defines the term “BANKING”

▪ Section 6 defines the authorized business of a banking company
▪ Section 11 of BR Act specifies minimum capital requirement and reserves requirements of a banking
company
▪ Section 17 specifies transfer of certain percentage of profit to Reserve Fund
▪ Section 18 of BR Act provide for cash reserve for non-banking companies
▪ Section 20 of BR Act imposes certain restrictions on loans and advances such as restrictions on
financing against own shares, granting loans or advances to or on behalf of its directors
▪ Section 21 provides for the issue of directions to regulate loans and advances by banks in purpose
of lending, margin in secured loans, rate of interest, terms and conditions in lending etc. Section 35A
of BR Act gives wide general powers to RBI to issue directions
▪ Section 22 regulates entry into banking business by licensing from RBI
▪ Section 24 of BR Act specifies the Statutory Liquidity Assets by banks
▪ Section 26 specifies for filing a return every year on their unclaimed deposits for ten years and
above
▪ Section 35 empowers RBI to inspect Banks
▪ Section 35A enables RBI to issue directions to banks such as Complying with provisions of Banking
Ombudsman Scheme, adhering to KYC guidelines, adhering to guidelines issued on Clean Note Policy,
Rate of interest on Savings Bank and Term Deposits, etc.
▪ Section 45ZA and 45ZB deal with nomination of deposit accounts; Section 45ZC and 45ZD deal with
Safe custody and Section 45ZE and 45ZF deal with Safe Deposit Lockers

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Scheduled Bank:

The Scheduled Bank is a status conferred on a banking company either Commercial Bank or Co-
operative Bank by RBI by including the bank in the list at the second schedule to RBI Act, 1934. Bank
becomes Scheduled Bank on issuing notification by RBI. Section 42 of the RBI Act lays down certain
conditions like: (a) must satisfy the RBI regarding its functioning being conducted in the interest of
the general public – Depositors. The bank is not indulging into any speculative activities. (b) Paid-up
capital and reserves should not be less than Rs. 5 Crores (c) The financial company must be a bank
notified by the Central Government. Scheduled banks are usually private, foreign and nationalized
banks operating in India.

Co-operative Banks:

Co-operative Banks were first introduced into India in 1904 by passing the Co-operative credit Society
Act. This form of organization was intended to provide rural credit to the agriculturists and artisans
coming together in voluntary association and also educating them in the use of credit and inculcating
the habit of savings, co-operation and self-help. All the co-operative credit societies were brought
under the purview of the Banking Companies Act in 1966.

Regional Rural Banks:

In 1976, the Regional Rural Banks Act was enacted to provide the incorporation, regulation, for
developing the rural economy by providing credit and other facilities to the small farmers, artisans,
craftsmen, landless laborers and the small entrepreneurs for starting trade, agriculture, commerce,
industry and other productive activities in rural areas.

Recent Developments – Differentiated Banks

The regulator has been trying to bring in new types of lenders into the Banking System in an effort to
introduce new ideas and develop niches to ensure that more segments are covered. RBI has granted
licenses for payments banks and Small-Finance Banks.

A payments bank is like any other bank but operating on a smaller scale without involving any credit
risk. In simple words, it can carry out most banking operations but can't advance loans or issue credit
cards. It can accept demand deposits (up to Rs.2 lakh), offer remittance services, mobile
payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-
party fund transfers.

In September 2013, the Reserve Bank of India constituted a committee headed by Dr. Nachiket Mor
to study “Comprehensive Financial Services for Small Businesses and Low-Income Households”. The
objective of the committee was to propose measures for achieving financial inclusion and increased
access to financial services.

The committee submitted its report to RBI in January 2014. One of the key suggestions of the
committee was to introduce specialized banks or 'payments bank' to cater to the lower income groups
and small businesses so that by January 1, 2016 each Indian resident can have a global bank account.

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The main objective of payments bank is to widen the spread of payment and financial services to small
business, low-income households, migrant labour workforce etc. in secured technology-driven
environment. With payments banks, RBI seeks to increase the penetration level of financial services
to the remote areas of the country.

Small Finance Banks are a type of niche banks in India. They were set up with the twin objectives of
providing an institutional mechanism for promoting rural and semi urban savings and for providing
credit for viable economic activities in the local areas. It will be for furthering financial inclusion by
(i) provision of savings vehicles primarily to unserved and underserved sections of the population, and
(ii) supply of credit to small business units; small and marginal farmers; micro and small industries;
and other unorganized sector entities, through high technology-low cost operations Banks with a Small
Finance Banks license can provide basic banking service of acceptance of deposits and lending.

It can also undertake other non-risk sharing simple financial services activities, not requiring any
commitment of own fund, such as distribution of mutual fund units, insurance products, pension
products, etc. with the prior approval of the RBI and after complying with the requirements of the
sectoral regulator for such products. The small finance bank can also become a Category II Authorised
Dealer in foreign exchange business for its clients’ requirements.

The small finance bank will be required to use the words “Small Finance Bank” in its name in order to
differentiate it from other banks.
They are promoted either by individuals, corporate, trusts or societies. The Reserve Bank of India (RBI)
has in April 2017 released a discussion paper seeking comments on a new category of banks—wholesale
and long-term finance banks that will fund large projects.
According to the discussion paper, these wholesale and long-term finance banks will focus primarily
on lending to the infrastructure sector and small, medium and corporate businesses. They will also
securitize assets for banks and financial institutions which do priority-sector lending.

The digital payments system in India has evolved the most among 25 countries with India’s immediate
Payment Service (IMPS) being the only system at level 5 in the Faster Payment Innovation Index (FPII).

Presently the Banking Industry is passing through tough time in the form of rising NPA / Stressed
Assets. A landmark development relating to resolution of stressed assets is the Insolvency and
Bankruptcy Code (IBC) 2016. From the Reserve Bank's point of view, a great enabler in this context
has been the Banking Regulation (Amendment) Ordinance promulgated in May and subsequently
enacted in August 2016. By the authority it conferred on the Reserve Bank to issue directions to
banks to initiate resolution processes, it scales up the ability of the Reserve Bank to deal decisively
with stress in banks' balance sheets and unclog the flow of credit to grease the wheels of growth.
In the year ahead, it will help to overcome the debilitating problem of corporate loan delinquency
and get our banks back into the mainstream of financial intermediation.

Mergers & Amalgamation

In 2017 the associate banks of SBI i.e. State Bank of Bikaner & Jaipur, State Bank of Mysore, State
Bank of Travancore, State Bank of Hyderabad, State Bank of Patiala, Bhartiya Mahila Bank were
merged into State bank of India. In April 2019 the Vijaya bank and Dena bank were merged in Bank
of Baroda. In Aug 2019 government announced the merger of ten public sectors into four bigger and
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stronger banks and on 1st April 2020 these ten banks were amalgamated into four banks. The Oriental
bank of commerce (OBC) and United Bank of India were merged into Punjab National Bank (PNB),
Syndicate bank was merged into Canara Bank, Indian bank was merged with Allahabad Bank,
Corporation Bank and Andhra Bank merged into Union Bank of India. After the merger there are 12
PSU Banks. The whole exercise of mergers and amalgamation was done by Govt. to create next
generation PSBs i.e. Bigger, stronger and global banks to compete with the best banks in the world.

Reserve Bank of India Act 1934:

RBI was established on April 1, 1935 under RBI Act 1934 (recommendations of John Hilton Young
Commission 1926 - called Royal Commission on Indian Currency and Finance), is the Central Bank of
the country and was nationalized wef Jan 01, 1949.

RBI is managed by a Central Board of Directors with 4 local boards at Mumbai, Delhi, Kolkata and
Chennai. It has one Governor, provision for 4 Dy. Governors and 15 other directors.

The Reserve Bank of India was constituted under Section 3 of Reserve Bank of India Act 1934 which
came in to force on 6th March 1934

i. To regulate the issue of bank notes

ii. For keeping reserves for securing monetary stability in India and
iii. To operate the currency and credit system of the country

RBI Act 1934 deals with

i. Incorporation, capital, management and business of a bank
ii. Central Banking functions like issue of bank notes, monetary control, acting as banker to
Government and banks, lender of last resort
iii. Collection and furnishing of Credit Information
iv. Acceptance of Deposits by non-banking financial institutions
v. General provisions regarding reserve fund, credit funds, publication of credit policies, publication
of bank rate, audit and supervisory controls on banks operating in India
vi. Penalties for violations of the provisions of the Act or the directives issued there under.
vii. Some of the important Sections of RBI Act 1934 related to Banking are:
viii. Section 22 of RBI Act deals with issue and management of currency in India
ix. Section 31 of RBI Act enables RBI / Central Government to issue paper currency notes
x. As per Section 20 of the Act, RBI is the banker for Central Government and as per section 21A, RBI
acts as banker to State Governments on agreement.
xi. As per Section 42 of RBI Act, every bank has to maintain Cash Reserve as per the directives of RBI
Act 2006 amended Section 45W to determine the policy relating to interest rates or interest rate
products and give directions in that behalf to all agencies dealing in securities, money market
instruments, foreign exchange, derivatives etc.

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Policy Rates

Repo rate :-

Repo rate is the rate at which banks borrow funds from the RBI to meet the gap between the demand
they are facing for money (loans) and how much they have on hand to lend. If the RBI wants to make
it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to
make it cheaper for banks to borrow money, it reduces the repo rate.

Reverse Repo Rate:

This is the exact opposite of repo rate. The rate at which RBI borrows money from the banks (or
banks lend money to the RBI) is termed the reverse repo rate. The RBI uses this tool when it feels
there is too much money floating in the banking system.

If the reverse repo rate is increased, it means the RBI will borrow money from the bank and offer them
a lucrative rate of interest. As a result, banks would prefer to keep their money with the RBI (which
is absolutely risk free) instead of lending it out (this option comes with a certain amount of risk)

Consequently, banks would have lesser funds to lend to their customers. This helps stem the flow of
excess money into the economy Reverse repo rate signifies the rate at which the central bank absorbs
liquidity from the banks, while repo signifies the rate at which liquidity is injected.

Bank Rate:

This is the rate at which RBI lends money to other banks (or financial institutions the bank rate signals
the central bank’s long-term outlook on interest rates. If the bank rate moves up, long-term interest
rates also tend to move up, and vice-versa. Banks make a profit by borrowing at a lower rate and
lending the same funds at a higher rate of interest. If the RBI hikes the bank rate, the interest that a
bank pays for borrowing money (banks borrow money either from each other or from the RBI)
increases. It, in turn, hikes its own lending rates to ensure it continues to make a profit.

Call Rate:

Call rate is the interest rate paid by the banks for lending and borrowing for daily fund requirement.
Since banks need funds on a daily basis, they lend to and borrow from other banks according to their
daily or short-term requirements on a regular basis.

Cash Reserve Ratio (CRR):

Cash Reserve Ratio, refers to a portion of deposits (as cash) which banks have to keep/maintain with
the RBI. This serves two purposes. It ensures that a portion of bank deposits is totally risk-free and
secondly it enables that RBI control liquidity in the system, and thereby, inflation by tying their hands
in lending money

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Statutory Liquidity Ratio (SLR):

Besides the CRR, banks are required to invest a portion of their deposits in government securities as a
part of their statutory liquidity ratio (SLR) requirements. What SLR does is again restrict the bank’s
leverage in pumping more money into the economy

BPLR: (At present our bank’s BPLR -13.25% w.e.f 01.04.2020): This was introduced in 2003

BASE RATE: (Our bank’s present BR - 8.60% w.e.f 01.10.2022). RBI introduced base rate w.e.f July 01,
2010 to have transparency and nondiscriminatory manner.

Marginal Cost of Funds Based Lending Rate (MCLR):

MCLR of our bank from (Applicable 11.10.2022 to 10.11.2022):

Overnight MCLR 7.15%

1 Month MCLR 7.30%
3 Months MCLR 7.50%
6 Months CLR 7.70%
1 year MCLR 7.90%
2 year MCLR 8.10%
3 year MCLR 8.25%
(IC 3630-2022 10.10.2022)

All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 were to be priced with
reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal
benchmark for such purposes.
a) The MCLR will be a tenor linked internal benchmark.
b) Actual lending rates will be determined by adding the components of spread to the MCLR.
c) Banks will review and publish their MCLR of different maturities every month on a pre-announced
date.
d) Banks may specify interest reset dates on their floating rate loans. They will have the option to
offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to
the date of review of MCLR.
e) The periodicity of reset shall be one year or lower.
f) The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date,
irrespective of the changes in the benchmark during the interim period.
g) Existing loans and credit limits linked to the Base Rate may continue till repayment or renewal,
as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of
Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms.
h) Banks will continue to review and publish Base Rate as hitherto.

External Benchmark Lending Rate (EBLR):-

The following categories of loans sanctioned with effect from 1st October 2019, are eligible for linking
to RBI policy Repo –

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a) Micro & Small Enterprises (MSE): Floating Rate General and Term Loan and / or Working Capital
Facilities under Schematic Lending.
b) Personal/Retail: Floating Rate / Retail Loan Schemes.
c) The interest rate on rupee credit to exports and imports.

All facilities granted to the categories of loans as mentioned above – be it working Capital, Term Loans,
Bills, Packing credit etc. shall be linked to EBLR.
Relationship between Bank and Customer: Before understanding the relationship between Bank
and Customer, it is important to understand the meaning of the Customer. As per KYC-AML policy, a
‘Customer’ is defined as:

➢ A person or entity that maintains an account and/or has a business relationship with the Bank;

➢ One on whose behalf the account is maintained (i.e. the beneficial owner);

➢ Beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers,

Chartered Accountants, Solicitors etc. as permitted under the law; and

➢ Any person or entity connected with a financial transaction which can pose significant reputational
or other risks to the Bank, say, a wire transfer or issue of a high value demand draft as a single
transaction.

Beneficial Owner:
Beneficial Owners shall mean the natural person who ultimately owns or controls a client and/or the
person on whose behalf a transaction is being conducted, and includes a person who exercises ultimate
effective control over a juridical person.
Determination of the Beneficial Ownership for different constitutions

i. Where the client is a company, the beneficial owner is the natural person(s), who, whether acting
alone or together, or through one or more juridical person, has/have a controlling ownership
interest or who exercises control through other means.

a) “Controlling ownership interest” means ownership of or entitlement to more than twenty-five

percent of shares or capital or profits of the company;
b) “Control” shall include the right to appoint majority of the directors or to control the
management or policy decisions

ii.Where the client is a Partnership firm, the beneficial owner is the natural person(s), who, whether
acting alone or together, or through one or more juridical person, has/have ownership
of/entitlement to more than fifteen percent of capital or profits of the partnership.

iii.Where the client is an unincorporated association or body of individuals, the beneficial owner is
the natural person(s), who, whether acting alone or together, or through one or more juridical
person, has/have ownership of or entitlement to more than fifteen percent of the property or
capital or profits of such unincorporated association or body of individuals.

iv.Where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the
relevant natural person who holds the position of senior managing official

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v.Where the client is a trust, the identification of beneficial owner(s) shall include dentification of
the author of the trust, the trustee, the beneficiaries with fifteen percent or more interest in the
trust and any other natural person exercising ultimate effective control over the trust through a
chain of control or ownership.

It is mandatory to create Cust IDs of all beneficial owners (BOs) like Proprietor, Partners, and Directors,
Authorised signatories in case of Clubs, Associations etc., Trustees, Karta and Co-Parceners.

Banker Customer Relationship: On opening of account with the Bank or availing services of the
Bank, a binding between the individual/non-individual and Banker gets established. Such relationship
is a contractual relationship. Banking is a trust-based relationship. There are numerous kinds of
relationship between the Bank and the customer. The relationship between a Banker and a customer
depends on the type of transaction. Thus the relationship is based on contract, and on certain terms
and conditions.

S.No Type of Transaction Bank Customer

1 Deposit in Bank Debtor Creditor
2 Loan from Bank Creditor Debtor
3 Safe Deposit vault (SDV Locker) Licensor Licensee
4 Safe Custody Bailee Bailor
5 Issue of Draft Debtor Creditor
6 Payee of a Draft Trustee Beneficiary
7 Collection of Cheque Agent Principal
8 Pledge Pledgee (Pawnee) Pledger (pawnor)
9 Mortgage Mortgagee Mortgagor
10 Hypothecation Hypothecatee Hypothecator
Money deposited, but no Trustee Beneficiary
11
instructions for its disposal
Article/Goods left by mistake by Trustee Beneficiary
12
customer

Termination of Banker Customer Relationship

The banker customer relationship stands terminated on:

▪ Death of customer
▪ Lunacy of the customer
▪ Insolvency of the customer

On happening of any of the above three events, the bank must stop the operation of the account and
stop payment of the cheque.
However, the banker –customer relationship is not affected by reason of:
▪ Arrest of the customer
▪ Imprisonment of the customer
▪ Migration of the customer to any foreign country.

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Category of customer: From customer’s constitution point of view, customers may be divided in
following categories:

▪ Individuals
▪ Joint Individuals
▪ Non-Resident Indians – Individuals
▪ Proprietary concern
▪ Hindu Undivided family
▪ Partnership Firms
▪ Companies / Corporations
▪ Trusts
▪ Local Bodies/Government Departments /Societies/Universities etc.,
▪ Unincorporated association or body of individuals including societies

Types of Customers

1. Natural person:

Individual: Person who has attained the age of 18 years (major).

Joint Individual: More than one individual joining together to open an account.
▪ Mandate like Either or Survivor / Former or Survivor / or Jointly etc. for operation in the account
is obtained at the time of opening of the account.
▪ Mandate can be changed with the consent of all the account holders anytime and any number of
times.

2. Special Individual

A. Minor:
According to Section 3 of Indian Majority Act 1875, Minor is a natural person who has not completed
the age of 18 years. Where, however a legal guardian of the person or property of a minor has been
appointed by a Court of Law before he has attained the age of 18 years, he attains majority on
completion of 21years.
A major is a person who has attained the age of 18 years.

▪ Legal protection and disabilities

So long as a Person is a minor, he suffers certain disabilities and enjoys certain protections under law.
According to Section 11 to 14 Indian Contract Act, a minor is incompetent to enter into a valid contract.
A Contract by a minor is void ab-initio i.e. from the very beginning. Again a contract made by a minor
during his minority cannot be ratified by him even after his attaining majority since agreement made
by a minor is void.

However, section 26 of NI Act provides that a Minor may draw, endorse, deliver and negotiate a cheque
so as to bind all parties except himself/herself. Of course the minor is not bound by the terms and
conditions of Bank Account.

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 ▪ Procedure and precautions for opening of minors account

An account of minor can be opened in the following manner

a) Account in the name of minor under guardianship.
b) In the name of minor only.
▪ Account in the sole name of minor only

a) A minor whose age is 10 years or more and one who can read and write is eligible to open Bank
account in his own sole name.
b) He should be competent to transact business.
c) No account should be opened in the name of a minor who is blind (even if he is more than 10 years
old) to be operated by himself.
d) Minor should come personally to withdraw the amount from his account.
e) In ordinary course no cheque book should be issued. However, if it is issued, it should be affixed
with a rubber stamp “encashable by self at counter only”
f) Date of birth of minor should be noted on the account opening form and should be verified by the
bank.
g) In case of term deposit, the maturity date of the deposit should not be earlier than the date on
which the minor attains majority. In such cases, relaxation has been allowed for accepting
deposits beyond 10 years. Further, no loan or premature payment should be allowed till the minor
attains majority.
h) In the event of death of a minor during his/her minority, the balance in the account can be paid
to natural guardian, as it is generally believed that the natural guardian could have provided
money for opening account to the minor.

▪ Account in the name of minor under guardianship

Date of birth of the minor should be noted on account opening form and should be verified by the
branch.
The account opening form will be signed by the guardian on behalf of the minor as under:
• for minor ‘X’
• Sd/-Guardian

A guardian means a lawful guardian and includes natural guardian by court of law under sec 7 (1) of
the Guardian and wards Act 1890. Natural Guardian of a minor differs from community to community
and is governed by a personal law(s) to which the minor is subject as under.

Hindu:
As per sec 6 of the Hindu minority and Guardianship Act, 1956, Hindu minor’s natural guardian is
always her/his father so long as the father is alive. After the death of the father, the mother can also
act as natural guardian (stepmother/step father cannot act as natural guardian)

Muslims:
Under the Muslim law, Muslim minor’s natural guardian in the order of preference is as follows: Father,
Executor appointed by father’s Will, Grandfather, Executor appointed by Grandfather Will.
A mother of a Muslim minor is not a natural guardian of her child. If there is no guardian in any of the
four categories above, then guardian will have to be appointed by the court.
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Roman, Christians & Parsis:
Roman Catholic and Parsis the natural guardian of a minor child is father during his lifetime and after
him, the mother

Opening of accounts in the minor’s name with mother as guardian:

RBI in consultation with Govt. of India has advised that there is no objection in opening Bank Accounts.
Only cash transactions are to be allowed and cheques / dividend warrants etc. drawn in the name of
minors should not be accepted. This is because when mother is not a natural or legal guardian she has
no legal right to deal with such Cheques or other property of the minor which the natural / legal
guardian can alone handle.

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

Legal guardian:
Where there is no natural guardian or testamentary guardian, court can appoint a guardian, such a
guardian appointed by the court is called a legal guardian.

B. Illiterate:

Illiterates are eligible to open Bank Accounts. Since illiterate are persons who cannot read and write
and are unable to sign, Bank obtains their thumb impression as record and consider the thumb
impression as an instrument for operations with consent. Latest Photograph must be held on record.
To protect the interest of such customers, customer should personally visit the branch and affix the
thumb impression in the presence of bank officials As and when he (she) wishes to withdraw money.

C. Married Women:
A married woman is as independent as other individuals and can enter into a valid agreement in her
own name. Banks can open account in her name and can also give loans against documents executed
by her.

D. Purdanashin:

A purdanashin lady is a woman who remains in complete seclusion and does not transact with people
other than her family members.

E. Visually Challenged Person:

Blind persons who are also called Visually Challenged Persons (VCPs) are fully competent to contract.
The branch should provide all types of banking facilities to the visually challenged without any
discrimination.

F. Mentally Retarded Person:

In case of lunatics and persons who are mentally unsound, the Mental Health Act, 1987 allows
appointment of guardian by the District Courts. These legal guardians have power to open and operate
the account as permitted in the order.

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G. Incapacitated Person:
Where a person is too ill to sign a cheque or to come in person to Bank to draw money, he can put his
thumb or toe impression. Wherever thumb or toe impression of the sick / old / incapacitated account
holder is obtained, it should be identified by two independent witnesses, known to the bank, one of whom
should be a responsible bank official.

H. Politically Exposed Person (PEP):

Politically exposed persons are individual who are or have been entrusted with prominent public
functions in a foreign country e.g. Heads of State or of Governments, Senior Politicians, Senior
Government/Judicial/Military Officers, Senior Executives of State Owned Corporations, important
Political Party Official, etc.

The above norms may also be applied to accounts of the family members or close relatives of PEPs.

3. Legal Person

Proprietorship:

Proprietary accounts are individual accounts except for the fact that it is opened and operated in a
name chosen by that individual. When a firm is owned by a single person it is known as proprietorship
firm.

Partnership:

A partnership is the relation between persons who have agreed to share the profits of the business
carried on by all of them acting for all.

▪ Indian partnership act 1932

▪ It is the relationship between persons agreed to share profits of the business carried on by all or
any one of them acting for all
▪ Number of partners: Minimum 2 and Maximum 100
▪ Minors can be admitted to the benefits of the partnership
▪ Registration is not necessary. Unregistered partnership firms cannot sue others

CLAYTON'S RULE:

The first item on the debit side will be the item to be discharged or reduced by the subsequent item
on the credit side. The credit entries in the account adjust or set off the debit entries in the
chronological order.

Hindu Undivided Family:

A Hindu Undivided Family may possess ancestral properties and carry on ancestral business and all the
members of the family are descendants of a common ancestor. Ownership of the assets passes on to
the members of the family. The family business and assets are managed by the eldest member who is
called Karta. Also known as Hindu Undivided Family and is governed by Hindu law. Registration is not
required for HUF.

14 | P a g e
Joint Stock Company:

Limited Companies are legal entities under the law. They are viewed as persons and are entitled to
enter into contracts, own property, sue in their own name and do all acts that an individual may do.
Companies limited by shares can be classified into three categories:

• PRIVATE LIMITED COMPANY: is a company which, by its articles restricts transfer of its shares,
prohibits itself from inviting subscription of shares/debentures from public.

• PUBLIC LIMITED COMPANY: Company whose shares can easily be transferred and does not have
such restrictions.

• GOVERNMENT Undertaking: Government owned enterprise/undertaking (Like us) where not less
than 51% of the share capital is held by government.

Limited Liability Partnership:

• Limited Liability Partnership is a business organization that combines the limited liability features
of a company and the operational flexibility of a partnership firm. The LLP being a separate legal
entity is liable to the full extent for its assets. The partners will be liable only to the extent of
their agreed contribution in the LLP.
• LLP is a corporate body and a legal entity separate from its partners. It has a perpetual succession.
Indian Partnership Act shall not be applicable to LLP and the minimum number of partners of a
LLP is two and there is no upper limit.
• Every LLP should have two “Designated Partners” at least one of whom should be resident Indian
satisfying the conditions stipulated by the Central Government. They should apply and obtain
Designated Partner Identification Number (DPIN) and digital signature certificate from the
designated authority.

Trust:

A trust is said to be created when the ownership of a property is transferred, to somebody with an
obligation to hold and manage the same for the benefit of another. Usually there are three parties to
a Trust viz.
• The person who transfers the property and reposes confidence known as Author or Creator or
Donor of the trust.
• The transferee of the property on whom confidence or trust is reposed is called the trustee.
• The person for whose benefit the trust is formed known as beneficiary.
• Trust Deed is an important document which contains all the information regarding formation,
governance, purpose and conditions of the trust.

Society/Association/Club:
A co-operative society is an association registered under the provisions of the Co-operative Societies
Act of the State concerned. Therefore, all formalities required under the act, for opening the account
of a registered association must be complied with by the bank. Generally co-operative societies are
not permitted to open accounts in banks other than co-operative banks unless otherwise specifically
permitted by Registrar of Co-operative Societies.
15 | P a g e
Clubs can be registered or unregistered. A Club can be registered under (i) The Societies Registration
Act, 1860 or (ii) Companies Act, 1956

Local Authorities/ Government Departments:

These authorities are established under separate statutes of state/central legislature. These
authorities have a managing committee with a president, vice-president and treasurer and the
treasurer is given power to open and operate bank account.

Executors and Administrators:

• Executors and Administrators are persons who are appointed to administer assets of a deceased.
• An executor is appointed by a will and can open account only if he holds a probate issued by the
Court on the basis of will.
• When the deceased has not left any Will, the Court appoints Administrator through Letter of
Administration.
• Before opening an account of Executors or Administrators relative Probates or Letter of
Administration, in original, should be called for. The Account Opening Form should be signed by
all the Executors/Administrators with clear instructions as to the manner in which the account
will be operated.

Official Liquidator:

For opening account of the Official Liquidator of a Company a certified copy of the Resolution of the
Company in Extraordinary General Meeting should be obtained and signature of the Liquidator should
be got verified by one of the authorized officers of the Company concerned. Liquidators cannot
delegate powers to third party.

Mandate and Power of Attorney:

Both mandate and power of attorney are instruments through which one person (called principal)
appoints another (called agent) to act on his behalf. A mandate is just a simple letter of authority
given by an account holder to the bank to allow a certain named person to operate his account on his
behalf. A power of attorney is a general document used to convey powers of many other purposes
besides the operation of account. Power of attorney could be General Power of Attorney or a Special
Power of Attorney. Usually Banks like us prefers Special Power of Attorney. As far as possible, we
should obtain registered, irrevocable and Special Power of Attorney only by a customer/borrower for
banking transactions.

As per KYC guidelines, details of power of attorney holders and others acting in fiduciary capacity
should also be obtained in addition to beneficial account holder.

Duties of a Banker towards Customer

i) Duty of secrecy
ii) Duty to honor Cheques
iii) Duty to submit periodical statements
iv) Duty to collect Cheques / bills

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i) Duty of secrecy

▪ A bank is legally obliged to keep the affairs of its customer’s secret.

▪ There is no need to have separate agreement for it; it is implied in banker customer relationships.
▪ This is also mandatory as per section 13 of Banking Companies (Acquisition and Transfer of
Undertaking) Act 1970.

(A)Circumstances where disclosure is authorized by law:-

▪ Order of the court.

▪ Disclosure as per Income tax Act –1961and Gift Tax Act 1958.
▪ Criminal Procedure Code 1973.
▪ Other Acts giving similar power to authorities like 1) CBI 2) Custom Authorities 3) Central Excise
Authorities. 4) Sales tax Authorities.
▪ Foreign Exchange Management Act
▪ Companies Act -1956 / Companies Act 2013
▪ Reserve Bank of India Act –1934 etc.

(B) Circumstances where disclosure is permitted as per banking practices:-

▪ Disclosure to another bank to supply credit information / opinion on Customers when requested by
another bank ----to be supplied on IBA `s format, in general terms, without fixing bank’s signatures
and in coded words as circulated by IBA among banks.
▪ Disclosure as per express or implied consent of the customer.

(C) Disclosure in public interest.

The obligation to maintain secrecy continues even if the account is closed or customer expires.

In case of unauthorized disclosure, the customer can sue the bank for damages and any third party
who relies on such information and suffered loss can sue the bank if the information turns out to be
false.

ii) Duty to honor Cheques:

As per Section 31 of NI Act, a bank is bound to honour its customer’s Cheques if the following three
conditions are fulfilled.
▪ There must be sufficient balance in the account
▪ The balance must be properly applicable for the payment of the cheque.
▪ The bank must be duly required to pay the amount

However, this obligation to honor cheques stands extinguished upon receipt of

a) Garnishee Order
b) Income Tax Attachment Order

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 1. Rights of a Banker

A. Right of general lien

It gives the right to the creditor to retain the possession till all amounts due from debtor are paid or
discharged. It can be exercised on the goods and securities of the debtor, which are received in the
capacity of a creditor. A banker can sell goods/securities after giving the debtor a reasonable notice.
In case of time barred jewel loan, bank has got a right to sell the jewels and appropriate the amount
to loan account and other dues of the borrower.

B. Right of Set- Off

When a customer has credit balance in one account and debit balance in another account, the banker
has a right to combine both the accounts to arrive at net sum; it is called right to set-off. For exercising
this right Debit balance should be due to the bank. Term deposits which are yet to mature are not
available for set-off. Both the balances should be held in same capacity of the customer. Prior notice
to customer to exercise right must be given.

C. Right of Appropriation

When a debtor owing several debts makes a payment, the creditor should appropriate it as per the
rules of appropriation.

D. Right to act as per the Mandate of the Customer

A mandate is letter given by an account holder to the bank to allow operations in the account. A
mandate is given for allowing somebody to operate the account; to make, draw, accept or otherwise
sign bills of exchange or other negotiable instruments or to overdraw the account whenever required.
The Joint Account opened by more than one individual can be operated by single individual or by more
than one individual jointly. The mandate for operating the account can be modified with the consent
of all account holders.

2. Garnishee Order

▪ A garnishee order is issued by a competent court under section 60 of civil procedure code at the
request of a creditor to attach his debtor’s funds in the hands of a Banker.
▪ A garnishee order is issued in two stages, first order Nisi and then an order Absolute
▪ Banker – Garnishee; Person approached the court - judgment creditor and person whose funds are
to be attached - Judgment Debtor.

i.Order Nisi

▪ Through an order Nisi, court seeks the bank to advise as to why the funds in the account of judgment
debtor should not be attached for meeting the obligation towards the judgment creditor.
▪ On receipt of order Nisi the bank stops honouring customer’s cheque.
▪ Bank must immediately inform the customer about the receipt of the order so that he may make
the necessary arrangements for payment of the debts due by him and avoid dishonoring of cheques
issued by him.

18 | P a g e
ii.Order Absolute

▪ After receipt of the explanation from the bank the court may issue order Absolute.
▪ On receipt of an order Absolute the bank has to pay the amount to the court.
▪ Production of pass Book/ Deposit receipt not necessary for making such payment
▪ Amount of the Garnishee Orders: A Garnishee order usually does not mention the amount. In case,
no amount is mentioned, the entire balance to be attached. If issued for specific amount only that
amount to be attached and the banker may mark a lien for the amount, and the customer may be
permitted to operate the account with the remaining balance.

Accounts to be attached

▪ Garnishee order extends only to those accounts, which are held in the same capacity in which the
order is issued.
▪ If garnishee order is in the name of ‘A’, joint account of A, B and C cannot be attached.
▪ But if the garnishee order is in the joint names of A, B and C, it will not only attach the joint account
but also accounts in their individual names.
▪ If the order is in the name of A and the account is in the name of a partnership firm where A is a
partner the firm account cannot be attached.
▪ If the order is in the name of a partnership firm, not only the firm account but also the balance in
the individual partner’s account can be attached.
▪ If the order is in the name of individual it would extend any account maintained by him in the name
of a firm as sole proprietor
▪ Accounts held by a person as a trustee (Trust Accounts) are not attached by a Garnishee order issued
in individual name

Accounts not attached

▪ Insolvent person’s account

Types of deposits attached

▪ All deposits due and accruing due are attached

▪ Deposit due means SB CD and overdue time deposits
▪ Deposits accruing due are term deposits, which will mature for payment in future. Hence Garnishee
order attaches the term deposits, but the amount is payable only on their maturity.
▪ Where amount is passed for payment, debit entry made and token issued but the actual payment
is not made by the cashier, the Garnishee order attaches such amount.
▪ Clearing Cheques passed can be attached till the time prescribed for clearing returns.

Types of Assets not attached

▪ Funds held in safe custody, safe custody locker
▪ Undrawn balance of cash – credit account
▪ Unclear balance in SB/CD account
▪ Credits/Deposits given after receipt of the order
▪ Bank is entitled to exercise its right of set off for all debt due from the customer before complying
with the order.

19 | P a g e
 3. Income – Tax Attachment Order

▪ As per 226(3) of IT Act, 1961, it can attach SB, CD term deposit (payable on maturity), proceeds of
collection items to be credited to account
▪ Even though the order is received in a single name, it attaches balance (pro rata) in any joint
account
maintained by such person
▪ Even the amount deposited after the receipt of order, it is attachable
▪ No need to insist upon presentation of Deposit Receipt to make payment

Procedure for attaching joint account

▪ IT attachment order attaches the funds held on account of a deceased or insolvent depositor
▪ The order attaches the money held or that may be subsequently held.
▪ The Bank is entitled to first exercise its right of set off before acting on the order.
▪ On receipt of the order the customer must be given notice.
▪ Permission from higher office is to be obtained before remitting the funds to ITO
▪ If Bank fails to attach the amount it would be deemed to be an assessee in default.

iii.Garnishee Order Vs Attachment Order

Sl. No. Garnishee order Attachment order

01 Issued by court Issued by IT Dept/Govt Dept
02 Usually amount not mentioned Amount mentioned
03 Deposits held at the time of receipt of order same and future credits
04 Proceeds of instruments on collection not attached Attached
05 If issued in single name joint a/c not attached Attached pro-rata
06 Issued in joint names, balance in individual attached Same
07 A/c of deceased/ insolvent cannot be attached Are attachable

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Our Organization
Union Bank of India was established on 11th November 1919 with its headquarters in the city of
Bombay now known as Mumbai. e- Andhra Bank was established on 23rd November 1923 and
e-Corporation Bank was established on 12th March 1906.

UNION CONNECT: Our Bank is now actively connected with Public through Social Media Platforms like
Facebook, Twitter, Instagram, You Tube and Linkedin.

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Organizational Set-up - Verticals/Departments:

22 | P a g e
Categories of Branches and Processing Centers

CATEGORIZATION OF BRANCHES

The Branch categorization is now redefined on the basis of four parameters for each branch i.e.
Business Profile, Average Stress Account and Stress Amount, Operation load & Growth Potential in
Advances. The new criteria includes two types of Branch Categorization as ‘Primary Category’ based
on Branch Business Profile & ‘Secondary Category’ based on Stress Category, Operation load and
Advances Growth Potential of the branch.

Primary Category

The branches are categorized on the basis of business profile i.e. various combinations of average
Deposits & Advances of last two years under Primary Category. The business requirement for Primary
Category Branches is as under:

S. No Primary Category Business Range (Both Deposits & Advances)

Deposits (Rs in Cr) Advances (Rs in Cr)
1 Small (S) Upto 10 Upto 10
10 – less than 50 Upto 5
2 Medium (M) Upto 10 10 to less than 50
10 to less than 50 5 to less than 45
50 to less than 150 Upto 10
150 to less than 250 Upto 5
3 Large (L) Upto 10 > 50
10 to less than 50 45 to less than 150
50 to less than 150 10 to less than 75
150 to less than 250 5 to less than 45
> 250 Upto 45
4 VLB Lite (VL) 10 to less than 50 > 150
50 to less than 150 > 75
150 to less than 250 45 to less than 150
> 250 45 to less than 75
5 VLB (V) 150 to less than 250 > 150
250 to less than 400 > 75
> 400 45 to less than 150
6 ELB > 400 > 150

Secondary Category: The Primary Category branches are further assessed on three parameters to
arrive at their Secondary Category. The Three Parameters constituting the Secondary Category are as
under:

Stress Load (Average Stress Account and Amount): The Secondary Category is to be allotted to
the branch on the basis of its volume of stress account in this segment.

Operation Load: The branches are evaluated on three parameters for allotting Secondary
Category in this segment as under:
(i) No of CASA Account
(ii) Average CASA Amount
(iii) Non-Interest Income
23 | P a g e
 Business Potential: The bank has allotted Secondary Category in this segment for focused
branches in the potential areas. Branches satisfying following three conditions are flagged as
‘Potential Branches’:
(i) Branch Advances Business > Rs. 50 Crore.
(ii) Branch Advance Growth Rate > 10%
(iii) Branch Advances Growth Rate > PIN Code Advances growth rate for retail and MSME advances
(outstanding) combined.

Exceptions:
(i) All Mid Corporate Branches Opened/to be opened under Specialized Category to be considered
as ELBs irrespective of their business figures.
(ii) Any Branch in Metro Center arriving at ‘Small’ category based on its business parameter to be
treated as a ‘Medium’ Branch.
(iii) All Financial Inclusion (FI) branches to be treated as ‘Small’ Branch.
(iv) Any small branch, which is the only branch of the Bank in any District, to be classified as
‘Medium’ even though the average business is lesser than the business required for classification
as ‘Medium’
(v) The branches achieving a minimum level of average advance of Rs 1500 Crore for the last two
years considered under ‘Premier’ category including all IFBs & Mumbai Samachar Marg
irrespective of their business figures.

Categorization based of Activity of the branch.

Different types of Business outlets/ Branches according to the activity they undertaken.
Branches are classified according the focus area of the branches. These branches either exclusively
operate or more focus will be given to the assigned filed.

1. Agri Focused branch

2. Business Banking Branch (BBB)
3. Mid Corporate Branch
4. Wholesale Banking Branch (WWB)
5. Asset Recovery Branch (ARB)
6. Cash Management Services (CMS) branches
7. Financial Inclusion Branch
8. Currency Chest
More details about the branches are as under:

1. Agri Focused branch:

Agri-Focussed branches are those branches which have shown good progress under Direct
Agriculture and have been allotted higher agriculture targets than the other branches keeping in
view the potential viability in the area.

