Maharashtra HSC Bifocal Banking cheat sheet

Banking is defined in Section 5(b) of the Banking Regulation Act, 1949 as accepting, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.

Section 5(c) defines a "banking company" as any company which transacts the business of banking in India; Section 5(d) defines "company" as a company as defined in Section 2(20) of the Companies Act, 2013.

Section 6 of the Banking Regulation Act lists permitted forms of business: accepting deposits, lending, dealing in bills of exchange, bullion, foreign exchange, safe custody, guarantees, and agency services.

Section 7 requires every banking company to use the word "bank", "banker", "banking" or "banking company" in its name; Section 7 was extended to cooperative banks by the 2020 amendment.

Section 22 requires a licence from the Reserve Bank to carry on banking business; Section 22(3A) prescribes minimum paid-up capital and reserves, and Section 22(4) allows RBI to cancel a licence after giving an opportunity of hearing.

Scheduled bank status under Section 2(e) of the RBI Act, 1934 requires that the bank's name be included in the Second Schedule; conditions include paid-up capital and reserves of not less than Rs. 5 lakh and satisfaction of RBI that the bank's affairs are not conducted in a manner detrimental to depositors.

The Banking Regulation (Amendment) Act, 2020 brought cooperative banks under RBI supervision, changed Section 45 to apply reconstruction and amalgamation schemes to them, and amended Section 56 so that the word "bank" may be used by cooperative banks.

In the Indian banking structure, commercial banks include public sector banks, private sector banks, foreign bank branches, regional rural banks, small finance banks and payments banks; cooperative banks include urban cooperative banks and rural cooperative credit institutions.

Public sector banks were nationalised in 1969 (14 banks with deposits above Rs. 50 crore) and 1980 (6 banks with deposits above Rs. 200 crore); these thresholds are historical facts often tested.

The Reserve Bank of India was constituted under the Reserve Bank of India Act, 1934 and commenced operations on 1 April 1935; it was nationalised on 1 January 1949.

RBI's traditional functions: note issue (except one-rupee notes and coins, which are issued by the Government of India), banker to the government, banker's bank, lender of last resort, custodian of foreign exchange reserves, and controller of credit.

Section 22 of the RBI Act gives RBI the sole right to issue bank notes; Section 24 sets the maximum denomination of notes at Rs. 10,000, and Section 26 makes notes a legal tender.

Section 42 of the RBI Act imposes cash reserve requirements on scheduled banks; Section 42(1) originally required every scheduled bank to maintain with RBI an average daily balance of 5 per cent of its demand and time liabilities (now notified by RBI within the statutory ceiling).

Section 17 of the RBI Act lists the business RBI may transact, including purchase and sale of bills, bullion, securities and foreign exchange; Section 18 deals with emergency loans to scheduled banks.

The Monetary Policy Framework (2016 amendment to the RBI Act) sets a flexible inflation target of 4 per cent CPI inflation with a tolerance band of +/- 2 per cent; the Monetary Policy Committee has six members, three from RBI and three appointed by the Central Government.

RBI regulates banks under the Banking Regulation Act, 1949 (Sections 21, 22, 24, 35, 35A, 36ACA) and non-banking financial companies under Chapter IIIB of the RBI Act; it also regulates payment systems under the Payment and Settlement Systems Act, 2007.

Statutory reserves: CRR under Section 42 of the RBI Act (no floor or ceiling after the 2006 amendment, but RBI notifies from time to time) and SLR under Section 24 of the Banking Regulation Act (currently 18 per cent of net demand and time liabilities).

Inspection and supervision: RBI conducts statutory inspection under Section 35 of the Banking Regulation Act, may issue directions under Section 35A, and may supersede a bank's board under Section 36ACA for up to six months.

Regional Rural Banks were created under the Regional Rural Banks Act, 1976; shareholding is 50 per cent Central Government, 15 per cent State Government and 35 per cent sponsor bank; they are scheduled banks.

