InlandRemittance

Fahad Iqbal

Introduction

• The way of transferring money from one place to another within the country is known as Inland Remittance.

• Demand Draft (DD)• Telegraphic Transfer (TT)• Payment Order (PO)• Security Deposit Receipt (SDR)• Mail Transfer (MT)• Electronic Transfer (ET)

In Banking Channel, money can be transferred from one place to another in the following ways:

Issue of Demand Draft

• A Demand Draft can be issued in the following three different ways, which depends upon the mode of payment by the customer:

a) Against Cashb) Against Chequec) Against a letter of instruction

In all cases the procedure of issuing a Demand Draft is almost same.

General procedure for issuing a DD 1. The customer is asked to complete the form

2. Commission, charges etc. are calculated and inserted

3. Required amount of money is deposited either by Cash or by debiting the customer’s account.

4. After receiving the cash, the voucher is given to Remittance Department.

5. Draft is prepared and the particulars are entered against the respective Branch.

6. A memorandum is issued to the customer if he desires.

Payment of Demand Draft

The DD can be paid by a branch in any of the following ways:

a) Cash Payment (normally discouraged)b) Payment through Transferc) Payment through Clearing

Issue of Telegraphic / Telephonic Transfer:

• Can also be issued in the following three different ways, like a Demand Draft:

a) Against Cashb) Against Chequec) Against a letter of instruction

General procedure for issuing a TT• The customer is asked to complete the form

• Required commission, charges etc. are calculated and inserted in the case provided

• Required amount of money is deposited either by Cash or by debiting the customer’s account

• After receiving the cash, the voucher is given to Remittance Department

• Relevant information are to be entered in the respective space

• Telephonic message is passed to the respective Branch

Payment of TTa) After receiving the message from TT issuing Branch, paying Branch has to verify the test number.

b) If the Test Number agrees a stamp “Test Number Agrees” should be affixed.

c) Following entries are then passed:1. : Head Office A/C (Branch Concerned)2. Cr. : Bills Payable A/C, TT Payable A/C

Issue of Payment Order

• Steps for issuing a Pay-Order is as like as the steps followed in case of issuing a Demand Draft (DD).

Payment of Payment Order

• When PO is presented for encashment, similar procedure is to be adopted as explained in payment of DD

a) Similar procedure is to be adopted as explained in issuing a DD/PO

b) The only difference from PO is that for SDR a separate Head of Accounts viz. “Sundry Deposit Account” is to be credited instead of Bills Payable Account.

c) SDR cannot be cancelled as is done in the case of other instruments.

Issue of Security Deposit Receipt (SDR)

a) In addition to the application of the purchaser, a confirmation of the beneficiary should also be obtained to the effect that, the instrument has been lost or not received by him/her

b) Head Office approval is to be obtained before issuing a duplicate SDR.

c) All other formalities/procedures are as like as mentioned for issuing a duplicate DD.

Issue of Duplicate Security Deposit Receipt (SDR):

Mail Transfers• Mail Transfers (MTs) are issued by Banks for

transfer of funds between branches through the medium of post offices either for credit of an account holder or for payment to a certain beneficiary

• The issuing branch directly sends the mail transfer to the drawee branch on the same day by Post.

Electronic Transfers• Electronic Transfer is the transferring of funds

through Computers and cell phones

• E.g Easy Paisa, UBL Omni, Mobi Cash