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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. |
