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Definition of Banking Instrument

Banking instrument is a report ensuring the installment of a particular measure of cash, either on request or at a set time, with the player named on the archive.

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Definition of Banking Instrument

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  1. Introduction to Banking Instrument

  2. Banking instruments are defined as follows: • Banking instruments are checks, drafts, bills of trade, credit notes and so on. • It is a report ensuring the installment of a particular measure of cash, either on request or at a set time, with the player named on the archive. • These are the accompanying

  3. Deposits or pay-in-slip • Cheques • Demand Drafts • Internet Banking • Mobile Banking • Core Banking Solution

  4. Deposits or pay-in-slip • The deposits are made by filling up a pay-in-slip. The form of the pay-in-slip is: • It is used to deposit money in the bank and returned to the depositor. • It has the signature of the cashier, as receipt. • It gives the details regarding the date, the amount deposited.

  5. Cheques • A cheque is an unconditional order on the bank made by the client instructing the bank to pay a certain sum of money to the person named in the cheque or his order or the bearer. • This instrument is very safe and convenient method of making payments or withdrawing money from a bank.

  6. Demand Drafts • A demand draft (DD) is a negotiable bank instrument similar to a bill of exchange. • A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee). • The difference between a cheque and demand draft is given below:

  7. Basis for Comparison Demand Draft Meaning Cheque is a negotiable instrument which contains an order to the bank, signed by the drawer, to pay a certain sum of money to a specified person. • Demand Draft is a negotiable instrument used for the transfer of money from one place to another. Payment Payable either to order or to bearer. Always payable to order of a certain person. Issuance Cheque is issued by an individual. Demand Draft is issued by a bank. • Bank Charges No Yes Drawer Customer of the bank. Client Parties Involved Three Parties- Drawer, Drawee, Payee. Two Parties- Drawer, Payee. Dishonour Yes, due to insufficient balance or other similar reasons. No Demand Draft/Payment Order/TravellersCheques

  8. Internet Banking: • Web-based keeping money or the Internet saving money is an electronic installment system that empowers clients of a monetary establishment to lead budgetary exchanges on a site worked by the bank. • Web-based saving money was initially presented in the mid-1980s in New York. • Four noteworthy banks—Citibank, Chase Manhattan, Chemical and Manufacturers Hanover—offered this administration.

  9. Mobile Banking: • Portable keeping money alludes to the utilization of a mobile phone or another cell gadget to perform the internet managing an account errands. • Versatile managing an account administrations are normally constrained to an electronic development of assets and information recovery.

  10. Core Banking Solution: • This is a procedure in which the data is put away in a brought together server of the bank, which is accessible to all system branches.

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