Automated Clearing House (ACH)

This is a nation-wide electronic clearinghouse that monitors and manages the process
of cheque and fund clearance between banks. In simple words, when you deposit a cheque issued
on a different bank into your bank account, the ACH manages the clearing process. Further, being
electronic, it reduces manual work and distributes the credit and debit balances automatically.
Automated Teller Machines (ATMs)
They are machines that dispense cash, receive cash, accept cheques, and give balance details
and mini statements to the customers through Computer network
Bank Account
A bank account allows the account holder to deposit, safeguard his money, earn interest, and
make cheque payments.
Bounced Cheque
When an account has insufficient funds the cheque is not payable and is returned by the bank with
a reason “Exceeds arrangement” or “funds insufficient”.
Cheque
A cheque is a negotiable instrument. By definition, a negotiable instrument is a document that
includes a promise to pay a certain amount of money to the intended beneficiary. A cheque
instructs the bank to pay a certain amount of money from the issuer’s bank to the receiver of the
cheque.
Clearing
Clearing of a cheque is done by the Clearing House. Further, in this process, the amount of the
cheque is debited from the issuer’s account and credit to the beneficiary’s account.
Debit Card
A debit card allows you to access the funds available in your account either from an ATM or a point
of sale (Pos). The amount used by you is instantly debited from your account. Also, there is no
credit available on a debit card.
Guarantor
A guarantor creates a trust which takes the responsibility of repayment of a loan. Usually, a
guarantor is not liable for the repayment of the loan. However, in some cases, the liability and
responsibility of repaying the loan lie with the guarantor.
Internet Banking
Most banks allow account holders to access their accounts using the internet. You can also
perform certain transactions using this system. This is internet banking or online banking or e-
banking.
Letter of Credit (Loc)
A bank issues a letter of credit on behalf of a buyer or an importer of goods. The Loc states the
bank’s commitment to pay the seller or exporter a specific amount for the purchase of goods by
the buyer.
In order to receive the payment, the seller must fulfill the conditions specified in the Loc and
submit the required documents. Usually, Locs are used in international trade transactions of huge
amounts.
Overdraft
It is the amount of cheque above the balance in the account of the issuer. Further, some banks
allow certain account holders to overdraft up to a certain limit.
Time or term Deposit (compte blocke)
A time deposit is a type of a bank deposit. In this deposit, the investor cannot withdraw his funds
before a fixed time elapses.
Zero-balance Account
Usually, account holders are required to maintain a certain minimum or average balance in their
account. However, banks at times offer accounts which do not have this minimum
or average balance requirement. This is a zero-balance account.
A non-cash transaction. In banking, the term is used to describe a negotiable instrument, such as a
check or bank draft, that is deposited but cannot be credited until it clears the issuer's account.
Examples: Demand Drafts, Transfers, other bank’s Cheques ( cheque deposited on your account)
etc.
Processing 
is a broad term that describes the multi-step process of transferring funds from a customer to a
merchant whenever a debit or credit card is involved in a transaction, Interbank clearing and
settlement occur on the processing date
Savings account
Typically, an interest-bearing account used to hold money for short- or long-term goals or
emergencies. You can add to this account at any time, but certain types of withdrawals may be
limited to certain period depending on Bank terms and conditions.