HISTORY AND DEVELOPMENT OF MONEY AND BAN

68 

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TOPIC ONE

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THE ORIGIN OF MONEY

AT THE EARLY STAGES OF DEVELOPMENT OF MONEY,

GOLD AND SILVER WERE USED AS MONEY ALMOST

THROUGHOUT THE WORLD:

DURING

THOSE

TIMES,

INTERNATIONAL

TRANSACTIONS DID NOT PRESENT ANY PROBLEM

BECAUSE THE CURRENCY (GOLD) WAS UNIFORM.

THE GOLDSMITHS, BECAUSE OF THEIR TRADE, HAD

EXCELLENT STRONG ROOMS, SO THEY BECAME AN

OBVIOUS CHOICE TO BE USED AS A PUBLIC SAFE

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AS AN ACKNOWLEDGEMENT FOR DEPOSITS THE GOLDSMITHS ISSUED

RECEIPTS AND SOON FOUND THEIR RECEIPTS WERE BEING PASSED

FROM ONE TRADER TO ANOTHER IN THE SETTLEMENT OF DEBTS.

THIS SAVED A TRADER WITH A DEBT TO PAY FROM HAVING TO GO TO

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IT WAS MUCH SIMPLER JUST TO TRANSFER THE RECEIPT:

TO HELP IN THIS, THE GOLDSMITHS BEGAN TO ISSUE RECEIPTS IN

CONVENIENT DENOMINATIONS AND TO MAKE THEM PAYABLE TO

BEARER SO THAT TITLE TO THE RECEIPT WOULD PASS BY DELIVERY”

PRESENT-DAY BANK NOTES ARE PAYABLE TO BEARER.

IN THE SAME WAY AND WHOEVER IS IN POSSESSION OF A NOTE,

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THE GOLDSMITHS BEGAN TO CONCENTRATE ON THE BANKING SIDE OF THEIR BUSINESS AND SOON FOUND THAT, AT ANY ONE TIME, ONLY A SMALL PROPORTION OF THE COINS THEY WERE HOLDING FOR SAFE- KEEPING WOULD BE REQUIRED TO MEET DEMANDS FOR REPAYMENT OF THEIR RECEIPTS.

THEY BEGUN TO LEND THE SURPLUS MONEY AND TO CHARGE INTEREST FOR DOING

SO, OTHER SERVICES WERE DEVELOPED SUCH AS DEPOSIT ACCOUNTS, DISCOUNTING (OR CASHING) BILLS OF EXCHANGE BEFORE THE DAY FOR PAYMENT AND DEALING IN BULLION AND FOREIGN CURRENCIES.

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WITH THE DEVELOPMENT OF BANKS AND THAT MONEY, EACH COUNTRY HAD

ITS OWN CURRENCY.

TO FACILITATE INTERNATIONAL PAYMENTS, STANDARD HAD TO BE

ESTABLISHED FOR COMPARISON OF THE DIFFERENT NATIONAL CURRENCIES.

THE SOLUTION WAS TO MAKE ALL CURRENCIES CONVERTIBLE INTO GOLD,

HENCE, THE CONCEPT OF GOLD STANDARD.

ACCORDING TO THE GOLD STANDARD ALL NATIONAL CURRENCIES WERE

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IMPORTERS HAVE TO CONVERT NATIONAL CURRENCY INTO FOREIGN CURRENCY AND

EXPORTER MUST CONVERT FOREIGN CURRENCY INTO DOMESTIC CURRENCY. HENCE THERE IS A MARKET FOR FOREIGN CURRENCY

IMPORTERS ARE THE DEMANDERS OF FOREIGN CURRENCY BECAUSE THEY NEED IT TO PAY FOR

THEIR PURCHASES ABROAD:

EXPORTERS ARE THE SUPPLIERS OF FOREIGN EXCHANGE BECAUSE THEY TRANSFORM THEIR

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The business of Banking

THE BUSINESS OF BANKING IS MAINLY

ABOUT BORROWING FROM THE PUBLIC

AND LENDING TO THE PUBLIC

BORROWING FROM THE PUBLIC IS DONE

THROUGH DEPOSIT MOBILIZATION

DEPOSITS ARE MOBILISED THROUGH

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FOR

EXAMPLE

SAVINGS

ACCOUNT,CURRENT

ACCOUNT AND OTHER TYPES OF DEPOSIT

ACCOUNTS.

