bank of america matter banking concepts

7/29/2019 Bank of America Matter Banking Concepts

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Banks: An organization, usually a corporation, chartered by a state or federalgovernment, which does most or all of the following: receives demanddeposits and time deposits, honorsinstruments drawn on them, and paysinterest on them; discountsnotes, makes loans, and invests in securities;collects checks, drafts, and notes; certifies depositor's checks; and issues

drafts and cashier's checks.

A cheque is a written instruction you give to your banker to make paymentby debit to your account on demand.

Types of ChequeBroadly speaking, cheques are of four types.a) Open cheque, andb) Crossed cheque.c) Bearer chequed) Order cheque

a) Open cheque: A cheque is called Open when it is possible to get cashover the counterat the bank. The holder of an open cheque can do the following:i. Receive its payment over the counter at the bank,ii. Deposit the cheque in his own accountiii. Pass it to some one else by signing on the back of a cheque.

b) Crossed cheque: Since open cheque is subject to risk of theft, it isdangerous to issuesuch cheques. This risk can be avoided by issuing another types of cheque

called Crossed cheque. The payment of such cheque is not made over thecounter at the bank. It is only credited to the bank account of the payee. Acheque can be crossed by drawing two transverse parallel lines across thecheque, with or without the writing Account payee or Not Negotiable.

c) Bearer cheque: A cheque which is payable to any person who presents itfor payment at the bank counter is called Bearer cheque. A bearer chequecan be transferred by meredelivery and requires no endorsement.

d) Order cheque: An order cheque is one which is payable to a particular

person. In such a cheque the word bearer may be cut out or cancelled andthe word order may bewritten. The payee can transfer an order cheque to someone else by signinghis or hername on the back of it.

Cashers Cheque is a check guaranteed by a bank. They are usuallytreated as cashsince most banks clear them instantly. However, banks are
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permitted to take back money from a "cleared" check one or two weeks laterif subsequent processing finds it to be fraudulent.A money order is a payment order for a pre-specified amount of money.Because it is required that the funds be prepaid for the amount shown on it,it is a more trusted method of payment than a personal check. Merchants

welcome the extra security of a pre-paid money order instead of a personalcheck, which can bounce

A certified checkis a form of check for which the bank verifies thatsufficient funds exist in the account to cover the check, and so certifies, atthe time the check is written. Those funds are then set aside in the bank'sinternal account until the check is cashed or returned by the payee. Thus, acertified check cannot "bounce", and, in this manner, its liquidity is similar tocash

traveler's cheque : is a preprinted, fixed-amount cheque designed to allow

the person signing it to make an unconditional payment to someone else asa result of having paid the issuer for that privilege. As traveler's cheques canusually be replaced if lost or stolen (if the owner still has the receipt issuedwith the purchase of the cheques showing the serial numbers allocated),they are often used by people on vacation in place of cash

A credit card is part of a system of payments named after the small plasticcard issued to users of the system. It is a card entitling its holder to buygoods and services based on the holder's promise to pay for these goods andservices. The issuer of the card grants a line of credit to the consumer (or the

user) from which the user can borrow money for payment to a merchant oras a cash advance to the user.

A debit card (also known as a bank card or check card) is a plastic card thatprovides an alternative payment method to cash when making purchases.Functionally, it can be called an electronic cheque, as the funds arewithdrawn directly from either the bank account, or from the remainingbalance on the card. In some cases, the cards are designed exclusively foruse on the Internet, and so there is no physical card

Demand Draft:

The Demand Draft is a device used to transfer payments from one bankaccount to another. Like a cheque, a Demand Draft also is a negotiableinstrument. This instrument is used by most banks in India for the effectivemoney transfer. Demand drafts are comparatively a more secure methodthan cashing cheques, and hence its popularity among customers. ADemand Draftis different from a normal cheque. The major difference is thata Demand Draft does not require a signature for it to be cashed. A demanddraft is also known as a remotely created cheque.
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A cheque is a document/instrument (usually a piece of paper)[nb 1] thatorders a payment of money from a bank account. The person writing thecheque, the drawer, usually has a current account (British), or checkingaccount where their money was previously deposited. The drawer writes the

various details including the money amount, date, and a payee on thecheque, and signs it, ordering their bank, known as the drawee, to pay thatperson or company the amount of money stated. Technically, a cheque is anegotiable instrument[nb 2] instructing a financial institution to pay a specificamount of a specific currency from a specified transactional account held inthe drawer's name with that institution. Both the drawer and payee may benatural persons or legal entities.

