Retail Banking is characterized by multiple products (liabilities, assets, services) catering to a large customer base (mass market) through multiple channels. The ticket size (loan/deposit amount) is typically low compared to corporate banking, making statement III incorrect. The customer base is huge, making statement IV incorrect.

Retail banking involves lending small amounts to a huge number of customers. Thus, the risk is spread out (diversified); the default of a few customers doesn't impact the bank significantly. Corporate banking involves huge loans to few entities, leading to high concentration risk.

Servicing millions of small customers requires extensive infrastructure (branches, ATMs, technology) and manpower. This results in high operational/monitoring costs per unit of money handled compared to wholesale banking.

The SBU model treats Retail Banking as a semi-autonomous unit (Profit Center). It has defined targets, dedicated resources, and separate P&L accountability, allowing for focused growth strategies independent of other bank divisions.

At the Self-Actualization stage (the highest level), basic financial needs are met. The customer seeks products that define their legacy, personal growth, or contribution to society (e.g., specialized wealth management, art investing).

TPM ensures fair assessment. A branch collecting deposits "lends" them to the HO and gets paid interest (Transfer Price). A branch giving loans "borrows" from HO and pays interest. The net margin determines branch profit.

Mass Affluent customers sit between the Mass Market and HNIs. They have higher income than average and demand value-added services, premium cards, and investment products but don't require bespoke private banking.

Horizontal organization breaks product silos. Instead of separate departments for Loans, Cards, and Deposits acting blindly, customer data is shared horizontally to enable cross-selling and better relationship management.

CRM uses data to segment customers, predict their needs, and offer relevant products. It shifts focus from "Product-Centric" to "Customer-Centric" banking.

CASA (Current and Savings Account) deposits have the lowest cost of funds. Increasing CASA reduces interest expense. Fee-based income (Cross-selling insurance, MF) adds revenue without using capital. This combination maximizes profit.

Historically, banks served only the wealthy or corporates (Class Banking). Post-nationalization and especially post-1991 reforms with technology, banks now target the general population (Mass Banking) with standardized products.

In a vertical model, each product line operates independently with its own P&L. While this allows specialization, it often creates silos where one department doesn't know the customer's relationship with another department, hindering a unified customer experience.

In banking terms, Loans are Assets (they earn interest) and Deposits are Liabilities (interest is paid). Personal Loan is an asset product for the bank.

During the Growth stage, the product gains market acceptance. Sales volume rises sharply, per-unit cost falls, and profits peak. However, competitors also enter the market during this phase.

Operating Profit reflects the core earnings from business operations. It deducts all expenses (cost of funds, salaries, rent, etc.) from all income sources, but BEFORE deducting provisions for bad debts or taxes.

Remote channels allow customers to transact without physical interaction or visiting a location. Branch, Extension Counter, and RM visits involve physical presence/interaction.

Private banks leveraged technology (ATMs, Internet) early to offer superior service and convenience, targeting the profitable urban salaried class, unlike PSBs which had a broader social mandate.

Physiological needs are basic survival needs (food, shelter). In banking, this translates to basic products needed for day-to-day living, like a savings account for liquidity and consumer loans for household items.

CASA (Current Account Savings Account) deposits pay very low or no interest. A high proportion of CASA means the bank pays less interest overall, reducing its Cost of Funds.

This is a traditional model where retail is just another department alongside others. It typically lacks the focus and agility of the SBU model and is often used by smaller or older public sector banks.

Assets refer to loans given by the bank. Auto Loan is a classic retail asset product. Current, Term, and Salary accounts are liabilities (deposits).

Demographic segmentation uses quantifiable population statistics. Age, income, and gender are the most common parameters used by banks to target retail products (e.g., Senior Citizen FD, Student Loan).

Operating Profit is profit before provisions and taxes. To calculate the final Net Profit, the branch must account for credit costs (provisions for bad loans) and taxation.

Synergy between Corporate and Retail banking is a major growth driver. A bank holding a corporate account can easily tap into the retail business of that corporate's thousands of employees (B2B2C model).

Behavioral segmentation looks at *how* the customer interacts with the bank—are they heavy users (transactors), do they prefer digital channels, are they price-sensitive? This helps in targeted marketing.

Liability products are those where the bank owes money to the customer (Deposits). Savings Account is the most fundamental retail liability product. Loans are assets.

A deposit-heavy branch collects more funds than it lends locally. It transfers the surplus to the Head Office and earns interest (Transfer Price) on it, which becomes its major income source.

This diversification is the biggest strength. Unlike a corporate loan where one default can wipe out profits, retail defaults are usually small and statistically predictable.

In this model, branches focus only on sales and customer service. All operational tasks (account opening, loan sanctioning, clearing) are moved to a Centralized Processing Unit to improve efficiency and standardize risk.

Retail involves millions of transactions (High Volume) but the value of each transaction (e.g., ATM withdrawal, Personal Loan) is relatively small (Low Ticket Size).

This statement is false. Cash withdrawals on credit cards usually attract interest from day one. There is NO interest-free period for cash advances.

WLAs are ATMs set up, owned, and operated by non-banks. They are authorized by the RBI under the Payment and Settlement Systems Act, 2007. Examples include Tata Communications Payment Solutions (Indicash).

Process involves the procedures, mechanisms, and flow of activities. In banking, efficient processes (like quick loan approval or fast account opening) are a key differentiator.

HNIs require personalized investment advice, tax planning, and estate planning. Private Banking is the specialized division that caters to these complex needs.

This principle suggests that a small portion of high-value customers contributes the majority of the bank's profitability. CRM strategies focus on retaining this top 20%.

Current Accounts typically carry 0% interest. Therefore, they are the cheapest source of funds for a bank. Savings accounts carry low interest (2.7%-3%), while Term Deposits carry high interest.

When a product is declining (obsolete or unpopular), banks try to revive it by bundling it with other products, reducing costs to maintain margin, or simply withdrawing it from the market.

AI/ML models can process unstructured data to predict repayment behavior, enabling banks to lend to "New to Credit" customers whom traditional models might reject.

Risk diversification is a key advantage. In corporate banking, a single default (e.g., Kingfisher) can create a massive NPA. In retail, the impact of individual defaults is negligible on the overall portfolio.

Digital channels have almost zero marginal cost per transaction compared to the high infrastructure and staff costs of branches and ATMs.

In services, the provider is inseparable from the service. A rude or incompetent staff member equals bad service in the customer's mind, regardless of the product's quality.

Horizontal structures break down silos, allowing data and processes to flow across product lines. This enables the bank to see the "whole customer" and offer relevant products (e.g., offering a home loan to a savings account customer).

Hypothecation is the charge created on movable assets (like cars) where the possession remains with the borrower, but the bank has the right to seize it in case of default.

India's demographic dividend (young population) and the rise of a consuming middle class with higher disposable income have fueled the demand for housing, vehicles, and personal loans.

This approach holds branch managers accountable for the bottom line. They must generate enough income (interest + fee) to cover their operating costs (staff, rent, etc.) and generate a surplus.

At this stage, the priority shifts from asset accumulation to income generation and security. Reverse Mortgage provides income from property, and savings schemes offer safe returns.

POS terminals are electronic devices used at retail locations to process card payments.

RBI has made NEFT and RTGS available 24x7x365. IMPS was always 24x7.

BPR involves rethinking workflows from scratch (e.g., implementing Centralized Processing Units for loans) to eliminate redundancies and improve customer turnaround time (TAT).

Place refers to distribution channels. In digital banking, the "place" of service delivery has shifted from physical branches to the customer's smartphone or computer.

Given the volume of retail accounts, ensuring compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) norms requires robust technology and constant vigilance, which is resource-intensive.

This segment focuses on the general population. Profitability comes from economies of scale and cross-selling basic products like savings accounts and debit cards.

Since the bank does not use its own funds to create an asset but acts as an agent earning commission, this is Non-Interest Income. It is crucial for boosting Return on Assets (RoA).

Most PSBs still follow the departmental approach where retail is one division within the general banking framework, though many are slowly moving towards the SBU model for better focus.

Personal loans are typically unsecured (Clean). The bank relies on the borrower's income and credit score (CIBIL) rather than physical security.

*99# service uses USSD technology to allow basic banking on feature phones (non-smartphones) without internet data.

Cross-selling increases the "Wallet Share" of the customer and deepens the relationship, making it harder for the customer to switch banks.

