Introduction to Banking Operations Functions
RELATIONSHIP BETWEEN EMPLOYER AND EMPLOYEE
One person agrees to employ another as an employee and that other agrees to serve his employer as an employee. The nature of relationship is contractual. Employer and employee bound by the contract of employment (express & implied) Employer’s duties : To provide work To pay wages To provide safe working environment Employees’ duties : To perform the work assigned/entrusted To maintain discipline To maintain utmost honesty To have duty of care towards work and employer’s property
SUPPORT MANAGEMENT AMBASSADOR
Complete all assignments / operative duties satisfactorily and in compliance with deadlines. commitment and passion for job duties.RESPONSIBILITIES
Subscribe to good work ethics / habits. Displays loyalty. Abide by Management’s instructions. philosophy and culture of the Hong Leong Group.
. Cooperative in all official matters and in all small group activities. policies and guidelines. Offers constructive suggestions / criticism. Participates in supports all Group Programmes.
. does not give up easily Knows his limitations.DILIGENT Hardworking & Persevering Tenacious. willing to seek assistance and to learn Inquisitive to new ideas.
Is honest in dealings with customers and with his own people. Two plus two is always four.HONOUR His word is his bond. Always above board in doing business.
. in building lasting relationships.
not a BirdIn-A-Cage Well-read. politics. technically skillful Well-informed about current affairs. business trends & developments Hungry for opportunities.KNOWLEDGEABLE Knows his job well. eager to learn more
COMMUNICATOR Conveys ideas and directives to others clearly. received. must ensure that it is understood. exactly Communicating is not just passing a message. analyses and acts on feedback
. receiver is convinced and message is executed A good listener.
Total Group Effort
Team Player – Caring & Protective Towards Team Members Able to instill loyalty Alert to opportunities for his own company as well as for others in the Group.
JOB ROLES OF AN OPERATIONS OFFICER BANKER – CUSTOMER RELATIONSHIP TYPES OF CUSTOMER ACCOUNTS UNDERSTANDING DEPOSITS ACCOUNTS (SAVINGS / CURRENT / FIXED / FOREIGN CURRENCY) AND WITHDRAWAL OPERATIONS FRAUD / MONEY LAUNDERING AND MANAGING FRAUD REMITTANCES CLEARING SYSTEMS & PROCESS
BANKER – CUSTOMER RELATIONSHIP & BANKING SECRECY
BANKER CUSTOMER RELATIONSHIP
.? Who is the Banker? Who is the Customer? What is their relationship? BANKING SECRECY Termination of the banker-customer relationship
.BANKER CUSTOMER RELATIONSHIP
What is it all about …………….
Who is the BANKER ?
Section 2 of the Banking and Financial Institutions Act 1989 (BAFIA) gives the definition of a bank as :A PERSON WHO CARRIES ON BANKING BUSINESS
. corporation. society.6(4). banking business is restricted to public companies which holds a valid licence granted by the Minister of Finance under S. statutory bodies or any other group of persons In BAFIA S.“Person” can include … Individual. 4.
. and Or such other business as BNM with the approval of the Minister of Finance may prescribe.“Banking Business” according to BAFIA S.2 consists of :
Receiving deposits. Paying and collecting cheques Provision of finance.
Now that you know what is a bank …
WHO IS THE CUSTOMER ? Most important thing to find out is : When is a person considered a CUSTOMER
Time & dealing is not of the essence. Imposes certain rights.BANKER – CUSTOMER RELATIONSHIP
The relationship is established once an account is opened for the customer. It is of considerable practical importance. duties and responsibilities on each party. liabilities. Any failure or negligence to comply may create legal issues
MISTAKE AS TO IDENTITY
Opening an account with a false identity may subject to the Bank’s negligence in collecting cheques for its customers. PREVENTION Comply with procedures & controls in opening of an account Introducer requirement ROC/ROB Searches
NATURE OF BANKCUSTOMER RELATIONSHIP IS
.DUTIES OF BANKER
Receive money. Repayment of whole or part of money upon customers written authority. Reasonable notice before closing customer/s account. Maintain secrecy of customers’ confidential information (A/cs & Affairs). Honour customers’ cheques subject to conditions like sufficient funds & no legal prohibition to payment. cheques and other instruments for collection.
