CLASS XII

STUDY MATERAIL

OFFICE PROCEDURES AND PRACTICES

1
 ACKNOWLEDGEMENTS

Advisors:

 Smt. Anita Karwal, IAS, Chairperson, CBSE.

Content Developed by:

 Mrs. Sunita Chugh, Lecturer (SP-English), MeeraBai Institute of

Technology, New Delhi
 Mrs. Ritu Veer Vijra, Lecturer in Stenography and Computer
Application, Govt. Model Senior Secondary School, Sector 23 A,
Chandigarh (Convener)
 Dr. R.C.Bhatia, Ret. Assistant Professor of Delhi University, New Delhi
 Mr. D.P. Bhatia, Former Instructor OMSP, Delhi of University, New
Delhi
 Mr. Sudershan Kumar, Retired Lecturer, OMSP Delhi of University,
New Delhi

2
 PREFACE

Today, a Private Secretary has acquired the status of Manager’s Manager and it has
become important for her/him to use all office methods/practices and modern
technology with a global perspective. Due to change in the profile of secretarial
work, the competency level expected from a professional secretary to manage an
office effectively and efficiently has gone up drastically. In addition to routine clerical
jobs, today a professional secretary is also responsible for wide range of
administrative activities performed in an office.
The study material presented in the book covers contents which relate to changing
profile of a modern professional secretary so that students gain not only knowledge
but also understanding and application of different secretarial functions.

An in-depth understanding of different secretarial functions covered in the book will

definitely prove to be a useful resource in building confidence among those students
who wish to enter into a world of administrative work.
The expert committee look forward for any corrections, inclusions and suggestions to
improve the contents of the subject material.

3
Executive ability is deciding quickly and getting somebody else to do the work.” John G.
Pollard

Unit-I

INTRODUCTION TO SECRETARIAL PRACTICE

Introduction

A Secretary or Personal Assistant is the backbone of an organisation, whose work requires

a variety of project management, communication and organizational skills. The work profile
of a Secretary of today is not the same as was in decades past. The job responsibilities have
evolved to acquire much more advanced skill set such as mastering Microsoft Office
applications, drafting correspondence, preparing presentations, managing budgets,
maintaining websites, preparing expense reports etc. Secretaries might also manage all the
administrative details of running a high-level conference or meeting and be responsible for
arranging the catering for a lunch meeting. Often executives will ask their assistant to take
the minutes at meetings and prepare meeting documents for review. In addition, a secretary
may be responsible for keeping all of the official records of a company or organization.
Hence, Secretary is an assistant to an executive, possessing mastery of office skills who is
supposed to have an ability to assume responsibility without direct supervision, the one who
displays initiative, exercises judgement and makes decision within the scope of his/her
authority. In other words, a Secretary is an assistant who performs routine and special duties
on behalf of an Executive (Boss) in an office.

Objectives
At the end of this lesson you will be able to:
 know the meaning of the term Personal Assistant/Private Secretary
 understand different types of secretaries
 list out the nature and duties of Secretary
 identify the qualifications and personal qualities of a Secretary
 understand what broadly includes in personality development
 manage time and stress in an organisation

4
1.1 MEANING, IMPORTANCE, TYPES AND DUTIES

Meaning

The word secretary is derived from the Latin word “Secretarius” which means “a confidential
person”. As the word conveys an idea of secrecy, the title of Secretary is generally used to
apply to an official who conducts confidential correspondence and performs such works.
However, in today‟s world, the duties of a Secretary have become so varied that a modern
secretary is no longer just restricted to performing confidential work. A Secretary is, also
sometimes called Personal Assistant, Executive Assistant or Professional Secretary Etc. and
considered to work for CEO, Chairman, Managing Director, Chief Manager, departmental
heads and so on.

Today, the profile of a Secretary has completely changed. A Secretary has to be responsible
person to whom an executive can delegate his/her routine duties, entrust confidential matters
with full confidence to act on his/her behalf whenever necessary.

A Secretary is appointed to assist executives in all types of organization; whether

commercial, manufacturing, industrial, educational or any other type. However, the functions
and duties of a Secretary vary according to the nature and size of an organization. Basically,
every Secretary has to perform certain routine duties. In an organization, generally, a
Personal Assistant is a junior official who has to perform the duties of a front Office Assistant
or a Stenographer, whereas a Private Secretary is usually attached to a Top Executive who
has to perform such duties which require higher level of secretarial skills. He/She is
considered as a link between the executive and the junior officials to facilitate
implementation of the decisions taken. Now-a-days, every Private Secretary is supposed to

5
be administrative specialist and well trained member of an office team.

Importance of a Secretary

A Secretary is considered to be the backbone of an organization and plays an important

indispensable part in the conduct of business in Government, professional, commercial
and industrial organizations of all kinds. The secretary attends to the time-consuming
details of the work of the executive and helps him/her to do the job in a better way. It is
the secretary who takes care of office mail, prepares the drafts, answers the phone calls,
do record management, makes tour programmes, operates bank transactions, arranges
meetings and prepares minutes of meeting.

It is well said that the success of an executive mainly depends on the competence of
his/her secretary. There is always an able secretary behind an able executive. A secretary
not only does what he/she is told to do but also does whatever is required for the proper
discharge of the assigned tasks. The secretary‟s job is not limited to carrying out the
instructions but his/her responsibility is also of advising the executive on various
administrative matters whenever required. At times, a secretary serves as the ears, eyes,
memory and hands of the Executive.

Types of Secretaries
In general, the word „Secretary‟ is used according to the nature of duties assigned to the
official in an organization. The different type of secretaries are:
a) Private Secretary (or Professional Secretary)
b) Secretary to a Club or an Association
c) Secretary appointed by Govt. (Central and State Govt.)
d) Company Secretary

6
Let us discuss the profile of each type of Secretary.
a) Private Secretary
Private Secretary (PS) is an administrative associate or assistant who performs various
administrative duties in an office. A Private Secretary is an official to whom the
executive delegates most of his/her routine duties. These tasks usually include taking
dictation and typing, handling correspondence, attending telephone and visitors, making
arrangements for meetings, keeping important and confidential records etc. It helps the
executive to discharge managerial duties efficiently and effectively. Thus, a private
secretary is supposed to be the person who should be very well organized and possess
excellent communication skills both oral and written to perform routine multiple tasks. A
private secretary also may be called as Personal Secretary or Personal Assistant (PA).
He/she is mostly employed by business executives, politicians, professionals and other
important persons who need secretarial help to attend to their routine repetitive works so
that they could concentrate on those jobs which require higher level of managerial and
decision making skills.

b) Secretary to a Club or Association

The members of Managing Committee select unanimously and appoint a Secretary to

perform various administrative tasks to run the office of a Sports Club, Cultural Club or an
Association (Trade Union, Cooperative Society etc). The appointed Secretary performs the
tasks strictly under the guidance, supervision and control of the Managing Committee. He/she
is responsible for correspondence, maintenance of records, registration of members,
arrangement of social gatherings and meetings, collection of subscription etc. He/she issues
notices and agenda of meetings, writes minutes, releases press notes and acts as a Liaison
Officer of the Club/Association.

c) Secretary Appointed by Govt.

In India, every Ministry is headed by a Minister. Though the Minister is the head of a
Ministry, a Secretary is appointed through Indian Administrative Service, who acts as an
executive head of the ministry. He/She is a very senior official of the government. Here, the
main role of the Secretary is to diligently assist and advise the Minister on all matters of

7
policy and administration within his ministry or department. The Secretary is assisted by
Joint, Deputy and Under Secretaries.

d) Company Secretary

Every incorporated company must have a Company Secretary who performs a variety of
tasks which are crucial for smooth running of the company. In other words, it is the duty of
the Company Secretary to ensure that in the company, all legal/statutory requirements are
fulfilled. Such requirements include allotment of shares, transfer of shares and appointments,
filing of the annual returns and accounts etc. as per the Companies Act. Briefly, a Company
Secretary has to-

 ensure that the company complies with all relevant statutory and regulatory
requirements;
 carry out the responsibility that business of the company is conducted in accordance
with its objects as contained in its memorandum of association. Also, it is to be
ensured that affairs of the company are managed in accordance with articles of
association and the provisions of the Companies Law.
 prepare the agenda in consultation with the Chairman and the other documents for all
the meetings of the board of directors.
 take care of all matters concerned with the allotment of shares, and issuance of share
certificates including maintenance of statutory Share Register and conducting the
appropriate activities connected with share transfers.

Basically, a Company Secretary ensures compliance of the provisions of Companies Law and
other statutes and bye-laws of the company.

1.2 CHANGING PROFILE OF A SECRETARY

In view of global era and development in IT skills, work profile of secretary has entirely
changed. Earlier, even the managers at junior level were also taking secretarial help in order
to discharge their duties. But since the advent of computers, usually the junior and, to some
extent, middle level managers are performing most of their routine administrative jobs like
preparing letters, sending of mails, record management, etc. on their own. However, top
management level and senior executives do have to delegate their routine administrative tasks
to their private secretary. With this change in scenario, it is evident that the secretarial work

8
 requires lots of expertise and skills as usually every Private Secretary has to directly report to
senior executives in an organization.

It is generally noted that no two private secretaries perform exactly the same work.
Therefore, one cannot lay down an arbitrary list of duties. A PA/PS to a junior executive
has to work as a Front Office Assistant, Stenographer, Multi-Tasking Assistant etc. while
a PA/PS to the senior executive has to collect information on different topics, draft
reports and speeches, write down the proceedings of the meetings/seminars and give
advice to the executive on certain administrative matters. That is why a definite list of
duties of a PA/PS cannot be laid down.

Usually, the duties performed by a Private Secretary depends on the–

 skills, personality and intelligence of a secretary
 size of an organization where the secretary is working.
 position of the executive with whom the secretary is working.
 willingness of the executive to delegate authority and the secretary‟s willingness
to assume responsibility
The duties of a Private Secretary may be divided in two types:
a) Routine Office Duties
b) Miscellaneous Duties
The above duties are discussed in detail below.
Routine Office Duties
i) Take dictation and transcribe the same on computer.
ii) Tabulate data, make simple calculations etc.
iii) Do correspondence with other organizations on the instructions of the boss
iv) Take initiative for briefing the information to the executive.
v) Handle inward and outward physical mail/e mail.
vi) Maintain records
vii) Operate office machines and do their maintenance.
viii) Maintain appointment diary, memory aids, etc.
ix) Locate information from various sources including internet

9
 x) Arranging and planning tour programme of the executive
xi) Organizing and conducting Meetings (Preparation and issue of notice and agenda,
making
seating and refreshment arrangements, keeping ready all the documents which may
be
required during the meeting, keeping record of attendance of the members,
recording
minutes, typing minutes and communicating the decisions and resolutions to the
members
etc.)
xii) Attending to liaison duties like telephone calls, visitors, handling enquiries

Everyday some new may jobs come up and they are to be managed according to the
priority. The best way to finalize priorities is to consult with the executive. For example,
connecting telephone calls can be given priority in the forenoon. This will be applicable
in taking down dictation also. Dictation must be transcribed on the same day as some
10
instructions pertaining to dictations might be forgotten which remain fresh during the
day. The most important thing is to ensure that pre-determined deadlines which are time
bound are adhered to.
Private Secretary has to handle the visitors who come to see the boss. An efficient PA/PS
should be familiar with the art of meeting people and receiving them. The manner of
dealing with them reflects the image of your executive and organization. .
Miscellaneous duties
Private Secretary has to perform some miscellaneous duties, like to:
 prepare Power Point Presentations on various topics
 work as Data Entry Operator
 present the concise information when the officer has to sit for an interview
 draft the reports and speeches for meetings and workshops, etc.
 supervise the junior employees and their training, etc.
 act as a liaison officer between the employer and the employees.
 advise the executive on purchase of office machine/equipment and stationery,
etc.
In order to perform the secretarial duties the most efficiently and effectively, it is
necessary for a Private Secretary to be competent in IT and secretarial skills. Today, an
efficient Private Secretary is a combination of secretarial plus managerial skills, as she
has to often report directly to senior executives and take care of multiple administrative
responsibilities.

1.3 QUALIFICATIONS AND PERSONAL QUALITIES OF A SECRETARY

With increasing complexities of administration and competition, a Secretary has become

an indispensable person. Much of secretarial work is carried on behind the scene and is
not noticed at times. The credit for his/her work generally goes to the executive with
whom he/she is attached.

To perform the secretarial duties with confidence and efficiency, a private secretary
requires many qualities and skills as well as a wide general education. These
qualifications and qualities are discussed below.

11
a) Academic Qualification

The education develops the mind of a person and enables a person to appreciate better the
total environment. A senior level secretary is usually a graduate. However, for the post of
a junior secretary, XII class qualification is also adequate. One holding a junior
secretarial position and aspiring to reach higher in the cadre do effort to acquire higher
qualification by joining correspondence courses along with the job.
It is generally said that, the more the education, the greater is the awareness and better
power of understanding, grasping and expression.
b) Vocational Course of Secretarial Practice or Office Management
A course in Secretarial Practice is a very useful attribute for a Private Secretary.
Opportunities for high level secretarial jobs and promotion comes often to those who
have broad general education with a vocational course in Secretarial Practice or Office
Management. The course includes mastery of various subjects viz. stenography,
computer operation, office procedure, business communication, etc.
c) Mastery of IT and Secretarial Skills
A Private Secretary must have a complete mastery of some basic skills which are the
essential tools of his/her trade. Complete knowledge of word processing, preparation of
spreadsheets, using internet, locating information from various sources, sending e mails
etc. is a must. Besides, he/she must be able to take dictation rapidly and transcribe the
same accurately. He/she must be fast and accurate on the computer. The letters and other
material typed by them should always be neat and well-arranged along with flair to
present error-free work for signature, except in those cases where only a rough draft is
called for.
Other secretarial skills include mastery on record management, reprography, ability to
write correctly and to the point, to answer telephone calls, to deal with visitors, to meet
people and talk with them pleasantly.
To be able to assist top executives, locating information on a variety of topics for him and
dealing with a variety of people coming into the office, one should have knowledge of the
recent development in political, economic and social fields and have an awareness of
national and international events. It can be achieved by regular reading newspaper,
periodicals, journals and magazines.

12
d) Good Communication Skills
A large part of secretary‟s work consists of correspondence and preparation of notices,
agenda, minutes, reports, speeches etc. Therefore, to be a successful secretary, one should
have a good command over the oral and written communication skills. The business in a
majority of offices in India, is carried on in English. In this global era, English also serve as
a language of commercial contact between different countries. Therefore, a secretary should
have sound knowledge of English. Skill in shorthand is of no use without proficiency in
language.
A secretary should preferably have the knowledge of the regional language too. If the
organization has dealings with foreign institutions, it will be an advantage to have a working
knowledge of one or more foreign languages also.

Personal Qualities of a Secretary

A secretary should possess a variety of soft skills to be successful and develop calm, positive
personality. Some of the important personal qualities relevant for the job a private secretary
are discussed below:

 Adaptability
If Private Secretary has got the quality of adaptability, adjustment under all the situations in
office becomes easy and less straining. It is important that a private secretary should be
adaptable to all kinds of people, situations and problems. Sometimes, it may happen that one
executive is transferred and the new executive takes over. The new executive might not be
having the same nature or temperament. Also, there may be heavy work at one time due to
certain deadlines but may not be much work at any other time. Thus, a secretary should
inculcate the habit of adjusting with different types of persons/situations.

 Cooperative Attitude

In an organization, cooperativeness means assisting every member with a courteous and

helpful attitude including exercising self-control at times of extra pressure. It is teamwork
that counts in an organization. A secretary should cooperate with every member of the
organization, from the highest to the lowest in rank. Cooperativeness enhances the respect
of the secretary. The urgency of work may require, sometimes, to sit late in the office or to

13
attend office during holidays. If the exigencies of work require it, one should try to
understand the situation with a cooperative attitude.

 Courtesy

A secretary should show proper consideration for all members of the organization as well as
to outside callers. One must avoid embarrassing anyone and making sarcastic comments.
Courtesy may be shown in greeting each member and visitor pleasantly, offering a seat, etc.
and with use of words such as „Please‟ or „Thank you‟, whenever required.

 Loyalty

To be loyal means that faithful to the employer and always helpful to him/her. A secretary
should be dedicated to the job and do assigned work honestly and sincerely. Loyalty is
critical quality for holding a secretarial position. In order to be loyal to your executive and to
the company or firm or institution for which you work, you must be familiar with the
executive‟s goals and the organization‟s overall objectives and work at all times towards the
goals.

