Just wondered...When I make an online payment, the money leaves my account instantly. When I'm expecting a payment, the money takes up to 5 working days to appear in my account even though it has left the payers account. So are the banks unnecessarily holding on to the money (and earning interest on it)?
2007-02-21 22:45:44 · 10 answers · asked by Fragile Rock 5 in Business & Finance ➔ Personal Finance
yep, thats exactly what they do, nice little earner when you add them all up.
2007-02-21 22:48:16 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You answered your own question in part. Yes, banks are holding on to your money and they can earn interest on it. However, a certain amount of delay is used up simply in processing. With more and more processing done automatically by computers, the processing time can be very quick, but it still takes some time for the process to take place.
Another reason for the delay is the need to verify that the transaction is legitimate. A bank may hold your money and prevent your access to it until it verifies that the transfer is legal. Many schemes have been developed by criminals to bypass bank safeguards and steal money, and banks want to make sure that a specific transfer of money is not a scheme to steal the money. The safeguards protect not only the bank but also the persons involved in the transfer.
2007-02-21 22:55:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Correct. The Financial Services Authority FSA has been tackling the banks to speed up their systems for money transfer but they are reluctant to do so. If you consider the transactions made in a day from the millions of accounts the value could be tens of millions. The interest on this money even for only 5 days is quite considerable. Loads of profit for really no work.
2007-02-21 22:56:04 · answer #3 · answered by ANF 7 · 0⤊ 0⤋
Yes banks have been doing that for ever, even though with today's technologies, they can do it instantaneously, they say they have to ensure the funds were actually there in the first place. Basically, since we can't control the world banking system, we are going to have to live with it.
2007-02-21 22:55:30 · answer #4 · answered by redhotboxsoxfan 6 · 0⤊ 0⤋
Yeah,Thats true.But do you know banks(i mean the total)earn(loot) around Rs 621 crores in FY05-06(This is done by a seperate research team).But thats how bank operate .
2007-02-21 22:54:38 · answer #5 · answered by Siddhanth Vasudevan 2 · 0⤊ 0⤋
The money stays in one acc untill it reaches the other, it might become "unavailable" but it is still earning the acc holder interest.
2007-02-25 02:06:02 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Yes - money in transit is money in the banks - they have to have some kind of disincentive in place, otherwise we would have our money in motion even more, right? (yet another money generator for the banks)
2007-02-21 22:58:38 · answer #7 · answered by Wise Kai 3 · 0⤊ 0⤋
It is called a "float", they make a lot of money on that.
2007-02-21 22:54:38 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Err yes did you not see their profits announcements???
2007-02-23 06:11:13 · answer #9 · answered by Dimples 4 · 0⤊ 0⤋
yep thats exactly what they do hon
2007-02-21 22:54:38 · answer #10 · answered by Anonymous · 0⤊ 0⤋