JAIIB Updated Syllabus-Principles and Practices of Banking

Module A - Indian Financial System:

Role of RBI, Commercial Banks, NBFCs, PDs,
FIs, Cooperative Banks, CRR, SLR; Equity &
Debt Market; IRDA,

Constitution, Objectives, Functions of RBI; Tools
of Monetary Control; Regulatory Restrictions on
Lending,

Retail Banking- Products, Opportunities;
Wholesale Banking, Products; International
Banking, Requirements of Importers & Exporters,
Remittance Services; Universal Banking; ADRs;
GDRs; Participatory Notes

Types of Money & Debt Market Instruments incl.
G-Secs; ADs, FEMA, LIBOR, MIBOR, etc

Overview of Capital Market; Stock Exchange;
Commonly used Terms; Types of Capital Issues;
Financial Products/Instruments including ASBA,
QIP; SEBI; Registration of Stock Brokers, Subbrokers,
Share Transfer Agents, etc; QIBs

Types of Mutual Funds, its Management & its
Role; Role & Functions of Insurance Companies;
Bancassurance; IRDA

Types & advantages of Factoring & forfaiting
services; Types of off balance sheet items

Introduction to Risk Management; Basel I, II & III
Accords

Role and Functions of CIBIL; Fair Practices Code
for Debt Collection; Codes of BCSBI

Structure, Reforms in the Indian Financial
System; recent developments in Money, Debt,
Forex Markets; Regulatory Framework;
Payments and Settlement System

Module B Functions of Banks

Types; Different Deposit Products & Services;
Services to Customers & Investors
PMLA Act; KYC Norms

Mandate; POA; Garnishee Orders; Banker’s
Lien; Right of Set off

Operational Aspects of COPRA Act & Banking
Ombudsman Scheme

NI Act; Role & Duties of Paying & Collecting
Banks; Endorsements; Forged Instruments;
Bouncing of Cheques; Its Implications; Return of
Cheques; Cheque Truncation System

Operational Aspects of opening and Maintaining
Accounts of Different Types of Customers
including Aadhar, SB Rate Deregulation

Remittances; Safe Deposit Lockers; Govt.
Business; EBT

Cash Management Services and its Importance

Cardinal Principles; Non-fund Based Limits; WC;
Term Loans; Credit Appraisal Techniques;
Sources of WC Funds & its Estimation; Operating
Cycle; Projected Net WC; Turnover Method;
Cash Budget; Credit Monitoring & Its
Management; Base Rate

Targets; Sub-Targets; Recent Developments
Types of Agricultural Loans; Risk Mitigation in
agriculture (NAIS, MSP etc)

MSMED Act, 2006 Policy Package for MSMEs;
Performance and Credit Rating Scheme; Latest
Developments

SGSY; SJSRY; PMRY; SLRS

Need for & Functions of SHGs; Role of NGOs in
Indirect Finance to SHGs; SHGs & SGSY
Scheme; Capacity Building

Operational Aspects, Advantages, Disadvantages
& Guidelines of Credit Cards; Procedure and
Practices for Home Loans, Personal Loans and
Consumer Loans

Types of Documents; Procedure; Stamping;
Securitisation

Assignment; Lien; Set-off; Hypothecation;
Pledge; Mortgage

Land & Buildings; Goods; Documents of Title to
Goods; Advances against Insurance Policies,
Shares, Book Debts, Term Deposits, Gold, etc;
Supply Bills

Definition; Income Recognition; Asset
Classification; Provisioning Norms; CDR

BC; BF; Role of ICT in Financial Inclusion, Mobile
based transactions, R SETI

Importance of financial literacy, customer
awareness

Module C Banking Technology

Computer Systems; LANs; WANs; UPS; Core
Banking
ATMs; HWAK; PIN; Electromagnetic Cards;

Electronic Banking; Signature Storage &
Retrieval System; CTS; Note & Coin Counting
Machines; Microfiche; NPC; RUPAY

Components & Modes of Transmission; Major
Networks in India; Emerging Trends in
Communication Networks for Banking; Evolution
of EFT System; SWIFT; Automated Clearing
Systems; Funds Transfer Systems; Recent
Developments in India