 Punctuality

Punctuality means available to the executive for work at the desired time and also to finish
the assigned job at the proper time. This simple but significant quality is very essential for a
secretary. One must not be a „Late Starter‟ or „Early Stopper‟. It is very annoying for an
executive to find his/her secretary absent when something requiring immediate attention
comes up suddenly.

 Tactfulness
Tact enables one to act in a particular fashion under particular situations. It is the personal
skill in saying or doing what is required by the circumstances, the ability to handle a difficult
situation in a right and positive manner. It has been truly called the “Fine art of avoiding
offence”.

A secretary is called upon to exercise tact in dealing with his/her employer, colleagues,
visitors, etc. Judgement and discrimination are essential to become tactful.

 Pleasing Voice
A secretary should have a low but confident well-controlled and pleasing voice. A
pleasant, clear voice is attractive and loud while demanding voice is unattractive. It has
also to be understood that a very low and retiring voice makes communication difficult.

 Personality and Poise

14
Personality is usually linked to what you are, what you do and how you do it. Personality
makes one person different from another. It is not important what kind of features you
have, but rather the expression on those features. Good personality creates a positive
impact on other people.
Poise is getting along with people well without superior or inferior feeling. It comes from
knowing one‟s abilities as well as limitations. Poise enables a secretary to be at ease and
also to make others feel at ease.
It is rightly said that knowing that you are well-groomed will give you confidence and
confidence gives you poise.

 Good Interpersonal Skills

Interpersonal skills are the skills which help a person to interact with others properly. In
an organizational setting, it is the ability to get along well with other members; whether
senior or junior. It is important for a Secretary to possess excellent interpersonal skills
to facilitate effective working relationships.

e) Knowledge of the Profession or Business of the Employer

Besides the above, one should be thoroughly familiar with the objectives and
management of the firm or organization for which one is working. In other words, one
should know the full range of activities of the organization, strong personalities, key
figures in any particular field of activity, duties and responsibilities of the executive with
whom one is working and the correlation between his performance goals and the overall
objectives of the organization. The more one knows about the organization, the better job
one will be able to do.

1.4 PERSONALITY DEVELOPMENT

Personality has different meanings for different people. Generally, it can be defined as a
set of characteristics and tendencies that determines your behaviour with your thoughts,
feelings and actions. We all are born unique and we all handle our lives in a different
way. But, ideally, we must strive to boost our enthusiasm so that we evolve ourselves
always in motivated and high energy state. It broadly includes:
a) Good Appearance

15
Physical appearance reflects the way you look from outside. A secretary must be well-
groomed as good appearance is a great asset. In other words, a secretary should be well-
dressed, neat and clean at all times. A well-groomed person looks alert and refreshing.
First impression lasts long. If you look good outside, you also feel good and confident
inside.
b) Etiquettes and Manners
In an organization, etiquettes and manners include social behaviour which we owe to our
colleagues. The way you talk, the language you use and the tone with which things said,
do reflect your behaviour. A display of good manners is an essential requirement for
success in society too.
c) Communication and Confidence
Communication and confidence are the direct expression of one‟s personality. It is
thereby essential that one masters the art of communication so that the confidence can be
shown. There are certain aspects of communication which should be looked into
properly. While communicating verbally, make sure that you do not criticize others. You
should be a good and patient listener and see the other person‟s point of view also.

1.5 TIME MANAGEMENT – MEANING AND IMPORTANCE

Time management means to gain a feeling of control over how your time is spent. In
other words, management of time is systematic planning of available time and setting
right priorities. Usually, a PA/PS has to do more work he/she can accomplish in any

16
given time. Time is a very essential component of life and the management of time is
essential both at work and outside.

Bad Management of Time (Time Wasters)

 Not setting deadlines
 Slow reading
 An untidy desk
 Inability to make decisions
 Failing to plan and budget your time
 Not keeping diaries, not making action or „to do‟ lists, etc.
 Improper delegation of work
 Accumulating routine work such as filing, mailing, etc.
Better Management of Time (Time Savers)
 Setting targets and deadlines
 Planning your work
 Noting the priority items and attending to them first
 Keeping frequently used information or details ready
 Developing proper routine
 Being systematic and tidy
 Improving reading speed and accuracy
 Avoiding mood swings
 Avoiding personal and unnecessary telephone calls

17
1.6 STRESS MANAGEMENT
Stress is a dynamic condition which results in tension due to demanding situations. Often,
there is anxiety in the mind of an individual as outcome of the situation is perceived to be
both uncertain and important.
Stress management means ways and techniques which help in controlling a person's
levels of stress. It is important to manage stress to improve everyday functioning and
keeping good health. One of the most important ways to manage stress is by prioritizing
the various tasks according to importance/urgency level.

Reasons for Stress in an organization may be:

 Task demands
 Role conflicts
 Organizational structures
 Leadership
 Individual factors (health, relationship, family etc.)

Symptoms of stress may be physiological, psychological or behavioural.

Physiological Symptoms:
 Health problems
 Increased blood pressure, constant headaches

Psychological Symptoms:
 Tension

18
 Anxiety
 Irritability
 Boredom

Behavioural Symptoms:
 Irregularity or absence
 Changes in eating habits
 Increased smoking and intake of alcohol
 Sleep disorders

The stress may be managed with the following ways:

 Express your feelings about the situation to the concerned person or another
trustworthy person. Any grievances or problems should be discussed and sorted out.
 Proper time management is very important. Prioritize your tasks according to
importance/ urgency.
 Prayer and meditation should be done regularly. It helps to improve concentration.

 Eat healthy food. Adopt healthy and regular eating habits. Do not skip any meal
during work.
 Cultivate a good hobby.
 Spend some time in recreation. Recreation could be a part of your daily routine.
 Take a vacation. Vacations and holidays generally charge you up and remove all the
fatigues of work.

19
 Listen to good music.
 Have proper sleep. Sleep for 7-8 hours daily.

CHECK YOUR PROGRESS

1. State whether the following statements are true or false:

a) The Secretary should be a tactful person with whomsoever the/she comes in
contact.
b) The job of the Secretary is not only to assist the executive but also to handle
meetings, prepare presentations.
c) The executives do not confide in the Secretary and do not entrust her/him the
secret assignments.
d) A Secretary also looks after the private and social jobs of the executive.
e) Loyalty to the executive is part of a Secretary‟s job.
f) It is not the duty of the Secretary to supervise the work of junior employees.
g) A Secretary performs the duty of writing brief notes on the verbal instructions
of the executive.
h) We should not pay any attention to what we wear in the office.

2. Fill in the blanks:

a) The word Secretary is derived from Latin word__________________
b) Tact has been called the ______________________
c) Health problems and Increased blood pressure, constant headaches are the
symptoms of ___________.
d) The personality of the secretary can be broadly categorized into
____________________.
e) Secretarial skills include _______________________.
f) Preparing T.A. bills of the executive is the responsibility of
__________________.
g) After the meeting is held ___________________ are prepared by a Secretary.
h) _____________ reflects on the way you look from outside.
i) _____________ is a social behaviour which we owe to our society.

20
 3. Answer the following questions:

1) What do you mean by the word „Secretary‟?

2) Explain the role of a Secretary in any organisation.
3) List out various duties of a Private Secretary.
4) Discuss the various types of secretaries along with brief job profile of each.
5) Enlist various qualifications and skills which an ideal secretary is required to possess.
6) Describe the various personal traits of a Secretary.
7) Differentiate between Time and Stress Management
8) What do you mean by Stress in an office? What are its consequences?
9) How can you manage Stress?

------------------------

21
The age of technology has both revived the use of writing and provided ever more
reasons for its spiritual solace. E mails are letters, after all, more lasting than phone
calls, even if many of them r 2 cursory 4 u. - Anna Quindlen

Unit-II

HANDLING THE MAIL

INTRODUCTION

It is essential for all business houses to initiate and maintain contacts with their customers,

government organizations, financial institutions, investors, employees etc. for their survival

and growth. As written communication is the most formal and reliable form of

communication, we write e-mail, letters, memos, circulars, endorsements, reports etc.

regularly to exchange information among business associates. Sending and receiving of

written communication of various types is termed as Mail.

Handling of Mail is one of the important functions of an office. It is important that every

Professional Secretary should have sound knowledge of the procedure of handling of mail

which is to be followed in the organization. Efficient and effective handling of mail helps a

company to boost its business and have better image of the organization. On the other hand,

inefficient and ineffective mailing system may cause delay and loss of business.

Objectives
At the end of this lesson you will be able to:
 define mail

 know different types of mail

 explain the two types of handling of mail : electronic and physical

 handle the procedure of handling incoming and outgoing mail

 list out frequently used postal services in an organization

22
  explain the importance of speed post and courier services

2.1 MEANING AND TYPES OF MAIL

Mail is a form of written communication sent out or received in an organization with the help

of an agency. The agencies which may help in transmission of mail are:

 Internet (E-mail)

 Fax Machine

 Post Office

 Special Messenger

 Courier etc.

In big organizations, a separate Mailing Department is set up to handle various mailing

operations. However, in small organizations, a Professional Secretary has to take care of

handling mail in addition to other secretarial functions. A Private Secretary or an Office

Manager generally plans mail handling work in an organization. Systematic planning of mail

handling ensures that mailing operations are carried out efficiently and effectively without

delay. It also helps to ensure that -

a) every mail received or generated in the organization gets due attention.

b) there are no last minute hassles.

c) judicious use of Mail Room Equipment.

d) selection of proper agency for transmission of mail.

e) proper recording of mail.

Types of Mail

There are three kinds of mail received or sent out from an organization. They include:

23
 a) Incoming (Inward) Mail: Any type of written communication coming to an

organization is termed as Incoming mail.

b) Outgoing (Outward) Mail: Written communication sent out or dispatched from an

organization is called Outgoing Mail.

c) Inter-Department Mail: The mail received or sent from one department to another

department within the same organization is Inter-Departmental Mail.

In business houses, there is a defined procedure for handling of incoming and outgoing mail.

Inter-Departmental Mail is handled by the executives according to their requirements and

convenience.

2.2 HANDLING OF INCOMING MAIL

Effective and efficient handling of all incoming and outgoing physical mail reflects efficiency

of a Secretary. Post Office, Special Messenger and Courier Companies help in physical

delivery of mail from one place to another. Post Office provides various facilities regarding

domestic and international carriage of mail. Local mail of urgent nature may be sent with the

help of a Special Messenger. Sending mail by this mode ensures quick delivery of mail along

with its acknowledgement. Now-a-days, Courier companies are also playing a vital role in

delivery of mail due to various additional services they are offering to their clients. This has

also become a popular mode of delivery of mail, whether local or international. However,

today, the most frequent method of sending and receiving mail is electronic mail (e mail).

In every organization, there are defined steps for physical handling of inward mail so that the

mail could reach the concerned official without delay. These steps vary depending on the size

and nature of the organization. The following procedure is usually followed in handling of

incoming mail if the mail is received manually/physically.

24
 1. Receiving Mail

Mail is delivered once or twice a day by a Postman in an organization while mail from

special messengers or courier companies keep pouring throughout the day. A Junior

Secretary or Mailing Clerk is entrusted with the task of receiving the mail and providing

acknowledgement of the receipt, wherever necessary. In case the mail is to be received from

Post Box or Post Bag, a person is deputed to collect the same from the Post Office once or

twice a day.

2. Sorting Mail

After receiving the mail, it is necessary to sort the received mail so that mail marked as

Private, Personal, Secret, Confidential etc. are not opened. This type of mail is directly

delivered to the person concerned unopened. Important mail viz. court summons, tenders,

confidential reports etc. is sorted out from the routine mail to accord priority in opening.

Routine mail consisting of sales letters, catalogues, product literature etc. are opened at last.

Trays or open racks with separate compartments are usually available in Mailing Department

in which segregated mail is kept while sorting. Trays or racks used for sorting mail have the

name of the departments clearly marked on them.

3. Opening Mail

A paper knife is generally used for opening envelopes. In case of large mail, a Letter

Opening Machine is helpful as it improves efficiency and opens the mail neatly. While

opening an envelope, it should be ensured that:

a) contents of the envelope are not damaged.

b) before disposing off the envelope, nothing is left inside the envelope.

c) enclosures are fastened if they are not properly tagged.

25
Sometimes, it is necessary to preserve the envelope received along with the mail. In such

cases, the same is attached along with the letter.

4. Examining Contents and Stamping Mail

After opening the mail, a Secretary should briefly examine its contents. Examining of

contents is done to again sort out the mail which needs immediate action so as to accord

priority. Sometimes, there are certain letters which require time-bound reply and are to be

dealt on urgent basis.

Examining of contents of mail also help to know if any of the enclosures of the letter are

missing. In such cases, the facts are recorded on the letter.

All the mail received is date-stamped to authenticate receiving of the same in the

organization. It can be done with the help of a Rubber Stamp or an Automatic Numbering &

Dating Machine. A specimen of date stamp normally used in an organization has the

following details -

M/s Concept Technology, New Delhi

Date________________ Time ________________

Diary No. ______________

Signature _____________________

5. Recording Mail

Recording of mail helps in tracing out any received letter at a later date. An Incoming Mail

Register is maintained to make a brief record of all the incoming mail. Incoming Mail

Register is also called Diary Register or Dak Register.

26
An Incoming Mail Register also has a column viz. Date of Reply to ensure that all the

received mail has been attended to.

Specimen of Incoming Mail Register

S.No./ Date Ref. Name & Brief Deptt./Official Initials Date of

Diary No. of Address of Subject referred of Reply

No. letter Sender Receiver

Some companies do not carry out the practice of recording of mail as it is quite time

consuming.

6. Distributing Mail

The recorded mail is segregated department-wise and immediately distributed to the

concerned departments by a peon or messenger.

7. Follow-up Action

Every incoming mail which needs a follow up action should be quickly attended to by the

concerned official. In business houses, it is ensured that every mail received should be

disposed-off within maximum 3-4 days, wherever possible.

2.3 HANDLING OF OUTGOING MAIL

Like incoming mail, speedy disposal of outward mail is equally important. Delay in sending

mail not only results in loss of business prospects but also creates a bad image for the

company. While on the other hand, quick replies of mail show the importance which has

been attached to it. The following steps are generally followed in case of handling of

outward mail physically:

27
 1. Production of Mail

The letters which are sent out of an organization are prepared and signed by an authorized

person. Every outgoing mail should bear a reference number which facilitates future

reference of the same. The mail ready to be dispatched is usually kept in „Out Tray‟ available

in all departments.

2. Collection of Mail

All outgoing letters are collected twice a day by a peon deputed by Mailing Department for

onward transmission. A Professional Secretary should ensure that the mail is collected timely

so that it could be dispatched from the office without delay.

It is also the duty of the Professional Secretary to mention the preferred mode of dispatch of

the mail. The Mailing Department or Despatch Section delivers the mail according to the

instructions given on the mail.

3. Recording Mail

Every outgoing mail is to be recorded in a register called Despatch Register or Mail Outward

Register. A specimen of the same is given below:

Outgoing Mail Register/ Despatch Register

S.No./ Date Reference Name & Subject Mode of Postage Remarks

Despatch No. Address Delivery Stamps
No. of used
Receiver Rs. P.

Local Mail which is sent by a Special Messenger is recorded in a Peon Book. A Peon Book

has following columns:

28
 PEON BOOK

S.No. Ref. Name & Address of Brief Subject By whom Signature

No. Receiver delivered of
& Receiver
Date along with
date and
time

4. Writing of Addresses

If the mail is to be sent in an envelope, the same should be selected of suitable size according

to the size and number of paper (s) to be inserted it. While writing address on an envelope, it

is ensured that the address should be written parallel to the length of the cover and in the

lower half and towards the right-hand side thus leaving adequate margin at the top for the

postage stamps and labels, postmarks and other indications.

Writing of correct, legible and complete address of the receiver on the outward mail is very

important point to be taken care of by a Professional Secretary.

The addressed Post town should be noted in block letters and according to the approved

spellings in the List of Post Offices along with the PIN (Postal Index Number) Code.

Postal Index Number

It is a code in the post office numbering used by India Post. It is unique 6 digit number,

shortly known as PIN code. There are nine PIN zones in India, including eight regional zones

and one functional zone (for the Indian Army). The first digit of the PIN code indicates the

29
region. The second digit indicates the sub-region, and the third digit indicates the sorting

district within the region. The fourth digit represents the route on which a Delivery office is

located in the sorting district. The last two digits represent the delivery office within the

sorting district. Hence, with the use PIN code, speedy and accurate postal delivery is possible

all over the country.

