Non-Resident Indian (NRI) is an Indian national who, for the time being, leaves India for the purpose of employment, education and similar other reason. Persons with such residential status suffer from a dilemma that when they need to open an NRI account in India. NRE account and NRO account two types of NRI account which differ in the sense that the former is an external rupee account while the latter is an ordinary rupee account. NRI's are allowed to open NRO account so as to receive funds … [Read more...]

There are end number of transactions occur in the normal course of business, where in receipt or payment is made in cash or cheque. To record these transactions the entity uses cash book and contains all the details of the receipts and disbursements that are recorded chronologically. Many times cash book is juxtaposed with Passbook, but there is a slight difference in the two. Passbook is a book issued by the bank to the account holder which records the amount deposited in/withdrawn from the … [Read more...]

SWIFT stands for Society for Worldwide Inter-bank Financial Telecommunication, which is a cooperative non-profit organization, fully owned by its member banks. SWIFT code is used when the transfer between two banks happens internationally. It is an electronic message transfer system, that conveys messages in a pre-defined format, anywhere in the world as and when the transaction occurs. On the other hand, IFSC code is used when the fund transfers between banks take place within the … [Read more...]

There are end number of facilities provided by the banks to its customers, apart from the basic lending of money and accepting deposits. Direct Debit and Standing Order are two such facilities, which the customers can avail, in order to ease their monetary transactions. The former implies a facility, in which the payee is authorized to draw the amount due for payment from the account of the payer, while the latter denotes an instruction given to the bank by the customer to pay/transfer certain … [Read more...]

With the advancement of technology, digital money transfer system is gaining popularity because of its speed, simplicity, safety, and convenience. Funds can be transferred electronically from one bank/account/place/branch to another through this system. Moreover, the system enables instant account update and gives quick information about the foreign exchange rates. In India, NEFT and RTGS are the two electronic media which effects fund transfer. While the former is used to handle smaller size … [Read more...]

When it comes to savings, every person wants to earn high returns on its deposits. Deciding which banking product is best for us is a tough task. There are various deposit schemes started by banks in which a person can invest money as per his convenience. Fixed Deposit or FD is one of those scheme, in which the user invests his money for a long time in a lump sum. Similarly, Recurring Deposit or RD is a kind of bank account in which the customer has to deposit a fixed sum of money in short … [Read more...]

Money is an essential element for any business, because it fulfills the short term and long term requirement of funds. It is nt possible for the owner to bring all the money himself, so he/she take recourse to loans and advances. Loans refer to a debt provided by a financial institution for a particular period while Advances are the funds provided by the banks to the business to fulfill working capital requirement which are to be payable within one year. The loan amount is required to be … [Read more...]

In any country's financial sector, banks play a crucial role in the overall economic development, by mobilizing savings of individuals and entities. They act as an intermediary amidst depositor and borrower. Besides lending money, banks provide various other value added services, that help in the smooth functioning of the economy. The Central bank, as the name suggest is the apex body, that regulates the entire banking system of the economy. The Central bank is not exactly same as a … [Read more...]

'Cheque' is an instrument which contains an unconditional order, drawn on a banker, directing to pay a certain sum of money to the person whose name is specified in the instrument. In contrast, 'Bill of Exchange' is a document contains an unconditional order, directing a person, to pay a certain amount to a specified person. A negotiable instrument is a written document, which entitles a certain amount and is transferable from one person to another, by simple delivery or by endorsement and … [Read more...]

Business organizations need funds in order to meet their monetary requirement. Funding provided by banks for this purpose can either be long term or short term. Nowadays individuals/entities choose short term loan facility, in the form of cash credit and overdraft. Cash Credit is a type of facility provided by the bank or financial institution in which, a company can withdraw an amount more than what he holds to his credit against the security of stock. On the contrary, Bank Overdraft is … [Read more...]