ROLE GUIDE CUM CERTIFICATION MANUAL

SERVICE MANAGERS
For Internal Circulation Only
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Chapter - 1
Role & Responsibility
of
Service Managers
NOTES
 Chapter – 1: Roles and Resonponsibilities of
Service Manager
With the advancement of technology, when everything in banking is happening at a fast
pace, the age old emphasis on ‘Systems and Procedure’ is getting diluted to a considerable
extent, leading to sharp rise in fraud cases with huge financial and reputational
implications. This is particularly evident in branch operations. The fraud cases not only
cause immense reputational loss to the bank, but these also dent the customer’s trust on
bank.
There is no denying the fact that customer service should get top priority at the branches,
but this does not warrant any compromise in systems and procedure. We can attain
highest level of customer service while following the laid down norms of the bank.
Willingness to develop team spirit, to stay updated by gathering knowledge about the
products and services and to strive for excellence can provide solution to this problem. The
Service Manager or Manager(Branch Operation) can play a pivotal role as he/she is the key
person who can set the tone for the branch.
He/she is responsible for outstanding customer relations as well as imbibing the bank’s
service culture in all staff members. In order to achieve the best results, he/she needs to
develop a team and delegate duties to various team members, giving them specific tasks to
accomplish within the given timeline.
He/she is someone, who needs to exhibit confidence and competence to inspire and
motivate the team members. He/she needs good interpersonal and communication skills to
take the team in the right direction and needs to ensure that entire team at the branch
should show a single face to the customer and deliver effective financial services.
His/her role also involves creating an ambience conducive for efficient branch operations.
He/she needs to ensure that the team members follow highest ethical practice and strive to
achieve the laid down goals and objectives of the bank.
The performance of the branch significanly depends on the performance of the Service
Manager. He/she is someone, who needs to update his/her skills continuously by acquiring
knowledge and expertise. He/she should lead by examples as the entire team at the branch
looks up to him/her.
He/she needs to fill the team with energy and provide mentorship to those in operations by
observing their activities and assisting them in solving complicated operational problems.
Some of the roles and responsibilites for a Service Manager are listed as under.
Roles:
Ÿ Joint Custodian of the Branch.
Ÿ Responsible for Cash/Gold Ornaments (as a Joint Custodian), SecurityDocuments viz.,
Specimen Signatures, Branch Documents, etc.
Ÿ He is the floor manager for the Branch, ensuring punctuality, neatness and efficient
functioning of the Branch.
Ÿ Coaching and motivating the SWOs to be customer friendly, encouraging them to
interact with the customers.
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Ÿ Handling staff related matters, maintenance work for the Branch, Operational risks in the
Audit process, timely submission of MIS related information etc., under overall
supervision of the Branch Manager
Ÿ Taking charge of Administrative matters, matters relating to Premises, Rent, Electricity,
Utilities, Annual Maintenance Contracts, ATM, etc. under the overall supervision of the
Branch Manager.
Ÿ Liaising with external agencies like CPCs, Contact Centre, ATM Agencies and CM
(Admin) to ensure effective functioning of the Branch.
Ÿ Ensuring smooth and efficient functioning of the Branch on various efficiency related
parameters for the customer service, staff and upkeep of the Branch.
Ÿ Act as a whistle blower and report to Controllers actual or suspected frauds,
inappropriate behaviour and practices, unethical actions etc.
Responsibilities:
Ÿ Overall Head of the Administration Unit of the Branch reporting to the BranchManager.

Ÿ Handling CMS complaints and Customer Complaints which cannot be solved bySWOs/
Grahak Mitra.
Ÿ Monitor and report the performance of external agencies attached to theBranch for
upkeep of ATMs, hardware, courier services etc. to controllers, so thatall the facilities are
available in trouble- free manner for rendering excellent customer service.
Ÿ Ensure that the ATM PIN mailers are handled securely and the undelivered ATMcards
are not handled by the persons who handle ATM PIN mailers. Allundelivered ATM cards
and PINs are delivered to the account holders after followup & destroyed after 45 days if
remains undelivered.
Ÿ Ensure Safe custody of scrip, safe deposit articles, and vacant safe deposit lockerkeys.
Ÿ Ensure that Current and Last calendar month’s vouchers are kept in lock and key.
Ÿ Delivering and accepting welcome kits to/from Senior/Special Assistants at the end
ofthe day.
Ÿ Branch Document Register is to be maintained as per laid down instructions.
Ÿ Branch Licence, Emergency Arrangement, Locking up Arrangement, DRP &
BCP,Insurance and AMC of Bank’s properties, Lease Agreements, Audit notes,
Gunlicence, Copy of RC books, FC, Insurance, Agreement etc. are entered in the
BDRegister.
Ÿ Items like NSC and LIC policies are properly recorded in the MiscellaneousSecurities
Register.
Ÿ The Emergency Arrangements / Locking up Arrangement are properly approvedand
current in order.
Ÿ BCP and DRP are approved by controllers and current.

Ÿ Ensure the display of proper notice boards as per the laid down norms from RBI/SBI time
to time.

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Ÿ Allotment of staff duties and ensure job rotation.
Ÿ Resetting/ foreclosure of password to the SWOs, when required after entering inthe
relevant Register.
Ÿ SOD/EOD Processes.

Ÿ Authorising transactions referred to him.

Ÿ Ensure Rent for Lockers are recovered periodically. (Failed SI report for recovery of rent
is available in the CDC Reports Folder between 1st and 5th April.)
Ÿ Follow-up on IBTS reconciliation on a daily basis and follow up un-reconciled
GLIFentries etc.
Ÿ Custody of articles for Safe Deposit and Safe Custody.

Ÿ Accepting and delivering cash from/to CAC personnel/Cash Officer.

Ÿ Any other activity necessary for efficient working of the Branch.

Ÿ Extend full support to the Branch Head as he cannot deliver 100% without
yourconstructive support.
HOUSE-KEEPING
Ÿ Arrange for withdrawal of duplicate keys for verification from the branch where itis
deposited and completely verify the keys with that of the Key Register and afterdue
verification, re-seal the keys presently in use and deposit the same andadvise the
Controllers about the withdrawal and redeposit in the prescribedmanner and obtain their
confirmation which should be kept securely in thedrawer of his desk (not hand-safe).
Ÿ Cash balance with physical counting to agree with cash balance register, BGLcash
balance & CGL cash balance. Note down the difference if any for follow up& balancing.
Ÿ If the branch is a currency chest, count all the packets above Rs. 500 and 10% ofthe rest
of the cash with clip system.
Ÿ Balance all the cash in almirah, bins and cages by jotting down in a register andtally with
cash vault register/Currency Chest Register/98958.
Ÿ Verify all small coins bags by weighing them & check their content slips.
Ÿ Reshuffle the cash in almirah at least once in three-months.
Ÿ Verify and Initial one or two items of cash in cash balance register daily.
Ÿ Randomly verify the complete cash balance and authenticate all items.
Ÿ Verify the gold items in gold loans bags with their content slips and tally the number of
gold bags with the Loan balance file.
Ÿ Verify the ‘Report on Loan Accounts’ in the ‘Other Reports’ folder daily andensure that
the security of gold obtained as security for each gold loan account appearing in the
report is turned into the vault.
Ÿ Deliver Gold pledged as security against Gold Loan Accounts after ensuring that the
Gold Loan A/c is closed in the System and Gold Loan register against proper
acknowledgement.
Ÿ Ensure Sundry loan documents are complete and securities obtained are current.
Ÿ Maintain daily list and present for renewal/ payment on due dates.
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Ÿ Have full control over non-home (non cash) transactions to avert any fraud.
Ÿ Ensure the reconciliation of all the Systems Suspense Accounts including TrickleFeed,
Draft/BC to be issued and other BGL Accounts on daily basis.
Ÿ Ensure the VVR checking allocation and checking on daily basis. Maintain theVVR
Roaster as per laid down instructions. Ensure entering the missing vouchers inthe
‘Missing Vouchers Register’. Any deviations to be brought to the knowledgeof the
Branch Manager.
Ÿ All statutory instructions regarding Service Tax and TDS must be adhered with andthe
amount recovered is deposited into the Government a/c before the 7th ofevery month. In
case of need, help of any local Chartered Accountants can besought.
Ÿ Verify the physical stock of all security forms with that of registers.
Ÿ Ensure destruction of all obsolete security forms viz. DD/BC etc. except IOIinstruments
with the Controller’s permission.
Ÿ Verify the Miscellaneous articles in Safe Deposit with the acknowledgements
fordeliveries since last inspection. Examine the packing, seals, numbers and storage.
Ÿ The Fixed Assets Register and Ledger should be checked, including physicalverification
of fixed assets.
Ÿ Verify the securities held at the Branch pending disposal.
Ÿ Verify the balance of stamps held in Stamp Account. Obsolete, unusable stampsshould
be sent to appropriate stamp authority for seeking refund.
Ÿ Maintain the relative books and ensure BMMC depicts the true picture of
positionobtaining at the Branch.
Ÿ Ensure Joint Custody of Security forms other than cheque books.
Ÿ Ensure KYC norms / AML guidelines are followed for deposit accounts.
Ÿ Ensure Trusts, Minors accounts and Government Accounts are clearly
indicated,flagged and operations conducted according to the mandate.
Ÿ The specimen signatures, Trust Deeds and letters of various governmentdepartments are
held under proper custody.
Ÿ Diarise the dates of renewal of Gun Licence, Lease Deeds of Office
Premises/ATMPremises, and Certificate for Weights & Measures, Insurance Policies of
Bank Vehicles,and Strong Room Fitness Certificate etc. and ensure proper renewal.
Ÿ Ensure the prompt balancing of securities, stamps, fixed assets etc.
Ÿ Scrutinise and follow-up outstanding entries in the sensitive accounts likeSuspense,
Sundry Deposits, and System Suspense Accounts.
Ÿ Clearing difference should be followed up vigorously.
Ÿ Postage Balance, letters pending, Inward/Outward/Courier/ Registered LettersSent
Registers should be scrutinized periodically. Letters should be delivered fordespatch
only against proper acknowledgement of the Courier in the postagebook.
Ÿ Deceased case documents for the period between two inspections previous tolast one
inspection should be kept as one document with new number.
Ÿ All staff loans are sanctioned properly and lien is noted in PF and cancelled whenthe
account is closed. Take a print of lien from PPG SITE, if confirmation notreceived from
LHO.
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Chapter - 2
Taking over as a
Service Manager
NOTES
 Chapter-2: Taking over as a Service Manager

BRANCH CASH BALANCE

Ÿ Cash Balance by Physical counting to agree with Cash Balance Register, BGLCash
balance and CGL Cash Balance.
Ÿ Also verify ATM Cash, if joint custodian for ATMCurrency Chest Branches (In addition
to the above)
VERIFY
Ÿ Cash Retention Limit.

Ÿ Vault Register & Currency Chest for their accuracy with physical cash.
Ÿ Count all Rs.2,000, & Rs. 500 denominations in full and remaining by clip counting with a
minimum of 10% of the packets.
Ÿ Un-examined remittances, if any
Ÿ Small Coin Depot- All the bags have to be verified / weighed denomination wise with
content slips.
Ÿ Verify balance of coins not in circulation with register.

CBS
Ÿ Denomination-wise balance in the cash drawer should tally with physical cash balance
and balance in BGL account No. 98903.
Ÿ Verify glcomp.txt for GLIF entries, if any
Ensure that:
Ÿ All the day end transactions are over except EOD
Ÿ The cash officer has transferred the cash balance to the accountant (Vault custodian)

Ÿ CT transactions are completed (for currency chest branches)

Ÿ All the cash drawers are closed including the Accountant
Ÿ The incoming Accountant has to open & close the Cash drawer
Ÿ Both the incoming and outgoing Accountants are to be signed off from CBS
Ÿ Switchover should be done by an officer with Admin rights through the CBS menu:
Ÿ Transaction group and capability levels are to be changed to 12 & 7 respectively, if
necessary
Gold Loans
Ÿ Verify Gold Retention Limit
Ÿ Verify the stock register maintained inside the strong room in respect of the number of
bags containing gold ornaments pledged to the Bank.
Ÿ Verify individual ledger accounts to confirm the quantity/number of pieces & weight of
gold ornaments with the actual ornaments kept in the bags.

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Foreign Currency Notes/
Verify FC Notes retention limit, kept in joint custody- All Foreign Currency notes to be
verified Currency wise and Denomination wise. Also ensure that existing balance of
Travellers Cheque tallies /destroyed.
SAFE DEPOSIT LOCKERS
The correctness of maintenance of locker key register has to be ensured. Verify the
surrendered/unrented keys held by the other officer with locker key register to ensure that
‘locks’ have been interchanged in respect of surrendered lockers and kept ready for allotment.
Branch Documents
Bds are arranged as per SF-19, as per instructions in BD Register
VERIFY following Documents
Ÿ Lease Deeds of the Branch / ATM Premises / Generator / Vehicle(s) and its validity
Ÿ RBI License, Strong Room Certificate, Insurance Policy of valuables / Gold / Jewellery /
Computers / Vehicles and its validity
Ÿ Indemnities in respect of duplicate DDs / BCs / TDRs / Deceased Claims
Ÿ Migration Reports / DATs
Ÿ Original Power of Attorneys
Ÿ Agency Arrangements with other banks, if any
Ÿ Password for Branch login ID-PW in ‘Traces’ for generation of ‘Form 16A’
Ÿ Branch Server Admin Password
Ÿ Netware Licenses
Ÿ Old Inspection Reports / Cds
Ÿ Gun Licenses with Gun History Book
Ÿ Weights & Measures Certificate
Ÿ Disaster Recovery Plan and Business Continuity Plan
Ÿ Certificate issued by the Labour Officer / Commercial Tax Officer (Profession Tax)
Ÿ Protective arrangements / Locking up arrangements / Emergency arrangements
Ÿ “Aide Memoir”
Ÿ Annual Maintenance Contracts relating to Computer systems, UPS, AC, etc.
Ÿ Banks Book of Instructions
Security Forms
Physical stock of all Security forms with registers and in VPIS of CBS.
Ÿ IOIs
Ÿ Cheque Book
Ÿ Holograms

Ÿ Damaged / cancelled security forms

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Please ensure:
Ÿ Joint custody of TDRs/STDRs held as security
Ÿ Securities for availability and due dates

Ÿ Liens / Assignments are noted

VERIFY
Ÿ Outstanding entries in respect of Suspense Sundry Deposits, GLIF, IOA etc

Ÿ Undelivered BCs and DDs register

Ÿ Postage balance with Postage register along with stamps

Ÿ Pending VVR Position

Ÿ Pending submission of Govt Challans to State Treasury or Various Central Govt
Establishments. Discrepancy if any of any un reconciled position
Pension Payment Orders (PPOs)
Take stock of the any pending correspondence with CPPC/State Treasury
KEYS- Branch duplicate Keys
Withdraw, interchange & Redeposit on the Same Day to the nearby branch, where these
keys are kept. The communication is also required to be sent to controllers for the same.
Fixed Assets, Stationery and Record Room
Ÿ Creation/amendment as USER- Authoriser in ISTAMS and IFAMS
Ÿ Position and identification of Fixed Assets- Physical vs. Items appearing in iFAMSlist

Ÿ Take position of available Stationery items and last purchase details

Ÿ The access to stationery and record room should be restricted
Ÿ Position of last ‘Destruction of old Records’
Deceased Accounts
The updated registers along with papers of deceased accounts settled and pending
matters if any.
Clearing House (at Non-MICR Centres)
Ÿ Details of Clearing differences, if any and its position
Ÿ Updation of Signatures and KYC details in the Bank, where our Bank is maintaining
account for clearing
Previous Audit Reports
Peruse the latest Corporate Centre Inspection & Audit Report and other Audit reports, their
compliance position, including RBI Inspection Report- Currency Chest, Clearing House
etc, if any.

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Other Important Aspects:
List of important Registers and Reports in Branch CBS Server: Important Registers

Important Reports :
I. Audit_BGL_accounts_age_wise_break_up_gend0805.txt
ii. Agewise_Report_of_sys_susp_gend7054.txt
iii. DDP_outstanding_cfpd0308.txt (For DDP Outstanding items)
iv. ddp_outstanding_cfpd0349.txt (For DDP Outstanding tracking by no. of days)
v. pending_coll_ cfpd0320.txt (For SC Outstanding items)
vi. Dep_act_deb_bal_dcsd0630.txt
vii. glcntr.txt (for Glif entries for Transfer transactions)
viii. glcomp.txt (for Glif entries for Cash transactions)
ix. ListOfNonZeroIntermediateSuspenseAccounts-gend0804.txt
x. Fail_sweep_report_dayd0203.txt
xi. Fail_standing_instructions_dayd0197.txt
xii. Stopped _Cheques_gend0825.txt
xiii. CC_OD_Balance_File_depd0580.txt (for all OD a/cs)
xiv. LoansBalanceFile_lond2390.txt (For SLs/DLs/GIs/Staff A/cs)

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Chapter - 3
Operational Risk
Management-I :
Critical Areas
NOTES
 Chapter-3: Operational Risk Management: Critical Areas

3 (i) CHARGES OVERHEADS: REPORTING & CONTROL

Expenses and Overheads are an integral part of any commercial activity and an effective
system of their monitoring and control is the key to commercial success. In the Bank, all
revenue expenses incurred on running day to day operations at the branches/other offices
are accounted for by way of debit to Charges Account divided into various subheads in
accordance with the need and nature of the expenses involved.
Ÿ All debits to the charges account must be authorized by the Branch Manager under his
signature.
Ÿ At divisionalised branches debits to charges account may be authorized by the
Managers / Deputy Managers of Divisions in respect of transactions pertaining to their
own divisions and by the Manager (accounts & administration) or by the Accountant in
respect of other transactions.
Ÿ In all cases, the sanction for the amounts involved must be obtained from the competent
authority and the particulars of sanction entered on the relative voucher, unless the
expenditure is within the discretionary powers of the official concerned.
Ÿ The official authorizing the debits are responsible to see that no unauthorized
expenditure is incurred. Sanctioned periodical charges such as salaries, rents, taxes,
subscriptions to newspapers, renewal fees for post box numbers, etc. will be debited as
they become due.
Ÿ At the beginning of each month, a suitable sum not exceeding a month’s requirements
will be advanced for meeting expenses towards postages by debit to Charges Account
and will be credited in the postage book under the initials of the official passing the
relative debit. Further sums will be advanced thereafter, as and when required. On the
last working day of each month, the unspent balance will be refunded to Charges
Account.
Ÿ All bills in respect of expenses incurred by the branches on account of remittances of
treasure (except freight and police escort charges) will be paid by debit to Charges
Account (under appropriate sub-heads). The Branch Manager / Manager (Accounts &
Administration) must scrutinize the bills thoroughly and ensure that the expenses
incurred are reasonable and are kept to the barest minimum.
Ÿ Recoveries of amounts debited to Charges Account must not be applied towards other
payments but must be credited as distinct items to Charges Account.
Ÿ All bills in respect of expenses incurred by the branches on account of remittances of
treasure (except freight and police escort charges) will be paid by debit to Charges
Account (under appropriate sub-heads). The Branch Manager / Manager (Accounts &
Administration) must scrutinize the bills thoroughly and ensure that the expenses
incurred are reasonable and are kept to the barest minimum.

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PETTY CASH PAYMENTS
Cash Officer will maintain the standard petty cash register, in which he will record all
advances received and payments made there from. The expenses will be classified under
different sub heads of charges account. The entries in the register will be initialed by the
branch Manager or the managers of divisions within their respective areas of control. No
payment will be made unless it has been duly authorized on the bill/cash memo by the
Branch manager/manager of the division/ any other designated authorized official.
The present ceiling for petty cash expenses is Rs. 50/-. The petty cash expenses normally
comprise of expenditure on purchase of articles against cash memos. Where cash memos
are not available, authenticated vouchers will be prepared for reimbursing such expenses,
which are normally incurred by staff members. A rubber stamp reading,” The expenses
incurred have been paid” will be affixed on each such voucher/ cash memo and authenticated
by the person receiving the money and the cash officer who makes the payment.
After money is paid, all bills / memos will be branded with the days cash paid date stamp.
The unspent balance with the cash officer will be verified once in a month at irregular
intervals by an officer of MMGS II and above. At the end of the month the Suspense Account
entry will be adjusted by debiting the amount spent to charges account under the
appropriate sub heads and refunding the balance in cash.
REPORTING
At the end of the month, abstract of charges account generated by CBS as part of month
end reports along with duplicate copies of bills is required to be submitted by the branches /
other offices to their controller for the purpose of monitoring and control.
Ÿ Scrutiny of Returns and Submission of Certificates:

Ÿ Submission of Certificate:
All branches shall submit a certificate in respect of ‘Charges Account’ to their controllers by
incorporating a specific certificate in the ‘Branch Manager’s Monthly Certificate [BMMC] of
the Branch, certifying that:
“Expenses booked to Charges Account are genuine, necessary and well controlledin
addition to having sanction of the competent authority”.
Charges Miscellaneous: Creation of New BGL Heads in CBS
With a view to have a better control over the expenditure booked under Miscellaneous
Expenses new sub-heads have been created as given below:
i. Other Alternate Channels Expenses[ATM/Debit Card, Internet Banking related
expenditure]
ii. P r of e ssiona l Fees for Consult ants[Charge s/expend itu re in curre d on
consultancy/professional services hired]
iii. Charges Fixed Assets [Fixed Assets below Rs.1000/-]
iv. Staff Expenses Not Enumerated [Self explicit]
v. Expenses - Incentives/Honorarium [Self explicit]
vi. Functions /Seminars related expenditure [Self explicit]

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BGL ACCOUNTS AS UNDER ARE TO BE USED FOR BOOKING THE OPERATIONAL
LOSSES ON ACCOUNT OF DAMAGE TO BANK'S PHYSICAL ASSETS.
.
Sl.No. BGL A/c No BGL A/c Name Description
1 2399967 Ass ets stolen Value of fixed assets stolen/missing.
2 2399968 Loss of Cash Lo ss of c ash in transit due to Dacoity,
burglary, theft, etc.
3 2399983 Ass et damages Loss due to assets damaged due to
(negligence) negligence.
4 2399984 Ass et damages Damage (loss) to physical assets due
(external) dacoity/ to external factors like dacoity
arson, etc. /blast/strike/riots, etc.
5 2399985 Ass et damages Damages (loss) to physical assets on
(fire/accident) account of fire/accident /arson.
6 2399986 Ass et damages Loss due to assets damaged due to
(natural disaster) natural disaster, floods, earthquake,
etc.

The damage (loss) to physical assets may be debited to any one of the above BGL
accounts (1 to 6), as the case may be, by writing off the WDV (Written Down Value)
available in fixed asset(s) concerned, irrespective of the fact whether these assets are
eligible/not eligible for claim under insurance. If any claim amount is received in future or
any scrap value realized, the same may be credited to the respective BGL account, i.e. the
BGL account to which the loss was originally debited.
In case of partial loss, the amount of loss may be debited to one of the above six BGL
accounts and credited to the concerned Fixed Assets account.
The financial powers for write off in above cases may be used by the authorities as per
Delegation of Financial Powers : General Matters under head “Power to write off under
miscellaneous /General matters (frauds other than reported in loans & advances, cash
shortages, dacoity, etc.)”, which are as under:
Sr No Power to write off bad debts/Losses Amount
1 MD Rs.100 lac
2 CGM Rs.15 lac
3 GM Rs.10 lac

3 (ii) ONLINE VOUCHER VIEWING AND VERIFICATION

Online Voucher Viewing and Verification Module (Online VVR-Version-4) has been
released by CBS-DEV Department, after making necessary enhancement and changes in
the functionality as per the suggestions / feedback received from Circles/Branches.
OVVVM-Acceptance/Verification (Screen – 60658) is provided with one more button
named as ‘Accept All’ to facilitate acceptance of all Transaction Tellers by the VVR checker
in one click. On clicking this button, system will change the status of all the Transaction
Tellers from Allocated to Accepted.
OVVVM-Online Voucher Verification (Screen – 60663) is provided with fetch button
against each verification record (voucher record) to display other related transactions with

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the same journal number pertaining to the record being verified. The fetch record will
display additional information about the transaction like product-code, transaction-type
and transaction description etc. This will facilitate in searching of the related voucher /
transaction record at the time of verification.
Transaction Excluded: At the time of premature closure of an account by a teller, the
interest reversal (Debit Interest Adjustment) transactions, for which there is no voucher,
were appearing in online VVR checking. These transactions have been excluded from
online VVR checking.
Transactions Included: Vendor Payment transactions pertaining to single debit/credit
payments which are posted through MR port will also appear under Online VVR
functionality for checking. These transactions were got excluded from online VVR checking
after shifting of posting method of these transactions in CBS. These transactions are
getting posted in CBS through MR port in place of Trickle Feed mechanism. Single
Debit/Credit Vendor Payment transactions were shifted to MR port as number of Trickle
Feed files required for processing in CBS were increased to alarmingly high and hence
processing of all these files in a single day were becoming a challenge.
3 (iii) INWARD / OUTWARD DAK
Inward Mail is opened in the presence of an authorized official, distributed against
acknowledgement and disposal is ensured / marked.
Outward Mail: Postal / Courier Receipt (duly acknowledged by authorized courier agent)
numbers are recorded in the Register. Letters returned undelivered are recorded and held
in the custody of authorized official. Proof of Delivery (POD) is collected and Courier bill
payment is made only after disallowing bill claimed for the delay in delivery as per terms of
agreement.
3 (IV) CHEQUE COLLECTIONS
Bank’s Cheque Collection Policy-2015 has been formulated as a comprehensive
document with transparency, covering following aspects, taking into account our
technological capabilities, systems and processes adopted for clearing arrangements and
other internal arrangements for collection through different methods. The Policy takes
adequate care to ensure that the interests of small depositors are fully protected and is in
line with the IBA’s model policy on Collection of Cheques/instruments. The procedure for
collection ofdomestic Cheques/instruments and international instruments has been
included herein, which, inter alia, incorporates the following:
a) Established procedure for collection of Bank’s own Cheques (local and outstation).
b) Collection of Cheques from our branches and branches of other banks.
c) Reduced time frame for collection of outstation/local Cheques drawn on branches of the
Bank
d) Penalty for delayed collection for local/outstation Cheques in a progressive manner
e) Amounts of Chequesup to which immediate credit is to be provided.
The printing of IOI instruments is also now migrated on “CTS-2010standard” platform.
Cheque Truncation System (CTS) is presently working at Northern grid in Delhi,
Southern Grid in Chennai and Western grid in Mumbai.
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All centres covered under the same grid will be treated as a single clearing zone and
cheques drawn on these centres and presented at any of the grid centres are treated as
locally drawn cheques in as much as no clearing charges would be applicable for such
cheques.
RBI has directed that no changes/corrections should be carried out on the Cheques. For
any changes in the payee’s name, courtesy amount (amount in figures) or legal amount
(amount in words) etc. fresh cheque forms should be used by customers. This will help
Banks to identify and control fraudulent alterations. Collecting banks have to ensure that
such Cheques are not accepted for presentation in CTS. It is not applicable to Cheques
cleared under other clearing arrangements such as MICR clearing, non-MICR clearing,
over the counter collection (for cash payment) or direct collection of Cheques outside the
Clearing House Arrangement.
Clearance of Govt. cheque is presently under “paper to follow” system at CTS and other
clearing centers. However, RBI proposes to introduce CTS for Govt. Cheques also. Upon
receipt of RBI instructions the Bank would modify its systems suitably.
TIME FRAME FOR COLLECTION OF CHEQUES
Cheques drawn on branches of other banks located at State Capitals/Major “A” class
Cities/other locations will be collected within 7/10/14 days respectively. If there is any delay
in collection beyond this period, interest at the rate specified shall be paid without
insisting/waiting for a request from the customer.
CHEQUE TRUNCATION SYSTEM
Cheque Truncation System is the process whereby images of cheques are scanned and
electronically sent to the concerned branches, for inward and outward clearing, instead of
physical movement of the relative instrument. In the process, the paying branch will receive
the images for inward clearing and, if found to be in order, will pay and send facsimile of
cheque back to the clearing centre and vice versa.
CTS INWARD CLEARING PROCESS FLOW AT CCPC BROADLY CONSISTS OF THE
FOLLOWING:
Ÿ Ensure data entry of account number and payee’s name
Ÿ Technical Verification (T.V.) which is scrutiny of the instruments and passing the same
on-screen
Ÿ OLRR Disposal, i.e. making sure that the Pay or Reject decision has been taken for each
cheque that has been referred to the home branch / Asset CPC
Ÿ Sending returns through CTS to Clearing House
CTS FILE UPLOAD@ CCPC
Ÿ Receive inward cleaning instruments and data file (RBI file) from MICR centre
Ÿ Process RBI file in the Cheque Mark software (instead of CBS)
Ÿ Take images of instruments and upload images to CBS
Ÿ Ensure account number and payee’s name in Cheque Mark
Ÿ Generate posting file in Cheque Mark and upload it to Host (CDC) through TFM
Ÿ Receive reports for Trickle Feed Posting
13
TECHNICAL VERIFICATION @ CCPC
Let us take a look at how technical verification takes place at CCPC.
Ÿ Receive Trickle Feed reports
Ÿ Do scrutiny of physical, if any received through P2F(Paper–To-Follow), instruments to
guard against chemical alterations, colour Xerox etc
Ÿ Do image-based Technical Verification i.e., on-screen passing of instrument

Ÿ Check and clear referred items

Ÿ Check for pending items
OLRR Disposal at Branch
Open OLRR enquiry prompt screen; enter branch code and instrument type
Check and take decision on each item
Check for pending items before cut-off time to ensure complete disposal
At CCPC
Ÿ Check for pending items

Ÿ At cut-off time, reject all pending OLRRs by running Blanket Rejections program
ECS
Entire work related to processing of ECS inward transactions is moved from branch to
CCPC. However, as a precondition, branches will have to record customers’ mandates for
debit transactions in respective customers’ accounts as one time activity for each account.
Ÿ Receive data file for the day from Clearing House
Ÿ Upload data file to CBS and process it to retain records pertaining to the linked
branches
Ÿ Correct wrong account numbers by using Look-up table
Ÿ Generate a posting file and upload it to Host through Trickle Feed Mechanism

Ÿ Process Rejections Report to generate Returns file and send it to Clearing House
Ÿ Input financial transactions in CBS for Funds Settlement
LOCAL CHEQUES/COUNTER RETURN
Ÿ All cheques, and other Negotiable Instruments, payable locally in clearing, would be
presented through the clearing system prevailing at the centre.
Ÿ Cheques deposited at branch counters and in Drop-boxes, within the branch premises,
before the specified cut-off time will be presented for clearing on the same day.
Ÿ The broad time–limit for receipt of cheques (say up to 3 hours after opening of branch, 1
hour before closure of business etc.), which can be fine-tuned for individual
locations/branches, based on local practices, will be fixed by the Controllers of the
respective branches.
Ÿ All the drop-boxes shall indicate clearly the time up to which cheques dropped in the
drop boxes would be sent for clearing on the same day.
14
Ÿ Bank branches situated at centres where no clearing house exists, would present local
cheques on Drawee banks across the counter and proceeds would be credited, at the
earliest, on realization.
Ÿ The time line for collection/clearing of local cheques will be extended by extra day in
case of branches having non-Sunday weekly off and for 7 days branches
OFFICE ACCOUNTS
Many instances have occurred when branches have misused System Suspense Accounts for
unrelated transactions. Branches are even permitting unauthorized clean overdraft to
customers / Government while paying salary / pension by not debiting the appropriate account
first and payments are made by debit to a System Suspense Account. This results in loss of
substantial amount of interest and opportunity cost to the Bank. Branches are not following
correct accounting procedures relating to clearing transactions. Branch Suspense accounts
are being misused in place of System Suspense accounts. Huge balances remain
outstanding in such accounts unattended for months together and are eventually transferred
to Recalled Assets account and written off.

SR BGL BGL NATURE OF PURPOSE FOR WHICH RECONCILIATION/REV

NO NO NAME ACCOUNT ACCOUNT IS OPENED ERSAL PROCESS
1 98533 SYSTE 1. Reconciliatory 1. It is an intra-day temporary 1. All the users (tellers)
M type a/c with pa rking account to be used while have to ensure that the
SUSPE Syst em Generated putting through various day- to- credits parked in this
NSE - Reference No. day transactions in CBS. account during the day
ORIGI 2. One to many 2. Cash receipts on account of by them are invariably
NATIN type a/c. new deposit accounts are usually reversed and the
G 3. Outstanding parked in this account till the respective credits are
CREDI should be in credit account opening procedure in posted to appropriate
T only. CBS is completed. accounts.
4. Intraday parking 3. Govt. transactions involving a 2. Before EOD the
account single debit & multiple credits account to be checked
5. The balances in can be parked in this a/c. and outstanding if any,
this account should 4. IOI transactions involving a should be Zeroed
be zero ed single debit & multiple credits invariably daily.
invariably every can be parked in this account. 3. Reference no. has to
day before EOD. 5. Whenever credits are required be used while reversing
to be paid through vendor the entries.
module to beneficiaries, having
accounts in other Bank, the
credit has to be parked in this
account.

15
16
S
BGL BGL NATURE OF PURPOSE FOR WHICH RECONCILIATION/REVE
R
NO NAME ACCOUNT ACCOUNT IS OPENED RSAL PROCESS
N
O 98543 MICR 1. Non-
3 1. This account is being used to 1. Normally this account
INWAR Reconciliatory type park the inward clearing cheques should show zero balance
D account. amount in debit till the cheques every day before EOD.
CLEARI 2. Outstanding may are posted in their respective 2. Any discrepancy in
NG be in Debit or Credit. account at the concerned inward clearing amount
SUSPE 3. Manual credits Branch. received from the clearing
NSE have beenrestricted 2. Clearing house conducting conducting branch and
ACCOU in this account. branches maysend the inward total of inward clearing
NT 4. Clearing house clearing cheques received in cheques leads to either
conductingbranches Clearing house from other banks excess debit or credit
have to post the by debitingBGL 98543 of linked balances in this account.
debit entries in this branches either by Service The debit or credit
account of linked Branch Functionality or by IBTS. balances in the account at
branches by using In case of Service Branch the time of EOD will be
serv ice branch Functionality, the debits will swept to BGL 98724 -
functionality. beposted by the system in the System Suspense
5. This account may linked branches of the clearing Clearing. Difference
have a debit or house conducting branches. In (Debit) (in case of debit
credit balance at case of IBTS entries received by balances) or to BGL
EOD for the the linked branches, branches 98745-System Suspense
following reasons: have to approve the Clearing. Difference
a. Wrong reversal of IBTStransactions after verifying (Credit) (in case of Credit
clearing cheques. the packing slips and inward balances).
b. Discrepancy clearing cheques received. 3. Branches have to
between inward Manualcredit entry postings are reconcile the balances
clearing amount restricted in this account. held in BGL 98724 or BGL
posted by the 3. After posting of inward 98745 on the next day
Clearing. clearing cheques by Inward without fail.
Conducting Branch clearing menu, the following
and the aggregate entri es will take place:
amount of Clearing. a. Dr. Customer A/c (Successful
Cheques received Debits) orDr. 98557 - OLRR
for payment. Suspense a/c (When customer
c. Posting of a/c could not be debited for any
cheques through reason).
Clearingmodule b. Cr. 98543 - Inward clearing
without the account Suspense a/c
having been debited
by Clearing.
Conducting branch.

17
18
19
8 98582 CUSTOMER 1. Reconciliatory type 1. Originating transaction 1. The transactions
A/C a/c with system is posted by the system posted by the system in
DEBITED - generated reference when customer account is this ac count are given
ATM CASH number. debited but cash has not in the report with
NOT 2. Originating Credit disbursed by the ATM. details ATM SU
DISBURSED a/c. 2. At times two debits are SPENSE POSTINGS
3. One to Many type raised with same RR no. REPORT in branch
accounts. in the account due to reports folder.
4. Generally some technical glitches. Branches may use the
Originating credit For such erroneous debits report to reverse the
entries are posted by a credit will be posted in entries.
Corporate Centre. BGL-98582 by ATM 2. The outstanding
Branches should avoid SWITCH CENTER on a entries in the account
originating any entry in later date say T+2. are also available in the
this account. daily report of Audit
BGL accounts age wise
breakup report.
3. Branches need to
pass on the credit to
c ustomers after
properly analysing the
case and matching the
RR no. and settle the
c orres ponding entry in
BGL-98582.
9 98585 IOI TO BE 1. Intraday credit 1. For issuing Inter Office No ma nual reversals
ISSUED A/C based BGL Account. instrument (IOI), funds can are required normally
2. Non reconciliatory be received either in Cash as both the credit and
System Suspense or throu gh transfer and will debit entries are
account be parked in this s ys tem generated. This
intermediary ac count for account should be
printing the IOI. By using zeroised before EOD of
journal number for printing everyday.
of IOI, system will debit
BGL 98585 and issue IOI.
10 98588 Inward 1. Non Reconciliatory When cheques are No ma nual reversals
collections type Ac count. received for collection by a are required normally
suspense 2. Cannot be credited branc h throughas both the credit and
account manually. automation, on invoking debit entries are
3. Credit based SC, system de bits B G L s ys tem generated.
account. 98544 (Outward Clearing (Branches debit this
Suspense account - account manually for
MICR) and Credits 98588. direct credit to
When SC is marked off c ustomers without
after receiving credit, routing it
BGL 98588 is debited and throughSC/DDP menu.
Customer's account is This results in debit
c redited by the system. balance in the
account). In such
situation the account
c annot be c redited
manually. The debit
entry can only be
revers ed with the help
of Servic e Desk.

20
21
3 (v) REPORTS IN CBS
Reports in Core Banking environment are generated from control and risk perspective. The
reports are broadly classified into four categories, as follows:
1. EOD Reports: namely Structured reports provided by CDC to Branches at daily
aswell as periodic intervals viz. weekly, monthly. The EOD Reports are further
classified as:
a) Online Reports: Transaction-based reports, needed by Branches for Checking
andReporting on a top priority basis.
b) Offline Reports: Other daily reports, which need to be checked/ verified/ scrutinized /
followed up at a convenient time during the day.
2. Front End Reports: Reports that can be generated by Branches using the Core
Banking Menu Options.
3. Ad-hoc Reports: Reports, which may be obtained by placing a request to CDC,
Belapur through CBSmenu.
4. Reports for Inspecting Officials can be generated by Branches using the Core
Banking Menu Options.
Besides the reports received from CDC, a web-site has also been created by the Data
Warehouse Project from which Data on critical areas is made available for Branch
Managers and Controllers (at ZO/LHO/CC). The URL of the website is
http://10.0.10.22/.The information about Reports also is made available at Data
Centre - Core Banking Project under Useful links-1.
1. EOD Reports - A Brief Introduction:
On completion of EOD, a set of structured reports is generated for each CBS
Branchand these reports are sent to (ftp'd) the Branch Servers, through LHOs. The
EOD reports in turn can be classified under the following operational categories:
a) Exception Reports.
b) Transactions Reports.
c) Letters/Reminders.
d) MIS Reports.
e) Other Reports.
f) Concurrent Auditor Reports [for specific branches]
g) Ad-hoc Audit Reports
h) Reports on Request
2. Generation and Transmission of Reports:
Every day after EOD, CDC generates a set of reports for each Branch and these are
transmitted through ftp (File Transfer Protocol) to the LHO reports server. LHO report
server in turn pushes the reports for each branch to the Branch Server which is identified by
an IP Address like ftp://A.B.C.D where A is 10 (for the network number), B is the CAP (City
Aggregation Point) Locator Number, C is LAN (Local Area Network) Locator Number and D
22
is the Server number which is 33 or 34. Each branch should know the IP address of the ftp
location, which will be of the form ftp://10.b.c.33 or 34/
3. Accessing Reports:
Open Internet Explorer; in the address box type the ftp site address; Click on GO or
alternatively press ENTER key.
The ftp folder will open up where you will observe a folder by name CDC. Open that folder.
You will find a folder named “Reports”. Open the folder “Reports”. (These folder names are
case insensitive.) You will find a number of folders each of them named after the date in
YYYYMMDD format like 20180212. Each folder contains the report files that generated for
that date.
Care: Only those folders, which are not more than 35 days old, will have files inside
them. If the folder is more than 35 days old, only the folder will be there but all files
inside would have been purged (i.e. the files are irrevocably deleted).
It is necessary for every branch to download the reports for each day systematically and
save them on a local disk. At regular intervals, backups on appropriate media should be
taken and the backed up resources should be deleted from the local disk to ensure
availability of space for regular use.
i) Exception Reports
Exception reports pertain to important areas of Branch functioning & Customer Service
like VVR status, Probable NPAs, Failed SI/Sweeps etc. These are necessary for
effective control & mitigating risks at the Branch. These reports are in the “Must See”
category & it would be absolutely necessary for the Branch Manager to either scrutinize
these reports himself/herself or allot it to other designated official for immediate
corrective actions. These reports are available in a sub- folder named as “Exception
Reports”. The path for this report in the FTP directory on the Branch server will be
“cdc/reports/<datewise folder>/Exception_Reports”.
ii) Transaction Reports
These reports are related to transactions that take place at the Branch which require
mandatory checking. These Transactions Reports will be provided to a Branch on the
next day of transaction. The Reports are available with a sub-folder named as
“Transaction Reports”.
The path for this report in the FTP directory on the Branch server will be
“cdc/reports/<datewise folder>/Transaction_Reports”.
iii) MIS Reports
These are the reports, which are miscellaneous in nature. These are required by
Branches to deal customer queries & monitoring Branch activities. The reports are
available with a sub-folder named as “MIS Reports”. The path for this report in the FTP
directory on the Branch server will be “cdc/reports/<datewise folder>/MIS_Reports”.
iv) Letters/ Reminders
These are schedules/reminders/advices/intimations/GAD reports etc. These reports
facilitate Branch work. These reports are placed in a sub-folder named as “Letters-

23
 Reminders”. The path for this report in the FTP directory on the Branch server will be
“cdc/reports/<datewise folder>/Letters_Reminders”.
v) Other Reports
The reports, which are not covered in the above mentioned categories, are provided to
the Branch in CDC Reports folder with a subfolder named as “Other Reports”. The path
for this report in the FTP directory on the Branch server will be “cdc/reports/<datewise
folder>/Other_Reports”.
vi) Summary File
CDC report folder will contain a text file named as “List of Reports”, which shall give
complete list of reports that have been generated for the branch during the day. All other
reports which are not listed inthese text files are considered „Nil Reports' for that
particular branch. The path for this report in the FTP directory on the Branch server will
be “cdc/reports/<datewise folder>/list_
4. Viewing / Printing of Reports:
The reports are either direct TEXT files (.txt) or TEXT files zipped using the GZIP
freeware utility (.txt.gz). Files can also be of the type PRT files (.prt) or PRT files zipped
using GZIP (.prt.gz). If the system being used is configured properly, when you right
click on a TEXT file (.txt file) or a PRT file (.prt file), you will observe that the option OPEN
/ OPEN WITH available in the Context Menu that appears. If OPEN is available, click on
OPEN option. The program which has been registered with Windows for opening files
ofthat file (like Notepad or WordPad) will open and the data in the file will appear in that
program window.
If a printout is needed, FILE PRINT in this word processor window will generate the
printed report.If the file is a zipped file namely a .gz file, it can be viewed by a right click
on the file and then by invoking with VIEW/ VIEW WITH GZVIEW, which will appear in
the Context Menu. If a printout is required, it can be obtained by right clicking on the file
name and then invoking PRINT/ GZPRINT in the Context Menu that appears. (In case
problems are encountered in viewing/ printing reports, call for the services of a Project
Officer who can configure the GZVIEW and GZPRINT correctly.)

3 (VI) IMPORTANT CDC REPORTS

The system is generating various daily reports and is posted in the CDC Reportfolder,
date-wise, for the purpose of scrutiny / checking by the branch functionaries.The CDC
reports, which are to be checked on a regular basis is listed hereunder:
1. Can we get the failed S.I and Sweep reports for a particular period ? Yes, a
request can be lodged through Screen No. 036031 – Adhoc Audit Report. The daily
report is available under “Exception Report folder”.
2. Is there any report available for VVRs pending for quite long time?
i. Report ID: dbcs0008 - VOUCHER_VERIFICATION_PEN DING_FOR_THE_
LAST_7_DAYS.prt (Pending for last 7 days)
ii. Report ID: dbcs0014 - VOUCHER_VERIFICATION_PEN DING_FOR_THE_
LAST_15_DAYS.prt (Pending for last 15 days)
24
 iii. Report ID: dbcs0016 - VOUCHER_VERIFICATION_PEN DING_FOR_
THE_LAST_MONTH.prt (Pending for One Month)
[The above reports are available under “Exception Reports folder”]
3. Is there any report to verify the manual interest adjustment ? Report ID:
depd0199 - MANUAL_INT_ADJUSTMENT, under “Exception Reports folder”.
4. Any report on ATM suspense transaction, which will be useful for
reconciliation ? Report ID: infd1130 - ATM_SUSPENSE_POSTINGS
_REPORT_infd1130.txt under “Transaction Report folder”.
5. Any report on monitoring high value transactions ? Report ID: lond2599 -
Report_High_Value_ Transactions.txt, under “Exception report folder”.
6. Any report to follow with BC/BFs ? Report ID: lond1221ms - FI_Daily_Acc_
Bal_Above_Threshold_ File.prt, under “Exception report folder”.
7. Any report to verify the staff accounts balance as well as transactions ?
Report ID: depd3323 - Report_on_Staff_acct_transactions_greater_
than_50000.txtReport ID: depd3324 - Report_on_Staff_ acct_balances_greater_
than_100000.txt Both the reports are available under “Exception report folder”.
8. Any report to verify KYC compliance with “ID Acceptable to Manager”? Report
ID: audt3411 - DAILY REPORT ON KYC_ID ACCEPTABLE TOMANAGER, under
“Exception Reports folder”.
9. Any report to verify back value dated transactions? Report ID: lond2476 -
Report_ Back_Value_Dated_Transactions_lond2476.txt Report ID: long2483 -
Back_ Value_Trans_ Greater_Period_lond2483.txt, Under “Exception report
folder”.
10. Any report to verify TDR/STDR Open/Close/Renewal for the business
development ? Report ID: depd6690 - TDR_STDR_OPEN_CLOSED_
RENEWED, under “Exception Report folder”.
11. Any report to verify Accounts (Other than TDR/STDR) Opened /Close
a) Daily_ACCT_CLOSE_BRANCH.txt.gz
b) Daily_ACCT_OPEN_BRANCH.txt.gz (Both the reports are available under
“Other Reports folder”).

v v v

25
Chapter - 4
Operational Risk
Management-II :
VPIS Management Control
NOTES
 Chapter -4: Branch Security Forms and Disposal of
Obsolete Security Forms
4 (i) DEALING WITH SECURITY FORMS
Custody of Blank Security Forms, Stamped Forms, Pass Books and other Stationery’ items
Boxes /parcels containing security forms must be opened immediately on their receipt from
tire CirSD. The acknowledgement cards accompanying the consignments should be
promptly dispatched to the CirSD duly signed in full by the officers holding joint custody of
the security forms. The stock of all security forms, after verification and record in the
appropriate registers, will be kept in cupboards/bins, duly locked by tire concerned
official(s), inside the strong room Branches not having strong rooms, should hold them in
FBR safes /cupboards, securely locked and adequately insured against loss by fire. The
books of security forms should bear the evidence of having been counted and checked.
Stationery stored outside the strong room should like-wise be insured against loss by fire.
On receipt, the stocks of security forms will be examined and verified with the relative
invoices received from the CirSD. The total number of books /forms under each category
of the security forms will be recorded in the Stamped and Unstamped Forms Register. All
subsequent deposits and withdrawals of books /forms will be posted in the respective
columns in the above register to show the stock position at any given time. The first and the
last printed serial numbers will be entered under the appropriate headings in separate
registers / sections of the register maintained for different types of the security forms. Each
entry in the registers must be authenticated by the designated officer is) holding custody of
the books/forms. The date a book or a form is subsequently taken out for use will be
recorded under the initials of the official(s) holding custody of the forms
The security forms will be kept in the strong room in the/joint custody of the Cash Officer
and the authorized official jointly in charge of cash. The date on which the forms are brought
into use will be recorded in the relative register under the initials of the joint custodians. It
will be their joint responsibility to ensure that the official who receives the security forms for
use, initials the relevant column of the register in token of receiving the books /forms. They
will be/jointly responsible for the stock of security forms and should exercise proper control
over the issue of security forms held in their joint custody.
The security forms taken out of the strong room for use at the branch will be held in the
single custody of the concerned official During the day. the forms will be delivered for actual
use to the concerned assistants, duly entered in the Security Forms Issued Register.
Before taking the forms in his custody, the receiving assistant will verify the forms and initial
in the register. The security forms will be issued to the concerned assistant on production of
the voucher(s) duly passed /receipted. At the time of issue of the security forms, the
concerned assistant and the official will ensure that the serial is unbroken. When away from
his seat, the assistant must keep the security forms duly locked in his drawer. At the end of
the day, he will return the unused security forms to the official who will account for the forms
issued, including the destroyed forms, and tally the closing stock with the opening stock
and the quantity used during the day. The printed number of the cancelled forms, before
being destroyed, should be cut and pasted in the register in evidence of its destruction
under proper authentication of the official and its details also must be entered in CBS
26
through proper menu. The returned forms will be Held overnight by the official in his custody
duly locked in his FBR safe or a cupboard in the strong room or in a locked box to be kept in
the strong room overnight.
All blank cheque books will be kept under lock and key in the custody of an official not below
the rank of accountant or. at the discretion of the Controlling Authority, any other official. The
number of forms in each cheque book will be counted and checked in his presence when
they are first received at tire branch The first and the Last serial number in each cheque
book, will be altered in the Cheque Book Register, in which other particulars will be
subsequently recorded at the time of issue of the cheque books.
The Bank Guarantee and Letters of Credit forms which are printed on security paper and
bear distinctive numbers, should be kept in charge of a supervising official, duly recorded in
separate registers.
OBSOLETE SECURITY FORMS
PROCEDURE FOR CUSTODY AND DESTRUCTION
The following procedure is prescribed for the custody and subsequent destruction of
security forms, which are rendered obsolete either due to change in their design or due to
change in the scheme / accounting procedure etc. The obsolete security forms, after they
are properly identified, should be segregated and retained in the custody of the two officers
holding joint custody of the security forms. The details of the forms, so withdrawn should be
recorded in a separate register, called ‘Obsolete Security Forms Register (specimen given
below). All entries therein should be authenticated by the said joint custodians. Appropriate
remarks should also be made against the original entries in the Security Forms Register /
Stamped – Unstamped Forms Register.
OBSOLETE SECURITY FORMS REGISTER

per latest

Where it is specifically advised that a change in the design of a particular form will not
render it obsolete, existing stocks of such forms should be exhausted completely before
bringing into use the new design forms. Such forms should not be considered obsolete. The
value of the obsolete security forms so segregated should be arrived at by reference to the
latest stationery valuation sheets received from the stationery deptt. and the same should
be written off after obtaining approval from the appropriate authority. A suitable remark
about writing off should be recorded against the relative entries in the register introduced
for the purpose.
27
After writing off the value, the obsolete security forms should be effectively destroyed in the
presence of the said joint custodians and the Branch Manager / Manager (Accounts), all of
whom will record their signatures in the above register in token of having ensured effective
destruction of the obsolete security forms. The forms will be destroyed either by burning (if
small quantity) or by shredding into minute pieces, manually or otherwise, so that the forms
are rendered irretrievable. The amount raised, if any, from sale of shredded forms will be
credited to the Charges A/c (Sundries).
The Branch Manager, thereafter will send to the Controlling Authority a Certificate of
Destruction (specimen given below), the office copy of which should be retained on branch
/ office record. During the next inspection & audit of the branch / office the Inspecting Official
/Circle Auditor should verify this certificate and point out in his report any lapses observed
by him in this behalf.
SPECIMEN OF CERTIFICATE OF DESTRUCTION
(BRANCH LETTER HEAD)
The Controlling Authority
State Bank of India
_______________
OBSOLETE SECURITY FORMS CERTIFICATE OF DESTRUCTION
We have to advise that the following obsolete security forms were effectively destroyed by
burning / shredding on -----------------, as per the laid down procedure. These forms were
rendered obsolete in terms of LHO Circular No. ------------------------------, dated----------------
Particulars with distinctive members of forms Value written off _____________________
_______
Yours faithfully,
Branch Manager
MAINTENANCE OF RECORDS PERTAINING TO ATM CARD UNDELIVERED
The Bank has prescribed a Register for recording, a few cards which could not be
delivered by the postal authority to the customers owing to improper/incomplete address,
which are returned to the branches for recording in a prescribed register and eventual
delivery to the customer.
Further the bank has stipulated that such undelivered Cards need to be destroyed on expiry
of 45 days to avoid misuse of the instruments against perpetration of fraud. We have
observed that at the time of searching the undelivered Card in respect of the customer, the
Customer Assistants have to spend avoidable manpower besides resorting to unfruitful
activity in locating the instrument and at times they are not able to locate; and simple
solution given to the customer is to seek duplicate ATM pin which is a costly affair besides
affecting the Bank's image in the eyes of customers.

28
In view of the above, it has been decided that the branches will be required to maintain the
record in excel format containing the essential columns as under :

SL. Consig Consign Date Account Name of Sign of Sign of Sign of Date of
No. nment Date of no. Account Officer customer officer Delivery
No. Recei Holder (custodia taking Delivery
pt n) delivery of Card

The sheet be printed on A4 sheet in landscape mode for pasting in the requisite register
when it contains 20 entries in Times New Roman font & 9 font size.(Format enclosed).
This will provide hassle free service to the customers in view of the “Find & Search” option
available in Excel sheet. This will also eliminate chances of non-location of Cards by keying
in the account no. of the customer in the excel sheet. The sample sheet in excel soft format
has been provided at ftp://10.64.9.34/ATM Pins/Cards undelivered which may please be
downloaded for immediate implementation of the instructions. This will ensure uniformity in
maintaining record across the Circle Branches and it would be neat and tidy for
presentation during Inspection & Audit at Branches.
STATIONERY
No Accounting entries will be passed at the branches as and when stationery- is received
from the CirSD. On receipt of the consignment- branches will verify the contents with the
relative ‘Advice -cum- Invoice- of stationery dispatched and the office copy- of the same..
Any discrepancy in the consignment should be immediately pointed out by a special letter
to the CirSD. Stationery received in error should not be returned to the CirSD without prior
reference. Similarly, the attention of the CirSD should be drawn to any inaccuracies that may
be found in the books or forms supplied by them The original of the Advice -cum- Invoice will be
retained by the branch and the duplicate will be forwarded to the CirSD after the branch’s
certification thereon that the stationery covered by the invoice has been duly received and is
correct in terms of the quantity and value. The following details of each invoice will be entered in
a portion of the Stationery Ledger, viz. date of receipt, Invoice number, value of stationery,
amount of pacing & forwarding charges, total amount of Invoice. etc.
Early in February, CirSD will send /originate to all branches Originating Debits and the
relative statement (in duplicate) incorporating the details of stationery supplied by them
during the accounting period (Le. February to January). The branches will verify and
compare the particulars in the statement with their records and respond to the total amount
shown in the Advice. One copy of the statement indicating the date on which the entry was
responded to, will be returned to the CirSD. Entries originated by the CirSD should be
responded, forthwith, by the branches /offices without any alteration in the amount debited
by the CirSD. In case there is any discrepancy in the figures, the branch concerned, should
immediately bring the matter to the notice of the CirSD for their necessary action
The cost of COS forms and sundry articles detailed in the statement received from CirSD
along-with the Originating Debits will be debited to the Charges Account (stationery) at the
receiving branches. The cost of COS forms printed locally and small value sundry articles
(e.g pencil, rubber, clips, pins etc.) purchased locally by branches will also be debited to the
Charges Account (stationery). Proper record of COS forms and sundry articles received
/printed /purchased and used from tune to time will be maintained at the branches. The high
29
valued items of stationery like security forms, books, registers, binders etc. supplied by
CirSD will be debited to the Stationery Account at the receiving branches.
All other stationery must be kept under lock and key in charge of a senior assistant He will
maintain a record of all stationery issued in the Stationery Requisition and Issue Book
which will have two openings, one for articles, such as pens, refills. pencils. rubbers, etc.,
and the other for forms and registers, the custody and issue of which call for more effective
control. A separate page will be allotted to each employee in the first opening and to each
section of the office (eg current, dispatch, etc.) in the second opening of the register. At
divisionalised branches a separate register the above lines may be maintained in each
division.
In the last week of each month the requirements of the employees and the various sections
for the following month, (or, in between for emergency / unforeseen use), will be entered in
the relative page of the Stationery Requisition and Issue Book: wherein an official at least of
the rank of Accountant will sanction the issue of articles /stationery, after satisfying himself
that the demands are justified The assistant in charge of the stationery will thereafter, issue
the stationery to the employees and the officials in charge of the sections against the
recipients’ initials in the said register. The name of the branch, code number and the
appropriate identification letters of the market segments must be clearly impressed, where
necessary, on all stationery before it is issued for use. At least once a month an official of the
rank of Accountant or above will verify the stock of various articles on hand, selected at
random, with the quantities shown in the Stationery Register and will satisfy himself that the
articles are kept in good order.
An account of all stationery received and issued will be maintained in the Stationery
Register, a separate page being allotted to each item of the stationery held. An index of the
items will be maintained in the register. Stationery received will be entered in the
appropriate column in the register on the date of receipt. A list of stationery items, the
custody and issue of which call for more effective control will be supplied to branches by
their Controlling Authority. The issue of stationery items included in this list will be entered in
the register monthly form an abstract of the Stationery- Requisition and Issue Book made at
the end of each month. The number of cheque books, draft books, etc. issued will be
similarly posted in the Stationery Register from the cheque book and the Stamped and
Unstamped Forms Register. In regard to other items, the total issue (ie. Consumption will
be arrived at and the necessary posting made on the basis of opening balances plus
receipts minus the closing stock as on 31" January. The particulars at the head of each
page and all entries in the registers will be checked and initialed by a supervising official or
the Senior Assistant.
Local purchase / printing of stationery, in excess of discretionary power, may be made only
with the sanction of the Controlling Authority
Branches will calculate total value of the closing stock of stationery- as on the 31" January. The
difference between the total value of stationery- thus arrived at and the debit balance of
Stationery Account in the General Ledger as on that date have been passed will be the cost of
stationery- used during the preceding twelve months. The amount will be debited to Charges
Account (stationery-) and credited to Stationery- Account.

30
Disposal of obsolete Stationery
Before the Annual Stock Taking, CirSD will prepare a list of the high valued items which
have become obsolete and circulate it to the branches to enable them to write off the value
of such items, if held. Branches should segregate obsolete items of stationery- on the basis
of the list circulated by the CirSD. Stationery must be written off only with the sanction of the
appropriate authority. The book value of the obsolete stationery to be written off , debited to
the Charges Account (stationery-) and credited to Stationery Account. The writing off of the
obsolete stationery- should be done well before the exercise of Annual Stock Taking so that
these items are not included in the closing stock as on 31st January. As far as possible,
obsolete books and forms should be utilized for some other purposes, (eg. One-side
printed forms/pads/ registers etc. may be used as scribbling paper). In the case of large
quantities the obsolete forms/pads/registers etc. should be sold as ‘scrap’ to the
paper/board mills for repulping and a certificate from the mill confirming pulping of the stock
of obsolete stationer.- is obtained and kept on record. Alternatively, the stock of obsolete
stationery- should be sold only after it is effectively shredded. The sale proceeds of
obsolete stationery should be credited to the Charges Account (sundries). Branches
should submit a detailed statement of obsolete stationery- disposed off to their Controlling
Office for perusal and necessary action.
RECORDS
As per the RBI directives. Bank has formulated a comprehensive Record Retention Policy,
which, inter alia, lays down the following as its main objective:
“Preservation of records in an efficient, secured and cost-effective manner so that
identification and retrieval of records by branches / offices of the Bank. are
facilitated to meet their operational, business, legal, statutory and decision /policy
making requirements in the course of their pursuit of the Bank’s Mission “
The staff responsible for management of records at the branches /offices will ensure to:
I. Establish and maintain a convenient, safe and low cost area for storage of records at
even’ branch /office of the Bank.
II. Manage the records in accordance with the procedure laid down for custody, upkeep,
inspection, retention and destruction of records.
III. Preserve the various records for the laid down prescribed minimum periods.
IV. Retain entire records, by and large, in paper-and-electronic form in branches /offices.
V. Hold the records in digitized images’ or ‘microfilm’ with suitable back-ups. if so required
with the approval of the competent authority to improve the ease and efficiency of the
retrieval /referencing the original records being preserved up to their prescribed
retention periods.
VI. Hold the original records for which secondary record in the form of ‘images’ / ‘microfilm’
has been created, at a central storage location to reduce cost and also to eliminate
congestion and free space in branches /offices.
VII. Maintain at least two sets of back-ups in addition to disk duplexing at computerized
branches, one set being kept on-site in a fire proof safe and the other in an off-site
location, with the approval of the Controlling Authority.
31
 The records at branches /administrative offices will be retained for the periods
mentioned below. However, these are the minimum periods for which the records are to
be retained. Relevant records may be kept for longer periods where circumstances so
warrant, such as in case of suit filed cases, fraud cases, disciplinary cases, etc. Records
relating to inter-office transactions will be preserved for the prescribed minimum periods or
for any longer period as may be specifically instructed by the Controlling Authority in
consultation with the concerned Reconciliation Office. Records/or which no retention
period has been laid down, will be retained for such period as may be determined by the
concerned departments) at the Corporate Centre / Business Group in consultation with the
Systems and Procedures dept. at Ac Corporate Centre. The Record Retention Period-
will be reviewed periodically to accommodate changes in the record retention area in
the light of Statutory /Legislative changes, or introduction of new technologies.
The relevance, adequacy and accuracy of the information and data generated at branches
/offices of the Bank. And other allied areas such as the methods by which information and
data are collected, data warehousing / mining information audit, creation of repositories of
information at different levels and processing of information for management functions,
etc. will be periodically reviewed by the management Information Systems dept. at the
Corporate Centre in consultation with the user departments / functionaries concerned. The
retention periods of the records so generated will be laid down, if not already laid down, in
consultation with the Systems and Procedures dept.
The authority responsible for compliance with the Record Retention Policy will be as under:

Records must be kept tidily and methodically, each book and file being conspicuously
numbered and dated for easy reference The assistant (records) will maintain a Record
Register in which the name of every book or file placed in the record room will be altered
under his initials with its number and first and the last dates as soon as it is received. A
separate page should be used for each type of book or file and then retention period (vide
Annexure R/1) recorded at the top of the page. He will take a receipt in the Record
Requisition Register for each bock or file removed from his charge and must see that all
such records are promptly returned.
Every precaution must be taken to prevent damage to the Bank’s stationery, vouchers or
records by white ants, mildew or dry-rot, any of which should be eradicated immediately on
discovery and the damage repaired as far as possible. The Branch Manager or another-
official not below the rank of Accountant should inspect fire record room at least once a
month for this purpose as well as to ensure that records are being properly kept. He should
at the same time examine the Record Register and Record Requisition Register and see
that they are being properly maintained.
32
 Branch Managers and other officials must keep themselves fully conversant with the
instructions issued by the Controlling Authority in regard to the steps to be taken for the
protection of the Bank’s records in the event of riots, civil commotion. floods, etc. so that
there may be no delay in introducing the necessary arrangements at their branches should
an emergency arise.
RETENTION PERIOD OF VARIOUS RECORDS
Sno PARTICULARS PERIOD
IN YEARS
1 ATTENDENCE REGISTER 5
2 ASSETS HYPOTHECATION REGISTER 8
3 BRANCH MANAGER’S MONTHLY CERTIFICATE REGISTER 5
4 BONUS REGISTER 10
5 BRANCH DOCUMENT REGISTER 20
6 CASH BALANCE BOOK 8
7 CASH CREDIT INSURANCE REGISTER 5
8 CASH CREDIT REGISTER 20
9 CASH RECEIPT AND PAYMENT REGISTER 8
10 CHARGES REGISTER 5
11 CHEQUE BOOK REGISTER 5
12 CHEQUE REFERRED AND RETURNED REGISTER 8
13 COMPLAINT REGISTER 3
14 CURRENCY CHEST BOOKS 8
15 DAK CUM SC REALIZED REGISTER 5
16 VVR ALLOTMENT / VERIFICATION 8
17 DCB REGISTER 3
18 DEMAND LOAN REGISTER 10
19 DOCUMENT EXECUTION REGISTER 20
20 GOLD LOAN LEDGER 10
21 HEAD CASHIERS CASH JOTTING BOOK 8
22 INSPECTION REGISTER 8
23 INSURANCE REGISTER 8
24 INTEREST REALISED ON SECURITIES REGISTER 8
25 INWARD MAIL REGISTER 5
26 LEAVE APPLICATION FILE 3
27 LEAVE REGISTER 45
28 LOCAL MAIL REGISTER 5
29 LOST DOCUMENT REGISTER 10
30 MEDICAL AID REGISTER 5
31 MISC SECURITY REGISTER 20

33
32 OVERTIME REGISTER 5
33 PASSBOOK RETAINED OVERNIGHT 5
34 PETTY CASH BOOK 5
35 POSTAGE BOOK 8
36 POWER OF ATTORNEY REGISTER 60
37 RECORD REGISTER 60
38 REGISTERED LETTERS DESPATCHED REGISTER 8
39 RBI REMITTANCES DRAWN REGISTER 8
40 RBI REMITTANCES ENCASHED REGISTER 8
41 SAFE CUSTODY REGISTER/ LEDGER 20
42 SAFE DEPOSIT LOCKER REGISTER 45
43 SAFE DEPOSIT LOCKER KEY REGISTER 45
44 LOCKER ACCESS REGISTER 10
45 PASSBOOK ISSUED REGISTER 5
46 SECURITY REGISTER/ LEDGER 20
47 SECURITY FORMS ISSUED REGISTER 5
48 SECURITY AND SHARES EX CUSTODY REGISTER 5
49 SECURITY AND SHARES PURCHASE AND SALE REGISTER 8
50 SC DESPATCHED REGISTER 8
51 SMALL COIN DEPOT BOOK 8
52 STATIONERY LEDGER 10
53 STATIONERY REGISTER 5
54 STATIONERY REQUISITION BOOK 5
55 STOCK REGISTER / STOCK INSURANCE REGISTER 8
56 STOPPED CHEQUE REGISTER 5
57 SUSPENSE ACCOUNT REGISTER 8
58 TITLE DEED REGISTER 30
59 VAULT REGISTER 5
60 EQUITABLE MORTGAGE REGISTER 8
61 NOMINATION FORMS 8
62 CHEQUE BOOK ACKNOWLEDGEMENTS 1
63 CHEQUE REQUISITION SLIPS 1
64 DOCUMENTS RELATING TO CLOSED LOAN ACCOUNTS 10
65 DOCUMENTS RELATING TO CLOSED LOCKERACCOUNTS 5
66 LETTER OF INDEMNITY/ SUCCESSION CERTIFICATE 60
67 SURRENDERED SAFE CUSTODY/ DEPOSIT RECEIPTS 10
68 STATIONERY INDENT / INVOICES 5
69 TERM LOAN DOCUMENTS EXECUTION REGISTER 20
70 DEMAND LOAN DOCUMENT EXECUTION REGISTER 10
71 USER IDENTITY ALLOCATION REGISTER PERMANENT
34
 72 COMPUTER HARDWARE ACCESS REGISTER 5
73 SYSTEM ROOM ACCESS REGISTER 5
74 DRAFTS CANCELLED AND DESTROYED REGISTER 8
75 LEASE DEED PERMANENT
76 ROUTINE CORRESPONDENCE RELATING TO PREMISES 20
77 CORRESPONDENCE RELATING TO FIXED ASSETS 5
78 CORRESPONDENCE ON STATIONERY 5
79 CASH VERIFICATION REPORT 5
80 DUPLICATE KEYS DEPOSIT/ WITHDRAWAL 5
81 INB APPLICATION FORMS 8
82 ATM CARD APPLICATION RECEIVED REGISTER 2
83 DUPLICATE ATM CARD ISSUED 3
84 ATM CASH RELATED REGISTERS 8
INCOME LEAKAGE
INCOME MISC CALCULATION
To eliminate the possibility of Income leakage following steps to be taken:
Ÿ All type of service charges including advance related charges are recovered promptly &
correctly as per extant instructions and advance related are recorded in a back-up
Register.
Ÿ Penalties (including penal interest) wherever applicable have been recovered as per
terms of sanction and special stipulations of the Sanctioning Committee.
Ÿ Back-value dated transactions whether manual or through CBS are properly put through
with appropriate authentication with record thereof.
Ÿ Commission on Issue of LC / BG is recovered promptly and correctly. b. Rating of
customers with Forex Exposure as per Margin Matrix has been entered in theMercury /
IFMS. c. Reset of interest rate has been done at stipulated intervals for all Fixed-Rate
Home Loans / Other Term Loans. d. Back up register of concession in interest applied /
service charges maintained with record of sanctioning authority. e. Back-up register is
maintained for recording all entries passed manually through Interest Expense a/c and
Interest Income a/c and are scrutinized & authorized by thecompetent authority.
Ÿ All the income calculation errors detected in earlier audit reports and the current report
have been rectified.
To have effective control over reporting , recovering and monitoring a new software
3rd EYE - Income Leakage Tracker Tool has been introduced
3rd EYE - INCOME LEAKAGE TRACKER TOOL
INTRODUCED BY I & A DEPARTMENT
OBJECTIVE
Income Leakage Tracker Tool Software prevents overlapping in reporting of Income
Leakages by various types of Audits at the Branches. This will also help in authentic
reporting & tracking of the recoveries made by Branches.

35
The software can also help in generating various Income leakage reports branch wise,
audit wise and whole bank level, which facilitate reporting to ACB.
Application URL: http://10.206.90.30:8080/Pages
Ÿ Work Flow for capturing the Income Leakage reported by various inspecting officials.

Ÿ The concept is to have an application to collate information on Income Leakage at the

Branches under inspection.
Ÿ The information can help at compiling information for MIS and bring improvements in
compliance of Bank’s systems and procedures.
Ÿ In this application, the Inspecting Official captures the leakage information with relevant
details.
Ÿ Branch Manager will have to login and enter details of the recovery/refund periodically.
Ÿ All activities on this application are logged. This system is for use of authorized officials only.
Sl No Charges for / Income Detected Recover Balance
1 Non Recovery of Interest
2 Recovery of Interest at lower rates
3 Payment of Excess Interest
4 Exchange on Bankers cheque Issued
5 Exchange on Drafts / TTs issued
6 Commission for Duplicate Drafts issued
7 Commission on Short Credits
8 Commission on DDP of cheques / bills
9 Commission on Inland LCs/BG
10 Bank Guarantee commission
11 Collection Charges on Demand bills
12 Retirement of bills under LC
13 Draft / BC Revalidation / cancellation
14 Issue of Duplicate BC/ STDR
15 Cheques / Bills returned unpaid
16 Return of cheques drawn on branch
17 Charges for Stop Payments
18 Fee for Safe Deposit Receipts
19 Fee for Articles kept in Safe Deposit
20 Rent for Safe Deposit Lockers
21 Charges for Standing Instructions
22 Duplicate Pass Books / Statements issued
23 MICR C/A and SB cheques issued
24 Non MICR C/A & SB cheques issued
36
25 Ledger Folio Charges
26 Minimum Balance Charges
27 Charges for excess debits in SB accounts
28 Service Charges on Inoperative A/cs
29 Account Closure charges
30 Charges for enquiry regarding old records
31 Loan Processing Charges
32 Upfront fee in case of Term Loans
33 Project Appraisal Fee
34 Fees for Limits allocated
35 Inspection Charges
36 Document Charges
37 Late submission of Stock Statements.
38 Late submission of financial statements
39 EM Charges
40 Non payment / Non acceptance of bills
41 P&T Charges recovered
42 ClearingHouseexpensesnotrecoveredfromClearing House memberbanks.
43 Penalty paid to Govt Departments
44 Penalty paid for delayed reporting of Currency Transfer
45 Penalty paid to Customers on late payment of SC, etc.
46 Any other penalty paid
FOREX RELATED AREAS
47 Charges for overdue export bills remaining unpaid beyond 6 months
48 Charges for export documents sent directly by exporter to overseas buyer
49 Charges for Registration of Export Contracts
50 Charges for issuance of Certificates
51 Export LC advising / confirmation charges
52 Collection charges on FC/Re export bills
53 Charges for amendments to LC
54 Charges for booking Forward Contracts
55 Cancellation of forward contracts
56 Charges for issuing opinion reports on our customers to foreign banks
57 Service Charges for operations in EEFC a/c
58 Any other item of revenue loss

v v v
37
Chapter - 5
BCP/DRP And Locking
Up Arrangement
NOTES
 Chapter-5:BCP/DRP and Locking up Arrangement
5 (i) Business continuity Plan
The Business Continuity Guidelines provides a framework to the organization to draw up
an action plan for meeting any crisis (disaster or emergency). It enables the organization to
take appropriate action to overcome the crisis and ensure the organization’s continued
operability. Heads of Branches/Processing Centres/Offices will arrange for periodical
review of the BCP and obtain approval of their Controllers. Heads of Branches/Processing
Centres/Offices shall be responsible to their controllers for BCP and shall submit a
confirmation to this effect in BM’s Monthly Certificate (BMMC). The Certificate to
incorporate that BCP is in place and was last reviewed on …… (date) and testing was
conducted last on ......... (date).
Ÿ BC Plan in case of newly opened Branch/CPC/Office should be drawn and approved
within 15 days from the date of opening.
Ÿ The BC Plan is required to be reviewed and approved as on 30th June every year.

Ÿ BC Plan (new/review) should be formally recorded as per the specified format and put up
to the controller for approval. While approving, the Controller should see that the
designated alternate location should not be in the same premises.
Ÿ On receipt of the approved copy of the BC Plan document, the Branch/Processing
Centre should record the same in ORM Risk Register as also in the Branch Document
for record and inspection purposes by I&MA officials.
Ÿ The Inspecting Officials from ZIO shall monitor the efficacy and maintenance of BC Plan
as part of Operational Risk Management and award marks accordingly.
Ÿ The branch/processing centre/office to invoke BCP within 30 minutes of disruption and
commence functioning from the designated alternate location within one hour of
disruption without waiting for restoration of connectivity.
Ÿ As per regulatory guidelines, Bank’s readiness for Business Continuity Management
(BCM) is placed in the Bank’s website. Bank’s customers are required to be apprised of
the alternate arrangements for their banking requirements in case of need through the
Contact Centre. ORMD will provide the consolidated list of the alternate branches /
processing centres / offices to Contact Centre at yearly intervals.
Ÿ Accordingly, AGM/CM (ORM) at Circles and Business Groups are required to forward
the updated list of the branches, processing centres and offices as on 30th June every
year to the ORMD at Corporate Centre. ORMD in turn will share the list with Bank’s
Contact Centre.
Ÿ BC Plan is required to be tested at least once in a year. General procedure of BCP
(Regular and Surprise) Testing is detailed elsewhere in the Manual.
The Business Continuity Planning has been divided into two parts:
I The planning process: - provides step-by-step Business Continuity Plan preparation
and activation guidance, including readiness, prevention, response, and
recovery/resumption

38
II. Successful implementation and maintenance: - details those tasks required for the
Business Continuity Plan to be maintained as a living document, changing and growing
with the organization and remaining relevant and executable. Business continuity
planning is cyclical.
THE PLANNING PROCESS
This Section addresses the process of preparing a Business Continuity Plan (BCP)
under the following heads:
1. Readiness;
2. Prevention;
3. Response; and
4. Recovery/Resumption.
READINESS
Assign Responsibility
It is essential that senior functionaries of the Bank assume responsibility for creating,
maintaining, testing, and implementing a comprehensive Business Continuity Plan (BCP).
This will ensure that management and staff at all levels within the Bank understand that the
BCP is a critical Senior Management priority. It is equally essential that senior functionaries
engage a ‘‘top down’’ approach to the BCP so that management at all levels of the Bank
understand accountability for effective and efficient plan maintenance as part of the overall
governance priorities.
Responsibilities
The Business Continuity Plan (BCP) shall be prepared by the Branch, Processing Centre
and Office as per the format enclosed.
Identification of Potential Threats
The first step of preparing a BCP is to identify the business process of strategic importance
which is responsible for growth of business and for fulfilment of business goals. Based on the
key processes, we need to identify the potential threats to business operations. The threats
can be classified into three categories: human (theft, industrial strike, virus introduction, etc.),
natural (calamities like earthquake, volcano, fire, flood, etc.) and technical (computer
hardware failure, software program corruption, loss of connectivity, etc.).
Perform Risk Assessment
Step two in the creation of a comprehensive BCP, is completion of a Risk Assessment
template, designed to identify and analyse the types of risk that may impact the branch,
processing centre and office. Assessment can be performed by a group representing
functionaries within the branch, processing centre and office.
Review Types of Risks That Could Impact the Business
Using available information about known or anticipated risks, the branch, processing
centre and office shall identify and review risks that could possibly impact the business and
assign the Scale (1-5) based on the likelihood/frequency. A Risk Assessment matrix can aid
in identification of risks and prioritization of mitigation/ planning strategies.
39
The sample matrix illustrates threat examples and demonstrates how risks can be
categorized and quantified. (This list is illustrative and not exhaustive and may be tailored
to reflect the operating environment).

a. The relative weight of a risk may be calculated as a product of ‘Likelihood or

Probability(Frequency) of Occurrence of the Risk’ and ‘Impact of Severity’ of the losses
if the disruption occurs.

40
b. For example - Higher scores e.g. 50 or 45 (Being arrived at based on Frequency 5 x
Severity 10 [50] or Frequency 5 x Severity 9 [45]) will represent severe risks as
compared to low scores e.g. 5 [1x5] or 10 [2x5] etc.
c. Branch/CPC/Office should set-up resumption/recovery strategies accordingly.
A recovery strategy sets out recovery objectives and priorities that are based on the
Business Impact Analysis. Among other things, it establishes targets for the level of
service the Bank would seek to deliver in the event of a disruption and the framework for
ultimately resuming business operations.
Conduct of Business Impact Analysis (BIA)
BIA is a critical step in developing the business continuity plan. This phase involves
identifying the various events that could impact the continuity of operations and their
financial, human, legal and reputation impact on the organization.
Identify Critical Processes
Business critical processes shall be identified and documented. Once the critical
processes are identified, an analysis of each can be made using the evaluation criteria
described below. Processes shall be ranked as a High, Medium or Low.
Assess Impact if Crisis Were to Happen
a. Human cost: physical and psychological harm to employees, customers, other
stakeholders, etc.
b. Financial cost: equipment and property replacement, downtime, overtime or other
expenses paid to staff and other expenses for restoring system on account of
downtime, stock devaluation, lost sales/business, lawsuits, regulatory fines/ penalties,
etc.
c. Corporate image cost: reputation, standing in the community, negative press, loss of
customers, etc.
Determine Maximum Allowable Outage and Recovery Time Objectives (RTO)
a. Determine how long process can approximately be non-functional before impacts
become Unacceptable
Identify Resources Required for Resumption and Recovery
Such resources can include personnel, technology hardware and software (including
telecommunications), specialized equipment, general office supplies, facility/office space
and critical and vital business records, etc. Identifying, backing-up, and storing critical and
vital business records in a safe and accessible location are essential prerequisites for an
effective BCP.
Strategic Plans Formulation
Strategic planning addresses the identification and implementation of:
a. Methods to mitigate the risks and exposures identified in the BIA and Risk Assessment; and
b. Plans and procedures to respond to any crisis situation that does occur.