In case of addressing of large mail, an Addressing Machine can be used which saves a lot of

time and energy of a Professional Secretary besides reproduction of correct address on the

outgoing mail.

5. Folding letters and Inserting them into Envelopes

Letters intended to be inserted into envelopes should be folded in such a manner that it has

minimum number of folds according to the size of the envelopes. Letters and enclosures

must be folded together.

Folding and Inserting Machines can be used to make the task easy for a secretary in case of

handling of large outgoing mail.

6. Sealing of Envelopes

The next step is to seal the envelopes to secure the contents of letters. The mail containing

financial documents, registered and insured articles should be sealed carefully. Book Post

mail mostly consisting of Product literatures, catalogues, price lists etc. are sometimes not

sealed for the convenience of the receiver.

7. Affixing Stamps on Envelopes

On the outgoing mail to be sent through Post Office, postage stamps of required

denominations are to be affixed as per the prescribed rates. The mail is weighed to calculate

the correct amount of the postage stamps. Over-stamping and under-stamping are to be

avoided at all costs.

Franking Machines are commonly used by offices for stamping the outgoing mail.

30
8. Posting Mail

Posting of Mail is the last step in the procedure of handling of outgoing mail.

Letters intended to be sent through Post Office are sent by a peon to the nearest Post Office.

Mail marked as Registered, Speed Post, Insured etc. are submitted at the counter of the Post

Office and a proof of delivery of the mail is obtained. Local mail which is to be sent through

special messenger is handed over to the concerned person along with Peon Book. Courier

Mail is handed over to the representatives of courier companies, whenever they arrive as per

the specified time schedules.

2.4 HANDLING OF ELECTRONIC MAIL

Electronically, mail can be received or sent out with the help of computer, fax, mobile phone

etc via a network. This type of mail does not have any elaborate handling procedure. The

mail is mostly addressed by name on individual‟s e mail address or number. Fax and e-mail

messages on receipt are directly delivered to person concerned for further action.

Electronic Mail or E-mail means messages distributed from one computer to one or more

recipients with the help of internet. An e-mail message consists of two parts: the message

header and message body. The message header contains space for email address (s) and

subject. The content of the mail is written in the message body. The mail is easy to compose

and transmit just with a click of button. It is generally received and sent from an individual‟s

e-mail address in an organization.

E-mail has given rise to concept of Paperless Office because of the following advantages:

 Speedy delivery

 Economy

 Security

 Feasibility of sending bulk mail

31
  Possibility of use of pictures, demonstrations etc.

 Automated record management

The problems which may be associated with e-mail include threat of virus, hacking of mail,

crowded in-box etc. However, with the various techniques, it is possible to deal and

overcome all these hazards. It is important that in-box of mail should be checked-in regularly.

Due to exponential growth of mail volumes, Digital Mail Rooms are set up now-a-days in

organizations. In such Mail Rooms, documents are scanned, archived and retrieved in original

image format. Electronic mail formats, fax etc. can also be combined while document

processing. The setting of Digital Mail Rooms has reduced decision making cycles, saved

paper costs and rationalized circulation of information.

2.5 MAIL ROOM EQUIPMENT

Various mechanical equipment is used to handle the incoming and outgoing mail efficiently

and effectively. Use of the mechanical devices also help to reduce monotony and increase

accuracy of mailing operations. Equipment and machines in Mail Room has following

advantages:

 increase in the speed of operations.

 saving of time.

 improvement in efficiency and accuracy.

 elimination of wastage.

 simplification of fixing of postage and avoidance of misuse of postage stamps.

The following Mail Room Equipment is commonly used in a large organization:

1. Letter Opening Machine

With the help of a Letter Opening Machine which operates manually or electrically at a great

speed and can open 100 to 500 letters per minute, work of opening of mail can be efficiently

32
managed. It has a rotary knife which shaves off a very thin slice of the edge of envelopes.

While using the machine, one should be careful that the contents of the envelope are not

damaged.

2. Numbering and Dating Machines

An Automatic Numbering & Dating Machine is used for stamping on the incoming mail. In

this machine, the next serial numbers and date automatically changes after every use with the

help of self-inking stamp pad.

3. Folding and Inserting Machine

A Folding Machine can fold approx. 5,000 to 10,000 sheets per hour. It is possible to fold and

insert letters into an envelope with this machine. The machine is to be adjusted as per the

required number of folds according to size of envelope.

33
4. Sealing Machine

Sealing Machine helps in automatically moistening the flaps of an envelope and then

sealing the same. Sealing with wax can also be conveniently done with the help of this

machine. Hand operated sealing machines can seal about 100 envelopes a minute while

electrically operated ones can operate at a speed of 15000 envelopes in an hour. The work of

sealing of mail can be performed very neatly and efficiently with the help of this machine.

34
5. Mailing Scale

A Mailing Scale is used to weigh outgoing mail and ascertain postage stamps which are to

be affixed on it. Digital scales at a very economical price are widely available in the market.

It is an essential equipment in Mail Room for performing mailing operations.

6. Addressograph (Addressing Machine)

It helps in printing of addresses on envelopes, parcels etc. The machine is used when mail

is to be sent to those customers which are regular and frequent on mailing list. It can be

operated manually or electrically. In this machine, there is a ribbon to give print of the

addresses from already prepared embossed plates. Once the address plates are prepared, it

can be repeatedly used any number of times. The required plates are selected and fed into the

machine from one side. After operating the machine, one can get the addressed envelopes

from the other side.

35
7. Franking Machine

A Postal Franking Machine is a stamping machine intended to stamp impressions of dies of

approved design on postal articles for payment of postage fee. A commission of 1 to1.5 per

cent is permitted on the value of franks used.

The use of a Franking Machine except under a valid license issued by the Head of the Postal

Division is prohibited. The franked articles are tendered at the counter of Post Office and

each consignment must be accompanied by a Window Delivery Ticket for identification of

the licensee‟s representative.

The impressions of the franking machines recorded on postal articles should not be

interfered-with in any way. Impression should be of bright red color, clear and distinct and

should not overlap. As far as possible, they should be on the right top corner on the address

side of the article itself or an address wrapper or an address label firmly attached to it.

Franking is allowed up to any amount. There may be more than one impression of the value

die but only one of the license die on each article.

The main benefits of using the machine include less risk of misappropriation of postal

stamps, avoidance of errors in stamping and simplification in keeping the account of stamps

36
used. Department of Posts have also introduced Remotely Managed Franking Machine in

place of Electronic Franking Machine with security features like generation of 2D barcode

with franked impression and elimination of human intervention for up-loading credit in

Franking Machine.

Now-a-days, business houses use Mail Accounting Software to manage postage expenses.

The software helps in collecting, maintaining and reporting mail accounting data. It also

helps in tracking and better controlling business mail expenses.

As physical handling of incoming and outgoing mail is quite time consuming and

monotonous job, the mail room equipment discussed above helps a Professional Secretary to

overcome these limitations and handle mailing operations in the most effective and efficient

manner.

2.6 POSTAL SERVICES

Though e-mail and courier services are the most commonly used mode of transmission of

written communication now-a-days, every organization still sends a large number of letters,

parcels etc. through a Post Office. In India, Department of Posts offers various services at

affordable rates for carriage of mail besides acting as a financial institution.

The primary function of Post Office is collection, processing, transmission and delivery of
mail. All postal articles whose contents are in the nature of message can be classified as mail

37
which includes Letters, Postcards, Inland Letter Cards, Packets, Registered, Insured, Value
Payable articles , Speed Post etc..
Mail is further classified as first class and second class mail. First class mail gets free air
transmission within India; whereas second class mail gets air lift only if prepaid with air
surcharge.
Department of Posts have also launched a pilot project „Project Arrow‟ to lay the foundation

for a comprehensive, long term transformation of India Post. The project ensures at

providing a fast, reliable and efficient postal services to the customers. The strong IT-base of

Department of Posts has also made it possible to offer a range of e-enabled services to their

customers such as on-line web based domestic money transmission service, electronic money

order, e-payment etc. Let‟s know about premium products, mail products, tools and Business

Solutions offered by India Post.

Premium Products Mail Products Tools Business Solutions

 Speed Post  Letter  Track Your  Opening a

 Business Post  Inland Letter Card Consignment Corporate Account
 Express Parcel  Post Card  Compare  Speed Post
Post  Book Packet Services Business Solutions
    Cash On
Media Post Registered Calculate Postage
Delivery(COD)
 Greeting Post Newspaper  Find Pin code
Facility
 Logistics Post  Blind Literature  Locate a Post  Express Parcel
Packet Office  Business Parcel
 Parcel  Bill Mail
 Registration  Direct Post
 Insurance  Retail Post
 Value Payable  Business Post
Post  Logistics Post
  e-Payment

A few of the often used postal services in an organization are discussed as under.

Registration

Registration makes the transmission of an article more secure as it passes through the hands

of postal officers, under special precautions. But the Post Office is not responsible for any

38
injury which its contents may sustain during the transmission. The risk of injury is

diminished by the use of the special registration envelopes sold at post offices.

Letters, letter cards, postcards, book and pattern packets, blind literature packets, parcels and

newspapers prepaid with postage at newspaper rates of postage, etc. may be registered at any

post office for transmission by post to any other post office.

The prepayment of the postage and registration fee is compulsory in the case of all registered

articles.

Insurance

Registered letters, value-payable registered letters, registered parcels and value-payable

registered parcels may be insured at such post offices, as are authorized, to accept articles for
insurance. Such post offices deliver insured articles, provided that in no case shall such value
exceed the real value of the contents of the article insured; provided also that articles
containing gold, coin or bullion Government currency notes or bank notes or any
combination of these shall be insured for the actual value of the contents. For the purpose of
this rule, papers such as securities, legal documents, etc. may be regarded as having a real
value.

Post Box

A post box is a uniquely addressable lockable box located on the premises of a post office.
Generally, post office boxes are rented from the post office either by individuals or by
businesses on a basis ranging from monthly to annual, and the cost of rent varies depending
on the box size Only fully prepaid unregistered mail namely letters, inland letter cards,
postcards, registered newspapers, books, or the post bearing the Post Box No. are delivered
through post box.

Value Payable Post

The value payable system is designed to meet the requirements of those persons who wish to

pay for articles sent to them at the time of receipt of the articles and also to meet the

39
requirements of traders and others who wish to recover the value of article supplied by them

through the agency of the Post Office.

Registered parcels, registered letters, registered book packets and newspapers prepaid with

postage of newspaper rates of postage and with registration fee may be transmitted by the

inland post as value payable postal articles, provided that the amount specified for remittance

to the sender in the case of any such postal article does not exceed Rs. 1,000/- .

No such postal article as aforesaid will be accepted at any post office for transmission by post

as a value payable postal article unless the sender declares that it is sent in execution of a

bona-fide order received by him.

Speed Post

Speed Post is a very high speed express service for letters and documents with time-bound

delivery across the nation and around the world. Speed Post offers a money-back guarantee,

under which the Speed Post fee will be refunded if the mail is not delivered within the

published delivery norms.

Speed Post delivers „Value for money‟ to everyone everywhere. It has a scheme called „One

India, One Rate‟ scheme which has been launched for all destinations across India, from

Kashmir to Kanyakumari. For corporate customers and to regular users, Speed Post provides

„Home collection‟, credit facilities, on-line tracking, account management and personalized

services.

Opening a Corporate Account

For corporate customers and regular users, India Post provides many value added services

including pick-up from the premises, convenient monthly billings, account management

facilities, assistance in import/export procedures of shipments, corporate tracking facilities,

40
volume discounts etc. When we open a corporate account, we open the door to convenience

and customized solutions, as per our requirements.

Surface Air Lifted (SAL)

Surface Air Lifted (SAL) is one more premium mailing service from India Post. SAL mail is
faster than sea mail yet cheaper than air mail - an ideal combination of air and surface
transport for quick and economical mail deliveries.
SAL mail will be Air Lifted between the country of origin and destination. However within
the country of origin up to the office of exchange and in the country of destination from the
office of exchange to the point of delivery, SAL mail will be transmitted by surface.

COURIER SERVICES

Due to features viz. high speed, security, tracking, acknowledgement and committed delivery

schedules, courier services have witnessed a phenomenal growth in modern era.

Courier services are popular among the business organizations as they offer the following

solutions to the customers in regard to mail delivery:

 Delivery of any type of article of any value or weight. (e.g. perishable commodities,

medicines etc.).

 Reliable and safe delivery.

 Speedy delivery as they follow stringent time schedules.

 Wide coverage (almost all corners of globe).

 Transit insurance facility.

 Facility of consignment status by web based Track and Trace System which can be

had on mobile and e-mail.

 Proof of delivery on request.

 Maintenance of quality standards.

41
  Provision of logistic solutions like go-down facilities, packing etc. as per customer‟s

needs.

 Processing of mass mail (envelope labelling in case of product promotional

literature, sending of greetings etc.)

The world's largest courier companies include DHL, FedEx, OBC Express Ltd., UPS, etc.

CHECK YOUR PROGRESS

1. Fill up the following blanks:

(a) __________ is unique 6 digit number, shortly known as PIN code.

(b) Every envelope is _____________to calculate the correct amount of the postage

stamps, if it is to be sent through Department of Posts.

(c) A ___________________machine is a stamping machine intended to stamp

impressions of dies of approved design on private and official postal articles in

payment of postage and postal fees.

(d) ________________ is very high speed express service for letters and documents

with time-bound delivery across the nation and around the world..

2. State whether each of the following statements are True or False.

a) Mail received electronically requires an elaborate handling procedure.

b) An Incoming Mail Register is maintained to make a brief record of all the

incoming mail.

c) Franking Machine helps in printing of addresses on envelopes, parcels etc.

d) Registration of articles should carry the superscription „Recorded Delivery‟ and

be prepaid with the appropriate postage and the prescribed fee per article.

3. Answer the following questions:

42
 a) Suggest various steps involved in handling of Incoming Mail, if the same is being

handled physically.

b) Outline the procedure of physical handling of Outgoing Mail.

c) Discuss any three Mail Room Equipment which are useful in performing mailing

operations efficiently.

d) Differentiate between Electronic Mail Handling & Physical Mail Handling

e) Describe any five facilities given by Department of Posts regarding carriage of mail.

f) Explain various services which may be provided by courier companies to their clients.

g) How Peon Book is different from Mail Outward Register?

h) Discuss the use of:

i) Remotely Managed Franking Machine

ii) Mail Accounting Software

--------------------------

43
 Records Management: Ensuring Access to Essential Information. (Tod Chernikoff)

Unit-III

FILING AND INDEXING

Introduction

Records management is an on-going process of managing the records of the organization in

accordance with approved policies and procedures. It can be defined as „the systematic
control of all records from their creation or receipt through processing, distribution,
organization and retrieval to their ultimate preservation and disposition. Different record
types may have different retention policies according to an organization‟s operational
requirements. Records are retained by maintaining the appropriate filling system of the
organization and their retrieval becomes easy with the help of indexing.

We know that many documents are generated in the office of any organization, whether all of
them are record? What procedure should be adopted to have a systematic procedure of record
management? It is important to answer these questions.

Objectives

After going through this lesson, you will be able to:

 Define the term - record

 Know the importance of records in an organization
 Explain the importance of filing as a mean to preserve the records.
 Understand essentials of good filing system
 Explain classification and method of filing
 Understand the terms - E-filing and also its importance
 Explain about indexing and its relationship with filing
 Recall different ways in which the indexing can be done
 Enumerate the steps involved in filing process

3.1 FILING – MEANING, IMPORTANCE AND ESSENTIALS

44
It is necessary for an organization to produce and handle a great deal of information for its
survival and growth. But all this information which generate during the course of business
may not be important to preserve for future use.

RECORD means any information generated or received in the course of conducting

business, which should be maintained to meet the financial, legal, historical or administrative
needs of an organization in future. A record may be any document that has been used to make
key business decision. Some common examples of record in business are – financial reports,
income tax returns, statistical compilations, company bylaws, minutes of meeting, business
plans, employment agreements, letter of credits etc. Further, a record may be in the form of
paper, computer printout, magnetic or optical disk, microfilm, audio recording or any other
way by which information could be stored.

FILING is the process of arranging and storing records in neat, orderly and efficient manner
so that they can be located easily and quickly when they are required.

Usually, in every office, all relevant papers like notes, correspondence, reports on a given
subject are stored in one file so that they are available for use at any point of time in future.
Every executive expects from his/her secretary to present quick presentation of records at the
time of need. Therefore, record management is an important task to be undertaken by every
secretary. In order to file records efficiently, a secretary should follow standard rules and
procedures of filing. Also for a responsible secretary, it is important to review the papers to
be filed every day or once a week and file them appropriately.