24 | P a g e
 Performances of these branches are continuously monitored by Regional Office as well as corporate
office on weekly basis.
Responsibilities of Agri-Focused Branch
• The focused growth under Agriculture portfolio.
• Finance minimum 15 investment Credit proposals in quarter
• RDOs to disburse minimum Rs. 5 cr. in the year
• All eligible farmers are provided ATM enabled KCC.
• Linkage of at least 5 SHG/JLG per month.
• Tapping potential of commercial projects on Agri and allied activities.

B. Business Banking Branch (BBB)

In order to have a focused and uniform growth of MSME finance, Bank has identified Business Banking
Branches which will mainly focus on MSME and Trade finance apart from their regular business.
These branches have been provided with specially trained credit officers for processing MSME/Trade
proposals. MSME continues to be our area of focus.
The Bank is committed to enhance the base of MSME clientele and hassle-free flow of credit to this
sector by assuring quick turnaround time (TAT), credit delivery at affordable prices and customized
products as per the requirements of the clients for increasing the focus on the core segment of micro
& small advances (MSE).
While the Bank has large network for reaching out to MSME clientele across the country, in order to
have special focus, the bank has dedicated business banking branches (BBBs) for credit delivery to
MSMEs.
BBBs are headed by experienced and knowledgeable executives / managers and they have also been
provided with either directly recruited credit officers or, SME trained officers.
These BBBs were allotted higher credit targets than the other branches keeping in mind their structure
and potential of the area in which they are located.

C. Mid Corporate Branch

Mid-Corporate Branches will be one stop shop for the borrowers who avail credit facilities above Rs.
50 crores to Rs. 150 crores.
Key Responsibilities of Mid Corporate Branch:
• Mid corporate branch will process the loans above Rs. 50 to Rs. 150 crores
• It will be responsible for entire credit administration.
• The Mid corporate branches will be responsible for business development and adding new customers
to create quality loan assets by effectively utilizing services of Marketing Officers/ CRMs posted at
Branch.

25 | P a g e
• The branches in Mid- corporate vertical will carry out appraisal of loan proposals as per Bank’s
policy. The Credit appraisal Teams will be strengthened by providing necessary training.

D. Wholesale Banking Branch (WBB)

To cater to the need of large corporate borrowers, Bank has started 4 Wholesale Banking Branch (WBB).
WBB will process credit facilities above Rs. 150 crores.
The Bank has 8 dedicated WBB at important centers, viz.; Ahmedabad, Bangalore Chennai Hyderabad,
Mumbai, New Delhi, Kolkata and Pune, to cater to their specialized requirements.
These WBBs report directly to Large Corporate Vertical at Central Office.

E. Asset Recovery Branches (ARBs):

The Bank has 7 Asset Recovery Branches (ARBs) across the country to have focused attention on high
value NPAs. ARBs initiate legal & non-legal steps to recover large NPAs which are transferred from
other business branches.

F. Cash Management Services (CMS) branches

The CMS branch caters to the specific corporate requirements of the clients towards the receivables
& payables management handling high speed, collection and payment at minimal cost, supported by
a customized MIS.
The Bank had launched Automated Clearing House (NACH) services as part of CMS collections and
payments for enabling our Bank move on to paperless transactions platform.

G. Financial Inclusion Branch:

A Specialized FI Branch is a small brick and mortar model intermediary between Bank and the
customers in remote villages.
It is a "single" Officer branch to which the allotted 2000+ population villages and identified less than
2000 population villages are attached in such a fashion that a single Specialised FI Branch would
monitor the working of 20 Customer Service Points (CSPs).

Objective of FI Branch

a. To Extend Banking reach to every village with 2000 + population as well as less than 2000
population assigned to it.
b. To implement Financial Inclusion projects at the field level;
c. To garner business through BCs;
d. To meet Credit requirements of villagers;
e. To achieve Financial Inclusion objectives/targets through BCs;
f. To monitor the activities of BCs;
g. Catering to cash requirements of BCs.

26 | P a g e
H. Currency Chest

Distribution of notes and coins throughout the country is done through designated bank branches,
called chests. Chest is a receptacle in a commercial bank to store notes and coins on behalf of the
Reserve Bank of India. Chest is managed by bank on behalf of RBI. Deposit into chest leads to credit
of the bank’s account and withdrawal, debit.
Functions of Currency Chest:
✓ To meet currency requirement of public.
✓ To withdraw unfit notes.
✓ To provide exchange facility from one denomination to another.
✓ To make payment requirement of the Government.
✓ To exchange the mutilated notes.
✓ To avoid frequent movement of cash.

Categorization of branches based on Forex Transactions

“A” Category Branch

‘A’ Category branches are branches doing Foreign Exchange business. They have been permitted to
maintain independent foreign currency accounts with other foreign banks. ‘A’ category branches can
provide all services related foreign exchange transactions.

‘B’ Category Branch

‘B’ Category branches have been also permitted to handle the foreign exchange business. ‘B’ category
branches are not permitted to have foreign currency account but permitted to operate foreign
currency account of “A” Category Branch. Foreign exchange business emanated from other branches
is also routed through the designated “B” category branches.
The following foreign exchange services have been identified which can be extended in “B” category
branches.
• All types of Foreign Exchange Transactions
• Encashment and issuance of Foreign Currency Notes.
• Encashment and issuance of foreign currency notes travellers cheques.
• Issuance of foreign DDs for personal purposes like education, medical treatment etc. remitted on
declaration basis.
• Remittances from miscellaneous non-trade purpose.
• Foreign currency cheques for collection.

“C” Category Branches-

All other branches other than ‘A’ and ‘B’ category branches are classified as ‘C’ category branches.
The following foreign exchange services have been identified which can be extended in “C‟ category
branches-
• All Forex Transactions through ‘B’ category branches only.
27 | P a g e
Processing Centers:
• Retail Loan Point – RLP (earlier Union Loan Point - ULP)
• MSME Loan Point - MLP

Retail Loan Point (RLP)

Retail Loan Points (RLP), the specialized Retail lending arm of our Bank. Retail lending means lending
for housing loan to individual, vehicle loan for personal loans, mortgage loans etc. RLP will act as a
processing center for Retail loans.

Currency Chest:

A currency chest is a depository of RBI. It is not possible for RBI to reach everywhere so it has
authorized PSU Banks to operate currency chests on its behalf. The Bank, however must maintain
separate account independently of the chest which is monitored by RBI.

RBI has now implemented project to replace the ICCOMS application with an improved currency
management module namely ‘CyM Portal’. This will be fully integrated with their Core Banking Solution
namely E-KUBER. Further, new package will facilitate real time reporting/accounting, easy
reconciliation, maintenance & remittances/diversion of treasure etc.

Exchange of Notes and Coins & Clean Notes Policy:

Reserve Bank of India announced Clean Note policy in the year 1999 to ensure that:

• Only reasonably clean notes and coins of all denominations should remain in circulation.
• Adequate quantity of fresh notes and coins should be available for distribution
• Soiled notes should be effectively mopped up for destruction

Exchange of soiled notes: (IC 2301-2020 / 3207-2022)

• Notes presented in small number: Where the number of notes presented by a person is up to 20
pieces with a maximum value of Rs.5000 per day, banks should exchange them over the counter,
free of charge.

• Notes presented in bulk: Where the number of notes presented by a person exceeds 20 pieces or
Rs.5000 in value per day, banks may accept them, against receipt, for value to be credited later.
Banks may levy service charges as permitted in Master Circular on Customer Service in Banks
(DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015). In case tendered value is above
Rs.50000, banks are expected to take the usual precautions.

Adjudication of Mutilated Notes:

• Reserve Bank of India framed Note Refund Rules in 1975 u/s 28 and 58 (i) of Reserve Bank of India
Act 1934 according to which the value of Bank Notes which are mutilated or imperfect, may be
refunded as a matter of grace, which does not confer any right to recover the value.
28 | P a g e
• In order to make the Note Refund Rules easy to understand and to apply, these have been
comprehensively revised and simplified. It has also been decided that any officer of the Bank
can adjudicate mutilated notes presented. Facility for exchange of soiled and mutilated notes is
to be provided by all the branches and notice of availability of this facility at the branch should be
displayed for information to common public.

• A mutilated note is a note of which a portion is missing or which is composed of more than two
pieces. Mutilated notes may be presented at any of the bank branches. The notes so presented shall
be accepted, exchanged and adjudicated in accordance with Reserve Bank of India (Note Refund)
Amendments Rules, 2018.

• As per with Reserve Bank of India (Note Refund) Amendments Rules, 2018, note value is adjudicated
as per undivided area of the single largest piece of the mutilated notes. For the purposes of
adjudication, a mutilated note of equal to or more than rupees fifty denomination may be refunded
in full or half, if the minimum undivided area of the single largest piece of the note is as under:
Minimum Minimum
area area (in
(in cm2) cm2)
Lengt Area
Denominatio Width required required for
h (in
n (cm) for payment of
(cm) cm 2)
payment half
of full value**
value@
50 14.7 7.3 107.3 86 43
1
50 (New MG 13.5 6.6 89.10 72 36
Series)
100 15.7 7.3 114.6 92 46
1
100 (New MG 14.2 6.6 93.72 75 38
Series)
200 14.6 6.6 96.36 78 39
500 15.0 6.6 99.00 80 40
2000 16.6 6.6 109.5 88 44
6

• If the area of largest undivided piece of the note presented is less than or equal to 40% of the
area of the note, the claim shall be rejected.

• Notes presented in small number i.e. up to 5 pieces, branches may pay adjudicated value
over the counter; alternatively they may remit the pieces to currency chest branch for
adjudication after duly providing acknowledgement to tenderer. In latter case, Adjudicated
value to be provided within 30 days in tenderer’s bank account.

• Note presented in bulk i.e. more than 5 pieces but not exceeding ₹ 5000 in value, tenderer
should exchange pieces at currency chest branch either through insured post or in person. But
in case of value exceeds ₹ 5000, tenderer to be advised to approach nearby currency chest
29 | P a g e
 branch.

Detection and impounding of Counterfeit notes:

• Counterfeit money is imitated currency having no legal sanction. Producing or using

counterfeit money is forgery on our Country. Branches and Currency Chests are the watchdogs
of Reserve Bank of India in detecting and impounding counterfeit notes.

• For cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a

consolidated report in the prescribed format (Annexure -3, IC 2301-2020/ 3206-2022) should
be sent to the Nodal Currency Chest Officer who will submit the same to police authorities or
Nodal Police Station, along with the suspect counterfeit notes, at the end of every month.

• For cases of detection of counterfeit notes of 5 or more pieces, in a single transaction, the
counterfeit notes should be forwarded to Nodal Currency Chest Officer immediately, who will
forward the same to local police authorities or identified Nodal Police Station for investigation
by filing FIR in the prescribed format (Annexure– 4, IC 2301-2020 / 3206-2022).

• Branch to ensure that all counterfeit notes received back from the police authorities should
be preserved for 3 years from the date of receipt from the police authorities. They may
thereafter be sent to the issue office of RBI concerned with full details.

RBI is providing Rs. 65/- per bag for distribution of coins on the basis of withdrawal from Currency
Chest. An additional incentive of Rs.10/- per bag would be paid for coin distribution in rural and semi-
urban areas on the submission of a CA / Auditor certificate to this effect.

Some important guidelines pertaining to reporting through CyM – CC Portal is being reiterated
hereunder:

Regular cash remittances between Currency Chests and branches should be carried out using Banks
cash vans or outsourced cash vans strictly as per procedures prescribed. Cash remittance limits are
given below:

1. Armed Guard Not Mandatory Cash Limit

Cash Van / Car / Four-Wheeler Rs.50 lakhs

a)
Auto Rickshaw (Three-Wheeler) / Route Bus / Train Rs.50 lakhs
b) / Water surface transport
Motorcycle / Scooter Rs.10 lakhs
c)
On Foot Rs.5 lakhs
d)
2. With One Armed Guard (Mandatory for cash above Rs. 50.00 lakhs)
Cash Van / Car / Four-Wheeler Rs.200 lakhs
a)
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 3. With Two Armed Guards (Mandatory)
Cash Van / Car/Four Wheeler Rs.500 lakhs
a)
Discriminatory Schedule of Audits/Inspection of Currency Chests is as follows:

• Regular Internal Audit: Bank’s internal auditors audit all the Currency Chests once in every six
months.

• BI-monthly inspection: Regional Offices conduct Bi-monthly inspection of Currency Chests in their
jurisdiction.

• Security Inspection: Security Department conducts Security Inspection of all the Currency Chests
once every year.

• Currency Chest should ensure conducting of fire audits bi-annually (once in two years) by the
officials from the District Fire Department or agencies approved by the respective State/District
fire department.

Branches attached to particular Currency Chest should place an indent for their requirement of cash
in advance and inform about remittance with details to enable Currency Chests to arrange cash vans
routes for both. This ensures smooth and fast movement of cash through cash vans available with
Currency Chests. Currency Chest should draw route plan for linked branches in consultation with
Regional Security Officer and plan cash van movements accordingly.

Cash received from branches should be counted immediately on the date of receipt and kept in
separate Bin for sorting purpose. Sorting should be completed within the permissible T+2 days. Such
sorted notes should be kept in a well-arranged manner in separate Bins depending upon quality and
denominations of Notes.

Maintaining minimum level of cash at branches contributes to branch profit. Benchmark level of Cash
Deposit Ratio (CDR) is 0.20% excluding cash at ATM.

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What is KYC ?

Know your Customer means establishing identity, suitability and risk involved in maintaining a business
relationship. The objective of KYC/AML guidelines is to prevent Banks from being used, intentionally or
unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also
enable Banks to know/understand their customers and their financial dealings better which in turn help them manage
their risks prudently.

Objectives of KYC

▪ Prevent banks being used, intentionally or unintentionally by criminal elements for money
laundering.
▪ To be aware of the identity of the customer
▪ To be aware of the location of the customer
▪ To manage the risks associated with the customer in a prudent manner

When does KYC apply?

▪ Opening of a new deposit / borrowal account

▪ Opening of a subsequent account where documents as per current KYC compliance not submitted
while opening the initial account
▪ Opening a locker facility where documents are not available with the bank for all locker facility
holders
▪ When bank feels it is necessary to obtain additional information from existing customers based on
the conduct of account
▪ Periodic intervals based on instructions received from RBI
▪ Where there are changes to signatories, mandate holders, beneficial owners, etc.
▪ Any other product introduced by the Bank from time to time requiring customer identification.

Establishing Identity:

Identity generally means a set of attributes which together uniquely identify a natural or legal person.

Identity comprises the following:

• Name
• Date of Birth
• Residence/Address
• Occupation
• Photograph

General Guidelines:

▪ The information collected from the customer for the purpose of opening an account is to be treated as
32 | P a g e
 confidential and details thereof are not to be divulged for cross selling or any other purposes.

▪ The branches, therefore, to ensure that information sought from the customer is relevant to the
perceived risk, is not intrusive, and is in conformity with the guidelines issued in this regard.
▪ Any other information from the customer shall be sought separately with his/her consent.
▪ The Branch, at the time of commencement of an account-based relationship, shall identify its
clients; verify their identity and other information on the purpose and intended nature of the business
relationship.
▪ Any remittance of funds by way of demand draft, mail/telegraphic transfer or any other mode and
issue of travellers’ cheques for value of Rs. 50,000 and above is to be effected by debit to the
customer’s account or against crossed cheques and not against cash payment.
▪ In case of transactions carried out by a non-account-based customer/ walk-in customer, where
the amount of transaction is equal to or exceeds Rs. 50,000, whether conducted as a single transaction
or several transactions that appear to be connected, the customer's identity and address shall be
verified.
▪ However, if a branch has reason to believe that a customer is intentionally structuring a transaction
into a series of transactions below the threshold of Rs.50,000/- the branch shall verify identity
and address of the customer and also consider reporting such transactions through Regional Office to
Principal Officer, KYC-AML Division for considering filing a Suspicious Transaction Report (STR)
to FIU-IND.
▪ The Branches shall verify identity of the customer for all outgoing international money transfer
operations.
▪ The Branches shall ensure that the provisions of Foreign Contribution (Regulation) Act, 2010, as
amended from time to time, wherever applicable are strictly adhered to.

Money Laundering:
Section 3 of the Prevention of Money Laundering (PML) Act 2002 has defined the “offence of money
laundering” as “whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly
is a party or is actually involved in any process or activity connected with the proceeds of crime and
projecting it as untainted property shall be guilty of offence of money laundering.”

Money launderers use the banking system for cleansing ‘dirty money’ obtained from criminal activities
with the objective of hiding/disguising its source. The process of money laundering involves creating a
web of financial transactions so as to hide the origin and true nature of these funds.

Process of Money Laundering:

The entire process of money laundering involves three stages;

I. Placement: In this stage large amount of cash generated through criminal activities is sought to be
introduced into the legitimate financial channels in small quantities hrough transactions of small
value often through Benami means.

II. Layering: In this stage the funds introduced into the financial channels are moved/rotated through a
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 number of accounts in order to mask the origins of the funds.

III. Integration: In this stage the layered funds are brought together in an account directly or
indirectly controlled by the owners of the tainted funds. Very often at this stage shell companies
purportedly dealing in exports/imports, real estate, casinos etc. are used.

Obligations under Prevention of Money Laundering (PML) Act 2002:

Section 12 of PML Act 2002 places certain obligations on every Banking company, financial
institution and intermediary, which include:-
• Maintaining a record of prescribed transactions
• Furnishing information of prescribed transactions to the specified authority
• Verifying and maintaining records of the identity of its clients
• Preserving records

Definition of Customer

As per Prevention of Money Laundering Act, 2002, a ‘Customer’ is defined as:

▪ A person or entity that maintains an account and/or has a business relationship with the Branch
▪ One on whose behalf the account is maintained (i.e. the beneficial owner);
▪ Beneficiaries of transactions conducted by professional intermediaries, such as Stock
▪ Brokers, Chartered Accountants, Solicitors etc. as permitted under the law.
▪ Any person or entity concerned with a financial transaction which can pose significant reputational
or other risks to the bank, say a wire transfer or issue of high value demand draft as a single
transaction.

Definition of Beneficial Owner:

Beneficial Owners shall mean the natural person who ultimately owns or controls a client and/ or the
person on whose behalf a transaction is being conducted and includes a person who exercises ultimate
effective control over a juridical person.

Determination of the Beneficial Ownership for different constitutions -

i. Where the client is a company, the beneficial owner is the natural person(s), who, whether
acting alone or together, or through one or more juridical person, has/have a controlling ownership
interest or who exercises control through other means.

a) “Controlling ownership interest” means ownership of or entitlement to more than twenty-five

percent of shares or capital or profits of the company;
b) “Control” shall include the right to appoint majority of the directors or to control the
management or policy decisions

ii. Where the client is a Partnership firm, the beneficial owner is the natural person(s), who, whether

34 | P a g e
 acting alone or together, or through one or more juridical person, has/have ownership
of/entitlement to more than fifteen percent of capital or profits of the partnership.
iii. Where the client is an unincorporated association or body of individuals, the beneficial owner
is the natural person(s), who, whether acting alone or together, or through one or more juridical
person, has/have ownership of or entitlement to more than fifteen percent of the property or capital
or profits of such unincorporated association or body of individuals.

iv. Where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the
relevant natural person who holds the position of senior managing official

v. Where the client is a trust, the identification of beneficial owner(s) shall include identification
of the author of the trust, the trustee, the beneficiaries with fifteen percent or more interest in
the trust and any other natural person exercising ultimate effective control over the trust through a
chain of control or ownership;

It is mandatory to create Cust IDs of all beneficial owners (BOs) like Proprietor, Partners, and
Directors, Authorised signatories in case of Clubs, Associations etc., Trustees, Karta and Co-Parceners.

Definition of Person:

In terms of PMLA Act a ‘person’ includes:

i. An individual
ii. A Hindu undivided family
iii. A company
iv. A firm
v. An association of persons or a body of individuals, whether incorporated or not,
vi. Every artificial judicial person, not falling within any one of the above persons and vii. Any
agency, office or branch owned or controlled by any of the above persons

Key Elements of KYC Policy:

KYC policy is framed incorporating the following four key elements:
• Customer Acceptance Policy;
• Customer Identification Procedures;
• Monitoring of Transactions; and
• Risk Management.

Customer Acceptance Policy (CAP):

Bank shall undertake identification of customers in the following cases:
I. Commencement of an account-based relationship with the customer.
II. Carrying out any international money transfer operations for a person who is not an account holder
of the bank.
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III. When there is a doubt about the authenticity or adequacy of the customer identification data it
has obtained.
IV. Selling third party products as agents, selling own product, payment of dues of credit cards/sale and
reloading of prepaid/travel cards and any other product for more than rupees fifty thousand.
V. Carrying out t ransact i ons for a n on-account b a s e d customer, that i s a walk-in customer,
where the amount involved is equal to or exceeds rupees fifty thousand, whether conducted as a
single transaction or several transactions that appears to be connected.
VI. When the Bank has reason to believe that a customer (account-based or walk-in) is intentionally
structuring a transaction into a series of transactions below the threshold of rupees fifty thousand.
VII. Bank shall ensure that introduction is not to be sought while opening accounts.

The failure or refusal by an applicant to provide satisfactory identification evidence within a reasonable
time period and / or without adequate explanation may lead to a suspicion that the depositor or investor
is engaged in money laundering. In such circumstances, the branch shall consider making a suspicious
activity report and submit it to the Principal Officer.

Following guidelines must be kept in mind during Customer Acceptance Policy –

• No account shall be opened in anonymous or fictitious/ benami name(s)

• Categorization of customers in to low, medium & high risk on the basis of following:

✓ Nature of business activity

✓ Location of the customer and his clients
✓ Mode of payments
✓ Volume of turnover
✓ Social and financial status
✓ Annual income

• Documents for proof of identification & address shall be collected

• Not to open an account or close an existing account where the Branch is unable to apply appropriate
customer due diligence measures i.e. the Branch is unable to verify the identity and / or obtain documents
required as per the risk categorization due to non- cooperation of the customer or non-reliability of the
data/information furnished to the Branch.
• Necessary checks shall be performed before opening a new account so as to ensure that the identity
of the customer does not match with any person with known criminal background or with banned entities
such as individual terrorists or terrorist organizations etc.
• A profile for each new customer based on risk categorization is to be prepared while opening the
account which will contain information relating to customer’s identity, social/financial status, nature of
business activity, information about his clients’ business and their location etc.
• The Branches shall apply enhanced due diligence measures based on the risk assessment,
thereby requiring intensive ‘due diligence’ for medium and higher risk.

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• Customer Acceptance Policy shall not result in denial of Banking/Financial facility to members of
the general public, especially those, who are financially or socially disadvantaged

Risk Categorization of Customers:

For the purpose of risk categorization, individuals (other than High Net Worth) and entities whose
identities and sources of wealth can be easily identified and transactions in whose accounts by and
large conform to the known profile, shall be categorized as low risk. Illustrative example of low risk
customers will be salaried employees whose salary structure are well defined, people belonging to
lower economic strata of the society whose accounts show small balances and low turnover,
Government Departments and Government owned companies, regulators and statutory bodies etc. In
such cases, only the basic requirements of verifying the identity and location of the customer are to be
met. Customers that are likely to pose a higher than average risk to the Bank shall be categorized as
medium or high risk depending on customer’s background, nature and location of activity, country
of origin, sources of funds and his client profile etc. The Bank shall apply enhanced due diligence.
Measures based on the risk assessment, thereby requiring intensive ‘due diligence’ for higher risk
customers, especially those for whom the sources of funds are not clear. In view of the risks involved
in cash intensive business, accounts of bullion dealers (including sub-dealers) & jewellers will be
categorized as ‘high risk’ requiring enhanced due diligence. Other examples of customers requiring
higher due diligence include (a) non-resident customers; (b) high net worth individuals; (c) trusts,
charities, NGOs, NPOs and organizations receiving donations; (d) companies having close family
shareholding or beneficial ownership; (e) firms with 'sleeping partners'; (f) Multi - Level Marketing
(MLM) Agencies; (g) ‘pooled accounts’ maintained by professional intermediaries (h) accounts of
agents/ sub-agents of cross border money transfer service providers (i) politically exposed persons
(PEPs) (j) non-face to face customers and (k) those with dubious reputation as per public information
available etc. However, Non-Profit Organizations (NPOs)/ Non-Governmental Organizations (NGOs)
promoted by the United Nations (UN) or its agencies will be classified as low risk customers.

Due to inherent risks and complexity involved in the transactions of Nontrade/ service related cross border
remittances in the accounts with declared nature of business/activity of (i) Logistics Service Providers/
Freight Forwarders (ii) Tour and Travel Service Providers (iii) Event Management (iv) Media/Film
production related (v) Advertising services (vi) IT/Software services shall be categorized under “High
risk category” and transactions in these accounts shall be closely monitored and EDD to be conducted
wherever applicable.

Categorization of all customer accounts in to “High Risk Category” in cases wherein Suspicious
Transaction Report (STR) is filed irrespective of previous risk categorization (i.e., Low Risk/Medium
Risk).

Categorization of all customer accounts having “Low Risk Category” in to “Medium Risk Category”
wherein Cash Transaction Report (CTR) is filed

Enhanced Due Diligence (EDD)

37 | P a g e
EDD is the combination of Know your customer (KYC), Know your customer Business (KYC-B) and
know your customer’s Business Risks (KYC-BR). So EDD=KYC + KYC- B+KYC-BR.
KYC-B: EDD is much more than simple KYC, which is a simple proof of identity and proof of address
for the bank. KYC is a critical component of Bank’s Risk Management frame work. A customer
centric business needs to know its customers, the nature of his business and the inflows /outflows
associated with that business, if it is to provide customized business products and solutions. This may be
termed as KYC –B.
KYC-BR: The Bank further need to understand the risks associated with customer’s business to manage
risks arising from potential delinquency, fraud and consequent losses as also legal and reput at i onal
ri s ks a r i s i n g from e x p o s u r e t o cust om er s , havi ng li nks t o mul t i l evel marketing (MLM)
business /terrorist activities/hawala transactions etc, which is another manifestation of KYC and may
be termed as KYC-BR.
Enhanced due diligence should be carried out before opening an account of customer falling under High
Risk /Medium Risk Category by following the procedure as under:
• Gathering further details of the customer profile including beneficial owners and the sources of
income/ funds, by making personal visits to the customer’s location and interviewing him/her.
• Review and reconfirmation of the completeness and accuracy of KYC documents submitted
by the customer by the Branch Head by signing on the form and indicating his / her views.
• Developing specific alerts for transaction monitoring.

Customer Accounts Requiring Enhanced Due Diligence:

• Accounts of Non-Face-to-Face Customers
• Accounts of Politically Exposed Persons (PEPs) resident outside India
• Client accounts opened by Professional Intermediaries
• Accounts of Multi-Level Marketing (MLM) Agencies
In view of the emerging trends in financial sector witnessing surge in complex business activity/ies
conducted by various entities (Including unregulated Crypto Currencies), Branches shall conduct Enhanced
Due Diligence (EDD) in all accounts/scenarios stipulated in this Policy, without fail, wherever applicable.
Failure to conduct EDD attracts severe penalties from regulators (such as RBI/ FIU-India etc.,) including
loss of reputation of the Bank which shall be viewed seriously by the Competent Authority.

38 | P a g e
Customer Identification Procedure (CIP):
Customer Identification means identifying the customer and verifying his/her identity by using
reliable, independent source documents, data or information.
Customer Identification Procedure (CIP) shall be carried out at different stages, i.e., while establishing a
Banking relationship, carrying out a financial transaction or when there is a doubt about the
authenticity/veracity or the adequacy of the previously obtained Customer Identification Data.
Information collected at the outset for Customer Identification purpose shall generally
include:
• The purpose and reason for opening the account or establishing the relationship
• The anticipated level and nature of the activity to be undertaken
• The expected origin of the funds to be used within the relationship
• Details of occupation/employment and sources of wealth or income

Permanent Account Number (PAN) or FORM 60:

Following banking transactions have been specified under the Income Tax Rules for which
PAN should be quoted:
• A Term Deposit exceeding Rs. 50,000/-
• Opening an account with amount exceeding Rs.50000/-
• Payment in cash for purchase of bank drafts or pay orders or bankers cheques for an amount
exceeding Rs.50000/- during one day.
• Deposit in cash exceeding Rs.50000/- during anyone day.
• Making an application for issue of a credit card
• When the customer quotes his PAN, a copy of the PAN card issued by the Income Tax
department should be obtained and kept on record.
• As per Government of India recent guidelines, it is mandatory to obtain and link PAN or Form 60
to all existing bank accounts. This directive is not applicable to BSBDS (Basic Savings Bank Deposit
Small Accounts) which are basically no frill accounts.

Verification of PAN:
Any officer of a Bank who has received any document relating to any transaction mentioned above
should ensure after verification that PAN has been duly and correctly quoted in the document. It is the
legal obligation of the bank officials authorized to verify correctness of PAN.
Where Pan is not quoted, declaration in Form No. 60 should be obtained with proof of address
while accepting declaration.

Single document for proof of identity and proof of address:

There is now no requirement of submitting two separate documents for proof of identity and proof of
address. If the officially valid document submitted for opening a bank account has both, identity and
address of the person, there is no need for submitting any other documentary proof.

39 | P a g e
“Officially Valid Document” (OVD)
It means
1. the passport;
2. the driving license;
3. proof of possession of Aadhaar number;
4. the Voter’s Identity Card issued by Election Commission of India;
5. job card issued by NREGA duly signed by an officer of the State Government and;
6. the letter issued by the National Population Register containing details of name and address or any
document as notified by the Central Government in consultation with the regulator.

Provided that where the Customer submits his/her proof of possession of Aadhaar number as officially
valid document, he/she may submit it in such form as are issued by the Unique Identification Authority
of India.

Relaxation regarding Officially Valid Documents (OVDs) for Small Account

If an individual customer does not possess PAN and Officially Valid Documents (OVD) and desires to
open a bank account, Bank shall open ‘Small Accounts’ subject to following:

Customer may be allowed to open such an account, subject to compliance of operational guidelines
issued on this subject matter, on production of a self-attested photograph and fixation of signature or
thumb print, as the case may be, on the account opening form.
While opening accounts as described above, the customer shall be made aware that if at any point of
time, the balance in all his/her accounts with the bank (taken together) exceeds Rs.50,000/-or the
aggregate of all credits in a financial year exceeds Rs.1,00,000/- in a year or the aggregate of all
withdrawals and transfers in a month exceeds Rs.10,000/-, no further transactions will be permitted
until full KYC procedure is completed. In order not to inconvenience the customer, the branch shall
notify the customer when the balance reaches Rs. 40,000/- or the total credit in a year reaches Rs.80,000/-
that appropriate documents for conducting the KYC must be submitted otherwise operations in the
account will be stopped on crossing the limit.

Monitoring of Transactions

Ongoing monitoring is an essential element of effective KYC procedures. Banks can significantly
reduce the risk of money laundering if they have an understanding of the normal and reasonable activity
of the customer. Banks must pay special attention to all complex, unusually large transactions and all
unusual patterns which have no apparent economic or visible lawful purpose. Very high account
turnover inconsistent with the size of the balance maintained may indicate that funds are being ‘washed’
through the account.

40 | P a g e
Precautions during Monitoring of Transactions:
▪ At least for first six months, the account should be monitored in all respects.
▪ Transactions with amount over Rs.1.00 lac, should be authorized by Accountant/Assistant Branch
Manager or Branch Manager.
▪ Care should be taken in collection of cheques in newly opened account
▪ Cash deposit aggregating Rs.50000/- or more in a day- PAN number of account holder is a ‘must’,
if it not provided at the time of account opening.
▪ Branches should also have a close watch on ‘Money Mule’ transactions. In ‘Money Mule’
transactions, others’ accounts are used by terror outfits and individuals for transferring funds or
making transactions for a commission or rent

Updation of Customer Identification Data/Customer Profile (Re-KYC):

• For Low Risk Customers once in 10 years

• For Medium Risk Customers once in 8 years
• For High Risk Customers once in 2 years
• Fresh photographs will be required to be obtained from minor customer on becoming major

Monitoring of Cash Transaction:

The maximum permissible cash transaction in an account in a day is Rs.10 lac (both receipts &
withdrawals). In case, a customer desires higher cash transaction levels, the same will have to be
approved for each account by the concerned Regional Office. For this purpose, the branch will submit
supporting evidences viz. Income tax returns, GST returns or GST assessment orders or any other
documents justifying higher levels of deposit/withdrawal of cash.
In respect of Bullion dealers, the maximum permissible daily cash level has been fixed at Rs.50 lacs.
This will be available for the bullion dealers buying bullion directly from our bank. Transactions
beyond this limit needs to get approved by IBD, CO.

Tipping Off:
The Bank shall ensure that the customers are not to be informed (‘tipped off’) at any level that the
account is under monitoring for suspicious activities and a disclosure has been made to the appropriate
statutory authorities.

Maintenance and Preservation of Records:

The Branch shall maintain the records containing information in respect of transactions referred to
in Rule 3 of the Prevention of Money-Laundering (Maintenance of Records, etc.) Rules, 2005.

The Branch shall maintain for at least five (5) years from the date of transaction between the Bank
and the client, all necessary records of transactions, both domestic or international, which will permit
41 | P a g e
reconstruction of individual transactions (including the amounts and types of currency involved, if any)
so as to provide, if necessary, evidence for prosecution of persons involved in criminal activity.
The Branch shall ensure that records pertaining to the identification of the customer and his address (e.g.
copies of documents like passports, identity cards, driving licenses, PAN card, utility bills, etc.) obtained
while opening the account and during the course of business relationship, are properly preserved for at
least five (5) years after the business relationship is ended.
The Branch shall maintain under Rule 3 of Prevention of Money-Laundering (Maintenance of Records,
etc.) Rules, 2005 the following information in respect of transactions
• Nature of the transactions;
• Amount of the transaction and the currency in which it was denominated;
• Date on which the transaction was conducted; and
• Parties to the transaction.

Risk Management:
The Bank is exposed to the following risks, which arise out of Money Laundering activities:

Reputation Risk
It is the risk of loss due to severe impact on Bank’s reputation. This may be of particular concern given
the nature of the Bank’s business, which requires maintaining the confidence of depositors, creditors
and the general market place.
Compliance Risk
It is the risk of loss due to failure of compliance with key regulations governing the Bank’s
operations.
Operational Risk
It is the risk of loss resulting from inadequate or failed internal processes, people and systems or from
external events.
Legal Risk
It is the risk of loss due to any legal action the Bank/Branch may face due to failure to comply
with law.

Foreign Account Tax Compliance Act (FATCA)

Foreign Account Tax Compliance Act (FATCA) was enacted in the United States in 2010 to combat
tax evasion by U.S person holding investments in off shore accounts. Under FATCA U.S taxpayer
holding financial assets outside the United States must report those assets to the US Internal Revenue
System (IRS). In addition, the act also requires Foreign Financial Institutions across the globe to
report directly to the IRS requisite information about financial accounts held by US taxpayers, or by
foreign entities in which US taxpayers hold substantial ownership interest.

42 | P a g e
Further Taxpayers increasingly operating on a global basis, tax authorities are moving from bilateral to
multilateral cooperation and from exchange of information on request to other forms of co-operation.
India had signed the Inter Government Agreement (IGA) with United States on 09.07.2015 for reporting
under FATCA. Accordingly Income Tax Rules 1962 was amended to facilitate reporting under FATCA
and Common Reporting Standards (CRS). To comply with the above Act, we are required to obtain and
capture the following details in Customer Information File (CIF) for all the accounts of individuals and
joint individuals.

• Details wherever the customers Country of Birth / Nationality / Tax Residency is other
than India.
• If customers Country of Birth / Nationality / Tax Residency are other than India, we
should collect documentary evidence of TIN or its functional equivalent.
• FATCA / Other Reportable Account Declaration, which has been incorporated in the
account opening form.

Shell Company:
The Bank shall not open the account of “Shell Company” (i.e. a company which is incorporated in a
country where it has no physical presence). Branches shall undertake enhanced due diligence of
existing accounts of companies and in case of detection of account of any Shell Company shall give
notice of closure after obtaining prior permission from concerned Regional Office. Branches are also
advised to file STR on such account as per extant guidelines of the Bank.

Principal Officer (Money Laundering Reporting Officer)

Bank has a KYC-AML Division at Central Office headed by Deputy General Manager under Compliance
Department. General Manager, Compliance Department is the Principal Money Laundering Reporting
Officer (Principal Officer / PO). The Principal Officer’s illustrative duties shall be:

• Overseeing and ensuring overall compliance with regulatory guidelines on

• KYC/AML/CFT and obligations under PML Act and Rules & regulations made there under.
• Monitoring the implementation of the KYC/AML policy
• Reporting of transactions and sharing of the information as required under the law
• Maintaining liaison with law enforcement agencies
• Preparing periodical reports for submission to the Top Management/Board.

The name, designation and address of the Principal Officer shall be communicated to the FIU-India.
The Regional Heads / Branch Heads posted at Regions / Branches shall be the Money Laundering
Reporting Officers for their Region / Branch.

Hiring of Business Facilitators/ Business Correspondents

The Bank may engage Business Facilitators (BFs) / Business Correspondents (BCs) as per the Policy
approved by its Board of Directors. In such cases, even though the Bank may use the services of the
BF / BC for preliminary work relating to account opening formalities under BC model, responsibility of
ensuring compliance with KYC and AML norms shall continue with the Bank.

43 | P a g e
 Prohibition on dealing in Virtual Currencies (VCs)
Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or
settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving
loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with
them and transfer/receipt of money in accounts relating to purchase/sale of VCs.

Transaction Monitoring:
• Monitor accounts with high value of transactions & match with their declared profile. Ensure
enhanced due diligence (EDD) in case of high value/high volume transactions.
• Monitor accounts with variance in declared occupation/profession & its transactions.
• Monitor accounts with high cash deposits & withdrawals, inconsistent with the line of activity.
• Permission from RO should be sought in deserving cases for all cash deposits and withdrawals
exceeding Rs.10.00 lacs (in case of bullion dealers the limit is Rs.50.00 lacs per day)
• Accounts with Deposits, withdrawals structured below threshold limit e.g. 49500, 49900,999000 etc
should be monitored closely and reported.
• Small amount deposit from different SOLs should be checked for Multi-Level Marketing (MLM)
accounts and reported.
• High value, round figure, U-turn, Circular transactions, not related to declared activities should be
monitored and reported.
• Accounts/transactions posing suspicion as explained herein and concluded as suspicious transaction
should be promptly reported to Principal Officer through Regional Office, not later than 7 days of
the conclusion.
• Extend full help and guidance to customers to comply with the requirements of KYC-AML.

Simplified KYC Measures:

a. Single Document for Proof of Identity and Proof of Address along with Account Opening Form
(AOF): If the officially valid document (OVD) submitted has both, identity and address of
the person, there is no need for submitting any other documentary proof. The information
containing personal details like name, address, age, gender, etc., and photographs made
available from UIDAI as a result of e-KYC process can also be treated as an Officially Valid
Document.

b. No Separate Proof of Address is required for Current Address: Since migrant workers,
transferred employees, etc., often face difficulties while submitting a proof of current
address, such customers can submit only one proof of address (either current or permanent).
For local address, a simple declaration can be obtained where a customer has provided
his/her Aadhaar number.

c. Small Accounts (BSBDS): Those persons who do not have any of the officially valid
documents· can open Small Accounts. Small accounts can be opened on the basis of a self-
attested photograph and putting her/his signature or thumb print in the presence of an
official. These small accounts would be valid normally for a period of twelve months.
Thereafter, such accounts would be allowed to continue for a further period of twelve more
months, if the account holder provides a document showing that she/he has applied for any
of the officially valid document, within twelve months of opening the small account.
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Processes available for opening of SB Accounts: Various processes are available in the Bank for
opening of SB accounts, the details of which are as under:

1. Online account opening process: This process was introduced during Nov.2015 as an alternate way
of account opening for techno savvy prospective customers, wherein a customer can enter the required
information through online mode at his/her home or work place (as per convenience) and submit the
necessary documents at selected Branch.