Small Finance Banks: minimum paid-up capital Rs. 200 crore (revised upwards from the earlier Rs. 100 crore); they must hold 75 per cent of adjusted net bank credit in priority sector lending, with at least 50 per cent of loans up to Rs. 25 lakh.

Payments Banks: minimum paid-up capital Rs. 100 crore; they may accept demand deposits up to Rs. 2 lakh per customer (revised from Rs. 1 lakh), cannot lend, cannot issue credit cards, and must invest at least 75 per cent of demand deposits in Government securities with maturity up to one year.

Local Area Banks are licensed under the Banking Regulation Act and were introduced in 1996; their area of operation is limited to a maximum of three contiguous districts.

Non-Banking Financial Companies are regulated under Chapter IIIB of the RBI Act; they cannot accept demand deposits, and deposit-taking NBFCs are subject to a public deposit ceiling and minimum investment grade rating.

Development finance institutions in India include IFCI (1948), IDBI (1964), SIDBI (1990) and NABARD (1982); NABARD is the apex institution for agriculture and rural credit and refinances RRBs and cooperative banks.

EXIM Bank (1982) finances foreign trade; the National Housing Bank (1988) regulates housing finance companies; the National Bank for Financing Infrastructure and Development was set up in 2021.

Cooperative credit structure: short-term rural structure has State Cooperative Banks at the State level, District Central Cooperative Banks at the district level and Primary Agricultural Credit Societies at the village level; long-term structure has State Cooperative Agriculture and Rural Development Banks and Primary Cooperative Agriculture and Rural Development Banks.

Scheduled status does not depend on ownership: a foreign bank branch, a private bank, an RRB or a cooperative bank can be scheduled if included in the Second Schedule of the RBI Act.

A customer is a person who has an account with the bank; the relationship is contractual, and the bank's obligation is to honour cheques drawn by the customer within the credit balance, subject to the mandate.

Primary relationships: debtor-creditor (credit balance: bank is debtor; overdraft: customer is debtor), trustee-beneficiary (safe custody, securities), agent-principal (collection of cheques, standing instructions) and bailee-bailor (articles in safe deposit lockers).

The bank's duty of secrecy is a legal obligation; exceptions include disclosure under compulsion of law, duty to the public, bank's own interest, and consent of the customer (Tournier v. National Provincial and Union Bank of England, 1924).

The banker has a right of set-off, a right of lien (general lien under Section 171 of the Indian Contract Act on goods and securities in its possession), a right of appropriation (Clayton's case applies to running accounts) and a right to charge incidental expenses.

Section 129 of the Negotiable Instruments Act, 1881 gives the banker a statutory right of set-off over all bills, notes and other instruments deposited for collection, even if the customer has other accounts.

Types of accounts: savings bank (interest-bearing, restrictions on withdrawals), current account (no interest, no withdrawal limit, suitable for business), fixed deposit (term deposit with a fixed maturity), recurring deposit (periodic deposits), and NRE/NRO/FCNR accounts for non-residents.

A joint account can be operated by either or both holders; the mandate should specify survivorship; a joint account with a "former or survivor" clause allows the survivor to operate the account after the other's death, but the balance belongs to the survivor's legal heirs.

A minor can open a savings account; under Section 26 of the Negotiable Instruments Act a minor may draw, endorse and negotiate cheques; a minor's account cannot be overdrawn, and on attaining majority the account must be re-designated.

Nomination: Section 45ZA of the Banking Regulation Act permits a single account holder to nominate one person, and Section 45ZA(2) allows joint holders to nominate; the nominee is a trustee for the legal heirs, not the owner of the deposit.

Savings bank accounts are governed by RBI's Master Direction on Customer Service; interest is calculated on the daily balance and is credited at quarterly or monthly intervals; minimum balance requirements vary by bank and location.

Current accounts carry no interest; RBI's 2020 circular barred scheduled commercial banks from opening current accounts for customers who have availed cash credit or overdraft facilities from the banking system, subject to specified exemptions.