To inform the bank immediately upon discovery of forgery of his cheques.DUTIES OF CUSTOMER Exercise reasonable care in drawing cheques so as not to misled the bank or to facilitate forgery.
RIGHTS OF THE BANKER Rights to commission / service charges Rights to interest Rights to set-off
RIGHTS OF THE CUSTOMER Rights to repayment Rights to draw cheques Rights to interest
Banks must not disclose information concerning accounts or affairs of their customers without express consent / exceptions qualified by Operations of Law
TERMINATION OF CONTRACT The banker-customer relationship may be terminated by : Mutual Consent Unilateral Act Operation of Law
Reasonable notice must be given by the bank to allow the customer to make alternative arrangements.TERMINATION BY CUSTOMER
The customer may close his account at his own free will. This can be done over the bank counter or delivering a written request to the bank
TERMINATION BY CUSTOMER
This is usually due to the Operation of Law.
TERMINATION DUE TO THE OPERATION OF LAW Third Incidence of Bad Cheque Bankrupt / Wound-up customers Death & Mental incapacity of the customer
TO ANY PERSON. REVEALING.
.97(1).BANKING SECRECY Section 97(1) of BAFIA
PROHIBITED FROM GIVING. Also applies to persons who have left the employment of a bank and third parties who have information or document which to his knowledge has been disclosed in contravention of BAFIA S. OF ANY INFORMATION OR DOCUMENT WHATSOEVER RELATING TO THE AFFAIRS OR ACCOUNT OF CUSTOMER. PUBLISHING OR OTHERWISE DISCLOSE. OR MAKE A RECORED FOR ANY PERSON. PRODUCING. DIVULGING.
BANKING SECRECY Permitted disclosures ~ BAFIA S.99
Where written permission has been given by the customer / personal representatives In cases where the bank takes legal action against a bankrupt / wound-up customer In the course of criminal or civil proceedings Under Federal Law to police on suspects Garnishee order served on banks by court order Customer’s credit reference for bona fide commercial transactions Authorised in writing by Bank Negara Malaysia Disclosure authorized by BAFIA
ANTI-MONEY LAUNDERING & ANTI-TERRORIST FINANCING
By the end of this presentation, you will be able to : Identify and be aware of the risk and opportunities for money laundering both in conventional and Islamic banking Understand “Know Your Customer Policy”, “Customer Due Diligence Requirements” and identify suspicious transactions in line with the latest BNM Circular on Money Laundering and Terrorist Financing Be aware of the Bank’s legal obligations and yours as an employee under Anti Money Laundering and Anti-Terrorism Financing Act 2001
CONTENTS OF PRESENTATION
Why do I need to know What is Money Laundering Stages of Money Laundering What is Terrorist Financing Anti-Money Laundering and Anti-Terrorist Financing Law & Guidelines Know Your Customer Policy Preventive Measures Taken Reporting Suspicious Transactions Examples of Suspicious Transactions
WHY DO I NEED TO KNOW ABOUT MONEY LAUNDERING?
In today’s globalized economy. illegal arms sales. is of little use to organized crime because it raises suspicions of law enforcement and leaves a trail of incriminating evidence. smuggling and financial crimes (eg. however. organized crime groups generate huge sums of money by drug trafficking. This process is knows as Money Laundering. Yakuza and Mafia) This illegally obtained money.
. Criminals who wish to benefit from the proceeds of large scale crime have to disguise their illegal profits without compromising themselves.
electronic funds transfer. etc. traveller’s cheque. ATM machines. that can be used to conceal the source of money
.WHY DO I NEED TO KNOW ABOUT MONEY LAUNDERING? Banks have become MAJOR TARGETS in money laundering activities Why? Banks provide a variety of services and instruments ie. foreign exchange services.
conviction and confiscation on the part of the criminals
.WHAT IS MONEY LAUNDERING?
