Operational Aspects of Handling Clearing & Collection & Cash
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary purpose of the Cheque Truncation System (CTS) introduced by RBI?
CTS eliminates the physical movement of cheques by transmitting electronic images of cheques between banks, speeding up the clearing cycle and reducing operational risk.
What is the meaning of 'clearing house' in banking operations?
A facility where banks exchange and settle interbank payment instruments.
What does the term 'clearing' mean in the context of banking operations?
Clearing is the process by which inter-bank claims arising from cheques and other instruments are settled through a centralized mechanism, typically managed by the Reserve Bank of India or a designated clearing house.
What is the maximum validity period of a cheque issued in India?
Three months from the date of issue.
What is the difference between 'outward clearing' and 'inward clearing' in a bank branch?
Outward clearing refers to cheques deposited by the branch's own customers drawn on other banks, while inward clearing refers to cheques drawn on the branch received from other banks for payment.
What does 'endorsement' mean on a negotiable instrument?
Signing on the back to transfer ownership to another person.
Under CTS, what is the prescribed image quality standard for cheque images?
CTS mandates that cheque images be captured at 200 DPI in grayscale, ensuring sufficient clarity for verification of signatures and other instrument details.
What is a 'crossed cheque' and what does it signify?
A cheque with two parallel lines; payable only through a bank account.
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