Project Report on Debit and Credit Cards

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CHAPTER 1
Introduction
What is a Bank?
Finance is the life blood of trade, commerce and industry. Now -a-days, banking sector acts as the backbone of modern business. The term bank is derived from the French word Banco which means a Bench or Money exchange table. In olden days, European money lenders or money changers used to display (show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or exchaning. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposit and it lends money to those who need it. Definition of a Bank

Section 5(b) of the Banking Companies Act, 1949 defines banking as “accepting for the purpose of lending or investment of deposits of money received from the public, repayable on demand and withdrawable by cheque, draft, order or otherwise”. Features of a Bank

1.Dealing in Money
2.Individual / Firm / Company
3.Acceptance of Deposit
4.Giving Advances
5.Payment and Withdrawal
6.Agency and Utility Services
7.Profit and Service Orientation
8.Ever Increasing Functions
9.Connecting Link
10.Banking Business
11.Name Identity

Funtions of Bank
The fuctions of banks are briefly highlighted in following Diagram or Chat.

A.Primary Function of Banks

1.Accepting Deposits:

a.Saving Deposits
b.Fixed Deposits
c.Current Deposits
d.Recurring Deposits

2.Granting of Loans and Advances:

a.Overdraft
b.Cash Credits
c.Loans
d.Discounting of Bill of Exchange

B.Secondary Function of Banks

1.Agency Functions

a.Transfer of Funds
b.Collection of Cheques
c.Periodic Payments
d.Portfolio Management
e.Periodic Collections
f.Other Agency Functions

2.General Utility Functions

a.Issue of Drafts and Letter of Credits
b.Locker Facility
c.Underwriting of Shares
d.Dealing in Foreign Exchange
e.Project Reports
f.Social Welfare Programmes

What is a Debit Card?
A debit card is a plastic card issued by banks to customers. It allows instant purchase, removing the correct balance from the user’s attached bank account. Most debit cards have two features:
The ability to purchase items at stores that have automated debit card machines •The ability to withdraw cash from a bank account at an automatic transaction machine (ATM) Types of Debit Cards system

The following are found in the front of a typical debit card: 1.Issuing bank logo
2.EMV chip
3.Hologram
4.Card number
5.Card brand logo
6.Expiration date
7. Cardholder’s name

The following are found in the reverse side of a typical debit card: 1.Magnetic stripe
2.Signature strip
3.Card security code

Advantages of Debit Cards
Money Management and Control.
Debit transactions are deducted directly from a checking account and recorded in one place on a monthly statement. •Security.
Debit cards offer better protections than cash or checks, and Zero Liability means consumers pay nothing for fraudulent purchases. •Acceptance.
Debit cards can be used at millions of locations worldwide, and can be used over the phone and on the Internet. •Convenience.
Debit card transactions are quick and simple, getting you out of the store faster; automatic bill pay via debit eliminates worries about missed payments. •Rewards.
More debit cards are also offering rewards so purchases earn points toward travel, merchandise or even cash.

Federally Imposed Maximum Lianilityfor Unauthorized Card use (United States) ReportedMaximum Card Holder Liability
Credit CardDebit Card
Before Use$0$0
Within 2 business days$50$50
After 2 but before 60 business days$50$500
After 60 business daysUnlimitedUnlimited

Disadvantages of Debit Cards
1.Record keeping is mandatory.
When you’re using a debit card you have to note each transaction so...
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