Money laundering is the process when the identify of illegally obtained money is changed so that it appears to have originated from a legitimate source Why? This is done to avoid prosecution.
it generally includes 3 basic stages :
Placement Layering Integration
.STAGES OF MONEY LAUNDERING
Although money laundering often involves a complex series of transactions made by launderers through banks.
Placement involves the physical disposal of cash proceeds derived from illegal activities. Objective : To get the illicit cash into the financial system
PLACEMENT METHODS INCLUDE : Breaking down of cash deposits below certain cash transaction reporting thresholds before banking them into designated account (s) Depositing large amounts of cash in less conspicuous small sums directly into designated bank account (s) Using shell companies incorporated in tax haven countries
Layering means creating complex layers of financial transactions to separate the illicit proceeds from their source and disguise the audit trail. Objective : To make detection as difficult as possible by attempting to break the linkage between the criminal and the proceeds of crime.
LAYERING METHODS INCLUDE :
Electronic fund transfers Using existing customer’s account where “account holder” and “account user” are no longer the same person Using shell companies from tax have countries
Integration involves the turning of criminally derived wealth into legitimate funds Objective : To place the laundered funds back into the economy so that they re-enter the financial system appearing as legitimate business funds
cars Buying existing legitimate businesses eg. supermarkets Investing in share. Land. Restaurants.INTEGRATION METHODS INCLUDE : Buying assets eg. derivatives
. house. unit trust.
uses. exchanges. converts. disposes. in a transaction that involves the proceeds of any unlawful activity . receives. transfers. b) Acquires. disguises. carries. or
. removes from or brings into Malaysia proceeds of any unlawful activity.OFFENCES UNDER AMLA
The offence of “money laundering” is defined under Section 4 AMLA as the act of any person who : a) Engages directly or indirectly. possesses.
disposition. location. or ownership of proceeds of any unlawful activity. the person knows or has reason to believe that the property are proceeds from any unlawful activity. or – The person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property are proceeds from any unlawful activity
. rights with respect to. disguises or impedes the establishment of the true nature. origin.TERRORIST FINANCING – HOW ARE FUNDS TRANSFERRED?
c) conceals. title of. where : – Based on objective factual circumstances. movement.
PENALTY FOR MONEY LAUNDERING (AMLA) An offender may be liable to a fine not exceeding RM5.000. upon conviction
.000 or imprisonment for a term not exceeding 5 years or both.
Conduct the necessary Customer Due Diligence checks
NO SHORT –CUTS
You must Know Your Customer (KYC)
NO SHORT –CUTS
Do the necessary background checks before starting any new relationship with any customers.WHAT SHOULD I DO?
Be on the lookout! Follow established procedures when opening accounts for new customers.
not all customers are what that they claim to be.WHAT SHOULD I DO?
Ask questions when you think there is something wrong. Bear in mind. If you are not sure on how to go about this.
. consult your supervisor/manager/compliance officer. Make a report if you are suspicious.
you are under a legal obligation to make a report if you believe that the customer is using his account for money laundering or terrorist financing purposes
.WHAT SHOULD I DO?
Suspicious transaction will often be one which is INCONSISTENT with a customer’s known. legitimate business or their normal course of business As a staff.
WHAT’S NEXT AFTER REPORTING?
Every report filed is CONFIDENTIAL and WILL REMAIN confidential. OR Know/have reason to suspect that a disclosure was made to an investigating officer. when they : know/have reason to suspect that an investigating officer is investigating/about to investigate.
