Multiple choice

A company wants to make payment of dividend warrants to a large number of shareholders. Which of the following will be used by it?

  1. Debit clearing

  2. Electronic clearing system

  3. Electronic clearing system (debit)

  4. Electronic clearing system (credit)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

At times, a large number of shareholders may face the following problems under the present system of payment of dividend by mailing of warrants, through post. a) Loss in transit, b) Fraudulent encashment by third parties, c) Postal delay

To avoid these problems, the Reserve Bank of India has introduced the Electronic Clearing Service (ECS) for payment of dividend/interest etc, which ensures the shareholders timely credit of dividends directly into their Bank Account.

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