Rabobank International. Code for Banking Practice

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1 Rabobank International Code for Banking Practice 1

2 Contents Para Particulars No. Introduction 2 Code for Banking Practice 1 Observance 2 2 Prizes and Gifts 2 3 Association with Chit Funds/Speculative Ventures 2 4 Deposit Receipts 2 5 Savings Bank Account 2 6 Printing of Customer s Logo, etc on cheque leaves 2 7 Renewal of overdue domestic Term Deposit 3 8 Payment of interest on term Deposit maturing on holidays 3 9 Negative Publicity 3 10 Interest payment 3 11 General conventions for domestic deposits 3 12 Terms of Acceptance of Deposits 4 13 Overdraft in Savings Bank Account 4 14 Monitoring Useful Definitions Page No. 4 Annexure Prohibition against opening of Savings Bank Accounts in the name of certain Bodies/Organisations 5 Rabobank - IBA Code for Banking Practice 1

3 INTRODUCTION - Rabobank International (Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.), Mumbai branch (hereinafter called the Bank ), has adopted the Banking Practice Code as drafted by the Indian Banks Association (IBA) to the extent of the Banks business and approved product range. The Code is intended : a. to promote good banking practices by setting out the minimum standards which the Bank will follow in their dealings with customers. b. to foster customer confidence in the banking system. c. to inculcate self-discipline amongst Member Banks with a view to promoting healthy competition and ethical practices in respect of banking services. IBA Code for Banking Practice 1. OBSERVANCE Member Banks of the Indian Banks' Association (the Association) agree to observe and abide by the following Ground Rules: 2. PRIZES AND GIFTS The Bank will not give prizes, gifts, donations, etc., or any direct or indirect benefits in the purchase price or in respect of any other transactions relating to securities, bonds, etc., as consideration or with a view to getting or retaining a deposit and or advance account. Promotional schemes duly approved by the Boards of respective banks may, however, be launched within the regulatory framework of the Reserve Bank of India. However, it may be customary to distribute gifts (cost of such gift article should not exceed Rs.250/- per piece) at the time of Diwali or New Year to the valued customers. The Bank's policy in this regard will be approved by the Board. 3. ASSOCIATION WITH CHIT FUNDS/SPECULATIVE VENTURES The Bank will not associate themselves with chit fund companies, which conduct lottery, gift schemes, etc., or any other speculative ventures. The Bank will also not encourage or lend their names to promote speculative ventures of any nature. However, it would be in order for the Bank to open current accounts, fixed deposits, etc. of such companies in the Banks' normal course of business. 4. DEPOSIT RECEIPTS When the Bank will issue deposit receipts against cheques/demand drafts/pay-orders drawn on local banks, the Bank will pay interest on such deposits from the date on which the relative instrument gets credited/adjusted in the Banks account at the clearing house (RBI, SBI, etc.). 5. SAVINGS BANK ACCOUNT The Bank will not open savings bank accounts in the name of the institutions which have been listed out in the Annexure to this Code and also as amended from time to time. 6. PRINTING OF CUSTOMER S LOGO, ETC., ON CHEQUE LEAVES The Bank will not print or allow the customers to print any logo, advertisement, etc., on the cheque leaves. However, this prohibition need not be extended to dividend/ interest warrants or refund orders in view of their limited circulation. Rabobank - IBA Code for Banking Practice 2

4 7. RENEWAL OF OVERDUE DOMESTIC TERM DEPOSIT Renewal of overdue domestic term deposit (from maturity date of overdue deposit) shall be for a period extending upto at least 15 days beyond the actual date of renewal. If the renewed overdue domestic deposit is tendered for premature foreclosure/encashment before completion of minimum 15 days from the actual date of the renewal, no interest will be paid for the overdue period even if the total overdue period from the date of maturity of the old deposit receipt exceeds 15 days. 8. PAYMENT OF INTEREST ON TERM DEPOSIT MATURING ON HOLIDAYS If the noted due date of a term deposit falls on a holiday, Sunday, nonbusiness working day, interest be paid for such intervening day(s), at the originally contracted rate, till the succeeding working day. 9. NEGATIVE PUBLICITY The Bank will not make publicity of adverse/weak position of other banks, in order to wean away the customers of the affected banks. 10.INTEREST PAYMENT a. The statements with regard to the rate of interest, method of interest calculation, etc. in any publicity literature, advertisement and other forms of publicity on deposit scheme/s of the Bank shall be precise and intelligible. b. The Bank will follow the Master Charts relating to payment of interest on deposits prepared by the Association from time to time for fixing maturity values; for payment of monthly income, annuities, etc. 11. GENERAL CONVENTIONS FOR DOMESTIC DEPOSITS a. The Bank will not accept any deposits for a period longer than 10 years. However, the Bank may accept deposits for periods exceeding 10 years in terms of orders of competent courts or in the case of minors where interests of minors are involved, provided the Bank is convinced that it is necessary to do so. Within the above period, the maximum tenor for Term deposits will be decided by the Asset Liability Committee (ALCO) from time to time. b. Interest on deposits for fixed term may be paid, credited, transferred or reinvested with frequency not less than the quarterly rests. However, payment of monthly interest may be allowed, if required, by discounting the quarterly interest accrued (refer to the Association's Master Charts). c. Interest on deposits where the terminal period (month/ quarter/half year etc., as the case may be) is incomplete shall be paid on maturity. d. On deposits repayable in less than three months or where the terminal quarter is incomplete, interest would be paid for the actual number of days on the basis of 365 days in a year. e. Where the interest is paid at discounted value on monthly basis during the currency of the deposits: If the terminal quarter or half years consists of one month (e.g. deposit is for 37 months), interest therefore (i.e. for 37th month) shall be paid at actuals (i.e. one third of quarterly or one-sixth of half-yearly interest). f. Where the terminal incomplete quarter or half year consists of (i) one month and over, but less than two months (ii) two months, and two months and over but less than three months, interest will be paid as under: (i) for one month and over but less than two months (e.g. deposit for 37 months and 15 days); or (ii) two months (e.g. deposit of 38 months) At discounted value for the first month (i.e. 37 th month) and at actuals for the terminal incomplete Rabobank - IBA Code for Banking Practice 3

