Oriental Bank of Commerce

Topics: Debt, Mortgage loan, Interest Pages: 16 (4089 words) Published: October 28, 2013
Oriental Bank of Commerce (OBC) was started in Lahore, Pakistan in 19th February of the year 1943. It made a modest beginning under its Founding Father, Late Rai Bahadur Lala Sohan Lal. OBC is a public sector bank engaging in monetary intermediation of commercial banks, saving banks and discount houses. In 1947, the Bank had to face the holocaust of partition. The bank was nationalized on 15 April 1980. It has its headquarters in Gurgaon, Haryana, India. Its revenue stands to be Rs. 11,457.17 crore, net income is Rs. 1,134.68 crore and total assets Rs. 8,237.958 crore. In the year 1998, the bank had joined hands with Citibank to launch OBC co-branded credit card. For the purpose of Centralised Banking Solution (CBS), OBC had joined hands with Infosys Technologies Ltd and Wipro Ltd in the year 2003. During the same year 2003, the Bank and Small Industries Development Bank of India (SIDBI) had agreed to work on projects in the field of small-scale, infrastructure and service areas. As per the Bank's IT Plan, the Bank had implemented 'Centralised Banking Solutions (CBS)' with effect from March 2004. On 14 August 2004, Global Trust Bank Limited (GTB) was amalgamated into OBC. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management.

A deposit held at a financial institution that has a fixed term is generally known as term deposit. These are generally short-term with maturities ranging anywhere from a month to a few years. When a term deposit is purchased, the lender (the customer) understands that the money can only be withdrawn after the term has ended or by giving a predetermined number of days notice. Short term deposits are an extremely safe investment and are therefore very appealing to conservative, low-risk investors. The term Short Term Deposit refers to an amount of money placed in a bank or financial institution for a term no longer than a few years. A Short Term Deposit will usually earn a fixed rate of interest. In a bank there are generally two types of short term deposit schemes. They are Fixed deposit scheme and Recurring deposit scheme.

Short term Deposit Schemes
In Oriental Bank of Commerce, there exists two short term deposit schemes. The fixed and recurring deposits which mature within three years are considered as short term deposits.

In deposit terminology, the term Fixed Deposit refers to a savings account or certificate of deposit that pays a fixed rate of interest until a given maturity date. Funds placed in a Fixed Deposit usually cannot be withdrawn prior to maturity or they can perhaps only be withdrawn with advanced notice and/or by having a penalty assessed. A Fixed Deposit is often be used by individuals, businesses and financial institutions around the world as a means of storing their liquid funds for a fixed period of time for future use. In the retail market, Fixed Deposits are relatively safe investments when provided by financial institutions such as banks. They also offer income tax and wealth tax benefits to the individuals Income tax regulations require that FD maturity precedes exceeding Rs 20,000 not to be paid in cash. Repayment of such and larger deposits has to be either by “A/c payee “crossed cheque in the name of the customer or by credit to the saving bank a/c or current a/c of the customer. Customers can avail loans against FDs up to 80 to 90 per cent of the value of deposits. The rate of interest on the loan could be 1 to 2 per cent over the rate offered on the deposit. Non resident Indian's and Person of Indian Origin can also open these accounts. The different fixed term deposit schemes of Oriental Bank of Commerce are as follows:

Under this scheme at first we have to...
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