41
Crisis Management and Response Team Development
Crisis Management Team (CMT)
CMT shall make all key decisions and coordinate the activities of all other teams. All other
teams will function under the guidance of CMT and report to it. CMT shall receive reports of
damage assessment and decide to activate the BCP, in part or in whole. The CMT vests
with the authority to:
a) Confirm the nature and extent of a disaster;
b) Order the evacuation or shutdown of the facility; and
c) Interface with outside organization, the media with prior consent of the controllers.
As soon as a disaster is declared, the communication regarding the same shall be send to
the respective controller by the Head of the Branch.
Respective Response Team shall communicate with the Service providers for restoration
of services; make necessary arrangements such as display of notices for customers so as
to apprise them of the situation and the steps being taken to restore the normalcy.
Contact Information
Contact information for personnel assigned to crisis management and response teams
may be included in the plans. Personal information such as unlisted phone numbers and
home addresses may be protected.
PREVENTION
Compliance with BCP Policy
Circle Management and Head of respective Business Groups shall ensure that provisions
contained in the Bank’s BCP Policy are complied with to prevent possibility of occurrences
and initiate corrective measures from the learning of the events.
Devise Mitigation Strategies
BCP involves cost implications. While the Bank may consider cost-effective strategies of BCP,
the strategies considered shall provide an adequate level of comfort and assurance in tackling
serious disruptions. Moreover, the mitigating solution will commensurate with the nature and
complexity of their business operations.
Resources Needed for Mitigation
The various resources that would contribute to the mitigation process shall be identified.
These resources, including essential personnel and their roles and responsibilities,
facilities, technology, and equipment shall be documented in the plan and become part of
‘‘business as usual.’’
Monitoring Systems and Resources
Systems and resources will be monitored continuously as part of mitigation strategies. Such
monitoring can be linked to simple inventory management. The resources that will support the
organization to mitigate the crisis will also be monitored continually to ensure that they will be
available and able to perform as planned during the crisis.

42
Declare a Crisis
The point at which a situation is declared to be a crisis be clearly defined, documented, and
fit very specific and controlled parameters.
Execute the Plan
BCPs to be developed around a ‘‘worst case scenario’’ with the understanding that the
response can be scaled appropriately to match the actual crisis. When initiating a
response, it is important to insure that the goals protect the following interests listed in order
of their priority:
a. Save lives and reduce chances of further injuries/deaths;
b. Protect assets;
c. Restore critical business processes and systems;
d. Reduce the length of the interruption of business;
e. Protect reputation damage;
f. Control media coverage (e.g. local, regional, national or global); and
g. Maintain customer relations.
Communications
Basel Committee specifically recognizes that clear, regular communication during a major
operational disruption is necessary to manage a crisis and maintain public confidence.
Identify the Audiences
Internal and external audiences are identified in order to convey crisis and organizational
responses. In order to provide the best communications and suitable messages for various
groups, it is often appropriate to segment the audiences. In this way, messages tailored
specifically for a group can be released.
Official Spokesperson
The Branch shall designate a single primary spokesperson, with back-ups identified, who
will manage/disseminate crisis communications to the media and others. This individual
will be trained in media relations prior to a crisis. All information shall be funneled through a
single source to assure that the messages being delivered are consistent. Personnel will be
informed quickly regarding where to refer calls from the media and that only designated
Bank spokesperson is authorized to speak to the media. In some situations, an
appropriately trained site spokesperson may also be necessary.
RECOVERY AND RESUMPTION
Develop policies, procedures and plans to bring the affected entity out of the crisis, recover/
resume critical processes, and finally return to normal operations. The following steps are
included in the process:
Damage and Impact Assessment
Once the Crisis Management Team has been activated, the damage to be assessed. The
damage assessment may be performed by the Crisis Management Team itself or a
designated Damage Assessment and Salvage Team (DAST). Responsibility be assigned

43
Avoidance
Avoidance has the goal of preventing a crisis from happening. The potential crisis will be
identified, understood, and addressed and, in doing so, avoided. The Risk Assessment can
be used to identify the specifics of potential crises, including any precursors and warning
signs.
Deterrence and Detection
The purpose of deterrence and detection is to make a hostile act (or activity) more difficult to
carry out against the organization or significantly limit, if not negate, its impact. The BCP will
address and include overall deterrence and detection measures. Examples of crises that
call for avoidance or deterrence and detection measures:
a. Workplace violence (erratic or threatening employee behavior);
b. Activism, protests, riots, terrorist attack;
c. Product or manufacturing failure; and
d. Natural disasters.
Natural Disasters
GoI has enacted the Disaster Management (DM) Act in 2005 which enabled creation of
National Disaster Management Authority (NDMA), State Disaster Management Authorities
as also District Disaster Management Authorities (DDMA). In terms of the provision, District
Disaster Management Plan (DDMP) at district level is being drawn. In view of Bank’s
experience in Uttarakhand and J&K, it is considered necessary to appropriately align the
provisions of the DM Act, 2005 with our BCP Policy.
RESPONSE
Potential Crisis Recognition
The first element in a response program is to determine if a potential crisis exists. The
organization will know and be able to easily recognize when specific dangers occur that
necessitate the need for some level of response.
Notify the Team(s)
A potential crisis, once recognized, is immediately reported to a supervisor, a member of
management, or another individual tasked with the responsibility of crisis notification and
management.
Custody and Updates to Contact Information
Qualified personnel to have ready access to the updated, confidential listings of persons
and organizations to be contacted when certain conditions or parameters of a potential
crisis are met.
Assess the Situation
Problem assessment (an evaluative process of decision making that will determine the
nature of the issue to be addressed) and severity assessment (the process of determining
the severity of the crisis and what any associated costs may be in the long run) be made at
the outset of a crisis. Factors to be considered include the size of the problem, its potential
for escalation, and the possible impact of the situation.
44
for the documentation of all incident related facts and response actions, including financial
expenditures.
Process Resumption Prioritization
Once the extent of damage is known, the process recovery needs to be prioritized and a
schedule for resumption determined and documented. The prioritization will take into
account the fundamental criticality of the process and other factors, including relationships
to other processes, critical schedules, and regulatory requirements.
Resumption of Critical Processes
Once the processes to be restored have been prioritized, the resumption work can begin
with processes restored according to the prioritization schedule. The resumption of these
processes may occur at either the current worksite or an alternate worksite, depending on
the circumstances of the crisis. Documentation shall be kept of when the processes were
resumed.
Resumption of Remaining Processes
Once the critical processes have been resumed, the resumption of the remaining
processes can be addressed. Where possible, decisions about the prioritization of these
processes will be thoroughly documented in advance.
Return to Normal Operations
The Bank will seek to bring the Branch/Processing Centre/Office ‘‘back to normal.’’ If it is not
possible to return to the pre-crisis ‘‘normal,’’ a ‘‘new normal’’ should be established. This ‘‘new
normal’’ creates the expectation that, while there may be changes and restructuring in the
workplace, the Bank will phase back into productive work. Each step of the process and all
decisions shall be carefully documented. As a rule, it is at this point that the crisis may be
officially declared ‘‘over.’’ Again, it is important to document this decision. Press conferences
and mass media communications may be undertaken to bolster employee and client
confidence.
PART TWO
IMPLEMENTING AND MAINTAINING THE PLAN
This section of the Guideline contains those functions and tasks required for the Business
Continuity Plan to remain a living and relevant document.
TESTING AND TRAINING
Training and educating team members, as well as general employees, and validate and
enhance the BCP are the parts of testing and training. This further includes:
Training and Awareness
The BCP is only as valuable as the knowledge that others have of it. Education and training
are necessary components of the BCP process. They require a time commitment from the
Crisis Management Team, the Response Teams, etc and all the employees.
Training needs
The Crisis Management and Response Teams be educated about their responsibilities and
duties. Check lists of critical actions and information to be gathered are valuable tools in the

45
education and response processes. Teams shall be trained at least annually and new
members should be trained when they join. All personnel shall be trained to perform their
individual responsibilities in case of a crisis. They shall also be briefed on the key
components of the BCP, as well as the Response Plans that affect them directly.
BCP Testing
Testing is to identify the need to modify the Business Continuity Plan and other aspects of
Bank’s business continuity management, in response to changes in the business,
responsibilities, systems, software, hardware, personnel, or facilities or the external
environment. An independent entity/department, such as internal or external audit, shall
assess the effectiveness of the Bank’s testing programme, review test results and report
their findings to senior management and the Board. BC Plan testing is required to be
conducted at least once in a year.
Benefits of Testing
The benefits and necessity for testing, which involves training and exercises, cannot be
overemphasized. Testing can keep Teams and employees effective in their duties, clarify
their roles, and reveal weaknesses in the BCP that needs to be corrected. A commitment to
testing lends credibility and authority to the BCP. It basically assesses the preparedness of
the organization.
Goals and Expectations
The first step in testing will be the setting of goals and expectations. An obvious goal is to
determine whether a certain crisis response process works and how it can be improved.
Other less obvious goals can be to test capacity (as in the case of a call-in or call-out phone
system, for instance), to reduce the time necessary for accomplishment of a process (for
example, using repeated drills to shorten response times), and to bring awareness and
knowledge to the general employee population about the BCP. Lessons learnt from
previous tests, as well as actual incidents experienced, shall be built into the testing cycle
for the BCP.
Planning and Development
The responsibility for testing the BCP shall be assigned. Establishment of a Test Team can
be considered. Expertise of external resources (consultants, local emergency
organizations, etc.) can be leveraged.
Timeline
A test schedule and timeline as to how often the plan and its components will be tested
needs to be established.
Scope of Testing
The scope of testing to be planned to develop over time.In their infancy, tests to start out
relatively simple, becoming increasingly complex as the test process evolves. Early tests
could include checklists, simple exercises, and small components of the BCP. As the test
schedules evolve, tests to become increasingly complex, up to a full-scale activation of the
entire BCP, including external participation by public safety and emergency responders,
wherever feasible.

46
Test and Exercise Evaluation
After completion, the test will be critically evaluated. The evaluation to include, among other
things, an assessment of how well the goals and objectives of the test were achieved, the
effectiveness of participation, and whether the BCP itself will function as anticipated in the
case of a real crisis
On-going Development of Test Schedules
Design of tests be evaluated and modified as necessary. They shall be dynamic, taking into
account changes to the BCP, personnel turnover, actual incidents, and results from
previous exercises.
Reporting Mechanism
a. CM (GB/Admin) and Operation Risk(OR) Managers at Circles and Business Groups
will ensure that all Branches/CPCs/Offices under their control are having approved-
BCP plans in place.
b. OR Manager at Circles and Business Groups will consolidate the status of review of
BCP Plans and Test (Regular and Surprise) Reports at monthly intervals.
c. CM (GB/Admin) at RBO/AO in the Circle and controllers of Business Groups other than
NBG will ensure to complete the process of drawal / review of BCPPlans and Test
(Regular and Surprise) within the stipulated time frame. OR Managers at Circles and
Business Group will oversee the process and ensure its timely completion.
d. The status report with regard to BCP Plan and BCP (Regular/Surprise) Testing will be
advised by OR Managers at Circles and Business Groups to ORMD at Corporate
Centre in addition to placing it before the respective Risk Management Committees at
AO, LHO and at Business Groups at quarterly intervals.
e. ORMD at Corporate Centre will consolidate the position of BCP Plan and Test
(Regular/Surprise) and place the same before the Committee of BCP Coordinators
(CBC) and Operational Risk Management Committee (ORMC) at quarterly intervals.
Evaluation and Maintenance
Keep the BCP relevant to the organization using a rigorous maintenance and evaluation
programme. The process includes :
Develop BCP Maintenance Schedule
Regular maintenance of the BCP needs emphasis. Clear responsibility for BCP
maintenance will be assigned. Maintenance can be either planned or unplanned and to
reflect changes in the operation of the organization that will affect the BCP. The following are
examples of procedures, systems, or processes that may affect the plan:
a. Systems and application software changes;
b. Changes to the organization and its business processes;
c. Personnel changes (employees and contractors);
d. Supplier changes;
e. Critical lessons learned from testing;

47
f. Issues discovered during actual implementation of the plan in a crisis;
g. Changes to external environment (new roads or changes to existing traffic patterns,
changes in regulation, etc. and
h. Other items noted during review of the plan and identified during the Risk Assessment.
Develop BCP Review Schedule
The BCP shall be regularly reviewed and evaluated. Reviews shall occur according to a
pre-determined schedule, and documentation of the review to be maintained as

5(ii) DISASTER RECOVERY MANAGEMENT

DISASTER MANAGEMENT
The disaster Management Cycle is given below:

Disaster Management Plans for Banks

Function of Bank Security Management: Conventionally, the function of Bank Security is
perceived as measures taken to protect the bank’s assets against crime. However, loss /
damage caused to a bank by disasters can be far greater than the effect of a large number
of crimes. A single earthquake can cause simultaneous devastation in a number of
branches, leading to losses worth several crores. As such preventive measures against all
types of disasters would be prohibitive in terms of cost and may not be pragmatic to
implement across the board against all forms of disasters. It is, therefore, recommended
that banks should take all measures to mitigate the effects of disasters selectively in those
areas which are prone to multiple disasters. In other areas, decisions may be taken on a
case tocase basis.
Disaster Management Policy:
Disaster Management Policy comprising of the following aspects:
a) Mitigation
b) Preparedness
c) Training
d) Insurance
e) Standing Operational Procedures (SOP) for Disaster Response

48
Post disaster actions such as rehabilitation and reconstruction involve multiple agencies
and would take considerable time. Since a large number of population and institutions
would be affected by such disasters, Branches would not be able to seek priority in post-
disaster attention. It is, however, crucial for the Branches to ensure that business activities
are resumed / re-located with minimum loss of time. In order to be able to do that, it is
important for the Regional Managers to make a contingency plan for each Branch so that
disruption to banking services is kept to the minimum.
The first step in making a contingency plan is to assess the vulnerability of the Branches to
such events. This should be done through Security Officers. Information on previous
disasters in that area and severity thereof should be obtained from the local civil and police
authorities so as to make a pragmatic assessment. Once that is done, the structural
strength of the building and premises should be assessed in relation to the potential
hazard. In areas falling in Vulnerability Zone - III (seismic zone)and above, services of a
Structural Engineer should be called in to assess the disaster bearing capability of the
structure in use by the branches. Where necessary, based on the advice from the Bank’s
Civil Engineer, retrofitting of the structure should be carried out on priority. In case of rented
premises, consent for retrofitting should be obtained from the owner

5 (iii) LOCKING UP ARRANGEMENTS

A Memorandum of the Locking up Arrangementsindicatingthe location of the important
keys of the branch, their effective custody etc. should bedrawn up and submitted to the
Controlling Authority. Locking up Arrangements must also be entered in the Branch
Document Register. The changes made/ proposed in the existing arrangements should be
promptly submitted to the Controlling Authority and after receipt of their approval, the
revised approved Locking up Arrangement entered in the Branch Document Register.
The requisite original keys of gate(s)/ door(s)/ entrance(s) of branches which are not
guarded round-the-clock may be handed over by the Branch Manager to an authorized
supervising official during the period of cleaning etc. Under no, repeat no circumstances,
these keys should be handed over to Bank Guard/ any other staff for retention overnight or
for supervising cleaning purposes.

v v v

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Chapter - 6
Cash Department
Procedure
NOTES
 Chapter-6:CASH DEPARTMENT PROCEDURE

Service Manager needs to be conversant in the following areas:

Ÿ Systems and procedures in Cash Department
Ÿ In Branch Cash Handling procedure

Ÿ Clean Note Policy

Ÿ Cash Retention Limit
Ÿ Cash Remittance
Ÿ Detection of forged notes
Ÿ Note Refund Rules
Ÿ CAC(Currency Administration Cell)

6 (i) Systems and procedures in Cash Department

Our branches are classified as Currency Chest branches and Hand balance branches or
non-currency chest branches, depending on whether a branch maintains a currency chest
or not.Currency chest is the property of Reserve Bank of India and we maintain currency
chest as Agent of RBI.
The cash and other valuables in a branch will be held in the joint charge of the Cash Officer
and the BM or Accountant.
Cash Officer is responsible for maintenance of the currency chest &functioning of Cash
department.He is responsible for correctness of the physical cash balance held at the
branch as reflected in various registers of the cash dept. Such as vault register, hand
balance register & Chest register.
At the beginning of the day, he will ensure that all cash boxes are handed over to the
cashiers/SWOs to enable them to undertake receipts & payments. At the end of day, he will
also take over surplus cash from the cashiers.He will also monitor receipts & payments of
cash during the day and arrange to removal of surplus cash from counters or deliver extra
cash to the counter for payments.He will also ensure that the Note sorting/counting
machines are in proper working condition.
At the end of the day, he will reconcile the physical cash in his possession with the balance
reflected in Electronic cash drawer & pass necessary entries.
The cashier has to receive cash from customers for credit to their accounts, count the cash
physically & then tally the amount with the amount written on the receipt form.
He then has to provide acknowledgement on the counterfoil of receipt form to the customer.
He will then enter the denomination wise details of the amount in the account of the
customer in the system. Similarly he will also make payments of cash against the
withdrawal form/cheque tendered by the customer & post the same in the system.
The transactions would be complete when the cash drawer is updated in CBS.

50
At the end of day, each cashier will reconcile his physical cash balance with system cash
balance as reflected in the individual Teller cash report and then hand over the physical
cash to the Cash officer.
The reconciled balance will then be transferred to Cash Officer in system also.
Only after the Cash Officer accepts cash physically and in system, the teller's job would be
completed for the day.
Cash Department operations are mechanized with use of machines for counting, sorting
and bundling currency notes. Fake note detecting machines are also used.
Desktop note counting machines with dual display are provided at the counters so that
customers can also view the counted number.
Receiving cash, sorting of notes into issuable & non-issuable, counting & preparation of
note packets are the responsibility of the cashier/SWO.
Each note packet should contain 100 pieces of the same denomination.
Every employee working in the cash department has to maintain a Cash Receipt/Delivery
book, for recording movement of cash handled by him.
The physical transfer of cash between any two employees will be made only after making
appropriate entries in the register. The employee receiving the cash must acknowledge by
signing against the relative entry in the book of the employee delivering the cash.
The Cashier/SWO has to count and confirm the number of packets in the bundles received by
him. Similarly he must also hand over surplus cash as and when required to the Cash Officer.
The employee receiving the cash will be solely responsible for the custody and safety of all
cash entrusted. He will be provided with a cash box/cash drawers with locking arrangement
and when leaving the counters, he must securely lock the door and keep the keys of the
drawer under his/her custody during the day.
6(ii) Currency Chest:
The objective of RBI's currency management policy is to ensure adequate supply of
currency notes & coins for public convenience.
Currency chest is a reservoir wherein currency notes & coins are stocked and held on
behalf of the RBI. Currency Chest is the property of Reserve Bank of India
SBI as well as other Banks maintain Currency Chests as agents of Reserve Bank of India.
Bank's responsibility to make available good quality notes to general public
Banks receive periodic remittances of notes from RBI and dispatch soiled notes
remittances to RBI periodically.
Operations in Currency Chest:
Every day at the start of operations, the joint custodians withdraw cash from the chest for
daily operations and redeposit cash at the end of the day.
The amount withdrawn/deposited is entered in Vault Register. This Register is always held
in the joint custody of Cash Officer and Accountant and kept inside the strong room.

51
The min transaction in Currency Chest is Rs 1,00,000/- & in multiples of Rs 50,000/-
thereafter. The remainder of cash is retained as hand balance.
RBI has issued guidelines for timely & accurate reporting of currency chest transactions to
monitor the availability of notes & coins.
All transactions are reported to RBI everyday by uploading data through ICCOMS
software. Non-reporting/ delayed/erroneous reporting is penalized by RBI.
Small Coin Depot:
Small Coin Depot is maintained at Currency Chest branches.
Small Coin Depot is the property of Government of India.
The minimum transactions from/to Small coin depot will be Rs.100/- and in multiples of
Rs.50/-.
All denomination of coins below Rs.1/- will form part of Small Coin Depot
The notes and rupee coins in the currency chest, and the small coins in the small coin depot
must be kept distinct from each other and from those in Branch Cash Balance.

6 (iii) In Branch Cash Handling System (IBCH):

At the close of business each day, the cahier/SWO is not required to hand over to the Cash
Officer the entire cash in his possession.
Each Cashier/SWO will be provided with an aluminium cash box (Size14 inch x 11 inch x 4
inches) along with keys. He is required to retain some cash (within the overnight retention
limit fixed) in the cash box. This cash will form part of the branch hand balance.
The locked cash boxes after being marked with suitable identification will be deposited with
the Cash Officer for overnight safe keeping in the vault room under joint custody.
The SWO / Assistant (Cash) etc. who is required to handle cash during the day's operations
will continue to be responsible for the cash handled. They are also responsible for the
custody, safety and correctness of the cash/valuables entrusted to their care
The system of intraday verification of cash acts as a surprise check on the operations of the
cashiers.
Cash Officer arranges to take out the Cash Boxes and hands them over to respective
SWOs after making entries in the Cash Box Receipt or Delivery Register to record handing
over of Cash Boxes to SWO.
Entries in the register are acknowledged by SWO. The SWO or Assistant (Cash) shall
acknowledge receipt in the system and begin the day's activities thereafter.
During the day the cashier receives/makes payments & accounts for the same in the
system. He also sorts/counts & prepares note packets as needed.
He segregates the soiled & issuable notes also.
IBCH: End of the day-
The SWO prepares note packets after sorting. The soiled or mutilated notes should not be
kept in the cash box overnight.

52
The SWO will tally his physical cash - denomination-wise, with the system balance.
In case the cash held exceeds the day-end retention limit fixed for him, the SWO will hand
over surplus cash to CO or to another SWO as directed by the CO. All transfer of physical
cash will be simultaneously inputted in his Cash Drawer in the system.
Cash retention limit for Cash Box is Max Rs 1,00,000/- (Can be increased by Controlling
Authority)
At the end of the day, he will lock his cash box and deposit the box with the cash officer.
Suitable entry will be in the register against signatures of cashier & CO.
At the end of the day, he will lock his cash box and deposit the box with the cash officer.
Suitable entry will be in the register against signatures of cashier & CO.
CO will verify physical cash of individual cashiers with system balance and then reconcile
his Cash Drawer and the physical cash.
By passing necessary entries, he will transfer cash balance of his Cash Drawer to the Vault
Teller (Accountant/Service Manager).
Joint custodian (Account/Service Manager) shall verify physical cash handed over to him
by CO and ensure that the details tally with the details of the cash transferred to him by CO
through the system (Vault Teller).
Details of packets to be turned into the Chest/cash safe are entered in the Vault Register
and duly authenticated by Joint Custodians.
Cash officer will also ensure that all cash boxes are received and actually lodged in the
strong room. The cash in cash boxes will form part of branch cash balance.
IBCH: Custody and retention of the Cash:
Custody of cash
The Cash Box remains overnight in the joint custody of CO and Accountant / Service
Manager.
The cash in the drawer continues to remain in the single custody of SWO and the key of
Cash Box remains with the SWO.
Retention of cash
The original keys of the Cash Box must always be in the possession of the SWO.
The duplicates of the keys of the cash box / drawer will be lodged, in a packet duly sealed by
the Assistant (Cash), in the joint custody of the two officials in joint charge of cash,
valuables, etc. at the Branch along with the keys of the other Assistants (Cash).
A separate section in the key register shall be opened for the purpose and the details of the
keys shall be entered on the lines as is in vogue for the joint custodians' keys.
IBCH-Using duplicate keys for opening cash box:
The circumstances for using duplicate keys for opening the Cash Box. If SWO remains on
leave, without prior approval, If SWO proceeds on sick leave, without handing over the
Cash and his absence is indeterminate Any other unforeseen and emergent
circumstances.

53
The procedure to be followed for using duplicate keys for opening the Cash Box under the
circumstances mentioned above shall be as under:
“Duplicate key of the Cash Box to be, opened shall be withdrawn as per the / extant
instructions. The Cash Box shall be opened with the duplicate key, recording the
circumstances under which the duplicate key was used.”
IBCH: Benefits:
The benefits from in branch cash handling process as under:
There will be no delay in starting customer transactions at the beginning of the day.
The process will reduce the time spent by the Cash Officer/Cashier-in-charge/SWO/
Assistant (Cash) in handing over and receiving cash at the beginning/close of the day.
Clean Note Policy:
Objective of Clean Note Policy of RBI is to provide good quality currency notes & coins to
general public.
It implies that that note packets are not to be stapled with pins but are to be secured with
paper bands etc.
Writing on currency notes is also discouraged.
RBI has directed all banks to sort out notes into issuable and non-issuable, and issue to the
public only the clean notes.
Banks are also required to extend note exchange facilities to public freely based on their
guidelines & note refund rules.
Bank has installed note sorting machines capable of segregating the notes into issuable,
non-issuable and suspect categories in all bank branches.
Note packets are to be prepared as per Clean Note Policy of Reserve Bank of India.
The remittances of non-issuable, soiled and mutilated notes are required to be sent to RBI
at regular intervals.
RBI has a scheme of incentives & penalties for banks in this regard. It is known as the
Currency Distribution & Exchange Scheme for rendering customer service to public.
Cash Retention Limit:
Bank has installed note sorting machines capable of segregating the notes into issuable,
non-issuable and suspect categories in all bank branches.
Note packets are to be prepared as per Clean Note Policy of Reserve Bank of India.
The remittances of non-issuable, soiled and mutilated notes are required to be sent to RBI
at regular intervals.
RBI has a scheme of incentives & penalties for banks in this regard. It is known as the
Currency Distribution & Exchange Scheme for rendering customer service to public.
Cash Retention Limit Policy review (Circular No.: R&DB/BOD-CD/28/2017 – 18 Date: 27
Oct 2017)
Fixing of Cash Retention Limit with peak and nonpeak level for Hand BalanceBranches,
Urban and Metro Branches serviced by CAC/SCAB Branches.
54
The Retention Limit for Cash Points (ATMs/CDMs/Cash Recyclers) to be fixed with an
overall ceiling as per Peak period requirement with the help of appropriate programme and
fixed for one year.
Insurance of Cash and other valuables “On Premises” and “In Transit”.
The existing Cash Retention Limit of the Branches may be reviewed based on the New
Policy document and re-fixed. Cash Retention Limit of Branches may be reviewed in the
months of May/June every year and to make it applicable w.e.f. 1st July every year.
Cash Remittance:
Cash being a physical asset, is required to be transported between branches depending
upon necessity. Due to risk of robbery/dacoity, transportation should be undertaken with
adequate security.
Remittances will be accompanied by a representative of the remitting branch.
Transportation of cash will be done as far as possible in bank's own vehicle or a closed
jeep/van with security guards.
Cash should be transported in steel boxes with locks. The boxes should be secured to the
body of the vehicle with chains. Antecedents of the vehicle owner & driver should be verified
before hand.Secrecy & confidentiality of transportation should be ensured.
Remittances upto Rs 50 Lac will have minimum one armed escort.
Remittances exceeding Rs 50 Lac but below Rs 100 Lac should be accompanied by two
armed guards. (Non- CAC linked Branch)
For CAC Linked – 50 Lac to 300 Lac
All remittances exceeding Rs 100 Lac, whether carried by cash van or hired vehicle, should
be accompanied by police escort (Non-CAC linked).
For CAC linked – above 300 Lac

6 (iv) Detection and Impounding of Counterfeit Notes:

Counterfeit Notes can be impounded by-
(i) All Banks
(ii) All Treasuries and Sub-Treasuries.
(iii) Issue Offices of Reserve Bank of India.
Detection of Counterfeit Currency Notes:
Banknotes tendered over the counter / received directly at the back office / currency chest
through bulk tenders should be examined for authenticity through machines.
No credit to customer's account is to be given for counterfeit notes, if any, detected in the
tender received over the counter or at the back-office / currency chest.
Counterfeit notes should not be returned to the tenderer or destroyed by the bank branches
/ treasuries.
Failure of the banks to impound counterfeit notes detected at their end will be construed as
wilful involvement of the bank concerned in circulating counterfeit notes and penalty will be
imposed.
55
Impounding of Counterfeit Currency Notes:
When a banknote tendered at the counter is found to be counterfeit, an acknowledgement
receipt in the prescribed format must be issued to the tenderer, after stamping the note as
counterfeit note.
The receipt should be authenticated by the cashier and tenderer. The receipt is to be issued
even in cases where the tenderer is unwilling to countersign it. Notice to this effect should
be displayed prominently at the offices / branches for information of the public.
Notes determined as counterfeit shall be stamped as "COUNTERFEIT NOTE" and
impounded in the prescribed format. Each such impounded note shall be recorded under
authentication, in a separate register.
Detection of Counterfeit Notes - Reporting to Police and other bodies:
Procedure to be followed while reporting incidence of detection of counterfeit note to the
Police:
For cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a
consolidated report in the prescribed format should be sent by the Nodal Bank Officer to the
police authorities or the Nodal Police Station, along with the suspect counterfeit notes, at
the end of the month.
For cases of detection of counterfeit notes of 5 or more pieces, in a single transaction, the
counterfeit notes should be forwarded by the Nodal Bank Officer to the local police
authorities or the Nodal Police Station for investigation by filing FIR.
Examination of the Banknotes before Issuing over Counters and Feeding ATMs:
To curb circulation of counterfeit notes through ATMs, adequate safeguards/checks have to
be ensured before loading ATMs with notes.
Dispensation of counterfeit notes through the ATMs would be construed as an attempt to
circulate the counterfeit notes by the bank concerned.
Preservation of Counterfeit Notes Received from Police Authorities:
All Counterfeit Notes received back from the police authorities/courts may be carefully
preserved in the safe custody of the bank and a record thereof be maintained by the branch
concerned. Forged Note Vigilance Cell of the bank will maintain a branch-wise
consolidated record of such Counterfeit Notes.
These Counterfeit Notes at branches should be subjected to verification on a half-yearly
basis (on 31st March and 30th September) by the Officer-in- Charge of the bank office
concerned. They should be preserved for a period of three years from the date of receipt
from the police authorities.
6 (v) RBI NOTE REFUND RULES:
RBI Note Refund Rules framed: (Section Sec.58 (1) & 58(2) (q) of RBI Act 1934)
Refund: not a right, but matter of grace: (Sec.28, RBI ACT 1934)
RBI Note Refund Rules 2009
• To mitigate hardship of general public, value of imperfect, mutilated or soiled notes may
be refunded.
56
• All bank branches delegated powers under rule 2(j) of RBI (NR) Rules 2009, to
exchange value of such notes free of cost.
• Adequate publicity to be given by banks
(Please refer to the Master Circular DCM(NE)No. G-1/08.07.18/2016-17 dated July 18,
2016 containing instructions on the facility for exchange of notes and coins).
Rule 8 - MUTILATED NOTES
(For Re 1, Rs 2, Rs 5, Rs 10 & Rs 20 notes)
Rule 8(1) (i) - Full Value (any portion > 50%)
Rule 8(1) (ii) – ANY PORTION < 50% Rejection of claim
(For Rs 50 and above denomination Notes)
Rule 8(2) (i) –Full value (any portion > 65%)
Rule 8(2) (ii) -Half value (any portion > 40% and <=65%)
Rule 8(2) (iii) –Rejection of claim (any portion <= 40%)
Rule 8(2) (iv) –Two half pieces of the same note (Full)
Liberalized definition of Soiled Notes:
SOILED NOTE: A 'soiled note' means a note which has become dirty due to normal wear
and tear and also includes a two piece note pasted together wherein both the pieces
presented belong to the same note and form the entire note with no essential feature
missing.
These notes should be accepted over bank counters in payment of Government dues and
for credit to accounts of the public maintained with banks.
However, in no case, these notes should be issued to the public as re-issuable notes and
shall be deposited in currency chests for onward transmission to RBI offices as soiled note
remittances for further processing.
Mutilated Notes:
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 designated bank branches of
the banks. The notes so presented shall be accepted, exchanged and adjudicated in
accordance with Reserve Bank of India (Note Refund) Rules 2009.
Currency Administrative Cell:
Currency Administration Cells have been opened by the Bank in all important towns. The
cash and remittance requirements of branches are being taken care by CAC.
Quantitative benefits
.Cash Optimization
.Transport Optimization
.Manpower Optimization
Qualitative benefits:
.Reduction of work load at Branches
Reporting and liaison with RBI will improve

v v v 57
Chapter - 7
KYC/AML Norms &
FATCA-CRS, CKYC,
Dealing with Discrepant AOF
and Dormant Accounts
Shell Companies, Fictitious
Offer of Funds, Hoax Caller
NOTES
 Chapter-7:KYC/AML, FATCA/CRS

7 (i) Know Your Customer & Anti money Laundering

Reserve Bank of India has specified Know Your Customer (KYC) standards to be followed
by banks and measures to be taken in regard to Anti Money Laundering (AML) and
Combating of Financing of Terrorism (CFT). The guidelines incorporate:
Ø Obligations cast on banks under the Prevention of Money Laundering Act (PMLA),
2002
Ø Recommendations made by the Financial Action Task Force (FATF) on AML
standards and CFT
Ø Customer Due Diligence (CDD) for banks as stipulated by the Basel Committee on
Banking Supervision
Banks are required to put in place comprehensive policy / procedural guidelines and this
Policy has been prepared, in line with the RBI guidelines, and incorporating Bank's
approach to KYC, AML and CFT issues.

OBJECTIVE, SCOPE AND APPLICATION

The primary objective of the KYC, AML & CFT Policy of the Bank, hereinafter called the
Policy, is to prevent the Bank from being used, intentionally or unintentionally, by criminal
elements for money laundering or financing of terrorism. Purposes proposed to be served
by the Policy are:
Ø To prevent criminal elements from using the Bank for money laundering activities
Ø To enable the Bank to know/understand the customers and their financial dealings
better which, in turn, would help the Bank to manage risks prudently
Ø To put in place appropriate controls for detection and reporting of suspicious activities
in accordance with applicable laws/laid down procedures.
Ø To monitor cash transactions for filing of Cash Transaction Reports
Ø To file Counterfeit Currency Reports in cases of detection of counterfeit currency.
Ø To comply with applicable laws and regulatory guidelines.
Ø To ensure that the concerned staff are adequately trained in KYC/AML/CFT
procedures.
Ø To facilitate monitoring of transactions in Non-Profit Organizations (NPO) and file
NPO Transactions Reports
DEFINITION OF MONEY LAUNDERING
Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) has defined the
“offence of money laundering” as under:
“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
(including its concealment, possession, acquisition or use) and projecting or claiming it as
untainted property shall be guilty of offence of money laundering”.
58
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 usually involves creating a web of financial transactions so as to hide the origin
and true nature of these funds.
For the purpose of this document, the term money laundering would also cover financial
transactions where the end use of funds goes for financing of terrorism irrespective of the
source of the funds.
OBLIGATIONS UNDER PREVENTION OF MONEY LAUNDERING ACT, 2002
Section 12 of PMLA places the following obligations on the Bank:
I. maintaining a record of prescribed transactions
II. furnishing information of prescribed transactions to the specified authority
III. verifying and maintaining records of the identity of its clients (in other words
complying with the KYC requirements) and identifying the beneficial owners, if any,
of such clients
IV. preserving records in respect of (i) and (ii) above for a period of five years from the
date of transactions, and in respect of (iii) above for a period of five years after the
cessation of relationship with the clients in respect of account opening forms and
KYC documents.
KEY ELEMENTS OF THE POLICY
The KYC/AML/CFT Policy of the Bank has the following key elements:
• Customer Acceptance Policy
• Customer Identification Procedures
• Monitoring of Transactions and
• Risk Management
CUSTOMER ACCEPTANCE POLICY.
Bank's Customer Acceptance Policy (CAP) lays down the criteria for acceptance of
customers.
CUSTOMER ACCEPTANCE
The guidelines in respect of the customer acceptance in the Bank, broadly, are:-
(I) No account is to be opened in anonymous or fictitious/benami name(s)/entity (ies). In
other words, thorough checking of antecedents to avoid opening of accounts in
fictitious/benami names.
(ii) Accept customers only after verifying their identity.
(iii) Not to open an account where the Bank is unable to apply appropriate customer due
diligence measures i.e. , unable to verify the identity and / or obtain required documents as
are required as per the risk categorization due to non-cooperation of the customer or non-
reliability of the documents/ information furnished to the Bank. The Bank may also consider
closing an existing account under similar circumstances
59
(iv) It should be ensured that identity of customer does not match with any person or entity
whose name appears in the sanctions lists circulated by Reserve Bank of India.
(v) Fill up the data properly and completely in all fields relating to the customer and
classify customers into various risk categories and, based on risk perception, apply the
acceptance criteria for each category of customers. Also, a profile of each customer will be
prepared based on risk categorization. Steps should be taken to identify and assess their
Money Laundering/ Financing of Terrorism (ML/FT) risk for customers, countries and
geographical areas as also for products/ services/ transactions/delivery channels.
Enhanced measures to be adopted for products, services and customers with a medium or
high risk rating. In this regard, the bank may use, for guidance in its own risk assessment, a
Report on Parameters for Risk-Based Transaction Monitoring (RBTM) dated March 30,
2011 issued by Indian Banks' Association.
(vi) Documentation requirements and other information to be collected, as per PMLA,
RBI and Bank's guidelines/instructions are to be complied with
(vii) Accounts of persons having relationships with banned entities such as individual
terrorists or terrorist organizations etc. are not to be opened. While information relating to
them will be shared from time to time, branches will also have to be guided by the
information available in public domain for the purpose.
(viii) Further, accounts should not be opened for persons convicted for predicate offences
such as money laundering, terrorist activities, drug trafficking, bank frauds, immoral
trafficking etc.
(viii) Accounts of persons who have been convicted and are lodged in jails can be opened,
with suitable safeguards decided on case to case basis, jointly with the Superintendent of
the respective Jail, with a view to ensuring financial inclusion, provided such persons have
not been punished for predicate offences. However, it should be ensured that banking
facilities are not denied, for genuine purposes, merely for the reason that criminal charges
have been leveled against them or they have undergone some form of punishment in the
past.
(ix) It is important to bear in mind that the adoption of Customer Acceptance Policy and its
implementation should not become too restrictive and must not result in denial of banking
services to general public, especially to those, who are financially or socially
disadvantaged.
CUSTOMER IDENTIFICATION
Customer identification means undertaking client due diligence measures while
commencing an account-based relationship including identifying and verifying the
customer and the beneficial owner on the basis of one of the Officially Valid Documents
(OVDs).
Customer identification requires identifying the customer and verifying his/her identity by
using reliable, independent source documents, data or information. Thus, the first
requirement of Customer Identification Procedures (CIP) to be satisfied is that a
prospective customer is actually who he/she claims to be. The second requirement of CIP
is to ensure that sufficient information is obtained on the identity and the purpose of the
60
intended nature of the banking relationship. This would enable risk profiling of the customer
and also to determine the expected or predictable pattern of transactions.
'Mandatory' information required for KYC purpose, which the customer is obliged to give,
shall be obtained at the time of opening an account or during periodic updation. Other
'optional' customer details/additional information, if required, may be obtained separately
after the account is opened with the explicit consent of the customer. The information {both
'mandatory' (obtained before opening the account) and 'optional' (after opening the
account with the explicit consent of the customer)} collected from the customer is to be
treated as confidential and details thereof are not to be divulged for cross selling or any
other purpose.
Extra care should be taken while opening accounts of various firms and companies
belonging to the same group especially in the light of beneficial owners/real beneficiaries of
such group accounts and under no circumstances accounts of shell companies/firms
should be opened in Bank's books.
Unique Customer Identification Code (UCIC)
The increasing complexity and volume of financial transactions necessitate that customers
do not have multiple identities within a bank, across the banking system and across the
financial system. This can be achieved by introducing a unique identification code for each
customer. The Unique Customer Identification Code (UCIC) will help banks to identify
customers, track the facilities availed, monitor financial transactions in a holistic manner
and enable banks to have a better approach to risk profiling of customers. It would also
smoothen banking operations for the customers. In our Bank, we have Customer
Information File (CIF), where all the accounts of the same customer should be tagged. A
customer should not be allotted more than one CIF.
Identification data, as under, would be required to be obtained in respect of different
classes of customers:
a. FOR CUSTOMERS WHO ARE NATURAL PERSONS:
Proof of identity and proof of address
Recent photograph
b. FOR CUSTOMERS WHO ARE LEGAL PERSONS:
a) Legal status of the legal person/entity through proper and relevant documents
b) Verification that any person purporting to act on behalf of the legal person/entity is so
authorized and identity of that person is established and verified
c) Understand the ownership and control structure of the customer and determine who are
the natural persons who ultimately control the legal person (beneficial owners)
Wherever applicable, information on the nature of business activity, location, mode of
payments, volume of turnover, social and financial status etc. will be collected for
completing the profile of the customer.

61
The Customer Identification Procedure (CIP) is to be carried out at the following different
stages as per details given below:-
(i) while establishing a banking relationship;
(ii) while carrying out a financial transaction;
(iii) when the bank/FI has a doubt about the authenticity or adequacy of the customer
identification data it has obtained;
(iv) when banks sell third party products as agents;
(v) while selling banks' own products, payment of dues of credit cards/sale and
reloading of prepaid/travel cards and any other product for more than Rs.50,000/-.
(vi) when carrying out transactions for a non-account based customer, that is a
walk-in customer, where the amount involved is equal to or exceeds Rs.50.000/-. whether
conducted as a single transaction or several transactions that
appear to be connected.
(vii) when a bank/FI has reason to believe that a customer (existing or walk-in) is intentionally
structuring a transaction into a series of transactions below the threshold of Rs. 50,000/-.
Periodic updation of KYC
A. Customer Due Diligence (CDD) requirements for periodic updation:
Periodical updation of KYC information of every customer which should include the
following should be carried out.
(I) KYC exercise should be done at least every two years for high risk customers, every
eight years for medium risk customers and every ten years for low risk customers. Such
KYC exercise may include all measures for confirming the identity and address and other
particulars of the customer that the bank may consider reasonable and necessary based
on the risk profile of the customer, taking into account whether and when client due
diligence measures were last undertaken and the adequacy of data obtained.
(ii) Fresh proofs of identity and address at the time of periodic updation need not be sought
from those customers who are categorized as 'low risk', in case there is no change in status
with respect to their identities and addresses. A self-certification by the customer to that
effect should suffice in such cases. In case of change of address of such 'low risk'
customers, they could merely forward a certified copy of the document (proof of address)
by mail/post, etc. Physical presence of such low risk customer at the time of periodic
updation should also be not insisted. The time limits prescribed at (i) above would apply
from the date of opening of the account/ last verification of KYC.
(iii) Fresh photographs to be obtained from minor customer on becoming major.
B. Freezing and closure of accounts
(I) In case of non-compliance of KYC requirements by the customers despite repeated
reminders, 'partial freezing' on such KYC non-compliant accounts may be imposed in a
phased manner.

62
(ii) During the course of such partial freezing, the account holders can revive their
accounts by submitting the KYC documents as per instructions in force.
(iii) While imposing 'partial freezing', it should be ensured that the option of 'partial
freezing' is exercised after giving due notice of three months initially to the customers to
comply with KYC requirements to be followed by a reminder giving a further period of three
months.
(iv) Thereafter, 'partial freezing' may be imposed by allowing all credits and disallowing all
debits with the freedom to close the accounts.
(v) If the accounts are still KYC non-compliant after six months of imposing initial 'partial
freezing' all debits and credits from/to the accounts should be disallowed thereby rendering
them inoperative.
(vi) Further, it would always be open to the bank to close the account of such customers
after issuing due notice to the customer explaining the reasons for taking such a decision.
Such decisions, however, need to be taken at a reasonably senior level. The competent
authority to permit closure of such accounts shall be the Branch Head not below the rank of
Senior Management Grade. In all other cases, Asst. General Manager (Region) of the
branch/Dy.
General Manager (B & O) shall be the competent authority to permit closure of such
accounts.
In the circumstances where it is believed that the Bank would no longer besatisfied about
the true identity of the account holder, a Suspicious TransactionReport (STR) should be
filed with Financial Intelligence Unit - India (FIU- IND) under Department of Revenue,
Ministry of Finance, Government of India.
CUSTOMER IDENTIFICATION PROCEDURE
ACCOUNTS OF INDIVIDUALS
The customer identification will be on the basis of documents provided by the customer as
(a) proof of identity and (b) proof of address. Prescribed application form along with
Photographs of the customer is to be invariably obtained in all cases.
For opening accounts of individuals, customer should submit one certified copy of an
'Officially Valid Document' (OVD) containing details of identity and address, one recent
photograph and such other documents pertaining to the nature of business and financial
status of the customer as may be required by the bank
A customer is required to submit only one OVD for both proof of identity and for proof of
address as part of KYC procedure. If the OVD submitted for proof of identity does not have
the proof of address (for e.g., PAN Card), then the customer is required to submit another
OVD for proof of address.
Similarly, a customer is required to submit only one OVD as proof of address (either current
or permanent) for KYC purpose. In case the proof of address furnished by the customer is
neither the local address nor the address where the customer is currently residing, a
declaration should be taken from the customer of her/his local address on which all
correspondence will be made by the bank with the customer. No proof is required to be
63
submitted by the customer for such address. This address, however, should be verified by the
Bank through 'positive confirmation' such as acknowledgment of receipt of letter, cheque
books, ATM cards; telephonic conversation; visits to the place; etc. In the event of any change
in this address due to relocation or any other reason, customers should intimate the new
address for correspondence to the bank within two weeks of such a change.
In case the address mentioned as per 'proof of address' undergoes a change,fresh proof of
address is to be submitted to the bank within a period of six months.
In case of close relatives, e.g. husband, wife, son, daughter and parents, etc. who live with
their wife, husband, father/mother, daughter and son, who do not have officially valid
document for address verification, then, in such cases, banks/FIs should obtain OVD for
proof of address and identity of the relative with whom the prospective customer is living
together with a declaration from the relative that the said person (prospective customer)
proposing to open an account is a relative and is staying with her/him.
A document (OVD) shall be deemed to be an “Officially Valid Document” even if there is a
change in the name subsequent to its issuance, provided it is supported by a marriage
certificate issued by the State Government or a Gazette notification, indicating such a
change of name. Accordingly, operating functionaries may accept a copy of marriage
certificate issued by the State Government or a Gazette notification indicating change in
name together with a certified copy of the OVD in the existing name of the person for
establishing an account based relationship or while undergoing periodic updation exercise.
The list of various documents that can be accepted as proof of identity and proof of address
are given below:
(a) Proof of identity and address required at the time of opening of the account of an
individual:
As per Rule 9 of the PML Amendment Rules 2013, any one document from the “Officially
Valid Documents” is only allowed. They are:
(i) Passport
(ii) Driving License
Permanent Account Number (PAN) Card (authenticity to be invariably cross checked
with CBDT web site before opening the account)
(iii) Voter's Identity Card issued by Election Commission of India,
(iv) Job Card issued by NREGA duly signed by an officer of the State Government
(v) The letter issued by Unique Identification Authority of India (UIDAI) containing details
of name, address and Aadhar Number.
It is implied that proof of address also follows from the above documents only.
Henceforth, only the documents mentioned above would be accepted for opening of
accounts of individuals. Bank does not have the discretion to accept any other
document.
Document accepted for proof of identity may be verified through internet using website of
public/concerned authority wherever such information is available online.
64
RECENT CHANGES
1. The Central Government in consultation with the Reserve Bank of India has made
amendments to the Prevention of Money laundering(Maintenance of Records) Rules,
2005. These rules are called the Prevention of Money laundering(Maintenance of Records)
Second Amendment Rules, 2017. Salient features of the amendments to the Rules are as
under:
2. Aadhaar & Permanent Account Number (PAN) is no longer in the list of Officially Valid
documents (OVDs) but these two documents have been made mandatory for the purposes
specified in Para 4 below.
3. The list of OVDs consist only the following five OVDs:
i. the passport,
ii. the driving license,
iii. the Voter's Identity Card issued by Election Commission of India,
iv. job card issued by NREGA duly signed by an officer of the State Government,
v. the letter issued by the National Population Register containing details of
name, address, or any other document as notified by the Central Government
in consultation with the Regulator.
4. An Individual customer (who is eligible to be enrolled for an Aadhar number)shall submit
to the Bank (i) the Aadhar number issued by the Unique Identification Authority of India and
(ii) the Permanent Account Number or Form No. 60 as defined in Income-tax Rules, 1962,
and such other documents which may be required by the Bank in respect of the nature of
business and financial status of the customer for the following purposes:
(a) At the time of commencement of an account based relationship, i.e. at the time of
account opening,
(b) in all other cases while carrying out transaction of an amount equal to or exceeding
rupees fifty thousand, whether conducted as a single transaction or several transactions
that appear to be connected, or any international money transfer operations.
5.In case Aadhar number is not available with the customer, he/she shall furnish proof of
application of enrolment for Aadhar and in case PAN is not available, one certified copy of a
OVDs from the list mentioned in Para-3 shall be submitted.
Explanation: Four scenarios occur, depending upon the availability of Aadhar & /or
PAN, as below:

65
Note: In case the identity information relating to the Aadhar number or PAN
submitted by the customer referred to in Para-4 to Para-11 of this circular does not
have current address of the customer, he/she shall submit an OVD showing the
current address to the Bank.
e-Aadhar: Banks are authorized by RBI to print/download directly, the prospective
customer's e-Aadhar letter from the UIDAI portal if such a customer knows only his/her
Aadhar number or if the customer has only a copy of Aadhar downloaded from a
place/source elsewhere, provided the prospective customer is physically present in the
branch/ office of the Banks.
In this regard, the Branches can download the information containing demographic details
and photographs from UIDAI through e-KYC process (“which is in an electronic form and
accessible so as to be usable for a subsequent reference”) and the same is treated as a
Valid Document.
6. An Individual, who is not eligible to be enrolled for an Aadhar number, shall submit
the PAN or Form No. 60 as defined in the Income-tax Rules, 1962 to the Bank for the
purpose mentioned in Para-4 above. In case the customer does not submit the PAN, he
shall submit Form No. 60 and one certified copy of OVDs containing details of his identity
and address, one recent photograph and such other documents which may be required by
the Bank in respect of the nature of business and financial status of the customer.
Explanation: From Para-6 where Aadhar will not be available, two scenarios occur,
depending upon the availability of PAN, as below:
Scenario Documents required
Scenario-1 PAN & one certified copy of OVD (Para-3)
Scenario-2 Form 60 & one certified copy of OVD (Para-3)
7. However, an Individual, who desires to open a small account in a Bank, may be allowed
to open such an account on production of a self-attested photograph and affixation of
signature or thumb print on the form for opening the account provided
(i) the designated officer of the Bank, while opening the small account, certifies under his
signature that the person opening the account has affixed his signature or thump print, as
the case may be, in his presence;
(ii) the small account shall be opened only at Core Banking Solution linked Branches or in
a branch where it is possible to manually monitor and ensure that foreign remittances are
not credited to a small account and that the stipulated limits on monthly and annual
aggregate of transactions and balance in such accounts are not breached, before a
transaction is allowed to take place. As our all Branches are on CBS platform, the stipulated
threshold limits are controlled systemically;
(iii) the small account shall remain operational initially for a period of twelve months, and
thereafter, for a further period of twelve months if the holder of such an account provides
evidence before the Bank of having applied for any of the OVDs within twelve months of the
opening of the said account, with the entire relaxation provisions to be reviewed in respect
of the said account after twenty- four months;

66
(iv) the small account shall be monitored and when there is suspicion of money laundering
or financing of terrorism or other high risk scenarios, the identity of customer shall be
established through the production of the documents, as referred to in Para-2 or where an
Aadhar number has not been assigned to the customer, through the production of proof of
application towards enrolment for Aadhar along with an officially valid document;
Further it is clarified that if the customer is not eligible to be enrolled for an Aadhar number,
the identity of customer shall be established through the production of OVDs;
(v) the foreign remittance shall not be allowed to be credited into the small account unless
the identity of the customer is fully established through the production of documents, as
referred to Para-2 or where an Aadhar number has not been assigned to the customer,
through the production of proof of application towards enrolment for Aadhar along with an
OVD provided that if the customer is not eligible to be enrolled for the Aadhar number, the
identity of customer shall be established through the production of an OVD.
8. Where the customer is a company, it shall for the purposes of mentioned in Para-4,
submit to the Bank the certified copies of the following documents:
(i) Certificate of incorporation;
(ii) Memorandum and Articles of Association;
(iii) A resolution from the Board of Directors and power of attorney granted to its
managers, officers or employees to transact on its behalf;
(iv) PAN of the Company; and
(v) (a) Aadhar number and (b) PAN or Form 60 as defined in the Income-tax Rules,
1962, issued to managers, officers or employees holding an attorney to transact on
the company's behalf or where an Aadhar number has not been assigned, proof of
application towards enrolment for Aadhar and in case Permanent Account Number
is not submitted an officially valid document shall be submitted.
Provided that for the purpose of this clause if the managers, officers or employees holding
an attorney to transact on the company's behalf are not eligible to be enrolled for Aadhar
number and do not submit the Permanent Account Number, certified copy of an officially
valid document shall be submitted.
9. Where the customer is a partnership firm, it shall, for the purposes mentioned in Para-
4, submit to the Bank the certified copies of the following documents:—
(i) registration certificate;
(ii) partnership deed; and
(iii) PAN of the Partnership Firm;
(iv) (a) Aadhar number; and (b) Permanent Account Number or Form 60 as defined in the
Income-tax Rules, 1962, issued to the person holding an attorney to transact on its
behalf or where an Aadhar number has not been assigned, proof of application
towards enrolment for Aadhar and in case Permanent Account Number is not
submitted an officially valid document shall be submitted.
Provided that for the purpose of this clause, if the person holding an attorney to transact on
the company's behalf is not eligible to be enrolled for Aadhar number and does not submit
the PAN, certified copy of an officially valid document shall be submitted.

67
10. Where the client is a trust, it shall, for the purposes mentioned in Para-4 submit to the
Bank the certified copies of the following documents:
(i) registration certificate;
(ii) trust deed;
(iii) PAN of the Trust; and
(iv) (a) Aadhar number; and (b) Permanent Account Number or Form 60 as defined in the
Income-tax Rules, 1962, issued to the person holding an attorney to transact on its
behalf or where Aadhar number has not been assigned, proof of application towards
enrolment for Aadhar and in case Permanent Account Number is not submitted an
officially valid document shall be submitted:
Provided that for the purpose of this clause if the person holding an attorney to transact on
the company's behalf is not eligible to be enrolled for Aadhar number and does not submit
the Permanent Account Number, certified copy of an officially valid document shall be
submitted.
11. Where the client is an unincorporated association or a body of individuals, it shall
submit to the Bank the certified copies of the following documents:
(i) resolution of the managing body of such association or body of individuals;
(ii) power of attorney granted to him to transact on its behalf;
(iii) (a) the Aadhar number; and (b) Permanent Account Number or Form 60 as defined in the
Income-tax Rules, 1962, issued to the person holding, an attorney to transact on its behalf or
where Aadhar number has not been assigned, proof of application towards enrolment for Aadhar
and in case the PAN is not submitted an officially valid document shall be submitted; and
(iv) such information as may be required by the Bank to collectively establish the legal
existence of such an association or body of individuals:
Provided that for the purpose of this clause if the person holding an attorney to transact on
the company's behalf is not eligible to be enrolled for Aadhar number and does not submit
the PAN, certified copy of an officially valid document shall be submitted.
12. Branches, at the time of receipt of the Aadhar number under provisions of this rule, shall
carry out authentication using e-KYC authentication facility or Yes/No authentication
facility provided by Unique Identification Authority of India.
13. (a) In case the customer referred to in (4) and (11) above is not a resident or is a resident in
the States of Jammu and Kashmir, Assam or Meghalaya and does not submit the PAN, the
customer shall submit to the Bank one certified copy of OVD containing details of his identity
and address, one recent photograph and such other documents which may be required by the
Bank in respect of the nature of business and financial status of the customer.
Explanation: From Para-13 two scenarios occur, depending upon the availability of
PAN, as below:

68
(b) In terms of Government of India, Ministry of Finance, Department of Financial Services
Letter No. F. No.20/2/2010-FI/ (Vol. II) (C-58530) dated 2nd August, 2017, it is clarified that in
case the customer is not a resident (as defined in clause (v) of section 2 of the Aadhar
(Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, i.e.
he is not an individual who has resided in India for period/periods amounting in all to 182
days or more in the 12 months immediately preceding the date of application for Aadhar
enrolment), or is a resident in the States of Jammu & Kashmir, Assam or Meghalaya, he
may be allowed to open such an account without submission of Aadhar number.
14. New Accounts:In case the customer, eligible to be enrolled for Aadhar and obtain a
PAN, referred to in Para-4 to Para-11 above does not submit the
Aadhar number or the PAN at the time of commencement of an account based relationship
with a Bank; the customer shall submit the same within a period of six months from the date
of the commencement of the account based relationship. In case the customer fails to
submit the Aadhar number and PAN within the aforesaid six months period, the said
account shall cease to be operational till the time the Aadhar number and PAN is submitted
by the customer.
Explanation: It is clarified that if the account is opened, say on 20.09.2017, on the
basis of proof of application of enrolment for Aadhar and/or Form 60, the customer
will have to submit Aadhar and PAN positively by 20/03/2018 (within six months from
the date of opening of the account) failing which the account will not be operational
after 20/03/2018.
15. Existing Accounts:The customers, eligible to be enrolled for Aadhar and obtain the
PAN, already having an account based relationship with Banks prior to 1st June, 2017, the
customers shall submit the Aadhar number and PAN by 31st December, 2017 failing which
the said account shall cease to be operational till the time the Aadhar number and PAN is
submitted by the customer.
The Central Government vide Prevention of Money-laundering (Maintenance of Records)
Fifth Amendment Rules, 2017 (Gazette Notification dated 16th October, 2017) has provided
explanation in respect of certified copy of original documents as under:
“Obtaining a certified copy by reporting entity shall mean comparing the copy of officially valid
document so produced by the client with the original and recording the same on the copy by
the authorized officer of the reporting entity in a manner prescribed by the regulator.”
With above provision, we advise all Branches/Operating Units to ensure as under:
i. While establishing a relationship with a customer, i.e. opening an account or making
certain transaction, e.g. cash transaction exceeding Rs. 50,000/-, a physical copy of the
OVD, duly signed by the customer, containing details of Identity and address, as specified
in our e-circular dated 23rd October, 2017, should be obtained.
ii. Such physical copy is required to be compared with the original OVD and
iii. The fact of such comparison is required to be recorded on the copy itself by an
authorized official of the Branch under his signature. The legend on the copy may be as
under:
Verified with the original.

69
Authorized Officer
It was provided that in case the identity information relating to the Aadhar number or PAN
submitted by the customer does not have current address of the customer, he/she shall
submit an OVD showing the current address to the Bank from the undernoted list of the
OVDs:
i. the passport,
ii. the driving license,
iii. the Voter's Identity Card issued by Election Commission of India,
iv. job card issued by NREGA duly signed by an officer of the State Government,
v. the letter issued by the National Population Register containing details of name,
address, or any other document as notified by the Central Government in consultation with
the Regulator.
Further to the above provision, the Central Govt. has given some relaxation in case of
officially valid document furnished by the customer also does not contain updated address,
the following documents shall be deemed to be officially valid documents for the limited
purpose of proof of address: -
(i) utility bill which is not more than two months old of any service provider (electricity,
telephone, post-paid mobile phone, piped gas, water bill);
(ii) property or Municipal tax receipt;
(iii) pension or family pension payment orders (PPOs) issued to retired employees by
Government Departments or Public Sector Undertakings, if they contain the address;
(iv) letter of allotment of accommodation from employer issued by State Government or
Central Government Departments, statutory or regulatory bodies, public sector
undertakings, scheduled commercial banks, financial institutions and listed companies
and leave and license agreements with such employers allotting official accommodation;
Provided that the customer shall submit updated officially valid document with current
address within a period of three months of submitting the above deemed “officially
valid documents”.
RISK CATEGORISATION
For proper risk assessment of business relationship with customers and evolving suitable
monitoring mechanism, all customers are to be categorized as High risk, Medium risk and
Low risk. It is to be specifically noted that risk categorization is meant for proper monitoring
of accounts and does not reflect in any way on the account holders. Risk Categorization
done by the Branch should not be disclosed to the customers.
The risk categorization of customers as also compilation and periodic updation of customer
profiles and monitoring and closure of alerts in accounts by banks are extremely important
for effective implementation of KYC/AML/CFT measures. Any laxity in effective
implementation of these guidelines will leave the bank vulnerable to operational risk.
Compliance with the regulatory guidelines on KYC/AML/CFT should, therefore, be
ensured both in letter and spirit.

70
While the extent of knowledge / information available on customers to prove their identity
sufficiently will determine the risk perception and concomitantly risk categorization, we give
below an illustrative list of customers / groups who may be assigned different risk
categories:
High Risk Category.
1. Politically Exposed person of foreign origin
2. Bullion Dealers/jewelers
3. Non Resident Customers (NRIs)
4. Trust Charities, NGOs &Organizations receiving donations from India & abroad
5. Non face- to-face Customers
6. Customers domiciled in/having transactions with High Risk Countries
7. Firms with Sleeping partners
8. Companies having close family shareholding
9. Multi-Level Marketing Companies
10. Accounts of Mules
11. Customers of dubious reputation
12. High Net worth Individuals - Individuals with total deposits of Rs.1.50 Crores or more
13. Pooled Accounts
14. Individual/entities involved in any fraud/forgery/antinational activity/ terrorism/tax
evasion/insider trading may be classified as High Risk
15. Account opened/operated by Power of Attorney Holders
16. Individual Account holder with Credit/debit summations of Rs.2.00 crores & more per
annum
17. Non Individual account holders with credit debit summations of Rs.10.00 crores &
more per annum
18. Customer accounts where STR has already been filed with FIU
Medium Risk Category
1. New accounts opened under Low Risk while on boarding, during first 180 days of
opening the account, except those pertaining to Central/State Governments, PSUs and
JVs with Govt., Regulators, FIs, Statutory Bodies, salaried persons/pensioners of these
organizations, Small Accounts and any product(s) that is/are specifically mandated to be
opened under Low Risk.
2. Non-Bank Financial Institution
3. Stock Brokers
4. Import/Export customers
5. Telemarketers
6. Pawn Shops
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7. Auctioneers
8. Venture Capital Companies
9. All In-operative accounts
10. Individual Account holder with Credit/debit summations of Rs.50.00 Lac to below
Rs.2.00 Crores per annum
11. Non Individual account holders with credit debit summations of Rs.2.00 crores to
below Rs.10.00 Crores per annum
Low Risk Category
1. Salaried Employees (whose salaries are well defined)
2. Customer belonging to lower economic strata, accounts opened under financial
inclusion
3. NGOs/NPOs promoted by UN or its agencies.
4. Government owned Companies/ Departments and (State/Central), PSUs, JVs with
Govt., Regulators, FIs, Statutory bodies etc.
5. All customers not classified either as High/Medium Risk Categories
6. Individual Account holder with Credit/debit summations below Rs.50 Lac per annum
7. Non Individual account holders with credit debit summations below Rs.2 crore.
MONITORING OF TRANSACTIONS
ONGOING MONITORING
Ongoing monitoring is an essential element of effective KYC/AML procedures. Ongoing
due diligence should be exercised with respect to every customer and closely examine the
transactions to ensure that they are consistent with the customer's profile and source of funds as
per extant instructions. The ongoing due diligence may be based on the following principles:
(a) The extent of monitoring will depend on the risk category of the account. High risk
accounts have to be subjected to more intensified monitoring.
(b) Particular attention should be paid to the following types of transactions:
(i) large and complex transactions, and those with unusual patterns, which have
no apparent economic rationale or legitimate purpose.
(ii)transactions which exceed the thresholds prescribed for specific categories
of accounts.
(iii) transactions involving large amounts of cash inconsistent with the normal
and expected activity of the customer.
(iv) High account turnover inconsistent with the size of the balance maintained.
(c) a system of periodical review of risk categorization of accounts and the need
for applying enhanced due diligence measures should be put in place. Such review of risk
categorization of customers should be carried out at a periodicity of not less than once in six
months.
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(d) Transactions in accounts of marketing firms, especially accounts of Multilevel
Marketing (MLM) Companies should be closely monitored.
A dedicated Anti Money Laundering Monitoring office for the Bank is established at Jaipur
which functions under the control of General Manager (AML/CFT). General Manager
(AML/CFT) is also designated as the Principal Officer (AML/CFT) of the Bank. Postal
address/communication details of the Jaipur office are as under:
The General Manager & Principal Officer (AML/CFT), State Bank of India,
AML/CFT Department,
Corporate Centre,
4th floor, Administrative Office Building,
A-5, Nehru Place, Tonk Road,
Jaipur-302015
Phone number: 0141-4089210, 4089211 Fax number: 0141-4089204
The AML/CFT Department at Jaipur will be analyzing the alerts on transactions handled
across the Bank with the help of AML software called AMLOCK, acquired from M/s 3i-
Infotech Ltd., for eventual escalation of Suspicious Transactions Reports (STRs), if
required, to the Principal Officer (AML/CFT) for filing it with the Financial Intelligence Unit-
India (FIU-IND). For carrying out the task of analyzing Suspicious Transactions alerts,
functionaries at the AML/CFT Department may contact Money Laundering Reporting
Officers (MLROs) at LHOs as well as branches/offices and their Controllers frequently. All
functionaries shall submit/provide the details/data, requisitioned by the AML/CFT
Department, on the account/customer expeditiously, in order to facilitate finalization of
these alerts within the specified time frame. However, the concerned functionaries should
not tip off the customer and/or divulge the information called for by the AML/CFT
Department to the concerned customer / others, nor should the transactions in the account
b ein g inve st iga t ed b e st op pe d/ re str ain ed . I t i s re it era te d th at t he
communications/investigations are of strictly confidential nature and are required
to be handled discreetly.
STRs can be classified into two broad categories based on the source of alert which
resulted in escalating such STRs - System generated STRs and Subjective STRs. System
generated STRs are those escalated, based on the alerts triggered by AML software
system. System generated alerts are critically analyzed by the centralized AML/CFT
Department, Jaipur. Subjective STRs are escalated, based on alerts or information
received from Branches/staff/media reports/law enforcement agencies etc.
REPORTING REQUIREMENTS
In terms of rules of Prevention of Money Laundering Act 2002, banks are obliged to file
following reports to Financial Intelligence Unit-India (FIU-IND ) which has been set up as a
national unit under Ministry of Finance, for inter-alia, collecting, analyzing, disseminating
information in respect of financial transactions:-
i. Cash Transactions Reports (CTRs)
ii. Counterfeit Currency Reports (CCRs)

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iii. Suspicious Transactions Reports (STRs)
iv. Non Profit Organizations Transactions Report (NTRs)
v. Cross Border Wire Transaction Reports
In terms of Rule 8 of PML Rules, while furnishing information to the Director, FIU IND, delay
of each day in not reporting a transaction or delay of each day in rectifying a misrepresented
transaction beyond the time limit specified in the Rule shall constitute a separate violation
and hence all reporting should be done as per the timelines prescribed. As per provisions of
PML Act, any deficiency in filing the mandatory reports by reporting entities will attract
minimum penalty of Rs.10,000/- which may go to Rs.100000/- per instance per day.
MECHANISM FOR FURNISHING INFORMATION & MAINTENANCE OF RECORDS OF
TRANSACTIONS
An internal mechanism should be evolved & put in place for furnishing information and
maintaining proper record of transactions prescribed under Rule 3 of Prevention of Money
Laundering (Maintenance of Records) Rules, 2005 (PML Rules, 2005), as mentioned
below having regard to any guidelines issued by Director FIU-IND in consultation with RBI:
(i) All cash transactions of the value of more than Rupees Ten Lakh or its equivalent in
foreign currency;
(ii) Series of all cash transactions individually valued below Rupees Ten Lakh, or its
equivalent in foreign currency which have taken place within a month and the monthly
aggregate which exceeds rupees ten lakhs or its equivalent in foreign currency. It is clarified
that for determining 'integrally connected transactions' 'all accounts of the same customer'
should be taken into account.
(iii) All transactions involving receipts by non-profit organisations of value more than rupees
ten lakh or its equivalent in foreign currency [Ref:Government of India Notification dated
November 12, 2009- Rule 3,sub-rule (1) clause (BA) of PML Rules]
(iv) All cash transactions where forged or counterfeit currency notes or bank notes have
been used as genuine and where any forgery of a valuable security or a document has
taken place facilitating the transaction and
(v) All suspicious transactions, whether or not in cash, made as mentioned in PMLA Rules.
(vi) All cross border wire transfers of the value of more than five lakh rupees or its equivalent
in foreign currency where either the origin or destination of fund is in India. .
Bank, its designated director, officers and employees are duty bound to observe the
procedure and the manner of furnishing the information mentioned herein above.
INFORMATION TO BE PRESERVED
Banks are required to maintain the following information in respect of
transactions referred to in Rule 3 of PMLA, 2002 :-
a) the nature of the transactions;
b) the amount of the transaction and the currency in which it was denominated;
c) the date on which the transaction was conducted; and
d) the parties to the transaction.

74
PRESERVATION OF RECORDS
a) Banks are required to maintain the records containing information in respect of
transactions to in Rule 3 above. Appropriate steps should be taken to evolve a system for
proper maintenance and preservation of account information in a manner that allows data
to be retrieved easily and quickly whenever required or when requested by the competent
authorities. Further, banks should maintain for at least five years from the date of cessation
of transaction between the bank and the client, all necessary records of transactions, both
domestic or international, which will permit 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.
b) It should be ensured 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 years after the business relationship is
ended. The identification records and transaction data should be made available to the
competent authorities upon request.
c) Special attention should be paid to all complex, unusual large transactions and all
unusual patterns of transactions, which have no apparent economic or visible lawful
purpose. It is further clarified that the background including all documents/office
records/memoranda pertaining to such transactions and purpose thereof should, as far as
possible, be examined and the findings at branch as well as Principal Officer Level should
be properly recorded. Such records and related documents should be made available to
help auditors in their day-to-day work relating to scrutiny of transactions and also to
Reserve Bank/other relevant authorities. These records are required to be preserved for
five years as is required under PMLA, 2002.
d) The Bank may maintain the record of the identity of clients, and records in respect of
transactions with its client referred to Rule 3, as above, in hard or soft format.
SUSPICIOUS TRANSACTIONS:
To observe “four eyes” concept in reporting suspicious transactions at branch level, first
dealing officer at the branch will report to the Manager of Division (MOD)/Branch
Manager(BM), who will get himself satisfied about existence of a suspicious activity/nature
and then report to their respective MLRO through the controlling office for submission to the
Principal Officer (AML/CFT) who will finalize the decision regarding filing of STR to FIU-
IND. LHO to submit the particulars of such incidents reported in the prescribed format
(STR) to the GM & Principal Officer (AML/CFT), Corporate Centre, Jaipur.
The MOD/BM to certify in the BMMC that compliance of KYC/AML/CFT guidelines has
been done as required.
The Controlling Authority during their visits to the Branches to verify some ofthe account
opening forms/transactions recorded in the register for the purpose at random.
All functionaries in the Bank will ensure at the time of approving outsourcing of services
(which are permissible as per outsourcing policy of the Bank) that KYC/AML/CFT
measures are implemented in letter and spirit and no access to any individual/entity having
direct/indirect link to banned entities/individuals, as per list of such entities/individuals
advised by RBI from time to time and duly circulated by the Bank.
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DUTIES AND RESPONSIBILITIES
The chain of duties and responsibilities at branches/controlling office/LHO will be as under:

7 (ii) FOREIGN ACCOUNTS TAX COMPLIANCE ACT (FATCA) AND COMMON

REPORTING STANDARDS (CRS)
India has signed Inter-Governmental Agreement (IGA) with USA on 9th July, 2015, for
Improving International Tax Compliance and implementing the Foreign Account Tax
Compliance Act (FATCA). For the purpose of FATCA, Reporting Financial Institutions had
to register with US IRS site and obtain a Global Intermediary Identification Number (GIIN).
In this connection, State Bank of India has registered with US IRS on 23rd December 2014
as mandated by RBI and obtained GIIN. The GIIN of the Bank is 68D1E5.99999.SL.356. All
branches located in foreign jurisdiction have also been allotted separate GIIN linked to the
GIIN of SBI in the process.
India has also signed a multilateral agreement on 3rd June, 2015, to automatically
exchange information based on Article 6 of the Convention on Mutual Administrative
Assistance in Tax Matters under the Common Reporting Standard (CRS), formally referred
to as the Standard for Automatic Exchange of Financial Account Information (AEOI).
76
3. The Finance (No.2) Act, 2014 has amended section 285BA of the Income Tax Act, 1961
to include the obligation of reporting tax information by prescribed reporting financial
institutions. This amendment has, in order to operationalize the provisions of India-US IGA
(FATCA) and multilateral agreement (CRS), prescribed Rules 114F to 114H detailing due
diligence procedure and reporting requirements by Reporting Financial Institutions which
have been published vide Notification No. S.O. 2155(E) dated 7th August 2015 (referred to
as CBDT rules hereinafter) read with Guidance Note dated 31 August 2015 on these Rules.
Further, RBI has also formally notified CBDT Rules vide its Circular No. RBI/2015-16/165
DBR.AML.BC.No.36/14.01.001/2015-16 dated 28th August 2015. The Report regarding
US reportable persons and Other Reportable persons have to be furnished electronically in
Form 61B, which has also been notified with above mentioned notification issued by CBDT.
As per Rule 114G(10) (b), report to CBDT shall be signed, verified and furnished by
the Designated Director of reporting Financial Institution. In our Bank, such reports
will be signed by MD (Compliance & Risk).
As per Rule 114G (10) (c), it shall be the duty of every reporting financial institution, its
Designated Director, Principal Officer and employees to observe the procedure and the
manner of maintaining information as specified by its regulator. Therefore, on completion of
due diligence procedure during a calendar year and on certification from the
controllers/circles regarding compliance with the rules, the requirement of electronic
reporting to CBDT with respect to each calendar year will be taken care of by GITC.
A few points which are critical and important for the purpose of compliance with CBDT rules
are enumerated below:
i. An account reportable to USA is termed as US Reportable Account (FATCA). An account
reportable to a country or territory outside India other than US is termed as Other
Reportable Account (CRS).
ii. FIs have to treat an account as a reportable account as on the date it is identified pursuant
to due diligence procedure specified in sub-rule (3) to (8) of Rule 114H and, unless
otherwise provided, information with respect to a reportable account will be required to be
reported annually in the calendar year following the calendar year to which the information
relates.
7 (iii) CENTRAL KNOW YOUR CUSTOMER RECORDS REGISTRY (CKYCR) PHASE I
COVERING NEW INDIVIDUAL CUSTOMERS WHILE ONBOARDING CHANGE IN CIF
CREATION/ ACCOUNT OPENING PROCESS AT BRANCHES & LCPC DEBIT
ACTIVATION OF CIFs ONLY AFTER 2 ND SCRUTINY/VALIDATION AT LCPC
Government of India, following the amendment of the Prevention of Money Laundering
Rules (PMLA) in July, 2015, has set up a Central Know Your Customer Registry (CKYCR)
for storage of data and allotment of a uniform KYC number (CKYC Identifier) to the
customer of Regulated Entities (REs), i.e. Bank. Central Registry of Securitisation, Asset
Reconstruction and Security Interest of India (CERSAI) has been notified to act as an entity
to perform the functions of the CKYCR.
To comply with the above guideline, every Reporting Entity (which includes the Bank) is
required to file the electronic copy of the Customer's KYC records/data (Customer
information,Photograph, Signature, KYC Documents) with the Central KYC Records
registry (CKYCR) within 3 days after the commencement of an account based relationship
77
with a customer. Account based relationship includes all types of Deposit accounts having
full KYC, Simplified KYC, etc., opened at Branches or through other channels/platforms,
Loan accounts, non-fund based accounts like Bank Guarantee, Letter of Credit, etc. in
respect of both Individual and Entity (Non Individual).
When a Customer having KYC number (CKYC Identifier) allotted by CKYCR approaches a
Bank/FI for opening an account and/or making relationship with them, then such Bank/FI
shall retrieve the KYC records online from the CKYCR by using CKYCR identifier and shall
not require the customer to submit the same KYC records or information or any other
additional identification documents or details provided there is no change in existing status
of KYC records of the customer.
The Account Opening Form for Individuals (Part-I: Customer Information Sheet and Part II
Account Details) has been recently modified by PBBU taking into account the CKYCR
guidelines an d PMLA regulations and circu late d vide eCircular No.:
NBG/PBU/LIMASB/27/2017 – 18 dated 2nd December, 2017 (Sl.No: 1032/2017 – 18). All
Branches/Offices are advised to use only Modified Account Opening Form.
The required IT architecture/ Interface for operationalization of CKYCR have been
completed by IT Department and it has been decided to implement national rollout of
CKYCR Project (Phase I) shortly.
Upon rollout of CKYCR Project, only credits will initially be permitted in accounts opened
under new CIFs. Debits will be restricted till the completion of second scrutiny/validation by
LCPC. It is, therefore, imperative that the Branches scan and upload AOF, KYC
documents, Photo, Signature, etc. of all New CIFs /accounts expeditiously so that debit
activation will take place immediately without any customer complaint.
Whenever AOF and related papers are required on urgent basis to be provided to RBI, CBI,
Police Department or any other Govt Agencies, the digital set of AOF and related papers
will be used to retrieve. Therefore, please ensure that all the documents obtained during
CIF/Account creation are scanned and uploaded correctly.
As the CKYC number shall be used by all Banks/Financial Institutions, the Bank/FI
uploading the CKYC details on CKYCR portal will be responsible for any related
consequences in respect of such uploaded details, even if accounts are opened at other
Banks.
7 (iv) YONO: Key Process shifts in Account Opening
Digital SavingsAccount :
Ø Form Filling: No paper based AOF, fields reduced from 58 to 37, single hand-off
between maker and checker
Ø KYC: Biometric based e-KYC: verification done using AADHAAR
Ø CIF Creation: Automated algorithm to find existing CIF (customer to validate using
CIF, A/c no or Debit card number
Ø Nomination: Auto populated using nominee AADHAR card
Ø Customer Photograph: Customer clicks selfie, verified/ retaken at branch, stored in
DMS

78
Ø Signature Capture: Customer reads T& C on device and provides single signature
on pre-printed T & C page for acceptance in branch. Signature is captured and
digitally from the form and stored in DMS.
Ø Debit Card Issuance: Customer gets and instant photo Platinum Debit Card (at
sbiINTOUCH branches). Personalized Platinum Debit Card to be sent to customers
address.
Ø Account activation: Instant account activation on completion of the process
Insta Account Opening: Self Service
Ø Form Filling: No paper based AOF, fields reduced from 58 to 37, No paper based
AOF,
Ø KYC: OTP based KYC verification done using AADHAR
Ø CIF Creation: Automated algorithm to find existing CIF. Existing customers not
allowed to open this account
Ø Nomination: Auto populated using nominee AADHAR card
Ø Customer Photograph: Customer clicks selfie, stored in DMS
Ø Signature Capture: No signature capture at the time of account opening
Ø Debit Card Issuance: Customer gets RuPay debit card delivered to his/her address
Ø Account Activation: Instant account activation on completion of the process
Regular Account Opening: Branch walk in with Aadhar
Ø Form Filling: No paper based AOF, single Queue generation(hand-off) between
maker and checker
Ø KYC: Biometric based e-KYC verification done using AADHAR at branch
Ø Customer Photograph: Customer photograph to be taken using web cam and
stored in DMS
Ø Signature Capture: Customer reads T&C on device and provides single signature
on pre-printed T&C page for acceptance in branch, Signature is captured and digitally
from the form and stored in DMS
Ø Debit Card Issuance: Customer gets non-personalized Debit Card if Insta Kit is
selected, Personalized Debit Card will be sent to customers address, Customer
acknowledges the acceptance using OTP
Ø Account Activation: Instant account activation on completion of the process
ROLE OF BRANCH IS ONLY:
Biometric based e-KYC verification using AADHAR at branch
7 (v) How to deal with discrepant AOF received from LCPC:
1. Record the dispatch in AOF returned register with all details.
2. Analyse the discrepancy memo.
3. Scrutinize the AOF once again and rectify all pages in which Branch related deficiency
can be removed.
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4. If any customer related deficiency is found, immediately call to the customer and
arrange meeting within three days of time and if customer found non cooperative,
write a letter with an instruction and deadline that if the discrepancy is not removed by
a certain date, account will be stopped. (Follow the guidelines of KYC Policy of the
bank for Partial freezing and complete freezing and even closure of the account).
5. AOF must be returned after working four steps in Work flow, and if stage shows Data
entry and sign upload, send the AOF as it is as the same was not returned to Branch
through system to avoid reflection of discrepant AOF in Branch Pendency.
6. Monitor daily AOF returned register and send duly rectified AOF after running four
steps from the Branch to LCPC; in a separate cover super scribed on envelope
“DISC AOF” to
Assistant General Manager/Chief Manager,
LCPC, Discrepant Cell, ---------------.
Precautions to be taken by the branch
v AOF must be sent to LCPC on very next day along with a system generated
forwarding letter and if it is not generated, a manual sheet containing details of all
accounts.
v All AOF should contain CIF No. and Account No. (New Opened No.) and Branch
name (strip stamp) on the face of the AOF. All such AOF and its account no. should
match with the forwarding letter to avoid any mismatch.
v AOF must be verified with Aadhar no. and PAN No. /Form No. 60/61 in revised
format.
v ID must be valid and current.
v While preparing AOF for submission or filling AOF please spare suitable time with
discrepancy list so that the common irregularities can be avoided and customer can
be impressed for getting information in one sitting. This will enable branch to avoid
customer complaints in future as Incomplete/wrong details in CBS lead to the
various systemic glitches and even wrong calculation of TDS/mode of
operation/Returning of Cheque/malfunctioning of add on service of alternate
channels etc.
v Branches are opening accounts with welcome kits without amending tab
authorization, or without filling name of state, village etc. this will lead to wrong
cheque book printing/ATM card etc. as all vendor related service files generated
from CBS.
v Many common discrepancies can easily be avoided.
v Not signing the open account by Branch Manager/open CIF by authorized official
lead to serious problems in case of any AML case if registered at a later date.
v Be prepared for PRE LCPC AOF and collate at the Branch for submission as and
when called. A link has also been added in LCPC site for easy reference.

