Reasons for credit card being rejected at retail outlet:

Reasons for credit card being rejected at retail outlet:

• One may have exceeded the borrowing limit or

defaulted (constantly) on minimum payment due.

• The Card is hotlisted.

• The card has crossed its expiration date.

• Non-receipt of dues of one-card blocks future transactions on any other card(s) held of the same card-issuing bank.

• The magnetic strip on the reverse of the card is damaged i.e. has been scratched or exposed to continuous heat/direct sunlight or magnetic field-like card kept near a TV set / other electronic appliances.

• Systems or technology failures have in rare in¬stances also led to non acceptance of cards when swiped through an Electronic Terminal.

Global player in credit card market:

Master Card : Master Card is a product of Mas¬ter Card International and along with VISA are dis¬tributed by financial in~titutions around the world. Card holders borrow money against a line, of credit and pay it back with interest if the balance is carried over from month to month. Its products are issued by 23,000 financial institutions in 220 countries and ter¬ritories. In 1998, it had almost 700 million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.

VISA Card:

VISA cards is a product of VISA USA and along with Master Card is distributed by finan¬cial institutions around the world. A VISA card holder borrows money against a credit line and repays the money with interest if the balance is carried over from month to month in a revolving line of credit. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards. 

American Express:

The world's favourite card is American Express Credit Card. More than 57 million cards are in circulation and growing and it is still groWing further. Around US $ 123 billion was spent in 2006 through American Express Cards and it is poised to be the world's No. 1 card in the near fu¬ture. In a regressive US economy in 2006, the total amount spent on American Express cards rose by 4 percent. American Express cards are very popular in the U.S., Canada, Europe .and Asia and are used widely in the retail and everyday expenses segment. 

Diners Club International :

Diners Club is the world's No. 1 Charge Card. Diners Club card holders reside allover the world and the Diners Card is a alltime favourite for cOI'porates. There are more than 8 million Diners Club cardholders. They are affluent and are frequent travellers in premier businesses and institutions, including Fortune 500 companies and leading global corporations.

JCB Cards:

The JCB Card has a merchant network of 10.93 million in approximately 189 countries. It is supported by over 320 financial institutions worldwide and serves more than 48 million cardholders in eighteen countries world wide. The JCB philosophy of "identify the customer's needs and please the customer with Service from the Heart" is paying rich dividends as their customers spend US$43 billion annually on their JCB cards. 

Grace / Interest Free Period :

The number of days you have on a card before a card issuer starts charging you interest is called grace period. Usually this period is the number of days between the state¬ment date and the due date of payment. Grace periods on credit cards are usually 2-3 weeks. However, there is likely to be no grace for balances carried for¬ward from previous month and fresh purchases there¬after if any ..

PLASTIC MONEY Credit Card and Debit Card

PLASTIC MONEY:

Credit Card and Debit Card 

Credit Card : Credit card in India is gaining ground. A number of banks in India are encouraging people to use credit card. The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and American Express. Credit card however became more popular with use of mag¬netic strip in 1970.

Credit card in India became popular with the in¬troduction of foreign banks in the country.

Credit cards are financial instruments, which can be used more than once to borrow money or buy prod¬ucts and services on credit. Basically banks, retail stores and other businesses issue these.

Major Banks issuing Credit Card in India:

• State Bank of India Credit Card (Sm credit card)

• Bank of Baroda Credit Card or BoB credit card

• ICICI Credit Card

• HDFC Credit Card

• IDBI Credit Card

• ABN AMRO Credit Card

• Standard Chartered Credit Card

• HSBC Credit Card

• Citibank Credit Card

Precautions taken after receiving credit card To Avoid : 

• Bending the Card.

• Exposure to electronic devices and gadgets.

• Direct exposure to sunlight.

• Be cautious about disclosing your account num¬ber over the phone unless you know you're dealing with a reputable company.

• Never put your account number on the outside of an envelope or on a postcard.

• Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.

• Don't sign a blank charge or debit slip.

• Tear up carbons and save your receipts to check against your monthly statements.

• Cut up old cards - cutting through the account number - before disposing of them.

• Open monthly statements promptly and com¬pare them with your receipts. Report mistakes or dis¬crepancies as soon as possible 'to the special address list~d on your statement for inquiries. Under the FCBA (credit cards) and the EFTA (ATM or debit cards), the card issuer must investigate errors reported to them within 60 days of the date of your statement was mailed to you.

