Systematic Investment Plan (SIP)

 

Systematic Investment Plan (SIP)

Sip is an investment route wherein one can invest a fixed amount at regular intervals– say once a month or once a quarter, instead of making a lump-sum investment. The instalment amount could be as little as INR 500 a month and is like a recurring deposit. It’s convenient as you can give your bank standing instructions to debit the amount every month.

SIP has been gaining popularity among Indian investors, as it helps in investing in a disciplined manner without worrying about market volatility and timing the market. Systematic Investment Plans are easily the best way to enter the world of investments for the long term.

How does a SIP work? 

Through SIPs you can invest in any funds or shares, which help you, create wealth over the long term. Here, generating returns and creating wealth is not the same thing. Investing in fixed deposits only helps you in generating returns. But if you want to create wealth, you can invest in SIP mutual funds. And this amount is automatically deducted from your bank account at the interval at which you choose to invest. 

Let’s suppose, you invest a certain amount in a monthly SIP and have automated your deduction date as 5th of every month. So, this amount will be automatically deducted from your bank account on the 5th of every month to be invested on the selected mutual fund. 

How investing in SIPs helps you create wealth?

In exchange for the money that has been paid to mutual funds, it allots a number of units to you. 

For example, let’s assume that the NAV for a mutual fund is currently Rs 20. Now if you invest Rs 1,000 in that mutual fund, you will be allotted 50 units of the scheme. As the NAV of the mutual fund increases, your investments will also grow accordingly. So, if the next year, the NAV of this fund becomes Rs 30, then the 50 units that you had bought for Rs 1000, would be worth Rs 1,500 after the increase. This is the way your investment grows, helping you to create wealth over the long term. 

As an investor, the next question you might ask is why should I invest in SIP? 

Here are the 3 benefits of investing in SIPs

#Number 1: Rupee cost averaging:

Whenever you invest in a SIP, your cost gets averaged out. As you see, the markets move in cycle. Sometimes it is bearish, then it turns bullish and then again, bearish, and then bullish. This is how the cycle moves. So, if you are investing a fixed amount on a regular basis in a SIP, in the time when the markets are bearish, you will be allotted more units for your investments. Meanwhile when the markets go up, the number of units that will be allotted for your investments will be much lesser. That is, when the markets are down you are buying more units and when the markets are at the peak, you are buying less. This way your cost gets averaged out. Now, when the market cycle changes, for example from bearish to bullish, since your cost has been averaged out, this becomes an opportunity to earn great returns. Eventually, it will help you to create great wealth on your investments. So if you are investing in a SIP, you do not need to think about the ups and downs of the market cycle, as the cost automatically gets averaged out.

Number 2: Power of compounding:

Warren Buffet started investing at the age of 14, but his money started to grow exponentially when he was 50. Power of compounding is often referred to as the eighth wonder of the world. And here, you must be thinking, what this power of compounding means? Under the power of compounding, you not only get returns on the money which has been invested but also on the gains. And this way you can create a great amount of wealth over a period of time. Let’s suppose, in one year, you have invested Rs 1 lakh in a mutual fund. Its one-year return is 15 percent. So, by the end of the year, this amount will be Rs 1 lakh 15 thousand. What power of compounding does is, in the next year (assuming the rate of return if 15 percent), it will provide the return on Rs 1 lakh 15 thousand, instead of your original investment of Rs 1 lakh. So, this way, in the second year, you will be getting a return on money that you have invested, and on the gain from the previous year. By the end of the second year, the amount would be Rs 1 lakh 32 thousand.

Is SIP really create wealth

If you are asking this question, the answer may not be yes always. All the investment are subject to market risk. Moreover, the performance of the mutual funds is based on the effectiveness of the fund manager. We need to accept the reality that most of the Fund manager are not real experts. The performance of many mutual funds and it is performance based on SIP is as under.

Conclusion

If you want to create SIP, you shall be prepared to wait for longer period and watchful about the market. The exit shall be also at the appropriate time so that you will make profit. From the above, none of the mutual fund has outperformed the NIFTY index and failed when there is a free fall in nifty and eroded the capital. This has happened when the Nifty fall heavily in 2020.  Hence, we need to understand the risk in Mutual funds and market securities and invest carefully based on out risk appetites

Source https://bluechipindia.co.in/    NSE - National Stock Exchange of India Ltd. (nseindia.com)

 

Data Security and Identity theft

 

Data Security and Identity theft

When I was kid, my mother used to say whatever, you do it is known to your consciousness and GOD. It is nothing but to caution from doing wrong things and instill a fear in my mind that I am being watched by GOD always. It is believed by many that your past, present, and future can be decoded though astrology.  The above are myth and belief.