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7(VI) Shell Companies, Fictitious Offer of Funds, Hoax Caller
A Shell company is a company without active business operations / significant assets and
is normally used to disguise business ownership from Law Enforcement Agencies. As
Shell companies apparently bear most of the characters of a normal company registered
under the Companies Act, these can be distinguished from genuine companies only on the
basis of activities and underlying purposes.
In terms of Bank's AML/KYC Policy, under no circumstances accounts of Shell companies
/ firms should be opened in Bank's books. Therefore, branches are required to ensure
meticulous compliance of the following to restrain a Shell company from having a banking
relationship with us.
a) At the time of on-boarding:
I) Obtaining Board resolution regarding opening of the account.
ii) Obtaining prescribed KYC documents / OVDs in respect of:
a. Compnay b. signatories / Directors c. Beneficial owners (if any)
Note: PAN of companies &Aadhar of signatories / Directors / Beneficial owners has
to be obtained.
iii) Verification of incorporation credentials of Company from website www.mca.gov.in
iv) Recording in CBS / AOFs the details of Beneficial Owners if any & extent of their
ownership.
b) Post account opening:
The operating Official to keep close watch over conduct of account of companies from
the following perspective:
I) Verifying the reasonability of transactions whether they are consistent with the
profile / business activity of company.
ii) Sudden high value credits (by cash / by transfer) followed by immediate transfer
should be enquired into with utmost care.
iii) Balance sheets should be obtained and examined for major variances with the
turnovers in the accounts.
The operating functionaries need to have awareness about additional attributes observed
common to Shell companies and it will be helpful in preventing their on-boarding /
detecting their presence in our books.
Attributes observed common to Shell companies are as under:
· Like any other company, incorporated under the Companies Act.
· Possess status of artificial juridical person under the eyes of the law.
· No physical presence other than the mailing address.
· No active business operations / no significant assets / no sizeable workforce.
· Established to disguise the business ownership from the Law Enforcement Agencies.
· Nominal paid-up capital.

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· Normally, their actual controllers and directors are different persons.
· Company works on paper only under the name of dummy directors.
· Multiple Shell companies are found to share common registered address.
· Transactions (Debit / Credit) in account appears to have been done with entities
engaged in unrelated business
· Serves as a vehicle for fictitious business transactions.
· Sole objective is to convert unaccounted money into accounted for disguising the
source ie, for laundering the illegally earned money & for tax evasion.
· In Bill collection / Bill discounting transactions, goods or services underlying the
transactions don't match with the company's profile as disclosed.
Indicators / symptoms given above are illustrative only. Any such occurrence, where
companies show any of the above attributes / symptoms of Shell Company, preliminary
investigation regarding credentials / activities of Company should be done at Branch and
suspicions observed, if any, has to be reported immediately at agm.alerts@sbi.co.in and with
information to the respective Controllers.
FICTITIOUS OFFER OF FUNDS
“Fictitious Offer of Funds” (FOF) cases are defined as those illegal activities whereby one
individual / group / entity deceives or misleads another individual or entity by making false
promises to give some benefits against payment of money in specified accounts of the
fraudsters. The money subsequently gets withdrawn from these accounts by the fraudster.
Some of the most common examples of Fictitious Offers of Funs (FOF) which are adopted
by the Criminals to deceive involve an offer of reward / service against a fee and include job
offers, mobile tower installation offers, admission offers in reputed Educational Institute,
winning lottery, offer of fists from foreign land, offer of money from reputed organisations
like IMF, RBI etc., investments at unexpected rate of return (Ponzi), Multi-Level Marketing
Companies (MLM) / Pyramid structure schemes, delivery of some goods at unbelievable
low prices etc.
Instances of FOF detected at the Branch level could arise from the following:
a. Employee initiated based on unusual pattern of multiple transactions observed at
branches during VVR checking.
b. Victim's / Customer / Non-customer complaint received at the Branch.
c. Enquiry from AML/CFT cell during transaction analysis of accounts while handling
alerts.
d. Receipt of notice from Law Enforcement Agencies / regulators or Govt. of India
directly at the Branch.
SOP for the branches for dealing such cases:
I) Complaint from victims of fictitious offers be taken in writing under victim's full signature
supported by ID proof and followed by recording the complaint in complaint register.
Further Branch to make a suitably worded reporting to controller with a simultaneous
action of temporary hold in the account of the alleged recipient (culprit) for the value

82
 under complaint wherever, the complainant provides / branch unravels convincing
grounds / evidence to justify the same. Simultaneously, advise the complainant that our
hold will work temporarily for 2-3 days only and that he should invoke legal recourses
available against the recipient (culprit) by lodging a complaint / FIR with the appropriate
LEA.
ii) Branch will report all such qualifying cases as defined above at the mail id:
agm.alerts@sbi.co.in with a caption on top “CARE-FICTITIOUS OFFER CASE” and
endorse a copy to AGM (S&I) of the concerned Circle or the Money Laundering Reporting
Officer (MLRO) of the BU in case of MCG and CAG for further course of action.
iii) In case the perpetrator of FOF maintains an account with SBI, then inform the home
branch immediately for cross-checking the KYC documents and other credentials of
their customers.
iv) Investigation and permanent freezing / closure of the account of perpetrator of FOF:
Based on the Bank's investigation in the case, if it is confirmed that the beneficiaries
(perpetrators) of the FOF case have indeed utilized their accounts with the Bank for
conducting illegal activities, the Branch to consider closure / permanent freezing of the
account after taking approval from the Controllers.
Advisory to operatives for mitigating risks of FOF cases:
KYC/AML-CFT compliance:
I) To ensure proper KYC at the time of account opening and updating of KYC of the
customer as per banks extant instructions.
ii) Proper record and follow-up action in accounts of the customer where Welcome letters
are returned undelivered for want of correct address.
iii) To carry out customer due diligence / enhanced due diligence when suspicious activity
in account or in customer behaviour observed.
Transaction Monitoring and Customer behaviour analysis:
I) The staff to be sensitized to take cognizance of transactions in customers' accounts,
which are unmatched with profile of customer / past transaction history in account
especially at the time of posting / passing of vouchers & checking the VVRs by making
necessary enquiries. Wherever warranted, steps to be taken viz., filing of STR at
agm.alerts@sbi.co.in or reporting the matter to the Branch Manager or Controlling
office for further action.
ii) Staff members to work with full alertness, behaviour of any customer if observed
suspicious from ML/TF angle, should be brought to the notice for the Branch Manager /
Controllers / AML-CFT department by filing an STR at agm.alerts@sbi.co.in.
Customer & Staff Education:
I) During “ Customer Relation Program “ participating customers to be addressed on the
issue about the preventive / deterrent measures on the following lines:
a) The Bank never calls for customer / card details etc.,
b) If they received any call / message / e-mail from any individuals luring them for
lottery / providing job or any financial benefit not to fall prey to such attempts.
83
 c) If they receive any call / message / e-mail from any individuals threatening to block
the debit / credit card / account, do not believe it.
d) Invariably report such incidents immediately to the Cyber cell of respective police
department for further investigation and recover and for deterring of such practices.
These are some of the indicative list having broad guidelines related to preventive
measures and the Branch should discuss all the possible threats with the
participants involved.
ii) The Branch heads to make the issue an essential point of discussions during
“Customer Service Committee Meeting “at the Branches. Participation of all staff
should be ensured for sharing the probable threats on this front, effective
deterrence / preventive measures.
Standard Operating Procedure (SOP) for dealing with customer complaints relating
to Hoax Callers:
The bank receives several complaints from its customers relating to instances of cheating
through hoax calls by vishing and phishing, stealing and hacking of credentials and
passwords etc.
ROLE HOLDER SOP FOR ROLE HOLDER

Branch where the complaint is
lodged (Home/ Non-Home):
The branch upon receiving the
complaint either from Contact
Centre Department or directly
from the Customer will proceed as
follows:-
1.Advise the complainant to file a complaint with Cyber
Crime Cell / lodge F.I.R with local police, if not already filed
and furnish copy of such F.I.R lodged, acknowledgement
/ details of complaint filed with Cyber Crime cell.
2. Verify the phone number of the hoax caller to
establish whether the alleged fraudster (Hoax Caller)
has any Banking relationship with SBI.
3. If the branch finds that the alleged fraudster (Hoax
Caller ) is having any Banking relationship with SBI, it
will forward the complaint received from the customer to
the home branch where the alleged fraudster maintains
an account.
4. Upon receiving a copy of the FIR / Complaint lodged
with Cyber Crime Cell from the complainant, the same
will be forwarded to the Home branch of the alleged
fraudster.
5. If it cannot be ascertained that the account of Hoax
caller is linked to any account maintained with SBI, a
non-customer STR needs to be submitted to AML/CFT
cell, Jaipur at agm.alerts@sbi.co.in.
6. If the Home / Non-Home Branch receives any specific
order / instructions from LEA / Police / Cyber cell to stop
/ hold the account of alleged fraudster consequent upon
that complaint, the Home / Non-Home branch will
immediately put STOP/HOLD in the account to comply
with the order under advise to the Home branch of the
alleged fraudster account also advise the AML/CFT
department incorporating previous reference details.

84
 ROLE HOLDER SOP FOR ROLE HOLDER

Branch where Hoax caller
(alleged fraudster) maintains
his account:
After receiving the complaint
along with the details of accounts
of hoax caller, the Branch will
proceed as follows:
1.Will conduct KYC verification and analyse the
transactions in the account to ascertain if any
suspicious pattern is indicated. Based on the adverse
observations if any, may put HOLD/STOP in the
account, guided by the e-circular No. R&DB/BOD-
GB/50/2017-18 dt. 17-11-2017 on STOP & HOLD.
2. Will inform Asst. General Manager (S&I) of respective
LHO where the Home Branch of Hoax caller is located
under advice to the controller or the MLRO of the
Business Unit in case of MCG and CAG.

3. Upon receiving copy of the FIR lodged / complaint

filed with Cyber Crime cell, the branch will file a one-
page STR on the prescribed format as per circular no.
CFO/AMLCFT/MEASURES/9/2017-18 dt. 20.01.2018
to AML-CFT Dept. Jaipur by mail at agm.alerts@sbi.co.in.
A copy of the FIR/complaint to Cyber Crime cell will be
attached.

Note: Filling of STR to FIU-IND is a statutory obligation of the Bank under PMLA Act.
This however, is not a resolution of the complaint. Complaint resolution process has
to be undertaken by the concerned branch and its Controllers in co-ordination with
the Crime Branch / Police / Cyber Crime Branch, other LEAs etc

v v v

85
Chapter - 8
Tax Compliance
NOTES
 Chapter -8 :TAX COMPLIANCE

8 (i) TAX DEDUCTED AT SOURCE

The Indian Income Tax Act provides for chargeability of tax on the total income of a person
on an annual basis. The quantum of tax determined as per the statutory provisions is
payable as:
a) Advance Tax
b) Self-Assessment Tax
c) Tax Deducted at Source (TDS)
d) Tax on Regular Assessment
Tax deducted at source (TDS), as the names imply aim at collection of revenue at the
source of income. It is essentially an indirect method of collecting tax which combines the
concepts of “pay as you earn” and “collect as it is being earned.” Its significance to the
government lies in the fact that it prepones the collection of tax, ensures a regular source of
revenue, provides for a greater reach and wider base for tax.
At the same time, to the tax payer, it distributes the incidence of tax and provides for a
simple and convenient mode of payment. The concept of TDS requires that the person, on
whom responsibility has been cast, is to deduct tax at the appropriate rates, from payments
of specific nature which are being made to a specified recipient. The deducted sum is
required to be deposited to the creditof the Central Government. The recipient from whose
income tax has been deducted at source gets the credit of the amount deducted in his
personal assessment on the basis of the certificate issued bythe deductor.
While the statute provides for deduction of tax at source on a variety of payments of
different nature, in this booklet, an attempt is being made to discuss various provisions of
TDS on payments made by the branches.
PAYMENTS SUBJECT TO TDS
Following payments made by the Bank are subjected to Tax Deduction at Source (TDS)
under the stipulated sections of Income Tax Act mentioned there against:
Ø Interest on securities [Section 193];
Ø Interest other than Interest on securities [Section 194A];
Ø Payment/Credit to Contractors/sub Contractors [Section 194C];
Ø Commission, brokerage etc. [Section 194 H];
Ø Rent [Section 194 I];
Ø Fees for professional or technical services or royalty [Section 194J];
Ø Transfer of immovable property [Section 194IA];
Ø Interest [other than NRE/FCNR Ac] & any other payments made to non-residents,
Ø Which are taxable under Income Tax Act [Section 195];
Ø Any other payments liable for TDS.

86
 p
Note : In case, PAN is not furnished by the deductee, tax shall be deducted at 20%TDS is
not to be deducted on Service Tax component (if shown separately in the Invoice)* In
case, Payee - transporter submits a declaration in prescribed form along with PAN
stating that he is covered under section 44AE and no tax is required to be deducted.
Payments made by the Bank where TDS is not applicable:
i. Under section 196 of the Income Tax Act, No deduction of tax shall be made from anysum
payable to:
a) The Government (Central Govt., State Govt and Union Territories Administrators), or
b) The Reserve Bank of India (RBI), or
87
c) A corporation established by or under Central act, exempt from income tax on its income,
or
d) a Mutual Fund specified under clause 23D of section 10 (where such sum is payable to it
by way of interest or dividend in respect of any securities or shares owned by it or in which it
has full beneficial interest, or any other income accruing or arising to it).
ii. There would be no TDS on payments to those funds or authorities or Boards or bodies,
whose income is unconditionally exempt under section 10 of the Income tax Act and who
are statutorily not required to file return of income as per section 139 of the Income tax Act.
CBDT vide circular no. 18/2017 dated 29.05.2017 has specified list of entities exempt u/s
10.
iii. Under section 194A of the Income Tax Act, TDS is not to be deducted on Interest
payments made to any banking company/cooperative bank, financial corporation formed
under Central or State statue, LIC, UTI, insurance company/insurance cooperative society
and other Notified Institutions. Some of the examples of Other Notified Institutions are as
follows –
a) Securities Exchange Board of India
b) Pension Fund Regulatory and Development Authority
c) Telecom Regulatory Authority of India
d) Insurance Regulatory and Development Authority
e) Other notified institutions
iv. No tax is required to be deducted on following payments made to the scheduled Banks
(Please refer eCircular no. CFO/FRTTAX/9/2012-13 dated 23rd January 2013):
a) Bankguarantees commission;
b) Cash management service charges;
c) Depository charges on maintenance of DEMAT accounts;
d) Charges for warehousing services for commodities;
e) Underwriting service charges;
f) Credit card or debit card commission for transaction between the merchant
establishment and acquirer bank;
g) Clearing charges (MICR charges) including interchange fee or any other similar charges
by whatever name called charged at the time of settlement or for clearing activities under
the Payment and Settlement Systems Act, 2007. (W.e.f. 17th June 2016, vide CBDT
notification no. 47/2016 dated 17th June 2016).
v. Tax should not be deducted on Service Tax component (if shown separately in the
Invoice) while making payments on or after 13th January 2014. (Please refer eCircular no.
CFO/FRTSERTAX/ 7/201314 dated 12th February 2014).
When to deduct Tax:
a. In case of Interest payable to non-residents, deduction of tax shall be made only at the
time of payment thereof in cash/cheque/draft/any other mode.

88
b. In all cases other than 'a' above, TDS is to be deducted at the time of:
i. Credit of such sum to the account of the payee; or
ii. Payment thereof; or
iv.Crediting such sum to any account in the books of accounts whichever is earlier.
Therefore, thebranches/offices should ensure that TDS is deducted on the provision
for expenses that is made in the books of accounts at the year end.
Branches should take extra caution at the time of making actual payments to the vendors
immediately after the year end, so that the TDS deducted earlier against provision for such
expenses is accounted for and there is no double deduction/deposit of TDS in this regard.
The deductees should also be duly informed.
Importance of Permanent Account Number (PAN):
Under Section 206AA of the Income Tax Act, the rate of TDS is higher of 20% or the
applicable rate in all cases where valid PAN is not quoted by the recipient [except on
payment of interest under section 194LC or to non-residents not being a company or
foreign company, subject to prescribed conditions (as may be notified by Income
Tax department)].
Further, the declaration filed in 15G and 15H is not valid unless the person filing the
declaration furnishes his valid PAN in such declaration. Therefore, branches should make
extra efforts in persuading the customers to provide their PAN.
8(ii) Form 15G/15H:
Under Section 197A of the Income Tax Act:
i. Individual (of less than 60 years of age) or a person (not being a Company or Firm), who is
resident in India and can request the Bank not to deduct tax at source on interest
Paid/payable on time deposits and rent payable by furnishing a declaration in Form 15G
to the effect that the tax on their estimated total income of the relevant financial year will
be Nil. However, the declaration in Form 15G is not applicable if the amount of the income
(individually or in aggregate) credited or paid or likely to be credited or paid during the
concerned financial year in which such income is to be included exceeds the
maximum amount which is not chargeable to tax (Rs.2,50,000/for F.Y. 201718).
ii. Resident senior citizen person (60 years or more anytime during the previous year) can
furnish similar undertaking in Form 15H (certifying that his estimated taxable income is
below the maximum amount which is not chargeable to tax and tax thereon would be NIL),
irrespective of the interest amount and rent amount paid or credited or likely to be paid or
credited during the financial year.
In this regard, it is to be noted that a customer would need to provide the details of all
ofhis/her time deposits with Bank in Form 15G/H. The declaration given in the Form is valid
for a financial year. The onus of intimating change in any particulars provided in the form is
on the depositor and not on the bank.

89
8 (iii) Responsibilities/ Obligations of deductor pertaining to TDS compliance:
As you are aware, the following steps are part of the Bank's TDS compliance responsibility:
i. To deduct tax at source wherever required under the Income Tax Act.
ii. To deposit the collected tax into the account of Central Government through internet
banking within prescribed time limits. Under the centralised environment, TDS will be
remitted centrally at whole bank level. However, for certain few transactions, on which
TDS is not routed through source systems (i.e. CBS, VPS, HRMS and CPPC),
branches/operating units will be responsible to remit TDS under central TAN allotted for
such payments MUMS86154F (please refer para 4(e) of our eCircular no. CFO/FRTTAX/
1/2017 18 dated 05.04.2017).
iii. Under Centralised environment, from F.Y. 201718, the TDS statements (Form 24Q, 26Q
& 27Q) will be filed at Central level (please refer circular no. CFO/FRTTAX/1/2017 18 dated
05.04.2017).
iv. TDS Certificates will be downloaded centrally from TRACES and shall be accessible to
branches/operating units through TDS Reporting System (TRS) as well as through their
Branch report folders. Form 16 shall be provided by HRMS in the usual manner (please
refer circular no. CFO/FRTTAX/1/2017 18 dated 05.04.2017).
v. Prescribed details of all the Form 15G and 15H received during the quarter, in the format
prescribed by Income Tax Department shall be uploaded centrally. However, the Branches
shall be required to retain the physical forms for a period of seven years from the end of the
financial year in which the Form 15G/Form 15H has been received.
vi. In case of any notices relating to any period up to 31st March, 2017 arising on account of
defects are issued to the branch/office by the Income Tax Department, they should act
upon the same within the prescribed time limit in order to avoid any consequences under
section 206(4) and 201(3) of the Act. As regards notices relating to any period on or after 1st
April, 2017, they shall be handled centrally.
vii. The branches/offices of the Bank are required to collect and preserve the certificate
issued under section 197 provided by the deductees based on which tax is not deducted or
deducted at a lower rate.
Consequences for noncompliance of TDS provisions:
Noncompliance with TDS requirements provided in the IT Act is subject to severe penalties.
Some of the major interest, fees and penalties are as below:
i. In case of failure to deduct whole or part of TDS, the deductor is liable to pay simple
interest @ 1% under section 201(1A) for every month or part of a month on the amount of
tax in arrear from the date on which such tax was deductible to the date on which such tax is
actually deducted. Further, the deductor may be liable for penalty of sum equal to the
amount of tax, which has been failed to be deducted.
ii. In case of failure to deposit whole or part of TDS in Govt. account after deduction, the
deductor is liable to pay interest @ 1.5% under section 201(1A) for every month or part of
the month on the amount of such tax from the date on which such tax was deducted to the
date on which such tax is actually paid. Further, a person who fails to pay tax to the credit of
the Central Government may be liable for prosecution u/s.276B. Branches/Offices should,
therefore, ensure that there is no violation of TDS provisions.

90
TDS deducted from the each streams viz., CBS, VPS, HRMS and CPPC will be parked in
the respective branch's new TDS BGL accounts. Following five new
BGL accounts for TDS are available at all branches/offices:-

a) The monthly TDS deduction data of each stream will be uploaded in the TRS.
b) At the month end, the balance in all branches TDS BGL accounts will be transferred to
Central TDS BGL at Corporate Centre for onward TDS remittance to government.
c) Mapping of New TANs: Bank has allotted separate TAN for each stream viz. HRMS,
CPPC and VPS. However, with regard to CBS stream, due to voluminous CBS data, all
branches/offices in a network of Circle shall be mapped to single TAN.
TAN mapping will be done as under-

All the branches under CAG/MCG/SAMG/CC establishments will be allotted single TAN
each.
Miscellaneous data
d) Monthly TDS remittance shall be made centrally by FRT department under Central TANs
through TRS.
e) Miscellaneous data: - For TDS deducted on any payments which are made outside the
4 streams [mentioned in 3(a) (i) above], the branches should ensure the following:
i. TDS to be deducted manually
ii. Remittance of such TDS manually under a specific TAN allotted for such payments (i.e.
MUMS86154F) on or before the due date.
iii. Feed the requisite TDS data (deductee details as well as challan details) in TRS through
specific screens provided.
The detailed work flow is furnished in the User Manual of TRS.
f) TDS returns will be submitted through TRS quarterly under central TANs, on the basis of
data provided by all streams on monthly basis.
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TDS CENTRALISATION FROM F.Y 2017-18
With a view to strengthening the tax compliance function and better customer service, our
Bank has decided to centralise TDS compliance of whole bank level at Corporate Centre,
Mumbai from 1st April 2017. As the statutory compliance will be ensured at central level,
branches will be free from the hassles related to TDS remittance and TDS return filing there
by providing better customer service. Centralized filing of TDS return under few Central
TANs will be done through an electronic platform at central level from the financial year
2017-18.
2. Present Scenario:-
At present TDS compliance at the branches/offices involves mainly the following functions,
carried out by the concerned individual branches/offices:
a) Deduction of Tax at Source (TDS);
b) Deposit of TDS;
c) Filing of the TDS statements (Form 24Q/26Q/27Q);
d) Issuance of TDS certificates to customers/vendors/employees;
e) Submission of Forms 15G/15H returns to the Income Tax department;
f) Dealing appropriately with various notices/orders received from the Income Tax
department;
g) Any other work relating to TDS compliance.
8 (iv) New System for TDS Centralisation - TDS Reporting System (TRS)
a) As a move towards centralization of TDS returns of the Bank, a new tool TDS reporting
System (TRS) is developed to manage TDS deducted by the various source systems as
below:
i. TDS on Interest on Deposits in Core Banking Solutions (CBS)
ii. TDS on Vendor Payments in Vendor Payment Systems (VPS)
iii. TDS on Salary Payments & Staff Pension in Human Resource Management System
(HRMS)
iv. TDS on Pension Payments in Central Pension Processing Centre (CPPC)
b) TRS shall integrate with CBS, VPS, HRMS &CPPC and these source systems will share
the data with TRS on regular basis. On the basis of tax deduction effected on payments
made through aforesaid source systems,TRS shall prepare the monthly TDS remittance
and quarterly TDS returns under Central TANs.
c) The TDS remittance, generation of returns and filing of returns will be done
centrally at the Corporate Centre.
d) TRS application will be accessible to the entire SBI branch through CBSB@ncslink
under common login apps. Branches can also view TDS deductee details.
e) Branches/offices need to ensure entry ofthe correct details related to
customers/vendors/employees/pensioners in the respective source systems, so that
appropriate tax is deducted.

92
g) TDS certificates [16A and Form 16 (part-A)] shall be downloaded from the TRACES site
at quarterly/annual interval under Central level and shall be available to the
branches/offices duly authenticated through digital signature. Branches/offices have to
provide these TDS certificates to its customers/Vendors/Employees/Pensioners.
h) Old TANs of the branches should not be used for any fresh TDS credits w.e.f.
01.04.2017. However, with regard to TDS deducted till 31st March, 2017, branches have to
remit the same with Government under the old TANs. Branches/offices also need to file the
TDS return for the Q4 of F.Y. 2016-17 as per extant instructions. Please note that under no
circumstances old TANs to be used for TDS deductions from the period on or after 1st April
2017.
The user is required to take following actions within the below mentioned timelines:

Accessing TRS -
There will be no need of any separate login credentials to access TRS. Users at
branches/operating units level will be able to access TRS with their respective CBS single
sign-on. The TRS access will be available from the App section in CBS by click on the TRS
logo. The following screen will be available to users upon signing in-

93
 Menus available to Teller (At Branch Level)

For detailed description and function of the menus, please refer the TRS User Manual (For
Teller). The responsibilities of the Teller with respect to TDS are described below in detail:

94
Roles and Responsibilities with respect to Source Stream (i.e., CBS, VPS, CPPC and
HRMS)
1) Ensure correct PAN no. is available in the source system
The Teller has to ensure that the data in the source system in respect of PAN of the
Customer, Vendor, Pensioner and Employee is correct and validated from the NSDL
website.
2) Ensure proper data entry in the source system
The responsibility to furnish correct data in the source stream lies with the Teller only. For
correct reporting of tax amount deducted, it is important that the data entry in all the source
system is correct. Any mistake in this may lead to incorrect remittance of tax to the
government or passing of incorrect tax credit to the Customer, Vendor, Employee or
Pensioner.
3) Ensure correct data entry with respect to Form 15G/H
Ensure that the Form 15G/H is received in the Central TAN only. Ensure that the correct
values are given while generation of Form 15G/H in the system, particularly amount
mentioned in Column No. 17 of Form 15G and column 16 of Form 15H in CBS/VPS.
Further, it has also to be ensured that the Form 15G/H received from the customer is
entered in the system on the same day as any delay would lead to deduction of tax.
For Form 15G/H, the following TANs to be used-
a) CBS- TAN will be advised in due course by the FR&T department
b) VPS- TAN will be advised in due course by the FR&T department
4) Ensure correct data entry with respect to Form 15G/H
Ensure that the Concession/ Exemption Certificates received contain Central TAN
applicable to that stream. Further, it has also to be ensured that the certificate received from
the customer is entered in the system on the same day as any delay would lead to incorrect
deduction of tax.
For Concession/ Exemption Certificates, the following TANs to be used
a) CBS- TAN will be advised in due course by the FR&T department
b) VPS- TAN will be advised in due course by the FR&T department
5) Flagging of per se exempt customers in CBS and VPS
Due care has to be taken that customers where no TDS is required to be deducted (e.g.,
Govt, Mutual Fund, Insurance co. etc.) is selected as “N” in the TDS Applicable in the CBS/
VPS and no such account remains un-flagged in the branch. For detailed instructions,
please refer E-Circular No. CFO/FRT-TAX/11/2015-16, dated 29.03.2016.
Roles and Responsibilities with respect to TRS-
Please refer TDS Reporting System (TRS) User Manual for detailed description of roles
and responsibilities. However, a brief description is given below:

95
1) Error Correction
Different error reports will be available in TRS under different screens for all users, to make
corrections for the errors in the uploaded data. All the corrections uploaded by the teller will
be checked and authorized by the Admin user before updating the data.
2) Payments made outside the streams (Miscellaneous Data)
There are various instances where payment are being made at the branches to customers/
vendors/ employees/ pensioners outside the streams (i.e., data and TDS for these
transactions are not captured by the respective stream(s) automatically). In such cases,
the payment of TDS will have to be made manually by the branches and respective
deductee details and challan details to be uploaded in TRS through separate screens
(Miscellaneous Data).
3) TDS Refund
a) In case TDS has been wrongly deducted due to non-updation of Form 15G/H, Concession/
Exemption certificate, non-availability of PAN etc. then the branches can make refund of the
TDS deducted in CBS/VPS through the respective source system only, to the customer(s)/
vendor(s) even after payment of the tax has been made to the government up to 15 days from
the end of the quarter. The details of refund so made through the respective stream shall flow
to TRS and should be appropriately dealt with in TRS.
b) No refund of TDS will be permitted after filing of TDS Returns. Therefore, Branches/
operating units should carefully view all the TDS data monthly and quarterly and then
submit the Branch return data.
4) Branch Return Submission request
a) Branches/operating units have to ensure that all the data reported in TRS is correct and
they have to submit the same to TRS.
b) At the end of the quarter, Teller will submit the request for return filing of the branch in
TRS, which will be available for view to the Admin user.
c) The LHO Admin user as well as CC Admin user will have a facility in TRS to enquire that
which branch has not submitted the “return submission request” so that proper action
and follow up can be taken up with that branch.
d) Please note that no refund of TDS will be allowed after filing of TDS Return.
th
e) Branches/operating units for which return submission request is not received by 18
EOD from the end of the quarter, “Forced submission request” will be generated by the
system, which will be deemed as “Return Submission Request” submitted by the branch.
TDS Certificates Form 16A
I. Generation of TDS Certificates will be done centrally which will be available for download
to the branches through TRS as well as in the report folder of Branches/Operating Units.
ii. Branches will then issue theses certificates to vendors / depositors in the same manner
as hitherto.
Form 16
i. Generation of TDS Certificates will be done centrally which will be available for download
to HRMS and CPPC Department.

96
ii. HRMS and CPPC shall provide the Form 16 to the respective DDO (Drawing Dispatch
Officer) for onward distribution to Employees / Pensioners, as being done hitherto.
Points to be kept in Mind
a) Branches should be careful during error corrections and Updation of data in TRS, as any
mistake will lead to incorrect remittance and further in incorrect reporting in the TDS return.
b) Branches should make necessary exercise every month end, quarter end and after
every error correction to reconcile the deductees being displayed in the system with the
deductee data available in the source system (i.e., CBS, VPS, HRMS and CPPC).
TAX on NRO Accounts :
Tax Implications:
Income Tax as per following will be deducted at source on interest earned in the NRO
accounts:
Ø If interest income is less than or equal to Rs. 1 crore: 30.90%
Ø If interest income is more than Rs. 1 crore: 34.608%
In case, depositor is resident of any of those countries with whom India has a DTAA, the tax
will be deducted as per DTAA (Double Taxation Avoidance Agreement) agreed between
India and the respective country. DTAA benefit can be availed by submitting following three
documents:
1. Tax Residency Certificate (TRC) issued by the revenue authorities of current country of
residence
2. Self-declaration (form can be downloaded from our website)
3. Form No. 10F (form can be downloaded from our website)
List of DTAA countries and corresponding TDS rates are given in Guide to NRI Business
available on SBI Time-Manuals.
4. Copy of PAN card issued *.
*In case of non-resident, not being a company, or a foreign company and not having PAN,
the provision of section 206AA shall not apply in respect of payments in the nature of
interest, royalty, fees for technical services and payments on transfer of any capital asset, if
NRI furnishes the details and documents as specified below:
1. Name, e-mail ID , contact number
2. Address in the country or specified territory outside India of which the (NRI) is a resident
3. A certificate of his being resident in any country or specified territory outside India from
the Government of that country or specified territory if the law of that country or specified
territory provides for issuance of such certificates
4. Tax Identification Number (TIN) of the deductee in the country or specified territory of his
residence and in case no such number is available, then a unique number on the basis of
which the deductee is identified by the Government of that country or the specified territory
of which he claims to be a resident.
(For details, please refer Circular No. NBG/PBBU/NRI Department/30/2017-18 dated
04th January, 2018)

v v v
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Chapter - 9
Branch Security
Aspects
NOTES
 Chapter-9: BRANCH SECURITY ASPECTS
9 (i) MAINTENANCE OF CURRENCY CHESTS AND STRONG ROOMS:
The following Guidelines for maintenance of currency chests and strong rooms are
prescribed:
(a) The joint custodians of vault should carry out at regular intervals, preferably once a
week, without fail, an intelligent check of the contents of the chest, to ascertain
correctness of balances.
(b) Bins/ Steel Almirahs inside the strong room containing currency balances must be
under the double lock of cash officer and supervising official having joint charge of the
cash.
(c) Vault register should be signed by both authorized officials. Any inspecting official
visiting the vault should necessarily make an entry in the register meant for the
purpose.
(d) The Joint custodians should necessarily enter the vault only after making use of the
Biometric Access Control System.
(e) Strong room should not be used for storage of old records, stationery and other items.
The contents of gold ornaments under pledge to bank, safe deposit articles, security
forms, cash credit and branch documents, stamps and stamped forms must be
retained in separate safe/ almirahs as far as possible and pasted with a notice “Non
Chest items”.
(f) Regular and periodic pest control and anti-termite treatment should be done in the
chest.
9 (ii) SAFE DEPOSIT LOCKERS: PROCEDURAL ARRANGEMENTS
The vault containing safe deposit lockers must be under the double lock of the official in
charge of safe deposit lockers (who will be at least of the rank of Accountant) and the Cash
Officer or, where the vault is entirely separate from the strong room, another supervising
official. Where the safe deposit vault is entirely separate from the strong room and the
protective arrangements permit only the grille door being kept locked during the day, the
Controlling Authority may allow it to be locked during the day only with the key of the officer
in charge of the locker to obviate the necessity of the Cash Officer or other supervising
officer to attend each time an operation takes place.
The custodian key(s) of the Lockers will be retained by the official in charge but, in special
cases, the Controlling Authority may permit its being entrusted to another supervising
official during the day so that the official in charge of the lockers need not remain in the vault
for the duration of an operation on a safe deposit locker.In no circumstances may the
custodian key and the hirers' keys of the un-rented / surrendered lockers be held by the
same official. Where the custodian key is held by the official in charge of lockers, the
custody of hirers' keys of the un-rented or surrendered lockers may be vested with another
supervising official of at least MMGS II or Cash Officer. While vesting custody of either the
hirers' keys of un-rented or surrendered lockers or the custodian key in officials other than
those having their own safes, adequate arrangements for safe keeping of the keys should
be made without impinging on the principle of independent custody.
98
REFERENCES
a) COS Letter No: COS/ 41/558 dated 20/6/13. Proceedings of committee for high value
Branches.
b) RBI Letter No: DCM(CC) No G-19/03.39.01/2008-09 dated 14.11.2008
c) Book of Instruction, Vol-I, Chapter-7
d) Cash Department- Sudden death/illness of Joint Custodian — Codified Circular
Reference Book on Staff Matters
e) Implementation of Security Precautions/Arrangements — CSO 6/87 dated 10.6.87

9 (iii) SAFE CUSTODY OF KEYS

INTRODUCTION
There have been instances, where unauthorized person(s), taking advantage of the
custodian's carelessness, managed to obtain impressions of important keys with a view to
create duplicate keys with criminal intent. It is extremely important that everyone,
especially the joint custodians, should exercise great care in the safe-keeping of the keys
entrusted to them. In this context broad guidelines regarding custody of various keys have
been laid down in this chapter.
KEY REGISTER
The particulars of important keys, such as those pertaining to cash, valuables, Lockers,
Strong Room, Cash Safe and the room in which these are kept, etc. must be entered in the
standard Key Register. The keys held by each officer will be listed on a separate folio in
section (a) of the register giving their identification marks / numbers, the separate key
register may be maintained, if considered necessary, for recording particulars of the keys
held by the officials in a particular division / segment. The important keys mentioned above
will be verified by the Bank's Inspecting Officials / Circle Auditors during the inspection /
audit of the branch.
Whenever there is a change in the incumbency of a particular post handling the set of keys,
the incoming official will initial against each entry and also record the date of his taking over
the custody of the respective key(s). He will verify the original keys taken over by him as
also the duplicate keys relating to those keys, kept with the designated branch for safe
custody along with other duplicate keys of the branch.
The keys (other than the important keys mentioned above) of other receptacles /
cupboards, drawers etc. handled by different members of the staff should be entered in a
separate register for general record and control, and these keys need not be verified by the
Inspecting Officials.
Whenever there is a change in the incumbency of the Branch Manager, the register will be
initialed by the incoming official as an indication of having checked and taken over its
charge.
KEY CUSTODY/ HANDLING PROCEDURE
The main keys of the branch (e.g. keys of the strong room, safe deposit vault etc.), on no
account, must leave the possession of the official to whose charge the keys have been

99
The lock of a surrendered locker must be interchanged with that of another vacant locker
before being let out to another hirer and the safe deposit locker key register should be
amended accordingly, the locker number and the new key number being entered in the
appropriate columns below the last entry. In case the hirers' keys of un-rented or
surrendered lockers are held by an official junior to the official in charge of lockers, the
interchanging of locks will be supervised by the official in charge in addition to the junior
official concerned.
Access to the safe deposit vault should be strictly controlled. Access to lockers should be
permitted only after verification of the signatures of the hirers. At the end of the day, officer in
charge of lockers should go round the locker room and inspect each and every locker that
has been operated during the day to ensure that the same is locked properly.
Before closing the locker room, the officer in charge of the lockers will ensure that all
constituents have left the room and no one is inside.
SAFE GUARD FOR MAINTENANCE AND OPERATION OF LOCKERS:
Safe guards for maintenance and operation of lockers should be foolproof. In view of the
same, the following guide lines should be meticulously followed:-
In Bank's own building, lockers should be kept inside strong room of 'Class B'
specifications. In rented premises where proper strong rooms are not available, the safe
deposit lockers should be of the cabinet type in order to provide better protection to them.
The Strong room door/ Grill door of the safe deposit locker room should always be kept
locked except when operation of locker by customer is taking place.
The Custodians key and the hirer's key of the unrented / surrendered lockers should be
kept locked except when operation takes place.
Whenever the custody of either the hirer's keys of unrented locker or the custodian's key is
vested with some other official not having their own safe, adequate arrangements for safe
keeping of keys should be made without impinging on the principle of independent custody.
Access to lockers should be permitted to hirers against their signatures, being duly verified.
More care should be taken in cases of illiterate hirers or nominees of hirers.
Whenever a key of the locker is reported lost by a hirer, greater care should be exercised
and thereafter laid down instructions immediately followed. When the lockers are kept in
ordinary rooms the following security precautions should be ensured:
(a) The entrance to the room should be provided with a collapsible gate/ Grille door in
addition to the main door.
(b) Windows, doors, etc., (if any) other than the main door, should be sealed.
(c) Ventilators should have strong grilles to block any entry.
(d) The safe deposit locker room should be located away from the strong room and cash
department. Under no circumstances strong room and safe deposit locker room should
have a common entrance.

100
entrusted, except as provided hereunder. The grave consequences that may follow any
slackness in the observance of these instructions cannot be too strongly impressed on
officials particularly responsible for the safe custody of the cash, securities and other
valuables.
When the keys of the strong room and other keys are kept in the personal safe of theBranch
Manager (or of the supervising official jointly in charge of the cash), keys of the safe in which
they are lodged must not leave his custody. The above instructions apply with equal force to
the Cash Officer, who is responsible for the custody of keys and for the arrangements made
(subject to the Branch Manager's approval) in the event of his absence from office.
STRONG ROOM KEYS
The following instructions will be strictly observed in regard to the custody of keys of the
strong room overnight:
The two sets of keys of the strong room doors held by the joint custodians (viz. the
Supervising Official and the Cash Officer) should be retained overnight in separate safes.
In no case may the arrangement permit of the possibility of anyone other than the Cash
Officer or the Supervising Official having access to their respective keys.
The supervising official jointly in charge of the cash, who is ordinarily provided with aFire
and Burglar Resistance (FBR) safe outside the strong room, should always keep his keys
of the strong room doors (i.e. grille and the outer door) and of the receptacles inside the
strong room in the drawer of his safe and carry on his person only the keys of the safe and
the drawer. Where he has not been provided with a safe, he should keep the above
mentioned keys locked in one of the drawers of the safe provided to the Branch Manager
and retain the key of that drawer in his personal custody.
DUPLICATE KEYS
Duplicates of all important keys entered in the Branch Key Register must be greasedand
labeled, and all keys held by each supervising official placed in separate packets, which will
be sealed with personal seals of the officials concerned. All packets, thereafter, will be kept
in a strong wooden or tin box, which must be locked or otherwise secured, wrapped in
waterproof cloth and sealed with the Branch Seal in the presence of the Branch Manager
and the other officials concerned. The box should be labeled as under and signed by the
Branch Manager and officials jointly.

The duplicate keys of the Strong Room and the duplicate of all other important keys must be
greased, labeled and placed in a strong wooden or in tin box. The Cash Officer's duplicate
keys will be packed in a parcel and sealed with his own seal before being placed with the
other duplicate keys in the box. When the supervising official in joint charge of cash is not
the Branch Manager, he and other members of the supervising staff holding important
keys, should follow a similar procedure with the duplicates of the keys in their possession.
101
The box containing the duplicate keys of the branch must be locked or otherwise secured,
wrapped in water-proof cloth and sealed by the Branch Manager with the branch seal in the
presence of the Cash Officer and the supervising official concerned. The packet will be
labeled with the name of the branch and signed by the Branch Manager and will then be
deposited at the nearest branch of the Bank or with the local treasury or another Bank of
good standing as instructed by the controlling Authority. In all cases, the relative safe
deposit receipt will be entered in the Branch Document's Register and kept in the Branch
Manager's safe and not to be kept inadvertently in the strong room.
Duplicate keys must be withdrawn from safe deposit at every inspection of the branchand
whenever there is a change of Branch Manager or Cash Officer or Supervising official in
joint charge of the cash. The reason for, and the duration of their withdrawal will be recorded
in the “Key Register” and advised to the controlling authority. The box must be opened by
the Branch Manager in the presence of the Cash Officer and the supervising officials
concerned, who will themselves, break the seals of the parcels containing their keys. When
the duplicate keys have been examined and tested, they will be taken into use, unless they
are more worn out than the originals, and the originals can be deposited in the box. When
the keys are withdrawn during the absence of any of the permanent joint custodians, these
should be withdrawn again and verified when the official concerned reports back for duty
and resumes charge.
Every effort must be made to return the box to safe deposit on the same day, failing which
the steps taken for its safe keeping must be reported to the Controlling Authority. When the
box is held by another branch, the date of its withdrawal and redeposit will also be advised
to the Controlling Authority by that branch; if it is not received back promptly, a reminder
must be sent and the Controlling Authority should be informed.
GUN BOX KEYS:
In Currency Chest branches one key will be kept with the armed guard on duty and the
duplicate key kept with the Branch Manager. In cash balance branches where day-time
armed guard has been posted, one key of the gun box will be with the Branch Manager and
the duplicate key kept with the other duplicate keys of the Branch.
SECURITY OF KEYS
All officials to whom the Bank's keys are entrusted should preferably secure the keysby
means of a chain at one end, with the other end thereof being fastened to their dress.
ACCESS TO KEYS:
All officials who have been entrusted with custody of keys should ensure that no
unauthorized person can have access to the keys. The keys are meant to be used and
operated by the custodians only. Branch Managers and other custodians of keys of
safes/strong room should not permit other staff members to close the doors and turn the
handle prior to the locking. This practice is dangerous because it is sometimes possible for
the officials to forget/ fail to turn the key because the door is apparently in closed state.
9 (iv) ARMS AND AMMUNITION
Out of the entire range of security equipment the most important is “The weapon system''.
Presently Banks are authorized to hold standard pattern of 12 bore DBBL guns
manufactured by firms approved by the Dir. Gen Quality Assurance (Small Arms). Every
Currency Chest branch is posted with armed guards and issued with two or more 12 bore
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DBBL guns. In addition, other cash balance branches posted with day time armed guards
are provided with DBBL gun(s).
The arms and ammunition that can be procured and possessed by a Branch, is governed
by The Arms Act 1959 and the Arms Rules 1962. Generally the Arms Act deliberates on
what is right and wrong while the Arms Rules give out the procedure as to how a certain
thing is to be done. For Example, the Act states possession of a weapon without a valid
arms license is prohibited, whereas the Rule gives the procedure for acquiring an arms
license.
Gun License:
According to Govt. of India, Ministry of Home Affairs letter No.V-11013/2/819- Arms dated
8th Dec. 1981, a license should be obtained from the Licensing Authority for each such fire
arm in favor of “Branch Manager of a branch by designation” (for e.g. “Branch Manager SBI
(Name Of Branch)”) and NOT in the name of the officer posted as Branch Manager.
Retainers: Name(s) of all permanent guard(s) serving at a branch must be entered as
retainer(s) on each of the license(s) and only then he/they would be legally authorized to
handle the gun(s) on behalf of the licensee, i.e. the Branch Manager.
Renewal: The license(s) must be renewed before its validity expires which is normally 3
years, unless specified to the contrary in the license. Date of renewal of the license should
be diarized and taken up two months in advance of the due date so that the process of
renewal is completed well in time. Necessary renewal fees must be deposited through
challan in Government Treasury branch under the head “055 Police”. The duplicate receipt
(copy) of the challan should be forwarded along with covering letter and license for renewal.
AMMUNITION
Branch Managers should purchase ammunition locally, from an authorized Arms and
Ammunition dealer. Branch Manager may issue the guards with a maximum of 10
cartridges for day- to-day use against signatures. Of these, 2 cartridges will be kept loaded
in the gun while on duty and the remaining kept in the pouches/cross belt. The gun and the
10 cartridges should be handed over together to the next guard taking over duty. Guns must
be unloaded and proved clear before handing over to the next guard. Handing over of gun
and cartridges should be noted correctly in guards handing over/ taking over register.
Every year at least 5 cartridges may be used for test firing and to give firing practice to our
guards. Firing practices could be carried out at police firing ranges after taking assistance
of police authorities or at our SBLC's, during armed guards training. The spent cartridges
may be replaced with new ones.
A List of Arms and Ammunition Dealers near a branch should be maintained by the branch
in security information register, along with Contact numbers.
Life of Cartridges: The life of cartridges is to be 2 years from the date of purchase (Bill
Date) which means that all the cartridges held in a branch should be replaced after every 2
years. After issuing the requisite number of cartridges to the guard(s), the balance of fresh
cartridges should be kept in a box wrapped in a polythene bag to avoid its exposure to
humidity and the weather. This bag should not be kept in the gun box along with the spare
gun but to be kept in a separate almirah or safe. Unused cartridges kept properly packed in
a box, may have a longer life, if left undisturbed.
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levels; firstly, providing important clues about the criminals to the law enforcing agencies
and secondly, on apprehension of the culprits to provide the evidence of their crime. CCTV
systems provide greater security cover and have a powerful deterrence capability and
provide extensive data of recorded images for post event analysis.
In banks, CCTV equipment may be used to observe cash handling areas, cash storage,
transactions, parking, and ATM machines and premises surveillance. CCTV systems may
operate continuously or only as required to monitor a particular event. A more advanced
form of CCTV, utilizing digital video recorders (DVRs), provides recording for many
months, with a variety of quality and performance options and extra features such as
motion-detection alarms and email alerts.
TIME LOCK
It is a device which allows keeping the safe/vault doors locked for a predetermined time.
During this period any attempt to open the safe/vault door, even with its own keys (except
the master key/ keypad) will not be possible. Only when the mechanism releases at the
predetermined time, the safe/vault doors can be opened. Time lock is of two types viz.
mechanical and electronic. The electronic time lock is an electromagnetic programmable
locking system. It is fitted inside the strong room door enclosure and has a digital lock
display as well as a two bridge locking system and a one point lock programming key with
an alarm set. The locking facility is available for a time span varying between one minute
and 120 hours.
These have been found useful for Currency Chests/Strong Rooms. The doors of the Strong
Rooms can be locked and opened only at a pre-set time thus providing protection even
during day from sudden raids in the Branches.
Guidelines for Time Locks:
(a) Time Locks should be installed mandatorily in the vault doors of all the Currency chests
& High Value Branches.
(b) Its master keys are deposited with the nearby bank branches to ensure its
impregnability. Ref Corporate Centre letter No COS/43/268 dated 03.12.2012
HAND HELD AND DOOR FRAME METAL DETECTORS
Hand Held Metal Detectors (HHMDs) Hand Held Metal Detectors (HHMDs), also
sometimes called Metal Detection Wands, are a very common security technology. Hand
Held Metal Detectors are used at public buildings and offices. Hand Held Metal Detectors
devices allow the security staff to more accurately locates the source of an alarm on a
scannee's body. By moving the Hand Held Metal Detectors around and close to a
scannee's body, the operator can fairly accurately locate sources of metal that may be on,
or even in, the person's body. When a suspect area is located, the Hand Held Metal
Detectors will generally give off an alarm squeal. Thus, it will help to ensure that no one is
bringing a weapon inside the premises.
Metal detectors use one of three technologies:
(a) Very Low frequency (VLF)
(b) Pulse induction (PI)
(c) Beat-frequency oscillation (BFO)

104
Disposal of Old Cartridges: The old and time expired cartridges should be kept
separately in a box wrapped in a polythene bag and issued to guard(s) deputed to attend
training courses. These cartridges will be utilized for firing by the guards under the
supervision of Security Officer conducting such training who will issue a certificate after
firing/destruction of the blank/misfired cartridges. On receipt of the certificate of
expenditure of cartridges, the Branch Manager would make necessary deletion entry (ies)
in the Ammunition held record in security information register maintained for the purpose. In
case, the firing is carried out in a police range under the supervision of the police officials
(when the bank Security Officer is not present), a certificate to the effect that the
blank/misfired cartridges have been destroyed is to be obtained from them.
9 (v) SECURITY EQUIPMENTS
SECURITY ALARM:
The security alarm system is an important and integral element in the physical safeguards
against theft, burglary, dacoities and robberies. It is a security aid which gives warning
whenever there is a danger to life, cash and other valuables kept in banks. The alarm
system is an electronic device, which enables a person to operate or activate the signal or
gets activated automatically.
Alarm system has a threefold objective. The objectives are:
(a) To scare and frighten the thieves and robbers and force them to flee;
(b) To alert neighbors so that, they can:
(i) Inform the police immediately about the occurrence of the theft or robbery;
(ii) Organize measures for apprehending the culprits;
(iii) Organize measures for blocking exits and obstructing an easy escape; and
(c) To alert the police so that, they can apprehend the thieves/ robbers.
The system should be simple so that it can be operated by one and all. Care should be
taken to ensure that false alarms are eliminated. The alarm system should also be tamper
proof as the culprits would first of all attempt to cut the wires of the alarm system and also
disconnect the telephone(s). The system should also be capable of indicating the defects
automatically. It should be tested daily before the commencement of the business. The
system should be capable of working effectively both, on electricity and on alternative
power supply in the form of a battery back-up.
CLOSED CIRCUIT TELEVISION
Closed-Circuit Television (CCTV): It literally means Tele Vision in a Closed Circuit. It
pertains to the use of video cameras to capture and transmit video signals to a specific
place, on a limited set of monitors. All the components of this system are connected in a
closed loop or circuit, from where the system derives its nomenclature. The system is most
often used for surveillance in areas that may need monitoring such as banks, airports,
military installations, Offices, Homes, Roads, Traffic Management and any other area of
interest which merits constant surveillance.
CCTV provides remote electronic surveillance of target areas on 24X7 basis. Due to its
inherent qualities it is a powerful tool for security. In that, it is used in fighting crimes at two

105
9 (vi) FIRE SAFETY
INTRODUCTION:
Fire plays the dual role of servant and master depending on how we handle it. Every fire,
however major it may be, would pass through its incipient stage during which if we are
vigilant and take timely action, we could prevent a major disaster. An awareness of the
devastating consequences of a fire accident should caution us to take adequate preventive
measures and avoid being negligent. Most of the fire accidents are caused due to sheer
negligence and lack of alertness on our part. Fire safety is not a complicated technical term
but is a by-product of common-sense and presence of mind.
Methods of Extinguishing a Fire: There are three methods of extinguishing a fire and
these are:
(a) Starvation: This can be achieved by removing the combustible material from / or in the
vicinity of the fire.
(b)Smothering: This involves cutting off or reducing the supply of oxygen from / to the
burring material so that the oxygen percentage in the surrounding air is below the
combustible level.
(c) Cooling: This can be achieved by using water which absorbs heat from the burning
material. Pouring water on the burning surface of oil will, however, have no effect because,
water being heavier than oil, will sink down letting oil to burn more fiercely. Water should
also not be used against any electrical fires as water is a very good conductor of electricity
and may cause harm or fatality to the operator.
Fire Safety Arrangements: Requirements for Server Room/ Battery Room/UPS Room
(a) As far as possible, the walls of the server / Battery / UPS room shall be of brick work/
RCC having plaster finish. If for some reasons, wooden partitions or wall paneling is
proposed on the brick walls for aesthetic reasons, then the supporting frame work must
be of metal viz G.I or Aluminium and BW grade plywood and adhesive used for skinning
and lamination shall be ISI marked.
(b) The side viewing/ screen window to the front wall of the server room shall be kept to bare
minimum size and toughened glass having 12 mm thickness be used.
(c) The walls/partitions of these rooms shall extend up to the roof. If required, separate
false ceiling of non-combustible material can be provided in these rooms.
(d) No cables shall pass through the false ceiling of these rooms.
(e) In case there is no external fire hazard or security risk, these rooms shall be located on
an external wall and a normal glass window on external wall may be provided so that in
case of fire the glass breaks and allows smoke to escape.
(f) Stand-by window A.C. arrangements shall be considered in the initial stage itself and it
should be ensured that A.C. units are periodically switched-off.
(g) Solid core doors, 50mm thickness, with teak wood leaping all around shall be provided
to these rooms.
(h) Stationery items or records shall not be kept in Server/Battery/UPS room.

106
Fire Safety Arrangement: Requirement for Air Conditioning System
(a) Air conditioning ducts shall be insulated from inside/outside with non-combustible
materials.
(b) Foam based insulation material shall not be used for under deck insulation, A.C. ducts
(inside/outside), chilled water pipes or for any other insulation purpose. Thisfoam based
materials, even if they are fire resistant type, must not be permitted.
(c) Provisions shall be made so that Air-Conditioning system stops functioning in case of
activation of any fire detector or manual call point.
Housekeeping: Good housekeeping for fire prevention is a must. The following
precautions should be taken in this regard.
Combustible materials such as waste papers, oil rags, and wooden packing cases should
not be left lying about. Metal bins with lid should be provided at suitable places wherein
waste paper and other garbage must be deposited. These bins should be emptied at the
end of the day or next morning and their contents disposed of. All waste paper is to be
destroyed by burning, in an incinerator or metal drum should be used. Burning of waste
should be done outside the premises.
As far as possible the surroundings of the building should be kept free of combustible
materials.
Papers/stationery/records, etc., should be stacked in such a way that a clear gap of 3-inch
is left between the top of the stack and the ceiling. In no case, such stacks should touch any
electric wiring.
Use of stoves, electric heaters should be shunned and be replaced by Induction Cook Tops
manufactured by reputed manufactures, incorporating all the safety and energy features.
Oil spillage must be avoided. In case of any spillage, it must be cleaned immediately.
Fuel such as fire wood, coal, kerosene should be stored in isolated rooms or in closed
drums away from fire sources.
Gas Connections:
Gas line, if any, should be properly closed before leaving the kitchen at the end of the day.
Leakage in the gas-pipe or even a suspicion of leakage should immediately be attended to
Gas cylinders should not be exposed to intense heat. Valves of cylinders must be properly
closed, when not in use. The rubber pipe connecting the gas cylinder and the burner/oven
must be examined every time a cylinder is changed and it is replaced every year or as and
when required with a new tube supplied by Gas Company.
Naked light should not be brought near gas cylinder.
Lighted stoves should not be left unattended.
Other Precautions: In addition to the preventive measures mentioned above, the
following additional precautions should be observed:
Smoking should not be permitted anywhere in the branch NO SMOKING boards should be
prominently displayed in English and Regional language.
Adequate water supply must be available at all times. Water reservoirs, tanks must be kept
107
full and the water pumps, if any should be in perfect working order. Also identify additional
water sources from the surrounding areas.
Telephone numbers of Fire brigade, Police station, and Branch Manager/ senior officer,
Fire Officer, Security Officer(s) and Circle Security Officer must be prominently displayed
near the telephone(s).
Old disposable records as well as broken furniture items shall be destroyed as per the
extant guidelines of the Bank.
Water accumulation/seepage in the branch premises shall be avoided.
Fuel drums/cans required for D.G. set shall be kept away from the D.G. set. Drums shall be
kept on the soak pit, filled with sand, sufficiently big to absorb entire fuel quantity.
Emergency contact Nos. shall be easily available with Branch Manager as well as Security
Guard.
One Emergency Life Savings Apparatus (ELSA) may be provided per floor (circular No.
CFO/GMCS/89/01205 dated 15.12.1989).
Fire officer posted at the LHO should be associated in the important, high value (exceeding
Rs. 2.5 Crores) ambience improvement and new construction projects from planning stage
itself at least for the High-Rise buildings to avoid complications/confusion at a later stage.
He may be consulted even for lower value projects if warranted under any special
circumstances.
Where the branches have already been renovated, measures, as stated above, may be
implemented to the extent possible.
For firefighting purposes, automatic flooding system is not considered necessary in the
Branches.
Fire Prevention in Godowns/ Stationery Rooms:
The following additional precautions should be observed in godowns Packages/bundles
should be stacked so as to provide easy access to the top.
There should be a clear gap of three ft. between the ceiling and top of the stacks as well as
on all sides. If the depth of the stack is more than fifty feet, then there should be a three feet
wide central gangway at the center. Under no circumstances, the packages/bundles
should touch any part of the wall/ceiling.
The packages/bundles must not touch any portion of the electrical wiring or appliances.
Where the stacks are covered with tarpaulins, free circulation of air should be ensured. The
stack should be aired by removing tarpaulin at least once a fortnight.
Godown must be aired at least once a fortnight.
Smoking in godowns must be prohibited. 'NO SMOKING' signs should be prominently
displayed in and outside the godowns.
Flammable materials should be stored in a separate godown. License/ permission from the
fire brigade should be obtained before storing any flammable material in the godown.

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The entrance of the godown should be kept clear of all obstructions. Door(s) and window(s)
should open fully.
Installation (Fixing) of Fire Prevention Glow Sign Display Boards:
As per extant guidelines Circular No. PRM/FIRE/1/2012-209, dated June 6, 2012, all the
Offices/ Branches should have Photo Luminescent (AUTO GLOW) signageto help/ guide
the occupants of the building in case of emergency/evacuation. These signages are
mandatory in all High Rise, Multi Storied Buildings (The buildings above 15 Mts in height).
The local Fire Brigades and Municipal Bodies insist on installation of the above Photo
Luminescent (AUTO GLOW) Signage while issuing NO OBJECTION CERTIFICATE
(NOC). These signages are required to be displayed at each Floor/ Landing/Pathways /Lift
lobby/ Staircases/ Lifts. The signage should indicate the firefighting, fire safety equipment
and systems present on the respective floors/ landing.
FIRE PROTECTION SYSTEM
Automatic Fire Detection and Alarm System (AFD&AS)
The following type of Automatic Fire Detection and Alarm System (AFD&AS) based on the
type of occupancy is to be provided (Details of technical specification given inAutomatic
Intelligent (Addressable) Fire Alarm System to be provided at multi storied branch
occupancy exceeding two floors or single storied occupancy of floor area exceeding
20,000Sqft.
Analog Microprocessor based Fire alarm system shall be provided at all other
occupancies.
Common Features of AFD&AS:
Detectors to be installed throughout the branch. In case, Guard is not available during the
night time, Auto dialer shall be incorporated to inform the concerned officials.
If possible, arrangements are made to inform the nearest fire station also through auto
dialer. Good liaison with the officials of local fire station is essential and, efforts shall be
made to obtain Mobile numbers of Station Officer/Sub-Officers of the nearest Fire Station.
FIRE FIGHTING EQUIPMENT:
Branch Managers should have the details of the number and correct type of various
firefighting appliances which are to be deployed in their branch premises.
The following guidelines are issued to enable the Branch Managers to correctly plan the
firefighting measures at their branches.
Normally the following equipment's must be made available for use:
Fire Buckets for storage of sand (Only for fuel storages exceeding 200 Litres): Useful for
small fires of above type and also for fires due to small oil spillages, etc. Sand should be
kept loose, dry, clean and filled up to two thirds level of the bucket and kept in readiness.
Water CO2/water (Gas pressure) Extinguisher: Suitable for fire on wood, paper, plastics,
fabrics, coal, etc., (Class A fire). The water jet (a good conductor) should not be used on
electrical fires unless electric mains have been switched off and there are no DCP/CO2
extinguishers readily available.

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Dry Chemical Powder Extinguisher (DCP): These spray dry chemical powder and are,
therefore suitable for use on electrical, (inflammable) liquid fires (Class B fire) and gas fires
(Class C fire).
Foam Extinguisher : These eject foam, which is lighter than oil and are, therefore, suitable
for fires involving oil, petrol, diesel, paint, varnish, etc. (Class B fire).
Carbon Di-Oxide Extinguisher (CO2): These eject carbon dioxide gas and hence suitable
for fires involving electric and electronic appliances or liquids and gas fires (Class B and
Class C fires).
All the Security Guards and branch personnel shall be adequately trained in use of fire
equipment.
The CO2type and water type fire extinguishers shall be provided throughout the branch.
One 4.5kg capacity CO2,extinguishers and one 9 litres water type, extinguisher for every
200 sq.mt. Floor area or part thereof with minimum of 2 extinguishers of each type on every
floor. Extinguishers shall be so located as to be available within 10 m radius. Dry powder
extinguishers, BC or ABC type, need not be provided. Keeping ambience in view, suitable
niches may be provided at the required locations, to store the extinguishers. The existing
Dry Powder extinguishers may be shifted near Electric rooms/DG Set.
One additional CO2type fire extinguishers of 22.5 kgs. Capacity, trolley mounted, with
flexible hose, be provided per branch, where not already provided.
All extinguishers shall be maintained as per IS: 2190 but refilling of all fire extinguishers
shall be carried out once every year. This is recommended so that all staff members
operate the extinguishers themselves before refilling the extinguishers to gain the required
confidence to enable them to use these without any hesitation or fear in case of a fire.
However, in case the Circle authorities feel that all the staff members have gained the
required confidence, then the refilling schedule, as mentioned in the appended Table may
be adopted. However, a note may be duly recorded at the LHO/ ZO concerned to this effect
before adopting the modified schedule as under:

v v v

110
Chapter - 10
Safe Deposit Locker
And Safe Custody
NOTES
 Chapter-10: SAFE DEPOSIT LOCKERS

Safe Deposit Locker facility is offered at our select branches and allotment of lockers are
subject to availability and compliance with other terms and conditions. Branch should
exercise due care and necessary precaution for the protection of the lockers provided to the
customer. Allotment of multiple safe deposit lockers is not prohibited.
Eligibility:
Lockers can be hired by an individual, singly or jointly with another individual(s), He / She
must be a customer of the branch, having a SB/Current account. There is no restriction on
allotment of multiple lockers; however this will be subject to availability of lockers at a
particular branch. More than ordinary care should be taken while allotting more than one
locker to a customer either singly or jointly.
Lockers to visually impaired/ blind person - Visually impaired/ blind person may be provided
with a locker facility. They may be provided with the locker facility without insisting on joint
operations. They may be allotted suitable lockers convenient for operations. Literate
visually impaired locker hirer/(s) will also be required to put his /her /their thumb impression
along with his/her/ their signature.
Apart from Locker agreement and other documents, suitable Undertaking having
Indemnity clause should also be obtained, depending upon the mode of locker operation.
Depending upon the availability at the branch visually impaired/ blind person should be
allotted lockers with hinges or with an additional (personal) locking facility, as a confidence
building measure. Not using personal lock should be the choice of the locker hirer in the
case of visually impaired/blind persons. Other instructions regarding operation and issue of
Safe Deposit Locker in Normal course will remain the same.He/she may be given the
following options for operation of locker:
Operation - Singly
i) When blind/ visually impaired hirer operates the locker himself.
ii) Operation singly- through power of attorney
Operation - Jointly
i) Where one of the joint hirers is not blind / visually impaired.
ii) Where all the joint hirers are blind/ visually impaired.
iii) Operation through Power of attorney.
Procedure to be followed in both the above cases would be as under:
Operation - Singly:
a) When blind/ visually impaired hirer operates the locker himself.
If the blind / visually impaired person is capable of recognizing the articles kept in the locker
and also capable of placing articles in the locker and withdrawing the same without the
assistance of any other person, on giving undertaking to this effect, at his/her risk, he/she
can be allowed to avail self-operating locker facility in single name. (Undertaking to this
effect is included in indemnity cum undertaking).

111
1. The Locker hirer may be clearly informed that Bank is not responsible for the contents
kept in the locker. This clause has been included in the letter of Undertaking.
2. Locker can be operated by the hirer singly. Locker access register should always be
signed by the visually impaired person in the presence of a person known to the bank who
should sign as a witness. While such a witness should be preferably customer of the Bank,
a branch official other than the Locker in charge may also put his signature as a witness.
3. Any operation carried out in the locker, by the, hirer is at his own risk and bank is not
liable for any claim made at a future date.
4. As soon as the locker operation is over, supervisor-in-charge of lockers should go
personally to the locker room and verify that the particular locker cabinet is securely locked
and that no item has been left out in the locker room. This has to be done, before allowing any
other person to carry out their locker operations.
5. The hirer should be informed by the locker in-charge, before the applicant leaves the
branch premises, that he has verified the locker cabinet and that it has been securely
locked and that no item has been left out in the locker room. This would enhance the
confidence of the locker applicant.
6. A declaration from the hirer for being informed by the bank official on the above lines
may be obtained duly countersigned by the locker in-charge of lockers. This declaration
should be taken on the reverse of the Locker Access sheet with following wordings:
“I declare that I have been informed by the Locker In charge that my locker cabinet has
been closed securely”.
b) When blind / visually impaired hirer operates the locker through 'Power of attorney':
Bank can accept notarized “Power of Attorney” in favor of another person who will operate
the locker on behalf of the blind/ visually impaired person. Thereafter the bankmay allow
operations under the signatures of duly authorized person having notarized power of
attorney.
Joint Operation:
a) Where one of the joint hirers is not blind / visually impaired
Visually impaired person/ blind may have joint operation facility where one of the Co-hirers
is not visually impaired /blind. Following procedure will be followed in such cases:
1. Where one of the hirer is blind / visually impaired, a locker in joint names may be
allotted. Co-hirer, who is not blind, may be allowed to operate the locker jointly with the
blind/visually impaired hirer.
2. At no point of time, the joint account holder, without the presence of the visually
impaired account holder, is permitted to operate the locker.
3. Signature in Locker access register should be done by visually impaired person as well
as by joint locker holder in the presence of a person known to the bank who should sign as a
witness.
b) where all the joint account holders are visually impaired / blind:
In case of joint operation with E or S, any one of us or survivor(s) or any other mode of joint

112
operation, where all hirers are blind and if they insist on jointly operated locker facility and
are prepared to furnish the undertaking to this effect, then the locker facility shall not be
denied to them.
4. All other conditions applicable to Operation Singly will also apply.
Operation jointly through Power of Attorney:
Bank can accept notarized “Power of Attorney” in favor of another person who willoperate
the locker on behalf of the blinds/visually impaired joint locker hirer(s). Thereafter, the bank
may allow operations under the signatures of duly authorized person having notarized
power of attorney.
Allotment-
Branches should maintain a wait list for the purpose of allotment of lockers and ensure
transparency in allotment of lockers. A safe deposit locker cannot be allotted to a minor
either singly or jointly with others. Branches will display the vacancy position in their Notice
Board and Circle website.
The locker should be allotted on first-come-first-served basis and a separate register
should be maintained. All applications received for allotment of locker should be
acknowledged and given a wait list number. Providing locker facility should not be linked
with placement of any type of deposit/Term Deposit. However, customers will be required to
open a Special Term Deposit at the time of allotment that would cover 3 years rent and the
charges for breaking open the locker in case of an eventuality.
If any hirer vacates a locker or the branch acquires a new locker cabinet, the allotment of
locker should be as per the order of wait list maintained at the branch.
A written communication should be sent to the applicant's address by registered post giving
him sufficient time, say, 15 days to acquire the locker.
Risk categorization and 'KYC' guidelines issued by the Bank should be meticulously followed.
Branches will carry out customer due diligence as per KYC norms for the customers at least to
the levels prescribed for customers classified as medium risk. If the customer is classified in a
higher risk category, customer due diligence as per KYC norms applicable to such higher risk
category should be carried out.
Agreement-
The hirer will be required to sign an agreement on form C.O.S. 404 which embodies, on the
reverse thereof, the conditions under which lockers are let out
by the Bank. A copy of the signed Locker Agreement and allotment letter should be given to
the Locker hirer(s) with an acknowledgement from the hirer.
Operations -
A locker account is to be opened in the Safe Deposit Locker Module of CBS.Access to
lockers will be permitted to hirers against their signatures in each instance in the Safe
Deposit Locker Access Register.
Joint locker hirers can give mandate for access to the lockers in the event of death of one of
the hirer on the lines similar to those for deposit accounts.

113
The hirer can operate the locker allotted to him free of charge up to 12 operations in a year
(April to March). Thereafter, he is required to pay charges for each visit at the rate
prescribed by the Bank. For lockers allotted in the middle of the year, pro-rata rentals will be
levied along with the advance rental and one-time fee/charge. These charges are levied by
the System automatically from the SB/CA of the hirer. The Customer may also deposit in
cash.
The hirers should open a Current or Savings Bank account, if he has no deposit account in
any of our branches. The hirer should give a Standing Instructions for annual rent payment.
CBS will deduct annual rents in advance for the Financial Year on 2nd April every year. The
S.I.(Standing Instruction) will be chased for 90 days. If during this period rent isnot
recovered, a 'hold' in the SB/Current account will be put equivalent to the pendingamount.
This hold can be removed by the teller at the time of putting through the rent recovery
transactions.
In the case of lockers in joint names, if a notice revoking the mandate of operation is
received, access should be allowed to all the hirers jointly.
Access to a locker may be allowed to a hirer's representative/attorney only against a power
of attorney in favor of the latter, on form C.O.S. 512 in case of single hirers, and on form
C.O.S. 513 in case of joint hirers. The power of attorney and the attorney's specimen
signature, duly verified by the hirer, should be recorded in the usual manner.
Where the locker has remained un-operated for more than 3 years for medium risk
category or one year for a higher risk category, the branch should immediately contact the
locker hirer and advise him/ her to either operate the locker or surrender it. This exercise
should be carried out even if the locker hirer is paying the rent regularly.
In case the locker hirer has some genuine reasons as in the case of NRIs or persons who
are out of town due to a transferable job etc., branch may allow the locker hirer to continue
with the locker. In case the locker hirer does not respond nor operate the locker, branch
should consider the opening of the locker after giving due notice to the locker hirer.
Rent-
Rent of the lockers depends on the size of lockers allotted and different rates are applicable
for Metro/Urban and Semi-Urban/Rural branches.
If rent is not paid on due date, CBS Screen cautions the teller about non recovery of rent
and the teller has to first recover the rent before allowing operation. Similarly after 12
operations have already been allowed and for the thirteenth time, when operation is
allowed, the teller will be cautioned by the System and he will first recover the applicable
charges then allow access to locker. Locker Hirer can operate the Locker after payment of
pending rent plus overdue charges, if any. Overdue charges are levied @ 10%, 20%, 40%
and 50% of the annual rental for 1st, 2nd, 3rdQtr. and one year delay in payment.
Overdue period is calculated as under -
S.I. set up on say 1/4/2014 for advance rental for the year 2014-15, then overdue charges
would be @10%, 25%,40%, 50% of Annual rent 1st July 2015, 1st Oct 2015, 1st Jan 2016, 1st
April 2016 respectively if remaining unpaid till that date.