Term deposits are repayable after a fixed period; premature withdrawal is generally permitted with a penalty of 0.50 to 1.00 per cent below the applicable rate for the run period, unless the bank has a more liberal policy.

Interest on term deposits is calculated on the simple interest basis for the deposit period and paid at maturity; for cumulative deposits the interest is compounded quarterly, and the maturity value uses the formula A = P(1 + r/n)^(n*t).

A recurring deposit uses the future value of an annuity formula: M = P * [((1+i)^n - 1)/i] * (1+i) for deposits at the beginning of each period, where i is the periodic rate and n the number of instalments.

Section 269SS of the Income-tax Act prohibits accepting a deposit of Rs. 20,000 or more otherwise than by account payee cheque, draft or electronic mode; Section 269T similarly restricts repayment in cash.

TDS on interest: under Section 194A, tax is deducted at source at 10 per cent on interest other than interest on securities exceeding Rs. 40,000 for a financial year (Rs. 50,000 for senior citizens), and at 7.5 per cent during the reduced-rate period for non-filers who have not filed returns.

Deposit insurance: the Deposit Insurance and Credit Guarantee Corporation insures deposits up to Rs. 5 lakh per depositor per bank (revised from Rs. 1 lakh in 2020), covering principal and interest.

NRE deposits are rupee accounts of non-residents, interest is tax-free in India and repatriable; NRO accounts are for non-resident income earned in India and are partially repatriable; FCNR(B) deposits are maintained in foreign currency and are fully repatriable.

Section 13 of the Negotiable Instruments Act, 1881 defines a negotiable instrument as a promissory note, bill of exchange or cheque payable either to order or to bearer; Section 13(2) states that a cheque is always payable on demand.

A promissory note (Section 4) contains an unconditional undertaking signed by the maker to pay a certain sum to, or to the order of, a certain person or bearer; a bill of exchange (Section 5) contains an unconditional order signed by the maker directing a certain person to pay a certain sum.

A cheque (Section 6) is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand, and includes the electronic image of a truncated cheque and a cheque in electronic form.

Crossing: general crossing (two parallel transverse lines, Section 123) and special crossing (banker's name, Section 124); a crossed cheque must be paid through a bank, and a special crossing restricts payment to the named bank.

Account payee crossing is a direction to the collecting banker to credit the proceeds to the payee's account only; it does not restrict negotiability but imposes a duty of care on the collecting bank.

Holder in due course (Section 9) means a holder who took the instrument for value, in good faith, before maturity and without notice of any defect in the transferor's title; a holder in due course gets a better title than the transferor.

Section 138 makes dishonour of a cheque for insufficiency of funds an offence: the cheque must be presented within three months of the date on which it is drawn, a written demand must be made within 30 days of receipt of the memo, and the drawer must be given 15 days to pay; a complaint must be filed within one month after the 15-day period expires.

Section 118 presumes consideration and other statutory presumptions; Section 139 presumes that the holder received the cheque for the discharge of a debt or liability; Section 20 allows a signer to deliver an inchoate instrument, and Section 21 imposes liability on the person who signs.

The Negotiable Instruments (Amendment) Act, 2015 allows filing of a Section 138 complaint where the payee's bank branch is located, and the 2018 amendment inserted Section 143A (interim compensation up to 20 per cent of the cheque amount) and Section 148 (deposit of at least 20 per cent of the fine or compensation in appeal).

The cardinal principles of lending are safety, liquidity, profitability, purpose, security, diversification of risk, and suitability of the borrower; safety and liquidity are usually ranked above profitability.

Forms of advances: cash credit (running account against hypothecation of stock), overdraft (temporary accommodation on a current account), demand loan (repayable on demand), term loan (repayable in instalments), and bill discounting/purchase.

The 3C's of credit are character, capacity and capital; the 5C's add collateral and conditions; the 5P's are person, purpose, payment, protection and prospects.