THE MOBILISED DEPOSITS ARE PARTLY EXTENDED

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THE OTHER PART OF THE MOBILISED

DEPOSITS IS PUT IN OTHER INVESTMENT

OPPORTUNITIES

IT IS IMPORTANT TO NOTE THAT MORE

THAN 60% OF THE BANKS PROFIT IS

GENERATED FROM LOANS EXTENDED TO

VARIOUS CUSTOMERS

IT IS THROUGH THIS AMOUNT THAT DAY

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FUNCTIONS OF THE BANKS

THE PRIMARY FUNCTIONS OF ANY BANK

INCLUDE;

(i) DEPOSIT MOBILIZATION

(ii) LENDING TO THE PUBLIC AND

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AGENCY FUNCTIONS

THE BANKS HAVE OTHER FUNCTIONS

WHICH ARE CONSIDERED AS AGENCY

FUNCTIONS OR ACTIVITIES;THEY

INCLUDE THE FOLLOWING;

a)

COLLECTION AND PAYMENT OF

CHEQUES,BILLS OF EXCHANGE AND

PROMISORY NOTES

b)

TRANSFER OF FUNDS

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The Meaning of Money

MONEY IS A CLAIM TO GOODS AND SERVICES.

MONEY CAN BE EXCHANGED FOR THE GOODS AND

SERVICES WE NEED. IN ITSELF, CONTEMPORARY

MONEY IS PRACTICALLY WORTHLESS:

THE STARVING MAN CANNOT EAT IT NOR THE

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Definition

:

MONEY IS SOMETHING WHICH IS READILY

ACCEPTABLE AS A MEDIUM OF EXCHANGE.

BEFORE MONEY CAME INTO USE AS MEDIUM

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The economic importance of money

MODERN ECONOMIES ARE BASED ON THE PRINCIPLE OF SPECIALIZATION AND DIVISION OF

LABOUR.

THE TYPICAL INDIVIDUAL DEPENDS UPON THE PRODUCTION OF GOODS AND SERVICES BY

OTHER PEOPLE.

WITHOUT THIS SPECIALIZATION LIVING STANDARDS WOULD BE EXTREMELY LOW, AS

INDIVIDUALS WOULD BE UNABLE TO DEVELOP SPECIFIC SKILLS, INSTEAD HAVING TO SPREAD THEIR EFFORTS OVER THE PRODUCTION OF BASIC ITEMS, SUCH AS FOOD, SHELTER AND CLOTHING REQUIRED FOR SURVIVAL. ALSO, THE SIGNIFICANT ECONOMIES OF SCALE, SO VITAL TO THE EFFICIENCY OF MODERN PRODUCTION PROCESSES, WOULD BE LOST.

IN GENERAL, SPECIALIZATION WILL ONLY BE UNDERTAKEN IF THERE IS SOME PROSPECT

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Historical Development of Money

MONEY CONSISTS OF ALL THOSE THINGS THAT ARE

GENERALLY ACCEPTABLE AS A MEDIUM OF EXCHANGE.

AN ALTERNATIVE DEFINITION OF MONEY IS THAT IT IS

ANYTHING THAT IS GENERALLY ACCEPTED AS PAYMENT

FOR GOODS AND SERVICES OR MONEY IS ANYTHING

THAT IS GENERALLY ACCEPTED BY THE SOCIETY TO ACT

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Barter System

IN THE COURSE OF HISTORY MANY DIFFERENT COMMODITIES HAVE

BEEN USED AS MEANS OF EXCHANGE.

IN THAT PERIOD THERE WAS NO COMMON MEDIUM OF EXCHANGE.

GOODS WERE EXCHANGED FOR GOODS.

THE SYSTEM IN WHICH GOODS ARE USED TO BUY OTHER GOODS IS

CALLED

BARTER SYSTEM.

THIS SYSTEM OCCURS WHERE GOODS OR SERVICES ARE TRADED

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Barter System Continue…

THE SUCCESSFUL OPERATION OF THIS FORM OF TRADE REQUIRES A

DOUBLE COINCIDENCE OF WANTS.

THE POTENTIAL PROBLEMS INVOLVED IN COMPLETING A TRANSACTION

MAY BE GREAT, ESPECIALLY AS MANY GOODS ARE VARIABLE IN

QUALITY, NOT EASILY DIVISIBLE, AND POSSIBLY PERISHABLE.