2. DMS Account Opening Process: Centralized account opening process through Document
Management System (DMS) was introduced in 2011 across the country in Union Bank of India
(standalone). The main objective of the process is to ensure standardization of SB account opening
process, uniform adherence of KYC norms, best in class customer service and reduced workload at
Branches.
After scrutinizing and verifying the application with all relevant documents and providing mandatory
fields, Branch user opens account using DMSACOPN menu in Finacle. After that, customer ID and
account number will get generated. Branch has to scan & upload account opening form & KYC
documents in DMS application.

3. Bulk account opening process: In order to provide convenience of SB account opening in a short
period, a new process was developed to open such accounts through file upload mode using Finacle
menu BACOPN. Branches send request to Operations dept. (erstwhile GBOD) duly recommended by
Regional Head for permission for Bulk account opening in Finacle (minimum no. of count should be
100). Branch has to ensure the CKYC compliance.

4. Account opening process through BC Mode: As per the directives of RBI, Bank has engaged Bank
Mitrs through Corporate Business Correspondents (BCs). These Bank Mitrs, working as an extended arm
of Branches are engaged in several financial inclusion activities including PMJDY account opening
through e-KYC. Resident along with Aadhar details visits BC point for e KYC account opening. After
successful biometric authentication basic details of all the resident will pop upon the screen which
will be checked before proceeding further. Immediately the details will reach CBS through FI Gateway
for account number generation. After the completion of successful validations account number will
get generated. The account holder is permitted to do financial transactions at BC point till the account
holder complete the process of submission of physical account opening form at the base branch with
relevant documents as per extant guidelines.

5. Account opening process through e-KYC in branches: Branches are also opening accounts using
e-KYC mode after authentication of Aadhaar from UIDAI. In this process, Branches are keeping all the
documents of the customers (i.e. account opening form and KYC documents) with them which are used
for scanning and uploading on CKYC portal for getting CKYC number from CERSAI and also future
reference.

6. Account opening process in Branches using Finacle directly: The Branches can open the accounts
directly in Finacle using HOAAC menu.

PAN/Form 60: Quoting of PAN is mandatory for some specified transactions as per guidelines of the
Income Tax Department. In the absence of PAN card, customer shall make a declaration in Form No.60.
45 | P a g e
The Manager/Officer of the Bank shall not accept the declaration where the amount of income of the
nature referred to in item 22b (of Form No 60) exceeds the maximum amount which is not chargeable
to tax, unless PAN is applied for and Column No 21 (of Form No 60) is duly filled.

Form 15 G/15 H: Branches to guide the customers to submit form15 G/15 H before 15th April every
year, in case their total income is less than taxable limit and interest income is more than Rs. 40,000/-
(for customers below the age of 60 years) or Rs. 50,000/-(for senior citizens).
Letter of Thanks: Letter of Thanks to Customer/Introducer should invariably be sent to account
holders and introducers (if any). In case, letter of thank is returned undelivered more particularly with
reason “undelivered/addressee does not reside etc.”, the account should be freezed. The branch
should ascertain the reasons for non-delivery, preferably by contacting the customer. The account
should be unfreezed after re-verifying the identity and address of the customer. In case the account
is opened using e-KYC, branches will not freeze the account in case the letter of thanks returned
undelivered. Instead branches will ascertain the reasons from the account holder and satisfy about
KYC formalities. Wherever ‘Letter of Thanks’ are returned undelivered, cheque books should not be
issued/delivered till the addresses are verified/confirmed to the satisfaction of the Bank.

Low Cost Deposit – Savings Bank

There are two types of deposits Demand deposits and Term Deposits. Savings and Current Deposits are
payable on demand hence are known also as Demand deposits. Term Deposits are those which are
payable after a specified period.
Both Savings and Current deposit accounts are a source of low cost funds for the bank hence termed
as Low Cost Deposits – LCD. We shall in this chapter deal with operational guidelines for Savings Bank
accounts.

A. Benefits for the Bank

▪ Low Cost Deposit: The Interest paid on Savings Bank accounts are comparatively low which
results in less expenditure. Less Expenditure leads to more profit.
▪ Enlarge Customer Base: Savings Bank accounts helps bank increase its customer base.
▪ Cross Selling: Having an enlarged customer base helps bank in cross-selling its various financial
products..
▪ Easy Operation: New Generation banking facilities like Anywhere / Any Time Banking through
Branch Banking / ATM Banking / Net Banking / Phone Banking makes operations easy and
convenient.
▪ Reduced Cost of Operations: Enabling operations through Digital Banking Channels viz; ATMs, E-
banking, SMS Banking, Mobile banking (U-mobile), Call Centre, etc. reduces the transaction cost
for the bank.

B. Benefits for Customer

▪ Easy Liquidity
▪ Banking Anytime anywhere
▪ Having facilities like Debit Card, Cheque book
▪ Sweep facility
▪ Giving Standing Instructions

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▪ Making Fund Transfers, Bill payments
▪ Use of Alternate Delivery Channels (ADC)/Digital Banking Channels
▪ Auto credit of Salary/Wage/Scholarship/Pension
▪ Receipt of Interest on Daily Balance

C. Who can open an account?

▪ Individual: Individual who is having the contractual capacity can open the account for the purpose
of saving, wage, salary, scholarship, pension, etc.
▪ Minor under the guardianship. Minor at the age of 10 years or more can open and operate the
account independently with prescribed limits. One time undertaking from guardians while
opening of account is required.
▪ Societies registered Societies Registration Act, 1860 or any other corresponding law in force in
state or Union territory except societies registered under the state cooperative Societies Acts
and specific state enactment creating land mortgage banks.
▪ Companies governed by Companies Act, 1956 which have been licensed by the Central Govt under
section 25 of the said Act, or under the corresponding provisions in the Indian Companies act ,
1913 and permitted, not to add to their names the words “Limited” “or the words “Private
Limited”
▪ Primary Co-operative Credit Society which is being financed by bank
▪ Khadi and Village Industries Boards
▪ Agriculture Product Market Committees
▪ Government Departments/bodies/agencies in respect of grants / subsidies released for
implementation of various programmes/schemes sponsored by Central Govt. subject to
production of an authorization from the respective Government Departments to open savings
accounts
▪ Institutions other than those prohibited from opening savings Bank account and whose entire
income is exempted under Income Tax Act- 1961
▪ Development of Women and Children in Rural Areas (DWCRA)
▪ SHGs, Farmer’s Club: Self Help Group and Farmer’s Club can open the SB account in which the
contribution from members, interest, donation, etc can be deposited.

D. Who cannot open SB account?

▪ Any trading or business concern, (e.g. firms of Chartered Accountants, Lawyers, etc) whether
such concern is proprietorship, Partnership, Company or Association.
▪ Government depts. /bodies depending upon budgetary allocations for performance of their
functions.
▪ Govt. Department, Municipal Corp., Panchayat Samitis, State Housing Board, State Electricity
Board, Industrial Development Authority, Water / Sewerages / Drainage Board, State Text Book
Publishing Corporation, Metropolitan Development Authority, State/District level Housing Co-
operative Societies, etc
▪ Regional Rural Banks, Cooperative Banks and Land Development Bank.
▪ Any political party

E. Introduction:
RBI has reiterated that INTRODUCTION IS NOT NECESSARY FOR OPENING OF ACCOUNTS UNDER PML Act
and rules or Reserve bank’s extant KYC guidelines, bank should not insist on introduction for opening
bank accounts of customers.
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F. Nomination
As per RBI directives every account should have nomination and if the customer is unwilling to have
nomination the same should be recorded.

G. Operation

▪ Letter of Thanks (Customer & Introducer): The letter of thanks to be sent to both customers who
has opened the account as well as to introducer which also serve the purpose of address
verification.
▪ Debit Card: It is strictly handed over to the account holder after taking proper acknowledgement.
▪ Cheque book: Cheque book is issued to the account holder who has agreed to maintain minimum
balance in the account and personalized cheque is issued after placing the indent in the Finacle.
▪ E-banking: Customer can use the E-banking facility after the ATM card gets activated. The
customer can be informed about the unique feature of self-user creation.
▪ Passbook/Statement: Banks must offer passbook facility to all its customers. In case statements
are offered and the customer chooses statements, then statements must be issued monthly.

H. Dormant account

An account will be classified as dormant, if there are no customer induced transactions in the accounts
for a period of 2 years (24 months). As per the procedure outlined, accounts where there are no
operations for 21 months a notice has to be sent to the account holder informing them that in the
event of account remaining inoperative for the next three months, it will be classified as dormant and
no further transactions will be allowed. If the bank does not receive any reply, then the account will
be classified by the system as dormant. At the end of 21st month, suitably letter will be generated by
the system at the time-of-day end process. Similarly, at the end of 24 months, also, the system will
similarly generate the letter on account being classified as dormant.

Maximum permissible cash transaction a day

If the cash transaction in any of the account whether credit or debit exceeds Rs.10.00 lacs in a day
permission should be taken from RO.

I. Mandate
The Joint Account opened by more than one individual can be operated by an individual or jointly. The
mandate for operating the account can be modified with the consent of all account holders.
The joint account holders can give any of the following mandates for the operation of the account:
▪ Either or Survivor: If the account is in the name of two individuals say, A & B, the balance along
with interest, if applicable, will be paid to either of account holders i.e. A or B, on date of
maturity or to the survivor on death of any one of the account holders.
▪ Former or Survivor: If the account is in the name of two individuals say, A & B, the balance along
with interest, if applicable, will be paid to the former i.e. A on date of maturity and to the
survivor on death of any one of the account holders.
▪ Latter or Survivor: If the account is in the name of two individuals say, A & B, the balance along
with interest, if applicable, will be paid to the latter i.e. B on date of maturity and to the survivor
on death of any one of the account holders.
▪ Jointly: The account will be operated by all the account holders jointly.
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 ▪ Anyone or Survivor: If the account is in the name of two or more individuals say, A, B & C, the
final balance along with interest if applicable, will be paid to any of account holders i.e. A or B
or C, on the date of maturity. The account will be operated by any one. On the death of any one
of account holder say A, the final balance along with interest if applicable, will be paid to any
two of the surviving account holders i.e. B or C. On the death of any two of account holder say
A and B, the final balance along with interest if applicable, will be paid to the surviving account
holder i.e. C.

Average Quarterly Balance (For Savings Accounts Minimum Balance Requirement)

Location Without cheque book With cheque book
METRO 500 1000
URBAN 500 1000
SEMI URBAN 250 500
RURAL 100 250
PENSIONER 0 0

Interest Payment in Saving Bank Deposit: Interest Payment on Saving Bank on Quarterly Intervals As per
RBI directives, it is decided to pay interest on SB Deposit at quarterly interval and will be paid in the month
of April, July, October and January every year.

Revision in Interest Rate on Savings Bank Deposits: The revised interest rate applicable to savings bank
deposits which is effective from 01st June 2022, is as per the following table:

Balance Revised Interest Rate

Up to Rs. 50 Lakhs 2.75%
> Rs. 50 Lakhs to Rs. 100 Crores 2.90%
> Rs. 100 Crores to Rs. 500 Crores 3.10%
> Rs. 500 Crores to Rs. 1000 Crores 3.40%
Above Rs. 1000 Crores 3.55%

Cheques
What is a Cheque?

Cheque is an instrument which helps in Payment and Settlement process.

Cheque is defined under Section 6 of NI Act as “a bill of exchange drawn on a specified banker and
not expressed to be payable otherwise than on demand”
Sec.5 of NI Act defines bill of exchange as “It is an instrument in writing signed by the maker containing
an unconditional order directing a certain person to pay a certain sum of money only to or to the order
of a certain person or to the bearer of the instrument.”
• Indian Stamp Act exempts cheques from payment of stamp duty
• NI Act does not provide any standard format for cheque
• Since it is not a legal tender, no one can be compelled to accept payment by cheque
Definition of cheque broadened by amendment to NI Act – now it includes cheques in electronic form
and electronic image of a truncated cheque also

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Parties to a Cheques

Drawee: A person on whom the instrument/s is/are drawn i.e. the person who has to pay the amount.
In case of cheque, drawee is always a Bank.
Drawer: A person or account holder or an entity who draws the instrument or issue the cheque.
Payee: Beneficiary or recipient of the cheque amount.

Bearer or Order

• A cheque can be drawn without mentioning the words order or bearer. In the absence of such
words the cheque is treated as order cheque
• A cheque drawn payable to “A” will mean payable to A or order
• If a cheque is drawn payable to A only, it cannot be payable to anyone other than A.
• If the words “or bearer” are not struck off, the cheque is treated as bearer cheque the payment
of which may be made to the named payee or any bearer of the cheque

Crossing of Cheque

• Crossing is applicable in case of cheques only [does not cover Bill of exchange and Promissory
Note]
• Crossing is either general crossing [123] or special crossing [124]
• General Crossing: Two parallel transverse lines on the face with or without words, such as
‘& Co’, ‘not negotiable’, ‘payees account only’ etc. These words without lines will not
constitute crossing. [Lines are important and not the words] These cheques are payable to
a banker
• Special Crossing: Cheque bears across its face, an addition of the name of the banker, either
with or without the words not-negotiable. These cheques are payable to the specific banker
whose name appears on the face of the cheque. [Name of the bank is important and not the
words/lines]
• Not Negotiable Crossing:[130] – A person taking a cheque crossed generally or specially
bearing in either case the words ‘not negotiable’ shall not have and shall not be capable of
giving a better title to the cheque than that of the person from whom he took it ‘had’. Such
crossing does not restrict further transfers but the endorsees do not get better title than
the endorsers.
• Account payee crossing [direction to collecting bank] – NI act does not define it. It is result
of custom, use and practice and legal decision. Law does not prohibit but cheques with such
crossings cannot be endorsed.

Material Alteration

• Material alteration is an alteration of a negotiable instrument which brings basic change in the
operation/characteristic of the instrument [i.e. mandate] and liabilities of the parties thereof,
whether the change be beneficial or detrimental.
• Alterations would be taken as material when it relates to date, sum payable, time of payment,
place of payment, rate of interest, addition of new party, tearing material part of NI, date of
endorsement etc.
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 • Alterations which are not material: such as crossing an uncrossed cheque, filling the date,
converting a general crossing into a special crossing etc.
• Only the drawer of a cheque can correct/attest material alterations.

Protection:
Payment of a materially altered cheque is not considered as a payment in due course and bank will
have to make good the loss if any. Sec 89 protects a banker only if the material alteration is not
apparent i.e. it is done in such a way that it cannot be detected with reasonable care, prudence and
scrutiny.

Types of Endorsements
• Blank Endorsement: Endorser only signs without adding any words, directions. This makes the
instrument payable to bearer as per Sec 54.
• Endorsement in Full: Endorser signs his name and adds the name of endorsee specifically.
• Restrictive Endorsement: Endorser adds along with sign such as Pay to A only
• Partial Endorsement: When endorser transfers part of amount mentioned in Negotiable
instrument.

Validity of Cheque
• Normally the cheque is valid for three months after the date of issue of cheque
• The validity can be increased or reduced by the drawer of the cheque
• The cheque can be revalidated with the authentication by the drawer

Methods to apply cheque book:

Though Branch: Account holder may apply for cheque book by submitting duly filled and signed cheque
book requisition slip (available in the form of a perforated page, in latter half of cheque book) to
Branch. New account holder may apply for cheque book by submitting a letter of request/instructions
as per Account Opening Form.

Through Digital Channels: Account holder may also apply for cheque book through Internet
Banking/Mobile Banking, ATM, customer care through OCRM.

Loose Cheque: Loose Cheque" may be used in branches for all cash payments up to 25000/- at the
base branch only. A note "For payments up to Rs. 25000/- only" is printed on Cheque leaves.

In absence of loose cheques for making payments in cash for more than Rs.25000/, and whenever there
is a requirement from customers to issue a loose cheque leaf for payment of cash exceeding Rs.
25000/-. Loose Cheque Books with 100 leaves with a note on the top as “ONLY FOR CASH PAYMENTS
AT BASE BRANCH” may be indented by branches.

The loose cheque leaf to be issued should be from a separate cheque book earmarked by the Branch
for this purpose. The entire cheque book so reserved for issuing the loose cheque leaves should be
branded with a rubber stamp reading as “Loose Cheque Leaf Issued to Mr./Ms./Mrs./M/s……………on
date……….. Not to be used for Clearing or other transactions. Transaction more than Rs.50000/- is

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to be permitted only with permission of Branch Head.”

Payment/withdrawal at non-base Branch by Account Holder: Customer can withdraw cash up to

Rs.1.00 Lac at non-base Branch. For proper identification of the drawer, Branches may ask for any one
document of identity proof from the drawer as required for opening of account, verify the same from
original and keep a Xerox copy with the paid instrument.

Payment/withdrawal at non-base Branch by third parties: Cash withdrawal can be allowed to third
parties at non-base Branch subject to the limit of :
• Rs.10,000/- per transaction in Savings Bank Account
• Rs. 25,000/-per transaction in Current/Overdraft Account

Payment in Due Course

Payment in due course means, payment
• In accordance with the apparent tenor of the instrument
• In good faith and without negligence
• To any person in possession of the instrument
• Under circumstances that do not afford a reasonable ground to believe that a defect exists in the
title of the person obtaining payment
• Good faith means not having any mala-fide or fraudulent intention
• Without negligence means with reasonable care, must raise a doubt if the circumstances so Warrant
Payments not in Due Course
• Payment in contradiction to apparent intention of parties
• Payment after receipt of Stop Payment Order
• Payment after Banking Hours
• Payment of a cheque bearing forged signatures
• Payment under suspicious circumstances

Collection of cheques
As an agent: When the cheque is collected on behalf of customer and the bank has no interest on the
cheque. The Bank first collects the amount and then gives credit to the customer.

As a holder for value: When the Bank has purchased or discounted the cheque
• Accepts cheque against OD
• Has already allowed withdrawal against cheque

Conversion
▪ Wrongful interference in the property of another person.
▪ When bank collects a cheque for a person who has no title or defective title, it can be held guilty
of conversion
▪ Section 131 provides protection to a banker against CONVERSION in following circumstances
▪ acting as an agent and not as a holder for value
▪ must receive payment for a customer
▪ acting in good faith
▪ cheque must be a crossed cheque

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 Cheque Truncation System
• Cheque Truncation is the process of stopping the flow of the physical instruments across branches.
The physical instrument is truncated and an electronic image of the cheque is sent to the drawee
branch along with the relevant information like the MICR fields, date of presentation, presenting
bank etc.
• There is no need to move the physical instruments to the drawee branch
except in exceptional circumstances.
• This reduces the time required for payment of cheques, cost of collection of cheques, the scope for
clearing related frauds, delay in processing and reconciliation problems, etc.
• With the elimination of logistics problems and scope for instrument getting lost in transit or
manipulated during clearing cycle; it speeds up the process of collection or realization of the
cheques and enhances customer service.
• The images captured at the presenting bank level is transmitted to the Clearing House and then to
the drawee branches with digital signatures of the presenting bank.

Outward Clearing Process: Customer submits the cheques in presenting Bank. Presenting Bank after
capturing the cheque data in CBS, will transmit the data file (CXF File) and image file (CIBF File) to
Clearing House (GRID). At Grid, Clearing House Interface of NPCI will process the data and exchanges
the data with respective Banks. Clearing House Interface of NPCI will generates the response
(acceptance and rejection) files and provides the same to respective Banks in clearing house (GRID).
Banks in turn will credit proceeds to respective accounts after marking returns.

Inward clearing process: Cheques presented by presenting Banks in clearing house will be received as
data file by Clearing House Interface and will be presented to Drawee Banks for inward clearing.
Drawee Bank after confirming the clearance of proceeds will return the data file to clearing house.
Clearing House Interface will further provide data files to presenting Bank. Presenting Bank in turn
credits proceeds to respective accounts.

Role of presenting and Collecting Bank:

a. As the payment processing is done on the basis of images under CTS, the onus of due diligence shifts
to the presenting Bank, as provided under explanation II to section 131 of NI Act. Member Banks have
to ensure compliance to “Know Your Customer (KYC)” norms in letter and spirit.

b. The Bank 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, Bank
may deploy suitable risk management techniques such as scrutiny of high value transactions; limit
based checking by officials, alerts in new accounts, etc.

c. The presenting Bank takes full responsibility for collecting on behalf of the intended payee and
exercises due diligence as per the conditions laid down in amended Negotiable Instruments Act.

Role of Paying Bank/Drawee Bank

As per Section 6 of NI Act, 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.
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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: Provided that the truncated cheque so demanded by
the Drawee Bank shall be retained by it, if the payment is made accordingly.

Properties of CTS – 2010 cheques can be easily recognized by:

a. Printer name / CTS – 2010· printed vertically near the perforation

b. An easily distinguishable shaded white column below the account number columns.

c. In the CBS environment, CTS-2010standard cheques are to be paid at par if presented in clearing
at any centre, even if the cheque leaves are not super-scribed with words indicating payable at
par at all branches of the Bank.

d. The new cheque standard “CTS 2010” with a set of minimum security features would ensure
uniformity across all cheque forms issued by Banks across the country and also help presenting
Banks while scrutinizing / recognizing cheques of Drawee Banks in an image based processing
scenario.

e. Reserve Bank of India has prescribed for implementation of the Mandatory Verification of CTS
instruments through Ultra Violet [UV] Lamp by the Presenting Bank. The move is aimed at
identification of fraudulently altered instruments presented through CTS clearing, as the payment
of instruments in CTS clearing is based on the image of the instrument. In our Bank, it has been
decided to subject all instruments of Rs.50,000/- and above to UV lamp verification.

f. Hence, any CTS instrument of value of Rs.50,000/- and above should be compulsorily verified
through UV lamp to ascertain correctness and genuineness of the instrument, before sending to
the Service /Nodal Branch for scanning.

g. After verification through UV Lamp, the Branch should affix a stamp at the back of instrument
confirming the verification. The verification seal shall be as under:

b. “Verified Through UV Lamp, Union Bank of India, Branch”

a. A cheque received for collection should conform to CTS-2010 standards. It should be ensured that
it contains security features, such as “CTS India” watermark Union Bank Water mark in Hindi and
English, Void Pantograph, Bank’s Logo printed with ultra violet ink, etc.

b. Signature/s and details on the cheque should be properly verified. In case of suspicion on the
appearance of the image, presenting Bank should be contacted to provide the original instrument
for verifying its genuineness.

c. Cheque passing official should keep in mind that no material alteration is permitted under CTS,
even if such alteration has been authenticated by the drawer, exception being date field.

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d. If the passing Officer observes any unusual feature on a cheque like variation in font size or writing
style, he/she may refer to the account holder/ Branch for confirming its genuineness.

Positive Pay System:

RBI has directed all the Banks to implement Positive Pay System from 01.01.2021. The concept of
Positive Pay involves a process of validating key details of large value cheques. Under this process,
the issuer of the cheque submits electronically through channels like SMS, Mobile App, Internet
Banking, ATM etc. certain minimum details of that cheque (like date, name of the beneficiary/payee,
amount etc.) to the Drawee Bank, details of which are cross checked with the cheque presented under
CTS. Any discrepancy is flagged by CTS to the Drawee Bank and presenting Bank, who would take
redressal measures.

Threshold limit under positive pay system: RBI has informed that this facility should be enabled to
all account holders issuing cheque for amount of Rs. 50,000/- and above. Availing of this facility is at
the discretion of the account holder. However, Banks may consider making it mandatory in case of
cheques for amounts of Rs. 5,00,000/- & above. Only those cheques which are complaint with above
instruction will be accepted under dispute resolution mechanism at the CTS grids. Member banks may
implement similar arrangements for cheques cleared / collected outside CTS as well.

National Automated Clearing House

The National Payments Corporation of India (NPCI) offers to banks, financial institutions, Corporates
and Government/s a service termed as "National Automated Clearing House (NACH)" which includes
both Debit and Credit. It shall be referred to as NACH. NACH (Debit) & NACH (Credit) aims at
facilitating interbank high volume, low value debit/credit transactions, which are repetitive in nature,
electronically using the NPCI service.

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 Savings Deposit Products
Savings Bank Account (SBGEN)
Any Individuals in single name, Two or more individuals (Joint
Accounts), Minors, Illiterate persons, Blind Persons, Hindu
Undivided families (HUF), Clubs, Associations, Committees,
Societies, Schools, Trusts, Executors, Administrators,
Eligibility
Institutions/Agencies specifically permitted by the RBI,
pensioners and Staff members.
QAB Rural S-Urban Urban Metro

Quarterly Average Balance With CHQ book 250 500 1000 1000
(in Rs) Without CHQ
100 250 500 500
Book
Type of ATM/Debit card Classic card
Issue charge –FREE
Debit Card charge
Annual maintenance charge –As per applicable charges.
Own Bank 5 transactions (financial + non-financial) per month.

Free Access of ATM 3 transactions (financial + non-financial) per month at Metro OR

Other Bank 5 Transactions (financial + non-financial) per month at other
centres
ATM Cash Withdrawal Limit Rs. 25,000/- Per day
POS Limit Rs. 50,000/- Per day
Free Personal Accident
Insurance (Death) cover with
Rs 2 Lakhs
debit card*
SMS Banking Charges As per applicable charges
Cheque leaves including 20 leaves free/ year. Beyond 20 leaves as per applicable
Personalized Cheque Leaves charges.
DD As per applicable charges
NEFT/RTGS/IMPS As per applicable charges.
Account closure -within 14
Nil
days or after 12 months
Account closure -Between 15 days
As per applicable charges.
to 12 months

Shortfall in QAB A/c with chq book A/c without chq book

Penalty for Non-Maintenance of Rs 501 to Rs 1000 Rs 100 + GST -NA-

QAB Rs 251 – Rs 500 Rs 50 + GST Rs 30 + GST
Up to Rs 250 Rs 25 + GST Rs 20 + GST

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

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Savings Bank Account for Pensioners (SBPEN)

Eligibility Individual pensioner drawing regular pension.

Quarterly Average Balance No minimum balance requirement

Type of ATM/Debit card Classic card

Debit Card charges Issue charge – Free

Annual Maintenance Charge –As per applicable charges.
Access to own Bank ATM 5 transactions (financial + non-financial) per month Free.

3 transactions (financial + non-financial) per month at Metro OR

Access to other bank ATM 5 transactions (financial + non-financial) per month at other
centres are Free
ATM Cash Withdrawal Limit Rs. 25,000/- Per day

ATM POS Limit Rs. 50,000/- Per day

Free Personal Accident

Insurance (Death) cover with Rs 2 Lakhs
debit card*
SMS Banking Charges Free

Cheque leaves including 20 Cheque leaves Free per year. Beyond 20 leaves as per
Personalized Cheque Leaves applicable charges
DD As per applicable charges

NEFT/RTGS/IMPS As per applicable charges.

Account closure -within 14 Nil

days or after 12 months
Account closure -Between 15 As per applicable charges.
days to 12 months
Non-Maintenance of QAB NIL

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

57 | P a g e
Savings Bank Account for Students (SBZER)

Students above 10 years and up to 25 years of age and are

pursuing regular courses can open these accounts. The account
will be automatically converted to normal SB after 25 years.
Eligibility Cheque book can be issued after student becomes major.
Accounts of students who are minors below the age of 10 years
will be operated by Parents/guardian.

Quarterly Average Balance Nil

Type of ATM/Debit card Classic card
Debit Card charges Issue charge – Free
Annual Maintenance Charge –As per applicable charges
Access to own Bank ATM 5 transactions (financial + non-financial) per month Free.
3 transactions (financial + non-financial) per month at
Access to other bank ATM Metro or 5 transactions (financial + non-financial) per month at
other centres are Free
ATM Cash Withdrawal Limit Rs.25,000/- Per day
ATM POS Limit Rs. 50,000/- Per day
Free Personal Accident Rs 2 Lakhs
Insurance
(Death) cover with debit card*
Withdrawal at branch Number of free withdrawals will be restricted to 10 per half-
through year.
withdrawal slip. Beyond the limit Rs 25/- per transaction to be charged.
SMS Banking Charge As per applicable charges
Cheque Book Cheque Book not allowed
NEFT Free
DD/RTGS/IMPS As per applicable charges
Account closure -within 14 Nil
days or
after 12 months
Account closure -Between 15 As per applicable charges.
days to 12 months
Passbook/Statement No Passbook will be provided. Monthly Statement of Account will
be given.
Non-Maintenance of QAB NIL

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

58 | P a g e
Basic Saving Bank Deposits Account-Small Accounts (BSBDS)

BSBDS accounts are opened under PMJDY scheme of government. Small accounts can be opened
on the basis of self-attested photograph and declaration on the account opening form.
Accounts can be opened by individuals who can open regular savings bank
Eligibility accounts. Account can be opened with limited KYC (with self- attested
photograph and declaration on Account opening form). Accounts should
not be opened in the name of Institutions, Organizations, Non- Resident
Indians & Staff
Quarterly Average Nil
Balance
Debit Card Allowed, RuPay debit card.
Debit Card charges Issue charge – Free
Annual Maintenance Charge - Free
Number of 4 per month FREE
withdrawals
➢ The aggregate of all credits in a FY should not exceed Rs.1,00,000/-.

➢ The aggregate of all withdrawals & transfers in a month should not

exceed Rs.10,000/-.

➢ The balance at any point of time should not exceed Rs.50,000/-.

Remarks
➢ Withdrawals at base branch only through withdrawal slip / Loose leaf

➢ The account valid is for 12 months initially and thereafter may be

extended for further 12 months if the person submits proof of having
applied for an OVD.

➢ Foreign remittance cannot be credited to small accounts without

completion of normal KYC formalities.

➢ Small accounts can only be opened at CBS linked branches of banks or

at such branches where it is possible to manually monitor the fulfillments

of the conditions

59 | P a g e
Basic Saving Bank Deposits Account (BSBDA)

The Basic Saving Bank Deposit Account should be considered as normal banking service. This
account shall not have the requirement of any minimum balance. The services available in the
account will include deposit and withdrawal of cash at bank branch as well as ATMs, receipt/
credit of money through electronic payment channels or by means of deposit/collection of
cheques drawn by Central/State Government agencies and departments. ATM card or ATM cum
debit card, RuPay debit card to be issued to all the account holders. These facilities will be
provided without any charges. No charges will be levied for non-operation/ activation of in
operative Basic Saving Bank Deposit Account.

Account can be opened by individuals who can open regular savings

Eligibility bank accounts. Customer to give declaration that he/she is not
maintaining any BSBDA A/c with other banks while opening the
account.
Quarterly Average Nil
Balance
Type of ATM/Debit card RuPay Classic card

Debit Card charges Issue charge – Free

Annual Maintenance Charge - Free
Number of withdrawals 4 per month FREE (including branch, own ATM & other ATM).

ATM Cash Withdrawal Rs.25,000/- Per day

Limit
ATM POS Limit Rs.50,000/- Per day
Free Personal
Accident Insurance Rs 2 Lakhs
(Death) cover with
debit card*
Cheque Book Not allowed. Withdrawal through withdrawal slip.
Account Closure Charges NIL

Charges for non-

operation/non- activation NIL
of inoperative BSBDA
Accounts

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

60 | P a g e
UNION SUPER SALARY ACCOUNT (USSA I, II & III)
Features Variant of USSA Scheme
Scheme Code USSA- I USSA- II USSA-III
Employees drawing Employees drawing Employees drawing regular salary
Eligibility
regular salary regular salary
Gross Salary (Average of Less than Rs. 25,000/- Rs. 25,000/- to Rs. Rs. 75000/- and above per month
last 3 months gross salary) per month 74,999/- per month

Quarterly Average Balance Nil Nil Nil

Signature/RuPay select Signature/RuPay
Type of ATM Card Platinum
Select
Issue charge – Free Issue charge – Free Issue charge – Free Annual
Debit Card Charges Annual Maintenance Annual Maintenance Maintenance Charge - Free
Charge - Free Charge - Free
ATM Cash Withdrawal Limit Rs.75000/- per day Rs 1,00,000 per day Rs 1,00,000 per day

POS Limit Rs 150000/- per day Rs 3,00,000 per day Rs 3,00,000 per day
5 transactions
Free ATM card access at
(Financial) + non- Unlimited Unlimited
own ATM
financial Per Month
3 transactions (financial
+ non- financial) per
month at Metro or 5
Free ATM card access at transactions (financial
Unlimited Unlimited
other ATM + non-financial) per
month at other centers

FREE Personal With Rs 50 Lakhs Rs 50 Lakhs

Accident Rs 2 Lakhs (Death)
account (Death + PPD & TPD) (Death + PPD & TPD)
Insurance to
Armed Forces Rs 2 Lakhs (by Bank) Rs Rs 2 Lakhs (by Bank), Rs Rs 2 Lakhs (by Bank), Rs 10 Lakhs
(Army, Navy, With debit
2 Lakhs (additional by 10 Lakhs (additional by NPCI for
Air Force, AR, card*
NPCI for RuPay (additional by NPCI for RuPay Select Card)
BSF, CISF, Platinum) RuPay Select Card)
CRPF,
ITBP, Persona
FREE NSG,
With Rs 40 Lakhs Rs 40 Lakhs
SSB)
Accident RS.2 Lakhs (Death)
account (Death + PPD & TPD) (Death + PPD & TPD)
Insurance for
Central/State Rs 2 Lakhs (by Bank) Rs Rs 2 Lakhs ( by Bank), Rs 2 Lakhs (by Bank), Rs 10 Lakhs
With debit
Govt, PSU 2 Lakhs (additional by Rs 10 Lakhs (additional by NPCI for
card*
Employees, NPCI for RuPay (additional by NPCI for RuPay Select Card)
Police Platinum) RuPay Select Card)
With Rs 20 Lakhs Rs 40 Lakhs
RS.2 Lakhs
FREE Personal account (Death + PPD & TPD) (Death + PPD & TPD)
Accident
Rs 2 Lakhs (by Bank) Rs Rs 2 Lakhs (by Bank), Rs Rs 2 Lakhs (by Bank), Rs 10 Lakhs
Insurance for With debit
2 Lakhs (additional by 10 Lakhs (additional by NPCI for
others card*
NPCI for RuPay (additional by NPCI for RuPay Select Card)
Platinum) RuPay Select Card)
FREE Air Accident Insurance
5 Lakhs Rs 100 Lakhs Rs 100 Lakhs
with debit card*

Free Hospital Cash Up to Rs15,000 per Up to Rs15,000 per annum

Nil
(Mediclaim) for IPD annum

61 | P a g e
 40 leaves free per 60 leaves free per 100 leaves free per
Personalized Cheque Book
year year year
90% of the one- 90% of the two
90% of the one-
month net salary months net salary
month net salary with
Temporary Overdraft credited to account credited to account
maximum of
Facility with maximum of with
Rs.
Rs maximum of
20,000 in the same
50,000/- in the Rs
account.
As per Applicable same account. 2,00,000/- in the
SMS Charges Free Free
same account.
charges
Unlimited Free.
Free Remittances From the 2 pm (Max. 5 pm (Max. Rs.
DD/NEFT
Account Rs.25000/- pm) 50000/- pm)
DD/NEFT DD/NEFT
As per Applicable As per Applicable
RTGS Free
charges charges
As per Applicable
IMPS Free Free
charges
Locker facility (Allotment
subject to availability, 25% concession on 50% concession on
Normal Charges
Concession shall b e extend 1st year rent. 1st year rent.
manually at branches)
Processing fee for Home
loan of Rs 25 lacs and above 100% concession 100% concession 100% concession

Processing fee for Home

50% concession 50% concession 50% concession
loan below Rs 25 lacs
Processing fee for retail
loan (other than Home loan) 50% concession 50% concession 50% concession
scheme
Rate of Interest on Home 0.05% p.a. 0.05% p.a. 0.05% p.a.
loan concession in concession in concession in
Rate of Interest on Vehicle applicable
0.10% p.a. ROI applicable
0.10% p.a. ROI applicable
0.10% p.a. ROI
loan concession in concession in concession in
Rate of Interest on applicable ROI applicable ROI applicable ROI
Education loan more than Rs 0.10% p.a. 0.10% p.a. 0.10% p.a.
7.5 lacs for study abroad / concession in concession in concession in
premier institution applicable ROI applicable ROI applicable ROI
Rate of Interest on 0.10% p.a. 0.10% p.a. 0.10% p.a.
Mortgage loan concession in concession in concession in
applicable ROI applicable ROI applicable ROI
Rate of Interest on 0.10% p.a. 0.10% p.a. 0.10% p.a.
Personal loan concession in concession in concession in
Joint A/c Facility with applicable ROI applicable ROI applicable ROI
Yes Yes Yes
spouse
Available for 3 family Available for 3 Available for 3
Zero Balance account to
members (Spouse,2 family members family members
family members (BSBDA)
Children) (Spouse,2 (Spouse,2
Account closure -within 14 Children) Children)
Nil Nil Nil
days or after 12 months
Account closure -Between As per applicable As per applicable As per applicable
15 days to 12 months charges. charges. charges.

* Additional Accident insurance of Rs 2 lakhs and Rs 10 lakhs is extended by NPCI with RuPay
Platinum and RuPay Select card respectively. No additional accident insurance is available with
RuPay Classic and VISA Signature debit card.
62 | P a g e
Savings Flexi Deposit Scheme (SBNFD)
Integrated features of the Savings Deposit and Fixed Deposit, namely liquidity with higher interest
returns on surplus funds.

Eligibility Individuals, Non-Government bodies/Organisations /Bodies are

eligible to open savings bank accounts.

Minimum balance in SB Rs 50,000/-

Sweep Out amount Minimum of Rs 10,000 and in multiples of Rs 10,000 Up to Rs 1 Crore
per day.
Periodicity of Sweep out Daily
Sweep in amount Rs.5,000/ and in multiples of Rs 5,000/-
Period of Term Deposit 46 days to 1 year
Type of Debit card Platinum card
Debit Card charge Issue charge –Free
Annual Maintenance charge –As per applicable charges.
Access to own Bank ATM 5 transactions (financial) per month Free.
3 transactions (financial + non-financial) per month at Metro or 5
Access to other bank ATM transactions (financial + non-financial) per month at other centres
are Free
ATM Cash Withdrawal Limit Rs 75,000/- Per day
ATM POS Limit Rs 1,50,000/- Per Day
Free Personal Accident
Insurance (Death) with debit Rs 2 Lakhs (by bank), Rs 2 Lakhs (additional by RuPay).
card*
SMS banking charges As per applicable charges
Personalized Cheque Leaves 60 leaves per year FREE.
DD As per applicable charges.
RTGS, NEFT Unlimited FREE
IMPS As per applicable charges
Penalty for non- NIL
maintenance of min balance
Account closure -within 14 Nil
days or after 12 months
Account closure -Between As per applicable charges.
15 days to 12 months

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

63 | P a g e
Savings Flexi Deposit Scheme (SBNFP)

Designed for Government Department bodies / high value customers to earn additional interest
income on surplus fund in Saving Deposit.

Individuals and institutions including Government Department bodies

Eligibility who are eligible to open savings bank accounts.

