UNIT III

Written Communication – 2

BANKING CORRESPONDENCE

Introduction

Banks as we all know are intimately connected with business and industry. They are, in a

way, business houses, which supply, sell or rent finance for business; that is to say, they deal in

credit. Originally, the functions of the bankers were very few. With the passage of time, bankers

began to perform a number of functions which are novel in nature. Therefore, the bank is an

indispensable institution in the modern society.

Banking Letters

In performing these services, the banker has to correspond with a number of persons. The

reputation of a banker is judged not only by the efficiency of his services but also by the

appearance of the passbook and his correspondence. That is why tactful, courteous and precise

letters go a long way in building up a banker’s name.

Elements of a Good banking correspondence

The essential elements of a good banking correspondence are secrecy, style, tact,

courtesy and clearness.

1.Secrecy :

Bankers deal only with money matters and secrecy in many matters is the first thing that

a client expects from his banker. Except in cases of enquiry from fellow bankers, a client’s

account and its details are treated as absolutely secret and are never revealed to any other person.

Absolute secrecy about the state of a customer’s account is the basic guarantee in bank

dealings. Even when an enquiry is made by another bank, the reply should be very brief and to

the point. The customer’s credit should not be injured in any way.

2.Style (Brevity and Conciseness)

Good Style in bank letters is brevity and conciseness because the customers are

businessmen and they have no time to waste on superfluous reading. The banker should not be

too impersonal or formal in his letters.

3.Tact and Courtesy

Tact and courtesy are of paramount importance in banking letters. It is very easy to level

allegations against a customer and thereby to lose his account. Courtesy is particularly very

important while writing about overdrawn accounts and while asking for additional security.

Similarly when a request for overdraft is to be refused, the language should be diplomatic so that

the customer takes no offence.

4.Clarity

Clarity in bank letters must be considered as a basic necessity. The matter should be learn

and precise and there should be no ambiguity. However, clearness should never be sacrificed for

the sake of brevity. All unnecessary details should be avoided. If opinions are expressed, they

should not be loose opinions or mere surmises; options lead to decisions and hence they must be

backed by actual facts.

Besides, the bank letters should also possess all the essential qualities of a business letter.

“The You Attitude” must be present in all the letters.

Types of banking correspondence

Banking correspondence can be broadly classified as follows:

1.Form letters.

2.Individual letters.

1.Form Letters

Bankers usually use a number of form letters with a set

text of the matter. They have a fixed phraseology meant to be used on different occasions in the

course of business operations of the bank. They are printed with some blanks left, to be filled in

by the customers or by bank officials at the time of transacting any deal. For example, account

opening forms, loan applications, credit reports etc. are all standardised in their contents. They

are generally prepared by legal experts and are suitably designed in physical appearance, tone

and appropriateness of the message to be conveyed. These letters reduce the cost of

correspondence by economising on time for dictation, transcription and handling. However, they

are used only when the intimation or communication is of a routine nature and when no special

or persuasive emphasis is necessary.

2.Individual Letters

Individual letter, in this context, refers to each letter which is individually written in each

case depending on the subject concerned and sent to others. Therefore, they are not standardised

letters like form letters. Individual letters can be again classified into three kinds namely,

1.Letters between the bankers and their clients

2.Letters from one bank to another

3.Letters between the head office and the branch office.

1.Letters between the Banker and the Customers:

These comprise of

(i)Letters from the banker to the customer, and

(ii)Letters from the customer to the banker.

1) Letters from Banker to Customers

The most important and crucial part of banker ’s correspondence consists in

communication with the customers. They include answering inquiries by customers, complying

with the standing instructions of the customers, handling complaints of the customers regarding

dishonour of their cheques, wrong statement of accounts, debits of bank charges etc. Besides

answering requests for overdrafts, bank loans etc., there are also other occasions when

correspondence is conducted with the customers.