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Nomination –
Nomination facility is available to individual(s) holding the lockers singly or jointly. In case of
singly operated lockers, only one Nominee is allowed. In respect of lockers held in joint
names, up to two nominees can be appointed. Nomination facility in respect lockers with 'E'
or 'S'/ 'F' or 'S'/'any one' or 'S'/'latter' or 'S' mandate' is not available.
Break Open of Lockers -
In the locker agreement, a clause has been incorporated, in terms of RBI guidelines, that in
case the locker remains un-operated for more than one year, the Bank would have the right
to cancel the allotment of the locker and break-open the locker, even if the rent is paid
regularly.
If the rent has fallen due and payment has not been received for three months, a reminder
should be sent to him and if, at the end of six months, the rent still remains unpaid, a notice
on form C.O.S. 405 drawing attention to conditions of the hiring agreement should be sent
by registered post with acknowledgment due.
Further action will depend on the circumstances of each case but, should rent remain
unpaid when the following year's rent falls due, a final notice by registered post with
acknowledgment due should be served on the hirer on form C.O.S. 406 advising that
unless the arrears of rent are paid within a month from the date of the notice, the locker will
be broken open and the contents dealt with in accordance with his agreement with the
Bank.
The issue of a final notice and its outcome must be reported to the Controlling authority
without whose approval no locker may be broken open.
Breaking open of the locker is done by calling the supplier of the lockers cabinet. At present
M/S Godrej Security Solutions, M/S Guardwell Securities and M/S Steelage is the
authorized supplier of Locker cabinets. Charges for breaking open of lockers on actual
basis are to be borne by the customer in addition to Bank's Charges.
Loss of Key-
If the key of a locker is reported lost by the hirer, arrangements should be made, with the
approval of the controlling authority, for a representative of the Suppliers of Locker cabinet
to break open the locker and change the lock in the presence of the hirer and the official in
charge of the lockers. All costs in this connection will be recoverable from the hirer.
In lockers hired in joint names, if the key is reported lost, the letter advising loss of the keys
should be signed by all the hirers. They should all be present, or should jointly authorize one
or more of them to be present, when the locker is forced open.
Where the final bill of costs is likely to take time, the approximate amount should be
recovered from the hirer and held in sundry deposits account at the branch.
Valuables found in Locker Room-
Valuables inadvertently left by hirer(s) outside the lockers in the vault/ room should
be retained as safe deposit article at the branch in a packet sealed with the personal seals
of both the joint custodians of cash. Whenever there is a change in the incumbency of either
of the joint custodians of cash, the packet(s) will be opened, contents verified and the
packet(s) redeposit duly resealed in the same manner.
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Surrender of locker-
When a locker is surrendered by the hirer, the key of the locker should be recovered
fromhim and he should be required to sign a letter in the following form, terminating the
relative agreement:
"I/We hereby terminate my/our Agreement for Hiring dated the .........................relating to
Locker No--- and surrender all my/our rights there under. The relative key(s) is/are returned
herewith."
In the case of joint hirers all must, sign the letter, where less than their full number attend the
Bank, a similar letter should be forwarded to the other hirer(s) for signature and return. The
letters and the agreements should be filed in a separate file.
Interchange of Lock-
The lock of a surrendered locker must be interchanged with that of another vacant locker
before being let out to another hirer and the safe deposit locker key register should be
amended accordingly, the locker number and the new key number being entered in the
appropriate columns below the last entry. In case the hirers' keys of unrented or surrendered
lockers are held by an official junior to the official in charge of lockers the inter-changing of
locks will be supervised by the official in charge in addition to the junior official concerned.
Where a locker account is formally closed and a new one opened with the original hirer as one
of the parties, there being no actual surrender of the locker, the lock need not be interchanged
provided a suitable letter to that effect is obtained from all the hirers in respect of the new
account.
For the vacant (unrented) or surrendered lockers, both the keys (custodian key and hirers'
key) should not be held by the same official. Adequate arrangements should be made for
safe and separate custody of both the keys.
Deceased Cases-
Notice or knowledge of the death of a hirer should be noted in the relative account in the
safe deposit locker ledger with the date and source of information, under the initials of the
supervising official in charge. The CIF of the Customer is also marked as 'deceased' in
CBS.As a further precaution, a slip reading 'hirer deceased' should be pasted on the locker.
The nominee will be allowed to access the Locker and remove the contents on identification
(such as Passport, Election ID Card/ PAN etc) and verification of proof of death of locker
hirer. Before permitting the nominee to remove contents of the Locker, an inventory of the
articles should be prepared (in standard format) in the presence of nominee(s) and two
independent witness.
Where there is no Nomination, access to the locker may be allowed only on production of
legal representation (Succession Certificate, Probate or Letter of administration). Access
may however be allowed, for making an inventory of the contents with a view to obtaining
the necessary legal representation, to known heirs of the deceased in the presence of their
solicitors or lawyers or to persons authorized by a Court for the purpose. Arrangements
should be made for two officers of the Bank and two independent witnesses to be present at
the time of the inventory to which they also should subscribe their signatures.
It should be noted that access permitted to Survivor(s)/Nominee(s) is only as a trustee of

116
the legal heirs of the deceased Locker hirer(s), on the condition that such access if given to
survivor(s)/nominee(s) shall not affect the right or claim which any person may have
against the survivor(s)/nominee(s) to whom the access is given.
In the event of death of one (or more but not all) of the joint hirers, the surviving hirer(s) will
be allowed to access the locker and remove the contents on verification of proof of death of
the joint hirer(s) and an inventory is taken in the prescribed manner.
Where the lockers are hired jointly, on the death of any of the joint hirers, the contents of the
locker are allowed to be removed only jointly by the nominee(s) and the survivor(s) after an
inventory is taken in the prescribed manner.
In cases where all the hirers of the locker standing in the names of two or more persons
have died and the rent has remained unpaid or is not being paid by the heirs of the hirer last
deceased, notices on forms C.O.S. 405 and 406 should be posted to the last known
address of such deceased hirer in the manner specified above; notices contemplated in
forms C.O.S. 405 and 406 may also be given further by way of public notices in leading
newspapers with the approval of the Controlling authority in each case. If the default in rent
still persists the full facts of the case together with the outcome of the notices sent as above
should be placed before the controlling authority and their instructions sought for in the
matter.
Miscellaneous-
The vault containing safe deposit lockers must be under the double lock of the official in
charge of safe deposit lockers and Joint Custodians and where the safe deposit vault is
entirely separate from the strong-room and the protective arrangements permit of only the
grille door being kept locked during the day, the controlling authority may allow it to be
locked during the day only with one key to obviate the necessity for two officials being
required to attend each time an operation takes place.
The 'custodian' key of the lockers will be retained by the official in charge but, in special
cases, the controlling authority may permit its being entrusted to another supervising
official during the day so that the official in charge of the lockers need not remain in the vault
for the duration of an operation on a safe deposit locker.
In no circumstances may the custodian key and the hirers' keys of unrented or surrendered
lockers be held by the same official. Where the custodian key is held by the official in charge
of lockers, the custody of hirers' keys of the unrented or surrendered lockers may be vested
with another supervising official. While vesting custody of either the hirers' keys of unrented
or surrendered lockers or the custodian key in officials other than those having their own
safes, adequate arrangements for safe keeping of the keys should be made without
impinging on the principle of independent custody.
For installation of Lockers in the branch Regional Manager approves the requirement.
Lockers are of four sizes and are installed as per the demand at the branch-

Note - For operation in CBS module, please be guided with the CBS Manual
117
IMPORTANT INSTRUCTIONS FOR LOCKERS
Eligibility-
Lockers can be hired by an individual, singly or jointly with another individual(s), He / She
must be a customer of the branch, having a SB/Current account. There is no restriction on
allotment of multiple lockers; however this will be subject to availability of lockers at a
particular branch. More than ordinary care should be taken while allotting more than one
locker to a customer either singly or jointly.
Risk categorization and 'KYC' guidelines issued by the Bank should be meticulously
followed. Branches will carry out customer due diligence as per KYC norms for the
customers at least to the levels prescribed for customers classified as medium risk.
Allotment-
Branches should maintain a wait list for the purpose of allotment of lockers and
ensuretransparency in allotment of lockers. A safe deposit locker cannot be allotted to a
minor either singly or jointly with others. Branches will display the vacancy position in their
Notice Board and Circle website.
The locker should be allotted on first-come-first-served basis and a separate register
should be maintained. All applications received for allotment of locker should be
acknowledged and given a wait list number. Providing locker facility should not be linked
with placement of any type of deposit/Term Deposit. However, customers will be required to
open a Term Deposit/Special Term Deposit at the time of allotment that would cover 3 years
rent and the charges for breaking open the locker in case of an eventuality.
If any hirer vacates a locker or the branch acquires a new locker cabinet, the allotment of
locker should be as per the order of wait list maintained at the branch.
A written communication should be sent to the applicant's address by registered post giving
him sufficient time, say, 15 days to acquire the locker.
The hirer will be required to sign an agreement which embodies, on the reverse thereof, the
conditions under which lockers are let out. A copy of the signed Locker Agreement and
allotment letter is required to be delivered to the hirer under his acknowledgement.
Specimen of Locker Agreement and allotment letter is uploaded in PBBU site.
The hirers should open a Current or Savings Bank account, if he has no deposit account in
any of our branches. The hirer should give a Standing Instructions for Annual rent payment
from that account. The S.I. should be marked through Locker Module only.
CBS automatically picks up one time allotment fees, broken period rent for the current
financial year plus the Annual Rent Amount in advance for the next financial year, as per
size of the Locker allotted. The amount along with Service Tax is deducted from the
account. The hirer can operate the locker allotted to him free of charge up to 12 operations
in a year (April to March). Thereafter, he is required to pay charges for each visit at the rate
prescribed by the Bank. The Customer may also deposit fees in cash. Every year, CBS will
deduct annual rents in advance for that Financial Year on 2nd April every year.
A locker account is to be opened in the Safe Deposit Locker Module of CBS. S.I. for Locker
rents should be put through the Locker Module. Locker hirers should be explained the

118
benefits of 'Nomination' and Form SL-1 for single hirers and Form SL- 1A for joint hirers.
Allotment letter duly acknowledged by the locker hirer should be kept with the Locker
Agreement. A copy of the agreement should be provided to the hirer.
Access to lockers will be permitted to hirers against their signatures in each instance in the
Safe Deposit Locker Access Register.
Joint locker hirers can give mandate for access to the lockers in the event of death of one of
the hirer on the lines similar to those for deposit accounts.
When rent is overdue, the system will display a message in the screen and operation will be
permitted only after deposit of rent and overdue charges are recovered.
In the case of lockers in joint names, if a notice revoking the mandate of operation is
received, access should be allowed to all the hirers jointly.
At the time of surrender of safe Deposit Locker by the hirers, the letter should be signed by
all the hirers. Swapping of Locker keys should be done in the System without fail.

v v v

119
Chapter - 11
ATM Operations &
CMS
NOTES
 Chapter-11: ATM OPERATION AND CMS

11(i) ATM: HARDWARE AND SOFTWARE

The following items of hardware, cabling equipment and related software are required to be
installed at the ATM host branch:
1. Terminal Master Keys (TMK)
Ÿ Branch has to obtain 2 TMKs (ATM specific) from ASC which are
essentiallyalphanumeric codes that has to be input into the ATM for making it live.
Ÿ TMKs may be required subsequently also to make the ATM live in case it goes down.
Ÿ Application for TMKs (TMK1 and TMK2) should be made through Circle authorities to
ASC well in advance.
Ÿ Once the TMKs are received at the branch, these have to be entered in the Branch
Documents Register.
Ÿ TMK1 and TMK2 to be kept in the custody of two different officials.
Ÿ It is to be ensured that an official who has held TMK1 is never given custody of TMK2.
The TMKs are also not to be disclosed by the officials holding them to any other person
and must be input by them personally.
Ÿ In case any of the officials holding custody of TMK is not available due to leave/ absence
/ incapacitation, etc., custody of the TMK should be given to other available official in
accordance with the guidelines mentioned above.
2. Admin Card
Branches have to make a request to ASC for ATM specific Admin Cards through Circle
authorities and obtain these well in advance. The Admin Cards are sent by the debit card
vendor to branches directly.
Admin Card is received in two sets. One set is kept as a backup card while the other is used
for daily operations (The backup card should also be tested periodically to ensure that it
works).
Details of Admin Cards and its PIN Mailers have to be entered in the Branch Documents
Register. The backup set is kept in the custody of the joint custodian (Accounts) while the
other is kept with the ATM Officer.
The Admin Card is used in the ATM for reporting details of Cash Replenishment directly to
ASC. This activity is called Admin Function. As such, Admin Function has to be performed
each time cash is replenished in the ATM.
In case one of the Admin Cards is damaged / misplaced / lost, branches should immediately
arrange to obtain another Admin Card through ASC and use the second card in the
meantime.
Any cash replenishment done without Admin function will not be accounted for at ASC and
resultantly, insurance claims will not be tenable.

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3.Maintenance of Off Site ATMs
As more and more ATMs (especially off-site) are being outsourced for cash replenishment
either by a Currency Chest Branch or through CIT (Cash in Transit) Agencies, the original
home branch has become a card-issuing branch with no 'linkage' to their off-site ATMs.
However, the following tasks, which are not related to cash, remain with the said branches
to be performed:
Payment of Monthly rents and electricity charges;
Custody of leased agreement, licenses;
Upkeep of items not covered by AMC, etc.
While CAC manual provides for the original home branches to continue to perform the
above functions, the BPR team has reviewed the position and decided that the above tasks
can be taken over by the respective Zonal Offices. Official-in-charge of ATMs at Zonal
Office with the assistance of Channel Managers can perform these functions. Accordingly,
payment of monthly rents/lease rental, electricity and other related charges, custody of
related agreements and their renewal, upkeep of items not covered by AMC in respect of
the site, etc. can be taken over by Zonal Office.
Role Holders at Branch
Various roles to be performed in respect of matters relating to ATMs are detailed here.
While the roles may be performed by different officials, it is also possible to combine some
of the functions, depending on the availability of officials in a branch.
i. ATM Officer
ATM Officer is a point of contact for customers as well as different service providers. He
also handles all the system related work pertaining to ATM.
ii. ATM Joint Custodians
ATM Joint Custodians are responsible for replenishing cash in the ATM. They have to
ensure that adequate ATM fit currency notes of the required denominations are replenished
in ATM. They need to perform the admin function each time the cash replenished and to
ensure that Admin cash tallies with physical Cash and BGL account balance.
iii.Custodian of Undelivered ATM Cards
Custodian of Undelivered ATM Cards is responsible for ensuring that the cards sent by the
debit card vendor to the branch are actually received, card details are recorded in a portion
of the ATM Cards Issued Register and cards are delivered against identification and safe
custody of the undelivered cards. Normally, Branches get such cards that could not be
delivered to customers directly, and cards issued under special schemes.
The card custodian cannot be a Custodian of PIN Mailers under any circumstances.
The Cards, lying undelivered for a period of 45 days are to be recorded in the Register and
Hot-listed.

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4. KEY HANDLING
I. Terminal Master Keys (TMKs)
TMKs are used for making an ATM live and must be recorded in Branch Documents
Register.
ii. Branch Key register:
All the keys are to be entered in the Branch Key Register and handed over to the official
concerned against acknowledgement. Whenever these keys are handed over/ taken over,
proper record and acknowledgement should be made in this register.
The duplicate keys, except combinations should be kept as per the procedure prescribed
for branch duplicate keys.
iii. Hood Key
It is used to access the inside of an ATM. This key is to be kept in the custody of one of the
joint custodians, preferably the custodian handling the Admin Function.
iv. Safe Keys / Combination Keys (Passwords)
The safe can be accessed only after the hood is opened. The safe door has a combination
lock. Each joint custodian holds one key or combination.
Combination Keys (passwords) are used by the joint custodians and are to be kept in
sealed covers, duly recorded in the Branch Documents Register for use in case of
emergency due to the absence of any of the joint custodians. In all such cases where the
user of the combination key changes, the combination key should also be changed.
Recording of all such events must be made in the Branch Documents Register and
reported to Controllers.
It should be borne in mind that if the password is lost / forgotten (In the absence of the above
arrangement or otherwise) it would cost substantial amount to the Bank to break open and
replace the chest door. During the process, the cash in the chest may also get damaged.
When joint custodians proceed on leave for short duration, say, and one or two days, the
cash may be replenished before they go on leave. The password need not be disclosed to
the reliever in such cases. Only in emergency, the sealed cover should be opened. The
combination should be changed whenever the sealed cover is opened. It should be
ensured that the combination lock password is changed once in every six months.
v. Keys to Cassettes and Depository
Currency and Divert cassettes, and the Depository are locked and the keys are to be kept in
the custody of the Joint Custodian (Cash).
5. ROLES AND RESPONSIBILITIES
a. BRANCH MANAGER
Ÿ Security Related
Ÿ Terminal Master Keys and Admin cards must be entered in the Branch Document
Register with their Serial Numbers.
Ÿ Joint Custodians' passwords (for the combination lock) should be kept in separate
sealed covers in his personal safe.
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Ÿ Combination Lock numbers should be changed periodically and also whenever there is
a change in incumbency of the joint custodian(s).
• Card Related
Ÿ Ensure that Replacement and Undelivered Cards received at the branch are cross
checked with the covering letter from the debit card vendor.
Ÿ Ensure that Cards are kept in the custody of two different officials and the details of these
items are properly recorded in a register.
Ÿ Ensure that Cards held at branch are verified periodically with the register.
Ÿ Keep track of application sent for new cards.
• Accounting Related
Ÿ Ensure that the Joint Custodians verify cash whenever they replenish cash and this is
suitably recorded in the prescribed register.
Ÿ Ensure that the branch maintains Cash Replenishment Register and it is verified at
periodic intervals.
Ÿ Ensure that entries parked in Branch Suspense accounts on account of customer
complaint settlements done, is zeroed by making recoveries from respective customers'
accounts / Vendors as per prescribed procedure.
Ÿ Ensure that BGL accounts 98581 and 98582 are reconciled on a daily basis.

ATM Kiosk Related:

Ÿ Periodical visits to ATM Kiosks to verify customer facilities, ambience and security.
Ÿ AMCs for UPS / AC and First Line Management are always kept current and periodical
maintenance is done by the vendors.
Ÿ Ensure that Digital Video Surveillance System in the ATM Kiosk is working properly.
Ÿ Access is provided to service providers for solving problems.
Ÿ All notices and promotional material for customer information prescribed by ATM
Department are displayed in ATM kiosks.
• Customer Service Related
Ÿ Ensure that disputes raised by customers are resolved promptly.
Ÿ Contact Centre number, ATM Officer's contact numbers and ATM ID are invariably
displayed in the ATM Kiosk for the benefit of customers.
b. JOINT CUSTODIANS
• Admin Function
Ÿ Ensure security of the Admin Card and confidentiality of PIN.
Ÿ Ensure PIN is changed periodically and whenever there is a change in incumbency.
Ÿ Ensure Admin Function is carried out using the Admin Card whenever cash is
replenished in ATM.
Ÿ Ensure that photocopy of the Admin Balance enquiry slips are pasted in a register and
are signed by both the joint custodians.
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Ÿ In case an official is holding multiple Admin Cards (for multiple ATMs), cards should be
kept separately to avoid damage to the magnetic stripes.
Ÿ Any "Cash Decrease" through "ADMIN Function" performed by the joint custodians
should be approved by the Branch Manager and noted in the Cash Replenishment
Register.
• Cash Handling
Ÿ Ensure cash is placed in the ATMs as per "Opti-cash" recommendations received from
the respective Management Centre.
Ÿ Ensure that back-up register for cash replenishment is maintained.
Ÿ Ensure that physical cash is verified, whenever cash is replenished and also whenever
complaint is received regarding non-dispensation or short dispensation of cash.
Ÿ Account for cash found excess / short on the day it is detected.
Ÿ Ensure that excess cash found in ATM is posted through the ATM itself using the Cash
Verification Screen. The ATM Excess Cash Found Account will be debited by the excess
cash found amount and the ATM Excess Cash Account will be credited. The excess cash
found is then deposited in the ATM Excess Cash Found Account at the branch, which
should be zeroed on daily basis.
Ÿ When a customer makes a claim, the amount can be refunded after checking that the
transaction done is unsuccessful in EJ Log and ATM log. Such settlements should be
done expeditiously.
Ÿ Ensure that cash shortage located in ATM is posted through the ATM itself using Cash
Verification Screen. The amount will be parked in ATM Short Cash Account on the same
day. A request need to be lodged with the service desk with the necessary details as
required for tracing the cause of Short Cash. As per service desk reply the short cash can
be reconciled or recovered from Joint Custodians/ Vendor expeditiously.
Ÿ Ensure that physical cash balance in the ATM tallies with the Admin Balance and BGL
Balance.
Ÿ Report details of rectification entries put through in respect of the cash replenishment to
controllers.
• Accounting
Ÿ Reconcile ATM Excess / Short account in ATM on a daily basis.
Ÿ Periodic surprise checks of physical cash in assigned ATMs and also Vaults of the CIT
Agencies where vaulting facility has been extended.
Ÿ Ensure quick settlement of customer disputes. In respect of claims where cash is short
dispensed / not dispensed, matter to be investigated and rectification entries passed
expeditiously.
Ÿ Ensure that the entries parked in suspense account on account of customer complaints
settlement done is zeroed by making recoveries from respective customers' accounts / Vendor.
Ÿ Ensure that entries in BGL accounts 98581 and 98582 are put through as reversal credit
/ debit entries.

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c. ATM OFFICERS
Ÿ Card Related
Ÿ Ensure that all applications for issuance for ATM cards are entered in the ATM Card
Issued Register.
Ÿ Ensure verification of card application data before transmitting card data files to ASC.
Ÿ Ensure that Card Data files for new and replacement cards are sent as separate files.
Ÿ Ensure that Hot Card request is submitted to Contact Centre immediately and the
"Ticket Number" recorded.
Ÿ Ensure that cards received at branch are verified, recorded and kept in the custody of
two different officials.
Ÿ Ensure delivery of cards to customers against identification and acknowledgement.
• Transactions Related
Ÿ Ensure that entries in BGL accounts 98581 and 98582 are put through as reversal credit
/ debit entries.
• Customer Service Related
Ÿ Ensure quick resolution of customer disputes.
Ÿ Educate customers about the security aspects of ATM usage, including non- disclosure
of PIN, destruction of transaction slips, etc.
Ÿ Maintain liaison with various vendors to ensure ATM availability and uptime. In case of
any problems, the matter has to be taken up with the Management Centre and the
appropriate vendor. The matter must be escalated until it is resolved.
Ÿ Ensure that Journal Printer / Receipt Printer ribbon is changed at regular intervals for
better print quality.
Ÿ Maintained a register under proper authentication in respect of hot listed cards, by
recording date, card number, account number, customer's name and ticket number
received from the Contact Centre. This data will be useful in case of Customer
grievances.
Ÿ Vishwa Yatra /other Pre-paid cards are not covered by the above procedure as they are
handled by Payment Systems Group (PSG) at Global IT Centre, Belapur.
6. REVISED ACCOUNTING PROCESS
a. INTRODUCTION
Three components are involved in the ATM operations and these have to be in agreement
for achieving a fully reconciled position. The three components are:-
i. Physical Cash: - Cash present in the ATM which is part of Branch cash balance.
ii. Admin balance: - While replenishing cash in ATM, an Admin function is carried out.
This data is captured by the Switch and a continuous record of admin balance is maintained
at ASC for each ATM.
iii. ATM Cash Balance Account 3198:- This is an ATM wise BGL account in which every
transaction taking place in ATM (Cash replenishment as well as customer withdrawals) is
posted at CORE Banking.
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b. REVISED ACCOUNTING PROCESS
Process to be adopted for replenishment of cash in ATMs under revised system will be as
under;
a. One additional menu of ATM related postings has been added in CBS menu with four sub
menus;
b. Four new BGL accounts have been opened for new accounting process;
Ÿ ATM Cash Intermediate Account (BGL No : 3199842)
Ÿ ATM Cash Admin Decrease Account (BGL No : 3199843)
Ÿ ATM Excess Cash Account (BGL No : 3199844)
Ÿ ATM Excess Cash Found Account (BGL No : 3199845)
c. DELIVERY OF CASH FOR REPLENISHMENT IN ATMs
a. At the time of delivery of cash by branch to ATM Joint Custodians / CIT agency, branch
will debit ATM Cash Intermediate Account (BGL No. 3199842) and give cash to them
(CBS Screen No 20092).
b. While posting this entry in CBS a unique Reference number will be generated and
given by the branch to CIT Agency/ATM Joint custodians/CAC along with cash.
c. This reference no. generated will be used by the CIT Agency/ATM Joint
custodians/CAC to replenish the ATM. The ATM Cash Intermediate Account (BGL
No. 3199842) will be credited and respective ATM BGL Account will be debited.
d. If the Branch has erroneously posted wrong amount for giving cash to the Joint
custodians / CIT agency, the entry has to be reversed and new entry of correct
amount has to be done.
d. REPLENISHMENT OF CASH IN ATMS
a. CIT/Joint custodian/CAC will go to ATM for replenishing the cash. They will enquire for
admin balance and will get printed slip for the same. Balance of BGL 3198 will also be
printed on the slip while doing admin balance enquiry. Print of only BGL balance can
also be taken through BGL enquiry option on the same screen.
b. Joint custodians will verify the cash and after physical verification of cash, they will have
to go to Cash Verification screen on ATM and have to select the appropriate option i.e.
Excess Cash / Short Cash / No Difference. In case of excess cash / short cash, the joint
custodians will have to enter hopper-wise amount of excess cash / short cash.
c. After cash verification, joint custodians will replenish the cash in hoppers; increase
counters value by number of pieces in each hopper and thereafter, will increase admin
balance. Joint custodians have to key in the reference number generated at the time of
giving cash to joint custodians.
d. Joint custodians will make balance enquiry to ensure that admin increased by them is
reflected in system. If admin increase is not reflected in the system, they will either have
to again do the admin increase or take back the cash from ATM. If any excess cash has
been found, the same has to be deposited at the branch.
e. After successful admin increase, custodians will do enquiry for Admin balance as well
as BGL 3198 balance. These both balances should tally.
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f. If the Joint Custodians has wrongly increased admin more than the cash replenished in
ATM, they will have to decrease admin for the excess admin increase. The cash
equivalent to this admin decrease will have to be deposited back at the branch as it
cannot be used for replenishing in other ATM due to the fact that the amount will be
treated as consumed against the particular reference number.
g. If the Joint Custodians has wrongly increased admin less than the cash replenished in
ATM, they will have to do one more admin increase for the remaining amount.
11(ii) CASH DEPOSIT MACHINE
Our Bank has the largest base of ATMs and CDMs installed across the country which help
branches migrate both cash withdrawals and deposits outside the branch. However, while
ATMs have reached the far flung corners of the country, we have only 1800+ CDMs
attracting cash deposits 24x7. Also, we have cash heavy branches that do not have space
to place CDMs alongside ATMs. With a view to ensure proper utilization of capital
expenditure, decongest branches and enable customers to deposit cash 24x7 in
morelocations, the Bank is introducing cash recyclers viz. 'STATE BANK CASH POINT'.
ABOUT STATE BANK CASH POINT:
State Bank Cash Point is a 'Cash Recycler' i.e. an ATM-like machine that performs dual
functions of cash withdrawal and deposit. From the customer perspective, it functions
exactly like our present day ATM and CDM. While cash withdrawals will be effected using a
debit card, customers can use their debit card/cardless function to make cash deposits.
The cash slot serves as the deposit as well as dispenser tray. As a special feature these
machines have 2 inbuilt cameras that are capable of capturing both the customer's face as
well as hand movements (handling cash only). The State Bank Cash Point like our
CDMs have been configured to dispense and accept only denominations of Rs.100/- and
Above.While the cash withdrawal limit will be restricted to the debit card limit, a customer
can deposit up to Rs. 49,900/- per transaction. Apart from the deposit and withdrawal
facilities, customers can also carry out other functions like Balance Enquiry, Mini Statement
and PIN Change. The Cash Recycler is an advanced machine where deposited notes are
counted and authenticated for their quality and quantity. The EJ also contains the serial
numbers of the notes that have been deposited by customers, which is an important tool in
complaint resolution.
All the erstwhile instructions pertaining to ATMs and CDMs will continue to apply to State
Bank Cash Point.
Operational Guidelines for the Branches
The procedure for cash replenishment and evacuation is akin to that in ATMs and CDMs
respectively. The joint custodians will be provided with a password to operate the safe of
Cash Recyclers. At present, the cash recyclers are notunder the revised accounting
system established by the Bank. Hence, they will continue to have manual entries.
A special series of BGLs have been identified for Cash Recyclers i.e. 3198621 to 3198999.

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The accounting entries to be passed in Cash Recyclers will be as under:

TREATMENT OF SUSPECT NOTES

In case, the machine detects any suspect/counterfeit note, the same is stored in a separate
bin. Credit for these notes is not afforded to the customer at the time of deposits. The joint
custodians will verify the genuineness of these notes in the branches.
* In case notes are found to be genuine, then credit is to be afforded to the customer
(customer details can be obtained from the EJ log or the online transaction log available on
the ATM Web - ABOSS under useful links. The entry to be passed will be as under:
Debit: Branch Cash Balance Account (value of the notes) Credit: Customer Account
Narration should include Recycler Cash Deposit along with Recycler ID and date of
transaction.
* In case the notes are found to be counterfeit, branches are advised to meticulously
follow the instructions issued by RBI on Detection and impounding of counterfeit notes from
time to time.
Daily Operations/Guidelines of Cash Recyclers:
Branches are expected to follow the guidelines meticulously to ensure there is no issue in
the functioning and accounting of cash recyclers:
· Branches are expected to ensure maximum availability of the recyclers so as to
aid in proper migration of customers to alternate channels.

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· The status of the cameras must be ensured i.e. that both cameras are
operational. This will aid the branches in complaint management.
· Cash Recyclers are expensive machines and hence we must ensure proper u s a g e
and utilization. Towards this, branches/Circles must ensure periodical
visits to rooms are made to verify customer facilities, ambience and security.
Any shortcomings must be rectified immediately.Care must be taken to ensure AMC,
preventive maintenance are carried out in true spirit.
· Controllers should ensure to undertake cash verification exercise once a month by an
officer other than joint custodians. The Recycler Cash verification certificate, in line with
ATM Cash verification certificate, should be made as part of the quarterly / half yearly /
yearly closing exercises. The instructions issued by the Bank from time to time about the
periodicity/date for cash verification for ATM/CDM will stand extended to Cash Recyclers.
· Joint custodians must maintain confidentiality of passwords and change them regularly
(especially when there is a change in incumbency). The passwords must be entered in pure
secrecy.
· Tally of physical cash, admin balance and the 3198 BGL account must be done on a daily
basis to identify and short/excess cash.
· To ensure that excess cash found in CDM is parked in Sundry Deposits account and
accounted for after due verification of the EJ Log and Recycler Log. These cases may be
settled proactively without waiting for customer complaints.
· Complaints must be resolved within 7 days in line with RBI's complaint resolution
policy.
11(iii) COMPLAINT MANAGEMENT SYSTEM
1. Present Scenario
Complaints relating to "SBI Card used on SBI ATMs" i.e. “on-us” transactions are dealt at
branches / CM (ADMIN) at Administrative Units, duly monitored by Customer Service/ATM
Department at LHOs and complaints under the remaining categories are resolved by
Complaint Management Department (CMD) at GITC. In case of complaints resolved at
branches, quality of complaint resolution is not up to desired level due to the following
hardships faced by branches:
i. Low awareness level of branch staff regarding technical nature of ATM complaints,
ATM response codes, Electronic Journal (EJ) error codes and process flow of transactions.
ii. Delayed/Non-response of ATM linked branches to Home branches for resolution of
complaints, particularly, in case ATM linked branch and Home branch belong to different
Circles.
2. Centralizing of ATM complaints at GITC
To ensure strict compliance with RBI stipulated timelines for complaint resolution and spare
Branch/RBO/LHO officials from numerous tasks pertaining to complaint resolution, it has
been decided by the Bank to centralize ATM related financial complaints at GITC in a
phased manner with effect from 01.05.2014. Circles, therefore, will be taken on board in a
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phased manner by migrating complaints of 2-3 Circles to GITC in each phase. Complaints
lodged prior to the date of on-boarding of Circle will be resolved by the Circles.
3. Standard Operating Procedure (SOP)
Complaints for “on-us” transactions will be resolved at GITC by taking up the matter with
ATM branches through CMS for ascertaining the position of excess cash and EJ
availability, as is being done for complaints pertaining to transactions done by other bank
customers on SBI ATMs.
4. Changes in CMS
In order to smoothen the process of centralization of complaints at GITC, following changes
have been effected in CMS application:
i. Routing of “on-us” complaints to GITC instead of home branch of customers.
Accordingly, “on-us” complaints tickets will have branch code '4292' instead of home
branch code.
ii. Change in viewing rights of CMS complaints to allow all branches to view details and
status of complaints in place of existing system of allowing only Home branch to view their
customers' complaints details.
iii. Along with existing chargeback report, additional report is provided in CMS Reports
menu of ATM branch to provide details of chargebacks pertaining to SBI. Pending
chargeback reports will be sent to Controllers/LHO for necessary follow up with ATM
branches.
iv. A new e-mail id sbi.cms@sbi.co.in is created for issues pertaining to “on-us” complaints.
Branches are also advised to send all their queries and excess cash confirmations at this
mail-id.
5. Role and Responsibility of Circles
In view of centralizing of “on-us” complaints, role & responsibilities of Home/ATM linked
branches, their controllers and LHOs are revised as follows:
I. Home Branch of Customer
a. Any restrictions in customer account may result in posting of online credits/trickle feed in
BGL account (98582) instead of customer account. Home branch needs to check for any
credit entry posted in their BGL account (98582) on daily basis and adjust it by providing
credit to customer account as per narration given in BGL account.
b. Apprise their customers about the resolution of ATM complaints and provide relevant
documents to customers, which are attached by GITC in CMS on resolution of complaints.
c. Ensure that complaints are lodged with correct transaction details in CMS. Customer
complaints received in CMS will only be resolved and any complaints received from
branches through e-mails will not be handled.
ii. ATM linked branch
a. Branch would not debit BGL ATM cash balance account (3198) for resolution of any
customer complaint.

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b. Reconcile physical cash balance with Admin balance and BGL ATM cash balance
(3198) at the time of cash replenishment and advise position of any excess cash along with
the details of transaction(s) causing excess cash. Verification of EJ Log and ATM Log will
enable branches to identify the failed transactions for which cash is found excess in ATM.
c. Attend to chargeback tickets which are registered by GITC in CMS for (a) confirming
position of excess cash for the disputed transaction (b) receiving a copy of EJ, whenever EJ
is not available centrally. ATM linked branch needs to take up the matter with Managed
Services (MS) vendors for retrieving EJ from ATM.
d. Any delay in branch confirmation about finding excess cash beyond stipulated time will
result in imposition of penalty @ Rs. 100 per day for the period of delay. BGL ATM
compensation account (2399995) is to be debited for charges on account of ATM
compensation.
e. Co-ordinate with LHO for making recovery from MS vendor to adjust debit entries in
branch BGL account (98581) due to “EJ not available” cases.
f. To verify the status of transaction in EJ, ATM branches should refer to “ATM dispensation
Error Codes” booklet of National Payment Corporation of India (NPCI) placed in ABOSS
site under the path State Bank Times -> Useful Links 1 ->ABOSS New ATM Web -> Logs ->
EJ Viewer -> EJ Related Documents -> EJ Error Code Documents -> Error Codes For All
ATM Makes (Approved By NPCI).
g. For cash outsourced ATMs/ Brown Label ATMs, ATM branches will continue to be single
point of contact for the vendors. No requests from vendors for cash reconciliation/ excess
cash position will be entertained at GITC.
h. In case of any requirement from office of Ombudsman and other law
enforcement/regulatory authorities, ATM branches will provide documents like No excess
cash found certificate, Switch report, DVSS/CCTV footage etc. directly to
authorities/Ombudsman/Court/Nodal officer at LHO as per the requirement.
6. Controllers of ATM Linked Branches
Controllers to monitor the pending chargeback complaints at ATM branches and to
expedite submission of ATM branch response to GITC.
7. ATM Operations Department at LHO
a. AGM (ATM Operations) has been designated as Nodal officer for ensuring prompt
response of ATM branches in the Circle to the Chargeback complaints/e-mails sent by
GITC for receiving response of ATM branches.
b. Ensure recovery from MS vendors for adjusting outstanding entries in ATM branch BGL
account (98581) due to “EJ not available” cases.
8. SOP FOR RESOLUTION OF ATM COMPLAINTS
i. “ON-US” TRANSACTIONS
Complaint Management Department (CMD) team will take following steps to resolve ATM
complaints pertaining to “on-us” transactions in CMS:
a. Download the report of ATM complaints lodged in CMS. ii. Segregate the complaints
based on the category of complaints like SBI, ASS, NFS etc. iii. Reassign the complaints to
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correct team in case complaint is registered in wrong category.
b. Check duplicity of complaints to identify multiple complaints in open/referred status for
one disputed transaction.
d. Verification of status of the disputed transaction in ATM Switch Transaction Log File (TLF)
and Core Banking through software program.
e. Based on the status of transaction in Switch & Core, disputed transactions will be
segregated and dealt as follows:

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EJ VERIFICATION
On doing EJ verification for successful and zero reversal transactions, complaint resolution
team will take following actions based on status of transaction in EJ:
a. Transaction status successful in EJ without any cash dispensation errors: Since
successful EJ without any cash dispensation errors signifies successful dispensation of
cash, GITC will close complaint in CMS by attaching copy of successful EJ GITC will also
send an e-mail to ATM branch to advise any cash found excess for the disputed transaction.
b. for complaints relating to Partial dispensation of cash: GITC will raise a ticket
number under chargeback in CMS to confirm any excess cash for the disputed transaction.
Based on response received from the ATM branch, GITC will take up the following action:
I. For complaints regarding full transaction amount:

*Working days will be calculated as per holiday calendar applicable to GITC, Belapur.

ii. For Partial Cash Dispensation Complaints:

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iii. EJ containing error codes:
GITC will raise Chargeback ticket number in CMS for the disputed transaction and

iv. EJ for the disputed transaction missing in EJ log: Based on the status of transaction
in Switch, Core & Admin, disputed transactions will be segregated and dealt as follows:

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v. EJ not available centrally for verification:
To ascertain the status of transaction in EJ and position of excess cash at ATM, CMS
chargeback ticket number will be generated for the attention of ATM branch. GITC will also
take up the matter with MS vendors for making EJ available for verification. GITC will keep
on checking EJ availability centrally and will close the CMS ticket number on receiving
successful EJ. If MS vendor fails to upload EJ on central server, GITC will consolidate such
“EJ not available” cases and send a list to LHOs on monthly basis to facilitate them in
making recovery from MS vendors as per applicable SLA. Based on the response received
from ATM branch in CMS, GITC will take the following action:

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vi. Repeat complaints (Second Chargeback):
Any complaint received after closure of earlier complaint will be treated as 'second
chargeback' and handled at GITC by taking the matter with ATM branch under chargeback
in CMS in the following manner:

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Any complaint received thereafter will be closed by providing the resolution given for the
second chargeback.

Complaint Management OtherApps:

Escalation matrix for complaints regarding Mobile Banking & other products:

v v v

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Chapter - 12
Dealing with Audit
Reports
NOTES
 Chapter-12: DEALING WITH AUDIT REPORTS
The Bank has put in place a comprehensive framework for Audit to ensure that the audit
function will independently assess the effectiveness of the internal control, risk
management, governance systems and processes, created by the business units. This
also, in the long run ensures quality assurance on these systems and processes.
With the formation of the Basel Committee on Banking Supervision (BCBS), a need is
perceived to co-ordinate the supervisory efforts across the countries and lay down
minimum Banking standards. The overarching goal for the Basel II Framework is to ensure
adequate capitalisation of banks, which will encourage improvements in risk management.
VARIOUS TYPE OF AUDITS AT BRANCHES
• CREDIT AUDIT
• RFIA AUDIT
• CONCURRENT AUDIT
• COMPLIANCE AUDIT
• STATUTORY AUDIT
• RBI AUDIT
• INCOME AUDIT
• SPOT AUDIT
• VIGILANCE AUDIT
• FEMA AUDIT
• LEGAL AUDIT
• AUDIT OF OUTSOURCED ACTIVITIES
Operational Risk Management is gaining more importance with the implementation of
Basel Guidelines. The Basel committee defines operational risk as the risk of loss resulting
from inadequate or failed internal processes, people and systems or from external events.
The key elements of Operational Risk events are internal fraud; external fraud;
employment practices & workplace safety; clients, products & business practices; damage
to physical assets; business disruption and system failure; and execution, delivery and
process management.
The key objectives of ORM covers proactive assessment of key risks, determination of
accountability / ownership of key risks, improvement in reputation through
reducedfrequency / severity of risk events, ensuring increased risk and control awareness
amongst employees.
Operational Risk Management includes evaluation of Bank's Risk Management Process
and overall control environment. ORM revolves around monitoring and reporting of
operational risk profile including data on operational losses, adoptable procedures for the
timely and effective resolution of risk events and its vulnerabilities besides maintaining
effectiveness of Bank's risk mitigation efforts. Introduction of sound practices for
Operational Risk facilitates the Business Units to improve internal controls throughout the

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Bank thereby reducing the probability and potential impact of operational risk losses. It also
helps in minimizing losses and customer dissatisfaction due to failures in processes by
putting in place mitigating measures. The business processes of the Organisation have
undergone a paradigm shift with the increasing dependence on information technology. In
consonance with the restructuring exercise / BPR initiatives and technological up-
gradation undertaken bythe Bank, the manual has undergone substantial modification.
Some new chapters like Online Transaction Monitoring System (OTMS), Early Sanction
Review (ESR), Loan Review Mechanism (LRM) and Legal Audit have been introduced.
'Internal Auditing is an independent, objective assurance and consulting activity designed
to add value and improve an organization's operations. It helps an organization accomplish
its objectives by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of risk management control and governance processes.' Internal Audit
function provides vital assurance to the Bank's Board of Directors and Senior Management
as to the quality of the Bank's internal control system. In doing so, the function helps to
reduce the risk of loss and reputational damage to the Bank. It is, therefore, an
indispensable and an integral function for the safe and sound operation of a Bank.
Areas to be covered under Operational Risk Management are as under:
Ø Deposits Accounts Opened Prior-LCPC
a. Documents obtained originally viz. Proof of ID, Proof of Address and
Photograph is held on record.
b. Proof of ID, Proof of Address and Photograph are updated, as
prescribed / full particulars of the documents are entered in the CBS correctly.
c. Risk categorization (High, Medium & Low Risk) is done correctly.
Review of risk categorization done periodically, as prescribed.
d. Effectiveness of follow up of KYC non-compliant account.
Ø Deposits Accounts Opened Post-LCPC:
a. KYC documents obtained and sent to LCPC along with Account
b. Opening Forms on a daily basis.
Account opening forms returned by LCPC for rectification are recorded in a Register
and resubmitted after compliance promptly.
c. Accounts opened under ID 41(Id acceptable to Branch Manager) are entered in the
register.
The above register is regularly checked by the BM and perused by the Controllers during
their branch visit.
d. ID Proof / Address Proof / Photographs updated periodically as per RBI norms.
Risk categorization is done correctly. Review of risk categorization done periodically.
e. Workflow software for LCPC is regularly used by the Branch.
Letter of thanks / Cheque book sent by LCPC and returned undelivered have been
followed-up until, fully compliant; else the account has been blocked.
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Ø Advances Accounts Opened:
a. Documents obtained originally viz. Proof of ID, Proof of Address and Photograph is held
on record.
b. Proof of ID, Proof of Address and Photograph are updated. Particulars of the
documents entered in the CBS correctly.
c. Risk categorization is done correctly. Review of risk categorization done periodically.
d. Effectiveness of follow up of KYC non-compliant account.
Ø ANTI MONEY LAUNDERING:
(i) New accounts opened are monitored for high value transactions in the initial period of 6
months
(ii) All instances of detection of counterfeit currency are recorded and reported to all
concerned.
Ø ISSUE OF PASSBOOK / CHEQUE BOOK:
(a) Appropriate action taken in cases of cheque books / ATM cards returned undelivered.
(b) Cheque reported lost / stop payment instructions are fed in the CBS promptly and
charges recovered. A record of all such instances is maintained.
(c) Frequent return of Cheques is followed-up & suitable action is taken in respect of such
accounts.
Ø INOPERATIVE ACCOUNT:
(a) Communications have been sent to all customers having balance of Rs.5000/- &
above with no customer-induced transactions for more than a year for ascertaining
reasons for non-operation.
(b) All inoperative a/cs are referred to the authorized official duly entered in prescribed
register before activating them.
Ø PENSION ACCOUNT:
a) All the PPOs are submitted to CPPC (after verification of document) and
acknowledg-ement received & kept on record.
b) Required certificates have been obtained from all pensioners and recorded in the
system.
Ø REMITTANCES / CLEARING / COLLECTION ETC.:
REMITTANCE:
Details of Inter-Office Instruments lost at the branch are fed in CBS.
Ø CLEARING:
i) Clearing module in CBS is invariably used.
ii) NALC a/c has been closed at the Branch after reconciling all entries.

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Ø CLEARING HOUSE / CCPC:
Entries of clearing house differences are attended to promptly. Adverse balances in
Clearing settlement a/cs of Banks are settled on the same day.
ii) Clearing House Charges are recovered promptly.
Ø NON HOME TRANSACTIONS:
i) All non-home payments are authorized after exercising extra caution.
ii) Appropriate charges are recovered for Non-Home transactions.
Ø CASH:Cash / Currency Chest / Small Coin Depot:
a) Acknowledgment of cash remittances is to be sent by post & should bear the signature of
joint custodians with their SS Number.
b) Verification of Currency Chest is to be done by other than joint –custodians at periodical
intervals i.e. bimonthly.
c) Strong Room fitness certificate is current.
d) Time Lock / CCTV / Smoke Detectors / Emergency Light have been provided and are
functional.
Hand Balance Branches:i) Cash Retention Limit is renewed annually & not exceeded
frequently and in case of exceed, proper reporting & confirmation obtained; ii) Mid-day
cash requirement through work flow.
iii) Intra-day cash
verification as per extant instructions with proper record thereof; iv) SWO's Cash Box is
verified on random basis with proper record thereof; v) Excess / Short Cash Register is
maintained and due reporting; vi) Stipulated in branch cash handling (IBCH) process is to
be followed.
Ø POSTAGES
a) Postage Register is maintained as per extant instructions & verified by OIC / BM at
stipulated intervals.
b) Courier Register is maintained. Courier Agreement is Current. KYC documents of
representative of courier are held duly verified with original. POD is obtained before making
payment and penalty is imposed for delay in delivery, if any as per agreement.
Ø ATM
a) Cash withdrawal voucher is signed by joint custodians.
a) Cash Verification done at stipulated intervals other than by joint custodians.
Ø LOCKERS:
a) KYC compliance updated for existing & followed for new lockers
b) All locker agreements (New & Old) contain the new clauses.

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b) Keys are interchanged on surrender of lockers before allotment.
c) Custodian's keys & Keys of surrendered lockers are held with two different officials
against acknowledgement.
d) Keys of Old & New lockers are engraved with SBI & Branch Code.
e) Locker module is implemented in CBS.
Ø GOVERNMENT BUSINESS:
a) Signature of drawing officials are scanned in CBS through maker / checker and
department-wise / date-wise serially numbered record is maintained & kept overnight
under Lock & Key.
b) Obtaining of VDMS(Verified Date wise Monthly Statement) is ensured.
c) Proper record of Govt. Commission Eligible / Received / Receivable is maintained
and claim is lodged & followed up for receipt of difference of commission.
Ø CARD ISSUE:
(i) ATM Cards application received Register & ATM Cards Lost register is maintained with
full particulars.
(ii) Mutilated cards are obtained back and recorded in separate section of ATM cards issued
Register.
i) Before sending request for duplicate card, the Branch has hot-listed the same through
CMS promptly & ticket number generated is recorded.
Ø UNDELIVERED CARDS & PIN MAILERS:
(i) Undelivered Cards recorded in separate Registers are held under separate custody of
two different officials against acknowledgement & from customer (when delivered).
ii) Entries in the registers are periodically verified with the physical possession with record
thereof.
iii) Undelivered Cards are destroyed and recorded under authentication by two officials.
Ø COMPLAINT MANAGEMENT:
Complaints are promptly registered with CMS (Complaint Management System) and ticket
number recorded.
Ø CASH REPLINISHMENT PASSWORD:
ATM Cash Replenishment Register is maintained and ATM Cash verified by the Manager
(BO), Joint Custodians and Branch Manager at monthly, quarterly and Annual Intervals as
stipulated.
Password secrecy is maintained for operating / cash replenishment in ATMs and change of
password is carried out whenever there is a change in incumbency / custodians / person(s)
handling with mandatory change of Passwords at quarterly intervals.
Ø INTERNET BANKING:
i) INB officer has been identified and duties allotted through an office order & copy of
application for approval as INB officer is held as a Branch Document.
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ii) PPKs Issued register is maintained properly.
iii) Board resolution for availing the CINB facility and subsequent changes if any, for
change of signatories, etc, are obtained, approved and held on record.
iv) Two Rule Authorizers (in addition to INB officer) have been identified and duties allotted
through an office order - in case of (CINB)
v) Unprocessed manual intervention transactions like IOI/Cheque book Issue etc.
arechecked and attended to promptly.
Ø MOBILE BANKING / SBI FREEDOM:
Applications on the Standard format are obtained for registration & registration is approved
by an authorized official (allotted through an office order).
Ø PROTECTIVE ARRANGEMENT:
i) The Security Officer has visited periodically and recorded his observations in Security
Information Register on the branch security environment which are dealt with
meticulously under advice to Controllers.
ii) Approved locking up arrangement is on record and current.
iii) Security Information Register is maintained as per extant instructions and
authenticated.
iv) Temporary movement of keys is recorded under authentication.
v) Arrangement with local police is on record for night patrol and emergency situations.
Beat Book is maintained.
vi) Loan documents, important branch documents are kept in Fire Resistant Safe.
Vouchers are kept overnight inside locked almirahs.
vii) All the SWOs drawers / cubicles are locked with automatic locking system.
viii) The alarm system including Smoke Detectors are in working condition, checked
periodically and fact recorded. Automatic Time lock installed in strong room door is
functional.
ix) CCTV surveillance system is used round the clock
x) Gun License(s) are current and guards' names are entered as retainers. Gun History
Book was produced.
Ø BRANCH DOCUMENTS:
I) BD Register is maintained duly authenticated as per extant instructions.
ii) These documents are also held as BDs under authentication: a) All AMCs are diarized
and renewed in time & are current. b) MoUs / SLAs with service providers / lawyers /
Legal Auditors / Valuers etc. c) Document destruction / other compliance certificates
are on record. d) Courier Agreement is not on record duly entered in BD Register
along with KYC of courier representative(s).
iii) Digital signatures of authorized officials are on record.

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Ø STATIONERY & RECORDS:
i) Vouchers are moved to record room on T+2 basis duly entered in Record Register.
ii) Destruction of vouchers / records at prescribed intervals as per prevalent OP&SP
instructions.
iii) Local purchase of stationery items if any, permission obtained and record maintained.
Ø IS AUDIT:
a) All devices used even for temporary purposes should have anti-virus agent installed &
updated within 24 hours.
b) System Room Access Register be maintained properly & be authenticated by
authorized officials.
c) Biometric installed on all the devices using CBS.
iii) System Room has CCTV, continuous availability of AC round the clock, Smoke
Detector and no dampness, unwanted materials & printer installed therein.
Ø FRAUD & PREVENTIVE VIGILANCE:
i) Frauds reported prior to period under review have been adequately followed
up/closed.
ii) Conduct of Preventive Vigilance Committee meetings periodically, recording &
reporting of minutes to Controllers. Modus operandi of frauds reported is discussed for
rectification of deficiencies found at the Branch if any.
iii) Fraud-prone areas and other critical areas are monitored E.g. : a) Unauthorized
persons do not have access to Records. b) Proper record of movement, requisition and
return of records is maintained. c) Custody of undelivered passbooks / Inter Office
Instruments (BCs, Drafts etc.). d) Monitoring of frequent return of Cheques. e)
Recording of forged instruments. f) Scrutiny of staff accounts and record of the same.
CDC reports regarding irregular / threshold-exceeding staff a/cs scrutinized regularly.
g) No outsourcing of core activities such as signature scan, clearing instruments
encoding etc is carried out. h) Any other area which may expose the Bank to the risk of
fraud be monitored promptly with record thereof.
Ø OFFICE ACCOUNT FOLLOW-UP:
i) Branch maintains USROMD account. Receipts are kept on record.
ii) a. Follow-up is prompt and effective in respect of outstanding entries in all Sundry
Deposit / Suspense / System Suspense Accounts / ATM Suspense A/c, Banker's
Cheque A/c. b. All Exception reports in respect of these a/cs are perused; entries
accounted for and Zeroised on daily basis.
iii) There are no STEPS a/c entries outstanding or if outstanding exists, efforts are made to
reconcile these are made.
iv) OLRR a/cs are zeroised daily.

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Ø CONTROL FUNCTIONS:
Deposit / Advance Accounts - follow-up
I) Deposit Accounts with zero balance are closed after advising the customers, in advance
suitably.
ii) Advance Accounts are properly closed in the system after recovery of dues.
iii) Staff indicator does not exist in any non-staff account.
Ø VVR/BGL Checking
i) All VVRs / BGL and VPS are checked regularly & records kept. Checking is confirmed in
CBS by the respective allottees and relevant report checked by Branch Head.
ii) Post-facto sanction for expenses incurred beyond BMDP(Branch Manager
Discretionary Power) have been obtained in all cases and all discretionary powers related
to General Matters, vested with the Branch reported for Control & controlled report is on
record.
iii) Cases of leave on loss of pay / un-authorized absence of staff reported to Controllers
and deterrent action taken.
Ø BMMC:
False Certification should not be in the BMMC.
BMMC covers all the mandatory areas and timely submission of BMMC is ensured.
Ø CONTROLLERS VISIT:
Controllers visit the Unit at stipulated intervals and record their observations in Controllers'
Visit System (CVS) in SBI Times followed by recording of branch responses to Controllers'
observations in the same system.
Ø RECONCILIATION (DAK / BMMC / IOA RETURN :
Age-wise break up of IBTS entries outstanding beyond 1 month (for values Rs.1 lac and
above) and more than 3 months for other entries are maintained and reported to
Controllers.
Ø RISK HISTORY:
a) Risk History & Operational Risk / Loss Collection Data: Risk Register (as per Operational
Risk Management Department (ORMD) circular letter) is maintained as per extant
instructions.
b) Operational Risk / Near Miss Events: All incidents of Near Miss Events along with
mitigation measures have been reported.
a) Operational Risk / Business Continuity Plan (BCP) / Disaster Recovery Plan (DRP):
a.Renewed & Updated BC Plan / DR Plan duly approved by controller is in place. b. BCP /
DRP testing is being conducted at stipulated intervals with suitable reporting to controllers.
Ø INWARD / OUTWARD DAK:
i) Inward Mail is opened in the presence of an authorized official, distributed against

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Ø COMPLAINT:
i) All complaints: a. Are promptly acknowledged and recorded in the standard register
prescribed under advise to controllers; b. Complaints are resolved & disposed of
promptly to the satisfaction of the customer, the fact recorded and the File closed. c.
Causative factors for the complaints do not persist.
Ø GENERAL MANAGEMENT:
PERSONAL
i) On-the-job capsules and e-learning is made available to staff to meet emerging needs of
the business environment.
ii) Staff is punctual and adheres to leave discipline.
iii) Detailed screening exercise has been done in respect of all staff as per extant guidelines
on 'Know Your Employee' (KYE)
iv) No restrictive practice observed & Job rotation is carried out as stipulated.
v) Awareness of business goals, house-keeping, customer service and other important
aspects of Bank functioning is observed amongst Staff. b. Mandatory leave is availed by
the staff.
vi) Regular meetings amongst staff are held for bonding for better teamwork apart from
regular meeting.
Ø GENERAL ADMINISTRATION
I) Missing Voucher (MV) Register is maintained and MV is entered in a register & after due
examination duplicate voucher(s) are prepared.
ii) All security forms are properly accounted for in VPIS. Security Forms received from
Stationery Department is acknowledged in the system.
iii) Branch Manager is not scrutinizing all the vouchers to ensure that they conform to the
instructions and arrange for corrections, if any.
Ø CHARGES / ESTABLISHMENT / OUTSOURCING
i) Other expenditure incurred isauthorized as per eligibility & reasonable with prior sanction,
if applicable. b. Salary Register generated by HRMS is received, printouts taken,
scrutinized and held on record. c. Monthly return on Charges is sent promptly.
ii) Extant instructions with regard to engaging service providers, confidentiality and
security, monitoring their performance standards, business continuity preparedness, due
diligence reviews, etc are complied with.
Ø PREMISES & FURNITURE:
i) a. Fixed Assets Register / Ledgers are maintained properly and depreciation entries passed
as per LHO guidelines. All furniture & fixtures are numbered, accounted for. b. A proper record
of fixed assets and furniture supplied to official's residences is maintained. All items supplied
adhere to eligibility norms. Annual possession certificate is obtained in all cases. c. Formalities
relating to disposal of old and discarded furniture / fixed assets are meticulously followed. d.
Formalities regarding renewal of lease & its registration complied with.
ii) Fixed Assets Balance in CBS balanced with IFAMS at monthly intervals.
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Ø CONCURRENT AUDIT REPORTS (WEBCAS):
i) The Concurrent Auditor (CA) has been regular in attendance and has covered all
prescribed areas of scrutiny. b. The CA has scrutinized more than 90% of accounts on an
on-going basis and branch has maintained compliance level of more than 90% on an on-
going basis.
ii) The Income leakage detected by the RFIA Auditor is less than 10% of the Income
Leakage detected by the CA from the date of last Audit to Current Audit.
Ø BUDGETARY PERFOMANCE & BROAD BASING:
i) The Branch has broad-based its clientele as reflected in the number of new
accounts opened during the period under review.
ii) Branch is active in cross selling products and encouraging technology products.
IMPORTANCE OF PROPER COMPLIANCE
WHAT ARE COMPLIANCE & ITS OBJECTIVE: Compliance is to act according to
certain accepted standard or laid down systems and procedures. Its objectives are:
1. To ensure high standards, appropriate system & procedures and adequate internal
control are in place to achieve the bank's objective
2. To promote and maintain safe& healthy operating practices & conditions to create safe
working environment.
3. To enable the organisation to initiate necessary measures to protect it from all future
hazards
Compliance of prescribed systems & procedures and control functions are critical to the
organization in prevention of frauds. A review thereof must be undertaken on a regular
basis to ensure that frauds of similar nature do not occur. An illustrative list of areas
demanding focused attention of controllers, at every level, to ensure prevention of frauds, is
given below:
i) Stress on KYC compliance and due diligence standards.
ii) To ensure that VVRs and other control reports are meaningfully checked on day to day
basis. Branch Managers and Controllers shall be accountable in case of any violation
leading to perpetration of fraud.
iii) Maintaining secrecy of passwords.
iv) Involvement of staff through concepts like Preventive Vigilance Committees, Whistle
Blower, Alertness Awards Scheme, etc. Identity of the Whistle Blower is not be revealed
unless the complainants themselves has made either the details of the complaint public or
disclosed the identity to any other office/authority.
v) Imparting training to operating staff to update their job knowledge in changes in systems
and procedures etc., and equip them to cope up with the technological advancement in
Bank.
vi) Following Best Practices Code adopted by the Bank.
vii) Job rotation.

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acknowledgement and disposal is ensured / marked.
ii) Outward Mail: Postal / Courier Receipt (duly acknowledged by authorized courier
agent) numbers are recorded in the Register.
iii) Letters returned undelivered are recorded and held in the custody of authorized official.
iv) Proof of Delivery (POD) is collected and Courier bill payment is made only after
disallowing bill claimed for the delay in delivery as per terms of agreement.
Ø INCOME MISC CALCULATION:
i) All the income calculation errors detected in earlier audit reports and the current
report have been rectified.
ii) a. All type of service charges including advance related charges are recovered
promptly & correctly as per extant instructions and advance related are recorded in a back-
up Register. b. Penalties (including penal interest) wherever applicable have been
recovered as per terms of sanction and special stipulations of the Sanctioning Committee.
c. Back-value dated transactions whether manual or through CBS are properly put through
with appropriate authentication with record thereof.
iii) a. Commission on Issue of LC / BG is recovered promptly and correctly. b. Rating of
customers with Forex Exposure as per Margin Matrix has been entered in the Mercury /
IFMS. c. Reset of interest rate has been done at stipulated intervals for all Fixed-Rate
Home Loans / Other Term Loans. d. Back up register of concession in interest applied /
service charges maintained with record of sanctioning authority. e. Back-up register is
maintained for recording all entries passed manually through Interest Expense a/c and
Interest Income a/c and are scrutinized&authorized by thecompetent authority.
Ø CUSTOMER SERVICE:
i) All employees wear ID Cards.
ii) Duties / Role of CROs / SWOs are carried out in full by them.
iii) Drop Box facility is provided and access to customers is available '24/7'.
iv) Grahak Mitra facility is in place and fully functional;
v) Branch ambience & amenities provided to customers are adequate and extract of
Bank's Code for Fair Banking Practices & SBI Compensation Policy (Banking
Services) are provided upon request.
vi) Quality of maintenance and up keep of ATMs is satisfactory.
vii) Branch accepts the reporting of lost card from any customer of any branch of State
Bank Group.
viii) Uniform template for ATM related complaints, as approved by IBA is made available to
the customers.
ix) Requests for duplicate passwords, profile passwords, Mobile No. updation etc. are
obtained by written requests and record is maintained.
x) CRP / CSC meetings are conducted as per extant instructions and minutes
sentpromptly to Controllers.
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viii) Scrutiny of staff accounts and keeping watch over lifestyles of members of staff.
ix) Verification of exception reports generated by KYC/AML/CFT Cell, Jaipur for KYC/AML.
x) Verification of high value non home branch transactions.
xi) Verification of transactions in inoperative accounts.
Periodicity of submission of compliance remarks
Group I branches Existing Revised
Branch 8 Weeks 10 Weeks
Controller 4 Weeks 4 Weeks
Group II branches Existing Revised
Branch 8 Weeks 9 Weeks
Controller 4 Weeks 4 Weeks
Group III branches Existing Revised
Branch 8 Weeks 7 Weeks
Controller 4 Weeks 3 Weeks
Credit CPCs Existing Revised
Branch 8 Weeks 14 Weeks
Controllers 4 Weeks 4 Weeks
HOW TO DEAL WITH COMPLIANCES REMARKS
To ensure closure there should be 95% rectification of high & medium risk and overall
rectification 90%. Hence branch should ensure 100% rectification to meet gap of
unacceptable compliance.
Ø Mandatory certificate of the above mentioned % of rectification of irregularities and
steps taken to follow system &procedures ensuring non recurrence of such type of
irregularity in future, to be submitted duly signed by the concerned DGM(B & O) and AGM.
Ø Compliance remarks for limit of Rs. 1.00 crore and above, if any reported in RFIA, to be
submitted for account wise SDRM individually along with SDRM.
Ø To ensure that spot /special audit report if any conducted in earlier for the particular
branch has been closed before submission of compliances for closure of RFIA report.
Ø Reply to management letter if there is Management letter. M L is mandatory in Group I &
Ii branches and in group three depends upon the I.O's perception and observations
prevailing at the branch.
Ø Pointed out irregularities by inspecting official pertain to a certain review period so their
rectification have to be confirmed/ensured. Further it should be ensured that these sorts of
irregularities are not recurring.
Ø Completion of a work to be certified by “this work has been done” If I.O. is reporting that
document not properly stamped, remarks should be like document now properly stamped.

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Ø The documents /papers which have not been shown to the I.O., in Compliance Remarks
other than recording of the same, branch has to certify those things which would have been
verified by the I.O. in case of presentation. For example if I.O. remark is Copy of RC book
not on record, simply reply that copy of RC book now on record is not proper. Proper reply is
that copy of RC book with noting of bank's charges duly verified with original is on record
and its genuineness has been verified from vahan.nic.in.
Ø Apart from ensuring comprehensive and satisfactory levels of compliance of the
deviations pointed out by the Inspecting Officials, the Controllers should strictly adhere to
the time norms specified for submission of compliance remarks in respect of audit reports.
In case of unsatisfactory levels of compliance, ZIO / Internal Audit Department would take up
such issues with the Circle Management directly. The RFIA reports are treated as dealt-with by
Internal Audit Department on the strength of the Controllers' certificate assuring rectification of
residual irregularities. It is, therefore, incumbent on the part of the Controllers to ensure that
the residual irregularities are rectified within a specified time frame.
COMPLIANCE CULTURE OF RFIA IN THE BRANCHES
Compliance of the reports needs to be carried out religiously by the branches but
compliance culture in the branches is as under:-
1) After the completion of the report, Branch do not initiate action of rectification of the
report rather they continue to place the task of compliance on the second priority
2) When the laid down time for the submission of the compliance comes near then
compliances are submitted in the haphazard manner to submit the compliances in the
prescribed priorities
3) While submitting the compliances in haste, branches submitted half- truth/ false
compliances of RFIA report resulting in non- mitigation of the OF INHERENT, POTENTIAL
& RESIDUAL RISKS, hence failure of the very purpose of the RFIA AUDIT. Branches
should submit the compliance of the report in true spirit and as per the laid down system.
FALSE COMPLIANCES AND ITS CONSEQUENCS
1. Submission of false compliances leads to the fact of non- mitigation of the OF
INHERENT, POTENTIAL & RESIDUAL RISKS, hence failure of the very purpose of the
RFIA REPORT. It fails to enable the organization to initiate necessary measures to protect
it from all future hazards
2. It can result into the perpetration of fraud and loss to the organisation
3. Perceived risk will continue in the branch resulting in hampering of risk of failure of the
system laid down and there will be reduction in score ensuing RFIA.
4. It will defeat the very purpose of RFIA report
5. Regulator(RBI) will be having negative image of the bank and authenticity of banks laid
down system
6. It will also spoil the image of the bank in the eyes of the public, shareholder and
international market
I&MA Department carries out Compliance Audit in respect of 10% of the units subjected to
RFIA during the previous year nearly after 3-4 months after closure of the report so as to

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ascertain whether the branches have complied with rectification of irregularities pointed out
in the audit report as certified by them as well as by their Controllers. Provision of deduction
of marks is in place as deterrent to false compliance.
Penalty for false compliance would be proportionate to the number of false compliances
observed in High / Medium / Low & Very Low Risks of the relevant RFIA as under:
a) High & Medium Risk - 1 mark for each false compliance
b) Low & Very Low Risk - 0.5 mark for each false compliance
i) The penalties of false compliances observed under “compliance audit” or during ensuing
RFIA by the Inspecting Official are to be deducted from ensuing RFIA, as the compliances
are submitted after RFIA and subsequent set of Branch Management has to ensure
compliance to system and procedures.
ii) In cases of branches not covered under Compliance Audit and where false compliances
are observed during conduct of RFIA, if the auditee unit during audit has not rectified, IO will
report the total no. of false compliances, the ZIO/CAU will apply penalties for false
compliance before final approval of RFIA score.
iii) The maximum penalty has been kept at 50 marks.
False certification shall be treated as misconduct on the part of the officials and he
may be penalized in terms of rule 50(4) of SBI OSR.

v v v

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Chapter - 13
IBTS, Vendor
Payment System
NOTES
 Chapter-13: IBTS: INTRODUCTION
IBTS:
1. PROCESS FLOW
I. Originating Branch shall initiate/originate such transactions (Debit/Credit) through its
Inter Branch Transfer Account entry by entry. All transactions shall be put through against
vouchers, duly passed by the appropriate authority. It shall arrange to send the relevant
documents pertaining to the transaction to the Responding Branch along with a covering
letter which shall be system generated. A separate menu has been provided for it.
(Transactions could relate to Fixed Assets transfer, TA&DA of staff on deputation, loans and
advances written off and debited to LHOs, Staff Welfare allotments, any other payment to
be recovered from other branches etc.) Transactions could also relate to clearing
transactions, half yearly/yearly transfer of balances in various accounts (Government
Accounts, Currency Chest, Small Coin Depot, CAO entries, RBI Bonds etc.)
After the data entry by the maker for the origination entries in various IBTS input fields
(other branch, Branch desc, IBT Txn Type, Destination BGL Head), system will schedule a
new screen and the user will have to enter the a. Destination BGL Head. b. Other Branch c.
Amount, which the system will validate with the already entered details, and if it is matching
, then system will allow the user to transmit to checker, if it is not matching , then system will
throw error about the mismatch.Checker need not do this verification re-entry.
ii. SC/DDP transactions shall be routed through the revised SC/DDP automation process
and not through IBTS.
iii. The funds shall be lying in one of the 2 new BGL Accountsin the OriginatingBranch
depending on the type of transaction till the responding branch 'Accepts' the transaction in
the system.
iv. The Responding Branch shall have an enquiry option (screen 27305) provision to view
the transactions originated by all other Branches on it based on the following filters (a) Date
(b) Other Branch code (c) category (d) status (e) amount and (f) journal No. The entry
details will be displayed in a grid format and responding branch can specifically select the
transaction it wants to respond, by double click on the selected entry.
However, responding branch shall be permitted to view and take action on entries
originated only on it by other Branches. Responding branch shall compare the transaction
with the covering list containing the date and transaction reference number and the relative
documents received from the Originating Branch and prepare appropriate vouchers.
v. The Responding Branch can either 'Accept' or 'Decline' a transaction. The originating
entry details cannot be modified by the responding branch.
vi. Responding branch shall respond online to the entry of the originating branch by
'accepting' the transaction through Inter Branch Transfer Account. At the time of responding
the entry in the screen 27305, a field for journal No. has been provided, so that the user will
able to zero-in to a particular entry out of the various entries received for responding from
the same branch.

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vii. The amount shall be transferred to the destination BGL through Core Inter
BranchAccount (CIBA). The status shall be updated in CBS as 'Accepted'. No message
shall be sent to the Originating Branch after acceptance by the Responding Branch. The
originating and responding branch can enquire about the status of the transaction through
screen 27305.
viii. The entry shall be responded by a user/maker of minimum capability of 3 and approved
by a checker of minimum capability of 5 and above.
ix. This shall result in an auto responding of the originating entry at the Originating Branch
through a system generated responding entry.
x. Responding Branch shall decline the transaction with a suitable narration, if it is
erroneously originated on them or if there is any discrepancy. At the time of declining the
entry, system shall give a pop up massage ' Are you sure you want to decline this entry' and
shall proceed further only on confirmation. No financial transaction shall be fired in case of
transactions that are declined by the Responding Branch.
xi. Entry originated may be corrected only on same day. From the next day of the entry
originated no transaction can be reversed by the Originating Branch without the entry being
declined by the Responding Branch. Further, no transaction can be amended by the
Responding Branch in the CBS system.
xii. Once the Responding Branch declines the transaction only Originating Branch can
reverse the transaction in case of a wrong originating entry and re-originate the entries
afresh, wherever required.
xiii. All reversals shall be input by a user with Capability 3 and above and authorized by an
official with Capability 8 and above adopting maker checker concept.
xiv. In case of an erroneous originating entry by a Branch, a transcript of the narration that
has been input by the declining Branch shall be shown to the originating branch as part of
various fields on enquiry. It is thus very important that the narration is very specific and
conveys the true picture to the Originating Branch. This shall enable the Originating Branch
to reverse the entry and re-originate the transaction afresh, on another branch, if need be.
While 'reversal' shall fire a financial transaction in the Originating Branch, 're-originating'
shall not fire any fire any financial transaction but update the System and the transaction
shall be reflected against the Re-originated Branch, for necessary action.
During 'reversal' of an Originating Credit at the Originating Branch, the amount shall be
parked automatically by the System in an intermediary account viz., Inter Branch Transfer-
Sundry Deposit Account.
Originating Branch shall have to manually reverse such transactions and zeroise the
IBT- Sundry Deposit Account, which is a reconciliatory type BGL Account.
During 'reversal' of an Originating Debit at the Originating Branch, the amount shall be
parked automatically by the System in an intermediary account viz., Inter Branch Transfer-
Suspense Account.
Originating Branch shall have to manually reverse such transactions and zeroise the
IBT- Suspense Account, which is a reconciliatory type BGL Account.
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xv. No correction transactions are permitted at Responding Branch for erroneously
responded transactions. They have to reverse the entries by re-originating entries afresh.
2. TRANSACTION FLOW:
i) Four new BGL Accounts have been in each CBS Branch as below:
a) Inter Branch Transfer Credit Account (NDTL),
(BGL A/c No. 2399775, CGL A/c No. 2164505001)
b) Inter Branch Transfer Debit Account (NDTL),
(BGL A/c No. 2399776, CGL A/c No. 1164505001)
c) Inter Branch Transfer - Sundry Deposit Account,
(BGL A/c No. 2399777, CGL A/c No. 2167505001)
d) Inter Branch Transfer - Suspense Account.
(BGL A/c No. 2399778, CGL A/c No. 1166505001)
I. TRANSACTIONS AT ORIGINATING BRANCH
The Originating Branch shall initiate an Inter Branch Transaction (debit/credit) on another
branch by using the existing CBS screens which were hitherto used for BCGA transactions.
All transactions shall be put through against vouchers, duly passed by the appropriate
authority.
a) Originating a Credit
If Branch initiates a Credit transaction on the Non Home Branch:
Debit: Customer/BGL Account (Originating Branch)
Credit: Inter Branch Transfer Credit Account (NDTL) (Originating Branch)
b) Originating a Debit
If Branch initiates a Debit transaction on the Non Home Branch:
Debit: Inter Branch Transfer Debit Account (NDTL) (Originating Branch)
Credit: Customer/BGL Account (Originating Branch)
ii. TRANSACTIONS AT RESPONDING BRANCH
a) The Responding Branch shall have a provision to view the transaction originated on it. It
shall compare the transaction with the relative documents received from the Originating
Branch and prepare appropriate vouchers. After satisfying itself about the correctness of
the transaction and by using the appropriate menu, it shall 'Accept/Decline' the transaction
in the CBS.
b) The entry shall be responded /declined by a user/maker of minimum Capability of 3 and
approved by a checker of minimum Capability of 5 and above adopting maker /checker
concept.
c) The system shall automatically trigger the following undernoted system generated
financial transactions.

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Case-1: Responding to a Credit Originated on it
i) Debit: Inter Branch Transfer Credit Account (NDTL) (Originating Branch)
Credit: Core Inter Branch Account (CIBA) (Originating Branch)
ii) Debit: Core Inter Branch Account (CIBA) (Responding Branch)
Credit: Destination BGL Account (Responding Branch)
Case-2: Responding to a Debit Originated on it
i) Debit: Core Inter Branch Account (CIBA) (Originating Branch)
Credit: Inter Branch Transfer Debit Account (NDTL) (Originating Branch)
ii) Debit: Destination BGL Account (Responding Branch)
Credit: Core Inter Branch Account (CIBA) (Responding Branch)
Case-3: Declining a Transaction Originated on it
Responding Branch shall decline the transaction with a suitable narration, if it is
erroneously originated on them or if there is any discrepancy. A transcript of the narration
that is input by the declining Branch shall be shown to the originating branch as part of
various fields on enquiry. The transaction cannot be amended by the Responding Branch in
the CBS system. No financial transaction shall be fired in case of transactions that are
declined by the Responding Branch. The status of the transaction shall become 'Declined'
in the CBS System.
Case-4: Erroneous Responding a Transaction Originated on it
If an entry has been erroneously responded by the Responding Branch, it shall re-originate
entries afresh on the Originating Branch, as no correction entries are permitted for
erroneously responded entries.
3. TREATMENT OF DECLINED TRANSACTIONS AT ORIGINATING BRANCH
a) Where the transactions are declined by the Responding Branch, the Originating Branch
shall initiate necessary action at its end, either to reverse the entry in to or re-originate it on
the correct Branch, by using the appropriate menu in CBS.
b) All reversals shall be input by a user with Capability 3 and above and authorized by an
official with Capability 8 and above adopting maker checker concept.
c) All re-originating entries shall be input by a user with Capability 3 and above and
authorized by an official with Capability 5 and above adopting maker checker concept
Case-1: IBT Reversal
The Branch user shall select the appropriate menu for reversal and after inputting the
proper narration select the 'reversal' option.
The following system generated entries shall be fired:
i) Reversal of an Originating Credit
a) Debit: Inter Branch Transfer Credit Account (NDTL) (Originating Branch)
Credit: Inter Branch Transfer-Sundry Deposit Account

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ii) Reversal of an Originating Debit
Debit: Inter Branch Transfer - Suspense Account
Credit: Inter Branch Transfer Debit Account (NDTL) (Originating Branch)
Case-2: Re-Originating an IBT
The Branch user shall select the appropriate menu for re-originating and under 'Re-
originate' option input the re-originated details (except for amount, other details like
Branch code, Destination BGL head can be amended) and proper narration. No financial
transactions shall take place at this stage. The status of the original entry is updated as
'Re-originated'. The entry shall now be available in the System against the Branch Code
of the re-originated branch. A fresh row with 'originated' status is updated in the System.
All other information including originating date shall continue to be the same.
4. REPORTS AND RECONCILIATION
i. REPORTS: Reports of Branch wise/Period wise/Account wise outstanding items of
entries put through IBT shall be provided to Branches /Controllers /LHOs /Circles
/Corporate Centre by CDC, in a predetermined format. These reports shall also be
provided in the Tool for Controllers /Data Warehouse Site. This shall facilitate quicker
follow-up of outstanding items by branches, and ensure timely reconciliation.
The following reports shall be generated:
a) Daily Reports
Daily reports IBT_TRANSACTIONS_DAILY_BY_BRANCH_cfpd0209 (report id
SY0209) and IBT_TRANSACTIONS_DAILY_ON_BRANCH_cfpd0210 (SY0210) shall
be generated, containing all the transactions, with status as under:
Originated
Accepted
Declined
Reversed
This report shall give details of all transactions in IBT Accounts, branch wise, amount wise
classification. The report shall be available to both the Originating and Responding Branch.
b) Monthly Reports
A monthly report shall be generated for pending transactions up to the date of report. All
entries shall available on age wise breakup of > 30 days in ascending order,
PENDING_IBT_ENTRIES_MONTHY_cfpd0208 (Report id SY0208)
c) Outstanding Items Report
These are Control Reports for CIBR Department, Corporate Centre and for
LHOs/Administrative Offices. The report shall give branch wise details of transactions of
outstanding IBT Account entries as on any given date.
Pending_IBT_as_on_date_date_time_stamp1.TXT (Report id - SY0206).
Another report for monitoring delayed responding entries a report by name
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DELAYED_RESPONDING_IBT_date_time_stamp1.TXT shall be sent to circles
(SY0207).
ii. RECONCILLATION OF ENTRIES IN IBT
a) It shall be the responsibility of the respective Branches and their Controllers to ensure
that entries are responded to at the earliest.
b) IOA Department at LHOs/AUs will be responsible for monitoring outstanding entries in
the newly opened IBT Accounts with the aid of the control reports. This Department should
take care of compliance and audit related issues also. The matter will be discussed in P
Review/ structured meetings for close follow up by controllers.
c) Inter Office Reconciliation Department (IOA), at Corporate Centre shall follow up with the
controllers for having the entries in the newly opened IBT Accounts reconciled in a timely
manner. In the new system, IOA department will not need to send the Memos of un-
reconciled entries to the transacting Branch at periodical intervals, as these reports are
already with the branch and controllers.
d) Balances in Branch Clearing General Account shall remain at the whole Bank level till
such time all entries are responded to and marked off. Responding/Reversing entries
(Schedules 2,4,5,6,8,9,10,) alone shall be permitted till all entries are reconciled andBCGA
outstanding are brought to Nil. IOA department shall continue to monitor the same as
hitherto.
e) IT Department shall make arrangements to provide reports to the Reconciliation
Departments /Corporate Centre /LHO /Controllers /Branches and any other agency which
may require such data. They shall make necessary arrangements through Service Desk
announcements and provide the hand holding and any other support/training to Branches
through the Circle ITS. In respect of issues relating to the new process the Branches shall
take it up with IT Department through the Service Desk.
f) IOA Department should report the outstanding balances IBTs to Treasury Department at
weekly intervals. Similarly, Reconciliation Department should provide data of outstanding
IBTs at periodical intervals or as required to FRC&T Department, CC for Balance Sheet
purpose.
REPORTING BALANCES IN WEEKLY STATEMENT OF AFFAIRS (WSA) AND
BALANCE SHEET CLASSIFICATION: IBT balances shall be reported under “Inter Office
Accounts” in the WSA/Balance Sheet.
On review of the above process for reversal of an originating entry, it is observed that
manual intervention is required at three stages. With a view to (a) decreasing manual
intervention(b) avoiding continuation of entries in IBTS (although in declined status) till its
reversal and(c) avoid subsequent raising of entries on the same branch/ office by the
originating branch with back dated effect, the appropriate authority has approved
modification of the process w.e.f. 12.01.2017 as detailed hereunder:
I. Entry originated may be corrected only on same day. From the next day of the entry
originated no transaction can be reversed by the Originating Branch without the entry being

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declined by the Responding Branch. Further, no transaction can be amended by the
Responding Branch in the CBS system
ii. Responding Branch shall decline the transaction with a suitable narration, if it is
erroneously originated on them or if there is any discrepancy. At the time of declining the
entry, system shall give a pop up message ' Are you sure you want to decline this entry' and
shall proceed further only on confirmation. Immediately upon declining of an entry by
the Responding Branch, a financial transaction shall be fired and amount parked
automatically by the system in the intermediary accounts at the Originating Branch
as under:
a) For credit entries: IBT-Sundry Deposit account (2399777)
b) For debit entries: IBT-Suspense account (2399778)
iii. Originating branch shall have to manually reverse such transactions and zeroise the
IBT-Sundry Deposit Account/IBT-Suspense Account, which are reconciliatory type
BGL accounts.
Further, for prompt responding of high value IBTS entries and to reduce the number of
entries being declined by the Responding Branch for want of relevant documents, facility of
auto generation/ sending of SMS/email to Responding Branch has also been approved as
under:
a) For originating entry of Rs.5 Lac and above put through by the Originating Branch, an
auto generated email message will be sent for information and necessary action to the
Responding Branch. The e-mail message will contain full details of the IBTS transaction
and the contact numbers as well as e-mail IDs of dealing officials & Branch Manager of the
Originating Branch.
b) For originating entry of Rs.1 crore and above put through by the Originating Branch, in
addition to the e-mail message an auto generated SMS will be sent to the mobile number of
the Branch Manager of the Responding Branch for their immediate action. The SMS will
contain brief particulars of the IBTS transaction and the contact numbers of dealing officials
& Branch Manager of the Originating Branch.
VENDOR PAYMENT SYSTEM
1. Introduction
1.1 Understanding on Functionality:
To support the core banking activities, State Bank of India engages services of different
professionals (vendor) for House Keeping, Security Services, Courier Services, Stationery
supplies, Travel companies to name a few. Bank has to process bills raised by all these
vendors after complying with the regulatory requirements such as Service tax, Tax
deduction at Source (TDS) etc. Apart from this, Bank makes the reimbursements of some
expenses such as mobile bills, conveyance expenses, medical expenses bills etc. claimed
by its own employees.

