DRA *

Debt Recovery Agent* (DAY 1) *DRA 2008 *DMP – Debt Management Plan (IBA, RBI, IIBF )
*Definition of DRA DRA is defined as person engaged by a bank for the purpose of collecting
specified loan or advances or other kinds of debts from debtors or borrowers in accordance with the
specified terms and conditions.

*BANK*

Bank is a financial Institution which acts as an intermediary between savers & users of funds. Bank
has no full form because bank is a Latin word. Bank is An institution that carries the business of
Accepting money and lending money Banking is a Business that carries out lending money and
accepting money from public and the Banking term has been defined in Banking Regulation Act 1949
section 5(b). Banker is a person who engages the business of lending money and accepting deposits
Functions of Bank

Deposit taking

Deposit lending

Deposit investment

RBI – The Reserve Bank of India ( RBI ) is India’s central bank, responsible for the issue and supply
of the Indian rupee and the regulation of the Indian Banking System. RBI established in 1st April
1935.

*SCHEDULED BANK*

Banks can be either scheduled or non scheduled. Banks which are listed in the second schedule of
the reserve bank of India act 1934, are known as scheduled banks. These banks are required to
maintain certain amounts with RBI and in return they enjoy the facility of financial accommodation and
remittance facilities at concessionary rate from RBI. A scheduled bank is eligible for loans from the
Reserve Bank of India at bank rate.

Types of Bank*

There are two types of Banks

Commercial Bank

Co-Operative Bank

Commercial Bank In Commercial bank there are five type of bank.

1. 1.Public Sector Bank – These banks are characterized by majority ownership (51% or more
share capital) by the Government of India. It is a group of 27 banks. This group of 27 banks has
the largest number of branches in metro / urban / rural areas throughout the country. The group
contribute to about 75% of the total deposits and about 70% of total advances of all commercial
bank in India. About72% of the banking business in India is performed through these banks.
India’s first public sector bank or Nationalize bank is Allahabad Bank which is established in
1876.
2. Private Sector Bank – These are incorporated in India and their shareholdings are with the
public and large business houses. Less than 49% share held by the government. In the year
1993 all bank started modernize. Modernization means traditional method was converted in to

Internal Use--Confidential
 computerized method. ( After modernization customer started getting lots of facilities like net
banking, mobile banking, telephone banking, online fund transfer etc. ). After modernization in
the year 1996 ATM was started. Modernization also called CBS [ Core Banking Solution ]
method. Payment Bank :- Payment bank can accept current deposit and saving bank deposit
from individuals, small businesses and other entities, but there is an upper limit of Rs. 1 lakh
per customer. Customer’s will earn interest on their saving bank balance. Payment bank can
accept and remittances. These bank cannot provide credit card to the customer. ( Fino
payment bank, Airtel payment bank, Aditya Birla payment bank, India post payment bank)
3. 18:39
ATM: Automated Teller Machine
3. Foreign Banks – These are the banks incorporated outside of the India but granted license by
RBI to do banking business in India through the Indian Banks. They can’t open their branches in
India.
4. Regional Rural Bank (RRB) –Regional Rural Banks have been established with a focus on rural
development. These are also scheduled banks sponsored by public sector banks. Their area of
operations was restricted to 3 or 4 districts. They are small localized banks operating in rural areas of
some district. RRB’s have been opened by some big nationalized banks. Their ownership capital is
provided jointly by Central Government 50%, State Government 15%, and the sponsor (public sector
bank) 35%.

5. Local Area Bank- These are banks which have been given license to function in a given area. They
operate with a low level of capital and cannot offer all the financial services of a commercial bank.
These banks provide loans to the local customers for agriculture and its allied activities. Capital local
Area Bank, Jullundur got converted in to small Finance Bank in 2016.

Co-Operative Bank

Co-operative banks are registered under the Registrar of cooperatives and their main regulator is The
State Government. In case the cooperative banks operating in more than one state then the regulator
is Central Government. The Organizational structure and management set up of cooperatives banks
is based on cooperative principal. Co-operative banks size of assets/liability is much smaller as
compared to commercial bank. Cooperative banks operate on “ No Profit No Loss” principle of
cooperation.

There are three types of cooperative banks-

1. Urban co-operative bank

2. Agricultural co-operative bank

3. Land development co-operative bank

Types of account*

There are four types of account

1. Saving Account:- Saving account can be opened by individuals for keeping saving for meeting
their future money needs. Saving account can be opened by guardians (on behalf of their
minor children) minors above the age of 10 years and below 18 years. Withdrawals are
permitted on demand of the account holder. Banks put certain restrictions on the number of
withdrawal per month/ quarter. The banks pay interest on the minimum balance maintained in
the account during the specified period of every month, say from 10th to the last day of the
month. Interest on saving bank account continues to be regulated by the Reserve Bank of

Internal Use--Confidential
 India. It is 4% per annum and all commercial banks have to pay this rate on saving bank
account
The saving bank account of two types:
1. Accounts with cheque book facility:- In which withdrawal are permitted by cheque drawn in
favour of elf other parties.

2. Accounts without cheque book facility:- Where withdrawal are permitted to the account
holders only at the drawee bank branch by filing up a withdrawal form. In such accounts, third parties
cannot receive payments.

Joint account
In these types of account, bank provide 4 types of operating system
1) Either or Survivor:- Only two individuals can operate account that is primary account
holder and secondary account holder.
2) Former or Survivor:- In this account where only the former account holder, the first holder
can withdraw funds from the account. Once the former account holder dies only then the
second account holder will be able to withdraw funds.
3) Jointly all name : In this type of account, both parties must sign to access the funds.
4) Latter Or survivor: This is similar to “Former/survivor” option. The main difference is ,only
the second account holder can access and operate the account till the time he/she is alive.
The primary /first account holder can operate the account only on death of the secondary
account holder.

Internal Use--Confidential