Banking Awareness - One Liner Fast Facts Bullets

Banking Awareness- Important One Liners - Bullets

Effective For Banking, SBI, IBPS, LIC, NIACL, BoI Exams

• When an order cheque is endorsed in blank, it is payable to bearer and transferable by mere delivery.

• A cheque crossed “Not Negotiable”, is  transferable.

• As per section 138 of Negotiable Instruments Act, there is a provision of penalty when the cheque issued in discharge of a liability is dishonoured due to insufficient funds in the account and if the cheque has been presented to the bank within a period of three months and is not honoured due to insufficient funds.

• The cheque on behalf of a partnership firm can be stopped for payment by anyone partner whether he/she is authorized to operate the account or not.

• The marginal farmer is one who possesses agriculture land upto 1.25 acres of irrigated land or 2.5 acres of non-irrigated land.

• Registration of charge is not required in the case of pledge, lien, set-off and appropriation.

• Loans for construction of godown for own use of farmers is not part of indirect finance to agriculture.

• Nostro account is an account of a bank established in India with a Foreign Bank in another country and the account is maintained in foreign currency.

• Resident Foreign Currency (RFC) account scheme is available for home returned Non-resident Indians.

• In an overdraft account, when the death notice of partner is received the bank should stop the operations to avoid application of Clayton’s case.

• A company is not dissolved by lunacy of a director or bankruptcy of a director or death of a director.

• In the case of insolvency, the banker’s obligation to honour customer cheques comes to an end when the customer is adjudged insolvent.

• A lien is the right to retain goods or securities belonging to a debtor until he has discharged a debt due to the retainer thereof.

• The shareholders of a Private Limited Co cannot transfer the shares to any other individual other than the shareholders of the company

• The term banking has been defined by Banking Regulation act – 1949

• INFINET  is – RBI’s VSAT based communication system.

• The negotiable instruments act is applicable in the entire part of the country.

• If the cheque is drawn in favour of “Mother God” or order, the cheque is to be returned with the reasons – “since drawn on fictitious name”.

• Under section 25 of Negotiable Instruments Act, public holidays are declared by – the respective state governments by notifications in the official gazettes.

• By “General Crossing”, we mean two transverse parallel lines on top left hand corner of a cheque.

• Banks were nationalized under – Banking Companies (Acquisition and transfer of undertaking) act-1970.

• When an account shows debit balance, the banker is a creditor and when the account shows credit balance, the banker is the debtor

• The process of replacing paper securities into electronic holding of shares is known as – dematerialization

• Natural guardian under Hindu Minority and guardianship act, 1956 will be – his father and after him the mother.

• For banking transactions, an administrator is one who is appointed by the court if the deceased has died intestate.

• The right of set-off can be exercised by the banker only when the relationship between the customer and the banker is that of debtor and creditor.

• Limitation period for availing the remedy under Section 138 of Negotiable Instruments Act is one month from the date of cause of action.

• In Camel’s rating – E stands for earnings.

• FIMMDAI means Fixed Income Money Market and Derivative Association of India.

• Chairman and Managing Directors of nationalized banks are appointed by Central Government

• Debt Service Coverage Ratio shows the number of times the company’s surplus generation covers the payment of interest and repayment of principal of long debt.

• A NRE depositor has issued a power of attorney in favour of his wife i.e., a resident Indian. She can withdraw cash, issue cheques-crossed for local payments and deposit into the account a foreign DD favouring the deposit, however, she cannot deposit foreign currency notes/foreign traveler cheques

•  The maximum period allowed for FCNR deposits is-  three years

•  A letter of credit in which the terms and conditions cannot be amended without the agreement of opening bank, applicant and the beneficiary is called – Irrevocable letter of credit