Promotion includes all communication strategies used to inform, persuade, and remind customers about the bank's products.

Branch managers monitor the Break-even point to know the minimum business volume required to cover fixed and variable costs.

Retail loans (Housing, Auto) create demand for goods and services (cement, steel, cars), driving industrial growth and economic development.

DPD stands for "Days Past Due". A value of "000" means the borrower has met their payment obligation on or before the due date for that month, indicating good credit behavior.

The breakdown of joint families into nuclear families creates new demand for housing, household goods, and vehicles, driving the need for retail loans. Coupled with rising income, this presents a massive growth opportunity.

In uncertain economic times (recession), customers prioritize safety of capital over high returns. Thus, the demand for safe liability products like Fixed Deposits tends to rise as people save more.

Empathy involves understanding the customer’s specific needs and providing personalized service. Physical appearance is "Tangibles," dependability is "Reliability," and willingness to help is "Responsiveness."

Secure Sockets Layer (SSL) or Transport Layer Security (TLS) encrypts the communication channel, indicated by "https://" and a padlock icon, protecting passwords and financial data from eavesdropping.

Repayment generally commences one year after the completion of the course or 6 months after getting a job, whichever is earlier. The standard moratorium is Course Period + 1 year.

Wealth Management is an integrated process. While investment advisory focuses on asset allocation, Wealth Management looks at the entire financial life of a High Net Worth Individual (HNI), including succession and tax optimization.

While banks can outsource support functions like marketing, recovery, or IT maintenance, the core decision-making function of Sanctioning Loans (taking credit risk) must remain with the bank's own officers.

Cost-to-Income ratio measures operating expenses as a percentage of operating income. A lower ratio means the bank is spending less to generate each rupee of income, indicating high operational efficiency.

Since retail banking depends on volume, the ability to serve millions of customers quickly, cheaply, and accurately through robust IT systems and channels (ATMs, Mobile) is the most critical success factor.

Reverse Mortgage allows senior citizens to pledge their self-owned property to a bank in exchange for a regular income stream (annuity), without selling the house during their lifetime.

Omni-channel means the customer can start a transaction on one channel (e.g., Mobile) and finish it on another (e.g., Branch) without loss of context. It ensures data synchronization across channels.

Direct Marketing involves communicating directly with targeted individual consumers to obtain an immediate response, using mail, telephone, email, or SMS.

Psychographics delves into the "Why" of buying behavior—focusing on inner traits like lifestyle choices (e.g., adventurous vs safe) and values, rather than just external stats like age.

Retail customers tend to be loyal and don't move money frequently based on small rate changes. This provides a stable and cheap source of funds for the bank (Stable Funding Base).

ABM analyzes the costs of specific activities (e.g., processing a cheque) to see if they add value. If not, processes are re-engineered or automated to save costs.

Paying the MAD ensures no late payment fee is charged and the card remains active. However, interest is still charged on the remaining unpaid balance.

Since the SBU is an independent profit center, its head has autonomy and direct accountability to the top leadership for the unit's performance.

Biometric ATMs use fingerprints or iris scans for authentication instead of PINs, making them accessible to rural/illiterate populations who might struggle with numbers or passwords.

Safety needs focus on security (Insurance, FD). Social needs involve belonging and status, leading to demand for consumer loans (Car Loan, Home Improvement) to improve lifestyle and social standing.

Asset Allocation is the core strategy of wealth management. By diversifying across non-correlated asset classes, it aims to optimize returns for a given level of risk.

Margin is the borrower's own contribution. Margin = 100% - LTV%. So, 100 - 80 = 20%.

Successful cross-selling relies on "Right Product, Right Customer, Right Time". Selling a pension plan to a 25-year-old might fail, but selling a car loan might succeed.

M&A Advisory is a core Investment Banking/Corporate Banking function dealing with large companies. Retail banking focuses on individual consumers.

SEO involves optimizing website content so that it ranks higher when customers search for keywords like "Best Home Loan" or "Credit Card", driving free (organic) traffic.

NII is the difference between the interest income a bank earns from lending and the interest it pays to depositors. It is the primary source of profit for a retail bank.

Semi-Closed PPIs allow purchase of goods/services at a network of clearly identified merchant locations/establishments but do not permit cash withdrawal (unless fully KYC compliant and interoperable).

A score of 750+ (out of 900) indicates a responsible borrower with a good track record of repayment. Banks often offer lower interest rates to such customers.

CPUs take the burden of processing, documentation, and sanctioning away from branches. This allows branches to focus on sales while specialists at CPU ensure uniform risk assessment and faster sanctions.

While technology is an enabler, the rapid pace of obsolescence requires banks to constantly invest huge sums in upgrading Core Banking, ATMs, and Digital platforms, which is a significant financial strain.

Over time, market movements can change a portfolio's asset mix (e.g., equity becomes 70% instead of 60%). Rebalancing involves selling overperforming assets and buying underperforming ones to restore the original risk profile.

Working Capital limits for large corporates fall under Wholesale/Corporate Banking. Retail banking deals with individuals and small businesses.

Niche marketing focuses on a specific subset of the market with unique needs. A women's savings account caters specifically to the financial needs and preferences of women.

Direct costs are those that can be directly attributed to the branch's operations. HO expenses and IT costs are typically indirect or allocated costs.

Since internet banking relies on digital credentials, the biggest threat is cybercrime, including phishing (stealing passwords) and malware (infecting devices).

Home loans are secured by the mortgage of the property being financed. Personal loans and credit card debt are generally unsecured. Education loans up to ?4 Lakh are collateral-free.

Universal Banking is a system where banks provide a wide variety of financial services, including commercial banking, investment banking, and insurance, becoming a one-stop shop.

"Click and Mortar" refers to the strategy of having both an online presence (Click) and physical branches (Mortar) to serve customers effectively.

Studies show it costs 5-7 times more to acquire a new customer than to retain an existing one. Loyal customers are also more likely to buy more products (cross-sell).

Estate Planning ensures the smooth transmission of wealth to the next generation, minimizing legal disputes and taxes. It is a key component of comprehensive wealth management.

Interest in EMI is calculated on the outstanding principal balance. As principal is repaid each month, the interest component decreases, and the principal component increases.

Closed wallets (like Amazon Pay balance initially) are issued by an entity for facilitating the purchase of goods and services from that entity only. They do not permit cash withdrawal or redemption.

With millions of transactions, the risk of system failure, fraud, human error, and cyber attacks (Operational Risk) is significant in retail banking.

In a service industry like banking, trust is paramount. A strong brand signals reliability, making customers more likely to choose that bank and stick with it.

Mutual Funds are products created by Asset Management Companies (AMCs), not the bank itself. The bank acts as a distributor/agent.

This method is more accurate as it recognizes that long-term funds have a different cost/value than short-term funds, aligning internal pricing with market realities.

Understanding the geographic concentration of customers helps banks place branches/ATMs strategically and tailor products to local needs (e.g., agricultural loans in rural areas).

LAP allows borrowers to unlock the value of their property for various needs like business expansion, education, marriage, etc. Unlike a home loan, usage is flexible.

Chatbots use AI to answer common questions instantly, reducing the load on human customer care agents and improving service availability.

CKYCR stores KYC records centrally. A customer with a CKYC identifier can open accounts with other banks/insurers/mutual funds without submitting physical documents again.

Robo-advisors use algorithms to assess a client's risk profile and goals to recommend and manage an investment portfolio at a low cost.

Timely repayment of past dues is the most critical factor (approx. 35% weightage). Defaults or late payments significantly damage the score.

NPAs are a double blow: the bank loses interest income (income leakage) and must also set aside funds as provisions from its profits (expense), directly hitting the bottom line.

SCSS involves the customer depositing money with the bank. It is a liability for the bank.

Intangibility makes marketing services challenging. Banks must use physical evidence (branding, ambiance) and reputation to make the service "real" to the customer.

Phishing uses fraudulent emails or websites to trick users into revealing their Netbanking passwords and PINs.

Loyalty is a behavior. Segmenting based on loyalty helps banks design retention programs for loyal customers and acquisition offers for switchers.

A horizontal structure integrates data across products, giving the bank a 360-degree view of the customer's total relationship (savings + loans + cards), enabling better service and cross-selling.

While policies vary, banks generally require a margin of 10-15%. Financing 100% is rare and risky. On-Road price includes registration and insurance, which is the true cost to the borrower.