Importance of filing

The records formulate the memory of an organization. Records not only provide a history of
the business but they also provide a foundation for future decisions.

The information contained in the records forms the basis of all business activities. Whether to
place an order, make a payment, get a loan or any another function of business, office records
is the origin of all activity. Decisions for the future course of business are taken keeping in
view the past performance, policies and strategies of the organization as per the records and
the available up to the date information. The sooner the desired information is available the
more quickly it can be put to use where it will do the most good. A business decision can be
as good as the fact or information on which it is based. On the contrary mismanagement of
important records may lead the organization to the business loss, litigation, fines and even

45
regulatory investigations. Therefore, records play an important role in the effective and
efficient functioning of an organization. The factors which make records important are listed
below:

1. The records act as memory unit of an organization and hence provide history of any
business.
2. Records constitute the database for the Managerial Information System. Here, they
provide necessary information for future planning and policy formulation of a
business.
3. Important decisions for the smooth functioning of a business originate from records.
4. Records provide the basis for compliance of legal and statutory requirements.
5. Status of the business, i.e., financial health, societal status, comparison with
competitors, etc. can be ascertained with the help of business records in the form of
various statements and reports.

6. Records help in handling customers and correspondence carefully to maintain the

goodwill of an organization.

Essentials of a Good Filing System

As there are various methods of filing and there is no one complete ideal filing system which
meets the full and complete requirements of office records in every office. Whichever filing
system is adopted by an office, it should be simple so that it may be understood by everybody
in the office even in the absence of a filing clerk.

A good filing system should have the following characteristics:

1. Compactness – Filing system should be compact which means that it should not take
unnecessary space.
2. Economical – Filing system should be economical in terms of time, space, money
and operation which mean that the cost of installation of filing equipment should be as
low as possible.
3. Flexibility – Filing system should be flexible so that it can be expanded or contracted
in case of need.
4. Easy location – The record should be placed at that place where it should be easily
located when required for reference without any delay.

46
 5. Safety – Filing system should be such that proper safety of records is ensured from
dust, water, fire, theft, insects, etc.

3.2 CLASSIFICATION OF FILING – ALPHABETICAL, NUMERICAL,

GEOGRAPHICAL, SUBJECT, CHRONOLOGICAL

When we plan to maintain a particular type of record in a file for future use, we have to
classify the same and give a suitable title or heading depending on the subject or section
to which it belongs.

Classification of Filing means the process of selecting headings under which records are
grouped or classified on the basis of common characteristics before filing them.

The main purpose of classification or records is to locate any one document from among
all the documents stored in the office without loss of time and at minimum cost. Proper
classification of a file at a proper place helps to retrieve the same quickly and it will not
be difficult to find it out later. The classification can be followed by sub-divisions,
depending on the nature of subject matter. There are different kinds of classification
methods which may be adopted in an organization. Commonly used methods of
classifications of files are:

I. Alphabetical Classification
II. Numerical Classification
III. Geographical Classification
IV. Subject based Classification
V. Chronological Classification

ALPHABETICAL SYSTEM OF CLASSIFICATION

This is the most popular system of record management. As it is the basis of most of the other
systems of classification, it is very important to understand this system.

In this system, all the records are kept in strict alphabetical order. Dictionaries, contacts‟ list
in mobiles and telephone directories are good examples of this system. In order to maintain
alphabetical classification of files, following rules need to be followed:-

Rule 1: File by name in terms of the first letter, e.g.:

Amit & Co.

47
 Bhushan & Bhushan

Garg Enterprises

Triveni Electronics

Rule 2: If the first letters are the same, file in terms of the second letter, e.g.:

Clarence

Colours

Cyndee

Cyril

Rule 3: File in terms of surnames, e.g.:

Arora G.

Diwan A.K.

Taneja V.R.

Yusuf R.K.

Rule 4: If surnames are the same, file in terms of the initial, e.g.:

Anil J.S.

Anil J.U.

Anil R.S.

Anil T.M.

Rule 5: When there are two surnames, files under the first surname., e.g.:

Verma & Sharma

Chopra & Khosla

Mehta & Gosain

Khurana & Chhabra

Advantages of Alphabetical Method of Classification

i. It is easy to understand and simple to operate.

ii. It contains self-indexing. No need for separate index.
iii. It reduces the chances of misfiling of documents.
iv. It can be expanded to any length.

48
 v. It provides ready reference and a quick check.

Disadvantages of Alphabetical Method of Classification

i. There may be difficulty in forecasting the space required for different

letters of alphabets.
ii. There may be congestion of files under a particular name.

iii. The method of filing leads to confusion and congestion if there is a

common

name or surname.

NUMERICAL SYSTEM OF CLASSIFICATION

Here, a unique number is allotted to a file and the file is placed in the filing system in
numerical order. Whenever, a new file is opened, it is allotted a new number. This is a simple
and logical method quite suitable for organizations dealing with large number of customers or
clients, especially where the work is growing. This system is supported by an index from
which the file number is obtained.

Many a times, every section/department is given a definite number and then different files
under each section/department are given additional numbers by allotting a decimal of slash to
differentiate.

For example, Sales Department is given 001; Stores Department is given 002, etc. Now say
files maintained by Sales are given internal numbers for various cadres, say Sales Manager as
1, Sales Supervisor as 2, Salesmen as 3, and so on. Further, the files are given sub
classification on the basis of their names like

Employees with names starting with A-B

Employees with names starting with C-D

Employees with names starting with E-F and so on

Therefore, in this system, we have to prepare index cards and the file numbers are written on
them and arranged in alphabetical order in a drawer. Whenever a particular file is needed, the
secretary has to consult the index card to retrieve the file.

Advantages of Numerical Method of Classification

i. It has the feature of expansion which means whenever a new file is placed
next to the last existing one, it is allocated the next number. Thus, with this
method filing system can be expanded to any length.
ii. The file numbers can be used as a reference number in correspondence.
iii. It facilitates accuracy in terms of filing of papers.
iv. It is simple to understand and easy to operate.
v. Chances of misfiling of papers are less.

49
Disadvantages of Numerical Method of Classification

i. We need more care to avoid errors arising out of transposition of figures.

ii. A separate index is required.
iii. One has to first consult an index to locate any file.

GEOGRAPHICAL SYSTEM OF CLASSIFICATION

This method is suitable for organization which has its business spread in different
geographical regions. In this system, the files are grouped on country, states, towns or district
basis, according to the area of operation. Further, geographical groups of records are usually
arranged alphabetical. If numerical system is used, a separate name and location index is
prepared giving the name of the party and its geographical place.

In geographical system of filing, the whole area may be divided into different zones. There
may be north zone, south zone, east and west zone. The areas allocated under each zone are
to be clearly defined. Then, zones may be further divided into states. For example -

North Zones: Haryana, Himachal Pradesh, Punjab, Uttar Pradesh, Uttarakhand

South Zone: Andhra Pradesh, Karnataka, Kerala, Orissa, Tamil Nadu.

After that, each state may be classified district-wise or town-wise in an alphabetical manner:

District Wise: Haryana: Ambala District, Karnal District, Rohtak District

Town wise: Punjab: Amritsar, Hoshiarpur, Jallandhar, and Ludhiana

After that, individual classification for different customers may be adopted.

Advantages of Geographical Method of Classification

i. The system helps in quick location of the files in an organization which has its
business spread in many geographical regions.
ii. It is simple to understand and study comparative progress made in different
regions in terms of sales or any other parameter.

Disadvantages of Geographical Method of Classification

i. Without proper knowledge of geography of an area before filing records, this

system is useless.
ii. It must be combined with other methods, viz, alphabetical, numerical, etc. to file
records.

Geographical filing is suitable when records are scattered in a diversified area and review of
the activities of different regions is to be made on continuous basis.

SUBJECT WISE SYSTEM OF CLASSIFICATION

50
Under this system of classification records are first sorted out on the basis of the subject
matter they contain, and then are filed accordingly. All letters, documents and papers relating
to a particular subject are brought together in one file even though they are received from
different parties or geographical locations. In a particular subject file, papers are to be filed in
some definite order, i.e., either alphabetically or chronologically.
An organization in which subject matter is of greater importance than the
parties/persons/places, subject system of classification is adopted.
Advantages of Subject wise Method of Classification

i. There is convenience of reference, if the subject is known.

ii. In this system, there is possibility of unlimited expansion.
iii. It proves useful whenever it is desired to combine different documents on a
single subject.
Disadvantages of Subject wise Method of Classification

i. There may be difficulty in filing of papers on the basis of subject matter as the
filing clerk has to study and decide about the nature of the record. Sometimes,
it is not an easy task to divide the papers on the basis of subject and giving the
titles to the concerned files as most of the papers are inter-related
ii. We cannot file miscellaneous papers according to this system.
iii. We always need an index for this type of classification system.
This system is suitable for offices where a number of projects are in progress at one point of
time and each project is important irrespective of the party/client.
CHRONOLOGICAL SYSTEM OF CLASSIFICATION

It means arranging all records and files in date order. Here, files are maintained in order of
time, i.e., according to the year, month and date. The most recent (current date) papers are
kept at the top of the file and the older papers are kept at the back. This system is important
because often it is the most recent correspondence that is usually needed and employed in
filing invoices and other vouchers associated with the payments.
In this system, the maintenance of files could be done in any of the classification system but
the records inside the file to be arranged in chronological order so that they can be retrieved
at the earliest.
This system is helpful for follow up actions. Further, files for daily appointments,
conferences and other important business engagements should always be maintained in
chronological order.

51
Advantages of Chronological Method of Classification

i. It is simple to understand and operate.

ii. Retrieval of records is easy if dates are known and also good for overall
classification i.e. if correspondence to be maintained of different years.

Disadvantages of Chronological Method of Classification

i. This method is useful only for small business types.

ii. May not be suitable at times as incoming letters and their outgoing replies to
be kept separately if both belong to different dates.
iii. Difficult to trace a record if dates are not known.

The choice of the appropriate method depends upon the nature of the business, and the
policies of the management. It is very difficult to choose any one method of maintaining files.
No method can be termed as the best. Different combination of these can be considered for
maintaining files.
Selection of an appropriate method also depends upon the size of the filing system. Other
things to be kept in mind are convenience, simplicity, degree of expansion, speed of reference
and accuracy.

3.3 METHODS OF FILING – HORIZONTAL AND VERTICAL

Filing method means how files are physically arranged. It may differ according to the nature
and size of records which are to be arranged. However, the purpose for keeping files is that
records are easily retrievable at the time of need. It is also important to ensure their safety
from theft, fire, dust and other calamities. The methods of filing can be grouped as:

 Horizontal or Flat Filing

 Vertical filling

Horizontal filing: In this method, the papers are filed into the filing folders which are kept
one upon another on the shelves of the racks or almirahs, parallel to the ground or horizontal
way. For easy maintenance, shallow drawer cabinets or deep drawers fitted with desks are
used. However, the main difficulty in this system is when a file lying at the bottom is
required, all the files above are to be taken out first and then only the lower file can be taken.
Vertical Filing: The most preferred and scientific method of arrangements of files is the
vertical filing system. Under this system, files are kept vertically in specially made drawers,

52
one behind another so that the side label is always in the front. It is very easy to find a file, to
take or put in, without disturbing other files. It is very flexible and classification of files
becomes easy.

Filing Equipment
For storage of records, we need to have various equipment which is discussed in brief.

Cabinets: Though there are many kinds and sizes of file cabinets that are available in market,
the cabinet size is determined by the size of the records to be stored. Usually, five or four-
drawer cabinets should be used whenever possible because they contain more filing space
and occupy the same floor space. The drawer or cabinet should be just a little larger than the
material. It is a waste of money, space and material to use a cabinet larger than needed.
Legal-size cabinets should be used only when the greater portion of the material to be filed is
larger than 8 ½ by 11 inches (A4 size).
Commonly used types of filing cabinets for storing paper records are-

 Vertical Filing Cabinets

 Lateral Filing Cabinets

 Open Shelf Cabinets

Principles for selecting a suitable cabinet to meet your requirements are:

1) Space Available: As office space is expensive, it is important to note that one should
always try to select filing cabinets which make the best use of office space. Further at the
time of measurement of the filing cabinets, space that is needed to pull out a drawer and to
stand in front of the cabinet should also be included.
2) Storage Needs: Storage space of the organization can be known on the basis of present
requirement in addition to making provision for future expansion plans. For the purpose of
present requirements, active records are taken into consideration. Then the future need is
assessed by looking at how fast the volume of files grows each year. For example, if it is
expected that the volume of active files will grow by ten percent per year over the next five
years, the organization will need 40 percent more storage space than it has now. On the safer
side it will be better to include an extra 14 percent more storage space for contingencies.
3) Security Needs: Certain records require a higher degree of security than the normal
records. These records should be stored in locking cabinets. Secure and fire safe cabinets are
more expensive, so they should only be purchased to meet a specific need.

53
4) Costs: As budget is an important consideration, cost of the equipment should match with
the finance available as per earmarked budget by an organization for this specific purpose.
The comparison of prices should be made so that costs of filing equipment could be
compared for equal amount of file storage space.
4) Operational Costs: Expenditure on storage cabinets is one time but the ongoing
operational cost, if any, also needs to be considered.
6) Physical Format of Records: Special records like maps, drawings, videos, films,
microfilm and diskettes may require special storage equipment.
7) Retrieval Efficiency: Retrieval efficiency is the most important aspect of record
management. It should be given a thought that how many people will be using the cabinets,
and how they will retrieve records from it. Open shelf filing cabinets lets a large number of
people access the files at the same time. Vertical, lateral, and mobile cabinets work best if
only one or two people are accessing the files at the same time. Moreover, physical abilities
of employees should also be taken into consideration. For example, a person in a wheelchair
may not be able to reach files that are in the top drawer of a tall cabinet.

3.4 E-FILING
One of the major problems of all filing systems is of storage space, especially for documents
that are no longer frequently used.
Earlier, Microfilming was the ideal solution to the storage problems for firms that could
afford it. Microfilming is a photographic process whereby documents can be photographed
and reduced to a much smaller size. Instead of files, full of documents, there are just small
rolls of films to store. The original documents can then be destroyed. When a document is
needed, the microfilm can be viewed on a scanner where the negative is enlarged and
projected on to a display screen. One microfilm allows for very compact storage of books and
documents. However, with the advent of computers, electronic filing has almost replaced
microfilming.

54
Electronic filing (E-filing)
Computers have been proved as boon to office managers and office workers. Creation of
documents, sharing of information, communication and record management, all these has
become easy with the help of computers. The stage of paperless office has arrived as there is
no unforeseen fear of loss of records by virus or other electronic threats. Therefore, users now
just manage records electronically and there is no need to create a print out of the records.
However, few organizations are still managing records in both electronic and as well as paper
format. Paper records are scanned and images are stored electronically. Whenever required,
electronic records may be printed and saved manually.
Multiple files can be stored in a folder. All sensitive files can be protected with the help of
password.
It takes flash of a second to retrieve a stored file. The ease with which a file can be retrieved
has prompted the organizations now-a-days to replace physical filing with e-filing and, thus,
move to a paperless era.
Options for Saving Your Electronic Files
There are many ways to store your e-files. Some of the ways are:
 USB Flash Drive
 Hard Disk
 Save to desktop & send as an email attachment
 Sign up for free online file storage
 Sign up for free online word processor and spreadsheets
 Save with the help of bookmarks/favourites online
A USB Flash Drive holds as much as 100 or 1,000 times as a single floppy disk drive. They
are referred to by many names including “jump drive,” keychain drive,” “pen drive”, “flash
drive”, etc.
They can hold Microsoft Word files, Excel spreadsheet files, digital images, music/video files
and more. In most cases, personal computer assigns the letter - e: to a USB drive. Opening of
files from or saving files to the USB drive is also very easy. You may need to type e: in the
“File Name:” cell and then hit the “enter” key on your keyboard to force Windows to “see”
the USB Flash Drive.
When you are ready to remove your USB drive, click the “Safely Remove Hardware” icon on
the Window toolbar in the lower right corner of the screen. When the power light on your
drive turns off, you can remove it from the PC. If the “Safely Remove Hardware” icon is not

55
available or it is not working, make sure all of your files are closed (power light on your drive
should not be blinking) before removing your drive.
Free Online File Storage
There are a number of free internet services you may use to store files on a remote server that
can be accessed using an Internet browser from any computer that has access to the Web.
Using these services generally requires you to set up a free account.
In general, free file storage services provide storage up to a certain limit and may also restrict
the size of individual files that may be uploaded. Some free services are meant to store files
for just a few days. However, it is important to read complete instructions and policies
carefully before taking up online service.
If you are storing critical files such as a resume, it is wise to have it stored in more than one
place. For example, you might have it stored online and also on a USB or hard disk.
To best manage electronic records, following points should be taken care of:
i. Electronic or Digital records are just as valid and important as paper records, and are
subject to same formalities and legal and fiscal requirements.
ii. These records also require the same treatment for retention as is required for their
paper equivalents. Therefore, they should not be retained longer than the approved
retention policy of the concerned organization.
iii. Where possible, departmental file plans used for paper records may serve as a basis
for the classification of electronic records, Departmental computers should have
similar directory structures, and allow for documents t to be classified within the
established record series.
iv. All official digital records can be moved off from individual workstations, and onto a
document repository server that is shared by the department.
v. As per the requirements of the organization, it should be decided which records need
to be stored in paper format or electronic format. Double record management for same
records should be avoided. If paper equivalents are required, retention period of
digital records may be reduced or vice versa.
vi. No analogous hard copy equivalent to the computer records need to be maintained. It
is especially essential that policies be developed and documented for their eventual
disposition. A plan should also be put in place to ensure that this disposition is carried
out on schedule.
vii. It should be ensured that duplicates and drafts are disposed along with their master
documents.