Let us come to the reality, are we being watched, or are we being followed, is some decode our secrets, the answer is yes. It may be happening with our knowledge or without our knowledge. Sometimes we are sharing your information without understanding the implication; sometime it is through unfair means by unscrupulous person either though stealing or purchased.

1.       We are being tracked by Google about my movement and it provide me a report covering the distance travelled, places/ cities visited during a specific time frame. This is possible though tracking our mobile phone. We gave all our information.

2.       In our Facebook we are seeing advertisement on the product we have purchased recently or browsed recently on the internet.

3.       If we use credit for bigger purchase, we get call from many other credit card providers for credit cards with big offers. Without our asking, card limit is enhanced.

4.       If we pay a hospital bill or purchase of medicines though electronic payment, we are getting a call for insurance policy

5.       If Our bank balance increased substantially, we are getting call for investment option and if reduced substantially we are getting loan offers

6.       But the bulk of the losses last year, $43 billion, stemmed from identity theft scams where criminals interact directly with consumers to steal their information through methods such as robocalls and phishing emails. Victims of these scams lost $1,100 on average, according to Javelin. 

7.        “Identity fraud has evolved and now reflects the lengths criminals will take to directly target consumers in order to steal their personally identifiable information,” says John Buzzard, a lead fraud and security analyst with Javelin Strategy & Research.

May be the day is not too far when we order a Pizza online, we will be guided by the system, based on our previous order, health conditions, and financial position, and payment options available with us, a pizza which may be plain not spicy, without any cheese over it.

Data Security

Data security refers to the process of protecting data from unauthorized access and data corruption throughout its lifecycle. Data security includes data encryption, hashing, tokenization, and key management practices that protect data across all applications and platforms.

Ø  Cloud data security – Protection platform that allows you to move to the cloud securely while protecting data in cloud applications.

Ø  Data encryption – Data-centric and tokenization security solutions that protect data across enterprise, cloud, mobile and big data environments.

Ø  Hardware security module -- Hardware security module that guards financial data and meets industry security and compliance requirements.

Ø  Key management -- Solution that protects data and enables industry regulation compliance.

Ø  Enterprise Data Protection – Solution that provides an end-to-end data-centric approach to enterprise data protection.

Ø  Payments Security – Solution provides complete point-to-point encryption and tokenization for retail payment transactions, enabling PCI scope reduction.

Ø  Big Data, Hadoop and IofT data protection – Solution that protects sensitive data in the Data Lake – including Hadoop, Teradata, Micro Focus Vertica, and other Big Data platforms.

Ø  Mobile App Security - Protecting sensitive data in native mobile apps while safeguarding the data end-to-end.

Ø  Web Browser Security - Protects sensitive data captured at the browser, from the point the customer enters cardholder or personal data, and keeps it protected through the ecosystem to the trusted host destination.

Ø  eMail Security – Solution that provides end-to-end encryption for email and mobile messaging, keeping Personally Identifiable Information and Personal Health Information secure and private.

In addition to the above, many countries has imposed regulation that all the financial data should be kept in their own countries and even if processing is done outside the country, it shall be transferred and stored in the country within 24 hours.

Self-Protection

Despite all, are we safe or our information are safe and secured, the answer is NO.  The information is wealth and it is being sold by money.  If yes how to protect us in this e-world.

1.       The emails account and mobile phone connected to financial transaction or your online transactions shall distinct one and do not connect it with any social media  Never receive any calls on these phone or answer any emails unless you are sure about the caller. May be ordinary phone will do and if you use a smart phone do not download unnecessary apps into it.

2.       Use a separate email for social media

3.       Never share your personal email address and phone to the public network unless you are sure about the web page.

4.       Never be greedy. In this world nothing is free and no free lunch.

5.       Destroy private records and statements. Tear up – or, if you prefer, shred – credit cards statements, solicitations, and other documents that contain private financial information.

