Crossed
Cheque: These are two parallel transverse line either or with
words ‘not negotiable’ across its face of a cheque
Account
Payee Crossing: It is a direction to the collecting banker
to collect it for the payee only. That is the cheque can be changed only to the
payee or to the account of the payee
MICR: Magnetic ink character recognition (MICR) is a
character-recognition technology used to ease the processing and clearance of
cheques and other documents. The MICR encoding (called the MICR line) is at the
bottom of cheques and other vouchers.
MICR
encoding includes:
·
document-type
indicator
·
bank
code
·
bank
account number
·
cheque
number and cheque amount
·
control
indicator
Stale
Cheque:
A cheque is said be stale when it has not been presented by the payee within
the stipulated time set aside by the financial institution regulatory body .
Minimum
Balance:
It is the balance which should be maintained in an account every time. It can
be different to various according to each banks. Interest is calculated on
daily basis. Interest is credited in accounts once in 6 months. Upto one lakh
deposit, rate of interest is regulated by RBI. Above this bank can decide.
Know
your Customer:
It is the term used for customer identification process. It involves making
reasonable efforts to determine true identity and beneficial ownership of
accounts, source of funds, the nature of customer’s business, reasonableness of
operations in the account in relation to the customer’s business, etc… which in
turn helps the banks to manage their risks prudently. The objective of the KYC
guidelines is to prevent banks being used, intentionally or unintentionally by
criminal elements for money laundering.
Nature
of Accounts
Joint
Accounts: Joint
account is a bank account shared by two or more individuals. All operations
including closing have to be authorized by all the account holders.
Either
Or Survivor
is the most common type of joint account and is applicable between any two
individuals. In this either of the two can operate the account and in the case
of the death of one of the depositors, the other can continue or the final
balance in the account along with all interests (as applicable at the time of
closure) which will be paid to the survivor.
Anyone
or Survivor
account is normally held when more than two individuals start an account
jointly. Here, any of the depositors can operate the account at a time. If any
of the depositors expire, the others can continue the account and if required,
the final balance along with interest will be paid to any of the survivor/s as
requested.
Minor's
Account
A
person who has not completed the age of 18 is said to be a minor. A savings
bank account can also be opened in the name of a minor jointly with a guardian.
Here, only the guardian is supposed to operate the account on behalf of the
minor. The guardian should be parents or in special cases, a legal guardian, as
appointed by court. Some banks allow minors above the age of 12 to open and
operate accounts independently
Account
of Illiterate / Blind Person
Withdrawals
from these accounts can be only done by them. No Cheque books are allowed. They
should come personally for withdrawing money. For blind along with the
signature, thumb impression is also obtained.
Banker’s lien
It
is an enforceable right of a bank to hold in its possession any money or
property belonging to a customer and to apply it to the repayment of any
outstanding debt owed to the bank, provided that, to the bank's knowledge, such
property is not part of a trust fund or is not already burdened with other
debts. There are 2 types of lien. They are
General
and Particular Lien.
Forged
cheque
It
is a genuine cheque that has been stolen from its original owner and used by a
fraudster with a forged signature.
Foreign
Exchange
It
is the mechanism by which the currency of one country gets converted into the
currency of another country
Export
Import Bank of India (EXIM BANK)
·
It
was established in 1982 under the Export-Import Bank of India Act 1981.
·
Purpose
of EXIM is to enhance exports from India, integrate the country’s foreign trade
and investment with the overall economic growth.
·
It
is managed by a Board of Directors from the Reserve Bank of India, Government,
Export Credit Guarantee Corporation of India, a financial institution, public
sector banks, and the business community.
·
It
provides financial support to exporters and joint venture projects
Export
Credit Guarantee Corporation of India Limited (ECGC)
The
Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly
owned by the Government of India. It is based in Mumbai.
It
is controlled by the Ministry of Commerce. Government of India had initially
set up Export Risks Insurance Corporation (ERIC) in July 1957. It was
transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1964
and to Export Credit Guarantee. ECGC is the fifth largest credit insurer of the
world in terms of coverage of national exports. Its tagline is ‘You Focus on
Exports, we cover the risks’. It is managed by a Board of Directors comprising
representatives of the Government, Reserve Bank of India, banking, insurance
and exporting community.
Functions
·
It
provides export credit insurance support to Indian exporters.
·
Provides
guidance in export-related activities
·
Makes
available information on different countries with its own credit ratings
·
Makes
it easy to obtain export finance from banks/financial institutions
·
Assists
exporters in recovering bad debts
·
Provides
information on credit-worthiness of overseas buyers
NABARD
It
is expanded as National Bank for Agricultural and Rural Development. Its
headquarters is in Mumbai. It was established on 12 July 1982. Its main focus
is to uplift rural India by increasing the credit flow for elevation of
agriculture & rural non-farm sector. RBI sold its stake in NABARD to the
Government of India, which now holds 99% stake.
·
Serves
as an apex financing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural
areas
·
Takes
measures towards institution building for improving absorptive capacity of the
credit delivery system, including monitoring, formulation of rehabilitation
schemes, restructuring of credit institutions, training of personnel, etc.
·
Co-ordinates
the rural financing activities of all institutions engaged in developmental
work at the field level and maintains liaison with Government of India, State
Governments, Reserve Bank of India (RBI) and other national level institutions
concerned with policy formulation
·
Undertakes
monitoring and evaluation of projects refinanced by it.
·
NABARD
refinances the financial institutions which finances the rural sector.
·
The
institutions which help the rural economy, NABARD helps develop.
·
NABARD
also keeps a check on its client institutes.
·
It
regulates the institution which provides financial help to the rural economy.
·
It
provides training facilities to the institutions working the field of rural
upliftment.
·
It
regulates the cooperative banks and the RRB’s, and manages talent acquisition
through IBPS CWE.
Devaluation
It
is the lowering of the external value of the currency in relation to other currencies
Service
Area Approach
This
came into effect from April 1, 1989. It is a system of assigning specific areas
to each bank branch in which it can concentrate for productive lending.
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