Security types: pledge (Section 172 of the Indian Contract Act, possession passes to the pledgee), hypothecation (no transfer of possession, charge created by agreement), mortgage (Section 58, transfer of interest in immovable property), lien and assignment.

The loan-to-value ratio caps: housing loans up to Rs. 30 lakh - 90 per cent; above Rs. 30 lakh up to Rs. 75 lakh - 80 per cent; above Rs. 75 lakh - 75 per cent; for loans against gold ornaments, RBI's LTV ceiling is 75 per cent of the value of gold.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit; sub-targets include 18 per cent for agriculture, 7.5 per cent for micro enterprises, and 12 per cent for weaker sections.

Non-performing assets: a loan is classified as NPA when interest or instalment remains overdue for more than 90 days; substandard (NPA up to 12 months), doubtful (NPA for more than 12 months) and loss assets follow, with provisioning norms prescribed by RBI.

Base rate and MCLR: the marginal cost of funds-based lending rate, introduced in April 2016, has five components - marginal cost of funds, negative carry on CRR and SLR, operating cost, tenor premium and a return on equity; external benchmark lending rates were mandated for floating-rate retail loans from 1 October 2019.

Restructuring and recovery: RBI's prudential framework for resolution of stressed assets (7 June 2019) requires an inter-creditor agreement for accounts above Rs. 50 crore and a 30-day review period; the SARFAESI Act, 2002 and the Insolvency and Bankruptcy Code, 2016 are the main recovery channels.

Simple interest: SI = P * R * T / 100, where T is in years; for months use T = months/12, and for days use T = days/365 (or 366 in a leap year).

Compound interest: A = P(1 + R/100)^T and CI = A - P; for half-yearly compounding the rate is halved and the period doubled; for quarterly compounding the rate is divided by 4 and the period multiplied by 4.

The rule of 72 estimates doubling time: years to double = 72 / annual interest rate; it is an approximation useful for quick mental calculation.

Present value of a single sum: PV = FV / (1 + r)^n; present value of an annuity: PV = P * [1 - (1 + r)^(-n)] / r; future value of an annuity: FV = P * [((1 + r)^n - 1) / r].

Bank interest on savings is calculated on the daily closing balance, with the sum of daily products divided by 365 (or 366) and multiplied by the rate; the formula is Interest = Sum of (daily balance * number of days) * rate / 365.

The accounting equation is Assets = Liabilities + Capital; for a bank, customer deposits are liabilities and loans and advances are assets; a debit increases assets and expenses and decreases liabilities, capital and income.

Double-entry rules: debit what comes in and credit what goes out (real accounts), debit the receiver and credit the giver (personal accounts), and debit expenses and losses and credit incomes and gains (nominal accounts).

Journal entries for common transactions: when a customer deposits cash, debit Cash and credit the Customer's Deposit account; when a loan is sanctioned and disbursed, debit Loans and Advances and credit the Customer's account; when interest is applied to a deposit, debit Interest Paid and credit the Deposit account.

A trial balance must agree; a bank's balance sheet lists capital, reserves, deposits and borrowings on the liabilities side, and cash, balances with RBI, investments, advances and fixed assets on the assets side; the profit and loss account shows interest earned, interest expended, other income and operating expenses.

RTGS processes high-value transactions of Rs. 2 lakh and above in real time, with finality of settlement; NEFT settles in half-hourly batches, operates 24x7 since December 2019, and has no minimum or maximum limit (limits are set by banks).

IMPS operates 24x7 through NPCI, uses a mobile money identifier or account number with IFSC, and has a per-transaction limit set by the bank (commonly Rs. 5 lakh).

UPI is a real-time payment system built on IMPS rails by NPCI; a UPI ID (virtual payment address) maps to an account, and the transaction limit is generally Rs. 1 lakh, with higher limits for specified categories such as capital markets and insurance.

NPCI operates RuPay, UPI, IMPS, NACH, FASTag (NETC), BHIM, AePS and the Bharat Bill Payment System; UPI and RuPay are the main domestic card and payment rails.

