Presentation of Commercial Bank

Operations on the chapter

“Deposit Mobilization”
 Topics Covered:

1. Procedures of opening Bank Account

2. Eligibility for opening Bank Account
3. Types and Structure of Charges
4. Know Your Customer
 Sabita Karki
Procedures for opening Bank
Account
 Bibek Shrestha
Eligibility for opening Bank
Account
Group Members
 Asmita Neupane and Work division
Types and Structure of Charges
 Roshan Rimal
Types and Structure of Charges
 Sabina Chauhan
Know Your Customer
 Prakash Bidari
Know Your Customer
A bank account is a
financial account
maintained by a
financial institution for
a customer from where
banking transactions Bank Account
can be performed.
 Current Account
 Saving Account
 Fixed Deposit Account
 Recurring Account
 Procedure for Account Opening in Banks

 Today Banks have emerged as important financial institutions.

Banks provide a safe environment and help us manage our
financial transactions.
 With the increasing security issues, the importance and use of
banks are increasing.
 The government has emphasis for the campaign “One
Household, One Bank Account”.
 Bank Account can be opened both online and offline.
 Generally, following steps are to be followed for
opening the bank account:
 Types of account offered by
the bank varies from one to
another.
 Generally most of the banks
offer 4 types of account:
Current, Saving, Fixed 1.Decide the type of
Deposit and Recurring
Account. Bank account you
 For instance: Saving want to open:
Account are suitable for
those who want to save the
small portion of their
earnings in banks to meet
their future need.
 So, the choice of bank
account is to be done
according to their need.
Businessman and
Entrepreneurs
The choice of bank may
depend upon the
following factors:
 Location of Bank
 Facilities provided by 2.Choose the
banks bank that is
 Interest rates
best for you:
 Flexibility
 Service time
 Number of branches
and ATM center.
 It is wise to check
whether you meet all 3.Make sure about
the criteria for opening the eligibility for
an account you desire . opening the type
 The criteria can be of account you
age, nationality, want.
gender, minimum
balance requirement
and so on.
 4.Fill up the Bank Account opening form:

 A form is to be filled up
including all the personal
and work related
information such as
name, address, contact
information, services
required(e-banking,
debit card…),family
information, occupation
details and so on.
Online Account Opening Form of Nabil Bank
You can have clarification
on any issues regarding
your account that you don’t
understand. Below are some
of the questions:
5.Ask important
-Is there a monthly fee for
maintaining this account? questions before
-Is there a minimum you finalize your
balance that I must keep account:
within this account?
-What is the interest rate of
my saving account?
-What is the fee for using
an ATM that doesn’t belong
to this bank?
 The duly filled up form
must be submitted to the
concerned bank with the
necessary documents
and fees. 6.Submit Bank
 For instance: In case of Account Opening
opening business Form and
account of a company Documents
one have to submit the
documents like copy of
Company Registration
Certificate, tax
certificate, copy of
MOA and AOA and so
on.
 After the submission of
form by the client, the
form is verified by the
bank on the basis of
information and
documents provided. 7. Verification of
 The bank checks form by bank:
whether the form is
complete in all respects
or not.
 If verified, account is
opened and if not, then
the process is to be
revised.
 Some of the banks
clarify the initial
minimum balance
requirement but some
of the banks provide 8. Deposit initial
facility for opening the amount in
account in zero
newly opened
balance.
Bank account:
 Cheque or pay in slip
book is provided on
the date account is
opened and extra fee is
charged for ATM.
Eligibility to open bank account

Based on
NEPAL SBI BANK
Savings account designed
for Nepalese female above
16 years of age with an aim
to develop saving habits
and to enhance self-
determination among them. NSBL NARI
Requirement: BACHAT KHATA
 Minimum balance
requirement of Rs.500/-
 Eligibility: Resident
female above 16 years of
age having citizenship
certificate of Nepal.
Savings account especially
designed for minors in order to
inculcate the saving habits and
make them financially literate.
Parents or Guardians can open
and operate the account to secure NSBL BAAL
the future of their children. BACHAT KHATA
Requirement:
 Accounts for children below 16
years of age.
 Low minimum balance
requirement of Rs. 501/-
 Maximum permitted account
balance is Rs. 5 Lakhs.
A SPECIAL SAVINGS ACCOUNT
DESIGNED FOR MINOR WHO IS
LITERATE ENOUGH TO READ &
WRITE, CAN SIGN UNIFORMLY. IT IS
AN OPPORTUNITY TO CULTIVATE
THE SAVINGS HABIT FROM
CHILDHOOD AND BECOME
RESPONSIBLE TO MANAGE YOUR KARNADHAAR
SPENDING, INDEPENDENTLY.