S35 AMLA states that a person who disclosed to any other person. being likely to prejudice investigation PENALTY FOR TIPPING-OFF : RM1 million FINE OR 1 year JAIL OR both
THE BANK WILL BE LIABLE FOR DAMAGES SUFFERED IF AN ACTION IS BROUGHT AGAINST THE BANK FOR INJURY TO THE CUSTOMER’S NAME AND REPUTATION
SAVINGS ACCOUNT PRODUCTS
. Guidelines on Anti-Money Laundering and Counter Financing of Terrorism. Sectoral Guidelines 1 for Banking and Financial Institutions and the policies spelt out in the Anti-Money Laundering Manual and Know your Customer Policy Manual.WHAT IS A SAVINGS ACCOUNT
A Savings Account is a deposit account of which the balance earns interest and can be withdrawn on demand or through electronic means such as an automatic teller machine Savings Account is also governed by the guidelines laid out in UPW/GP1.
ELIGIBILITY Individuals who have attained the age of 18 years and above (residents and non-residents) Personal Joint Account Registered societies, clubs, associations and non-profit organisations
PERSONAL AND JOINT PERSONAL
Personal The individual must have attained the age of 18. However, exception is given to payroll customers aged between 12 to 18 years old (with valid NRIC/My Kad) and working full time. It is allowed for one or more individuals to be added to the account provided all parties consent to it in writing. The new party(s) to the account must have attained the age of 18 and be properly identified. Instructions on the manner of operating the account must be clearly stated and agreed by all the joint account holders in writing. The constitution of the account will have to be changed from “Personal” to “Joint Personal”.
TYPES OF ACCOUNT PERSONAL Operated by one person aged 18 years and above. JOINT ACCOUNT Operated by two or up to a maximum of 4 persons aged 18 years and above
association or club
.TYPES OF ACCOUNT SOCIETY/ASSOCIATION /CLUB Operated by the committee of the society.
.PERSONAL AND JOINT PERSONAL All required documents are to be produced in the original form for verification Photocopies of the originals to be kept for future reference must bear the “original sighted” notation against which the attending staff is required to date and sign.
Their presence is required to minimise the possibility of the blind person making allegations of fraud or negligence against the bank. the following requirements must be complied with :
A blind person must be accompanied by a close friend or relative of his choice.BLIND PERSON In addition to the normal procedures for opening and operation of the account.
An executor is a person who has been appointed by will or codicil to administer the estate the testator (the deceased person) and to carry into effect the provisions of the will. The mere naming of a person as executor in a will does not bind him to accept the duty.
The Court may appoint one or more administrators.ADMINISTOR An administor is appointed by the Court to administer the estate of a deceased person.
ASSOCIATION / CLUB / SOCIETY An association / Club / Society is an organisation of people who are interested in a particular activity or belonging to a particular occupation or having the same interest or aim.
. the purpose of the organisation is not for any business of making money. However.
For opening an account.SCHOOL
Private schools are excluded as they may be registered as a business enterprise and are not allowed to open a savings account. Minutes of Meeting / Resolution from the school Board of Governors
. the following documents are required :
Identification documents of the authorised signatories A written letter from the State Education Department giving approval for the school to open an account with the Bank.
Operation of the account is by way of Savings Passbook Inter-branch deposits and withdrawals can be performed at all branches Inter-branch transfer of funds between Savings and Current Account Inter-branch transfer of accounts
.PRODUCT FEATURE Payable on demand.
Account holder is advised to read and understand the Terms and Conditions. ATMs.PRODUCT FEATURE
Easy access to account through branches nationwide. A copy of the General Terms & conditions of Accounts – Deposits / Islamic Banking Deposits governing deposit accounts must be given to the account holder upon opening the account.
CHECKING & SEARCHES
CTOS AND BLACKLIST CHECKING Upon keying in the customer ID into the system. If the customer’s name is confirmed blacklisted. the message ‘Customer’s ID number matches Bankruptcy Listing’ will be displayed. the bank should not open the account for the customer. the system will automatically conduct a CTOS check and if the ID number matches in the Bankruptcy Listing.
ACCOUNT OPENING DOCUMENTS
Individual – Personal or Joint
Identity card Paspport (non-resident)
Individual – Personal or Joint
Certificate of Registration Rules & regulations Resolution passed by the Board of Committee members to open an account with Hong Leong Bank and persons authorised to operate the account Identity card of authorised signatories
will be transferred to Unclaimed Moneys
.DORMANT ACCOUNT Dormant Account is an account that is not operated upon for a period of 12 months A dormant account of 7 years or more.
