Conversion?

Conversion is another word for wrongful payment of a customers cheque. All cheques are drawn by the account holders to be payable to the intended person. If the bank pay it to any person other than the intended person, the payment will be wrongful payment or conversion.

Post-dated Cheque?

A cheque bearing a future date is called post-dated cheque. A bank can not pay cheque before date of cheque. Post dated cheque is not paid by a bank.

Stale Cheque?

A cheque, after 6 months from its date of issue is regarded as 'Stale' and such a cheque is not paid by a bank. Stale cheques are also called 'out of date' cheque. A cheque should be encashed as soon as possible.

Indemnity?

A contract of indemnity is defined under Section-124 of the Contract Act- 1872 as:

A Contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.

Guarantee?

The Contract of Guarantee has been defined under Section-126 of the Contract Act-1872 as:

A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default.

What is a Bank?

Bank is a financial Institution. It takes deposit from public, lending money to the people and make investment.

Main Funcition of a Bank :
(a) Accept of deposits from Public
(b) Lending Money to the people
(c) Investment

Banks also function of various works :
(a) Collection and payment of cheques
(b) Payment on behalf of customers
(c) Purchase and sale of stock
(d) Acting as trustee, acting as correspondents
(e) Opening letter of credit
(f) Safe custody
(g) Dealing in foreign exchange
(h) Complete service in foreign trade
(i) Providing credit reports
(j) Providing remittance facilities
(k) Providing advisory services