• Keep a record - in a safe place separate from your cards - of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.

• Carry only those cards that you anticipate you'll need.

To Do: 

• Please sign on the signature panel on the re¬verse of the Card immediately with a non-erasable ball-point pen (preferably in black ink). This will en¬sure that the benefits of membership are yours and yours alone.

• Keep the Card in a prominent place in your wal¬let. You will notice if it is missing.

General procedure to open an account

General procedure to open a Bank account:

• The Bank will provide you with details of vari¬ous types of accounts that you may open with the Bank. 

• You can have your choice on what type of ac¬count would best suit you, based on your needs and requirements

• The Bank will, prior to opening an account, re¬quire documentation and information as prescribed by the "Know Your Customer" (KYC) guidelines issued by the RBI and or such other norms or proce"dures adopted by the Bank prior to opening the account. 

• The due diligence process that the Bank would follow, will involve providing documentation verifYing your identity, verifying your address, and information on your occupation or business and source of funds. As part of the due diligence process the Bank may also require an introduction from a person acceptable to the Bank if they so deem necessary and will need your recent photographs.

• The Bank is required by law to obtain Perma¬nent Account Number (PAN) or General Index Register (GIRl Number or, where you do not possess such registration, declaration in Form No. 60 or 61 as speci¬fied under the Income Tax Rules. 

• In the event that the account opening process is likely to take longer than normal, the Bank will inform you of the revised timeline. 

• You can also call your branch or the executive for any queries that you may have and the branch / executive will revert on the query at the earliest. 

• The Bank will provide you with the account opening forms and other relevant material to enable you open the account. Bank personnel will advise you on the complete details of information that would be required by the Bank for the verification process. 

• The Bank reserves the right, at its sole discretion, [0 open any account and at such terms as the Bank may prescribe from time to time

BANKING SERVICES IN INDIA

BANKING SERVICES IN INDIA :

With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks operating in lndia.

With stiff competition and advancement of tech¬nology, the services provided by banks has become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from ac¬counts or a cheque from north of the country being cleared in one month in the south.

This section of banking deals with the latest dis¬covery in the banking instruments along with the pol¬ished version of their old systems. 

Bank Account : Open bank account - the most common and first service of the banking sector. There are different types of bank account in Indian banking sector. The bank accounts are as follows: 

• Bank Savings Account - Bank Savings Account can be opened for eligible person / persons and cer¬tain . / organisations / agencies (as advised by Re¬serve Rank of India (RBI) from time to time)

• Bank Current Account - Bank Current Ac¬count can be opened by individuals / partnership firms ! Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts, etc" 

• Bank Term Deposits Account - Bank Term De¬posits Account can be opened by individuals / part¬nership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts, etc. 

• Bank Account Online - With the advancement of technology, the major banks in the public and pri¬vate sector has faciliated their customer to open bank account online. Bank account online is registered through a PC with an intemet connection. The ad-vent of bank account online has saved both the cost of operation for banks as well as the time taken in opening an account. 

Note: A minor account can be opened but jointly with a guardian and only the guarqian would is allowed to operate the account.

SCHEDULED COMMERCIAL BANKS IN INDIA

SCHEDULED COMMERCIAL BANKS IN INDIA:

The commercial banking structure in India con-

sists of:

• Scheduled Commercial Banks in India 

• Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in tum includes only those banks in this schedule which sat¬isfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India 'having a total network of 64,918 branches. The scheduled commercial banks in India comprise of State bank of India and its associates (8), nationalised banks (19), foreign banks (45), private sector banks (32), co-operative banks and regional ru¬ral banks.

"Scheduled banks in India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted un¬der section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acqui¬sition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

The following are the Scheduled Banks in India (Publici Sector): 

• State Bank of India

• State Bank of Bikaner and J aipur

• State Bank of Hyderabad

• State Bank of Indore

• State Bank of Mysore

• State Bank of Patiala

• State Barik of Saurashtra

• State Bank of Travancore

• Andhra Bank.

