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DEFINITION
SNURAZANI/PB303/JUN 2012
DEFINITION
Banking business in turn is defined as:
the business of:
(i) receiving deposits on current account, deposit
account, savings account or other similar account;
(ii) paying or collecting cheques drawn by or paid in by
customers; and
(iii) provision of finance; or
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ROLES AND RESPONSIBILITIES
To actively promote and inculcate the saving habits,
especially among the younger generation. It is also an
important strategy to fight unnecessary inflationary pressures
on the economy of the country.
Banks should educate the users on making the most out of the
services and facilities by giving simple pep talks and publishing
pamphlets and brochures, clarifying on the procedure and
advantages of the various types of services and facilities
available.
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FUNCTION OF COMMERCIAL BANK
Retail banking services such as acceptance of deposits, granting of
loans and advances and financial guarantees
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Commercial banks are also authorized
to deal in foreign exchange i.e. to buy,
sell, borrow and lend in foreign
currencies and are also the only
financial institutions allowed to provide
current account facilities.
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Sources and Uses of Fund
Sources Uses
Capital and reserves Cash1 and reserves with BNM
Debentures and notes Amount due from financial
Deposits of which: institutions and BNM
Placement with discount houses
NIDs issued
Marketable securities of which:
Repos
Treasury bills
Amount due to financial MGS
institutions and BNM NIDs held
Bankers acceptances Cagamas bonds
Investments
Loans2 of which: Trade bills
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CREDIT DIRECTION
General commerce
Manufacturing Wholesale
Real estate Retail
Construction Hotel & restaurants
Purchase of residential Finance, insurance &
properties and business services
building Agriculture, hunting,
Consumption credit forestry & fishing
Purchase of transport Mining & quarrying
vehicle Electricity, gas & water
Purchase of securities Transport, storage &
communications
Trade Bill
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STATUTORY REQUIREMENTS AND BANKS
LIQUIDITY
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STATUTORY REQUIREMENTS AND BANKS
LIQUIDITY
DECREASE in SRR would raise the volume of resources available to
the commercial banks for granting new credit.
INCREASE in SRR will make resources available reduce and directly
limit the lending capacity of commercial banks.
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Hong Affin Bank
Leong Berhad
Bank Public
Berhad Bank
Berhad
CIMB
Bank Alliance
Berhad Local Bank
Commercial Malaysia
Banks Berhad
RHB Bank
Berhad
Malayan
Banking
AmBank Berhad
(M)
Berhad
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United HSBC Bank
Overseas Malaysia
Bangkok
Bank Berhad
Bank Berhad
(Malaysia)
Bhd.
National J.P. Morgan
Bank of Abu Chase Bank
Dhabi Berhad
Malaysia Foreign
Berhad
Commercial
Standard Banks
Chartered The Bank of
Bank Nova Scotia
Malaysia Berhad
Berhad
Mizuho
Corporate
OCBC Bank Bank
(Malaysia) (Malaysia)
Berhad Citibank
Berhad Berhad
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MODERN
BANKING LOANS &
STATUS SERVICES ADVANCE
FINANCIAL
SERVICES
DEPOSITS
REMITTANCE
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DEPOSITS: ADVANCE AND LOANS:
a. Current account a. Overdraft
b. External cheque purchase
b. Savings account c. Fixed and term loans
c. Fixed account deposit
STATUS:
MONEY REMITTANCES: a. Credit cards
a. Demand draft b. Bankers guarantee
b. Telegraphic transfer c. Trust receipts
c. Mail transfer d. Enquiry status
d. Standing instructions. e. Travellers cheques
OTHER SERVICES:
a. Share trading
b. Insurance
c. Unit trust
d. Will writing
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CONTINUE
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DEPOSITS
Saving
Current
Fixed
Negotiable Certificates
of Deposit (NCDs)
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SAVING ACCOUNT
A deposit account where the account holder
periodically and regularly places a certain amount
of money as saving for his future requirements.
DEPOSITS
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SAVING ACCOUNT
Example: CIMB
Eligibility:
Individuals aged 18 years and above who are either
DEPOSITS
residents or non-residents.
Joint account is allowed.
Requirements:
Minimum opening deposit of RM20.NRIC or
passport.
A copy of utility bill for verification of address.
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SAVING ACCOUNT
Some of the common transactions you can
perform as an account holder are:
Withdraw money, either over the counter or from ATMs
DEPOSITS
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CURRENT ACCOUNT
A form of working account and is operated
through the used of cheques.
When a current account is opened, the customer is
DEPOSITS
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Demand Draft
REMITTANCE
Telegraphic Transfer
Mail Transfer
Standing Instruction
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DEMAND DRAFT
It is a payment order in writing issued by an issuing bank
to a payee bank to pay on demand the sum stated in the
draft and to the order of the person specified on the draft.
REMITTANCE
abroad.