Diffrences between a cheque and demand draft

Cheque has been defined in Negotiable Instruments Act 1881 section 6. Acheque is a bill of exchange drawn on a specified bank and not expressed tobe payable otherwise than on demand.A demand draft has been defined by Negotiable Instruments Act 1881 insection 85. A demand draft is an order to pay money drawn by one office ofa bank upon another office of the same bank bank for a sum of moneypayable to order on demand.Following are some more differences:

1. A cheque can be made payable to bearer but a Demand Draft cannot.2. A demand draft can be cleared in a specified branch of the issuer bank

3. A cheque can get dishonored but Demand draft is always honored.4. An issuer party of the cheque is liable to the cheque and not backed by

a Bank Guarantee, A demand draft is backed by a bank guarantee

Internet Banking The necessary things that a person needs for using onlinebanking are, an active bank account with balance in it for transactions, debitor a credit card number, customer's user ID, bank account number, theInternet banking PIN number, and a PC with access to the web. People usingInternet banking are certainly benefited by the online services theirrespective banks are providing them with. The primary reason why it is sofamous and mostly used is that, customers are allowed to bank at non-

working hours.

The common features fall broadly into several categories Transactional (e.g., performing a financial transaction such as an

account to account transfer, paying a bill, wire transfer, apply for aloan, new account, etc.)
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Payments to third parties, including bill payments andtelegraphic/wire transfers

Funds transfers between a customer's own transactionalaccount and savings accounts

Investment purchase or sale

Loan applications and transactions, such as repayments ofenrollments Non-transactional (e.g., online statements, cheque links, cobrowsing,

chat) Viewing recent transactions Downloading bank statements, for example in PDF format Viewing images of paid cheques

RemittanceTransfer offunds, usually from a buyer to a distant seller,instrument of transfer (such as a check or draft), or funds so transferred.

Overdraft Loan arrangement under which a bank extends credit up to amaximum amount (called overdraft limit) against which a current (checking)account customer can write checks or make withdrawals. The most commonform of business borrowing, an overdraft is a type of revolving loan wheredeposits (credits) are available for re-borrowing, and interest is charged onlyon the daily overdraft (debit) balance. It is, however, also a demand loan: thefacility can be cancelled (and entire outstanding amount 'called') at any timeby the lender at its discretion, without any warning notice or explanation. Ifthe overdraft is secured by an asset or property, the lender has the right toforeclose on the collateral in case the account holder does not pay.

If there is a prior agreement with the account provider for an overdraftprotection plan, and the amount overdrawn is within this authorisedoverdraft limit, then interest is normally charged at the agreed rate. If thebalance exceeds the agreed terms, then fees may be charged and higherinterest rate might apply.

Wire transfer or credit transfer is a method of transferring money fromone person or institution (entity) to another. A wire transfer can be madefrom one bank account to another bank account or through a transfer of cashat a cash office.

Different types of acounts in a bank:

CURRENT DEPOSITS /ACCOUNTS:

These accounts are used mainly by businessmen and are not generallyused for the purpose of investment. These deposits are the most liquiddeposits and there are no limits for number of transactions or the amount oftransactions in a day. Most of the current account are firm / company
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accounts. Cheque book facility is provided and the account holder candeposit all types of the cheques and drafts in their name or endorsed in theirfavour by third parties. No interest is paid by banks on these accounts. Onthe other hand, banks charge service charges, on such accounts.

SAVING DEPOSITS / ACCOUNTS

These deposits / accounts are one of the most popular deposits forindividual accounts. These accounts not only provide cheque facility but alsohave lot of flexibility for deposits and withdrawal of funds from theaccount. Most of the banks have rules for the maximum number ofwithdrawals in a period and the maximum amount of withdrawal, but hardlyany bank enforces these. However, banks have every right to enforce suchrestrictions if it is felt that the account is being misused as a currentaccount. The interest on these accounts at present is regulated by ReserveBank of India. Banks in India at present offer 3.50% p.a. interest rate on

such deposits.

RECURRING DEPOSITS / ACCOUNTS

These kind of deposits are most suitable for people who do not have lumpsum amount of savings, but are ready to save a small amount everymonth. Normally, such deposits earn interest on the amount alreadydeposited (through monthly installments) at the same rates as are applicablefor Fixed Deposits / Term Deposits. These are best if you wish to create afund for your child's education or marriage of your daughter or buy a carwithout loans.

Under these type of deposits, the person has to usually deposit a fixedamount of money every month (usually a minimum of Rs,100/- p.m.). Anydefault in payment within the month attracts a small penalty. However,some Banks besides offering a fixed installment RD, have also introduced aflexible / variable RD. Under these flexible RDs the person is allowed todeposit even higher amount of installments, with an upper limit fixed for thesame e.g. 10 times of the minimum amount agreed upon.

