Exam bachao

 LAWS RELATING TO NEGOTIABLE INSTRUMENTS Introduction: Exchange of goods and services is the basis of every business activity. Goods are bought and sold for cash as well as on credit. All these transactions require flow of cash either immediately or after a certain time. In modern business, large number of transactions involving huge sums of money takes place every day. It is quite inconvenient as well as risky for either party to make and receive payments in cash. Therefore, it is a common practice for businessmen to make use of certain documents as means of making payment. Some of these documents are called negotiable instruments. In this lesson let us learn about these documents 4.1. Definition & Characteristics of Cheques Cheque is a very common form of negotiable instrument. If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favour of others, thereby directing the bank to pay the specified amount to the person nam...

 Cash Credit Generally the facility given to the Industrial / Business customers is known as ‗Cash Credit‘ (CC) account in which the stock (raw material / work in process / finished goods) lying in the go down is pledged or hypothecated as the security by the bank. In a CC account, the bank fixes a ‗cash credit limit‘ for the borrower which is usually 75% to 80% of the values of stocks and book debts (minus creditors for purchase), as declared by the borrower in a prescribed format periodically. The bank conducts periodical surprise checks in the go downs of the borrower to ensure that the borrower declares the quantity and value of the stocks accurately and maintains the acceptable level of financial discipline. 3.7. Overdrafts An overdraft facility is an open-ended facility. Normally the limit is initially sanctioned for a period of one year and rolled over after a review by the bank of the facility utilised by the borrower. Bank charges interest on the actual amount utilised by ...