Minimum balance in SB Rs 10,00,000/-

Sweep Out amount Minimum of Rs.5,00,000 and in multiples of Rs.5,00,000

Periodicity of Sweep out Weekly

Max sweep out amount Rs.9.90 Crores per week

Sweep out limit Maximum amount in flexi fixed deposit Rs.100 Crores per customer.

Sweep in amount Rs.5,00,000/ and in multiples of Rs 5,00,000/-

Period of Term Deposit 46 days to 90 days

Personalized Cheque Unlimited FREE

Leaves
RTGS, NEFT & DD Unlimited FREE
Cash Deposit Charges No Cash Deposit Charges upto Rs.50.00 Lakhs Per Month
(Base/Non- Base Branch)
Penalty for non- NIL
maintenance
of min balance
Account closure -within 14 Nil
days or after 12 months
Account closure -Between As per applicable charges.
15
days to 12 months

64 | P a g e
Capital Gain SB Account (SBCAP)

Profit or gains arising out of sale / transfer of a capital asset is chargeable to tax under head
“Capital gain”. Under the scheme, the tax payers can avail of the benefit of exemption from
capital gains only if the amount of capital gains or the net consideration if not invested in specified
assets is deposited in branches of Public Sector Banks on or before the due date for filing a return
of income in accordance with the scheme. However, the tax exemption for the capital gains
deposited in the account is transitory in nature. The account holder has to invest the balances in
the account in the specified assets within the period stipulated for availing exemption from tax
on capital gains.

Features:

a) The deposits can be made under Savings Bank Account Scheme (Account-A) or under Term
Deposits with Cumulative interest or non-cumulative interest (Account-B).
b) There is no maximum period of deposit under the scheme. However, the assesse has to utilise
the balances in the account within the time stipulated under the Income Tax Act by investing the
same in specified assets failing which the balances will attract income tax.
c) Interest will be paid on the deposits as per the rates stipulated by R.B.I. Interest on Term
Deposits under non-cumulative scheme will be credited to a Savings Bank Account of the assesse
under Account -A.
d) The balances under Term Deposit Accounts (Account-B) can be withdrawn only through Savings
Bank Account (Account-A). Except the initial withdrawal, for all other withdrawals the account
holder has to give a utilisation certificate in the prescribed format.
e) No lien or charge can be created on the balances under the accounts.
f) The assesse has to use the prescribed formats for opening the account, for withdrawals from
the account and for closing the account.
g) Introduction of the account holder need not be insisted.
h) Nomination facility is available under the scheme.
i) NRE funds are not eligible for investment under this Scheme.

65 | P a g e
MACT Claims SB Account (MACT)
MACT accounts provide option for customers to receive compensation amount given under the
awards of the Motor Accident Claim Tribunal.

Scheme Scheme Code: MACT

Scheme Name: MACT Claims SB A/c
Eligibility Individuals including Minors (through guardian) in single name.
Minimum/Maximum Balance Not applicable, Account may be opened with Zero Balance.
Requirement
Cheque book / Debit Card / i.By default, these facilities are not available in this product.
ATM Card/ Welcome
ii. However, in case these facilities have already been issued, the
Kit/Internet Baking / Mobile
court shall direct the bank to cancel the same before the
Banking facility
disbursement of the award amount.

iii. The bank shall make an endorsement on the passbook of the

claimant(s) to the effect that no cheque book and/or debit card
have been issued and shall not be issued without the permission of
the Court.

Operations in the account i.Only single operation.

ii. In case of Minor accounts, the operation will be through

guardian.

Withdrawals Only through Withdrawal Forms or

through Bio-Metric authentication.
Product change Not permitted
Place of Opening Only at the Branch near to the place of residence of Claimant (as
directed by the Court).
Account Transfer Not allowed
Nomination Mandatory
Passbook Available
Rate of Interest As applicable to Regular SB accounts
Statement by e-mail Available
P. S.: - Any other terms and conditions of SB account in Bank are applicable.

66 | P a g e
Special SB Scheme Variant-I (SB Premium) SBPRE

Product for customers who maintain good balance in the accounts, with additional facilities to
normal savings account.

Eligibility Accounts can be opened by all those who can open regular
savings bank accounts.

Quarterly Average Balance Rs. 15,000/-

Type of ATM/Debit card Platinum card

Debit Card charge Issue charge – FREE

Annual Maintenance charge - FREE
ATM Access at own ATM Unlimited FREE

ATM Access at other Bank ATM 10 per month FREE at all centers

ATM Cash Withdrawal Limit Rs. 75,000/- Per day

POS Limit Rs. 1,50,000/- Per day

Personal Accident Rs 5 Lakhs FREE

(Death) cover with
account
Personal Accident Insurance (Death) Rs 2 Lakhs FREE (by bank), Rs 2 Lakhs FREE (additional by
with debit card* RuPay).
Air Accident Insurance with debit Rs 5 Lakhs FREE
card
SMS Banking Charges FREE
NEFT FREE

RTGS Facility 2 transactions per month FREE

Concession on Demand Draft 50%

IMPS Chargeable

Personalized Cheque Leaves 60 leaves per year FREE, beyond 60 leaves as per applicable
Charges
Locker Rent 25% concession on 1st year Locker rent

Non-Maintenance of QAB Rs.150+ GST

Account Closure Charges No charges

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.
67 | P a g e
Special SB Scheme Variant-II (SB High Net Worth Customers) SBHNI
Product designed with additional facilities/features to normal savings account for customers who
maintain very high average balance in the accounts.

Scheme Code SBHNI

Eligibility Accounts can be opened by all those who can open regular savings
bank accounts.

Quarterly Average Balance Rs. 1,00,000/-

Type of Debit card Signature Card/RuPay Select Debit Card
Debit Card charge Issue charge – FREE
Annual Maintenance charge – FREE
ATM Access at own ATM Unlimited FREE

ATM Access at other Bank ATM Unlimited FREE

ATM Cash Withdrawal Limit Rs. 1,00,000/- Per day

ATM POS Limit Rs. 3,00,000/- Per day

Personal Accident (Death) Rs 10 Lakhs FREE

cover with account
Personal Accident Insurance Rs 2 Lakhs FREE (by bank), Rs 10 Lakhs FREE (additional by NPCI for
(Death) with debit card* RuPay Select Debit Card).
Air Accident Insurance with Rs 50 Lakhs FREE
debit Card*
SMS Charges FREE
Cheque leaves including 100 leaves per year FREE, beyond 100 leaves chargeable
Personalized Cheque Leaves as per applicable charges
NEFT FREE

RTGS Facility FREE.

Demand Draft FREE

IMPS FREE

Locker Rent 50% concession on 1st year Locker rent

Non-Maintenance of QAB Rs.500+ GST
Account Closure Charges No charges

*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

68 | P a g e
Union Digital Saving Account (UDSA)
Name of the Product Union Digital Saving Account (UDSA)
Eligibility Any Individual can open and operate Union Digital Savings
Account (UDSA) in his /her name. Joint Account or Joint
mandate for Operation is not permitted.
Account opening mode Through internet banking, U-Mobile App and branch.
Average Monthly Balance No minimum balance requirement as account can be opened
with Zero balance.
Cash Deposit limit per month Cash Deposit Charges will be applicable for any cash deposit in
the account. Charges Re.1/-+ GST per thousand. (Amount above
Rs.500/- will be reckoned as Rs.1,000/- for this purpose for cash
deposits above Rs.1,000/-)
Free Self-Cash Withdrawal limit Cash Withdrawal (self) at non base branches is allowed up to
per day at Non Base Branch / Rs.25,000/- No such limit for Cash Withdrawal at Base Branch.
Base Branch Max 3 withdrawal permitted for base & non-Base branch put
together in a month, beyond which charges of Rs.10 + GST for
every extra transaction to be levied.
Type of Debit card Classic card
Debit Card charge Issue charge - FREE.
Annual Maintenance charge –As per applicable charges.
Access to own Bank ATM 5 transactions (financial + non-financial) per month Free.
3 transactions (financial + non-financial) per month at Metro or
Access to other bank ATM 5 transactions(financial + non-financial) per month at other
centres are Free
ATM CASH Withdrawal Limit Rs 25,000 per day

POS Limit Rs 50,000/- per day

Personal Accident Insurance Rs 5 Lakhs FREE
(Death) cover with account
Personal Accident Insurance Rs 2 Lakhs FREE
(Death) with debit card*
Issuance of Cheque Books Charges as applicable to Normal savings Account.
Outward Remittances From Branch – No Charges
charges through Digital Via All digital platforms-No Charges
Channels like U- mobile, UPI,
BHIM, Net Banking etc
Charges for Purchase of As applicable to Normal savings Account
DD/outstation cheques for
collection/ standing
instruction/auto sweep
Monthly Statement of Accounts Will be sent by E-mail without any Charges.
*Personal Accident insurance with debit card is subject to terms and conditions of debit card
policy/usage and policy of RuPay which may change from time to time.

69 | P a g e
Current Deposit Products

Types of current account and its opening: Current Account or current Deposit means a form of
demand deposit account wherein withdrawals are allowed any number of times depending upon
the balance in the account or up to a particular agreed amount. Current accounts are non-interest
bearing accounts which are neither Savings Deposit nor Term Deposit. This account is generally
maintained for business purposes.

Current Account (CD General)

Features:

Eligibility Individual/s, HUF, Sole Proprietary concerns, Partnership, Pvt. and Pub. Ltd. Cos.,
Corporations, Clubs, Associations, Cooperative Societies, Govt. Departments,
Religious Endowments, Semi Govt. or Local Bodies, Trusts, Executors and
administrators, liquidators, Other Banks, State Financial Corporation, Dept of
authority created by Govt, LLPs etc.
Average Quarterly Rural Rs 1,000/-, SU Rs 2,500/-, Urban Rs 5,000/-, Metro Rs 10,000/-
Balance
Cash Deposit Charges Base Branch - Up to Rs 50,000/- or 1000 pieces whichever is lower per day free.
Non-Base Branch - Up to Rs 25,000/- or 500 pieces whichever is lower per day
free.
(Chargeable, Beyond above limit as per Service Charge Circular).

Type of ATM/Debit Classic card

card
Issue charge –FREE
Debit Card charge Annual maintenance charge –As per applicable charges.

Access to own Bank 5 transactions (financial + non financial) per month Free.
ATM
Access to other bank As per applicable charges from first transaction onwards (No free transaction).
ATM
ATM Cash Rs.25,000/- Per day
Withdrawal Limit
POS Limit Rs. 50,000/- Per day
Cheque leaves As per applicable charges
DD/NEFT/RTGS As per applicable charges

Charges for non- Rural Rs 200/+ GST - Other centres Rs 500/- + GST per quarter
maintenance of AQB
Interest No interest to be paid
1. ATM cards are given to individual current accounts, joint individuals and to the accounts of
proprietary concerns.
2. Statement of account is issued as per requirement (Monthly/Quarterly/Half-Yearly/Yearly).

70 | P a g e
Union Classic Current Account:
Eligibility Individual/s, HUF, Sole Proprietary concerns, Partnership, Pvt. and Pub. Ltd.
Cos., Corporations, Clubs, Associations, Cooperative Societies, Govt.
Departments, Religious Endowments, Semi Govt. or Local Bodies, Trusts etc.
Scheme UCCA-I UCCA-II
AMB to be Rs 50,000/- to < Rs 5,00,000 Rs 5,00,000/- and above
Maintained
Periodicity for 16th of Previous month to 15th of 16th of Previous month to 15th of Current
calculation of AMB Current month month
Free Cash Deposit 10 times of AMB in Base Branch and Rs 1 15 times of AMB in Base Branch and Rs 1
per month Lakh in Non-base Branch in addition to Lakh in Non-base Branch in addition to
free daily Limit subject to 1000 pieces free daily Limit subject to 1000 pieces of
of note per day note per day
Type of ATM/ Platinum card Platinum card
Debit card
Issue charge –FREE Issue charge –FREE
Debit Card charge Annual maintenance charge – As per Annual maintenance charge – As Per
applicable charges. applicable charges
Acces to own 5 transactions (financial + non financial) 5 transactions (financial + non financial)
Bank ATM per month Free. per month Free.
Access to other As per applicable charges from first As per applicable charges from
bank ATM transaction onwards (No free first transaction onwards (No free
transaction). transaction).
ATM Cash Rs.75,000/- Per day Rs.75,000/- Per day
Withdrawal Limit
POS Limit Rs. 1,50,000/- Per day Rs. 1,50,000/- Per day
Cheque Book 100 leaves per year FREE 200 leaves per year FREE
Charge
Free NEFT/RTGS Unlimited Unlimited
Remittance Five DDs per month FREE subject to Ten DDs per month FREE subject to
through DD maximum amount of previous month maximum amount of previous month AMB
AMB
Folio charges NIL NIL
A/c statement at FREE once in a month FREE once in a month
Branch
Auto Gradation Up gradation/down gradation based on AMB
Upfront facility For new accounts and converted accounts, FREE facilities equal to AMB of Rs 1
Lac is available from day one.
Penalty for non- Rs 1,000/- + GST per month if the AMB falls below Rs 50,000/-
maintenance of
AMB

71 | P a g e
Union Classic Current Account for Banks (UCCA-B)
UCCA - B is the Premium Current Account Product tailored for Banks including Co-operative Banks
and RRBs. This product facilitates the banks for free remittances and free cash transactions up to
certain level.

Eligibility Banks including RRBs and Co-operative Banks

AMB to be maintained For Scheduled Commercial Banks:- Rs. 100 Lakhs For RRBs and Co-
operative Banks:- Rs. 50 Lakhs
Date for calculation of 16th of Previous month to 15th of Current month
AMB
Free Cash Deposit For Scheduled Commercial Banks:- Rs. 100 Lakhs per day For RRBs and
Co-operative Banks:- Rs. 50 Lakhs per day
Free Cash Deposit at non NIL
base branch
Restriction in Cash No intersol cash deposits. Denominations less than Rs 100 not accepted
Deposit
Remittance through For Scheduled Commercial Banks:- Rs. 250 Lakhs per month
DD/NEFT/TRTGS etc
For RRBs and Co-operative Banks:- Rs. 125 Lakhs per month
Free Cheque Book 100 leaves per month. Normal charges beyond the limit
Cash Withdrawal At Base Branch only. Withdrawals in excess of Rs10 lakhs in Rural/Semi-
Urban centers, requires one day notice.
Penalty for non- Rs 10,000/- + GST
maintenance of AMB

72 | P a g e
Union Micro Digital Current Account (UMDCA)
The product is well suited for small traders and small /retail businessman whose turnover per day
is quite low and aimed at migrating them to Digital Payment /settlement environment. The
maximum turnover in these types of accounts will be restricted to Rs.40.00 lakh per annum. The
account will be converted to normal Current account if the turnover exceeds Rs.40.00 lakh per
annum.

Eligibility Any Resident Individual-Single accounts, Two or more

individuals-Joint Accounts, Sole Proprietary Concerns,
Partnership Firms are eligible to open Union Micro Digital
Current Account (UMDCA), HUF
Annual Turnover Maximum turnover Rs.40.00 lakhs per annum. Account will be
converted to normal current account if the turnover exceeds
Rs.40.00 lakhs per annum.
Average Monthly Balance (AMB) Rs.1,000/-

Free Cash Deposit limit per Rs.1.00 lakh over and above free daily limit of Rs 50,000/-
month
Free Self-Cash Withdrawal limit Cash Withdrawal(self) at non base branches is allowed up to
per day at Non Base Branch / Rs.25,000/-
Base Branch No such limit for Cash Withdrawal at Base Branch.
Type of ATM/Debit card Classic card
Debit Card charge Issue charge –FREE
Annual maintenance charge –As per applicable charges.
Access to own Bank ATM 5 transactions (financial + non-financial) per month Free.
Access to other bank ATM As per applicable charges from first transaction onwards (No
free transaction).
ATM Cash Withdrawal Limit Rs.25,000/- Per day
POS Limit Rs. 50,000/- Per day
Cheque Book charges As per applicable charges
Outward Remittances charges From Branch –Charges as applicable
through Digital Channels like U- Through Internet Banking No Charges up to Rs.50,000/- per
mobile, UPI, BHIM, Net Banking month. Beyond that normal charges will apply.
etc
DD charges As applicable to General Current Account
Biometric Aadhar Pay Device Free of Cost at the time of account Opening.
Ledger Folio Charges No Folio Charges will be levied in the account.
Monthly Statement of Accounts Will be sent by E-mail without any Charges.
Penalty for non-maintenance of Rs 25/- per month
AMB

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Current Flexi Deposit Scheme (CDFFD)
Eligibility Individual/s, HUF, Sole Proprietary concerns, Partnership, Pvt. and
Pub. Ltd. Cos., Corporations, Clubs, Associations, Cooperative
Societies, Govt. Departments, Religious Endowments, Semi Govt. or
Local Bodies, Trusts etc.
Minimum Balance in Rs 5,00,000/-
Current Account
Sweep out amount Rs 1,00,000/- and in multiples of Rs 1,00,000/-
Periodicity of sweep Weekly
Sweep in amount Rs 1,00,000/- and in multiples of Rs 1,00,000/-
Period of Term Deposit 15 days to 91 days as per the choice of the customer
Type of Debit card Signature Card/RuPay Select Debit Card
Debit Card charge Issue charge – FREE
Annual Maintenance charge –As per applicable charges.
ATM Access to own / other 20 transactions (financial) per month Free
Bank ATM
ATM Access to other Bank As per applicable charges from first transaction onwards (No free
ATM transaction).
ATM Cash Withdrawal Rs. 1,00,000/- Per day
Limit

ATM POS Limit Rs. 3,00,000/- Per day

Cheque Book 100 leaves per year FREE
Cash Deposit Charges Rs 1 Lakh per month FREE
RTGS/NEFT/IMPS/DD As per applicable charges.

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Current Flexi Deposit Scheme (CDFFP)
Eligibility All entities that is eligible to open current account. Preferably
Govt. Departments/ PSUs/ Companies
Minimum Balance in Rs 25,00,000/-
Current Account
Sweep out amount Rs 5,00,000/- and in multiples of Rs 5,00,000/-

Periodicity of sweep Weekly

Sweep in amount Rs 5,00,000/- and in multiples of Rs 5,00,000/-

Period of Term Deposit 15 days to 91 days as per the choice of the customer

Cash Deposit Charges No Cash Deposit charges up to Rs 50 Lakh per month. Month is
considered from 16th to 15 th of next month

Unlimited
Cheque Book

NEFT/RTGS/IMPS FREE

Folio charges FREE

DD Charges Unlimited FREE

A/c Statement at branch FREE once in a month

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UNION CASH PLUS CURRENT ACCOUNT (UCPCA):
Union Cash Plus Current Account (UCPCA) is a Current account variant to cater to the demands of
customers having large number of transactions through cash mode.
Name of the Product Union Cash Plus Current Account (UCPCA)

Eligibility Any Resident Individual-Single accounts, Two or more

Individuals-Joint Accounts, Sole Proprietary Concerns,
Partnership Firms are eligible to open Union Cash Plus Current
Account (UCPCA)

Minimum Balance Requirement Balance ofRs.1.00 lakh to be maintained on a daily basis.

Remittances Chargeable as per stipulated for normal current deposit

account

Free Cash Deposit 1) Designated Branch: Maximum 1500 pieces of note per day
2) Non- base branches: Rs.25,000 per day

Cash Deposit Charges Beyond Free For Designated Branch:

Cash Deposit per day Above 15 packets i.e 1500 no of notes, charges will be levied
@ Rs.5/- per packet or a part thereof. (Minimum Rs.50/- plus
taxes at applicable rate. No maximum limit on charges)
Non- Base Branch:
For an amount up to Rs.25,000 per day free of charges. Cash
deposited in excess of Rs.25,000/- service charges will be
levied @ Rs.5/- per packet or a part thereof.
(Minimum Rs.50/- plus taxes at applicable rate. No maximum
limit on charges.)
Cheque Books Charges As applicable to normal current deposit account.

Availability of the product In designated Branches where currency chest is available.

DD charges As applicable to Normal Current Account

Monthly Statement of Accounts Will be sent by E-mail without any Charges.

Penalty for Non- Maintenance of Rs.500 + applicable service tax (per month) (in case the
Minimum Required Balance balance is not maintained any day/days during the month).

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UNION RERA CURRENT ACCOUNT

Union RERA Current Account scheme is a combination of three current accounts viz. Union RERA
collection account (URCA), Union RERA project account (URPA) & Union RERA operative accounts
(UROA). Union RERA collection account (URCA): All collection proceeds of the project shall be deposited
in this account.
Union RERA project account (URPA): In this account minimum 70% of the collection proceeds transferred
from URCA, at the end of the day as per the mandate of the account-holder and as per RERA Act 2016.
Union RERA operative account (UROA): In this account maximum 30% of the collection proceeds
transferred from URCA at the end of the day.

Account Type Union RERA Union RERA Project Union RERA Operative
Collection account Account Account

Scheme Code URCA URPA UROA

Eligibility Promoters/Real Estate Developers etc. eligible for RERA Registration.
Average Monthly As applicable to Normal
Balance N.A. Current Account
Interest No Interest is payable on these deposits accounts.
Cash Deposit No cash Deposit permitted
Limit
No, withdrawal is Withdrawals from Union Withdrawals from
permitted in Union Rera Project Account are Union Rera Operative
Rera Collection permitted Account are allowed
Account, but at the / restricted as per as in the case of
end of the day 70% of guidelines issued by the Normal Current
the clear balance state RERA authority. account.
amount will be
transferred to Union The withdrawals are to be
Rera Project Account done by way of Transfer
and 30% will be from Project Account to
Withdrawal transferred to Union Operative account from
Rera Operative where it could be
Account. withdrawn and utilised by
the customer. Since every
withdrawal from URPA
will be accompanied with
the undertaking from the
developer on their letter
head, the entire onus of
complying with RERA
norms lies with the
developer. Further the
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 withdrawal should be in
proportion to the
percentage of completion
of the project.

Any
document/compliance
prescribed under the
State/UT, RERA rules shall
have to be obtained
/ensured additionally.
All debits of return All Charges to All Charges of URCA &
clearing/wrong NEFT, be debited/ adjusted URPA to be debited/
Charges RTGS adjustments. from UROA only. Adjusted from UROA.
Cheque return
charges to be
adjusted from
operative account
(UROA) only.
ATM CARD Not allowed
Cheque Books are not Cheque books are not Issuance of cheque
allowed. allowed. However Amount Book is allowed.
Issuance of Cheque should be transfer on the Charges as applicable
Books basis of declaration as per to GeneralCurrent
Annexure II. Account.

Outward As applicable to
remittances N.A N.A General Current
charges Account
Charges for
Purchase of DD/ As applicable to
outstation cheques General Current
for collection / N.A N.A Account
standing
instruction / auto
sweep
Internet Banking Only View Facility Only View Facility Both View &
Transaction Facility.
Minimum N.A N.A As applicable to
Balance Charge General Current
Account
Closure of After Completion of After Completion of the As per the discretion
Account the Project/Phase Project of The customer.

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RERA scheme will be made available for all the Branches up to Large Category (i.e, Premier, ELB, ELB
Lite, VLB, VLB Lite and Large Branch) of the states where RERA act is notified. The other Branches of
RERA act notified states can also open the account after obtaining due approval from their respective
Regional Head.

UNION TRADE CURRENT ACCOUNT

S.N. Parameter Scheme Guidelines
1. Scope All B and C category branches can open the account under all schemes.

2. Eligibility a) The scheme is available to new as well as existing customers not enjoying any
credit limits(except point b) and falling under below categories:
1. Exporter/Importer.
2. Customers doing frequent Foreign Outward Remittance.
b) The clients who are only taking loan against 100% deposits can also be offered
this product, provided they are not enjoying any other credit limits (including
forex limits) with our bank. For Example: LC issuance against 110% margin.

Scheme
UTCA 1 to UTCA 5
Code
4. Usage of ✓ Normal Business transactions in India
account ✓ Bonafide Trade related Export/Import/Remittances Transactions

5. Operationa 1. The existing current account can be migrated to NEW SCHEME at the request
l of the customer without changing the account number.
Guidelines 2. The existing Current Account Opening form can be used for opening this
account, provided required KYC requirements are scrupulously followed by
branches e.g. requirement of customer request, board resolution etc.
3. The customer can be on boarded in any of the schemes any time. Migration
between schemes will be applicable from next month, though the same can be
entered in Finacle on any day of the month.
4. Periodicity for Calculation of Avg. Monthly Balance will be 16th of previous
Month to 15th of Current month.
5. Periodicity for Calculation of turnover/No. of transactions will be 1st of
previous Month to last day of previous month.

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 6. For new/converted accounts Average monthly balance and turnover will be
counted from 16th of next month in case of MAB and 1st of next month in case of
MFT.
7. Existing account holders can also choose to opt any of the 5 variants. Branches
should intimate this to all existing account holders by email and should also
display in branches.
8. Concession approved to existing customer will be discontinued and charges
as per UTCA scheme will be applicable on moving to UTCA scheme.
9. The average balance of all the current accounts will be considered to
categorize customers into different variant. (Ex: If customer maintains UTCA
account, other current account and EEFC account, while categorizing into
different variant and levying charges average balance of all the three accounts
will be considered.)

6. Features The account will have five variants:

1. Three variants on basis of Monthly Average Balance (MAB).
2. Two variants on basis of Monthly Forex Turnover (Both Amount & Number of
transactions).

Particulars Monthly Average Balance (MAB) Concessional Charges

Variant 1 Rs. 1.00 lacs (Rupees One lakh)

a. Foreign Exchange Service
(TCA Basic)
Charges as per Annexure II.
Variant 2 Rs. 5.00 lacs (Rupees Five lacs)
(TCA Gold) b. UCCA-I Benefits will be
extended to TCA Basic.
Variant 3 Rs. 10.00 lacs (Rupees ten lacs)
(TCA c. UCCA-II Benefits will be
Platinum) extended to TCA gold & Platinum.

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 Particu Monthly Forex Turnover (MFT) Concessional Charges
lars
Transaction Count Cumulative Monthly
Amount (USD eqv.)
Variant Min. 30 Per $ 5.00 Lacs
4 Month (approx. Rs.3.75
(TCA cr.) a. Foreign Exchange Service
Extra) Charges as per Annexure II.
Variant Min. 60 Per $ 10.00 Lacs
b. UCCA-II Benefits will be
5 Month (approx. Rs.7.50 extended to TCA Extra & Ace
(TCA cr.)
ACE)

Other conditions:

(1) Out of Pocket Expenses like SWIFT/Postage etc. will be charged extra as per extant circular on service
charges relating to FOREX transactions latest being IC 07115:2020 dated 14th July, 2020.

(2) The charges are excluding the applicable tax/Cess/GST/ Currency conversion taxes etc.

(3) In case of first variant minimum and maximum charges will be as per the forex service charges circular
and will not be reduced. In other variants standard charges are to be taken for each transaction
irrespective of the amount and no minimum or maximum charges are applicable.

(4) The remittance towards capital account transactions, viz; ECB repayments, remittance under ODI etc.
is outside the purview of this product.

(5) All other FOREX related charges, other than those mentioned in Annexure 1, are as per extant circular
on service charges relating to FOREX transactions latest being IC 07115:2020 dated 14th July, 2020.

(6) Additional benefits in form of concessional General banking charges are as applicable to Union Classic
Current Account-I for variant 1 and Union Classic Current Account-II for other variants 2 to 5.

(7) Monthly Forex Turnover will be calculated as “summation of Export/Import/ Remittance transactions,
where branch has earned exchange margin”. Number of transactions will be counted as those transactions
in which foreign exchange conversion is involved or bank is earning ‘commission in lieu of exchange’.

(8) General banking transactions will not be counted towards no. of transactions.

(9) For all transactions, commission in lieu of exchange is to be charged wherever bank is not earning
exchange margin and as per circular on Forex service charges.

(10) No Superfine exchange margin permissible. Minimum exchange margin will be 5 paisa. However,
Approval of concession in exchange margin without any restriction on size of transaction and amount of
turnover vests with committee of GMs comprising of GM (Domestic FX Business) and GM (Treasury).
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7. Penalty- It is proposed that following charges per month shall be charged as penalty in case the
Non- MAB/turnover falls below the stipulated minimum balance/turnover. (No separate
maintenan penalty as per UCCA scheme)
ce of MAB/ Variant/ Penal Variant Varian Varian Variant 4 Variant
Turnover Charges if 1 t2 t3 5
MAB/Forex
Turnover (Monthly Average Balance) (Turnover - Both
condition not met Amount wise and
Number of
Transaction wise)
If maintained up to 1000 2500 5000 2500 5000
50% of required
MAB/ Both Forex
Turnover & no. of
transactions
If maintained 2000 5000 10000 5000 10000
below 50% of
required MAB/
either Forex
Turnover or no. of
transactions

*Non-maintenance of MAB/MAT for three months in any FY (continuous or otherwise)

will lead to withdrawal of concessions/scheme benefits and standard charges will
apply for all transactions. Further, the customer will not be able to use “Union Trade
Current Account” scheme benefits in that FY. Hence, his account will be treated as
general current account for rest of the FY.
(Moreover, there will be no effect on salary accounts, which can be continued)

8. Other There are bundled offerings to the clients in form of:

Benefits a. ‘Salary accounts - USSA’ to the employees of Companies/Firms.
b. SBHNI account to the Directors /Promoters /Partners /Proprietors.
c. Mutual Funds/ Insurance Products will be offered to above mentioned saving
account holders.
d. Government Schemes like Atal Pension Yojna, Pradhan Mantri Suraksha Bima
Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojna, Sovereign gold bonds, Sukanya
Samriddhi Yojna, National Pension Schemes etc. will be offered to employees as
bundled product.

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 e. Locker/ Retail loans with certain concessions to employees as per USSA/
SBHNI scheme.

Term Deposits:

TIME LIABILITIES means Term Deposits which are also known as Fixed Deposits. The word “Fixed
Deposits” are nowhere mentioned in the Banking Regulation Act, 1949(10 of 1949). The term in vogue
is “Time Liabilities”. However, for convenient understanding we shall use the term “Term Deposit”.

Term Deposit means a deposit received by the bank for a fixed period withdrawable normally after the
expiry of the fixed period.

1) Features of Term Deposit

• Each Term Deposit Receipts is a separate contract.
• A Term Deposit is accepted for a period of 7 days and above only.
• The bank will not accept Deposits for period longer than 10 years. However, exceptions may be made
in terms of orders of Competent Courts or in case of minors where interest of minors is involved.
• In the case of online creation of Term Deposits the minimum amount is Rs.500/-
• It is not repayable on demand i.e. which is repayable at a fixed date or after a period of notice.
• No Change in the terms and conditions permissible, except under statutory obligations or as per RBI
directives, till the deposit matures for payment.
• Term Deposit Receipts are not negotiable instruments.
• Loan against Term Deposits are allowed except in cases of Tax Saver Schemes, Flexi Deposit, Motor
Accident Claims Annuity Deposit,Money Flex Term Deposit and Capital Gain Scheme.
• Term Deposits are accepted as collateral for other loans.

2) Addition / Deletion / Substitution of Names

A. Addition/Deletion in the deposit accounts of individuals is permitted as given below:
• Single depositor - Addition is permitted at the written request of the sole depositor
• Deposit in the joint names of two or more persons (including Either or Survivor , Any one or
Survivor), addition/deletion in the deposit account would be permitted at the written request of
all the depositors
• If the request for addition/deletion of a name is received from the survivor(s), after the demise of
one or more of the joint depositors, the legal heirs of the deceased depositor(s) and the survivor(s)
should give the consent letter.
• In case of Deletion of name in Deposits of joint names at least one of the original depositors should
continue in the account.
• After any change fresh nomination is to be obtained

B. Addition/Deletion in deposit account of individual is NOT permitted

▪ In the case of a “Former or Survivor” account, no deletion of the “Former” is permitted
▪ In the case of accounts in the names of minors.
▪ Change is not permitted if encumbered (Attachment order/ Garnishee order)
3) Interest Rates
• Interest will be paid on Term deposits only if had run for a minimum tenor of 7 days.
83 | P a g e
 • Senior Citizens (who have completed 60 years of age at the time of placing the deposit with the
bank) will be eligible to get additional 0.50% interest for the term deposits of the principal amount
up to Rs.5 crore
• Staff and eligible ex-staff members will continue to get the benefit of additional 1% over and above
the card rate for deposit amount of less than 1 crore.
• Eligible ex-staff members, who are senior citizens, will get the benefit of additional 0.50% over
and above the card rate plus 1% p.a. in all maturity buckets and principal amount up to Rs.5 crore.
• Interest will be calculated at quarterly rests and paid quarterly except where mentioned otherwise
in specified schemes.
• Interest paid in cash to the depositor should be noted on the reverse of the deposit receipt.
• Interest payable will be rounded off to the nearest Rupee.
• The rate of interest allowed for renewed deposit will be the appropriate rate applicable to the
period for which the Deposit is renewed, as on the ruling on the date of maturity of the Deposit,
if renewed within 14 days of maturity.

i.Deposits Maturing on Holiday

In case of reinvestment deposits and recurring deposits, bank shall pay interest for the intervening
Sunday/holiday/non-business working day (as also Saturday in case of NRE deposits) on the maturity
value. However, in the case of ordinary term deposits, the interest for the intervening
Sunday/holiday/non-business working day (as also Saturday in case of NRE deposits) shall be paid on the
original principal amount.

4) Payment

As per Section 269 T of the Income Tax Act 1961(43 of 1961) repayment of deposits together with interest
aggregating Rs.20000/- (wef 1.4.1989) or more should be paid by an account payee cheque or bank draft
or by crediting the amount to the account, if any, of the depositor with the Banking Company or a
Cooperative Bank.

5) FORM 60

Form 60 must be produced by an individual who does not have a PAN Card.
• In absence of PAN, Declaration in Form 60 can be accepted.
• In case of account in the name of minor who does not have any income chargeable to income tax is
opened, the PAN of his/her father or mother or guardian, as the case may be is to be provided.
• The data collected through Form 60 during the financial year in respect of term deposits exceeding
Rs.50,000/- received in cash shall be transmitted electronically to the concerned Director of Income
Tax (Investigation) in two installments i.e. the forms received up to 30th Sept shall be forwarded by
the 31st October of that year and the declaration till the 31st March shall be furnished latest by the
30th April of the same year.

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6) Tax Deduction at Source (TDS)

• U/s 194A of Income Tax Act 1961 Bank is required to deduct tax at source either at the time of
payment or credit of interest or at annual rest, whichever is earlier, on term deposit as well as
recurring deposits in case the aggregate interest held by the depositor exceeds or is likely to
exceed Rs.40000/- in a financial year. Interest on Savings Bank account is not to be taken into
account while determining the threshold of Rs.40000/- interest.
• Such TDS is to be deducted at the applicable rates in force.
• In case the depositor’s tax liability calculated on total income is nil and the total of the aggregate
of the income does not exceed the basic exemption limit as the Bank can obtain Form 15G/H with
the PAN Number (mandatory).
• In terms of the changes U/S 194A of Income Tax Act and introduction of Section 80TTB, the
threshold limit on interest on Term Deposit for TDS has been increased from 10,000 to 50,000 for
SENIOR CITIZEN RESIDENT IN INDIA, w.e.f. 01/04/2018

Two New Tax Slab Codes have been introduced as under:

1. TDSSC for Senior Citizen with PAN CARD

2. NOPSC- Senior Citizen without PAN CARD

Tax on interest paid need not be deducted in respect of the following categories of deposits :

• Any banking company to which the Banking Regulation Act, 1949 applies, or any cooperative
society engaged in carrying on the business of banking (including a cooperative land mortgage
bank)
• Any financial corporation established by or under a Central, State or Provincial Act.
• The Life Insurance Corporation of India.
• The Unit Trust of India.
• Any Company or Cooperative Society carrying on the business of Insurance. Such other
institution, association or body or class of institutions, associations or bodies which Central
Government may for reasons to be recorded in writing, notify in this behalf in the Official
Gazette.
• Wherever any Central/State Government undertaking company approaches the bank stating
that they are exempt from deduction of tax and produces copy of the Government Notification
explicitly citing the name of the institution in the notification, then tax need not be deducted
at source.
• As per Section 196 of the IT Act, no tax need to be deducted in respect of interest payable to
the Government or Reserve Bank of India or A Corporation established by or under a Central
Act, which is under any law for the time being in force, exempt from income tax on its income
or a Mutual Fund Specified under Sec 10 (23D).
• The income of a local authority viz. Panchayat, Municipality, Municipal Committee, District
Board or Cantonment Board which is chargeable under the head income from house property or
income from other sources is exempt from income tax under Sec 10(20).

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 • List of institutions which are notified under Section 194A (3)(iii)(f) of IT Act for the purpose of
non-deduction of tax at source from interest credit credited or paid thereto. The list is furnished
by CBDT.

Interests earned on the following types of deposits are liable for TDS under Sec 194A of IT Act.

1. Capital Gains Deposit Account Scheme 1988 which is in the form of Term Deposit attracts TDS.
2. Accounts by Official Liquidator in the style Official Liquidator account are also liable for TDS.

7) FORM 15G / 15H

• TDS is not required to be deducted in respect of persons who submit declaration in Form 15G
or Form 15H as per the provisions of Income Tax Act.
• Form 15G may be submitted by an individual (other than Senior Citizen), HUF, Association of
persons, body of individuals, Trust or any other category of depositor (other than firm &
Company) whose total estimated income for the Financial Year is less than the taxable limit.
• Form15H can be submitted by an individual, who is a senior Citizen, provided he/she declares
in Form 15H that the tax on his/her estimated total income during the financial year will be
NIL.
• Quoting of PAN number is made mandatory for acceptance of Form 15G or15H.
• Nonresidents are not eligible to submit Form 15G or 15H.
• If the limit of interest credit (paid or to be paid) as given below, in the current financial is
exceeding, branches are advised to delete 15G/H from Customer Master under intimation to
customer

Form Age Limit Interest limit for exemption of TDS

15G Below 60 years Up to Rs.2.50 lacs

15H 60 years and above below 80 years Up to RS. 3.00 lacs
15H 80 years and above Up to Rs.5.00 lacs

Procedure :
• Branches should generate the Form 15G/H preferably from finacle menu ‘FORM15”. Whereas
in accepting of manual form, it should be filled up properly
• UIN – Unique Identification Number is introduced by Income Tax Department which is to be
issued after acceptance of 15G/H
• Branches can generate receipt from finacle menu “ACK15H”after verification of 15G/H entry
in finacle. This receipt will comprise of Unique Identification Number
• In place of submission of physical form 15G/H to Income Tax Department, they have
introduced new filing system through Income Tax e-filing site- incometaxindiaefiling.gov.in
• Centralization of filing of 15G/H and reporting of 15G/H transaction:
• Filing of 15G/H return done centrally by Central Office. Branches should not to file 15G/H
return and also not to report any 15G/H transaction with regular TDS return
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 • Certificate from the Assessing Officer for lower/nil tax deduction:
• In cases of assesses like Educational Institutions, Hospitals, Charitable institutions etc. whose
income is exempt from Income Tax, an application in Form No.13 has to be made to the ITO
(TDS) who after satisfying himself that the income of the applicant is exempt will issue a
certificate under Section 197.
• If such certificate is produced, the branch can act accordingly and note the same in CBS.
• Non deduction certificates u/s 197 are issued for prospective period and not applicable for
the period prior to the date of the issue of the Certificate.
• The date up to which the Certificate is valid should be diarized manually for removal of
exemption in CBS system. (Exempt up to date in Finacle – validation check)

8) Precautions
• PAN is required to be quoted in TDS certificate issued in Form 16A and in all the e-TDS return
submitted to the Income Tax Department and correction statements.
• Pan is required to be quoted to avoid higher deduction of TDS under Section 206AA of IT Act.
As and when a customer quotes the PAN number, the same has to be verified by the branch.
• Invalid and incorrect PAN quoted in e-TDS return/TDS certificates will lead to levy of penalty
on the bank.
• Any wrong or invalid PAN quoted may lead to non-credit of TDS to customer.
• Xerox copy of PAN Card of the customer is to be obtained, verified and preserved.