Such accounts are normally allowed for maturities ranging from 6 months to120 months. A Pass book issued where the person can get the entries for all

the deposits made by him / her and the interest earned. Prematurewithdrawal of accumulated amount permitted is usually allowed (however,penality may be imposed for early withdrawals). These accounts can beopened in single or joint names. Nomination facility is also available.

FIXED DEPOSIT ACCOUNTS / TERM DEPOSITS


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All Banks offer fixed deposits schemes with a wide range of tenures forperiods from 7 days to 10 years. The term "fixed" in Fixed Deposits (FD)denotes the period of maturity or tenor. Therefore, the depositors aresupposed to continue such Fixed Deposits for the length of time for whichthe depositor decides to keep the money with the bank. However, in case of

need, the depositor can ask for closing (or breaking) the fixed depositprematurely by paying paying a penalty (usually of 1%, but some banks evendo not charge any penalty). (Soon some banks have even introducedvariable interest fixed deposits. The rate of interest in such deposits willkeep on varying with the prevalent market rates i.e. it will go up if marketinterest rates goes and it will come down if the market rates fall).

The rate of interest for Fixed Deposits differs from bank to bank (unlikepreviously when the same were regulated by RBI and all banks used to havethe same interest rate structure. The present trends indicate that privatesector and foreign banks offer higher rate of interest.

The rate of interest for Fixed Deposits differs from bank to bank (unlikepreviously when the same were regulated by RBI and all banks used to havethe same interest rate structure. The present trends indicate that privatesector and foreign banks offer higher rate of interest. Usually a bank FD ispaid in lump sum on the date of maturity. However, some banks havefacility to pay interest at the end of every quarter. If one desires to getinterest paid every month, then the interest paid will be at a discountedrate. The Interest payable on Fixed Deposit can also be transferred toSavings Bank or Current Account of the customer

How may numbers are there on Credit cards: 16 Numbers

Forieign Banks operating in india:

RBS(Royal Bank Of Scotland), HSBC (Honkong Schangai BankingCoprporation), Standard Chartered Bank, Barclays Bank, Citi Bank, ABN AmroBank.

Public Sector Banks in India:

Andhra Bank, State Bank Of India, Bank of Baroda, Union Bank of India,Vijaya Bank, Indian Overseas Bank.

Private Sector Banks in India:

ICICI Bank, HDFC Bank, Indusland Bank, ING Vysya Bank, Bank Of Punjab,Bank of Rajasthan, Axis Bank


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Governor Of RBI: DR.D.Subba Rao

Foriegn Curriencies :

US $, Singapore $, Aus $, SLR(Sri Lankan Rupee) , Japnese Yen, PKR

(Pakistan Rupee),Swiss Frank

Finance Minister Pranab Mukherjee

RBI governs the functioning of the Banks in India

SEBI governs the functioning of the stock markets in India

Two companies that became bankrupt during recession Lehman Brothers and MorganStanley

What do you know about Bank of America or Why do you want tojoin Bank Of America:

Bank of America Corporation :is a financial servicescompany, the largestbank holdingcompany in the United States, by assets, and the second largest bank by market capitalizationBank of America serves clients in more than 150 countries and has a relationship with 99% ofthe U.S. Fortune 500 companies and 83% of the Fortune Global 500..

The bank's 2008 acquisition ofMerrill Lynch made Bank of America the world's largest wealthmanagerand a major player in the investment bankingindustry.. As of 2010, Bank of America isthe fifth largest company in the United States by total revenue,as well as the second largest non-

oil company in the US (Behind Walmart). In 2010,Forbeslisted Bank of America as the thirdlargest company in the world.

The company holds 12.2% of all U.S. deposits, as of August 2009, and is one of theBig FourBanks of the United States, along with Citigroup,JP Morgan Chase and Wells Fargo its maincompetitors.

On January 11, 2008, Bank of America announced they would buy Countrywide Financial for$4.1 billion.On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch &Co., Inc. in an all-stock deal worth approximately $50 billion.

BA Continuum Solutions Private Limited is a non bank subsidiary of Bank of America, set upunder Bank of America's Global Delivery Center of Expertise. Operating" out of 3 locations inIndia, BA Continuum Solutions provides Business Processing solutions exclusively to Bank ofAmerica across a number of Lines of Business ranging from Consumer and Small BusinessBanking, Global Investment Banking, Cards Services, Global Wealth and InvestmentManagement.
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