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Bills claimed by the vendors/ employees consist of two parts:
a) Original Value of Service
b) Service Tax (Including Cess), now Service Tax is replaced by GST
GST is applicable on all services except those covered under Negative list and Mega
Exemption Notification. Also, there are some services which are covered under Reverse
Charge Mechanism, where Bank is liable to pay full or partial service tax directly to
Government Account which is paid by Corporate Centre based on the “Nature of Service”
and “Sub-Nature of Service” as selected by the user while posting transaction. Also, Input
credit of Good and Service Tax paid to the vendors can be claimed by Bank on different
services as per GST Input credit Rules.
To achieve the purposes of Good and Service Tax compliance, Vendor Payment System
(VPS) was incorporated in CBS. All the debits to charges can be done only through VPS. To
make payments using VPS, all the employees and vendors needs to be created in VPS
giving full details of vendors/employees. Auto deduction of TDS based on input given by
user in key fields like nature of service, residential status and constitution of vendor etc. is
done in VPS.
Vendor Name: -In case vendor has PAN, name of the vendor will be fetched from NSDL
site to bring unanimity/accuracy in the vendor name. Further, in the process, it will also
enable the system to verify PAN entered by user.
Residential Status: User will be prompted to select either RI (Resident Indian) or NRI (Non
Resident Indian) in this field, since applicable TDS section and TDS rate will differ in both
the cases.
Nature of Service: User will be required to map the “Nature of Service” (NOS) and “Sub-
Nature of Service” (sNOS) at the time of vendor creation. User can map maximum of TEN
“Nature of Service” and “Sub- Nature of Service” with one vendor ID. This field will also be
used to determine applicable section and rate of TDS.
Further, at the time of bill payment through VPS, user will be allowed to use only those NOS
and sNOS, which are mapped at the time of vendor creation. Therefore, user needs to map
the NOS/sNOS very carefully. It may be noted that most of the services will appear twice in
this field; therefore, user should select proper NOS / sNOS, to avoid any errors at the time of
bill processing.
TDS Nature of Service: This is the new field incorporated in vendor creation screen. User
is required to select from values available in the drop down in this field.
Operational part is covered in detail in the subsequent paragraphs. Users are expected to
go through the details and follow the manual instruction to help the Bank to enhance
Service tax and TDS compliance.
1.2 Overview of Vendor Payment System:
User can view the “Vendor Payment System” in B@ncslink CBS menu and this system has
been divided into Five Functionalities:
a) Vendor Maintenance
b) Transaction Processing
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c) Transaction Enquiry
d) Reversal of Transactions
e) Rent payment process
2. Vendor Maintenance
Under Vendor Maintenance, following functions will be available:
1) Vendor Creation
2) Employee Creation
3) Enquiry /Updation /Deletion
4) Vendor Master List
5) Employee Master List
User should create the vendor masters before processing of the transaction bills.
Purpose: Vendor Master will be created so that user need not enter the vendor details for
each bill at the time of transaction processing. Therefore, basic details like name, address,
contact number, service tax registration number and account number will be captured in
vendor master screen. Also, in case of employees only three fields-“Name, PF number and
Account number” will be captured.
Vendor is unique for each Branch. Vendor created at Branch 1 will not be displayed under
Vendor Master List to Branch 2. Therefore, Vendor Master List will display only vendors
created at branch level. However, Vendor ID created by Branch 1 can be used by other
Branches for payments to same vendor.
As per Income Tax Rules, The Bank is liable to deduct TDS for payment made to any vendor
based on the total amount paid by all the branches of the Bank. Accordingly, TDS will be
calculated by the system on the basis of total payment made by all the branches for similar
service to any vendor under same PAN.
2.1 Process for Vendor Creation:
A) Login to CBS menu using existing login ID and password.
B) Click on Vendor Payment System -> Vendor Maintenance ->Vendor Creation.
2.2 Process for Employee Creation:
For the creation of new employee user has to follow the procedure as stated below:
A) Login to CBS menu using CBS existing login ID and password.
B) Click on Vendor Payment System -> Vendor Maintenance -> Employee Creation to
create the Employee IDs, which will be the same as PF number of the employee.
2.3 Process for Enquiry / Updation / Deletion:
Purpose of this functionality is either to enquire or update or delete the details of:
1. Vendor
2. Employee

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A. Enquiry: User will be able to check the vendor/employee master details through this option.
B. Updation: PAN/ Service Tax Registration Number/ Constitution/ Resident Status
cannot be amended. However, Resident Status is allowed to be changed only in cases
where constitution is Sole-proprietorship or Individual.
C. Deletion: User will be able to delete the Vendor/Employee ID from the database through
this option.
2.4 Vendor Master List:
Purpose: This option is being provided so that branch can view the list of the vendors,
which have been created by that particular branch. The table is sorted Vendor's name wise.
User will click on Vendor Payment System -> Vendor Maintenance ->Vendor Master List
option, a new Screen will appear. On clicking “Search” Button available at the bottom of the
screen, a screen containing vendor master list will be displayed.
2.5 Employee Master List:
Purpose: This option is being provided so that branch can view the list of the employees,
which have been created by that particular branch.
User will click on Vendor Payment System ->Vendor Maintenance->Employee Master List
Option, a screen containing employee master list will be displayed.
2.Transaction Processing
Once user clicks on “Transaction Processing”, then following three menus will be
displayed:
1) Bill Processing
2) Generate / Upload file for Payment
3) Adjusting Entries at Quarter End
Bill Processing is used for posting of the bills related to Vendors and employees. Bill
processing is generally done by the maker at the branch. The checker then generates /
uploads the file after verifying the bills.
Adjusting entries at the quarter & year-end are passed through this menu only.
3. Transaction Enquiry
Status enquiry of a transaction will be provided in two ways:
1) Bill Enquiry: To know the status of transactions uploaded through VPS till the stage of
final posting in CBS or rejection by CBS.
2) Branch files Enquiry: To know the status of transactions posted in VPS but pending for
either authorization or upload in CBS.
4. Reversal of Transactions
Reversal Process:
Payments made through VPS should be reversed only through “Bill Reversal” option given
under VPS. Transactions posted through VPS should not be reversed outside VPS.

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Reversal can be of three types:
1) Bill Reversal: Bills wrongly processed by debiting /crediting with wrong amounts to the
wrong accounts.
2) TDS Refund: If a user needs to refund only TDS leg of a bill without cancelling the whole
bill, then this option to be used.
3) TF (Trickle Feed) Suspense Reversal: If at the time of posting bills through VPS, debit
leg is posted to trickle field suspense BGL instead of charges BGL, then TF Suspense
Reversal“ option should be used to rectify the transaction.
6. Rent Payment Process
Objectives: By the end of this module user will understand about the following:
1) Creation of Premises ID of Branches/Leased Houses
2) Enquiry for Premises / Vendors linked with premises
3) Bill processing (for Rent Payment)
6.1. Process for Creation of Premises ID of Branches/Leased Houses:
A) The details of premises of branches are captured through Menu ->Vendor Payment
System-> Rent Payment Processing-> Premises and Owner Details.
B) In Premises details capture screen Mandatory fields are Premises Category, Lease
Start Date, Lease End Date, Address fields, Monthly basic rent amount without service tax,
Total TDS amount.
C) In the beginning, Maximum 10 vendors i.e. owners are allowed for one premise. More
vendors can be added once the Premises ID is created by using Add Owner Details Screen.
6.1.1 Changes made in Premises detail capture screen:
A) Premises Category: New drop down option has been added in this field “Plant &
Machinery Rent”. Rent payments for hiring of plant and machinery, e.g., generator /QMS
/cheque drop machine /note sorting machine etc. are to be made using this option.
B) Lease Renewable option: Lease Renewable option has been added with a dropdown
of “Yes” / “No”.
C) Monthly Gross Rent amount without Service Tax: This is a modified field, where
value has to be entered by the branch user. User has to enter basic rent amount for the
premise excluding service tax amount.
6.2 Premises Updation/ Enquiry/ Deletion:
This option can be initiated by the user by clicking on ->Vendor Payment System-> Rent
Payment Processing-> Updation /Enquiry/ deletion. This option can be used to either
Amend, enquire, or delete premises IDs already created in the branch.
6.3 Adding Owners to existing Premises ID: In Premises creation screen, user can map
up to ten vendors, however, if the rent is payable to more than ten vendors for same
premises, the user need to use “Add More Owners” Screen provided under “Vendor
Payment System ->Rent Payment Processing”. Also, there may be need to add more

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owners due to change in terms of agreement. In case branch wants to add/map more
vendors to same premises ID then following steps are required to be followed:
Click on Vendor Payment System ->Rent Payment Processing -> Add More Owners.
6.4 Premises Master List: This option can be initiated by the user by clicking on ->Vendor
Payment System ->Rent Payment Processing-> Premises Master List. On clicking over
“Transmit” a user can find the list of all the Premises created along with all the details
associated to that premises.
6.5 Owner Master List: This option can be initiated by the user by clicking on ->Vendor
Payment System ->Rent Payment Processing -> Owner Master List. On clicking over
“Transmit” a user can find the list of all the Owners created.
6.6 VPS Bill Processing for Rent payment:
A) On the 1st of every month following transaction will be posted by the system for all the
premises IDs created in the branch till end of previous month.

B) A reference number (against the amount parked in 3199738/3199739) will be generated

for the respective entries.
C) Branch will use the respective reference number for making payment to landlord. Please
note that separate transaction is to be posted for each landlord mapped with the premises
using same reference number.
6.7 Rent Payment through Bill Processing Screen:
Click on Vendor payment system-> Transaction Processing ->Bill Processing. After
selecting Nature of service as “Rent” an additional field “Premises ID” will appear where the
user need to enter the Premises ID (09 digit alpha numeric code beginning with PRID…) to
proceed rent payment.

v v v

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Chapter - 14
Law
(Branch Operation-I)
NOTES
 Chapter-14:Negotiable Instruments Act 1881 amended 2002
and Payment and Settlement Systems Act 2007
We need to study the following acts since they are the governing laws related to the main
activity of Banking – payments. These acts cover physical and electronic modes of payments
and deal with conditions for payments as well as penalties related to default in payments.
14 (i) NI Act–
The Negotiable Instruments Act was enacted, in India, in 1881. Prior to its enactment, the
provision of the English Negotiable Instrument Act were applicable in India, and the present
Act has been modified to suit the present day needs of the country in this regard. It has 147
sections spread over 17 Chapters. It extends to the whole of India. The Act operates subject
to the provisions of Sections 31 and 32 of the Reserve Bank of India Act, 1934. Section 31 of
the Reserve Bank of India Act provides that no person in India other than the Bank or as
expressly authorised by this Act, the Central Government shall draw, accept, make or issue
any bill of exchange, hundi, promissory note or engagement for the payment of money
payable to bearer on demand. This Section further provides that no one except the RBI or
the Central Government can make or issue a promissory note expressed to be payable or
demand or after a certain time. Section 32 of the Reserve Bank of India Act makes issue of
such bills or notes punishable with fine which may extend to the amount of the instrument.
Negotiable instrument means a written document which creates a right in favour of some
person and which is freely transferable. Although the Act mentions only three instruments
(promissory note, a bill of exchange and cheque), it does not exclude the possibility of
adding any other instrument (Section 1 of the NI Act states – local extent, saving of usage
relating to hundis etc. But nothing herein contained affects the RBI Act (section 2 of 1934)
or affects any local usage relating to any instrument in an oriental language).
As such, documents like share warrants payable to bearer, debentures payable to bearer
and dividend warrants are negotiable instruments. But the money orders and postal orders,
deposit receipts, share certificates, bill of lading, dock warrant, etc. are not negotiable
instruments. Although they are transferable by delivery and endorsements, yet they are not
able to give better title to the bonafide transferee for value than what the transferor has.
Promissory Note (PN) (sec.4) – A document which contains a promise to pay on demand a
certain sum of money only to a specified person is a PN though there may be no words of
negotiability. The unconditional understanding to pay a specified amount to the specified
person is sine qua non in a PN. The promise to pay is not dependent upon a contingency. If
indebtedness is acknowledged in a document for a defined sum of money payable “on
demand” that is enough to make the document a PN. PN has two parties to the contract the
promisor and the promisee.
Therefore essential elements of a PN can be listed as – it must be in writing. It must certainly
an express promise or clear understanding to pay. The Promise to pay must be
unconditional. It should be signed by the maker and the maker must be certain and not
assumed. The payee must be certain. The promise should be to pay money and money
only and the most important element is that the amount should be certain between the
promisor and the promisee. The other formalities regarding number, place, date,

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consideration etc. though usually found given in the promissory notes but are not essential
in law. The date of instrument is not material unless the amount is made payable at a certain
time after date. Even in such a case, omission of date does not invalidate the instrument
and the date of execution can be independently ascertained and proved.
Bill of Exchange (BOE) (sec.5) – a BOE has three parties to the contract, maker (Drawer),
specified person (beneficiary or Payee) and a third party (Drawee) who is directed by the
maker to pay a certain sum of money only to or to the order of a Payee or to the bearer of the
instrument.
Essential conditions for a BOE include - It must be in writing and must be signed by the
drawer. The drawer, Drawee and payee must be certain and the sum payable must also be
certain. It should be properly stamped (As per applicability of Central or State Stamp Acts).
It must contain an express order to pay money and money alone
Cheque (sec.6) – is a BOE, which is drawn on a specified banker (Drawee) 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 (Amendment Act 2002)
Distinction between BOE and PN

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Bills can be classified as:
(1) Inland and foreign bills – an Inland bill are drawn or made in and made payable in India
or are drawn upon any person resident in India. Any BOE that is not an inland bill is a foreign
Bill. The foreign bills are generally drawn in sets of three, and each sets is termed as a 'via'.
As soon as anyone of the set is paid, the others become inoperative. These bills are drawn
in different parts. They are drawn in order to avoid their loss or miscarriage during transit.
Each part is despatched separately. To avoid delay, all the parts are sent on the same day;
by different mode of conveyance.
(2) Time and demand bills – A bill payable after a fixed time is termed as a time bill. A bill
payable at sight or on demand is termed as a demand bill.
(3) Trade and accommodation bills - A bill drawn and accepted for a genuine trade
transaction is termed as a “trade bill”. A bill drawn and accepted not for a genuine trade
transaction but only to provide financial help to some party is termed as an
“accommodation bill”.
Similarities and Distinction between BOE and Cheque

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A Negotiable instrument therefore has the following characteristics:
1. Property - The possessor of the negotiable instrument is presumed to be the owner of
the property contained therein and also has the right on that property. In the case of bearer
instrument, the property passes by mere delivery to the transferee. In the case of an order
instrument, endorsement and delivery are required for the transfer of property.
2. Title – The transferee of a negotiable instrument is known as holder in due course. A
holder in due course (sec.9) has a better title to the instrument subject to certain conditions
(consideration for the amount mentioned in the NI and received without having sufficient
cause to believe that any defect existed in the title of the person from whom he has received
the NI). Therefore it is not affected by defect in title on the part of previous holders of
instrument.
3. Rights - A negotiable instrument can be transferred any number of times till it is at
maturity (sec.22). The maturity is of an NI that is expressed to be payable on Demand is the
date at which it falls due. For all others the maturity is on the third day after the day on which
it is expressed to be payable. When the day on which a PN or BOE is at maturity is a public
holiday, the instrument shall be deemed to be due on the next preceding business day. The
transferee of the negotiable instrument can sue in his own name, in case of dishonour. The
holder of the instrument need not give notice of transfer to the party liable on the instrument
to pay.
4. Presumptions - Certain presumptions apply to all negotiable instruments
a. Consideration - It is presumed that, consideration is present in every negotiable
instrument until the contrary is presumed (e.g. NI obtained from its lawful owner by means
of fraud or undue influence).
b. Date - Where a NI is dated, the presumption is that it has been made or drawn on such
date, unless the contrary is proved.
c. Time of acceptance – Where acceptance of the instrument is undated Unless the
contrary is proved, every accepted bill of exchange is presumed to have been accepted
within a reasonable time after its issue and before its maturity. If the acceptance is dated it
will prima facie be taken as evidence of the date on which it was made.
d. Time of Transfer - Unless the contrary is presumed it shall be presumed that every
transfer of a negotiable instrument was made before its maturity
e. Order of endorsement - Until the contrary is proved it shall be presumed that the
endorsements appearing upon a negotiable instrument were made in the order in which
they appear thereon.
f. Stamp - Unless the contrary is proved, it shall be presumed that a lost promissory
note, bill of exchange or cheque was duly stamped (Subject to Central and State Stamp
Acts)
g. Holder in Due Course - it shall be presumed that the holder of a negotiable instrument
is the holder in due course, unless otherwise proved.
h. Proof or Protest - Section 119 lays down that in a suit upon an instrument which has
been dishonoured, the court shall on proof of the protest, presume the fact of dishonour,
unless and until such fact is disproved.

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5. Prompt Payment - A negotiable instrument enables the holder to expect prompt
payment because dishonour means the ruin of the credit of all persons who are parties to
the instrument. This is the reason that dishonour of Cheque due to insufficiency of money in
an account is treated as a Criminal Offence and not a civil offence under the Indian Penal
Code and sec. 138 of NI Act.
The most important part of any NI is the negotiation. According to section 14 of the Act,
'when a promissory note, bill of exchange or cheque is transferred to any person so as to
constitute that person the holder thereof, the instrument is said to be negotiated. Therefore
Negotiation requires that there must be a transfer of the instrument to another person and
the transfer must be made in such a manner as to constitute the transferee the holder of the
instrument.
Negotiation can be done by way of:
a) By Delivery (sec.47) – A bearer NI is negotiated by delivery.
b) By Endorsement and Delivery (Sec. 48) – A NI that is payable to order is negotiated by
endorsement and delivery.
Every sole maker, drawer, payee or indorsee, or all of several joint makers, drawers,
payees or endorsees can endorse an NI and negotiate if negotiability of such instrument
has not been restricted or excluded as per section 50 of the NI act. When the holder
transfers or indorses the instrument to anyone else, the holder becomes the 'indorser'. The
person to whom the bill is indorsed is called an 'indorsee'.
Assignment - Transfer by assignment takes place when the holder of a negotiable
instrument sells his right to another person without endorsing it. The assignee is entitled to
get possession and can recover the amount due on the instrument from the parties thereto
(actionable claims are assigned e.g. Insurance policies can be assigned). NI act only
recognises negotiation as the method of transfer.
Endorsement is signing a negotiable instrument for the purpose of negotiation.
Essentials of a valid endorsement
a) The endorsement may be on the back or face of the instrument and if no space is left
on the instrument, it may be made on a separate paper attached to it called Allonge.
b) Must be made by the maker or holder of the instrument and not by a stranger.
c) It must be signed by the endorser. Full name is not essential. Initials may suffice.
Thumb-impression should be attested. Signature may be made on any part of the
instrument. A rubber stamp is not accepted but the designation of the holder can be done by
a rubber stamp.
d) It may be made either by the endorser merely signing his name on the instrument (it is
a blank endorsement) or by any words showing an intention to endorse or transfer the
instrument to a specified person (it is an endorsement in full).
e) When in a bill or note payable to order the endorsee's name is wrongly spelt, he should
when he endorses it, sign the name as spelt in the instrument and write the correct spelling
within brackets after his endorsement.
f) It must be completed by delivery of the instrument. Where a person endorses an

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instrument to another and keeps it in his papers where it is found after his death and then
delivered to the endorsee, the latter gets no right on the instrument.
g) It must be an endorsement of the entire bill. Endorsement is complete after the
condition is fulfilled for a conditional delivery.
There are certain classes of endorsements as under:
a) Blank or General Endorsement (sec. 16 and 54) - Endorsement in blank specifies no
endorsee. It only consists of the signature of the endorser. A negotiable instrument even
though payable to order becomes a bearer instrument if endorsed in blank.
b) Special or Full Endorsement (sec.16) – When the endorsement contains both the
signature of the endorser and also the name of the person in whose favour the
endorsement is made. E.g. “Pay to A or A's order”. A blank endorsement can be converted
into a full endorsement.
c) Partial Endorsement (sec.56) – where only part of the amount is purported to be
endorsed. It is not a valid negotiation.
d) Restrictive Endorsement (sec.50) – which restricts the further negotiation of a bill.The
endorsee under a restrictive endorsement acquires all the rights of the endorser except the
right of negotiation
e) Conditional or Qualified Endorsement - where the endorsee limits or negatives his
liability by putting some condition in the instrument. It does not affect the negotiability of the
instrument. E.g. are Sans recourse (without recourse) endorsement, Facultative
endorsement (endorser extends his liability or abandons some right under a NI), Sans frais
endorsement (endorser does not want the endorsee or any subsequent holder, to incur any
expense on his account on the instrument), Liability dependent upon a contingency
(endorser makes his liability depend upon the happening of a contingent event, or makes
the rights of the endorsee to receive the amount depend upon any contingent event e.g.
Pay A or order on his marriage with B)
Please remember - A person cannot pass a better title than he himself possesses. A person
who is a mere finder of a lost goods or a thief or one who obtains any article by fraud or for an
unlawful consideration does not get any title to the thing so acquired. The Negotiable
Instruments Act provides protection to those persons who acquire the instruments in good
faith and for valuable consideration. The moment an instrument comes into the hands of a
holder in due course, not only does he get a title which is free from all defects, but having
passed through his hands the instrument is cleaned of all defects.
Where the holder of a bill or note loses it, the finder gets no title to it. But if the instrument is
transferable by mere delivery and there is nothing on its face to show that it does not belong
to the finder, a holder obtaining it from the finder in good faith and for valuable consideration
and before maturity is entitled to the instrument and can recover payment from all the
parties thereof. The holder of the instrument when it is lost must give a notice of loss to all
the parties liable on it and also a public notice by advertisement. A person who obtains an
instrument by fraud gets a defective title. But if such an instrument passes into the hands of
a holder in due course, the plea of fraud will not be available against him. An instrument
given for an illegal consideration is void and does not convey a valid title to the holder.
Forgery confers no title and a holder acquires no title to a forged instrument. A forged

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instrument is treated as a nullity. A forged instrument has no existence in the eyes of law. If
an endorsement is forged, the endorsee acquires no title to the instrument even if he is a
bonafide purchaser except in the case of a bearer instrument. Bankers are specially
protected against forged endorsement under section 85 of the Act.
Some very important definitions to remember as a Banker
Every person capable of contracting, according to the law to which he is subject, may bind
himself and be bound by the making, drawing, acceptance, endorsement, delivery and
negotiation of a promissory note, bill of exchange or cheque.A minor may draw, endorse,
deliver and negotiate such instruments so as to bind all parties except himself
Holder in Due Course (sec.9) - must be a holder for valuable, not void or illegal
consideration. Must have become a holder before the date of maturity.Must have become
holder of the NI in good faith. A holder in good faith purges the defective title of the NI but all
prior parties continue to be liable to him until the instrument is duly satisfied. His rights are
not affected in case of an inchoate instrument (incomplete – begun but not completed). No
effect of absence of consideration or presence of an unlawful consideration.
An NI can be dishonoured by non-acceptance (sec.91) or by non-payment (sec.92). When
a negotiable instrument is refused acceptance or payment notice of such refusal must
immediately be given to parties to whom the holder wishes to make liable. Failure to give
notice of the dishonour by the holder would discharge all parties other than the maker or the
acceptor (Sec. 93). The holder of the instrument or some party to it who is liable thereon
must give a notice of dishonour to all the prior parties whom he wants to make liable on the
instrument (Section 93). The agent of any such party may also be given notice of dishonour.
A notice given by a stranger is not valid. The notice must be given in a reasonable time and
in calculating such time public holidays shall be excluded (sec. 105). The notice of
dishonour may be oral or written or partly oral and partly written. It may be sent by post.
Section 106 lays down two different rules for determining reasonable time in connection
with the notice of dishonour
(a) When the holder and the party to whom notice is due carry on business or live in
different places - the notice of dishonour must be dispatched by the next post or on the day
next after the day of dishonour.
(b) When the parties live or carry on business in the same place - the notice of dishonour
should reach its destination on the day next after dishonour.
The notice may be served at the place of business or at the residence. If the party entitled to
the notice cannot after due search be found, notice of dishonour is dispensed with. When a
promissory note or bill of exchange has been dishonored by non-acceptance or non-
payment, the holder may cause such dishonor to be noted (not certified) by a notary public
upon the instrument, or upon a paper attached thereto, or partly upon each (sec.99 & 100).
When a promissory note or bill of exchange has been dishonored by non-acceptance or
non-payment, the holder may, within a reasonable time, because such dishonor to be noted
and certified by a notary public. Such certificate is called a protest.
After the formality of noting and protesting is gone through, the holder may bring a suit
against the parties liable for the recovery of the amount due on the instrument.

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Section 131 of NI act gives protection to the collecting banker - A banker who has in good
faith without negligence received payment for a customer of a cheque crossed generally
or specially, shall not, in case the title to the cheque proves defective, incur any liability to
the true owner of the cheque by reason for having received such payment. A banker
receives payment of a crossed cheque for a customer within the meaning of this section
not withstanding that he credits his customer's account with the amount of the cheque
before receiving payment thereof. Hence in order to be eligible for protection under
section 131, the banker should ensure the following:
a) There should not be any dishonesty and or negligence on the part of the banker. The
banks therefore take introduction while opening the accounts.
b) The cheque should be collected only for a customer. It is therefore essential that before
the cheque is collected the relationship of the customer and the banker is established. It is
because of this that the customer account is first opened and then the cheque is collected
c) The cheque should be crossed before it comes into the hands of collecting banker.
Once these precautions are taken, the bank is protected and no charge of conversion can
be made against him.
A Cheque can be
a) An open cheque – payable at the counter of the bank
b) Bearer Cheque – payable to the person who presents the cheque for encashment.
Transferable by mere delivery.
c) Order Cheque – payable to the person named in the cheque. When the word bearer is
cancelled it becomes an order cheque.
d) Crossed Cheque – cheque with two parallel transverse lines are drawn with or without
the words between the lines. It can only be credited to the account of the payee.
e) Stale Cheque – a Cheque whose validity period is over. An Out-dated cheque.
f) Ante-dated cheque – a cheque contains the date on which it is drawn. If it bears a
priordate or back date, it is called ante-dated cheque.
g) Post-dated cheque – cheque bearing a date later than the date on which it is drawn.
h) Mutilated cheque – torn into pieces.
Modes of Crossing a Cheque
a) General Crossing - cheque bearing two transverse parallel lines at the left hand top
corner, with or without words (not negotiable).
b) Special crossing – when a cheque bears the name of the bank with or without the words
(not negotiable) between the transverse lines.
c) Restrictive crossing / Account payee Crossing – cheque can be paid by way of credit to
account only. Marked as a/c payee between the lines.
d) Double Crossing – when a second bank act as an agent of the first collecting banker it is
said to be doubly crossed.
Sec.87 – Material alteration - Any material alteration of negotiable instrument renders the
same void as against anyone who is a party thereto, unless it was made in order to carry
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out the common intention of the original parties. Any such alteration, if made by an
endorsee, discharges his endorser from all liability to him in respect of the consideration
thereof. Sec.89 - When a Promissory note, BOE, or Cheque has been materially altered but
does not appear to have been so altered or where a cheque is presented for payment which
does not at the time of presentation appear to be crossed or to have had a crossing which
has been obliterated Payment thereof by a person or banker liable to pay and paying the
sum according to the apparent tenor thereof at the time of payment or otherwise in due
course, shall discharge such person or banker from all liability thereon and such payment
shall not be questioned for the reason 'the instrument has been altered', or the cheque
crossed.
Penalties for Bouncing of Cheques (sec. 138 to 142)
Where any cheque drawn by a person on an account maintained by him with a banker for
payment of any amount of money to another person from out of that account for the
discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the credit of that account is insufficient
to honor the cheque or that it exceeds the amount arranged to be paid from that account by
an agreement made with that bank, such person shall be deemed to have committed an
offence and shall without prejudice to any other provisions of this Act, be punished with
imprisonment for "a term which may extend to two years", or with fine which may extend to
twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
a. The cheque has been presented to the bank within a period of six months from the date
on which it is drawn or within the period of its validity (3 months by RBI w.e.f April 2012),
whichever is earlier.
b.The payee or the holder induce course of the cheque, as the case may be, makes a
demand for the payment of the said amount of money by giving a notice, in writing, to the
drawer, of the cheque, "within 30 days" of the receipt of information by him from the bank
regarding the return of the Cheques as unpaid, and
c.The drawer of such cheque fails to make the payment of the said amount of money to the
payee or, as the case may be, to the holder in due course of the cheque, within Thirty days
of the receipt of the said notice. Explanation: For the purpose of this section, "debt or other
liability" means a legally enforceable debt or other liability].
d. Court empowered to take cognizance of offence even if complaint filed beyond one
month
e. Summary trial procedure permitted for imposing punishment up-to one year and fine
even exceeding Rs 5,000. Offence can be compounded.
f. Summons can be issued by speed post or courier service. Summons refused will be
deemed to have been served.
g.Evidence of complainant through affidavit permitted. Bank's slip or memo indicating
dishonor of cheque will be prima facie evidence unless contrary proved.

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14 (ii) Payment and Settlement Systems Act 2007
With the advent of Technology in Financial transactions there was a need to regulate the
electronic payments in India and its settlement across spectrum. NI Act lagged in this
aspect and RBI Act did not empower RBI to be the regulator for electronic settlement
systems.
RBI, as the central bank of the country, is the sole authority for the issue of currency notes
under the RBI Act 1934. Under this act RBI can frame regulations for clearing houses and fund
transfers through electronic means between banks or between banks and other financial
institutions. Hitherto Clearing houses were governed by Uniform Regulations and Rules for
Bankers' Clearing Houses (URRBCH) and each system's local procedural guidelines were
contractually agreed between the clearing house and its members. These contracts are now
legally covered under the Payment and Settlement Systems Regulations, 2008.
RBI regulates foreign currency payments and receipts (Foreign Exchange market) under
provisions of the Foreign Exchange Management Act 1999 (FEMA).
The Banking Regulation Act, 1949, defines Banking and empowers RBI to regulate the
Banking system in the country. Under this Act RBI also regulates clearing houses that are in
turn managed by banks, can inspect the books and accounts of banks and calls for
periodical financial reports and data from the banks (Risk Based Supervision). NBFCs that
are accepting deposits and other financial institutions also come under the purview of RBI
within this Act.
The Negotiable Instruments Act, 1881 (NI Act), defines promissory notes, bills of exchange
and cheques. In 2002, amendments were made to the NI Act to provide for electronic
cheques and cheque truncation and changes in penal provisions and filing of suit.
The Information Technology Act, 2000, covers all aspects related to electronic transaction
processing, security features that are necessary to maintain the confidentiality, integrity
and authenticity of such transactions, digital signatures and encryption of data. It also
provides for treating electronically stored information as equivalent to documentary
evidence in a court of law (This was not covered earlier under the Indian Evidence Act).
The Indian Contract Act, 1872, explains and governs contracts and agreements in India,
including mutual rights and obligations of the parties involved. This Act was amended over
a period of time, wherein besides other changes the sections covering sale of goods and
sections covering Partnership were obliterated.
Therefore the Payment and Settlement Systems Act 2007 that came into force in 2008. The
Payment and Settlement Systems Act, 2007, empowers the RBI to
1) regulate and oversee all payment and settlement systems in the country and call for
regular reports
2) Provide settlement finality and a sound legal basis for netting.
3) Mandatory obtain RBI authorisation to set up and operate a payment system.
4) Audit and conduct on and off site inspections of the system
To exercise its powers and perform its functions and discharge its duties, the RBI is authorized
under the Act to constitute a committee of its central board, which is known as the Board for

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Regulation and Supervision of Payment and Settlement Systems (BPSS). Although BPSS
became operational in 2005 it was reconstituted after the Act came into force.
The payment and settlement systems act (PSA) had the impact on the following:
• National Payments Corporation of India (NPCI) - an umbrella organisation for operating
retail payments and settlement systems in India, is an initiative of Reserve Bank of India
(RBI) and Indian Banks' Association (IBA). It is promoted by ten core promoter banks
namely State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union
Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank N. A. and HSBC. In 2016 the
shareholding was broad-based to 56 member banks to include more banks representing all
sectors. It is Not for Profit Company under the Companies Act 2013 and has been set up to
provide infrastructure to the entire Banking system in India for physical as well as electronic
payment and settlement systems. The Flagship products of NPCI have been – RuPay
payment settlement systems resulting in RuPay cards, Immediate Payment Service
(IMPS), National Financial Switch (NFS), Cheque Truncation System (CTS), Bharat Bill
Payment System (BBPS), Unified Payments Interface (UPI), National Common Mobility
Card (NCMC) and National Electronic Toll Collection (NETC).
• Institute for Development and Research in Banking Technology (IDRBT) – was setup in
1996 with a brief to spearhead technology absorption in the banking and financial sector of the
country. Over the period of years the institute has helped in development and spreading of
FinTech in the country especially after the enactment of PSA. For e.g. NFS was established by
IDRBT to facilitate connectivity among the ATM switches of all Banks, addressing the
limitations of other ATM networks and creating a reliable national infrastructure.
• Committee on Payments and Market Infrastructures (CPMI) - The Committee on
Payments and Market Infrastructures (CPMI) promotes the safety and efficiency of
payment, clearing, settlement and related arrangements, thereby supporting financial
stability and the wider economy. The CPMI monitors and analyses developments in these
arrangements, both within and across jurisdictions. It also serves as a forum for central
bank cooperation in related oversight, policy and operational matters, including the
provision of central bank services. The CPMI is a global standard setter in this area. It aims
at strengthening regulation, policy and practices regarding such arrangements worldwide.
It works under the aegis of Bank for International Settlements.
• RTGS System - The acronym 'RTGS' stands for Real Time Gross Settlement, which can
be defined as the continuous (real-time) settlement of funds transfers individually on an
order by order basis (without netting). 'Real Time' means the processing of instructions at
the time they are received rather than at some later time; 'Gross Settlement' means the
settlement of funds transfer instructions occurs individually (on an instruction by instruction
basis). Considering that the funds settlement takes place in the books of the Reserve Bank
of India, the payments are final and irrevocable.
• NEFT System - NEFT is an electronic fund transfer system that operates on a Deferred
Net Settlement (DNS) basis which settles transactions in batches. In DNS, the settlement
takes place with all transactions received till the particular cut-off time. These transactions
are netted (payable and receivables) in NEFT whereas in RTGS the transactions are
settled individually. Any transaction initiated after a designated settlement time would have
to wait till the next designated settlement time Contrary to this, in the RTGS transactions
are processed continuously throughout the RTGS business hours.
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• Electronic Clearing Services - ECS is an electronic mode of payment / receipt for
transactions that are repetitive and periodic in nature. ECS is used by institutions for
making bulk payment of amounts towards distribution of dividend, interest, salary, pension,
etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax
collections, loan instalment repayments, periodic investments in mutual funds, insurance
premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account too many
bank accounts or vice versa. ECS includes transactions processed under National Automated
Clearing House (NACH) operated by National Payments Corporation of India (NPCI).
• Cheque Truncation System - Truncation literally means stopping or cutting short. In this
system the physical movement of cheque is cut short and instead an electronic image of the
cheque is transmitted to the Drawee branch, along with relevant information like data on the
MICR band, date of presentation, presenting bank, etc. This helps in faster clearing of cheques.
• Speed Clearing - Speed Clearing refers to collection of outstation cheques (a cheque
drawn on non-local bank branch) through the local clearing. It facilitates collection of
cheques drawn on outstation core-banking-enabled branches of banks, if they have a net-
worked branch locally.
• US Dollar Cheque Collection - There are various ways of collecting (realising) USD
denominated cheques. The collection process followed by banks (presenting banks) varies
depending on the institutional arrangements put in place by them. There are basically three
types of arrangements adopted by banks–
a) Cash Letter Arrangement (CLA): Cheques are sent by the presenting banks in India to
their correspondent banks (CBs) in USA for domestic clearing. Funds are collected
(realised) by the CBs and credited to the account of the presenting bank maintained in US.
Such accounts are known as NOSTRO accounts. For cheques sent under CLA the CB
gives provisional credit to the bank on a pre-determined date (which varies from 7 to 9 days
after tendering of cheque to the CB). However, the provisional credit will be subjected to a
cooling period. After the cooling period, the customer's account with the presenting bank in
India is credited. In case of secured collection facility, the CB provides a guaranteed credit
but at an additional cost. (Cooling period is the time up to which banks wait after receiving
provisional credit for the amount of cheque in their Nostro account for possible return of the
cheque under provisions of the laws of USA by the Drawee bank, before giving credit to the
customers. More details are available under Question 9 of FAQ released by RBI on this
topic) (Secured Collection is a facility extended by the CBs. Under this facility, the CBs
provide guaranteed final credit without recourse within a confirmed time period unlike
normal collection service. Hence the collection time period is better under this facility. CBs
offering this facility normally fix a cap for the amount of individual cheques collected under
the arrangement. The CBs absorb any subsequent recall of payment by the Drawee bank
as per US laws. The bank offering such service charge an additional amount for giving
credit without recourse.)
b) Direct Collection Arrangement (DCA): Cheques are sent by the banks in India directly to
the Drawee banks in USA for collection. Usually collection services ensure receipts of clear
funds i.e., risk of return is almost eliminated. Therefore, high value cheques are generally
sent under collection though the time taken may be more.
c) Final Credit Services (FCS): These services are offered by some CBs. The CB offering
the service guarantees confirmed credit against the instrument. Under this arrangement
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banks receive final credit in their Nostro accounts without any recourse. This service
normally does not have any cooling period as the cooling period is factored by the CBs
before releasing the clear funds.
d) Check-21 Facility: The System has been facilitated under Check-21 Legislation. It works
more or less like CTS. When using check 21 facility, dealings are cleared utilizing the
exchange of check images from bank to bank. It saves time in transit.
• Indo Nepal Remittance Facility Scheme - Indo-Nepal Remittance Facility is a cross-
border remittance scheme to transfer funds from India to Nepal, enabled under the NEFT
Scheme. The scheme was launched to provide a safe and cost-efficient avenue to migrant
Nepalese workers in India to remit money back to their families in Nepal. A remitter can
transfer funds up to Indian Rupees 50,000 (maximum permissible amount) from any of the
NEFT-enabled branches in India. The beneficiary would receive funds in Nepalese
Rupees. Further details on the NEFT system and the NEFT-enabled branches are
available on the website of Reserve Bank of India at http://www.rbi.org.in/scripts/neft.aspx.
There is no need for the remitter to maintain an account with a bank branch in India and also
no need for the beneficiary to maintain an account with a bank branch in Nepal.
• The PSA therefore impacts the lives of all Indians (Biological or others) in Electronic
Payments and Settlements through Cards, ATMS, Internet Banking, Point of Sale
Infrastructure, and Instant Money Orders from India Post etc.
The Act has 8 chapters and 38 sections that cover all the aspects of an act, namely –
1) Applicability – it extends to whole of India
2) Designated Authority and its committee – i.e. RBI and Board for Regulation and
Supervision of Payment and Settlement Systems
3) Authorisation of Payment Systems – RBI is empowered to set up and operate or permit
set up and operate any payment system in India.
4) Regulation and Supervision by the RBI – its powers to call for inspection and reports
5) Rights and Duties of System Provider – to operate the system under the terms and
conditions specified by RBI and duty to maintain the standards as prescribed under the Act.
6) Settlement of Disputes – the system provider shall make rules and regulations to decide
the disputes between system participants or refer to the panel set up by RBI or RBI where
ever applicable.
7) Offences and Penalties – penalty for contravention of section 4 of the Act (unlicensed /
unauthorised operations of a payment system) or failure to comply with terms and conditions
of the authorisation shall be punishable with imprisonment ranging from minimum 1 year to 10
years or fine up-to Rs. 1 crores or both and with further fine of Rs. 1 lac for every day the
contravention continues. Failure to disclose a material information in the application for setting
up of a payment system to RBI shall be punishable with imprisonment for a term which may
extend to three years and shall also be liable to fine which shall not be less than ten lakh rupees
and which may extend to fifty Lakh rupees. Failure to produce documents required / asked for
by RBI shall be punishable with fine which may extend to ten Lakh rupees in respect of each
offence and if he persists in such refusal, to a further fine which may extend to twenty-five
thousand rupees for every day for which the offence continues. Disclosure of prohibited
information (section 22 of the Act) by a person shall be punishable with imprisonment for a
term which may extend to six months, or with fine which may extend to five lakh rupees or an

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amount equal to twice the amount of the damages incurred by the act of such disclosure,
whichever is higher or with both. Failure to comply with the direction of RBI under this act or
where the penalty imposed by the Reserve Bank under section 30 is not paid within a period
of thirty days from the date of the order, the system provider or the system participant which
has failed to comply with the direction or to pay the penalty shall be punishable with
imprisonment for a term which shall not be less than one month but which may extend to ten
years, or with fine which may extend to one crore rupees or with both and where the failure
to comply with the direction continues, with further fine which may extend to one lakh
rupees for every day, after the first during which the contravention continues. There are
further stringent penalties that are mentioned under this chapter.
8) Miscellaneous - the heading suggests covers certain other provisions related to
penalties, RBI powers to make regulations consistent with this act by way of notice.
Some key definitions under this Act
The Section 2(1) (i) of the PSS Act 2007 defines that a payment system enables payment to
be effected between a payer and a beneficiary, involving clearing, payment or settlement
service or all of them, but does not include a stock exchange. It is further stated a 'payment
system' includes the systems enabling credit card operations, debit card operations, smart
card operations, money transfer operations or similar operations except stock exchanges
and clearing corporations set up under stock exchanges.
Settlement means the settlement of payment instructions received and these include
settlement of securities, foreign exchange or derivatives or other transactions. Settlement
can take place either on a net basis or on a gross basis. Both netting and gross settlement
system are defined under the Act.
Payment Instruction is defined as any instrument, authorization or order in any form,
including by electronic means, to effect a payment by a person to a participant in a payment
system or from one participant in such a system to another participant in that system. The
payment instruction can be communicated either manually i.e. through an instrument like a
cheque draft, payment order etc. or through electronic means, so that a payment can be
made by either a person to the participant in such a system or between two participants.
Payment obligation is defined as what is owed by one participant in a payment system to
another such participant, which results from clearing or settlement or payment instructions
relating to funds, securities or foreign exchange or derivatives or other transactions
“netting” means the determination by the system provider of the amount of money or
securities, due or payable or deliverable, as a result of setting off or adjusting, the payment
obligations or delivery obligations among the system participants, including the claims and
obligations arising out of the termination by the system provider, on the insolvency or
dissolution or winding up of any system participant or such other circumstances as the
system provider may specify in its rules or regulations or bye-laws (by whatever name
called), of the transactions admitted for settlement at a future date so that only a net claim
be demanded or a et obligation be owned
“Gross” settlement systems means a payment system in which each settlement of funds or
securities occurs on the basis of separate or individual instructions;
For complete details please refer to
1. Complete bare Act on NI and Payment and Settlement Systems Act
2. RBI website for FAQs and Notifications.

v v v
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Chapter - 15
Law
(Branch Operation-II)
NOTES
 Chapter-15: Law (Branch Operations) – Banking
Ombudsman, Consumer Protection Act, BCSBI, RTI,
Minimum Wages Act
As a BM /Service Manager / Accountant / for that matter any officer working in operations, it
is pertinent for all of us to be aware of important legal provisions / Rules of the above
mentioned Acts / Codes as applicable to the bank. The awareness of such provisions helps
us in discharging our duties responsibly and effectively leading to better customer service.
Deficiency in customer service leads to complaints. Perception of deficiency depends upon
the customer. However there are SOPs in are bank to reduce the deficiencies and there by
improve on customer service. Over the last few decades the banking sector in India has
witnessed explosive growth not only in terms of branches and business but also in terms of
technologies employed resulting in plethora of banking channels for servicing the
customers.
The fast changing environment has been characterized by rapidly growing size,
complexity, uncertainty and ambiguity. On the one hand, public sector banks have to
shoulder the social responsibility of taking a leading role in the balanced socio-economic
development of India, and, on the other hand, they are asked to be concerned about their
level of profitability. Mix of both commercial and social interests leads to dis satisfaction
among the customers that feel left out. Present bankers realize the need to improve
banker-customer relationship, to anticipate, identify, reciprocate and satisfy their needs
efficiently, effectively and profitably. There has been improvement in the customer service
in the PSBs.
The following committees have contributed towards improving the customer service in
Indian Banks (prominent suggestions / recommendations as under)
1. Saraiya Committee (Banking Commission 1972) – made 77 recommendations to
improve customer service.
2. Talwar Committee (1977) – made 176 recommendations. The major
recommendations of Talwar Committee were standardization of procedures, customer
service centres at circle office 1 Head office level, provision for 'may I help you', counter at
branches and provision for time norm board.
3. Goiporia Committee (1991) - Some of the key recommendations of the committee are,
one or more teller counters at area I centres, compensation for delay in collection of
outstation cheques, credit cards/ ATM facilities, infrastructure facilities at branches and
display of business timing.
Besides the above, once a complaint materialises, there are redressal mechanisms in
place. Prominent being:
15 (i) Banking Ombudsman
The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking
Regulation Act, 1949 by RBI with effect from 1995 – the scheme caters to the complaints
pertaining to the banking services, considers them and facilitates their settlement by

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making agreements or recommendations or awards. The purpose of Ombudsman is to
ensure speedy relief to the aggrieved customers without any costs and legal complications
such as time consuming processes. Presently the Banking Ombudsman Scheme 2006 (As
amended up to July 1, 2017) is in operation.
The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to
redress customer complaints against deficiency in certain banking services covered under
the grounds of complaint specified under Clause 8 of the Banking Ombudsman Scheme
2006 (As amended up to July 1, 2017).
Presently there are twenty Banking Ombudsmen that have been appointed with their
offices located mostly in state capitals. The addresses and contact details of the Banking
Ombudsman offices have been provided under Annex I of the Scheme. The contact details
of the nearest office of the Banking ombudsman need to be displayed at branch of the bank.
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-
operative Banks are covered under the Scheme.
The Banking Ombudsman can receive and consider any complaint relating to the following
deficiency in banking services:
1. non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
2. non-acceptance, without sufficient cause, of small denomination notes tendered for any
purpose, and for charging of commission in respect thereof;
3. non-acceptance, without sufficient cause, of coins tendered and for charging of
commission in respect thereof;
4. non-payment or delay in payment of inward remittances ;
5. failure to issue or delay in issue of drafts, pay orders or bankers' cheques;
6. non-adherence to prescribed working hours ;
7. failure to provide or delay in providing a banking facility (other than loans and advances)
promised in writing by a bank or its direct selling agents;
8. delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-
observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits
in any savings, current or other account maintained with a bank ;
9. complaints from Non-Resident Indians having accounts in India in relation to their
remittances from abroad, deposits and other bank related matters;
10. refusal to open deposit accounts without any valid reason for refusal;
11. levying of charges without adequate prior notice to the customer;
12. Non-adherence to the instructions of Reserve Bank on ATM / Debit Card and Prepaid
Card operations in India by the bank or its subsidiaries
13. Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on
credit card operations
14. Non-adherence to the instructions of Reserve Bank with regard to Mobile Banking /
Electronic Banking service in India by the bank
15. Non-disbursement or delay in disbursement of pension (to the extent the grievance can
be attributed to the action on the part of the bank concerned, but not with regard to its
employees);
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16. Refusal to accept or delay in accepting payment towards taxes, as required by Reserve
Bank/Government;
17. Refusal to issue or delay in issuing, or failure to service or delay in servicing or
redemption of Government securities;
18. Forced closure of deposit accounts without due notice or without sufficient reason;
19. Refusal to close or delay in closing the accounts;
20. Non-adherence to the fair practices code as adopted by the bank;
21. Non-adherence to the provisions of the Code of Bank's Commitments to Customers
issued by Banking Codes and Standards Board of India and as adopted by the bank ;
22. Non-observance of Reserve Bank guidelines on engagement of recovery agents by
banks;
23. Non-adherence to Reserve Bank guidelines on para-banking activities like sale of
insurance / mutual fund /other third party investment products by banks
24. Any other matter relating to the violation of the directives issued by the Reserve Bank in
relation to banking or other services.
A customer can also lodge a complaint on the following grounds of deficiency in service with
respect to loans and advances
1) non-observance of Reserve Bank Directives on interest rates;
2) delays in sanction, disbursement or non-observance of prescribed time schedule for
disposal of loan applications;
3) non-acceptance of application for loans without furnishing valid reasons to the applicant;
and
4) non-adherence to the provisions of the fair practices code for lenders as adopted by the
bank or Code of Bank's Commitment to Customers, as the case may be;
5) Non-observance of any other direction or instruction of the Reserve Bank as may be
specified by the Reserve Bank for this purpose from time to time.
6) The Banking Ombudsman may also deal with such other matter as may be specified by
the Reserve Bank from time to time.
One can file a complaint before the Banking Ombudsman if the reply is not received from
the bank within a period of one month after the bank concerned has received one's
complaint, or the bank rejects the complaint, or if the complainant is not satisfied with the
reply given by the bank.
One's complaint will not be considered if:
1) One has not approached his bank for redressal of his grievance first.
2) One has not made the complaint within one year from the date of receipt of the reply of
the bank or if no reply is received, and the complaint to Banking Ombudsman is made after
the lapse of more than one year and one month from the date of complaint made to the
bank.
3) The subject matter of the complaint is pending for disposal / has already been dealt with
at any other forum like court of law, consumer court etc.

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4) Frivolous or vexatious complaints.
5) The institution complained against is not covered under the scheme.
6) The subject matter of the complaint is not pertaining to the grounds of complaint
specified under Clause 8 of the Banking Ombudsman Scheme. If the complaint is for the
same subject matter that was settled through the office of the Banking Ombudsman in any
previous proceedings.
One can file a complaint with the Banking Ombudsman simply by writing on a plain paper.
One can also file it online at (“click here to lodge a complaint”) or by sending an email to the
Banking Ombudsman. There is a form along with details of the scheme in our website.
However, it is not mandatory to use this format.
One may lodge his/ her complaint at the office of the Banking Ombudsman under whose
jurisdiction; the bank branch complained against is situated.
For complaints relating to credit cards and other types of services with centralized
operations, complaints may be filed before the Banking Ombudsman within whose
territorial jurisdiction the billing address of the customer is located.
The complaint can be filed by one's authorized representative (other than an advocate). The
Banking Ombudsman does not charge any fee for filing and resolving customers' complaints.
The amount, if any, to be paid by the bank to the complainant by way of compensation for
any loss suffered by the complainant is limited to the amount arising directly out of the act or
omission of the bank or Rs. 20 lakhs (Rs. Two Million), whichever is lower. The Banking
Ombudsman may award compensation not exceeding Rs. 1 lakh (Rs. One Hundred
Thousand) to the complainant for mental agony and harassment. The Banking
Ombudsman will take into account the loss of the complainant's time, expenses incurred by
the complainant, harassment and mental anguish suffered by the complainant while
passing such award.
Details required in the application - Name and address of the complainant, the name and
address of the branch or office of the bank against which the complaint is made, facts giving
rise to the complaint supported by documents, if any, the nature and extent of the loss
caused to the complainant, the relief sought from the Banking Ombudsman and a
declaration about the compliance with conditions which are required to be complied with by
the complainant under Clause 9(3) of the Banking Ombudsman Scheme.
Once a complaint is received, the Banking Ombudsman endeavours to promote, through
conciliation or mediation, a settlement of the complaint by agreement between the
complainant and the bank named in the complaint. If the terms of settlement (offered by the
bank) are acceptable to one in full and final settlement of one's complaint, the Banking
Ombudsman will pass an order as per the terms of settlement which becomes binding on
the bank and the complainant.
The Banking Ombudsman may reject a complaint at any stage if it appears to him that a
complaint made to him is:
1) not on the grounds of complaint referred to above
2) Compensation sought from the Banking Ombudsman is beyond Rs. 20 lakh (Rs. Two
Million).

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3) requires consideration of elaborate documentary and oral evidence and the
proceedings before the Banking Ombudsman are not appropriate for adjudication of such
complaint
4) the complaint is without any sufficient cause
5) the complaint that it is not pursued by the complainant with reasonable diligence
6) In the opinion of the Banking Ombudsman there is no loss or damage or inconvenience
caused to the complainant.
If a complaint is not settled by an agreement within a period of one month, the Banking
Ombudsman proceeds further to pass an Award. Before passing an award, the Banking
Ombudsman provides reasonable opportunity to the complainant and the bank, to present
their case. It is up to the complainant to accept the award in full and final settlement of or to
reject it.
Any person aggrieved by an Award issued under Clause 12 or the decision of the Banking
Ombudsman rejecting the complaint for the reasons specified in sub-clause (d) to (g) of
Clause 13 of the Banking Ombudsman Scheme 2006 (As amended up to July 1, 2017) can
approach the Appellate Authority. The Appellate Authority is vested with a Deputy Governor
of the RBI.
Other recourse and/or remedies available to him/her as per the law (COPRA or Civil Court
etc.) can also be explored. The bank also has the option to file an appeal before the
Appellate Authority under the Scheme.
One can file the appeal against the award or decision of the Banking Ombudsman rejecting
the complaint within 30 days of the date of receipt of the Award, The Appellate Authority
may, if he/ she is satisfied that the applicant had sufficient cause for not making an
application for appeal within time, also allow a further period not exceeding 30 days.
The appellate authority may:
1. dismiss the appeal; or
2. allow the appeal and set aside the Award; or
3. send the matter to the Banking Ombudsman for fresh disposal in accordance with such
directions as the appellate authority may consider necessary or proper; or
4. modify the Award and pass such directions as may be necessary to give effect to the
modified award; or
5. Pass any other order as it may deem fit.
15 (ii) Consumer Protection Act 1986 (COPRA)
As described in the act itself – it is An Act to provide for better protection of the interests of
consumers and for that purpose to make provision for the establishment of consumer
councils and other authorities for the settlement of consumers' disputes and for matters
connected therewith.
The Act has 31 sections spread over 4 chapters
This act provides for setting up of consumer protection councils (chapter -2) and consumer
disputes redressal agencies (chapter-3). This law changed the face of consumerism in
India. It aims to provide protection to a consumer by checking the unfair trade practices,

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defects in goods and deficiencies in services. It has empowered consumers in India and
has led to changed face of doing business in India.
This act extends to the whole of India except the State of Jammu and Kashmir, and gives
definition of branch office as any establishment described as a branch by the opposite party
or any establishment carrying on either the same or substantially the same activity as that
carried on by the head office of the establishment.
A complainant under this act could be a consumer, any voluntary consumer association
registered under the Companies Act, 1956 (1of 1956) or under any other law for the time
being in force, the Central Government or any State Government, one or more consumers,
where there are numerous consumers having the same interest or in case of death of a
consumer, his legal heir or representative; who or which makes a complaint.
A complaint can be made in writing and can cover
a. an unfair trade practice or a restrictive trade practice has been adopted by any trader or
service provider;
b. the goods bought by him or agreed to be bought by him; suffer from one or more defects;
c. the services hired or availed of or agreed to be hired or availed of by him suffer from
deficiency in any respect;
d. a trader or service provider, as the case may be, has charged for the goods or for the
service mentioned in the complaint a price in excess of the price –
1. fixed by or under any law for the time being in force
2 . displayed on the goods or any package containing such goods ;
3. displayed on the price list exhibited by him by or under any law for the time being in force;
4. agreed between the parties;
e.goods which will be hazardous to life and safety when used or being offered for sale to the
public,
1. in contravention of any standards relating to safety of such goods as required to be
complied with, by or under any law for the time being in force;
2. if the trader could have known with due diligence that the goods so offered are unsafe to
the public;
f. services which are hazardous or likely to be hazardous to life and safety of the public
when used, are being offered by the service provider which such person could have known
with due diligence to be injurious to life and safety;”
"consumer" means any person who— buys any goods for a consideration which has been
paid or promised or partly paid and partly promised, or under any system of deferred
payment and includes any user of such goods other than the person who buys such goods
for consideration paid or promised or partly paid or partly promised, or under any system of
deferred payment when such use is made with the approval of such person, but does not
include a person who obtains such goods for resale or for any commercial purpose; or
hires or avails of any services for a consideration which has been paid or promised or partly
paid and partly promised, or under any system of deferred payment and includes any

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beneficiary of such services other than the person who 'hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of the first
mentioned person but does not include a person who avails of such services for any
commercial purposes;
"service" means service of any description which is made available to potential users and
includes, but not limited to, the provision of facilities in connection with banking, financing
insurance, transport, processing, supply of electrical or other energy, board or lodging or
both, housing construction, entertainment, amusement or the purveying of news or other
information, but does not include the rendering of any service free of charge or under a
contract of personal service.
The Act provides for setting up of
1. District Consumer Disputes Redressal Forum (DCDRF): Also known as the "District
Forum" established by the State Government in each district of the State. The State
Government may establish more than one District Forum in a district. It is a district level
court that deals with cases valuing up to Rs. 20 Lac
State Consumer Disputes Redressal Commission
2. (SCDRC): Also known as the "State Commission" established by the State Government
in the State. It is a state level court that takes up cases valuing less than Rs. 1 crore.
National Consumer Disputes Redressal Commission
3. (NCDRC): Established by the Central Government. It is a National level court that takes
up cases valuing more than Rs. 1 crore
Objects of the Central, State Council and District Council.—The objects of the Central
Council shall be to promote and protect the rights of the consumers such as,—
4. the right to be protected against the marketing of goods and services which are
hazardous to life and property;
5. the right to be informed about the quality, quantity, potency, purity, standard and price of
goods or services, as the case may be so as to protect the consumer against unfair trade
practices;
6. the right to be assured, wherever possible, access to a variety of goods and services at
competitive prices;
7. the right to be heard and to be assured that consumer's interests will receive due
consideration at appropriate forums;
8. the right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers; and
9. the right to consumer education
Jurisdiction of District Forum
1. Subject to the other provisions of this Act, the District Forum shall have jurisdiction to
entertain complaints where the value of the goods or services and the compensation, if any,
claimed does not exceed rupees twenty lakhs.
2. A complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction:-
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a) – the opposite party or each of the opposite parties, where there are more than one, at
the time of the institution of the complaint, actually and voluntarily resides or carries on
business or has a branch office or personally works for gain, or
b) – any of the opposite parties, where there are more than one, at the time of the institution
of the complaint, actually and voluntarily resides, or carries on business or has a branch
office, or personally works for gain, provided that in such case either the permission of the
District Forum is given, or the opposite parties who do not reside, or carry on business or
have a branch office, or personally work for gain, as the case may be, acquiesce in such
institution; or
C) – the cause of action, wholly or in part, arises.
Consumer courts do not have jurisdiction over matters where services or goods were
bought for a commercial purpose
Jurisdiction of State Commission
Subject to the other provisions of this Act, the State Commission shall have jurisdiction:-
a) – to entertain
i) – complaints where the value of the goods or services and compensation, if any, claimed
exceeds rupees twenty lakhs but does not exceed rupees one crore (R10 million); and
ii) – appeals against the orders of any District Forum within the State; and
b) – to call for the records and pass appropriate orders in any consumer dispute
Jurisdiction of National Commission
The National Commission has jurisdiction—
(a) To entertain—
(i) Complaints where the value of the goods or services and compensation, if any, claimed
exceeds rupees one crore; and
(ii) Appeals against the orders of any State Commission; and
(b) To call for the records and pass appropriate orders in any consumer dispute
which is pending before or has been decided by any State Commission. However, the
Supreme Court of India has held that the jurisdiction of National Commission under
Revision Jurisdiction is very limited and can only be exercised when State Commission
exceeds its jurisdiction, fails to exercise its jurisdiction or there is material illegality in the
order passed by State Commission.
The district forum, state commission or National commission can admit a complaint within 2
years from the date on which the cause of action has arisen. A complaint may be admitted
even after 2 years if it is backed by sufficient cause, however it should be recorded by the
respective forum or commission.
Appeal against district forum can be made in state commission within 30 days from the date
of order. State commission can admit an appeal after 30 days if backed by sufficient
reasons. If an order has been passed by district forum to pay an amount, the state
commission can admit the appeal only if the person deposits 50% of the amount so ordered
of Rs. 25000 whichever is less. In the same situation of an order having been passed by the
state commission, the national can admit the appeal only if the person deposits 50% of the

185
amount so ordered of Rs. 35000 whichever is less commission.
The appeals shall be disposed of as expeditiously as possible and an endeavour shall be
made to finally dispose of the appeal within a period of ninety days from the date of its
admission.
Finality of orders. — Every order of a District Forum, the State Commission or the
National Commission shall, if no appeal has been preferred against such order under the
provisions of this Act, be final.
15 (iii) Banking Code Standards Board of India (BCSBI)
BCSBI is an independent and autonomous institution to monitor and ensure that the
Banking Codes and Standards adopted by the banks are adhered to in true spirit while
delivering their services.
The Banking Codes and Standards Board of India is registered as a society under the
Societies Registration Act, 1860. Membership of BCSBI is voluntary and open to scheduled
banks, Regional Rural Banks and select Urban Co-operative Banks.
The general superintendence, direction and control of the affairs and funds of the Society is
vested in the Governing Council (constituted by RBI) consisting of members drawn from
different disciplines such as banking, economics, service etc.
The main objectives of the BCSBI are
· To plan, evolve, prepare, develop, promote and publish comprehensive Codes and
Standards for banks, for providing for fair treatment to their customers.
· To function as an independent and autonomous body to monitor, and to ensure that the
Codes and Standards adopted by banks are adhered to, in letter and spirit, while delivering
services to their customers.
BCSBI has in collaboration with the Indian Banks' Association (IBA), evolved two codes-
Code of Bank's Commitment to Customers and the Code of Bank's Commitment to Micro
and Small Enterprises - which set minimum standards of banking practices for member
banks to follow when they are dealing with individual customers and micro and small
enterprises.These Codes are subject to periodical review and revision. The central
objective of these Codes is promoting good banking practices, setting minimum standards,
increasing transparency, achieving higher operating standards and above all, promoting a
cordial banker-customer relationship which would foster confidence of the common man in
the banking system.
Both these Codes set minimum standards of banking practices we will follow as a member
of BCSBI while dealing with individual customers and MSME as defined as per MSMED Act
2006. It provides protection to customers and explains how a member bank is required to
deal with customers in its day-to-day operations. The Code does not replace or supersede
regulatory or supervisory instructions of the Reserve Bank of India (RBI) and we will comply
with such instructions / directions issued by RBI from time to time. The Code may have set
higher standards than those prescribed in the regulatory instructions and such higher
standards will prevail as the Code represents the best practices voluntarily agreed to by us
as our commitment to you. We will endeavour to adopt higher standards of banking
practices to extend better customer service and achieve higher levels of customer
satisfaction. In the Code, 'you' denotes the customer and 'we' / 'us', the bank, the customer

186
deals with. Branch includes Banking Outlet / Part-time Banking Outlet.
(It is highly recommended that the service managers read the code available on info.sbi
under useful link1)
15 (iv) RTI Act
Right to Information Act, 2005 (RTI Act) is a landmark enactment in the historyof Indian
democracy. The concept of Right to Information is not alien to the Indian
Legal System. It is a cardinal principle in the democratic culture of an open society. It is
embedded in Article 19 of the Constitution of India. In S. P. Gupta vs. Union of India (AIR
1982 SC 149), the Hon'ble Supreme Court has held that “In regard to thefunctioning of the
Government, disclosure of information must be the ordinary rule while secrecy must be an
exception, justifiable only when it is demanded by the requirement of public interest.”
The Bank, being a body corporate constituted by a law made by the Parliament is a
Public Authority under RTI Act. Hence, the Bank is bound by the provisions of RTI Act in
providing information to the citizens. As per the RTI Act, the Bank has an obligation to
publish certain information as stated in Section 4 of the RTI Act. Another obligation of the
Bank under RTI Act is designation of Central Public Information Officer(s) [CPIO(s)] for the
purpose of providing information to a personrequesting for such information, Appellate
Authority for the purpose of deciding the appeals against the decision of the CPIO. Bank is
also bound to appoint such number of Central Assistant Public Information Officers
(CAPIOs) for the purpose of accepting the applications / appeals from the citizens and to
forward the same to CPIO or Appellate Authority as the case may be.
Disposal of Request
CPIO shall not transfer the application to another CPIO within the Bank under this
Provision.The normal time available for a CPIO to dispose the application is 30 days
fromthe date of receipt of the application. However, in respect of application
receivedthrough a CAPIO, the CPIO has a time limit of 35 days from the date of receipt
ofthe application by the CAPIO. If the information sought by the applicant concernsthe life
or liberty of a person, the same has to be disposed within 48 hours of thereceipt of the
request. The endeavour of the CPIO should be to dispose the application at the earliest but
in any case, within the time frame stated as above.
If the CPIO fails to give a decision on the request for information within the specified period,
he/she shall be deemed to have refused the information. In exceptional circumstances, if
the collection of information takes more time, it is advisable to give an interim reply to the
applicant, as observed by the CIC in some cases.
Appeal to Appellate Authority
An applicant who does not receive a reply within the specified period or an Applicant who is
aggrieved by a decision of the CPIO can prefer an appeal within 30 days to the Appellate
Authority in the Bank. However, an Appellate Authority can admit an appeal after the expiry
of the period of 30 days, if the appellant shows sufficient cause for the delay. The Appellate
Authority has to dispose of the appeal within 30 days or within such extended period not
exceeding a total of 45 days from the date of receipt of the appeal. In appeal proceedings,
the onus to prove that the denial of information was justified shall be on the CPIO. The

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Appellate Authority should also give the reasons for his decision

Penalties under RTI Act

The Central Information Commission (CIC), at the time of deciding any complaint or appeal
has the power to impose a penalty of Rs.250/- per day subject to a total of Rs.25,000/-
against the CPIO in the following cases:
1. Refusal to receive an application for information without any reasonable cause.
2. Failure to furnish information within the time specified.
3. Malafide denial of the request for information.
4. Knowingly giving incorrect, incomplete or misleading information.
5. Destroyed information which was the subject of request.
6. Obstructed in any manner in furnishing the information.
In case, there is a persistent failure by the CPIO on any of the above grounds, the
CIC also has the power to recommend for disciplinary action against the CPIO as
per the applicable service rules. In cases, where the CPIO has taken the assistance of any
other official in disposal of the application under RTI Act and if such official is responsible for
any of the contraventions as above, such official shall be liable to face the above penal
provisions, as he / she is the CPIO
15 (v) Minimum Wages Act 1948
As a banker working in branches / administrative offices, we hire contractual services,
besides hiring services from vendors. It is pertinent for us to ensure that minimum wages as
defined under the act are being paid to the labors. As a principal hirer the responsibility falls on
us. The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that
sets the minimum wages that must be paid to skilled, semi-skilled and unskilled labours.
Fair wage is that level of wage that not just maintains a level of employment, but seeks to
increase it keeping in perspective the industry's capacity to pay.
A minimum wage is such a wage that it not only guarantees bare subsistence and
preserves efficiency but also provides for education, medical requirements and some level
of comfort. Payment of wages below the minimum wage rate amounts to forced labour.
Wage Boards are set up to review the industry's capacity to pay and fix minimum wages
such that they at least cover a family of four's requirements of calories, shelter, clothing,
education, medical assistance, and entertainment. Under the law, wage rates in scheduled
employments differ across states, sectors, skills, regions and occupations owing to
difference in costs of living, regional industries' capacity to pay, consumption patterns, etc.
Hence, there is no single uniform minimum wage rate across the country and one needs to
check the prevailing wage rates in the area of operations.

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The Minimum Wages Act 1948 generally specifies minimum wage rates on a per day basis,
and extends to the entire country and is revised within a period of not less than five years,
however there is a provision to increase dearness allowance every.
Revision of minimum wage rates is based on a 'cost of living index' and wages can be fixed
for an entire state, part of the state, class or classes and employments pertaining to these
categories. The fixation of wages is based on the norms mentioned and a wage board
(different for different industry).
Under the Minimum Wages Act, State and Central Governments have the power to fix and
revise minimum wages. The Centre fixes the National floor level Minimum Wage that is
lower than most states' respective minimum wages.
As per Section 5 of the Minimum Wages Act, 1948, there are two ways of fixing and/or
revising minimum wages
Committee Method: Committees and Sub-committees are set up to make
recommendations or create inquiries.
Notification Method: The government publishes proposals and an official date in the
Official Gazette. All advice and recommendations from various committees and sub-
committees as well as representations are collected before the specified official date and
the government then proceeds to fix/revise minimum wages
The Central Government is proper authority for enforcement of act. Schedule Employment is
carried under the railway administration, mines, oilfield, major port and corporation established by
Central Act. Chief Labor Commissioner is charged under central level and in State level officers in
industrial relations are charged for enforcement act and other Labor Laws.
Violation of Act in regards to Minimum Wages, working hours & other comes under Central
Act is an offences and there is a penalties of 5 years imprisonment and fine of Rs. 10000/-
(under section act 22). Any agreement whereby an employee reduces his right under this
act shall be null and void
To process complaints the appropriate government can appoint labour commissioner/
Commissioner for Workmen's Compensation/officer with experience as a judge of
Stipendiary Magistrate/ or an officer that is at least above the rank of Labour Commissioner.
In case an individual feels that he/she is being paid less than the minimum wages specified
for his region/sector/occupation, or is not paid for duration of work, a complaint can be
made to the appointed authority.
This act has 31 sections.
For complete details please refer to
1. RTI User Interface Document on info.sbi
2. RTI Circular No. : CDO/RTI-RTI/1/2015 – 16 dated 06-08-2015
3. RTI master circular No. : NBG/BOD-GB/72/2009 – 10 dated 02-01-2010
4. Bare Acts of Minimum Wages Act 1948, RTI Act, Consumer Protection Act.
5. BCSBI manual on info.sbi
6. FAQ on Ombudsman from RBI
7. SOP on Ombudsman by SBI

v v v

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Chapter - 16
Nomination And
Deceased Account
Settlement
NOTES
 Chapter-16: Nomination and Deceased Account Settlement

We all know that deposits are types of contracts and there may be situations when bank is
precluded from fulfilling its obligations to the depositor because of intervention of some
legal provisions as under
1. Receipt of stop-payment instructions from the customer
2. When the customer becomes insolvent
3. When the customer becomes insane
4. The death of the customer
5. Receipt of Attachment Orders
6. Exercising Banker's lien
7. Right of set off
8. Minor's account
All these types of legal intervention need to be honoured by the bank and the banker needs
to take care during these interventions.
Death of the customer – in the event of a death of a customer who has maintained
deposits or locker or has kept any article in safe custody, the family becomes dependent on
the settlement of claim of the nominee / legal heirs by the bank to access the deceased
customer's assets with the bank. At this juncture the bank becomes the custodian of the
deceased customer's cash or other articles in the branch. Hence the bank assumes the
status of a Trustee of the articles or deposits. Delay in settlement of claims of the nominee /
legal heirs of the deceased constituents cause considerable hardship and resultant
complaints.
Nomination takes care of payment in deposit accounts of the deceased depositor to a
large extant and it has a legal backing (subject to non-objection by the heirs) under section
45ZA to 45ZF under Banking Regulations Act and Banking Nomination rules 1985.
Therefore Nomination is a must, but not all types of customers can nominate and there are
certain special conditions for nomination in any account (deposit, locker, safe custody).
The death of the customer requires the bank to settle the amount in deposit, one way is
nomination but there are other ways as well and they can be classified under
1. Deceased claim settlement without legal representation (procedure, discretionary
powers, documents, procedure to be followed on receipt of death of a constituent etc.)
2. Deceased claim settlement with legal representation (succession certificate, wills
and probate, letter of administration, order of administrative general attached to the high
court)
3. Settlement of claims of special category customers (missing persons, attorney
administrator, defence personnel, disposal of assets to constituents who are under
imprisonment, NRI customers)

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Each of these has separate set of guidelines and provision to pay interest in a non-interest
bearing accounts.
Let us begin with Nomination
The death of the customer brings the contract of deposit to an end. However at this point of
time the bank then is responsible for handing over the deposits of the deceased customer
to its legal heirs / beneficiaries / receivers on behalf of the legal heirs. Nomination in the
account helps the bank in disposing such deposits without having to ask the legal heirs to
get orders from the court.
Nomination as per the dictionary is defined as:
1. The act or instance of appointing a person to office by a political party
2. The act or an instance of bestowing of an honour or award.
3. The state of being nominated.
This person nominated is called a “nominee”
In exercise of the powers conferred by section 52 read with section 45ZA to 45ZF of the
banking regulation act, 1949 (10 of 1949) and after consultation with the Reserve Bank of
India, the Central Government, introduced nomination facilities in banks and these rules
are called the Banking Companies (nomination) Rules, 1985.
Although as per the dictionary meaning the purpose of nomination is amply clear from the
definition itself, however, the Banking Regulation Act 1949 (section 45ZA to 45ZF) provide
for the purpose as under:
1. To enable the bank to make payment to the nominee of a deceased depositor.
2. To enable the bank to return the articles in its safe custody, left by a deceased
individual(s), to her nominee
3. To enable the bank to release the contents of the safe deposit locker to the nominee(s) of
the hirer(s) of such locker, in the event of the death of the hirer(s).
Nomination therefore covers all types of deposit accounts like Savings, TDR, STDR etc;
Government Deposit accounts like PPF, Senior Citizen Savings Scheme etc; Safe custody
of articles and Safe Deposit Lockers
Based on the above definition and subject to other laws the following can nominate:
1. Single account holders (deposit accounts, safe custody of articles, safe deposit lockers)
– Adult, Married women, illiterate persons, Blind person, Proprietor, Guardian of a minor.
2. Joint account holders (in deposit accounts only) – joint operation or with survivorship
clause;
3. Safe Deposit Lockers – joint operation only
The following cannot nominate:
1. Minor – person less than 18 of years of age or where a court has appointed a guardian a
person not having completed 21 years of age.

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2. Pardanashin women – one who lives in seclusion having no commission except from
behind the “Parda'' or screen with any male person except a few privileged relations. She
has not much interaction with the outside world.
3. Drunkard – A person who is habitually drunk.
4. Lunatic – a person who is mentally ill.
5. Insolvent – a person unable to satisfy creditors or discharge liabilities, either because
liabilities exceed assets or because of inability to pay debts as they mature.
6. Attorney – a lawyer
7. Agent – section 182 of the Indian Contract Act 1872 defines an agent – is a person
employed to do any act for another, or to represent another in dealings with third person.
The person for whom such act is done or who is represented is called a Principal.
8. Trustee – A trustee is a person or firm that holds and administers property or assets for
the benefit of a third party. They have a fiduciary responsibility to the trust beneficiary.
Following Forms are used in the Bank related to nominations
A. All Deposit Accounts:
1. To make a nomination – Form DA1
2. To cancel the already made nomination – Form DA2
3. To change the nomination already made – Form DA3
B. Articles in Safe Custody:
1. To make a nomination – Form SC1
2. To cancel the already made nomination – Form SC2
3. To change the nomination already made – Form SC3
C. Safe deposit lockers:
1. To make a nomination (by sole hirer of the locker) – Form SL1
2. To make a nomination (by two or more individuals jointly) – Form SL1A
3. To cancel the already made nomination – Form SL2
4. To change the nomination already made (by sole hirer) – Form SL3
5. To change the nomination already made (by two or more individuals jointly) – Form SL3A
Nomination - Important Points to remember
1. An individual deposit account holder can make nomination in favour of single nominee
only except in case of PPF and SCSS deposits where the nomination can be made in
favour of two or more nominees with percentage sharing mentioned against the name of
the nominees.
2. Nomination in safe custody of articles can be made in favour of only one person. Facility
of nomination is not available in case of deposit of Safe Custody of article by more than one
person.
3.In case of sole hirer of a safe deposit locker, nomination shall be made in favour of only
one individual.
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Deceased Account Settlement
Death of any constituent whether customer or family member, comes as a shock and is
painful. The pain intensifies in case the family members are unable to or are able to access
with delay, the assets of the deceased. Since distribution of deceased assets to the legal
heirs is a responsibility, the state has made legal provisions and procedures to take care of
distributions.
As stated on the first page of this chapter there could be different ways of settling deceased
accounts.
Let us first get acquainted to the procedure to be followed on receipt of information of Death
of a Constituent.
Information of death of a customer may be oral and / or in writing. If such information is
received orally, the authenticity must be verified, depending on the situation and a written
confirmation should follow. In Core Banking Solution (CBS), the account should be properly
'Flagged' and 'Message' should be input. A condolence letter must be sent to the family of
the deceased by the branch.
In the case of Individual Accounts - Notice or knowledge of the death prevents the Bank
from paying further Cheques on that account as the contract between Bank and the
customer comes to an end, even if the Cheques are dated prior to death of the customer.
These Cheques should be returned with appropriate remarks. Exception could be
Cheques that are purchased as Demand Drafts or are encashed under an arrangement
such as authority to encash Cheques, State Bank Card etc. where the Bank would have
paid such instruments in advance. These can be put through the account at the Drawee
branch if received subsequent to the death of the customer.
In the case of Partnership Accounts – Clayton's rule applies. The death of a partner brings
the partnership to end. A new account should be opened and all transactions to the existing
account should be stopped. A fresh account may be opened with the remaining partners
with fresh documents and operations allowed in the fresh account. A Confirmation of
Balance certificate is to be obtained from the remaining partners as on the date of the
freezing of the operations in the old account consequent on the death of one of the partners.
In the case if Hindu Undivided Family Account – If the Karta dies, the operations in the
account should be stopped. In case a co-parcener has died then operations can be carried
by Karta, subject to that co-parcener not having left any will.
In the case of Club, Association and Trust Accounts – Cheques issued before the death of
the office bearer / Trustee can be paid, although subsequent operations should be stopped.
Death Certificate – in all cases a copy should be collected and verified with the original and
recorded in the Branch Documents Register (Sundry). Death certificate can be issued by
a) Registrar of Births and Deaths
b) The Local Sarpanch and countersigned by the BDO or Tehsildar in case of death in
remote village (under Registration of Births and Deaths Act)
c) Or if death certificate is not possible then a sworn affidavit stating the date and place of
death of the deceased constituents, should be obtained.
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Identification of legal heirs (Applicable laws) – there are various communities and
religions in India, and each has its own definition of legal heirs based on customs / personal
laws. Identification is done by a court of law if a succession certificate or will is available.
However as a banker, since we rely more on the nomination for handing over the financial
assets of the deceased to the nominee (nominee in turn is responsible for handing over to
the legal heirs) or where ever nomination is not available, identifying legal heirs becomes a
responsibility. Let us understand various aspects of laws or otherwise in different cases
where the customer dies without a nomination or will.
Hindus (Hindu Succession Act, 1956) - includes followers of Jainism, Buddhism and
Sikhism. The primary heir of a male Hindu dying intestate are – Wife, Son(s), Daughter(s)
(married / un-married), Mother, Son/Daughter of a Pre-deceased son, if any, Son/Daughter
of a Pre-deceased daughter, if any, Wife of a Pre-deceased son, if any, Son/Daughter of a
Pre-deceased son of a Pre-deceased son, if any, Widow of a Pre-deceased son of a Pre-
deceased son, if any. The father of the deceased is a second-class heir under Hindu Law
and will be entitled to claim only in the absence of the primary heirs. The primary heirs are
entitled to share equally without any preference. The primary heirs of a female Hindu dying
intestate in respect of her self-acquired assets are – Husband, Son(s), Daughter (s),
Son/Daughter of a Pre-deceased son/daughter, as the case may be. The herein mentioned
primary heirs of a Female Hindu dying intestate are entitled to the assets equally without
any preference.
Please do take care that - If assets in question have been inherited from her mother or
father, and at the time of her death she leaves behind only husband and no issue, then such
assets will not be inherited by the husband, but the heirs of the father. Similarly, if the assets
have been inherited by the deceased from her husband or father - in - law and upon her
death, if she does not leave behind any issue, then such assets will not be inherited by other
heirs as mentioned above, but by the heirs of her husband.
Muslims - The primary heirs under Muslim Law in cases where the deceased was a male
are - Wife/Wives, Son(s), Daughter (s), Father, Mother. The asset under Muslim Law of the
deceased will devolve on the heirs in specific shares. The primary heirs under Muslim Law
in cases where the deceased was a female, taking into consideration the Shares which
each of the heirs will be entitled, are – Husband, Son (s), Daughter (s),
Indian Christians - The primary heirs in case of Indian Christians dying intestate are -
spouse, Son (s), Daughter (s) and they are entitled to equal share.
Minor – A person attains majority on completing the age of 18 years even if there is a Court
appointed guardian. In case, the Court appointed guardian is empowered to collect/receive
the assets of the minor, the settlement could be made by permitting the minor to be
represented by the Legal appointed guardian. The Natural guardian in the case of Hindus is
the father and after the father, the mother. A Guardian may be appointed under a Will
executed by the father or mother to manage the assets of the minor. The Natural Guardian
in case of Muslims is Father and in the absence of the father, the grandfather (father's
father). A guardian may be appointed to look after the minors under a Will executed either
by the father or by the grandfather. The Natural Guardian in case of Indian Christians is the
father and in the absence of the father, the mother.
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4. In case of joint hirers (joint operation) of a safe deposit locker, nomination can be made in
favour of more than one person. However, if the joint hirers are of E or S operation, then no
nomination permitted even for single nominee.
5. The form for making nomination is available with the respective account opening forms.
However, separate forms are to be used for cancellation or change of nomination.
6. If the account holder is not in favour of making nomination, signed declaration from the
account holder must be obtained to this effect.
7. Where the nominee is a minor, the depositor may nominate another individual who is not
a minor, to receive the amount of the deposit on behalf of the said minor in the event of the
death of the depositor. Same is applicable to safe custody and safe deposit lockers.
8. Nomination shall be made by a person lawfully entitled to act on behalf of the minor for a
deposit made in the name of the minor.
9. The bank upon making payment to a valid nominee, on the death of the depositor, gets
fully discharged in respect of its liability relating to the said deposit.
10. The payment of the time deposit can also be made before the due date of maturity, after
the death of the depositor, only if the nominee gets similar rights as the depositor in respect
of obtaining premature payment of the said deposit.
11. However, if the bank has granted loan against a deposit, on the death of the depositor
the bank is not discharged of its liability if it grants loan to the nominee against the security
of the said deposit.
12. The nominee is a person appointed to receive the deposit for and on behalf of the legal
heirs.
13. Payment should be made only on strict identification of the nominee.
14. If on death of the depositor, both the nominee and the legal heir lodge their claims
simultaneously in respect of the deposit, the banks should take note of the legal heir holding
succession certificate. However the legal heirs should be advised to bring from the court an
injunction restraining the bank from effecting payment to the nominee.
15. Therefore before making payment to such claimant who is nominee of the deceased
bank should collect the death certificate, pass book, cheque book, and time deposit receipt
and retain the documents.
16. The noting of the fact that the account has a nomination (not the details of nominee)
should be made on the passbook, TDR, STDR etc; invariably. However, the name of the
nominee may also be mentioned in case the customer is agreeable to the same.
17.The noting of nomination in the respective deposit accounts / Safe custody articles /
Safe deposit lockers should be invariably made in CBS.
18. Option to print the name of the nominee on the passbook etc; is available in CBS and
should be selected only if the depositor requests for the same.

