DCB 2509 - Capital Account

 

The Banking Tutor 

                       Daily Banking Concept 

No. 2509                                            28-07-2026 

Capital Account 

The capital account is a record of the inflows and outflows of capital that directly affect a nation’s foreign assets and liabilities. It is mainly concerned with the transactions which are a part of international trade. It is also a part of the balance of payments.

BTL 923 - Financial Kiting (Check Kiting or Kite Flying)

 

The Banking Tutor’s Lessons

BTL 923                                                                                27-07-2026

Financial Kiting (Check Kiting or Kite Flying)

Financial kiting (commonly called check kiting) is an illegal financial fraud scheme that exploits the processing delay (float time) between when a check is deposited and when it physically clears across different banks. It creates a false illusion of money using empty accounts.

Working of the Scheme

• Account A and B: The person opens accounts at two or more different banks.
• Writing the Bad Check: They write a check from Account A (which has no money) and deposit it into Account B.
• Withdrawing Early: Before Bank B realizes the check from Account A is bad, they withdraw or spend the money.
• The Cycle: They must keep writing more bad checks between accounts to cover the previous gaps, meaning the money is backed by "thin air".

Why People Do It

• False Balances: To make a bank account look larger than it is.
• Hiding Shortfalls: To fool auditors or lenders into thinking a business has more cash on hand than it actually does.
• Free Credit: To get short-term money when no real funds exist. 

Prevention and Detection

• Faster Clearing: Modern digital banking and electronic processing have shortened float times, making kiting much harder to pull off today.
• Bank Alerts: Banks use automated computer software and AI to watch for circular fund transfers and unusual withdrawal patterns.
• Legal Penalties: Check kiting is a serious crime that leads to heavy fines and prison time.

Sekhar Pariti

+91 9440641014

 

DBC 2508 - Current account (in Global Trade)

 

The Banking Tutor 

                       Daily Banking Concept 

No. 2508                                            27-07-2026 

Current account (in Global Trade) 

The current account records a nation’s global transactions such as imports and exports of goods and services, payments to and from investments abroad, and transfers such as foreign aid and remittances. Together the current account and the capital account make up a nation’s balance of payments.

DBC 2507 - Current Account (in Banking)

 

The Banking Tutor 

                       Daily Banking Concept 

No. 2507                                            26-07-2026 

Current Account (in Banking) 

A current account is a type of bank account designed primarily for businesses, traders, and professionals who handle frequent, high-volume transactions. It allows for unlimited daily deposits and withdrawals but does not earn interest.

DBC 2506 - Liberalised Remittance Scheme (LRS)

 

Daily Banking Concept 

No. 2506                                            25-07-2026

           Liberalised Remittance Scheme (LRS)

 The Liberalised Remittance Scheme (LRS) is a Reserve Bank of India (RBI) facility that allows all resident individuals (including minors) to freely remit up to USD 2,50,000 per financial year abroad. Funds can be used for permissible current or capital account transactions without prior RBI approval.

BTL 922 - Redlining

 

The Banking Tutor’s Lessons

BTL 922                                                                               24-07-2026

Redlining

Redlining in banking is an illegal, discriminatory practice where financial institutions deny or inflate the cost of services (such as mortgages, insurance, or business loans) to residents of certain neighbor-hoods based on their race, ethnicity, or socioeconomic makeup. This systemic exclusion limits access to credit and prevents marginalized communities from building wealth.

In modern banking, redlining risk and enforcement focus not just on outright loan denial, but also on several subtle exclusionary tactics:

• Branch Placement: Deliberately avoiding placing physical branches, ATMs, or having dedicated loan officers in predominantly minority neighborhoods.
• Marketing Exclusion: Structuring advertising or direct-mail campaigns to actively bypass specific areas or racial demographics.
• Reverse Redlining: The practice of aggressively targeting minority areas with predatory, high-interest loan products or disadvantageous terms that are not offered in affluent neighborhoods.
• Disparate Treatment: Evaluating borrowers in minority neighborhoods using stricter, unjustified underwriting standards compared to similarly qualified borrowers in other areas. 

Sekhar Pariti

+91 9440641014

 

DBC 2505 - Repatriation

 

The Banking Tutor

 Daily Banking Concept

 No. 2505                                            24-07-2026

Repatriation 

Repatriation is sending money across countries and converting it into foreign currencies. For Indians living abroad, the funds they earn in India through their work, businesses, or investments can be transferred from theirbank in India to a bank in their country of residence or any country other than Indiathrough NRI repatriation.