9 April 2018




  • 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.

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