THUS BARTER TRADE IS EXTREMELY INEFFICIENT, INVOLVES HIGH

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Disadvantage of Barter System

THE PROBLEM OF DOUBLE COINCIDENCE OF WANTS:

THIS MEANS THAT UNDER BARTER SYSTEM THERE SHOULD BE A POSSIBILITY OF FINDING SOMEONE WHO IS WILLING TO BUY WHAT YOU ARE SELLING AND AT THE SAME TIME TO SELL TO YOU WHAT YOU WANT TO BUY. THIS PROCESS WAS VERY DIFFICULT AND A LOT OF TIME WAS WASTED DURING THE EXCHANGE PROCESS. THE PROBLEM OF PORTABILITY:

THE VALUE/WEIGHT RATIO OF THE COMMODITY WAS TOO BULKY THAT INDIVIDUAL CANNOT CARRY REASONABLY HIGH SUM OF MONEY AT A LONG DISTANCE.

THE PROBLEM OF DIVISIBILITY:

TO ACT AS MONEY OTHER COMMODITY WAS NOT EASILY DIVISIBLE INTO UNITS LIKE GRAINS OR SALT. THE PROBLEM OF DURABILITY:

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Characteristics/Quality of Good Money.

ANY COMMODITY CAN PERFORM THE ROLE OF MONEY PROVIDED THAT IT

POSSES CERTAIN KEY QUALITIES SUCH AS THE FOLLOWING.

BY DEFINITION A SUBSTANCE MUST BE GENERALLY ACCEPTABLE IF IT IS TO BE

REGARDED AS MONEY. THE EXTENT OF THIS ACCEPTABILITY AND THE

WILLINGNESS OF PEOPLE TO ACCEPT SOME FORMS OF MONEY IN

PREFERENCE TO OTHERS, ARE IMPORTANT INDICATORS OF QUALITY OF GOOD

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Characteristics/Quality of Good Money.

MONEY SHOULD BE EASY TO TRANSPORT OR TO CARRY

REASONABLY. ALSO IT SHOULD BE PHYSICALLY CONVENIENT FOR

THE USER.

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Characteristics/Quality of Good Money.

MONEY SHOULD STAY LONG IN TERMS OF VALUE, THAT IS, PEOPLE WILL ONLY ACCEPT MONEY IN EXCHANGE FOR THEIR OWN PRODUCTS IF THEY BELIEVE THAT THE MONEY WILL MAINTAIN ITS KEY PHYSICAL CHARACTERISTICS AT LEAST UNTIL AFTER A TIME AT WHICH THEY HAVE PLANNED TO SPEND THE MONEY.

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Characteristics/Quality of Good Money.

RECOGNIZABILITY- MONEY SHOULD BE EASILY RECOGNIZED BY THE PEOPLE; OTHER THINGS

BEING EQUAL THE BETTER WILL BE ITS QUALITY AS MONEY. ALSO MONEY SHOULD NOT BE EASILY FORGEABLE.

SCARCITY- THE VALUE OF MONEY, LIKE ECONOMIC VALUE OF ANY ASSET IS A SUPPLY AND DEMAND PHENOMENON. THIS GIVES APPEARANCE OF VALUE EVEN IF THE COMMODITY HAS NO INTRINSIC VALUE. MONEY DERIVES ITS VALUE FROM ITS SCARCITY.

STABILITY OF VALUE- MONEY, DESPITE THE INFLUENCES OF INFLATION AND DEFLATION REMAINS

FAIRLY STABLE IN VALUE. MONEY IS NOT SUBJECT TO THE NATURAL FORCES OF WEATHER AS MUCH EARLY COMMODITY MONIES WERE.

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The Functions of Money

THERE ARE FOUR BASIC FUNCTIONS OF MONEY

NAMELY:-MEDIUM OF EXCHANGE

MONEY’S PRIME FUNCTION IS TO ACT AS A MEDIUM OF EXCHANGE. THE EXISTENCE OF MONEY ENABLES ALL GOODS AND SERVICES TO BE EXCHANGED AGAINST IT.

 WITHOUT MONEY THE MODERN ECONOMIC SOCIETY WHICH IS BASED ON SPECIALIZATION AND DIVISION OF LABOUR COULD NEVER HAVE DEVELOPED.

