Royal Entrepreneurship – The Case of Royal Bank Zimbabwe Ltd Formation

The deregulation of the financial services in the late 1990s resulted in an explosion of entrepreneurial activity leading to the formation of banking institutions. This chapter presents a case study of Royal Bank Zimbabwe, tracing its origins, establishment, and the challenges that the founders faced on the journey. The Bank was established in 2002 but compulsorily amalgamated into another financial institution at the behest of the Reserve Bank of Zimbabwe in January 2005.

Entrepreneurial Origins
Any entrepreneurial venture originates in the mind of the entrepreneur. As Stephen Covey states in The 7 Habits of Highly Effective People, all things are created twice. Royal Bank was created first in the mind of Jeffrey Mzwimbi, the founder, and was thus shaped by his experiences and philosophy.

Jeff Mzwimbi grew up in the high density suburb of Highfield, Harare. On completion of his Advanced Level he secured a place at the University of Botswana. However he decided against the academic route at that time since his family faced financial challenges in terms of his tuition. He therefore opted to join the work force. In 1977 he was offered a job in Barclays Bank as one of the first blacks to penetrate that industry. At that time the banking industry, which had been the preserve of whites, was opening up to blacks. Barclays had a new General Manager, John Mudd, who had been involved in the Africanisation of Barclays Bank Nigeria. On his secondment to Zimbabwe he embarked on the inclusion of blacks into the bank. Mzwimbi’s first placement with Barclays was in the small farming town of Chegutu.

In 1981, a year after Independence, Jeff moved to Syfrets Merchant Bank. Mzwimbi, together with Simba Durajadi and Rindai Jaravaza, were the first black bankers to break into merchant banking department. He rose through the ranks until he was transferred to the head office of Zimbank – the principal shareholder of Syfrets – where he headed the international division until 1989.

The United Nations co-opted him as an advisor to the Reserve Bank in Burundi and thereafter, having been pleased by his performance, appointed him a consultant in 1990. In this capacity he advised on the launch of the PTA Bank travellers’ cheques. After the consultancy project the bank appointed him to head the implementation of the programme. He once again excelled and rose to become the Director of Trade Finance with a mandate of advising the bank on ways to improve trade among member states. The member states were considering issues of a common currency and common market in line with the European model. Because the IFC and World Bank had unsuccessfully sunk gigantic sums of funds into development in the region, they were advocating a move from development finance to trade finance. Consequently PTA Bank, though predominantly a development bank, created a trade finance department. To craft a strategy for trade finance at a regional level, Mzwimbi and his team visited Panama where the Central Americans had created a trade finance institution. They studied its models and used it as a basis to craft the PTA’s own strategy.

Mzwimbi returned to Zimbabwe at the conclusion of his contract. He weighed his options. He could rejoin Barclays Bank, but recent developments presented another option. At that time Nick Vingirai had just returned home after successfully launching a discount house in Ghana. Vingirai, inspired by his Ghanaian experience, established Intermarket Discount House as the first indigenous financial institution. A few years later NMB was set up with William Nyemba, Francis Zimuto and James Mushore being on the ground while one of the major forces behind the bank, Julias Makoni, was still outside the country. Makoni had just moved from IFC to Bankers’ Trust, to facilitate his ownership of a financial institution. Inspired by fellow bankers, a dream took shape in Mzwimbi’s mind. Why become an employee when he could become a bank owner? After all by this time he had valuable international experience.

The above experience shows how the entrepreneurial dream can originate from viewing the successes of others like you. The valuable experiences acquired by Mzwimbi would be critical on the entrepreneurial journey. An entrepreneurial idea builds on the experiences of the entrepreneur.
First Attempts

In 1990 Jeff Mzwimbi was approached by Nick Vingirai, who was then Chairman of the newly resuscitated CBZ, for the CEO position. Mzwimbi turned down the offer since he still had some contractual obligations. The post was later offered to Gideon Gono, the current RBZ governor.

Around 1994, Julias Makoni (then with IFC), who was a close friend of Roger Boka, encouraged Boka to start a merchant bank. At this time Makoni was working at setting up his own NMB. It is possible that, by encouraging Boka to start, he was trying to test the waters. Then Mzwimbi was seeing out the last of his contract at PTA. Boka approached him at the recommendation of Julias Makoni and asked him to help set up United Merchant Bank (UMB). On careful consideration, the banker in Mzwimbi accepted the offer. He reasoned that it would be an interesting option and at the same time he did not want to turn down another opportunity. He worked on the project with a view to its licensing but quit three months down the line. Some of the methods used by the promoter of UMB were deemed less than ethical for the banking executive, which led to disagreement. He left and accepted an offer from Econet to help restructure its debt portfolio.

While still at Econet, he teamed up with the late minister Dr Swithun Mombeshora and others with the intent of setting up a commercial bank. The only commercial banks in the country at that point were Standard Chartered, Barclays Bank, Zimbank, Stanbic and an ailing CBZ. The project was audited by KPMG and had gained the interest of institutional investors like Zimnat and Mining Industry Pension Fund. However, the Registrar of Banks in the Ministry of Finance, made impossible demands. The timing of their application for a licence was unfortunate because it coincided with a saga at Prime Bank in which some politicians had been involved, leading to accusations of influence peddling. Mombeshora, after unsuccessfully trying to influence the Registrar, asked that they slow down on the project as he felt that he might be construed as putting unnecessary political pressure on her. Mzwimbi argues that the impossible stance of the Registrar was the reason for backing off that project.

However other sources indicate that when the project was about to be licensed, the late minister
demanded that his shareholding be increased to a point where he would be the majority shareholder. It is alleged that he contended this was due to his ability to leverage his political muscle for the issuance of the licence.

Entrepreneurs do not give up at the first sign of resistance but they view obstacles in starting up as learning experiences. Entrepreneurs develop a “don’t quit” mind-set. These experiences increase their self -efficacy. Perseverance is critical, as failure can occur at any time.

Econet Wireless
The aspiring banker was approached, in 1994 by a budding telecommunication entrepreneur, Strive Masiyiwa of Econet Wireless, to advise on financial matters and help restructure the company’s debt. At that time Mzwimbi thought that he would be with Econet probably for only four months and then return to his banking passion. While at Econet it became apparent that, once licensed, the major drawback for the telecommunication company’s growth would be the cost of cell phone handsets. This presented an opportunity for the banker, as he saw a strategic option of setting up a leasing finance division within Econet that would lease out handsets to subscribers. The anticipated four months to licensing of Econet dragged into four years, which encompassed a bruising legal struggle that finally enabled the licensing against the State’s will. Mzwimbi’s experience with merchant banking proved useful for his role in Econet’s formation. With the explosive growth of Econet after an IPO, Mzwimbi assisted in the launch of the Botswana operations in 1999. After that, Econet pursued the Morocco licence. At this stage, the dream of owning a bank proved stronger than the appeal of telecoms. The banker faced some tough decisions, as financially he was well covered in Econet with an assured executive position that would expand with the expansion of the network. However the dream prevailed and he resigned from Econet and headed back home from RSA, where he was then domiciled.