2)Letters from the Customers to the Banker

These mainly consist of requests for opening accounts, enquiries about the interest rats,

status enquiries, application for loans and overdrafts, standing instructions regarding making

payments etc.,

2.Letters between One Banker to another

These relate to status enquiries, negotiations of bill exchange, clearance of cheques etc.,

Here technical terms normally used in the banking business can be freely used but should not be

used in letters to the customers.

3.Letters between Head office and Branch Offices

These consist of

1.Letters from Head office to the Branch office, and

2.Letters from Branch Office to the Head Office.

1)Letters from Head Office to Branch Office

These include letters from the Head office to the Branch, which deal with matters of

administration, and convey

the decisions and policy of the head office to its net work of branches. The Head Office should

serve as a model for the branches to follow both as regards to its mode of administration and its

methods of correspondence. Therefore, the letters from the Head Office to the Branch should

serve as a model in all those qualities such as accuracy, clearness, courtesy etc. They should be

drafted carefully and precisely.

2)Letters from the Branch Office to the Head Office :

Letters from branches to the head office generally

consist of :

1.Various monthly, quarterly, half-yearly or annual reports submitted by the branch manager.

These are only factual reports and generally form letters.

2.Reports from branch managers giving suggestions for further development of business in the

branch.

3.Letters recommending appointment of staff, promotion and transfer.

4.Letters containing the date of advances granted to the customers.

5.Letters which explain some unconventional decisions.

Letter No. 1 : A letter requesting a Banker to open an account.

VASANTH KULKARNI & COMPANY

61, 5th Main,

Vijayanagar,

Bangalore,

May 17,

200....

Dear Sir,

Sub : Request for opening an account

I am desirous of opening a current account with you. I have sent your printed application

form duly filled in with specimens of may signature and the letters of introduction from one of

your customers, Shri N. Guru, Proprietor Madhu Sweet Mart” through my personal assistant,

Miss N. Maya, who will pay a sum of Rs. 5000 (Rupees five thousand only) as initial deposit.

Kindly send with her a cheque book containing 25 leaves, a Pass Book and paying-in-

slip book for purposes of remittances.

Thank you,

Yours faithfully,

Vasanth Kulkarni,

Proprietor.

COMPANY SECRETARY

The company secretary belongs to a different class by himself. The largest and the most

important group of secretaries in the business world comprise of secretaries appointed by joint

stock companies. With the growth and expansion of corporate sector, there has been growing

appreciation of the secretary in the company administration. He, in fact, occupies a unique

position in the company hierarchy.

DUTIES OF THE SECRETARY

The duties of the secretary can be broadly classified into two kinds such as-

1.Statutory duties, and

2.General duties

1. STATUTORY DUTIES OF THE SECRETARY

The statutory duties of the secretary arise out of his position as mentioned in different

statues e.g.Companies Act, Income Tax act., If the secretary fails to attend to those matters, he

shall be considered as an “ Officer in default” and should face the consequences. The following

are the important statutory duties of the secretary.

1) Specific duties under companies act : The companies act specifically imposes the following

duties on the secretary to be performed either by himself or as the alternate by some other office

e.g.directors.

1. To sign any document of proceedings requiring authentication by the company.

2. To sign copies of annual returns to be filed with the Registrar of companies.

3. To authenticate the Balance sheet and the Profit and loss account on behalf of the

board and after approval of the board.

4. To sign copies of the balance sheet and profit and loss account files with the registrar.

5. To sign the statutory declaration at the time of incorporation. If his name is also

mentioned in the articles.

6. To verify the statutory declaration in relation to the commencement of business.

7. To verify and to submit the statementof affairs regarding the assets, debts and

liabilities to the liquidator at the time of winding up.

2) Secretarial duties under Companies act: The secretary, besides the duties mentioned above,

should perform certain duties under the Companies act. The secretary himself should perform

these duties. Some of the secretarial duties are given below:

1. To publish the name of the company outside the place of its business.

2. To deliver a return of allotment to the registrar.

3. To cause registration of charges with the registrar.

4. To issue share certificates and debentures.

5. To send out to members copies of Annual balance sheet and the profit and loss

account.