Trends in Technology Developments; Role &
Uses of Technology Upgradation; Global Trends;
Impact of IT on Banks

Risk Concern Areas; Types of Threats; Control
Mechanism; Computer Audit; IS Security; IS
Audit; Evaluation Requirements

Gopalakrishna Committee Recommendations

Customer Education; Safety Checks;
Precautions

Module D

Concept; Management; Products & Services;
Marketing Mix; Brand Image

Evolution, Importance & Relevance of Social
Marketing/Networking
Consumer
Behaviour and
Product
Consumer Behaviour; Product Planning,
Development, Strategies, etc; CRM
Pricing Importance, Objectives, Factors, Methods,
Strategies of Pricing; Bank Pricing
Distribution Distribution Channels; Channels for Banking
Services; Net Banking; Mobile Banking
Channel
Management
Meaning, Levels, Dynamics, Advantages
Promotion Role of Promotion in Marketing; Promotion Mix
Role Of Direct
Selling Agent /
Direct Marketing
Agent in a bank
Definition; Relevance; Banker as DSA/DMA;
Delivery Channels in Banks; Benefits
Marketing
Information
Systems – a
longitudinal
analysis
Functions & Components of MKIS; MKIS Model;
Use of Computers & Decision Models;
Performance of MKIS; Advantages

PRADHAN MANTRI JAN-DHAN YOJANA (PMJDY) - Frequently Asked Questions (FAQs)

Q. 1.    What  is  Pradhan Mantri  Jan-Dhan Yojana?

Ans.    Pradhan  Mantri Jan-Dhan Yojana  (PMJDY)  is   National Mission for  Financial  Inclusion  to  ensure  access  to  financial  services,  namely,  Banking/ Savings & Deposit  Accounts, Remittance, Credit, Insurance, Pension in an  affordable  manner.

Q.2.     How  is  PMJDY  different  from  the  earlier  Financial Inclusion Plan (Swabhimaan)?

Ans.    PMJDY  focuses  on coverage  of  households  as  against  the  earlier  plan  which focused  on  coverage  of  villages.  It  focuses  on  coverage  of  rural  as  well  as  urban  areas.   Earlier  plan  targeted only  villages  above  2000  population  while  under  PMJDY  whole  country  is  to be  covered  by  extending  banking  facilities  in  each  Sub-Service  area  consisting  of  1000 – 1500 households  such  that  facility  is  available  to  all  within  a  reasonable  distance, say  about  5  Km.

Q.3.     Whether  Joint  account  can  be  opened  in  Pradhan  Mantri  Jan-Dhan  Yojana?

Ans.    Yes,  joint  account  can  be  opened.

Q.4.     Under  this  Scheme,  where  can  I open  an  account?

Ans.    Account  can  be  opened  in  any bank branch  or  Business Correspondent  (Bank  Mitra) outlet.

Q.5.     What  is  BSBDA  Account ?

Ans.    Basic  Savings Bank Deposit Account  (BSBDA) has  been  defined  by RBI vide  its  circular  dated  10.08.2012.  Its  salient  features  are:

·        There is no requirement of minimum balance.

·        The services available include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of collection/deposit of cheques.

·        Maximum of 4 withdrawals a month including ATM withdrawal. No such limit for deposits.

·        Facility of ATM card or ATM-cum-Debit card.

·        These  facilities  are  to  be  provided  without  any  extra  cost.

Q.6.     Whether  there  are  any  restrictions like  age, income, amount  etc. criteria  for  opening  BSBDA by  banks  for  individuals?

Ans.   Any individual  above  the  age  of  10 years  can  open  BSBDA  Account.

Q.7.     What  is  RuPay  Debit  Card?

Ans.    Rupay  Debit  Card  is  an   indigenous  domestic  debit  card  introduced  by  National  Payment  Corporation  of  India (NPCI).  This  card  is  accepted   at  all  ATMs  (for  cash  withdrawal)  and  at  most  of  the  PoS  machines  (for making  cashless payment  for  purchases)  in  the  country.

Q.8.     What  is  PIN  Number ?

