What is meant by letter in connection with Bank? | Types of banking correspondence

Money is regarded as the driving force of modern economy and civilization. Banks are the vein of circulating that money supply in the whole economy. Therefore, the role of bank is very important is very facet of our lives especially in business and industry. People of all sections are somehow related to banks. Perhaps some of us are depositors, some are creditors and some of the rest may be the owners or employees of the bank. So bank requires exchanging various letters with its different stakeholders. So the letters that are exchanged between the bank and its customers with a view to performing banking activities are known as letters related to bank.

Generally, bank exchanged letters with its various customers and other parties for collecting deposits, granting credits, and issuing letter of credits, transferring money, discounting bills, collection and its other stakeholders for performing banking activities is known as letter related to bank operation.

Therefore, any letter exchanged between bank and its clients or any other letter exchanged between bank and its other stakeholders for for performing banking activities is known as letter related to bank operation.

Classification or types of banking correspondence

Any letter exchanged between bank and it clients or any other letter written by bank to any other party else for performing its banking activities is known as bank related letter or banking correspondence. Such banking correspondences may be of following types:

  • Letter exchanged between bank and its clines
  • Letter exchanged between bank and its branch office or head office
  • Letter exchanged between two individual banks

A. Letters exchanged between bank and its clients: Depositors and borrowers are the prime customer of bank. For many reasons, such as opening accounts, withdrawal of deposits, transfer of money, granting loans, issuing letter of credit and so on bank exchanges various letters with its customers. Among those, the following are the most important:

  • Letter relating to opening of various accounts
  • Letter for issuing bank passbook and cheque book
  • Letter requesting to stop payment
  • Letter regarding dishonoring of cheque
  • Letter for granting bank overdraft
  • Letter for granting mortgage loan
  • Letter for realizing principal and interest

B. Letters Letter exchanged between bank and its Branch office or head office: The followings are the most important of this category of bank letter:

  • Letter for forwarding the Clint’s loan or over draft proposals
  • Letters relating to training, promotion, transfer, discharge, retirement etc. of the employees of both branch and head office
  • Letter written regarding branch administration
  • Letter relating to forwarding recommendations for expanding branch activities

C. Letters exchanged between two individual banks: The followings are prominent of this category:

  • Letter written to other bank for supplying information about an approaching customer
  • Letter regarding issuance of L/C info our of any expectant customer
  • Letter relating to acceptance of any bill of exchange on behalf of a client

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