Card security: EMV chip cards store data on an embedded chip; tokenisation replaces the card number with a token; the RBI mandate effective 1 October 2022 prohibits merchants from storing card data and requires tokenisation for card-on-file transactions.

Zero liability for unauthorised electronic transactions applies when the fraud is due to a third-party breach and the customer notifies the bank within three working days; limited liability applies when the customer reports within four to seven working days, subject to RBI's 2017 circular on customer protection.

Digital lending: RBI's 2022 guidelines require that all loan disbursals and repayments be executed directly between the borrower's and lender's bank accounts, that no fee be charged by the lending service provider without disclosure, and that the borrower's consent for data use be explicit and auditable.

Positive Pay System for cheques: for cheques of Rs. 5 lakh and above, the issuer must furnish account number, cheque number, amount, beneficiary name and issue date; banks may also offer it for lower amounts, and non-registration may lead to refusal of the cheque.

Payment system regulation: the Payment and Settlement Systems Act, 2007 empowers RBI to authorise and regulate payment systems; the Board for Regulation and Supervision of Payment and Settlement Systems is the apex body, and the 2020 PSS Act amendment requires net-worth criteria for authorisation.

Financial inclusion means access to financial services - savings, credit, insurance, payments and remittance - at an affordable cost for vulnerable groups; the Pradhan Mantri Jan Dhan Yojana launched on 28 August 2014 provides a basic savings account with a RuPay card, overdraft up to Rs. 10,000 and accident insurance.

Business correspondents operate under RBI's 2006 circular and the 2010 guidelines; they may be individuals or entities, must be within 30 km of a bank branch (relaxed in certain cases), and are permitted to conduct small-value deposit and withdrawal transactions.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit; the Service Area Approach assigns villages to bank branches for planned credit.

Priority sector lending categories include agriculture, micro, small and medium enterprises, export credit, education, housing, social infrastructure, renewable energy and others; the 40 per cent target applies to scheduled commercial banks, with 18 per cent for agriculture.

RBI's Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; complaints must first be made to the regulated entity, and if not resolved within 30 days the complainant may approach the RBI ombudsman.

The Ombudsman scheme provides for cost-free redress, and an award accepted by the complainant is binding on the regulated entity; the complainant may appeal to the Appellate Authority within 30 days of the award, and the RBI ombudsman can award compensation up to Rs. 20 lakh.

The Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body that frames codes for fair treatment of customers; the RBI Charter of Customer Rights (2014) covers the right to fair treatment, transparency, privacy, grievance redress and fair dealing.

Know Your Customer: RBI's Master Direction on KYC (2016, amended) requires customer due diligence, periodic updating, risk categorisation (low, medium, high) and beneficial ownership identification; simplified measures apply to low-risk customers such as small accounts.

Senior citizen and basic service accounts: the Basic Savings Bank Deposit Account has no minimum balance requirement and is limited to four free withdrawals per month; the simplified small account under the KYC Master Direction has a balance limit of Rs. 50,000, credits up to Rs. 1 lakh per year and is valid for 12 months, extendable by 12 months.

Financial inclusion is measured by the extent of access to formal financial services; the Pradhan Mantri Jan Dhan Yojana, launched on 28 August 2014, provides a basic savings account with a RuPay debit card, an overdraft of up to Rs. 10,000 and accident insurance cover.

Business correspondents, permitted under RBI's 2006 circular and 2010 guidelines, act as agents of the bank; they may accept small deposits, disburse small loans and make withdrawals, but may not accept deposits on behalf of a non-bank entity.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit planning; the Service Area Approach assigns villages to specific bank branches for planned credit.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit, with 18 per cent for agriculture, 7.5 per cent for micro enterprises and 12 per cent for weaker sections.

The Reserve Bank - Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; the complainant must first approach the regulated entity, and may approach the ombudsman if no reply is received within 30 days.