9) Premature Closure / Withdrawal

i. Premature withdrawal of term deposit

• Unless expressly prohibited under a deposit scheme, premature withdrawal of deposit will be
allowed, irrespective of the period, it has run.
• Premature withdrawal norms are governed by norms of mandate/s.
• No interest will be paid on term deposit, which remains with the bank for less than 7 days.
• For deposits which have run for 7 days and above, interest will be paid at the rate applicable
on date of deposit for the period for which it has actually remained with the bank or the
contracted rate whichever is lower with penalty charges if any for premature withdrawal.
• As per the guidelines in case of retail term deposits (less than Rs.2 crores) which have run for
7 days or above, interest to be paid at 1% less than the applicable rate(as on the date of
opening of deposit) for the period for which it has actually remained with the bank or
contracted rate, whichever is lower , except for the following

(a) Flexi Term Deposits

(b) Bank induced closure of term deposits
(c) Recurring Deposits/Union Monthly Plus scheme
(d) Money Flex Term Deposit Scheme
(e)
Penal interest not to be charged for NRE and FCNR deposits but it is applicable for NRO deposits.

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ii Premature withdrawal of deposit in the name of minor:

In guardian operated minor account:

• In case of death of the minor, the amount will be withdrawn by guardian and account will be
closed.
• Premature withdrawal can be allowed provided the amount is to be utilized for the benefit
and in the interest of the minor
• If guardian has died (minor alive) the balance is to be paid to the minor when he attains
majority. Alternatively, the next guardian can operate the account.
• iii Renewal of Term Deposit
• Renewal instruction by depositors can be at the time of opening the account or any time
before the maturity of the deposit for the period of their choice.
• In the absence of any instructions from customer, the bank will renew the deposit on due
date for the same period for which the matured deposit was placed.
• However, the depositor will have an option to change the auto renewal period within 14 days
from the date of maturity with value dated effect for such period.
• Request for change of the auto renewal period received after 14 days from the date of
maturity will be treated as premature renewal of deposit.
• iv Renewal before Maturity
• In case the depositor desires to renew the deposit by seeking premature closure of an existing
term deposit account, the renewal at the applicable rate on the date of renewal will be
permitted, provided the deposit is renewed for a period longer than the balance period of the
original deposit.
• While prematurely closing a deposit for the purpose of renewal, interest on the deposit for
the period it has remained with the bank will be paid at the rate applicable on the date of
deposit to the period for which the deposit remained with the bank and not at the contracted
rate.

10) Issue of Duplicate Deposit Receipts

• If a term deposit receipt is lost, stolen, destroyed, mutilated or defaced, the person
entitled thereto may apply for the issue of a duplicate receipt to the branch from
where the receipt was issued.
• Every such application shall be accompanied by a statement showing particulars,
such as number, amount and date of receipt, and the circumstances leading to such
loss, theft, destruction, mutilation or defacement.
• Wherever applicable a Consent letter of legal heirs of the deceased depositor is to
be obtained
• Officer shall verify the signature/s of the depositor/s on the application.
• Loss, theft, destruction, mutilation or defacement of the certification to be
recorded in the system
• If the concerned Branch Manager is satisfied of the loss, theft, destruction,
mutilation or defacement of the certificate, he shall issue a duplicate receipt on
the applicant furnishing an indemnity bond in the prescribed form with one or more
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 approved sureties or with a bank guarantee; Provided that where such application
is made with respect to a deposit receipt mutilated or defaced, of whatever face
value, a duplicate receipt may be issued without any such indemnity bond, surety
or guarantee, if the receipt mutilated or defaced is surrendered and the receipt is
capable of being identified as the one originally issued.
• The duplicate receipt is to be printed from the system and labeled “DUPLICATE –
ISSUED IN LIEU OF ORIGINAL” and the same to be handed over to the depositor/s
against acknowledgement.

11) Back dated opening

A depositor can, in case of auto renewed account, change the tenor and scheme of the deposit within
14 days of such renewal.

Term Deposit Products

Short Deposit Receipt (SDR):

➢ Deposits for a period of 7 days and above but not exceeding 179 days are classified as short
deposits
➢ Any Resident Individual - Single Accounts, Two or more individuals in Joint Accounts, Illiterate
Persons, Blind persons, Purdanasheen Ladies, Minors, Associations, Clubs, Societies, etc. Trusts,
Institutions/Agencies specifically permitted by the RBI are eligible to open a "Short Deposit
Receipt Account" in single/joint name/s
➢ Both interest and principal are paid on maturity
➢ Interest is calculated at quarterly intervals on domestic term deposits and paid half yearly in Mar
& Sept
➢ No compounding of interest
➢ Penalty on premature closure: 1.00% less than the applicable rate (as on the date of opening of
deposit)
➢ Nomination facility available
➢ Minimum amount Rs 1000. No maximum limit.
➢ In case date of interest payment falls on a holiday the same will be paid on the next working
day.
➢ Loan Facility available.
➢ TDS will be deducted as per guidelines.

Fixed Deposit Receipt (FDR):

➢ Deposits for periods of 6 months and maximum period of 120 months

➢ Any Resident Individual - Single Accounts, Two or more individuals in Joint Accounts, Illiterate
Persons, Blind persons, Purdanasheen Ladies, Minors, Associations, Clubs, Societies, etc. Trusts,

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 Institutions/Agencies specifically permitted by the RBI eligible to open a “Fixed Deposit" Account"
in single/joint name/s
➢ Minimum Amount Rs.1000/- for FDR. No cap on maximum
➢ Minimum Amount criteria will not be applicable to Subsidy kept under GOVT Sponsored Schemes,
Margin Money, earnest money and court attached/ordered deposits
➢ Interest will be paid on quarterly or half yearly basis as per the instruction of the customer and
in case the date of interest payment falls on holidays then on the next working day.
➢ Rate of Interest is linked to the tenure of the deposit
➢ Penalty on premature closure : 1.00% less than the applicable rate (as on the date of opening of
deposit)
➢ TDS Rules apply.
➢ Nomination & Loan facilities are available

Monthly Income Scheme (MIS):

➢ All resident individuals eligible to open a "Monthly Income Scheme" account in single/joint
name/s.
➢ The deposit can be placed for 12 months to 120 months
➢ Interest is paid monthly at the discounted value of contracted rate.
➢ TDS Rules apply.
➢ Penalty on premature closure : 1.00% less than the applicable rate (as on the date of opening of
deposit)
➢ Nomination & loan facilities are available.
➢ The amounts acceptable under the scheme will be in multiples of Rs.100/- minimum being
Rs.1000/- & maximum no limit.
➢ Retired persons, widows, charitable and educational institutions etc. generally depend only on
interest as the monthly source of income and hence this scheme is best suited for them

Deposit Reinvestment Certificate Scheme (DRIC):

➢ Any Resident Individual - Single Accounts, Two or more individuals in Joint Accounts, Illiterate
Persons, Visually Impaired persons, Purdanasheen Ladies, Associations, Clubs, Societies, etc.
Trusts, On behalf of a minor by his/her natural guardian or by a guardian appointed by court. In
the name of associations, educational institutions, HUFs, firms, partnerships, joint stock
companies, co-operatives, executors and administrators, Government departments etc.
➢ A scheme where for investing a lump sum amount, interest is compounded quarterly and paid
along with the principal amount invested on maturity date.
➢ Deposits can be accepted for any period from 6 months to 120 months.
➢ Minimum amount of deposit will be Rs.1000/- with no upper cap.
➢ Interest at applicable rate for the period for which the deposit is kept, is automatically reinvested
at quarterly intervals.
➢ Penalty on premature closure : 1.00% less than the applicable rate (as on the date of opening of
deposit)
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➢ Interest will be calculated, compounded on quarterly rests and credited to the deposit account
on half yearly interval. Interest accrued on the deposit will be paid along with principal at the
time of maturity.
➢ TDS Rules apply
➢ Nomination facility available
➢ Deposit will be auto renewed for the same period at the applicable rate of interest on maturity
in the absence of specific instruction

Union Tax Saver Deposit Scheme:

➢ All individuals and HUF having PAN are eligible to invest in this product.
➢ Firms, Companies, Trust, Societies, Clubs, Institutions, Corporate etc., are not allowed to invest
in this product.
➢ The deposit can be of Single holder type or Joint holder type.
➢ The single holder type of deposit shall be issued to an individual for himself or in the capacity of
the Karta of the Hindu undivided family.
➢ The joint holder type of deposit receipt may be issued jointly to two adults or jointly to an adult
and a minor and payable to either of the holders or to the survivor, provided that in the case of
joint holder type deposit, the deduction from income under Section 80C of the Act shall be
available only to the first holder of the deposit.
➢ The amount to be invested in the term deposit of the Bank shall be a minimum of Rs.5,000/- and
in multiples of Rs.1,000/- thereof and maximum limited to Rs.1,50,000/- in a financial year. The
product will be available for investment, until further announcement or otherwise withdrawn by
the Government, as the case may be.(* Maximum amount revised to Rs.1,50,000/- from this
financial year 2014-15 as per IC 10042 dated 3rd Sept 2014)
➢ Deposit will be accepted for a minimum period of 5 years and maximum period of 10 years
➢ The deposit will be accepted in the form of DRIC or Fixed Deposit or Monthly Income Scheme
➢ The term deposit will be issued to the assessee.
➢ The receipt shall bear the name, address, Permanent Account Number and Signature of the
Assessee, along with other particulars.
➢ Separate Union TAX Saver Receipts are provided by our stationery Department and the same is to
be used by branches for printing of Deposits under this scheme.
➢ The deposit will be accepted by all branches across the country.
➢ The deposit may be transferred from one branch to another branch of Union Bank of India on the
depositor making an application, at either of the two branches.
➢ The said Term deposit will not be transferred to any other Bank.
➢ The term deposit can be pledged to secure loan or as security to any other asset, only after the
lock in period of 5 years. This will be subject to the terms and conditions governing such
loans/advances
➢ The maturity period of term deposit receipt of any denomination shall be minimum five years
commencing from the date of the receipt and maximum being 10 years. No term deposit shall be
en-cashed before the expiry of five years from the date of its receipt.
➢ Rates of interest as applicable to general Term Deposits will apply. Senior Citizens will be eligible
for additional interest as per the extant policy of the Bank.
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 ➢ Penalty on premature closure: 1.00% less than the applicable rate (as on the date of opening of
deposit) (In case of Deposits of more than 5 Years)
➢ The interest may be paid either in lump sum at the time of maturity or it may be paid every
quarter or every month in accordance with the regulatory guidelines for payment of interest on
the nature of term deposit chosen
➢ Nomination can be made for the deposit as per extant guidelines applicable. No nomination shall
be made in respect of a term deposit applied for and held by or on behalf of a minor
➢ TDS rules will be applicable as per extant guidelines
➢ Exemption under section 80 C of Income Tax Act can be claimed by the depositor in case of single
depositor or the first holder in case of joint depositors, within eligible investments
➢ In case of death of the primary account holder pre-closure of deposit account is allowed.

Union Capital Gain Scheme

Accounts under the Scheme can be opened only at Semi-Urban / Urban / Metropolitan Branches

➢ Two types of deposit accounts can be opened under this Scheme

➢ Deposit account A-Account shall be in form of Saving Bank Deposit
➢ Deposit account B -This account will be in the form of Term Deposits(DRC, FDR)
➢ Minimum amount of Rs 1000 with no ceiling on upper limit in term deposit.
➢ Such deposits may be made as a single lump sum amount or in installments at any time on or
before furnishing the Income Tax Return
➢ Withdrawals under Deposit Account - A can be made from time to time by the depositor, subject
to prevailing terms and other provisions of the Scheme, by submitting the requisite form
➢ The amount required to be utilized by the assesse, within the specified period, for acquisition
of new asset under the respective Section of the Income Tax Act, 1961
➢ Period of Deposit:
o Not exceeding 2 to 3 years from the date of transfer of original asset as given below
o Max 24 months - if capital gains is U/s 54, 54B, 54 F. (As declared in Form A by depositor)
o Max 36 months - if capital gains is U/s 54, 54 D, 54 F, 54 G & 54GB
o (As declared in Form A by depositor)
➢ Under this scheme, the tax payers can avail of the benefit of exemption from Capital Gains, if
the amount of Capital Gains or the net consideration is deposited in the bank on or before the
due date of filling the return of income.
➢ Closure of Term Deposit allowed before maturity. (Proceeds to be credited to Cap Gains SB
account-Account- A only). At the time of closure of all accounts, the depositor will have to

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 produce specific authority letter/ certificate from the Income Tax Officer of the respective
jurisdiction. The closure would be allowed on the terms mentioned in the letter of authority.

Union Non-Callable Term Deposits Scheme (UNTDS) for Bulk Deposits:

This scheme will be available to the bulk deposits of Rs. Two Crore and above (single deposits) only
from the customer point of view. This scheme will be beneficial for them as they will get higher rate of
interest as compared to interest rate on the regular bulk deposits

➢ Minimum amount of product - Rs.2 crore and above can be deposited in the form of DRIC, FDR,SDR
➢ Scheme code in Finacle would be TD47(FDR), TD048(SDR), TD049(DRIC)
➢ Tenure of deposit - 61 days to 3 years , automatic renewal of deposit is not allowed
➢ Rate of interest would be decided by ALCO on daily basis
➢ Premature closure in this term deposits is not allowed – exceptions are as under :
o In case of death of depositor / first depositor in case of joint account
o In case of bankruptcy of depositor/s
o In case of Government/ Regulators order
o In case of Court Order
➢ Availability of Loan /Overdraft is as per prevailing guidelines.

Motor Accident Claims Annuity Deposit (MACAD):

Motor Accident Claim Tribunal awards the compensation to the victim of road accidents, and the
compensation amount is generally deposited in Banks as per tribunal direction. To meet such
requirements, our Bank introduced a Term Deposit Product named as Motor Accident Claims Annuity
Deposit (MACAD). The main features of the scheme are:

➢ One time lump sum amount, as decided by the Court / Tribunal, deposited to receive the same
in monthly annuity, comprising a part of the principal amount as well as interest.
➢ Individuals including Minors through guardian, can open accounts in single name.
➢ Type of account is - Motor Accident Claims Annuity (Term) Deposit Account (MACAD)
➢ Minimum monthly annuity of Rs 1000 is permissible with no upper cap
➢ Tenure is 36 to 120 months, In case the period is less than 36 months, normal FD will be opened.
MACAD for longer period (more than 120 months) will be booked as per direction of the Court.
➢ Premature closure or part lump sum payment of MACAD during the life of the claimant will be
made with permission of the court. However, if permitted, new annuity account will be opened
for balance tenure & amount, applicable rate of interest will be the prevailing rate as on the
date of opening of new account. In case of balance tenure is less than 36 months then new MIS
(Fixed deposit) account will be opened at current prevailing rate. In case of death of the claimant,
payment to be given to the nominee. The nominee has an option to continue with the annuity or
seek pre-closure. If balance of tenure is less than 36 months then MIS (Fixed deposit) account to
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 be opened at current prevailing rate. Penal Rate of Interest will not apply in case of prematurely
closed term deposit accounts.
➢ Branches have to compulsorily open MACT Saving Bank account before opening of MACAD annuity
deposit account. Annuity payment should be credited in MACT Saving Bank account only
➢ No Receipts will be issued to depositors. Instead passbook will be issued for MACAD.
➢ TDS Rule:-
i) Interest payment is subject to TDS as per Income Tax Rules. Form 15G/15H can be submitted by
the Depositor to get exemption from Tax deduction.
ii) The annuity amount on monthly basis net of TDS, will be credited to the MACT Savings Bank
account.

Money Flex Term Deposit (MFTD)

➢ Scheme Code MFTDF-Money Flex Term Deposit FDR and MFTDD- Money Flex Term Deposit DRIC
➢ Eligibility Money flex Deposit Account can be opened:
➢ by an individual in his/her own name;
➢ by more than one individual in their joint names with suitable repayment instructions;
➢ on behalf of a minor by his/her, natural guardian viz. father as guardian or by a guardian
appointed by court;
➢ in the name of a minor by a person interested in the minor other than natural guardian;
➢ in the name of clubs, societies, associations,
➢ educational institutions, trusts, HUFs, firms, partnerships, joint stock companies, co-
operatives, executors and administrators, Government Departments etc.
➢ Type of Deposit can be FDR or DRIC as per the choice of the customer
➢ Minimum Period 6 months Maximum Period 10 years
➢ Minimum Deposit Amount Rs. 25,000/-
➢ Maximum Deposit Amount Less than 2.00 crores

Scheme Feature

➢ Part withdrawal of one or more units is allowed.

➢ In case of part withdrawal the interest on withdrawal amount is paid at the rate applicable for
the period the units remained with the bank.
➢ Request from the depositor for part withdrawal of units to be obtained.
➢ Rate of Interest depends on the tenor of the deposit.
➢ Loan Facility Not Available
➢ Nomination facility available.
➢ Premature Closure Allowed
➢ No Penalty on Premature Closure
➢ No receipt will be provided to the customer. Only statement of flexi deposits & Passbook will be
given.
➢ Automatic Renewal Allowed.

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Recurring Deposits:

Cumulative Deposit

➢ A Cumulative Deposit is one where a customer deposits monthly installments over an agreed
period and will receive the lump sum amount at the end of the maturity along with interest
earned on the deposit.
➢ Any Resident Individual - Single Accounts, Two or more individuals in Joint Accounts, Illiterate
Persons, Visually Impaired Persons, Purdanasheen Ladies, Minors, Associations, Clubs, Societies,
etc. Trusts, Institutions/Agencies specifically permitted by the RBI eligible to open account under
this scheme.
➢ Monthly installments can be for any amount starting from as low as Rs.50/- onwards
➢ An account can be opened for any number of months for period ranging from 6 months to 120
months.
➢ The installment amount selected at the start of the scheme will be payable every month
➢ The number of installments once selected, cannot be altered.
➢ A cumulative deposit can be converted into a Term Deposit before maturity, provided that the
term deposit is for a period longer than the remaining period of cumulative deposit account and
arrears, if any, of the monthly installments, are paid by the depositor.
➢ Interest at the permissible rate is compounded every quarter. Interest will be paid for the run
period at applicable rate and penalty if any. In case of premature closure within one month of
the opening of the account, no interest will be paid.
➢ The last installment shall be paid at least one month before the maturity date. Any delay in
payment of last installment will delay the maturity date to that extent.
➢ TDS rules apply.
➢ A pass book will be provided to the depositor
➢ No Penalty is levied in case of any delay or default in payment of any monthly installment.

Union Monthly Plus – Flexible Cumulative Deposit Scheme

Recurring Deposit Scheme, with flexibility of Step Up and Step-Down options, in monthly installment.

➢ The Scheme is available to Individuals / Institutions / Corporate / Proprietorship / Partnership /

Trust / HUF etc.
➢ The customer will have to select the "Core Installment Amount", at the time of opening the account
and deposits the same initially.
➢ Minimum Core Amount is Rs.100/- & Maximum Rs.1,00,000/- or 10 times of core installment
➢ The period of deposit will be from 6 month to 60 months, in multiple of one month
➢ Rate of interest on this scheme will be as per the Term Deposit rate applicable for the period the
deposit is invested.
➢ Interest will be calculated on daily product basis and will be credited quarterly
➢ The Scheme offers flexibility of depositing monthly installment amount, by way of “Step Up” &
“Step Down” options.
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a. Step Up Options

➢ Depositor can increase (Step Up) the monthly installment amount upto 10 times the Core Amount
during any month.
➢ The installment can also be deposited one or more times during a month, subject to maximum
ceiling of 10 times the Core Amount. Example: Core Amount is Rs.1,000/-, customer can deposit
maximum up to Rs.10,000/- in a month.

b. Step Down options

➢ After stepping up the installment amount, a customer can also reduce the same (Step Down), in
any subsequent month/s, but the same should not be less than the Core amount
➢ Request for Premature closure will be permitted. Interest, in such accounts, will be paid at the
applicable Term Deposit rate, for the actual period the deposit has remained with the Bank.
➢ No penalty will be charged in case of premature closure
➢ Similarly, no penalty will be levied on delayed installment
➢ Nomination facility available,
➢ Loan facility is permitted up to 75 % of the deposit amount outstanding at the time of availing
loan.
➢ Account can be transferred to any branch, free of cost.

Union Easy Tax Saver Deposit Scheme:

➢ Eligibility: Individual either singly or jointly or in the name of HUF can open account under this
scheme. Other customers like Associations, Clubs, Partnership, Limited Company, etc. are not
permitted. PAN is mandatory.
➢ Nature of the Account: The scheme provides flexibility to the customer to invest in Tax Saver
Fixed Deposits through monthly instalments (Standing instruction), in lump sum, or as and when
he has surplus fund for investing. The account will be in continuous deposit format. The depositor
can start investing with a minimum of Rs.1,000/- and in multiples of Rs. 1,000/- any number of
times up to a maximum of Rs. 1,50,000/- in a financial year. Any deposit made in the account
will be swept-out and locked-in for a period of 5 years. System generated annual statement will
be issued to the depositor.
➢ Tax Exemption: The depositor can claim exemption under Section 80 (C) for the amount which
he /she had deposited under this scheme during the FY.
➢ Period of deposit: Each deposit made under this scheme is for a fixed period of 5 years and with
a lock-in period of 5 years.
➢ Maturity Date: On completion of 5 years from the date of deposit of each installment.
➢ Rate of Interest: At the prevailing interest rates for five year term deposit at the time of deposit.
Additional interest is paid to Senior Citizens/Staff as payable to term deposits.
➢ Premature Closure/Loan against the deposit: No premature closure /loan are permitted and also
deposits cannot be taken as collateral security for any other facility. However, premature closure
is permitted in case of death of the depositor.

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 ➢ Tax deduction at source: Tax will be required to be deducted at source, as in the case of normal
term deposits and in applicable cases.
➢ Passbook: Passbook will be issued to the customer using "HPBP" menu.
Statement: System generated annual statement will be issued by the Branches to claim IT exemption.
The statement will contain Name, PAN, and Address of the depositor, account number, date of deposit,
amount of deposit, applicable interest rate, and maturity date and maturity value. No separate deposit
receipt will be issued to the customers. The customer can deposit cash or can transfer fund online or
give a standing instruction to the branch for debiting his account for a particular amount every month.

Consumer Protection Act (COPRA).

The new Consumer Protection Act, 2019 came into force on 20th July 2020 and it will empower
consumers and help them in protecting their rights through its various notified rules and provisions. The
new act will be swift and less time consuming compared to the older Consumer Protection Act, 1986 in
which single-point access to justice was given making it a time-consuming exercise. The old act provided
for a three-tier consumer dispute redressal machinery at the National (National Consumer Disputes
Redressal Commission), State and District levels.

Key Points
• The Consumer Protection Act, 2019 establishes the Central Consumer Protection Authority (CCPA)
whose primary objective will be to promote, protect and enforce the rights of consumers.
• It is empowered to:
• Conduct investigations into violations of consumer rights and institute complaints/prosecution.
• Order recall of unsafe goods and services.
• Order discontinuance of unfair trade practices and misleading advertisements.
• Impose penalties on manufacturers/endorsers/publishers of misleading advertisements.

Rules on E-commerce and Unfair Trade Practices: The government will notify the Consumer Protection
(E-commerce) Rules, 2020 under the Act whose broad provisions are given below:

• E-commerce entities are required to provide information to consumers, relating to return, refund,
exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal
mechanism, payment methods, security of payment methods, charge-back options and country of
origin.
• These are necessary for enabling the consumer to make an informed decision at the pre-purchase
stage.
• These platforms will have to acknowledge the receipt of any consumer complaint within 48 hours
and redress the complaint within one month from the date of receipt. They will also have to appoint
a grievance officer for consumer grievance redressal.
• The Consumer Protection (E-commerce) Rules, 2020 are mandatory and are not advisories.

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• Sellers cannot refuse to take back goods or withdraw services or refuse refunds, if such goods or
services are defective, deficient, delivered late, or if they do not meet the description on the
platform.
• The rules also prohibit the e-commerce companies from manipulating the price of the goods or
services to gain unreasonable profit through unjustified prices.
• Product Liability: A manufacturer or product service provider or product seller will be held
responsible to compensate for injury or damage caused by defective product or deficiency in services

Basis for product liability action:

• Manufacturing defect.
• Design defect.
• Deviation from manufacturing specifications.
• Not conforming to express warranty.
• Failing to contain adequate instructions for correct use.
• Service provided-faulty, imperfect or deficient.

Punishment for Manufacture or Sale of Adulterated/Spurious Goods:

• In case of the first conviction, a competent court may suspend any licence issued to the person for a
period of up to two years and in case of second or subsequent conviction, may cancel the licence
permanently.
• Alternate Dispute Resolution Mechanism of Mediation:
• A complaint will be referred by a Consumer Commission for mediation, wherever scope for early
settlement exists and parties agree for it.
• The mediation will be held in the Mediation Cells which will be established under the aegis of the
Consumer Commissions.
• There will be no appeal against settlement through mediation.
• Simplification of the Consumer Dispute Adjudication Process:
• Empowering the State and District Commissions to review their own orders.
• Enabling a consumer to file complaints electronically and in consumer commissions that have
jurisdiction over the place of his residence.
• Video-conferencing for hearing and deemed admissibility of complaints if the question of
admissibility is not decided within the specified period of 21 days.

Other Rules and Regulations:

• As per the Consumer Disputes Redressal Commission Rules, there will be no fee for filing cases
up to Rs. 5 lakh.
• The credit of the amount due to unidentifiable consumers will go to the Consumer Welfare Fund
(CWF).
• State Commissions will furnish information to the Central Government on a quarterly basis on
vacancies, disposal, the pendency of cases and other matters.
• Apart from these general rules, there are Central Consumer Protection Council Rules, provided
for the constitution of the Central Consumer Protection Council (CCPC).

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 • It will be an advisory body on consumer issues, headed by the Union Minister of Consumer Affairs,
Food and Public Distribution with the Minister of State as Vice Chairperson and 34 other members
from different fields.
• It will have a three-year tenure and will have Minister-in-charge of consumer affairs from two
States from each region- North, South, East, West, and North-East Region.
Negotiable Instruments Act, 1881

• The Negotiable Instrument Act 1881 has 147 sections and 17 chapters. Section 138 to 142 were added
in 1988 and Section 143 to 147 were added in 2002.
• Section 4 of NIA 1881 defines Promissory Note; As per sec-4, a promissory note must be writing and
signed by the maker, must be an unconditional undertaking to pay, it must be payable in money only
in certain amount and the payee must be certain person
• Section 5 defines a Bill of Exchange which is an instrument in writing, contains an unconditional
order, directing a certain person to pay a certain sum of money, only to or the order of a certain
person or the bearer of the instrument
• Section 6 defines a Cheque
• As per sec-13, a negotiable instrument means and includes a promissory note, a bill of exchange or
a cheque
• Section 31 of NIA 1881 lays down the law relating to payment of customer’s cheque by a banker and
the protection available to a banker.
• The special of this instrument is that the right, title and interest can be transferred all at a time
from one person to another by mere delivery and sometimes by endorsement & delivery. The
transferee of the negotiable instrument, who takes it in good faith and for consideration gets a good
title even though the title of the transferor is defective(section-9)
• Section 10 of NIA 1881 defines payment in due course to mean payment in accordance with apparent
tenor of the instrument in good faith and without negligence to any person in possession thereof
under circumstances which do not afford a reasonable ground for believing that he is not entitles to
receive payment of the amount therein mentioned.
• Section 31 of NIA 1881 says it is the duty on the part of banker to honour the customer’s mandate
• Section 85 of NIA 1881 grants protection to a banker on his making payment of a cheque in due course
• Section 89 of NIA Act 1881 states the effect of making payment on instrument on which alterations
is not apparent
• Section 128 protects the paying banker in case of customer’s signature is forged
• Section 131 of NIA grants protection to a collecting Banker provided the collecting banker should
have acted in good faith, acted without any negligence, received the payment for a customer and
the cheque should have been crossed generally or specially to himself.
• Section 138 of NIA deals with dishonor of cheques and punishment for the same
• NI Act amended in 2018, included an amount of Interim compensation payable by the drawer to the
complainant during the court proceeding that can be up to 20% of the amount of cheque.
Indian Contract Act, 1872
The law of contract constitutes the most important branch of commercial law. It affects the entire
trade, commerce and industry in the country. In India, the law relating to contract is governed by the

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Indian contract act 1872. The act is broadly divisible in to 2 parts. Part one describes the general
principles of the contract which are applicable to all types of contracts. The second part deals with
special types of contract like indemnities, guarantees etc.

The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act
regulating Indian contract law. It is applicable to all the states of India. It determines the circumstances
in which promises made by the parties to a contract shall be legally binding.

Meaning of the contract:

Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by
law.
It has two major constituents:
1. An agreement between two persons or more.
2. The agreement must be enforceable by law (i.e. the rights and obligations arising out of it).

Essential components of a valid contract:

Proposal and acceptance:

Acceptance : There must be a lawful proposal by one party and the other party must accept the
proposal.
Ex: Ravi proposes by a letter to Mr. Raja to sell his car for Rs. 2 lakhs. This is known as a proposal. Ravi
is a promisor, if Raja accepts the proposal then he becomes a promisee. This process results in to a
contract.
Promise: A Proposal when accepted becomes a promise. In simple words, when an offer is accepted it
becomes promise.

An agreement may be oral or written:

Every promise and set of promises forming the consideration for each other is an agreement.
While valid contract can be under oral agreement, under certain laws an agreement is required to be in
writing only and is also required to be registered and attested. If such formalities are not complied with
then the agreement cannot be enforced before a court of law.

Consideration :

There must be a lawful consideration for both the parties to enter in to agreement. Consideration here
means ‘something in return’. Hence, when both ( or more) parties to an agreement give something to
one another and get something in return, then the agreement becomes enforceable at law.
Consideration is the most essential element of a valid contract. It may be past, present or future. It
may be an act or abstinence or promise in exchange as reciprocation of both parties. It may not be
adequate except for illegal & fraudulent purposes. It should not lead to illegal, immoral or acts opposing
public policy.

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Free Consent :

Free consent of the parties to a contract is required. A consent is said to be free when the parties agree
to the same thing in the same sense.
Capacity to contract:

The parties to an agreement must be legally competent to enter in to contract. Section 11 of the
contract act lays down that every person is competent to enter in to contract if:
➢ He has attained the age of majority, and
➢ He is of sound mind, and
➢ He is not disqualified from entering into a contract by any law to which he is subject.

Void contract: A contract becomes void when it ceases to be enforceable by law.

Minor’s contract:
An agreement made by minor is void ab initio. The principle behind this is that a minor is not supposed
to have a mature judgement and hence, he cannot decide what is good or bad for him. A minor is hence
not liable to perform any promise made by him under any agreement.

As per section 39, actual breach of contract takes place on non-performance on the due date.
Anticipatory breach of contract may take place before the due date

Sale of Goods Act, 1930

• A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property
in the goods to the buyer for a price( sec-4 of the Act )
• Where under a contract of sale, the property in the goods is transferred from the seller to the buyer,
the contract is called as a SALE. But when the transfer of property in the goods is to take place at a
future time or subject to some conditions thereafter to be fulfilled, the contract is called AN
AGREEMENT TO SELL
• AN AGREEMENT TO SELL BECOMES A SALE WHEN THE TIME ELAPSES OR THE CONDITIONS ARE
FULFILLED SUBJECT TO WHICH THE PROPERTY IN THE GOODS IS TO BE TRANSFERRED
• Goods form the subject matter of Sale and include all kinds of movable property other than
actionable claims and money. It also includes stocks and shares, growing crops, grass & things
attached to or forming part of the land
• Goods may be existing, future or contingent. The price in a contract of sale must be expressed in
terms of money only
• When the price is not determined specifically, the buyer must pay the seller a reasonable price
(sec-9 )
• A stipulation in a contract of sale with reference to goods sold/to be sold may be a condition or a
warranty (sec-12.1)

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• A CONDITION is a stipulation essential to the main purpose of the contract. Its violation gives a right
to the buyer to cancel/refuse the contract
• A WAARANTY is a stipulation collateral to the main purpose of the contract. Its violation gives rise to
a claim for damages, but not a right to reject the goods and treat the contract as refused/cancelled
• In a contract of sale, there is an implied warranty that 1. The buyer shall have and enjoy quiet
possession of the goods 2. The goods are free from any charge or encumbrance in favor of any third
party
• CAVEAT EMPTOR means LET THE BUYER BE AWARE and thus a privilege available to seller. However,
this privilege shall not be available when 1. Implied warranty is there 2. The buyer gives a choice
and depends solely on the seller’s skill/judgment 3. There is practice in trade to deny this privilege
4. there is a fraud committed by seller
• The general rule of law is that only the owner of the goods or any person specifically authorized by
him can sell the goods. If any other person sells it, the title of the buyer will not be better than that
of the unauthorized seller
• Some exceptions to the above rule are:
1. Sale by a mercantile agent
2. Sale under the implied authority of the owner
3. Sale by one of the several joint owners
4. Sale by a seller in possession of goods under a voidable contract
5. Sale by a seller in possession after sale
6. Sale by a buyer in possession after having bought or agreed to buy the goods
7. Sale by an UNPAID SELLER

The rights of an unpaid seller are:

• Lien of unpaid goods
• Stoppage of goods in transit
• Withholding delivery of unpaid goods
• Re-sale of unpaid goods
• Suit against the buyer for unrealized price
• Suit against the buyer for damages
• Refusal/cancellation/repudiation of the contract made earlier with the buyer
• Suit for realization of interest as time value for money

aw Related To Appropriation Of Payments

• When the debtor owes several distinct debts to a creditor, and he makes some payment which is not
enough to cover the payment of all the debts in full; the question arises as to which particular debt
the payment proceeds to be appropriated/applied. The rule of appropriation as per contract act are
as follows:
• When the debtor indicates a choice to apply the amount to a particular debt, the creditor has to
follow it faithfully. In case, the creditor does not want it, he must not accept the payment at all
(sec-59)

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• When a debtor fails to make any indication of his intention for appropriation, then the creditor has
a right to appropriate the amount to any actually due and lawful debt. Even, a time barred debt is
lawfully due (sec-60)
• In case, neither debtor nor creditor makes any indication for appropriation, then the payment shall
be applied/appropriated in discharge of debts in order of time. Here, the oldest one is to be
discharged first of all, even though time barred. THE FAMOUS CLAYTON’S RULE IS REFERRED HERE
(SEC-61)
• QUASI CONTRACTS deal with certain relations resembling those created by a contract. However, this
may not be always a valid contract. The basis and legal sanction here suggest that no one should
have unjust benefit at the cost of the other party(AIR 1990)
• Some examples of quasi contracts are: (sec-68 to 72)
o Claims for necessaries supplied to a person incompetent to contract
o Reimbursement of money paid, due by another
o Obligation of a person enjoying benefits of non-gratuitous Act( not free/charity)
o Responsibility of finder of lost goods
o Liability of a person getting benefit under mistake or coercion

Indemnity & Guarantee

INDEMNITY:
• Sec 124 of Indian Contract Act define Contract of Indemnity as” A contract by which one party
promises to save the other from loss caused to him by the conduct of the promisor himself, or
by the conduct of any other person”. Thus, in this case the Indemnifier (one who gives indemnity)
undertakes through the contract of indemnity that he would make good the loss incurred by the
Indemnified (in whose favour the indemnity is given) on account of his own conduct or conduct
of a third person.
• In Banks we generally take Indemnity Bond while issuing duplicate DD or duplicate Deposit
Receipt etc.
• We also obtain counter-Indemnity from the borrowers wherever we issue Letter of Guarantee.
Through this counter Indemnity, borrower undertakes to indemnify the bank.

GUARANTEE:
• As per Sec.126 of Indian Contract Act 1872,”it is a contract to perform the promise or discharge the
obligation of a third person in case of his default”. There are three parties to a contract of Guarantee
i.e. Principal Debtor (borrower), Surety (Guarantor) and Creditor (Bank). Guarantor’s liability arises on
default made by the principal debtor.
• A Guarantee may be specific or continuing one. Guarantee issued for a specific single transaction is
called “specific guarantee”. When a guarantee extends to a serious of transactions it is called a
“continuing guarantee “(Sec.129). Normally the guarantee obtained by the bank for the loan given is a
continuing guarantee.
• Guarantees are also further classified into Performance Guarantee, Financial Guarantee, and
Deferred Payment Guarantee.
• The liability of the guarantor is co-extensive with that of principal debtor (borrower) (u/s 128).
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Consideration for Guarantee:
Anything done or any promise made to the principal debtor is sufficient consideration to the surety for
giving the guarantee (Sec 127) and law does not require any separate consideration to be given to the
guarantor for a valid contract of guarantee.

GUARANTEE BY TWO OR MORE PERSONS:

Two or more persons can undertake a “joint liability” or a “joint and several liability”. Guarantee taken
by the Bank is usually is with “joint and several liability” clause. All the joint sureties should sign the
guarantee document. Those who have not signed the guarantee shall not be liable for the guarantee.
Further, even the guarantee may not be enforceable even against those who signed the guarantee, if
the other guarantors have not signed
GUARANTEE BY PARTNERSHIP FIRM:
Where the partnership firm is giving the guarantee, all the partners should sign the guarantee on behalf
of the firm to bind the firm, unless providing guarantee is a normal business of the firm. In case partners
are giving their personal guarantee for the loan taken by the firm, then they have to sign the guarantee
in their personal capacity (without the firm’s seal).

GUARANTEE BY A LIMITED COMPANY:

A limited Company can give a guarantee if the Memorandum of Association and Articles of Association
expressly permit for giving such guarantee. A Board resolution to be passed for giving the guarantee and
authorizing specific persons to execute the guarantee. Common seal is required to be affixed in presence
of directors/executives authorized in the board resolution/AOA.

DETERMINATION OF LIABILITY:
The liability of the guarantor stands determined (crystallization) on happening of any of the following
events:

Revocation of Guarantee: When the continuing guarantee is revoked, guarantor’s liability stands
determined and he is liable for the balance in the account as on the date of receipt of notice by bank

Death of Guarantor: Death of surety results in revocation of guarantee as to future transactions.

Deceased guarantor’s asset is liable for the balance in the account as on date of receipt of the news of
death by the bank. On getting the information of death, bank should stop further credits in the account
(so as to avoid application of Clayton’s Rule). If Bank decides to continue operation, account is to be
first ruled off (either by opening new account in Finacle or with one simultaneous credit and debit entry
in the same account to reflect “ruling off”) and also an undertaking to be obtained from the legal heirs
of the deceased guarantor that they are liable for the balance in the account on the day the Bank has
the notice of death of the guarantor.

LIMITATION FOR GUARANTEE:

Limitation against the guarantor starts from the date demand is made on the guarantor. It is advised
that branches are to obtain composite DBC signed by borrower and the guarantor to extend the
limitation period against the guarantor also due to conflicting judgments of various High Courts on
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extending limitation against the guarantor’s liability. However, now it is the settled law that the
limitation against the guarantor starts from the date of demand made on him. However, branches to
continue to take guarantor’s signature on the composite DBC.