Interest is calculated on the daily balance basis using the following formula : Interest = Principal (P) x Time (T) x Rate (R) P = Balance at the end of each day (lump basis) T = 1 / 365 (daily basis) R = Multi-Tiered Interest Rate
. The system automatically credits the accrued daily interest to the customer’s account every six monthly i.CALCULATION OF INTEREST
Saving Account are entitled to interest at the rate determined by the Bank. on the 30th June and 31st December of each year or upon closing of the Savings Account.
Interest is computed and calculated on a daily basis.e.
Less 100.WITHOLDING TAX A withholding tax of 5% is deductible by the Bank upon crediting interest to an individual resident in Malaysia Interest income earned from deposits of up to RM100.000 – 5% withholding tax on interest
.000 is exempted from withholding tax.000 – no withholding tax More 100.
WHAT IS A CURRENT ACCOUNT? It is an account maintained with a COMMERCIAL BANK on which cheques are drawn and into which money. cheques and other negotiable instruments are deposited.
OTHER NEGOTIABLE INSTRUMENTS Banker’s Cheques Money Orders Postal Orders Pension Warrant Demand Drafts
.BENEFITS OF ISSUING CHEQUES CURRENT ACCOUNT ALLOWS THE ACCOUNT HOLDER TO ISSUE CHEQUES WHICH IS A VERY CONVENIENT AND SAFE METHOD FOR MAKING PAYMENTS.
Withdrawal may be by cheque encashment or through ATM Statement of account will be sent monthly
.PRODUCT FEATURE Cheque book will be issued to the customer. The bank will honour the cheques issued subject to availability of funds in the account.
the officer will :
Verify the signature Place date and time of receipt and initial Input instruction into the system. amount. Service charge RM10 will be charged.
Inter-Branch Encashment of Cheques
. date and payee’s name On receipt of the instruction.PRODUCT FEATURE
Pay utility bills any time through the ATMS or online services Payment stopped is an authorised instruction to the Banker to stop payment providing details on cheque number.
3RD PARTY Any party other than the authorised signatories of the account.
.DEFINITION OF 1ST & 3RD PARTY 1ST PARTY Authorised signatory of the account.
OVERDRAFT FACILITY Account can be overdrawn .
.Overdraft (against security) Overdraft is a facility granted under a Current Acount whereby the customer is authorised to draw on the account up to an approved limit.
FUNDAMENTAL OF CHEQUES
rights & liabilities a financial institution in respect of cheques
.FUNDAMENTAL OF CHEQUES
Why do we need to learn about cheques? Integral part of banking operations Their collections have legal implications Their payments have legal implications Better equipped to advice customers in the course of our work Understand the duties.
ESSENTIAL FEATURES OF A CHEQUE
It is an unconditional order In writing Addressed by the customer to the bank Requiring the banker to pay on demand A sum certain in money To the order of a specified person or bearer
PARTIES TO A CHEQUE
PAYEE – THE PERSON TO WHOM THE MONEY SHOULD BE PAID
DRAWEE – THE BANK WHICH IS AUTHORISED BY THE DRAWER TO PAY THE MONEY
DRAWER – THE PERSON WHO
DRAWS THE CHEQUE
An cheque with an incomplete date i. a date is valid for 6 months from the date of issuance An undated cheque will normally be returned unpaid with the reason “date required”. A cheque presented six months after the date of issue will be returned with the reason “stale cheque” OR “out of date” A Cheque presented before the due date would be returned as “post-dated”
.e.IMPORTANCE OF DATE
A cheque must bear a date. 10 November xxxx will be returned with the reason “date incomplete”. In banking practice.
AMOUNT The amount to be paid should be expressed in words and figures If they differ.