His Econet days bestowed on him a substantial shareholding in the company, expanded his worldview and taught him vital lessons in creating an entrepreneurial venture. The persistence of Masiyiwa against severe government resistance taught Mzwimbi critical lessons in pursuing his dream in spite of obstacles. No doubt he learnt a lot from the enterprising founder of Econet.

Debut Royal Bank
On his return in March 2000, Mzwimbi regrouped with some of his friends, Chakanyuka Karase and Simba Durajadi, with whom he had worked on the last attempt at launching a bank. In 1998 the Banking Act was updated and a new statutory instrument called the Banking Regulations had been enacted in the light of the UMB and Prime Bank failures.

These required that one should have the shareholders, the premises and equipment all in place before licensing. Previously one needed only to set up an office and hire a secretary to acquire a banking license. The licence would be the basis for approaching potential investors. In other words it was now required that one should incur the risk of setting up and purchasing the IT infrastructure, hire personnel and lease premises without any assurance that one would acquire the licence. Consequently it was virtually impossible to invite outside investors into the project at this stage.

Without recourse to outside shareholders injecting funds, and with minimal financial capacity on the part of his partners, Mzwimbi fortuitously benefited from his substantial Econet shares. He used them as collateral to access funds from Intermarket Discount House to finance the start up – acquired equipment like ATMs, hired staff, and leased premises. Mzwimbi recalls pleading with the Central Bank and the Registrar of Banks about the oddity of having to apply for a licence only when he had spent significant amounts on capital expenditure – but the Registrar was adamant.

Finally, Royal Bank was licensed in March 2002 and, after the prerequisite pre-opening inspections by the Central Bank, opened its doors to the public four months later.

Entrepreneurial Challenges
The challenges of financing the new venture and the earlier disappointments did not deter Mzwimbi. The risk of using his own resources, whereas in other places one would fund a significant venture using institutional shareholders’ capital, has already been discussed. This section discusses other challenges that the entrepreneurial banker had to overcome.

Regulatory Challenges and Capital Structure
The new banking regulations placed shareholding restrictions on banks as follows:

*Individuals could hold a maximum of 25% of a financial institution’s equity
*Non-financial institutions could hold a maximum of 10% only
*A financial institution however could hold up to a maximum of 100%.

This posed a problem for the Royal Bank sponsors because they had envisaged Royal Financial Holdings (a non-financial corporate) as the major shareholder for the bank. Under the new regulations this could hold only 10% maximum. The sponsors argued with the Registrar of Banks about these regulations to no avail. If they needed to hold the shares as corporate bodies it meant that they needed at least ten companies, each holding 10% each. The argument for having financial institutions holding up to 100% was shocking as it meant that an asset manager with a required capitalisation of $1 million would be allowed by the new law to hold 100% shareholding in a bank which had a $100 million capitalisation yet a non-banking institution, which may have had a higher capitalisation, could not control more than 10%. Mzwimbi and team were advised by the Registrar of Banks to invest in their personal capacities. At this point the Reserve Bank (RBZ) was simply involved in the registration process on an advisory basis with the main responsibility resting with the Registrar of Banks. Although the RBZ agreed with Mzwimbi’s team on the need to have corporations as major shareholders due to the long term existence of a corporation as compared to individuals, the Registrar insisted on her terms. Finally, Royal Bank promoters chose the path of satisficing- and hence opted to invest as individuals, resulting in the following shareholding structure:

*Jeff Mzwimbi – 25%
*Victor Chando – 25%
*Simba Durajadi- 20%
*Hardwork Pemhiwa- 20%
*Intermarket Unit Trust – 2% (the only institutional investor)
*Other individuals – less than 2% each.
The challenge to acquire institutional investors was due to the restrictions cited above and the requirement to pump money into the project before the licence was issued. They negotiated with TA Holdings, which was prepared to take equity holding in Royal Bank.

So tentatively the sponsors had allocated 25% equity for Zimnat, a subsidiary to TA Holdings. Close to the registration date, the Zimnat negotiators were changed. The incoming negotiators changed the terms and conditions for their investment as follows:

*They wanted at least a 35% stake
*The Board chairmanship and chairmanship of key committees – in perpetuity.

The promoters read this to mean their project was being usurped and so turned TA Holdings down. However, in retrospect Mzwimbi feels that the decision to release the TA investment was emotional and believes that they should have compromised and found a way to accommodate them as institutional investors. This could have strengthened the capital base of Royal Bank.

Credibility Challenges
The main sponsors and senior managers of the bank were well known players in the industry. This reduced the credibility gap. However some corporate customers were concerned about the shareholding of the bank being entirely in the hands of individuals. They preferred the bank risk to be reduced by having institutional investors. The new licensing process adversely affected access to institutional investors. Consequently the bank had institutional shareholders in mind for the long term. They claim that even the then head of supervision and licensing at RBZ, agreed with the promoters’ concern about the need for institutional investors but the Registrar of Banks overruled her.

Challenges of Explosive Growth
The strategic plan of Royal Bank was to open ten branch offices within five years. They planned to open three branches in Harare in the first year, followed by branches in Bulawayo, Masvingo, Mutare and Gweru within the next year. This would have been followed by an increase in the number of Harare branches.

From their analysis they believed that there was room for at least four more commercial banks in Zimbabwe. A competitor analysis of the industry indicated that the government controlled Zimbank was the major competitor, CBZ was struggling and Stanbic was not likely to grow rapidly. The bigger banks, Barclays and Standard Chartered, were likely to scale down operations. The promoters of the bank project had observed in their extensive international experie nce that whenever the economy was indigenised in Africa, these multinational banks would dispose of their rural branches. They were therefore positioning themselves to exploit this scenario once it presented itself.

The anticipated opportunity presented itself earlier than expected. On an international flight with the Standard Chartered Bank CEO, Mzwimbi, confirmed his interest in a stake of the bank’s disinvestments which was making rounds on the rumour mill. Although surprised, the multinational banker agreed to give the two month old entrepreneurial bank the right of first refusal on the fifteen branches that were being disposed of.

The deal was negotiated on a lock, stock and barrel basis. When the announcement of the deal was made internally, some employees resisted and politicised the issue. The Standard Chartered CEO then offered to proceed on a phased basis with the first seven banks going through, followed by the others later. Due to Mzwimbi’s savvy negotiating skills and the determination by Standard Chartered to dispose of the branches, the deal was successfully concluded, resulting in Royal Bank growing from one branch to seven outlets within the first year of operation. It had exceeded their projected growth plan.

