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Q:

What is ‘Crossed Cheque’ ? 

Answer:
Q:

What is Line of credit?

Answer

Line of credit is an agreement or arrangement between the bank and a borrower, to provide a certain amount of loans on borrower’s demand. The borrower can withdraw the amount at any moment of time and pay the interest only on the amount withdrawn. For example, if you have $5000 line of credit, you can withdraw the full amount or any amount less than $5000 (say $2000) and only pay the interest for the amount withdrawn (in this case $2000).

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Q:

What ACH stands for?

Answer

ACH stands for Automated Clearing House, which is an electronic transfer of funds between banks or financial institutions.


 

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Q:

What is Demat Account ?

Answer

The way in which a bank keeps money in a deposit account in the same way the Depository company converts share certificates into electronic form and keep them in a Demat account.


 

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Q:

What is ‘Bill Purchase’?

Answer

In ‘Bill Purchase’ the loan will be created for the full value of the draft and the interest will be recovered when the actual payment comes. For example, a ‘Sight draft’ is presented for which the loan is created for 100% of the draft value. The money is received after 7 days, and then the interest will be recovered for 7 days along with the principal amount.


 

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Q:

What is ‘Bill Discount’ ?

Answer

‘Bill Discount’ is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.


 

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