The Law of Insurance: IT is a contract whereby one person, called as the INSURER, ASSURER OR
UNDERWRITER undertakes(indemnifies) to make good the loss of another called THE INSURD OR ASSURED
by payment of money to him on the happening of a specified event
➢ The consideration for which the insurer undertakes to indemnify the assured is called PREMIUM
➢ The instrument in which the contract of insurance is generally described is called THE POLICY. The
policy itself is not the contract. It is the evidence of contract
➢ The thing or property insured is called the subject matter of insurance and the interest of the assured
in the subject matter is called insurable interest

PERILS INSURED AGAINST IS THE LOSS ARISING FROM UNCERTAIN EVENTS OR CASUALTIES IN FORM OF
DESTRUCTION/DAMAGE TO PROPERTY OR DEATH/DISABLEMENT OF A PERSON.

FUNDAMENTAL ELEMENTS OF INSURANCE:

1. IT must have all essential elements of a valid contract
2. It is a contract of malafide i.e. of utmost good faith. A mis-statement or withholding of any material
information is fatal to the contract of insurance
3. It is a contract of indemnity. The assured is paid for the actual loss not exceeding the amount of
policy
4. The assured must be so situated with regard to things insured that he would benefit from its existence
and suffer loss from its destruction
5. The assured can recover the loss only if it is caused by any of the perils insured against
6. If for any reason the risk is not run, the consideration fails and the insurer must return the premium
7. In the event of any mishap to the insured property, if the assured fails to take all necessary steps to
mitigate the loss; the insurer can avoid the payment of loss which is attributable to the assured’s
negligence
8. Where there are two or more insurances on one risk, the principle of contribution applies between
different insures
9. The insurer who has agreed to indemnify the assured on making good for loss, is entitled to succeed
to all ways and means by which the assured might have protected himself against the loss. THIS IS
CALLED AS THE DOCTRINE OF SUBROGATION
10. If an insurer has insured a venture in which the risk involved is beyond his capacity, he may insure
the same risk either wholly or partially with other insurers. This facility is called RE-INSURANCE and can
be resorted to in all kinds of insurance
11. Where the assured insures the same risk with two or more independent insurers and the total sum
insured exceeds the actual value of subject matter, the assured is said to be OVER INSURED BY DOUBLE
INSURANCE. But, in case of loss, the assured cannot recover more than the actual amount of loss
12. This is because, a contract of insurance (other than life and personal accident insurance) is a
contract of indemnity
13. Insurance ombudsman handles all grievance regarding insurance policies and has the authority to
handle claims up to Rs. 30 lakhs.
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Payment and Settlement System Act 2007:
Payment and Settlement System Act 2007 came into effect on 12th August 2008 and it provides the
conduit for the movement of money in the economy thereby increase the velocity of money
Some of the important provisions of the Act are:
1. It empowers the RBI to act as regulator and Supervisor of the Payment and Settlement System of the
Country
2. It permits RBI itself to operate payment and settlement system or permit any other person to do so
with its authorization
3. It provides for formation of Board called the Board for /Regulation and Supervision of Payment and
Settlement System for administration of the Act
4. It empowers RBI to form a Company which will manage the clearing function and also retail payment
system subject to the condition that minimum 51% of the equity will be held by Public Sector Banks.
5. As per Section 25 of PSS Act , dishonor of electronic fund transfer instruction is returned for want of
funds, it is punishable as stipulated under section 138 of NI Act.

Instruments used in Payment and Settlement System are (i) Cheque Clearing System, (ii) National
Electronic Clearing Service, (iii) National Electronic Fund Transfer System (NEFT), (iv) Real time Gross
Settlement System (RTGS), (v) Automated Teller Machines (ATMs), (vi) Plastic Cards which include Debit
Cards, Credit Cards, Smart Cards etc.

The Bankers’ Books Evidence Act 1891:

The Bankers’ Books Evidence Act 1891 was enacted to amend law of evidence with respect to banker’s
books. The Act gives directions to produce various details maintained in Banks’ ledgers, registers etc as
evidence in the court of law in easy way and to have evidentiary value to the extracts and copies.
Certified copy is a prima facie evidence and admissible in evidence as if original is produced. On
production of certified copies, no further evidence is required. In any proceeding where bank is not a
party and certified copies are produced bank’s officer cannot be called as witness as copy is admissible
evidence. Court can order inspection of books of accounts. The orders for inspection of books must give
three clear days for the bank to arrange for inspection. When the books of the bank are taken print out
form they need further certification. When a data is stored in computer form a certificate from person
in charge of the computer is required.

Right to Information Act 2005:

The Right to Information Act 2005 secured access to information under the control of public authorities
to the citizens in order to promote transparency and accountability in the working of every public
authority and containing corruption.
• Public Sector banks including Regional Rural Banks come under the purview of the Act.
• Any citizen can apply to a public authority to inspect a record, taking a note of the same, seek a
copy of the same and can even request an electronic copy of the same as permitted by the Act.
• Companies / Corporates are not eligible to seek any information under this Act.
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• The Principle Information Officer has to provide or reject the request for information within 30 days
of the receipt of the application
• As per Section 8 and 9 of the RTI Act, PIO can refuse give information which are classified under
exempted category.
• The Central Government constitutes the Central Information Commission and the State Government,
the State Information Commission for monitoring the implementation of RTI Act.

Indian Partnership Act:

Partnership is the relation between persons who have agreed to share the profits of a business carried
on by all or any of them acting for all.
Partners are bound to carry on the business of the firm to greatest common advantage. The partners
are responsible to each other for the conduct of the business of the firm.

Duties and Rights of the partner:

➢ Partner should not make secret profits.
➢ They have to be just faith full to each other.
➢ Every partner is duty bound to indemnify the loss caused by his fraud.
➢ The partners of the firm can decide their mutual rights and duties and change them from time to
time with the consent of all the partners.
➢ The property of the firm has to be held and used by the partners exclusively for the propose of the
business.
➢ The partners can decide the use of the property by mutual consent.
Minor as partner:
As per the Indian contract act 1872, a minor is not competent to enter into a contract, hence he is not
eligible to enter into contract.
Though minor can’t be partner, with the consent pf the all the partners minor can be admitted to the
benefits of the partnership firm.
As per the act registration of the firm is not compulsory. However non-registration of the firm has some
consequences viz.
➢ The firm cannot file legal proceedings against any third party.
➢ The firm cannot file a case against a partner for any mismanagement/ theft etc.

The Companies Act 2013:

The Act consolidates and amends the law relating to companies. The Companies Act, 2013 has been
notified in the Official Gazette on 30th August, 2013. Some of the provisions of the Act have been
implemented by a notification published on 12th September, 2013. The provisions of Companies Act,
1956 is still in force.

As per the above act the company has been defined as under:

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 “Company” means a company incorporated under this Act or any previous company law; In other words,
A company is a legal entity which is formed by different individuals to generate profits through their
commercial activities”.
• Company is a voluntary association of persons come together to carry on some business for profit
• Change in its members or their identity does not affect the legal existence or its identity
• The shares of joint stock companies are freely transferable
• A member’s liability in a company is limited to the extent of nominal value of the shares held by
them.
• A company is entitled to own and hold property in its own name
• A company can sue and be sued in its own name
• Thus, a Company is having its distinct legal personality, its shares are easily transferable and its
members are having limited liabilities

Section 13 of Companies Act stipulates that the Memorandum of a company should state a name of the
company. Memorandum of Association of a company should define the object for which the company is
formed, various business activity that it can undertake, the liability of its members etc.
Articles of Association of a Company states the rules and regulations relating to the internal
management of the Company.

Section 33A and 35 of Companies Act state the procedure of incorporation of a company and getting
certificate of incorporation from the Registrar of Companies.

Section 149 stipulates that in case of a public limited companies, certificate for commencement of
business is necessary before it commences business.

Section 33 stipulates various documents that are required to be filled before the Registrar of Companies
of concerned State in which the registered office of the company is situated.

As per the Companies act various types of companies that can be formed:

i. On the basis of mode of incorporation :

1. Statutory companies: Is create and incorporated by special act passed by either the central or state
legislature. Hence the statutory companies are not required to have memorandum of association.
2. Registered under companies act: Such companies are incorporated and registered under the
prevailing companies act.

ii. Classification of companies based on Public Interest :

1. Private Company: Number of members restricted to 200 and min members needed is 2.
2. Public Company: Seven or more person can form a public company and members can be unlimited.
3. Government Company: Is a company wherein not less than 51 % of the paid-up share capital is held
by central government or state government or state or central governments partly.

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4. Foreign Company: The act defines a foreign company as a company which is incorporated outside
India but has place of business in India.

The act has undergone various amendments some of the latest amendments done are as under:

The Companies (Amendment) Act, 2019 seeks to ensure more accountability and better enforcement to
strengthen the corporate governance norms and compliance management in corporate sector as
enshrined in the Companies Act, 2013”.

The main reforms undertaken through the Ordinance include the following:

• Re-categorizing of offences which are in the category of compoundable offences to an in-house

adjudication framework. However, no change has been made in respect of any of the non-compoundable
offences.
• Ensuring compliance of the default and prescribing stiffer penalties in case of repeated defaults.
• De-clogging the NCLT by:
➢ enlarging the jurisdiction of Regional Director (“RD”) by enhancing the pecuniary limits up to which
they can compound offences under section 441 of the Act.
➢ vesting in the Central Government the power to approve the alteration in the financial year of a
company under section 2(41); and
➢ vesting the Central Government the power to approve cases of conversion of public companies into
private companies.
• Other reforms include re-introduction of declaration of commencement of business provision; greater
accountability with respect to filing documents related to creation, modification and satisfaction of
charges; non-maintenance of registered office to trigger de-registration process; holding of directorships
beyond permissible limits to trigger disqualification of such directors.

Introduction of One Person Company (OPC)

It's a Private Company having only one Member and at least One Director. This concept is already
prevalent in the Europe, USA, China, Singapore and in several countries in the Gulf region. It was first
recommended in India by an expert committee (headed by Dr. J.J. Irani) in 2005. The one basic pre-
requisite to incorporate an OPC is that the only natural-born citizens of India, including small
businessmen, entrepreneurs, artisans, weavers or traders among others can take advantage of the ‘One
Person Company’ (OPC) concept outlined in the new Companies Act. OPC shall have no compulsion to
hold AGM (Annual General Meeting).

The threshold limits of paid-up capital and turnover applicable for OPCs have been removed so that
there are no restrictions on the growth of OPCs. Earlier, the threshold ceilings on the paid-up share
capital of ₹50 lakh/average annual turnover of ₹2 crore was a primary requisite.
When a Private Company converts into OPC: The private company has to file Form INC-6 for converting
itself into an OPC. The paid-up share capital of a private company should not be exceeding Rs.50 lakhs
and should not have an average annual turnover of more than Rs. 2 crore at the time of such conversion
into OPC.
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What is a Small Company?

As per the new definition and threshold limits, companies with a paid-up capital of INR 2 crore or less
and turnover of INR 20 crore or less are defined as small companies.

The 2013 Act provides exemptions to Small Companies primarily from certain requirements relating to
board meeting, financial statements and annual returns, rotation of company auditors, exceptions in
auditor’s reports and lesser penalties compared to other companies.

What is a Small LLP?

The Limited Liability Partnership (Amendment) Bill, 2021 provides for formation of a small LLP where:
(i) the contribution from partners is up to Rs 25 lakh (may be increased up to five crore rupees), (ii)
turnover for the preceding financial year is up to Rs 40 lakh (may be increased up to Rs 50 crore). The
central government may also notify certain LLPs as start-up LLPs (as recognized through notifications).
Minimum members for private company
The new act has increased the limit of the number of members from 50 to 200.

Immediate changes in stationery

The letterhead, bills or invoices, quotations, emails, publications & notifications, letters or other
official communications, should bear the full name of contact person, address of company’s registered
office, Corporate Identity Number ( CIN No. which is a 21 digit number allotted by Government),
Telephone number, fax number, Email id, contact website (if any).

Memorandum of Association & Article of Association

Memorandum of Association (also known as Charter of the Company or document of outdoor
management) specifies relationship of the company with outside world.
Articles of Association (document of indoor management) lays down the regulations for carrying the
objects, activities and management of its internal affairs as defined in its Memorandum of Association.

Commencement of Business
Companies (public/private Company) registered under Companies Act 2013 needs to file the following
with the Registrar of Companies (ROC) in order to commence their business
1. A declaration by the director in prescribed form stating that the subscribers/ promoters to the
memorandum have paid the value of shares agreed to be taken by them
2. A confirmation that the company has filed a verification of its registered office with the Registrar of
Companies (ROC)
In the case of a company requiring registration from any sectoral regulators such as RBI, SEBI etc.,
approval from such regulator shall be required prior to starting the business.

Financial Year:
The Companies Act 1956 Act provided companies to elect financial year. The Companies Act 2013 Act
eliminates the existing flexibility in having a financial year different than 31 March. The 2013 Act

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provides that the financial year for all companies should end on 31 March, with certain exceptions
approved by the National Company Law Tribunal. Companies should align the financial year to 31 March
within two years from 01 April 2014.

Eligibility age to become Managing Director or whole time Director

The eligibility criterion for the age limit has been revised to 21 years as against the existing requirement
of 25 years.

Number of directorships held by an individual

- Section 165 provides that a person cannot have directorships (including alternate directorships) in
more than 20 (twenty) companies, including ten (ten) public companies. It provides a transition period
of one year from 1 April 2014 to comply with this requirement

Board of Directors and Disqualifications for appointment of director

- The 2013 Act requires that the company shall have a maximum of 15 (fifteen) directors (earlier it was
12) and appointing more than 15 (fifteen) directors will require special resolution by shareholders.

Further, it requires appointment of at least one woman director on the board for prescribed class of
companies. It also requires that company should have at least 1 (one) resident director i.e. who has
stayed in India for a total period of not less than 182 (hundred and eighty two days) in the previous
calendar year.

All existing directors must have Directors Identification Number (DIN) allotted by central government.
Directors who already have DIN need not take any action. However, Directors not having DIN should
initiate the process of getting DIN allotted to him and inform the respective companies on which he is
a director. The Company, in turn, has to inform the registrar of companies (ROC).

Independent Directors-
The 2013 Act defines the term "Independent Director". In case of listed companies, one third of the
board of directors should be independent directors. There is a transition period of 1 (one) year form 01
April 2014 to comply with this requirement. The 2013 Act also provides additional qualifications/
restrictions for independent directors as compared to the 1956 Act.
Section 150 enables manner of selection of independent directors and maintenance of databank of
independent directors and enables their selection out of data bank maintained by a prescribed body

Resident Director:
Every Company must have atleast one director who has stayed in India for a total period of 182 days or
more in previous calendar year. For existing companies, the compliance need to be made before 31st
March 2015.
Loans to director:
The Company cannot advance any kind of loan / guarantee / security to any director, Director of holding
company, his / her partner/s, his/ her relative/s, Firm in which he or his relative is partner, private

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limited in which he is director or member or any bodies corporate whose 25% or more of total voting
power or Board of Directors is controlled by him.

Appointment of managing director, whole time director or manager [section 196 of 2013 Act]
The re-appointment of a managerial person cannot be made earlier than one year before the expiry of
the term instead of two years as per the existing provision of section 317 of the 1956 Act. However, the
term for which managerial personnel can be appointed remains as five years. Further, the 2013 Act lifts
the upper bar for age limit and thus an individual above the age of 70 years can be appointed as key
managerial personnel by passing a special resolution.

Key Managerial Personnel (KMP)

The Provisions relating to appointment of KMP includes (i) the Chief Executive Officer (CEO) or the
managing director (MD) or the manager (ii) the company secretary (iii) the whole-time director; (iv) the
Chief Financial Officer (CFO); and (v) such other officer as may be prescribed is applicable only for
Public Limited Companies having paid up capital more than 10 crore and Private Limited Companies are
exempted from appointment of KMPs.

Attending Board Meetings

As per section 167 of the Act, a Director shall vacate his/her office if he/she absents himself from all
the meetings of the Board of Directors held during a period of 12 (twelve months) with or without
seeking leave of absence of the Board. Simply speaking, attending at least one Board Meeting by a
director in a year is a must else he has to vacate his/her office.

Board meetings
At least 7 days’ notice to be given for Board Meeting. The Board need to meet at least 4 times within a
year. There should not be a gap of more than 120 days between two consecutive meetings.

Appointment of Statutory Auditors

Every Listed company can appoint an individual auditor for 5 years and a firm of auditors for 10 years.
This period of 5 / 10 years commences from the date of their appointment. Therefore, those companies
who have reappointed their statutory auditors for more than 5 / 10 years, have to appoint another
auditor in their Annual General Meeting for year 2014.

Other specialized services which cannot be provided by Statutory Auditors

The Statutory Auditor of the Company cannot give following specialized services directly or indirectly
to the company –
a. Accounting and bookkeeping services
b. Internal audit
c. Design and implementation of any financial information system
d. Actuarial services
e. Investment advisory services
f. Investment banking services
g. Rendering of outsourced financial services
h. Management and/or any other services as may be prescribed
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Corporate Social Responsibility (CSR)
The company has to constitute a CSR committee of the Board and 2% of the average net profits of the
last three financial years are to be mandatorily spent on CSR activities by an Indian company if any of
the following criteria is met:
• Net worth of Rs.500 crores or
• Turnover of Rs. 1000 crores or more or
• Net profit of Rs. 5 crores or more
Contributing to Incubators, which has been notified by the Government of India, is eligible for spending
under CSR. This is a prosperous time for incubators and entrepreneurs and can really change the
entrepreneurial eco system in India.

Limitations Act:
The Limitation Act, 1963 is the legislation that governs the period within which suits are to be filed,
with relevant provisions for delay, condonation thereof etc. If the suit is filed after the expiration of
the time period as specified in this act, it will be barred by limitation.
Definitions:
Period of limitation is always in relation to a document which entitles the beneficiary to take action in
a court of law.

“A limitation period is the period of time within which a party to a contract must bring a claim. In
construction contracts, limitation periods are often relevant in relation to defects claims brought
against contractors”

The act gives rise to the fresh period of limitation on two instances:

1. Where before the expiration of the prescribes period for suit or application in respect of any property
right, an acknowledgement of liability in respect of such property or right has been made in writing
signed by the party against whom such property or right is claimed.

2. Where payment on account of debt or interest on legacy is made before expiration of the prescribed
period by the person liable to pay the debt.

Period of limitation for certain important suits:

Description of the suits Period of Time from which period begins to run
limitation
For money payable for money lent 3 years When the loan is made
For the money lent under an 3 years When the loan is made
agreement that it shall be payable in
demand
On bill of exchange payable at sight, 3 years When the bill is presented
or after sight, but not at a fixed time

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 On bill of exchange or promissory 3 years When the fixed time expires
note payable at fixed time after
sight or after demand
On a promissory note or bond 3 years The expiration of the first term payment
payable by installments as to the part then payable and for the
other parts, the expiration of the
respective terms of payment.
For arrears of rent 3 years When the arrears become due
For specific performance of a 12 years The date fixed for the performance, or if
contract. no such date fixed, when the plaintiff has
noticed that performance is refused.
To enforce payment of money Thirty When the money sued for becomes due
secured by a mortgage years
By a mortgagee for foreclosure 12 years When the mortgagee becomes entitled to
possession.

Internal Ombudsman:

The Internal Ombudsman system is introduced with a view to strengthen the internal grievances
redressal system of bank and to ensure redressal of complaints of the customers at the highest level
authority of the bank so as to minimise the need for the customers to approach other for a for redressal.
The Internal Ombudsman as an independent authority shall review complaints examine customer
complaints which are in the nature of deficiency in the service on the part of bank that are partly or
wholly rejected by the bank.
Bank shall internally escalate all complaints which are not fully redressed to IO before conveying the
final decision to the complainant.

Banking Ombudsman:

June 15, 1995 – RBI announced the Banking Ombudsman Scheme, revised w.e.f 14.06.2006, Amended in
2007 & 2009

Essential Requirements for complaint:

• Bank has rejected a complaint or complainant has not received any reply within 1 month after the
bank has received his representation or he is not satisfied with the reply given.
• A period of 1 year has not lapsed
• Compensation is limited to Rs.20.00 lacs.
• Not a subject matter settled through Ombudsman in previous proceeding and not pending with any
other court
• Not frivolous or vexatious in nature.

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 Government Business Products
PUBLIC PROVIDENT FUND SCHEME, 2019

Erstwhile PPF Scheme 1968 now replaced with PPF Scheme 2019

Eligibility for 1. The scheme is open to Individuals and account can also be opened on behalf of
opening minor child as a natural / legal guardian.
Account 2. Only one account can be opened in one name. If two accounts in same name are
opened by mistake, second account shall be treated as irregular and will not
carry any interest amount.
3. If a resident, who opened an account under this scheme, subsequently becomes
a non-resident during the currency of the maturity period, the account shall be
deemed to be closed with effect from the day he becomes a non-resident.

Subscription Minimum amount Rs.500/- and maximum Rs.1,50,000/- in a financial year.

Period Minimum period is 15 years and can be extended in a block of 5 years.
Rate of As per Govt. Notification from time to time (on Quarterly basis)

Interest Presently 7.10% w.e.f 01.07.2021

Withdrawal • Partial withdrawals are allowed anytime after the expiry of 5 years from the end of
from the Fund the year in which initial subscription was made. In case of medical emergency /
serious ailment / critical illness or higher education of minor child, change of
residency status, account can be closed after 5 years (Valid documents / Proof to
be submitted)
• Partial withdrawals are allowed after the expiry of 5 financial years.
• Partial withdrawal is restricted to 50 % of the amount at credit at the end of 4th year
immediately preceding the year in which the withdrawal is made.
• Entire amount can be withdrawn after completion of 15 years.
Loans Anytime after the expiry of one year from the end of year in which initial subscription
was made but before the expiry of 5 years from the end of the year in which initial
subscription was made, a loan of 25% of the credit balance at the end of the second
year immediately preceding the year in which the loan is applied may be availed of by
the subscriber

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 In erstwhile scheme, one needs to pay an interest of 2% on such loans up to & above
the prevailing PPF interest rate, which is now reduced to 1 percent.

Nominations Nominations of one or more persons are allowed except in the account opened on behalf
of the minors.
Premature Partial withdrawals are allowed anytime after the expiry of 5 years from the end of the
Withdrawal year in which initial subscription was made. In case of medical emergency / serious
ailment / critical illness or higher education of minor child, change of residency status,
account can be closed after 5 years (Valid documents / Proof to be submitted)
Tax 1. Deposits in the account are exempted under section 80C of Income Tax Act
Concessions 2. Interest on PPF / withdrawal from the fund is exempted from Income tax.
3. Balance held in PPF account is totally exempt from wealth tax.
4. Deposits in the name of wife/minor children will also qualify for deduction of
section 88 of Income Tax Act, 1961.
PPF accounts can be opened at any of the authorized branches
Premature 1. Exemptions:
Closure 1) In case of need of Funds for higher education of dependent children, after
producing the supporting document.
2) Treatment of life-threatening ailments affecting self, spouse or dependent
Children or parents.
3) On account of change in residency status on production of a copy of passport &
visa or I-T return, premature closure is allowed.

2. If a PPF account that has already completed 15 years and has subsequently been
extended for 5 years. If PPF is closed prematurely before the completion of the current
5 year block period, the reduction in interest rate by 1 percent point shall be applicable
from the date of the commencement of the current 5 year block period and not from
the date of initial opening of the account.

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 RBI FLOATING RATE SAVINGS BONDS, 2020 (TAXABLE)
ITEM FRSB, 2020 (TAXABLE) REMARKS
Category of Non-Resident Indians (NRIs) are
Investor Resident Individual, HUF not eligible to invest in these
bonds.
Limit of
investment Minimum Rs.1000/- and in multiples thereof. No maximum limit

Date of Issue Date of receipt of subscription in cash (up to

of bonds Rs.20,000/- only) or date of realization of ---
cheque /draft/ funds.
Forms of Bond Ledger Account will be
Electronic form held in the Bond Ledger
Bonds opened by the Receiving Office in
Account.
the name of investor/s.
Rate of (i) Interest is payable semi-annually from the
Interest date of issue of bonds, up to 30th June / 31st
December as the case may be, and
The interest rate is
thereafter half-yearly for period ending 30th
linked/pegged with prevailing
June and 31st December on 1st July and 1st
National Saving Certificate (NSC)
January respectively.
rate with a spread of (+) 35 bps
over the respective NSC rate.
(ii) Half-yearly interest is payable on 1st January
/ 1st July. The coupon on 1st January 2021
shall be paid at 7.15%.
Post Maturity Interest will not be paid after maturity period
Interest ---
of the bond.
Tax benefits
Tax will be deducted at source
while interest is paid. Any other
Income from the bonds is taxable.
applicable exemption may be
declared in the Application Form.
Nomination The sole holder or all the joint holders may
Facility ---
nominate one or more persons as nominee**
Maturity 7 years from the date of issuance. ---
period
Premature
Facility is available to the eligible investors after
redemption 50% of interest due and payable for
lock in period of 4, 5, and 6 years in the age
the last six months shall be
bracket of 80 years and above, between 70 to 80
recovered as penalty.
years and 60 to 70 years respectively.
Transferability The bonds are non transferable. Transferability is limited to
nominee(s)/legal heir in case of
death of holder.

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Tradability /
Advances The bonds are non tradable in the secondary
market and also not eligible as collateral for ---
availing loans.
Application Unauthorized branches can
forms Available at 66 authorized branches of Union mobilize applications and can send
Bank of India to nearby authorized branches.

SENIOR CITIZENS SAVINGS SCHEME – 2019 (SCSS)

Scheme As per Government of India’s notification dated 12.12.2019, this scheme

is called as Senior Citizens’ Savings Scheme, 2019.

Eligibility ➢ Individual who has attained the age of 60 years or above as on the
date of opening of the account.
➢ Individual, who have attained the age of 55 years or more but less
than 60 years on the date of opening of an Account, subjected to
retirement under VRS or superannuation scheme shall also be eligible
to subscribe under the scheme but within a period of one month.
➢ Retired personnel of Defence Services (excluding Civilian Defence
Employees) on attaining the age of 50 years.
➢ Non-Resident Indians (NRIs) and Hindu Undivided Family (HUF) are not
eligible to open account under these rules

Tenure of the Scheme 5 years, which can be extended by 3 more years just once.
Rate of Interest 7.60% w.e.f 01.10.2022, however, subject to change as per Govt.
Notification from time to time.
Frequency of Computing Quarterly
Interest
Tax Aspects Interest is fully taxable
Investment to be in Minimum Rs. 1000/- in beginning and thereafter in multiples of Rs.1000/-
multiples of
Maximum Investment Limit Rs. 15 lakhs
Eligibility Resident Individual can invest in SCSS. NRIs and HUFs are not allowed
to invest in SCSS
Facility of premature Available after 1 year of holding but with penalty.
withdrawals - 1.5% of Deposit amount, before completion of 2 Years from the date
of Account opening.
- 1% of Deposit amount, between 2 Years to less than 5 Years.
Transferability feature Accounts can be transferred to other branches/banks/post office.
Tradability Not available

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Nomination Facility Available
Mode of Holding Generally single. Joint mode is permitted but only spouse will be allowed
to open accounts jointly with beneficiaries.

SUKANYA SAMRIDDHI ACCOUNT (SSA)

The Scheme A Govt. of India Deposit Scheme for Individuals on behalf of Minor Girl Child

The account may be opened by or legal guardian in the name of a girl child
from the birth of the girl child till she attains the age of ten years and any
girl child, who had attained the age of ten years, one year prior to the
commencement of these rules, shall also be eligible for opening of the
Eligibility
account under these rules.
Natural or legal guardian of a girl child shall be allowed to open the account
for two girl children only or 3 accounts if twin girls are born in the second
birth or triplets are born in the first birth.
Initial Minimum Deposit : Rs 1000.00
Monetary Limits Further Deposits to be made in multiples of Rs 100.00 into the account with
Minimum deposits in the account in financial year: Rs 1000.00
Birth Certificate of Girl child; Address proof of parents/guardians; Identity
Documents
proof of the parents/guardian
Minimum tenure of contribution is 15 years from the date of opening of
Subscription Limits
account.
21 years from the date of opening of account.
Duration Withdrawal allowed up to 50% for the girl’s higher education and marriage
after she attains 18 years of age
7.60 % w.e.f. 01.07.2021 (Interest is compounded annually), however,
Rate of Interest
subject to change as per Govt. Notification from time to time.
➢ Annual subscription during F.Y. eligible for tax exemption under Sec 80
C of I.T. Act.
Tax Benefits ➢ Interest earned on the deposit amount under the scheme is tax free u/s
10 of IT Act.
➢ No tax will be levied on the maturity amount.

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 ➢ In the event of death of the Beneficiary Account holder the account shall
be closed immediately.
➢ If, after opening of the account, the account holder becomes non-citizen
or non-resident of India, intimation to this effect shall be given by the
guardian or the Account Holder within a period of one month from the date
of such status. In the event of such change, no interest shall be deemed
Premature Closure to accrue to the account holder and the Account shall deemed to be closed
prematurely from that date.
➢ In case of extreme compassionate grounds such as medical support in life
threatening diseases of the Account holder or death of the guardian, that
the operation of continuation of the Account is causing undue hardship to
the Account holder, premature closed may be allowed after recording
reasons in writing.
Mode of Deposit Cash/Cheque/ Demand Draft

50% of the balance lying in the account as at the end of previous financial
Withdrawal: year for the purpose of higher education, marriage after attaining the age of
18 years.

Completion of 21 years from the date of opening of the account & where the
Marriage of the account holder takes place before completion of such period
Closure on Maturity
of 21 years. (Affidavit verifying Account Holder’s 18 years of age as on date
of closing of account)

Operations All branches can open Sukanya Samriddhi accounts

Penalty in Irregular An account may be regularized on payment of a penalty of Rs. 50/- per year,
Account along with the minimum specified subscription for the year (s) of default.

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 KISAN VIKAS PATRA (KVP)
It is Small Saving Certificate Scheme. Its enables people to mobilize their
Scheme
small savings into long term saving plan.

One must be adult and Indian Resident.

Eligibility Joint accounts permitted up to 3 individuals.

Trust, HUF (Hindu Undivided family) and NRI not eligible to invest in KVP

A minimum of one thousand rupee and any sum in multiple of one hundred
rupees may be deposited in an account.
Investment Limit
No maximum limit for purchase of the certificates.

Interest, Maturity Invested amount doubles on Maturity.

Amount and Rate of interest and maturity period as notified by the Government of India
Period on quarterly basis.

Interest Rate Current Interest Rate is 7.00% (w.e.f. 01.10.2022). Will mature in 123 months

No income tax benefit is available under the scheme. However, the deposits
Tax Benefits
are exempt from Tax Deduction at Source (TDS) at the time of withdrawal.

Operations Account opening & operations through GBM module

Lock in period for premature withdrawal is 2 years 6 months. However, it

can also be paid earlier in following cases:
Premature
Withdrawal • Death of certificate holder or any of the holders
• On order by court of law
• Forfeiture by a pledge or by Gazette Government Officer.

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 ATAL PENSION YOJANA (APY)
Atal Pension Yojana (APY) is one of the Social Security Schemes for launched by
Scheme
GOI in May 2015 for citizens of India in unorganized sector.

All Citizen of India aged between 18-40 years.

NRI in the age group 18-40 years of age having a Bank Account with APY POP
Eligibility (Point of Presence) i.e. Branch are also eligible to open APY Account. If the NRI
becomes non-citizen of India, then the APY Account will be closed and the net
actual interest earned on his/her contributions (after deducting the account
maintenance charges) will be refunded.

Subscription Defined contribution by subscriber depending upon his age & targeted pension
Limits Minimum Rs 42/- p.m. for subscriber of 18 years of age (Chart given below).

Investment Contributions till the subscriber attain 60 years of age. Minimum tenure of
Period contribution is 20 years from the date of opening of account.

The exit from the Scheme is permitted at the completed age of 60 years with
Duration/ Exit 100% annuity of pension wealth. On exit, pension available to the subscriber. Exit
also permitted in the event of death of beneficiary or terminal disease.

Nomination It is mandatory to provide nominee details in APY Account.

Guarantee Each subscriber under APY shall receive a GOI Guaranteed minimum pension of
Monthly Rs1000/-to Rs. 5000/- after the age of 60 years until death. After the demise of
Pension the Subscriber, the spouse of the subscriber shall be entitled to receive the same
Amount pension amount as that of the subscriber.

After the demise of both the subscriber and the spouse, the nominee of the
Pension Corpus subscriber shall be entitled to received the pension wealth, as accumulated till
the age of 60 years of the subscriber.

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 NATIONAL PENSION SYSTEM (NPS)
NPS is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers
to make optimum decisions regarding their future through systematic savings during their working life.
NPS seeks to inculcate the habit of saving for retirement amongst the citizens. It is an attempt towards
finding a sustainable solution to the problem of providing adequate retirement income to every citizen
of India. It is operated with the participation of the Central Recordkeeping Agency (CRA) which is the
National Security Depository Ltd. (NSDL).

• This scheme has been introduced by Pension Fund Regulatory and Development Authority (PFRDA) to
promote old age income security to all citizens of India including workers of the unorganized sector.

• NPS is a voluntary, defined contributions retirement savings scheme & is administered / regulated by
PFRDA. It is operated with the participation of Central Record Keeping Agency (CRA) – NSDL e-
Governance Infrastructure Limited & KFin Technologies Private Limited.

• A Citizen of India, OCI, whether resident or non- Resident Indian between age group of 18 to 70 years;
salaried or self-employed can join this scheme.

• The people within age group 60-70 can also join/re-join NPS.

• Account can be opened by Individual and Corporate.

• Every individual subscriber will be issued a Permanent Retirement Account Number (PRAN) card
having 12 digit unique numbers.

• Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is mandatory and the
subscriber has option to opt for Tier II account opening and operation. Tier II account can be opened
only when Tier I account exists.

• The subscribers joining the NPS after the age of 60 would be eligible to continue in system up to age of
70 years and during this period the subscriber may continue to contribute.

Pre-Mature Closure / Maturity / Partial Withdrawal:

Exit & Withdrawal:

The withdrawal treatment is different based on the criteria that if the Subscriber
registration is before 60 years and after 60 years.

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 For Subscriber registration before 60 years:

• Pre-Mature Closure:The subscriber has to compulsorily annuitize 80% of the accumulated pension
wealth and the remaining 20% can be withdrawn as lump sum.
• If Corpus <2.50 Lakhs, complete withdrawal permitted.
• In case of death of the subscriber - Entire accumulated pension fund will be paid to the nominee/s or
legal heirs, as per norms. No family pension under the scheme.

1. On Maturity:

• After attaining 60 years of age, upto 60% of the corpus can be withdrawn. Subscriber is required to invest
minimum 40% of the accumulated savings (Pension Wealth) to be kept as annuity. At the time of maturity
whole 60 % of corpus amount is tax exempted.
• If Corpus < 5.00 Lakhs, complete withdrawal permitted.
•

• For Subscriber registration after 60 years: At the time of withdrawal, if the Subscriber exits after
completing 3 years of holding NPS account 60-40 option is available (40% annuity is minimum condition, if
the subscriber wants more pension he can allocate higher annuity percentage). If the Subscriber exits his
NPS account before completing 3 years then 20% lumpsum & 80% has to be allocated for annuity option is
available.
•
• Can defer the withdrawal of eligible lump sum amount till the age of 75 years and withdraw the same in
10 annual instalments.
•
• Annuity purchase can also be deferred for maximum period of 3 years at the time of exit.
• For the subscriber under Unorganized Sector (UOS), if the exit option or deferment option or continuation
is not exercised then by default the subscriber is taken into continuation mode. This is applicable only for
UOS sector subscriber. For corporate sector subscriber, the subscriber has to give the concerned request
(continuation/deferment/exit) 15 days prior to his retirement date. After the subscriber’s retirement
date, if he/she wishes to continue or defer a written application has to be sent to NPS Trust for necessary
action.

Partial Withdrawal:

• Subscriber should be in NPS for at-least 3 years.

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• Amount should not exceed 25% of the contributions made by the subscriber during that period.
•
• Purpose for which partial withdrawal allowed are:
• Higher education of children
• Marriage of children
• Purchase or construction of residential house or flat
• Treatment of specified illness
• Disability of more than 75%
• Skill Development/ re-skilling or any other self –development activities
• Establishment of own venture or any start-ups Other reasons as specified from time to time by
PFRDA.
• Frequency of partial withdrawal:
• Max 3 (three) times during entire tenure
• The gap between the consecutive partial withdrawals has been removed.

Tax Benefits to the Employees & Employer :

1. Benefits to Employer:
• A contribution made by the employer (Upto 10% of Basic + DA) is allowed as Business expense under Sec
36 (1) iv (a) of I.T Act 1961.
2. Benefits to Employee:
• Employee’s own contribution is eligible for tax deduction upto 10% of Salary (Basic + DA) under Sec 80
CCD(1) within the overall ceiling of Rs. 1.50 lakhs under Sec 80 CCE of the I.T Act
• Employee also gets tax deduction for the contribution made by the employer under section 80 CCD (2) of
I.T Act upto 10% of salary (Basic + DA) which is in addition to the tax benefit available under sec 80 CCE.
No monetary ceiling.

Note:- Subscriber is allowed tax deduction in addition to the deduction allowed under Sec 80 CCD(1)
for additional contribution in his NPS account subject to maximum investment of Rs. 50000/- under
sec 80 CCD 1 (B).

Settlement of Death Claim

Methods of settlement

a. Payment to Nominee: Nomination is introduced solely for the purpose of Simplifying the procedure
for settlement of claims of deceased depositors and nomination facility does not take away the rights

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 of legal heirs on the estate of deceased. The nominee receives the payment as a trustee of the legal
heirs and they have the right to claim the amount from him. Bank is fully discharged by making payment
to the nominee. Claims and counter claims by legal heirs and others need not be taken into cognizance
unless a Court Order is produced.

b. Payment to Legal Heirs on Production of Legal Representation:

Legal Representation: It is a court order empowering certain person/s to collect the amount due to the
deceased such as Probated Will, Letter of Administration or Succession Certificate.

Probated Will: It is a copy of the will certified under the seal of the Court of competent jurisdiction
confirming that the will has been duly executed and has the force to be acted upon. It is the legal
process/court order administering the estate of a deceased person by resolving all claims and
distributing the deceased person’s property under a valid Will. Bank to act as per the probate/court
order.

Letter of Administration: Where there is no will or When a person dies leaving a Will without appointing
an executor or if an executor appointed by a Will is legally incapable or refused to act or who has died
before the testator or before he has proved the Will, an administrator can be appointed by a competent
court as distinguished from an executor who can be appointed by a person by his Will or codicil.

