corpora lutea Antedate – Investopedia

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BANKING TERMS – II

1. Cheque:
Cheque is a
negotiable (which can be transferred to another person in exchange of money)
instrument drawn on a specified banker ordering the banker to pay a certain sum
of money to the drawer of cheque or another person. Cheque is always payable on
demand.

2.    Types
of Cheque:

i. Ante Dated Cheque: A cheque bearing a date prior to
actual date of signing the cheque or opening of an account is called an ante
dated cheque which is valid and can be paid till it become stale. For Ex. A cheque
is dated 9th Jan 2013 for an account opened on January 25, 2013 can be paid.
ii. Stale Cheque:
If the validity of the cheque has already expired it is called stale cheque
which cannot be paid. The normal maximum validity of cheque is 3 months earlier
it was 6 months. If the cheque is presented after the 3 months, it will be
returned.
iii. Post Dated
Cheque:
The cheque which bears a date subsequent to the date on which it is
drawn. For ex. A cheque drawn on 10th January, 2013 bears the date
of 12th January, 2013.
3.    Crossing
of Cheque
: Crossings refers
to drawing two parallel lines across the face of the cheque.
A crossed
cheque cannot be paid in cash across the counter, and is to be paid through a
bank either by transfer, collection or clearing.
A general
crossing means that cheque can be paid through any bank and a special crossing means
where the name of the Bank is indicated on the cheque can be paid only through
the named bank.
4.    Dishonour
of Cheque:  
Non – payment of cheque by the paying
banker with a return memo giving reasons for the non – payment.
5.    Demand
Draft:
Demand draft
is defined as an order to pay money drawn by one office of a bank upon another
office of the same bank for a sum of money payable to order on demand.
Cheque and
Demand draft both are used for transfer of money.
Difference b/w Cheque & DD
A cheque
can be bounce but D.D cannot be bounce as it is already paid.
6.    Current
account:
Current
account with a bank can be opened generally for business purpose. There are no
restrictions on withdrawals in this type of account. No interest is paid in
this type of account.
7.    NEFT
(National Electronic Fund Transfer):

NEFT enables funds transfer from one bank to another but works a bit
differently than RTGS. NEFT is slower than RTGS. The transfer is not direct and
RBI acts as the service provider to transfer the money from one account to
another. You can transfer any amount through NEFT, even a rupee.
Need of NEFT: We can use this facility if we want
to transfer funds online in a day or two. NEFT can make life easier for those
who need to send money to their parents or children living in another city. It
cuts the trouble of issuing a cheque or draft and posting it. It can also be
done through internet banking.
8.     RTGS
(Real time gross settlement ): RTGS system is a funds transfer systems
where transfer of money or securities takes place
from one bank to another on a “real time” and on “gross”
basis.
Settlement
in “real time” means payment transaction is not subjected to any
waiting period. The transactions are settled as soon as they are processed.
“Gross
settlement” means the transaction is settled on one to one basis without
bunching or netting with any other transaction. Once processed, payments are
final and irrevocable.
Minimum & Maximum Limit of RTGS: 2
lakh and no upper limit.
The
implementation of RTGS systems by Central Banks throughout the world is driven
by the goal to minimize risk in high-value electronic payment settlement
systems.
In an RTGS
system, transactions are settled across accounts held at a Central Bank on a
continuous gross basis. Settlement is immediate, final and irrevocable (which
cannot be changed or reversed).
9.    CBS
(Core Banking Solutions):

Core Banking Solutions is the process, where branches of the bank are connected
to a central host and the customers of connected branches can do banking at any
breach with core banking facility.
Advantages for both to the customers
& the banks:
Customer: i. Transactions of business from any
branch.
ii. Lower incidence of errors.
iii. Better funds management due to immediate availability of
funds.
Banks: i. Better customer service.
ii. Availability of accurate data.
iii. Increased business volume with better asset liability
management and risk management.
10.  BOND: Publicly traded long term debt
securities issued by corporations and governments, whereby the issuer agrees to
pay a fixed amount of interest over a specified period of time and to repay a
fixed amount of principal maturity.