The trend is shifting towards "Phygital" (Physical + Digital) banking, where data and AI are used to offer hyper-personalized products and seamless digital experiences.

Before a full-scale launch (Commercialization), banks conduct Test Marketing (Beta Testing) with a select group of customers or in a specific region to identify potential issues and refine the product.

High credit utilization indicates credit hungriness and increases the risk of default, thereby lowering the score. Checking one's own score (soft inquiry) does not hurt it.

Since 2010, RBI has mandated that interest on savings accounts must be calculated on a daily product basis (Daily Closing Balance) and credited at quarterly or shorter intervals.

As per RBI/IBA rules, if a deposit matures on a non-business day, interest is paid for the intervening holidays/Sunday at the contracted rate until the next working day.

During the construction of a property, the loan is disbursed in tranches. The borrower pays only simple interest (Pre-EMI) on the amount disbursed until possession, after which regular EMI (Principal + Interest) starts.

If the customer rolls over credit (pays only MAD), the interest-free period is withdrawn, and new purchases attract interest from Day 1. Full payment of the previous bill restores the grace period.

As per RBI guidelines, uncredited NEFT proceeds must be returned to the originating bank within 2 hours of the completion of the batch (B+2) to avoid penalties.

Since the possession of the car remains with the borrower but the bank has a right to seize it upon default, the charge is Hypothecation. The RTO endorses this hypothecation on the RC.

Section 31 of the SARFAESI Act excludes loans where the amount due is less than ?1 Lakh OR where the remaining debt is less than 20% of the original principal and interest.

A VPA (e.g., name@bank) maps to the underlying bank account. It allows users to send/receive money without sharing sensitive bank details like account numbers.

"Thin file" refers to consumers who have insufficient credit history for the bureau to generate a reliable credit score. This makes assessing their risk difficult.

Processing fees cover the administrative cost of assessing the loan application (credit checks, verification). It is usually upfront and non-refundable.

Form 15G is for individuals below 60 years (and HUFs) declaring that their total income is below the taxable limit. Form 15H is for Senior Citizens (60+).

A Charge Card (e.g., Amex) has no pre-set spending limit but does not offer the option to roll over the balance. The full bill must be paid by the due date, unlike credit cards which allow minimum payment.

Lok Adalats provide a low-cost, faster resolution mechanism for smaller loans. The monetary ceiling for cases to be referred to Lok Adalat is ?20 Lakh.

NLP allows the chatbot to understand, interpret, and respond to customer queries in natural language (text or voice), improving customer service efficiency.

The Augmented Product includes additional features/benefits (insurance, concierge) beyond customer expectations to differentiate it from competitors. Core is safety; Basic is the account itself.

Increasing the tenure spreads the repayment over a longer period, reducing the monthly installment amount (though the total interest paid over the life of the loan increases).

If a taxpayer cannot invest capital gains in a new house/bond before the tax filing due date, they can deposit it in a CGAS account to defer tax liability.

S&P is a global Credit Rating Agency (CRA). The four CICs in India are CIBIL, Equifax, Experian, and CRIF High Mark.

To ensure ethical behavior and knowledge of regulations, RBI mandates that all recovery agents must undergo 100 hours of training and pass the DRA examination conducted by IIBF.

The SPV (usually a Trust) isolates the assets from the bankruptcy risk of the Originator. It buys the loans and issues securities backed by the cash flows from these loans to investors.

ECS Credit is a "many-to-one" or "one-to-many" push system. Specifically, ECS Credit is used by a single institution to credit the accounts of many beneficiaries (bulk payments).

To mitigate risk in high-value loans, RBI mandates a lower LTV of 75% for loans above ?75 Lakh. (For loans up to ?30L: 90%; ?30L-?75L: 80%).

RBI allows customers to modify their billing cycle to align the due date with their salary date or cash flow convenience.

Management Information Systems (MIS) aggregate operational data to provide actionable insights for top management to strategize business growth and risk control.

Add-on cards are issued to immediate family members. The liability to pay lies with the primary cardholder, and the limit is shared.

The core feature of BSBDA is that it is a zero-balance account. Banks are strictly prohibited from levying charges for non-maintenance of minimum balance.

A guarantee is a personal security. It acts as collateral because if the borrower defaults, the bank can recover dues from the guarantor.

APIs (Application Programming Interfaces) enable secure data sharing, allowing non-banking apps to initiate banking transactions, enhancing user experience and reach.

Paying only the minimum due revokes the interest-free period. Interest is calculated on the *entire* bill amount from the date of purchase, not just the unpaid portion, until the outstanding is cleared.

Section 13(4) empowers the bank to take possession of the secured assets, take over management, or appoint a person to manage the assets if the borrower fails to pay within 60 days of the demand notice.

RBI guidelines specify LTV ratios: Up to ?30L = 90%; ?30L to ?75L = 80%; Above ?75L = 75%. This ensures borrowers have sufficient equity in the property.

The new composite definition (July 2020) for Micro Enterprises requires Investment up to ?1 Crore and Turnover up to ?5 Crore.

To encourage retail participation in IPOs and G-Secs, NPCI enhanced the per-transaction limit in UPI to ?5 Lakh for specific categories like IPOs and RBI Retail Direct.

Under Section 30 of the RDDBFI Act, an appeal against the order of the Recovery Officer lies with the Presiding Officer of the DRT itself, not directly to the DRAT.

IMPS (Immediate Payment Service) provides 24x7 instant interbank electronic fund transfer. Transactions are settled individually and instantly.

Moratorium allows the student time to complete the course and find a job. Repayment starts after Course Period + 1 year (or 6 months after getting a job). Simple interest usually accumulates during this period.

Under the Legal Services Authorities Act, the award of a Lok Adalat is deemed to be a decree of a civil court and is final. Since it is based on compromise/agreement, no appeal is allowed.

Multiple financiers (Banks/NBFCs) bid to finance the invoice. The financier offering the lowest interest rate (best bid) is selected, ensuring the MSME gets the best rate through reverse auction.

RBI guidelines state that banks must provide the facility for all cheques of ?50,000 and above. Banks may consider making it mandatory for cheques of ?5 Lakh and above.

Once the loss is reported to the bank, the cardholder has zero liability for any transactions that occur *after* the reporting time. Most cards also offer "Zero Lost Card Liability" for a period prior to reporting as well.

The scheme is specifically for Senior Citizens. The primary borrower must be at least 60 years old. If a spouse is a co-borrower, they must generally be above 55 or 58 years (varies by bank).

To protect farmers, the SARFAESI Act explicitly excludes "any security interest created in agricultural land" from its purview. Banks must use civil courts or DRT for recovery in such cases.

For cash-based remittances (walk-in customers), the limit is ?50,000 per transaction with a maximum of 12 remittances per year. Account holders can remit higher amounts.

To support the smallest micro units, the guarantee cover is higher at 85% for loans up to ?5 Lakh. For amounts above ?5 Lakh up to ?50 Lakh, it is usually 75%.

AePS is primarily used at Micro-ATMs/BC points for Cash Withdrawal, Deposit (at BC), Balance Enquiry, and Fund Transfer. Cash Deposit at an automated ATM requires a card, not just Aadhaar.

ARCs pay banks a portion in cash (e.g., 15%) and the balance in the form of Security Receipts (SRs), which represent an undivided right/interest in the acquired asset.

EWS (Economically Weaker Section) is up to ?3 Lakh. LIG (Low Income Group) is ?3 Lakh to ?6 Lakh. Hence, the cap for the EWS/LIG category is ?6 Lakh.

Banks offer EMI conversion at a reduced interest rate (e.g., 15-24% p.a.) compared to the standard revolving credit rate (36-42% p.a.) to encourage affordability.

Standard SWIFT codes are 8 or 11 characters long. The first 4 are bank code, next 2 country code, next 2 location code, and last 3 (optional) branch code.

The Sale Notice of 30 days is mandatory. If the sale fails and a subsequent sale is conducted, the notice period is reduced to 15 days.

This strict provision ensures timely payments to Micro and Small Enterprises. The rate is punitive (3x Bank Rate).

Merchants are not allowed to store card data. They request a token from the Card Network/Issuer, which is then used for future transactions.

RBI caps the LTV for gold loans at 75% to cushion against volatility in gold prices. (It was briefly raised to 90% during Covid but reverted).