Succession Certificate: It is a certificate/order issued by a Court of competent declaring the names of

Legal heirs of a deceased person and percentage of their share in the property of the deceased. A
succession certificate is a document which gives authority to a person named in the document to collect
“debts and securities” (i.e. credit balances & transferable securities) due to deceased person.

c. Payment to Legal Heirs in the absence of Legal Representation: It involves making payment to the
Legal heirs when:

1. The depositor dies intestate (not leaving behind any will)

2. There is no Nomination
3. There is no Legal Representation/Court Order

❖ Claims up to and inclusive of Rs 5000/-:

When Branch Manager is fully satisfied about the identity, integrity and bonafides of the
claimant after due enquiry, he can settle the claim upto Rs 5000/- without insisting for legal
heir certificate, affidavit and indemnity bond.
Only a declaration to be obtained in Annexure – X (To be stamped as an Agreement - IC 3164-2022
dated 31.03.2022)

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❖ Claims above Rs 5000/- and up to & inclusive of Rs 50,000/-
Following documents to be taken:
a. Application form (Estate Claim form) (annexed as Annexure-II).
b. Original death Certificate issued by appropriate authority.
c. Legal Heir Certificate (not mandatory)
d. Affidavit stating that the deceased died intestate and there are no other legal heirs other than the
one mentioned therein (to be stamped as per local Law). Affidavit to be executed before a
Notary/Magistrate/other Officer authorized by State Government (as per Annexure-VII).
e. If the claim is less than Rs.25000, then Letter of Indemnity to be obtained executed by all the legal
heirs along with two sureties (Annexure-VI) instead of Indemnity Bond (Annexure-VIII).
f. If the claim is above Rs.25000, Indemnity Bond to be obtained signed by all legal heirs and two sureties
acceptable to the Bank. The means of each of the sureties should not be less than the claim amount
(credit information to be obtained & credit report to be compiled). Indemnity Bond to be stamped as
per the local laws (as per Annexure-VIII).

❖ Claim above Rs 50,000/-

a. Application form (Estate Claim form) (annexed as Annexure-II).

b. Original death Certificate issued by appropriate authority.
c. Legal Heir Certificate
d. Affidavit stating that the deceased died intestate and there are no other legal heirs other than
the one mentioned therein (to be stamped as per local Law). Affidavit to be executed before a
Notary/Magistrate/other Officer authorized by State Government (as per Annexure-VII).
e. Indemnity Bond to be obtained signed by all legal heirs and two sureties acceptable to the Bank. The
means of each of the sureties should not be less than the claim amount (credit information to be
obtained & credit report to be compiled). Indemnity Bond to be stamped as per the local laws (as per
Annexure-VIII). (To be executed before a Notary/Magistrate on Non-Judicial Stamp paper).
Wherever the claimants are finding it difficult/not able to obtain legal heir certificate from the
revenue authorities, the claim can be settled by obtaining the following additional document:
f. A declaration to be obtained from the respectable person/s well known to the deceased’s family
and the Bank preferably an existing depositor of the bank, to the effect that the claimants are the
only legal heirs of the deceased.(Annexure- IX)(To be stamped as an agreement- Need not be
signed before Notary or Magistrate).
Procedure for Payment: The branch is expected to exercise due care and caution in ascertaining the
identity of nominee(s) and the fact of death of the account holder, through Documentary evidence.
Payment should be made to the nominee(s) through “Account Payee Only” Pay Order/Demand Draft
after getting a receipt.

Release of Assets of Deceased Customer to Legal Heirs / Claimants: As per directives issued by RBI to
apply the same principle of settlement of death claim in respect of release of property documents and
other assets of deceased customer like Articles kept in Safe Custody, securities held against advances
after adjustment thereof, etc.

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Settlement in respect of Missing Persons: In case of persons reported missing, the section 108 of the
Indian Evidence Act, 1872 provided that presumption of his death can be raised only after a period of
seven years from the date of his/her being reported missing before the Competent Court. If the court
presumes that he/she is dead/missing, then the claim can be settled as is done in case of deceased
accounts.
Obtaining Court order regarding presumption of death is time consuming & costly for a customer. As per
RBI directives, Banks are required to set the simplified procedure for settlement of claims received from
nominee/legal heirs of missing person so as to avoid inconvenience and undue hardship to the customer.

Settlement of Claims in respect of Safe Deposit Locker: When the legal heirs of a deceased lessee of
a Safe Deposit Locker approach the branch for surrendering the locker, the procedure for settlement of
death claim is same as for deposit accounts subject to some conditions. In addition, if the legal heir
desire their claim to be settled against letter of indemnity, branch has to obtain the same in Annexure-
VI of the Policy (IC 3164-2022).

Upon receipt of written request from legal heirs (Annexure XII) and only after payment of all arrear of
rent, locker to be opened and joint inventory of the contents to be taken detailing the brief particulars
of items and estimated commercial value.

The value of the articles may be estimated by the persons who take the Joint inventory provided all
legal heirs or their authorized representatives are present and there is no dispute. If locker is lost/not
available with the legal heirs and if they request the branch to drill/break open the locker for preparing
the inventory, in addition to collecting all arrears of rent, the cost of drilling/breaking open the locker
and repairing the locker should also be deposited by the claimants. An indemnity bond has to be obtained
as per “Annexure VI e”(IC 3164-2022) before drilling/break open. The charges for safe should be
recovered from the legal heirs till the time formalities of delivery of article are completed. The
delegated authority for settlement of claim to be decided based on value of the article (IC 3164-2022).

Safe Custody of Article: The procedure for settlement of claim for the Safe custody of Articles is same
as Safe Deposit Locker.

However, in those cases where property documents form part of the estate of deceased
customer/account holder i.e. other deposits and security items of the deceased available with the Bank
then the settlement of claim shall be made by following the procedure of death claim and the matter
shall be placed before the delegated authority.

Settlement of Claim through Legal Representation:

In cases where the claimant approaches the Bank for settlement of death claim through legal
representation viz. production of succession certificate/probate/ letter of administration,
Branches/RO/ZO (as per delegation) will settle the claim at their end after verifying the genuineness of
documents produced.
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Following procedures are to be adopted while making payment to Legal Heirs:
a. Verify the original of the legal representation/ court order
b. Satisfy that it is issued by the Court of competent jurisdiction
c. Confirm that the Bank Deposit is mentioned in the order or in the schedule
d. Certified photo-copy of the legal representation should be taken on record along with the application
form.
e. Identify the persons mentioned in the legal representation.
f. Payment should be made through “Account Payee only” Pay Order/ Demand Draft as per the terms
of the court order.
g. No sanction of higher authorities or indemnity Bond or surety is required. Permission of higher
authorities be sought only if there is any doubt to be got clarified.
h. No Indemnity Bond or surety is required.

Partnership Accounts:

When the Partnership is dissolved upon death of a partner: The account operations to be stopped and
balance to be paid to the surviving partners along with the legal heirs of the deceased partner.

When the Partnership is not dissolved upon death of the partner: Surviving Partners can continue to
operate the account.
If there is any dispute among the surviving partners and the legal heirs of the Deceased Partner, they
should be advised to get a court order. Generally, it is advisable to stop operations in partnership
account when fact of death of a partner is known till documents/proof are produced and legal position
is clear. Remaining partners can open a new account and operate this new account. It is suggested to
take opinion of the local Advocate on the matter.

Time norms for settlement of death claims: If all the papers submitted are in order and if the claim
amount is within the delegated powers of the Branch Manager, the claim should be disposed off within
two days at the most.
In case the claim is beyond the powers of the branch, the proposal to be sent to Regional Office, Through
Regional Office, to Zonal Office and/or through RO to ZO to Central Office on the same day and it should
be ensured that the approval is received within 15 days. It should be ensured that no death claim is
pending beyond TAT period of 15 days from the date of submission of all the documents.

Legal heirs: In the absence of a Common Civil Code, who is legal heir of a deceased person depends
upon his/her personal law.

Branches to take following Precautions:

• Branch should maintain a Claim Register in which serial number, date of receipt of death claim,
amount, date of settlement and transaction number should be recorded.
• After settlement of the death claim, all claim forms/documents such as heir ship certificate,
Indemnity Bond, Affidavit, Declaration, Death Certificate and other documents along with the
Account Opening Form to be properly preserved.

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 • When legal heirs approach for any information for approaching court or for claiming against
indemnity bond, such information may be given on production of death certificate and letter
requesting for such information and after satisfying about bonafides of legal heirs.

Introduction of New Menu (DCFE) in Finacle

As part of Govt of India’s EASE Agenda to provide banking services for the customer convenience, the
data on deceased claim at branches/offices to be captured in system and reported on quarterly basis.
In order to facilitate the field functionaries to report the data for effective monitoring of TAT, a menu
‘DCFE’ has been developed in Finacle for the uses of Branches/Offices.

Introduction of Web Based Portal for expeditious settlement of Death Claims

A web-based portal for Death Claim settlement has been developed as per instructions of IBA and
Ministry of Finance, initially to cater to Savings/Current/Term Deposit accounts of individuals which is
a first of its kind in the industry. After successful completion of upload of required documents, the
claimant will receive an Application Reference number via email/SMS. The Branch/RO/FGMO will also
receive email/SMS simultaneously in respect of the claims lodged in their respective branch for
appropriate action at their end to and to RO/FGMO/CCU for monitoring the progress. Special focus is
given to Covid related Death Claims cases in line with the guidelines by IBA.

Settlement of Claims - Various types of operational instructions

Deposits with Nomination
Account in Operational Nominee Situation What is to be done
the Name of Instructions
A Self X X dies A can change the nomination
A Self X A dies X will receive the outstanding
A, B Either or Survivor X A dies Balance outstanding will be payable
to B after maturity. Before maturity the
amount may be paid to legal
heir of A and B.
A, B Either or Survivor X B dies Balance outstanding will be payable
to A after maturity. Before
maturity the amount may be paid to legal
heir of B and A.
A,B Either or Survivor X A & B dies X will receive the outstanding
A,B Jointly X A dies Payable to B and legal heirs of A
Jointly
A,B Jointly X B dies Payable to A and legal heirs of B
Jointly
A,B Jointly X A & B dies Payable to X

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Deposits without Nomination
Account in Operational Situation What is to be done
the Name Instructions
of
A Self A dies Outstanding will be payable to the legal heirs or any one of them
mandated by all of the legal heirs
A, B Either or A dies Outstanding will be payable to B (before maturity legal heir of A &
Survivor B and after maturity payable to B)
A,B Either or B dies Outstanding will be payable to A (before maturity legal heir of A &
Survivor B and after maturity payable to A)

A,B Either or A & B dies Jointly payable to legal heirs of A & B (or any of them mandated by
Survivor all the legal heirs)
A,B Jointly A dies Jointly payable to B and legal heirs of the A (or any one of them
mandated by all the legal heirs).
A,B Jointly B dies Jointly payable to A and legal heirs of the B (or any one of them
mandated by all the legal heirs)
A,B Jointly A & B dies Jointly payable to legal heirs of A & B (or any of them mandated by
all of them)

Safe Deposit Lockers with Nomination

Locker in Operational Nominee Situation What is to be done
the Name of Instructions
A Self X X dies A can change the nomination
A Self X A dies X will be given access to the locker and
liberty to remove contents
A,B Jointly X A dies B and X will be given access to the locker
and liberty to remove contents jointly.
A,B Jointly X B dies A and X will be given access to the locker
and liberty to remove contents jointly
A, B Jointly X A & B dies X will be given access to the locker and
liberty to remove contents.
A,B Jointly X&Y A dies B along with X and Y will be given access
to the locker and liberty to remove
contents jointly
A, B Jointly X&Y B dies A along with X and Y will be given access
to the locker and liberty to remove
contents jointly.
A,B Jointly X&Y A & B dies X and Y jointly will be given access to the
locker and liberty to remove the contents

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 Safe Deposit Lockers without Nomination
Locker in Operational Situation What is to be done
the Name of Instructions
A Self A dies Legal heirs of A or any of them mandated by any of them.

A, B Either or A dies B will be given access to the locker and liberty to remove the
Survivor contents.
A, B Either or B dies A will be given access to the locker and liberty to remove the
Survivor contents.
A,B Either or A & B dies Legal heirs of A and B (or any one of them mandated by all
Survivor legal heirs) will be given access to the locker and liberty to
remove the contents.
A,B Jointly A dies B and legal heirs of A (or any of them mandated by all legal
heirs) will be given access to locker and liberty to remove the
contents jointly.
A,B Jointly B dies A and legal heirs of B (or any one of them mandate by all
legal heirs) will be given access to locker and liberty to
remove the contents jointly
A, B Jointly A & B dies Legal heirs of A & B (or any of them mandated
by all legal heirs) will be given access to locker and liberty
to remove the contents
(IC 3164-2022)

** The above cases/examples are only indicative and may differ from case to case. Hence, view/opinion
may be obtained from the Law Officers in case of need.

Staff Deposits & Payment of Additional Interest

Definitions:

1. Staff Member:
“A member of the bank's staff” means a person employed on a regular basis, whether full-time or part-
time and includes a person recruited on probation or employed on a contract of a specified duration or
on deputation and an employee taken over in pursuance of any scheme of amalgamation, but does not
include a person employed on casual basis.

2. Retired Staff Member:

“A retired member of the Bank's staff” means an employee retiring whether on superannuation or
otherwise as provided in the bank’s service / staff regulations, but does not include an employee retired
compulsorily or dismissed in consequence of disciplinary action or resigned employees.
3. Family:
“Family” means and includes the spouse of the member / retired member of the bank’s staff and the
child / children, parents brothers and sisters of the member / retired member of the Bank's staff who
are dependent on such member retired member but does not include legally separated spouse.

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Payment of Additional Interest:
The additional interest is payable till the person continues to be eligible for the same and in case of his
ceasing to be so eligible, till the maturity of term deposit account.
The deposits made by the staff of erstwhile Andhra bank and Corporation Bank shall continue to be
eligible for the additional rate of interest on all such deposits post amalgamation as well. Deposits
renewed / created after amalgamation will earn interest inclusive of the additional 1% as applicable to
regular employees of the bank, depending on tenure of deposits as per card rate prevailing on the date
of deposit.

Joint Deposits of Staff:

1. Where a joint holder of a deposit is a staff member, in order to be in title for 1% p.a. additional
interest the name of the staff member should be first and not subsequent.
2. If a deposit is held by a retired staff member who is also a senior citizen jointly with his parents /
spouse / child / children, brother or sister then the branch can offer both staff benefit and senior citizen
benefit subject to obtaining a declaration form the staff member to the effect that the monies is
deposited or which may be deposited from time to time into such account/s, belong to the concerned
staff member.
3. Where a joint holder of a deposit made by the senior citizen is a staff member, to be entitled for 1%
p.a. additional interest only when the name of the staff member is first and not subsequent.
4. If a deposit is held jointly by the spouse of the deceased member of the staff who is senior citizen,
then the branch can offer both staff interest and senior citizen interest subject to obtaining of the
declaration that deposits belong to him/her.

Ceiling on Staff Deposits:

The maximum ceiling of Rs. 5.00 Crore for the amount invested in Term Deposits (Principal Amount) at
all branches of the Bank put together under staff category on which the benefit of additional rate of 1%
p.a. is admissible.

On premature closure of a staff members term deposit penalty as applicable shall be levied (1% less
than the card rate applicable for staff deposits as prevailing on the date of deposit for the tenure up to
which the deposit remained with the bank.)

Safe Deposit Vault (SDV) / Locker

Liability of bank will be limited to 100 times its annual rent in case of fire, theft, building collapse or
frauds by bank employees.

Locker allotment-
Branches should maintain a register reflecting details of applicants seeking locker facility. 80% of the
lockers falling vacant from time to time are to be allocated as per the waiting list. Remaining 20% of
lockers can be allotted at the discretion of Branch Head to the valued customers.
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Waitlist of lockers should be maintained which consist of Name, A/C no., Mobile No., Date of application
received, signature, Date of allotment, locker no allotted, Signature.

Application for locker can be from existing customers or from prospective customers: In case of existing
customers such as SB/CD/TD etc. KYC and CKYC need to be verified and proper documents to be
obtained. (IC 2540-2021 DT-30.03.2021on KYC-AML)

Where the lockers have remained un-operated for more than three years for medium and low-risk
categories, or one year for higher risk category, banks should immediately contact the locker holder
and advise him/her to either operate the locker or surrender it. This exercise should be carried out even
if the locker holder is paying the fee regularly.

Branches may extend locker facility to Visually Challenged customers after taking necessary precautions
i.e to insist for single name and not in joint name, branch person should not offer any assistance for this
purpose, if required branch can allow third party with proper records.

Locker operation guidelines-

If the locker is in joint names, mandate of the operation should be verified and access to the licensee
should be allowed as per mandate. If a notice of revoking of mandate of operation is received, the
access should be allowed jointly. The revocation letter may be given by one of the joint licensees.

The licensee will be permitted to be in the vault room only for a reasonable time (i.e. not more than
30 minutes)

The master key should be kept in joint custody of branch officials within the locker safe overnight.
Before keeping the master key within the safe, it should be put in a small metal box and locked in the
presence of the branch officials (joint custodians)

Important menus for locker operations in Finacle 10 are as following-

Sr. Finacle Purpose Function
No Menu
1 LKACU Locker operative For change of operating account no for locker
account update
2 LKCC Locker change For change of Customer ID
customer ID
3 LKCHM Locker transaction It shows locker fees and penalty collection date
history
maintenance
4 LKCM Locker customer Issuance/Surrender of locker, operating account can
maintenance also be updated using this option
5 LKKM Locker key Here, we can add new key, modify existing key,
maintenance delete old key and inquiry key no
6 LKOPS Locker operation Here we have to do check in and check out entry
maintenance every time when customer comes to operate the
locker
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 7 LKRCM License fee charge For collection of locker fees and penalty collection
collection
maintenance
8 LKREPM Locker report To generate report such as overdue fees, vacant
lockers, etc
9 LKTRM Locker types and To check locker fees for a particular locker type for
fee maintenance a period of time
10 LKUPL License fee For updation of locker fees
updation
11 LKWAIT Waiting list locker Here we can add new customer who wants locker in
menu our branch

Lockers are licensed for a minimum period of 1 year and for a maximum period of 3 years at a time
subject to advance payment of fee. Locker fees is payable in advance annually, branches may collect
locker fees in advance of 3 years. There would not be any concession in case advance fee is paid by the
licensee. However, in case of surrender of locker before expiry of period of three years, for which
advance fee is collected upfront, branches can allow refund for unexpired full year/s. Fraction of the
year should be ignored.
Penal interest @18% on overdue fee, with minimum of Rs.5 should be levied.

Staff Lockers-
One staff can be provided with maximum 2 lockers in his own name or jointly with the family member.
First name should be invariably of the staff member.
The licensee fees payable by staff/retired staff members would be at 25% concession from the card
rate.
Penalty for late payment of fees and service charges for operation of locker in excess of 12 times in a
year to be collected from the staff/retired staff members.

Overdue of Rent
Branches should affix sticker on such lockers with remarks “Fee Overdue” such lockers should not be
allowed to be operated till payment of full fees/due.

Break open of Locker

Breaking open of a locker is an extreme step and it should be resorted to only after exhausting all
available remedies after obtaining permission of the Regional/Controlling Office. (As per I.C No. 285-
2015 dt 10.11.2015)

If the locker holder (which has been broken open and in which articles are found) is not traceable
despite the best efforts of the branch official, the branch would be free to dispose -off articles.
Two successive public notices at fortnightly intervals in leading newspapers should be given.
Such unclaimed articles should be disposed off by public auction and the sale proceeds should be first
utilized to adjust the expenses incurred by branch and surplus, if any, should be transferred to Central
Office (IC 3607-2022).

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If sale proceeds are inadequate to meet the expenses incurred the branch should initiate action against
the locker/holder/s for recovering the amount.
Vacant lockers or which have been surrendered, branches should undertake the embossment on the keys
before allotment.

Duplicate Key safekeeping

Duplicate master key should be kept with another branch under safe custody. At least once in two years
the original key should be interchanged with the duplicate key.
Keys of the vacant lockers should remain in sealed envelope in the joint custody of the custodians in a
vacant locker whose key in turn should be deposited in the cash safe. Key register recordings should be
updated on an ongoing basis.
Surprise verification of surrendered/ vacant lockers and their keys should be carried out by the Branch
Manager at least once in a fortnight.

Pilferage issues

Sometimes locker licensees complain of pilferage of contents of their lockers. In such cases branches
should follow following guidelines:

• Written complaint should be obtained from licensee, if licensee claims that locker has been tampered
with or if there is any suspicion of the locker the concerned branch officer should not allow the licensee
to operate the locker, bank should get the locker inspected by the experts from the company who
manufactured the locker cabinet to determine whether it has been tampered with or not.
• The inspection by the experts should be done in presence of the licensee after giving him/her due
notice. The matter should be reported to the Regional Office or the Head Office and advice should be
obtained for further action.

Branch should ensure that whenever a locker is surrendered, the locking mechanism of the locker is
changed before it is licensed to another customer. Strict adherence of the instruction will help eliminate
occurrence of frauds.

The minor can be appointed as nominee. However, the responsibility of the bank in such cases is to
ensure that when the contents of a locker are sought to be removed on behalf of the minor nominee,
the articles are handed over to a person who, in law, is competent to receive the articles on behalf of
the minor.

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Safe Deposit Lockers with Nomination
Accounts Operational Nominee Situation What is to be done
in the Instructions
Name of
A Self X X dies A can change the nomination
A Self X A dies X will be given access to the locker
and liberty to remove contents
A, B Jointly X A dies B and X will be given access to the
locker and liberty to remove
contents jointly
A, B Jointly X B dies A and X will be given access to the
locker and liberty to remove
contents jointly
A, B Jointly X A & B X will be given access to the locker
dies and liberty to remove contents
A, B Jointly X&Y A dies B along with X and Y will be given
access to the locker and liberty to
remove contents jointly
A, B Jointly X&Y B dies A along with X and Y will be given
access to the locker and liberty to
remove contents jointly
A, B Jointly X&Y A & B X and Y jointly will be given access
dies to the locker and liberty to remove
the contents
Safe Deposit Lockers without Nomination
Accounts Operational Situation What is to be done
in the Instructions
Name of
A Self A dies Legal heirs of A or any of them mandated by any of
them
A, B Either or A dies B will be given access to the Locker and liberty to
Survivor remove the contents
A, B Either or B dies A will be given access to the locker and liberty to
Survivor remove the contents
A, B Either or A & B Legal heirs of A and B (or any one of them mandated
Survivor dies by all legal heirs) will be given access to the locker
and liberty to remove the contents
A, B Jointly A dies B and legal heirs of A (or any of them mandated by
all legal heirs) will be given access to locker and
liberty to remove the contents jointly
A, B Jointly B dies A and legal heirs of B (or any of them mandated by
all legal heirs) will be given access to locker and
liberty to remove the contents jointly
A, B Jointly A & B Legal heirs of A & B (or any of them mandated by all
dies legal heirs) will be given access to locker and liberty
to remove the contents
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The above cases/examples are only indicative and may differ from case to case. Hence, view/opinion
may be obtained from the Law Officers in case of need.

Facilities in Locker Room

The following basic facilities should be provided in the safe deposit vault:
Full sized mirror, A small working table, A proper ladder for operating the lockers on the upper bay,
Proper lighting and fan, switch for calling bell
A display of board in Hindi, English & local language conveying availability of lockers may be placed at
a place which will have attention and visibility.

General Operations at Branch:

Handling Keys-

At Branch -
1- In joint custody of Branch Head/Dy Branch Head/Officer and the Head Cashier/Office-in Charge
2- Should not be kept overnight in the branch premises and should be carried by joint custodians
3- Set of keys in regular use should be exchanged with duplicate sets once in two years, which prevents
worn -out of keys.

Cash Handling at ATM/CRM-

1- Should be handled by 2 identified custodians jointly
2- Each custodian will have 4 or 6 digits of combination lock, both custodian has to enter the 4 or 6
digits
3- Each identified custodian should handover his part of combination code in a sealed (duly signed)
cover to the Branch Manager to be kept in safe custody.

Merchant Banking:

DEMAT Accounts:

A Depository facilitates holding of securities in the electronic form and enables securities transactions
to be processed by book entry. The Depository Participant (DP), is an agent of the depository, offers
depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians,
stockbrokers etc. are eligible to act as Depository Participant. The investor who is known as beneficial
owner (BO) has to open a demat account through any Depository Participant (DP) for dematerialization
of holdings and transferring securities. Our Bank is providing demat facilities to customers as Depository
Participant of NSDL and CDSL Depositories.

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 Benefits of DEMAT Accounts:

i.Significant growth in CASA deposits

ii.Higher float funds
iii.Expand product portfolio and client offering
iv.New customer acquisition
v.Increase in non-interest income
vi.Improvement in client penetration in non-Banking products

A new menu called “DAO” is also introduced in Finacle for seamless demat account opening process.
Seamless Instant Demat Account opening facility is also made available in Internet Banking in interface
with NSDL.

M/s SMC Global Securities Limited has tied-up with Bank for opening 3-in-1 Account (Demat Account and
Savings Bank Account/Current Deposit Account with Union Bank of India and Trading Account with SMC).

Demat account can be opened by authorized branches for demat activities (list of such branches in IC
01253-2018 dated 03.07.2018). Those branches which are not authorized, can obtain application in
physical mode along with PAN Card (mandatory), Address Proof (Aadhar, passport, Voter’s Identity Card,
Drive license, Telephone bill, electricity bill, copy of bank passbook or latest statement, Identity card
issued by Government organization) and 2 photos. It is also made available in My Diary portal under
Report as Demat Account Opening Form – NSDL and Demat Account Opening Form -CDSL.

For opening of Online Trading Account PAN Card is mandatory and an address proof is required as
mentioned above. E-KYC will be done by M/s SMC.

Customers can open online trading account with SMC using following web link:
https://smconline.smcindiaonline.co.in:6060

Application supported by Blocked Amount (ASBA):

To streamline the Public Issue process, SEBI has made ASBA as mandatory mechanism for all investors
including retail individual investors for all the Public Issues on and after 01.01.2016. ASBA enables
branches to retain substantial float funds and also lead to generation of fee based income by way of
commission on the allotted portion of NII and Retail category.

Under ASBA process, the applicant should have funded deposit account with the Bank. ASBA facility can
be availed in Saving Bank accounts, Current Deposit accounts and ODASB Accounts (SOD against Term
Deposit with limit having zero balance)

Along with the filled ASBA application form, the following details are required to be obtained from the
customer:
• Investor Category
• Name of the Applicant/s
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 • PAN No. of the Applicant/s
• 16 digit De-Mat account number (CDSL or NSDL)
• Name of the Depository Participant
• 15 digit Account Number to be blocked
• Bid details
• Number of Shares - should be in multiples of bid lot
• -Amount per share – should be within the price band
• Signature of the Applicant/Bank Account Holder (in case the Account to be blocked is
of a third party i.e., not that of the applicant)
• Contact number – Land line No. / Mobile No.

Finacle Menu ASBAENTR is for making the entry & ASBARPT for generating the report.
The ASBA facility is available at branch and in Internet Banking.

Bond Payment:

Bank used to raise capital by issuing Bonds/debt instruments by way of private placements. These bonds
are issued for different periods at defined coupon rate to investors. On due date, redemption/interest
payment need to be made by Operations Dept. to eligible bond holders (as per list received from the
Registrar and Transfer Agent (RTA)) for bonds through RTGS. Board Secretariat is informed after
payment of the bond, who informs the various stock exchanges.

Operation department arranges payment of interest /redemption of Capital Bonds raised by the Bank
for Capital Requirement. M/s Datamatics Business Solutions RTA (Registrar & Transfer Agent) is
managing the Basel III compliant Capital Bonds / Lower Tier II in our bank. M/s IDBI Trusteeship Services
Limited trustee is rendering its services in managing the bonds.

Dividend Account Opening:

Dividend account is opened by the Bank for payment of dividend of the respective Financial Year. It is
a great channel to generate the fee-based income. Branches should endeavor to open dividend payment
account. The proposal duly recommended by Regional Office and FGMO should be send to Operation
Department for opening of the Account. The proposal should invariably carry profitability study of the
company. The procedure for opening of dividend account is as under:

Documents Required for opening Dividend Account:

i. Company Board Resolution (mentioning mode of operation)

ii. Certificate of Incorporation
iii. Memorandum of Association
iv. Articles of association
v. List of shareholders with amount of Dividend
vi. MCA Copy- Master Data of Company
vii. GST Registration Certificate
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viii. Shareholding Pattern
ix. Request letter for opening dividend account
x. Request letter for Cheque book (If required)
xi. NOC& declaration of loans from other Banks
xii. Indemnity bond cum agreement
xiii. Financial Statements

A flat fee will be applicable based on cost benefit analysis provided by the branch. It will be derived
out from volume to be handled for payment of dividend and tenure of funds to be parked in the account.

Company has to fund the dividend account at least 5 days in advance to date of declaration of dividend.

Company should provide the data (as per RBI prescribed format) of ECS, in case any payments are to
be made through ECS and up-loadable Dividend Warrant file (as per Bank format) at least 8 days in
advance of Dividend payment date to the branch.

M S Marg Branch will handle the assignment and be responsible for ensuring payments are done on said
date and all compliances of regulators such as SEBI, RBI are strictly followed while executing the
assignment

In terms of the provisions of the Companies Act (Section –205(A, B &C), the companies are required to
keep the un-paid balances in the dividend account for a period of seven years from the date of credit
to the account and thereafter are required to transfer the entire un-paid balance to Govt. - A/c. for
the purpose of crediting to “Funds for Investors’ Protection (DEAF)”. This clause should be invariably
mentioned in the indemnity agreement to be executed by the company (IC 2967-2021- Capital Market
Policy)

Digital Channels/Products:

Internet Banking: Our Bank offers its customers the Internet Banking 24X7 services to carry out Banking
activities from the comfort of their home/office without any hassle. The customer has at least one
operating account with our branch. Individual customers possessing ATM cum Debit Card may create
internet Banking User id and passwords through Self User Creation module on our website. Individual
customers not having an ATM cum Debit Card may also create internet Banking User id and passwords
through Self User Creation module on our website, their user id will be given only view rights. Corporate
customers should apply through the branch using the internet Banking application format for viewing
and transaction facility.

SMS Banking: It provides instant notification about the transactions as and when it happens. It helps
the customer to keep a watch on their account with a round the clock service. With this facility, the
customers are in a position to detect unauthorized access to their account. It also helps to know the
balances and mini statements instantly by just sending an SMS at 09223008486. There are many other
services viz. Cheque Status, Know the nearest branch/ATM, Aadhaar number seeding etc. customer can
avail through the said service. To register, the customer has to call our 24X7 Call Centre or contact their
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branch.

Positive Pay facility has also been embedded in SMS banking. User can send SMS to 9223008486 and
submit the cheque details under positive pay in the following format:

UCPPS <Account no><cheque no><Issue date in dd/mm/yyyy><Amount in rupees and paiseupto two
decimal points><MICR code><SAN no><transaction code><Payee Name>

POS (Point of Sales) Terminal: POS or Swipe Machine as it is popularly known is a technological
instrument provided to a Merchant Establishment (ME) to carry out the sale of goods or services to
customers in a cashless environment. The customer has to do is swipe their Debit/Credit/Prepaid Card.
The Merchant should have a current account with a branch of the Bank with a satisfactorily account
operation. The merchant should not be in Visa/MasterCard negative list for malpractices.

FASTag: Union Bank FASTag program is part of National Electronic Toll Collection (NETC) initiative rolled
out by NPCI under the aegis of NHAI and IHMCL. It is a reloadable tag which enables automatic deduction
of toll charges and let you pass through the toll plaza without stopping for the cash transaction. It is
linked to a prepaid account from which the applicable toll amount is deducted. The tag employs Radio-
Frequency Identification (RFID) Technology and is affixed on the vehicle’s windscreen after the tag
account is active.

IMPS (Immediate Payment Service): Under this facility, customers can approach any of our branches
and request for instant fund transfer. IMPS facility allows customers to instantly transfer funds to any
other Bank account up to Rs.5.00 lacs per day.

Debit Card: It can be used to avail Banking services such as cash withdrawal, balance value added
services viz. Fund Transfer, Mobile recharges, other payments etc. from ATMs round the clock. Payments
can also be made to merchants through POS terminals and online mode.

Credit Card: It offers a hassle free and secured shopping experience at an assortment of outlets and
websites around the globe. The card can also be used for cash withdrawal at ATM centers. The attractive
spending limit is 20% of the annual gross salary. The maximum free credit period is up to 50 days. There
is flexi payment option and EMI scheme for the period of 3/6/9/12 months are also available at
attractive interest rates. 24-hour hot-listing facility is available. Now a separate vertical is created
exclusively to look after Credit Card and its transactions.

Gift Cards: The customers can use the Union Bank Gift Card at a wide variety of locations accepting
Visa cards, including restaurants and entertainment venues. In order to apply for the gift card, one has
to contact their nearest branch with KYC documents. It can be obtained for any amount between
Rs.250/- and Rs.10000/- and can be used in India before the expiry date embossed on the card. It cannot
be used to withdraw cash at ATMs. There is no pricing for the Card. They are issued free of cost to
customers.

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ATM Banking: As a Union Bank ATM card holder, one can perform Banking transactions round the clock.
Additionally, Union Bank ATMs accept all Visa/MasterCard/RuPay/Discover/JCB & UnionPay cards. Our
Bank’s ATM allows card holders to perform various functions such as Cash Withdrawal, Balance Enquiry,
Mini Statement, Change of PIN, Transfer of funds to other Union Bank accounts linked to the card,
Registration for Mobile Banking, Payment of Utility bills, Request for cheque books and account
statements, Inter-Bank card to card fund transfer Inter-Bank remittance through IMPS, Mutual Fund
payments.

Cash Deposit Machine (CDM):

a. Bunch Note Acceptor (BNA): It accepts the currency notes, verifies and instantly credits the amount in
the customer account. It can accept maximum 200 currency notes of Rs.100, Rs.500, Rs.2000
denominations per transactions and maximum value of Rs.49999/-. With PAN card validation additional
amount up to Rs.1.00 lakh can be deposited per transaction.

b. Single Note Acceptor (SNA): Cash is deposited by pulling one note at a time inside the machine and
verify the genuineness. SNA accepts 30 number of notes of Rs.100, Rs.500, Rs.2000 denominations per
transactions and maximum value of Rs.49999/-. With PAN card validation additional amount up to
Rs.1.00 lakh can be deposited per transaction.

c. Cash Recycler Machine (CRM): It is capable of accepting and dispensing multiple notes
simultaneously. CRMs accepts maximum 200 currency notes of Rs.50, Rs.100, Rs.500, Rs.2000
denominations per transactions and maximum value of Rs.49999/-. With PAN card validation additional
amount up to Rs.1.00 lakh can be deposited per transaction.

Semi-Automatic Passbook Printers (SAPBP): The machine provides the convenience of self-operation
for customers as also anytime passbook updation. The Barcode based passbooks are specific for each
account and can be updated either at the SAPBP or in branches desktop printers.

Cheque Deposit Machine (CDM): Bank has installed CDMs at selected branches and e-lobbies. The CDMs
are self-operation without intervention of Bank staff. The machine accepts the cheque and also provides
additional facility of account name/number verification for credit to the correct account.

App Banking:

a. Nxt - UNION BANK OF INDIA (earlier U-Mobile): It provides the customer a secure and convenient
means of Banking and commerce from anywhere anytime. Customers can check their account balances,
take a mini-statement, transfer money to Union Bank accounts and other Bank accounts, Fee Payments,
Stop Cheques, Know cheque status, know branch/ATM locations, make request for cheque books, make
donations etc.

b. Union Credit Card App: Credit Card holders can make use of Card control features either through
U-Mobile app or Union Credit Card app for payment channel/limit setting (ATM/Cash, POS, e-commerce
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and NFC/Contactless) and other features like PIN change, Standing Instruction, hot-listing, Virtual Card
generation, Bill payment etc. instantly.

c. BHIM / UPI: UPI application is a payment system that allows transferring money between any two
parties with virtual identity. It allows to instantly transferring money to someone else using the IMPS
payment framework, without knowing their Bank account details.

d. BHIM Aadhaar Pay: It is a mobile based application wherein a merchant receives payment from the
customer after biometric authentication of customer is successful. The payment can be made against
any goods or services from the merchant.

Call Centre: Bank has an uninterrupted 24x7x365 banking services to its customers. Calls can be taken
by the IVR in 7 Regional languages besides Hindi and English. The All-India Toll Free numbers are
1800222244 and 18002082244. The charged number is 080-61817110. The dedicated number for
Non-Resident is +918061817110.

Union Cashless Campus: It enables all financial transactions through cashless digital channels in an
educational institution. Various kinds of fees are collected from the students through Debit cards, Credit
cards and Internet Banking from the respective websites of the institutes.

Compliance Related Parameters:

Anti- Money Laundering (AML): Section 3 of the Prevention of Money Laundering (PML) Act 2002 has
defined the “offence of money laundering” as “whosoever directly or indirectly attempts to indulge
or knowingly assists or knowingly is a party or is actually involved in any process or activity connected
with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money
laundering. “Money launderers use the Banking system for cleansing ‘dirty money’ obtained from
criminal activities with the objective of hiding/disguising its source.

The process of money laundering involves creating a web of financial transactions so as to hide the
origin and true nature of these funds.

Obligations under Prevention of Money Laundering (PML) Act 2002: Section 12 of PML Act 2002
places certain obligations on every Banking company, financial institution and intermediary, which
include: -

a. Maintaining a record of prescribed transactions

b. Furnishing information of prescribed transactions to the specified authority

Non-Profit Organization (NPO) Transaction Report (NTR): All transactions involving receipt by non-
profit organizations exceeding Rs.10.00 lacs or its equivalent in foreign currency.

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Counterfeit Currency Report (CCR): All cash transactions using forged currency notes or valuable
security or document. CCR has to be submitted by the Branch to Nodal Chest Officer. Simultaneously,
the branches/currency chests have to report detection of fake notes to KYC AML Division, Mumbai
through AML Software called “Omni Enterprises”. Principal Officer of the Bank has to submit CCR to
FIU-IND in the specified format by 15thday of the next month. Delay and/or non-reporting may attract
financial penalty by FIU India, Ministry of Finance, recoverable from erring officials as personal liability
(IC no. 2422:2021 dated 06.02.2021).

Cross Border Wire Transfer Reporting (CBWTR): With the amendments to prevention of Money
Laundering (PML) Rules, notified by the Government of India vide Notification No.12 of 2013 dated
August 27, 2013 and in terms of amended Rule 3, every reporting entity is required to maintain the
record of all transactions including the record of all cross border wire transfers of more than Rs.5.00
lacs or its equivalent in foreign currency, where either the origin or destination of the fund is in India.
Bank shall ensure that the information of all such transactions shall be furnished to Director, FIU-IND
by 15th of the succeeding month.

Suspicious Transaction Report (STR): Suspicious transaction means a ‘transaction’, including an

attempted transaction, whether or not made in cash, which, to a person acting in good faith
a. Gives rise to a reasonable ground of suspicion that it may involve the proceeds of an offence
specified in the Schedule of the Act, regardless of value involved; or

b. Appears to be made in circumstances of unusual or unjustified complexity; or

c. Appears to have no economic rationale or bonafide purpose; or

d. gives rise to a reasonable ground of suspicion that it may involve financing or the activities relating
to terrorism includes transaction involving funds suspected to be linked or related to OR to be
used for terrorism, terrorist acts or by a terrorist, terrorist organization or those who finance or
are attempting to finance terrorism

Cash Transaction Report (CTR):

a. The maximum permissible cash transaction in an account in a day is Rs.10.00 lacs (both receipts
& withdrawals)

b. All cash transactions of more than Rs.10.00 lacs or its equivalent in foreign currency

c. All series of integrally connected cash transactions exceeding Rs.10.00 lacs or its equivalent in
foreign currency in a month

d. CTR has to be submitted by CO to FIU-IND by 15th day of succeeding month

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Payment of Premium to Deposit Insurance & Credit Guarantee Corporation (DICGC): In terms of the
Deposit Insurance and Credit Guarantee Corporation (DICGC) guidelines; the Bank is required to make
payment of Deposit Insurance Premium to DICGC on the basis of the total deposit position of the Bank
as on the last working day of March and September every year. This premium is payable by Bank in
advance by the last day of second succeeding month of relative half-year.

