Definitions of Banking Terms
In the first question some banking terms are involved that need a clear definition. The case is based on banking and transactional problems. Ian Cameron has maintained a cash management account in the bank of Macquarie. The term Cash Management Account denotes an account where a person can manage his or her cash through the one particular portal (Cadenillas 2015). It is acting like a main cash hub, where all the investments can be in motion. The positive side of cash management account is that a person can trace his or her monetary movement and the financial opposition of that person can be checked at any moment. The cash flow of that person can be followed up thoroughly (Pan 2017). Simply, the term cash flow means circulation of money. Money can be circulated by the way of income and expenditure. There are two types of cash flow can be seen, such as positive cash flow that indicates the proportion of income ratio is higher than expenditure ratio. Through positive cash flow, the savings ratio got increased. The term negative cash flow indicates some specific time, where the outflows over ride the inflows of money. Another term that is used in the problem is that Mr. Ian has another transaction account at the community credit union. The word transactional account is a depository account that is available at the bank or related financial institution (Barradell and Peseta 2016). Bank is ready to offer such account on demand from the customers. Through the transactional account, one may get the benefit of cash withdrawals, cheque book facilities and money submission by way of electronic media. A person can operate the transactional account for the purpose of commercial or personal use. It is observed from the case that Mr. Ian had requested to transfer his money from cash management account to transaction account by way of electronic fund transfer.
Bank of Macquarie bank is the largest investment bank in Australia headquartered in Sydney (De Jong, Loudon and Choo 2016). The bank allows its customers to transact their money through online. The customers can transfer money to any bank situated and entrusted in Australia. The customer has to create a bill payment system through online to make the payment and credit the payment. The bank also offers its own website for the customer satisfaction. The cash management provides the cash flow through self-managed super funds (SMSFs).
Online Transfer Problem and Solution
In this case, Mr. Ian had made an instruction to the bank of Macquarie to transfer an amount of $ 5000 from his cash management account through online. The problem arises when the cash was deducted from the account but did not credit to the intended account. On asking, the bank had shifted the blame over the other.
There may be certain specific problem arise in case of transfer the money through online base. The queries can be as follows: whether the payer did any mistake regarding the credit account number during the payment; whether the bank has followed the mandate properly; whether the scheme rules had been properly maintained by the bank or not.
It is important for Mr. Ian to produce a formatted entry to show that the credit account number was correct during the making of payment. It is an evidence to prove his correctness. A mandate is given by the customers to the bank in case of making payment or transaction of money online. It consists of certain instructions mentioning the transfer details. As per the banking law of Australia, if the user’s account numbers are accepted during the payment making, it is the responsibility of the bank to compensate for the loss suffered by the customer. Mr. Ian has an option to visit the branch office of the bank or ask for general inquiries. It is to be considered whether the account number of Mr. Ian has been affected by cyber crime or not. There is an option open to Mr. Ian to go before the Ombudsman authority to file a complaint as against the banking authority if the branch or head quarter of the bank denied to help him or continued to avoid him by shifting the blame on other authorities (Stuhmcke 2017).
In United Kingdom, the bill of exchange is an Act of the Parliament (Ashton, Gerrard and Hudson 2013). Sir Mackenzie Chalmers drafted the Act. The term bill of exchange is used mainly in the sector of finance and trade. It is important to obtain credit. From the legal view, bill of exchange can be defined as an unconditional order that is in writing, addressed by one person to another. The person or the drawer should sign the order. It is required that the person in favor of whom the order is to be addressed that is the drawee should pay on demand or to order a certain amount of money at a specific future time (Aigler 2013). The drawee can make the payment to any third party. However, the third party needs to be specified by the drawer.
History and Importance of Bill of Exchange
The bill of exchange is a negotiable instrument that was very frequently used in the sphere of foreign trade in England (Chalmers 2015). A seller addressed an order to the buyer through this instrument. In the early times, the trade practice of England was largely entertained by shipping procedure. The bill of exchange contained the details of the shipment, the time of payment, the bank details and the amount that was receivable from the overseas buyer.