56
viii. Printing or saving an e-mail message to disk makes it a document which requires the
same record management treatment as is required in case of other records. Therefore,
one should be judicious in the use and retention of electronic mail.
ix. Saving electronic documents on magnetic media such as floppy disks or data tapes is
not advisable for long term retention. Magnetic media is usually unstable, and loses
its signal very quickly. Records stored on these media will likely be unreadable when
they are needed at a later date.
x. Records in electronic formats may quickly become unusable due to changing
hardware and software standards. For instance, a document saved in an early version
of a program may be unreadable when that program is upgraded to a new version. If
electronic documents require retention beyond three years, a strategy must be in place
to migrate that data forward.
xi. It should be ensured that the protection of electronic document backup is not optional.
It is essential.

IT tools help users classify, manage, retain and dispose their digital records with the same
care and attention we have provided for paper files. The time has come when Records
Management has placed emphasis on the management of electronic records within the office
environment.

3.5 WEEDING OUT OR DESTRUCTION OF OLD RECORDS

Weeding out or destruction of old records means destroying the unwanted papers or
documents or files after completing the record period to make a space for future documents.
All dead records should be destroyed as per organizational policies. A destruction certificate
may be prepared giving the date on which the record was destroyed. A Paper Shredder is a
mechanical device used to cut paper into either strips or fine particles to destroy
private, confidential, or otherwise sensitive documents.

3.6 INDEXING – MEANING, IMPORTANCE AND TYPES

Index is a ready guide to the location of the file required. As an aid to filing, indexing can be
described as a process of providing a ready reference list of records to locate particular
documents at the time of need. It is important to know here that files maintained in
alphabetical order are self indexed and do not require the additional tool of indexing for the

57
purpose of easy retrieval or location but in all other systems, indexing is a must for ready
reference and early retrieval.
Importance of Indexing
An index is an essential aid to the filing system. Its importance can be understood from the
following benefits:
i. It facilitates easy location of papers and records whenever needed.
ii. It provides easy cross-referencing and cross-checking, which ultimately improves the
efficiency of office staff, thereby saving time and energy.
Types of Indexing
 Page indexing
 Card indexing
The Page Indexing
It is an old system of indexing. Here index is prepared on papers. This index consists of a
page for each letter of the alphabet, fitted with a tab showing the letter and on each page the
names are written beginning with the letter and quoting the relevant page numbers. This type
of indexing can be in the form of:
Bound Book Index: In this form of index, a bound book or a register is divided into various
sections. Each section is allotted an alphabet. Names of the parties and the persons starting
from a particular alphabet are written in the concerned section. At the outer margin of the
page letter groups are shown by cut outs so that the initial letters of all the sections are visible
at a glance. All entries relating to a particular letter of the alphabet are arranged in the same
section or pages reserved for the same letter of the alphabet in a strict alphabetical order. The
best example of this type of index is printed telephone directory.
This method of indexing has following advantages:
i. This system is very simple and easy to grasp.
ii. It does not involve high cost.
iii. It is good for maintaining records for a longer period
iv. Since the pages are bound, fear of loss and disarrangement is not there.
Some of the disadvantages of this system are:
i. It is not flexible. When name of a new party comes which should be placed before an
existing name, there may not be sufficient space for it. If an old party‟s name or
record is to be deleted, his name still remains in the index register occupying some
space unnecessarily.

58
 ii. Much time is lost to prepare it and to consult it.
iii. If one man is busy seeing it, another man cannot consult it simultaneously.
iv. It cannot show the function of the party unless separate index books are maintained
for separate subjects.
Loose Leaf Index: In this type of index, the pages on which the index is prepared are not
bound. Here the pages are fitted on to a metal hinges and screwed. Thus, wherever required
some pages can be taken out and/or additional pages can be inserted.
This method of indexing has following advantages:
i. This method is very much flexible. The number of sheets can be added or removed as
per the requirement. Thus, loose-leaf binders have complete flexibility and can be
expanded without disturbing the order or sequence of records.
ii. The records sheets can be classified in any manner and they can be made self-
indexing. The sheets can also be rearranged at any time in a new order.
iii. Tabled index or guide sheets can be inserted at reasonably spaced intervals to
facilitate quick location of any sheet.
iv. The speed of reference and the facilities of making entries in loose-leaf books are so
favourable that there is considerable economy of time and labour.
The only disadvantage of this system is that loose leaves can be removed intentionally and
there is fear of loss and mis-handling.

59
Card Indexing

Card indexing is the most popular method of indexing. These are commonly used as they
overcome the difficulty of an ordinary page index. It consists of a number of cards of a
standard size, each concerned with one item of index. The heading is written on the top edge
of the card and the remaining space is used to indicate the place where the corresponding
record is kept. The lower portion of a card also carries certain essential information.
Cards may be arranged in alphabetical or numerical order and are kept in drawers or boxes
specially meant for these. These drawers are divided into sections with sticking up tabs.
Sometimes the cards are filed on a rotary deck or on a wheel.
The advantages of card indexing system are as follows:
i. As the cards are serially arranged, it takes very little time to find out a card and to
locate the file.
ii. It is extremely flexible. When a new party comes, the relevant card is prepared and
placed at the proper place.
iii. It can be expanded to any extent.
iv. It gives some additional services. On the back side of the card, important useful
information about the file can be maintained.
v. By using different coloured cards, they can be grouped according to subjects or
regions.
vi. A mark can be made on the card by fixing a clip, whenever the file of a party has been
taken out from the filing rack.
vii. It can be operated by more than one person simultaneously.
viii. The system is quite cheap to install and operate. The equipment required includes card
and drawers of desired size.
The disadvantages of this system are:
i. All cards cannot be seen at a glance. So it may be time consuming for the filing clerk
to locate a particular card out of all.
ii. The cards may get spoiled because of frequent handling and, therefore, have to be
replaced.
iii. There is a danger of separate cards being lost or manipulated.
However, as the merits of this system overcome its disadvantages, it is widely used in offices
including libraries.

60
Visible Card Index
In this system, the cards are laid flat in transparent covers in a metal frame or a shallow tray.
Each card is so fitted into a metal hinge that it overlaps the one before it, the name and
address on it being visible without touching another card. The trays or frames may be fitted
horizontally into cabinets or attached vertically to metal stands. The hinges enable the
operator to read on each card, either on back or font, without removing it from its place.
A modern method of visible card indexing is operated with the help of cared wheel in which
cards are attached to metal rods surrounding a wheel set on a tub or stand. The wheel rotates
and can be spun around or held in any position by a brake. It can hold between 1,000 and
4,000 cards.

61
Strip Index -The strip index is type of visible indexing which can be used when entries in an
index are limited to a few lines (names, addresses, reference, etc.). It consists, of a frame into
which strips of stiff paper can be fitted in any required order. Each strip is devoted to one
item. Frames can be either fixed on the wall, held in a book form, or arranged on a rotary
stand which can be turned round to look at any part of the index.

The advantages of Visible Card Indexing system are:

i. It is a compact index as the number of cards which can be kept in a tray or cabinet (or
fixed on wheels, frames, etc., as in card wheel or strip index) is much larger than in
other types of index.
ii. As the main reference (name or subject title) is visible, any card can be instantly
located and entries can be quickly made.
The disadvantages of this system are:

62
 i. The requisite type of equipment for visible card index is very costly in comparison to
the non-visible card indexing system.
ii. It is not so easy to understand and operate.
3.7 FILING PROCEDURE

Let us study filing procedure which is usually used in organizations in case of physical record
management.

Step 1: Receiving of a document

A letter or document which has been received through the physical mail is first recorded in
Mail Inward Register. Then the same is stamped with „dating and stamping machine‟.

Step 2: Dealing with the Mail

After that, the letter/document is sent to the person that has to deal with it.

Step 3: Follow up Action

It is to be ensured that the action has been taken on the letter/document as required.

Step 4: Collecting Documents to be filed

All relevant documents and copy of the replies must be collected in a filing tray.

Step 5: Sorting

Bulky tags, pins and paper clips are removed from the documents and the same are sorted
into convenient batches for filing. Always remember to sort and file by date order.

Step 4: Filing

File regularly so that you are never left with a huge pile of loose documents.

Step 6: Indexing

Carefully each document must be examined to decide under which heading it should be filed.

Step 7: Cross-referencing

In case a document to be filed in more than one heading/file, put cross reference cards.

Step 8: Storage

The following points to be taken care of while storing documents in files and cabinets:

a) Use File Trays to keep documents that are waiting to be filed and not on the open
shelves.
b) Sorted batch of papers should be as per the classification method used in the
organization.

63
 c) To avoid inconvenience, open one cabinet drawer at a time and shut it before opening
the next.
d) Insert documents into the file, in date order, placing the latest document on top.
e) Return the file to the cabinet and remove the guide card, if inserted.
f) Avoid bulky folders.
g) Replace the file covers when these are worn or torn off with new ones.
h) Avoid filing drawers or cabinets to become too bulky or heavy.
i) Lock up all confidential documents.

In order to observe good housekeeping, a Secretary should leave the table tidy at the end of
the day and place all waste papers in rubbish bins.

As a secretary, it is your duty to provide him/her all the necessary information and documents
as and when required without any waste of time.

CHECK YOUR PROGRESS

1. Define the term – Filing. Also discuss various essentials of an efficient filing system.
2. Name various methods of classification of filing.
3. Alphabetical filing is the basis of all other types of filing. Do you agree with the
statement? Also explain its advantages and disadvantages.
4. What do you understand by chronological classification of filing? Also discuss its
advantages and disadvantages.
5. What types of organizations should adopt geographical filing? Also discuss
disadvantages of geographical filing.
6. The simplest method of filing is by subject method. Do you agree with the statement?
Explain the subject method of filing with the help of an example.
7. What are the horizontal and vertical methods of filing?
8. Explain the term indexing. Why is it important to have a proper indexing system in an
organization?
9. What are the essential steps that should be followed for effective and efficient
management of electronic records?
10. Discuss in brief Filing Procedure.
----------------------------

64
 Run your meetings as you would have others run the meetings that you attend. (Don
Jacobson)

UNIT IV

ARRANGING MEETINGS
INTRODUCTION

In every office, meetings are a common phenomenon to conduct business operations. Every
Private Secretary has to arrange meetings of a well-managed group. Though directions are
given by the executive as to when, where and for what purpose a meeting is to be conducted
but it is the duty of the secretary to ensure that all logistics are provided to conduct the
meeting in a qualitative manner. Therefore, it is important to understand how to plan,
conduct and participate in meetings so that they produce good results. An active involvement
of PA/PS is expected if he or she is working with a senior level executive whose
responsibility is to chair a meeting.
Objectives
At the end of this lesson you will be able to:
 know the meaning of the meeting and also its importance
 understand different types of meetings
 list out the requisites of a valid meeting
 know duties before, during and after a meeting
 understand various terms relating to meetings

4.1 MEETING – MEANING, IMPORTANCE AND TYPES OF MEETINGS

A meeting may be generally defined as a gathering or assembly or getting together of a

number of persons for transacting any lawful business, discussing certain matters of concern,
making recommendations or taking decisions. In other words, a meeting is “any focused
conversation which has usually a specific agenda.” There should be at least two persons to
constitute a meeting.

Importance

In an organization, meetings help in smooth functioning of an organization. Basically,

meetings may be organised to:

65
  transact official business.
 find solutions for problems.
 exchange ideas, opinions, etc. for growth of business.
 take decisions and make recommendations for the growth of business.
 plan new schemes.
 brief members on plans already made or proposals already finalised .
 discuss and make arrangements for a specific event.
 review the progress being made on a particular front.
 resolve conflicts, confusions and disagreements.
 change the existing policies and procedures.
 motivate staff by generating enthusiasm and positive attitude.

Types of Meetings

Broadly meetings may be categorized as -

 Public meetings
 Business meetings.

Public Meetings are those meetings which are open to the members of the public in general.
These are generally held at some public place like a park or public hall. The purpose of these
meetings may be to propagate some knowledge or belief. Notice of such meetings is served
by announcements in the newspapers or by posters etc. Civic reception meetings, political
meetings etc. are example of the public meetings.

Business Meetings are those meetings which are held by private bodies or associations in
which affairs or business of the private body concerned are discussed. These are open to
those persons only who are the members of that body or those who have been invited to
attend. Business meetings may be classified as:
i) General Meetings
ii) Committee or Sub-committee meetings
General Meetings are those meetings which are for all the members of the body or
organization concerned. At such meetings, the general business of the organization is
transacted and discussed.
There are two types of general meetings:

66
  Annual General Meetings and
 Extraordinary General Meetings.

Annual General Meeting: It is a formal meeting that is held by companies once every year in
order to deal with ordinary business. According to the Company Law, all companies are
obligated to hold an annual general meeting every year. In this meeting, the company‟s
executives, directors, and shareholders meet for the purpose of transacting ordinary business.
The Annual Report of the company is presented to everyone gathered at the meeting. Some of
the other businesses transacted at annual general meetings may be the appointment of
directors of the company, adopting of the budget for the next 12 months, dealing with the
remuneration of auditors of the company etc.
Before an annual general meeting is held, it is normally required that a 21-day notice is
issued.
Extra Ordinary General Meeting: An extraordinary general meeting or the EGM is a meeting
which is convened by the Directors of a company in order to deal with any special business
that is so important that it cannot wait until the next annual general meeting (AGM) to be
dealt with. These meetings do not have a regular time of occurrence and can be held anytime
to deal with any urgent matter. Because of the nature of these meetings, they are normally
called on short notices. A minimum of 14 days notice is generally required for an
extraordinary general meeting.

Committee Meetings are the meetings in which only concerned or elected members are
invited to attend. For example, Governing Body Meeting, Sales Committee, Canteen
Committee or Finance Committee Meetings etc. Committee meetings may take the form of
problem solving meetings, innovation meetings, team meetings etc.

4.2 REQUISITES OF A VALID MEETING

Every meeting needs to be planned in advance, so that it is successful. A meeting is said to be

properly convened when proper notice of a meeting has been issued by a proper authority to
all persons who have right to attend the meeting. Further, in a duly constituted meeting, there
is a proper person in the chair to preside over it and the quorum is complete. The first step
towards planning a meeting is that it must be properly convened and constituted. It is the
duty of a PA/PS to know all the valid requisites of a meeting which are discussed below.

67
4.2.1 Notice of a Meeting

Notice of a meeting means advance information or intimation of a meeting so that the person
receiving it gets an opportunity to prepare himself/herself for it. The notice of a meeting
should contain the day, date, time and venue of the meeting. It must also indicate the purpose
and nature of the meeting. If so required under the rules, copies of certain reports, statement
etc, must also be enclosed or annexed to the notice. For example, in the case of an Annual
General Meeting of the company, a copy of the Balance Sheet and Profit and Loss Account
of the company and Directors‟ Report have to be sent along with the notice.

Issuing notice to all the members who are supposed to attend the meeting is mandatory and
obligatory. The notice must be served in the manner prescribed as per the rules or
constitution of the organization or body concerned. Notice should always be in writing.

Minimum notice period required for a meeting is also prescribed in the rules or constitution
of the organization. For example, as also said above, in the case of an Annual General
Meeting of a Company, the notice about the meeting must reach the members at least 21 days
before the meeting.