6. To maintain statutory registers and make them available for inspection.

2. GENERAL DUTIES OF THE SECRETARY

Besides the statutory duties mentioned above, the secretary of a company has several

other duties. These duties can be classified into four major groups. They are as follows:

1) Duties to the directors: The secretary is under the full control of the board of directors. He

has to carry out the instructions of the directors and can exercise only those powers, which are

delegated by the board to him. However, in relation to the directors, he has to perform the

following duties in general.

1. To deal with all correspondence in which the directors themselves are interested.

2. To issue notice and agenda for the board and the general meetings, attend such

meetings, keep notes of the proceedings, maintain separate minutes for these meetings.

3. To act as a liaison between the Board and the shareholders and the staff etc.

4. To ensure submission of Statutory returns in time.

5. To keep calendars of the due dates or checklist of meetings, so that returns etc, can be

filed on the due dates.

2) Duties to the shareholders: The secretary is the connecting link between the directors and

the shareholders. In relation to the shareholders, the secretary owes the following duties.

1.To do all necessary things connected with the issue of shares such as issue of

prospectus, share application forms, allotment letters and of share certificates etc.

2. To maintain several non-statutory books such as share transfer book etc,.

3. To arrange for funds and pay interest on loans received.

4. To arrange for funds and issue dividend warrants within the specified time.

5. To issue notices and agenda for the general meetings, class meetings and to attend

correspondence received from them.

6. To attend and maintain minutes books of such meetings.

3) Duties of the organization and staff: The secretary is the executive head of the office All the

head of the departments should be in touch with the secretary and it is only through the secretary

that the orders of the higher management are conveyed to them. The secretary, therefore, should

communicate the instructions of the board. Sometimes, he may also be asked to assist the

personnel department in recruiting and training the office staff.

4) Duties to outsiders: The secretary is full aware of the policies of the management. Therefore,

he is the gateway of the board of communication with the general public. The general public, in

this context, means and consists of the company’s creditors, bankers, solicitors, debenture

holders and the prospective investors.

CLASSIFICATION OF SECRETARIAL CORRESPONDENCE

While performing his duties as the secretary, he has to correspond with the directors,

shareholders, office staff and outsiders. The nature of correspondence with the above referred

persons is discussed below:

1.Correspondence with the Directors:

The secretary, being the servant of the board, should contact the directors frequently. As he

meets the directors personally during the board meetings, he is not required to carry on much

correspondence with them. However, the secretary will have to correspond with the directors

when:

1. The notice of the Board meetings is to be sent.

2. A particular information is to be conveyed under the instructions of the Chairman or

in response to an enquiry from a director.

3. A director, who is absent from a board meeting, asks for a report of its proceedings.

4. A director proposes in writing that a particular matter should be included in the

agenda and the chairmen asks the secretary to write a letter to the director persuading

him not to insist to include such matter in the agenda.

5. A director proposes some cause of action, which is not in the interest of the company,

or which is illegal and the chairman asks the secretary to point out this to the director.

2. Correspondence with the shareholders:

The secretary, although, basically a servant of the board of directors, he is also in a sense

servant to the shareholders who are the real owners of the company. The correspondence of the

secretary with shareholders usually relates to the following matters.

1. Complaints relating to low or unsatisfactory dividend.

2. Late or non-issue of notices relating to the meetings, issue of a fresh share certificate,

lodgment of transfer deeds, transfer and transmission.

3. Notice and circulars relating to the change of address of the company or schemes of

reconstruction, etc or any other change in the structure of the company.

4. Request for inspection of books and registers etc.

5. Letters in response to complaints and special requests made in writing by the

shareholders.

3. Correspondence with the registrar and company law board:

Joint stock companies, be they public or private, are governed by the provisions of the

companies act,1956 and its subsequent amendments. The secretary, in his capacity as a

responsible official of the company, has to see that each provision of the act is complied with. In

this connection, he has to observe certain formalities and to submit periodically statements,

returns etc. to the registrar of companies. He has also to carry on correspondence with the

company law administration department of the Government of India.