Ans.    Personal  Identification  Number (PIN)  is  randomly  generated  code  for   use  of  ATM  Card   at  the  time  of  withdrawal  of  money  from  ATM  Machine  and  also  at  the  time  of  making  payment  on  PoS.

Q. 9.    How  to  keep  your RuPay  Card  safe?

Ans.    Beneficiary  of  RuPay  Card  is  required  to  keep  the  Card  in safe  custody.      PIN  should  be  changed  at  frequent  intervals  and  should  never  be  shared  with  anyone.  While  using  the  card  at  ATM  Machine  or  PoS,  PIN  should  be  entered  in  machine  very  secretly  so  that  nobody  could  even  guess  about  the  PIN  Number.      As  far  as  possible,  Card  should  be  used  at  authorized  places / centres  only.     Besides,  PIN  number  should  never  be  written  on  the  Card.                                            

Q.10.   What  is  special  advantage  of RuPay  Debit  Card?

Ans.    It  provides  accidental  insurance  cover  upto  Rs.1.00 lac  without  any  charge  to the  customer.

Q.11.   Whether illiterate  customers  can  be  issued  RuPay  Card?

Ans.    Yes.  However,  Branch  Manager  will  have  to  advise  all  the  related  risks  to the  illiterate  account-holder  at  the time  of  issuance  of  RuPay Card.

Q.12.   How  to  link  Mobile  Number  with  Bank  Account ?

Ans.    Mobile  Number  of  an  account holder  is  entered  in customer’s  account  in  CBS  System  by  the  Bank on  the  basis  of  information  given  in  the  Account  Opening  Form.   Also,  for  existing  accounts,  banks  permit  seeding  through  ATM, SMS from  registered  mobile, net-banking or  on  making  a  request  in  the  branch  (there  may  be  variations  depending  on  the  bank).

Q.13.   How  to  keep  debit  card  operational ?

Ans.    To  get  benefit  of  Accidental  Insurance  Cover,  RuPay  Debit  Card  must  be  used  at  least  once  in  45  days.

Q.14.   How  long  the  debit  card  is  valid  and  how  to  get  Debit  Card  renewed ?

Ans.    Debit  Card  expiry  date  is  mentioned  on  the  Card  itself.  Account-holder  is  advised  to  get  issued  new  card  well  before  expiry  date  of  his/her  existing  card  by  giving  fresh  application  to  the  concerned  bank.

Q.15.   If  someone  has  two  or  more  accounts  and  two  or  more  RuPay  Debit  Cards,  whether  accidental  insurance  cove  is  available  in  each account /  each  card?

Ans.    Accidental  insurance  cover  is  available  only  in  one  account.

Q.16.   What  is  PoS  Machine ?

Ans.    PoS  stands  for  Point  of  Sale.   PoS  Machine  is  a  small  device  installed  at  almost  all  Business  Centres  to  facilitate  cashless  purchases  to  their  customers.

Q.17.   Does  a  person already  having  a   Bank  account in  any  bank  needs  to  open   another  account under  Pradhan Mantri Jan-Dhan Yojna (PMJDY)  to  get the  Accidental Benefit/Life  Insurance  Benefit  under the  Scheme?

Ans.    A  person  who  is  already  having  a  bank  account  with  any  bank  NEED  NOT  to  open  a  separate  account  under  PMJDY.      He/she  will  just  have  to  get  issued  a   RuPay  Card  in  his  existing  account  to  get  benefit  of insurance.  Credit  facility  can  be  extended  in  the  existing  account  if  it  is  being  operated  satisfactorily.

Q.18.   What  is  the concept  of  overdraft  of  Rs.5000/-  in  PMJDY  Account and  for  whom  this  facility  is  available?

Ans.    Overdraft  facility  upto Rs.5000/-  will  be  available  to  one  account  holder  of  PMJDY  per  household  after   6  months  of    satisfactory   conduct   of   the   account.  To avoid  duplication  Aadhaar  number  will  also  be  required.  If  Aadhaar  number  is  not  available  then  Bank  will  do  additional   due  diligence  and  also  seek  declaration from  the  beneficiary.