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Deceased claim settlement without legal representation
a. In case Nomination is available in the account - If any payment is made in accordance
with the nomination, it shall constitute a valid discharge irrespective of any claims by any
person under a will or otherwise. Only when an injunction order is received from a Court
restraining the Bank from making payment to the nominee, the same is to be acted upon
and payment should not be made during the pendency of the injunction order.
b. Accounts with Joint Names with survivorship clause (E or S, F or S, L or S, etc.) -
For time deposits, the survivors can continue with the account just by deleting the
deceased depositor's name from the TDR/STDR / Other FDs. In case of Current Account/
Savings Bank Account, record the Death Certificate and get an appropriate letter from the
survivors and transfer the balance to a new account in the name of survivor after obtaining a
fresh account opening form. In case the survivor simply wants to close the account, they can
do so. No penalty should be levied on the interest if it involves premature payment of FD.
c. Accounts with Joint Names but without survivorship clause - When a joint account
holder dies, in the absence of a clause like E or S, F or S, L or S, the balance can be paid
jointly to the survivors and the legal heirs of the deceased.
In case the claim is contested by rivals - The legal position is that the survivor is entitled by
the survivorship clause only to receive the money from the Bank, but he does not get any
title to it the survivor holds the money thus received as trustee for the legal heirs. This needs
to be explained to the rival claimants and they need to be asked to proceed directly against
the survivors, without involving the Bank. If the Bank receives a court order restraining the
payment to the survivor due to a rival claim, then the court order should be carried out. If the
payment has not been made, it should be stopped. Such cases should be reported to the
Controlling Authority.
d. Accounts having neither Survivorship Clause nor Nomination - In such cases the
assets have to be delivered only to the legal heirs. We can settle such accounts without
production of legal representation on the basis of Indemnity - cum – Affidavit, applicable
only when the customer has died Intestate (without a WILL). This is subject to no disputes
among the legal heirs and all the legal heirs (other than those who have furnished a Letter of
Disclaimer) join in indemnifying the Bank and there is no reasonable doubt about the
genuineness of the claimant (s)being the only legal heirs. Before the claim in respect of
Safe Deposit Locker is processed, an inventory should be prepared in the presence of two
officers of the Branch and two Independent Witnesses (one of them being a Notary Public,
if available) and in the presence of the claimants who should affix their respective
signatures on the inventory report. The report should ascertain the value of the contents in
the Locker.
The following procedure is followed for claim settlement in the above case of deceased
accounts - Obtain copy of Death Certificate issued by competent authority after verifying
with the Original and Letter of Disclaimer / Letter of Relinquishment, if any. The Revised
Claim Format is to be filled by the claimants (other than those who have signed the Letter of
Disclaimer/ Letter of Relinquishment). Identify the claimants / Sureties /person furnishing
declaration or Affidavit (if Affidavit is necessary). Arrive at the worth of the surety (ies) to
ascertain whether he (they) is (are) good for the amount, (if surety is necessary). Ask legal
196
heirs and Sureties (where ever applicable) to come to Branch together for executing the
Letter of Indemnity (LOI). Disburse the Claim amount by issuing a Banker's Cheque or
credit to the account and obtain Receipt (by cancellation of Revenue stamp) from the
claimants. Record the documents obtained in the branch record etc. and claim settled
Register for the Deceased Constituent Assets Accounts which is a part of the Branch
Document Register. Submit the proposal for sanction if it is beyond Branch Manager's
power or Submit “Control Return” as per the existing format.
1. Balances in the account are up to and inclusive of Rs. 5,00,000/-
a. No Sureties for claims required.\
b. Revised Claim format signed by claimants + one independent witness.
c. Stamped letter of indemnity (LOI) from claimant(s).
d. Other documents, where ever required as above.
1. Balances in the account above Rs. 5,00,000/-
a. Revised Claim format signed by claimants.
b. Stamped letter of indemnity from claimant(s) + One surety good for the amount or two
sureties jointly good for the amount.
a. Affidavit (stamped) from one independent respectable person well known to the
deceased family but unconnected with it and acceptable to the Bank
b. Other documents, where ever required as above.
Deceased claim settlement with legal representation
A legal representation is one that is granted by a Court of Law entitling the legal heirs of the
deceased to collect the debts/securities or assets of the deceased. Bank may opt for
settling the matter through legal representation in cases where there are disputes and all
the legal heirs do not join in indemnifying the bank or in exceptional cases where the bank
has a reasonable doubt about the genuineness of the claimants being the only legal heir (s)
of the depositor.
Succession Certificate: is granted only in respect of debts and securities and when the
person has dies intestate. It does not cover gold loan ornaments, articles in safe custody
and safe deposit lockers. It is valid throughout India even if granted by a District Court. The
Certificate specifies the items of Debts and Securities and the person to whom it is granted.
Any payment to the grantee/s on the strength of a Succession Certificate affords a valid
discharge to the person making the payment. Where a Succession Certificate is in favor of
two or more persons, the payment of the deposits should be jointly in favor of all of them.
It is not a proper legal grant in the case of return of pledged gold ornaments, although a
Succession Certificate may be granted with respect to delivery of gold ornaments showing
it in the Schedule as a debt or securities. In such cases, it would not be prudent to refuse
settlement of the claim when the claimants have spent considerable amount in obtaining
the Succession Certificate.
As a result, in such cases, provided that there are no rival claimants or disputes – obtain the
Certified Copy / Attested photo Copy of the Succession Certificate and keep on record.
197
Explain the limited usefulness of Succession Certificate not being a proper legal grant for
delivery of gold ornaments and therefore requested to execute a letter of indemnity for
delivering the gold ornaments to them.
A Letter of Indemnity (specified form) to be obtained from all the claimants while delivering
the gold ornaments. A receipt (specified form) also to be obtained while delivering the gold
ornaments.
Wills and Probate: If customer has dies Testate, it must be probated (approved) by the
Court, before it can be executed, however a Will does not require to be compulsorily
probated in all the states of India (Please check the State specific guidelines in the matter).
An Executor is appointed by the person making the Will empowering him or she to do all
acts specified in the Will. It applies to both movable and immovable properties. A Will need
not be registered. A copy of the Will is always attached to the Probate (Please ensure). A
Probate issued by a High Court is valid throughout India. Probate issued by the District
Court is valid within the State. In case the value of property outside the state does not
exceed Rs.10,000/- it is even valid outside the state.
A court issued probate is valid, and therefore claims can be settled in favor of the
beneficiary (ies) mentioned in the probate and the assets (the deposits/gold
ornaments/contents of Safe Deposit Locker/articles kept in safe deposit) are bequeathed.
A Muslim cannot dispose of by Will more than 1/3rd of his property, and any disposition of
property in excess of 1/3rd is void. As it is difficult to know what is the 1/3 as far as the assets
left behind by the deceased with the Bank, it is safe to ignore a Will, if any, executed by a
Muslim unless all other heirs consent by way of undertakings in favor of the Bank to act
upon the Will.
If a will is not probated (as some states do not require it to be probated) it is necessary to
ensure, before acting upon the will, that this will is the last Will and Testament of the
deceased and was executed by him with his own free will and consent and in a sound and
disposing state of mind.
It would practically be difficult for the Branch to ensure the genuineness of the will.
Therefore in cases where the settlement is requested by producing a Will, which is not
probated, it should be dealt with as per Indemnity – cum – Affidavit basis.
Letter of Administration (LOA): It is issued by a Court in favor of an Administrator when
the deceased has died intestate or when the deceased has left a Will but has not named an
Executor or when the Executor named therein refuses to act or himself is dead. The LOA
covers not only debts due to the deceased and transferable securities but also all kinds of
movable and immovable properties. It is valid throughout India if issued by a High Court. If it
is issued by the District Court, it is valid within the State. However, if the value of property
outside the state does not exceed Rs.10,000/- it is even valid outside the state. It is also
applicable in respect of delivery of pledged gold ornaments or contents of the safe deposit
locker to the legal heirs of the deceased. It authorizes the grantee/s to administer the estate
of the deceased and receive the assets mentioned in the Schedule
Order granted by the Administrator General attached to a High Court: The
Administrator Generalhas the powers to grant a Certificate (which is equivalent to a

198
Succession Certificate) where the amount of the deposit does not exceed Rs. 50, 000/- and
the amount is paid to the grantee (s) of the Certificate in the same manner as provided for in
the case of a Succession Certificate. The Certified Copy/Attested Xerox Copy of the
Certificate is to be kept on record and a receipt (Form III) is to be obtained in respect of such
delivery from the grantee (s)
Settlement of claims of special category customers
Missing persons - The relevant provisions relating to persons unheard of and the burden
of proof of whether a person is alive or dead is contained in Sections 107 and 108 of the
Indian Evidence Act, where a person is not heard of by those who would normally have
heard of him for a period of Seven years, is presumed dead. However, this presumption is
not absolute and in the very preceding section (i.e. 107) it is provided that where a person is
shown to be alive within thirty years, then the presumption that he is dead cannot be drawn.
Therefore, the settlement in case of missing persons requires to be handled with due
caution and with prior reference to the Controlling Authorities.
In case the claims up to a threshold limit of Rs 100000/-(Rs one Lac only) in respect of
missing persons, reported missing for a minimum period of one year, shall be settled on
production of – FIR, Non-traceable report issued by the police authorities, Indemnity from
the claimant (s). The AGM of the respective region is authorized to settle such claims. The
claims in respect of missing person above Rs 100000/-- should be settled after getting
order from the competent court.
Attorney Administrator - When a foreigner dies, leaving assets in India, but having
named a person not residing in India as the executor in his will, legal representation will
have to be obtained first in the foreigner's country and on the strength of which letter of
administration has to be obtained in India. For remittance of the proceeds necessary
approvals from RBI may be required.
Defense Personnel - The assets left with the bank by deceased Army, Air force and Naval
personnel can be disposed-off without the production of legal representation irrespective of
the amount as per the provisions of the Army and Air Force (Disposal of private property)
Act, 1950 and Navy Act, 1957 under section 171, 172 and 174.
Release of Title Deeds of Deceased borrowers - The persons who are entitled to claim
the Title Deeds of a deceased borrower are his heirs subject to the Personal Law by which
the deceased borrower is governed. To dispose such title deeds – obtain Death Certificate
and keep it on record, (if possible) the Legal Heir Certificate issued by MRO may be
obtained, obtain a request letter from the legal heirs of the deceased borrower for return of
the title deeds on the lines of form (Form IV) specified by the bank, obtain an Affidavit-cum-
Indemnity executed by all the legal heirs of the deceased borrower before a Notary Public
on Non-Judicial Stamp worth Rs.100 on the lines of the form (Form V) specified by the bank
and at the time of delivery of the title deeds obtain a receipt executed by the legal heirs on
the lines of form (Form VI) specified by the bank.
Disposal of assets (ornaments) to constituents who are under imprisonment - obtain
a specific request from the borrower. Ensure that the pledged ornaments should not be
connected with the offence for which he is imprisoned. The third party who seeks delivery of
the gold ornaments should be identified and the borrower should have given clear authority
to such third party to receive the gold ornaments on his behalf. The signature on this Letter
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of Authority of the Borrower should be identified by the Jail Superintendent under his official
seal. Obtain the signature of the representative in the Gold Loan ledger. Obtain the Letter of
Authority on the lines of specified form (Form XXX). Obtain a Letter of indemnity from the
Borrower for delivery of the gold ornaments to his representative. The execution of the
Letter of indemnity (specified by the bank) by the Borrower should be certified by the Jail
Superintendent by way of a separate letter.
NRI Customers – there could be two situations
In case of death of NRI account holders, legal heirs are also NRIs or foreign nationals -
Mostly it is not possible for them to visit India for completion of formalities. Sometimes, they
obtain an order from a foreign court and expect us to act on the same.
1. In case, where there is no legal representation, the Branches are to be guided by e
Circular no. NBG/S&P-SP/10/2014/15 dated November17, 2014 for disposal of proceeds
of accounts of deceased constituents. The settlement of NRIs' accounts will be done within
the guidelines of this Circular but given the special circumstances of this segment, few
more clarifications to help branches have already been issued by an e-Circular
NBG/PBBU/NRI-DEPOSIT/38/2014-15 dated 24.01.2015 in regard to confirming the
veracity of death certificate issued abroad. Further, the following aspects may also be kept
in mind while processing claims for settlement of accounts of deceased NRI constituents
2.When it is not possible for the claimant(s) to come to India for completion of formalities
then he can either execute the documents abroad in the presence of officials of our foreign
offices. If there is no branch in the place of residence of the NRI claimant, the documents
can be executed in the presence of Indian Embassy officials. For example, COS 539 and
540 can be executed by the claimant in the presence of Indian Embassy officials and the
said document can be submitted to the Stamp authorities for payment of stamp duty after it
reaches India. Or he can appoint his attorney for obtaining proper legal representation and
obtain payment against affidavit, indemnity, surety etc. The procedure for the same is that
the claimant should execute valid POA which is attested by the Indian Embassy officials.
3. The assets of deceased NRI account holder should be settled to the legal heirs as per the
Personal Law of succession (Hindu, Muslim, Christian or any other community) applicable
to the depositor. This is irrespective of whether the claimants happen to be a resident
Indian, NRI, PIO or a foreign national. The nationality of the claimants will not have any
bearing on the disposal of the proceeds and it would be settled to the legal heirs of the
depositors as per the law of succession applicable to the depositor. (However if any court
order/legal representation is obtained, the proceeds should be settled as ordered by Court.
In the case of a foreign court order, ancillary orders/resealing should be obtained from
Indian Court u/s 228 of the Indian Succession Act.)
4. Foreign nationals cannot be accepted as sureties while obtaining Letter of Indemnity as
he / she will not be governed by Indian law.
5. In case, where there is a legal representation, broadly there can be following types of
cases in relation to payment of balances in accounts of deceased constituents:
Where there is a will.
Where there is a succession certificate in place.
6. Following guidelines are laid down for establishing the veracity of death certificate issued
abroad (NRI CUSTOMERS)
200
a.A death certificate which is attested / certified by any of the following should be accepted
as such for processing the claim:
ü Notary Public in that country Indian Embassy / High Commission in that country.
ü SBI's Foreign Office. (Wherever it is possible/permissible to do attestation as per local
regulations)
b. A death certificate which is attested/ certified by the Embassy / High Commission of that
country in India should be accepted as such for processing the claim
c. A death certificate accompanied by any of the following document as a corroboratory
evidence, confirming incidence of death, should be accepted as such:
ü Evidence of settlement of an insurance claim at foreign center on account of death of our
account holder.
ü Evidence of settlement of proceeds of bank accounts at foreign center on account of
death of our account holder.
ü Evidence of settlement of terminal benefits by the employer at foreign center on account
of death of our account holder. However, the employer would have to be a government
institution or a multilateral organization only.
ü Evidence of death as provided by a hospital or local police authorities at the foreign center.
d. However it may be ensured that these documents are issued from the same country as of
the death certificate.
Last, but not least, interest has to be paid on
a) Current Account of Individuals (including Proprietorships and Staff accounts) - From the
date of death to the date of payment @ S.B. Rate as applicable on Date of Payment
b) Other types of Current Accounts - No interest payable
c) Claim before Maturity of Time Deposit - As applicable to the actual period up to payment,
without penalty.
d) Claim after Maturity and date of death is prior to Date of Maturity (DOM) of Time Deposit -
contracted rate up to DOM and simple TDR rate from DOM to Date of Payment.
e) Claim after maturity and date of death is after Date of Maturity of Time Deposit - from
DOM to DOP at SB interest.
Please remember
1. It is very important to obtain Nomination in all accounts (wherever applicable). It makes
the disposal of deceased accounts easier and hassle free.
2. The bank has delegated financial powers for disposal of deceased accounts – therefore
please refer to latest circular instructions in this regard.

References used for this chapter and details obtained from:

1. Disposal of Deceased assets book compiled by SBLC Trichy on website of SBLC
Trichy and Banks Circular instructions in this regard.
2. Banking Regulation Act 1949 and Banking Nomination Rules 1985 and Banks
Circular instructions in this regard.

v v v 201
Chapter - 17
Gold Loan and Loan
Against Specified
Security
NOTES
Chapter-17: Gold Loan and Loan Against Specified Security

202
 ‘X’

11 Repayment a. Cash Credit / Over Draft:

period Like KCC, it is a running account for a period of 3 years
subject to review (outstanding vis a vis advances value of the
ornaments pledged) at annual intervals. It should always be
ensured that the outstanding in the loan account should not
exceed the market value of the ornaments pledged.
b.Demand Loan: The repayment period of the loan should be
fixed synchronizing with harvesting and marketing season,
allowing 2 or 3 months after harvesting to market the
produce and realize the proceeds. However, the total period
should not exceed one year form the disbursement of the
loan.
It should always be ensured that the outstanding in the loan
account should not exceed the market value of the
ornaments pledged. In such an event, the borrower should
be advised to repay adequately to regularize the position.

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12 Loan a. Up to Rs.25,000 : NIL
Processing fee b. Above Rs.25,000 to up to Rs.2.00 lakhs : Rs.500 + GST
c. Above Rs.2.00 lakhs: 0.30% of loan limit.
13 Discretionary As per the Delegation of Financial Powers vested with
powers Sanctioning Authority by the respective Circles.
14 Documentation a. KYC documents
b. DP Note and DP Note Take Delivery Letter
c. Application, appraisal and Acknowledgement letter : SIM- GL/1
d. Two copies of photograph of the borrower
e. Gold Ornaments Take Delivery Letter ( SIM-GL /2)
f. Witness letter in case of illiterate borrowers ( SIM-GL / 3)
g. Memorandum in respect of Gold ornament(s) deposited as
security (SIM-GL / 9)
15 Delivery of On repayment of a loan, the ornaments held as security for it together
Ornaments with the demand promissory note duly discharged should be returned
to the borrower(s) and his / their acknowledgement for receipt of the
ornaments obtained in the Gold Loan Ledger. The acknowledgement
should state that the ornament received by him/them are complete
and in order. Where it becomes necessary to retain the ornaments
pertaining to a closed account, these should be kept in the
jointcustody of the official in charge of gold ornaments and the
Cash Officer / Cash in Charge as an article in the Safe Deposit.
The full particulars of the relative loan account should be entered and
authenticated by both the officers in the Safe Deposit Register.
16 Part Delivery of On written request of the borrower(s), part delivery of ornaments may
ornaments be given against part repayment of the loan, provide the advance
value of the ornaments still in the Bank's possession fully cover the
outstanding in the account. The borrower's acknowledgement for
receipt of ornaments delivered to him / she/they should be obtained in
the Gold Loan Ledger.
17 Delivery of Delivery of ornaments to a third party, who must be identified, may be
ornaments to a made on complete repayment of loan only in very exceptional
third party circumstances and on undoubted authority of the borrower. The letter
of authority (SIM-GL/5) contains an undertaking by the borrower
absolving the Bank from responsibility in the event of dispute or loss
arising from the delivery of ornaments to the party named therein. If
necessary, the undertaking may be taken in the form of letter of
Indemnity as per SIM-GL/9. The receipt of the third party will be taken
on the letter of authority as well as the Gold Loan. Ledger. The
borrower should be advised separately of the delivery of the
ornaments to the third party and requested to send to the bank an
acknowledgement on form COS 49 which should be sent to him along
with the request letter. On receipt of the COS 49 necessary remarks
should be made in the Gold Loan Ledger. The letter of authority /
indemnity Bond and the acknowledgement on COS 49, when
received, should be filed in a separate file and retained in the strong
room.

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18 Deceased a. Interest in the account of deceased borrower should be
Borrower charged as per the contracted rate in the usual manner.
b. If the legal heir / near relatives wish to liquidate the
outstanding in the gold loan account, they can be permitted to
do so by giving them clear understanding that the ornaments
would be delivered to the legal heirs on production of legal
representation in the proper way only and that the amount so
deposited would not be refunded to them in case they fall to
obtain legal representation in their favour. A letter of
understanding to this effect must be obtained and kept on
record.
c. The ornaments will be delivered to the legal heirs on
production of the legal representation or on completing the
Bank' formalities with regard to delivery of the ornaments in lieu
of the proper legal representation. In the latter case, the
person(s) liquidating the loan account should be made to sign
the letter of indemnity as one the sureties.
d. Pending completion of the formalities / production of the
legal representation and delivery, the gold ornaments should be
held as safe deposit article.
19 Calling up of a. Advance will be called up, when
advances (i) The value of gold is less than the outstanding or
(ii) The account becomes irregular
b. If the account is irregular, a letter should be sent to the
borrower as per SIM-GL/7 requesting him / her to deposit the
amount / regularize the account within 15 days.
c. If the borrower fails to regularize the account and if continue
to be irregular , a notice as per SIM-GL /8 should be sent
advising that the ornaments will be sold by public auction, if the
loan and interest are not paid within 15 days from the date of
notice. The notice (English and Vernacular) must be
dispatched to the borrower under Registered Post
withacknowledgement due.
d. Whenever any of the notices described above is sent the
date of dispatch should be noted in the relative ledger account
underthe initials of the official signing the notice.

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20 Auction of Branches should put in a system to declare every 3rd Friday of
gold the month for conducting monthly auction for sale of gold
ornaments ornaments to realize and recover the dues of NPA.
The procedure for auction of gold loans are as under:
a. When an advance bas been called up and repayment is still
not forthcoming, the Bank has the right to sell the gold
ornaments pledged, after giving reasonable notice to borrower
( Section 176 of the Indian Contract Act).
b. If the account is not put in order within the time slated in the
notice (SIM-GL / 8 : Annexure-11, the ornaments should be put
up for auction with the prior approval of Branch Manager in
accordance with the procedure described below:
(i) A final notice must be sent by ‘Registered Post' with
acknowledgement due to the borrower or if he is dead to all the
likely claimants at the last known address calling up the loan
and stating, inter alia, that the relative ornaments will be sold
by public auction without further reference if the loan account
is not closed within 30 days from the date of the notice. The
date, time and place of the proposed auction should be stated
in the notice.
(ii) In the event of the registered letter being refused, it must
be kept unopened preferably on a separate file after making
appropriate remark in the ledger account.
(iii) The branch should satisfy itself before advising the
borrower or his legal claimants, if he is dead, that in the event
of a forced sale, it is possible to realign the amount
outstanding in the loan account plus interest. The gold
ornaments to be auctioned should be examined by a reliable
local goldsmith and his valuation of each ornaments
ascertained in writing.
(iv) The proposed auction and auction dates should be
publicized by ‘tom-tom' in the local bazaar on three
consecutive days prior to the date of auction. (all charges to
be equally debited to all the defaulting borrowers
account.)However, while doing so the borrower's name should
not be divulged. The Cash Officer
/ Cash In Charge may arrange for some of the local merchants
to witness the proceedings and, if they choose, take part in the
bidding.
(v) The auction should be held in the Bank's premises.
(vi) Every effort should be made to realize the full market
value of the security pledged. A reasonable minimum price
must

206
Through
auction ?

207
22 Agri gold loan • Gold loan safe keeping charges have to be recovered from
safe keeping all agri gold loans.
charges • Charges to be charged 30 days after the expiry of the
presc ribed tenure of gold loan, presently 12 months.
• Applicable charges are to be recovered including service
charges which will be determined by Bank from time to time. At
present, Rs.843/ per annum.
23 Suggestive Branches should exercise caution while processing and
measures to sanctioning of agri gold loans to obviate the chances of
prevent gold pledging gold ornaments that were stolen and spurious or low
loan frauds quality by strictly following the measures narrated below:
a. KYC compliance of applicant: Branches should strictly
adhere to the KYC guidelines for proper identification of loan
applicant.
b. Proof of land records: Branches should meticulously
comply the instructions laid down by bank while granting loans
under Interest subvention scheme.
c. Transfer of loan proceeds to applicant SB / KCC
account:
Branches should transfer the loan proceeds to applicants
SB/KCC account to obviate the chances of fake borrower
d. Testing the purity of gold ornaments: Branch Cash Officer
/ Award Cash Officer( Special Assistant / Senior Assistant in
charge of cash) is responsible for ensuring the genuineness
and purity of gold ornaments by using the purity testing
methods viz (i) Touch Stone Method (ii) Nitric Acid Method
(iii) Specific Gravity Test. If necessary, Cash Officer should
utilize the services of a reputed jeweller to verify the
genuineness of the gold ornaments, in his presence, at the cost
of borrower. In case the services of a local gold smith are
employed, the certificate of purity and mass of gold should be
obtained. For loans above 50,000, ornaments are to be
assessed by reputed appraiser, specially identified for this
purpose for its quality and value. However, for Hyderabad,
Chennai and Kerala circles, assessment by an appraiser has to
be done for loans above Rs 1, 00,000/Since accuracy in
assessment of purity of gold ornaments in determining the loan
amount as also to prevent finance against low quality / spurious
gold ornaments, (Karatometer) were deployed in gold loan
intensive branches to use as an aid to manual testing and but
not supplement other quality testing methods.
e. Leverage ‘Gold Assaying Machine' as an additional aid:
Since accuracy in assessment of purity of gold ornaments is
important in determining the loan amount as also to prevent
finance agains t low quality / spurious gold ornaments, Branches
should use Karatometer , in gold loan intens ive branches,

208
 as an aid to manual testing and but not supplement to other
quality testing methods.
f. Engaging the second' Gold Appraiser': Branches may
engage the services of more than one qualified ‘Gold Appraiser'
to obviate the chances of vested interests, if any, and to have
unbiased opinion of second gold appraiser is always reassuring.
The appraiser has to perform his job in the branch premises to
avoid any transit loss/delay. Independent check on appraiser is
necess ary.
g. Mandatory Use of Agri LOS' : LOS for Agri loans was
launched in Jan'14 for appraisal, sanction, control and
documentation thereby ensuring Standardization of Operating
Proc edure (SOP). It has an interface with CBS, External Credit
Bureau, Census India data base, PAN data base, etc. All Agri
Gold loan products were rolled out for loan processing in Agri
LOS. It ensures due diligence, KYC compliance, online control of
sanctioning of loans, generation of SMS alerts at the time of
sourcing of application /sanction of loans to applicant/soft
recov ery resolution, mandatory registration of mobile number.
h. No repayment of loan: Branches s hould exercise caution and
act immediately on noticing the default repayments and return of
notices /lack of response to notices for reminders in agri gold
loans
i. Carrying out ‘Surprise Verification' of gold ornaments :
Verification of quality and number of gold ornaments pledged
under Agri Gold Loan Scheme at the Agri Gold Loan intensive
branc hes by an officer other than the joint custodian must be
carried out annually a on random sample basis (30% or
maximum of 100 gold loan a/cs whichever is less) to safeguard
against frauds in Gold Loans.
j. Sharing of External Loss Data: Information on frauds:
External LOSS Data (ELD) is used to improve Bank's existing
s ys tems and procedures with a view to guard against likely
happening of similar events. A system may be put in place for
sharing the ‘External Loss Data' on gold loan frauds received
from IBA at periodical intervals as a part of strengthening
operational risk management.
24 IRAC norms Crop loan sanctioned against the collateral security of gold
ornaments shall continue to be governed by the extant income
recognition, asset classification applicable to Crop loan.
25 Computation of Loan granted against gold / silver ornaments are not to be taken
DCB position into account to arriv e a t the recovery position. Hence, the amount
of such loans and recoveries made there on are excluded from
the purview of Demand, Collection and Balance (DCB) Register.

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Gold retention limit: Branches should fix the gold retention limit taking into Business
needs /potential available, Law and Order situation, availability of storage space for safe
custody of gold ornaments, availability of security guards etc. The proposal will cover
security arrangements and insurance for the gold retention limit. Controllers to review Gold
Retention Limit in the month of January every year. The review will indicate any upward
revision /downward revision /retaining the same limit.
Security arrangements: Security arrangement instructions issued by Security
Department from time to time should be meticulously followed. Security Department has
devised a risk matrix format for calculation of Risk Matrix for individual branches based on
different parameters.
Insurance cover: Insurance for gold held as per Gold Retention Limit at branches is taken
on a centralized basis at Mumbai. Although the data on gold loans sanctioned at branches
is dynamic and subject to change every day, insurance is obtained for the retention limit
amount. The market value of gold fluctuates widely, which needs to be considered at
prevailing conversion rate, at the time of insurance cover.
Storage and safe custody of gold ornaments: Storage of gold invariably be kept in FBR
safes when there is no strong room in the branch. Gold ornaments are placed under double
lock of the Branch Manager / Accountant and Cash Officer. Ornaments relating to each loan
should be held in a separate cloth bag marked with the loan account number and name of
borrower. A slip showing the particulars of ornaments viz number, weight etc duly signed by
Joint Custodian should also place inside the bag. The bags should be tied intact with cloth
tag. The sealing of bag with lac is not required.
Handing Over and Taking Over: Handing over and taking over periods for Agri Gold
Loans including verifications of Quality / Quantity of gold ornaments by the Cash Officer,
following procedure for adoption by the operating functionaries:
The Cash Officer is expected to hand over / take over on an average of 200 to 250 accounts
per day by verifying the quality / quantity of Gold ornaments and the respective documents.
Though the above numbers are indicative, these numbers can marginally vary depending
upon the number of ornaments in each bag and experience of the incumbents in handling of
Gold ornaments, which will be finalized by the respective Branch Managers.
17(ii) SBI GOLD LOAN (P-segment)
Purpose:
A general purpose scheme against collateral security of gold ornaments & specially minted
gold coins sold by Banks to individuals.
Eligibility:
Individuals who are 21 years of age with steady income including Bank's employees and
pensioners.Submission of proof of income by borrower, not necessary. Proper introduction
of the borrower and minimum capacity to service the interest will be sufficient to determine
eligibility
Loan amount:
Minimum: Rs.20,000/- irrespective of centre.

210
Loan amount to be linked to the need / value of the gold less usual margin, with a cap of
Rs.20.00 Lac.
Note : 'While granting advance against the security of specially minted gold coins sold by
Bank, the operating units should ensure that the weight of coin(s) does not exceed 50
grams per customer'.
Advances to staff against Gold ornaments
Staff: The minimum and maximum ceilings would not apply to staff members. In their case
the existing restrictions of aggregate monthly repayment obligations not exceeding 60% of
the gross monthly emoluments will apply.
Type of loan
Demand loan only.
Since the OD facility has been withdrawn, the existing OD accounts should be converted to
Demand Loan at the time of annual review/renewal of the account.
Rate of Interest :Interest will be recovered at the rates stipulated by Bank from time to time.
Margin and Security valuation:
For Public : 25% For staff: 25% reduction in margin is permissible. Monthly
calculations of advance value of gold not applicable to staff where repayments are
regular
The Market Value and Advance Value for per gram of Gold of different Carats purity being
given by Precious Metal Department beginning of every month in SBI Tmes ->
Department2 -> Precious Metals -> Daily Reports.
Processing Fees
0.50% of the Loan amount + applicable Tax or Rs 500 + applicable Tax whichever is higher
Procedure for accepting Gold Ornaments
The gold ornaments offered as security should be delivered to the Bank along with the Take
Delivery Letter (vide Annexure-PL-51 Chapter F of e-Manual on Loans and Advances Part
10) duly completed and signed by all the borrowers. Each ornament or a group of
ornaments of similar type/fineness should be entered separately in the Take Delivery
Letter. In case of the illiterate borrowers, Witness Letter, vide Annexure-PL-52, should be
obtained from the witnesses who were present while the illiterate borrowers executed the
various loan documents including the Take Delivery Letter. The borrower may be issued an
acknowledgement for the ornaments offered as security for the loan, vide Annexure-PL-61
Chapter F of Part 10.
Branch Cash Officer/Award Cash Officer (Special Assistant/ Senior Assistant in-charge of
cash) is responsible for ensuring genuineness and purity of gold ornaments by using the
following methods:
Touch stone Method
Nitric Acid Test
Specific gravity test

211
If necessary, Cash Officer should utilise the services of a reputed jeweller to verify the
genuineness of the gold ornaments in his presence at the cost of the borrower. In case the
services of a local gold smith are employed, the certificate of purity and mass of gold should
be obtained.
Particulars (including the details/descriptions of the gold ornaments) of every loan granted,
by way of a Demand Loan should be entered in the standard Gold Loan Ledger and the
particulars of the gold ornaments should be initialed by the two authorised officers in whose
joint custody the ornaments are to be held. The accounts should be serially numbered and
the number of each account recorded on the demand promissory note and other relative
documents.
Custody of gold ornaments pledged:
The gold ornaments must be placed in the strong room under the joint custody of the
Branch Manager/Manager of 'P' division /Accountant and the Cash officer. The ornaments
relating to each loan account should be held in a separate bag marked with the loan
account number and name of the borrower. A slip showing these particulars should also be
placed inside the bag. At the branches where loans are numerous, it would be advisable to
hang the bags in numerical order of accounts on 'S' shaped hooks suspended from
horizontal bars fitted inside the cupboards/ safes stored in the strong room. Adequate
arrangements must, in all cases, be made to protect the bags against surreptitious removal
when the strong room is open.
.Documentation:
Ÿ D P Note and D P Note Take Delivery Letter

Ÿ Application for Gold Loans, vide Annexure-PL-50 Chapter F of Part 10(e-Manual on

Loans and Advances)
Ÿ Two copies of photograph of the borrower(s)
Ÿ Gold Ornaments Take Delivery Letter, vide Annexure-PL-51 Chapter F of Part 10

Ÿ Witness Letter in case of illiterate borrowers, vide Annexure-PL-52 Chapter F of Part 10

Ÿ Arrangement Letter, vide Annexure-PL-53, to be obtained in duplicate, original being
handed over to the borrower. Opinion Reports need not be compiled for loans upto
Rs.3.00 Lac
Repayment:
Maximum: 36 months
The repayment of Principal and Interest should commence from the month following the
month of disbursement.
OD AGAINST GOLD - LIQUID GOLD SCHEME
To give a boost to our Gold Loan Portfolio, the Competent Authority has approved a new
variant of Per Segment Gold loan to be known as 'Liquid Gold Loan Scheme'. With the
introduction of this product, the Per Segment Gold Loan can now be sanctioned as
Overdraft. The features in the new product that will be different from the existing product are
summarised below:

212
Since this scheme is a variant of SBI Gold Loan Scheme, the other terms and conditions of
the scheme as well as standard operating procedure will remain unchanged. The
Arrangement letter as applicable to Liquid Gold Loan Scheme is attached as Annexure-I of
the circular. Operating units are also advised to meticulously follow the instructions as
contained in the below listed e-circulars issued from time to time

213
GOLD LOAN-BULLET REPAYMENT
The most sought after variant of P-segment Gold loan where repayment of loan is permitted
by way of bullet repayment at the end of the term i.e., there is no requirement to service the
interest or instalment during the loan term has been approved by the competent authority
and has now been made available for our customers. Suitable functionality developed in
CBS to track the fall in margin during the tenor of the loan which is a critical feature of this
loan scheme. The product was launched on 25.05.2016.

margin

214
(i) The loan will be sanctioned with a margin of 35%
(ii) LTV of 75% has to be maintained throughout the tenor of the loan.
(iii) The LTV ratio has to be computed against total outstanding in the account including
accrued interest. (Interest would be charged to the account at monthly rests but would
become due for payment along with principal only at maturity i.e. after 12 months).
(iv) The LTV ratio has to be computed against the current value of gold.
Once the LTV of 75% is breached, the account would become out of order in terms of IRAC
norms and if the account continues to thus remain out of order for 90 days it would become
an NPA. For maintenance of margin of 35% notices are to be sent as under.
Ø On the day when LTV is above 75%, 1st Notice is to be sent.
Ø If the above position continues then 2nd Notice is to be sent after 15 days from 1st
Notice.
Ø If still the above position continues then 3rd Notice is to be sent after 30 days from 1st
Notice.
Ø In case the borrower fails to replenish the margin even after 3rd Notice the operating
units/Branches will be required to auction the gold ornaments as per extant instructions of
auctioning of Gold Ornaments. This is mandatory irrespective of the IRAC status of the
account.
17(iii) LOANS AGAINST BANK'S TIME DEPOSITS
Eligibility Criteria:
Time Deposits are deposits kept with the Bank by customers for the stipulated contracted
period and are ordinarily payable only after expiry of the said contracted period. To meet
depositors' liquidity needs, branches can grant loans against the security of the following
types of the Time Deposits:
i) Term Deposits (including NRE/NRO /FCNB deposits)
ii) Special Term Deposits (including NRE/NRO/FCNB deposits)
iii) Recurring Deposits (Accounts with balance of Rs.100/- & above only eligible including
NRE/NRO Deposits)
(No loan will be granted against RFC deposits)
Loans can be granted against time deposits kept by the Indian Nationals as well as Non-
Resident Indians (NRIs) to
I) Individual depositors against the deposits held by them either in their sole
name or jointly with other person(s), (In case of deposits payable to “Jointly or Survivor(s)”,
loans can only be granted to all the depositors jointly. In case of death of any of the joint
depositors, the survivors along with the legal heirs of the deceased depositor(s) will have to
apply for the loan.)
ii) Guardian in his capacity as a Natural /Legal guardian against the deposits held by him
jointly with the minor or in the sole name of the minor,

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iii) Loan against a term deposit issued in joint names with 'E or S' / 'anyone or S' may be
granted only if it is pledged jointly by all the depositors.
Loans can also be granted to Third Parties (individuals) against the deposits, which are not
held in their names. (e.g. Loan granted to A against the deposit held in the name of B.)
However, as per the observations of Special Committee of the Board for Monitoring Large
Value Frauds, BO Dept. has since restricted sanction of loans against third party deposit(s).
Branches may grant loans against Term/Special Term Deposit Receipts of any other
branch of our Bank only on strict identification of the depositor and after the lien has been
noted against such deposit in the books of the issuing branch and a written confirmation
thereof has been received at the loan sanctioning branch.
As a general rule, no advance should be granted against the security of Term
Deposit Receipts issued by other banks.
Type of facility:
Demand Loan or Current Overdraft Account
Margin:
TDRs: Minimum 10%
STDRs: Margin same as TDRs. However, as the interest on STDRs is quarterly
compounding and the interest on advances is monthly compounding the effective margin
erodes faster in case of STDR if a customer does not service the interest. Accordingly, if
interest servicing is not done for advances against STDRs for more than 3 months,
available cushion i.e. prematurity payment due less outstandings shall be worked out and if
it is less than 2%, loan a/c must be closed forthwith by making premature payment of
STDR. A simple letter of undertaking as prescribed shall be taken from each borrower for
this purpose.
Loan Amount:
90% of the Principal plus accrued interest
Security:
TDR/STDR: Undated discharge on revenue stamp on reverse of receipt and deposited as
security along with suitable security delivery letter Lien to be recorded in the system and on
the deposit receipt, which is to be held in joint Custody. Joint custody TDR Register to be
maintained.
In case of RD account, the question of discharging the receipt does not arise, as there is no
system of issuing deposit receipt(s). However, lien will be marked in the system on similar
lines of the TDR/STDR. The particulars of the loan account will be noted on the first page of
the Pass Book and after authenticating the said entry, the relative Pass Book will be
returned to the borrower(s).
Post extension of system of issuing TDR/STDR advices instead of receipts, the documents
in case of loans against balance in TDR/STDR accounts have undergone some changes.
We reiterate that the following documents are required to be obtained while granting
Demand Loan/ Overdraft against balances in said term deposit accounts.

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i) Loan Application Form Annexure PL-63 Chapter F of Part 10 (e-manual on Loans &
Advances)
ii) Loan Agreement - Specified Security Annexure Pl-65 Chapter F of Part 10 (e-manual
on Loans & Advances)
However, in case of loans against deposits held in single name loan agreement noted
herein is not required to be obtained.
iii) D.P. Note with D.P. Note Delivery Letter in case of Demand Loan.
iv) E or S form on COS 142 and / or E or S Agreement on COS 57, if applicable.
v) Witness letter in case of illiterate borrowers, if applicable.
Further under the new procedure
i) No separate consent for disclosure to CIBIL or any other agency will be
obtained as consent clause for the purpose is built in Loan Agreement- Specified Security
Form. However, the same shall be obtained separately in cases where the specified Loan
agreement is not required to be obtained.
ii) The depositors are not required to surrender the deposit advice already issued /
delivered to them.
iii) In case the loan account against TD/STD Advice is closed from funds other
than proceeds of relative deposit, no acknowledgement on COS 49 will be obtained, as
return of Receipt / Scrip / Security is not involved (as in case of TDR/STDRs). Instead
Security Release letter will be issued to the holder of the security, with a copy endorsed to
the borrower, by the branches.
iv) The branches will mark lien on the relative deposit(s) in the system and generate
Statement of customer Balances showing lien marked therein on the relative deposits, and
will keep it with the loan documents to facilitate verification of the fact by Inspectors /
Auditors.
v) Opinion Reports need not be compiled for Loan against Bank's own fixed deposits
Rate of Interest:
Rate of interest as prescribed by the Bank from time to time will be applicable.
RBI have granted freedom to banks to charge interest rates on loans against domestic /
NRE term deposits without reference to their own Prime Lending Rates/Base Rate.
The interest charged on the advance against the Bank's term deposit receipts+ where the
relative deposits are subsequently withdrawn prematurely, should be adjusted in such a
way that the interest charged on the advance works out to 1.00% [or as applicable] over the
rate at which interest is actually paid on the deposit.
Mandate from the Borrowers:
In view of keeping the value of security against Bank's own Time Deposit higher than the
outstanding in the loan account, it has been decided that the branches will obtain the
following mandate from the borrower(s) at the time of sanction of the Demand Loan
“I (we) hereby authorise the Bank to credit the interest earned on my/our TDR(s) in the loan
account instead of my/our deposit account till the loan is liquidated”.

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Provision to open Multiple Demand Loans against the same TDR/ STDR
Multiple Demand Loans against the same TDR/STDR can be permitted so long as the sum
total of the limits of all the Demand Loan accounts will be within the permissible limit of the
Demand Loan against the TDR/STDR. The sanctioning authority can however allow
maximum of four such Demand Loans. In special cases the AGM/RM can permit a fifth
loan.
Continuation of Loan Account in case of Auto Rollover of Time Deposits:
As rollover of TDRs/STDRs is now permissible, the loan granted against such
TDRs/STDRs will not be closed on the date of rollover. The new TDR/STDR will continue to
be linked to the existing loan account and lien/ hold on the account will also continue.
The interest rate and DP at the loan account will be as follows:-
i) In case where interest rate of STDR/TDR remains same at the time of auto renewal, it will
be allowed to be auto renewed and same interest rate will continue at the Loan/OD
account.
ii) In case of interest rate undergoing change, the STDR/TDR will be allowed to be auto
renewed. The interest rate in Loan account will be revised as per the rate of STDR/TDR
plus the product level spread/ margin.
(iii) Changed security value with revised details will be captured in Security (Collateral) field
of loan / CCOD accounts.
(iv) DP in case of CC/OD accounts will only change the advance value and effective DP
will continue to the approved limit or advance value whichever is lower.
It has been decided by the competent Authority that Non-Home Branches shall henceforth
not sanction and disburse loan against TDRs/STDRs maintained at nonhome Branches
i.e., the earlier instructions as advised above have been withdrawn. The TDRs/STDRs
holders willing to avail the DL/OD against the TDRs/STDRs held at non-home Branches
should be advised to get the deposit transferred to the Branch from where he/she is willing
to avail the loan. Alternatively, operating units should advise them to avail the facility of
Online loan against Fixed Deposits available to Retail Internet Banking users.
17 (iv) LOAN AGAINST NSCs/KVPs
Eligibility:
All branches can grant loans to the customers maintaining satisfactorily conducted
accounts, against the security of the National Savings Certificates (NSCs) of VIII Issue and
Kisan Vikas Patras (KVPs), both of which are categorised as “specified security” in terms of
61(d) (i) of State Bank of India General Regulations. NSCs of VIII issues are issued for
tenure of six years. Commencing from 1.03.2003, KVPs are issued for a maturity period of
eight years and seven months. Third party loans against NSCs and KVPs may also be
considered on merits of each case.
Facility:
Demand Loan / Overdraft

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Margin:
Public: 40% of face value plus accrued interest of NSC VIII issue/KVPs.
For Staff / Bank's pensioners
15% of face value plus accrued interest of NSC VIII issue/KVPs.
(The margin is lower as a special case on condition that interest should be serviced by the
staff promptly and regularly and should be ensured that at no point of time the outstanding
exceeds the maturity value of the security.)
Loan Amount:
60% of Face value together with accrued interest for public.
No ceiling on maximum loan amount provided stipulated margin is maintained.
Security:
The NSCs/KVPs are required to be transferred by the issuing Post Office as a security in
the name of the bank.
Discharge of the holder on the reverse of NSCs/KVPs is not considered necessary. Third
party loans against NSCs/KVPs may be considered on merits of each case. Security ledger
and security register should be maintained
Rate of Interest: Interest will be recovered at the rates stipulated by Bank from time to time.
Documents:
I) Simple Application form undertaking to repay the loan as per terms and conditions of
the Bank.
ii) DP note & DP Note Take Delivery Letter.
iii) Security delivery letter .
iv) Form A/A1/A2 if necessary.
Repayment:
A suitable repayment schedule is to be fixed.
At no point of time, the outstanding in loan a/c should exceed the maturity value of the
certificates pledged. [Otherwise a/c will be treated as NPA.]
Premature encashment of KVPs
Rule No. 12 of KVP Rules, 1988 deals with encashment at maturity. As per Rule No. 13
which deals with premature encashment: (i) notwithstanding anything contained in Rule
12, certificates may be prematurely encashed any time in any of the following
circumstances:
On the death of the sole holder or any of the holders in the case of joint holder,
On forfeiture by a pledgee being a Gazetted Govt. Officer.
When ordered by a court of law.
After 2½ years from date of the KVP, it is eligible for premature encashment. In such cases,
the loan a/c can be liquidated from out of the proceeds of the KVPs if requested by the
borrower.

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FAQs
● What is the procedure for transferring the NSCs/KVPs in the Bank's name?
The form prescribed by the Postal Dept. for such transfer should be duly completed, signed
and submitted along with the NSCs/KVPs to the Post office which has issued the said
scripts. The post office will tally the holder's signature on the transfer form with his signature
on its records and thereafter super scribe each certificate on its face with the words
'transferred as security in favour of State Bank of India' under the signature and seal of the
authorised official of the Post office and return the certificates to the concerned branch after
making appropriate remarks in its books. The holder need not sign on the reverse of the
scrip as they are to be transferred in the name of the lending Banker by signing appropriate
form prescribed by Postal Dept. The holder's signature on this transfer form is deemed as
sufficient.
● What is the procedure for repayment before / after maturity of NSCs/KVPs?
If loan is o/s on maturity date of security: On the due date, the certificates are to be sent to
Post Office concerned for collection and the proceeds are to be adjusted for liquidation of
the loan amount. The balance in excess of o/s will be refunded to borrower by B/C or credit
to his other running a/c. If loan is closed before maturity date of NSCs/KVPs, the securities
will be delivered back to the borrower against his acknowledgement on COS-49 along with
a letter to the post office concerned to retransfer the certificates in the name of the holder.
● What are the guidelines with regard to loans to staff?
No repayment schedule need be fixed for staff and Bank's pensioners provided periodical
interest is promptly and regularly recovered.
In the event of transfer of staff member:
The DL a/c and the NSCs/KVPs pledged, as security have to be retained at the original
pledgee branch. The branch where the employee is transferred may remit the repayment
instalments regularly to the pledgee branch till the o/s in the a/c is adjusted.
In case of overdraft account, in as much as the deposits / withdrawals are permitted within
the drawing power available the account may be transferred to the branch where the
employee is transferred to enable him to operate his account. However, NSCs/KVPs may
be retained at the original pledgee branch. For the purpose of audit, Branch's certificate/
Memorandum of Certificate may be issued to the transferee branch.
What is the procedure to be followed in case Borrower(s) comes with the request of
Pledging fresh NSCs/KVPs in order to avail higher loan in over draft facility?
With a view to maintain uniformity in the process, it has been decided that operating units
will henceforth enhance the LIMIT/DP of the existing Over Draft account in case
borrower(s) comes with the request of pledging fresh NSCs/KVPs in order to avail higher
loan amount instead of opening of a new OD account. This will facilitate the borrower to
continue his existing Overdraft Account Number for the future transactions and operating
units will not have to open multiple OD accounts of the same borrower(s) and issue cheque
book etc.

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17 (v) LOANS AGAINST LIFE INSURANCE POLICIES
Eligibility Criteria:
All branches can grant loans to the customers maintaining satisfactorily conducted
accounts, against the security of the life insurance policies issued by (a) Life Insurance
Corporation of India (b) Department of Post Offices (c) SBI Life Insurance Company Ltd.,
provided the following conditions are fulfilled:
Ÿ The age of the insured should have been admitted by the authority issuing the policy.
Ÿ The Policy has not been issued under the Married Women’s Property Act, 1874. Under
the Married Women's Property Act, the benefits of the insurance policy held in the name
of the husband, upon his death or on maturity, will accrue to the beneficiaries under the
Trust. Thus such a policy is not the property of the husband and therefore should not be
accepted as security.
Ÿ The policy stands in the name of the borrower only.
Ÿ The policy is in force and the insurance premium has been paid up to date.
Type of Facility:
Demand Loan or Overdraft
Margin:
5% of the Surrender Value of the policy.
Maximum Loan Amount:
The amount of advance must not exceed 95% of the present surrender value of the policy,
which should be ascertained from the Corporation, and recorded in the miscellaneous
security register and the drawing power register. [Surrender Value is the amount payable
by the insurance company on premature payment of the policy]
Security:
Assignment of Policy:
An assignment denotes transfer of debt or any beneficial interest in a movable property.
Under the Transfer of Property Act, assignment means transfer of an actionable claim. The
person who assigns the right/property/debt is called the Assignor and the person to whom
the right/property/debt is transferred is called the Assignee.
The policy should be assigned in favour of the Bank. Except for a nominee who acquires no
interest in a policy during the lifetime of the assured, all the parties interested in the policy
must assign it to the Bank. Where there is more than one such party to a policy, the parties
may assign it either jointly or through a chain of assignments. As a separate document of
assignment attracts stamp duty, the assignment (or assignments) should preferably be on
the policy itself and must be sent to the LIC/Post Office/SBI Life, as the case may be,
immediately for registration and return.
The form of the assignment should be on the following lines:
I, the within-named ______________________ for valuable consideration hereby assign
and transfer all my right, title and interest in the within-written policy and in the moneys
thereby secure to the State Bank of India and its successor and assigns and declare that

221
the receipt of the said Bank or its successors or assigns shall be a good and valid discharge
for all moneys under the policy.
Dated at ______________ this day of _____________________ (in words) Witness
Occupation
Address (Signature of Assignor)
A notice, in duplicate, signed by the Assignor (i.e. borrower) and the Assignee (i.e. Bank),
requesting the LIC/Post Office/SBI Life to return one copy there of duly acknowledged by it
under its seal, should be sent along with the assignment. The acknowledgement copy of
the notice should be retained along with the assigned policy, when received.
At the time of notifying the Bank's interest in the policy, the LIC/Post Office/SBI Life, as the
case may be, should be asked to advise the present surrender value of the policy.
To confirm that no other assignment is registered with them and the policy is
unencumbered.
Ÿ To confirm that the premium have been paid up to date.
Ÿ To confirm that the age of the insured is admitted.
The policy received after registering the assignment in Bank's favour together with the
confirmation on the above points should be kept properly filed after recording all the details
in the Miscellaneous Security Register.
Rate of Interest:
Interest will be recovered at rates stipulated by the Bank from time to time.
Documentation:
i) Simple Application form undertaking to repay the loan as per terms and conditions of the
Bank.
ii) DP note & DP Note Take Delivery Letter.
iii) Security delivery letter (COS 54).
iv) Life Insurance policy duly assigned in favour of the Bank.
Repayment:
Loans should be repaid within 3 years
Miscellaneous:
Overdrafts may be granted against an Endowment Policy, Anticipated Endowment Policy
or a Money Back Policy.
Advances against whole life policies should be discouraged.
Insurance premium should, as far as possible, be paid by the Bank understanding
instructions from the borrowers and the premium receipts kept attached to the assigned
policy.
ADVANCES AGAINST INSURANCE POLICIES OF SBI LIFE
The above instructions will also apply in general terms to life insurance policies issued by
the Posts & Telegraphs Dept. and SBI Life. This will provide promotional support to
products of SBI Life, which is our joint venture company.

v v v 222
Chapter - 18
Saving Account
Guidelines And
Products
NOTES
 Chapter-18 : Savings Bank Accounts

Guidelines and Products

We all have been opening various types of Savings account, however many times it may
still slip our mind as to why we should open an SB account. SB accounts simply were
developed for cultivating a habit of savings among people. It is a form of demand deposit
which is subject to the
restrictions as to the number of withdrawals as also the amounts of withdrawals permitted
by the bank during any specified period. Therefore primarily it is meant for individuals and
not for business purposes, for that we have Current Accounts (discussed is a separate
chapter).
However, not every individual can open an SB account because it falls under the purview of
Indian Contract Act 1872, therefore only those persons who meet the criteria can open an
SB account. The criteria is further subject to other laws and guidelines for anti-money
laundering etc. (Please refer to chapter on KYC, FATCA etc. for details)
The operations in SB account are subject to Government of India guidelines, if any, and
rules of the RBI and the Bank.
Bank has customized the quintessential SB account for variety of customers for e.g Normal
SB account for general public, Pehla Kadam & Pehli Udaan for minors, CSP for salaried
employees, etc. An SB account comes with host of features including Internet Facility and
ATM cards. However not all types of SB account have all the features (general feature
details given below)
SB accounts fall under the Demand Deposit and along with Current Accounts are classified
as CASA (Current Account Savings Account) deposits.
Opening an SB account is beneficial for the customer as well as the Bank. Some of the
benefits are:
Benefits to the customer
1. Inculcates a habit of savings
2. Money is withdrawable on demand 24x7 with INB and ATM facility
3. ATM, Mobile banking and INB make it possible to not carry cash everywhere or more
than what is required in the pocket/ at Home.
4. There is no maximum limit of amount that one can save in the SB account (except in
special accounts).
5. While money is available for meeting daily expenditure, the surplus provides low but
steady interest. For higher interest the amount can be converted into Fixed
Deposits.
Benefits to the Bank
1. It provides stable deposit for the bank. It is imperative to open as large a number of
Savings Bank accounts as possible in order to mobilize stable deposits due to its
inherent restrictions on number of withdrawals for encouraging habit of savings.

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 2. It is a source of low cost deposit. With large number of SB accounts higher deposits
can be garnered, which, if deployed properly could lead to higher Net Interest
Margin and higher profit for the bank besides improving other ratios like Business
per Employee etc.
3. A Savings Bank account could be the beginning of a fruitful lifelong banking
relationship with a customer (Banker for Life!) e.g. if you open a minors' savings
account and he or she continues to bank with us over period of years. After he / she
becomes an adult we should be able to take care of all their banking needs and thus
expand our deposit base, loans and other income portfolio.
Who can open SB account? - A Savings Bank Account may be opened by
1. A single person in his or her name or two persons in their joint names, payable to:
i) Either or Survivor
ii) Former or Survivor
iii) Latter or Survivor
iv) Both or Survivor
v) Both jointly
2. By more than two persons in their joint names payable to :
a. All of them or the survivors or the last survivor
b. Any one or more of them or survivors or the last survivor
c. A particular person during his/her lifetime or survivors
Please note that in case of HUF a SB account can be opened in the name of the head of the
family i.e. karta—provided that the HUF is not engaged in any business activity.
Opening an SB account
With the improvement in technology and Universal Identification in India (Aadhar) a SB
account can be opened through multiple channels as under:
1. Through Account opening form (AOF) - Bank has a standardised account opening
form that has been revamped in light of instructions related to C-KYC. The customer
can simply fill and submit the AOF at the branch with KYC documents or C-KYC and
photographs. After opening of accounts, customers will be given a hard copy of the
abridged version of Savings Bank Rules.
2. Online – the customer can login to the online account opening page on the bank
website and fill the data. Thereafter he / she can approach the branch at any
convenient date and time within 30 days with the printout of AOF and KYC
documents (if not C-KYC). The online system generates a Temporary Customer
Reference Number (TCRN) once the customer information section is filled and
Temporary Account Reference Number (TARN) will be generated once the account
information section is filled. The customer should note and bring these numbers to
the branch, although TCRN is also sms to the customer.
Once the customer signs the printout of the AOF, after verification of the documents
or C-KYC, the account can be opened 'with Welcome Kit' or 'without Welcome kit'.
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 For 'with welcome kit' opening start with “Amend Personal Customer” in the CBS
and for 'without Welcome Kit' start with “Create Personal Customer” in the CBS.
In case the customer has not brought he printed AOF, the branch staff will take the
printout at the branch by visiting 'Print/Save Account Opening Form' in the Online
Account Application available in onlinesbi.com/ bank.sbi.in and enter the TARN
given by the applicant(s) and date of birth of the first applicant in the field provided
there. Please do not turn away the customer to get the print out him or herself.
3. Through YONO app (INSTA DIGITAL Savings Account) – YONO stands for You
Only Need One. This app is part of Project Lotus to simplify the procedures at the
branch. A customer can download this app and register as new customer and can
open a singly operated account through YONO. It needs to provide details including
Aadhar and PAN / Form 60 (These documents are mandatory for opening the
account through YONO). Nomination is mandatory in the account and the customer
needs to visit the branch selected for biometrics verification only once before the
account becomes operational. Other features of the Digital Account are given later
in the chapter.
4. Through TAB banking – in this case the authorised branch official visits the customer
at his / her place and obtains the customer details, photograph and copy of KYC
documents (or C-KYC) in the TAB. The photograph and documents are scanned
and uploaded through the TAB. TARN and TCRN are generated through this
process which is communicated to the customer. The customer also signs a pre-
printed Account opening declaration form. Thereafter account is opened with
welcome kit or without welcome kit as above. The non-personalised welcome kit is
dispatched to the customer immediately after opening the account in CBS else if
personalised welcome kit is required the account will be processed accordingly by
the branch. The customer details can also be captured in the offline mode in the TAB
which can later be uploaded once the system / location is online.
5. SBI In-touch branches – A person can open an account at any of the Intouch
branches in the city. The process is simple and technology driven. The customer has
to visit any of the In-touch branches with KYC documents.
Please note that Accounts are permitted to be opened and operated in Hindi or Regional
languages. An account in the name of a person not knowing either the official language of
the State or English or Hindi can be opened on the same terms and conditions as for an
illiterate person
For detailed KYC guidelines please refer to the chapter on KYC, AML and FATCA. However
we reiterate here the instructions for opening of accounts w.e.f 1st June 2017.
1. In case of an individual, who is eligible to be enrolled for an Aadhar number, he / she
shall submit the Aadhar number issued by UIDAI and PAN or Form 60 at the time of
opening an account. All new accounts are required to be opened with Aadhar and
Permanent Account Number (PAN) or Form 60 as KYC document.
2. Where Aadhar number has not been assigned to an applicant, the applicant shall
furnish proof of application of Enrolment for Aadhar and in case PAN is not
submitted, one certified copy of an Officially Valid Document (OVD) along with Form
60 is required.
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 3. In case the applicant is not a resident or is a resident in the states of Jammu and
Kashmir, Assam or Meghalaya and does not submit the PAN, he / she shall submit
one certified copy of OVD containing details of his identity and address and one
recent photograph.
4. The extant instructions regarding opening of small account will continue.
5. For Low-risk accounts, identity cards with applicant's photograph issued by
Central/State Govt. Departments/Statutory/Regulatory authorities/Public Sector
Undertakings to their employees are also deemed to be “Officially Valid” documents
for the purpose of KYC compliance. Letter issued by a Gazetted Officer with a duly
attested photograph of the person pasted on it can also be accepted for opening of
Low Risk accounts.
Following accounts are classified as “Low Risk”
Sl.no. Account (Product name)
1 Pehla Kadam
2 Pehli Udaan
3 Pehla Kadam (Staff)
4 Defence Salary Package (DSP)
5 Defence Salary Package (DSP) Navy-Sailors (minors)
6 Indian Coast Guard Salary Package (ICGSP)
7 Paramilitary Salary Package (PMSP)
8 Railway Salary Package (RSP)
9 State Government Salary Package (SGSP)
10 Police Salary Package (PSP)
11 Central Government Salary Package (CGSP)
12 BSBDA - Small Account
Please note that
1. Only one documentary proof of address (either current or permanent) shall be
submitted by the customer while opening a bank account or while undergoing
periodic updation. Customers are not unnecessarily asked to submit additional
proofs of addresses for current addresses in cases where proofs of addresses for
permanent addresses are already available.
2. In case the proof of address furnished by the customer is not the local address or
address where the customer is currently residing, the Bank may take a declaration
of the local address on which all correspondence will be made by the Bank with the
customer. No proof is required to be submitted for such address for
correspondence/local address. This address may be verified by the bank through
'positive confirmation' such as acknowledgment of receipt of (i) letter, cheque books,
ATM cards; (ii) telephonic conversation; (iii) visits; etc. In the event of change in this
address due to relocation or any other reason, customers may intimate the new
address for correspondence to the bank within two weeks of such a change
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3. In case the address mentioned as per 'proof of address' undergoes a change, fresh
proof of address should be submitted to the branch within a period of six months
4. Where the accounts are classified as Low Risk and simplified measures' are applied
for verifying, for the limited purpose of, proof of address the following additional
documents are deemed to be Officially Valid Documents:
a. Utility bill, which is not more than two months old, of any service provider
(electricity, telephone, post-paid mobile phone, piped gas, water bill);
b. Property or Municipal Tax receipt;
c. Bank account or Post Office savings bank account statement;
d. Pension or family Pension Payment Orders (PPOs) issued to retired
employees by Government Departments or Public Sector Undertakings, if
they contain the address;
e. Letter of allotment of accommodation from employer issued by State or
Central Government departments, statutory or regulatory bodies, public
sector undertakings, scheduled commercial banks, financial institutions and
listed companies. Similarly, leave and license agreements with such
employers allotting official accommodation; and
f. Documents issued by Government departments of foreign jurisdictions or
letter issued by Foreign Embassy or Mission in India
5. In case the person who proposes to open an account does not have an OVD as
'proof of address', such person shall provide OVD of the relative and a declaration
from the relative that the said person is a relative and is staying with him/her shall be
obtained
e-KYC is accepted as an Officially Valid Document under PML Rules. The customer
has to input his / her Aadhar biometrics and Aadhar number at the branch while
opening an account and e-KYC certificate is printed. This certificate needs to be
signed by the Customer.
The KYC details need to be updated at the following periodicity

Risk Category Periodicity Fresh proof of identity and address

in years
Low Risk 10 Not required. A self- certificate should suffice.
In case of change of address certified copy of
proof of address to be submitted.
Medium Risk 8 Required
High Risk 2 Required

In case of non-compliance of KYC in the existing accounts, a notice is to be issued with a

response time of 3 months to the account holder. If response is not forthcoming then a
reminder will be sent after 3 months for a further period of 3 months. Thereafter the account
will be partially frozen (debit transactions are blocked). After another 6 months of imposing
initial 'partial freezing' all the transaction will be blocked rendering them inoperative. It will
be open for the branches to close the accounts of such customers thereafter.

227
The notices are generated by GITC and placed in the 'Report Folders' of the branches.
Branches have to print and dispatch.
The features of some of the types of SB accounts are as under:
Min. Max.
SNo Product Period Others Remarks
Deposit Deposit

228
 Min. Max.
SNo Product Period Others Remarks
Deposit Deposit

229
230
Salary Silver Gold Diamond Platinum
Package
CSP ## Gross Monthly salary Gross Monthly salary Gross Monthly Gross Monthly Salary
between Rs.5,000/ - between Rs.20,000/ - Salary between above Rs.1,00,000/-
and Rs.20,000/- & Rs.50,000/- Rs.50,000/- and
Rs.1,00,000/-
SUSP Between Rs.5,000/ - Between Rs.20,000/ - Between. 50,000/ - Promoters/Founders/
and & to 100,000 Co-founders of Start -ups
Rs.20,000/- Rs.50,000/- &/or Employees >
100,000
SGSP Class 4 employees like Class 3 Employees Class 2 employees Class 1 and Executive
Peons, sub-staff like Teachers, Lower i.e. Gazetted Grade 1 like
Divisional Clerks, Officers, Asst Commissioner,
Upper Divisional Directors etc Collectors, HOD,
Clerks, excl. Police Directors, PS, Secretary

CGSP Gross Monthly Gross Monthly Class I Officers, Director, Joint Secretary,
Salary between Rs. Salary between Rs. Under Secretary, Addl. Secretary, Spl.
5,001 and Rs. 20,000 20,001 and Joint Director, Dy. Secretary, Cabinet
Rs. 50,000 Secretary or Secretary or
Employees with Employees with Gross
Gross monthly Monthly Salary above
Salary between Rs. Rs. 1,00,000
50,001 and Rs.
1,00,000
RSP Group “D” Office Supervisor/ Junior Principal HOD, General
(Peons, Gangmen, Superintendent Administrative Manager, Member of
Junior Clerk, Senior Junior Scale Officer, Officer ( Grade Railway Board
Clerk Senior Scale officer Officer) Selection
Grade (JAG
Officer) HOD
PSP PI, PSI, ASI, Police ACP/ Commissioner/ Commissioner / DIG, IGP Addnl. DGP
Head Constable, Sr. SP, Addnl. DCP SP, Additional and DGP
Police Constable, Commissioner Commissioner /
Police Constable Senior SP
Steno, Clerical Staff, Registrar Junior Staff DG, IG, Addl.
Asst. Grade -2, Driver, (Lekhaadhikari), MTI, Officer, District Commandant General,
Hawaldar, Arakshak, MTO, Asst. Quarter Commandant, Senior Staff Officer
Peon, Sepoy, Aradali, Master, Office
Follower Superintendent, Asst.
Superintendent
DSP - JCOs & Other Ranks Lieutenant, Captain Lt Colonel and Brigadiers ,
Army , Major Colonel MajorGeneral, Lt.
General ,General

DSP - Sea II, Sea I, Leading Sub Lieutenant, Commander, Commodore, Rear
Navy Seaman, Petty Officer, Lieutenant and Captain Admiral, Vice Admiral
Chief Petty Officer, Lieutenant and Admiral
Master Chief Petty Commander
Officer-II and Master
Chief Petty Officer-I
Those sailors who join Navy before they attain majority, DSP accounts can be opened without the Overdraft
facility and Personal Accident Insurance Cover (not included in MOU and not covered as of now). The relative
customer type code would be 10208- and the Product Code would be 1092-1471

231
DSP- Air Air Craft Man Flying Officer, Flight Wing Commander, Air Commodore , Air
Force ,Corporal, Lieutenant, Group Captain Vice
Sergeant, Junior Squadron Leader Marshal ,Air Marshal ,
Warrant Air ChiefMarshal
Officer, Warrant
Officer,
Master Warrant
Officer, Non
Combatants (enrolled)
DSP- Personnel Asst. Engineer/ Superintendent Chief Engineer,
GREF Below Officer Asst. Administrative Engineer/ Joint Additional
Rank Officer, Director(Administra Director General,
Asst.ExecutiveEngine tion), Director
er/Administra Superintendent General
TiveOfficer/ Medical Engineer (Selection
Officer II, Executive Grade)/ Director
Engineer/Senior (Administration)
Administrative
Officer/ Medical
Officer I
Note: Please note that unlike in DSP Army where ranks are used as ‘Title’ while creating Customer Type, under
DSPGREF/ BRO the title should be Shri/ Smt/ Kum etc and not the Ranks. Please also note that the product
code is similar to that of DSP Army and the description thereof also will be corresponding to DSP Army.

Indian Naviks, Uttam Naviks, Deputy Commandant Director General,

Coast Pradhan Naviks, Commandant, (JG), Commandant Additional
Guards Adhikari,Uttam Assistant Director General,
Adhikari, Pradhan Commandant Inspector General,
Adhikari, Yantrik, Deputy Inspector
Uttam Yantrik, General
PradhanYantrik,
Sahayak
Engineer,Uttam
Sahayak Engineer,
Pradhan Sahayak
Engineer, Enrolled
Followers.
DSP Buglers Riflemen and Deputy Commandant, NA
Assam Mule Drivers, Lance Commandant, Second-in- Personnel at this
Rifles Naik, Nalband, Assistant Command level are being
Havaldar, Warrant Commandant (Equivalent to deputed from Army
Officer, Havaldar (Equivalent to Lt Major, Lt Col and and DSP Army
Major, and Capt in the Col in the would be offered to
Naib Subedar, Army) Army) them.
Subedar, Subedar
Major
PMSP Subedar Major, Deputy Commandant, Director General,
Inspector, Sub - Commandant, Second-in- Special Director
Inspector, Assistant Assistant Command General, Additional
Sub Inspector, Head Commandant Director General,
Constable, Constable, Inspector General,
Enrolled follower Deputy Inspector
General
The DSP packages are offered based on their ranks, Civilians of these forces are covered under Central
Government Salary Package (CGSP).

232
Features of CSP

Variant Silver Gold Diamond Platinum

Min. Balance NIL. No penalty for non-maintenance of Monthly Average Balance (MAB)
## Rs.1 lacs Rs.5 lacs Rs.15 lacs Rs.20 lacs
Personal ü Cost of Plastic Surgery / Burn (only for Gold, Diamond, Platinum) - Rs. 2 lakh
Accident ü Transportation of Imported Medicine (only for Gold, Diamond, Platinum) - Rs.
Insurance 1,00,000/-
(Death) cover ü Death after Coma after accident (more than 24 hrs) - Rs. 2 lakh
with add on ü Air Ambulance – Rs. 5 lakhs
covers for ü Higher Education (only Graduation)- 10% of PAI cover, maximum Rs. 2 lakh
Primary Salary ü Girl Child Cover-Marriage (18-25 age) – 10% of PAI cover, maximum Rs. 2 lakh
Account holders ü Family Transportation - Rs. 20,000/ - (cost of travel incurred by immediate 2
family members to reach place of accident)
ü Repatriation of mortal remains - Rs. 20,000/-
ü Ambulance charges-Rs. 1,500/-
## Additional NA Rs.5 lacs Rs.20 lacs Rs.30 lacs
Air Accident @
@ only where Air Ticket has been purchased by debit to salary account
Insurance
using State Bank Debit Card / INB
(Death) Cover

## Conditions apply. Valid till 03.01.2019.

ATM cum Debit Free. Domestic Free. Free. Free International##

Card Classic Debit International ## International ## Platinum Debit
Card. Gold Debit Card. Gold Debit Card. Card. Rs.2 lacs limit for
Rs.50,000 limit Rs.2 lacs limit for Rs.2 lacs limit for Point of Sale/
for Point of Point of Sale/ Point of Sale/ Merchant
Sale/Merchant Merchant Merchant Establishments
Establishments Establishments Establishments
Transactions at Any number of Any number of Any number of Any number of
ATM transactions transactions transactions transactions subject
subject to a subject to a subject to a to a maximum limit of
maximum limit maximum limit of maximum limit of Rs.1,00,000/- per day in
of Rs.40,000/- Rs.50,000/- per Rs.50,000/- per India and Foreign
per Day. day in India and day in India and Currency
Foreign Currency Foreign Currency equivalent of Daily
equivalent of equivalent of Rupee limit abroad
Daily Rupee limit Daily Rupee limit
Abroad abroad
ü ## will be issued ONLY to those Salary Package account holders of Gold,
Diamond or Platinum variant who consent to issuance of International Debit Card
ü No annual maintenance charges.
ü Add on card for spouse free of cost for joint account holder

233
Employee Available
Reimbursement Additional account in the name of the employee for crediting reimbursements.
(Current) Account No Minimum balance
No Account keeping charges
No AMC
Can be linked with single ATM card
Internet Banking Free facility offered from SBI.
Charges applicable to third party sites like Railways etc. payable
Mobile Banking Free facility offered from SBI
Core Power: Waived Waived Waived Waived
Charges on Non Free (Self only) Free (Self only) with Free (Self only) Free (Self only) with no
Home branch max no upper cap on with no upper cap upper cap on amount
transaction Rs.50,000/- per amount. on amount.
Cash Deposit: day
Cash Withdrawal:
Multi City Cheques Personalized cheque book available to all accounts.
(Payable at par at Unlimited free for all variants
all Branches) Cheque Leaf charges*: NIL
Payment Charges : NIL
(*Except for bulk requirement of cheques exceeding 25 leaves at single instance in
a month).
RTGS/NEFT Charges waived for transactions Charges waived for transactions originated
originated only through online platform through online platform or originated at the
branch
Charges on issue of Waived if issued through transfer from CSP account
Demand Draft No restrictions on number of free drafts
Not applicable for cash entries
SMS Alert Charges Waived
Charges on issue of Normal Rates Waived
Duplicate A/c
Statement For CSP/ SGSP/ SUSP :
Through online channel : Waived for all variant
Through Branch Channel : Waived only for Diamond & Platinum variant
Easy Overdraft maximum of maximum of maximum of maximum of
Up to 2 Month’s Rs.40,000/- Rs.75,000/- Rs.1,50,000/-. Rs.2,00,000/-
Net salary, (subject Rate of interest: As applicable from time to time.
to min residual Adjusted from the next salary (ies) within a period of 6 months
service of 6 Mths).
Savings Plus Available on request from customer only
(Auto Sweep Threshold Amount: Rs.35,000
Facility) TDRs/STDRs to be created for a minimum amount of Rs.10,000 (and in multiples of
Rs.1,000) in any one instance.
Concession in NIL NIL 15% concession 25% concession
locker charges
Passbook Available for all accounts.
Free updating at Non Home Branches
For complete details Please refer to the Master Circular

234
Features of DSP

Variant Silver Gold Diamond Platinum

Min. Balance NIL.

Lifetime Unique Available
Account Number
ATM cum Debit Free Domestic International # Gold Debit Card International # Platinum
Card Classic Free Debit Card
Debit Card No annual maintenance ChargesAdd on Free
No annual card for spouse free of costfor joint No annual maintenance
maintenance account holder. charges
charges Add on card for spouse
Add on card for free of cost for joint
spouse free of account holder
cost for joint
account holder
# to be issued to those DSP/PMSP/ICGSP account holders who consent
to issuance of International Debit Card
Transactions at Any number of Any number of Any number of Any number of
ATM transactions Transactions transactions transactions subject
subject to a subject to a subject to a to a maximum limit of
maximum limit maximum limit of maximum limit of Rs.1,00,000/- per day in
of Rs.40,000/ - Rs.50,000/- per Rs.50,000/- per India and For eign
per Day. day in India and day in India and Currency
Foreign Currency Foreign Currency equivalent of Daily
equivalent of equivalent of Rupee limit abroad
Daily Rupee limit Daily Rupee limit
Abroad abroad
Unlimited free transactions across all Bank ATMs
Rs 50,000 limit Maximum Rs 2 lacs Rs 2 lacs limit for Rs 2 lacs limit for
for limit for Point of Point of Sale/ Point of Sale/
Point of Sale/ Sale/ Merchant Merchant
Merchant Merchant Establishments Establishments
Establishments Establishments
Personal Rs 5 lakh Rs 5 lakh Rs 15 lakh Rs 20 lakh
Accident
Insurance
(death)
Cover*
Air Accidental NA Rs 5 lakh Rs 20 lakh Rs 30 lakh
Insurance
(death)
cover*

235
 Add on Cover ü Cost of Plastic Surgery / Burn (for Gold, Diamond, Platinum)– maximum Rs. 1
(Applicable in lakh
case ü Transportation of Imported Medicine (for Gold, Diamond, Platinum) - maximum
of Accidental Rs. 50,000/-
Death ü Death after Coma after accident (more than 24 hrs) - Rs. 1 lakh
ü Air Ambulance – maximum Rs.5 lakhs
ü Girl Child Cover:
· Higher Education (only Graduation)- 10% of PAI cover, maximum Rs. 1
lakh
· Marriage (18-25 age) – 10% of PAI cover, maximum Rs. 1 lakh
ü Family Transportation - Rs.20,000/- (cost of travel incurred by immediate 2
family members to reach place of accident)
ü Repatriation of mortal remains – maximum Rs.10,000/-
Internet Banking Free. Charges applicable to third party sites like IRCTC etc payable
Multi City Free
Cheques
(Payable at par
at all
Branches)
Easy Overdraft maximum of maximum of maximum of maximum of
Up to 2 M onth’s Rs.40,000/- Rs.75,000/- Rs.1,50,000/-. Rs.2,00,000/-
Net salary, Adjusted from the next salary (ies) within a period of 6 months
(subject to min
residual service of
6 Mths).
Savings Plus Available on request from customer only
(Auto Sweep Threshold Amount: Rs.35,000
Facility) TDRs/STDRs to be created for a minimum amount of Rs.25,000 (and in multiples of
Rs.1,000) in any one instance.
Concession in NIL NIL 15% concession 25% concession
locker charges
Cash withdrawal Rs. 50,000/- per day Free (self only) with no upper cap on amount
free (self only)
For complete details Please refer to the Master Circular
Besides the above there are concessions on various loans to the Defence Salary Package.
For details please refer to the master circular.

