Dr.RANM ARTS AND SCIENCE COLLEGE�Affiliated to Bharathiar University , Accredited with “ B+” NAAC

Mrs.S.Sangeetha M.Com.,Mphil.,Bed

Head & Assistant Professor,

Department of Commerce (B&I)

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Course Name : Banking and Insurance

Welcome You All

Definition of Banking

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• The Banking Regulations Act 1949, Sec.5 (b) defines the term banking as “Banking means accepting, for lending or investment, of deposits of money from the public repayable on demand or otherwise and withdraw by cheque, draft, and order or otherwise.”

Types of Banking

• Commercial banks:
• These banks are regulated by Banking Regulation Act, 1949. They accept the public deposit from the public for lending or investment
• Co-operative Bank
• These banks are regulated by Banking Regulation Act, 1949. They accept the public deposit from the public for lending or investment
• Specialised Bank
• These banks provide financial help to special industries, foreign trade, etc.
• Central bank
• These banks provide financial help to special industries, foreign trade, etc.

Function of Commercial Bank

• Acceptance of deposits
• Lending of Funds
• Cheque Facilities
• Remittance of Funds

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Trends in Baking

• RTGS – Real Time Gross Settlement
• E-cheques
• Electronic Clearing Service
• EFT – Electoral Funds Transfer
• ATM – Automatic Teller Machine
• Point of sale terminal,
• Telebanking,
• Electronic data interchange

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Negotiable Instruments meaning

• Negotiable Instruments are signed legal documents that guarantee paying a particular amount to a person or party at a set date or on-demand. It acts as an assurance of payment or repayment that the assignee expects. Based on the nature of the note, this document may or may not contain the recipients’ names.

Negotiable Instruments

Features

Cheque Meaning

A cheque is a piece of document/paper which orders the bank to transfer money from the bank account of an individual or an organisation to another bank account.

Types Of Cheque

• Bearer Cheque
• Order Cheque
• Crossed Cheque
• Account Payee Cheque
• Stale Cheque
• Post Dated Cheque
• Anti Dated Cheque
• Self Cheque
• Traveller Cheque
• Multilated cheque
• Blank Cheque

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Endorsement Meaning

Endorsement is the act of signing, usually on the back of a negotiable instrument, to legally transfer its ownership to another party. It certifies certain aspects regarding the instrument, such as validity, enforceability to the transferee, and any subsequent holder.

Endorsers

Types of Endrosement�

Crossing of Cheque

Definition: Crossing of a cheque is nothing but instructing the banker to pay the specified sum through the banker only, i.e. the amount on the cheque has to be deposited directly to the bank account of the payee.

Types of Crossing

• General Crossing
• Restrictive Crossing
• Special Crossing
• Not Negotiable Crossing
• Double Crossing

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Insurance Meaning

• Insurance is a legal agreement between an insurance firm (insurer) and an individual (insured). In this case, the insurance company guarantees to compensate the insured for any losses incurred due to the covered contingency occurring.

Types of Insurance

• Special Insurance
• Whole life insurance
• Endowment life insurance policy
• Joint life Policy
• Annunity policy
• Children Endowement Policy
• General Insurance
• Marine Insurance
• Cargo Insurance
• Ship or Hull Insurance
• Fright Insurance
• Health Insurance
• Motar vechile Insurance
• Cattle Insurance

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Function of Insurance

*Insurance provides certainty

• *Insurance provides protection
• *Risk-Sharing
• *Prevention of loss
• *It Provides Capital
• *It Improves Efficiency

Principles of Insuranse

• 1.Utmost Good Faith
• 2.Proximate Cause
• 3.Insurable Interest
• 4.Indemnity
• 5.Subrogation
• 6.Contribution
• 7.Loss Minimization

Types of Business Risk

• Strategic Risk
• . Compliance Risk
• Financial Risk
• Operational Risk

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The Impact of LPG on indian insurance industry

• The Indian life insurance industry has its own origin and history, since its inception. It has passed through many obstacles, hindrances to attain the present status. The income earning capacity of an individual citizen of a nation and the eagerness and awareness of the general public are the two key determinants of the growth of any insurance industry. For that they should provide wider and mass-employment opportunities and sound educational system. More over, the general public must be inculcated with more knowledge, awareness and importance about life insurance, and these steps help to boost the growth of insurance industries.

