Banking, Business, Commerce

BANK DRAFT

BANK DRAFT DEFINITIONS: Bank draft is a document drawn by one bank upon on another bank or its other office, which contains an order for the payment of specified amount.   A Bank draft is a cheque or an instrument in writing drawn by one bank upon another bank or by one branch of a bank upon its another branch for…

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Banking, Business, Commerce

PROMISSORY NOTE DEFINITION

Promissory note is a credit instrument in which the debtor or the buyer promises to pay a certain amount of money to the creditor or seller on demand or at a fixed future time. DEFINITIONS: 1.  “A promissory note is a negotiable instrument in writing containing an unconditional declaration signed by the maker to pay a certain sum of money…

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METHODS OF MAKING FOREIGN PAYMENTS
Banking, Business, Commerce

METHODS OF MAKING FOREIGN PAYMENTS

FOREIGN EXCHANGE INTRODUCTION: The foreign (international) trade has become inevitable for all countries in present era. But every country faces problems for international receipts and payments due to determination of exchange rate and procedure. It is the desire of every country’s trader that he should be paid in his own country’s currency. Thus, determination of exchange rate, conversion of the…

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PROCESS OF LETTER OF CREDIT
Banking, Business, Commerce

PROCESS OF LETTER OF CREDIT

What is Letter of Credit? 1. The letter of credit is a written instrument issued by the buyer’s bank authorizing the seller to draw in accordance with certain terms and conditions. (Frank Henious) 2. The letter of credit is a commitment on the part of the buyer’s bank to pay or accept draft drawn upon provided such drafts do not…

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EXCHANGE CONTROL
Banking, Business, Commerce, Economics

EXCHANGE CONTROL

INTRODUCTION: The government of any country, for achieving its specific economic objectives, does not permit the free movement of foreign exchange and the conversion of one country’s currency into the currency of another country. Hence, the government makes some rules and regulations to check the free movement and conversion of home/foreign currencies which are called “Exchange Control” policies. After the…

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Bills of Exchange
Banking, Business, Commerce

BILLS OF EXCHANGE

In this blog, we will understand the below following core concepts of bills of exchange: Definition & Parties of Bills of Exchange Characteristics of Bills of Exchange Types of Bills o f Exchange Advantages of Bills of exchange MEANING: The document used by bankers, traders, industrialists and other people for the settlement of business transactions is called bills of exchange. It is an…

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Relationship Between Banker and Customer
Banking, Business

Relationship Between Banker and Customer

1. Debtor and Creditor: The relation between a banker and his customer is primarily that of a debtor and creditor, which can be explained in following ways. (i) Bank (Debtor) & Customer (Creditor): When a customer deposits money in his account, the money is to be considered as the money of depositor, so he has the right to withdraw it…

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RIGHTS AND DUTIES OF BANKER AND CUSTOMER
Banking, Business

RIGHTS AND DUTIES OF BANKER AND CUSTOMER

Right and Duties of Customers: (DUTIES) 1. Banking Hours: A customer must present cheques for payment and collection during banking hours. 2. Out-Dated Cheque: A customer is required to present cheques for payment before they become stale or outdated. 3. Unauthorized Person: A customer should keep his Cheque Book under lock and key, so that it may not go into…

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Difference Between Pledge, Hypothecation & Mortgage
Banking, Business, Commerce

Difference Between Pledge, Hypothecation and Mortgage

Pledge: Pledge is an actual delivery of rights (documents) as well as the possession of the goods/property to the. bank against certain loan. The ownership of the property remains with the pledger (customer). In case of non-payment the banker serves a notice for the fact and afterwards can sell the goods. Hypothecation: In case of hypothecation goods are made available…

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Types of Customers in Bank
Banking, Business

Types of Customers in Bank

Following are the major kinds of bank’s customer. Individual Customer Joint Customer Trustee Business Organizations Non-Trading Concerns Government Organization 1. Individual Customer: Any person literate or illiterate but not a lunatic, mental patient, drug addict or bankrupt etc. can open an account with bank. The bank demands a photograph from an illiterate person and he also requires thumb expression on…

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