Banks must file details of security interest with the Central Registry (CERSAI) within 30 days to ensure public record and priority of charge.

Cash withdrawal is a high-risk feature. Banks restrict the cash limit to a fraction of the total limit to minimize risk and discourage cash advances.

MTSS is a tied-up arrangement between overseas principals and Indian agents for personal remittances towards family maintenance. It allows ONLY inward remittances.

NACH replaced ECS. It is used for bulk transactions like salary payments, pension, dividend (Credit) and utility bills, EMI collections (Debit).

The overall cost of the dwelling unit should not exceed ?45 lakh in metropolitan centres and ?30 lakh in other centres for the loan (up to limits) to qualify as PSL.

Under the RDDBFI Act, a bank can file an application in the DRT within whose jurisdiction the defendant resides/works OR where the cause of action arises wholly or in part.

MRI is a decreasing term life insurance policy where the sum assured reduces along with the outstanding loan balance. If the borrower dies, the insurance pays off the loan, protecting the family.

VPA (e.g., user@upi) acts as a unique identifier to map funds to a bank account. Duplicate VPAs are not allowed within the UPI ecosystem.

If a customer claims a transaction was fraudulent or goods were not delivered, they can raise a dispute. If valid, the bank forces a reversal of funds from the merchant, known as a Chargeback.

Since Small Accounts are opened without complete KYC (simplified measures), they are restricted from receiving foreign remittances to prevent money laundering risks.

In non-metro centers, the loan limit is ?25 Lakh, and the overall cost of the dwelling unit must not exceed ?30 Lakh for PSL eligibility.

In a PTC structure, the SPV acts as a conduit. As borrowers repay loans, the SPV passes these cash flows directly to the investors who hold the PTCs.

Wait! Small criteria: Inv = ?10 Cr AND Turn = ?50 Cr. Here, Turnover (?60 Cr) exceeds the limit for Small. Therefore, it moves to the next category: Medium (Inv = ?50 Cr, Turn = ?250 Cr). The categorization is based on the higher limit breached.

Unlike MTSS (Money Transfer Service Scheme) which caps receipts at 30 per year, RDA has no specific cap on the number of transactions for personal purposes.

In a Flat Rate, interest is calculated on the full principal for the entire tenure, ignoring repayments. This makes the effective cost nearly double that of a Reducing Balance rate (where interest is on outstanding principal).

To prevent delays, the Act specifically bars Civil Courts from issuing injunctions on matters that the DRT/DRAT is empowered to determine.

OFF-US transactions leverage the interoperability of BBPS. For example, paying an Electricity Bill (onboarded by Bank A) using the PhonePe app (Customer OU).

Keeping credit utilization (Balance / Limit) below 30% shows responsible credit usage and positively impacts the score. Maxing out cards (>90%) hurts the score.

Upon death of one joint holder, the title vests in the survivor. The survivor can cancel the old nomination and make a new one in their own name.

The core need is housing finance. The loan is the basic product. Adding value-added services like free cards or insurance makes it an "Augmented Product" to differentiate it.

To encourage exports without fear of losing MSME status, the government allows the exclusion of export turnover from the aggregate turnover calculation.

Under Section 10(43) of the Income Tax Act, any amount received as a loan (lump sum or installment) under a reverse mortgage transaction is exempt from tax.

To encourage compromise, the Legal Services Authorities Act provides that if a case is settled in Lok Adalat, the court fee originally paid is refunded to the plaintiff.

RBI mandated that Full-KYC PPIs (wallets) must be interoperable across UPI, allowing users to send/receive money to/from any bank account or other wallets.

Revolving credit allows the borrower to pay only a minimum amount and roll over the rest of the debt to the next billing cycle, incurring finance charges.

Loans to distressed farmers indebted to non-institutional lenders (moneylenders) not exceeding ?1 Lakh per borrower are classified under Weaker Sections within the Priority Sector.

Credit enhancement (like cash collateral or over-collateralization) absorbs initial losses, making the senior tranches of securities safer and higher-rated.

Banks must credit the returned NEFT amount to the originator's account within B+2 hours to avoid paying penal interest at the repo rate + 2%.

To manage price volatility risk, gold loans usually have a short tenure (e.g., 12 months) with a bullet repayment option (interest + principal at end).

As per RBI guidelines, ARCs must pay at least 15% of the agreed price in cash, and the remaining 85% can be in Security Receipts (SRs).

Dashboards aggregate complex data into charts/graphs (like NPA levels, deposit growth), allowing executives to monitor health and performance at a glance.

NFTs are unique digital assets verified using blockchain technology. Unlike money (fungible), each NFT is unique and cannot be exchanged like-for-like.

RBI mandates that for retail term deposits (up to ?15 Lakh, later revised to ?1 Crore in some contexts, but strictly for small retail), banks must allow premature withdrawal. Non-callable deposits are allowed only for bulk deposits.

CHAMPIONS stands for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength. It serves as a one-stop shop for MSME solutions.

CICRA 2005 provides the legal framework for the registration, governance, and functions of Credit Information Companies like CIBIL.

Section 21 of the RDDBFI Act mandates a pre-deposit of 50% of the amount of debt due as determined by the DRT. The Chairperson of DRAT has the discretion to reduce this amount, but not below 25%. This ensures that appeals are not used merely to delay recovery.

A Clean-up Call is an option permitting the originator to purchase the remaining assets in a securitisation scheme when the outstanding securities usually fall to 10% or less of the original issuance. This is done because the cost of servicing small remaining balances outweighs the benefits.

UPI 2.0 added features like linking of Overdraft (OD) accounts (earlier only savings/current were allowed), "Invoice in the Inbox" (viewing bills before paying), and "Signed Intent and QR" to enhance security and functionality for merchants and customers.

Unlike retail purchases (POS/Online) which may have an interest-free period, Cash Advances on credit cards attract interest charges immediately from the date of transaction until the date of payment, along with a one-time cash advance fee.

The subsidy amount is the Net Present Value (NPV) of the interest savings over the loan tenure (max 20 years), discounted at 9%. This upfront subsidy reduces the principal outstanding immediately.

Due to relaxed KYC norms, Small Accounts are considered high risk for money laundering. Hence, crediting foreign remittances directly into these accounts is prohibited until full KYC is completed.

In the Hybrid Security model, banks can take collateral for a portion of the loan and cover the uncovered portion under the CGTMSE guarantee scheme, allowing for higher loan limits (up to ?5 Crore).

The remittance is originated in Indian Rupees, and the credit to the beneficiary in Nepal is afforded in Nepalese Rupees. The exchange rate is applied by SBI.

The loan is meant for the welfare of senior citizens. Use of funds for speculative, trading, or business purposes is strictly prohibited.

Amendments to the Act state that the right of redemption is available to the borrower only till the date of publication of the auction notice or public notice for sale/transfer.

A healthy "Credit Mix" (balance of secured and unsecured debt) is viewed positively by credit bureaus. Closing old accounts shortens credit history (bad), and frequent applications indicate credit hunger (bad).

According to Kotler, the Core Product is the underlying need being satisfied. For a savings account, the core benefit is "Safety and Liquidity". The passbook is the "Tangible Product".

Tokenization is device and merchant specific. A token generated for Amazon on your mobile cannot be used for Flipkart or on another mobile device, enhancing security.

Collection Efficiency measures the amount collected against the total demand raised during a period. It helps track the quality of the retail asset portfolio.

In Metropolitan centres, the loan limit is ?35 Lakh (with overall dwelling unit cost = ?45 Lakh). In Non-Metropolitan centres, the loan limit is ?25 Lakh (dwelling cost = ?30 Lakh).

These are intelligent interfaces that use NLP (Natural Language Processing) to converse with customers, answer queries, and perform basic transactions.

Every award of the Lok Adalat shall be deemed to be a decree of a Civil Court. It is final and binding, and executed directly as a decree.

MTSS has a cap of USD 2500 per transaction and 30 transactions/year. RDA has no specific limit on individual transactions for personal purposes, though trade remittances have caps.

SCSS accounts can only be opened by an "Individual" who has attained the age of 60 years. HUFs and NRIs are explicitly excluded from SCSS.

Students from Economically Weaker Sections (EWS) with parental income up to ?4.5 Lakh per annum are eligible for full interest subsidy during the moratorium period for loans taken for professional courses.

RBI guidelines allow a Clean-up Call option to the originator to purchase remaining assets when the outstanding securities are not more than 10% of the original amount, facilitating the winding up of the SPV.

