Banking Instruments
Banking Instruments are referred to as the documents used in processing the activities of bank. There are several banking instrument, some of which are stated below.
- Depositor Slips: A deposit slip is a written form of notification that reflects the amount of money deposited to an account by an account holder. A typical deposit slip is an itemized document, which identifies a precise amount of money being deposited.
- Demand Draft (DD): A method used by individuals to make transfer payments from one bank account to another. Demand drafts are marketed as a relatively secure method for cashing checks. The major difference between demand drafts and normal checks is that demand drafts do not require a signature in order to be cashed.
- Pay Order: A banker’s cheque(Pay Order) is another payment instrument which is used by the banks to settle payment obligations on behalf of their customers. This instrument is guaranteed by the bank for its full value and is similar to a demand draft. In practice, these instruments are payable at the branch of issue and are used for payment within the local clearing jurisdiction.
- Cheque: Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of certain person or to the bearer of instrument.
- Pass-Book or Statement of Account: Banks provide their customers either with a pass-book or with statements of account at regular intervals A Pass Book is a book given to account holders of banks and savings and loans institutions in order to document alltransactions. Used predominately for a savings account. Passbooks are simple paper books that include pages that are intended for use with simple accounting notations regarding a bank account.
- Ante-dating and post-dating: A drawer has an option of dating the cheques as per his requirement. Ante-Dated cheque: A cheque which bears a date before the date of issue is ante-dated