Under the Integrated Ombudsman Scheme, 2021, an award accepted by the complainant is binding on the regulated entity; the complainant may file an appeal before the Appellate Authority within 30 days, and compensation can be awarded up to Rs. 20 lakh for consequential loss.

The RBI Charter of Customer Rights (2014) sets out five rights: fair treatment, transparency and fair dealing, privacy, grievance redress and fair dealing; the Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body for fair customer treatment.

KYC Master Direction (2016, as amended) requires customer due diligence, periodic updating, risk categorisation into low, medium and high, and identification of beneficial owners; simplified measures apply to low-risk customers.

The Basic Savings Bank Deposit Account has no minimum balance requirement and allows four free withdrawals per month; the small account under the KYC Master Direction has a balance limit of Rs. 50,000, annual credits up to Rs. 1 lakh and validity of 12 months, extendable by another 12 months.

Financial inclusion means affordable access to savings, credit, insurance, payments and remittances for vulnerable groups; the Pradhan Mantri Jan Dhan Yojana was launched on 28 August 2014 with a basic savings account, RuPay card, overdraft up to Rs. 10,000 and accident insurance.

Business correspondents, permitted under RBI's 2006 circular and 2010 guidelines, are agents of the bank; they may accept small deposits, disburse small loans and allow withdrawals, but may not accept deposits on behalf of a non-bank entity.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit planning; the Service Area Approach assigns villages to specific bank branches for planned credit.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit, with 18 per cent for agriculture, 7.5 per cent for micro enterprises and 12 per cent for weaker sections.

The Reserve Bank - Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; the complainant must first approach the regulated entity, and may approach the ombudsman if no reply is received within 30 days.

Under the Integrated Ombudsman Scheme, 2021, an award accepted by the complainant is binding on the regulated entity; the complainant may file an appeal before the Appellate Authority within 30 days, and compensation can be awarded up to Rs. 20 lakh for consequential loss.

The RBI Charter of Customer Rights (2014) sets out the rights to fair treatment, transparency and fair dealing, privacy, grievance redress and fair dealing; the Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body for fair customer treatment.

The KYC Master Direction (2016, as amended) requires customer due diligence, periodic updating, risk categorisation into low, medium and high, and identification of beneficial owners; simplified measures apply to low-risk customers.

The Basic Savings Bank Deposit Account has no minimum balance requirement and allows four free withdrawals per month; the small account under the KYC Master Direction has a balance limit of Rs. 50,000, annual credits up to Rs. 1 lakh and validity of 12 months, extendable by another 12 months.

Financial inclusion means affordable access to savings, credit, insurance, payments and remittances for vulnerable groups; the Pradhan Mantri Jan Dhan Yojana was launched on 28 August 2014 with a basic savings account, RuPay card, overdraft up to Rs. 10,000 and accident insurance.

Business correspondents, permitted under RBI's 2006 circular and 2010 guidelines, are agents of the bank; they may accept small deposits, disburse small loans and allow withdrawals, but may not accept deposits on behalf of a non-bank entity.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit planning; the Service Area Approach assigns villages to specific bank branches for planned credit.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit, with 18 per cent for agriculture, 7.5 per cent for micro enterprises and 12 per cent for weaker sections.

The Reserve Bank - Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; the complainant must first approach the regulated entity, and may approach the ombudsman if no reply is received within 30 days.

Under the Integrated Ombudsman Scheme, 2021, an award accepted by the complainant is binding on the regulated entity; the complainant may file an appeal before the Appellate Authority within 30 days, and compensation can be awarded up to Rs. 20 lakh for consequential loss.

The RBI Charter of Customer Rights (2014) sets out the rights to fair treatment, transparency and fair dealing, privacy, grievance redress and fair dealing; the Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body for fair customer treatment.

The KYC Master Direction (2016, as amended) requires customer due diligence, periodic updating, risk categorisation into low, medium and high, and identification of beneficial owners; simplified measures apply to low-risk customers.

