Promissory note is a simple kind of instrument of credit in which debtor himself makes a promise to his creditor to pay the amount of money at promised date. To make this document legal one, the revenue stamps are affixed according to the value of the promissory notes. We can define promissory note as “An instrument which can be in written shape by making promise to pay a specific amount on demand at a fixed date and time or unconditional order of a certain person or to carrying of the instrument”.
Banking & Finance
Banking & finance both combine the study of modern banking and finance for business. Banking and Finance is a basic business subjects in which probably acquiring the matters of finance are discussed. Probably business acquired the business finance from the different banks and the study of such financing for business is known as banking & finance in business education. Today in banking & finance there is a enough scope and every year a lot jobs opened for youth.
To know exactly what the functions of commercial banks are? Firstly we should try to understand that what commercial bank is? Commercial Banks are those institutes which deal with the money and engaged in performing the routine activities of banking business. Commercial banks are primarily established to earn profit. It deals with the funds of other. It takes money from one person and lends to another. They give fixed amount of interest while talking money from others and give to needy people and take a fixed amount of interest which is higher than previous one. So difference between both of them is actually the profit of bank. Along with this borrowing and lending money, there are a lot more functions of commercial bank, which play a vital role in the development of country and also give a lot benefits to the general public.
There are three different types of crossing and by crossing , we mean putting or drawing two parallel transverse lines on the front side of a cheque on upper left corner, with or without the use of the word like “& CO” “Not Negotiable”.
A cheque may be define as “An order which is unrestricted in written form signed by maker address to a specific bank with the direction to pay a certain specific amount to a specific person on demand”. There are various types of cheque, but moving towards the types of cheque, let’s talk about the essentials of cheque.
To understand what is the functions of central bank, firstly we should know about what central bank is? Every country of the world has its own central bank for resolving all the monetary and credit problems in the country. We can define the central bank as “Central bank is an institution, which is charged with the responsibility of managing the expansion and contraction of the volume in the interest of the general public welfare”.
If we could not deny the importance of money in business, then we can also never deny the importance of credit in business. Since the supply of money is the lifeblood of a borrowing economy, there are two sources which meet the capital requirements of the business. These are the savings of the people and commercial banks. Probably these Commercial Banks take the savings of money and borrowed them to the needy people as well as the businessmen.
Today most businesses run on credit and there are various types of credit used in business world. Probably businesses don’t have enough amounts of cash to meet the day to day needs of business and as well as other business transactions, but through credit, they can meet all these expenses easily. Also general public various types of credit to enhanced their lifestyle. The term “Credit” refers to purchase in which price is not paid in cash, instead a document is given by the purchaser in acknowledgment of his debt. The document is called as “Instruments of Credit”. A credit transaction therefore is a protected exchange. Credit involves confidence in the person’s honesty and integrity. The fundamental elements of credit are time and trust.
Banking plays an important role in the financial life of a business, and the importance of banks can be seen from the fact that they are considered as to be the life-blood of modern economy. Although no wealth is created by Bank, but their essential activities facilitates the process of production, exchange and distribution of wealth. In this way they become the effective partners in the process of economic development and growth. In the words of Stephenson & Britain “Banks are the custodians and distribution of liquid capital, which is the life-blood of our commercial and industrial activities and upon the prudence of their administration depend the economic well-being of the nation”.
There are different types of bank as well as different opinions about the derivation Bank”. Before discussing the types of bank, let’s see what is bank and from where the word bank had derived. Some authors say that bank is derived from the word ‘Banco” which means bench. According to another opinion the work bank is derived from the German word “back” which means joint stock fund and after some time the word back became “’Bank”.
There are number of instruments of monetary policy, which are important for business to understand, but, here it is also important to know what Monetary Policy is? Credit performs the important functions. Being the major part of the total supply of money in a modern economy, the value of money is influenced by the volume of credit. The volume of credit in the country is regulated for the economic stability. This regulation of credit by the central bank is known as “Monetary Policy”. It is also called Credit Control.