Due to what Mzwimbi calls divine favour, the deal included the real estate belonging to the bank. Interestingly, Standard Chartered had failed to get bank buildings on lease and so in all small towns they had built their own buildings. These were thus transferred within the deal to Royal Bank. Inherent in the deal was an inbuilt equity from the properties since the purchase price of $400 million was heavily discounted.

Shortly after that, Alex Jongwe, the CEO of Barclays Bank, approached Royal Bank to offer a similar deal to the Standard Chartered acquisition of rural branches. Barclays offered eight branches, of which Royal initially accepted six. Chegutu and Chipinge were excluded, since Royal already had a presence there.

However after failing to dispose of those two branches, Barclays came back and asked Royal “to take them for a song”. Mzwimbi accepted these for two strategic reasons, namely the acquisitions gave him physical assets (the buildings) that he could lease out to anyone who decided to expand into those areas and secondly, that created a monopoly in those towns. With time, the fortuitous inclusion of real estate into the deal increased the wealth of Royal Bank as the prices of properties skyrocketed with hyperinflation.

One of the major key drivers of the Zimbabwean economy is agriculture. After the failed Land Donors Conference in 1998 and the subsequent land reform programme, it was evident to the established banks that commercial farming would be significantly affected.

They sought to quit the small towns since their major clients were commercial farmers. Strategically to acquire these branches when the major source of their revenue was under threat would have required that Royal Bank should have put in place an alternative source of revenue from farming. It is not clear whether this had been considered during these acquisitions.

The acquisition increased Royal’s branch network to 20 and the staff complement by 50. Incidentally, the growth created problems of managing the system as well as cultural issues. The highly unionised Standard Chartered employees were antagonistic to management as compared to the trusting Royal culture. This acquisition resulted in potential culture challenges. Management controlled this by introducing Norton and Kaplan’s Balanced Scorecard system in an effort to manage the cultural clashes of the three systems.

The Challenge of Financing Acquisition
A major challenge in acquisitions is the financing structure. During licensing the Registrar of Banks refused to accept the nearly $200 million that had been spent by the promoters of Royal Bank as capital. She insisted that this be recognised as pre-operating expenses and therefore wanted to see fresh capital amounting to $100 million. The change of rules posed a challenge for Mzwimbi’s team. However, being an astute deal maker he strategically conceptualised an arrangement whereby the $170 million worth of equipment purchased be accounted for as belonging to Royal Financial Holdings and made available to Royal Bank on a lease basis. This would then be sold to the bank as it grew. The RBZ was appraised of this decision and accepted it, and even noted in the inspection report the amount of expenditure spent pre-operatively by the promoters. The remainder of the pre-operative expenses were converted into nonvoting non-convertible preference shares of Royal Bank.

In January 2003 commercial bank capitalisation was increased to $500 million by the regulator and hence there was a need for recapitalisation. This coincided with the branch acquisition deals. At this stage the Royal Bank team decided to partially fund the acquisition through a conversion of the preference shares into ordinary shares and partially from fresh capital injected by the shareholders. Since the bank was now performing well, it purchased the capital equipment, owned by Royal Financial Holdings, which it had been leasing. This deal included the redistribution and balancing of shareholdings in Royal Bank to conform to the statutory requirements. Retrospectively it may be viewed as a strategic blunder to have moved the equipment into the bank ownership. Considering the “sale” of Royal Bank assets to ZABG, if these and the real estate had been warehoused into RFH the take-over may have been difficult. This highlights the failure sometimes by entrepreneurs to appreciate the importance of asset protection mechanisms while still small.

However the RBZ accused the shareholders of using depositors’ funds for the recapitalisation of the bank. Partly this is due to a misunderstanding that RFH is the holding company of Royal Bank and so sometimes accounts flowing from Royal Financial Holdings were accounted by RBZ investigators as Royal Bank funds. These allegations formed part of the allegations of fraud against Mzwimbi and Durajadi when they were arrested in September 2004. Subsequently the courts cleared them of any fraudulent activities in January 2007.

Managerial Challenges
Retrospectively, Mzwimbi views his managerial team as being excellent apart from some “weaknesses in the finance department”. He assembled a solid team from various banking backgrounds. The most significant ones became founding shareholders like Durajadi Simba at treasury, the late Sibanda in charge of the lending department. Faith Ngwabi-Bhebhe, then with Kingdom, helped lay a solid foundation of human resource systems for the bank.

However, they had a challenge finding a financial director. The new statutory instrument required that CVs of all corporate officers be made available for vetting when the licence was applied for. Without a licence one could not promise someone in current employment a job and submit his CV as this would reflect badly on the promoters. Eventually they hired a chartered accountant without banking experience. Initially they thought this was a stop-gap measure.

With the unanticipated growth, they forgot to revisit this department to strengthen it. Because of these weaknesses the bank continued to face challenges in the treasury department, despite the gallant efforts of the financial director. Strangely, when other executive directors were arrested the FD was left untouched and yet all the issues at stake arose from treasury activities. It would appear in retrospect that the FD was intimidated into providing incriminating evidence for the others. She too was threatened with arrest.

Successful entrepreneurial ventures in a growth phase need both strong leaders and strong managers. It’s not enough to have strong leadership skills. As Ed Cole said, “It’s easier to obtain than to maintain.” The role of strong managers is to create the capacity to maintain what strong entrepreneurial leaders acquire. Interestingly a new field of research, Strategic Entrepreneurship now recognises the need for both entrepreneurial and strategic management competences for successful ventures.

Strategic Growth Plans
Royal Bank’s strategic intent was to create a full house of financial services. The plan included a commercial bank, a discount house, an insurance company, a building society and an asset management service. However the vision was later refined and the plans for a discount house were dropped, since a strong commercial bank with a powerful dealing room would serve the same purpose. A strong asset manager would also relieve the need for a discount house.

With the significant branch network, the commercial bank was solid but needed a presence in a few major centres e.g. Masvingo and Gweru. In Gweru they could not locate suitable premises.

In Masvingo, after a struggle they were offered premises which had previously been earmarked for Trust Bank. With Trust Bank facing challenges, it abandoned Masvingo. However, Royal was placed under a curator when it was about to move in.

Royal Bank courted Finsreal Asset Managers for a potential acquisition since there were synergies and shared beliefs. It had a solid corporate customer base and very good growth prospects since an astute entrepreneur led it. Unfortunately the deal was aborted at the last minute when the owner opted out. After the Finsreal flop, Mzwimbi and his team pursued the asset manager through organic growth. They developed their own company -Regal Asset Managers – during the last quarter of 2003. At this stage the capital requirements and licensing process of asset managers was fairly easy. Asset managers were quite profitable, with minimal regulatory controls. Regal Asset Managers completed two good deals, namely: a management buyout of Screen Litho, a printing concern, and a big deal for First Mutual at its demutualisation.