LIQUID STORE OF VALUE

MONEY HAS THE ADVANTAGE THAT IT CAN BE STORED TODAY WITHOUT COMMITMENT AS TO HOW IT WILL BE ALLOCATED IN FUTURE.

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The Functions of Money

UNIT OF ACCOUNT OR MEASURE OF VALUE

MONEY SIMPLIFIES THE PROCESS OF CALCULATING THE

RATE OF EXCHANGE BETWEEN COMMODITIES.

THAT IS IN ALL FORMS OF TRADE IT IS USEFUL TO BE ABLE TO

COMPARE DIRECTLY THE VALUE OF ONE TYPE OF COMMODITY

OR SERVICES AGAINST ANOTHER.

THEREFORE MONEY CAN BE USED FOR SUCH A COMPARISON.

MONEY BEING A UNIT OF ACCOUNT ENABLES ASSETS TO BE

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The Functions of Money

STANDARD OF DEFERRED PAYMENTS

MONEY ENABLES LOANS AND CREDIT TO

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CHEQUES

INTRODUCTION:

THE USE OF CHEQUES AS A MEANS OF PAYMENT IS PROBABLY BECOMING MORE

POPULAR IN TANZANIA AS PEOPLE, ESPECIALLY INDIGENOUS AFRICANS GET

ACCESS TO BANKING SERVICES.

FOR INSTANCE THERE ARE SOME WHO WANT TO EXPAND THEIR BUSINESSES

THUS APPROACH THE BANKS FOR LOANS WHICH ULTIMATELY WILL HAVE TO USE

CURRENT ACCOUNTS AND HENCE THE USE OF CHEQUES.

ALSO SOME OTHER GROUPS SUCH AS CBOS, RETIRED OFFICERS WHO RECEIVE

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CHEQUES

AS ONE MAY SEE THE CHEQUES BECOME MORE POPULAR IT IS IMPORTANT TO MAKE SURE THAT THE USE OF CHEQUE AND THE FACTORS AFFECTING ITS VALIDITY ARE WELL KNOWN BY AT LEAST EVERY

 A CHEQUE IS A COMMON FORM OF NEGOTIABLE INSTRUMENT USED THROUGH OUT THE WORLD.

 IT OPERATES AS MANDATE OR ORDER OF THE DRAWER, AUTHORIZING OR DIRECTING THE DRAWEE TO MAKE PAYMENT TO THE HOLDER OF IT. USUALLY THE DRAWER IS A BANKER.

A CHEQUE IS A FORM OF A CONTRACTUAL DOCUMENT, AND THE CONTRACT IN IT FALLS UNDER THE

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CHEQUES CONT….

WHEN WRITING OUT A CHEQUE, CARE SHOULD ALWAYS BE

EXERCISED TO ENSURE THAT ALL DETAILS ARE

COMPLETED:--DATE

-NAME OF PAYEE

-AMOUNT IN WORDS AND IN FIGURES AND

-DRAWER’S SIGNATURE

CHEQUES MUST BE WRITTEN IN INK AND NO ROOM SHOULD

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CHEQUES CONT….

WHEN AN OPEN CHEQUE BOOK IS IN USE, CHEQUE SHOULD BE CROSSED, PREFERABLY NOT NEGOTIABLE, WHENEVER THEY ARE TO BE SENT THROUGH THE POST.

 IF THERE IS ANY ALTERATIONS THE DRAWERS MUST SIGN AGAINST SUCH ALTERNATION.

FOR THE CHEQUES TO BE USED EFFECTIVELY SUFFICIENT FUNDS SHOULD BE

AVAILABLE IN THE DRAW

A CHEQUE IS A COMMON FORM OF NEGOTIABLE INSTRUMENT USED THROUGH OUT THE

WORLD.

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CHEQUES CONT….

IT OPERATES AS MANDATE OR ORDER OF THE DRAWER,

AUTHORIZING OR DIRECTING THE DRAWEE TO MAKE

PAYMENT TO THE HOLDER OF IT. USUALLY THE DRAWER IS A

BANKER.

BANKERS ACCOUNT TO MEET CHEQUES WHEN THEY ARE

PRESENTED FOR PAYMENT AND CHEQUES DRAWN SHOULD

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ADVANTAGES OF USING

CHEQUE PAYMENT METHOD

CHEQUES ARE WIDELY USED BECAUSE THEY ARE EASIER FOR TRADERS TO TRANSPORT

THAN CASH.