A private secretary should ensure that the notice is circulated to all the members within the
stipulated time.

4.2.2 Agenda of a Meeting

It is a practice to send an agenda along with the notice to the members who have to attend the
meeting. An agenda is a programme of the items of the business to be discussed at a meeting
in the order in which they are to be taken.
The purpose of agenda is to let all the members of the committee or organization give
adequate information so as to enable them, prior to the meeting, ponder over the items of
business to be discussed. Agenda is prepared by Secretary in consultation with the
Chairperson and the items of business dealt with at the previous meeting are taken into
consideration. The Secretary should make a note of any matters requiring the attention of the
members, so that these may be included in the agenda for the next meeting.

68
An agenda could be a part of the notice of the meeting or can be annexed along with it.
When the agenda is given as an annexure to the notice or circulated separately it contains the
following information-
 Name of the organization and date of circulation
 The day, date, time and venue of the meeting
 The items of business to be transacted at the meeting
 The background paper or information, if any.
Sample of Agenda:

69
Sometimes, the first item on an agenda is the “confirmation of minutes of the previous
meeting” and the last item is “any other matter with the permission of the chair”. Other
matters are arranged according to their importance. The routine matters are put first and then
the controversial matters.

4.2.3 Quorum of a Meeting

The word “quorum” is derived from Latin and may be defined as the minimum number of
members who must be present at a meeting as required by the constitution or rules. No
important decisions can be taken or business transacted in a meeting without a proper
quorum. A meeting is not properly constituted if the quorum is not present and any business
transacted at such a meeting will be invalid. The main Purpose of having a quorum is to
prevent a small minority from taking decisions which may be unacceptable to the majority of
the members.
The number of members required to complete a quorum is given in the rules of the
organization. For example, in the case of the meetings of the Governing Body of a College, it
may be provided that quorum will be one-third of the total strength of the Committee,
whichever is .

4.2.4 Chairperson of a Meeting

In the context of a meeting, Chairperson is the person who presides over a meeting.
The person in charge of a meeting or organization is referred to as the chair, or
sometimes the chairperson. These words can be used to refer to either a man or a woman. In
other words, it is necessary to designate a chairperson to preside over and conduct the
proceedings of a meeting in proper manner according to the rules and constitution. The other
points of importance of chairperson in a meeting are to:
 approve the items to be discussed on the agenda
 manage the proceedings of a meeting and keep order
 conduct the business according to the agenda and constitution/standing orders/rules
and keep the discussion within the prescribed limits.
 deal with points of order
 provide guidance in the discussion and assist the meeting to make decisions by
passing resolutions, amendments, etc.
 take a vote or poll and declare the result

70
  do signature on the minutes and ensure that action is taken, as approved
 adjourn or postpone meetings
 exercise casting vote
4.2.5 Motions and Resolutions
A motion is a proposal put before a meeting for its consideration and decision. The business
of a meeting is transacted through motions.
A motion must normally be written and handed to the Chairperson or Secretary before the
meeting. A member who wants to put a proposal, first of all secures the permission of the
chair and then introduces the motion. The mover of the motion speaks of it and has the right
of reply at the close of the discussion. A motion is then required to be seconded by another
member, who is called the seconder. If there is no seconder, a motion is dropped and cannot
be introduced again. However, no seconder is required if the motion is moved by the
Chairperson. After a motion is formally put before the meeting, the Chairperson asks
members to express their views on it. Therefore, when put to a meeting, the motion becomes
“the question” and when a decision is taken after discussion and is passed then it is called
“the resolution”.
A resolution is defined as the formal decision of the meeting on any proposal put before it. A
resolution if adopted and recorded in the minutes becomes the official decision of the
meeting. Usually the rules provide for passing of two kinds of resolutions: ordinary
resolutions and special resolutions.
A resolution which is passed by a simple majority of votes is called ordinary resolution.
Simple majority means that the votes cast in favour of the resolution must exceed the votes
cast against it. Special resolution is a resolution which is passed by a three-fourths majority.
Votes cast in favour of the special resolution must be at least three times more than the
number of votes cast against it. The matters for which special resolution must be passed are
specified in the rules of the body concerned.
An amendment is a proposal to alter a motion by adding or deleting words. Before a motion
is voted upon and adopted, an amendment may be proposed. It must be also proposed and,
seconded and passed in the meeting in the customary manner. When the motion of
amendment is moved, seconded and accepted, discussion on the original motion ceases and
discussion on the motion of amendment starts. After the discussion, it is put to vote and if it
is passed, the original motion is amended.

71
4.2.6 Adjournment of a Meeting

It means suspending the proceedings of the meeting either for a particular time or
indefinitely. Subject to the articles, rules or constitution of an organization, the Chairperson,
with the consent of members of the meeting, may adjourn it in order to postpone further
discussion. If it is carried, the meeting is adjourned to the agreed date or indefinitely.

A Chairperson, can adjourn the meeting when there is no quorum or the meeting becomes so
disorderly that it is impossible to transact the business at his own discretion. In other words,
he/she can adjourn the meeting or a discussion for a bona fide purpose.

4.2.7 Minutes of a Meeting

Minutes of a meeting may be defined as a record of the proceedings of a meeting and are kept
to preserve a brief, accurate and clear record of the business transacted. The term „Minutes‟
in literal sense means a note to preserve the memory. The minutes of any meeting serves as
an official record of what took place i.e. the points discussed and decisions taken during any
meeting. One must be very alert and accurate in taking down minutes of meeting.
Before the Meeting, choose your medium carefully with which you will take notes, i.e. pen
and paper, laptop, computer, or tape recorder. Also ensure that the same is in working order
and have a backup facility in case of emergency. It is important to refer the meeting agenda to
formulate an outline of minutes of meeting.
During the Meeting
 Get a list of committee members and pass around an attendance sheet.
 Note the time when the meeting begins.
 Don't try to write down every single comment -- just the main ideas.
 Write down motions, which made them, and the results of votes, if any; also write
down who seconded a motion.
 Make note of any motions to be voted at future meetings.
 Note the ending time of the meeting.
After the Meeting
 Type up the minutes as soon as possible after the meeting, while everything is still
fresh in your mind.
 Include the name of organization, name of committee, type of meeting (daily, weekly,
monthly, annual, or special), and purpose of meeting.

72
  Include the time the meeting began and ended.
 Proofread the minutes before submitting to the executive for obtaining relevant
signatures.
A draft is generally submitted to the chairperson for approval before the final copy is typed.

Sample of Minutes of Meeting

73
4.3 SECRETARIAL DUTIES RELATING TO MEETINGS

It must be understood that there is no direct authority and responsibility of a private secretary
for convening and conducting a meeting. But it is one of his/her duties to assist the executive
in the performance of all the secretarial work relating to meeting. Secretarial work relating to
a meeting may be before, during and after the meeting.

Before the meeting, a secretary has to -

1. ascertain the date, time and place i.e. when and where the meeting is to be held in
consultation with the executive and take steps to make preparations accordingly e.g.
booking of the committee/conference room, hotel etc.
2. draft the notice and agenda and get it approved.
3. get adequate number of copies of the notice, agenda and reports etc., if any required to
be sent along with the notice and send the same to all the members who have a right
to attend the meeting.
4. check in advance all logistics viz. air-conditioning system, blowers etc. in the meeting
room and to arrange for public address system, OHP/LCD/Screen and other
equipment that may be required and to see that sufficient number of chairs are made
available in the meeting room keeping in view the number of invitees.
5. book in advance necessary orders for refreshment and lunch.
6. keep ready (i) the items of stationery such as writing paper, pen, pencil, (ii) spare
copies of agenda, (iii) minutes of the previous meeting, (iv) the papers, reports,
statements and other documents likely to be required at the time of the meeting
including letters of apology received from the members unable to attend, (v)
attendance sheets or register, (vi) any books of reference, standing orders etc.

Secretarial duties during the meeting are to:

1. obtain signatures of the members present in the Attendance Book or on Attendance
Sheets.
2. help the chairperson in ascertaining the quorum.
3. keep before the Chairperson the necessary papers, filed and documents for ready
reference and to distribute papers and documents, if any, to the members.
4. read, if required, the notice of the meeting, apologies for absence, minutes of the last
meeting and Auditors‟ Report etc., if directed by the Chairperson to do so.

74
 5. see that refreshment is served properly.
6. supply necessary information, if any, regarding rules of procedure, papers and
documents required by the Chairperson while conducting the proceedings of the
meeting.
7. take notes of the proceedings of the meeting.

After the meeting, it is the duty of the secretary to:

1. prepare draft minutes and when approved, get the same typed in proper form.
2. see that the meeting room is left in good order, check the room for papers or personal
items left behind by the departing participants, arrange to return borrowed equipment,
to have unused supplies and exhibits picked up.
3. arrange for carrying out decision taken in the meeting and to ensure that proper
intimation is given to those who are associated with given assignments.
4.4 TERMS RELATING TO MEETING

Ad hoc subcommittee: Adhoc means „arranged for this purpose‟. An ad hoc subcommittee
is appointed for the purpose of carrying out one particular piece of work, such as the
arrangements for the visit of a VIP. These committees are also called special purpose
committee.
Addressing the Chair: All remarks must be addressed to the chairperson and members must
not discuss matters between themselves at a meeting.
Attendance Sheet: A record of people present at a meeting, usually provided at a sheet
which is passed round for signature by members.
Casting Vote: A vote usually allowed to the Chairperson. A casting vote is used only when
there are equal numbers of votes „for‟ and „against‟ a motion.
Convener: A person authorized to call a meeting.
Co-opted Member: A person who serves on a committee as a result of the committee‟s
powers of co-option, i.e. the committee approves of the appointment of a co-opted member
by a majority vote in order to engage the services of a person qualified to assist them in their
work.
Ex-officio Member: A person who is a member of a committee by virtue of office.

75
Memorandum and Articles of Association: These are regulations drawn up by a company
setting out the objects for which the company is formed and defining the manner in which its
business shall be conducted respectively.
Point of Order: A point of order is a question regarding the proceedings of a meeting or a
query relating to the standing orders or constitution of the meeting. For example, a member
may draw the attention of the Chairperson to the fact that there is no quorum or the motion
put before the meeting is not within the scope of the meeting or there is use of improper
language or indecent behaviour. When a point of order is raised, debate on the main motion
will stop. The Chairperson will give his decision at once which will be final and binding.
After the settlement of the point of order, discussion on the main motion will start again.
Poll: Poll is the term given for the method of voting at an election and in a meeting this
usually takes form of a secret vote by ballot paper.
Proxy: A person appointed to attend a meeting and vote on behalf of a member who is unable
to attend.
Rider: A rider is an additional clause or sentence added to a resolution after it has been
passed.
Standing Orders: These are the rules compiled by the organization regulating the manner in
which its business is to be conducted. It may also have the title „constitution‟.
Status quo: Used to refer to matter in which there is no change.
Teller: A person who counts the votes at a meeting.
Web Conferencing: Web conferencing enables the real-time sharing of computer screens,
individual applications or web-based content among two or more computers or mobile
devices.
It works the same way in the virtual world as it does the real world. Web conferencing
platforms may be internet based and delivered via software, which enables the users to hold
live meetings and conferences. Web conferencing covers also online collaborative services
like web seminars ("webinars") and webcasts (it is considered to be a video broadcast of an
event transmitted across the internet).
Ultra vires: Beyond the legal power or authority of a company or organization.
Unanimous: When all members of a meeting have voted in favour of a resolution, it is said to
be carried „unanimously‟.
CHECK YOUR PROGRESS
Answer the following questions:
1. Define the term – Meeting. Enumerate the various types of meetings.

76
2. Explain the requisites of a valid meeting.
3. Differentiate between Agenda and Minutes of Meeting.
4. Discuss the various secretarial duties before, during and after a meeting.
5. Explain the following terms:
(a) Casting Vote
(b) Proxy
(c) Rider

---------------------------

77
“In order to ensure executive’s travel productive and stress-free, as a Private Secretary it’s
your responsibility to plan and organize all adequate arrangements.”

Unit-V

TRAVEL ARRANGEMENTS

INTRODUCTION

As it is imperative for business executives to make outstation tours to attend conferences,

meet customers, finalize tenders, study new projects etc., it is the responsibility of a
professional secretary to make his/her travel arrangements. It is the secretary‟s duty to plan
the business tour in such a way that a great deal of cost, time and energy of his/her executive
is saved.
When a secretary is informed about the travel plans, she/he is supposed to schedule the same
according to travel policies of the company. All big organisations have defined policies and
procedures which are to be obeyed by its employees while travelling so that travel expenses
made by them could be settled. All travel expenses incurred like travel ticket, car rental,
hotel accommodation; meal allowances, etc. are reimbursed to the executive when on an
official tour.
A secretary designs tour programme of the executive and also inform all the associates in the
department, so that they can get in touch at all times while the executive is travelling, if
needed, in order to run office work smoothly.
Making travel arrangement is an art, as a properly designed tour programme increases the
efficiency of the executive and keeps him/her satisfied.

OBJECTIVES
After going through this lesson, you will be able to:
 enumerate the different modes of travel
 identify the formalities needed to make rail and air reservations
 explain the role of travel agencies
 prepare an itinerary
 make arrangements for travel in accordance with organisational policies
 know the various documents needed for an overseas tour

78
5.1 MODES OF TRAVEL
Various modes of travel include air, rail, road, water etc. Each mode has its own merits and
demerits and is chosen on the basis of cost, speed, route and capability.
Normally, business travel is multi-modal. When more than one mode of transport is used for
a journey, the journey is described as multi-modal. The following modes of travel are
commonly used by executives while on business tour:
a) Private Car, Taxi or Cabs
b) Bus
c) Railway
d) Air
Private Car, Taxi or Cabs
It provides ad-hoc services at rider‟s desire. This is resorted for travelling short distances
within the country. Though this mode of travel is bit expensive but it offers flexibility of
travel. The concept of cabs (radio taxis) is very popular now-a-days. But private car and
taxi have lower capacity and are, sometimes, time consuming.
There is no elaborate procedure involved in booking cars and taxis. A person can either book
a car/taxi on telephone, on-line or approach personally local taxi stand. Cab users usually
download the various service applications on their mobile and make use of the same,
whenever the service needed.
Bus
The cheapest mode of transport is the bus. We know that every city has a well developed
system of buses. Luxury and air conditioned buses are available to make travel comfortable.
For booking a ticket in a bus, there are not much formalities needed. Like private car/taxi, a
ticket can be booked on-line, on telephone or by approaching local bus terminal.
Railway
Rail travel is very important mode of travel between different cities. Train travel can bring
much comfort and convenience to the travellers. Unlike planes, one can use cell phone on
trains. The seats on a train are comfortable and trains are rarely delayed due to bad weather.
India has one of the most spectacular rail networks in the world. Advance reservation is
necessary for rail travel. One can refer to time table published by Indian Railways which is
published at regular intervals or visit the website - w.w.w.indianrail.gov. to find out the
different classes of services offered by Indian Railways to its passengers. One can go for
booking tickets on internet and check for all the enquiries like Train Alert, PNR Status, Train

79
 Status, Seat Availability, Train Schedule, Train Information, Train Time Table, Train Fare
etc.
One can send SMS on 57886 through mobile phone to get any information on railways.

5.2 HOW TO MAKE RAILWAY RESERVATION

For booking reservation in railway trains personally, Railway Reservation Slip is to be filled
in with particulars about journey, trains and persons travelling. This slip is also used for
cancellation of journey, if so required. A specimen of railway reservation/cancellation form
is given below:

Reservation/Cancellation Requisition Form

If you are a Medical Practitioner

Please tick ( ) in Box
Dr.
(You could be of help in an emergency)
If you want Sr. Citizen Concession, please write Yes/No in Box
(if yes, please carry a proof of age during the journey to avoid inconvenience of panel charging under extant Railway Rules)
Do you want to be upgraded without any extra charge? Write
Yes/NO in the box.
(if this option is not exercised, full fare paying passengers may be upgraded automatically)
Train No & Name Date of journey

Class 3A Number of Berth/Seat

Station From To

Boarding at Reservation upto

Name in Block Letters Concession/Travel Authority Choice Me

S.No. Sex(M/F) Age
(not more than 15 letters) No. (Lower / Upper Berth) Ex
1. -- --

2. -- --

3. -- --

4. -- --

5. -- --

6. -- --

FOR OFFICE USE ONLY

S.No. of Requistion _______________________ PNR No. _______________________
Berth/Seat No. _______________ Amount collected ________________

______________________ Signature of Reservation Clerk

NOTE : 1.Maximum permissible passengers is 6 per requisition.
2. One person can giFve one requisition form at a time.
3. Please check your ticket and balance amount before leaving the window.
4. Forms not properly filled or in illegible forms shall not be entertained.
5. Choice is subject to availability

80
For rail e-ticket booking in India, Register as an individual. Registration is free. The e-
booking procedure of railway and air ticket is almost the same. The same is discussed in the
section just below.

