After studying this chapter you will be able to understand: Features of a cheque, types of cheques, anted – dated cheque, stale cheque, mutilated cheque, parties to a negotiable instruments, holder in due course, banker and customer,...
Revise Lecture 25 • 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 • Broadly speaking, cheques are of four types; Open cheque Crossed cheque Bearer cheque Order cheque • Anted – dated Cheque Cheques • Stale Cheque Cheques Stale Cheque • • • A cheque which is issued today must be presented at bank for payment within a stipulated period After expiry of that period, no payment will be made and it is then called a stale cheque Find out from your nearest bank the validity period of a cheque Cheques • Mutilated Cheque Cheques • Post-dated Cheque Banker’s Right to Lien • • Lien is, in its primary sense, a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied In its primary sense, it is given by law and not by contract Banker’s Right to Lien • • A banker’s lien on negotiable securities has been judicially defined as ‘ an implied pledge’ A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer • Banker’s right of set-off Banker’s right of set-off • • • The of right of set-off is also known as the right of combination of accounts A bank has a right to set-off a debt owing to a customer against a debt due from him ‘A legal set-off is where there are mutual debts between the plaintiff and the defendant, or if either party sue or be sued Banker’s right of set-off • • • From a commercial standpoint, a right of set-off is a form of security (right) for a lender It is an attractive security because its realization does not involve the sale of an asset to a third party A set-off must be in the form of a cross claim for a liquidated amount, and it can • Deposit Account Deposit Account • • • The main banking activities consist of acceptance of deposit from the public for the purpose of lending to businessmen and others who may seek loans Actually, the money deposited in any bank is mostly the saving of the people Money may be needed in future for various purposes such as medical Deposit Account • • So people keep their savings with someone where it will both be safe and earn a return A bank is a such place where money once deposited remains safe and also earns profit • Types of deposit account Types of deposit account • • • Bank deposits serve different purposes for different people Some people cannot save regularly, they deposit money in the bank only when they have extra income Some, mostly businessmen, deposit all their income from sales in a bank account and pay all business expenses out of the Types of deposit account • Keeping in view these differences, banks offer the people the facility of opening different types of deposit accounts to suit their purpose and convenience Types of deposit account • Accordingly, bank deposit accounts may be classified as; Savings bank account Current deposit account Fixed deposit account Recurring deposit account Salary account • Withdrawal from deposit account Withdrawal from deposit account • • Customer deposit his savings for use in future The need for money may arise any time So customer should know how to get back your money from the bank Withdrawal from deposit account Money can be withdrawn by using; Withdrawal form Cheque ATM card ... course Lecture 26 • 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. .. his transactions with the bank Banker and Customer • Banker’s right to charge interest and commission Banker and Customer Banker’s right to charge interest and commission • • The bank generates