Requirement:
BACHAT KHATA
 Account for children aged
10 years and above but
below 16 years.
 Low minimum balance
requirement of Rs. 501/-
 NSBL COMBO SAVINGS SCHEME

NSBL Combo Savings Scheme is a merged variant of

Saving Bank (Public) and NSBL Mobile Banking
Scheme for residential and non-residential individuals
of any age group.
Requirement:
 Account can be opened at zero balance.
 Minimum balance Rs 5000/- to be maintained for
operation of account.
 Account can be operated singly &/or jointly.
This scheme has been
introduced with an
objective to inculcate
saving habits to the
students. Under this STUDENTS
scheme, any student of ACCOUNT
college can open this
Savings account.
Requirement:
Minimum Balance:  Rs
500/- (Nil for government
students).
Student card
This account is
designed for Nepali
citizens presently in
service of Nepal Army. SCHEME FOR NEPAL
Requirement: ARMY SERVICE
 Minimum Balance: PERSONNEL
Rs. 500/-
 ID of army
headquarter
Under this scheme, the
Nepali domiciled (treat a
specified country as a
permanent home)
GOVERNMENT OF
Government of India
INDIA
Pensioners can open the
account.
PENSIONERS'
ACCOUNT
Requirement:
 Minimum Balance: Nil.
 Eligibility: Nepali
domiciled Government
of India Pensioners.
Requirement:
 Minimum Balance:
Nil
SHAREHOLDERS
 Eligibility:
SAVINGS
Shareholder of NSBL ACCOUNT
– Natural Person Only
 Account can be
operated singly only
Requirement:
 Currency: NPR or USD
 Eligibility: Non
Resident Nepalese
having valid passport SAVINGS - NON
indicating immigration RESIDENT
visa NEPALESE (NRN)
 Single or Joint
Account         
 Minimum Balance:
NPR. 10,000.00 or
equivalent in USD
 Bank Charges

The term bank charge covers all charges

and fees made by a bank to their customers. In
general, the term often relates to charges in respect
of personal current accounts or checking account.
These charges may take many forms, including:

1. monthly charges for the provision of an

account
2. Interest in respect of overdrafts (whether
authorized or unauthorized by the bank)
3. Transfer Redirection charges
4. Minimum Balance
 Types and structure of charges

1. Monthly account charges

Banks may charge their customers a fixed monthly charge for the provision
of the account.
For example travel insurance, mobile phone insurance, preferential rates on
other products.

2. Interest in respect of overdrafts

Most banks charge interest to their customers in respect of overdrafts.
 It is common to charge differentially for authorized and unauthorized
overdrafts, with unauthorized overdrafts often bearing an interest rate two or
three times higher than authorized ones.
In order to gain customers from competitors, banks will sometimes offer
introductory 0% or low interest rates on authorized overdrafts, together with
generous initial overdraft limits.

 
3. Transfer Redirection charges
 A Redirection of Transfer charge is included in bank charges and are only
required on specific transfer occasions only.
A redirection fee is a bank charge that is only paid to a bank when a mistake
is made by another bank and a sum of amount is transferred into a wrong
bank account in another bank.
 This may occur between continents, countries or states.

4. Minimum Balance
Some of the banks offer free opening of bank account, while most of the
banks require minimum balance to opening an bank account such as saving
account and fixed account.
The minimum balance ranges from Rs. 1000 to Rs. 10000.
Examples of charges by bank

Any Branch Banking System (ABBS) charges

The bank provides ABBS facility and asks for charges. ABBS is free
within the Kathmandu valley which outside valley it charges ABBS fee
that equals to 0.05% of total deposit or withdrawal.

Interest rate on loans

The fee charges on loan amount.

Monthly account keeping or service fee

The fee we pay for an organization to manage our bank account.
Internet banking fee
A fee may be charged for doing transactions over the internet.