The Screen Litho deal had been offered to venture capitalists but their demands were excessive. That is when Regal Asset Managers was set up and concluded a funding deal through Royal Financial Holdings (RFH), resulting in RFH holding 99% of Screen Litho which was to be off- loaded once management was in a solid financial position. Screen Litho is performing very well and hence this investment has proven successful. The entrepreneurial Mzwimbi thus diversified his financial portfolio through this deal.

For the building society, Royal eyed First National Building Society (FNBS) and almost signed a memorandum of agreement. Royal Bank was almost ready to transfer its staff mortgage facility to FNBS, when a close friend with a powerful position in the Society discouraged it from committing to the deal without divulging the reasons. A short while later FNBS was placed under a curator, with the RBZ citing cases of fraud by the top executives. The increasingly acquisitive Royal Bank entrepreneurs shifted and trained their guns at Beverly Building Society. Intermarket had already failed to consummate a deal with Beverley. Royal Bank was now competing with African Banking Corporation (ABC), which beat it to an agreement but was denied shareholder authority to complete the deal. Royal Bank then went back to wooing Shingai Mutasa of TA Holdings in an effort to increase its institutional shareholder base. He was keen on the deal.

Mutasa was acquainted with the two British owners of Beverley and one of his board members sat on the Beverley Building Society board. His support would have been crucial in the deal. However this process was overtaken by events, as the incoming RBZ governor superintended a monetary policy which led the financial sector into a tailspin.

Some young entrepreneurs approached Royal Bank seeking for support to establish an insurance company. Since this was in line with Royal’s strategic plan it consented and helped start Regal Insurance Company. Royal Bank originated the name Regal Insurance.

Once the licence was acquired there were some shareholder disputes and Royal Bank distanced itself from the deal. The young entrepreneurs who had been supported by Royal Bank lost the company to the other shareholders.

The final thrust in the strategic plan was establishing a stock broking firm. An idiosyncrasy with stock broking licences is that they are not issued to an institution but to a person. Intermarket had the highest number of stock broking licences. Mzwimbi approached the Intermarket stock broking CEO, who was a friend, about the prospects of acquiring one of the stockbrokers and he did not seem to have a problem with that. At the same time Victor Chando, a major shareholder in Royal Bank, brought to the table his interest in acquiring Barnfords Securities. He was encouraged to pursue the deal with the help of Royal Bank with the plan of bringing it in-house as soon as possible. All Royal Bank deals would now be channelled through Barnfords.

It appears that Royal bank developed a strong appetite for deals. One wonders what it would have been like if it had taken time to develop strong systems and capacity before attempting so many deals. What could have been avoided if the appetite for deals had been controlled? Entrepreneurs may need to exercise restrain in their expansion in order to create capacities to absorb and consolidate the growth.

International Banking and Offshore Finance for the Rest of Us

In a media storm of: “big bad corporations shelter billions in offshore tax havens”, one would think that you either have to be a “big bad corporation” or a “money-grubbing 1%’er with an overwhelming penchant for hiding money” in order to have an offshore bank account. Nothing could be further from the truth. Nearly anyone can and should utilize the services of an offshore bank.

Why would you want to keep your money in an offshore account you say? One of many reasons could be concern for domestic bank stability, and unless you’ve been under a rock for the last several years, you are likely more than a little weary of domestic bank stability. And as of January 2013, the FDIC is rolling back coverage on individual accounts to a cap of $250,000. This is likely not an issue to most of us, but what’s the bigger picture here? What does this say about the solvency of the FDIC? How many near-simultaneous bank failures will it take to bankrupt the FDIC completely? What other policy changes are there that could; in the event of multiple bank failures, effect your hard-earned life savings?

You’ve heard about diversifying your assets, between stocks, cash, and hard assets such as gold and silver, but what about diversifying your banks? I’m not talking about opening an account at your local Savings and Loan and an additional account down the street with Citibank, I’m talking about diversifying your banks in different countries. Don’t worry, I’m not suggesting you head out and convert half of your life’s savings to Icelandic Krona, you can keep your money in US Dollars, just don’t keep those US Dollars in a US Bank. Think about it, you wouldn’t keep your entire life’s saving in one company’s stock, or one mutual fund with one investment company would you? At least I hope you wouldn’t! (Bernie Madoff Investment Securities ring a bell?)

Many international banks offer great lines of product with fantastic rates of return designed specifically to attract depositors with US dollars that just don’t exist domestically. Many of these programs are only available to account holders. Even if your credit rating has taken a beating in recent years, you may still be eligible for mortgage financing from your offshore bank when domestic banks won’t even look at you. Granted, the money may be pricey and may have steep equity requirements, but when no domestic lending institution will even give you the time of day… any financing is better than no financing.

There are inherent risks with having your money in an offshore bank so take your time, do your homework. Just as you wouldn’t put your money in a domestic bank that appears unstable, or is on the FDIC list of troubled banks, you probably would be well served to stay away from banks like the First National Bank of the Democratic Republic of the Congo. No matter what fantastic rate they offer you! Find a good bank, in a good jurisdiction. Want to know why Swiss banks look so attractive to wealthy account holders? You would think from listening to the talking heads on the major network nightly news programs it would be hiding money… think about that one for a moment: Would you consider a place that has been demonized on the nightly news year-in and year-out; and that is known by absolutely everyone, a good hiding place for money? So what makes you think these wealthy account holders aren’t using the same logic? They didn’t become wealthy by making mistakes with their cash, that’s for sure. The number one reason for using a Swiss Bank is simple: they’re really good at banking. In fact, they’ve been doing it for longer than the US has been the US, and are rock-solid stable. In fact, when was the last time you heard of a Swiss bank failure, collapse or a call for a bailout of the Swiss banking system?

And what about staying out of trouble with the IRS? Guidelines change all the time, so be sure to check, recheck and understand them thoroughly before sending your money to a foreign bank account. If you follow the guidelines, do your homework and report your offshore holdings, you can enjoy your offshore account hassle free for many years to come!

7 Qualities Bank Jobs Recruiters Look For in Candidates

Bank jobs have always been considered to be safe and rewarding, from career standpoint. However, bank jobs are not for everyone; they do require a pre-determined skillset and certain traits in an individual’s personality. The crux of this article is to provide you with information and pointers that a bank job interviewer judges the candidates on, so that it helps you land with a bank job.

Indicators of Future performance: Bank jobs recruiters prefer candidates with a consistent academic record, strong GPAs and experience. As it is believed that records of past performance are the indicators of future performance, keeping this notion in mind recruiters look for those with a high performance record. Banks look for candidates with past performance records as they are fuller proof predictors of performance and so it tops their checklists.

Proactive actions: Being a customer facing role, recruiters look for candidates who are proactive and go that extra mile to solve a customer query and will not dissuade from answering a customer. Bankers work in a customer centric environment, where the customer is treated as a king. Thus, serving the king is of prime importance and a banker needs to provide services to its customers along with quick and speedy Redressal of complaints and queries of the customers. Recruiters look for candidates who can pro-actively; provide solutions and assistance to a customer pertaining to their needs with prompt and swift actions.

