CHAPTER 30

CHAPTER 30 - CHAPTER SUMMARY BANK DEPOSITS AND COLLECTIONS Collection of Items Depositary Bank the bank in which the payee or holder deposits a

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CHAPTER SUMMARY BANK DEPOSITS AND COLLECTIONS Collection of Items Depositary Bank the bank in which the payee or holder deposits a check for credit Provisional Credit tentative credit for the deposit of an instrument until final credit is given Final Credit payment of the instrument by the payor bank; if the payor bank (drawee) does not pay the check, the depositary bank reverses the provisional credit Intermediary Bank a bank, other than the depositary or payor bank, involved in the collection process Collecting Bank any bank (other than the payor bank) handling the item for payment Agency a collecting bank is an agent or subagent of the owner of the check until the settlement becomes final Duty of Care a collecting bank must exercise ordinary care in handling an item Duty to Act Timely a collecting bank acts timely if it takes proper action before its midnight deadline (midnight of the next banking day) Indorsements if an item is restrictively indorsed “for deposit only,” only a bank may be a holder Mann CH 30- 1
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Warranties customers and collecting banks give warranties on transfer, presentment, and encoding Final Payment occurs when the payor bank does any of the following, whichever happens first: (1) pays an item
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This note was uploaded on 10/14/2010 for the course BUS 5503 taught by Professor Sorrell during the Fall '10 term at Troy.

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CHAPTER 30 - CHAPTER SUMMARY BANK DEPOSITS AND COLLECTIONS Collection of Items Depositary Bank the bank in which the payee or holder deposits a

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