Under the SARFAESI Act, details of securitisation, asset reconstruction, or creation of security interest must be filed with the Central Registry (CERSAI) within 30 days.

NPCI functions as the authorized BBPCU, responsible for setting business standards, rules, and procedures for technical and business requirements for all participants.

Paying only MAD keeps the card active but the unpaid balance attracts heavy interest (30-40% p.a.), leading to a debt trap. It acts as a negative factor in credit scoring long-term.

The specific sub-limit for this category (distressed farmers) within the Weaker Sections target is ?1 Lakh per borrower.

This is a key feature. Once the financier accepts the invoice and pays the MSME seller, the risk of non-payment by the corporate buyer is borne by the financier, not the MSME seller (Without Recourse).

Hypothecation creates a charge on movable property where possession remains with the borrower (owner) but the creditor has the right to take possession in case of default.

MT 103 is the standard SWIFT payment message used for cross-border wire transfers between banks for their customers. MT 202 is for bank-to-bank transfers.

Section 34 ensures that Civil Courts cannot entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered to determine, preventing delays in recovery.

Using AI to analyze transaction history and behavior, banks can offer products tailored to the specific immediate needs of an individual customer (e.g., offering a travel loan just when a customer books a flight).

Since a banking service cannot be seen or touched before purchase, Physical Evidence helps reduce the perceived risk and builds trust in the customer's mind.

In Omni-channel, a customer can start a loan application on a mobile app and finish it at a branch without re-entering data. In Multi-channel, the branch might not know what happened on the app.

Operational CRM handles front-end interaction. Analytical CRM works in the background to analyze data for segmentation and targeted marketing.

BCSBI (now dissolved, but historically relevant for the code) issued voluntary codes setting minimum standards of banking practices for member banks to follow.

Demographic uses age/income. Behavioral uses usage rates/loyalty. Psychographic dives deeper into the psychological attributes and lifestyle choices of the customer.

Hyper-personalization moves beyond segment-based marketing to individual-based marketing, using real-time data (e.g., offering a travel loan the moment a customer books a flight ticket).

While the WLA machine is owned by a non-bank entity (WLAO), the cash loaded into it is provided by a Sponsor Bank, as non-banks cannot hold currency chests.

Profits usually peak in the late Growth or early Maturity stage. In the Growth stage, sales rise rapidly, and costs per unit drop (economies of scale). In Maturity, competition squeezes margins.

The Internal Grievance Redressal mechanism of the bank is given 30 days to resolve the issue. If rejected or unresolved after 30 days, the customer can escalate to the Ombudsman.

RBI permits cash withdrawal at POS terminals (up to ?2000 per day in Tier 3-6 centres and ?1000 in Tier 1-2 centres) to improve cash accessibility.

Up-selling involves persuading a customer to buy a more expensive, upgraded, or premium version of the chosen item. The other options are examples of Cross-selling.

Managed by NPCI, IMPS enables 24x7 instant money transfer.

RBI mandates automatic reversal within 5 days. Failure attracts a penalty of ?100 per day beyond T+5, payable to the customer without demand.

A Data Warehouse integrates data from various sources (loans, deposits, cards) to provide a unified view of the customer, which is the foundation of Analytical CRM.

Positive brand equity means customers are willing to pay more or choose the brand over competitors because of trust and recognition.

BCs act as "extended arms" of the bank to provide financial inclusion services (deposits, withdrawals) in remote areas where physical branches are not viable.

Responsiveness measures how quickly and willingly employees respond to customer needs. Delays or indifference negatively impact this dimension.

APIs allow third-party providers (like Fintech apps) to access bank data securely (with consent) to offer integrated financial services.

Once the customer reports the incident, any subsequent loss is borne by the bank. However, the loss incurred *before* reporting is the customer's liability due to their negligence.

Advertising is a non-personal, paid form of communication used to reach a large audience to build brand awareness.

Brown Label ATMs carry the logo of the Sponsor Bank, which handles cash and network connectivity, even though the machine is leased/owned by a third party.

CRM aims to increase Wallet Share. If a customer has ?100 savings and keeps ?80 with Bank A, Bank A has an 80% wallet share.

This policy ensures transparency and standardized compensation for customers when the bank is at fault.

This strategy rewards loyal, high-value customers, encouraging them to consolidate more business with the bank.

Immutability is achieved through cryptographic hashing. Changing one block would require changing all subsequent blocks, which is computationally impossible in a decentralized network.

By fraudulently obtaining a duplicate SIM card, the attacker intercepts the OTPs sent by the bank, bypassing the second factor of authentication.

Strengths and Weaknesses are Internal. Opportunities (e.g., new markets) and Threats (e.g., new competitors, regulations) are External environmental factors.

Before any analysis or software can work, the bank must ensure it has accurate, consolidated customer data. Garbage In, Garbage Out applies.

To ensure financial inclusion for vulnerable groups, RBI mandates doorstep services (cash pickup/delivery, KYC, Life Certificate) for seniors over 70 and the differently abled.

Product Depth refers to the variety of variants offered within a specific product line (Deposits). Width would mean offering Loans, Insurance, Cards, etc.

The Core is the credit facility. Basic is the plastic card. Expected is acceptance at shops. Augmented is the value-add (Lounge access) that exceeds expectations and differentiates the product.

Standard CDMs only accept cash. CRMs "recycle" the cash—validating deposited notes and using them to dispense cash for withdrawals, reducing the frequency of CIT (Cash-in-Transit) replenishment trips.

Analytical CRM uses data mining and predictive modeling on historical data to identify patterns indicating dissatisfaction or intention to leave (Churn), allowing the bank to take preemptive retention measures.

As per RBI guidelines on limiting liability, if the customer reports the unauthorized transaction within 3 working days of receiving the communication from the bank, the customer has **Zero Liability**, regardless of whether the fault lies with the bank or a third party.

This targets the customer's internal values, beliefs, and lifestyle choices regarding sustainability, which is a classic Psychographic variable.

Account Aggregators are RBI-regulated NBFCs that enable individuals to share their financial data across institutions digitally and securely, with explicit consent.

To promote digital transactions, the limit for IMPS was increased from ?2 Lakh to **?5 Lakh per transaction.

Unethical cross-selling (misselling) erodes trust. Ethical selling focuses on fulfilling a genuine customer need, not just meeting a sales target.

Confidentiality is a core banker-customer duty. Exceptions include legal compulsion (Income Tax, Court), public duty, or customer consent (Credit Bureaus).

Brand Associations are the mental connections customers make (e.g., "SBI is safe", "HDFC is fast"). Positive associations build strong Brand Equity.

RBI limits cash withdrawal at POS to ?1,000 per day in Tier I and II centers, and ?2,000 per day in Tier III to VI centers.

Since not all customers are equally profitable, banks use tiered service levels (Gold, Platinum, Priority) to focus resources on retaining high-value customers (Pareto Principle).

To ease the burden on senior citizens, banks must allow submission at any branch or digitally via Jeevan Pramaan (biometric). Doorstep banking is also an option.

Push strategy "pushes" the product through the distribution channel to the customer. Pull strategy (Advertising) motivates the customer to "pull" (seek) the product.

ML allows Chatbots to "learn" from past interactions. The more they converse with humans, the better they become at understanding intent and providing accurate answers.

This model optimizes costs. The Hub handles complex tasks (Foreign Exchange, Loan Processing) while Spokes focus on basic sales and service, reducing the need for experts at every location.

Churn (Attrition) is the opposite of retention. High churn indicates dissatisfaction. Banks use predictive analytics to identify "at-risk" customers and retain them.

The IO acts as an independent apex level authority within the bank. Before the bank finally rejects a customer's complaint, it must be reviewed by the IO to ensure fairness.

At the top of the pyramid, wealthy individuals look beyond accumulation to meaning, legacy, and personal passions (Self-Actualization).

Blockchain's distributed ledger ensures transparency and immutability, making it ideal for tracking trade documents (LCs) and sharing secure KYC data between institutions without duplication.

If a user logs in from a new device or country (High Risk), the system adaptively asks for extra proof (MFA). For routine logins (Low Risk), it might allow just a password. This balances security and convenience.

CLV helps banks decide how much to spend on acquiring and retaining specific customers. High CLV customers warrant higher investment.

