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By

- Anish Nair

- Bibekanand Mishra

- Dewanshu Kumar

- Pranav Nagar

- Prateek Goyal

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Need for Fee Based Services

Volatility in the interest rate regime havecompelled banks to explore the various noninterest based income

Fierce competition is prevailing in the Indian

economy The non-interest income activities of banks are

also on the increase in recent years Stabilized the total income of banks Increase in non-interest income as a source of

funds for banks would also greatly be helpfulfor maintaining the financial soundness ofbanks

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Fee Based Services

Corporate Fee Based Services Cash Management Services

Treasury Services

Trading Facilities

Letter of Credit Bank Guarantee

Factoring and Forfeiting Services

Correspondent Banking

Leasing Bill Discounting

Trust Operations

Custodial Services

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Fee Based Services

Retail Fee Based Services

Credit cards

Remittance

Insurance

Wealth Management

Miscellaneous Services

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Fee Based Services

FOREX Services

Merchant banking

Underwriting

Project Counseling

Supply Chain Management

Mergers and Amalgamations

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Corporate

Fee

Based

Services

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Cash Management Services In United States banking, cash management, or treasury

management, is a marketing term for certain servicesoffered primarily to larger business customers.

These include:

Account Reconcilement Services.

Advanced Web Services.

Automated Clearing House.

Balance Reporting Services.

Cash Concentration Services.

Zero Balance Accounting.

Controlled Disbursement and wire transfer.

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Treasury Services

Treasury services is a function of an investment bank

which provides transaction, investment, and informationservices for chief financial officers or treasurers.

These Generally include:-

Accounts Receivable services.

Accounts Payable services.

Liquidity Management services.

Reporting Services.

Trade Finance Services.

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Trading Facilities

A person or group of persons that provides a physical or

electronic facility or system in which multiple participantshave the ability to execute or trade agreements,contracts, or transactions by accepting bids and offersmade by other participants in the facility or system.

This includes:- Online share trading facilities.

Multilateral trading facility.

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Trading Facilities

Trade Service for Importers : Import Bills for Collection and letters of credit.

Bank Guarantee.

Trade Service for Exporters :

Export Bills for Collection and Bank Guarantee. Outward Bill.

Credit Bill Negotiation.

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Letter Of Credit

Letter of credit implies one has found a creditorthat is willing to loan

It is an irrevocable payment undertaking

The issuing bank makes available the Proceeds,

to the Beneficiary of the Credit provided Letters of credit accomplish their purpose by

substituting the credit of the bank for that of thecustomer, for the purpose of facilitating trade

Two types: Primary Mechanism: Commercial letter of credit

Secondary Mechanism: Stand by letter of credit

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Bank Guarantee A commercial instrument in the nature of a contract,

intended between two parties, to secure compliancewith the contract

It is a guarantee made by a bank on behalf of acustomer should it fail to deliver the payment,

essentially making the bank a co-signer for one ofits customer's purchases

In case of breach of contract the beneficiary canencash the guarantee and avail the amountimmediately without having to undergo any litigation

Types: Conditional

Unconditional

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Factoring and Forfeiting Services

Forfeiting and factoring are services in internationalmarket given to an exporter or seller.

Forfeiting typically involves the following cost elements:

Commitment fee, payable by the exporter to the

forfeiter for latters commitment to execute a specificforfeiting transaction at a firm discount rate with in aspecified time.

Discount fee, interest payable by the exporter for theentire period of credit involved and deducted by theforfeiter from the amount paid to the exporter against theavailed promissory notes or bills of exchange.

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Correspondent Banking

A correspondent account is an account (oftencalled a nostro or vostro account) establishedby a large banking institution to receivedeposits from, make payments on behalf of, orhandle other financial transactions for smallerfinancial institutions

The Banks LC stands acceptable in theinternational market

Suppliers can confirm LCs from any of the

correspondents Quick collection of export bills as well as

outward remittances towards imports

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Leasing

Leasing is a process by which a firm can obtain the use

of a certain fixed assets for which it must pay a series ofcontractual, periodic, tax deductible payments.

Leases are most advantageous to companies that areacquiring equipment that is subject to technological

obsolescence. Leasing companies typically fund leasesand then get their funding for the transaction from abank, because they are not capitalized enough.

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Bill discounting

Bill discounting is a major activity with some of thesmaller Banks. Under this particular type oflending, Bank takes the bill drawn by borrower onhis(borrower's) customer and pay him or her

immediately deducting some amount asdiscount/commission. The Bank then presents theBill to the borrower's customer on the due date ofthe Bill and collect the total amount. If the bill is

delayed, the borrower or his customer pay theBank a pre-determined interest depending uponthe terms of transaction.

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Trust Operations

Act as Executors/Administrators

Permission from Office of the Comptrollerof the Currency

Strict adherences to rules governing onhow the bank administers its fiduciarypowers

Personal Trust: Living trusts &

Testamentary trusts Corporate Trusts: Estate Admin & Bond

Admin

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Custodial Services

A Custodian bank, or simply custodian, is a specialized

financial institution responsible for safeguarding a firm'sor individual's financial assets and is not likely to engagein "traditional banking.