A constant learner: We live in a society where everything around us is dynamic and constantly evolves with time. As a banker one needs to be a learner for the entire lifetime and should not stop learning. Banking as a function brings in reforms and updations to the banking guidelines; and in order to keep up with the changes a banker needs to be on a constant curve of learning. The learning’s shall not be confined to the banking domain; keeping an eye on developments in the economy will help you become a sensitive banker I.e. A banker who is sensitive to the needs of a growing economy.

Analytical bent of mind: Risk management is the primary tasks that a banker does, which involves calculating and taking measures to de-rail any projected losses that a bank might have to go through. This makes it very essential for a banker to possess an analytical bent of mind, that helps in shaping the sound-ness of the banking sector. Analytical bent of mind helps bankers to analyze the financial background and capabilities of a customer, identify low yielding products such as loans, securities or bonds and optimum utilization of available financial assets to drive profits. Banking as a function involves high risk, and since all the banks are inter-linked somehow, failure of one banking institution will directly impact other banking institutions, this makes recruiters look for candidates who have advanced levels of analytical thinking so that they can project and avert losses.

Professionalism: Recruiters look for candidates who have a deeper sense of the professionalism. Professionalism means the ability to perform and remain committed to the core principles of the profession under the most challenging situations. Bank jobs being customer facing and customer oriented; leaves no other option with the recruiter to look for candidates who can be passionate about the needs of their cus-tomers as well as do not compromise on logic while solving their needs. Taking the right decisions under pressure and stress; without compromising on the principles of profession is one of the major concerns of a bank jobs recruiter.

Accountability: Since bankers deal with customer’s money, this is one of the most important trait for a bank job. Banks undergo audits, to scrutinize and verify the numbers to check financial frauds. And many of the financial frauds had been committed by bank employees in the past, banks look for candidates who are sincere, committed and trustworthy towards their job and society at large. Banks look for an accountable and reliable banker who can be the whistleblower and help the bank minimize financial frauds.

Hunger for growth: As a banker one needs to be hungry for growth, be it improving on communication skills, learning about new developments in the banking domain both at national and international levels. This is the only preparation one needs to do in order to apply for high paying bank jobs; which are a sure shot medium of growth in this domain. Hunger for growth, a motivational factor which will help you progress in your career in various stages.

Bank jobs demand, desire to learn, a deeper sense of professional ethics, an inquisitive mind, a strategic view along with qualities of humility and empathy, willingness to embrace practical experience and eagerness to learn and absorb new developments. If you think you posses all the above mentioned qualities or traits then start applying for bank jobs and witness unceasing growth in all aspects of your life.

Banking on Good Banks: Guidelines to Help You Choose the Right Bank for You

More often than not, we make decisions impulsively, without dwelling on too much thought about what we want and without considering other options, guidelines and criteria to base our decisions with. We can always get away with this on small decisions such as deciding on the flavor of Starbucks coffee we want; whether this is decaf or not; medium or large; with cream or without and many other trivial options.

This is okay but this is not applicable when we are considering things that concern the financial aspect of our lives – financing, refinancing, mortgages, insurance, investments and yes, even choosing the bank where we could save and store our money. Here are some guidelines you have to consider when you want to invest portions of your money into banks:

1. Location. When choosing banks, you have to consider their locations. If you see yourself visiting your bank or banks in a regular basis, then the best option would be to look for banks nearest to wherever you conduct your business or in your home.

2. Accessibility of ATM Machines. Choose banks where a sufficient number of their ATM machines are accessible to you.

3. In relation to number 2, check the functionalities offered by the ATM machines of these banks. Check if it has the following features: – Do the banks’ ATM machines allow deposits to be made in it? – Do the banks’ ATM machines printout statements about your accounts such as your available balance, etc.? – Do the banks’ ATM machines enable a client to order a check book?

4. Telephone Banking. If you are one of those people who cannot go to banks during banking hours, then one of the features you have to look for in banks is the availability of telephone banking service. With this, you can make queries and transactions in your banks anytime, anywhere usually 24/7 all year. Telephone Banking allows you to do some of these transactions in your banks: – Transfer your money from your accounts in your banks to pay your bills – Telephone banking in banks enables cancellation and change of current orders – Check the balance of your account – Telephone banking in banks allows you to apply for other products or services from banks

5. Internet Banking. Internet banking features in banks also allows the following services offered by Telephone Banking wherein transactions and inquiries can be done via the Internet through the Internet portals of these banks.

If you are a business person and you need a bank or banks for your small business, here are some other aspects and guidelines you have to consider when choosing the right bank/banks for you:

1. Aside from the first general consideration on the location of the banks, you have to consider if the banks understand the nature of the business you are involved in.

2. Consider also if some of the banks will be able to allow you to deal with the senior employees/executives in the bank. This way, problems concerning your business banking needs will be addressed easily.

3. Check banks that offer SBA – Small Business Administration – Loans. This can help you should different needs arise in your business that will compel you to make a loan.

4. It is good to consider banks where the capitalization rate is greater than six percent. This will ensure you that the banks you will be working with will still be present while you are still in business

5. Consider the competitiveness of the banks by checking how much they charge for every transaction you make.

6. Aside from these, check also the competitiveness of the interests and other fees that come with their credit cards.

7. Check the stipulations on balances for checking accounts that bear interests.

8. Check if the banks you are considering are members of the FDIC – Federal Deposit Insurance Corporation and the Federal Reserve Bank and lastly,

9. Look for banks that are capable of giving service that you and your business might need ahead of time.

Keep all these in mind when considering the right bank/banks and surely, you will never go wrong. Good luck!

Online Banking Provides Satisfaction and Convenience For Users

With all the attention online banking has received in the last couple of years, it seems there are new online banks popping up everywhere. Users are choosing online banking for its ease and convenience. And while issues of identity theft are important factors to consider with online banking, it has not stopped people from utilizing the Web to streamline their finances.

Even more importantly, recent studies suggest that Internet banking doesn’t just make life easier, customers who choose it seem to be more satisfied with their bank. The two areas of greatest satisfaction fall in the categories of the convenience online banking provides and the ability to pay bills online. One recent industry report indicated that satisfaction with online banking services is up 5.5 percent. The report also shows that users who pay their bills online experience not only satisfaction with the ability to bank online, but with their specific banking institution, suggesting users have strong confidence in their bank’s ability to secure identity. In fact, similar reports have also shown that those who pay bills online retain their business longer at a particular bank than those who do not use a bank’s online service.

As a result, banks are seeing tremendous growth in online service. One major commercial bank cited that in 2004, there were 3.4 million customers paying bills online, followed by an increase to 6 million online bill payers just a year later. Many bankers believe those kinds of increases are the result of services such as online bill pay that customers find most appealing.

