The term 'after date' refers to the words used in a bill of exchange to indicate that the period of the bill should commence from the date inserted on the bill. This affects the calculation of the payable date.
The banker's discount is the discount calculated by a bank when purchasing a bill of exchange before its maturity.
Cleared for Value refers to the exact time when a credit to a customer's bank account is recognized for calculating interest and determining the undrawn balance of an agreed overdraft facility.
The term 'Collecting Bank,' also known as the remitting bank, refers to the bank to which a person who requires payment of a cheque (or similar financial document) has presented it for payment.
A collection account is a specific type of bank account opened with the purpose of reducing bank float for remittances from specific customers or groups of customers, often those located abroad or who remit payments in a foreign currency.
A compensating balance is a sum of money deposited at a bank by a customer, which acts as a condition for the bank to lend money to the customer. It serves as a form of collateral or security for the loan.
Kiting, also known informally as 'kite-flying', refers to the practice of creating false or fraudulent checks to leverage the time delay in bank processing. This term is also known as the discounting of an accommodation bill at a bank, with the knowledge that the person on whom it is drawn will dishonor it.
Refers to words written on a cheque that is being dishonoured by a bank, typically due to insufficient funds or other specific issues such as bankruptcy or technical errors.
A cheque that has not been presented for payment within a specific period, typically six months, rendering it invalid as the issuing bank will not honour it.
A substitute cheque, also known as an image replacement document (IRD), is a negotiable instrument used in electronic clearing mechanisms to improve the efficiency and speed of check processing.