RINGGIT Two Thousand only
The cheques may be returned with the reasons “words and figures differ”
e. Pay Cash or bearer
. the cheque may be treated as payable to bearer. i. i.e.PAYEE
A cheque may be made payable to the order of a specified person or to bearer. Pay Aminat bte Borhan or bearer If the payee is fictitious or non-existing person. Pay Ali Bin Ahmad or bearer i.e.
if the customer draws a cheque in such a way as to allow a forgery to occur
.. ….. The bank is not held liable for debiting an account ….. If a person is aware that his signature had been forged and does not inform his banker of the forgery Or.HOWEVER ….
TYPE OF CHEQUES
BEARER CHEQUE Cheque is made payable to bearer which is expressed so on its face May be paid cash over the counter – if it’s not crossed ORDER CHEQUE Cheque is payable to a named payee with cancellation of the printed word “or bearer” May be encashed over the counter if it is not crossed and upon proper identification
made across it’s face.CROSSINGS Section 76 defines a CROSSING as : An addition to a cheque. by means of two parallel transverse lines A CROSSING MERELY RESTRICTS THE PAYMENT OF CASH OVER THE COUNTER
the paying banker should pay particular attention to : The customer’s signature The date on the cheque The amount express in words & in figures Any alterations to the cheque
.PAYING BANK When examining cheques for payment.
mental incapacity or customer.PAYING BANK’S DUTIES
Obligation to honour customer’s cheques provided that
there is sufficient funds Cheque is properly signed and drawn No legal restrictions to payment – death. garnishee orders and injunctions
A Bank must pay or dishonour cheques within statutory or legally recognised time limits
. winding-up of limited companies. bankruptcy.
A Fixed Deposit can be placed by individuals and non-individuals.
. A Fixed Deposit is not negotiable or transferable. placed by the customer for a fixed period of time bearing a fixed rate of interest.WHAT IS A FIXED DEPOSIT A Fixed Deposit or a Term Deposit as it is sometimes called is a fixed sum of money.
. One or more fixed deposits may be place in the Fixed Deposit Account. A depositor must have opened a Fixed Deposit Account before the placement of fixed deposits.WHAT IS A FIXED DEPOSIT ACCOUNT A Fixed Deposit Account is an account under which fixed deposits are placed.
WHAT IS A FIXED DEPOSIT RECEIPT? A Fixed Deposit Receipt (FDR) is an acknowledgement of and represents each placement of fixed deposit
or Kad Pengenalan Angkatan Tentera (BAT C 10). or Passport. URUSAN RASMI Adalah disahkan bahawa gambar. or Surat Pengenalan Sementara Angkatan Tentera (BAT C 10A).
. or JPN. cap-cap ibu jari dan butir-butir pemegang resit JPN.KP11 ini adalah betul. or Kad Kuasa Polis Di Raja Malaysia.IDENTIFICATION REQUIREMENTS
The original of any of the following documents is acceptable for identification purpose :
National Registration Identity Card (NRIC) / My Kad.KP09 – Dokumen Pengenalan Sementara JPN.KP11 – Dokumen Pengenalan Sementara Kerana Kehilangan Kad Pengenalan This document is valid only if the document bears the following phrase and is supported by other forms of identification such as driving licence and passport.
the document must be verified by National Registration Department / Jabatan Pendaftaran Negara (JPN) and such verification is declared by way of a chop and against which is signed by a JPN officer.IDENTIFICATION REQUIREMENTS
Where the phrase is not there. KPPK 09 – Dokumen Pengenalan Sementara (Temporary Documents of Identity Pending Issuance of a GMPC MyKad) KPPK 11 – Resit Laporan Kehilangan Kad Pengenalan
the transaction should be declined.
. should be requested. other documents such as driving licence. the document must be verified by the National Registration Department / Jabatan Pendaftaran Negara (JPN) and such verification is declared on the reverse of the document by way of a chop and against which is signed by a JPN officer. If there is further doubt.IDENTIFICATION REQUIREMENTS
KPPK 09 and KPPK 11 are valid only if the document bears the following phrase : PENUKARAN KE GMPC Where the phrase is not there. If any of the abovementioned identification documents is produced and yet it is not satisfactory for purpose of identification.
