Banking

Definition: The Cheque Truncation System or CTS is the cheque clearance system introduced by RBI to fasten up the clearing of cheques. In this system, instead of producing the physical cheques to the payee bank, just the electronic image of the cheque along with the MICR code and other cheque credentials are transmitted to the drawee bank for the payment through a clearing … [Read more...] about Cheque Truncation System

Definition: The Microfinance is the cluster of banking services, relatively of lower monetary amounts, designed specifically to meet the banking requirements of an unemployed or low-income people. In other words, Microfinance is the arrangement of financial services including loans, savings, insurance, money transfers and remittances offered to the lower income groups or … [Read more...] about Microfinance

Definition: The Virtual Banking is the provision of accessing the banking and related services online without actually going to the bank branch/office in person. Simply, availing the banking services through an extensive use of information technology without any requirement for the physical walk-in premises is called as virtual banking. Any financial institution that offers … [Read more...] about Virtual Banking

Definition: The Concentration Banking is the arrangement used by the firms, wherein the funds from all the regional banks in different locations gets concentrated or collected into the single bank account. In other words, a firm has its operations in several parts of the country and in order to ease the complexity of handling multiple bank accounts at different locations, … [Read more...] about Concentration Banking

Definition: The National Financial Switch is the largest interconnected network of automated teller machines (ATMs) in India. This system was developed by Institute of development and research in Banking Technology (IDRBT), Hyderabad. The national financial switch enabled the interconnectivity between the bank’s switches such that the transactions made at any ATM could be … [Read more...] about National Financial Switch

Definition: The Moratorium Period is the time during the loan term in which the borrower in not required to repay the loan. It is the relaxation time given to the borrowers before beginning with the loan repayment in the form of EMIs. The education loan is a very good example that features the moratorium period scheme, where the loan repayment begins after the student … [Read more...] about Moratorium Period

Definition: The Balloon payment is the final amount paid against the loan and is much higher than the regular monthly installments. Simply, the lump sum amount attached to a loan which has to be paid (generally at the end of the loan period) to extinguish the loan is called as a balloon payment. The need for a balloon payment may arise due to the inadequacy of the previous … [Read more...] about Balloon Payment

Definition: The Foreign Draft is a type of bank draft, which is used to send money to the foreign countries. The foreign draft can be purchased from the commercial banks, which is prepared in the local currency and then is forwarded to the intended institution in any country, where the currency is converted on the basis of the current exchange rate. The individual or a firm … [Read more...] about Foreign Draft