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Can You Please Explain What Contingent Accounts Are?

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Saadia Samad answered
Contingent accounts are those accounts which are widely used by all commercial , non commercial , small and medium banks.

All Cheques are needed before clearing and under pipelining for clearance will get registered here.

This account acts as Solicitor between two clients – all the Cheque before clearing registered into this account.

This can be easily explained with the help of an example :

Lets suppose a client given name A has made payment to Client B through Cheque – Client B then submits that Cheque to the bank XYZ. The bank then gets the Cheque and put it in pipeline for clearance. For maintaining the GL Bank in required to post all the Cheque in pipeline for clearance need to be posted in some account until the Cheque is being cleared completely and amount transfers to receiver.

Bank is required to setup such accounts to overcome some frauds, they must store and protect so much confidential financial information on their customers. As now all transactions are being moving forward towards paperless and electronic sphere. Banks are therefore much keen to provide clear satisfactory and confidential services to the customers

Furthermore bank also provide so many types of bank account like asset account, beneficiary accounts, current account saving accounts , escrow accounts , Monet market credit accounts e.t.c.

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