6.       Secure your mail. Empty you mailbox quickly, lock it or get a P.O. box so criminals don’t have a chance to snatch credit card pitches. Never mail outgoing bill payments and checks from home. They can be stolen from your mailbox and the payee’s name erased with solvents. Mail them from the post office or another secure location.

7.       Safeguard your Social Security number. Never carry your card with you, or any other card that may have your number, like a health insurance card. Don’t put your number on your checks. It’s the primary target for identity thieves because it gives them access to your credit report and bank accounts.

8.       Don’t leave a paper trail. Never leave ATM, credit card or gas station receipts behind.

9.       Never let your credit card out of your sight. Worried about credit card skimming? Always keep an eye on your card or, when that’s not possible, pay with cash.

10.   Know who you’re dealing with. Whenever anyone contacts you asking for private identity or financial information, make no response other than to find out who they are, what company they represent and the reason for the call. If you think the request is legitimate, contact the company yourself and confirm what you were told before revealing any of your personal data.

11.   Take your name off marketers’ hit lists. In addition to the national Do-Not-Call registry  you can also cut down on junk mail and opt out of credit card solicitations.

12.   Be more defensive with personal information. Ask salespeople and other if information such as Social Security or driver’s license number is absolutely necessary. Ask anyone who does require your Social Security number about their privacy policy and that you do not want your information given to anyone else.

13.   Monitor your credit report. Obtain and thoroughly review your credit report (check for a free copy at www.Annualcreditreport.com or by calling 877-322-8228) at least once a year to check for suspicious activity. If you find something, alert your card company or the creditor immediately. You may also look into credit protection services, which alerts you any time a change takes place with your credit report.

14.   Review your credit cards statements carefully. Make sure you recognize the merchants, locations and purchases listed before paying the bill. If you don’t need or use department-store or bank-issued credit cards, consider closing the accounts.

Let us be safe and get ourselves protected always.

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Based on Data collected though various webpages 

CENTRAL BANK DIGITAL CURRANCY – A NEW NORMAL IN NEAR FUTURE.

 

CENTRAL BANK DIGITAL CURRANCY – A NEW NORMAL IN NEAR FUTURE.

A central bank digital currency (CBDC) uses an electronic record or digital token to represent the virtual form of a fiat currency of a particular nation (or region). A CBDC is centralized; it is issued and regulated by the competent monetary authority of the country. A central bank digital currency (CBDC) utilizes technology to represent a country's official currency in digital form. Unlike decentralized crypto currency projects like Bitcoin, a CBDC would be centralized and regulated by a country's monetary authority.

 

Except as currency notes, all other use of paper in the modern financial system, be it as bonds, securities, transactions, communications, correspondences or messaging – has now been replaced by their corresponding digital and electronic versions. On anecdotal evidence, use of physical cash in transactions too has been on the decline in recent years, a trend further reinforced by the ongoing Covid19 pandemic. These developments have resulted in many central banks and governments stepping up efforts towards exploring a digital version of fiat currency.

.CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies that have mushroomed over the last decade. Private virtual currencies sit at substantial odds to the historical concept of money. They are not commodities or claims on commodities as they have no intrinsic value; some claims that they are akin to gold clearly seem opportunistic. Usually, certainly for the most popular ones now, they do not represent any person’s debt or liabilities.

To sum up, CBDC is the same as currency issued by a central bank but takes a different form than paper (or polymer). It is sovereign currency in an electronic form and it would appear as liability (currency in circulation) on a central bank’s balance sheet. The underlying technology, form and use of a CBDC can be moulded for specific requirements. CBDCs should be exchangeable at par with cash.

Design Features

Availability

Currently, access to digital central bank money is limited to central bank operating hours, traditionally less than 24 hours a day and usually five days a week.8 CBDCs could be available 24 hours a day and seven days a week or only during certain specified times (such as the operating hours of largevalue payment systems). CBDC could be available permanently or for a limited duration (eg it could be created, issued and redeemed on an intraday basis).

 Anonymity

Token-based CBDC can, in principle, be designed to provide different degrees of anonymity in a way that is similar to private digital tokens.9 A key decision for society is the degree of anonymity vis-à-vis the central bank, balancing, among other things, concerns relating to money laundering, financing of terrorism and privacy.

Transfer mechanism.

