Q. No.1: Define Commercial banks.
Ans. : Professor G Crowther has defined commercial banks in his
book  “An outline of money” in the following
“A bank is a firm which collects money
from those who have it spare. It lends to those who require it.”
Q. No. 2: Define Customer of a bank.
Ans. : A customer of a bank is that person who has an account with
the bank.
Sir John Paget has defined the
term customer as under:
“To constitute a customer  there must be some recognizable course or
habit of dealing  in the nature of
regular banking business.”
Q. No. 3: Define a banker.
Ans. : According to Sir John Paget, “No one and no body, corporate
or otherwise can be a banker, who does not:
Take current accounts
Pay cheque drawn on himself
Collects cheques for his customers.”
Q. No. 4: Define Negotiable Instrument.
Ans.: Negotiable means transferable 
from one person to another. Negotiable instruments are those documents
which are transferable from one person to another by simple delivery or by
endorsement and delivery. Promissory note, bills of exchange, cheque is the
negotiable instruments.
Q. No. 5: Define Bills of Exchange.
Ans. : According to Section 4 of the Negotiable Instrument Act  1981, “An instrument in writing, containing
an unconditional order, signed by the maker, directing a certain person to pay
a certain sum of money only to or to the order of a certain person or to the
bearer of the instrument.”
Q. No. 6: Define Order Cheque.
Ans. : An order cheque is one which is payable to a certain person
as specified in the cheque or to his order. It must contain the name of a
certain person as the payee.
Q. No. 7: Define Crossing of the cheque.
Ans. : Crossing of the cheque means to draw two parallel transverse
lines at the top left  corner of the
cheque. Some words, such as “& Co.”, “Payee’s Account only”, etc., may be
inserted between the said two lines.
Q. No. 8: Define a Bank Draft.

Ans. : A bank draft is an order by one branch of a bank to another
branch of the same bank to pay a certain some of money on demand to the person
named therein.

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