81
5.3 AIR TRAVEL

Air travel has become extremely popular for long distance travelling and is widely used by
top and middle level executives. Air transport has in the recent past become relatively
economical due to competitive prices. Further, it is a fast and reliable mode of transport. The
decline in prices has increased its demand. Like rail travel, advance reservations are also
necessary for all airline flights.
Air travel can be divided into two:

-Domestic flights
-International flights

In addition to Air India, there are several private airlines services which operate on both
domestic and international routes.

For booking airline reservation, a person can:

82
-buy a seat on line
-walk into any counter at airport or city airline office

Booking an air ticket through internet is just a few clicks away. To book an air ticket online,
we need a credit card or a net banking account. Online air ticket booking sites have been
provided by airlines and booking agents. Some of sites of online air ticket booking are
goibibo, yatra.com, cleartrip.com, makemytrip.com, expedia etc. In addition, the sites also
provides help to –

 provide information about the discounts in fare and hotel packages

 find out latest offers from different airlines
 avail special offers given by different banks to credit/debit card holders
 select extra insurance and other schemes provided by third party companies

Air Ticket Reservation

It is very simple to book an air ticket online. First you have to select whether it is a one way
trip or round trip. Then select the travelling dates – for one way trip select the starting date
and for round trip select the return date too. Then you have to select the source and
destination cities. You can scroll down through all major cities and towns in India. Once the
source and destination is selected then you have to specify number of passengers including
children and infants. After giving all these details, click on search and it will display all
available flights from different airlines on the particular date.
After selecting your convenient flight, click on Book button to go to the billing page. In the
billing page, you have to enter your personal details including email id and phone number. It
will take you to the payment page for selecting a payment option. Most airlines accept two
types of payment - one is through a credit or debit card and next is via a net banking account.
Select your payment method and fill the necessary details. Once this step is completed, you
will get a confirmation page and one email in your specified email id within few seconds.

83
Thus, there are many ways that helps you in making flight reservations on the net. You can
make use of number of travel sites to find out what prices are obtainable for your executive‟s
tour itinerary. It is so interesting to note that some of the travel websites allow you to choose
the fare you are eager to shell out and then provide help to find the tickets for that price. To
book the flight reservation, you can also contact the airlines directly. The advent of modern
technology has made flight reservation a cakewalk.
Various travel agencies also do provide facilities by booking tickets on commission basis.

5.4 E-TICKET AND PAPER TICKET

84
Both, railways and airlines support e-tickets. You can take a printout or show the screen shot
of the ticket along with an identification proof at the time of travelling. A soft copy of ticket
in a mobile is also as good as a paper ticket. For the travel, any valid photo identification
proof like original passport, Voter‟s ID, Aadhar Card, Driving license etc. is mandatory.

For international travel, passengers require to be in possession of valid passport, visa and/or
entry permits and health certificates as required. Embarkation forms (this is part of the
immigration formalities required to be concluded for your visit to the country, and contains
the personal, passport and visa details which are to be filled up by you in addition to the flight
details. The form is to be submitted at the immigration counter where your entry to the
country shall be stamped in the passport) should be duly filled and submitted to customs and
immigration authorities before boarding the aircraft.
5.5 TRAVEL AGENCIES
Travel agencies help travellers by sorting through vast amount of information to help their
clients make the best possible travel arrangements. Travel agents offer advice on destinations
and make arrangements for planning itineraries, transportation, hotel accommodations, car
rentals, tours etc. for their clients. Travel agents are also expected to be able to advise
travellers about their destinations, such as the weather conditions, local ordinances and
customs, attractions, and exhibitions. For those travelling internationally, agents also provide
information on customs regulations, required documents (passports, visas, and certificates of
vaccination), travel advisories, and currency exchange rates. In the event of changes in
itinerary in the middle of a trip, travel agents intervene on the traveller's behalf to make
alternate booking arrangements, which avoids lots of inconvenience.
Some travel agencies specialize in commercial and business travel only. Travel agencies do
have a separate department for senior executives and business travellers to cater their special
needs. There are also travel agencies that serve their clients by having offices in various
countries.
A good travel agent can save endless hours of searching the travel information. They protect
clients‟ interest by providing the best possible services at the most economical rates and
offering special discounts.

It is very important to select a good travel agent to take care of travel arrangements for your
executive‟s tour. While searching on internet, you will find that several companies are
engaged for years in tourism and travel trade. You have to select really a good travel agent

85
who has been in this line of business for quite some time. One of the first questions, you
should consider is how long the agency has been in this business. In order to find out their
credentials, one can read the reviews of the customers available online. This would give an
opportunity to assess the scope and skills along with the genuineness of the facilities which
are being offered by the agency. As said, a reputed travel agency has its offices in different
cities.
Travel agents work on commission basis and do charge from their clients for providing
various services. Thus, while making travel arrangements, it is important to search sites
available on the internet which provide information of reputed travel agents and give
complete information about the various services offered by them along with the previous
clients‟ reviews and experiences.
5.6 HOTEL RESERVATION

Based on your executive‟s eligibility and preferences, you have to find out the various
facilities offered by the hotel which you are planning to book. These may include internet
access, non smoking areas, swimming pool, fitness centre, restaurant, book shop, etc.
You can search for good hotels on line and do booking for all good reputed hotels in any part
of the world. Various sites help in comparing the rates offered by different hotels and provide
all the relevant information. Once the hotel is booked online, confirmation of the same is sent
on email address provided. One can check the reservation status or cancel the reservation, if
needed, by the link provided in the confirmation that is sent to on e-mail.
A rating system of „one to five stars‟ is there which helps the prospective clients to compare
the facilities offered by different hotels.

5.7 ITINERARY

It means a detailed tour programme for any person or a party. The success of your
executive‟s tour depends upon how well a secretary can help him/her while planning stage.
When your executive gives full particulars of his/her tour programme, you should prepare an
itinerary and circulate it to all concerned officials to whom he has to confer. It is the duty of
secretary to prepare an itinerary so that the tour of the executive takes place without any
trouble.
The following points must be kept in mind while preparing an itinerary:
1. The time and place of departure and arrival
2. The mode of travel preferred

86
 3. Sequence of visits
4. Hotel Accommodation (Motel is a roadside hotel designed primarily for motorists
usually situated on highways)
5. Conveyance between hotels and railway station/airports
6. Appointments and meetings of the executive

Sincere planning and a thoughtful consideration on the executive‟s preferences, comfort and
convenience is primarily necessary while preparation of itinerary. Once basic planning
done, final approval of executive is necessary before making any specific engagements and
bookings.
Samples of itinerary template:

ITINERARY OF MR AMIT VERMA, GENERAL MANAGER

Date/Time Departure Station Arrival Station

Train No/ Purpose Remarks
Flight No.
___________________________________________________________________________

87
5.8 ORGANIZING TRAVEL

After making all the travel and accommodation arrangements for your executive, a secretary
is required to perform other important duties. Before departure on tour, the private secretary
should hand over all the related papers and other things to the executive. These may include:
 A copy of itinerary
 Transportation tickets
 Hotel Reservation confirmation print outs
 Financial instruments, if required (Cash, credit cards, traveller‟s cheques etc.)
 All relevant documents, reports, proposals, files, agenda of meeting etc.
 Telephone nos., e mail addresses of all concerned people
 Necessary stationery, pen drives, hard disk etc.

88
It is important to prepare a check list and then make preparations accordingly. If you are an
efficient secretary, then your executive has every reason to anticipate his travel information
i.e. who, what, when and where of his various travel reservations.

5.9 TOUR ADVANCE AND TOUR CLAIM

All the expenses concerning official travel are reimbursed by every company to the staff as
per the policies/procedures laid down. It is the duty of the secretary to discuss and find out
the adequate amount which may be needed by the executive to incur various expenses during
the tour and draw the same from the Finance Department. Usually, before leaving for official
tour, a Tour Advance Form which contains complete details of journey to be performed is
filled up to draw necessary advance.
After completion of the journey, Tour Claim Form is filled-in by the Secretary. It contains in
detail the actual expenses incurred by the executive while performing the journey viz.
boarding and lodging expenses, conveyance expenses, etc. Tour advance already taken, if
any, is also filled up in the Tour claim form and, accordingly, the private secretary draws the
balance amount or returns the excess amount. Tour claim form is accompanied with all
relevant bills of hotel, travel tickets or other expenses incurred.

5.10 OVERSEAS TRAVEL ARRANGEMENT

If your executive has to proceed on an international tour, he/she will require a variety of
travel documents apart from an itinerary, meeting notes and so on. The necessary documents
needed for tour to foreign countries include:

 Passport
 Visa
 Health documents
 Travel Insurance Policy

Passport
A passport is a travel document, usually issued by a country's government, that certifies the
identity and nationality of its holder for the purpose of international travel. Standard

89
passports may contain information such as the holder's name, place and date of birth,
photograph, signature, and other identifying information. There are three types of Indian
Passport, which are:
 Regular Passport has a Navy Blue cover and is issued for ordinary travel, such as
vacations and business trips.
 Diplomatic Passport has a Maroon cover and is issued to Indian diplomats, top
ranking government officials and diplomatic couriers.
 Official Passport has a White cover and it is issued to individuals representing the
Indian government on official business.
VISA
Visa (often said to be Visitors Intended Stay Abroad) is a document issued by a country to a
person to formally ask the traveling country for permission, with a specific reason for a
stipulated amount of time. All the countries have their own VISA laws and it is up to the
country to allow a traveler to allow him/her or not. A visa does not guarantee entry, a person
may also may also be rejected after getting permitted.
Visa is granted by High Commission/Embassy/Consulate of a country subject to eligibility
and on an application made in the prescribed form. The application for visa must be
supported by the necessary documents.
When visa is granted, it is endorsed on the passport indicating the period of stay in the
country.
Types of Visa: Tourist Visa, Student Visa, Employment Visa, Business Visa, Pilgrim Visa,
etc.
Health Documents
Before travel, it is important to find out country specific information regarding health check
up to be performed. Most of the countries have made it mandatory for visitors to get
vaccinated prior to their visit as a precautionary measure.
Travel Insurance Policy
Travel insurance policy covers several risks associated with unfortunate events such as
baggage loss, passport loss, a medical emergency or an accident. Having Overseas Travel
Insurance ensures that in a foreign land, you do not feel helpless in any kind of an
emergency.

Foreign Exchange

90
Foreign Exchange (or Forex) is exchange of one currency for another. It also means
conversion of one currency into another currency. All travellers intended to travel abroad
require foreign exchange. Information regarding currency regulations should be found for
each country. This includes details of how much currency can a passenger bring into the
country and how much foreign exchange can a passenger carry out of a country.
In addition to above, travel Vouchers and maps are another important documents which may
be needed while executive‟s travel. As discussed, travel vouchers are provided for various
bookings undertaken usually on email id provided viz. Travel tickets, car rental
confirmations, hotel accommodation etc.

It is important to note that while travelling abroad, your executive may feel „jet lag‟ which
means extreme tiredness and other physical effects after a long flight across several time
zones. In other words, he/she may be tired and slightly disoriented for days after arriving,
accompanied by a lack of concentration and motivation, especially for any activity that
requires effort, such as reading or discussing a business deal. So, all meetings scheduled
abroad to be taken care of and the time zone differential respected among various countries to
avoid any embarrassed situation at a later date.
CHECK YOUR PROGRESS

1. State which of the statements given below are true and which are false:

(i) Most of the airlines support e-tickets.

(ii) Air travel is not a popular mode for long distance travelling.
(iii) For Rail and air travellers, advanced reservation is necessary.
(iv) Before making a flight reservation, firm‟s policies must be considered.
(v) You do not need a credit card for booking online tickets.
(vi) Your executive itinerary should contain information about his qualifications
and experience.
(vii) Before your officer‟s departure on tour, he/she should have with him/her,
among other things, a complete list of persons whom he/she wants to meet
during the tour.
(viii) It is not the responsibility of the secretary to arrange conveyance from the
residence of the executive to the Airport.
(ix) The easiest way of getting travel reservations done is through a Travel Agent.
(x) It is not possible to get a hotel accommodation reservation in other countries
when you are sitting at office.
(xi) Good travel agencies also provide the car rental services.

2. Complete the sentences given below:

(i) An itinerary is _________________________________.

91
 (ii) Tour Claim form is filled, once the journey is ______________________.
(iii) Within few seconds, You can check your reservation status or cancel the
reservation ___________________________________.
(iv) The job of travel agents is _________________
(v) It is the duty of _______________ to arrange the travel arrangements of the
executive.
(vi) Foreign currency is required for ______________

3. Answer the following questions:

(a) How will you select a good travel agent for your executive?
(b) When your officer plans a tour, what points you will keep in mind to make his/her
successful?
(c) Make an imaginary itinerary of your executive with five entries.
(d) Differentiate between passport and visa.
(e) What general preferences of boss you need to know while making reservation for
executive‟s travel?
(f) What is the difference between Tour Advance and TA Claim?
(g) Explain in details the formalities required for Overseas Travel?
(h) What is e-Ticketing? Write down the process?

-----------------------------

92
People have lot of faith in banking industry as the industry has contributed a lot not only in
country’s economic growth and its prosperity but of an individual’s too.

Unit - VI

BANKING SERVICES
Introduction

A bank is a financial company that works with the money. It helps the public to deposit their
money and give them credit whenever they need it. During lending money, they collect extra
money called banking fees with which they pay interest to savers as well as salaries for their
workers. Banks make a profit because they collect more interest than what they pay to savers.
Without banks the world‟s economy would not be able to grow. Investors would not find the
money they need for new projects and industries would not buy new
machines/modern technology.
OBJECTIVES
After going through this lesson, you will be able to:
 know various services provided by banks as on date viz. deposits, advancing loans,
transfer of funds etc.
 understand common terms relating to banking transactions/industry

6.1 SERVICES PROVIDED BY BANKS

a) DEPOSITS

 CURRENT DEPOSITS (DEMAND DEPOSITS) ACCOUNT

It is a running account for a businessman with minimum number of restrictions. One can
make any number of deposits and withdrawals in a single day. A bank grants overdraft
facility in this account.

 SAVING DEPOSITS ACCOUNT

93
It is an account opened by a person who wishes to save some part of his income for meeting
the unforced expenses and also future needs. It is also a source of income on the savings
made by him. This account provides a nominal rate of interest and a person can deposit as
many times in a day. All the entries of deposits made and withdrawn are entered in a small
book called Pass Book. The specified rate of interest given by the bank on the amount
deposited in the saving bank account keep varying. This rate of interest is fixed by Reserve
Bank of India. It is 4% currently. To open this account, one has to complete all the formalities
required by the Bank such as photograph of the person, Aadhar card, residential proof etc.

 FIXED DEPOSITS (TIME DEPOSITS)

These types of accounts are for a fixed period. The depositor can deposit the money in fixed
deposit for a specific period that can vary from 90 days to any number of days. The rate of
interest is more than saving deposit account and the interest is payable on the maturity of
account. The rate of interest differs from bank to bank and also depend upon the amount of
deposit. The higher the amount of deposit for a longer period, the higher is the rate of interest.

 RECURRING DEPOSITS ACCOUNT

It is also called Term Deposit which can be opened for a specific period and a specific
amount is deposited every month during that term of period. On this deposit, the rate of
interest given is slightly less than fixed deposit which is given on the maturity of account.

b) ONLINE BANKING

Online banking, also known as internet banking, e-banking or virtual banking, is an electronic
payment system that enables customers of a bank or other financial institutions to conduct a
range of finances through the financial institution's website. The online banking system will
typically connect to or be part of the core banking system operated by a bank and is in
contrast to branch banking which was the traditional way customers accessed banking
services.

94
c) MOBILE BANKING

Mobile banking is a service provided by a bank or other financial institution that allows its
customers to conduct financial transactions remotely using a mobile device such as a mobile
phone or tablet. It uses software, usually called an app, provided by the financial institution
for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial
institutions have restrictions on which accounts may be accessed through mobile banking, as
well as a limit on the amount that can be transacted.

d) TRANSFER OF FUNDS

Transfer of funds within your own accounts is known as Fund Transfer. Transfer of funds
can be made to third party account also held in the same or different bank. It is used
to transfer funds to another account that belongs to somebody else but in the same bank (not
necessary to be in the same branch as yours).

e) CHEQUE FACILITY

A cheque is a bill of exchange or an instrument drawn on any bank on demand. In other

words, cheque is a bill of exchange drawn on a specified banker ordering the banker to pay a
certain sum of money to the drawer of cheque or another person. Money is generally
withdrawn by clients by cheques. Cheque is always payable on demand. Commonly,
following four types of cheques are used in -

 Bearer Cheque: This cheque is payable by the drawee bank over the counter to the
Bearer or presenter of the cheque. A bearer cheque can be negotiated or passed to
another person by mere delivery.