Q. 19.  Whether  Overdraft  facility can be  availed  in  more  than  one  account?

Ans.    Overdraft  facility  upto  Rs.5000/-  is  available  in only  one  account  per  household,  preferably  lady of  the  household.

Q.20.   What  is  Accidental  Insurance Cover?  Who  will  pay  the  premium ?

Ans.    Accidental  Insurance  Cover  is  Rs.1.00 lac  and  no  premium  is  charged  to  the  beneficiary  --  NPCI  will  pay  the premium.  At  present the premium is  Rs.0.47  per  Card.

Q.21.   If  both husband  and  wife  who are  opening  accounts  under  PMJDY  are  eligible   for  Accidental  Insurance  Cover  of  Rs.1.00 lac  and  Life  Insurance  cover  of  Rs.30,000/- and  overdraft  facility  of Rs.5000/-  in both  the  accounts  separately?

Ans.    Accidental  Insurance  cover  of  Rs.1.00  lac  and  Life  Insurance  Cover  of  Rs.30000/-  will  be  available  to  all  account-holders.  However,  overdraft  facility   upto  Rs.5000/-  will  be  available  to  only  one  person  in  the  family  (preferably  lady  of  the  house).

Q.22.   What  documents  are  required to  open  an  account  under  Pradhan  Mantri Jan-Dhan  Yojana?

Ans. (i) If  Aadhaar  Card/Aadhaar  Number  is  available then  no  other  documents  is  required.  If   address  has  changed,  then  a  self  certification of current  address  is sufficient.

            (ii) If  Aadhaar Card  is  not  available,  then  any  one of  the  following  Officially  Valid  Documents (OVD)  is  required:  Voter  ID  Card,  Driving  Licence,  PAN  Card,  Passport  &  NREGA  Card.  If  these  documents  also  contain  your  address, it  can  serve both as “Proof  of  Identity and  Address”.

            (iii) If  a  person  does  not  have  any  of  the “officially  valid documents”  mentioned  above,  but  it  is  categorized  as   ‘low  risk’  by  the  banks, then  he/she  can open  a  bank  account  by  submitting  any  one  of the  following  documents:

a)    Identity  Card  with  applicant’s  photograph  issued  by  Central/State  Government  Departments, Statutory/Regulatory Authorities, Public  Sector  Undertakings, Scheduled Commercial Banks and  Public  Financial  Institutions;

b)    Letter  issued  by  a  gazette  officer,  with  a  duly  attested  photograph  of  the  person.

           

Reserve  Bank  of  India  (RBI)  vide  its  Press  Release  dated  26.08.2014  has  clarified  as   under:

            “Those  persons who do  not  have  any  of  the ‘officially  valid  documents’  can  open  “Small  Accounts” with  banks.  A  “Small  Account”  can be  opened on  the  basis  of  a  self-attested  photograph  and  putting  his/her signatures  or  thumb  print  in  the  presence  of  an  officials  of  the  bank.  Such  accounts  have  limitations  regarding  the  aggregate  credits  (not  more  than Rupees  one  lac  in  a  year), aggregate  withdrawals  (nor  more  than Rupees  ten  thousand  in  a  month)  and  balance  in  the  accounts (not  more  than  Rupees  fifty thousand  at  any  point  of  time).  These  accounts  would be valid  normally  for  a  period  of  twelve  months.  Thereafter,  such  accounts  would  be  allowed  to  continue  for  a  further  period  of  twelve  more  months,  if  the account-holder  provides  a  document  showing that  he/she has  applied for  any  of  the  Officially  Valid  Document,  within  12  months  of  opening  the small  account.

Q.23.   If  the present  address  is  different  than  that  of  printed  on  Aadhaar  Card, can the account still  be  opened  under  Pradhan Mantri  Jan Dhan Yojana  on  the  basis  of  Aadhaar  Card?

Ans.    If  address  has  changed,  then  a  self  certification of  current  address  is  sufficient.

Q.24.   What  is  meant  by  Insurance  cover  of  Rs.30,000/- announced  by  Prime  Minister in  his  speech  of  28.08.2014?