The four exceptions established are: 1. Under Law, 2. Public Duty, 3. Bank's Own Interest (e.g., suing customer), 4. Customer's Consent. Casual requests are strictly denied due to confidentiality.

Gap 1 is the "Knowledge Gap". It occurs when management does not correctly understand what customers actually want.

The 4 Vs are Volume (Scale), Velocity (Speed), Variety (Forms), and Veracity (Uncertainty/Quality). Poor veracity (bad data) leads to bad decisions.

Migration of low-value, high-volume transactions (like updating passbooks) to automated kiosks frees up branch staff for high-value sales and advisory roles.

Up-selling involves encouraging the customer to purchase a higher-end product (upgrade) than the one they currently have or are considering. Cross-selling would be selling a different product (like a loan).

Zero liability applies if the bank is at fault OR if there is a system breach elsewhere reported within 3 days. If the customer is negligent (shares OTP), they bear the loss until reporting.

The core product is the fundamental benefit the customer is buying. For savings, it is the ability to keep money safe and access it when needed. The passbook/cheque book are Tangible products.

SaaS delivers applications over the internet. Banks use SaaS for non-core applications to reduce IT maintenance costs and ensure easy scalability.

Since services are intangible, customers rely on physical cues (Physical Evidence) like the look of the branch, brochures, and cards to assess quality and build trust.

NUUP (National Unified USSD Platform) uses USSD technology to allow basic banking services (balance check, fund transfer) on feature phones (non-smartphones) without internet data.

CBS relies on a Data Center (DC) where all customer and transaction data is hosted centrally. Branches act as access points, updating this central database in real-time ("Anywhere Banking").

BCSBI (now dissolved, but historically relevant for the code) issued voluntary codes setting minimum standards of banking practices for member banks to follow regarding transparency and fairness.

Effective CRM starts with gathering data, cleaning and analyzing it to create segments, and then executing targeted campaigns based on those insights.

Demographic uses age/income. Behavioral uses usage rates/loyalty. Psychographic dives deeper into the psychological attributes and lifestyle choices of the customer.

While the WLA machine is owned by a non-bank entity (WLAO), the cash loaded into it is provided by a Sponsor Bank, as non-banks cannot hold currency chests.

Profits usually peak in the late Growth or early Maturity stage. In the Growth stage, sales rise rapidly, and costs per unit drop (economies of scale). In Maturity, competition squeezes margins.

The Internal Grievance Redressal mechanism of the bank is given 30 days to resolve the issue. If rejected or unresolved after 30 days, the customer can escalate to the Ombudsman.

RBI permits cash withdrawal at POS terminals (up to ?2000 per day in Tier 3-6 centres and ?1000 in Tier 1-2 centres) to improve cash accessibility.

Up-selling involves persuading a customer to buy a more expensive, upgraded, or premium version of the chosen item. The other options are examples of Cross-selling.

Managed by NPCI, IMPS enables 24x7 instant money transfer using Mobile Number and MMID or Account Number and IFSC.

RBI mandates automatic reversal within 5 days. Failure attracts a penalty of ?100 per day beyond T+5, payable to the customer without demand.

A Data Warehouse integrates data from various sources (loans, deposits, cards) to provide a unified view of the customer, which is the foundation of Analytical CRM.

Positive brand equity means customers are willing to pay more or choose the brand over competitors because of trust and recognition.

BCs act as "extended arms" of the bank to provide financial inclusion services (deposits, withdrawals) in remote areas where physical branches are not viable.

Responsiveness measures how quickly and willingly employees respond to customer needs. Delays or indifference negatively impact this dimension.

APIs allow third-party providers (like Fintech apps) to access bank data securely (with consent) to offer integrated financial services.

Once the customer reports the incident, any subsequent loss is borne by the bank. However, the loss incurred *before* reporting is the customer's liability due to their negligence.

Advertising is a non-personal, paid form of communication used to reach a large audience to build brand awareness.

Brown Label ATMs carry the logo of the Sponsor Bank, which handles cash and network connectivity, even though the machine is leased/owned by a third party.

CRM aims to increase Wallet Share. If a customer has ?100 savings and keeps ?80 with Bank A, Bank A has an 80% wallet share.

This policy ensures transparency and standardized compensation for customers when the bank is at fault.

This strategy rewards loyal, high-value customers, encouraging them to consolidate more business with the bank.

Immutability is achieved through cryptographic hashing. Changing one block would require changing all subsequent blocks, which is computationally impossible in a decentralized network.

By fraudulently obtaining a duplicate SIM card, the attacker intercepts the OTPs sent by the bank, bypassing the second factor of authentication.

Strengths and Weaknesses are Internal. Opportunities (e.g., new markets) and Threats (e.g., new competitors, regulations) are External environmental factors.

Before any analysis or software can work, the bank must ensure it has accurate, consolidated customer data. Garbage In, Garbage Out applies.

To ensure financial inclusion for vulnerable groups, RBI mandates doorstep services (cash pickup/delivery, KYC, Life Certificate) for seniors over 70 and the differently abled.

Product Depth refers to the variety of variants offered within a specific product line (Deposits). Width would mean offering Loans, Insurance, Cards, etc.

PR aims to manage the spread of information between the bank and the public to build trust and reputation (e.g., press releases, community service), often perceived as more credible than paid ads.

Device/SIM binding ensures that the banking app works only on the device containing the registered mobile number's SIM card, preventing fraudsters from using stolen credentials on their own phones.

Operational CRM includes tools for Sales Force Automation (tracking leads, sales pipeline), Service Automation, and Marketing Automation to streamline daily business processes.

For a delay of 4-7 days, the customer's liability is capped (e.g., ?5,000 for Basic Savings accounts, ?10,000 for other SB accounts, up to ?25,000 for Credit Cards with limit > ?5 Lakh). Beyond 7 days, it is as per board-approved policy.

In banking (e.g., cash withdrawal at a counter), the service is produced by the teller and consumed by the customer at the same moment. They cannot be separated.

The limit for fund transfer using USSD (*99#) is capped at ?5,000 per transaction to minimize risk on feature phones.

This technique analyzes purchase patterns (e.g., "Customers who bought Home Loans also bought Insurance") to design effective product bundles and cross-sell offers.

For delays in collection of local cheques beyond the timeline, banks typically pay interest at the Savings Bank rate for the period of delay. (For outstation cheques, higher rates apply for longer delays).

Banks may offer loans at lower interest rates or waive processing fees (Penetration Pricing) to attract new customers and gain market share in a competitive segment.

"On-Us" transactions (Issuer = Acquirer) are processed within the bank's own switch and are usually free/unlimited. "Off-Us" transactions go through the NFS switch and may attract charges.

ML algorithms enable chatbots to learn from historical interactions, identify patterns in customer queries, and refine their answers automatically.

Internal Marketing views employees as internal customers. It ensures they are aligned with the bank's vision and skilled enough to deliver the brand promise to external customers.

DMAs act as an extended sales force, reaching out to potential customers for loans/cards, collecting applications, and doing preliminary checks, helping banks expand reach at lower cost.

Retention REDUCES overall marketing costs because acquiring new customers is far more expensive. Retained customers buy more and refer others.

Form 15H is specifically for resident individuals aged 60 years or more to declare that their tax liability is nil, preventing TDS on interest.

Psychographics analyzes the internal drivers of behavior. For example, two people with the same age/income (demographic) might have different risk appetites (psychographic) - one buys FDs, the other Crypto.

To improve cash access in smaller towns/rural areas (Tier III-VI), RBI allows a higher limit of ?2,000 per day per card for cash withdrawal at POS terminals. (In Tier I/II, it is ?1,000).

NBP models use predictive analytics to increase cross-selling success rates by offering the right product at the right time, rather than random selling.

The penalty for delayed reversal of failed transactions (ATM, IMPS, UPI, Cards) is standardized at ?100 per day of delay beyond the prescribed TAT (T+1 for IMPS).

Primary research gathers fresh data for a specific purpose. Secondary research uses existing data (reports, publications). Banks use primary research to test new product concepts.

NEFT operates in half-hourly batches throughout the day, starting from 00:30 hours to 00:00 hours. Total batches = 24 hours * 2 = 48.

This unified view is essential for understanding the customer's total relationship value, identifying cross-sell opportunities, and providing better service.

The Ombudsman does not interfere in the commercial decisions of the bank (like credit sanctioning) unless there is a violation of RBI guidelines or fair practice code.