CLEARED AND BEFORE IT IS APPLIED TO A BANK ACCOUNT.

A CHEQUE ALSO PROVIDES EVIDENCE OF RECEIPT AND EVIDENCE ON NON PAYMENT

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DEFINITION OF A CHEQUE

A CHEQUE IS AN UNCONDITIONAL ORDER IN WRITING

DRAWN ON A BANKER,SIGNED BY THE DRAWER

REQUIRING THE BANKER TO PAY ON DEMAND,A SUM

CERTAIN IN MONEY TO ORDER OF SPECIFIED PERSON

OR TO BEARER AND WHICH DOES NOT ORDER ANY

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ANALYSIS OF THE DEFINITION

UNCONDITIONAL ORDER

THE ORDER TO PAY COMING IN A FORM OF

A CHEQUE MUST NOT BE ATTACHED WITH

CONDITIONS AS FAR AS THE BANKER IS

CONCERNED.

THE ORDER MUST BE IN WRITING

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ANALYSIS OF THE DEFINITION

THE ORDER MUST BE SIGNED BY THE

DRAWER OR HIS AUTHORISED AGENT

THE SIGNING BY THE DRAWER OR HIS/HER

AUTHORISED AGENT IS WHAT BRINGS

VALIDITY TO A CHEQUE

THE ORDER TO PAY MUST BE ADDRESSED

BY ONE PERSON TO ANOTHER

.

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ANALYSIS OF THE DEFINITION

THE SUM WRITTEN IN THE CHEQUE MUST BE CERTAIN

THE AMOUNT WRITTEN IN THE CHEQUE SHOULD BE CLEARLY STATED BOTH IN WORDS AND FIGURES

THE ORDER MUST BE PAYABLE ON DEMAND

IN ORDER FOR THE INSTRUMENT TO BE CALLED A CHEQUE,IT MUST BE DRAWN PAYABLE ON DEMAND

PAYEE MUST BE A SPECIFIED PERSON

IF THE CHEQUE IS NOT PAYABLE TO BEARER,THE NAME OF PAYEE

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PARTIES TO A CHEQUE

DRAWER

THE PERSON WHO GIVES THE ORDER TO PAY THE CHEQUE

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TYPES OF A CHEQUE

WHEN ONE TALKS OF DIFFERENT TYPES OF CHEQUES, ONE REFERS TO THE NATURE

OF THE CONTENTS OF CHEQUES AND NOT TO FORMS. IN THIS RESPECT, WE MAY DISTINGUISH BETWEEN VARIOUS TYPES OF CHEQUES SUCH AS;

A BEARER CHEQUE:

THIS IS ONE WHICH CAN BE NEGOTIATED BY A MERE DELIVERY.

WHEN THE HOLDER OF A BEARER CHEQUE TRANSFERS IT WITHOUT ENDORSEMENT

IN EXCHANGE OF GOODS, HE IS NOT LIABLE ON IT IF IT IS DISHONOURED.

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AN ORDER CHEQUE

THIS IS NEGOTIATED BY ENDORSEMENT AND DELIVERY.

WHERE THE HOLDER OF A CHEQUE PAYABLE TO HIS

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A CROSSED CHEQUE

THIS IS ONE WHICH CANNOT BE ENCASHED ACROSS THE

COUNTER.

IT HAS TO BE PAID (DEPOSITED) INTO THE BANK ACCOUNT OF

HE HOLDER.

ANTE-DATED CHEQUE

ANTE-DATED CHEQUE IS ONE THAT HAS A DATE ON IT

EARLIER THAN THE DATE IT WAS ISSUED. SUCH A

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POST-DATED CHEQUE.

THIS IS A CHEQUE WHICH POSTPONES THE CHEQUE UNTIL

THAT DATE IT ARRIVES.

A POST-DATED CHEQUE IS THEREFORE FREELY NEGOTIABLE.

A BANKER WHO PAYS A POST-DATED CHEQUE DISOBEYS THE

ORDER BY THE CUSTOMER AND ACCORDINGLY SUFFERS THE

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POST-DATED CHEQUE CONT…

THE BANKER MAY ALSO BE HELD LIABLE FOR INJURING HIS

CUSTOMERS’ CREDIBILITY.