Product Remarks

Life Cover available upto 55 years of age for Rs. 2 lacs at

PMJJBY - Pradhan Mantri
a yearly prem ium of Rs.330/ - from SBI Life Insurance Co.
Jeevan Jyoti Bima Yojana
Ltd.

PMSBY - Pradhan Mantri Accidental Death Cover available for 18 -70 years old -
Suraksha Bima Yojana Rs.2 lacs available from National Insurance Co. Ltd.

236
 Product Min Deposit Max Deposit Remarks
Period

Minor Accounts (Upto 10 years
Pehla of Age) to be operated by
Kadam Guardian/Natural
Guardian/Mother as Guardian
Minor Accounts (above 10 years
Pehli of Age), Singly operated or
Udaan jointly with NG/G/Mother as
Guardian
Minor's Photo embossed ATM -cum-Debit Card. Sbi Life
Product - Smart Scholar and Smart Champ. Cap on
Balance - Min: 5 lacs, Aggregate : 10 la cs, INB/POS
per day : Rs. 5,000, Mobile : Rs.2,000, 10 Chq leaves,
OD - 2 months salary in case of Salary Package, Auto
Sweep - Min Threshold:Rs.20,000; Sweep in multiple
of 1000/ - with a minimum of 10,000/ -, PAI by SBI
General.

Eligibility : All Indian Citizens
aged between 18 to 40 yrs.
APY - Atal
Aadhaar will the primary KYC.
Pension
APY is focussed on all citizens in
Yojana
urorganized sector. The scheme
is administered by PFRDA.
Guaranteed minimum monthly pension for the
subscribers ranging between Rs. 1000 and Rs. 5000
per month by the Government. The exit from APY is
permitted at the age of 60 yrs with 100% annuitisation
of pension wealth. On exit, pension would be available
to the subscriber.

Age : 18- 60 years, 6 months old

account, Account seeded with
SB-OD Period of Loa n : 36 months, Quantum : 50% of credit
Aadhaar. Rs.30,000/ - life cover
under summations during the last 6 months, Average
available from LIC (Aam Aadmi
PMJDY Balance - 4 months, Rs.5000/- whichever is less
Bima Yojana), 2 lacs - Personal
Accident Cover

The master circular on Savings Bank Account NBG/PBU/LIMA-SB/17/2017-18 dated 04-

10-2017 lists the process / precautions to be followed in case of Minors, Illiterate Persons,
Visually Challenged Persons, Autism, Cerebral Palsy, Mental Retardation, Multiple
Disabilities, Non Individuals, HUF and Leprosy. The instructions are reproduced as under:
ACCOUNTS OF MINORS
a. Minors can open Savings Bank accounts either singly or jointly with his/ her
guardian or by guardian alone on behalf of his/ her minor ward. Mothers can also be
a Guardian of the minor for opening of Bank accounts. Mothers, however, will be
guardian for the limited purpose of operation of the account with their minor children.
b. We cannot open joint accounts with either or survivor/former or survivor mandate
where one account holder is a minor and the other one is major who might not be a
guardian.
c. Minors who can adhere to uniform signature and are not less than ten years old can
open accounts in their single name.
d. The minors' accounts opened are not allowed to be overdrawn and operating staff
members will ensure that accounts always remain in credit. In this way, the minors'
capacity to enter into contract would not be a subject matter of dispute.

237
 e. If minor is less than 10 years of age, ID proof and address proof of the person who
will operate the account shall be obtained with the Account Opening Form. In cases
where minor can operate the account independently i.e. he is of 10 years and above
and can sign uniformly, KYC documents for identification and address verification as
in the case of any other individual would apply. Maximum Deposits that can be
accepted in the SB accounts of minors in single name is Rs.10,00,000/-. and with
guardian is Rs. 20,00,000/- A separate dispensation is available for Pehli Udaan
accounts.
f. Deposits in the name of minors, where guardians operate the account, photograph
of guardians should be obtained.
g. In case of Savings Bank account in the name of minor, the minor has to complete
certain formalities on attainment of his majority. In the absence of completion of
these formalities, the Core Banking Solution (CBS) does not permit debits in the
account. On attaining majority, the following formalities are to be completed:
1. Erstwhile minor should confirm the balance in his/her account.
2. Submit fresh specimen signature, recent photograph, PAN card or Form 60
3. Declaration with the proof of majority for activation of the account as a major
account.
h. All branches should monitor these accounts (accounts where minors have attained
majority) from the daily report (depd0622.txt) sent to them by CBS. They should
intimate the account holders for visiting the branch for completion of formalities.
i. RBI has advised that banks can offer additional banking facilities to minors like INB,
ATM/Debit Card, Cheque book facility etc, subject to safeguards (risk perception).
Accordingly, the Bank has launched two specially designed products for minors,
namely “Pehla Kadam” and “Pehli Udaan”. Products features are stated above and
an undertaking is to be obtained from the guardians as per format given in the above
circular.
j. The accounts opened under the product Codes 'Pehla Kadam' or 'Pehli Udan' in the
name of minors, are treated as 'Low- Risk' Category and simplified KYC documents
may be obtained for opening of these accounts.
k. The risk category of existing accounts opened by minors either singly operated
(aged 10 yrs and above) or opened with Natural guardians/Guardians/mothers as
guardians (of any age) will continue as it is and existing KYC instructions will be
followed
ACCOUNTS IN THE NAMES OF ILLITERATE PERSONS
1. An illiterate person may open an ordinary Savings Bank account in his sole name or
jointly with other person(s). Where one of the depositors is literate a cheque-
operated joint account payable to 'any one, survivors or survivor' or 'either or
survivor', etc., may be opened in which event only the literate depositor will be
allowed to withdraw moneys from the account by means of cheques.
2. In the case of an illiterate person, the application form for opening of the account and
the relative cash deposit voucher should be filled in by the operator. The left-hand
238
 thumb impression of the depositor should be obtained on the account opening form
in the place provided for signature of the depositor and on the specimen signature
sheets in the presence of a supervising official authorized to sanction opening of
accounts who should attest the thumb impression in the same manner as the
specimen signatures. Brief details of one or two identification marks, if any, of the
depositor, such as a mole or scar, should be noted on the account opening form
under authentication of the authorized official
3. One copy of the photograph will be pasted on the account opening form and will be
authenticated by the authorized official in the same manner as the specimen
signatures, care being taken to see that part of the authenticating signature appears
on the account opening form and part on the photograph.
4. The authorized official will explain the implications and conditions for the operation
of the account to the illiterate depositor and append a certificate to the account
opening form for having done so. A prominent remark or by means of a rubber stamp
to indicate that the depositor is illiterate will be made on the account opening form
under the initials of a supervising official.
5. When an illiterate depositor calls on the Bank for depositing money into his account,
the operator should fill in the pay-in-slip. The depositor will affix his left-hand thumb
impression in the place provided for his signature. The authorized official will sign
the pay-in slip after personally ascertaining from the depositor the amount deposited
in the account and in token of having done so, affix his initials against the amount
mentioned in the pay-in slip.
6. Ordinarily, only personal withdrawals against production of the relative pass-book
will be allowed to an illiterate depositor. When he desires to affect a withdrawal he
should call at the Bank and present his pass-book to the operator. After the depositor
is identified on the basis of the photograph on the Bank's record and/ or the
identification marks, if any, recorded on the account opening form, the operator will
fill in the withdrawal order form for the required amount. The depositor will,
thereafter, affix his left-hand thumb impression on the face of the withdrawal order
form at the place provided for the signature of the depositor and also on the back of
the form. Before passing the withdrawal for payment, the passing official will arrange
to call for the depositor and, by personally referring to the photograph and/ or the
identification marks, if any, ensure that the withdrawal is being in fact made by the
depositor himself. He will also ascertain from the depositor the correct amount of
withdrawal and in token of having done so, affix his initials against the amount
mentioned in the withdrawal order form.
7. Account closure: The thumb impression of the depositor on the Savings Bank
account closing form will, in all cases, be witnessed by an independent witness
acceptable to the Bank. Also, the passing official will explain to the depositor in the
presence of the witness that no more money is due to the depositor from the Bank as
the entire balance including interest, if any, has been paid to him and that the
depositor ceases to have any claim on the Bank in regard to his deposit.
8. Accounts of illiterate depositors may be transferred, at their request, from one
branch to another like other accounts.

239
 9. Accounts in the names of persons who are deaf/dumb and also illiterate. In such
cases we can preferably open joint accounts to be operated jointly by the deaf dumb
illiterate along with his close blood relations. Where this is not possible, accounts
may be opened in the name of such persons as per the procedure laid down in the
preceding paragraphs.
ACCOUNTS IN THE NAMES OF VISUALLY CHALLENGED PERSONS
1. A Blind / visually challenged person can open ordinary or cheque operated deposit
account in his / her sole name or jointly with other person(s) or in the names of sole
proprietorship concerns / firms / partnerships where a Blind /visually challenged
person(s) is / are involved.
2. For opening Savings Bank account in the name of a Blind / visually challenged
person two copies of the recent photograph of the Blind / visually challenged person
should be obtained, one copy to be pasted on the account opening form and the
other on the pass book duly attested by the authorized official.
3. A prominent remark or by means of a rubber stamp indicating that the depositor is
Blind / visually challenged will be made on the account opening form and in the
system under the initials/authentication of a supervising official.
4. If a Blind / visually challenged person is illiterate, or literate but unable to sign
uniformly, his thumb impression should be obtained as a rule on the account
opening form, pay-in slips and the withdrawal order forms and all the other
precautions prescribed for the opening and conduct of accounts of illiterate
depositors will be followed.
5. However, if a Blind / visually challenged person is literate and he/she is in a position
to sign uniformly, he / she may put his signature on the account opening form, pay-in
slips and the withdrawal order forms.
6. In all cases where a withdrawal order form or a pay-in slip is presented by the Blind /
visually challenged depositor, a supervising official will ensure, after making enquiry
with the Blind / visually challenged person, that the correct amount has been entered
herein; in the case of withdrawals, a supervising official should satisfy himself that
the correct amount is paid. An official making verification of this nature will record on
the relative voucher the fact of having made the necessary enquiries.
7. Except for the extra care to be taken in handling cash payment to the Blind / visually
challenged depositor, all other rules relating to withdrawing amount through
withdrawal slip are the same for both the “literate depositors” and “literate Blind /
visually challenged depositors”.
8. When a Blind / visually challenged person is unable to be present personally for
withdrawal of money, his signature or thumb impression on letter of authority for
withdrawal indicating to the Bank as to who would receive the money from the Bank
should be duly attested by two persons known to the Bank or a Magistrate under his
court seal and the pass-book should accompany the letter of authority for such
withdrawal.

240
9. Self-Operated Cheque Facility Accounts of Visually Impaired persons: Blind /
visually challenged depositors, if they so desire, are allowed to operate their S.B.
accounts, through self-drawn cheques subject to the following:
a. If a Blind / visually challenged depositor is able to sign the cheques consistently.
OR
b. If the Blind / visually challenged depositor(s) feel(s) that his/her/their signature
may not exhibit consistency due to the impairment / some other infirmity and
do/does not mind branding of rubber stamp “CARE – Depositor Blind / Visually
Challenged”, in order to avoid the 'cheque being returned unpaid' on account of
'difference in the signature', in such cases, the depositor on receiving the cheque
book from LCPC, should bring it to the branch and make a written request for
branding of cheques with a caution stamp and / or attestation of the thumb
impression affixed on the cheques.
c. The Bank official with the written consent of the customer shall arrange for
branding of the caution stamp "CARE-DEPOSITOR BLIND / VISUALLY
CHALLENGED" on the cheque leaf to alert the bank officials /operational staff.
d. The thumb impression of the account holder affixed on the cheque leaves should
be duly authenticated by the bank official under his Signature and SS number
along with the bank stamp/seal on the bottom centre of cheque, (as per the
prescribed format given with the circular).
e. To enlarge the scope of banking facilities to the Blind / visually challenged
persons, they may be allowed to issue “Post-dated cheques” to banks and
financial institutions. Crossed cheque book for specific purpose like payment of
loan, utility bills etc. may be issued to the Blind / visually challenged depositors, if
requested. Or else, the cheques should be crossed at the time of issue.
f. In case of 'self-operated cheque facility account' of Blind / visually challenged
depositors, the third party cash payment of self-drawn cheques is permitted at
Home branches only.
g. On the request of a Blind / visually challenged account holder, the Bank should
issue cheques in the name of the specified payee to make periodic payments for
the retail loans, utility bills, etc. Bank official will facilitate in filling up the cheque in
the presence of the Blind / visually challenged account holder.
h. At the time of issuing such cheque(s), thumb impression of the account holder
should be duly affixed on the cheque and authenticated by the bank official under
his signature and SS No. along with the bank stamp, where Blind / visually
challenged depositor is unable to sign consistently.
i. Where Blind / visually challenged depositor is unable to sign consistently,
Cheques drawn under his/her signatures shall be dishonored when presented
for payment in case his/her thumb impression affixed on the cheque is not
attested by the Bank official.
j. For cash withdrawals, the Blind / visually challenged person should personally
present herself/himself before the Bank official who will facilitate in filling up the
cheque.
241
 k. The Blind / visually challenged account holder(s)/ prospective customers need
to be informed/explained about his/her rights and liabilities before/at the time of
opening the account, by reading out to them about his / her rights and liabilities
under the arrangement as carried in Deposits Annexure III & IV of the master
circular as applicable
l. Declaration on prescribed Format Annexure III & IV (given in the master circular)
duly signed by the account holder(s), should be obtained in duplicate. One copy
filed separately at the Branch, shall remain in the custody of the Division/Branch
Manager, whereas, the duplicate copy shall be annexed to the account opening
form when forwarding it to the LCPC.
Ÿ m. The Blind / visually challenged person may operate the account singly (i.e.
self-operated or through a power of attorney) or jointly with any other person as
given below:
Ÿ Operation by cheque in the Blind / visually challenged depositor's
account in the sole name may continue to be permitted, under the
signature of a duly constituted 'power of attorney' of the account
holder.
Ÿ Where the depositor declines to operate her/his account in the 'sole
name' through a power of attorney and insists on self- operated
cheque facility account, her/his request may be acceded to as per the
terms and conditions of Self Operated Cheque Facility enumerated
earlier.
OPERATION BY CHEQUE IN THE JOINT ACCOUNT OF BLIND / VISUALLY
CHALLENGED DEPOSITOR(S)
1. Where one of the depositors is Blind / visually challenged person, a joint account, to
be operated by 'either or survivor' or 'anyone of us or survivor(s)' may be opened.
2. The Blind / visually challenged depositor can operate the account through use of
self-operated cheque facility as per the terms and conditions of self-operated
Cheque Facility enumerated above, while the joint account holder, who is not Blind /
visually challenged / is allowed to operate on the account by means of cheques
normally.
3. In case, both / all the joint account holders are Blind / visually challenged, then the
account will be operated as under :
a. Under the duly constituted attorney of the Blind / visually challenged joint
account holders.
b. Where the Blind / visually challenged depositors/account holders decline to
operate their cheque facility account in joint names through a 'power of attorney'
and insist on 'self / jointly operated cheque facility account', their request may be
acceded to, as per the terms and conditions of Self Operated Cheque Facility
accounts as enumerated earlier.

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ACCOUNTS OF PERSONS WITH AUTISM, CEREBRAL PALSY, MENTAL
RETARDATION AND MULTIPLE DISABILITIES
Branches should give proper guidance to the Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities. Branches should ensure that the
guardians/managers of the disabled persons do not face any difficulties in dealing with the
Banking facilities.
a) The Mental Health Act, 1987 provides for a law relating to the treatment and care of
mentally ill persons and to make better provision with respect to their property and
affairs. According to the said Act, “mentally ill person” means a person who is in need
of treatment by reason of any mental disorder other than mental retardation.
Sections 53 and 54 of this Act provide for the appointment of guardians for mentally
ill persons and in certain cases, managers in respect of their property. The
prescribed appointing authorities are the district courts and collectors of districts
under the Mental Health Act, 1987.
b) Branches should seek for appointment of a guardian only in such cases, where they
are convinced on their own or based on documentary evidence available, that the
concerned person is mentally ill and is not able to enter into a valid and legally
binding contract.
c) The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999 provides for a law relating to certain
specified disabilities. Clause (j) of Section 2 of that Act defines a “person with
disability” to mean a person suffering from any of the conditions relating to autism,
cerebral palsy, mental retardation or a combination of any two or more of such
conditions and includes a person suffering from severe multiple disabilities. This Act
empowers a Local Level Committee to appoint a guardian, to a person with
disabilities, who shall have the care of the person and property of the disabled
person.
d) Branches are advised to take note of the legal position stated above and may rely on
and be guided by the orders/certificates issued by the competent authority, under
the respective Acts, In case of doubt, care may be taken to obtain proper legal
advice.
OPENING OF BANK ACCOUNT BY PATIENTS AFFECTED BY LEPROSY
There is no bar for leprosy patients in opening of accounts. However, if such patients are
incapacitated, Bank's extant Instructions/procedure for Operation of Accounts by Old &
Incapacitated Persons would apply, which read as under:
1. 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.
2. Where the customer cannot even put his / her thumb impression and also would not
be able to be physically present in the bank, a mark can be obtained on the cheque
/withdrawal form which should be identified by two independent witnesses, one of
whom should be a responsible bank official.

243
 3. The customer may also be asked to indicate to the bank as to who would Withdraw
the amount from the bank on the basis of cheque / withdrawal form as obtained
above and that person should be identified by two independent witnesses. The
person who would be actually drawing the money from the bank should be asked to
furnish his signature to the bank.
S.B. ACCOUNTS OF NON-INDIVIDUALS
1. No business or trading concern (proprietary, partnership or corporate body) can
ordinarily open a Savings Account.
2. The primary objective of a Savings Bank account is to save; hence bank can close
any such account which is being used for purpose other than savings.
3. Government Departments or Bodies, who for performance of their functions depend
on Budgetary Allocations, cannot open Savings Bank Accounts.
Ÿ Examples are Municipal Corporations or Committees, Panchayat Samiti,
State Housing Boards, Water & Sewerage Boards, State Text Book
Publishing Corporations or Societies, Metropolitan Development Authorities,
State/District level Cooperative Housing Societies, etc., any political party or
any trading/business or professional concern, whether such concern is a
proprietary or a partnership firm or a company or an association.
Ÿ Any institution, irrespective of the fact that it is a Government Department,
Semi-Government or Quasi-Government Body, which receives grants, loans
or subsidies from the Government is said to depend on budgetary allocation.
Government grants to institutions are also in the nature of the budgetary
allocation.
Ÿ Government's subscription to the share capital of these institutions also forms
part of the budgetary allocation.
Ÿ A political party herein above will mean an association or body of individual
citizens of India, which is, or is deemed to be registered with the Election
Commission of India as a political party under the Election Symbols
(Reservation and Allotment) Order, 1968 as in force for the time being.
Ÿ Local bodies like Municipal Corporations, Zilla Parishads, Taluka Panchayats
and Gram Panchayats are given grants in the nature of 'compensation and
assignments', which also form part of budgetary allocation, although taxes
collected by these bodies are not covered under the definition and scope of
budgetary allocation of Central and State Governments
4. Limited' or 'Private Limited' Companies are not eligible to open Saving Bank
Account
5. The following agencies / Organisations are, exempt from the above rules and hence
Savings Bank can be opened in their names
Ÿ Primary Co-operative Credit Society which is being financed by the Bank
(PACS)
Ÿ Khadi and Village Industries Boards (KVIB)

Ÿ Agriculture Produce Market Committees

244
 Ÿ Societies registered under Societies Registration Act, 1860 or any other
corresponding law in force in State or a Union Territory except societies
registered under the State Cooperative.
Ÿ Companies governed by the Companies Act, 1956 which have been licensed
by the Central Government under Section 25 of the said Act, or under the
corresponding provision in the Companies Act, 2013 (Section 8) and
permitted, not to add to their names the word "Limited" or the words "Private
Limited".
Ÿ Institutions and Trusts other than those mentioned above and whose entire
income is exempt from payment of income tax under Income-Tax Act, 1961.
Ÿ Government Departments/ bodies/ agencies in respect of grants/ subsidies
released for implementation of various programmes /schemes sponsored by
Central Government/ State Governments subject to production of an
authorisation from the respective Government Departments to open Savings
Bank accounts.
Ÿ Development of Women and Children in Rural Areas (DWCRA).
Ÿ Self-help Groups (SHGs), registered or unregistered, which are engaged in
promoting savings habit among their members.
Ÿ Farmers' Clubs – Vikas Volunteer Vahini (VVV).

Ÿ Savings account can be opened (subject to approval) in the names of -

Accounts may in approved cases, be opened in the names of Associations,
Clubs, Kendriya Vidyalaya, Regimental Funds or Military Units or other
similar non-trading institutions, like Prajapita Brahma Kumaris Ishwariya
Vishwa Vidyalaya, Rajayoga Education and Research Foundation for
purpose of depositing their savings, provided their byelaws, rules etc. are
acceptable to the Bank and are strictly adhered to. Their income should also
be exempt from Income Tax
SB ACCOUNT IN THE NAME OF HINDU UNDIVIDED FAMILY
Savings Bank accounts can be opened in the name of Hindu Undivided family also. However,
if the HUF is engaged in any business activity only current account will be opened. The
following documents will be obtained for opening of HUF accounts. Normally eldest member
of the family will operate the account as Karta of the family. The following documents are to be
obtained for opening of Savings Bank Account in the name of Kartha of HUF.
1. PAN card of HUF.
2. KYC documents and Customer Information Sheet as of Karta.
3. Prescribed Joint Hindu Family letter signed by all adult coparceners COS- 38
(format placed at Annexure-V of the master circular as mentioned above).
4. Declaration from the Karta that - the depositor is the Karta of the joint family and the
deposit belongs to HUF and Identity of Adult Co-parceners.
5. Account Opening Form (AOF) for Customers other than individuals is to be used.

245
INOPERATIVE ACCOUNTS - Savings Bank Accounts are treated as inoperative if there
are no transactions in the account for over a period of two years. For the purpose of
classifying an account as inoperative both type of transactions i.e. debit as well as credit
transactions, induced at the instance of customers or induced by a third party (e.g.
Standing Instructions / ECS etc.)
Operations in Inoperative accounts may be allowed after due diligence as per risk category
of the customer. This includes ensuring genuineness of the transaction, verification of the
signature and identity, etc. First debit in the Inoperative account should be only through
referral / second level of authorization
No charge is to be levied for activation of 'Inoperative' Account and the account will continue
to earn interest.
UNCLAIMED DEPOSITS
Inoperative deposit accounts of banks which have not been claimed or operated upon for a
period of 10 yrs or more are classified as Unclaimed Deposits. For activation/payment of
claims the branches/ operating units should follow the following;
1. Claim by self - Customer has to submit the Unclaimed Deposits Claim Form duly
filled and signed, along with the available details of the account, recent photographs
and valid Identity and address proof documents. Only KYC compliant accounts will
be entertained.
2. Claim by legal heir/nominee - For claim process of deceased accounts, the legal
heir/(s) can visit the branch and submit the Unclaimed Deposit Claim Form duly filled
and signed, along with the following documents as a proof:
Passbook/Term Deposit/Special Term Deposit Receipts (advices) etc
Valid Identity proof of the claimant
Copy of death Certificate of the account holder, which will be verified with Original.
Other documents prescribed under the Bank's procedures for disposal of assets of
deceased constituents will also be applicable in payment of the Unclaimed accounts.
Branches will meticulously follow the Bank's policy for claim settlement of deceased and
missing persons. Balances in the Unclaimed accounts of deceased constituents will be
governed by the extant delegation of powers and laid down procedures for the disposal of
assets of deceased constituents.
Balance of unclaimed deposit up to Rs. 1,00,000/- (Rs one lac only) will be processed
directly by the branches after due diligence and KYC compliance. For cases having
balance over Rs. 1,00,000/- (Rs. One lac only), the branch will obtain sanction from their
controllers before activation of the account or payment of the balance. Sanction will be
given by the Controllers only after branch ensures due diligence and KYC compliance.
For claim of non-individual accounts including proprietorship and HUF, the Claim forms will
be submitted on Company's/firm's letter head duly signed by authorized signatories along
with valid identity proof.

246
For complete details please refer to
1. Master Circular on Savings Bank Account - NBG/PBU/LIMA-SB/17/2017 – 18 dated
04-10-2017.
2. Other circulars and guidelines issued by PBBU Circular on INSTA DIGITAL
SAVINGS ACCOUNT on YONO (Project Lotus Initiative) - NBG/PBU/LIMA-
SB/24/2017 – 18 dated 09-11-2017 and NBG/PBU/LIMA-SB/36/2017 – 18 dated
12-03-2018.
3. Circular no. NBG/PB/C^ITU-CSP/11/2017 – 18 Dated 3 Mar 2018 Master Circular
on CORPORATE SALARY PACKAGE, CENTRAL GOVT. SALARY PACKAGE,
STATE GOVT. SALARY PACKAGE, RAILWAY SALARY PACKAGE, POLICE
SALARY PACKAGE.
4. Master Circular on Defence Salary Package no. NBG/PB/C^ITU-CSP/6/2017 – 18
dated 13 Nov 2017.
5. Modification on master circular on Defence Salary Package NBG/PBUCITPL-
CSP/1/2017 – 18 dated 5 Dec 2017
6. Salient features of the amendments to the Rules and list of “ Officially Valid
Document (OVD)” vide e- Circular No.: R&DB/OPS-KYC/42017-18 dated 23rd Oct.
2017
7. BOD Cir No- NBG/BOD-KYC/83/2014-15 dated 17th November 2014

8. e- Circular: NBG/PBU/LIMA-SB/9/2017-18 dated 14th July 2017).

9. Creation of CIFs/opening of accounts (including Salary Package Accounts) was

made mandatory through the process of eKYC with biometric authentication of
Aadhaar with immediate effecte-Circular No.: R&DB/OPS-KYC/6/2017-18 dated
20th November 2017.

10. The Competent Authority has provided relaxation for Salary Package Accounts and
opening of Salary Package Accounts was permitted with Aadhar without using e-
KYC facility till such time suitable mechanism is put in place for use of e-KYC at
customer doorsteps. These instructions have been circulated to the Branches/
operating units vide e- Circular No.: R&DB/OPS-KYC/8/2017-18 dated 27.11.2017.

v v v

247
Chapter - 19
Current Account
Guidelines And
Products
NOTES
 Chapter-19 :Current Account guidelines and products

Current account is a type of Demand Deposit which is primarily meant for high number of
transactions. Some of its features can be as under
1. CA are opened by Businesses or Institutions having high volume of transactions
2. It is a non interest bearing account
3. Together with SB accounts it forms CASA which is a source of low cost funds for the
bank. However it is not treated as stable fund unlike SB and fixed deposits
Not every individual / Entity can open a Current account because it falls under the purview
of Indian Contract Act 1872, therefore only those who meet the criteria can open a Current
Account. The criteria is further subject to other laws and guidelines for anti-money
laundering etc. (Please refer to chapter on KYC, FATCA etc. for details)
A current account cannot be opened without the authority of the Branch Manager / Deputy
Branch Manager / Divisional Manager / Service Manager / Authorised Official.
A Current Account can be opened with a caveat – the Branch has to obtain an undertaking
from the applicant - that they are not enjoying any credit facility with any other Bank. If the
customer is availing credit facilities from other Banks then the Branch has to obtain a 'No
Objection Certificate' from the creditor Bank. (Circular no. NBG/TBU-LTP/6/2016-17 dated
29-08-2016). The undertaking format has been circulated vide letter no. TBU/L&TP/9
dated 06-05-2017. This undertaking has to be collected in existing accounts as well.
The following can open a Current Account – as stated above if the purpose is other than
savings than almost anyone can open a Current Account. The list could be as under:
1. Individuals
2. Proprietorship Firms
3. Partnership Firms (Unlimited / Limited Liability)
4. Joint Hindu Family (engaged in business activity then mandatory current account
only)
5. Private & Public Limited Company
6. Clubs/ Associations/ Societies of other fiduciary nature
7. Trusts
8. Liquidators
9. Executors and Administrators
10. Banks
11. Government Departments or Bodies, who for performance of their functions depend
on Budgetary Allocations, cannot open Savings Bank Accounts but can open a
Current Account.
Ÿ Examples are Municipal Corporations or Committees, Panchayat Samiti,
State Housing Boards, Water & Sewerage Boards, State Text Book
Publishing Corporations or Societies, Metropolitan Development Authorities,

248
 State/District level Cooperative Housing Societies, etc., any political party or
any trading/business or professional concern, whether such concern is a
proprietary or a partnership firm or a company or an association.
Ÿ Any institution, irrespective of the fact that it is a Government Department,
Semi-Government or Quasi-Government Body, which receives grants, loans
or subsidies from the Government is said to depend on budgetary allocation.
Government grants to institutions are also in the nature of the budgetary
allocation.
Ÿ Government's subscription to the share capital of these institutions also forms
part of the budgetary allocation.
Ÿ A political party herein above will mean an association or body of individual
citizens of India, which is, or is deemed to be registered with the Election
Commission of India as a political party under the Election Symbols
(Reservation and Allotment) Order, 1968 as in force for the time being.
Ÿ Local bodies like Municipal Corporations, Zilla Parishads, Taluka Panchayats
and Gram Panchayats are given grants in the nature of 'compensation and
assignments', which also form part of budgetary allocation, although taxes
collected by these bodies are not covered under the definition and scope of
budgetary allocation of Central and State Governments.
(Please refer to chapter on SB accounts for who cannot / can open a SB account)
Opening of a Current Account – Documents required
1. Account Opening Form (Revised as per circular dated 09-03-2018)
2. Individual Photographs (persons who will be operating the account and beneficial
owners)
3. Individual KYC documents (persons who will be operating the account and
beneficial owners)
Besides above the following documents are to be obtained in each case for other than
Individual Accounts
Entity Documents required (other than above)
Company ü Memorandum and Articles of Association
ü Certificate of Incorporation (Public or Private Company)
ü Certificate of commencement of business (in case of section 11 of the
Companies Act 2013 all newly incorporated Public and Private
Company having share capital),
ü A resolution of the Board of Directors for opening of the Account, and
Power of Attorney (POA) granted to its managers, officers or
employees to transact on its behalf
ü Certificate of Incorporation & Certificate of Commencement of
Business should be entered in the Power of Attorney Register
ü CIN Number
ü Copy of PAN of Company
ü Proof of Current Address
Societies / ü Resolution of the managing body for opening of the account
Association / ü A copy of Bye-laws
Clubs ü Copy of Certificate of Registration in the case of Registered Clubs
Societies and Associations
ü Personal Information sheet of Chairman/ MD/ Chief Promoter
ü In case of Tax exemption then Tax exemption certificate (in that case a
SB account can be opened)

249
Hindu Undivided ü Declaration from the Karta
Family (HUF) ü Proof of Identification of Karta
ü Prescribed Joint Hindu Family Letter on COS 38 (Annexure 2 of
master circular on Current Account no. NBG/SMEBU-LIP/69/2014 –
15 dated 25-03-2015) signed by all the adult coparceners
ü Identity of adult coparceners
ü PAN Card of Joint Hindu Family
ü On death of a coparcener, birth of a coparcener and a minor
coparcener attaining majority (18 years), a fresh JHF letter (COS 38)
has to be executed.
ü Declaration that a) the depositor is the Karta of the Joint Family, b)
the deposit belongs to JHF
Trusts ü A copy of the Resolution
ü Trust deed
ü A copy of registration certificate
ü Power of Attorney granted to transact business on its behalf (wherever
applicable)
ü Any officially valid document to identify the trustees, settlers,
beneficiaries and those holding Power of Attorney
ü KYC of trustees, executors, administrators, etc. and beneficial owners
ü Proof of current address
ü All Trust Accounts to be invariably assigned “High Risk
ü In case of Tax exemption then Tax exemption certificate (in that case a
SB account can be opened)
Partnership Firms ü Copy of Partnership deed
ü Partnership letter in the Bank’s format (Annexure 3 of master circular
on Current Account no. NBG/SMEBU-LIP/69/2014 – 15 dated 25 -03-
2015)
ü Registration Certificate (in case of registered firms)
ü Any officially valid document identifying the partners and persons
having Power of Attorney and their addresses
ü Proof of current address
ü POA granted to a partner or employee of the firm to transact business
on its behalf
ü KYC of all partners & beneficial owners
ü PAN Card of the partnership firm
ü In case of LLP – certificate of Registration issued by Registrar of LLP
besides other documents as stated herein
Unincorporated ü Resolution of the managing body o f such association or body of
association or individuals
body of ü Power of attorney granted to him to transact on its behalf
individuals ü An officially valid document in respect of the person holding an
attorney to transact on its behalf
ü Such information as may be required by the bank to coll ectively
establish the legal existence of such an association or body of
individuals
Proprietary ü Proof of the name, address and activity of the concern like registration
Concerns certificate (in the case of a registered concern)
(These guidelines ü Certificate/license issued by the Municipal authorities under Shop &
apply to all new Establishment Act.
customers, as well ü Sales and income tax returns.
as accounts of ü CST / VAT certificate, certificate/registration document issued by Sales
existing customers. Tax/Service Tax/Professional Tax authorities
The KYC documents ü License issued by the Registering authority like Certificate of Practice
as per these issued by Institute of Chartered Accountants of India, Institute of Cost
guidelines for the Accountants of India, Institute of Company Secretaries of India, Indian
existing accounts Medical Council, Food Drug and
should be obtained ü Control Authorities
and the KYC ü Registration (in case of registered concern) / licensing documents
particulars should issued in the name of the proprietary concern by the Central
be updated) Government or the State Government Authority / Department

250
 ü IEC (Importer Exporter Code) issued to the proprietary concern by the
office of DGFT as an identity document for opening of the Bank
account
ü The complete Income Tax Return (not just the acknowledgement) in
the name of the sole proprietor where the firm’s income is reflected,
duly authenticated/ acknowledged by the Income Tax authorities
ü Utility bills such as electricity, water and landline t elephone bills in the
name of the proprietary concern
ü Minimum 2 documents issued in the name of Proprietary Concern,
from the list given must be obtained while opening of accounts
ü Further, the KYC of the proprietor as an individual has to be taken.
This is in addition to and not in substitution of the 2 documents in the
name of the proprietary concern.
ü In cases where the account is otherwise eligible to be classified as
“low risk”, the risk category to be assigned during the first six months
of opening the account should be “Medium Risk”.
KYC of Individuals Please refer to the KYC Chapter for details
(For persons who
will be operating
the account)
Government or its ü Document showing name of the person authorised to act on behalf of
Departments, the entity;
societies, ü Such documents as may be required to establish the legal existence of
universities and such an entity/juridical person
local ü KYC documents for individuals, mentioned above, from managers,
bodies like village officers or employees holding an attorney to transact on its behalf.
panchayats,
samiti

Indicative Guidelines for customer identification as above (Please refer to Master

circular for complete details)
TRUST/NOMINEE OR FIDUCIARY ACCOUNTS
1. Determine if the customer is working on behalf of another person as trustee /
nominee or any other intermediary (Purpose to be determined)
2. In case of intermediaries obtain satisfactory evidence of the identity of the
intermediary
3. Verify the identity of the trustees and the settlers of the trust grantors, protectors,
beneficiaries and signatories.
4. In the case of 'foundation', steps should be taken to verify the founder managers/
directors and the beneficiaries, if defined.
ACCOUNTS OF COMPANIES AND FIRMS
1. Details of registration of companies should be verified through company master
data from Ministry of Corporate Affairs, Govt. of India, website – www.mca.gov.in
(MCA-21) wherever available, in addition to verification of copies of KYC documents
from the originals thereof.
2. Examine the control structure of the entity
3. Determine the source of funds
251
 9. In the event of an existing customer or the beneficial owner of an existing account,
subsequently becomes a PEP, Branches should obtain necessary approval as
mentioned above to continue the business relationship and subject the account to
the enhanced Customer Due Diligence (CDD) measures as applicable above.
10. Instructions are also applicable to accounts where PEP is the ultimate beneficial
owner.
Simplified KYC guidelines for Foreign Portfolio Investors (FPIs)
1. FPI is a Foreign Portfolio Investor.
2. Simplified KYC is permitted in case the FPI is registered in accordance with SEBI
guidelines and have undergone the required KYC due diligence / verification
prescribed by SEBI through a Custodian/ Intermediary regulated by SEBI
3. The account is opened only for investment under Portfolio Investment Scheme
(PIS) for which KYC documents have been prescribed by the RBI. (the details are
given in master circular)
RISK CATEGORISATION
All customers are to be categorized as High risk, Medium risk and Low risk for proper risk
assessment of business relationship with customers and evolving suitable monitoring
mechanism. This categorisation does not reflect in any way on the account holders it is
meant only for monitoring purposes. Since this categorisation is extremely important for
implementation of KYC/AML/Combating of Financing of Terrorism (CFT) measures,
therefore please comply with the regulatory guidelines in letter and spirit.
Risk categorisation done by the branch should not be disclosed to the customers

A. High Risk Category

Following are classified as High Risk Category
1. Politically Exposed person of foreign origin
2. Bullion Dealers/ jewellers
3. Non Resident Customers (NRIs)
4. Trust Charities, NGOs & Organisations receiving donations from India & abroad
5. Non face-to-face customers
6. Customers domiciled in/ having transactions with High Risk Countries
7. High Risk Countries as per statement of Financial Action Task Force (FATF). The list
is updated by FATF thrice in a year.
8. Further Global Markets Unit, Kolkata, will issue list of high risk countries as well as
details of sanctions against having transactions with countries/ Banks and financial
institutions/ currencies.
9. Firms with sleeping partner
10. Companies having close family shareholding
11. Multi-level Marketing Companies
252
 4. Identify the natural person persons who have a controlling interest and who
comprise the management (may be moderated in case of Listed Companies as it will
not be necessary in this case to identify all the beneficial owners / shareholders.
CLIENT ACCOUNTS OPENED BY PROFESSIONAL INTERMEDIARIES
1. If account opened on behalf of single client, identify the client.
2. In the case of Pooled accounts like those managed by professional intermediaries
on behalf of entities like mutual funds, pension funds, other types of funds, accounts
managed by lawyers/ chartered accountants or stockbrokers for funds held 'on
deposit' or 'in escrow' for a range of clients there could be two situations a) accounts
are co-mingled or b) accounts are separate sub-accounts attributable to beneficial
owner.
3. In case of sub-accounts – all the beneficial owners must be identified
4. In case of co-mingled accounts - still look through the beneficial owners.
5. In case the Customer Due Diligence is done by an intermediary – please ensure that
the intermediary is regulated and supervised and has adequate systems in place to
comply with the KYC requirements.
6. The ultimate responsibility for knowing the customer lies with us.
7. While opening of the account of an administrator of the estate, it would be necessary
to examine the Letter of Administration (Authority) as it would give a clear picture of
the assets of the estate. Similar authority letter examination would apply to
guardians of estate, executors, administrators, assignees, receivers, etc.
ACCOUNTS OF POLITICALLY EXPOSED PERSONS (PEPS) RESIDENT OUTSIDE
INDIA, THEIR FAMILY MEMBERS AND CLOSE RELATIVES
1. Politically exposed persons are individuals who are or have been entrusted with
prominent public function in a foreign country which includes civil / judicial and
military functions. For e.g. Heads of States or of Governments, senior politicians,
senior government/ judicial / military officers, senior executives of state-owned
corporations, important political party officials, etc
2. Gather sufficient information on any person/ customer of this category.
3. Check all the information available on the person in the public domain.
4. Verify the identity of the person and seek information about the sources of funds
before accepting the PEP as a customer.
5. In BPR outfits / other branches where branch / outfit is headed by Junior
Management/ Middle Management officer, account should be opened with the
approval of controller of the branch / outfit.
6. In respect of branches/ BPR outfits headed by officers of Senior Management and
above, such approval should be accorded by the branch/ operating unit head in
person.
7. Such accounts should be subjected to enhanced monitoring on an on-going basis
8. The above norms are applicable to the accounts of the family members and close
relatives of PEPs as well.
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 12. Accounts of Mules
13. Customers of dubious reputation
14. High net worth individuals – Individuals with total deposits of Rs.1.50 Crores or more
15. Pooled Accounts
16. Individuals/ entities involved in any fraud/ forgery/ anti-national activity/ terrorism/
tax-evasion/ insider trading may be classified as High Risk
17. Accounts opened/operated by Power of Attorney Holder
18. Individual Account holders with credit/ debit summations of Rs.2.00 Crores and
more per annum
19. Non Individual account holders with credit/ debit summations of Rs.10.00 Crores
and more per annum
20. Customer accounts where Suspicious Transaction Report (STR) has already been
filed with Financial Intelligence Unit (FIU)

B. Medium Risk Category

Following are classified as Medium Risk Category
1. New accounts opened under Low Risk while on boarding, during first 180 days of
opening the account, except those pertaining to Central/State Governments, PSUs
and JVs with Govt. regulators, FIs, Statutory Bodies, salaried persons/ pensioners
of these organisations, Small Accounts and any product (s) that is /are specifically
mandated to be opened under Low Risk.
2. Non-Bank Financial Institution
3. Stock Brokers
4. Import/Export Customers
5. Telemarketers
6. Pawn Shops
7. Auctioneers
8. Venture Capital Companies
9. All In-operative accounts
10. Individual Account holders with credit/ debit summations of Rs.50.00 lacs to below
Rs.2.00 Crores per annum
11. Non Individual account holders with credit/ debit summations of Rs.2.00 Crores to
below Rs.10.00 Crores per annum

254
For medium and high risk category customers, branches may call for additional information
as under
ADDITIONAL INFORMATION SHEET FOR INDIVIDUALS
Ÿ Nature of Business Activity/Profession

Ÿ Copy of latest Income Tax return

Ÿ Any close relatives settled abroad; if yes, details thereof

FOR TRUSTS/CLUBS/ASSOCIATIONS/SOCIETIES
• Details of Beneficial Owners with name, address and percentage share
• Details of Office Bearers with name and addresses
• Copy of latest Financial Statement
• Copy of latest Income Tax return
FOR PARTNERSHIP FIRM
Ÿ Details of Partners with names, addresses and percentage share

Ÿ Details of Office Bearers with names and addresses

Ÿ Copy of latest Financial Statement

Ÿ Copy of latest Income Tax return

FOR COMPANIES
• Details of Promoter directors with names, addresses and percentage of
shareholding
• Details of Office Bearers with name and addresses
• Copy of latest Financial Statement
• Copy of latest Income Tax return
C. Low Risk Category
Following are classified as Low Risk Category
1. Salaried Employees (whose salaries are well defined)
2. Customer belonging to lower economic strata, accounts opened under financial
inclusion
3. NGOs/NPOs promoted by UN or its agencies
4. Government owned Companies/ Departments and (State/Central), PSUs, JVs with
Govt. Regulators, FIs, Statutory bodies, etc.
5. All customers not classified either as High/Medium Risk Categories

255
 6. Individual Account holders with credit/debit summations below Rs.50 lacs per
annum
7. Non Individual account holders with credit/debit summations below Rs.2 crores p.a

Other aspects that need to be taken care of before / while opening current account
1. A prospective customer should invariably be interviewed by the official who
authorises the opening of the account
2. If the applicant is of very high standing and it would be impolitic to demand his
presence, a responsible official of the Bank may be deputed to call on him to obtain
the necessary signatures.
3. LCPC will dispatch personalised cheque books to the address of the CA holder.
4. Only in case of emergency branch may manually issue cheque books as a special
case. Each form in a cheque book issued and the requisition slip therein should be
branded with the account number of the constituent.
5. Cheque book should be issued only against an application / requisition slip.
6. Immediately on the opening of an account a letter of thanks for the patronage offered
should be sent by the branch to the new customer (unless he is well known) by post
to ensure that the new customer's address is not fake or fictitious.
7. Specimen signatures must be executed in ink and must be individually attested with
full signature by the designated official.
8. Specimen signatures in Hindi or any other regional language may be accepted
provided it is the language of the State where the branch is situated.
9. In order to ensure that no necessary formalities are overlooked when an account is
opened , a note will be made in a separate register kept for the purpose regarding
the forms and documents not taken at the time of opening the account, and items
marked off as they are received. Branch Managers or Divisional Managers will
periodically examine the register to ensure that all the required documents are
received without unnecessary delay.
Bank has launched certain variants of Current Accounts the brief features of these Current
Account products are reproduced as under :-
(Master Circular on Current Account NBG/SMEBU-LIP/69/2014 – 15 dated March
25,2015)

256
 NORMAL POWER POWER Power POWER Power SAHAJ
CURRENT PACK GAIN POS Base Jyoti CURREN
ACCOUNT T
ACCOU
NT
Monthly Min. Rs. Rs.2,00,000/ Rs. Rs 20,000/- Rs. Rs.
Average balance 5,00,000/ - 5,000/- 50,000/- 1000
Balance Rs. - for POS
10,000 a/c
* Cash i)Upto Free Deposit of i)Upto i)Upto Rs. 60/- Max
deposit in Rs.25000/ upto Cash upto Rs.25000 Rs.25000/- per + ST per amount
Home - per day : Rs.60 Rs.15 lacs /- per day day : Free transacti Rs
Branch Free lacs per per month: : Free ii) Beyond on 10,000
ii) Beyond month. Free. ii) Beyond Rs.25000/- per CGM of
per day
Rs.25000/ Thereaft Thereafter, Rs.25000 day: the
- per day: er Rs.0.75 per /- per day: Rs.0.75 per Circle
RS.0.75 Rs.0.75 Rs.1000/- + Rs.0.75 Rs.1000/-+ ST has the
per per ST per Minimum discretio
Rs.1000/- Rs.1000/ Minimum Rs.1000/- Rs.50/- + ST n to
+ ST - + ST. Rs.50/- + ST + ST Maximum reduce
Minimum Minimum Maximum Minimum Rs.20000/- + charges
Rs.50/- + Rs.50/- + Rs.20000/- + Rs.50/- + ST by Rs
ST ST ST @ ST 20/-
Maximum Maximu Maximum Nil Cash
Rs.20000/ m Rs.20000 Handling
- + ST Rs.2000 /- + ST Charges
0/- + ST
@
Maximum Limit for deposit of cash at Non Home branch is Rs.2 lakhs per day. Thereafter, Branch
Manager of Nonhomebranch is vested with the powers to accept more cash.
@Deposit of cash free of charges within the overall monthly limit for Power gain and Power pack
customers wouldinclude both Home and Non-home Branch
Corporate Free Available Free
Internet
Banking
RTGS / Normal Free NA normal NA Normal
NEFT charges charges charge
s
Salary NA All Silver & NA NA NA NA
accounts categor Gold salary
y of Accounts
salary for all
account employees
s for the of the firm
employe
es of
the firm
/
corporat
e
Please refer to SMEBU website for latest instructions in this regard.
Please refer to latest charges circular for penalty and other charges

257
SME also offers following deposit & transactions products for Current Account customers:
1. Deposits – Unfixed Deposit &Corporate Liquid Term Deposit (CLTD)
2. Internet Banking – Khata, Khata Plus, Vyapaar, Vistaar, Saral
3. Transactions – Collection Products – Power Jyoti
4. Other Products – Cash Pickup, Point of Sale (PoS), Insta Deposit Card, Business
Debit Cards, Power PoS, POS Linked Overdraft, CMP, DW
SURABHI
Purpose To sweep and reverse sweep into/from Term Deposit
in Current Account/Savings Bank Account
Period of Term Deposit Minimum 12 months, Maximum 36 months
Minimum Deposit to be Current Account Rs 10,000
maintained
Operation of Account Amount of sweep: Multiple of Rs 1000/- above
threshold limit
Reverse sweep: - LIFO: Last in First Out in case of
inadequate balance in current Account / savings
account
Term Deposit broken will be paid interest with
premature withdrawal rule
Rate of Term Deposit As applicable to term deposit
Loan facility No overdraft facility

Unclaimed Deposit / Balances

1. Inoperative accounts of banks that have not been claimed or operated upon for a
period of 10 yrs or more are classified as Unclaimed Deposits.
2. A list of unclaimed/inoperative accounts is displayed on the Bank's website under
Customer Care > List of Unclaimed/Inoperative Accounts. The list has names and
addresses. If a customer visits branch with supporting documents for claim /
reactivation of accounts, branches will first verify the KYC documents and after
proper verification of the branch records and carrying out due diligence process, will
process the payment/reactivation as per the delegation power for payment of
unclaimed deposits.
Nomination Facility
The nomination facility is available for Current Accounts of individuals and proprietary
concerns and the account holders are advised to avail of this facility for smooth settlement
of claim by legal heirs in unforeseen circumstances. Please refer to the chapter on
Nomination and Deceased settlement.
For more details please refer to
1. MASTER CIRCULAR on CURRENT ACCOUNT – circular no NBG/SMEBU-
LIP/69/2014 – 15 dated March 25,2015.
2. New AOF for Current Account – circular date 09-03-2018SMEBU website
3. Revision in Service Charges w.e.f 01.04.2017 circular noNBG/BOD-GB/1/2017 –
18 dated April 01,2017.
v v v 258
Chapter - 20
Government Business
NOTES
 Chapter-20 :Government Business

By government business we mean the banking facility we provide for the government
transactions and it is a source of income for us. The best part is that we don't have to provide
any capital outlay for the government business. If we look at the Q3 and 9M data of FY 17-
18 then we will find that commission on Government Business is Rs. 840 crores and Rs.
2406 crores respectively which has shown a growth of 27.14% and 13.03% over the
previous years' data. This government commission contributes 16.87% and 15.83%
respectively of the total fee income of the said period.
If we look at the history, RBI is the banker to both Central Government and State
Governments (as per RBI Act). It was in 1976 that the RBI authorized all Nationalized PSBs
to handle government business as the agents of the ministries to cope with the volume of
transactions on commission basis.
SBI has been the pioneer of government business in India, however over the years we have
had to face growing competition in this business. If we provide better service and increase
our share of government business in the country we shall be able to increase our overall fee
income. Hence we need to take care of Government Business to continue earning
substantial income.
The conduct of Government business is governed by the Civil Accounts Manual and
instructions issued by the Offices of Controller General of Accounts, Comptroller & Auditor
General and Finance Departments of States, Banking Department (PAD), Treasury Rules
of State Governments and periodical circulars issued by RBI.
In order to be able to provide better service in the area of Government Business the bank
has set up Government Banking Unit (GBU) in the year 2006 at New Delhi which is headed
by CGM (GBU) under the aegis of DMD (Development Banking & New Business). At the
circle level it is headed by DGM (DB) under CGM (Circle). The GBU is supported by
Government Accounting Department (GAD) at Belapur, Navi Mumbai which takes care of
Accounting and Analytics.
The accreditation for conducting the business as agent of Reserve Bank is given by the
respective Ministries through the office of Controller General of Accounts and Reserve
Bank of India in consultation with the Ministry of Finance.
Overview of the Government Business Process
Simply stating the transactions taking place at the branches of agency banks are
consolidated at their head offices or “link offices” and reported to the designated offices of
Reserve Bank of India daily for settlement by booking in the Ministries/Departments
accounts and ultimate adjustment every month-end in the government account at Central
Accounts Section (CAS), Nagpur which maintains the accounts of the individual Ministries /
Departments

259
Let us take a look at the Government Business incentive at a Glance for our Bank :

Let us also look at the Government Commission pie and its share among the TOP
banks in India as per RBI

SBI Agency Comm. share in 2015-16 was 67% (SBI) and 7% (Associates) which has
increased to 81.20% in 2016-17 for the Group. This business will be undergoing a big
change in future due to implementation of BPR in Govt. Business by RBI. The Bank earns
commission on Government Business that comprises both – Receipts (on behalf of) and
Payments (on behalf of).
The Government business covers the following as well
1. PPF
2. Sukanya Samridhi Scheme
3. Senior Citizen Savings Scheme (SCSS 2004)
4. Pension
5. Family Pension
It is not necessary that the customer should come to the branch for paying taxes. The
payment can be made online through CINB and INB. However they can also pay taxes by
paying cash at the branch. On the reverse the Government / Quasi Government Bodies /
Government Companies can make use of Cash Management Product (CMP), State Bank
Collect, Multi Option Payment Systems (MOPS), SBI e-Pay (aggregator services), e-
Tendering. Various Central and State Government departments have integrated with SBI
e-Pay.
Governments following initiatives open new avenues for commission for the bank:
1. E-Auction – project of Indian Railways
2. E-Tendering – project of Indian Railways

260
Government Cheques
• Government cheques are issued by all Central Govt. and State Government
departments.
• Government cheques are non-transferable and payable 'to order'.
• Government cheques drawn on bank are treated as Negotiable Instruments. But cheques
drawn on the Treasury are treated as Government Bill and hence protection under
Negotiable Instrument Act is not available.
• Validity of these cheques vary.
• Cheque Truncation System (CTS) has been implemented in all Central Government
departments w.e.f. 1st February 2016. Under this system, the physical cheques remain with
the presenting bank. Only the image of the cheque travels to the issuing bank.
Government Receipts
All taxes and non-tax revenues collected by the Bank on behalf of the Central and State
Government Departments are considered as government receipts. For example,
Income Tax, GST, UPSC/ SSC examination fees, passport fee, VISA fee and all State
Government taxes, etc.All credits to the Government Account should be supported by
Challans.
Physical Receipts:
• Govt. Challans, accompanied by cash/ clearing cheque/ transfer cheque etc. tendered
at the Branch are considered to be physical transactions. Bank collects the amount and
credits the respective government account. This amount is transferred to RBI within
prescribed time period 3/5/12 days as applicable to local/ outstation/ difficult centre
branches. The challans are subsequently sent to respective Ministries/ departments
alongwith scrolls while the funds are settled with RBI within the prescribed time frame of T +
3/5/12 days, where T stands for the day the money is received by the accredited Bank
branch.
• Bank is paid a commission of Rs. 50/- per challan received by the Bank (irrespective of
the amount).
E-Receipts:
• Taxes/ dues are also being collected through electronic modes like Internet Banking,
Debit Cards/ Credit Cards etc. These receipts need to be settled on T+1 basis where T
stands for the day the money is received by the accredited Bank branch.
• Bank is paid a commission of Rs. 12/- per receipt transaction done through any of these
channels (irrespective of the amount).
Note: All receipts should be settled within the prescribed time limit to avoid penalty for
delayed settlement.
State Govt. Transaction
Bank undertakes the following transactions:
• Receipt of Registration Fees, Sales Tax, motor vehicle tax etc.

261
3. Rail Shakti and Cash pick up for Railways
4. Passport Sewa Project
5. E-Tourist VISA project
6. Fee Collection
7. National Literacy Mission
8. Others
But the following challenges remain
Ÿ Migration from physical mode to electronic modes of collections, leading to reduced
commission.
Ÿ Increased competition.

Ÿ Direct flow of funds from Central exchequer to State Treasuries, thereby reducing float
funds.
Ÿ Direct Benefit Transfer instead of routing the subsidies through nodal agencies.
Ÿ RBI taking over payment Business.

The details regarding receipts, payments, direct taxes, and various small savings scheme
as per e-Book on Govt. Banking are reproduced as under :
Government Payment
The Bank maintains mirror accounts of various ministries / government departments. In
most cases the payment account is separate from receipt account.
The Bank makes the payment through mirror accounts and then claims reimbursement
from RBI in T+1 day. During this period the Bank is out of funds. Therefore, it is very
important to send the claims to RBI on time. RBI pays commission @ 5.5 paise per Rs.
100/- (Rs. 5500/- per Rs. One Crore).
Government payments are effected by means of cheques, Treasury Bills and electronic
payment. Gradually most of the government payment are migrating to e-Payments.
Government Bills
A Government Bill may be drawn in respect of:
Ÿ Salaries
Ÿ Vendors supplying goods to the Govt. departments
Ÿ Pension
Ÿ Grants in aid, contributions etc.
Ÿ Government Bills are not negotiable instruments
Ÿ Government bills are drawn by drawing officer and thereafter passed by Treasury
Officer for payment at the Bank. After that, the Government Bill is called as Pay order.
Validity of a Pay order is upto 10 days or till the end of the month, whichever is earlier.
Ÿ After expiry of the validity period, it can be revalidated by Treasury Officer.
Revalidation extends its validity for another 10 days.

262
• Stamp Duty
• Distribution of Govt. funds among various departments
• Payment on account of work done by State Govt.
• Pension payment to State Govt. Pensioners
FSLO (Funds Settlement Link Office)
A separate department called FSLO has been set up, with a separate branch clearing code,
postal address etc. at RBI Centre/LHO/State Capitals. FSLO is responsible for settlement
of State Govt. transactions (including State Govt. pension), currency chest transactions
and Small Coin Depot transactions. State Govt. pensions are also part of FSLO's functions.
It reports to DGM & CFO in the Circle.
State Govt. Link Branch/Office (SGLO)
At the State Capital a branch is designated as State Govt. Link Branch/office for the
purpose of settlement and reconciliation of State Govt. transactions. It consolidates the
receipts/payments at the branches and settles the transactions on day to day basis with
Integrated Banking Department, Local office of RBI.
Reporting Branches
All branches conducting State Govt. business will report the transactions to the above link
Branch.
General Ledger Account
The branches conducting Govt. business have a General Ledger A/c in the style of State
Govt. A/c. The balance in this account is shown separately in the Weekly Abstract.
Daily Reports
The daily reports of State Govt. transactions are sent to the FSLO on a day to day basis by
courier/speed post/fax. These reports should bear running serial numbers in an unbroken
annual sequence for the financial year 1st April to 31st March. 'Nil' reports have also to be
sent. The report has to be dispatched on the day of the transaction itself.
State Govt. Scrolls etc.
The paid bills, cheques etc. as well as the copies of the SG Receipt and Payment Scrolls
should be sent to the concerned Treasury Officer/Sub-Treasury Officer/Pay and Accounts
Officer through the Treasury Pass-Book. The number of voucher/challans as well as Total
Receipts and Total Payments (quintuplicate) will be entered in the Treasury Passbook.
State Govt. transactions Penalty for delayed reporting:
W.e.f 01.04.2007, delayed remittances under State Govt. Transactions will attract same
penalty as Central Govt. Transactions. It is applicable irrespective of the amount involved.
RBI had decided with the approval of Comptroller and Auditor General of India that the
procedure applicable to Central Govt. transaction may also be made applicable to State
Govt. transactions. The procedure is given below:
· Settlement of Local Transactions with RBI shall be completed within T+3 working days,
where T is the day when money is available to the bank branch.
· Outstation transactions shall be completed in T+5 working days.
263
· The put through date, i.e, the date of settlement with the RBI shall be kept outside this
time limit of T+3/T+5 days.
• Delayed period interest shall start from the day following the prescribed put through
date.
Delayed Period Interest:

The above instructions shall also be applicable in respect of Non-Tax and all other Govt.
receipts.
Date-wise Monthly Statements:
It should be prepared once a month and sent to the Treasury Officer/Sub-Treasury
Officer/Pay and Accounts Officer on the 1st of next month. It is verified by him and sent to the
branch; thereafter, they should be sent to the FSLO (Quadruplicate). Under GBSS-Phase I
DMS is generated at Belapur and sent to FP Branches for getting verified by the respective
Govt. Departments.
Advice to FSLO:
The branch should advise the details of Govt. transactions to FSLO by the fastest mode of
communication like Fax, STD or Telegram/Telex when the net difference between total
receipts and payments is Rs. 1 lakh or more.
Commission:
The FSLO submits, as at the end of every quarter the claim for Commission to the Local
Office of RBI. The commission is distributed to the branches. Dealing branches/L.B. will
share in the ratio of 75:25.
Transfer of Balance:
Once a year as on 30th September.The balance in the State Govt. A/c should be transferred
to the FSLO. If 30th September is a holiday; the balance would be transferred on 29th
September. Of late, Corporate Centre GAD advises the date of transfer.
Central Govt. Transactions
The Bank established Government Accounts Department (GAD) in 1987 as an
independent accounting unit (code no. 9595). The branches have been divided into (a)
dealing or receiving branches and (b) Focal Point branches (FPBs).
Dealing / Receiving branches route their transactions through the Focal Point / Link
Branches. The Focal Point Branches/ Link Branches, on receipt of daily memo from
Dealing / Receiving Branches will include their own branch figures and settle the funds with
RBI expeditiously. The Focal Point/ Link Branches report the Government Transaction to
GAD, Mumbai at the end of each day to enable it to report to RBI, CAS, Nagpur for final
reconciliation of all government transactions.

264
In view of the criticality of the Government transactions and the necessity to modernize the
accounting / settlement/ Reconciliation process of Central Government Transactions, the
Bank has launched GBSS in 2009.
GOVERNMENT BUSINESS SOFTWARE SOLUTION (GBSS) for Central Government
Transaction (Launched on 01.02.2009)
New System- Highlights:
• A new process of Accounting, Settlement and Reconciliation of Central Government
transactions (CGT) has been introduced with seamless integration of GBSS and CBS.
• Settlement of Central Government transaction with RBI is being done for the bank as a
whole, based on data directly extracted form Core Banking Solutions (CBS) at End of Day
(EOD).
• W.e.f. 23.03.2009 the settlement process has been modified in respect of Central Govt.
Transactions.
• Settlement now takes place with RBI, CAS, Nagpur only if the Date Update utility of GAD
for information is updated with the related scrolls/ challans received by FP/LBs from the
linked dealing branches. The FP branch should obtain GAD 5s (along with challans etc.)
quickly from DBs and update the file for sending to GAD for settlement. The documents
from local branches should be obtained the next day and from other branches within 3
days. Any delay will attract penalty or will result in opportunity loss, as settlement is done by
RBI simultaneously with the submission of documents to Govt. authorities.
• FPBs will not be involved in the accounting and data entry of CGT. The role of Focal Point
branches will be restricted to documents collation, verification, recording of GAD/ Main
Scroll received in GBSS system and forwarding of documents to respective Government
Authorities.
GBSS holds both financial and non-financial data and CBS holds financial data.
Processing Of Transactions:
For all Dealing Branches a new CGL account titled 'Dealing Branch Central Government
General Account' (DB-Central-CGA) and a new BGL mirror account 'Dealing Branch-
Government Business Software Solution-Government General Account (DB-GBSS-CGA)
per branch has been opened in CBS.
Entry Level accounting of CGT takes place at the Dealing Branch Govt A/cs which are
mapped to 'DB-Central-GCA' CGL on CBS.
At the End of the Day (EOD), Net Government Funds are transferred by CBS to GAD-
GBSS-CGA-BGL account through the mirror a/c by zeroising the Dealing Branches level
accounts.
This means that the balance in the DB- Central-CGA in the CGL will only be to the extent of
uncleared CGT of Dealing Branches, if any.
It is the responsibility of the branch to ensure that the balance has been adjusted in
consultation with CBS Help-Desk. The extra balance represents the unsettled CGT at the
Bank level and hence has to be adjusted immediately.

265
As the funds are available in GAD-GBSS-CGA at EOD, CBS generates electronic GAD-5
(ACCH File for CGT) for direct upload to GBSS, for settlement of CGT with RBI, CAS,
Nagpur from GBSS,
GBSS generates ASCII file of settlement transactions by consolidating settlement data in
RBI format for electronic transmission to RBI, CAS, Nagpur.
GBSS generates Main Scrolls for all the FPBs centrally and provides functionality to track
scrolled/ un-scrolled challans and GAD-5s.
Role of Focal Point Branch (FPB)
FPBs role is restricted to receiving of Documents i.e. GAD-5/Scrolls/Challans/paid
instruments form their respective DBs and forwarding of every date's Main Scrolls along
with Scrolls/ Challans /Paid Instruments, to the Government Authorities concerned. FPBs
have to key-in the following data, using “GBSS Date Update” Utility and electronically
transmit the files every day to GAD FTP server.
Ÿ Date of receipt of individual Dealing branch-wise transactions, date-wise GAD-5s
received by them.
Ÿ Date of dispatch of a particular date's Main Scroll to the Government authorities
immediately on the date of dispatch.
These files are uploaded to GBSS by GAD, to facilitate tracking of document movement
centrally. Date-wise Monthly Statement (DMS) are provided by GBSS at month-end to all
the FPBs. FPBs have to get it verified by the Government Authority and forward copy of
Verified Date-wise Monthly Settlement (VDMS) to GAD for uploading GBSS for the
purpose of external reconciliation with Government Authorities.
Accounting entries at Various Levels:

Post-GBSS-Dealing Branch Activities:

• Verification of challans with CBS generated scrolls and dispatch of GAD-5/ Scrolls/
challans/ paid instruments to the FPBs on the next day.
• Transfer of Funds will be carried out at EOD by CBS from back-end.
• Dealing branches should not credit/ debit the new BGL a/c DB-GBSS-CGA manually
unless advised to do so.
266
• Verification of Non-Zero balances in CGL at EOD and correction at the earliest in
consultation with CBS Help-Desk. (Branch-wise non-zero balances in CGL should be only
to the extent of un-cleared transactions i.e. cheques tendered but yet to be cleared).
• Follow- up of unsettled amounts, if any.
• Carrying out Reversal entries in respect of erroneous/ misclassified transactions
through Reversal menu.
Post-GBSS: FPB activity:
• Up-dating of GAD-5s received data in GBSS.
• Responsibility to call for GAD-5s and challans/ scrolls from DBs and dispatch of Main
scroll along with complete set of documents to the authority within 6 days.
• Verification of documents with Main Scroll provided by GBSS and communicating
correction/ reversals required to be done to the DBs.
• Up-dating of 'Main Scroll Dispatched date' in GBSS.
• Monitoring of non-zero CGL in respect of their Dealing Branches.
• Verification of DMS and follow-up of corrections required.
The balance in respect of pre-GBSS data (i.e. as on 31.01.2009) has been transferred to
the FP branch on 25.04.2009 and the FP branch transferred it to GAD on the same day.
Direct Taxes
Corporation tax, Income tax, Wealth Tax, Gift Tax are covered under direct taxes. Central
Board of Direct Taxes is responsible for administering direct taxes. The Income Tax
Commissioners are located in different parts of the country. The Principal Chief Controller
of Accounts (Pr. CCA) is the apex accounting authority. Zonal Accounts Officers are
established at many centres. Only authorized branches can conduct transactions relating
to Direct Taxes.
All tax payments including TDS should be made only electronically by branches (w.e.f
01.04.2008) Further, CBDT has made electronic payment of taxes mandatory for
companies and persons (other than a company) to whom S 44 AB of IT Act is applicable.
The 4th digit of the PAN 'C' denotes Corporates. The responsibility of making e-payment
rests primarily with the tax-payer. In case they opt to make payment through physical
challans the bank can accept them.
OLTAS (Online Tax Accounting System):
Introduced from 1.06.2004 by IT Dept. for online collection, accounting and reporting of
direct taxes. Settlement based on online data has been introduced w.e.f. 01.04.2005.
Besides online facilities, taxpayers have the option to pay their tax through designated
branches also. The electronic strings are generated from CBS for tax deposited from online
/branch channel which are then uploaded by GAD Belapur to NSDL site.
Online Tax Accounting System has facilitated fast collection of taxes by the Government
and timely deposit of taxes by the tax payers with convenience. The number of challan
forms for payment of direct taxes has been reduced from three to new single copy challans.
The new challan is simplified single copy form with a detachable counterfoil. Taxpayers are
no longer required to fill up multiple copies of challan forms.
267
Now, the Bank is submitting the CBDT figures to RBI, CAS, Nagpur separately through
digitally signed e-mail (to be signed by a class-II Certificate holder). The CBDT figures
reported to TIN (1:15 PM on week days and 12:30 PM on Saturdays) should
simultaneously be reported to CAS, Nagpur for funds settlement through digitally signed e-
mail. The data mailed after the cut-off time will not be accepted by CAS Nagpur.
New Challans:

Examples:
a) If the tax payer is an individual and is paying Self Assessment Tax, the correct challan
form to be used is ITNS 280 and the major head code to be selected is 0021.
b) If the tax payer is a firm and has deducted tax at source from a company, the correct
challan form to be used is ITNS 281 and the Major Head Code to be selected is 0020.
The bank will give a stamped acknowledgement on the taxpayer's counterfoil mentioning
the name of the bank branch, the 7-digit BSR Code of the Bank branch, the date of deposit
(DD/MM/YY), and a running serial number (5 digits) collectively called the Challan
Identification Number (CIN).
Some Common Terms:
CIN (Challan Identification Number) is a unique serial number consisting of:
a) BSR Code number of the Bank Branch (7digits)
b) Date of presentation of the challan (DD/MM/YY)
c) Serial number of the challan in the branch on that day (5 digits)
TIN (Tax Information Network): The online data is sent to TIN (NSDL at Mumbai); the
normal practice of sending paper scrolls and challans to the ZAO and IT Dept is continued.
The Bank's Link Cell at Nagpur will get complete data electronically.
Taxpayers will no longer need to attach a copy of challan with their Income-Tax Returns.
Instead, they need to mention their CIN. The CIN Particulars will be available in the Bank
seal affixed on the Counterfoil of the Challan.

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PAN
Permanent Account Number is a 10 character alpha numeric number as per the following
format: 5(A)+4(N)+1(A)
• First 5 characters should be Alpha, 4th character should be A,B,C,F,H,J,L,P,T,G only, 5th
character should be Alpha, for Corporation Tax 4th character should be 'C'
• 6th to 9th characters are Numeric only but not all zeroes
• 10th character should be Alpha
TAN
Tax Account Number is a 10 character alpha numeric number allotted to a tax deducting
authority for deduction of tax at source. The structure of the TAN is as per the following
format:
4(A)+5(N)+1(A)
• 1st three characters should be valid CTU Codes and Alpha only
• 4th character should be Alpha
• 5th to 9th position should be Numeric but not all zeroes
• 10th character should be Alpha
e-filing of ITR
The Income Tax Return by the tax payers can be filed electronically. E-filing minimizes the
chances for error and thereby makes the filing accurate. A secure e-file submission process
helps to keep tax payer's personal information private. E-filing also helps the taxpayer to
get instant notification of acknowledgement of return. One can also check the status of the
tax return or tax refund at his/her convenience. The IT Department has authorized certain
entities called “e-Return Intermediary” (e-RI), who facilitates the e-filing process for the tax
payers. It has been decided to offer this facility, as a fee based service, to our customers in
association with one of these “e Return Intermediary”.
e-Verification of ITR
SBI has extended the facility of direct access to the ITD website through net banking login
by customers. After e-filing of the IT returns, the tax payer can also e-verify his ITR through
electronic verification code (EVC) generated through the usage of net banking of several
banks. The EVC generation is also proposed through ATMs. The advantage of the process
is that taxpayer will not have to send the printed copy of ITR to CBDT by post. The entire
process would be paperless, cost effective and less time consuming. The CBDT's
notifications nos. 2/2015 and 1/2016 pertain to EVC for electronically filed income tax
returns.

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 Goods & Services Tax
It is a nationwide uniform Consumption based Indirect Tax for Goods and Services tax. It
has subsume the existing Central and State Indirect Taxes like :
Vat/Sales Tax
Entry Tax
Luxury Tax
Consumption Tax
CENVAT
Service Tax
Entertainment Tax
Taxes on Lottery, Betting and Gambling
There are 4 types of Taxes: IGST, SGST, CGST, Cess

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Clearing
• The data entry is made in the system within 7 days of generation CPIN.
• A trimmed message giving a clearing reference number is automatically sent to GSTN
• Cheque is sent to clearing
• Cheque realized after (T + n) days
• On (T + n) day, the GST system data is updated with cleared status.
• Messages generated for all cleared Cheques on this day and sent to GSTN
• Data is included in the Summary sent to GSTN
GBSS Screens & GST Receipts

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273
Do's: Ensure the following
Ÿ Challan amount shouldnever be more than 10,000/-
Ÿ Verify the name of the Customer displayed on the screen with that available on the
Challan.
Ÿ Don't keep the Challans pending for data entry/authorization in the evening hours.

Ÿ Stamp the challan properly with the CIN generated & return.

Ÿ Ensure that the cash drawer gets updated properly.

Don'ts: Avoid the following
· Challan amount should not be more than 10,000/-
· Don't try to reverse the challan amount manually, this may lead to disciplinary action, as
reversal is not allowed in GST receipts.
· Entering the amount without verifying the name of the customer. (Two challan's may
have same amount, but the breakup may differ & govt. account once credited cannot be
reversed).
· Entering of the details in CBS as the account are prohibited to be posted from CBS.
Small Savings Scheme
1) Public Provident Fund Scheme
The Scheme was introduced by the National Savings Organization in 1968 to mobilize
small savings. The Scheme offers an investment avenue with decent returns coupled with
income tax benefits. Salient features of the Scheme are as follows:
Eligibility - Individuals in their own name as well as on behalf of a minor can open the
account at any Branch. As per extant instructions, opening of PPF accounts in the name of
Hindu Undivided Family is not permitted.

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Investment Limits - With effect from August, 2014 a minimum of Rs.500.00 subject to a
maximum of Rs.1.50 lac per annum may be deposited. The subscriber should not deposit
more than Rs.1.50 lac per annum as the excess amount will neither earn any interest nor
will be eligible for rebate under Income Tax Act. The amount can be deposited in lump sum
or in a maximum of 12 installments per year.
Duration Of Scheme - Original duration is 15 years. Thereafter, on application by the
subscriber, it can be extended for 1 or more blocks of 5 years each.
Interest - Interest will be paid on 31st March every year. Interest is calculated on the
minimum balance between 5th day and end of the month.
Loans And Withdrawals - Loans and withdrawals are permitted depending upon the age
of the account and balances as on the specified dates.
(Withdrawals: 50% of the balance in the account as at the end of the 4th financial year can be
withdrawn in the 6th year)
Tax Benefits - Income Tax benefits are available under Sec 80C of IT Act. Interest income
is totally exempt from Income Tax. Amount outstanding to the credit is fully exempted from
Wealth Tax also.
Nomination - Nomination facility is available in the name of one or more persons. The
shares of nominees may also be defined by the subscriber.
Transfer Of Account - The account can be transferred to other branches/ other banks or
Post Offices and vice versa upon request by the subscriber. The service is free of charge.
Documents Required - KYC Documents
Maximum No. Of Accounts - An individual can open only one PPF Account. However,
he/she can open another account on behalf of each minor child for whom he/she is the
guardian. Both mother and father cannot open PPF accounts on behalf of the same minor.
Premature Closure - Allowed in the event of death of the depositor or in cases of extreme
compassionate grounds to be authorized by an order by the Central Government.
Irregular Payment/ Revival Of Account - Payment of penalty of Rs.50 per year along with
minimum specified amount per year.
Mode Of Deposit - Subscribers can deposit by way of cash, cheque, demand draft,
transfer, online banking. The subscribers can also opt for SIP.
2) SUKANYA SAMRIDDHI ACCOUNT
The Sukanya Samriddhi Account, also known as girl child prosperity scheme was launched
by Prime Minister Narendra Modi. Sukanya Samriddhi account is to ensure a bright future
for girl children in India. This scheme is to facilitate them proper education and carefree
marriage expenses of the girl child. The scheme has well been accepted by the masses in
wake of the financial security and independence it would provide to the girl child as well as
their parents and guardians. Sukanya Samriddhi Account Yojana offers a small deposit
investment for the girl children as an initiative under 'Beti Bachao Beti Padhao' campaign.
Sukanya Samriddhi Yojana has been introduced vide Government of India Notification No.
G.S.R.863(E) dated December 02, 2014 and circulated to Banks by Reserve Bank of India

275
vide their letter No.RBI/2014-15/494/IDMD(DGBA).CDD/No.4052/15.02.006/2014-15
dated 11th March 2015. Facility to open accounts under the scheme is available at all SBI
branches.
Objective: To promote the welfare of Girl Child.
Who can open the account: A natural/ legal guardian on behalf of a girl child.
Maximum number of accounts: Upto two girl children or three in case of twin girls as
second birth or the first birth itself results in three girl children.
Minimum and Maximum Amount of Deposit: Min.1000 of initial deposit with multiple of
one hundred rupees thereafter with annual ceiling of Rs.1.50 lac in a financial year.
Tenure of the Deposit: 21 years from the date of opening of the account.
Maximum period upto which deposits can be made: 14 years from the date of opening
of the account
Interest on Deposit: As notified by the GOI, compounded annually.
Tax Rebate: As applicable under section 80C of the IT Act, 1961.
Premature Closure: Allowed in the event of death of the depositor or in cases of extreme
compassionate grounds such as medical support in life threatening diseases to be
authorized by an order by the Central Government.
Irregular Payment/ Revival of account: By payment of penalty of Rs.50 per year along
with the minimum specified amount per year.
Mode of Deposit: Cash/Cheque/ Demand Draft
Transfer of Account: Sukanya Samriddhi Scheme has been launched across India and
hence the account is transferrable to any part of the country in situation of the account
holder or the depositor moving to other places.
Withdrawal of Account: Withdrawal is permissible only after the girl child attains 18 years
of age or has passed 10th standard, whichever is earlier. An account under default should
be regularised before the withdrawal is allowed.
Documents required:
• Certificate of Birth of the girl child: The certificate of birth is often provided by the
hospitals where the girl child is born. In other situations, even a certificate issued by
government officials related to domicile would also be considered to be valid for opening of
the account.
• Address Proof of the parents or legal guardian of the girl child: The address proof
document could be anything among Passport, Driving License, Electricity or Telephone
Bill, Election ID Card, Ration Card or any other address proof issued by the Government of
India.
• Identity Proof of the parents or legal guardian of the girl child: Likewise, passport,
PAN Card, Matriculation Certificate, Election ID Card or any other certificate issued by
Government of India validating the identity of the concerned person would be valid as an
identity proof for opening the account.

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3Senior Citizens Savings Scheme, 2004
Senior Citizens Savings Scheme is a product offered by Govt. of India and hence is one of
the safest investment options. Rate of interest is as decided by Ministry of Finance from
time to time. Any depositor may open an account at any deposit office by making an
application in Form A along with the amount of deposit in multiple of one thousand rupees,
along with age proof.
A depositor may operate more than one account subject to the condition that deposits in all
accounts taken together shall not exceed the maximum limit of Rs.15 lakhs and provided
that deposits by depositors shall be restricted to the retirement benefits or Rupees Fifteen
lakhs whichever is lower.
A depositor may open the account in individual capacity or jointly with spouse.
Eligibility:
• An individual who has attained the age of 60 years and above on the date of opening of
an account.
• who has attained the age of 55 years or more but less than 60 years and who has retired
on superannuation or otherwise on the date of opening an account.
• who has retired at any time before the commencement of these rules and attained the
age of 55 years or more on the date of opening of an account,
• The retired personnel of Defence Services (excluding civilian Defence employees)
irrespective of the above age limits subject to fulfillment of other specified conditions.
NRI /HUF
• Both NRIs and Hindu Undivided Family are not eligible to open an account under these
rules.
Deposits and withdrawals:
• There shall be only one deposit in the account in multiple of one thousand rupees not
exceeding Rupees Fifteen lakhs.
• Permitted after one year of opening the account but with penalty.
Mode of Deposit:
The deposit under these rules may be made:
• In cash, if the amount of deposit is less than Rupees One lakh.
• By cheque or demand draft drawn in favour of the depositor and endorsed in favour of
the deposit office.
Renewal:
• The depositor may extend the account for a further period of three years after the
maturity period of five years. An application in Form B should be made within a period of one
year after the date of maturity period.
Interest on Deposit:
• Deposit made under these rules shall bear interest as advised time to time from the date

277
of deposit payable at the end of each calendar quarter e.g. 31st March / 30th June / 30th
September / 31st December. Compounding of interest not permissible.
Nomination:
• The depositor may nominate a person or more than one person, at the time of opening of
the account or at any time after the opening of the account but before its closure, by an
application onccompanied by the passbook to the Branch.
• Nomination made by the depositor can be cancelled or varied.
Maturity
• The deposit made at the time of opening of account shall be paid by the concerned
deposit office after the expiry of five years from the date of opening of the account on
production of the passbook accompanied by a written application (withdrawal form) Form
E.
• In case a depositor does not close the account on maturity and also does not extend the
account, the account will be treated as matured and the depositor will be entitled to close
the account at any time subject to the condition that the post maturity interest at the rate as
applicable to the deposits under the Post office Savings Accounts from time to time will be
payable on such matured deposits up to the end of the month preceding the month of the
closure of the account.
Death of the depositor
• In case of death of the depositor before maturity the account shall be closed and deposit
refunded on application inForm F along with interest to the nominee or legal heirs in case
the nominee has also expired or nomination was not made as per rules.
• If the total amount including interest payable is up to Rupees one lakh it may be paid to
the legal heirs on production of (i) letter of indemnity (ii) an affidavit (iii) a letter of disclaimer
on affidavit (iv) certificate of death of the depositor on stamped paper in the form as in
Annexure to Form F.
Where the depositor has expired before the maturity of the deposits and the nominee/ legal
heir approaches the bank for closure of the deposit account, the nominee/legal heir in such
cases is entitled to the benefit of SB rate of interest for the period commencing from the date
of death of the depositor to the date of closure.
Premature closure of Account
On an application in Form E the depositor may be permitted to withdraw the deposit and
close the account at any time after the expiry of one year from the date of opening of the
account subject to the following conditions:-
ü In case the account is closed after the expiry of one year but before the expiry of two
years from the date of opening of the account, an amount equal to one and half percent of
the deposit shall be deducted and the balance paid to the depositor.
ü In case the account is closed on or after the expiry of two years from the date of opening
of the account, an amount equal to one percent of the deposit shall be deducted and
balance paid to the depositor.