Many first-time users come to online banking to access their account information such as account balances and check activity. That is followed by the ability to transfer funds between accounts. And finally, many users then move into online bill pay. Perhaps they start with paying a few utilities online at the utility’s website. They may then look into the online bill pay service offered by their bank. Now, banks are seeing more and more users receiving bills electronically.

Yet for some bank customers, concerns about identity theft keep them from trying online banking. Interestingly, their counterparts who do use the Internet to conduct banking do not seem to hold those same perceptions. Most are satisfied with the level of online security offered by their banks. The challenge then for banks lies in the continued education of their customers to try online banking and discover for themselves the high level of security in place at most banks. Once those customers give online banking a try, perceptions of risk seem to decrease, reports indicate. Surprisingly, these same reports discovered that today’s security measures put in place by PC users and banks have many ID thieves targeting potential victims offline.

The following are a few tips to consider when choosing an Internet bank account:

1.The Annual Percentage Yield (APR) may be higher with Internet bank accounts, and therefore one of the most important attractions for those looking for a high yield. Conducting transactions online may save the bank money, and those savings may then be passed on to the online customer, most often in the form of higher savings rates.

2.Ability to access money. Online users need to consider what steps are involved in accessing their money in an online account.

3.Ability to link accounts. Users want the ability to link various accounts to one another, making it easy to move money seamlessly between online bank accounts.

4.What types of additional services are available? Potential users should be interested in not only banking online, but purchasing CDs, applying for a mortgage, and paying bills online.

5.Security. Users must confirm that their online bank is FDIC insured and that the security system can be trusted.

6.Ability to set up automatic savings account. There’s no reason not to save today with an online account that electronically deposits money into a savings or money market account.

Banking on Sharia Principles – Islamic Banking and the Financial Industry

There are an estimated 1.61 billion Muslims worldwide, making Islamic banking one of the fastest growing segments of the financial industry. Banks serving the Islamic population must comply with several very specific principles of Islamic law if they hope to retain existing customers and attract new ones. Banks must be ready with specialized products and services and they must put programs in place to train their personnel to support these products and services in order to exist in this competitive marketplace.

The basic principle of Islamic banking follows the laws of Sharia, known as Fiqh al-Muamalat (Islamic rules on transaction). The term “Islamic banking” is synonymous with “full-reserve banking” and “Sharia-compliant banking.” The most prominent feature of these laws is usury – the prohibition of paying or collecting interest on funds. The Islamic terminology for this is riba or ribaa. The Sharia also forbids engagement in investments that include financial unknowns such as buying and selling futures, as well as businesses that are haraam – dealing in products that are contrary to Islamic law and values such as alcohol, pork, gossip or pornography. These principles apply to all individuals, companies and governments.

Banks that comply with Islamic law are forbidden to charge interest or late payment fees, which is also considered a type of riba. To minimize risk, banks will often require a large down payment on goods and property, or insist upon large collateral. It is lawful for the Bank to charge a higher price for a good if payments are deferred or collected at a later date since it is considered a trade for goods rather than collecting interest. Sharia-complaint banking products include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus) and Ijarah (leasing). Another way that banks work within Islamic laws while trying to turn a profit is by buying an item that the customer wants, and then selling the item to the customer at a higher price.

The Mudharabah is a partnership between an entrepreneur and the bank. The bank is known as the rabal-maal and the entrepreneur as the mudarib. The bank provides all of the necessary capital to start a business and the entrepreneur does the work of managing the business. Profits are split at an agreed ratio until the initial funds of the rabal-maal are paid off. The rabal-maal is also compensated with additional funds based on the profits of the business in terms previously agreed on. In the event that the business folds, the rabal-maal shoulders the cost and the mudarib is not compensated.

Musharakah is similar to Mudharabah, in which an entrepreneur seeks funds for a business venture and pays the bank back with a ratio of profits. However, there are often more than two parties who contribute funds and become partners who can influence the business depending on the amount of money invested. The entrepreneur also contributes funds and shares in the risk. Any loss is proportional to the amount of capital invested in the business.

Wadiah is a system in which a person deposits money into a bank and receives a “gift” from the bank. The bank is the keeper of the funds and will refund the entire amount at the demand of the depositor. The bank rewards the amount of time the depositor keeps the money in the bank with a hibah or gift, which is not guaranteed. The hibah is similar to interest, but lawful according the Islamic law.

Murabaha governs the issuing of home loans or any other type of goods needed by a borrower. An Islamic bank does not lend money to a borrower to buy properties; rather, the bank will purchase the property at the borrower’s request at a freely disclosed price, and mark up the price for the borrower to pay back, therefore making a profit from the investment. The borrower is named on the title and allowed to utilize the property immediately and pays the bank back in installments.

Another type of loan is the Ijara, in which the bank buys the home or item and leases the property to the borrower while retaining ownership of the property. The borrower can either use the property for a pre-determined period of time, or pay off the purchase price and buy out the Bank to attain full ownership of the property.

There are occasionally controversies surrounding the interpretation of the riba, which certain scholars argue was meant to prevent petty money-lenders from abusing borrowers, rather than a modern bank charging a reasonable, agreed upon interest. The general consensus, however, is that any interest is a direct violation of the law of Sharia and therefore unethical.

While each Islamic bank has its own board which rules on ethical banking principals, Islamic banking organizations have been establishing standard regulations and policies. The Islamic Development Bank has been working on international standards, policies and procedures, and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Finance Service Board (IFSB), International Islamic Financial Market, Liquidity Management Center and International Islamic Rating Agency are in development to ensure accurate and fair banking practices.

Today, Islamic financial institutions exist worldwide, participating in the $180 billion/day industry. In 1975 there was one Islamic bank; today there are over 300 in more than 75 countries. Islamic banks have become more prevalent worldwide and can be found in high numbers in such countries as Indonesia, Pakistan, Bangladesh, Nigeria, Egypt, Turkey, Iran, Sudan, Algeria, Morocco, Iraq, Uzbekistan, Afghanistan, Malaysia, Saudi Arabia, Yemen, Syria and Kazakhstan. The total amount of deposits in Islamic institutions, balance sheets, assets under management and private wealth are growing at a rate of 25-40% annually.

Because oil prices and liquidity are expected to stay at the same levels throughout 2007, budget surpluses will remain high, pushing both public and private sectors to be involved with the Islamic market. Many Islamic countries are investing in large infrastructure projects, creating more than a trillion dollars in investments. There is also a huge potential customer base. According to Standard and Poor’s surveys, 20% of the customers in the Gulf Area and Southeast Asia would choose an Islamic banking product over a similar conventional product. There are significant middle-class urban and suburban populations that already use conventional banking, and therefore present ripe opportunities for Islamic banks. Most important to note, outside of the religious and political allure of Islamic banks, is that people are choosing their services for the safeties they offer. The evidence is clear: Islamic banking is big business and it is growing every day.

