Banking Operations
Banking operations covers the daily processes that move money safely: account opening, KYC, deposits, withdrawals, cheque clearing and electronic transfers. The exam tests process order, limits and the RBI’s regulatory role.
Core rules
- RBI regulates banks, issues currency, acts as banker to government and lender of last resort.
- KYC requires identity and address verification; periodic updation is risk-based.
- Cheques are valid for three months from the date written; stale cheques are returned.
- NEFT has no minimum or maximum limit and settles in batches; RTGS is for ₹2 lakh and above with no upper limit; IMPS is instant and available 24×7.
- Dormant accounts are reactivated after KYC; unclaimed deposits are parked in the RBI’s UDGAM portal.
- Suspicious transactions must be reported under AML rules; staff cannot tip off the customer.
Worked example
A customer presents a cheque dated four months earlier. Reasoning: it is a stale cheque. The bank should return it with the reason “stale cheque/out of date”, not pay it, even if the balance is sufficient.
Traps that cost marks
- Saying NEFT is always instant; it is batch-based.
- Mixing the RTGS minimum with the IMPS limit.
- Ignoring KYC periodic updation for high-risk customers.
- Assuming a joint account can be operated by any joint holder without checking the mandate.