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TDS
TDS is applicable. However, no TDS is applicable if the depositor files Form 15H or Form
15G or a certificate under S 197 (i) of IT Act. Nominee of investors of SCSS can also
produce 15G form at the time of payment after the death of depositor.
Opening of Government Accounts
Types of Government Accounts:
There are three types of Government accounts:
a) Cash Assignment or Letter of Credit A/c: Every Ministry has an Integrated Financial
Adviser. He makes budget allocation of the various departments under the Ministry. On the
strength of this, the Accounts Officers issue letters of credit (LOC) assigning the amount
available to the Drawing and Disbursing Officers (DDO). There are two types of DDOs- i)
Cheque Drawing and Disbursing Officer (CDDO) and ii) Non Cheque Drawing and
Disbursing Officer (NCCDO). The Bank is advised directly, by the Pay & Accounts Officer of
the allotment under the letter of credit. The drawings should not be permitted in excess of
the allotment under any circumstances. The unspent balance of allocated LOC may be
carried over to the next quarter but not beyond the financial year. However, the unspent
amount of the last quarter of the year can be carried over to the first quarter of the next year
and should be adjusted against the last year's LOC only.
b) Drawing Account: The Government may authorize the Bank to permit drawings without
limit. Usually, the Accounts Officers of Pay & Accounts Officers are authorized to operate
Drawing A/cs. These accounts are known as 'Drawing Accounts'.
c) Personal Ledger Accounts: Some Govt. Officers are authorized to open a current
account with the Bank to book receipt and drawings; drawings shall not exceed the balance
in the account. These accounts are called Personal Ledger Accounts.
Opening of Govt. Accounts: Formalities
For opening the accounts (Deposit/ Drawing/Cash Assignment Accounts) for accredited
Ministries, the following formalities are required:
1. The head of the concerned accounts organization of the Ministry/Departments may
directly approach the Bank under advice to RBI, DGBA, Central Office, Mumbai: CAS,
Nagpur and office of the CGA.
2. The permission/approval of Principal Chief Controller of accounts of Ministry/ Deptt.
3. Required forms duly signed by the Controller of Accounts of concerned Ministry/ Deptt
and counter signed by the Head of Local Accounting Unit, with their Stamps and Seal.
4. Name and designation, Code & Address of Pay & Accounts Officer (CDDO/NCDDO, if
any also)
5. Name of Focal Point Branch.
6. Confirmation of the Branch for availability of infrastructure/ communication/ good courier
and cash management etc. for ensuring timely fund settlement, reconciliation and to avoid
the losses to the Bank on account of it.
7. Willingness/ consent of the Branch and their controller to open such account.

279
8. Approval of Circle Management Committee of the circle as it has wide ramifications on
business, income and also on loss on account of delayed settlement of funds.
All applications for opening Government Account received by the branches should be
obtained in the prescribed forms and forwarded to GAD, Belapur through the LHO.
In this regard, please also refer to e-Circular No. NBG/GAD/PKP/19 of 2011-12 dated
22.08.2011.
(Where the Bank is not the accredited Bank, Government authorities have to additionally
seek approval of the CGA, Ministry of Finance, New Delhi and the RBI)
Precautions in handling Government Accounts
1. All Government accounts should be opened with authorization from the respective
Ministries/ RBI and Controller General of Accounts. Therefore, the application in prescribed
formats should be submitted to GAD, Belapur through LHO.
2. All government accounts should be opened under government product codes as
advised by GAD to ensure proper accounting and reconciliation.
3. All PAOs maintain Drawing Accounts where there are unlimited Drawing Power.
Therefore, branches have to take care that proper limits are fed in the system so that no
cheques drawn on these accounts are returned for want of drawing powers.
4. The CDDOs and NCDDOs maintain Cash Assignment or Letter of Credit Accounts
where limited drawing power is assigned by respective PAOs. Therefore, branches have to
ensure that proper record is maintained of the LOCs assigned in the registers maintained
for the purpose and the same LOC is fed in the system so that no cheques are inadvertently
returned for want of LOC in the system.
Calculation of Government commission
Calculation of Government commission was done manually up to the month of February
2014. The branches used to maintain back-up register for this purpose. This data was then
fed in P report software. Therefore, the process was very cumbersome. It also gave room
for wrong calculation. To plug this loophole and to avoid manual intervention, the
calculation of government commission was automated with effect from 31.3.2014.
How does the system calculate Government Commission?
The government commission is calculated on accrual basis every month based on
transactions put through in the government accounts in CBS under specified State
Government and Central Government product codes as per the specified rates. The pension
data is taken from Pension Software and commission calculated at the specified rates.
Every quarter end, the following entries are passed by the system:-
For State Government Accounts:
Debit State Government Commission Receivable Account BGL 3199686
Credit State Government Commission Account BGL 3199690
For Central Government Accounts:
Debit Central Government Commission Receivable Account BGL 3199687 Credit Central
Government Commission Account BGL 3199691
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On Receipt of Actual Commission from RBI
Actual commission is claimed by GAD in case of Central Government transactions and by
FSLO in case of State Government transactions. On receipt of actual commission from
RBI, GAD credits the amount so received from RBI to Central Government Commission
Receivable Account BGL 3199687. Similarly FSLO credits the amount to State
Government Commission Receivable Account BGL 3199686. Ideally, on passing these
entries, the Commission Receivable Accounts should have zero balances. However, many
a times this does not happen because the amount settled by RBI may be more/ less than
the amount of accruals shown in the Commission Receivable Accounts.
Why does the Actual Commission Received and Commission Accruals Differ?
The difference could be for following reasons:
• The government accounts are not opened under the specified Central Government or
State Government product codes.
• The receipt transactions are routed through a pooling account opened under normal
current account before being transferred to Government Accounts under specified product
codes. In such cases, the branches need to give the correct number of transactions in the CBS
screen when transferring the funds from pooling account to Government account.
Alternatively, use the new Trickle Feed File format. While doing so, the branches need to
ensure that the mode/ channel type is given correctly as e- mode/ physical mode as the case
be. System calculates the commission as per the identification code given in the file in the
specific field.
• Some branches give Challan number printed on the challan instead of number/ count of
transactions while putting through the transaction. This gives inflated commission accruals.
Such instances have reduced substantially after the introduction of system checks. Now the
system validates through a logical relationship between the number/count of challans with the
amount field so that branches are restricted to input unusually large number of transactions.
However, such instances can not be ruled out completely. Therefore, branches have to be
very careful while inputting the number of transaction/ challan field.
Precautions to be taken by Branches
1) Ensure that the government accounts are opened under specified Government product codes.
2) If pooling accounts are to be opened for any purpose, it should have approval of the
Circle Management Committee. Branches have to ensure that these accounts are
reconciled on a daily basis and the amount is transferred from pooling account to
Government Accounts opened under specified government product codes before EOD.
3) GAD 5 should be checked on a daily basis with the actual vouchers so that any
abnormalities are noticed immediately.
4) In case of bulk transactions posted using trickle feed files, the specified trickle feed file
format for government transactions, should be used. Branches have to ensure that the
mode/ channel type is given correctly as e-mode/ physical mode as the case be. System
calculates the commission as per the identification code given in the file in the specific field.
5) The default codes in Government Commission Receivable Account and Government
Commission Account should be attended to immediately and necessary correction entries
passed.

v v v 281
Chapter - 21
Digital Products of
the Bank
NOTES
 Chapter-21:Digital Products of the Bank

As part of modernization our Bank has been adding new Digital Banking products on time to
time for the customers. Our Bank wants to empower its customers to avail services through
digital channels while inside a physical branch or on the move. Bank also wanted to tap the
vast unbanked masses of the country and drive financial inclusion. Here we can see some
of the digital banking products which have been added by the bank in past few years.

State Bank “No Queue”: It empowers the customers to efficiently book a virtual token at
their own convenience from any place without being physically present in the branch. With
No Queue app, customer can book a virtual queue ticket for their nearest branch and get
real time status notification of their position in the queue.
SBI Anywhere: Personal
State Bank Anywhere - Personal is State Bank of India's Retail Internet Banking (RINB)
application offered on Mobile. This application contains majority of important functionalities
and features that are provided on INB platform.
Features include:
Enquiry Services: Account Information, Mini Statement, Statement of Account
Funds Transfer :To Self, Inter and Intra Bank Accounts, NEFT,IMPS - Person 2 Person
(P2P), Person 2 Account (P2A).
mCash - Transfer funds to other accounts using account number and mobile number or
email ID to any bank
RTGS Funds transfer | Credit Card (Visa) Transfer
Quick Transfer - Fund transfer instantly without adding beneficiary by scanning receiver's
QR code | Transaction Status Enquiry
FD /RD Open Fixed Deposit <Rs. 1 Cr. Open Recurring Deposit and Enquiry
mCommerce :Top up/Recharge of Mobile & DTH
Debit Card : Debit Card Hot-listing
Requests : Cheque Book Request, Aadhar and LPG Seeding, Pay with Bill,Pay without
Bill, Scheduling of Bill Payment,Post-paid Bill Payment (Mobile / Landline)
Platforms available on: Android, iOS, Windows and Blackberry
How to install and use :Download the State Bank Anywhere App from App Store. There is
no registration process for Anywhere, as it can be accessed using INB credentials.
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Safety instructions :Do not share your User ID/Password, Profile Password and One
TimePassword (OTP) sent through SMS, etc., to anyone or leaves any such information
anywhere.
State Bank Anywhere: Saral
This is a simplified, single user friendly and simple transactional product ideally suited for
sole proprietorship concerns, micro enterprises or individual businessmen who require
online transactions facility in their business accounts. The product provides transaction
rights to the user involving transfer of funds to own or third party accounts. Both intra and
inter-bank transactions are supported.
Features include:
My Accounts:Show case overview of 3 account variants (Transactions / Deposits / Loan)
Detail account information
Banking :Mini statement, Funds Transfer (Own A/c), Intra-Bank (Within SBI) Transfer, Inter-
Bank (Other Bank), Transfer (NEFT), Pay EPF, Pay Supplier, Fixed Deposit
Bill payment: With Bill, Without bill, View Biller, Scheduled bills
Top up and recharge: Mobile top-up, DTH recharge, Transaction enquiry Platforms
available on: Android, iOS, Windows and Blackberry
How to install and use :Download the State Bank Anywhere-Saral App from App Store.
There is no registration process for Anywhere - Saral, as it can be accessed using CINB
credentials of Saral.
Safety instructions :Do not share your User ID/Password, Profile Password, One Time
Password (OTP) sent through SMS, etc., to anyone or leave any such information
anywhere.
State Bank Anywhere: Corporate
State Bank Anywhere Corporate' is the CINB facility offered on Mobile for Khata plus, Vypaar
& Vistaar users. The transaction limit is the same as that of desktop application. (Corporate
users are able to make payments as per the access right and limits set by the corporate.)

Platforms available on: Android, iOS and Windows 283

How to install and use:Download the State Bank Anywhere- Corporate App from App
Store. There is no registration process for Anywhere - Corporate, as it can be accessed
using CINB credentials of Corporate.
Safety instructions :Do not share your User ID/Password, Profile Password, One Time
Password (OTP) sent through SMS, etc., to anyone or leave any such information
anywhere.
BHIM-Aadhaar-SBI / SBI Aadhaar Pay
BHIM-Aadhaar-SBI is a digital payment acceptance solution from State Bank of India
which enables the SBI merchant to accept payments for goods/services using his android
smartphone and fingerprint reader from customers having Aadhaar seeded bank accounts.
The transaction will be interoperable in nature allowing any bank customer to transact on
BHIM-Aadhaar-SBI.
The registration process is fully automated and app based for the individual merchants.
The merchant needs to download BHIM- Aadhaar-SBI / SBI Aadhaar Pay from the Google
Play store and register himself using his Aadhaar number and biometric credentials. During
the registration process the merchant is asked to select his account maintained with SBI
where he wants the payments to be credited. In addition, the merchant is also asked to
agree to the terms and conditions for using the app which are displayed on the mobile itself.
Merchant Requirements:
Ÿ Aadhaar seeded account with SBI.
Ÿ Certified Biometric Reader with Micro USB / USB C-Type connector.
Ÿ Android smartphone with Android version 4.2 or higher with internet connectivity and
OTG support for connecting biometric device.
Ÿ Phone should be able to power the biometric reader; please check with supplier
Merchant Complaints : In case the funds are not received for a successful transaction.
The merchant needs to contact SBI helpdesk 1800112211 to lodge a complaint for non-
receipt of funds.
SBI Pay
Brief Description :“SBI Pay” is a payment solution not only for SBI account holders, but
account holders of all Banks who are part of UPI, to send and receive money from their
smart phones with a virtual payment address acting as unique identifier. No additional
details are required to be used other than the Virtual Payment Address (VPA). SBI Pay
works on the interoperable mobile based payment solution of NPCI aimed at facilitating
instant payments (push, pull and merchant transactions) and providing a single interface
through mobile/web with superior customer experience.
Platforms available on - Android platform. The IOS version will be rolled out as and when
NPCI, comes out with the specification for IOS platform.
How to install and use - Download the SBI Pay App from App Store. On app start up,
confirmation message for SMS to be sent for registration will be displayed.
On clicking YES, registration page is displayed where the customer enters the following
details: Preferred Virtual Address b. First Name c. Last Name d. Email e. Security Question
f. Security Answer g. Bank Name(where the customer holds the account).
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On completion of above details, customer clicks on "Next" button and SBI Pay App submits
the above details to UPI Engine for registration. Select Account and Click Register.
Safety instructions: Do not share login or MPIN with anyone.If mobile phone gets stolen,
block number / SIM immediately
SBI Buddy
Brief Description :State Bank Buddy, a mobile wallet by SBI that helps the users to meet
their daily payment needs. It can be used by customers of all Banks. It is available in13
languages on Android and iOS.
Ÿ Transfer Money to all your contacts using their mobile number or Facebook Contacts
Ÿ Pay all your electricity/telephone bills, insurance premiums, recharge mobile/d2h, shop
online & offline, book travel and movie tickets, rail tickets on IRCTC etc.
Ÿ Transfer money from your wallet back to your bank account
Ÿ SBI customers can transact up to Rs. 1,00,000/- per month by just submitting their KYC
through INB or Debit card credentials, using the Power Up option within the wallet.
For more details, visit: www.sbi.co.in/buddyPlatforms available on: Android and iOS
How to install and use: Give a missed call on 09021122222 or download directly from
Google Playstore or iOS App store
Safety instructions :Do not share your 4 - digit PIN used for login or while doing trans
Bharat QR
Brief Description:State Bank Bharat QR Merchant Application offers a simple and reliable
way to receive payments by the Merchant. This allows the merchant to:
Ÿ Provide hassle-free and quick payment experience to customer.
Ÿ Receive payments by displaying static QR code or dynamic QR code
Ÿ Merchant need to login to the application with valid credentials (User ID and Password).
Ÿ Use 'Generate Static or Dynamic QR Code' option to generate QR code.
Ÿ This QR code is scanned by the customer in the State Bank Anywhere Application and
the payment is processed.
Ÿ Merchant receives payment confirmation as notification in the Bharat QR Merchant App.

Point of Sale Terminals

Point of Sale terminals enable safe and hassle-free card payments.
Features: PSTN/GPRS Network ,Additional Convenience Point to the card holder No
additional/ hiddenchargesLoyalty Rewards for Customers No cash handling by merchants
and branches
Types of Terminals :
Ÿ PSTN - Gets connectivity through Land Line
Ÿ Desktop GPRS - Gets connectivity through the secure GPRS SIMs provided by
Bank. Terminals get power from the normal electricity supply.

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 Ÿ Portable GPRS - Gets connectivity through the secure GPRS SIMs provided by
Bank. Terminals get power from the inbuilt battery.
Ÿ Mobile POS (mPOS) - Mobile phone + dongle for swiping/dipping the
Magstripe/EMV card
Cash@PoS (Chhota ATM): Cash@PoS is a value added service on SBI PoS terminals
deployed at merchant establishments.It enables the cardholder to avail cash withdrawal
facility at their nearby merchant shop having SBI PoS using their debit cards up to a limit of
Rs. 1000/- per card per day for Metro and Urban centres and Rs. 2000/- per card per day for
Semi-urban and Rural centres (as per RBI guidelines).
The cardholder may request the merchant, enabled with Cash@PoS facility to swipe/dip
his card for the following scenarios to withdraw cash:
Ÿ Withdrawing Cash only
Ÿ Withdrawing cash in addition to purchase of goods.

Retail Internet Banking

Retail Internet Banking enables individual customers (customers of personal segment
including NRIs) to carry out anywhere and anytime banking activities, aided with the power
and convenience of the Internet.
Features: Transfer of funds between own accounts ,Intra / Inter Bank fund transfer
(RTGS/NEFT/IMPS),Internal Fund Transfer facility,Quick Transfer facility | Bill
payments,Payment of Direct, Indirect and State Govt. Taxes,Online Nomination facility | E-
Statement,Online creation/closure of Fixed Deposits (TDR/STDR/ RD/MOD),Lock, Limit
ATM Card, Block Card, Activation of New ATM card, etc. Online generation / regeneration
of ATM PIN ,Registration for Social Security Schemes (PMJJBY, PMSBY, APY) Download
PPF account statement financial year wise Stop Cheque and Revocation of Stop
Cheque,Cheque Book Request Page.
How to register
Existing Individual customers can register online by using the link "New User? Register
Here" on the login page or "New User Registration" on the home page of OnlineSBI, for
availing retail internet banking service of the bank provided he has State Bank ATM cum
Debit Card. Existing Individual customers not having State Bank ATM cum Debit Card can
also register online by submitting the application form generated online at any branch of
State Bank of India and after approval by the branch. Individual Customers (existing & new)
can also visit any branch for availing net banking facility.
Safety instructions
Do not share your User ID/Password, Profile Password, One Time Pass word (OTP) sent
through SMS, etc., to anyone or leave any such information anywhere.
Ensure that you have installed the latest anti-virus/anti spyware/ personal firewall/security
patches on your computer or high end mobile phones. Do not access Internet Banking from
shared or unprotected computers in public places.

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Corporate Internet Banking
CINB enables Corporate customers (customers of non-personal segment including
Companies, Firms, Trusts etc.) to carry out anywhere and anytime banking activities, aided
with the power and convenience of the Internet. Bank is offering different variants to suit the
needs of corporates.
Transaction Products
Saral: Single user operated, suitable for Proprietorship firms. Per day financial
transactions limit is Rs.10 lacs.
Vyapaar: Suitable for small & medium sized firms with per transaction limit of Rs.50 lacs.
No limit on number of transactions per day.
Vistaar: Suitable for large and very large sized firms / corporates with per transaction limit
of Rs.500 Crores. No limit on number of transactions per day.
Enquiry Products
Khata: Facility to view account information and download account statement of your account.
Suitable for single user operated accounts. Khata Plus: Khata Plus is an enquiry facility for
business entities having multiple business locations. Access allowed for multiple users.
Major features:
Ÿ Account view and statement download
Ÿ Transfer of funds between own accounts
Ÿ Intra / Interbank fund transfer (RTGS/NEFT/IMPS)
Ÿ Bill payments | Bulk Transactions through file upload
Ÿ Payment of Direct, Indirect and State Govt Taxes
Ÿ EPFO Payments | Supplier payment | Draft Request facility
How to avail the CINB facility:
CINB forms are available on Bank's website https://www.onlinesbi.com. To avail CINB, the
respective forms should be filled, duly signed and submitted at the Branch.
Safety instructions Do not share your User ID/Password, Profile Password, One Time
Password (OTP) sent through SMS, etc., to anyone or leave any such information
anywhere.
SBI Mingle
SBI Mingle is the Social Media Banking Platform of our bank. Using Mingle, customer can
transact without going out of his/her Facebook/Twitter.

Platforms available on:Android & Desktop 287

How to Register
Facebook Registration
Registration can be done with Account Number validated through OTP Customer can also
register through Debit Card Number & PIN Registration and Login process is secured
through SSL Customer will be able to set password validated through OTP Customers can
view account balances, transaction history and transfer funds between accounts instantly
Twitter Registration : Send DM #SBIreg <Account No> An OTP will be sent to your
registered mobile number
Next send DM #regOTP <OTP>

State Bank MobiCash

Brief Description :
State Bank Mobicash is a Mobile Wallet by State Bank of India in association with BSNL. It
offers facilities like fund transfer, mobile recharge (BSNL Pre-paid), bill payment (BSNL
landline and Postpaid), balance enquiry and mini statement. The wallet is available on
Smartphones as well as Basic/Feature phones. The wallet can be used in “self-mode” as
well as in assisted mode through the help of BSNL CSPs. The wallet can be upgraded to
Full-KYC wallet, which offers higher transaction limits and cash withdrawal at BSNL CSPs.
Features:
Ÿ Loading of wallet through Cash at BSNL's CSPs (Only method to Load cash into wallet)
Ÿ Transfer of funds to another MobiCash wallet and SBI A/c
Ÿ Cash-out (Cash withdrawal through wallet at CSP, For Full-
KYC Wallet only)
Ÿ Transfer to Other Bank's account through IMPS
Ÿ Payment of BSNL services where BSNL is a biller (Postpaid mobile/ Telephone bill
payment, prepaid top up, VAS purchase).
How to register
Ÿ The app for Smartphones is available on Play Store(Android) andApp Store (iPhone).
Ÿ Basic phone users can register and transact through SMS. SMSKeywords are available
at www.sbimobicash.co.in. Nearest BSNLCSP or SBI Contact Centre may be contacted for
assistance.
Ÿ BSNL subscribers can also register through USSD for which they need to dial *511#. For
assistance nearest BSNL CSP may be contacted.
Safety instructions
Do not share your User ID/Password, One Time Password (OTP) sent through SMS, etc.,
to anyone or leave any such information anywhere. If using SMS mode of wallet then after
each transaction the SMS should be deleted from Message Sent-Box.

State Bank Debit Card :Card Ek, Khushiyan Anek

Brief Description :State Bank Debit Cards now come with the latest security feature, a
built in EMV Chip and gives you access to your bank account whenever and wherever you
want. One third of India has chosen to have State Bank Debit Card (260 million Cards).
State Bank Debit Card can be used at PoS/eCom transactions at more than 30 Lakh
288
Mode of payment options available:
SBI Internet Banking
Other Banks' Internet Banking
SBI ATM cum Debit Card
Other Banks' ATM cum Debit Card
All Banks' Credit card
Off-line Collection at SBI Branch through SBI Cheque/cash
For more details, visit: www.onlinesbi.com
How to avail this facility :
The Corporate customers desirous of availing the 'State Bank Collect' facility should be
registered for CINB with Khata plus/ Vyapaar/ Vistaar facility. In post-login, the CINB
administrator has to go to State Bank Collect page and configure page for State Bank
Collect for their Corporate/Institution which will be subsequently approved by the Bank.
Safety instructions :
Do not share your User ID/Password, Profile Password, One Time Password (OTP) sent
through SMS, etc., to anyone or leave any such information anywhere.

SBIePay
Brief Description :
SBIePay is the Payment Aggregation Module of the State Bank of India. It is the first Bank in
India to start its own online aggregator services. This initiative will go a long way in providing
payment facilities to a large number of customers performing online transactions towards
Govt. dues and e-commerce transactions through the following channels:
1. Internet Banking: 41 major banks and growing.
2. Debit Cards (Visa/Master/Maestro/Rupay): All Banks
3. Credit Cards (Visa/Master/Amex)
4. IMPS: All Banks
5. Kiosks: Digital Banking Seva Kendras 6. Wallet : PayPal
SBIePay has on-boarded over 180 Merchants. Some of the important on-boarded
clients are:
1. Visa on Line by MHA.
2. Non Tax Revenue Portal of CGA.
3. Indian Railway E Procurement Services.
4. E GRAS of Maharashtra & Rajasthan
5. National Pension Scheme
The thrust is on enabling the Govt Departments / Agencies, Utility services & PSUs to go
online as a part of the PM's “Digital India” initiative.
SBIePay has the necessary 'Payment Industry Data Security Standard version 3.0'
(PCIDSS V 3.0) and 'Payment Application Data security Standards' (PADSS) Certificates
for implementing the prescribed data security standards.

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Merchant Establishments, across different categories; these typically include: grocery,
medicine, travel portals, utility stores/ portals etc. Feel empowered to use it for all your daily
needs.
How to use :
a)At Point of Sales terminals: Swipe/chip-in/tap your State Bank Debit Cards, and enter
PIN for payments.
b) For eCom transactions: Enter the Card Details at secure payment gateways (https links
only) and enter the OTP received on your registered mobile number and your payments are
made.
Variants :Signature (only for Exclusif customers), Platinum, Gold, Global and Silver.
How to get a debit card :Apply at Home Branch or through OnlineSBI.
Safety instructions :Do not share the PIN or card details with anyone. If card is lost/stolen
Block the card through SBI Quick. Use the ATM ON/OFF features in SBI Quick to control
usage of your debit card at various channels like e-commerce, PoS, International etc.
Same feature available on OnlineSBI with additional option to control limits on card spends.
Pre-paid cards
Brief Description :
SBI has a range of prepaid cards that meet various requirements of individuals as well as
companies.These Cards can be used for online transactions, purchases at Merchant
Establishments (PoS) as well as for withdrawal of cash from ATMs
Variants :
i)eZ Pay : For distribution of Social Benefits by Govt Depts, wages to Blue
Collar workers etc.
ii) Gift : Individuals/Corporates to be given as gifts to recipients.
iii)Smart Payout : Paying workers who do not have Bank Accounts.
iv)Imprest : Primarily for Indian Railways and Transport Companies.
v)Achiever : For corporates to distribute incentives,bonus to employees,agents etc.
vi) Foreign Travel : Available in 8 major currencies for those travelling abroad (except
Nepal and Bhutan). Students and holiday travelers key target group.
How to get a card :All prepaid cards except Foreign Travel are available at all branches.
KYC varies based on type of Card and Nature of applicant (individual/applicant). Foreign
Travel cards available only at select branches.
Safety instructions :Do not share the card or PIN with anyone.

State Bank Collect

Brief Description :
'State Bank Collect' facilitates Corporate Internet Banking (CINB) customers to receive
online payments from receivers of their goods & services. CINB customers need not
maintain a website. Payer of the Corporate has to just click on 'State Bank Collect' and
choose the Corporate for which payment has to be made, fill up particulars of
goods/services towards which payment has to be made and make the payment through
one of the several options displayed to him on a Multiple Option Payment System (MOPS)
page. The corporate customer will get MIS Report of the account.

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How to on-board merchants
web page of the merchant/Govt departments for accepting payments online via all above
channels.Customers can also duly fill in MIF and TIF, as available at
https://www.sbiepay.comfor SBIePay to take it forward for integration.
SBI Quick: Missed Call Banking
SBI Quick is a simple and quick way to get balance and mini statement through mobile
phone. This application provides SMS banking by sending an SMS with pre-defined
keywords to predefined mobile numbers. For availing the benefits of this functionality there
will be charges for SMS as per the mobile tariff plan.
Services include:
a) Balance Enquiry
b) Mini Statement
c) Blocking of ATM Card
d) ATM Card Usage Configuration
e) Car and Home Loan Enquiry
f) PM Social Security Schemes
New Services available: Request for Issue of cheque Book, can also be done.
Platforms available on: Android, Windows, iOS & Blackberry
How to install and use :Requires a simple one time registration from the mobile number
registered with Bank.
State Bank Secure OTP
Brief Description :
State Bank Secure OTP is an OTP generation App for verifying transactions done through
State Bank Internet Banking and State Bank Anywhere App. It is a service provider
independent, hassle free OTP service which replaces the need for receiving the OTP for
INB transactions via SMS.
Features
OTP can be generated in two modes:
1. Online OTP: Internet connection (via SIM or Wi-fi) is required for generating OTP.
2. Offline OTP: OTP is generated in the absence of Wi-fi, Mobile network or SIM card.
Platforms available on: Android, Blackberry, Windows and IOS.
How to install and use : One time registration with INB credentials is required for using
the App. Enter your Internet Banking (INB) credentials to register for the application.
Enter the OTP received in your INB registered mobile number and set your mPIN to
complete the one time registration for the App.
For more details please visit :https://m.onlinesbi.com/sbijava/mobile/sbsecure_otp_app_faq.html
SBI FASTag:
SBI FASTag users don't need to carry cash for toll transactions, and don't need to worry
about collecting the exact change. Auto-debit of exact amount through the SBI FASTag
enables faster transit through the toll plazas and save time. SBI FASTag can be recharged
online through Credit Card / Debit Card/ Net Banking / IMPS etc.

291
 YONO: Key Process shifts in Account Opening
You Only Need One is an integrated digital banking platform offered by our Bank to enable
users to access a verity of financial and other services such as Online account opening,
Fund transfer, online shopping, taxi booking or medical bill payments. Currently YONO is
offered as a smartphone app for both Android and iOS.
Digital Savings Account:

(Source : Digital Banking Booklet, LHO Thiruvananthpuram) 292

v v v
Chapter - 22
Cross Selling
NOTES
 Chapter-22:Cross Selling
Cross Selling has become a buzz word these days. And the bank has been emphasising on
cross selling in recent times. The importance of cross selling is understood by all of us. This
chapter is an attempt to explain the importance of cross selling beginning with definitions
and highlighting the importance. It also covers some broad definitions of Insurance and
MFs to help service managers in developing an overarching view of cross selling business.
Let us begin with definitions.
Marketing is the process of identifying, anticipating and then meeting the needs and
requirements of consumers in order to make a profit. In contrast, selling involves
persuading customers that your products or services provide the benefits that they are
looking for.
Selling - The last step in the chain of commerce where a buyer exchanges cash for a
seller's good or service, or the activity of trying to bring this about.
Cross Selling - sell (a different product or service) to an existing customer, invites
customers to buy related or complementary items. Selling of banks products/services to an
already existing customer—is the broad definition of what cross sell means in the Banking
parlance. It can be selling an existing account customer a credit card or selling an existing
credit card customer a mortgage loan. Normally cross-selling in banks includes Mutual
Funds, Life Insurance, General Insurance and other products like National Pension
Scheme etc;
Upselling is the practice of encouraging customers to purchase a comparable higher-end
product than the one in question. Up-selling is a powerful skill, but only when your customer
is getting more value. Not less.
Cross-selling and Upselling are often used interchangeably; both offer distinct benefits and
can be effective in tandem.
Down-selling is the art of narrowing a customer's expectations and matching them more
effectively with a solution that best fulfils their needs or desires. In this instance the
salesperson is simply meeting their own agenda and getting the customer to pay for it.
When you down-sell you build trust and demonstrate you are acting in your customers best
interests.
Importance of Cross-selling and Up-selling in Bank
Bank that offers more than one product or service can promote to customers different
products and services they deliver based on need (e.g. Insurance etc), behaviour (Credit
Card etc) or demography (Pehla Kadam Pehli Udaan etc). This type of cross selling can be
a highly effective tool for growing business, acquiring new to bank clients and enhance
customer life time value by encouraging multiple product holdings by Individual customer.
When you cross-sell, you offer the customer a product or service related to whatever they
are already buying. It can be simple as promoting a credit card and internet banking to a
savings or current account customer. Up-selling enables increasing the quantum placed on
an existing product or additional products. Both methods of encouraging clients to use
additional services and invest a little more can dramatically boost your Bank Business,

293
grow revenue (Other Income) and help achieve set objectives (Risk Mitigation e.g. Loan
Insurance).
If you worry about irritating customers with too many sales calls, SMS, e-mailers (Customer
Relationship Management efforts) to invest more or open a new account, don't. Surveys
show that most customers appreciate being told about additional products or services that
might better meet their needs or about new services that were not offered in the past which
creates value in the present shows that the bank is in a way demonstrating that you are
aware of their needs and care about their satisfaction and overall experience. But please
remember “Be aware of the customers' needs”.
How can you improve and create opportunities for cross-selling and up-selling in
branches?
1. Stay relevant: Do not overload customers with too many unrelated cross-selling
suggestions. Offering Pehla Kadam accounts to parents with kids below 15 is certainly a
good fit. But if your attempts to cross-sell are not closely related to the original purchase /
purpose, they are far less likely to succeed.
2. Share expert recommendations. One way to facilitate successful cross-selling and up-
selling is to state specific recommendations from professionals / experts of our bank. You
may consider seeking help of Wealth Management Professionals of the Bank in this regard.
3. Employee approach in cross-selling, up-selling techniques. The approach must be built
around serving the customer and further solve the customer's problem, not just selling
more products.
4. Timing is important. Cross-selling and up-selling can occur at different times, depending
on the products and services you are offering. At times it may not materialise at that instant
time, but may later revert.
5. Try product or service bundles. Bundling has long been used as a way to entice
prospective or existing customers to buy not just a single product or service, but an entire
group of items that go together.
6. Use the customer relationship system effectively (Combination of Social CRM)
integrated with your core banking system to identify changing customer behaviour, needs
and extract timely information in order to promote the required product or service to target
groups. Please do not be late in responding. The CRM gives a 360º view of the customer -
indicating the current products and services used what could be sold, purchase patterns,
future potential, predicting what next.
7. Leverage the cross-selling potential of your branch / area. Position cross-sell and up-sell
items throughout your site in places where they can help educate visitors on the depth and
variety of what your business offers. Try mixing and matching different products and
services to see what works best. But try – you must!
The key to successful cross-selling and up-selling is to focus your efforts on meeting the
customer's needs, rather than simply pushing more products and services. This is one area
where you may need to do a little experimentation in order to find just the right balance, use
of right business intelligence (environment scan of your branch) and CRM.

294
You need to make cross selling and up-selling a key component of your doing business at
branch. Further entire staff should be sales oriented and speak to customers with a right
attitude and should posses' adequate knowledge on products, services, communication
skills and be motivated to convert customers. It therefore becomes your responsibility
(along with the Branch Manager) to cultivate the habit of cross-selling in your branch.
Tips for effective Cross-selling and Up-selling
1. Make sure your customers know what other products and services you provide. If you
don't tell them you have a corresponding or alternative product or service, you can't expect
them to know. And don't expect that your customers would have done their homework in
this matter or wait for them to ask.
2. Suggest only relevant products or services that your customer might actually need or
appreciate. There is no long-term value in selling someone something they don't really
need as they're less likely to buy from you again.
3. Recommend the product at the right time. Cross-selling is usually best to do before
checkout to maximize on the potential for impulse buys, while it is better to up-sell earlier in
the sales process before your customer has made up their mind. While conversing with
your customers try to gauge their needs. Drop enough hints that you understand them.
4. Up-sells and cross-sells should be recommendations only – don't continue to push
products or services on your customers if they have said they don't want them. However, do
provide them with your contact number, in case they wish to revert. Update the CRM
appropriately.
5. Make sure all employees know your range well so that they can advise customers on
how you can best help them and which products go together (Age profile and need of the
customers to be understood along with the products).
6. Target your clients; Estimate which clients are suitable candidates for the cross-selling
process, create clients' behaviour profiles and predictive modelling using Business
Intelligence / CRM tools. CRM is available in our bank, for Business Intelligence once may
request Analytics department to throw up results in the form required. Scan your branch
environment and the area of operations.
7. Provide your clients with good customer service. This will help repeat sales, when you
have higher chances of cross-selling and especially up-selling. Please remember the
competition is increasing day by day and coupled with new Financial Technologies, the
impact on earnings of the bank will be high, if we do not provide good customer service.
8. Inform your clients correct about the opportunity to buy an additional product without
forcing them to wonder or search. You can take the help of YONO / website in these
matters.
9. Keep track of refusals to accept cross-selling or up-selling offers and lost business
report in order to make follow up calls or visits. Use CRM effectively.
Benefit of Cross-Selling for Bank and Branch
1. Enhances customer experience with the organization (Customer gains)
2. Enables acquiring of new-to-branch customers and retention of existing customers.

295
3. Enables customers to form opinions and introduce new customers to the branch (Word
of mouth publicity).
4. Improves your customer base and help meet goals and objectives.
5. Encourages customers to use multiple products and services and prevent switching to
competitor banks.
6. Assist indeveloping new products and value propositions through constant engagement
(make suggestions regularly).
7. Enjoy customer life time value (customer longevity), reduce acquiring cost.
How to get into Cross Selling
1. Bank has a Cross Selling department under the National Banking Group. An officer of
Scale-IV is appointed as CM cross selling for each type of product at every LHO (Cross
selling – SBI Gen etc ;) Besides at RBO level there a Deputy Manager is posted in every
region for cross selling & Sales campaign management performance management.
2. One needs to clear an exam to be able to sell the products of SBIMF, SBILife and SBI
General.
3. No exam has to clear for selling NPS or other Government Products / Business. Don't
forget government business is lucrative for bank.
4. One needs to register on the website of National Institute of Securities Markets (NISM)
(available on banks intranet) for NISM series V-A – Mutual Fund distributor's certificate
exam.
5. After registration the URN needs to be submitted to the cross selling department.
6. One can select the exam date and time online from the NISM website. After completing
the exam, the certificate needs to be submitted to the cross selling department in the
respective RBO.
7. For SBI LIFE & SBI General (only for SBI employees) – one needs to download SMART
Investor app from Google play store (those having android phones) and through ones PF
number one can register for composite certificate (that is one can appear for single exam of
Life and Gen insurance). After keying the data and selecting the center, the URN is received
in few days on the e-mail / through SMS by the candidate. Thereafter the candidate needs
to complete 50-75 hours of training depending on type of certificate and educational
qualifications (at the Insurance Institute of India – website).
8. One can appear for exam of insurance only after having completed the training.
9. After having cleared the respective exams one can start cross selling the Insurance and
MF products on behalf of the bank.
Government Business incentive at a Glance for our Bank

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Government Commission share Top Banks (Source: RBI)

SBI Agency Comm. share in 2015-16 was 67% (SBI) and 7% (Associates) which has
increased to 81.20% in 2016-17 for the Group. This business will be undergoing a big
change in future due to implementation of BPR in Govt. Business by RBI.
Importance of Government Business
• Facilitates cross-selling of P Segment Products and other products
• No Capital Adequacy requirement
• No risk of bad accounts/NPAs
• Govt. is the largest customer of the Bank
• Largest commission earner
• SBI Commands Market Share > 58%
Agency Commission Rates w.e.f 01-07-2012 (The Earning Potential)

For more details please refer to GBU site on info.sbi

MUTUAL FUNDS - Some Definitions
MF - A mutual fund is a professionally-managed investment scheme, usually run by an
asset management company that brings together a group of people and invests their
money in stocks, bonds and other securities.

297
Parties involved in the Mutual Fund
· Sponsor: A Sponsor establishes the Mutual Fund, along with any individual/body
corporate. The Sponsor's liability is restricted to his contribution. Sponsor must contribute a
minimum 40% to the net worth of AMC.
· Trustees: Refers to Board of Trustees who holds property of the Mutual Fund, for the
benefit of the unit holders.
· Asset Managing Company (AMC): Can be a company registered under the
Companies Act 1956 / 2013 approved by SEBI. The AMC is entrusted with the task of the
managing the various schemes and operations of the AMC. The AMC should have
minimum Net worth of Rs 50 crores. At least 50% of the Board of the AMC should be
independent directors, i.e. not connected with the Sponsoring organization. No person can
be a Director on more than one AMC.
· Custodian: Person holding a certificate to carry on business of custodian of securities
under SEBI.
Definition: Net asset value (NAV) is the value of a fund's asset less the value of its liabilities
per unit.
NAV = (Value of Assets-Value of Liabilities)/number of units outstanding
NAV is often associated with mutual funds, and helps an investor determine if the fund is
overvalued or undervalued. When we talk of open-end funds, NAV is crucial. NAV gives the
fund's value that an investor will be entitled to at the time of withdrawal of investment. In
case of a close-end fund, which is a mutual fund with fixed number of units, price per unit is
determined by market and is either below or above the NAV.
A new fund offer (NFO) is the first time subscription offer for a new scheme launched by the
asset management companies (AMCs). A new fund offer is launched in the market to raise
capital from the public in order to buy securities like shares, govt. bonds etc. from the
market.
Mutual funds can be classified as
1. Open ended funds - is a collective investment scheme which can issue and redeem
shares at any time. An investor will generally purchase shares in the fund directly from the
fund itself rather than from the existing shareholders.
2. Close ended funds - A closed-end fund is organized as a publicly traded investment
company by the Securities and Exchange Commission (SEC). Like a mutual fund, a
closed-end fund is a pooled investment fund with a manager overseeing the portfolio; it
raises a fixed amount of capital through an initial public offering (IPO).
Funds can also be classified as Growth Fund and Dividend Fund - Mutual fund houses offer
two kinds of schemes: Growth and dividend. In the growth option, profits made by the
scheme are invested back into it. Dividends are declared only when the scheme makes a
profit and it is at the discretion of the fund manager. The dividend is paid from the NAV of the
unit

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Some common types of Mutual Funds are:
1. Money market funds - These funds invest in short-term fixed income securities such as
government bonds, treasury bills, bankers' acceptances, commercial paper and
certificates of deposit. They are generally a safer investment, but with a lower potential
return then other types of mutual funds.
2. Fixed income funds - These funds buy investments that pay a fixed rate of return like
government bonds, investment-grade corporate bonds and high-yield corporate bonds.
They aim to have money coming into the fund on a regular basis, mostly through interest
that the fund earns.
3. Equity funds - These funds invest in stocks. These funds aim to grow faster than money
market or fixed income funds, so there is usually a higher risk that you could lose money.
You can choose from different types of equity funds including those that specialize in
growth stocks (which don't usually pay dividends), income funds (which hold stocks that
pay large dividends), value stocks, large-cap stocks, mid-cap stocks, small-cap stocks, or
combinations of these.
4. Balanced funds - These funds invest in a mix of equities and fixed income securities.
They try to balance the aim of achieving higher returns against the risk of losing money.
Most of these funds follow a formula to split money among the different types of
investments. They tend to have more risk than fixed income funds, but less risk than pure
equity funds. Aggressive funds hold more equities and fewer bonds, while conservative
funds hold fewer equities relative to bonds.
5. Index funds - These funds aim to track the performance of a specific index such as the
BSE / NSE. The value of the mutual fund will go up or down as the index goes up or down.
Index funds typically have lower costs than actively managed mutual funds because the
portfolio manager doesn't have to do as much research or make as many investment
decisions.
6. Specialty funds - These funds focus on specialized mandates such as real estate,
commodities or socially responsible investing.
7. Fund-of-funds - These funds invest in other funds.
Before you cross –sell, understand the fund's investment goals and make sure that
your customer is comfortable with the level of risk. Even if two funds are of the same
type, their risk and return characteristics may not be identical. You may also want to
speak with a financial advisor / Wealth Management Branch of the Bank to help you
decide which types of funds best meet your customer's needs.
Some Definitions of Life Insurance
• Life Insurance - Life insurance is a protection against financial loss that would result
from the premature death of an insured.
• Whole life policy - Whole life insurance is a contract with premiums that includes
insurance and investment components. The insurance component pays a predetermined
amount when the insured individual dies. The investment component builds accumulated
cash value the insured individual can borrow against or withdraw.

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• Endowment policy - An endowment policy is a life insurance contract designed to pay a
lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten,
fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of
critical illness.
Some definitions of Life Insurance
A rider is an add-on provision to a basic insurance policy that provides additional benefits
to the policyholder at an additional cost. Standard policies usually leave little room for
modification or customization beyond choosing deductibles and coverage amounts
Types of Riders
1. Accidental Death Benefit – death due to accident or bodily injury. It doubles the sum
assured payable.
2. Accelerated Death Benefit – involves payment of all or a portion of life insurance policy's
face value prior to the insured's death because of adverse medical condition of the insured.
3. Waiver of Premium - A waiver of premium rider is a clause in an insurance policy that
waives the policyholder's obligation to pay any further premiums should he become
seriously ill or disabled, so the waiver of premium allows people to benefit from an
insurance policy, even when they cannot work.
Effect of riders on insurance policies
1. When a claim for the benefits of a rider is made, it can result in the termination of the rider,
while the original policy continues to insure you as usual or
2. When a claim for the benefits of a rider is made, it can result in the termination of the
entire policy.
Mortality Tables
A table that shows the rate of deaths, occurring in a defined population, during a selected
time interval or survival from birth, to any given age. Statistics included in the mortality table
show the probability a person's death before their next birthday, based on their age.
Premium – is the price for insurance.
Premium plans and payment modes
1. Single premium – premium is paid in one lump sum and once only.
2. Level premium - the premiums remain the same throughout the duration of the
contract.
3. Limited Payment - Premiums on limited payment life insuranceare paid for a limited
number of years, but the benefits last a lifetime. Premiums are payable for 10, 15, or 20
years depending on the policy selected. You can pay premiums monthly, quarterly, semi-
annually, or annually.
4. Flexible Premium Plan – flexibility of deciding the amount of premium.
Bonus - bonus is the extra sum which gets accumulated to any insurance policy on a yearly
basis which will be paid to the policyholder on the maturity of the plan or in the case of his
death. This will be paid on successful completion of all the premiums due for a particular
number of years.
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Actuary - a person who compiles and analyses statistics and uses them to calculate
insurance risks and premiums.
Policy Conditions (always to be aligned with the customers' needs)
1. Age – of life assured is to be admitted before entertaining any claim
2. Days of Grace – after days of grace the policy lapses.
3. Lapse and Non-forfeiture. If premiums are not paid the policy lapses and the benefits
under the policy (cover etc.) ceases to exist. Some amount may be refunded by the
insurance policy which is termed as non-forfeiture amount of the premiums paid.
4. Paid up value – the value of the premiums that have been paid as reduced by the
insurance company after the policy lapses or the surrender value that a policy acquires
(normally after 3 years of premium) as calculated by the Insurance Company.
5. Extended Term Assurance – when the policy holder ceases to pay the premiums but
keeps the full amount of policy in force for whatever term the cash value permits.
6. Revival - special schemes, installment revival scheme, loan cum revival scheme.
7. Assignment and Nomination- the act of appointing a Nominee to receive the sum
assured in case of an insurance event occurs is called Nomination. The benefits of the
policy can be assigned to the lender against the policy. In the event of death of the policy
holder the benefits are first paid to the assignee and the remaining to the nominee.
8. Minor Nominee- minor is considered in eligible for contract and handles the sum assured
money. Therefore in case of a nominee being a minor someone needs to be appointed to
take care till the minor turns 18 years of age.
9. Surrenders and Loans against policies – surrender value is paid by the insurance
company when an insurable event occurs or a policy is surrendered voluntarily by the policy
holder. Loan against policy is available in case of traditional life insurance policies subject
to surrender value.
10. Foreclosure – in the event a loan is foreclosed which is covered by a loan insurance the
insurance coverage comes to an end, since the insurable interest ceases to exist.
11. Alterations – some policies permit changes in the written document of the policies
these are termed as alterations.
12. Indisputability of the policy – if a policy has run a minimum set time, the insurance
company cannot dispute the any claim under the policy.
13. Restrictions – these are series of exclusions, restrictions or limitations in the policy that
is designed to withhold payment under certain circumstances.
Settlement of Claims
A claim is the payment made by the insurer to the insured or claimant on the occurrence of
the event specified in the contract, in return for the premiums paid for the insured. The easy
and timely settlement of a valid claim is an important function of an insurance company.
Types of Insurance Claims
1. Non-early death claims – made after 3 years from the commencement of the policy

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2. Early death claims – made within 3 years from the commencement of the policy.
3. Survival claim
4. Maturity Claim
(Please check IRDA website for comprehensive set of guidelines for claim settlement)
Bancassurance - In India, banks hope to maximize expensive existing networks by selling a
range of products including insurance. Hence Bancassurance channel is gaining
popularity in India due to its inherent advantages in 7 p of marketing
Rebating – Returning a portion of the premium or the agent's/broker's commission on the
premium to the insured or other inducements to place business with a specific insurer. (This
is prohibited in India through IRDA act 1938)
SBI Life offers following plans
3. Protection plans – Sampoorn Cancer Suraksha, Smart Shield, Saral Shield, Saral
Swadhan +, Smart Swadhan Plus, Grameen Bima, eShield, elncome Shield.
4. Retirement Plans – Saral Pension, Retire Smart, Annuity Plus.
5. Child Plans – Smart Champ Insurance, Smart Scholar.
General Insurance
• Insurance other than Life Insurance falls under the category of General Insurance.
• General Insurance comprises of insurance of property against fire, burglary etc,
personal insurance such as Accident and Health Insurance, and liability insurance
which covers legal liabilities. There are also other covers such as Errors and Omissions
Insurance for professionnels, Credit Insurance etc.
• Non-life insurance companies have products that cover property against Fire and allied
perils, flood storm and inundation, earthquake and so on. There are products that cover
property against burglary, theft etc. The non-life companies also offer policies covering
machinery against breakdown. There are policies that cover the hull of ships and so on.
A Marine Cargo policy covers goods in transit including by sea, air and road. Further,
insurance of motor vehicles against damages and theft forms a major chunk of non-life
insurance business
• In respect of insurance of property, it is important that the cover is taken for the actual
value of the property to avoid being imposed a penalty should there be a claim. Where a
property is undervalued for the purposes of insurance, the insured will have to bear a
rateable proportion of the loss. For instance if the value of a property is Rs.100 and it is
insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim
amount payable would be Rs.25/- (50% of the loss being borne by the insured for
underinsuring the property by 50%). This concept is quite often not understood by most
insured.
• Personal insurance covers include policies for Accident, Health etc. Products offering
Personal Accident cover are benefit policies. Health insurance covers offered by nonlife
insurers are mainly hospitalization covers either on reimbursement or cashless basis.
The cashless service is offered through Third Party Administrators who have
arrangements with various service providers, i.e., hospitals. The Third Party
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 Administrators also provide service for reimbursement claims. Sometimes the insurers
themselves process reimbursement claims. Accident and health insurance policies are
available for individuals as well as groups. A group could be a group of employees of an
organization or holders of credit cards or deposit holders in a bank etc. Normally when a
group is covered, insurers offer group discounts.
• Liability insurance covers such as Motor Third Party Liability Insurance, Workmen's
Compensation Policy etc offer cover against legal liabilities that may arise under the
respective statutes— Motor Vehicles Act, The Workmen's Compensation Act etc. Some
of the covers such as the foregoing (Motor Third Party and Workmen's Compensation
policy) are compulsory by statute. Liability Insurance not compulsory by statute is also
gaining popularity these days. Many industries insure against Public liability. There are
liability covers available for Products as well. There are general insurance products that
are in the nature of package policies offering a combination of the covers mentioned
above. For instance, there are package policies available for householders, shop
keepers and also for professionals such as doctors, chartered accountants etc. Apart
from offering standard covers, insurers also offer customized or tailor-made ones.
• Suitable general Insurance covers are necessary for every family. It is important to
protect one's property, which one might have acquired from one's hard earned income. A
loss or damage to one's property can leave one shattered. Losses created by
catastrophes such as the tsunami, earthquakes, cyclones etc have left many homeless
and penniless. Such losses can be devastating but insurance could help mitigate them.
Property can be covered, so also the people against Personal Accident. A Health
Insurance policy can provide financial relief to a person undergoing medical treatment
whether due to a disease or an injury. Industries also need to protect themselves by
obtaining insurance covers to protect their building, machinery, stocks etc. They need to
cover their liabilities as well. Financiers insist on insurance. So, most industries or
businesses that are financed by banks and other institutions do obtain covers. But are
they obtaining the right covers? And are they insuring adequately are questions that
need to be given some thought.
Government run schemes (namely ESIS, Central Government Health Scheme or CGHS) –
these are mandatory
1. Employer State Insurance Scheme (ESI):- Enacted in 1948, the employers' state
insurance (ESI) Act was the first major legislation on social security in India.
2. Central Government Health Insurance Scheme (CGHS):- Established in 1954, the
CGHS covers employees and retirees of the central government and certain
autonomous and semi-autonomous and semi-government organizations.
3. Universal Health Insurance Scheme (UHIS):- For providing financial risk protection to
the poor, the government announced UHIS in 2003.
Other initiatives of Government of India
1. Maternity Benefit (Amendment) Act 1961
2. Workmen's Compensation (Amendment) Act 1923
3. Plantation Labor Act 1951

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4. Mine Labor Welfare Fund Act 1946
5. Beedi Workers Welfare Fund Act 1976
6. Building and Other construction Workers Act 1996
7. Janraksha insurance scheme
Health insurance provided to employees by an employer or by an association to its
members is called group coverage.
Marketing of Insurance Products and Services
• To best meet the needs of its targeted market. The Insurance business deals in selling
services and therefore due weight-age in the formation of marketing mix for the
Insurance business is needed.
• The marketing mix includes sub-mixes of the 7 P's of marketing i.e.
1. the product,
2. its price,
3. place,
4. promotion,
5. people,
6. process &
7. Physical attraction.
• The above mentioned 7 P's can be used for marketing of Insurance products and
banking services as well
The premium paid towards medical insurance is tax deductible under section 80D (u/s
80D) of the Income Tax Act, 1961.
• You can claim tax deductions, provided you are paying the premium on a mediclaim
policy which is in the name of
• Yourself (and / or)
• Your Spouse (and / or)
• Your Parents ( Parents need not be dependent on you) (and / or)
• Dependent Children
(For more details please refer to Income Tax guidelines as per latest budget)
Also to encourage cashless transactions, the Centre recently announced that life and
general insurance policies of the PSU insurers would be offered at a discount of 8 per cent
and 10 per cent respectively if they are purchased online.
Personal Accident insurance or PA insurance is an annual policy which provides
compensation in the event of injuries, disability or death caused solely by violent,
accidental, external and visible events. It is different from life insurance and medical &
health insurance.

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Accident Insurance helps you handle the medical and out-of-pocket costs that add up after
an accidental injury. This includes emergency treatment, hospital stays and medical
exams, and other expenses you may face, such as transportation and lodging needs.
What is not covered under PAI?
1. Natural Death
2. Compensation under more than one of the benefits mentioned in Table of Benefits in
respect of same period of disablement.
3. Any other payment after a claim under one of the benefits 1,2, 3 and 4 in Table of
benefits has been admitted and becomes payable.
4. Any payment in case of more than one claim under this policy during any one period of
Insurance by which our liability in that period would exceed CSI
Payment of compensation in respect of Death or injury as a consequence of/resulting from
a) Committing or attempting suicide, intentional self-injury.
b) Whilst under influence of intoxicating liquor or drugs.
c) Drug addiction or alcoholism.
d) Whilst engaged in any adventurous sports and/or hazardous activities.
e) Committing any breach of law with criminal intent.
War, Civil War, invasion, act of foreign enemies, revolution, insurrection, mutiny, military or
usurped power, seizure, capture, arrest, restraint, or detainment, confiscation, or
nationalisation or requisition by or under the order of any government or public authority.
Consequential loss of any kind and/or any legal liability
5. Pregnancy including child birth, miscarriage, abortion or complication arising there
from.
6. Participation in any naval, military or air force operations.
7. Curative treatments or interventions
8. Venereal or sexually transmitted diseases.
9. HIV and or related illness
Products of SBI General Insurance
1. Individual – Retail Insurance: Home Insurance (Simple Home Insurance, Long Term
Home Insurance), Motor Insurance (Long Term Two Wheeler Insurance Policy, Motor
Private Car Insurance, Motor Two Wheeler Insurance), Health Insurance (Arogya Top up
policy, Arogya Premier Policy, Arogya Plus Policy, Loan Insurance, Hospital Daily Cash,
Critical Illness Insurance Policy, Health Insurance- SBI, Health Insurance), Travel
Insurance (Business & Holiday), Personal Accident Insurance (Individual).
2. Business – Corporate Insurance : Health Insurance (Group Personal Accident
Insurance, Group Health Insurance), Miscellaneous (Plate Glass Insurance, Money
Insurance, Burglary Insurance), Construction / Engineering Insurance (Consequential
Loss – machinery breakdown, Boiler and Pressure Plant Insurance, machinery breakdown

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insurance, Contractors Plant & Machinery, Plant Erection all Risks Insurance, Contractors
All Risk Insurance, Electronic Equipment Insurance), Package Insurance (Business
Package Insurance, Industrial All Risks Insurance), Marine Insurance (marine cargo
insurance), Motor Insurance (Tractor and other farm vehicles insurance, commercial motor
insurance), Fire Insurance (consequential loss – fire insurance, standard fire and special
perils insurances).
3. Rural Insurance – Sheep & Goat Insurance Policy, Micro Insurance Policy, Cattle
Insurance Policy, and AgriculturePump set Insurance Policy.
SBI has enter into tie-up with
1. AMUNDI (France) for setting up SBI Funds Management Pvt. Ltd. -Amundi is a
subsidiary jointly created by Crédit Agricole and Société Générale to regroup their asset
management operations. It was created in January 2010. The company is listed on
Euronext Paris since November 2015 which was, at the time, the largest initial public
offering on the Paris stock exchange for 10 years. In December 2016, the company
announced that it was buying Pioneer Investments from the Italian bank UniCredit, bringing
the total of assets under management at €1.276 trillion, and making Amundi the world's
eighth largest asset manager. It has offices in 37 countries and local investment teams in
Boston, Dublin, London, Milan, Paris and Tokyo
2. BNP Paribas Cardiff – for setting up SBI Life Insurance Co. Ltd.
BNP PARIBAS CARDIF - is the Life and Property & Casualty insurance arm of BNP
Paribas, one of the strongest banks in the world. With presence in more than 70 countries,
the BNP Paribas Group ranks highly in Retail Banking, Investment Solutions and
Corporate & Investment Banking.
BNP Paribas Cardiff is one of the world leaders in creditor insurance, and its life and non-life
insurance units have received an A rating from Standard & Poor's.
Insurance Australia Group (IAG) - SBI General Insurance Company Limited commenced
its operations in the year 2010 and is a 74:26 joint venture.
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307
v v v

308
 25 SBI Loan App

Customer Relationship Management (CRM) Solution:

Customer Relationship Management (CRM) as a concept has always been integral to the
customer centric vision of the Bank. It has always been a pioneer in implementing new age
solutions to enhance the customer experience and increase the moments of customer
delight. The Bank has also been a forerunner in catering to the need of the customers in this
digital age. In the context of the present 'Always-on-Always-Connected' day and age, the
bank's customers demand and deserve a consistent, high quality service experience,
across all interaction points – at the branch, online, over the phone or at any of the self-
service stations. Customers expect a continuity of context/conversation across
interactions that they have had with the bank over time. Towards that end, the Bank has
implemented a robust full featured CRM system to deliver efficient and seamless high
quality customer experience. The CRM system will leverage the Bank's Data Warehouse
and Analytics capabilities to proactively address customer's needs and offer the right
product/services at the right time. Apart from increased cross-sell and up-sell capabilities,
reduced turn-around-time, Customer 360 degree view, automated and streamlined
processes, improved reporting and effective decision making would be some of the key
benefits of the CRM system.
v v v
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 ANNEXURE-3:ATM/CDM RECONCILIATIOIN

Reconciliation of the ATM/CDM should be done each time when the cash is replenished /
evacuated to / from ATM/CDM. There are three components involved while reconciliation of
the ATM / CDM machine. These three components are:-
a) Physical Cash is the cash present in the ATM/CDM which is part of Branch cash
balance.
b) Admin balance may be called as the balance maintained at ATM Switch Center. When
we replenish/evacuate cash in ATM/CDM, an Admin function is carried out.This data is
captured by the Switch and a continuous record of admin balance is maintained at ASC
for each ATM.
c) ATM Cash Balance Account (3198) is an ATM wise BGL account in which every
transaction taking place in ATM (Cash replenishment as well as customer withdrawals)
is posted at CORE Banking.
ACCOUNTING PROCESS
The accounting process to be followed at the branch in CBS menu for replenishing the
ATMs is already discussed in Chapter “ATM Operations & CMS”. The reconciliation
procedure to be followed in the machine is discussed below.
STEP-BY-STEP PROCEDURE FOR ACTIVITIES AT ATM
First step to be followed is Cash Verification. There can be three possibilities;
a.) The physical cash is matching with Admin Balance i.e. No difference
b.) Physical cash is more than the Admin Balance i.e. Excess Cash
c.) Physical cash is less than the Admin Balance i.e. Short Cash
Each of these possibilities is discussed as follows:
1. CASH VERIFICATION (NO CASH DIFFERENCE)
Joint Custodian / Admin card holder will insert admin card into SBI ATM. TheATM will
prompt card holder to enter the PIN.On entering the PIN, ATM will display admin
transaction menu with following options- CASH VERIFICATION, CASH
REPLENISHMENT, ENQUIRY and OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS

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ATM custodians will select “CASH VERIFICATION” option. On user selection, ATMwill
display following options under “CASH VERIFICATION” menu - EXCESS CASH,SHORT
CASH & NO DIFFERENCE.
SELECT YOUR CHOICE
CASH VERIFICATION
SHORT CASH
EXCESS CASH
NO DIFFERENCE

If physical cash is tallying with admin balance, the custodians will select “NO
DIFFERENCE” option from the transaction menu;
On successful capture of the message at Switch, ATM will display the appropriate
message to Admin card holder and prints the receipt.
YOUR TRANSACTIONSUCCESSFUL

2. CASH VERIFICATION (EXCESS CASH)

Joint Custodian / Admin card holder will insert admin card into SBI ATM.ATM will
prompt card holder to enter the PIN.On entering the PIN, ATM will display admin
transaction menu with following options-
CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS
· Custodians will select “CASH VERIFICATION” option.
SELECT YOUR CHOICE
CASH VERIFICATION
SHORT CASH
EXCESS CASH
NO DIFFERENCE
· After selection of “CASH VERIFICATION”, ATM will display following options -
EXCESS CASH, SHORT CASH & NO DIFFERENCE. Custodians will select
“EXCESS CASH” option from the transaction menu.
· ATM will prompt custodians to select the hopper.

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 PLE A SE SELECT HOPPER

HOPPER 1
HOPPER 2
HOPPER 3
HOPPER 4

On hopper selection, ATM will prompt card-holder to enter the excess cash amount.On
amount entry, ATM will prompt user to select option “YES” or “NO”.

PLESAE ENTER AMOUNT

YES
NO
If custodians select “YES”, ATM will prompt user to Re-enter the amount.On amount
entry, ATM will prompt user to select option “YES” or “NO”.

PLESAE ENTER AMOUNT

YES

NO

If custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”,
ATM will show confirmation screen giving hopper no and amount of excess cash

PLESAE CONFIRM DETAILS

AMOUNT :
HOPPER :
YES

NO

If custodians select “NO” button then transaction will be cancelled.If custodians select
“YES” button then ATM will send transaction request to switch.Depending upon the
response from Base 24, ATM will display the appropriate message on screen and print
the receipt.
YOUR TRANSACTION SUCCESSFUL
Entry of Excess cash will be posted in CBS online, on the basis of message given from
Switch to CORE as under:
Debit : ATM Excess Cash Found Account (3199845bbbbbc)
Credit : ATM Excess Cash Account (3199844bbbbbc)
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When Custodians return the excess cash found in the ATM, the branch will manually post
undernoted entry through “ADJUSTMENT OF ATM EXCESS CASH” option;
Debit : Branch Cash Balance Account
Credit : ATM Excess Cash Found Account (3199845bbbbbc)
Note :CBS generated reference number (SYS NO) has to be entered in reference number
field and last 3 digits of ATMID has to be entered in ATM Number field of the screen.

The entry of excess cash will be posted in CBS as under

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3. CASH VERIFICATION (SHORT CASH)
Joint Custodian / Admin card holder will insert admin card into SBI ATM.ATM will prompt
card holder to enter the PIN.On entering the PIN, ATM will display admin transaction menu
with following options- CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and
OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS
· Custodians will select “CASH VERIFICATION” option.
SELECT YOUR CHOICE
CASH VERIFICATION
SHORT CASH
EXCESS CASH
NO DIFFERENCE
ATM will display following transactions - EXCESS CASH, SHORT CASH &
NODIFFERENCE. Custodians will select “SHORT CASH” option from the transaction
menu.
ATM will prompt user to select the hopper.
PLE A SE SELECT HOPPER

HOPPER 1
HOPPER 2
HOPPER 3
HOPPER 4

On hopper selection, ATM will prompt custodians to enter the short cash amount.

PLESAE ENTER AMOUNT

YES

NO

On amount entry, ATM will prompt custodians to select option “YES” or “NO”.

PLESAE RE-ENTER AMOUNT

YES

NO

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If custodians select “YES”, ATM will prompt custodians to Re-enter the amount.On amount
entry, ATM will prompt custodians to select option “YES” or “NO”.If custodians select “NO”,
ATM will terminate the transaction.If custodians select “YES”, confirmation screen will
appear with hopper no and amount of short cash with “YES” and “NO” options.

PLESAE CONFIRM DETAILS

AMOUNT :
HOPPER :
YES

NO

If custodians select “NO” button then transaction will be cancelled.If custodians select
“YES” button then ATM will send transaction request to switch. If Response is successful:
the switch will decrease the balance in the corresponding hopperand send the successful
response to ATM. If response is unsuccessful: switch will not decrease the cash in hopper
and send decline response to ATM.Depending on the response from Base 24, ATM will
display the appropriate message to Admin card holder and prints the receipt.

YOUR TRANSACTION SUCCESSFUL

Note: In case of Short cash, no accounting entry will be passed in the books of the branch.
The Branch has to lodge a request of Short cash in CMS and the same will be resolved at
GITC level.
CASH REPLENISHMENT (ADMIN INCREASE)
Joint custodians will insert admin card into SBI ATM.ATM will prompt custodians to enter
the PIN.On entering the PIN, ATM will display admin transaction menu with following
options- CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS
Custodians will select “CASH REPLENISHMENT” option. On user selection, ATM will
display Cash verification message with “YES” and “NO” options.

HAVE YOU VERIFIED CASH

YES
NO

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If custodians select “NO”, transaction will be declined.If custodians select “YES”, ATM will
display following transactions - ADMIN INCREASE and ADMIN DECREASE. Custodians
will select “ADMIN INCREASE” option from the Transaction menu.
SELECT YOUR CHOICE
CASH REPLENISHMENT

ADMIN INCREASE

ADMIN DECREASE

ATM will prompt custodians to select the hopper

PLEA SE SELECT HOPPER

HOPPER 1
HOPPER 2
HOPPER 3
HOPPER 4

On hopper selection, ATM will prompt custodians to enter last 8 digits of reference number
generated at the time of giving cash to custodians.
PLEASE ENTER 8 DIGIT REFERENCE NUMBER
YES
NO
On reference number entry, ATM will prompt custodians to select option “YES” or “NO”.If
custodians select “NO”, ATM will terminate the transaction. If custodians select “YES”, ATM
will prompt the card holder to re-enter 8 digit reference numbers.
PLEASE ENTER 8 DIGIT REFERENCE NUMBER
YES
NO

On Reference number re-entry, ATM will prompt custodians to select option “YES” or
“NO”.If custodians select “NO”, ATM will terminate the transaction. If custodians select
“YES”, ATM will ask the custodians to enter amount.

PLESAE ENTER AMOUNT

YES

NO

On amount entry, ATM will prompt custodians to select option “YES” or “NO”.If custodians
select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM will prompt
the custodians to re-enter the amount.
PLESAE RE-ENTER AMOUNT

YES
NO

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On amount re-entry, ATM will prompt custodians to select option “YES” or “NO”.If
custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM
will send the transaction to switch.
Note: If increase amount is greater than hopper limit of 2500 X Hopperdenomination (e.g.
For hopper-2, i.e. '100/-, the maximum amount would be 2500 X 100 = 2,50,000/-) system
will decline the transaction.
On successful validation for amount system will display confirmation screen which contains
reference number, selected hopper and amount entered by user with“CONFIRM” and
“CANCEL” option.
PLEASE CONFIRM DETAILS
REF NO :
HOPPER :
AMOUNT :
YES
NO

If custodians select “CANCEL” then ATM will terminate the transaction.On user
confirmation, ATM will send transaction request to switch.Switch will send this transaction
to CBS and after getting response from CBS, the message will be displayed on ATM
screen:
YOUR TRANSACTION
SUCCESSFUL
Note : If receipt printer is not working, the transaction will be declined and no reversalwill be
generated.
The message of Admin increase will be captured in the Switch and switch will give the
message to CBS. In CBS, undernoted transaction will be posted on the basis of message
received from the Switch;
Debit :BGL A/c No. 3198 of respective ATM
Credit: ATM cash Intermediate account (3199842bbbbbc)
If the custodians have erroneously increased the admin more than the cash replenished in
the ATM machine, the custodians have to decrease the Admin balance as under:
Cash Replenishment (Admin Decrease)
Joint Custodians will insert admin card into SBI ATM.ATM will prompt custodians to enter
the PIN.On entering the PIN, ATM will display admin transaction menu with following
options- CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS

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On amount re-entry, ATM will prompt custodians to select option “YES” or “NO”.If
custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM
will prompt user to enter 4 digit RR number(transaction number). This is 4 digit reference
number mentioned on admin slip of admin increase transaction against which this
decrease is being done.

PLESAE ENTER ADMIN INCREASE

TRANSACTION TIME IN
HHMMSS FORMAT

YES
NO

On RR number entry, ATM will prompt custodians to select option “YES” or “NO”.If
custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM
will validate RR No and after successful validation it will ask the custodians to enter Local
Transaction Date in DDMMYY Format. This will be the date on which wrong admin increase
entry was done.
PLESAE ENTER ADMIN INCREASE TRANSACTION
DATE IN DDMMYY FORMAT
YES
NO
On transaction Date entry, ATM will prompt custodians to select option “YES” or “NO”.If
custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM
will prompt custodians to enter Transaction Time in HHMMSS Format. This time is also
printed on the slip of Admin increase transaction.
PLESAE ENTER ADMIN INCREASE
TRANSACTION TIME IN
HHMMSS FORMAT

YES
NO

On Transaction Time entry, ATM will prompt custodians to select option “YES” or NO”.If
custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”, ATM will
send the request to switch for validation whether proper date and time has been entered or
not.
Ÿ If Date is not valid then DH will prompt ATM to enter valid date.
Ÿ If Time is not valid then DH will prompt ATM to enter valid Time.
Then it will ask custodians to enter “8 DIGIT REFERENCE NUMBER”. This is the
reference number against which admin was increased.

PLEASE ENTER 8 DIGIT REFERENC E NUMBER

YES

NO

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Custodians will select “CASH REPLENISHMENT” option. On user selection, ATM will
display Cash verification message with “YES” and “NO” options.If custodians select “NO”,
transaction will be declined.

HAVE YOU VERIFIED CASH

YES
NO

If custodians select “YES”, ATM will display following transactions - ADMIN INCREASE and
ADMIN DECREASE. User will select “ADMIN DECREASE” option from the transaction
menu.
SELECT YOUR CHOICE
CASH REPLENISHMENT

ADMIN INCREASE

ADMIN DECREASE

ATM will prompt custodians to select the hopper

PLEA SE SELECT HOPPER

HOPPER 1
HOPPER 2
HOPPER 3
HOPPER 4

On hopper selection, ATM will prompt the custodians to enter amount.On amount entry,
ATM will prompt custodians to select option “YES” or “NO”.If custodians select “NO”, ATM
will terminate the transaction.

PLESAE ENTER AMOUNT

YES

NO

If custodians select “YES”, ATM will prompt the card holder to re-enter the amount.

PLESAE RE-ENTER AMOUNT

YES

NO

319
If custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”,
ATM will ask the custodians to Re-enter “8 DIGIT REFERENCE NUMBER”
PLEASE RE -ENTER 8 DIGIT REFERENCE NUMBER

YES

NO

If custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”,
ATM will ask to CONFIRM the same.
PLESAE CONFIRM DETAILS
HOPPER :
AMOUNT :
RRN NO :
DATE :
TIME :
YES
NO

If custodians select “NO”, ATM will terminate the transaction.If custodians select “YES”,
ATM will send the transaction to switch and on the basis of response received from CBS,
appropriate message will be displayed on ATM screen.
YOUR TRANSACTION
SUCCESSFUL
Note : If receipt printer is not working then transaction will be declined and no reversal will
be generated.
In CBS, posting of Admin decrease transaction will be as under;
Debit : ATM cash Admin Decrease Account (3199843bbbbbc)
Credit : BGL A/c No. 3198 of respective ATM
Joint custodians have to return back the cash equivalent to admin decrease, to the Branch.
On receipt of the cash, Branch will post undernoted entry in CBS through CBS
ScreenNo.20192;
Debit : Branch Cash Balance Account
Debit : ATM cash Admin Decrease Account (3199843bbbbbc)

320
Note :CBS generated reference number (SYS NO) has to be entered in reference number
field and last 3 digits of ATMID has to be entered in ATM Number field of the screen.

ENQUIRY (BGL BALANCE)

Custodians will insert/dip admin card into SBI ATM.ATM will prompt custodians to enter the
PIN.On entering the PIN, ATM will display admin transaction menu with following options-
CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and OTHERS.

SELECT YOUR CHOICE

ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS

321
Custodians will select “ENQUIRY” option. On user selection, ATM will display following
transactions under “ENQUIRY” menu - PRINT ADMIN TOTAL & BGL BALANCE
SELECT YOUR CHOICE
ENQUIRY
PRINT ADMIN TOTAL
BGL BALANCE

Custodians will select “BGL BALANCE” option from the transaction menu.ATM will send
the transaction request switch and depending on the response from the switch, ATM will
display the appropriate message to Admin card holder and prints the receipt.
YOUR TRANSACTION
SUCCESSFUL
ENQUIRY (ADMIN BALANCE)
Custodians will insert admin card into SBI ATM.ATM will prompt Custodians to enter the
PIN.On entering the PIN, ATM will display admin transaction menu with following options-
CASH VERIFICATION, CASH REPLENISHMENT, ENQUIRY and OTHERS.
SELECT YOUR CHOICE
ADMIN MENU
CASH VERIFICATION
CASH REPLENISHMENT
ENQUIRY
OTHERS

Custodians will select “ENQUIRY” option. On user selection, ATM will display following
transactions under “ENQUIRY” menu - PRINT ADMIN TOTAL & BGL BALANCE.
Custodians will select “PRINT ADMIN TOTAL” option from the transaction menu.
SELECT YOUR CHOICE
ENQUIRY
PRINT ADMIN TOTAL
BGL BALANCE

ATM will send the transaction request to switch and depending on the response from Base
24, ATM will display the appropriate message to Admin card holder and prints the receipt.
YOUR TRANSACTION
SUCCESSFUL

322
This is the process that needs to be followed for reconciliation at ATM. The same procedure
need to be followed for CDM.
At any point of time, if there is difference between the Admin balance and BGL balance of
any ATM /CDM, the same need to balance after locating the difference. For locating the
difference, Joint custodians need to check the Admin balance and BGL balance for a RR
no. or transaction no. for each dates. The admin balance can be checked from ATM
iALERTS site -> ATM Log while BGL balance can be checked from BGL account enquiry
option in CBS.
The Admin balance and BGL balance for a particular RR no. on a particular date should
match. If there is a difference between the two the balance, the same need to be noted.
Now each and every transactions shown in Admin log need to be matched with that of BGL
log. It may be possible that one transaction hit Admin but missed in BGL or vice versa which
is the actual cause of difference. These entries need to be located and then advised to ATM
Reconciliation deptt. at LHO and GITC for reversal from back end.
v v v

323
 Annexure-4: Complaint Escalation Matrix
iNB Complaints:

RINB Technical Complaints: Lodge a request in service desk under

CINB
Buddy complaints
may please be sent
to:
Complaints o/a P.O.S
may be sent directly
to
Complaints regarding
SBI Pay & BHIM:
RINB.
Financial Complaints: Lodge it in CMS; If not resolved please
escalate to:
cm2it.cms@sbi.co.in with a copy to inb.lhotri@sbi.co.in
Please mail complaints to:
inb.cinb@sbi.co.in ; cm1it.cms@sbi.co.in with copy to
inb.lhotri@sbi.co.in
CINB Helpdesk : 022 27566066 / 27560137 / 27566501 /
27566067
support.statebankbuddy@sbi.co.in &contactcentre@sbi.co.in
complaints.mab@sbi.co.in&agm.mab@sbi.co.in
Please mail complaints to:
1) support.upi@sbi.co. in and 2) cm5it.cms@sbi.co.in

Complaints regarding Please mail complaints to:

Mobicash: 1) techops@triotech.co.in and 2) contactcentre@sbi.co.in

For MBS Financial Please take up all mobile banking financial complaints directly
Complaints Only: by mail to: sbimobilitysupport@techmahindra.com ; and
MK00472187@techmahindra.com .

Additionally, in case of State Bank Anywhere/State Bank Freedom, mb.support@sbi.co.in,

cm5it.cms@sbi.co.in also in the loop and
You may also contact the reconciliation team (financial transactions) at the following No's for further
enquiries/guidance:
1) mb.support team: 022-27564131
Mobile Banking Technical & other Non-Financial Complaints:
Please mail to mb.jaipur@sbi.co.in.
All complaints must be mailed along with the following details (as far as available).

Transaction Id
Mobile No.
USER ID
Acccount Number
Type of Txn
Txn Date/Attempt Date
Amount Top up
Mobile Number
Detail Of Complaint/Error Code
Handset Model
Application used (Freedom/Anywhere/
Anywhere-Personal/Buddy/INB/
P.O.S/BHIM etc.)

324
 DISCLAIMER

This booklet is to be used as ready reference for the Role

Owners. The Primary Objective of this booklet is to provide
hand holding and guidance in day to day effective working.
For Detailed instructions and further clarifications, if any,
reference may please be made to the related circulars
issued by the Bank.

All efforts have been made to ensure correctness of the facts

and figures mentioned in the booklet as per Bank’s
instructions issued till 28/02/2018.

In case of any suggestions, the same may please be sent to

the Email id : sbfi.admin@sbi.co.in
NOTES
NOTES
NOTES
NOTES
NOTES
STU Vision : To Make The Bank Future Ready