However, in order for Islamic banks to be competitive with conventional products and attractive to customers, Islamic financial products must meet the risk/reward profiles of investors and issuers while fulfilling the tenets of the Sharia and remaining sufficiently cost-effective. Additionally, Islamic banks must educate their personnel to understand the tenets of Islamic law that pertain to banking, and to train them to comply with Sharia as they serve their Islamic customer population

Opening an Offshore Bank Account – What Documents Are Required?

The documentation requested by offshore banks (bank reference letters, proof of source of funds etc) when opening accounts for the first time can sometimes appear overwhelming. For example, Panamanian banks, which I have particular experience with, can appear extremely bureaucratic. But don’t be perturbed. Once you understand the logic behind it, it’s really quite straightforward.

You can basically break down the requirements into just three things that the bank wants to document before opening your new account:

1. Who you are.
This is almost exclusively demonstrated with your passport. A passport is definitely the preferred identification document internationally. Most people who want to open accounts or invest offshore will be in possession of a valid passport. In certain cases, banks may accept other documents like government-issued ID cards or driver’s licences, but as a general rule you will need your passport.

This step is easiest if you are meeting your offshore bank in person, since you just need to show your passport and allow the banker to take a copy. It’s a little more complicated if you are opening the bank account by mail, as the copy will normally need to be certified as a true copy. Requirements vary by bank and country, but notaries are almost universally accepted for the purpose of certifying copies. Lawyers, consulates and embassies, and officers of international banks may also be accepted as certifiers. If you are meeting a consultant or corporate service provider, they can usually arrange to certify your passport copy too.

2. That you’re a good guy (or girl).
For this, the best document is a letter of reference from your existing bankers. A bank to bank reference letter just says something like “Mr and Mrs Smith have been clients of our bank for five years and have always maintained their accounts in good standing.” That’s it – no big deal! Some banks also refer to reference letters as “certificates.”

My clients are sometimes worried that their banks won’t issue references – but it is very unusual to find a bank that won’t issue a reference. Even if you don’t know any one individual who works in your bank, it’s a standard document that the back office should be able to produce based on their records.

British banks are some of the most difficult to deal with, but even they will, according to the guidelines of the British Bankers’ Association, issue exactly the reference you require if you ask in the right way. In the UK the reference must be requested by a hard copy letter in the post. Banks in other countries like USA, Canada, Australia, Europe etc will usually write bank reference letters on request by telephone, or even a message sent through internet banking.

You need to check with both banks (the new one and the old one) about any specific requirements. For example, whether the reference can be addressed “to whom it may concern” or if it has to be addressed to a specific bank.

Some banks will accept references from professionals like accountants, lawyers, corporate service providers and the like. This can be useful if a “to whom it may concern” reference is not an option, and you don’t want the old bank to know where you are opening the new account. Overall, you should not worry about references. They are not a problem. If you have any doubts, talk to a professional for specific case-by-case advice.

3. The source of funds
The source of funds means where the money is coming from. The rationale behind this, of course, is for bankers to be sure that they are not accepting money that is being laundered or was acquired irregularly. They are not usually interested in tax matters. Typically documents people present to show source of funds are contracts for sale of real estate, documents showing you inherited money or received it from a family trust, documents demonstrating that you own a business from where the funds are being withdrawn, or a contract of employment showing your regular income.

Of course, the documents presented must match the amounts you are depositing. A document showing you earn $5000 a month net would be fine if your average balance will be under $20,000. But then if a million suddenly arrives in the account, the bank will freak out! If you want to receive a million all you need to do is provide documents in advance, for example showing that you sold a million dollar house or that you sold out your business for cash… then the bank will roll out the red carpet for you.

So that’s it… those three things are all banks are really looking for. Some also want proof of your residential address. And obviously if you are opening a corporate account the bank will want to see documents linking you to the corporation – but it’s best to let your offshore corporate service provider take care of that for you.

Remember: banks are in business to open accounts and accept deposits. So if you are in doubt about what documents are needed, or if there’s something they ask for that you can’t supply, just talk to them openly and explain the problem. Most likely, they will be able to suggest a common sense, mutually-acceptable solution. If not, then take your business elsewhere.

So all in all, the documentation is not as difficult to handle as it sounds. If you use an intermediary it’s even easier – they can normally dedicate more time to you as an individual than banks can afford to on all but the largest accounts, but of course they do charge for this service. Often, with a short telephone call an intermediary can help you complete all required documentation and just provide you with the finished versions to sign.

Keeping Your Bank Account Safe From Fraud

Financial exploitation of seniors is an increasing problem (National Center on Elder Abuse), including cases where money is stolen directly from a senior’s bank account. The research company Gartner Inc. estimates that two million people in the United States have had money stolen from their bank accounts in the past year. The average amount lost was $1,200.

We often think that fraud is committed by people we don’t know who gain access to our personal information. While that can be true, for seniors the probability is greater that a family member or caregiver is the one who takes advantage of them financially. A survey by the Adult Protective Services agencies found that the most common financial abuser was a son or daughter, accounting for 33% of the reported cases of fiscal exploitation of seniors age 60 or over.

Red flags for financial abuse to seniors, as reported by the National Association for Professional Geriatric Care Managers, include:

  • Someone who is responsible for paying bills for the senior, but the bills have not been paid and there are not adequate resources to pay them;
  • Unexplained money missing from the senior’s accounts;
  • Family member/caregiver withdrawing large amounts of money from accounts;
  • Someone taking money under false pretenses;
  • Forgery;
  • Seniors who are forced to make property transfers or transfers that are completed through lies or deceit.

Fraudulent bank account activity occurs both through standard accounts and online, so a variety of safeguards are necessary to defend against fraud. Begin by confirming that your bank is financially sound and your bank deposits are fully covered by the FDIC (Federal Deposit Insurance Corporation). The FDIC is an independent agency of the federal government that was set up in the 1930s to preserve and promote public confidence in the U.S. financial system by insuring deposits in banks. All reputable banks will have FDIC coverage.

Once you find a bank you are comfortable with, a bank officer can help you determine a good plan for your specific circumstances and help put safety measures in place. There are many different precautions available to ensure the safety of a senior’s bank account.

Standard bank accounts rely heavily on a paper trail, such as checks, deposit slips, and bank account statements. With this much information readily available through the mail and filed within the home, seniors need to create a secure method for receiving and storing bank account documents.

