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October 20, 2016

Banking Awareness 2017 in Simple Language - Lesson 10

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Dear Gr8 Ambitionists, in our yesterday's Banking Awareness 2017 Lesson 9, we have learnt about various types of Bank Accounts. In today's lesson, we shall learn about the KYC (Know Your Customer), Basic Banking Services and some important facts you should know about Banking in India. Happy Reading :) 

Banking Awareness 2017 : Know Your Customer (KYC)

The Reserve Bank of India (RBI) introduced KYC guidelines for all banks in 2002 & RBI directed all banks to compliant these guidelines by 31st December 2005. KYC means "Know Your Customer". It is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks' services are not misused. The KYC procedure is to be completed by the banks while opening accounts and also periodically update the same. Bank is required to update KYC data of high risk customer once in 2 years, for medium-rick customer once in 8 years and for low-rick customer once in 10 years.
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KYC requirement for opening a bank account is : Proof of Identity and proof of address with a recent photograph. 

India's first know your customer registration agency "KRA (KYC Registration Agency)" was launched at Bombay Stock Exchange (BSE) in 2012 by UK Sinha (SEBI Chairman).

Officially Valid Document (OVD)
  1. The Aadhar Card
  2. Voter's Identity Card
  3. PAN Card
  4. Driving license
  5. Passport
  6. The NREGA job card issued and duly signed by an officer of the State Government. 
    • Note : PAN Card is Identity Proof only not an Address proof. 


e-KYC is electronic KYC. e-KYC is possible for those who have Aadhar numbers. While using e-KYC service, you have to authorize the Unique  Identification Authority of India (UIDAI), by explicit consent to release identity / address through biometric authentication to bank branches. The UIDAI transfers the data comprising name, age, gender and photograph of hte individual, electronically to the bank. Information provided through e-KYC process is permitted to be treated as an "Official valid document" under PML [Prevention of Money Laundering] act and is a valid process for KYC verification.

Basic Banking Services

  • Services relating to Deposit accounts (Cheque Book Facility)
  • Issue of Passbook / Statement. 
  • ATM card.
  • Debit card
  • Stop payment
  • Balance enquiry
  • Account closure
  • Cheque return (inward, signature verification)
  • Loan accounts (no dues certificate)
  • Remittance facilities like Demand Draft : Issue / cancellation / revalidation
  • Payment Order : Issue / cancellation / revalidation / duplicate 
  • Telegraphic Transfer : Issue / cancellation / duplicate
  • ECS (Electronic Clearing Services)
  • Collection, Facilities (Collection of local / outstation cheque, cheque return-outward)

Banking Awareness : Important Points to Note about Banks in India

  • First Indian Bank to get ISO : Canara Bank
  • First governor of RBI : Mr. Osborne Smith
  • First Indian governor of RBI : Mrs. C. D. Deshmukh
  • First Bank to introduce ATM in India : HSBC
  • First Bank to introduce saving Bank in India : Presidency Bank in 1833
  • First Bank to introduce cheque system in India : Bengal Bank in 1784
  • First Bank to introduce Internet Banking : ICICI Bank
  • First Bank to introduce Mutual Fund : State Bank of India
  • First Bank to introduce Credit Card in India : Central Bank of India
  • First Foreign Bank in India : Comptoire d'escompete de Paris of France in 1860
  • First Bank setup in India : Bank of Hindustan in 1770
  • First Joint Stock Bank of British India : State Bank of India
  • First Joint Stock Bank and oldest Public Bank in India : Allahabad Bank
  • First Bank in India launched talking ATM for differently abled persons : Union Bank of India
  • First Indian Bank to launch its own payment aggregators - SBI [SBI epay]
  • First national bank that was merged with PNB : New Bank of India in 1993
  • First Indian Bank to open branch outside India : Bank of India in London in 1946
  • First Indian Bank started with Indian Capital / Indigenous Bank of India : Punjab National Bank
  • First Regional Rural Bank (RRB) : Prathama Grameen Bank
  • First RRB was started by : Syndicate Bank  
  • First Bank to provide mobile ATM : ICICI Bank
  • Largest Public Sector Bank of India : SBI
  • Largest Bank with the Foreign Offices : SBI
  • Largest Private Sector Bank of India : HDFC
  • First Public Sector Bank to implement CBS (Core Banking Solution) : Syndicate Bank
  • First Bank purely managed by Indians : Punjab National Bank
  • First Indian commercial bank which wholly owned & managed by Indians : Central Bank of India (India's first truly Swadeshi Bank)
  • First Indian Bank listed in New York Stock Exchange (NYSE) : ICICI Bank
  • First Indian Woman Bank : Bharatiya Mahila Bank
That's all for now friends. In our next Banking Awareness lesson, we shall learn about the Types of Loans in India. Happy Reading :)
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