Bancassurance leverages the bank's extensive branch network ("Place") to distribute insurance products to a captive customer base.

Micro ATMs are portable devices used by BCs in rural areas to facilitate biometric-based cash deposits/withdrawals using AePS.

Collaborative CRM ensures that if a customer complains via email, the call center agent also knows about it, providing a unified interface.

While the service is mandatory for eligible customers, banks are permitted to charge a reasonable fee for the service to cover costs.

Social media amplifies consumer voice. A single complaint can go viral instantly, causing significant reputational damage if not handled quickly.

UPI Mandate (AutoPay) allows users to pre-authorize a transaction that will execute later or recurrently, automating bill payments and investments.

Open Banking fosters innovation by enabling a secure ecosystem where banks share data (with consent) with fintechs, who then create tailored financial management tools and services.

Investment Banking serves corporations (raising capital), while Wealth Management serves individuals (managing and growing assets).

Strategic allocation is a passive strategy focusing on long-term goals. Tactical allocation involves active short-term deviations to exploit market opportunities.

For listed shares, the holding period is >12 months for LTCG. For unlisted shares and real estate (immovable property), the period was reduced to >24 months. For debt mutual funds, it is >36 months.

Sharpe Ratio = (Portfolio Return - Risk Free Rate) / Standard Deviation. A higher Sharpe ratio indicates better risk-adjusted performance.

Probate is the official proof of the validity of the Will and the executor's authority to administer the estate. It is mandatory for Wills executed in certain presidential towns involving immovable property.

Gold ETFs combine the flexibility of stock investment with the simplicity of gold investment. Each unit typically represents 1 gram (or less) of gold of 99.5% purity.

Only 5-year Tax Saver Fixed Deposits are eligible under 80C. Standard RDs or FDs less than 5 years do not qualify.

Retirement planning has two phases: Accumulation (working life, saving money) and Distribution (retired life, withdrawing money/annuity).

Bond prices and interest rates have an inverse relationship. When market rates rise, new bonds offer higher coupons, making existing lower-coupon bonds less attractive, driving their price down.

Indexation adjusts the purchase price of an asset for inflation using the Cost Inflation Index (CII), effectively reducing the taxable capital gain. (Note: Recent changes removed indexation for certain debt funds, but conceptually it applies to LTCG on eligible assets).

A standard POA ceases if the principal loses mental capacity. A Durable POA contains a specific clause allowing it to continue, which is crucial for managing the affairs of elderly clients.

Systematic risk (e.g., inflation, war, recession) affects the entire market. Diversification removes unsystematic risk (specific to a company), but market risk remains.

Young investors have a longer time horizon to ride out market volatility, making Equities the best asset class for wealth creation due to high long-term returns.

Section 80D provides deduction for medical insurance premiums paid for self, family, and parents. The limit is higher for senior citizens.

Compound interest allows interest to be earned on interest, leading to exponential growth of wealth over time. It is the fundamental principle of wealth creation.

Rental Yield (Annual Rent / Property Value) measures the return generated by a property. It helps compare real estate with other income-generating assets.

The Settlor (or Author/Grantor) creates the trust. The Trustee manages it. The Beneficiary receives the benefits. This structure helps in protecting assets and managing succession.

The buyer is required to deduct TDS @ 1% of the sale consideration (or stamp duty value, whichever is higher) if the value exceeds ?50 Lakh.

Beta measures sensitivity to market movements. Beta = 1 means same volatility as market. Beta = 1.5 means if market moves 10%, the fund moves 15% (High Risk).

RMs build trust and provide personalized service, orchestrating the bank's resources to solve the client's financial problems and grow their wealth.

Gifts from "Relatives" (Spouse, Parents, Siblings, Lineal ascendants/descendants) are tax-free. Gifts from non-relatives > ?50,000 in a year are taxable.

In case of Intestacy, the law determines the heirs. For Hindus, Class I heirs (Mother, Widow, Children) have the first right to the property.

SIPs buy more units when prices fall. This reduces the average cost per unit. In a continuously rising market, lump sum investment might mathematically outperform SIP, but SIP manages volatility risk better.

REITs own rent-generating assets (offices, malls). They distribute the majority of this rental income to unit holders as dividends/interest.

The sequence is: 1. Establish relationship 2. Gather data 3. Analyze status 4. **Develop and Present Plan 5. Implement 6. Monitor.

As per Income Tax Act, if tax payable (after TDS) is ?10,000 or more, advance tax must be paid in installments (15%, 45%, 75%, 100%).

Any coparcener can demand partition of the HUF property. After the 2005 Amendment, daughters are coparceners and have the same rights as sons.

"Don't put all your eggs in one basket." Diversification lowers unsystematic risk because different assets react differently to economic events.

For a self-occupied property, the maximum deduction for interest on housing loan is ?2 Lakh per financial year. For let-out property, it is restricted to ?2 Lakh set-off against other income.

S.M.A.R.T stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Option C defines the amount, purpose, and timeline clearly.

While Macaulay Duration measures the weighted average time to receive cash flows, Modified Duration measures the price sensitivity of the bond to interest rate changes.

Section 54 is for selling a house and buying a house. Section 54F applies when you sell ANY long-term asset (like Gold, Shares, Land) OTHER than a house, and invest the net consideration in a Residential House.

An Executor is named in the Will. If no executor is named, the court appoints an "Administrator". The Executor derives authority from the Will itself.

To accumulate a future sum through periodic payments, we use the Sinking Fund method (derived from FV of Annuity formula). We need to find the annuity amount (PMT).

Standard Deviation measures the dispersion of returns from the mean. It captures Total Risk (both systematic and unsystematic). Beta captures only Systematic Risk.

Under Section 64, if an individual transfers assets to their spouse for inadequate consideration, any income from such assets is clubbed with the transferor's income to prevent tax avoidance.

Real Estate is highly illiquid. Unlike stocks or gold, finding a buyer and completing the legal process takes months, making it unsuitable for emergency funding.

A Will is a testamentary document of an individual. An HUF continues to exist even after the death of the Karta. Individual coparceners can bequeath their *share* in the HUF, but the HUF itself cannot make a Will.

Since Arbitrage Funds invest more than 65% in equity (hedged using derivatives), they are classified as Equity Oriented Mutual Funds for taxation, enjoying lower capital gains tax rates.

Section 80TTA allows a deduction of up to ?10,000 on interest earned from Savings Accounts (Bank/Post Office). It does not apply to FD interest.

SWP allows an investor to withdraw a fixed amount regularly from their mutual fund investment, serving as a pension-like income stream.

A POA is an agency relationship. The authority of the Agent dies with the Principal. The legal heirs must take over.

Credit Risk Funds take on higher credit risk by investing in lower-rated papers in exchange for higher interest income (Accrual strategy).

ELSS has the shortest lock-in period (3 years) among all Section 80C tax-saving instruments. (PPF is 15 years, Tax Saver FD is 5 years).

SGBs pay interest semi-annually on the nominal value, which is a unique advantage over physical gold or gold ETFs which do not generate regular income.

Succession Certificate validates the heirs' right to collect debts/securities due to the deceased. For Immovable property, a "Letter of Administration" or Probate is usually needed, or simple mutation based on legal heirship.

Portfolios on the Efficient Frontier are optimal. Any portfolio below this line is sub-optimal because it offers less return for the same risk.

This is a special exemption. For Sec 194-IA, the buyer does not need a TAN. They can file the TDS return (Form 26QB) using their PAN.

Using borrowed money (leverage) to invest increases exposure. If the asset rises, returns are magnified. If it falls, losses are equally magnified.

Peer-to-Peer lending platforms are classified as a special category of Non-Banking Financial Companies (NBFC-P2P).

Stock-in-trade is meant for sale in the ordinary course of business. Profits from it are "Business Income", not "Capital Gains".

A Nominee is merely a trustee/custodian who receives the money from the bank to discharge the bank. The ultimate owner is the Legal Heir as per the Will or Succession Law.

Index funds simply mimic a market index (like Nifty 50) without active stock selection by a fund manager, resulting in lower costs.

The payments are essentially loan disbursements, not income. Hence, they are tax-exempt for the senior citizen.

This amendment was a landmark step for gender equality, granting daughters equal coparcenary rights in HUF property.

Since it pays no periodic interest ("Zero Coupon"), the return comes from the difference between the discounted issue price and the face value received at maturity.