• Allahabad Bank

• Bank of Baroda

• Bank of India

• Bank of Maharashtra

• Canara Bank

• Central Bank of India

• Corporation Bank

• Dena Bank

• Indian Overseas Bank

• Indian Bank

• Oriental Bank of Commerce

• Punjab National Bank

• Punjab and• Sind Bank

• Syndicate Bank

• Union Bank of India

• United Bank of India .

• UCO Bank

• Vijaya Bank "

The following are the Scheduled Banks in India (Private Sector):

• Vysya Bank Ltd

• UTI Bank Ltd

• Indusind Bank Ltd

• ICICI Banking Corporation Bank Ltd

• Global Trust Bank Ltd

• HDFC Bank Ltd

• Centurion Bank Ltd

• Bank of Punjab Ltd • IDBI Bank Ltd

The following are the Scheduled Foreign Banks

in India:

• American Express Bank Ltd.

• ANZ Gridlays Bank Pic.

• Bank of America NT & SA

• Bank of Tokyo Ltd.

• Banquc Nationale de Paris

• Barclays Bank Pic

• Citi Bank N.C.

• Deutsche Bank A.G.

• Hongkong and Shanghai Banking Corporation

• Standard Chartered Bank.

• The Chase Manhattan Bank Ltd.

• Dresdner Bank AG.

FINANCIAL OR BANKING SECTOR REFORMS OR PHASE III

FINANCIAL OR BANKING SECTOR REFORMS OR PHASE III :

This phase has introduced many more products and facilities in the banking sector in its reforms mea¬sure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalisation of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are introduced. The entire system became more convenient and swift. Time is given more impor¬tance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from anY'CriSiS trig¬gered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flex¬ible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign ex¬change exposure.

NATIONALISATION OF BANKS IN INDIA 

The nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi, the then Prime Min¬ister. It nationalised 14 banks then. These banks were mostly owned by businessmen and even managed by them.

• Central Bank of India

• Bank of Maharashtra

• Dena Bank

• Punjab National Bank

• Syndicate Bank

• Canara Bank

• Indian Bank

• Indian Overseas Bank

• Bank of Baroda

• Union Bank

• Allahabad BaI1k

• United Bank of India

• UCO Bank

• Bank of India

Before the steps of nationalisation of Indian banks, only State Bank of India (SBIl was nationalised. It took place in July 1955 under the SBI Act of 1955. Nationalisation of Seven State Banks of India (formed subsidiary) took place on 19th July, 1959.

The State Bank of India is India's largest commer¬cial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches and it offers - either di¬rectly or through subsidiaries - a wide range of bank¬ing services.

The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over Rs. 200 crores. Till 2006, approximately 80% of the banking segment in India were under Govemment ownership.

BANKING SYSTEM IN INDIA For BANK EXAMS and Other Exams

BANKING SYSTEM IN INDIA:

Banking system occupies an important place in a nation's economy. A banking institution is indispensable in a modem society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country.

For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalisation of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in days. Now it is as simple as instant messaging or dial a pizza. Money have become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks

• Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector reforms.

• New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

EARLY PHASE OR PHASE I:

The General Bank of India was set up in the year 1786, next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were alga mated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894' with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and ac¬tivities of commercial banks, the Government of In¬dia came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with exten¬sive powers for the supervision of banking in India as the Central Banking Authority.


During those days public has-lesser confidence in the banks. As an aftermath deposit mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

NATIONALISATION OF BANKS OR PHASE II 

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Govern¬ments allover the country.

Seven banks forming subsidiary of State Bank of India was nationalised on 19th July, 1959, and thus major process of nationalisation was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi, 14 major commercial banks in the country was nationalised. Second phase of nationalisation of Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership.

The following are the steps taken by the Government of India to regulate Banking Institutions in the Country: 

• 1949 : Enactment of Banking Regulation Act.
• 1955 : Nationalisation of State Bank of India.
• 1959 : Nationalisation of S'BI subsidiaries.
• 1961 : Insurance cover extended to deposits.
• 1969 : Nationalisation of 14 major banks.
• 1971 : Creation of credit guarantee corporation.
• 1975 : Creation of regional rural banks.
• I980 : Nationalisation of seven banks with de¬posits over Rs. 200 crore.
After the nationalisation of banks, the branches of the public sector bank of India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government owner¬ship gave the public implicit faith and immense confidence about the sustainability of these institutions.