1

A REPORT

ON

“Overall banking operations” OF

AXISBANK LTD.

BY: KOMAL MAHESHWARI (14BSP2540)

AXISBANK LTD.

2

A REPORT ON

“Overall banking operations”

BY:

KOMAL MAHESHWARI

(14BSP2540)

AXISBANK LTD. A report submitted in partial fulfillment of the requirements of

PGPM program of IBS Pune.

Distribution List: AXISBANK LTD. & IBS - Pune

Date of submission: 10th April’2015

3

ABSTRACT “A bank is a financial intermediary and MONEY creator that create money by lending money to a borrower, thereby creating a corresponding deposit on the bank's balance sheet. Lending activities can be performed directly by loaning or indirectly through capital markets” When we talk about banks, we are talking about several different types of financial institutions, conducting different kinds of business. Some banks are very large and carry out many different functions, others are more specialized. Some have operated for hundreds of years and some have taken on new kinds of business quite recently. There are mainly four types of banking:

1) Central Bank 2) Retail Banking 3) Commercial Banking 4) Investment Banking

Central bank:

The duty of central banks is to maintain financial stability; otherwise a country's economy will not operate properly. Central banks act as regulators of their country's interest rates by controlling the amount of money in circulation and buying and selling currencies. They amass reserves and act as lenders of last resort, should another bank get into trouble. They exist as a separate entity from all the other banks. Ex. Reserve Bank of India (RBI)

4

Retail banking:

Retail banks are the high street banks we are all familiar with. They take deposits from individuals, provide saving facilities and pay interest on these accounts. They also lend money to individuals, in the form of loans and overdrafts, and charge interest on the money they lend. They provide a range of other financial services.

Ex. Axis bank, HDFC bank etc. Commercial banking :

Commercial banks, or divisions of banks, provide banking services to businesses, from small companies through to corporate banking directed at large corporations. They help companies raise finance to expand their businesses and to maintain their cash flow by lending them money. They provide a wide range of other financial services.

Ex. Axis bank, SBI bank, HDFC bank etc.

5

Investment banking: Investment banks distribute and underwrite (guarantee the sale of) share and bond issues; they trade securities on the financial markets and advise corporations on capital market activities such as mergers and acquisitions. Investment banks originally developed in the USA and these banks have now taken over many roles that were previously carried out by UK merchant banks. Ex. Goldman Sachs, HSBC, Lazard etc. There are many Retail banks in India like:

6

Axis bank: Axis Bank Limited (formerly UTI Bank) is the third largest private sector in India. It offers financial services to customers segments covering large and Mid-Sized corporates, MSME, Agriculture and Retail Businesses. Axis Bank has its headquarters in Mumbai.

In the year of 2014 Axis bank had revenue of US$5.3 billion, operating income was US$1.5 billion, and Net Income was US$820 million.

And Axis bank had a network of 2402 branches and extension counters and 12922 ATMs. Axis bank has the largest ATM network among private banks in India and it operates an ATM at one of the world’s highest sites at Thegu, Sikkim at a height of 4023 meters (13,200 ft.) above sea level.

The Bank has seven international offices with branches at Singapore, Hong Kong, Dubai, Shanghai and Colombo and representative offices at Dubai and Abu Dhabi, which focus on corporate lending, Trade finance.

As on 31 march 2014, Axis Bank had 37,901 Employees, out of which 7,117 employees were women. The bank incurred INR 26.7 billion on employee benefits during the FY 2012-13. The average age of Axis Bank employees is 29 years.

Purpose of Axis bank: Making profit: The 1st and foremost purpose of Axis Bank is to attain profit

generally through collecting deposits and lending this money to earn interest income or by making investment.

Providing services and relation management: This bank increases the volume of financial transaction through the development of relation with the clients.

Increasing flow of money: Axis Bank in replace of currency uses different medium as cheque, bank draft, pay order, letter of credit when doing transaction. Thus it increases the actual flow of currency.

7

Products:

Credit card:

A credit card is a payment card issued to users as a system of a payment. It allows the cardholder to pay for goods & services based on the holder’s promise to pay for them.

Credit card allows customers a continuing balance of debt.

In Axis bank we are giving 50 days credit limit to the customers. If he/she is not paying within 50 days then he will be charged of 2.6% of amount.

There are mainly 5 types of cards.

1. The card for travel-fans 2. Power of signature 3. The card for entertainment-fans. 4. The customizable card for choosy-fans. 5. The card for self-employed.

