Some Useful Informations About Banks.

Plastic money–Credit cards, debit cards,ATM cards and international cards are considered plastic money as like money they can enable us to get goods and services.

Personal Identification Number(PIN) is a number which an ATM card holder has to key in, before he is authorized to do any banking transaction in ATM.

Prime Lending Rate(PLR)-The rate at which banks lend to their best(prime) customers.

Pledge-A bailment of goods as security for payment of a debt or performance of a promise, e.g. pledge of stock by a borrower to a banker for a credit limit.Pledge can be made in movable goods only.

Priority  Sector Advances–consist of loans and advances to agriculture,small scale industry,Small Road and Water Transport Operators, Retail Trade, Small Business with limits on investment

in equipments, professional and self employed persons, state

sponsored organizations for lending to SC/ST, Educational loans,

Housing Finance up to certain limits, self-help groups and consumption

loans.

Premature Withdrawals–Term deposits like Fixed Deposits, Call Deposits, Short Deposits and Recurring Deposits have to mature

on a particular day. When these deposits are sought to be withdrawn

before maturity, it is premature withdrawal.

Post dated cheque–A cheque which bears  the date, which is subsequent

to the date when it is drawn. For eg: a cheque drawn on 8th of February

2007, bears the date of 12th February, 2007.

Promissory Note–Promissory note is a promise/undertaking given by one person in writing to another person, to pay to that person, a certain sum of money on demand or on a future day.

Public Sector Bank-A bank fully or partly owned by the Government.

Power of Attorney-It is a document executed by one person-Donor or Principal , in favour of another person, Donee or Agent-to act on behalf of the former, strictly as per authority given in the document.

Provisioning–Provisioning is made for the likely loss in the profit

and loss account while finalizing accounts of banks. All banks are supposed to make assets classification and make appropriate provisions for likely losses in their balance sheets.

Rescheduling of payment–Rearranging the repayment of a debt over a longer period than originally agreed upon, due to financial  difficulties of the borrower.

Restrictive endorsement–Where endorser desires that instrument is to be paid to a particular person only, he restricts further negotiation or transfer by such words as ”Pay to Ashok only.” Now Ashok cannot negotiate the instrument further.

Right of Appropriation–As per Section 59 of the Indian Contract Act,1972

while making the payment, a debtor has the right to direct his creditor

to appropriate such amount against discharge of some particular debt.

If the debtor does not do so, the banker can appropriate the payment to any debt of his customer.

Right of Set-Off—When a banker combines two accounts in the name of the same customer and adjusts the debit balance in one account with the credit balance in other account, it is called right of set-off. For example, debit balance of Rs.50,000/- in overdraft account can be set off against credit balance of Rs.75,000/- in the Savings Bank Account of the same customer, leaving a balance of Rs. 25,000/-credit in the savings account.

Core Banking is a banking service provided by a group of net worked bank

branches where customers  may access their bank account and perform basic transactions from any of the member branch office.

Core banking is expensive. This expense is recovered by way of service charges from the customers.Elements of core banking system include

making and servicing  loans, opening new accounts and processing cash deposits and withdrawals.Core banking is dependent on computer server, internet, electricity, telephone and connectivity. If any one fails,banking business comes to a halt.

Source:Collection.

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