ATM transaction fee

When using our ATM card, we may be charged a fee if you
exceed the number of transactions nominated for a particular
timeframe (e.g. per month) on a particular account.

Non-bank or foreign ATM fee

If bank owns an ATM network and we withdraw cash at an
ATM that our bank doesn't own or is an overseas ATM, we may
be charged this withdrawal.
Telephone banking transaction fee
If we use the telephone to do our transactions, this might cost something for
the withdrawal and/or deposit.

Branch withdrawal fee

Dealing with a person face-to-face can sometimes cost money.

Cheque withdrawal fee

A fee to produce a cheque is often charged.

Dishonour fee
The fee we pay when the balance in everyday transaction account goes
below $0.00
Types of loans and their charges

Consumer loan
Business loan
Agricultural loan
 An amount of money lent to
an individual (usually on a
no secured basis) for
personal, family, or
household purposes.
 Consumer loans are
monitored by government
regulatory agencies for their Consumer loan
compliance with consumer
protection regulations such
as the Truth in Lending Act.
 Also called consumer credit
or consumer lending.
Interest rate, 90 percent of
collateral etc. are some
charges of consumer loan.
 A business loan is a loan
specifically intended for business
purposes. As with all loans, it
involves the creation of a debt,
which will be repaid with added
interest.

 There are a number of different

types of business loan, suited to the
requirements of different types of Business loan
business such as bank loans,
mezzanine financing, asset-based
financing and invoice financing.

 Some charges are: Account

Service Fee/ Flat Fees,
Transactions and Enquiries,
Electronic transactions, Monthly
card fee-each card, each month,
Late Payment Fee etc.
Agricultural loans are made to
farmers to finance farming
activities.
Short-term agricultural loans are
usually seasonal and are used to
finance the purchase of seeds,
fertilizer and livestock.
These types of loans usually
require a lending officer to
Agriculture loan
inspect the borrower’s farm once
a year.
Some of charge charged by
banks are: Foreclosure
Charges, Processing Fees,
Stamp Duty and other
statutory charges ,Late
Payment Penalty And Legal
Fees etc.
KYC is a policy to enable banks
to know and understand their
customers better and help them
manage their risks prudently.

 Know your customer (KYC) is

an important step developed
globally to prevent identity Know your
theft, financial fraud, money
laundering and terrorist customer(KYC)
financing.

The process of KYC entails

identifying the customer and
verifying the identity by using
reliable and independent
documents or information.
Situation In which KYC is required

 While opening an account in a bank

 While applying for a credit card or loan
 While opening a subsequent account
 Opening a locker facility
 When there are not enough documents with the bank in
existing account
 When there are changes in signatories, beneficial
owners, etc
 When the bank feels it necessary to obtain additional
information from existing customers based on conduct of
the account
 While investing in a mutual fund
 Financial institutes may ask for a mandatory KYC
process in other instances too
 What does KYC control?

 Collection and analysis of basic identity information

(“Customer Identification Program” or CIP)
 Name matching against lists of known parties
 Determination of the customer’s risk in terms of
propensity to commit money laundering, terrorist
finance, or identity theft
 Analysis of an expectation of a customer’s
transactional behavior
 Monitoring of a customer’s transactions against their
expected behavior and recorded profile as well as
that of the customer’s peers
 
 Why KYC is important for Banks??

1 To Prevent Money Laundering: When the illegally obtained money are made to
.

appear as though it has originated from legitimate sources, it is called money

laundering. This is a serious threat to any economy as it shelters and breeds

criminal activities such as tax evasion, smuggling, financial frauds and corruption.

2. To Combat Finance of Terrorism :One of the major objectives of KYC is to

enable the banks know and understand their customers as well as their financial

dealings. KYC is a deliberate effort taken by banks to check suspicious monetary

transaction by any of their customers which may involve financing of the activities

related to terrorism.
 3.To Manage Risk: KYC also helps banks in managing risk by creating risk

profiles and assigning risk categories to customers. Banks can monitor any

possible financial frauds and loan defaults through Customer Identification

Procedure and by considering their financial background, nature of account,

purpose behind their account opening, and nature of transactions etc.

 4. To check Identity Theft: As per the KYC guidelines, bank cannot open

fictitious accounts on behalf of other persons whose identity has not been

verified. Also, banks will not allow you to open an account until and unless

you present valid documents that establish your identity.