In a letter of the exporter, the word bill of exchange was drawn and that must be signed by the exporter and send it to the buyer from his bank. When the documents were reached to the buyer, he accepted the instrument by put his signature on it. The amount of proceeded only at the time of date of maturity of the bill and the buyer effects the amount to the supplier through his bank. There are some reason regarding the importance of bill of exchange regarding the usage in the foreign trade and business (Dickson 2017). It is very important to mention a fix date regarding the payment. There is an opportunity for both the creditor and buyer regarding the payment of the money. The bill of exchange can be used in case of settlement regarding the debts. As the instrument bear the signature of the creditors and debtors, it can be taken as a conclusive proof of indebtedness. It is one of the important benefits of the bill of exchange that the bill is payable when it get matured. Thus, the debtor get full period to enjoy the credit wholly. There is no scope for the debtor to be called upon to pay the amount before the maturity of the said bill. It is at the will of the creditor to convert the bill into cash prior to the due date. The bill of exchange can be transferred at any time without any difficulties. From these aspects, the traders of England used to choose the bill as a matter of instrument in case of business in England.
In the mid-fifteenth century, bill of exchange was begun to use in domestic sector of England. There is a distinction in case of domestic use than the foreign trade. In domestic use, the instrument drawn on a person, who residing in the same state that of the drawer. In Ragsdale v. Franklin 25 Miss. 143, it was observed that the place of the drawer and drawee determined the nature of the bill (Lee 2015). In domestic business of England, there were certain problem arise regarding the transaction of money. A solution was needed in case of that and the idea of bill of exchange was taken into consideration. Bill of exchange was got the preference regarding the legal effect of the same and there were certain advantages regarding the instrument. The payment was made to a particular person, so there were little scope for defraud others. the particular amount must have to pay within a particular time. Except that, the bill of exchange must bear adequate stamp duty and that must be made with a prescribed rate. Therefore, by keeping the all advantages in mind, it was taken as the most prominent transaction medium as transaction and it was began to use in case of domestic purpose (Cottrell 2013).
References:
Aigler, R.W., 2013. Rights of Holder of Bill of Exchange against the Drawee. Harvard Law Review, 38(7), pp.857-886.
Ashton, J.K., Gerrard, B. and Hudson, R., 2013. Economic impact of national sporting success: evidence from the London stock exchange. Applied Economics Letters, 10(12), pp.783-785.
Barradell, S. and Peseta, T., 2016. Promise and challenge of identifying threshold concepts: a cautionary account of using transactional curriculum inquiry. Journal of Further and Higher Education, 40(2), pp.262-275.
Cadenillas, A., 2015. Cash Management. Encyclopedia of Systems and Control, pp.108-111.
Chalmers, M.D.E.S., 2015. A digest of the law of bills of exchange, promissory notes, cheques, and negotiable securities. Stevens
Cottrell, P.L., 2013. Industrial finance, 1830-1914: the finance and organization of English manufacturing industry. Routledge.
De Jong, P., Loudon, G. and Choo, W., 2016. Monitoring Risk in the Financial System Using Time Series Methods.
Dickson, P.G.M., 2017. The Financial Revolution in England: a study in the development of public credit, 1688-1756. Routledge.
Lee, F.A., 2015. How the manipulation of the Ras homolog enriched in striatum alters the behavioral and molecular progression of Huntington’s disease (Doctoral dissertation, University of New Orleans).
Pan, X., 2017. Accounting conservatism, bank lending and firm investment: Evidence from a quasi-experiment of China’s stimulus package. Pacific-Basin Finance Journal.
Stuhmcke, A.G., 2017. Australian Ombudsmen: Drafting a Blueprint for Reform. Australian Journal of Administrative Law.
Tyree, A. (n.d.). Banking law in Australia.
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