8

Accounts:

A bank account is a financial amount between a bank customer and a financial institution. Account can be deposit a/c or credit a/c or other type of a/c offered by financial institutes. The financial transaction which have occurred within a given period of time on a bank account are reported to the customer on a bank statement and the balance of the account at any point in time is the financial position of the customer with the institution.

A fund that a customer has entrusted to a bank and from which the customer can make withdrawals. Bank account may have a positive or credit balance where the bank owes money to the customer or a negative or debit balance where the customer owes the bank money.

Types of account:

1. Saving account 2. Current account 3. Salary account

Corporate banking:

Corporate banking is the area of finance dealing with the sources of funding and the capital structure of corporation and actions that managers take to increase the value of the firm. The primary goal of corporate banking is to provide funding to companies o they can maximize the profit.

While providing finance to companies they check all the history and their forecasting. Companies present net profit Government policies. These things done with the help of the CRISIL rating. CRISIL suggests maximum permissible bank finance (MPBF) according to that rating and with the help of MPBF bank gives finance to banks.

Insurance:

Insurance is the equitable transfer of the risk of a loss from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss. In the Axis bank Max life insurance is a company selling the insurance the insured or policy holder is the person or entity buying the insurance policy.

The amount of money to be charged a certain amount of insurance Isa called as a policy.

Ex. Max life insurance is selling one policy its name is “monthly guaranteed income” in which customer is required to pay yearly 50,000/- for 12 years and he/she will get monthly income guaranteed income from 13 years onwards of 6000/- per month and at the end of 18 years he will get double of premium.

The age of person should be under 58.

9

Mortgage loan:

Mortgage loan is used by purchasers of real property to raise money to buy the property to be existing property owners to raise funds for any purpose. If the customer is not able to repay the loan then bank can sell his/her property.

10

INTRODUCTION

Functions of Axis bank:

11

Axis bank’s organizational structure:

Opening an account at Axis bank:

The depositors served as the basic source of deposit that leads to form the funds to lend loans to others. A transaction with a depositor is launched with the opening of account in the bank. I was informed that various types of Bank Accounts are opened in the bank, that is to say,

I have learned till now two accounts Currents and saving till the opening of that account. Entire process of both is below. First we will understand process of saving account.

12

Owner of Joint A/c: When two or more persons open an account jointly, it is called a joint A/c and such account holders are termed as joint A/c holder. While maintaining, the following rules and regulations are followed:

The joint account holders or any one of them authorized to operate the A/c may open either a joint account.

The joint account holders are equally liable for repayment of debt taken from the bank.

If after the death of an owner, if at least two of them are alive, then the money is withdrawn from the A/c through cheque and new A/c is opened for the alive persons and the money is deposited to the A/c.

According to the rules of our country is case of joint A/c by husband and wife, the husband is considered as the owner of that A/c.

Usually the client is required to deposit at least 10,000/- in saving and 10,000/- in Current Account.

The Banker therefore provides the customer with a pay in slip book, a chequebook and a passbook.

13

Saving Account: As the name indicates this account is meant for saving purpose, any individual either single or joint can open a saving account.

In the accounts one has to maintain minimum balance as low as 10,000/-. In saving a/c number of financial transaction are restricted.

Interest rates are higher when compared to current account. Any cash transaction of 10 lakh and above in a year will be informed to the IT department.

In case if you do many transactions and issuing of cheques in saving account banks have all the rights to question you on income and reason for transaction.

Axis Bank pays interest quarterly at the rate of 4% p.a. on daily balance basis in your Savings Account. While account opening process within 10 days customer will get chequebook, passbook and debit card to their residence. With the help of chequebook he/she can withdraw money whenever he/she wants Passbook gives you your all transactions that you have done. If customer exceed limit of transaction means if he does transaction more than 5 then he will be charged for 230/- . In case of salary account if salary does not credit for consecutive three months then the account is considered as saving account and minimum balance maintenance is required.

14

15

Current Account:

-LLP agreement and Certificate of incorporation & PAN card

16

Current account mainly for persons, firms, organization etc. this is useful when a person does a number of business transactions on daily basis While there is no interest paid on amount held in the account. There is no limit on number of transactions. In the accounts one has to maintain minimum balance as low as 10,000/-. While account opening process within 10 days customer will get chequebook, passbook and debit card to their residence. With the help of chequebook he/she can withdraw money whenever he/she wants Passbook gives you your all transactions that you have done. If customer exceed limit of transaction means if he does transaction more than 5 then he will be charged for 750/- . The procedure relating to C. D. account is summarized below.

Person intending to open a Bank Account shall apply in a prescribed form, duly filled in.

