Theory question 103
Banking(a) State five factors a bank manager would consider before granting a loan to a young school leaver.
(b) State five conditions that will make a bank to dishonour a customer's cheque.
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(a) Any five: purpose of the loan/viability of the business plan; the applicant's character and integrity; collateral/security offered; guarantor; ability to repay (source of income); amount requested; repayment period; whether he has an account and its record with the bank; his age and legal capacity.
(b) Any five: insufficient funds in the account; signature differs from specimen; words and figures differ; cheque is stale (over six months old); cheque is post-dated; alterations not signed for; drawer has died, become bankrupt or insane; customer has stopped payment; account is closed or frozen by court order; cheque is mutilated.
(b) asks for reasons the bank refuses to pay a cheque.