THE BANKER MAY BE AT LOSS IF PAYMENT IS MADE IN A POST

DATED CHEQUE IF THE CUSTOMER DIES OR A GARNISHEE

ORDER IS ISSUED BEFORE THE DATE SHOWN ON THE CHEQUE.

USUALLY IF THE BANKER PAYS A POST-DATED CHEQUE IT DOES

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OVER DUE CHEQUE

AN OVER DUE CHEQUE IS ONE THAT APPEARS

ON THE FACE OF IT TO HAVE BEEN IN

CIRCULATION FOR AN UNREASONABLE LENGTH

OF TIME IS REASONABLE OR UNREASONABLE.

IN THIS RESPECT, EVERY CASE HAS TO BE

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A STALE CHEQUE

A STALE CHEQUE IS ONE WHICH HAS BEEN IN CIRCULATION FOR MORE

THAN SIX MONTHS.

WHEN THE PAYING BANKER RETURNS THE STALE CHEQUE, HE PREFERS

TO CONFIRM WITH THEN DRAWER WHETHER IT IS STILL VALID OR NOT.

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CHEQUE CROSSINGS

A CROSSING MAY BE DEFINED AS AN INSTRUCTION TO THE BANK BY THE

CUSTOMER TO PAY THE CHEQUE ONLY INTO A BANK ACCOUNT, NOT ACROSS THE

COUNTER.

THERE ARE TWO TYPES OF CROSSINGS ON CHEQUES. THESE ARE GENERAL

CROSSINGS AND SPECIAL CROSSINGS.

CROSSING FACILITATES IN TRACING THE RECIPIENT OF PAYMENT IF

SUBSEQUENTLY DEFECTED.

IT ASSURES SAFETY IN CIRCULATION AND PREVENTS PAYMENT TO A WRONGFUL

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GENERAL CROSSINGS:

GENERAL CROSSING PERMITS PAYMENT OF A CHEQUE INTO ANY BANK ACCOUNT. THE PAYING BANKER MUST PAY THE VALUE OF THE CHEQUE TO THE OTHER BANK

WHERE THE CUSTOMER HAS THE ACCOUNT.

THE CUSTOMER’S BANKER HAS AN OBLIGATION TO MAKE COLLECTION OF THE

PROCEEDS OF THE CHEQUE FROM THE PAYING BANKER.

THE BASIS OF THIS CROSSING IS THAT IT PROTECTS THE HOLDER BECAUSE IF

THE CHEQUE IS STOLEN, IT CANNOT BE ENCASHED ACROSS THE COUNTER.

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GENERAL CROSSINGS CONSIST OF TWO

PARALLEL TRANSVERSE LINES TO WHICH MAY

BE ADDED THE WORD SUCH AS “& CO” “NOT

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SPECIAL CROSSING

A SPECIAL CROSSING INCLUDES THE NAME OF A

PARTICULAR BANK ON THE FACE OF THE CHEQUE AND

HENCE THE CHEQUE IS CROSSED SPECIALLY TO THE NAMED

BANK.

SPECIAL CROSSING MAY BE ILLUSTRATED BY SUCH WORDS

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NOT NEGOTIABLE

THE WORD NOT NEGOTIABLE DENIES A CHEQUE OF ITS STATUS OF BEING A NEGOTIABLE

INSTRUMENT.

THE WORDS PERSE DO NOT ADD ANY RESPONSIBILITY ON THE PART OF THE PAYING

BANKER.

WHAT THEY PRACTICALLY MEAN IS THAT THE TRANSFEREE OF A CHEQUE MARKED NOT

NEGOTIABLE SHALL NOT BE CAPABLE OF ACQUIRING A BETTER TITLE TO IT THAN THAT IS

TRANSFEROR HAD.

THE PAYING BANKER IS NOT OBLIGED TO INQUIRE ABOUT THE TITLE OF THE HOLDER.

AGAIN, THE HOLDER OF SUCH A CHEQUE IS NOT, AND CANNOT CLAIM TO BE, A HOLDER IN

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NOT TRANSFERABLE

THESE WORDS HAVE AN IMPLICATION THAT A CHEQUE HAS BEEN RESTRICTIVELY INDORSED.

IT CANNOT BE TRANSFERRED AT ALL IN SUCH MANNER AS TO CONSTITUTE THE

TRANSFEREE /THE HOLDER OF IT.

