Banking is a very broad term. It may include any one of the following types of banking: Non-banking, commercial banking and insurance banking among others. Commercial banking refers to those types of banking systems that lend money as security for loans or investments. There are different types of banks namely Savings, Merchant Savings, Co-operative, Mutual and Unitary. Such types of banks are available in the UK market.
Non-banking is basically any type of banking that does not lend its own deposits. Some of the common types of non-banking are commercial banks, savings and loans, internet banking, pool banking, cooperative banks etc. There are different types of non-banking institutions, the most prominent ones being the PPSs or personal secure deposit accounts, government-guaranteed deposits, trust deeds, bonds, unit trusts, CDs, debentures, gilt and shares.
Financial institutions are the other main types of banks in the UK. These are the central banks of the country. The financial institutions lend money and use it to create new loans. The loan needs collateral, which is provided by the borrower. The secured types of loans include home loans, car loans, student loans, mortgages and many more. Unsecured types of loans are payday loans, credit cards, store cards, credit lines, and others.
Different Types of Banking Services
Different types of banks earn income through banking activities. A banking institution may earn income by lending money. It may also earn income through its customers’ deposits. It may also earn income through the buying and selling of securities and loans. Other financial institutions participate in the Forex market and facilitate global trade.
The pnb parivar banking system is governed by a Central Bank. The central bank’s job is to keep the money supply under control. There are many banks in the UK. These banks are classified into five classes: there are commercial banks, savings and loans, specialized banks, public sector banks and central banks.
Commercial banks act as lending institutions and form part of the banking system. They lend money to businesses for start-up funds and to expand existing businesses. Banks also take care of corporate borrowing. Commercial banks can form a partnership with other institutions such as building societies and trust companies to provide commercial loans.
Banking Services Offered by Commercial Banks
Savings and loan banks provide monetary funding for investments. They may also provide wholesale banks. Specialized banks are financial services organizations that lend money on behalf of clients. They mainly deal in certain sectors such as Jewellery, banking, insurance, and banking systems.
Public sector banks are the main source of bank services to the general public. They include the Bank of England, the Bank of India, the Central Bank of India, the National bank of Pakistan, the State bank of India, the Government nationalized banks and the private PNB Knowledge Centre banks of various countries. On the other hand, investment banks are primarily formed for the purpose of banking products.
Some of the well-known investment banks are the Indian operations of ICICI Bank, United States operations of Chase Manhattan Bank, Japanese operations of Dai-ichi Bank, China operations of Peking Bank, Russia operations of Sberbank, British Virgin Islands operations of HSBC and International Business Times. The Union Bank of Switzerland acts as an intermediate banking institution for multi-national corporations. It also forms part of the management consultancy of Price water house Coopers.
Internet banking Or Online Banking
Internet banking has revolutionized banking services in the UK. Online banking provides the customer with the facility to transfer money online. This has made it possible to keep a track of the various payments made by customers to the company and also provides the facility of online budgeting. Also, the customer can calculate his future finances through online budget sheets offered by various financial institutions.
Most multinational companies have their respective website which enables the customers to make online deposits and withdrawal payments. Online banking provides a large variety of financial products to the customers like savings accounts, investment plans, commercial loans, and consumer loans. Commercial banks provide an assortment of saving accounts, investment plans and consumer loans like personal loans, merchant accounts, credit card lending and checking. Savings accounts, merchant accounts, and credit card lending and checking are some of the most common services offered by commercial banks.
The common services offered by the bank accounts include the handling of the credit card dues, debit cards, electronic funds transfers, cheque and cash payments, ATM machine transactions, and the withdrawal and deposit of money from the bank accounts. An individual may be able to undertake various activities using his bank accounts like bill payment, withdrawal of money from the account, making purchases, and paying wages and bills. Commercial banks offer several financial services to the customers and may offer various financial products to attract customers. The bank may offer money market rates, interest rates, deposit rates, and banking rate comparisons. A customer may opt for the services offered by the bank under its category which may include saving account, savings account, money market rates, interest rates and banking rate comparison.
Knowing your customer banking
KYC (KYC for Credit Card Transactions) has become an important factor in the struggle against money laundering and financial crime and proper customer identification is arguably the single most important step in this process as it’s the first step towards being able to do well in all the other stages. The basic idea behind KYC is to make sure that the person who is going to be using a credit card is genuinely the owner of the card and not an unauthorized or illicit character.
Most importantly, a legitimate bank will always ask for identification before giving out credit information. There are various reasons why this is done, but whatever the reason (and there are a number of reasons), it can be useful to have a bit of background on the concept itself. If the answers provided by the customer are found to be consistent, then this is an indication that the person is a genuine and legal owner of the items which have been bought via credit. The second stage of customer due diligence involves data collection.
This part of KYC is where financial institutions get the information they need from various different sources (such as banks, government offices and the likes). This data collection process is what is called the verification process. Once this is completed, then a final report is generated (called the reconciliation report). Both the customer and the institution can read this report.
KYC for Credit Card Transactions
The purpose of these reports is for the institutions to assess the risks posed by a particular customer. Know Your Customer in Banking needs to address both the prevention of money laundering and countering terrorism. In the prevention of money laundering, these firms collect information from banks regarding any suspicious activities. They also conduct comprehensive internal operations and thoroughly check the documents of every customer involved with their accounts.
They must address issues pertaining to the financial institutions in general, including their anti-money laundering programs. In order to tackle terrorism-related cases, financial institutions have to coordinate with the United States Department of Justice and the FBI on all investigations that deal with terrorist financing. Know Your Customer in Banking must know their customer identification requirements when dealing with financial institutions. Customers must be able to verify their personal information and biometric data to avoid identity theft. This is an important step in knowing your customer due to diligence requirements. This will help prevent money laundering as well as combat terrorism.
