BANK ADVICE

NAME UID ROLL NUMBER

ZARA DHANBHOORA 19BA256 234

TANISHI SAMPAT 19BA247 235

NANDANI VANSIA 19BA272 236

 Introduction
Definition- An advice letter is giving someone instructions or advice about how to
complete a specific task. You can use an advice letter in many situations, both formal and
Informal. Written notice of an action taken or to be taken on a stated date. In banking, a
letter of advice is employed (among other uses) to confirm a transaction or to instruct
another bank to make a payment. Also called advice.

What bank advice includes and how it is to be written:

❖ Companies accountants may to get in touch with the bank regarding the companies
transactions or account activity. You can send an advice letter to give them
instructions about how to do something.
❖ An advice letter has to be clear, precise and relevant to the topic
❖ Bank advice letters tend to be of the formal kind and hence must have a formal tone
and professional manner
❖ Bank Advice letters must be short, formal and to the point and colloquial language
 TYPES OF BANK ADVICE
There are 2 types of advice letters.Each one needs to include different aspects and follow a
different set up:

1. Formal advice letters:

For a formal advice letter, you should include relevant, clear and correct information.
A formal advice letter should follow the format of a formal letter.
A formal letter should be short and to the point and less than a page.
There are various types of formal advice letters:
1. Payment advice letter
2. Advice letter to client
3. Advice letter to bank
4. Advice letter to business
2. Informal advice letter :

• For an informal advice letter, you need to adapt the letter to the recipient, weather that is a family
member, close friend or a colleague.

• An informal advice letter is usually sent to family members or close friends and therefore it is at your
discretion as to what you add within an informal advice letter.

• You can write as much as you feel necessary depending on the situation.
 Aim/purpose of Bank advice
CASE 1: The beneficiary can request the applicant to specify his/her bank (the beneficiary's bank) as the advising bank in
an L/C application. In many countries, this is beneficial to the beneficiary, who may avail themselves of the reduced bank
charges and fees because of special relationships with the bank. Under normal circumstances, advising charges are
standard and minimal. In addition, it is more convenient to deal with the beneficiary's own bank over a bank with which
the beneficiary does not maintain an account.

CASE 2: A letter of credit (LOC) is a promise from a bank to make a payment after verifying that somebody meets
certain conditions.Signature mismatch. The issuing bank most often sends the L/C (Letter of credit) through its branch
office or correspondent bank to avoid fraud. The branch office or the correspondent bank maintains specimen signature
on file where it may counter-check the signature on the Letter of credit, and it has a coding system to distinguish a
genuine L/C from a fraudulent one (authentication).

CASE 3: A dishonoured cheque or cheque bounced, attracts penalty on the issuer of the cheque. It depends on the
reason for the bounce.If a cheque is dishonoured because funds in the payer’s account were insufficient, it is a criminal
offence under the Negotiable Instruments Act of 1881.The payer may end up in jail for up to two years for issuing a
dishonoured cheque.Apart from this, banks also charge penalty for dishonour of cheque.
Request Letter to return back Cheque because of signature error Bounce cheque letter
 CASE STUDY

Kingfisher cheque bounce case: Vijay Mallya accused but sentence deferred due to
absence in court
THANK YOU