When uncrossed cheque is presented for payment in cash at the counters of the bank, the presenter should sign on the reverse of the cheque. Banks verify the signature on the cheque with specimen signature of drawer on record before making payment. The payment cashier will ask for another signature to be made by the…
The Cheque Truncation System (CTS) is basically an online Image-based Clearing System (ICS). In this system of clearing, the collecting bank need not present the physical cheque to the drawee branch. The presenting bank captures the cheque images and Magnetic Ink Charecter Recognition (MICR) data from end to end precise scanners by using the Capture…
Every commercial bank in India borrow funds from other banks to cover a sudden shortfall in cash on a particular day in the following circumstances. to tide down the temporary requirements of funds due to liquid asset-liability mismatch to meet the mandatory requirement of CRR&SLR or to meet the demand for funds arising out of…
A cheque signed by a drawer of cheque without completing the material particulars such as date, amount or name of the payee, it is known as an inchoate or incomplete cheque. When the drawer of a cheque hands over an inchoate cheque to a payee, prima facie he has given authority to the payee to…
The money market instrument is a marketplace for trading in short-term debt investments considered low-risk investments with high safety. It is primarily used by governments and corporations to keep their cash flow steady, and for investors to make a modest profit. The money market ensures a balance between the demand for short-term funds and their…
Any alteration in the original state of a cheque such as date, amount, payee’s name, changing the word ‘order’ to bearer appearing after payee’s name or in endorsement is called material alteration. All material alteration must have drawer’s approval with his full signature (not initials) where the alterations are made. One of the mandatory features of…
Sec 30(1) of partnership Acts 1932 provides that a person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners, for the time being, he may be admitted to the benefits of partnership. Under sub-section 30…
Most of you are aware of repurchase options (REPOS) a temporary Liquidity Adjustment Facility (Temporary need by RBI to Indian banks. Repo transactions, transactions also taking place between RBI and primary dealers, banks to banks, banks to other counterparties, primary dealers to primary dealers and primary dealers to other counterparties. In the money market, internationally…
In partnership businesses we find different types partners viz. nominal or ostensible partner, sub-partner, partner by estoppel or holding out, partners in profits only, minor as a partner, others. The different kinds of Partners that we may normally notice in Partnership Firms are as under. Nominal Partner: When a well-known personality in the society who…
Writing a cheque seems to be a simple task, but remember, issuing a cheque to a person is equivalent to payment of cash and we find frauds related to cheque are very common. Therefore, no need to mention that writing a cheque in right way is crucial to avoid misuse or dishonor of cheque issued…