The lump sum withdrawal (up to 60%) is tax-free. The remaining 40% must be used to buy an annuity (which is taxable as income when received).

If the SPV pays tax at the normal rate, dividend is tax-free for the investor. If the SPV opts for the lower tax rate (Sec 115BAA), dividend becomes taxable for the investor.

A holistic plan addresses all aspects of a client's financial life to meet short and long-term goals.

CAGR is the geometric progression ratio that provides a constant rate of return over the time period. It smoothens out volatility.

Withdrawals from EPF are tax-free if the employee has rendered continuous service for a period of 5 years or more. Otherwise, the withdrawal is taxable.

Unlike Fundamental Analysis which looks at financial health, Technical Analysis assumes that future price movements can be predicted by analyzing past market data (charts, patterns).

Donations to certain funds like PMNRF or PM CARES Fund are eligible for 100% deduction without any qualifying limit (ceiling) on the donation amount.

A fiduciary relationship implies the highest standard of care and loyalty. The trustee must manage the trust property solely for the benefit of the beneficiaries, not for personal gain.

PE involves investing directly in private companies to gain an ownership stake, often with the goal of restructuring and eventually selling for a profit (Exit).

Financial planners recommend keeping 3-6 months of living expenses in liquid assets (Savings, Liquid Funds) to handle unforeseen events like job loss or medical emergency.

Under Section 112A, LTCG on listed equity (held > 1 year) is taxed at 10% on gains exceeding ?1 Lakh, without the benefit of indexation.

Diversification works best when assets do not move in the same direction. Negative correlation means when one asset falls, the other rises, offsetting losses.

Unlike a normal Will (for property), a Living Will deals with health decisions (Right to die with dignity/Passive Euthanasia), recognized by the Supreme Court of India.

Annuity plans typically provide regular income for life. Options include Life Annuity, Joint Life Annuity, and Return of Purchase Price to nominees.

The Expense Ratio is deducted from the fund's assets. A lower ratio means less money is taken out for management fees, leaving more money invested to grow, thus increasing NAV/returns.

The third condition for HRA exemption calculation depends on the location of the accommodation: 50% of salary for Metro cities (Delhi, Mumbai, Kolkata, Chennai) and 40% for other places.

Launched by the National Housing Bank (NHB), RESIDEX is India's first official housing price index aimed at tracking property price movements.

Life events (marriage, retirement) change risk appetite. Markets change asset values. Reviews ensure the investment strategy remains relevant and effective.

A beneficiary is the person for whose benefit the trust is created. A minor, being incompetent to contract, cannot be a trustee but can certainly be a beneficiary.

The Golden Cross (e.g., 50-day MA crossing above 200-day MA) is a widely interpreted bullish breakout pattern indicating potential market rise.

STCL can be adjusted against both STCG and LTCG. However, Long Term Capital Loss (LTCL) can be adjusted ONLY against LTCG.

The limit was enhanced from ?15 Lakh to **?30 Lakh in the Union Budget 2023-24 to provide better social security to seniors.

SID details the investment objective, asset allocation, investment strategy, and risk factors to help investors make informed decisions.

MCX is India's largest commodity derivatives exchange allowing trading in metals, energy, and agricultural commodities.

Individuals/HUFs paying rent > ?50,000 per month must deduct 5% TDS, even if they are not subject to tax audit.

It breaks down performance to see if the manager added value by picking the right sectors (Allocation) or the right stocks within those sectors (Selection).

The executor acts as a fiduciary to carry out the testator's instructions, settle liabilities, and ensure beneficiaries receive their share.

Small and Mid-cap companies are in the growth phase. They can grow faster than large established companies but are more vulnerable to economic downturns.

Resident Senior Citizens without business income are not liable to pay advance tax installments; they can pay Self-Assessment Tax before filing returns.

Older borrowers and higher property values allow for higher loan amounts (and thus higher monthly payments) because the loan tenure is shorter or the asset backing is stronger.

Positive Alpha indicates that the fund manager has outperformed the market (benchmark). Negative Alpha means underperformance.

SGBs have a tenure of 8 years. However, early redemption is allowed after the 5th year from the date of issue on interest payment dates.

HUF has perpetual succession. It is not affected by the death of the Karta. Management passes to the next senior member.

A proper risk profile considers both financial ability (assets, liabilities, age) and psychological willingness to handle market volatility.

While Sharpe Ratio uses Standard Deviation (Total Risk), Treynor Ratio uses Beta (Systematic Risk). It is appropriate for well-diversified portfolios where unsystematic risk has been eliminated.

For purchase, the window is 1 year before or 2 years after sale. For construction of a new house, the time limit is 3 years after the sale date.

In a revocable trust, the transfer is not permanent. The Settlor can take back control. Consequently, income from such a trust is usually taxable in the hands of the Settlor (Clubbing provisions).

If a bond with a face value of ?1000 is selling for ?950, it is at a discount. This happens when current interest rates are higher than the bond's coupon rate.

It acts as a market timing strategy. For example, if the stock market is undervalued, a manager might temporarily increase equity exposure above the long-term target.

Under Section 64(1)(iv), income arising from assets transferred to a spouse without adequate consideration is clubbed with the income of the transferor (Mr. X). However, if Mrs. X reinvests the interest, income on that reinvestment belongs to her.

While MCX leads in metals and energy, NCDEX has a dominant market share in agricultural commodities like chana, soybean, castor seed, etc.

Under the Registration Act, any document (including POA) conferring authority to sell or create rights in immovable property requires mandatory registration.

VPF enjoys the same interest rate and tax benefits as EPF (subject to the ?2.5 Lakh cap on tax-free interest). It gives flexibility to save more for retirement.

Normally, long-term rates are higher. When short-term rates exceed long-term ones, it suggests investors expect future rates to fall due to a slowing economy/recession.

This higher limit (compared to ?10,000 for non-seniors under 80TTA) includes interest from FDs, RDs, and Savings accounts.

Art funds pool capital to buy art pieces. SEBI halted many collective investment schemes (Art funds) in the past that were unauthorized, and now they fall under the AIF regulations.

Currently, there is no inheritance tax in India. Assets received under a Will or inheritance are also exempt from Income Tax under Section 56(2).

NAV = (Assets - Liabilities) / Number of Units = (100 - 10) / 5 = 90 / 5 = ?18.

LTA exemption applies only to the "travel fare" component (not stay/food) for travel within India, restricted to 2 journeys in a 4-year block.

Hedge funds are less regulated pools of capital that seek absolute returns using risky strategies. They typically require a very high minimum investment.

In a Trust, the Legal Title (ownership on paper) lies with the Trustee, while the Beneficial Title (right to enjoyment) lies with the Beneficiary.

Risk Capacity is financial (objective). Risk Tolerance is emotional/psychological (subjective). A wealthy person may have high capacity but low tolerance (fear of loss).

For non-filers, the threshold is tighter. TDS is 2% for withdrawals > ?20 Lakh and 5% for > ?1 Crore. For filers, it applies only above ?1 Crore.

Exemption from capital gains tax is available only if the bond is held till maturity. Early redemption or sale on exchange attracts Capital Gains Tax (with indexation benefits usually).

To deepen the market, SEBI reduced the trading lot to 1 unit and application value to the range of ?10,000-15,000, making it accessible to small investors.

PFMs are the professional fund management companies appointed by PFRDA to invest the pension corpus in various asset classes (Equity, Corp Bonds, Govt Securities).

Principal repayment falls under the overall ?1.5 Lakh limit of Section 80C. Interest repayment falls under Section 24(b) (up to ?2 Lakh).

AAA is the highest rating assigned by credit rating agencies, signifying the borrower has an extremely strong capacity to meet financial commitments.

Under the Indian Succession Act, a Will must be signed by the testator in the presence of at least two witnesses, who must also sign the Will.

This ratio indicates how many months a person can survive without income using their liquid cash/assets. Ideally, it should be 3-6.

This was a major change. Debt funds are now taxed at the investor's marginal slab rate, and the indexation benefit for LTCG has been removed for funds purchased after April 1, 2023.

It is a top-down approach: First analyze the Economy (Macro), then the specific Industry (Sector), and finally the Company (Financials) to determine fair value.

Category III AIFs employ diverse or complex trading strategies (including leverage and derivatives) and include Hedge Funds.

Financial Freedom is the state where your assets generate enough cash flow to maintain your lifestyle, giving you the choice to work or not.