STEP 3
Notifies beneficiary
of the remittance and BRANCH/CORRESPONDEN
BENEFICIARY IN SYDNEY to collect payment T BANK IN SYDNEY
STEP 4
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MAIL TRANSFER
When you are too busy, you may request the bank to
remit the payment on your behalf.
You have to fill in the full name, address and telephone
number of the beneficiary.
The bank will write to its correspondent bank/ branch to make
the payment
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STEP 1
STEP 2
Notifies beneficiary
of the remittance Writes with the
necessary details and
authorises to pay the
beneficiary
STEP 3
Contacts the
beneficiary to collect BRANCH/
BENEFICIARY payment CORRESPONDENT BANK
STEP 4
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STANDING INSTRUCTION
Also known as Standing Order
Appropriate when a person has to make periodic
REMITTANCE
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Credit Cards
Bankers
Guarantee
Trust Receipt
Status Enquiry
STATUS
Travellers
Cheques
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CREDIT CARDS
Master and Visa are two key players for credit cards. Most credit cards
are issued by commercial banks. Credit cards are issued after an account
has been approved by the credit provider.
If the cardholder uses the credit card for purchases goods or services
STATUS
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CREDIT CARDS
A credit card enables its holder to buy goods and services with a credit
line given by credit card issuer and the amount will be settled at a later
date.
Cardholders are billed on a monthly basis and cardholders would have
STATUS
SNURAZANI/PB303/JUN 2012
BANKER GUARANTEE
A bankers acceptance (commonly referred to as BA) is a usance bill of
exchange drawn by the customer in Ringgit to finance an underlying
genuine trade transaction that is accepted by his banker and payable on
a specified future date.
BA can be used for domestic trade i.e. financing the buyer or seller of
STATUS
SNURAZANI/PB303/JUN 2012
BANKER GUARANTEE
SALIENT FEATURES OF BAS
The following are the salient features of BAs:
a. It is payable in Ringgit to the order of the drawer;
b. The tenor is at least 30 days but not later than 200 days from the date of
acceptance;
STATUS
EXERCISE/DISCUSSION
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TRUST RECEIPT
Trust receipts (commonly referred to as TRs) are
granted by a bank to finance domestic trade or the
import of goods on behalf of the customer.
STATUS
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STATUS ENQUIRY
Is the request for a banker's opinion or
report, particularly regarding the financial
standing of customers.
STATUS
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TRAVELERS CHEQUEU
Travelers cheques are cheque issued by financial institutions such as
American Express, Thomas Cook, Barclay Bank etc. to facilitate travel
arrangements.
They are issued in various currencies, likes US dollars, sterling pound,
STATUS
SNURAZANI/PB303/JUN 2012
OVERDRAFT
An advance or facility granted under a current account
LOANS & ADVANCE
whereby the customer is authorised to draw on the account
up to an approved limit.
Overdraft facility is normally extended to customers to
finance working capital or short terms transactions.
Interest is charged only on the utilised portion of the
overdraft limit. However, a commitment fee is levied on
unutilised overdraft facilities.
SNURAZANI/PB303/JUN 2012
EXTERNAL CHEQUE PURCHASE
Are those which are drawn on banks outside the clearing area of the
LOANS & ADVANCE
bank at which the cheques are deposited for clearing.
Normally banks take a few days to clear outstation or outport cheques,
depending on the locality of the drawee (paying) bank in relation to the
collecting bank.
However, the businessman needs to use the proceeds of the various
cheques even before the said cheques are cleared in order to improve
his cash flow or liquidity requirements.
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TERM & FIXED LOAN
A facility amortized over a fixed period, with repayment
LOANS & ADVANCE
structured as repayable as monthly, quarterly, semi-annually
or annually.
With this structure, each repayment consists of loan
principal and interest.
The repayment can also be structured as balloon or bullet
payment.
In this case, each repayment consists if only interest and
principal to be repaid in one lump sum at the end of loan
period.
A fixed loan is commonly usually used to finance CAPEX
Personal loan, housing loan, car loan.
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Units Trust
OTHER SERVICES
Share Trading
Insurance
Will Writing
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UNIT TRUST
Unit Trust or Mutual Funds are collective investment
scheme, which pools the savings of investors with similar
OTHER SERVICES
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UNIT TRUST
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WILL WRITING
Will and Wasiat Writing Services are legally effective
arrangements to ensure the disposition of assets in
OTHER SERVICES
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INSURANCE
Insurance is the equitable transfer of the risk of a loss, from
one entity to another in exchange for payment. It is a form
OTHER SERVICES
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SHARE TRADING
A share investing facility that allows you to purchase shares
quoted on Bursa Malaysia using your own funds or via a
OTHER SERVICES
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CONGRATULATIONS!!!
You Have Completed
Topic Commercial Bank
SNURAZANI/PB303/JUN 2012