Lecture Retail and merchant banking – Lecture 24

After studying this chapter you will be able to understand: features of a cheque, types of cheques, bearer cheque, order cheque, anted – dated cheque, stale chequ, mutilated cheque, post-dated cheque,...

Revise Lecture 24 Cheques • Cheques generally contain; Place of issue Cheque number Date of issue Payee Amount of currency Cheques Signature of the drawer Routing / account number Fractional routing number A cheque is generally valid indefinitely or for six months after the date of issue unless otherwise indicated, this varies depending on where the cheque is drawn Cheques • Features of a Cheque Cheques Features of a Cheque • Some important features of a cheque are given below; A cheque must be in writing and duly signed by the drawer It contains an unconditional order It is issued on a specified banker only • Types of Cheques Cheques Types of cheques • • A cheque used to pay wages due is referref to as a payroll cheque A traveller’s cheque is designed to allow the person signing it to make an unconditional payment to someone else as a result of paying the account holder for that privilege These cheques can usually Cheques Types of a Cheque • • A cheque issued by a bank on its own account for a customer for payment to a third party is called a Cashier’s cheque A Treasure’s cheque, a Bank cheque, or a Bank draft A cheque issued by a bank, but drawn on an account with another bank, is a teller’s cheque In addition banks often sell money orders Cheques • Broadly speaking, cheques are of four types; Open cheque Crossed cheque Bearer cheque Order cheque Cheques Open Cheque: • • • A cheque is called ‘open’ when it is possible to get cash over the counter at the bank The holder of an open cheque can the following; Receive its payment over the counter at the bank Deposit the cheque in the bearer’s account Negotiable Instrument Bill of Exchange: Drawer Drawee or acceptor Endorser Endorsee Negotiable Instrument Valid Acceptance: • The essential requirements of a valid acceptance are that it; Must be written Must be signed Must be completed by delivery Negotiable Instrument • Holder in Due Course Negotiable Instrument Holder in Due Course Holder in due course means any person who for consideration becomes the possessor of a promissory note, bill of exchange or cheque payable to bearer or the payee or endorser thereof if payable to order, before the amount mentioned therein becomes payable and without sufficient cause to believe that any defect existed in the title of the person from whom he Negotiable Instrument Holder in Due Course The definition specifies that: The holder has to possess the instrument in due course and before the date of maturity The consideration must be legal and adequate There should be sufficient cause to believe that he possessed the instrument Negotiable Instrument Holder in Due Course The holder should not become the holder in due course even if he received the instrument without any suspicion or knowledge about such defects Notice of any defect in the title subsequent to the date of acquisition should not affect the rights of the holder in due course Lecture 25 • Banker and Customer Banker and Customer The Banker • • • The role of a banker is one filled with multiple duties and responsibilities There are different types of bankers and each one is unique in his own way Some of these individuals work for large corporate conglomerates while others work for small town financial institutions Banker and Customer The Banker • • • Each banker has his own set agenda in his role as a banker A banker is an individual (or an institution) who advises his clients with regard to financial matter The duties concerning saving, loans, taxes, investment and securities are all within the job realm of a banker Banker and Customer • The Banker He will provide financial assistance to the client in accordance with their needs Banker and Customer • The Customer Banker and Customer The Customer • • In banking, a customer is someone who makes use of or receive the services of the bank The word customer historically derives ‘custom’ meaning habbit, so a customer was someone who frequented a particular shop, who made it a habbit to purchase goods there Banker and Customer Duties of a Customer All banks carry out the customer’s instructions in a business-like manner In return, the customer has special duties of cooperation and other duties of care A customer is bound to the following; Banker and Customer Duties of a Customer Communication of important information and changes Unambiguous information in orders and instructions Care in transmission of particular orders Banker and Customer • Duties of a Customer Use of forms Express notification of any special instruction Notification of time limits and dates Complaints to be made immediately Checking of confirmation of the bank Liability arising from neglect of duty ... course Lecture 25 • Banker and Customer Banker and Customer The Banker • • • The role of a banker is one filled with multiple duties and responsibilities There are different types of bankers and. .. Banker and Customer Duties of a Customer Communication of important information and changes Unambiguous information in orders and instructions Care in transmission of particular orders Banker and. .. investment and securities are all within the job realm of a banker Banker and Customer • The Banker He will provide financial assistance to the client in accordance with their needs Banker and Customer