Banking and Financials

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Mandates Vs Power of Attorney

Mandates Sometimes, an account holder appoints a third person to act on his behalf or to do certain acts, like drawing cheques or instructing the bank to debit his account for various purposes like issuance of drafts, mail transfers, or for carrying outstanding instructions. When such authority is given to the banker in the form of an unstamped letter, signed by the customer (account holder) and addressed and submitted to the bank, it is called a mandate letter. The banker verifies the signature of the customer on the mandate letter and then, if satisfied, makes an appropriate note in his records. It may be noted that a mandate is issued by a customer generally for a short and temporary period. The bank does not accept mandate letters for a limited company, cooperative society, or trust account. In case of doubt or difficulty, with regards to the correctness of the mandate letter, the banker should insist that a power of attorney be issued in favor of the third person, which should b

Investment Policy of Bank: Points to Considered before Investing

Commercial banks are inspired to earn profit. There are many reasons for the goal of gaining profit. A bank is legal, it can do nothing alone. It is an invisible and non-living thing. We can see only its building. But there are two bodies to run such a legal person in the bank. One of them is the supreme body of the bank that is a general meeting and the other is the board of directors of the bank. The whole shareholders make the general meeting. The shareholders are the owner of the bank. The board of directors is the agent of the bank. It operates (runs) the bank. To run the banks, many employees are appointed. It needs a great number of expenses in the bank. In addition, the aim of any person or the institution to invest the money in the bank is to earn more profit only. A bank established without the aim of gaining profit is the central bank. Other banks are inspired with eh objective of earning profit and helping the economic development and finally to take social responsibility.

Means of Transferring Remittance

The cash amount to be sent from one bank to another bank is called remittance. This transaction can be carried out from one place to another place within a country and from one country to another country too. To carry out such transactions, the bank generally uses such means as bank draft, mail transfer, and telegraphic transfer. Such amount may be for personal use, for business transactions,s, and governmental use. The bank can discharge this task for its customers. The money sent from one place to another place within a country is called inland remittance and likewise from one country to another country is called foreign remittance. To sed cash from one place to another through remittance a bank needs to deposit cash in the bank and pay applicable charges The bank takes the charge from its customers. The bank gives advice and suggestions to all about the type of currency they need to deposit and the customers must fulfill their work. The main means of remittance are briefly given bel

The Relationship Between Customer and Banker

Before taking up the relationship between a banker and his customer, it is necessary to understand the meaning and definition of the terms 'Banker" and "customer" about each other. Meaning and Definition of Banker Dr. Herbert L. Hart, an author on Law of Banking based on several legal decisions, defined the term "banker" as follows: ' A banker is one who in the ordinary course of his business, honors cheques drawn upon him by persons from and for whom he receives money on current accounts." Sir John Paget, another great authority on banking has defined the term based on the essential functions performed by persons who claim to do the business of banking. According to him, "It is a fair deduction that no person or body corporate or otherwise, can be a banker who does not (1) take deposit accounts, (2) take current accounts, (3) issue and paycheques and (4) collect cheques ad uncrossed, for his customers". Hence, according to Sir John Paget

Process of Payment of all Types of cheques

One must have a general knowledge of the payment of the cheque. An order of any customer to the bank which is a kind of document to give the payment to any person or institution from the cash balance of his account is called a cheque. If the presented cheque is acceptable and there is enough balance in the drawer's account, the bank should honor the cheque and give the payment to the payee. The cheques are classified into the following four types: Bearer cheque Order Cheque Crossed cheque Specially crossed cheque There are some differences in the process of the payment of all these cheques. Let's discuss those differences here. Payment of Bearer Cheque A cheque which bears the word 'own' or the name of the person who gets the payment from the bank where he has his account and the word 'Bearer" is not cut, such cheque is called 'Bearer Cheque'. They should give the payment to such cheque as per the above-mentioned process. There must be the date, the am