CTS: Cheque Truncation System in India
RBI in its Statement on Developmental and Regulatory Policies on Thursday (August 8, 2024) announced the implementation of Continuous Clearing of Cheques under the Cheque Truncation System (CTS). The Cheque Truncation System (CTS) currently processes cheques with a clearing cycle of up to two working days. To improve the efficiency of cheque clearing and reduce…
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Meaning and essentials of a contract of sale
A contract of sale is an agreement whereby a seller transfers or agrees to transfer the ownership (property) in goods to a buyer for a price; when property passes immediately it is a sale, and when transfer is deferred or conditional it is an agreement to sell. This framework underpins trade and inventory finance, receivables…
Read article Contract of Agency: A Banking-Friendly Guide
A contract of agency creates a legal relationship where one person (the agent) is authorized to act on behalf of another (the principal) in dealings with third parties, binding the principal within the agent’s authority. This framework enables distribution partnerships, correspondent banking, syndications, and outsourced service models in finance. Definition Essential characteristics Rules Types of…
Read article Contracts of indemnity in banking
A contract of indemnity is an agreement where one party promises to compensate another for loss caused by specified acts or events, typically arising from the promisor’s conduct or that of a third person, and is widely used in banking for letters of indemnity, escrow, agency, custody, and transactional risk allocation. Meaning Rights of indemnity…
Read article Meaning and essentials of a contract
A contract is an agreement enforceable by law, formed when parties intentionally create legal obligations through offer, acceptance, and consideration under free consent for a lawful object. In banking, contracts underpin every product and service—accounts, loans, guarantees, securities, and digital mandates—so validity requirements must be embedded in documents and processes. Meaning of contract Key components…
Contract of Pledge: A Banking-Focused explainer
A contract of pledge is the bailment of movable goods as security for payment of a debt or performance of a promise; the pledgor (pawnor) delivers possession while ownership remains, and the pledgee (pawnee) gains a limited, security interest with rights on default. This structure underpins core banking products like gold loans, pledge of warehouse…
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