Revolving Credit

Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Credit cards are an example of revolving credit used by consumers. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day operations. They were first introduced by the Strawbridge and Clothier Department Store.

It is an arrangement which allows for the loan amount to be withdrawn, repaid, and redrawn again in any manner and any number of times, until the arrangement expires. Credit card loans and overdrafts are revolving loans, also called evergreen loan.

 

In this case-

• The borrower may use or withdraw funds up to a pre-approved credit limit.
• The amount of available credit decreases and increases as funds are borrowed and then repaid.
• The credit may be used repeatedly.
• The borrower makes payments based only on the amount he or she has actually used or withdrawn, plus interest.
• The borrower may repay over time (subject to any minimum payment requirement), or in full at any time.
• In some cases, the borrower is required to pay a fee to the lender for any money that is undrawn; this is especially true of corporate bank revolving-credit loans.

A revolving loan provides a borrower with a maximum aggregate amount of capital, available over a specified period of time. Unlike a term loan, the revolving loan allows the borrower to draw down, repay and re-draw loans on the available funds during the term of the note. Each loan is borrowed for a set period of time, usually one, three or six months, after which time it is technically repayable. Repayment of a revolving loan is achieved either by scheduled reductions in the total amount of the loan over time, or by all outstanding loans being repaid on the date of termination. A revolving loan made to refinance another revolving loan which matures on the same date as the drawing of the second revolving loan is known as a "rollover loan", if made in the same currency and drawn by the same borrower as the first revolving loan. The conditions to be satisfied for drawing a rollover loan are typically less onerous than those for other loans.

A revolving loan is a particularly flexible financing tool as it may be drawn by a borrower by way of straightforward loans, but it is also possible to incorporate different types of financial accommodation within it - for example, it is possible to incorporate a letter of credit, a swingline (that is, a short-term borrowing that is funded on one day's notice), or an overdraft within the terms of a revolving credit loan. This is often achieved by creating a sublimit within the overall loan, allowing a certain amount of the lenders' commitment to be drawn in the form of these different facilities.

Dormant Account

A checking or money market account is considered Dormant/Inactive if the account has had no deposit or withdrawal activity (other than posting interest) for a period of one year.

 A Certificate of Deposit account is considered Dormant/Inactive if there is no account activity for a period of one year after the first date of renewal.

In other words, An account is declared dormant after a bank or building society has failed in attempts to contact the holder; if letters or statements are returned marked "not known at this address", and if it is unused for an extended period (accounts still being used regularly will generally remain open even if mail is returned).

It varies from bank to bank. Generally, current accounts are often marked "dormant" after a year, but savings accounts can go untouched for between three and five years.

Merchant Banking

Merchant banking consisted initially of merchants who assisted in financing the transactions of other merchants in addition to their own trade. In France, during seventeenth and eighteenth centuries a merchant banker was not merely a trader but an entrepreneur par excellence. He invested his accumulated profits in all kinds of promising activities. He added banking business to his merchant activities and became a merchant banker.

The origin of merchant banking is to be traced to Italy in late medieval times and France during the seventeenth and eighteenth centuries. 

The Italian merchant bankers introduced into England not only the bill of exchange but also all the institutions and techniques connected with an organised money market.

Holder in due course

The holder in due course (HDC) theory is a rule in commercial law that protects a purchaser of debt, where the purchaser is assigned the right to receive the debt payments. The theory insulates the purchaser of debt, or other obligation to pay, against charges that either party to the original transaction might have had against the other.

A holder in due course must

1. Be a holder of a negotiable instrument

2. Take it for value

3. Take it in good faith

4. Take it without notice that it is overdue or dishonored, or that the instrument contains an un-authorized signature or an alteration, or that any person has any defense against or claim to it;

5. Take it without reason to question its authenticity due to apparent evidence of forgery, alteration, incompleteness, or other irregularity.

Banker’s right of set- off

When a customer keeps two or more accounts at the bank, some of which are over drawn and some in credit, the bank has the right to combine such accounts and pay the resultant balance. When certain securities e.g. shares, debentures etc. are in the hands of a banker, he has a right of lien and not set-off.

A banker can exercise right of set-off provided the following conditions are satisfied:

•The amount of the debt must be certain

•The debt must be due and payable

•The accounts must be between the same parties and in the same right

•The debt due must be immediate and not a future debt

•Liability should not be contingent

•There should be no agreement to the contrary

•The banker may exercise this right at his discretion

•The banker has right to exercise this right before a garnishee order is made effective

The right to set-off all accounts arises immediately in the following instances:

•On the death, mental incapacity or insolvency of a customer

•On the insolvency of a firm, or on the liquidation of the company

•On receiving a garnishee order

•On receiving notice if assignment of a customer’s credit balance

•On receiving notice of a second mortgage over security charged to the bank

Short Notes on- Commercial Announcements

Commercial Announcements is dedicated to manufacturers and developers of sample libraries, virtual instruments, and other music gear announcing their development, upgrades, updates, upcoming releases, projects, contests, and promotions and deals them themselves put together. 

The invention relates to a method for broadcasting customized commercial announcements, that includes the following steps: determining at least one broadcasting criterion; making a pre-selection of a group of commercial announcements corresponding to the broadcasting criterion or criteria; from said pre-selection, making a selection of announcements having an intrinsic correlation between them based on at least one predetermined correlation criterion; concatenating the selected announcements in order to form at least one eligible commercial sequence; electing a sequence from the selected announcements; and broadcasting the elected sequence.