Endorsements

a. Requirements for Endorsement:A cheque, payable to order, can be negotiated only by endorsement and delivery. Endorsement is made on the back of the instrument, or by attaching a slip of paper (‘allonge’) if the space on the instrument is not enough. Following are the main requirements of endorsementi. Signature of the endorser, without adding any words, is adequate to constituteendorsement. -ii. Endorsement has to be made by the payee or by all the payees ointIy. Astranger cannot endorse an instrument, unless he is a holder in due course.iii. An endorsement cannot be partial as to only a part of the amount of theinstrument.

Scrutiny of the cheques received by DRAs in Loan Recovery
• The cheques should be drawn on local banks and no out-station cheques be received, except in exceptional circumstances where the Bank’s branches are networked under CBS.

• The cheques should be crossed “Account Payee” and the Bank’s name and the borrower’s account No. should be clearly written as F5ayee. In the case of Credit Card dues, the Card Issuing Bank’s Name and the Credit Card No. should be written.

• The word “Bearer” printed on the cheque should have been cancelled.

• No third party cheques viz., the cheques endorsed in favour of the borrower, can be accepted by the DRA.• The date of the cheque should be the date on which the cheque is received by the DRA. If the cheque is dated a few days before the date when actually received by the DRA, it may be overlooked. No post-dated cheques should be received in any event.

• The amount of the cheque in words, as well as in figure, should match exactly.

• No torn or mutilated cheques be accepted.

• No defaced cheques, where the name of the payee or, the amount in words or, in figure, cannot be read clearly, may be accepted by the DRA.

• Immediately on his accepting the cheque for the due receivables from the borrower, the DRA should pass a valid receipt mentioning the number, date and amount of the cheque and the Bank on which it is draWn and hand it over to the borrower. The receipt so passed should read that the cheque is accepted subject to its realization.

• The Debtor Bank should apply the proceeds of the cheque for redemption of debt in the account to which the payment is ostensibly made by the borrower, failing which it will be construed to be ‘ conversion of the borrower’s money”.
Let us sum up
There are dif-ferenttype of banks, based on the ownership and activities. There are Public Sector Banks, Nationalized banks, Private Banks, Foreign Banks, Co-operative Banks and RRBs, functioning in our country. The major activity of all these banks is accepting savings from public in deposits and lending money to various persons who are in need of them fortheir personal requirements or business requirements. Banks offer remittance facility in the accounts. Accounts can be opened by individuals, trusts, companies etc. KYC is an important aspect of account opening and monitoring.
Key Words
Savings, Current, Term and Flexi deposits, Electronic banking, know your customer,money laundering, Cheque book, Power of attorney, specimen signature, operating instructions and nomination.