To protect standard bank accounts:

  • Read statements as soon as you receive them. Review each withdrawal and deposit for accuracy. Report any inaccuracies to your bank immediately.
  • Never leave bank statements or checkbooks in open view around the house, especially if there is an outside caregiver coming into the home.
  • Take precautions with your ATM card. Never lend it to someone or give another person your password or personal identification number (PIN). When using your ATM card, shield your transactions from others around you who may be trying to watch what you are doing.
  • Shred old and unused checks and old bank account statements. Check with your bank or accountant regarding how long to keep bank records. Store statements in a secure location and away from visitors to the home.
  • Never give anyone a signed blank check.
  • Always initiate contact with your bank yourself. If you receive a phone call from someone saying they are with your bank, hang up and call the bank back.
  • If necessary, get a joint checking account so two signatures are required for withdrawals.
  • Consider setting up a custodial account. The bank collects the senior’s income and pays the senior’s bills. If the senior needs money, the bank will issue a check or debit card so the senior has access to cash.

Online banking has become a common and accepted way to manage bank accounts. It gives consumers immediate access to bank information and the ability to check that all transactions are accurate. However, fraud can occur online as well.

Precautions to take for online banking include:

  • Log onto your account regularly to check accuracy of transactions. Report any inaccuracies to your bank immediately.
  • Never do online banking in a public place such as the library or at a coffee shop. Others may be able to access your information.
  • Always initiate contact with your bank yourself. If you receive an email from your bank requesting that you log in or provide personal information, do not.
  • Check for secure connections. One way to do this is to see if the bank’s site starts with “https.” The “s” means that the URL address is on a secure server.
  • Change your password regularly. A few times a year is recommended.
  • Install software barriers such as firewalls, spyware blocking, and anti-virus.

If multiple people are involved in the care of a loved one, a plan for managing the money and putting safeguards in place is even more important. If each person providing care for the senior has access to the bank account for his or her part of the care, spotting fraud in the account would be challenging. If possible, designate one person to oversee the account, pay bills and provide money or reimbursements to the people involved in the senior’s care. That way, all money goes through one place and can be tracked easily.

Consistently monitor bank accounts and immediately report any suspicious activity to your financial institution for their help in remedying the situation. A good bank will respond quickly to any questionable transactions and help you recover lost funds. Protecting your finances by setting up a sound bank account and banking system for yourself or a loved one is a proven way to avoid fraud by family members, caregivers, or strangers.

A Guide to a Banking Career

With new banks coming up in the Indian market every year, the banking sector has become the thriving career option. The Indian banking sector is expected to record 25% growth in the next few years. Moreover, with the entry of international banks, the banking sector is ready to produce abundant bank jobs.

Some of the common bank positions available in the sector

1) Tellers
2) Auditors
3) Cashier
4) Brokers
5) Probationary Officer
6) Clerks
7) Loan Officers

If you also want to build a career in the banking sector, the below comprehensive guide would give you a steady start.

Requisite professional education & qualifications

To get into the bachelor program, you need to secure good percentage in Class XII. In India, both private and government colleges are offering banking programs to equip students with important concepts, tools and techniques. It is strongly advised that you should start preparing for the CAT (Common Aptitude Test) right from the college onwards so that you are fully prepared to clear the entrance examinations because then only you will be able to get into prestigious b-schools.

Broadly, the banking program offers specialization in below areas-

1) Micro Economics
2) Equity Debt
3) Cost Accounting
4) Banking Communication
5) Corporate Laws
6) Taxation

Here it is imperative to note that bank jobs are open for students from all streams, be it commerce, science or arts. However, to build a great career in banking, you should be good in mathematics.

Top banking colleges in India-

1) Delhi School of Economics
2) The Indian Institute of Banking & Finance (Mumbai)
3) National Institute of Bank Management (Pune)
4) Maharaja Sayajirao University of Baroda
5) Indira Gandhi National Open University (Delhi)

Where to look for bank jobs?

In India, job opportunities for graduates and post-graduates are excellent in the banking sector. Once you complete your banking course, you will immediately get a job as a banking sales officer. Nowadays, students are showing keen interest towards probationary officer (PO) jobs also. Students interested in PO jobs have to appear for the all-India entrance test. You can find such bank jobs both in private and government sectors. Moreover, positions in loan, insurance and back office operations are available in the market. If you are from a top college like IIMs, you can expect to get an employment in foreign companies like Fidelity, JP Morgan Chase, etc. Top-notch banks like Barclay’s, Royal Bank of Scotland, American Express, Standard Chartered and other financial institutions need thousands of professionals every year for their divergent banking operations.

Future of Indian banking sector

In the recent years, the Indian banking sector has recorded an extensive growth. According to the report of the Boston Consulting Group, Federation of Indian Chambers of Commerce and Industry and Indian Banks’ Association (IBA), the banking industry of India would become the third largest in the world by 2025. Even the Ethiopian government has requested the State Bank of India (SBI) to open a representative office in its nation. All these new initiatives and development would trigger the job market and there would be a demand for employees in sales & marketing divisions. Due to the mobile and internet banking, there is a high demand of IT professionals in the banking sector also.

Looking for the Right Bank

There are various factors you need to consider when choosing a bank to handle your finances. Firstly, it is important to note that banks are profit organizations and their primary goal is to maximize profits for their shareholders. This means that all their programs, products and services are geared to making the most profits from your financial transactions. Therefore, on your side, you must select the bank that gives you the most value for the services that they give you. Keenly review the terms and conditions, their fees and their products to get any hidden costs before settling for a bank. There are different types of banks and each type has its advantages and disadvantages.

Traditional Banks

Traditional banks provide us with a convenient way of accessing our funds and making payments for bills and other payments. They have a large network of ATMs that make it easy to withdraw our funds and make deposits whenever we need to. However, banks are known to have excessive and hidden fees that eat into our finances. It is therefore important that you shop for a bank that charges less fees and still gives you quality services.

Online Banks

Unlike the traditional banks, online banks have reduced fees and they give a higher interest rate on savings. This makes the banks ideal for a savings account. Opening the account and operating the account is easy since you can open and transact from the comfort of your personal computer. Some online banks will even reimburse you ATM fees since they do not have their own ATMs. However, the pitfall of these bank account types is that it is hard to make deposits.

One way of capitalizing from both types of banks is to have a checking account with a regular bank to handle all your transactions with convenience. However, ensure that you get a low-fee bank to reduce on your banking expenses. You can then have an online account linked to your checking account to maintain your savings so as to gain from the high interest rates.

Credit Unions

Credit unions are banks that are run as non profit organizations. The banks are owned by the members. Since they are not driven by the profit agenda, they have a much lower fee structure. However, many of these credit unions have fewer ATMs and their accessibility are not as convenient as those of traditional banks. When considering whether to open an account in a credit union, you should check for the services they offer for supporting small businesses. Some credit unions do not offer facilities and services for small businesses. You should also check whether they have advanced online banking that provides online-bill-pay services.

Points and Reward System

Most major banks offer a points and reward system on their credit cards. Reward points are accumulated any time you spend using the credit card. When considering whether to join such a scheme, you should actually consider whether you will ever use such points and what it takes to redeem such reward points. There is no need of applying for the reward system if you will never get to use the points. You should also check whether such a system is free or you are charged an ongoing cost once you join the system.