Retail Banking: How it is different from wholesale banking?

The basic distinctions between retail banking and wholesale banking/Corporate banking are apparent in their target audiences, services offered, customer relationships, and risk profiles. Retail banking business is targeted at individuals, salaried professionals, micro, small, and medium enterprises, Self Help Groups (SHGs), and Non-Resident Indians (NRIs). Retail bankers offer a variety of deposit schemes to individuals…

Revised guidelines on Inoperative Accounts /Unclaimed Deposits in Banks

The Reserve Bank of India on Monday issued revised instructions on Inoperative Accounts /Unclaimed Deposits in Banks. According to the revised guidelines, a savings/ current account shall be treated as inoperative, if for over two years there are no ‘customer-induced transactions’ in that account. Customer induced transactions are; (a) Financial transactions like debit/credit transactions in…

Green Deposits and Green finance by banks explained

Meaning of green deposits: The provisions of the framework for green deposits raised in India after June 01, 2023. A green deposit means an interest-bearing deposit, received by Regulated Entities (RE) like Commercial Banks, Small Finance Banks (excluding Regional Rural Banks, Local Area Banks, and Payments Banks), and deposit-taking NBFCs for a fixed period, the…

Meaning and terms of ‘Bulk Deposits’ in Banks

In terms of Master Direction – Reserve Bank of India (Interest Rate on Deposits) Directions, “Bulk Deposit” means, a Single Rupee term deposit of Rupees two crore and above for Scheduled Commercial Banks (excluding Regional Rural Banks) and Small Finance Banks. For Regional Rural Banks (RRBs), single Rupee term deposits of Rupees fifteen lakhs have…

Threshold limit for Term deposits without premature withdrawal option increased

In terms of extant RBI instructions, banks have been permitted to offer domestic term deposits (TDs) without a premature withdrawal option, provided that all TDs accepted from individuals for an amount of Rupees fifteen lakh and below shall have premature-withdrawal-facility. Moreover, commercial and cooperative banks were permitted to offer differential rates on interest on Term…

What are deficiencies in regulatory and KYC compliances for which banks pay penalties?

Regulatory compliance aims to ensure the bank operates within regulation, safeguarding its integrity and industry reputation. The function oversees multiple duties: protecting bank data, avoiding government fines, avoiding tax evasion, complying with KYC guidelines, monitoring and reporting anti-money laundering activities, assessing risks, and ensuring zero violation of banking ethics. Following are the few cases where…