As per latest DICGC’s letter dated 05.02.2020, the limit of insurance cover in respect of amounts due
to a depositor of an insured Bank has been increased from Rs.1.00 lac to Rs.5.00 lacs w.e.f. 04.02.2020.
The rate of annual premium payable by the insured Banks has been raised from 10 paise per Rs.100.00
to 12 paise per Rs.100.00 of assessable deposits w.e.f.01.04.2020.

Depositor Education and Awareness Fund (DEAF): Reserve Bank of India established Depositor
Education and Awareness Fund through section 26A of the Banking Regulation Act, 1949. As per the
Depositor Education and Awareness Fund Scheme, 2014, Banks are required to transfer the credit
balance in any deposit account maintained with them which have not been operated/ claimed upon
for ten years or more on monthly basis. Amount so collected by the fund shall be utilized for promotion
of depositors’ interest & for such other purposes which may be necessary for promotion of depositors’
interest as specified by RBI from time to time.

Procedure for remittance to DEA Fund and Refund Claim: Every month, Operations Department
conducts following exercises for remittance of funds and claiming the refund.

a. At the end of each month, dormant accounts which have not been operated for ten years are
identified and after calculating interest on the funds, the total corpus is remitted to RBI through
e-Kuber portal.

b. At the beginning of each month, refund is claimed for the accounts which were earlier remitted
to DEA Fund but have been activated now.

c. In order to curtail the amount being remitted to DEA fund every month and also to recover the
amount that has already been remitted, Branches should take necessary steps in
identifying/contacting the customers for operations in the accounts.

CKYC updation: The Reserve Bank of India vide their letter no.RBI/2016-17/177.DBR.AML.BC.47/
14.01.01/2016-17 dated 08.12.2016 has directed Banks to invariably upload KYC data pertaining to all
new individual accounts on or after 01.01.2017 with Central KYC Records Registry. RBI has also issued
guidelines to verify CKYC of the Current Accounts w.e.f. 01.04.2021. In terms of provision of Rule
9(1A) of PML Rules, the REs shall capture customer’s KYC records and upload onto CKYCR within 10
days of commencement of an account-based relationship with the customer. In this regard, various
guidelines have been issued to Branches/ Offices for scanning and upload of CKYC documents on daily
basis for all such accounts. Accordingly, separate utility (Desktop and mobile based) was provided to
Branches/ROs to scan & upload the KYC documents of eligible customers on CKYC portal for getting
the CKYC number from CERSAI. Salient features of both the utilities are as under:

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 A. Desktop utility (CKYC portal on UBINET):

a. URL to access in-house portal for CKYC desktop utility is https://172.27.74.16/ckyc/

b. Utility provided is compatible to all types of scanners generally used in our branches i.e. Flat
bed, Sheet fed etc.

c. For login, user has to enter his “user id used to login to PC” as “Domain User Id” and “System
login password” as “Domain password” and select the corresponding AD server.
d. Standard Operating Procedure for desktop utility is available at URL
https://172.27.74.16/ckyc/pages/sop.pdf

B. Mobile App utility:

a. Branches can download the app from following URL

https://ckycmob.unionbankofindia.co.in/app/app.apk
b. Mobile App can be installed on the mobile number of staff provided in Union Parivar.

c. Branch staff having Finacle ID can only install and use the Mobile App.

d. Mobile App works on Android devices only

e. With the usage of Mobile App, there is no need of Desktop and scanner for scanning and
cropping of documents at branches. Further, more than one staff in each branch can do
scanning and upload work at same time using their mobiles.

f. Branch staff can process the data of his/her branch only.

g. For login, user have to enter the employee ID and password

h. User should change the password through OTP verification process

i. Care should be taken that only the KYC documents fetched from Finacle are captured in
Mobile, cropped and uploaded with clear image.

j. Approver/checker (at RO and CO level) after viewing the data /images from web portal,
approves it, if it is as per requirements. Discrepancies if any, will be of two types i.e.
Rescan/Rejection. In case of Rescan (i.e. when image are not clear) branch has to rescan the
images properly (which will reappear for scanning) and in case of rejection, branch has to
correct the data in Finacle.

Re-KYC: Banks have introduced a system of periodical updation of customer identification data (Re-
KYC) (including photograph/s) after the account is opened/ last KYC done. The periodicity of Re-KYC

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is at least once in Ten years for Low-risk customer, once in Eight years for Medium risk customer and
once in Two years for High risk customers.

Re-KYC shall be applied in case where customer has been re-categorized from Low to Medium, Low to
High and Medium to high or vice versa.

Due notice for updation, which are generated by system itself shall invariably be sent by UCP (Under
Certificate of Post) to customers

Periodic Updation of KYC (Re-KYC): Time intervals for periodic updation of KYC for existing
low/medium and high-risk customers is 10/8/2 years, respectively. Branches should prepare a profile
for each new customer based on risk categorization. The customer profile should contain information
relating to customer identity, social/financial status, nature of business activity, information about
the clients· business and their location etc. The nature and extent of due diligence will depend on the
risk perceived by the branch. Branches should ensure proper filling of Account Opening Form.

Uniform Customer Identification Code (UCIC): It is issued to each customer while entering into any
new relationship and customer shall be identified by that code. Similarly, existing individual customers
shall also be allotted to UCIC. The existing customers, who have multiple accounts and
separate/multiple customer identification codes, shall be brought under one single Unique Customer
Identification Code (UCIC) by merging their existing multiple identification codes.

Beneficial Owners: Beneficial owner is the natural person who ultimately owns or controls and/or the
person on whose behalf a transaction is being conducted, and includes a person who exercises ultimate
effective control over a juridical person.

Reporting to Govt. Authorities: CBI, ED, SEBI, CVC, Cyber Crime Cell, Excise/Custom Authorities
etc. Separate communications are received through letter/emails from various government agencies
such as SEBI, CBI, ED, SFIO (Serious Fraud Investigation Office), Income Tax, Excise, Cyber Crime
Department etc. seeking information about various accounts, KYC, account opening forms, counter
party details, account statement etc. In some cases, the reply has to be submitted to the concerned
authority immediately while in other cases, it is to be submitted within a stipulated timeline. Branches
shall file STR invariably in aforesaid cases (IC 2356-2020 dated 18-12-2020).

Issuance of Caution Advises/Circulars:

It has been observed that multiple attempts have been made to defraud the Bank using forged cheque
presented through CTS clearing and remittances through NEFT/RTGS. A perusal of reported cases of
frauds /attempted frauds indicates that Branches are not contacting the customers / base branch
especially in case of RTGS/NEFT transactions. It is very crucial when transactions are done at remote
branches (Inter Sol Transactions).

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 In line with the RBI directives to review and strengthen the controls in cheque presenting / passing
process to mitigate cheque related frauds, our Bank had introduced additional security feature of
Alpha Numeric Random Number in Cheques.

Risk Management: Bank’s Internal Audit and Compliance functions will provide an independent
evaluation of KYC/AML policies and procedures including legal and regulatory requirements.
Concurrent/ Internal Auditors shall specifically test check and verify the application of KYC/AML
procedures for new customer as well as periodic updation of KYC at branches and comment on the
lapses observed in this regard. Management Audit shall check the effectiveness and timely scrutiny of
alerts by ROs, being sent by KYC-AML Division and also comment on progress under KYC updation and
Re-KYC of the concerned Region. Customers shall be categorized as Low, Medium and High Risk
category, based on the assessment and risk perception of the Bank.

Risk categorization shall be undertaken based on parameters such as customer’s identity,

social/financial status, nature of business, activity, information about clients’ business and their
location etc. While considering customer’s identity, the ability to confirm identity documents through
online or other services offered by issuing authorities may also be factored in.

Business Continuity Plan: The Bank is committed to provide uninterrupted service to its customers.
This commitment extends to all activities from front office to back office. Branches / Offices shall
train and depute manpower to ensure routine work of the Branch is not hampered even in case of
absence of any personnel. Branch activities including replenishment of cash in ATMs or printing of
pass- book must be carried out uninterruptedly. Continuity of service is a way to win customer
confidence and continue their loyalty. BCP includes the strategies, actions and procedures to prevent
disasters pro-actively as far as possible or else to manage the consequences of a disaster. Necessary
guidelines issued by the Risk Management Department should be followed in this regard.
Customer related functions:

Working hours of Branch: In terms of Uniform Banking hours in Public Sector Banks under reform agenda
EASE-2.0, the customer timing in each state/UT is to be maintained on three-time sets, described as
under, as decided by the respective SLBC.

S.N. AREA BANKING HOURS

1 Timing Set-1 09:00 AM to 03:00 PM
2 Timing Set-2 10:00 AM to 04:00 PM
3 Timing Set-3 11:00 AM to 05:00 PM

Banking hours include both cash & non-cash transaction timing. Lunch Break of 30 minutes should be
given to staff members in such a way that no staff member shall be asked to work continuously for more
than 5 (Five) hours unless given a break of not less than half an hour. In case of Metro and Urban
Branches, lunch break shall be given on staggered basis in such a way that no counter shall be left
unattended during the customer working hours.

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In areas where lunch break timings have been specified by the SLBC, the same should be followed.

Commencement of Employee Working Hours: The working hours of the employees starts 15 minutes
before the commencement of business hours at all branches. The Branch Manager and supervisory staff
should ensure that members of staff are available at the respective counters from the commencement
of the business hours and throughout the business hours, so that, there is no room for customer
complaint. The branches should ensure that no counter remains unattended during business hours and
uninterrupted service is rendered to the customers.

Customer Service – Guidelines: Customer service has great significance in the Banking industry. The
Banking system in India today has perhaps the largest outreach for delivery of financial services and is
also serving as an important conduit for delivery of financial services. While the coverage has been
expanding day by day, the quality and content of dispensation of customer service has come under
tremendous pressure mainly owing to the failure to handle the soaring demands and expectations of the
customers.
The vast network of branches spread over the entire country with millions of customers, a complex
variety of products and services offered, the varied institutional framework – all these add to the
enormity and complexity of Banking operations in India giving rise to complaints for deficiencies in
services. This is evidenced by a series of studies conducted by various committees such as the Talwar
Committee, Goiporia Committee, Tarapore Committee, etc., to bring in improvement in performance
and procedure involved in the dispensation of hassle-free customer service.

Union Care – Complaint Management Handbook Operations Department has issued a handbook for the
staff working at branches/offices for effective handling of customer queries, feedback and complaints
(IC No.02462-2021 dated 04.03.2021 Union Care –Complaint Management Handbook Version 2).

Grievance Redressal Structure in the Bank

Level-1 - Branch
Branch Head / Dy. Branch Head / Call Centre

Level - 2 - Regional Office

Regional Head / Dy. Regional Head / GRO at RO

Level - 3 - FGM Office

FGM / Dy. Zonal Head/GRO at FGMO

Level - 4 - Central Office

CCU/CGO

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System Support available to Customer Care Unit (CCU), CO

a. OCRM – For complaints other than BO complaints

b. BOCMS – For BO complaints
c. CPGRAM/INGRAM – For Government
d. Complaint Management System (CMS) of RBI

OCRM = Operational Customer Relationship Management

BOCMS = Banking Ombudsman Complaint Management System
CPGRAM = Centralised Process for Grievance Redressal Mechanism
INGRAM = Integrated Grievances Redressal Mechanism

Communication Structure for Field linked to CCU (F-GROs & R-GROs)

CCU

OCRM BOCMS IO Govt.

Team Team Portal
Team
Team

1. FGMO Grievance Redressal Officer (F-GRO)

2. Regional Office Grievance Redressal Officer (R-GRO)

All branches, back-office units and administrative units are required to conduct staff meeting invariably
once in a calendar month.

The Customer Meet is conducted once in a quarter and Customer Service Committee Meeting is held
every month by all branches.

Customer Service Committee Meetings: Customer service committees must be constituted at all
branches/ROs/FGMOs with representation from all sections of customers especially Senior Citizens,
Pensioner, Ladies and Differently abled. Customer Service Committee meeting must be held at
branches/ROs once in a month on the 15th of each month or on the previous working day in case the
15th is a holiday. At FGMOs it should be held once in a quarter. Meeting should be held for sharing
performance of the Bank, showcasing new products and services with their benefits, to obtain views,
observations and suggestions of the customer pertaining to product and service. Brief introduction on
cyber security / Information security / security of digital products is to be provided in all meetings for

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safeguarding the customers from cyber Risk / Cyber-attacks. Necessary support can be obtained from
ZCC / RCC / CISO office.

Branches should observe, without fail, Customer Day on 15th of every month (between 3:00 p.m. &
5:00 p.m.) or on preceding working day, if 15th happens to be a Saturday/ Sunday or a Public Holiday.

Branches should display a banner on the preceding working day to the effect that Customer Day will be
observed on the 15th of the month (or on preceding working day as the case may be) / display a notice
of the meeting.

The All India Customer Service Meeting should also be organized as per policy on Grievance Redressal
(IC 02968:2021 dated 30.12.2021) at quarterly intervals with corporate presentation received from
Central Office.

Banking Facility for Senior Citizens & Differently Abled Persons

✓ Dedicated Counters / Preference to Senior Citizens / Differently Abled.

✓ To provide a clearly identifiable dedicated counter which provides priority to Senior Citizens
and people who are Differently Abled including Visually Impaired Persons.
✓ Counters / Preference to Senior Citizens: Life Certificate
✓ Branches shall ensure that when a Life Certificate is submitted at any branch including a non-
home branch, the same is updated / uploaded promptly in Finacle by the receiving branch
itself to avoid any delay in credit of Pension. Timely credit of Pension is to be ensured.
✓ Automatic conversion of status of accounts
✓ Fully KYC compliant account should automatically be converted into a “Senior Citizen Account”
bases on the date of birth available in Bank’s record. If any discrepancy in Date of Birth, the
same should be corrected with available records without further delay.

Door Step Banking:

• In order to remove difficulties faced by Senior Citizens of more than 70 years of age and
differently abled or infirm persons (having medically certified chronic illness or disability)
including those who are visually impaired we should make concerted efforts to provide banking
facilities at their Door Step through newly launched Door Step Banking Facility
• Passbook Printing / Statement generation
• Provide Passbook print to the Senior Citizens & Differently abled persons as and when
demanded. Also educate them about e-statement facility of the bank to provide ease of
banking.
• EASE of Submission of Life Certificate:
• Process of submission of Life Certificate should be eased. Facilitate Jeevan Pramaan (Digital /
Otherwise) if the Senior Citizen is Net Savvy. Facilitate collecting of Life
• Certificate from home where they are not able to move / travel. Help them is availing Door
Step Banking Services under PSB Alliance for identified banking transactions.
• EASE of Filling Form 15G/H:
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 • Process of submission of filling for 15G / H should be eased. Also, if possible bank should
provide prior intimation through SMS/Email to Senior Citizens & differently abled person once
in a year (preferably in first week of April) to submit Form 15G/H. We should also explore the
possibility of online submission of Form 15G / H.
• No Queues: Greet with Smile:
• Prioritize the work / transaction/s of Senior Citizens. Greet all the customers with smile
especially Senior Citizens & Differently abled persons. Show your kindness, courtesy and
priorities their work. Never indulge in argument with any Senior Citizens.
• Ramp Facility: As per RBI guidelines we need to provide ramps at the entrance of the bank
branches (wherever feasible), existing ATMs/ future ATMs so that the senior citizens &
differently abled person can enter bank branches and conduct business without difficulty.
• Talking ATM: In order to provide ease of banking to differently abled persons we should think
about installation of more and more talking ATMs.

PSB Alliance DSB (Doorstep Banking) facilities Non-Financial -

1- Pick up Services-
a. Cheque/Demand draft/Pay order
b. New cheque book requisition slip
c. 15G/15H forms
d. IT Challan / Govt. Business/GST
e. Issuing standing Instructions
f. Fund Transfer Request
g. Account Nomination Request

2- Delivery Service -
a. A/c statement
b. Non-Personalized cheque Book, DD ,Pay Order
c. Prepaid Instrument /Gift card
d. TDS/ Form 16 certificate
e. Term Deposit Receipt/ Acknowledgment

3- Other Services –
Submission of Life Certificate

POB Accounts:

When occasion arises for making payment on behalf of other branches, the amount should be paid by
debit to an account called “Payments on Behalf of branches (POB)”. GL code for POB account is 80300.
The persons responsible for raising the POB claim should ensure that the POB account is debited at their
end after complying with all the required formalities to enable the responding branch or department to
respond the same without entering into correspondence.
Branches will pass separate entries for which transaction in POB account and will not pass consolidate
entries for enabling the branches for adjustment of individual entries easily.
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The outstanding in the POB accounts should be followed up to ensure that no entry in these accounts
remains outstanding for more than 15 days.
POB claim should be responded within 15 days from the date of POB by the respective branches or
offices, otherwise CSOLOP will not be allowed by Finacle from 15th day onwards.
While nomenclature of POB accounts indicates the nature of operations which can be put through each
of these accounts, the procedure relating to some of the heads of accounts, which are operated more
often are

i) POB A/c Foreign Exchange

ii) POB A/c Cash Remittance
iii) POB A/c Department of Central Government
iv) POB A/c Central Accounts Department
v) POB A/c Staff
vi) POB A/c Clearing

Suspense Account

Debits to suspense account should only be made in respect of such item which cannot immediately be
accounted for under any of the regular Heads of Accounts. Suspense accounts heads are created for
specific purpose and should be used for that purpose only. The same should not be misused for any other
purpose.

Debit of suspense account at branches should be permitted by the Branch Head only. In case of absence
of the Branch Head it should be permitted by the second man in command.

Only four suspense accounts will be maintained in the General Ledger

i) Suspense Account- Clearing cheques on hand and clearing adjustment
ii) Suspense Account- Others
iii) Suspense Account-Branches
iv) Suspense Account- Options

Suspense accounts need a close and careful watch. It is therefore necessary that:

✓ Operations in these accounts are as few as possible

✓ Each operation is very carefully scrutinized
✓ Credit balance is not permitted in suspense accounts
✓ No operations in the account are allowed unless it is expressly approved and authorized by the
branch manager under his full signature on the relative voucher.
✓ The manager keeps a watch over long outstanding entries in these accounts and takes effective
steps for their early adjustment.

Safety and Security

Precautions during closing of branch
The collapsible gate at which entrance should be closed and locked from inside after the banking hours
and entry to be strictly regulated by identification.
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Before locking the main entrance at the end of the day , all rooms should be checked to ensure that no
one is left behind. It should be ensured that all electrical switches, except those required to be kept
ON, are switched off, all windows are closed and latched from inside and doors of all the rooms are
locked. Ensure that flames of candle or stove (if used) are extinguished. Check that all lights, fans,
switches, computers, printers etc. as well as Air Conditioners and heaters are switched off. Check that
all tables, drawers and almirah’s are locked. The main entrance door/gate/shutter should be locked in
presence of an officer. The electronic alarm system should be changed to night mode.

Basic Security measures in Branch

Incidents of Robbery, burglary and other forms of crime s in the bank necessitate a pro active approach
towards security from the staff members in general and branch head in particular. In the past forced
entries have been made at night by cutting the grills of windows/ventilators, removing door latches and
locks and breaking walls. Even strong room doors and cash safes have been cut with gas torches resulting
in loss of cash as well as jewelry. It is essential that branches examine their location, protective
structures in the building and implement appropriate security measures.

Branch Premises should be selected while keeping in mind the safety and security. The site should not
be isolated or should not be in crime prone area. If it is in the proximity to the police station it is
preferable, if it is not, care should be taken while selecting the branch like it should be in public area.
Security officer must be consulted while selecting the branch premises.

The Building Infrastructure at branches provided should offer maximum resistance to ingress by
criminals. Padlocks should be of good quality manufactured by reputed companies and preferably should
have at least 5 levers lock at doors inside the premise and seven levers lock at main entrance. Doors
not in use and other unnecessary openings and windows should be closed permanently by walling them
up.

Entry into the branch should preferably not be through a common entrance that provides access to other
offices/shops/residential premises. The Branch should preferably have a single entry and exit. The main
entrance should have a collapsible gate and rolling shutter with embedded central lock. Other entrances
should have either collapsible grill or rolling shutter besides wooden doors. The collapsible gate of the
main entrance should be closed immediately after the close of banking hours and other entrances should
be kept permanently closed and used only during emergency on during a special requirement. In order
to restrict entry/exit of persons t the main entrance to one person at a time during banking hours, the
collapsible grill gate should be kept partially opened using a chain and lock.

Electronic Alarm System: All branches should have electronic alarm systems with appropriate
sensors/switches and the system should always be kept in proper working condition. The alarm system
should not only be kept ON always, but should be in appropriate mode , ie, Day or Night mode as
applicable to the working hours and non-working hours respectively. There should be an auto-shutoff
feature with timer in the system to silence false alarms, if any within 10-15 minutes. Staff must be
familiar with the operation of Alarm system and location of its switches in the Branch. All alarms should
be covered under AMC with reliable firms.
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CCTV( Closed Circuit Television): All metro, urban , semi urban and rural branches should have CCTV
systems. New branches and existing branches undertaking installation/replacement of CCTV system will
be installed with a minimum 16 channel CCTV system with required number of CCTV cameras to cover
all vulnerable/vital areas within and outside the branch premises. The CCTV system should have HDD
capacity of storing minimum 90 days recording without a break at all times within the system. All CCTV
cameras will be Infra-Red (IR) type. The system will be always connected to the UPS station of the
branch.

Relationship with Land Lord, Police, Fire Department, Vendors, Concurrent and Statutory Auditors etc,
play a vital role in maintaining and running the branch smoothly and without any disruption. Branch
should establish and maintain a cordial relationship with all of them and should avail their services as
per need.
• Branch should ensure timely payment of the rent of the premises, renewal of lease as pe the branch
premises lease deed/contract.
• Branch should maintain good relationship with the nearby police station, nearby fire station and their
In-charge. Branch should also keep and display the phone number of the nearest police station, fire
station and In-charge of the same at the prominent place of the branch. This will help in time of
exigencies/emergencies.
• Vendors of various services /goods maintain the branches and ensure the smooth functioning of
various infrastructures. Branch should keep the contact numbers of various vendors/AMC holders handy
and should lodge service requests immediately as and when required.
• Internal and external auditors plays a important role in maintain the quality of the business. They
inspect the procedures and practice of the branch and point out deviations from the
policies/regulations, irregularities, malpractices, leakage of income etc. and ensure sound quality
business of the branch. There-fore, branches should ensure that the auditors are given full cooperation
and should not be misguided. Further branches should not be obstacles in auditor’s duty or never try to
hide any vital information.
• All the stakeholders working in the sound health of the branch and in turn in the prosperity of the
bank. Hence, branches should always establish and maintain a healthy bond between them.

Fire Safety equipment’s and Upkeep:

An outbreak of fire may result in grave loss of life/property, disrupt business activity and pollute the
environment. The fire safety frame work forms part of the overall physical security and fire safety ( PS
& FS) policy of the bank.
Every branch/offices shall be provided with fire detection and alarm system consisting of smoke/heat
/flame/LPG leak detectors and manual call points connected by appropriate cables to main control
panel and the equipment in use. The control panel shall have a built in GSM/Landline based auto dialer
facility capable of dialing at least eight stored telephone numbers and deliver pre-recorded messages ,
whenever the panel gets activated.

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Cyber security/Information security:
Keeping in view the business requirements, 100% branches and offices were computerized, with the
implementation of technology, associated risk i.e. cyber risk and technology risk is increasing. For
effective monitoring and addressing the risk, CISO office is established in the Bank. This department is
monitoring the security of the Bank on 24*7 through security operations center and taking corrective
actions for the observed weaknesses.

Bank is maintain latest tools for protecting the environment. Some of the security controls suggested
are as under:
a. Physical security
b. System security
c. Password Security
d. Clean Desk Security
e. Network Security
f. Data Security and Maintaining Confidentiality of customer data
g. Regular updation of patches and antivirus in System.
h. Staff awareness
i. Customer awareness

CISO office is regularly sending alerts and awareness messages to branches/office. For the purpose of
cyber awareness , CISO office is doing the following activities.
a. Training programs through Staff College
b. Cyber security Bulletin
c. Fortnightly crossword quiz
d. Displaying cyber security messages through NEDU ( Network Electronics Display Units)
e. Conducting security awareness surveys
f. Union Gyan Kasauti online quiz on quarterly basis.
g. Daily/weekly/monthly messages through mail
h. Display of posters at prominent places at CO/other offices/branches/ATM locations etc.
i. Online( E-learning modules) on information / cyber security. ( Mandatory course)
j. My cyber hygiene and user risk profiling.
k. Security awareness programs through Kaizala
l. Conducting phishing / table top exercise
m. Cyber talk by eminent professionals

Branch Support System:

Ambience of Branch: Branch head should ensure that proper sitting arrangement for the customer is
available in the branch. Senior citizens/ pensioners are given priority in work. Arrangement of drinking
water to the customer is available. Branch premises, toilets are regularly cleaned.

Upkeep of branch premises: Branch head should ensure that the branch its ambience is under regular
maintenance, phone numbers are in the working conditions, records are maintained properly, stationary
is properly maintained, record of annual maintenance contract is maintained properly and renewed in
time.
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As far as possible, sweeping /cleaning of branches should be done in the evening after the cash is kept
inside the safe and before the branch is closed, so that the branch need not be opened ahead of the
business hours. However, wherever this is not feasible, branches may be cleaned in the morning, but
minimum two staff members excluding PTS must be present before opening branch. Where ever armed
guard is posted he will also be present at the time of opening branch.
Office/Branch Keys: Branch manager/Dy branch manager should ensure that the branch keys are in dual
control. Designated officer should remain present while opening the branch and get the branch cleaned
in his/her presence.

Emergency call numbers: Emergency contact numbers such as Police, Fire Brigade and Ambulance Phone
number etc. need to be displayed in the branch hall.

Complaint box/ Register: RH/BH should ensure that the complaint box is available in the branch and it
is regularly attended/opened for resolving the customer complaints if any.

Display of Mandatory boards at prominent place: All the information as directed by RBI must be displayed
in the branch hall for the information of the customers such as service charges, interest on deposit,
interest on advances, various services available, customer rights, Banking ombudsman’s address,
Regional Heads Name, address and phone numbers etc.

Display of Branch timing board: RH/BH should ensure to display the branch business hours on a display
board at the entrance door of branch. The board displayed should be in neat and clean condition and
bilingual/trilingual i.e. English/Hindi and a Local Language.
Signage Board of Branch: RH/BH needs to ensure that the Banks signage board is displayed properly and
is as per the Banks existing guidelines. It should be ensured that the signage board is maintained and is
in neat and clean condition and have proper light during night time. Also, to ensure that the permission
from the local authorities for displaying the board (as per the local laws) is obtained and is on record.
Muster rolls/Attendance register: All the staff members shall remain present well in time i.e. 15 minutes
earlier to branch/office start time, and muster roll is signed by them against their name. The business
of the branch should starts well on time without any inconvenience to the customers.

Operation/ Service Boards: Branch counters must be displayed with the boards such as MAY I HELP YOU,
CLEARING, RTGS/NEFT/DD/PO/Transfers, DEPOSITS, CASH RECIEPTS, CASH PAYMENTS, LOCKER
FACILITY, ADVANCES DEPARTMENT, etc. for the convenience of the customers.

Network Electronic Display Unit (NEDU):

In order to publicize bank’s products and services using digital media, separate network electronic
display units (NEDU) are provided in branches. The publicity material is displayed in NEDU at centralized
level. Branches have to ensure that the NEDU unit is working properly in branches and is installed at
prominent place in branch for wider publicity.

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Ethic Package:

To automate the whole Audit Reporting Process, bank has procured new web-based software solution
eTHIC package for audit management. This application is used by the internal auditors, concurrent
auditors, regional office, zonal office , branches etc. Field functionaries can share their queries /
feedback to audit.ethichelpdesk@unionbankofindia.com for prompt resolution of issues relating to
eTHIC package.
In this eTHIC package data is readily available at the time of opening of account, this reduces the
laborious task of data mining and auditors would have more time for scrutiny of files and inspection of
the units.
The system is designed in such way that audit will be closed only after at least 90% compliance and
ensure that no major irregularities are left out.
All audit records are brought into the eTHIC application thereby ensuring a permanent back-up of
records in soft form and easy retrieval.

CMRD Portal:

In order to simplify the task of credit monitoring CMRD web portal is available for all the field
functionaries. The portal is a single data point source and the action taken at branches on each of the
credit monitoring parameters is updated on line at each level , i.e. branch, RO, ZO and Central Office.
The web portal will host data on all the important parameters of credit monitoring like:
a. Mock run
b. SMA ( Stressed Assets) – SMA-0, SMA-1 and SMA-2
c. Ceiling vis a vis actuals – slippages, stressed assets, mock run and EWS
d. CRILC
e. Early Warning Signals ( EWS)
f. Review/Renewal of loan accounts.
g. Legal Audit Compliance ( LAC)
h. Monthly Credit Monitoring Report( MCMR)
i. Credit Card- NPA and Mock run
j. Technical slippages of the respective branch/RO/FGMO
k. CMRD visit – spurt in advances and others like M-27, F-1, Documentation, High stress, Mock run etc.
l. Defaulter list- Defaulter entity and Defaulter director
m. Report of respective branches / Offices

Digital Document Execution (DDE):

DDE platform is a Web-based API platform/ service for execution of loan documents digitally. Presently
this facility is available for two products i.e. Union Personal Loan, Vehicle Loan in the State of Rajasthan,
Delhi, Uttar Pradesh, Karnataka, Tamil Nādu, Puducherry, Jharkhand , Himachal Pradesh, Chattisgarh,
Kerala, Gujarat, Assam, Meghalaya and Andaman & Nicobar.

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The features of applications are:

a. Lender sends borrower (loan) data through API to National e governance Services Limited (NeSL)
indicating template number of security documents.
b. Borrower(s) can execute document from remote location
c. Digital signature with DSC of borrower or Aadhaar e-Sign using C-DAC as ESP (e-Sign Service provider)
d. Any Document can be e-Signed by borrower or lender or both
e. Documents executed are linked to a borrower and to a credit facility if any
f. E- Stamping based on jurisdiction of Lender integration with State Holding Corporation of India Ltd.
SH CIL) with collection of Stamp Certificate
g. Documents executed are linked to a borrower and to a credit facility if any.
h. Demat of stamp certificate for paperless contract and digital journey.

Benefits of Digital Documents Execution:

✓ Increase volume of business to bank

✓ Borrower on-boarding using offline or Digital KYC, including video identification
✓ Instant execution of document with or without Stamping - DSC or Aadhar e sign
✓ It is a paperless, temper proof and retrieval is quick
✓ Significant cost reduction in terms of storage and resources
✓ Stamp Certificate via SHCIL
✓ Customer sign in multiple pages is avoided

The concept of Digital Documentation execution:

It has been the vision of the IBBI to achieve the mandate of the information utility which is to facilitate
superior enforcement of contracts, in itself a vital parameter of the “ease of doing business” matrix. In
pursuance of this objective, the NeSL IU has rolled out an efficient Technologies Solution for ‘Demat’
of loan documents that will facilitate both digital on-boarding and document execution as also sharing
of financial information to the Information Utility (IU).

Salient Features –
• Paperless: An entirely paperless documentation process has seamlessly integrates with lenders
existing online loan system using API
• e-stamping: Online and real time generation of stamp duty certificate inscribed with a unique
stamp duty number from Stock Holding Corporation of India Limited SH CIL as per extent policy of
lender for jurisdiction
• Digital Signature /e-Sign: Execution of onboarding document or loan Agreement or T&C
Acceptance (sanction letter) using digital signature with e-sign available for execution by the
borrower
• Electronic Contract: Merging of text of document with the Stamp Duty Certificate making it usable
only for a single electronic contract and the same look and feel as the existing document
• Secure Legal Process: Temper proof and secure legal process with an NeSL IU validation of the
execution and affixation of stamp duty as taking place on and through its platform
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 • Hash storage facility: Option of storing document or its signed Hash with IU. In case of tampering
the hash of stored document will differ from the documents presented during dispute which will
help to identify its authenticity
• CERSAI upload: This facility is under development at NeSL

Legal Admissibility of the DDE

Provision for requirement under Information Technology Act 2000:
Section 5 of Information Technology Act 2000 as amended by the Information Technology Act 2008
provides that if any information or document is confirmed by electronic signature shall have the same
effect as the affixing of signature if done according to the prescribed manner. Further, section 10A of
the said act validate the contract formed through electronic means

Provisions requirement under Indian Evidence Act 1872:

Section 65a and 65b of the Indian Evidence Act provides for special provision as to evidence in relation
to electronic records and the admissibility of electronic records respectively section 65b provides that
if any electronic record or documents which has been signed electronically will be admissible in evidence
without production of its original if the conditions set out in section 65b are satisfied with regard to the
authenticity and integrity of the electronic / Digital Signature is proved.
The DDE platform also allows financial institution to download the document along with a Section 65
B(4) certificate from NeSL IU which is a mandatory requirement under the Indian Evidence Act 1872 as
mentioned herein earlier
Indian Legal Framework recognizes the validity of electronic records and the same are enforceable in a
Court of Law if all the conditions mentioned earlier under the IT Act and the Evidence Act are followed

OCRM: Operational Customer Relationship Management is available for lodging and resolution of
customer complaints. Presently, the complaints received on the toll free numbers at call center are
lodged in the OCRM package, which in term are diverted to the respective department for its real time
resolution. Immediately on lodgment of complaints complainant receives the acknowledgement over
his/her registered mobile number. On resolution of the complaint a link is provided for feedback of the
complaint.

My Diary : 360 M degree portal for Utility of Branch/RO/FGMO/CO Users:

In the present situation, all the information pertaining to branch is not available in any particular
portal/system and branch/RO’s /FGMO’s have to draw different reports from different packages and
clubbing it to monitor the Branches/Offices. In this process , huge man power is involved to generate
the data pertaining to different verticals. Due to this, monitoring, development and improvement is
difficult to asses in present scenario.

Highlights of the My Diary Portal

• Availability of Key data Branch/ Regional/ FGMO wise.
• Real-time Monitoring of Branches.
• Single Source of Information.
• Branch Performance on all counts in one go.
• All utilities under single platform.
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• Facility to raise operational issues and their redressal.
• My Library - Creating awareness amongst users for operational matters.
• Facility to search Branch and staff details.
• Right Information at right place & right time. Important for right and quick decision making.
• Facilitate unification of data/ information in one Amalgamated Entity.
• Reduce (drastically) data searching, data generation & data compilation at various levels.
• Comprehensive as well summarize view of data.
• Time & cost saving at all levels.
• Free up the staff at Branch/ Offices for more Productive Work/ Business lead generation &
conversion.
• Customer outreach and lead generation.
• Developing Compliance Mechanism.
• At single click, anywhere any time and as many as users can login and view. No restriction on reach
and usage.
• Easy handholding for the Branch Head to embark upon the business parameters and assignment of
task to subordinates.
• Ease of doing business.

The portal is developed in such way that, it imbibes data through db link / interface from different
servers. The input of data is scheduled on daily, weekly and monthly basis. The portal is co-connected
with Finacle - DR, MIS, LAS, CCU (Customer Care Unit), Vigilance, BOCMS (Banking Ombudsman),
premises, DMS, OCRM (Customer Relations Management) etc..

The portal can be accessed through internal network with a separate URL. The URL is
172.27.70.12:8012/mydiary/ is also available on UBINET in the name “My Diary”
The portal is made available to all branches, Regional Offices, FGMO’s and CO users. It can be
concurrently used by more than one user in a branch or office.

Credentials for the portal:

User ID: IBR code (Branch Code) of the branch
Password: default password is ubi123 (branches are advised to change the password)
Captcha also to be entered for secure login.

The portal has two stages - Pre-Login & Post Login

Contents of home Page

1. Message of MD & CEO Sir for the staff
2. Message of ED (In-charge of Operations) for the staff.
Home page contains the links to My library, Branch contacts, Organisation structure, Activities and flow,
Vertical and flow and Operations Manual.

Operations Dashboard contains information such as position of Lockers, Dormant accounts, Lien marked
accounts, Accounts without nomination, Third party products commission details.

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Main menus in the homepage are:
✓ User Dashboard
✓ Utility Corner
✓ Defaulting accounts
✓ Alerts Corner
✓ Lead Corner
✓ SUD Life Corner,
✓ Mutual Fund Corner
✓ Meetings, Complaints, Letters and Notes, Reports, Others, Govt. Business and Settings.

Branch Profitability:
Every business organization operates to earn profits. Although it may have other goals also, but if it
does not make profits then other achievements may appear displeasing and undesirable. Amidst high
competition in the banking industry, an excellent management of available resources is required for
steady increase in the market share. NIM (Net Interest Margin) and ROE (Returns on Equity) with profit
generation is not an option, but it is a must for survival of any organization. It indicates how efficiently
we are managing the available funds.

Components of Branch Profitability are as under

a. Interest income from Advances
b. Interest expenses for Deposits
c. Non-Interest Income i.e. processing charges, commission on LC/BG etc.
d. Operating Expenses including establishment expenses i.e. Salary and allowances
e. MFTP credit / received (Matched Funds Transfer Pricing) for deposits
f. MFTP charge/debited (Matched Funds Transfer Pricing) for advances

Non-Interest Income and its components:

Income generated from non- core banking activities is referred as non-interest income. It plays a vital
role in total income of the bank. In present era of market competition, while borrowers demand the
credit at the finest possible rates, the depositors expect higher rates. Obviously, it puts pressure on the
Net Interest Margin of the Bank. Hence, there is need of thrust on augmenting the Non-Interest Income.
Components of Non-Interest Income are as under:
a. Commission, Exchange and Brokerage (Inland)
b. Commission, Exchange and Brokerage (Foreign)
c. Commission on Govt Business
d. Commission on Para Banking Services
e. Profit on sale of investment
f. Profit on Sale of land, building and other assets
g. Profit on exchange transactions
h. Miscellaneous Income i.e. Rent on SDV lockers, processing charges on advances, various service
charges etc.

Service Charge:
A service charge is fee charged to customer on account of extending banking services as cost is
associated. Bank review service charges on various services keeping in view of regulatory guidelines
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from time to time/cost benefit analysis, peer banks service charges etc. Service charges on inland
services (Other than advances) are administered by Operations Department, however some specific
charges are administered by respective vertical at CO.

Leakage of Income:

Leakage of income has direct effect on the profit of the Bank. While monitoring the transactions,
leakage of income, if any, observed should be recovered by the concerned Branch immediately on being
pointed out by the auditors.
The deficiencies are observed on the part of branches in collecting stipulated charges such as :
a. Processing charges
b. Commitment Charges
c. Inspecting/ Unit Visit charges
d. Equitable Mortgage Charges
e. Security redemption charges
f. CERSAI charges
g. Legal charges
h. Charges for amendment of sanction terms / revalidation/ rephasement
i. Penal Charges for the reasons such as default in repayment, non-submission of financial statements,
Stock/ Book Debt statements, Diversion of Funds etc.

Leakage is also detected on account of failure to carry out the interest rate revisions, non-linking of
interest to base rate, non-collection/ short collection of commission on BGs /LCs, amendment charges,
closing charges and other service charges related to remittance of funds and locker rentals. Immediate
recovery of leakage of income detected is paramount duty of the officials at branches.

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