5 month (i.e. 15 days) or second month (i.e. 38 th month), as the case may be; (iii) for two months and over but less than three months (e.g. deposit for 62 months and 15 days) At discounted value for first and second months (i.e. 61 st and 62 nd month) and at actuals for the terminal incomplete month (i.e. 15 days). 12. TERMS OF ACCEPTANCE OF DEPOSITS The Bank will not issue an incomplete Term Deposit Confirmation Advice which does not clearly mention the amount actually deposited, period for which the deposit is placed/accepted and the rate of interest payable. 13. OVERDRAFT IN SAVINGS BANK ACCOUNT No overdraft limit on a regular basis be permitted in saving bank account. 14.MONITORING The Committee constituted by the Association to ensure the observance / compliance of the Code by the Banks shall be empowered to investigate and follow up the cases of violation of the Code by Member Banks that may be brought to its notice. The Bank will not violate any of the Ground Rules merely because some other Member bank/s has/have violated. The Bank will instruct their officials that on their coming across any case of violation by other banks, they shall bring the same to the notice of the Management, who will take up the matter with the Association. For this purpose, the Bank has nominated a Nodal Officer who shall liaise between the Bank and the Association. The Association shall consider the complaint on violations received from the Nodal Officer of the Bank. The Bank will give immediate effect to the suggestions given by the Committee in respect of any matter related to violation of this Code. USEFUL DEFINITIONS a. "Prizes etc." means any prize, lottery, lucky dip, prize draw, gift, benefit either in cash or in kind, attached to, linked with or flowing from any deposits/advances schemes. b. "Term Deposits" or "Fixed Deposits" are deposits where the depositor makes a lump sum deposit at one time for a fixed term and receives payment thereof on maturity; the interest on the deposit is payable at simple rate either periodically or at maturity. c. "Cumulative Deposits" are deposits where the input is in equal monthly instalments and the output, on maturity, is in one lump sum. Rabobank - IBA Code for Banking Practice 4

6 Annexure PROHIBITION AGAINST OPENING OF SAVINGS BANK ACCOUNTS IN THE NAME OF CERTAIN BODIES/ORGANISATIONS (Vide paragraph Manual of Instructions (June 1998): Department of Banking Operations and Development, Reserve Bank of India) 1. Savings deposit account cannot be opened by banks in the name of: a) Government departments b) Bodies depending upon budgetary allocations for performance of their functions. c) Municipal Corporations or Municipal Committees d) Panchayat Samitis e) State Housing Boards f) Water and Sewerage/Drainage Boards g) State Text Book Publishing Corporations h) Societies i) Metropolitan Development Authority j) State/District Level Housing Co-op. Societies, etc. k) Any trading, business or professional concern (e.g. firms of Chartered Accountants, Lawyers, etc.) whether such concern is a proprietary or a partnership firm or a company or an association l) Political Party 2. The above prohibition will not apply in the case of the following organisations/ agencies : a) Primary Co-operative Credit Society which is being financed by the bank b) Small Farmers Development Agencies (SFDA)/Fish Farmers Development Agencies (FFDAs) c) Marginal Farmers and Agricultural Labourers Agencies (MFALAs) d) Drought Prone Areas Programme (DPAP) e) District Development Authority (DDA) f) District Rural Development Agency/Society (DRDA/DADS) g) Integrated Rural Development Programme (IRDP)/Development of Women and Children in Rural Areas (DWCRA)/Self-Help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habit among their members/farmers Clubs-Vikas Volunteer Vahini (VVV), informal groups of rural farmers or entrepreneur. h) Integrated Tribal Development Agency (ITDA) i) Agricultural Produce Market Committees j) Khadi and Village Industries Boards k) Societies registered under the Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory. l) Companies governed by the Companies Act, 1956 which have been licensed by the Central Government under Section 25 of the said Act, or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the words Limited or the words Private Limited m) Institutions other than those mentioned in clause (i) above and whose entire income is exempt from payment of income-tax under the Income- Tax Act, n) Zilla Parishads/Gram Panchayats only in respect of Jawahar Rojgar Yojana Funds o) Nagar Panchayats, Nagar Palikas and Municipal bodies in relation to funds (Central assistance + State share) given under Nehru Rozgar Yojana Rabobank - IBA Code for Banking Practice 5

7 towards the components of (i) Subsidy and (ii) Training and Infrastructure of the Scheme of Urban Micro Enterprise (SUME) and Scheme of Urban Wage Employment (SUWE) and interest earned on deposits under both the components of SUME and on deposits under SUWE subject, however, to the condition that no such account shall be opened with a bank other than public sector bank. Rabobank - IBA Code for Banking Practice 6