Banking Operations and Transaction Processing
Banking Operations and Transaction Processing tests how money actually moves: how entries are captured, cleared, settled and reconciled, and which controls prevent loss. Expect questions on availability schedules, endorsement and negotiability rules, balancing, and exception handling.
Core rules
- Every posting is a debit or a credit; the general ledger must balance at the end of each batch, and cash must prove to the teller's blotters.
- Availability is not collection. Under Reg CC the first $225 of a non-next-day deposit must be available by the next business day and the rest generally within two business days; a large-deposit exception applies above $5,525 (both figures are inflation-adjusted).
- Cash is handled under dual control: one person counts, a second verifies, and differences are documented rather than netted.
- A check is negotiable only with a date, matching written and numeric amounts, a drawer signature and a valid endorsement; 'for deposit only' restricts further transfer.
- Cutoff times decide same-day processing. A wire is final when released; an ACH entry can still be returned inside the NACHA return window.
Worked example
A long-standing customer deposits a $3,000 check drawn on a local bank at 3 p.m. Tuesday. Neither the new-account nor the repeated-overdraft exception applies, and $3,000 is below the large-deposit threshold, so the bank must make $225 available Wednesday and the remaining $2,775 by Thursday. The funds are available, not necessarily collected.
Traps
- Saying a deposited check has 'cleared' when it is merely available.
- Promising to recall a wire; the receiving bank can only be asked to return funds.
- Placing a hold without giving the required exception notice.