95
  Order Cheque: When the word “bearer” on the cheque is cancelled, it becomes an
order cheque. Such a cheque is paid to the person specified therein as payee. The
payee can be anyone else too, to whom the cheque is endorsed.
 Open Cheque: An open cheque is a cheque that is not crossed on the left corner and
payable at the counter of the drawee bank on presentation of the cheque. An open
cheque may be bearer or order cheque.
 Crossed Cheque: A crossed cheque is a cheque that has been marked to specify an
instruction about the way it is to be redeemed. A common instruction is to specify that
it must be deposited directly into an account with a bank and not immediately
encashed by a bank over the counter. Crossed cheque means drawing two parallel
lines on the upper left hand corner of the cheque and writing the words „A/c Payee‟.
The main advantage of this cheque is that if the cheque is lost, nobody can take the
payment. In case of any mis-use, it can be easily found in whose account the payment
is credited. So it is advisable to cross the cheque always.

f) DEMAND DRAFT
It is a cheque or a document stating to pay the amount written on this document on demand.
This document is issued by the bank requesting to pay the specified amount to the person in
whose name this demand draft is issued. It is convenient and simple method of remitting
payments or money from one place to another.
g) OVERDRAFT
An overdraft allows a person to borrow money for short time through current account.
Having overdraft facility from a bank helps an individual or businessmen to meet with short
term cash flow problems.
h) CASH CREDIT (LOANS AGAINST CERTAIN SECURITY)
Cash credit is a short-term source of finance. Under cash credit, the bank offers its customer
to take a loan up to a certain limit. Cash credit is also known as bank overdraft.
Advantages of Cash Credit:
i. It is an important source of working capital financing.
ii. Cash credit can be obtained very easily and quickly.
iii. Interest is charged only on the amount of loan taken by the customer and not on
the amount of credit sanctioned. In other words, interest is charged only on the
utilized amount.

96
Disadvantages of Cash Credit:
i. The rate of interest charged by loan on cash credit is very high.
ii. Such loan is granted by bank on the basis of company‟s turnover, its financial
status, value of inventory, etc. So, it is difficult for new and financially weak
companies to obtain cash credit.
i) DISCOUNTING (BILLS OF EXCHANGE)
The holder of a bill can get it discounted by the bank, when he/she is in need of money. After
deducting its commission, the bank pays the present price of the bill to the holder. The
commercial banks can re-discount, the discounted bills with the central banks when they are
in need of money. When the bill matures the bank can secure its payment from the party
which had accepted the bill.
j) MONEY AT CALL
Bank also grant loans for a very short period, generally not exceeding 7 days to the
borrowers, usually dealers or brokers in stock exchange markets against collateral securities
like stock or equity shares, debentures, etc., offered by them. Such advances are repayable
immediately at short notice, hence, they are described as money at call or call money.
k) TERM LOANS
Banks give term loans to traders, industrialists and now to agriculturists also against some
collateral securities. Term loans are so-called because their maturity period varies between 1
to 10 years. Term loans, as such provide intermediate or working capital funds to the
borrowers. Sometimes, two or more banks may jointly provide large term loans to the
borrower against a common security. Such loans are called participation loans or consortium
finance.
l) CONSUMER CREDIT
Banks grant credit to households in a limited amount to buy some durable consumer goods
such as television sets, refrigerators, etc., or to meet some personal needs like payment of
hospital bills etc. Such consumer credit is made in a lump sum and is repayable in
installments in a short time. The scope of consumer credit has been extended to cover
expenses on marriage, funeral etc., as well.

m) MISCELLANEOUS ADVANCES

Among other forms of bank advances there are packing credits given to exporters for a short
duration, export bills purchased/discounted, import finance i.e. advances against import bills,

97
finance to the self employed, credit to the public sector, credit to the cooperative sector and
above all, credit to the weaker sections of the community at concessional rates.

OTHER COMMON FACILITIES PROVIDED BY BANKS

 Agency Services: Banks also perform certain agency functions for and on
behalf of their customers like collection and payment of credit instrument.
Banks collect and pay various credit instruments like cheque, bills of
exchange, promissory notes etc., on behalf of their customers.
 Purchase and Sale of Securities: Banks purchase and sell various securities
like shares, stocks, bonds, debentures on behalf of their customers.
 Collection of Dividends on Shares: Banks collect dividends and interest on
shares and debentures of their customers and credit them to their accounts.
 Acts as Correspondent: Sometimes banks act as representative and
correspondents of their customers. They get passports, traveller tickets and
even secure air and sea passages for their customers.
 Execution of Standing Orders: Banks execute the standing instructions of
their customers for making various periodic payments. They pay
subscriptions, rents, insurance premium etc. on behalf of their customers.
 Acts as Trustee and Executor: Banks preserve the „Wills‟ of their customers
and execute them after their death.

GENERAL UTILITY SERVICES PROVIDED BY BANKS

a) Locker Facility: Bank provide locker facility to their customers. The customers can
keep their valuables, such as gold and silver ornaments, important documents,
shares and debentures etc. in these lockers for safe custody.
b) Credit Cards: A credit card is a payment card issued to user as a system of payment.
It allows the cardholder to pay for goods and services based on the promise to pay for
them. The issuer of the card creates a revolving accounts and grants a line of credit to
a consumer or the user from which the user can borrow money for payment to a
merchant or as a cash advance to a user. In short, credit card is a small plastic card

98
 issued by a bank, building society, etc., allowing the holder to purchase goods or
services on credit.
c) Debit Cards: A debit card is a plastic payment card that provides the card holder
electronic access to his/her bank account at the financial institution. It is a card that
deducts money directly from a consumer‟s checking account to pay for a
purchase. Debit cards eliminate the need to carry cash or physical checks to make
purchases. These cards help their customers to travel without the fear of theft or loss
of money. With this facility, the customers need not take the risk of carrying cash
with them during their travels.
d) Letter of Credit A letter of credit is a guarantee letter from a bank thereby
guaranteeing that the buyer‟s payment to the seller will be received on time and for
the correct amount. In case of non-payment, the bank will be required to cover the full
or remaining amount of the purchase. Due to the nature of international dealings,
including factors such as distance, differing laws in each country, and difficulty in
knowing each party personally, the use of letters of credit has become a very
important aspect of international business. In short, Letters of credit are issued by the
banks to their customers certifying their credit worthiness.
e) Collection of Statistics
Banks collect statistics giving important information relating to trade, commerce,
industries, money and banking. They also publish valuable journals and bulletins
containing articles on economic and financial matters.
f) Acting Referee
Banks may act as referees with respect to the financial standing, business reputation
and respectability of customers.
g) Underwriting Securities
Banks underwrite the shares and debentures issued by the Government, public or
private companies.
h) Gift Cards
Banks issue gift cards of various denominations to be used on auspicious
occasions.
i) Merchant Banking
Some commercial banks have opened merchant banking divisions to provide
merchant banking services.

99
 j) Automated Teller Machine (ATM) : It is installed by almost all the banks to facilitate
the customers to withdraw money at any time as per their convenience on all the days of
the year. For this, an ATM card is issued which has a PIN number. When this card is used
on the machine, a password is to be set before the transaction is carried on. It releases the
amount punched by the customer after taking into consideration the balance of the
customer‟s account.

k) Electronic Clearing System (E.C.S.) : This system helps to credit the funds faster.
Under this system, the account holder can make payment to other parties having their
account in the same banks without issuing any proper instrument. This system is
restricted or limited to the accounts maintained in one or different branches of the
same bank within or outside the city. The computer system allows the transfer of
funds to the other party after verifying the details from the account.
6.2 TERMS USED IN BANKING TRANSACTIONS

 PAY IN SLIP
It is a slip or the form with a counter foil to be filled for depositing the money by the
depositor or any other person for depositing the cash, cheque, draft etc in any account.
 CASH WITHDRAWAL SLIP
This is a form or slip used for withdrawing the money from the account where the cheque
book or ATM cards are not issued to the account holder. The passbook is to be produced
along with the cash withdrawal slip at the time of withdrawing the money for the account in
a bank.
 PASS BOOK

100
Pass book is a small handy book issued by bank to the customers to record all the dealings
between them. Now-a-days, printed statements of accounts are also being issued by the bank
instead of passbook.
 CHEQUE BOOK
It is a book containing detachable blank cheques and issued by a bank or building society to
holders of cheque accounts

 DRAWER

Person who withdraws the money or writes the cheques. He is an account holder.

 DRAWEE

The party authorized to payout the money, it is the bank.

 BANKRUPT

To go out of business.

 REAL TIME GROSS SETTLEMENT (RTGS)

It means an electronic form of funds transfer where the transmission takes place on a real
time basis. In India, transfer of funds with RTGS is done for high value transactions, and, at
present, the minimum amount being Rs 2 lakh. The beneficiary account receives the funds
transferred, on a real time basis.
 NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT)

It means a nation-wide payment system facilitating one-to-one funds transfer. Individuals can
electronically transfer funds from any bank branch to any individual having an account with
any other bank branch in the country.
 IFSC (Indian Financial System Code)

It is an alphanumeric code that is used to identify the particular branch of a participating bank
in either of the popular electronic funds settlement options in India, namely RTGS and
NEFT.

 INTEREST RATE

The percentage amount that banks give to savers when they leave their money there or charge
customers when they borrow money.
 OTP (One Time Password)

101
It is a password that is valid for only one login session or transaction, on a computer system
or other digital device. For eg. Mobile phones, e mail etc.
 PIN
Personal Identification Number. Generally a four-character number or word, the PIN is the
secret code given to credit or debit cardholders enabling them to access their accounts. The
code is either randomly assigned by the bank or selected by the customer. It is intended to
prevent unauthorized use of the card while accessing a financial service terminal.

 MORTGAGE
It is an agreement between a customer and a bank in which it lends you money to buy a
house; you have to pay back the money with interest over a longer period of time.
 RBI
The Reserve Bank of India (RBI) is India's central banking institution, which controls
the monetary policy of the Indian rupee.
 NRE ACCOUNT (Non-Resident External Account)
An NRE account can be opened by any person who is residing outside India. NRIs (Non-
Resident Indians) having NRE account in India are permitted to hold and maintain foreign
currency earnings in Indian rupees. Moreover the interest earned is not taxable in India.
 NRO ACCOUNT (Non-Resident Ordinary Rupee Account)
An NRO account is a savings or current account held in India that helps NRIs manage
income earned in India such as rent, dividends, or pension from abroad. The account holder
can deposit and manage accumulated rupee funds conveniently through an NRO account.
 FCNR Account (Foreign Currency Non Resident Account)
FCNR Deposit is a Fixed Deposit Foreign Currency account and not a savings account.
Deposits in this account can be made in any of the major currencies like US Dollar, UK
Pound, Canadian Dollar, Deutsche Mark, Japanese Yen and Euro.
 CASH RESERVE RATIO (CRR)
It is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the
percent of this, the available amount with the banks comes down. RBI is using this method
(increase of CRR rate), to drain out the excessive money from the banks.
 BANK RATE

102
It means the discount rate, is the rate of interest which a central bank charges on the loans and
advances that it extends to commercial banks and other financial intermediaries. Changes in
the bank rate are often used by central banks to control the money supply.
 FDI (Foreign Direct Investment)
It is an investment which occurs with the purchase of the “physical assets or a significant
amount of ownership (stock) of a company in another country in order to gain a measure of
management control” (Or) A foreign company having a stake in an Indian Company.
 ACCRUED INTEREST
It means the interest that has been earned but not yet paid.

 AUTOMATED CLEARING HOUSE (ACH)

It has a computerized facility used by member depository institutions to electronically
combine, sort, and distribute inter-bank credits and debits. ACHs process electronic transfers
of government securities and provided customer services, such as direct deposit of customers'
salaries and government benefit payments (i.e., social security, welfare, and veterans'
entitlements), and preauthorized transfers.
 DISHONOUR OF CHEQUE
Non-payment of a cheque by the paying banker with a return memo giving reasons for the
non-payment. It is a condition in which the bank does not pay the amount of the cheque to
the payee. In fact, when the drawer draws the cheque without following all the rules of
issuing cheque. Where an account does not have sufficient balance to honour the cheque
issued by the customer, the cheque is returned by the bank with the reason "funds
insufficient" or "Exceeds arrangement”.
 BANK OMBUDSMAN
Bank Ombudsman is the authority to look into complaints against Banks in the main areas of
collection of cheque/bills, issue of demand drafts, non-adherence to prescribed hours of
working, failure to honour guarantee/letter of credit commitments, operations in deposit
accounts and also in the areas of loans and advances where banks flout directions/instructions
of RBI. This Scheme was announced in 1995 and is functioning with new guidelines from
2007. This scheme covers all scheduled banks, the RRBs and co-operative banks.

 CO-OPERATIVE BANK

103
An association of persons who collectively own and operate a bank for the benefit of
consumers /customers, like Saraswat Co-operative Bank or Indraprastha Sehkari Co-
operative Bank etc.

 CORE BANKING
It is a banking service provided by a group of networked bank branches where customers
may access their bank account and perform basic transactions from any of the member branch
offices.
 E-BANKING
E-Banking or electronic banking is a form of banking where funds are transferred through
exchange of electronic signals between banks and financial institution and customers ATMs,
Credit Cards, Debit Cards, International Cards, Internet Banking and new fund transfer
devices like SWIFT, RTGS belong to this category.
 EFT - (Electronic Fund Transfer)
It is a device to facilitate automatic transmission and processing of messages as well as funds
from one bank branch to another bank branch and even from one branch of a bank to a branch
of another bank. EFT allows transfer of funds electronically with debit and credit to relative
accounts.
 EITHER OR SURVIVOR
It means operation of the account opened in two names with a bank. It means that any one of
the account holders have powers to withdraw money from the account, issue cheques, give
stop payment instructions etc. In the event of death of one of the account holder, the
surviving account holder gets all the powers of operation.
 ELECTRONIC COMMERCE (E-Commerce)
E-Commerce is the paperless commerce where the exchange of business takes place by
Electronic means.
 FOREIGN BANKS
Banks incorporated outside India but operating in India and regulated by the Reserve Bank of
India (RBI),. e..g. Barclays Bank, HSBC, Citibank, Standard Chartered Bank, etc.
 KYC NORMS
Know your customer norms are imposed by R.B.I. on banks and other financial institutions to
ensure that they know their customers and to ensure that customers deal only in legitimate
banking operations and not in money laundering or frauds.

104
  MORATORIUM
R.B.I. imposes moratorium on operations of a bank; if the affairs of the bank are not
conducted as per banking norms. After moratorium R.B.I. and Government explore the
options of safeguarding the interests of depositors by way of change in management,
amalgamation or take over or by other means.
 POST DATED CHEQUE
A Cheque which bears the date which is subsequent to the date when it is drawn. For
example, a cheque drawn on 8th of February, 2007 bears the date of 12th February, 2007.
Plastic Money: Credit Cards, Debit Cards, ATM Cards and International Cards are
considered plastic money as like money they can enable us to get goods and services.

 RESTRICTIVE ENDORSEMENT
Where endorser desires that instrument is to be paid to particular person only, he restricts
further negotiation or transfer by such words as "Pay to Vijay only". Now Vijay cannot
negotiate the instrument further.
 TELLER
Teller is a staff member of a bank who accepts deposits, cashes cheques and performs other
banking services for the public.
 VIRTUAL BANKING
Virtual banking is also called internet banking, through which financial and banking services
are accessed via internet's World Wide Web. It is called virtual banking because an internet
bank has no boundaries of brick and mortar and it exists only on the internet.

CHECK YOUR PROGRESS

1. Discuss different types of accounts in which one can deposit money.

2. Differentiate between NEFT and RTGS.

3. Explain the following banking terms:

(a) Virtual Banking

(b) Interest Rate

(c) Electronic Fund Transfer

(d) Bank Ombudsman

105
 (e) NRO Account

4. Expand the following abbreviations:

(a) PIN

(b) OTP

(c) IFSC

(d) FDI

(e) ACH

(f) KYC
-------------------------

106
107