Business Services Test - 4

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934

Cash credit is a short-term source of finance. Under cash credit, the bank offers its customer to take a loan up to a certain limit.

Order cheque is payable to the person named in the cheque or his order. - For e.g. " Pay to X or order.", such cheque is payable either to X or to any person whom he orders the payment of the cheque. - Order cheque is paid by the bank only when the bank is satisfied about the identity of the payee.

When a cheque is Account payee, it directs the Bank that cash cannot be withdrawn on this cheque, funds can be only tranferred from one bank account to another bank account.

When the maker or holder of negotiable instrument signs the same, otherwise than as maker, for the purpose of negotiation on the back or face thereof or on a slip of paper annexed thereto, or signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to have endorsed the same and is called the endorser. Endorsement consists of the signature of the maker (or drawer) payee of a negotiable instrument with the intention of negotiation.

The main motive of insurance is cooperation. Insurance is defined as the equitable transfer of risk of loss from one entity to another, in exchange for a premium.

The insured is the person or entity who is covered by the insurance policy. The insurer is the entity (insurance company)that pays to, or on behalf, of the insured for a covered loss.The contract between both is Insurance contract.

 Life Insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder).

A compulsory car insurance scheme was first introduced in the United Kingtom with the Road Traffic Act 1930. This ensured that all vehicle owners and drivers had to be insured for their liability for injury or death to third parties whilst their vehicle was being used on a public road.