KYC is a tool that enables banks to know their customers by verifying their identity in order to prevent banks from money laundering, identity theft, financial fraud and terrorist financing so that they can manage their risks prudently. KYC is a regulatory and legal requirement.
Following documents are required by banks under KYC of an individual:
"A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years" as per RBI guidelines.
According to RBI, following type of transactions will be considered for the purpose of classifying an account as ‘dormant’:
However, the service charges levied by the bank or interest credited by the bank are not considered as transaction for the purpose of classifying an account as 'dormant'.
The banks make annual review of all savings bank account and current accounts and in case there is no transaction, the bank is required to inform the account holder to activate the account by making some transaction. If the account is not activated in the second year too then the bank is again required to inform the customer three months in advance of the account being classified as dormant.
It is mandatory for the banks to credit the interest on savings bank accounts on regular basis whether the account is operative or not.
Account holder may face many consequences on his/her account being dormant like cheque book be cannot be issued, address cannot be changed, no cash withdrawal from an ATM, no transaction through internet banking, no renewal of ATM/debit card etc.
To reactivate the dormant account, the account holder has to submit a request to the bank in person to change the status of the account from 'Dormant to Active' indicating the reasons for not operating the account in the past along with a copy of the pass book or cheque of his/her savings bank account or current account. The account holder has also to submit 2 recent colour passport size photos and KYC documents. Please note that banks do not levy any charge for reactivation of dormant accounts as per RBI guidelines. The reactivation process differs from one bank to another. The account generally gets activated within 24 hours.
Non-performing Asset is the loan given by a bank on which previously agreed upon interest payments or repayments are not being received by the bank on time and has remained overdue for a period of 90 days. NPA is an asset that does not generate any income for the bank.
As per RBI guidelines, a term loan on which interest or instalment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset.
In the balance sheet of the bank, loans made to customers are shown as assets and when customers who have taken the loan stop making their interest payments or principal repayments, the value of the loan assets starts declining in the balance sheet. The higher is the amount of NPAs, the weaker will be the bank’s revenues.
NPAs are categorised into 3 major types:
For Agriculture Loans, there is some change while classifying loan as NPA as mentioned below:
Banks can neither credit the income nor debit the loss unless either recovered or identified as loss in case of NPA.
It is the amount which is outstanding in the books of bank regardless of any interest.
It is Gross NPA minus interest debited to borrower's account and not recovered as income.
If a bad loan has remained NPA for minimum of 2 years, the bank can resale such bad loan to the Asset Reconstruction Companies e.g. Asset Reconstruction Company (India) (ARCIL). Asset Reconstruction Companies purchase such bad loan on very less amount and then try to make maximum possible recovery of such loans from the defaulters.
An automated teller machine (ATM) is a specialized computerized machine that allows bank customers to gain access to their accounts with a magnetically encoded plastic card and a code number (PIN). Through ATM, customer can process a variety of banking transactions like cash withdrawal, cash deposit, change of mobile number, getting transaction summery of his account, pay bills, etc.
It a safe and convenient way to manage one's money. There are thousands of ATMs which remain open 24 hours a day and all 7 days a week.
In addition to cash dispensing ATMs may have many services / facilities such as:
The services offered vary from bank to bank and can also depend on the ATM’s capacity to offer these options.
Banks usually set limit for withdrawal of cash from ATM by customers which is set by the issuing bank at the time of issuance of the card. For cash withdrawals at other bank ATMs, banks have decided to maintain a limit of Rs 10,000/- per transaction. Banks can also restrict the number of free transactions like cash withdrawal from different banks' cards to a maximum of 5 per month and can charge maximum of Rs 20/- per transaction for transactions beyond this number.
2017 February 24 is a bank holiday in Chandigarh due to Mahashivratri.
2017 February 27 is a bank holiday in Sikkim due to Losar.
2017 March 03 is a bank holiday in Mizoram due to Chapchar Kut.
2017 March 12 is a bank holiday in Jammu And Kashmir due to Holi (Jammu Province Only).