The transfer of cash is conducted on a peer-to-peer basis, while central bank deposits are transferred through the central bank, which acts as an intermediary. CBDC may be transferred either on a peer-to-peer basis or through an intermediary, which could be the central bank, a commercial bank or a third-party agent.

 Interest-bearing.

As with other forms of digital central bank liabilities, it is technically feasible to pay interest (positive or negative) on both token- and account-based CBDCs. The interest rate on CBDC can be set equal to an existing policy rate or be set at a different level to either encourage or discourage demand for CBDC.11 Both non-interest bearing and interest bearing accounts could be used for retail or wholesale payment transactions. The payment of (positive) interest would likely enhance the attractiveness of an instrument that also serves as a store of value.

Limits or caps.

Different forms of quantitative limits or caps on the use or holdings of CBDC are often mentioned as a way of controlling potentially undesirable implications or to steer usage in a certain direction. For example, limits or caps could make a CBDC less useful for wholesale rather than retail payments. At present, such limits or caps on holdings/use are most easily envisioned in non-anonymous account-based systems.

 

What is the need for a CBDC?

While interest in CBDCs is near universal now, very few countries have reached even the pilot stage of launching their CBDCs. The adoption of CBDC has been justified for the following reasons:-

i.        Central banks, faced with dwindling usage of paper currency, seek to popularize a more acceptable electronic form of currency (like Sweden);

ii.        Jurisdictions with significant physical cash usage seeking to make issuance more efficient (like Denmark, Germany, or Japan or even the US);

iii.        Central banks seek to meet the public’s need for digital currencies, manifested in the increasing use of private virtual currencies, and thereby avoid the more damaging consequences of such private currencies.

 In addition, CBDCs have some clear advantages over other digital payments systems – payments using CBDCs are final and thus reduce settlement risk in the financial system. Imagine a UPI system where CBDC is transacted instead of bank balances, as if cash is handed over – the need for interbank settlement disappears. CBDCs would also potentially enable a more real-time and cost-effective globalization of payment systems. It is conceivable for an Indian importer to pay its American exporter on a real time basis in digital Dollars, without the need of an intermediary. This transaction would be final, as if cash dollars are handed over, and would not even require that the US Federal Reserve system is open for settlement. Time zone difference would no longer matter in currency settlements – there would be no ‘Herstatt’ risk.

A pilot survey conducted by the Reserve Bank on retail payment habits of individuals in six cities between December 2018 and January 2019, results of which were published in April, 2021 RBI Bulletin (please see charts below) indicates that cash remains the preferred mode of payment and for receiving money for regular expenses. For small value transactions (with amount up to ₹500) cash is used predominantly.

There is thus a unique scenario of increasing proliferation of digital payments in the country coupled with sustained interest in cash usage, especially for small value transactions. To the extent the preference for cash represents a discomfort for digital modes of payment, CBDC is unlikely to replace such cash usage. But preference for cash for its anonymity, for instance, can be redirected to acceptance of CBDC, as long as anonymity is assured.

CBDC and the Banking System

CBDCs, depending on the extent of its use, can cause a reduction in the transaction demand for bank deposits. Since transactions in CBDCs reduce settlement risk as well, they reduce the liquidity needs for settlement of transactions (such as intra-day liquidity). In addition, by providing a genuinely risk-free alternative to bank deposits, they could cause a shift away from bank deposits which in turn might reduce the need for government guarantees on deposits (Dyson and Hodgson, 2016).

21. At the same time reduced disintermediation of banks carries its own risks. If banks begin to lose deposits over time, their ability for credit creation gets constrained. Since central banks cannot provide credit to the private sector, the impact on the role of bank credit needs to be well understood. Plus, as banks lose significant volume of low-cost transaction deposits their interest margin might come under stress leading to an increase in cost of credit.

 There is another risk of CBDCs that could be material. Availability of CBDC makes it easy for depositors to withdraw balances if there is stress on any bank. Flight of deposits can be much faster compared to cash withdrawal. On the other hand, just the availability of CBDCs might reduce panic ‘runs’ since depositors have knowledge that they can withdraw quickly. One consequence could be that banks would be motivated to hold a larger level of liquidity which could result in lower returns for commercial banks.

CBDC and Technology Risk

CBDC ecosystems may be at similar risk for cyber-attacks as the current payment systems are exposed to. Further, in countries with lower financial literacy levels, the increase in digital payment related frauds may also spread to CBDCs. Ensuring high standards of cyber security and parallel efforts on financial literacy is therefore essential for any country dealing with CBDC.