4. Correspondence with the office staff :

The correspondence of the secretary is also with the staff employed by the company.

Here he is a business executive with a final and deciding voice. He must be able to take a firm

and quick decision. His letters should carry a note to authority. At the same time, the secretary

has to avoid unpleasant words and has to be very tactful in dealing with union members.

SPECIMEN LETTERS

CORRESPONDENCE WITH THE DIRECTORS

Letter requesting a director to attend a Board Meeting

TAMILNADU CHEMICALS LTD.

28, Peters road,

Royapettah,

Chennai-600 014.

15th October 2013.

Mr.S.Chandrasekaran,

4, Eldams Road,

Coimbatore- 641 001.

Dear Sir,

You are probably aware that an important item of the company’s policy is on the agenda

for the next Board meeting. Nearly thirty percent of our plant capacity is idle and this leads to

huge and unwarranted overhead expenses.

Ways and means for utilizing this spare capacity will be discussed at the next meeting. A

new chemical factory, Mumbai chemicals co. private ltd. Has approached us with an offer to

manufacture a few of their products in our plant. The only point difficult to decide is whether to

allow a rival firm to expand its business by using our factory to manufacture its products.

As this item has crucial importance, your opinion will be of immense value in arriving at

a decision.

I have been asked by the Chairman, therefore, to request you to make it convenient to

attend the next meeting of the Board of Directors, where this item will be on the agenda.

Yours faithfully,

A.Sekaran,

Secretary.

CORRESPONDENCE WITH THE SHAREHOLDERS

Reply to a shareholder who complains about Lower Dividend

DIAMOND MOTORS LIMITED

8,N.S.C. Bose Road,

Chennai -600 001.

17th October 2013.

Sri.M.Sathish,

5, Llyods Road,

Gopalapuram,

Chennai – 600 086.

Dear Sir,

In your letter of October 15, you have expressed the view that a higher dividend than

what has been declared should have been recommended by the Directors.

We should like to point out that in taking the decision about dividends the Directors were

solely guided by their desire to strengthen the financial position of the company. In the larger

interests of the company, they thought it fit to plough back half the profits into the general

reserve fund of the company, which in fact will automatically improve the potential value of the

shares.

The condition of the trade and the changes in the export policy of the Government were

also considered before this decision was taken.

It is also pointed out in the Director’s Report that declaration of a higher dividend would

not be in the best interests of the company.

We trust that the position is now clear.

Yours faithfully,

For Diamond Motors Limited,

S.Sangeeth,

Secretary.

Insurance Correspondence:

Insurance is a business that covers risks due to loss of life and assets due to fire, theft,

burglary, natural calamities etc. Insurance business to start with was in in private sector. Later,

owing to Governmental policies two giant corporations like LIC and GIC emerged. Today, in the

background of privatisation, many new private enterprises including foreign companies have

entered the field. There appears to be a future of stiff competition in the insurance sector.

Insurance operates under two guiding principles, namely faith and indemnity. It is a business

where a high level of ethical value should prevail with both the customers and the company.

Companies are obliged to do a balancing act between competition and ethical values. Insurance

correspondence demands tact, faith, courtesy and transparency in their content.

Import and Export Correspondence:

Import export business is another aspect of general trade. The only difference is that the

trading is between an indigenous concern and a foreign company. Normally, these letters have to

be written with an understanding of the working of the working company and the cultural milieu

(environment) of the people who are responsible for that foreign company. In fact, export

business also involves communication at different levels, with licensing authorities, transporters,

customers, authorities and others. All correspondence has to be coordinated with speed as the

watchword.