Ans.    Modalities  of  this Scheme  announced  by  the Prime  Minister  on 28.08.2014  are  being  worked  out  expeditiously  and  will  be  disseminated   to  General  Public  very  soon.

Q.25.   Whether  Cheque  Book  will  be  issued  in  accounts  opened  under  PMJDY?

Ans.    In  PMJDY  accounts  are  being  opened  with  Zero  balance.  However, if  the account-holder  wishes  to  get  cheque  book,  he/she   will  have  to   fulfill  minimum  balance  criteria, if  any,   of  the  bank. 

Q.26.   What  are  the  direct / special  benefits attached  to  PMJDY?

Ans.    Special benefits  attached  to  the  scheme  are:

                      i.        Interest  on  deposit.

                    ii.        Accidental  insurance  cover  of  Rs.1.00 lac

                   iii.        No minimum  balance  required.  However, for  withdrawal  of  money  from  any  ATM  with  Rupay  Card,  some  balance  is  advised  to  be  kept  in  account.

                   iv.        Life  insurance  cover  of  Rs.30,000/-

                     v.        Easy  Transfer  of  money  across  India

                   vi.        Beneficiaries  of  Government  Schemes  will get  Direct  Benefit  Transfer  in  these  accounts.

                  vii.        After  satisfactory  operation of  the  account  for  6  months,  an  overdraft  facility  will  be  permitted

                 viii.        Access  to Pension,  insurance  products.

Q.27.   I  have  no  official valid  document  for  opening  an  account.  Can  I still  open  an account  with  bank?

Ans.    Reserve  Bank  of  India  (RBI)  vide  its  Press  Release  dated  26.08.2014  has  clarified  as   under:

            “Those  persons who do  not  have  any  of  the ‘officially  valid  documents’  can  open  “Small  Accounts” with  banks.  A  “Small  Account”  can be  opened on  the  basis  of  a  self-attested  photograph  and  putting  his/her signatures  or  thumb  print  in  the  presence  of  an  officials  of  the  bank.  Such  accounts  have  limitations  regarding  the  aggregate  credits  (not  more  than Rupees  one  lac  in  a  year), aggregate  withdrawals  (nor  more  than Rupees  ten  thousand  in  a  month)  and  balance  in  the  accounts (not  more  than  Rupees  fifty thousand  at  any  point  of  time).  These  accounts  would be valid  normally  for  a  period  of  twelve  months.  Thereafter,  such  accounts  would  be  allowed  to  continue  for  a  further  period  of  twelve  more  months,  if  the account-holder  provides  a  document  showing that  he/she has  applied for  any  of  the  Officially  Valid  Document,  within  12  months  of  opening  the small  account.

Q.28.   How  much  interest   savings  would  earn  in  PMJDY  Account?

Ans.    Interest  rate  applicable  for  Saving  Bank  Accounts (presently  @ 4 % in  most  of  the  banks)  shall  be  admissible to   accounts  opened   under  PMJDY  Scheme. 

Q.29.   How  much  interest  will  be charged  by  bank  on  overdraft  facility  in  PMJDY?

Ans.  Base  Rate  +  2 %  or  12  %,  whichever  is  lower.  At  present  it  will  be 12 %.

Q.30.   Whether  banks  will  be  organizing  Account  Opening  Camps  in  future  also?

Ans.  Yes.  Nationalised  banks  have  been  asked  to organize  camps  on  all  Saturdays  from  8.00 AM  to  8.00 PM.  Banks  can hold  additional  camps  on  other  days  also.

Q.31.   If I  have  required  papers  for  issuance  of  Aadhaar  Card,  can  I  get  Aadhaar  Card  in  Bank  and  open  my   account  under  PMJDY  simultaneously?

Ans.   Aadhaar  Registration  may be  got  done  in  Camps  organized  by  UIDAI.  In  account  opening  camps  also,  endeavour  is  to  make  Aadhaar  Registration  Counter  available.

Q.32.   Do  you  have  to  pay  some  fee  to  open  a  Bank account  under  PMJDY?

Ans.  No.  There is absolutely  no  charge / fee  for  opening  an  account  under  PMJDY.