The general Insurance Business Act 1972

• An Act to provide for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers in order to serve better the needs of the economy by securing the development of general insurance business in the best interests of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for matters connected therewith or incidental thereto.terchange the previous IRDA (Insurance Brokers) Regulations 2013.

Insurance Act 1938

There are several acts introduced to guide and govern the functioning of Insurance institutions. From the abundance of acts present, one of the prominent ones is the Insurance Act, 1938. This article will discuss the Act highlighting some important points such as its history and features it holds.

The salient features of the Insurance Act 1938

• Forming a department of insurance to overlook all the insurance business.
• Mandatory registration of insurance companies.
• Compulsory submission of annual financial returns of insurance companies.
• A provision for initial deposits was made to allow only genuine companies in the insurance sector.

Customert Rights

• Right to Safety- Before buying, a consumer can insist on the quality and guarantee of the goods. They should ideally purchase a certified product like ISI or AGMARK.
• Right to Choose- Consumer should have the right to choose from a variety of goods and in a competitive price
• Right to be informed- The buyers should be informed with all the necessary details of the product, make her/him act wise, and change the buying decision.
• Right to Consumer Education- Consumer should be aware of his/her rights and avoid exploitation. Ignorance can cost them more.

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IRDA- introduction

Insurers, reinsurers and insurance intermediaries in India are governed by the IRDAI. The first legislation regulating the Indian insurance sector comprises the Insurance Act 1938 (the Insurance Act) and therefore the Insurance Regulatory and Development Authority Act 1999 (the IRDA Act). Pursuant to the powers granted thereto under both of those statutes, the IRDAI has issued various regulations governing the licensing and functioning of insurers, reinsurers, and insurance intermediaries.

Function of IRDA

• *To ensure that the policyholders are treated equally and their interests are also safeguarded.
• *Promoting quick development and smooth expansion of the insurance sector (including annuity and surplus payments) in the public interest, as well as long-term finance to accelerate economic growth;
• *Few of the main responsibilities are to encourage, monitor, and maintain standards of honesty, liquidity position, fair dealing, and expertise among those it governs.
• *Ensure that legitimate claims are swiftly resolved, eliminate insurance fraud and other wrongdoing, and provide an efficient remedy system for complaints;

Insurance Ombudsman

• *To ensure that the policyholders are treated equally and their interests are also safeguarded.
• *Promoting quick development and smooth expansion of the insurance sector (including annuity and surplus payments) in the public interest, as well as long-term finance to accelerate economic growth;
• *Few of the main responsibilities are to encourage, monitor, and maintain standards of honesty, liquidity position, fair dealing, and expertise among those it governs.

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• *Ensure that legitimate claims are swiftly resolved, eliminate insurance fraud and other wrongdoing, and provide an efficient remedy system for complaints;

Powers of IRDA

All insurance companies have to register with IRDA compulsorily.

2. Companies can undertake only insurance business.

3. The capital structure of the companies will be determined by IRDA.

4. Companies have to deposit with RBI the amount stipulated by IRDA.

5. Accounts and balance sheets of companies have to be submitted to IRDA.

6. Insurance companies have to appoint actuaries and they will value the liabilities of the insurance companies and report the same to IRDA.

7. Investment of assets will be prescribed by IRDA in the form of approved securities.

Structure of Central Government

• The Central Government of India is divided into three main sections, as outlined in the Constitution. The power of the each department of the government is separated. Various roles and responsibilities are assigned to each department for the proper functioning of the country.
• Executive: President, the Vice President and the Cabinet Ministers
• Legislature: Parliament, Lok Sabha, Rajya Sabha
• Judiciary: Supreme Court of India, High Courts of India at the state level, and District Courts and Sessions Courts at the district level

• Thank You

• Thank you