NOT TRANSFERABLE CHEQUES INCLUDE

ARE:-(A)CHEQUES PAYABLE TO A NAMED PERSON (PAYEE) AND FOLLOWED BY THE WORD “ONLY”.

(B) CHEQUES PAYABLE TO A NAMED PAYEE AND MARKED “NOT TRANSFER

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ACCOUNT- PAYEE CROSSINGS

THIS IS COMMON WITH GENERAL CROSSING.

THE CROSSING IMPLIES THAT THE BANKER WHO COLLECTS THE

PROCEEDS OF THE CHEQUE SO CROSSED IS REQUIRED TO

CREDIT THE PAYEE’S ACCOUNT;

HE WILL BE GUILTY OF NEGLIGENCE AND LIABLE TO THE TRUE

OWNER TO THE EXTENT OF THE AMOUNT OF THE CHEQUE.

THE WORD ALONE DOES PROHIBIT NEITHER TRANSFERABILITY

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EFFECTS OF CROSSING A CHEQUE

THE CHEQUE IS NOT PAYABLE OVER THE

COUNTER

THE PROCEEDS ARE COLLECTED FROM

THE DRAWEE BANK

SPECIAL CROSSING SHOULD ONLY BE

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ADVANTAGES OF CROSSING A CHEQUE

IT BECOMES DIFFICULT TO COMMIT

FRAUDS ON PAYMENT

IT PROVIDES MORE TIME FOR FRAUDS TO

BE DETECTED BEFORE PAYMENT IS

EFFECTED.

IT ALLOWS THE DRAWER TO PLACE A

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PAYMENT OF CHEQUES

THIS IS A SERVICE DONE BY BANKS TO EFFECT

PAYMENTS TO THEIR CUSTOMERS WHEREBY THE PAYING

BANK IS THE ONE WHICH MAINTAINS THE DRAWER’S

ACCOUNT.

DEBITING THE DRAWER’S ACCOUNT EFFECTS THE

PAYMENT.

HOWEVER,BEFORE ANY CHEQUE IS PAID IT HAS TO BE

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FUNDS

ARE THE FUNDS IN THE ACCOUNT

SUFFICIENT TO MEET THE AMOUNT OF

THE CHEQUE?

ARE THERE ANY UNCLEARED EFFECTS?

IS THE PAYMENT OF THE CHEQUE WITHIN

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TECHNICAL ASPECTS

THE CHEQUE SHOULD NEITHER BE

POSTED NOR STALE

THE CHEQUE LEAF SHOULD COME FROM

A CHEQUE BOOK ISSUED TO HIM/HER.

IN ADDITION TO THAT IT IS IMPORTANT

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TECHNICAL ASPECTS

THE PAYEE MUST BE IDENTIFIED BEYOND

ANY REASONABLE DOUBT BY THE BANK

THE AMOUNT IN WORDS AND IN FIGURES

SHOULD AGREE

THE DRAWER’S SIGNATURE SHOULD BE

SAME AS THE ONE HELD BY THE BANK AS

A SPECIMEN

IF THE CHEQUE IS CROSSED IT CANNOT

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TECHNICAL ASPECTS

ANY ALTERATION THAT APPEARS ON THE

CHEQUE MUST BE ACCOMPANIED BY THE

FULL SIGNATURE OF THE DRAWER

ANY MULTILATION ON THE CHEQUE

MUST BE AUTHENTICATED BY THE BANK

IF THE CHEQUE IS TO BE PAID TO

SOMEONE OTHER THAN THE PAYEE IT

MUST HAVE AN APPROPRIATE

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LEGAL ASPECTS

A CHEQUE SHOULD NOT BE PAID IF ANY OF

THE FOLLOWING IS INVOLVED

IF A NOTICE HAS BEEN SERVED TO THE

BANK ABOUT THE DEATH,INSANITY,OR

BANKRUPTCY OF THE DRAWER

IF THERE IS A STOP PAYMENT ORDER FOR

THE RESPECTIVE CHEQUE BY THE DRAWER

PRESENCY OF GARNISHEE ORDER FROM A

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NON PAPER MONEY/PLASTIC MONEY

PAYMENTS THROUGH PLASTIC CARDS (MONEY)

-PLASTIC CARDS:

THESE INCLUDE CREDIT CARDS, DEBIT CARDS, CHEQUE GUARANTEE

CARDS, TRAVEL AND ENTERTAINMENT CARDS, SHOP CARDS AND SMART

CARD OR CHIP CARDS:

TECHNICALLY, PLASTIC CARDS DO NOT ACT THEMSELVES AS A

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CREDIT CARD

THIS ENABLES THE HOLDER TO OBTAIN INSTANT CREDIT. THEY ARE VERY WIDESPREAD IN

DEVELOPED COUNTRIES.