He will put at least three specimen signatures in the signature card supplied by the bank and given two passport size photograph.

Application form shall be dully verified by a competent officer. Bank officer shall carefully check specimen signature of the client and verify

the genuine of the introducer. After these formalities Officer proceed for next step that steps are below:

17

18

Various types of Account holder need documents and maintain rules relating to open Bank Account Owner of personal A/c: If any person opens account in his own name and maintain it, he will be termed as the owner of personal A/c. He has to maintain the bank A/c. Nobody for him can maintain the A/c. The necessary documents require opening personal A/c, which is discussed above.

Joint Stock Company: While opening an account in the name of a company, the Banker must satisfy himself about the following:

The name of the company, the shareholders name and addresses. Whether the company is registered or not. If there is any change among the shareholders, it must be informed to the bank. All the shareholders are equally liable for the repayment debt taken from the bank.

Public Limited company: While opening an account in the name of public limited company the Banker should take the following particulars:

The application for opening an account Naming the person who is authorized by the managing director or managing

committee to operate the bank A/c. Specimen signature of the customer. Certified copy of constitution and memorandum of the company List of directors and their signature certified by chairman Scrutiny the financial condition, nature of business of the company The company is liable for the repayment of debt taken from the bank.

Non-trading Organization:

Clubs, societies, charitable and religious institutions not engaged in trading activities can open their accounts in the bank. According to the constitution of this institution one or more employee authorized to operate the bank A/c can operate the A/c. If the institutions are not registered, Bank Account cannot be opened.

19

Closing of Bank Account: The relationship between a Banker and his customer is a contractual one and may be terminated by either of them by giving notice of his intention to the other person. The rights and obligation of a Banker in this regard is as follows:

If a customer directs the Banker to close his account. On receipt of the notice of the death of a customer. If a Banker receives a notice regarding the insanity of his customer. On receipt of a Garnishee order from the court. Fixed account is closed automatically after the specified date.

Steps of Cash Management at Branch Level: The cash receipts procedure, as I found, is summarized below: Cash Receipt:

Pay-in-slip or credit voucher are given to the cash counter for depositing cash. Cash deposit section checks the title if account, its number, amount in words and

figures in the pay-in-slip or credit voucher. Cash receiving officer after receiving the cash giving records/denomination of the

currency on the back of the voucher shall enter the particulars of the voucher in the cash receiving book under progressive serial number & puts his signature putting the date stamp both on counter foil & pay-in-slip voucher. Then he will pass it on to the officer- in-charge of cash section for his signature along with the register

The officer will then detach pay-in-slip from the counter foil and return it to the receiving officer along with the register.

The officer sends the pay-in-slip/ credit voucher to the deposit section in case of pay-in-slips and credit vouchers to the respective section to which it relates.

Cahier and cash-in-charge puts signature on the book at time of closing cash.

20

Cash Payment:

Generally cheques, D.D, pay order and cash deposit voucher etc. are received from customer and institutions. The formalities are given below:

The instrument is checked for any discrepancy, posting and cancellation Specimen signature of cancellation officer should be available Cash is counted and the denomination of notes are written on the reverse of the

instrument Cash is paid to the bearer of the instrument Particulars of the instruments are entered in paying cash book Paid instruments are kept with the paying officer

Cancellation Of cheque: The cancellation officer shall keep the specimen signature card under his personal custody.

All specimen signature cards will be kept in serial order. In case of difference of signature, cheques shall not be passed. Officer shall not pass any cheque unless it is posted against the account and

initialled by the ledger keeper. The cancellation shall be made waving a red line across the signature of the drawers

of the cheque. The cancellation shall sign in full using red ink the drawer’s signature.

Cash Balancing:

The entire cash related employees ensure the balancing of cash on daily basis:

All cash register written in words and signed Checking agreed with each other Preparing cash position memo Writing cash Balance book Checking all registers and signing Ensuring that Balance is correct. Preparing cash cum daybook.

Checking cash in hand: Cash should be checked as per cash balance which is showing in system.

Counting the loose cash entirely also coin Petty cash Prize bond stick Late paid cash/Scrutiny instrument Surplus cash if any pass voucher

21

Cash safe keeping: All the custodians of cash must ensure overnight safe keeping of cash at branch level. Counted cash to keep under following precaution:

Iron safe condition Strong room as per specification Lodgement of keys Maintain safe limit Excess over limit disposal

References:

1. www.axisbank.com 2. Twitter.com/axisbank 3. LinkedIn.com/axisbank 4. Facebook.com/axisbank

The End