The full form of DBD in banking is "Debit Balance Due". This term is used to refer to the amount of money that a customer owes to a bank.
Here's a breakdown of the concept:
- Debit: A debit represents a reduction in a bank account's balance.
- Balance: The balance of a bank account refers to the amount of money available in the account.
- Due: This signifies that the customer is obligated to pay the bank the outstanding amount.
Therefore, DBD signifies that the customer has a negative balance in their account, meaning they owe money to the bank. This can occur due to various reasons, such as:
- Overdraft: When a customer withdraws more money than available in their account.
- Insufficient Funds: When a customer attempts to make a payment or transfer but has insufficient funds in their account.
- Unpaid Fees or Charges: When a customer incurs bank fees or charges that remain unpaid.
Banks typically charge interest on DBD amounts, further increasing the customer's debt.