The Basic Savings Bank Deposit Account has no minimum balance requirement and allows four free withdrawals per month; the small account under the KYC Master Direction has a balance limit of Rs. 50,000, annual credits up to Rs. 1 lakh and validity of 12 months, extendable by another 12 months.

Financial inclusion means affordable access to savings, credit, insurance, payments and remittances for vulnerable groups; the Pradhan Mantri Jan Dhan Yojana was launched on 28 August 2014 with a basic savings account, RuPay card, overdraft up to Rs. 10,000 and accident insurance.

Business correspondents, permitted under RBI's 2006 circular and 2010 guidelines, are agents of the bank; they may accept small deposits, disburse small loans and allow withdrawals, but may not accept deposits on behalf of a non-bank entity.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit planning; the Service Area Approach assigns villages to specific bank branches for planned credit.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit, with 18 per cent for agriculture, 7.5 per cent for micro enterprises and 12 per cent for weaker sections.

The Reserve Bank - Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; the complainant must first approach the regulated entity, and may approach the ombudsman if no reply is received within 30 days.

Under the Integrated Ombudsman Scheme, 2021, an award accepted by the complainant is binding on the regulated entity; the complainant may file an appeal before the Appellate Authority within 30 days, and compensation can be awarded up to Rs. 20 lakh for consequential loss.

The RBI Charter of Customer Rights (2014) sets out the rights to fair treatment, transparency and fair dealing, privacy, grievance redress and fair dealing; the Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body for fair customer treatment.

The KYC Master Direction (2016, as amended) requires customer due diligence, periodic updating, risk categorisation into low, medium and high, and identification of beneficial owners; simplified measures apply to low-risk customers.

The Basic Savings Bank Deposit Account has no minimum balance requirement and allows four free withdrawals per month; the small account under the KYC Master Direction has a balance limit of Rs. 50,000, annual credits up to Rs. 1 lakh and validity of 12 months, extendable by another 12 months.

Financial inclusion means affordable access to savings, credit, insurance, payments and remittances for vulnerable groups; the Pradhan Mantri Jan Dhan Yojana was launched on 28 August 2014 with a basic savings account, RuPay card, overdraft up to Rs. 10,000 and accident insurance.

Business correspondents, permitted under RBI's 2006 circular and 2010 guidelines, are agents of the bank; they may accept small deposits, disburse small loans and allow withdrawals, but may not accept deposits on behalf of a non-bank entity.

The Lead Bank Scheme assigns a lead bank to each district to coordinate credit planning; the Service Area Approach assigns villages to specific bank branches for planned credit.

Priority sector lending target for scheduled commercial banks is 40 per cent of adjusted net bank credit, with 18 per cent for agriculture, 7.5 per cent for micro enterprises and 12 per cent for weaker sections.

The Reserve Bank - Integrated Ombudsman Scheme, 2021 covers banks, NBFCs, payment system operators and non-scheduled primary cooperative banks with deposits above Rs. 50 crore; the complainant must first approach the regulated entity, and may approach the ombudsman if no reply is received within 30 days.

Under the Integrated Ombudsman Scheme, 2021, an award accepted by the complainant is binding on the regulated entity; the complainant may file an appeal before the Appellate Authority within 30 days, and compensation can be awarded up to Rs. 20 lakh for consequential loss.

The RBI Charter of Customer Rights (2014) sets out the rights to fair treatment, transparency and fair dealing, privacy, grievance redress and fair dealing; the Banking Codes and Standards Board of India, set up in 2006, is a self-regulatory body for fair customer treatment.

The KYC Master Direction (2016, as amended) requires customer due diligence, periodic updating, risk categorisation into low, medium and high, and identification of beneficial owners; simplified measures apply to low-risk customers.

The Basic Savings Bank Deposit Account has no minimum balance requirement and allows four free withdrawals per month; the small account under the KYC Master Direction has a balance limit of Rs. 50,000, annual credits up to Rs. 1 lakh and validity of 12 months, extendable by another 12 months.