Agency Correspondence:

A. The agency utilizes various communications systems for the mutual benefit of the agency and

its employees. Those communications systems include, but are not limited to:

1. Telephones and facsimile (FAX) devices;

2. Email systems and internet access;

3. Voice and video recorders and players;

4. Radio and paging systems;

5. Bulletin boards; and

6. Other miscellaneous locations where documents, paper mail, and messages are posted,

retained, or stored.

B. All agency employees are responsible for the efficient, effective, ethical, and lawful use of the

agency’s communications systems.

C. Consistent with CJ 10-402 and applicable case law, employees have only limited expectations

of privacy from intrusion when using electronic communications systems that are agency

authorized or are provided for the mutual benefit of employees and the agency.

D. Agency employees will not access communications intended solely for other employees or

persons unless required or requested to do so by intended recipients, as authorized by lawful

processes, or for bona fide, work related reasons. Applicable statutes include, but are not limited

to:

1. CR 8-606 - False entry in public record, altering, defacing, destroying, removing or concealing

public record; accessing public record;

2. CR 7-302 - Unauthorized access to computers prohibited;

3. CR 3-905 - Opening letters without permission;

4. CR 3-804, CR 3-805, CR 8-210, CR 9-602, and CR 9-603 pertaining to surveillance,

telephone misuse, etc.; and

5. CJ 10-401 thru 10-414 - Wiretapping and electronic surveillance.

E. All agency communications will be in English unless specifically authorized by the Chief or

University administration for use by non-English speaking recipients.

F. Encryption programs will not be used unless specifically authorized by the Chief, OTS or HR.

G. Classified, confidential, sensitive, proprietary, or private information or data will not be

disseminated to unauthorized persons, organizations, or agencies.

H. Except in the furtherance of bona fide police duties, agency employees will not utilize

correspondence or communications systems to:

1. Violate the University’s Guidelines for the Acceptable Use of Computing Resources;

2. Send messages that threaten, harass, or intimidate others;

3. Send images that contain nudity, images or words of a prurient or sexually suggestive nature,

even if recipients have consented to or requested such material;

4. Send unbecoming communications; or

5. Send communications in violation of laws or directives, including, but not limited to:

a. The UB Policy on Sexual Harassment;

b. The UB Human Relations Code; or

c. CR 10-301 and 10-304 - Religious and ethnic crimes.

1.458.04 Electronic Mail

A. The University maintains and operates an email system as a primary means of facilitating

official agency communications and actions.

B. Agency correspondence conducted via email carries the same effect and importance as hard

copy correspondence.

C. Emails must conform to the same efficiency, effectiveness, ethical, and lawful standards as

hard copy correspondence.

D. The secondary purposes of the agency’s email network are to encourage and facilitate intra-

agency communications.

E. All employees, per university policy are responsible for reading their e-mail on a "frequent

and regular basis." Since information is critical all officers and staff are to check their mail at

least once each tour of duty.

1.458.06 Correspondence Referrals From the Office of the Chief

A. Correspondence received by the Office of the Chief is tracked and accounted for consistent

with acceptable business practices.

B. When appropriate, Correspondence Referrals will be attached to correspondence sent from the

Office of the Chief to subordinate commands within the agency. Referrals will be used to

indicate:

1. The subject of correspondence;

2. To whom the correspondence is directed;

3. Assigned suspense dates and actual completion dates; and

4. The actions to be taken with respect to the correspondence.

1.458.08 Correspondence Directed to Superiors

A. All routine correspondence originating from subordinate commands and directed to superiors

will be prepared in a standard intra-agency memorandum format (hard copy or email) and be

staffed through Sergeants/OIC’s.

B. Unit commanders are responsible for reviewing, commenting on, and endorsing (either

positively or negatively) correspondence submitted to them prior to forwarding the

correspondence through the chain of command.

C. Once correspondence has been initiated, it should be endorsed and forwarded to the next level

within five working days. When requested by a superior, the endorsement will contain an

accurate, factual reason for any delays.

D. Correspondence endorsements will be in the same form (hard copy or email) as the original

correspondence.

