CBSE Class 11-commerce Answered

Cheque discounting is one of the services that can be availed from banks. This was majorly used in case of outstation cheques where clearance time was long and the customer had an immediate need of funds. There a customer may discount his cheque at the prescribed interest percentage, say 10%. The funds that may be provided depends upon bank to bank and customer needs. It may be bank will provide you with say 50% of the mentioned amount on cheque and will charge interest only on that amount. Once the cheque passes after the relevant days the balance amount is credited to customer's account.