Its Responsibilities include:

hold in safekeeping assets/securities such as stocks,bonds and commodities.

arrange settlement of any purchases and sales of suchsecurities.

collect information on and income from such assets. maintain currency/cash bank accounts, effect deposits

and withdrawals and manage other cash transactions.

perform foreign exchange transactions.

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Retail

Fee

Based

Services

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Credit cards

It allows its holder to buy goods and services based onthe holder's promise to pay for these goods andservices. The issuer of the card creates a revolvingaccount and grants a line of credit to the consumer (orthe user) from which the user can borrow money forpayment to a merchant or as a cash advance to theuser.

One credit card, multiple APRs.

Lower credit score, higher APR APR includes interest, not fees.

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Remittance

It is transfer of money by a foreign worker tohis or her home country

The banks help their NRI customers to availthe highest benefit of the exchange rates while

transferring money Modes:

SWIFT(Society for worldwide inter bank financialtelecommunication)

Bankers Cheque

Demand Drafts Mail Transfers Telegraphic Transfers Travellers Cheque

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Insurance

Distributors for both Life and Non lifeinsurance products

Insurance companies tie up with banks as

well as Irda recommendation of every bankbeing allowed for tie ups with 2 life, 2 nonlife and 2 health care Insurance companies

Increased penetration for Insurers (rural

areas as well) The Commission fee charged is regulated

by Irda

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Wealth Management Wealth management is an investment advisory

discipline that incorporates financial planning,investment portfolio management and a number ofaggregated financial services.

These include the following:

Portfolio Management Services.

Portfolio Advisory.

Trading in Equity, Currency, Interest Rate Futures.

Fixed Income Products.

Structured Products.

Financial Planning.

Private Equity Funds.

Mutual Funds & IPOs.

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Miscellaneous Services

The Banks are authorized for collection of Income orother Direct taxes

The banks are authorized for disbursement ofvarious Pensions like Central Civil Pension, DefencePension etc

The banks offer payment facilities towards bills likephone, electricity, data services

ECS system facilitates paperless credit/debitfacilities transaction directly linked to ones account

ECS caters to Utility bills, Mutual Fund, Insurance

Premium, Loan Installments, credit card bills

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Foreign Exchange Services The foreign exchange market (FOREX OR currency

market) is a global, worldwide decentralized financialmarket for trading currencies. The primary purpose ofthe foreign exchange is to assist international trade andinvestment, by allowing businesses to convert onecurrency to another currency.

These services include:

Travellers cheques.

Forex plus cards.

Foreign currency drafts. Remittances.

Trade services.

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Merchant Banking A bank that deals mostly in (but is not limited to)

international finance, long-term loans for companies andunderwriting. Merchant banks do not provide regularbanking services to the general public.

Traditional merchant banks primarily perform

international financing activities such as foreigncorporate investing, foreign real estate investment, tradefinance and international transaction facilitation. Someof the activities that a pure merchant bank is involved inmay include issuing letters of credit, transferring funds

internationally, trade consulting and co-investment inprojects involving trade of one form or other.

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Underwriting

The process by which investment bankers raiseinvestment capital from investors on behalf ofcorporations and governments that are issuingsecurities (both equity and debt).

The procedure by which an underwriter brings anew security issue to the investing public in anoffering. In such a case, the underwriter willguarantee a certain price for a certain number ofsecurities to the party that is issuing the security

(in exchange for a fee). Thus, the issuer is securethat they will raise a certain minimum from theissue, while the underwriter bears the risk of theisssue.

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Project Counseling

Study and analysis of project viability

Effective and efficient implementation

Project Counseling Activities:

General Review Technical feasibility

Market Survey

Capital Structuring Obtaining licenses, permissions,

registrations

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Supply Chain Management

Integrated commercial and financial solutionsto the supply and distribution channels of acorporate

Channel financing products that extend

working capital finance to dealers or vendorshaving relationships with large corporates: Dealer Financing Receivables Factoring Purchase Invoice Financing Warehouse Financing Trade Cards Rent Receivable Financing

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Mergers and Amalgamations

Expertise in exclusive sales, divestitures,acquisitions, merger advisory, tender offers,joint ventures, strategic alliances, takeoverdefense and special committee representation,

recapitalizations and restructurings Key focus on clients throughout the

transaction process from identifying potentialpartners, preparing the marketing materials, to

contacting potential partners, positioning,structuring, negotiating and closing of a dealby leveraging the industry knowledge andcapital markets and restructuring expertise

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Mergers and Amalgamations

Services Provided Strategic alternatives "Going private" transaction Special committee advisory Share repurchase strategies Strategic alliances and joint ventures Corporate defensive activities Sell-side advisory Buy-side advisory Leveraged recapitalization Management buyout Acquisition financing alternatives Fairness opinion

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THANK YOU