Q.33.   Can  a  minor  (below 18  years  of  age)  can open  an  account  under  PMJDY?

Ans.    A  minor of  above  the age  of  10  years  can  open  his / her  Savings  Bank   account  in  any  bank. 

Q.34.   Who  is  Business  Correspondent  Agent /  Bank  Mitra  and  what  is  their  role  in  PMJDY?

Ans. Business Correspondent Agents (Bank   Mitras)  are  retail  agents  engaged  by  banks for  providing  banking  services  at  locations  where  opening  of a  brick  and  mortar  branch / ATM  is  not  viable.  Scope  of  activities  of  Business  Correspondents / Bank Mitra  are  as  under:

a)    Creating Awareness  about  savings  and other  products and education and advice on managing money  and  debt  counseling.

b)    Identification  of  potential  customers.

c)    Collection  and preliminary processing of various forms for deposits including verification of primary information /data.

d)    Filling  of  applications / account opening forms

e)    Collection  and  payment  of small  value deposits  and  withdrawals.

f)     Receipt  and  delivery  of  small  value  remittances / other payment  instructions.

g)    Furnishing  of  mini account  statements  and  other  account  information.

h)    Any  other  service  on  behalf  of  the  Bank, duly  authorized by  the appropriate  authority  etc.

Q.35.   How   Bank  Mitr  helps  us  to  use Banking  Services ?

Ans.    Bank  Mitr  represent  the  bank  concerned  and  enable  a  bank to  expand  its  outreach  and  offer  limited  range  of  banking  services  at  low  cost,  particularly  where  setting  up  a  brick and  mortar  branch  is  not  viable.  Bank  Mitrs,  as  agent  of  the  Bank,  thus  are  an  integral  part  of  the  business  strategy  for  achieving   greater  financial  inclusion.

Q.36.   Who  can  be  Bank  Mitra ?

Ans.    Banks  have  been  permitted  to  engage  individuals / entities  as  Business  Correspondent  (Bank  Mitras)  like  (i)  Retired  Bank  Employees (ii) Retired  Teachers (iii) Retired  Govt.  Employees  (iv) Ex-Servicemen (v) Individual  owners  of  kirana / medical/ fair  price  shops,  individual  Public  Call  Office  (PCO)  operators,  Agents  of  Small  Savings  Scheme  of  Government  of  India / Insurance  Companies,  ‘for  profit’  companies  registered  under  the  Indian Companies  Act.   Since  24.06.2014,  RBI  has permitted  Non  Deposit  taking   NBFCs as  BCs  in  addition  to  above.

Q.37.   Can I  get  my  PMJDY  account  transferred  to  other  City / State  upon  my  transfer  posting  to  other  States?

Ans.    All  banks  participating  in  PMJDY  are  on  CBS (Core  Banking  Solution)   platform  and  the  account  can  easily be  transferred  to  any  branch  of  the  bank  in  any city/town as  per  the  request  of   the  account-holder.

Q.38.   What  is  USSD based  transaction  and  how  to  use  it ?

Ans.    USSD  is  abbreviated  form  of  “Unstructured  Supplementary Service  Data”.  USSD  based  Mobile  Banking  offers  basic  Banking  facilities  like  Money  Transfer,  Bill  Payments,  Balance  Enquiries,  Merchant  Payments  etc.  on  a  simple GSM   based  Mobile  Phone,  without  the  need  to  download  application  on  a  Phone  as  required  at  present in  the  Immediate  Payment  Service (IMPS)  based  Mobile  Banking.  Transactions  can be  performed  on basic  phone  handsets.   The  user  needs  to  approach  his  bank  and  get  his  mobile  number  registered.  The  bank   will  issue  an  MPIN  (Mobile   PIN)  to  the  user.  The  user  thereafter  needs  to  dial   *99#  and  the  menu  for using   USSD  opens.   Thereafter  customer  has  to  follow  selections  on  the  menu  to  complete  the  transaction.  Charges  as  applicable  by  the  Telecom  Operator  (not  more  than Rs.1.50 per  transaction  as  mandated  by  TRAI)  may  be  applicable.   

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