Business, Legal & Accounting Glossary
Illegally benefiting from float, for example by depositing and drawing checks between accounts at two or more banks.
Kiting, or “floating,” is a banking term that refers the illegal practice of drawing and depositing two checks at two separate banks in hopes of taking advantage of the time it takes for the checks to clear.
This means that there is a time period in kiting where the bank that cashed the check doesn’t have the money yet, and the bank that issued the check isn’t yet aware that the check was issued. This window is where kiting comes in. With kiting, the process of writing two checks is repeated as long as both banks believe there is money behind the checks. Kiting also refers to changing the numbers on a check to increase the face value. Kiting may also refer to the manipulation and inflation of stock prices. Kiting in any form is highly illegal.
The kiting scheme used by the criminal was effective for one day but then he had to pay back three times as much later.
You must always make sure that you do not do any kiting or you will tarnish your reputation and may not be able to repair it.
Mr. Wiley started with kiting, and now, after a few years of education courtesy of the state, has mastered the art of paper hanging.
kite
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This glossary post was last updated: 5th November, 2021 | 0 Views.