THE TWO BEST KNOWN ARE BARCLAY’S CARD, WHICH IS RUN BY BARCLAY BANK, BUT IS

AVAILABLE TO PEOPLE HOLDING ACCOUNTS AT OTHER BANKS AS WELL.

THEY GAVE THE HOLDER AUTHORITY TO BUY GOODS, AT SHOPS/SUPERMARKET

DESIGNATED BY THE ISSUING ORGANIZATION FOR AMOUNTS UP TO AN AGREED MAXIMUM.

THE SELLING SHOP THEN PRESENTS THE BILL TO THE ORGANIZATION THAT ISSUED THE

CREDIT CARD AND IS PAID PROMPTLY: THE ISSUING ORGANIZATION THEN BILLS THE CARD

HOLDER AND EITHER ASKS FOR PROMPT CASH OR IN INSTALLMENTS IN WHICH CASE

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DEBIT CARD

THESE ARE ISSUED DIRECTLY BY BANKS AND

ALLOW CUSTOMERS TO WITHDRAW MONEY FROM

THEIR ACCOUNTS.

THEY CAN ALSO BE USED TO OBTAIN CASH AND

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CHEQUE GUARANTEE CARDS

THESE CARDS WERE INTRODUCED BECAUSE OF RETAILERS’

RELUCTANCE TO ACCEPT PERSONAL CHEQUES.

TYPICALLY,

WHEN

PAYING

BY

CHEQUES

FURTHER

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TRAVEL AND ENTERTAINMENT CARDS(CHARGE

CARDS)

THESE PROVIDE PAYMENT FACILITIES AND ALLOW REPAYMENT TO BE

DEFERRED UNTIL THE END OF THE MONTH, BUT THEY DO NOT PROVIDE

INTEREST FREE CREDIT.

UNLIKE CREDIT CARDS, ALL BILLS HAVE TO BE REPAID AT THE END OF

THE MONTH AND NO ROLL OVER IS ALLOWED.

NORMALLY, UNPAID BALANCES ARE CHARGED AT A HIGHER INTEREST

RATE THAN FOR CREDIT CARDS, SO AS TO DISCOURAGE LATE PAYMENT.

THE MOST WIDELY USED CHARGE CARDS INCLUDE AMERICAN EXPRESS

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SMART, MEMORY OR CHIP CARDS

THESE ARE CARDS WHICH INCORPORATE A MICROPROCESSOR OR A

MEMORY CHIP.

THE MICROPROCESSOR CARD CAN ADD, DELETE AND OTHERWISE

MANIPULATE INFORMATION ON THE CARD AND CAN UNDERTAKE A VARIETY

OF FUNCTIONS AND STORE A RANGE OF INFORMATION.

MEMORY CHIP CARDS (EG PAID PHONE CARDS) CAN UNDERTAKE A

PRE-DETERMINED OPERATION.

THE MAIN CHARACTERISTIC OF THE MICROPROCESSOR TECHNOLOGY IS TO

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MONEY GRAM

IS A GLOBAL LEADER IN WORLDWIDE MONEY TRANSFER SERVICES, WORKING CLOSELY WITH SPECIALLY CHOSEN AGENTS IN 190,000 LOCATIONS ACROSS 190 COUNTRIES AND TERRITORIES?

IT PROVIDE A SECURE WAY TO SEND AND RECEIVE MONEY TO AND FROM YOUR LOVED ONES WORLDWIDE AND IT MAKES SURE THAT YOUR MONEY GETS TO WHERE IT IS NEEDED QUICKLY.

WHY MONEY GRAM ?

IT IS QUICK- YOUR MONEY IS WHERE IT’S NEEDE IN JUST TEN MINUTES

IT IS CONVENIENT- WITH 190,000 MONEY TRANSFER AGENTS AROUND THE WORLD, YOU’RE NEVER FAR AWAY FROM MONEY GRAM

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Figur

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Referensi

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