27. Absorption of CBDCs in the economy is also subject to technology preparedness. The creation of population scale digital currency system is contingent upon evolution of high speed internet and telecommunication networks and ensuring the wider reach of appropriate technology to the general public for storing and transacting in CBDCs.

 

Legal Framework

Although CBDCs are conceptually no different from banknotes, introduction of CBDC would require an enabling legal framework since the current legal provisions are made keeping in mind currency in paper form. Under the Reserve Bank of India Act, 1934, the Bank is empowered to “…regulate the issue of bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage” (Preamble).  Even though CBDCs will be a primarily technology driven product, it will be desirable to keep the legislation technology neutral to enable coverage of a variety of technology choices.

Conclusion

There is new era will start in India thereby the cost of printing money in paper form will vanish and Digital currency and technology driven payment methods will stay and continue to grow. The digital currency will also help in cross border transaction and trade finance activity. The Pandemic on one hand helped us to think how to perform all transaction though electronic form and digitally. Already there is development seen in digitalisation of trade activity. I am of the view the day is not too far to transfer cross border funds from my mobile though Fintech instead of Banks.

² https://law.stanford.edu/projects/central-bank-digital-currencies-a-transatlantic-perspective/

³ https://www.federalreserve.gov/newsevents/speech/quarles20210628a.htm

Reserve Bank of India - Speeches (rbi.org.in)

PNB FRUAD – an eye opener

PNB FRUAD – an eye opener

What is banking?

Banking is dealing with public money by accepting deposits from the public and lending to them to earn profit out of the transactions.  Till 1985, Indian banking had a strong system and procedure and whatever work you do there is clear systems and procedures which includes the accounting procedure and reporting also.  When the banking system starts computerizing their operations starting from 1985, it is presumed that the computers will not do any mistakes and whatever reports generated by the computers were accepted as it is, without any verification process. We used say in a lighter vain that if you generate a resignation letter through the computer, it will be signed by the manager without any hesitation.

The department of technology in the banking sector does not coordinate with the operation department and User Acceptance Test is also done by a group based on the operating instruction but they do not have much exposure to the operation.

Now the bank in order to increase the profitability by selling insurance, credit cards etc under the name cross selling and to increase the cross selling activity, incentives are given to all the people starting from the marketing team at the branch to the top Management  of the bank. Therefore, the top Management is only interested in the incentives instead of their core banking activity. The core banking activity has been pushed to back seat at the bank as the top Management  drive the entire unit towards the cross selling activity.

Till 1990, the banking is traditional but thanks to globalization, the banking has transformed into global business with many complicated products and cross border transactions. The products “buyers credit”, “Suppliers Credit”, options, swaps etc., are predominant and availed by the borrowers in order to reduce the cost of borrowings. Due to globalization process, Indian customer has access to the international Market for their borrowing to reduce the cost of borrowings. But the bank has not implemented the risk management and compliance process as per international standard although they have some position as Risk manager and banking operation department to take of compliance. These people will be working directly under the operation department hence their  reports are not effective.

The top Management  also of the opinion that the department compiling the returns, system and procedures, control frauds, risk management departments etc are useless and the people working therein are also will not receive any recognition for their good work. Therefore, people who wants go up in the cadre will not incline to work in these departments.

Now come to the fraud of PNB:

Mr. Nirav Modi wanted to import pearls and diamonds, design exquisite world-class jewellery and sell them. He needed money to buy the pearls and diamonds. He did not want to opt for a rupee loan, and rightly so as it is expensive and there is foreign currency risk. He wanted foreign currency loan. That’s cheap and he had a natural hedge against currency fluctuations as he was earning in foreign currency by exporting jewellery.

As the loans is foreign currency loan arranged through the bank abroad, and there will not be any entry in their accounting system except the contingent liability by way of guarantee/ comfort letter. But in the PNB case there is no loan account created in the books of the bank including contingent liability and letter of comforts were issued through MT799 through swift to the foreign bank for release of loan. RBI instruction in this regard is clear that buyers’ credit can be arranged through a bank abroad by issuing letter of comfort for the import of goods (raw materials) or capital goods. The Buyers credit period should not exceed the working capital cycle.  