1. Hard copy endorsements will be attached to the front of the original correspondence.

2. Correspondences reviewed without endorsements are not acceptable.

3. Correspondences marked "approved" are acceptable only if reviewing superiors are satisfied

with the content and quality of the work and are willing to accept the document as if it were their

own.

4. Suggestions and opinions submitted into the chain of command at any level, having the final

destination of the Office of the Chief, must have full recommendations from all unit commanders

performing reviews.

E. Recipients of correspondence will provide a timely response as necessary and appropriate to

originators via the chain of command.

F. Personnel submitting correspondence utilizing the chain of command may submit courtesy

copies for informational purposes, with "cc" indicated thereon, directly to the Chief. The Chief

will not normally specifically address subject matter contained therein until the correspondence

has been staffed through the chain of command.

1.458.10 Transfer Requests

A. Requests for transfer will generally be prepared, submitted, and responded to similar to all

other agency correspondence directed to superiors. Transfer requests should be submitted by

email with all persons in employee's chains of command receiving courtesy copies. Transfer

requests may be submitted as hard copy documents.

B. Transfer requests should contain information that includes, but is not limited to:

1. Employee's current assignments;

2. Positions to which employees wish to be reassigned; and

3. Reasons for transfer requests and/or special skills, knowledge, and abilities that may be

utilized in proposed assignments.

1.458.12 Personal or Confidential Correspondence

A. Personal or confidential correspondence may be directed to a higher level of command

without being staffed through the chain of command.

B. The intent of allowing personal or confidential correspondence to be directed to a higher level

of command is to insure that the lines of communication between the Chief, command ranked

officers, and all personnel are maintained.

C. Personal or confidential correspondence directed to a higher level of command will be

prepared in a standard intra-agency memorandum format (hard copy or email).

1. Hard copy correspondence will be placed in an envelope, addressed to the intended recipient,

marked "Personal" or "Confidential," and placed in the recipient's mail distribution box.

2. Email correspondence will have subjects listed as "Personal" or "Confidential" and sent to

intended recipients.

3. The first paragraph of personal or confidential correspondence to a higher level of command

will contain an explanation of why the correspondence needed to be routed outside the chain of

command.

D. The process of corresponding directly with a higher level of command outside the chain of

command will not be used to circumvent agency directives or practices regarding the chain of

command in routine matters.

1.458.14 Preparing Agency Correspondence

In keeping with the University Policy on Inclusive Language, agency correspondence will be

written in a style intended to be as bias free as possible, thereby reflecting the diversity of our

community.

1.458.16 Correspondence Protocol

A. Any correspondence going to directors, chiefs, and CEOs of any agencies,

departments, internal or external organizations, etc., will be drafted for the signature of the Chief.

B. Correspondence written over the Chief's signature to another police agency will always be

addressed to the CEO of the other agency.

C. Employees with duty assignments or responsibilities that involve normal or routine contact

and correspondence outside the agency may do so, so long as the correspondence is within the

limits and scope of the employee’s normal or routine duties and in accordance with this directive.

1.458.18 Official and Honorary Titles or Positions

A. When persons are serving in acting capacities, the word "acting" precedes the title in the

inside address, but not in the salutation.

B. Persons who have held positions entitling them to be addressed as "The Honorable" continue

to retain that title after retirement.

C. Retired members of military services retain their titles, but with their retirement status

indicated, e.g., Admiral J. P. Jones, U.S.N., Retired.

1.458.20 Mailing Services

A. Outgoing U.S. Mail will be forwarded or brought to the agency's out-going mail box and

placed in the appropriate section for pick up.

B. Campus mail will be forwarded or brought to the agency's out-going mail box and placed in

the appropriate section for pick up. Confidential or limited access correspondence may be

forwarded in sealed, plain brown envelopes. All other materials and/or correspondence will be

forwarded in reusable mailing envelopes currently in university inventory.

C. Intra-agency mail will be placed by the sender or a designate in the receiver's agency mail

slot.