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Ancillary Business of Banks Terminology


  • Banker Cheque- This is also a mode to transfer money but these instruments are being used in local payments whereas, for the outstation payments, the drafts are being used.
  • Bank Draft- A cheque drawn by a branch of a bank, on its another branch, for the value recieved from the applicant, instructing to pay the specified amount to the person named in or by his order.
  • Depository Service- These are the services provided by the banks for keeping the share market and money market securities in electronic form under Demat accounts and for this service banks are collecting charges on yearly basis.
  • Letter of Credit (L/C)- This is a letter whis is opened at the instance of a customer by its bank, advising other bank to negotitate documents submitted by the seller of goods.
  • Merchant Banking- A Merchant Banker performs all the tasks to permote a company.
  • Mutual Fund Business- Banks are involved in issuing mutual funds by their own and also participate in other's mutual fund for selling them.
  • Remittances- This includes issues of Demand Drafts, Pay Orders (Banker cheques), Electronic remittances such as RTGS and NEFT, mail transfers, telegraphic transfers etc. and the banks are earning commission and exchange for these services.
  • Traveller Cheques- Preprinted fix denomination cheques in rupee or foreign currency issued to individuals after collecting commission and obtaining signatures of the applicants at left hand upper corner of it and these are payable all over the country or in a foreign country(FxTC's) by the branches of issuing bank or correspondent banks, after obtaining another signature on right hand corner of the cheque.

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