For any guarantee without any collateral, it is normal on the part of the bank to ask for 100/110 % margins (to cover foreign exchange fluctuation but PNB is liberal enough to do letter of comfort (LOC) without any margin. When the devolvement of the LOCs takes placed the bank wake up to a USD 1.77 billion fraud that shook the Indian banking system. They had continued the entire operations by opening one LOC to meet the liability on account of previous LOC which is nothing but kite flying.

The violations done by PNB

No loan appraisal has taken place and limit of letter of credit or letter of comfort has been sanctioned. The MT799 has been issued without any back up collateral as paper without understanding the implication or otherwise.

There is huge money flowing through the bank both inward and outward and as normal practice it should be reported to the controllers at least as forex sales and purchase figures.

 The controller might not have time to check these reports and arrive at a logical conclusion of the business. On the other hand there is no risk management system prevailing at the Apex office / forex managing branch to check the matching transaction of inflow and outflow on regular basis.

The audit conducted by the Head office fails to track these transactions as normally the person who does audit normally do not have an idea about foreign exchange / trade related transactions.

Buyers credit operations:

Most of the bank resort to the buyers’ credit through a bank abroad to meet the import payments. The normal practice is to open a letter of credit on usance term for import of Raw materials and on receipt of the goods under the LC, the value of bill is paid by arranging through buyers credit.  It is nothing but converting a non fund based facility into a fund based facility although it is contingent liability to the bank by way LOU. But this may leads to double finance as the imported materials might have been added to the stock pledged to the bank and availed cash credit against the same. The banks do not have a proper SOP (standard Operating Procedure) for the buyers’ credit as it will not reflect into their Books/CBS.

Although most of the bank claims that there is integration of CBS and swift and the swift message is generated from the system automatically from CBS, it is not fool proof as the verification/ authorization should be done in Swift. There is a possibility of generating swift directly also without any involvement of CBS.

What are the learning points?

1. Normally, the top management escapes out of such large frauds blaming of the people at the bottom which is not true. The fraud to the tune of Rs.11000 crores cannot be committed without the knowledge of the top management. Their failure for not managing the bank in a proper way by creating proper SOPs and strengthening the report system, audit system, risk management system etc, if at all they are really unaware of it which is a very remote possibility.
2. The Technology is incomplete and do not have checks and balances required to be there because it is being rolled out at the urgency of the top management without giving adequate time for testing the roll outs. The Computerization is not done 100 % due to lack of coordination between IT and Operation department of the bank.  Working knowledge is required for computerizing the operations which will not be available. The management / technology department do not take any feedback from the operations on the technology introduced in operation.
3. Most of the time as the management never invests in developing the work force as they themselves do not have faith in the training system. Specialization of work is not supported by the Management.
4. The due importance is not given by the management for support departments such as Risk Management, Audit, Vigilance, Training etc. and it is normal the management see them as not contributing to the bank as their contribution is invisible. I have personally come across top management blaming opening these departments that they have wasting their time and do not contribute to the bank’s growth.
5. Top management is selected based on the political influence not based on their ability leads,  deteriorate the management function of the of the Banks.
6. Importance to cross selling at the cost of the core business by the management for personal interest of earning incentive.
7. RBI also failed in their role as supervisor of the banking system, has never evaluated the technology upgrade and new product Standard Operating Procedures, and also audit of the Banks. Further, till now RBI has not insisted that Risk Management and compliance function should be reported to a different vertical and to RBI directly not to the Chairman of the bank.
8. The management has withdrawn the concurrent auditor position at a medium and a large branch is a unwise action and shows their ignorant to the internal Audit function.
9. Last but not the least, in the previous generation, the employees are wedded to the bank and work for the bank till they retire from service. The will be more committed to work because their stake of PF, pension is in the bank. Now, the generation switch between banks at least once in 3 to 5 years and hence it will difficult for the bank to understand the attitude and values of their employees.

Conclusion:

It is high time the bank should centralize the process of loans, international Banking, liability products and marketing activities from the branch and treat the branches as only a delivery points. Two / three stages of verification of important process such as loan sourcing, appraisal , sanction, administration, processing international banking activities, KYC process etc to protect the interest of the bank. More training to be organized to enrich the knowledge of the work force and also to inculcate the Risk management at each stage of transaction. Enhance the supervision of Reserve Bank of India to protect the public money and also financial sector stability of the country