.TERMS OF DEPOSIT
The minimum amount for deposit is RM5.000 for 1 month fixed The minimum amount for deposit is RM500 for 2 month
The interest rates for 1 to 12 months must be displayed prominently at the bank premises Branches shall accept deposit for these tenures at theses whereby the announced rates are applicable.
TERMS OF DEPOSIT
Terms Placement of fixed deposits shall be for periods of 1 month and thereof up to a period of 60 months. Backdating A fixed deposit may be backdated for a a maximum 29 calendar days
. Effective Date The effective date is dependent on the mode of placement.
TERMS OF DEPOSIT Backdating is only allowed under the following circumstances :
Placements made via ATM Placements made during prolonged offline. backdating dependent on the mode of placement Delays / oversight by branch toa ct on depositor’s instruction Errors made by branch when processing placements as wrong amount or tenure
TERMS OF DEPOSIT
Calendar month is the basis for determining the maturity date Examples :
Tenure/Period (Months 1 3 12 1 1 12 12 1 Effective Date of Placement 15/01/2000 15/01/2000 15/01/2000 31/01/2000 31/03/2000 28/02/2000 29/02/2000 29/02/2000 Maturity Date 15/02/2000 15/04/2000 15/01/2001 29/02/2000 30/04/2000 28/01/2001 28/02/2001 29/03/2000 Subsequent Maturity Date 15/03/2000 15/07/2000 15/01/2002 31/03/2000 31/05/2000 28/02/2002 28/02/2002 29/04/2000
Societies. Associations Sole Proprietorship Partnership Limited Company Schools Government/Para government bodies Other not-for-profit organizations
.WHO MAY OPEN A FD?
Individuals Trust Clubs.
ACCOUNT OPENING REQUIREMENTS Personal Accounts – Identity Card. Society. Associations
Certificate of Registration Rules and Regulations of the said body Committee Resolutions
. Passport. Mode of operations must be clear. Military/Police Identity Card Joint Accounts – As Above Sole Proprietor Account – Certificate of Registration Partnership Account – All partners to sign specimen card. Temporary Identity Card.
ACCOUNT OPENING REQUIREMENTS
Companies Certificate of Incorporation Memorandum and Articles of Association Copy of Resolution or Minutes of Meeting stating that a Fixed Deposit be opened at the said bank and branch Staff Account As with personal or joint account
Cash Cheque Transfer from A/C over counter ATM (Some banks) Telegraphic Transfer/IBG Banker’s Cheque House/Local Cheque Outstation Cheque/FC/MO/PO Mixed Placement – except for ATM
.MODES OF PLACEMENT Cash.
INTEREST/PROFIT PAYMENT 1 – 12 months : paid at maturity > 15 months : paid 6-monthly (called interim interest). of months to maturity
. last payment based on the balance of no.
eg. excluding maturity date (no. of days per annum)
NOTE – Interest/Profit is rounded up to 2 decimal points.INTEREST/PROFIT CALCULATION P X R/100 X T/365 P = Principal Sum R = Interest rate quoted/profit rate declared T = Tenure/period from date of deposit to maturity.18
.178 will become 29. 29.
All FDs are on auto renewal not operated via placement or withdrawal will turn unclaimed after the 7th year and will be transferred to the unclaimed balances account.
. the unclaimed balances are transferred to Head Office account by preparing the Advise of Credit and UMA-3 Form (New) to CAD/Head Office for onward transmission to Jabatan Akaun Negara. System will generate notices to inform customers to decide on the unclaimed balances one month before they turn unclaimed On 31 December each year.
The tenure of the placement is 1-12 months Applies only on amount that exceeds RM1.1 million placement Normally lower than board rate Rate determined by Treasury Division Need not be displayed at branch premises Interest rates for deposit with tenure >12 months need not be announced.
.2ND TIER FD INTEREST RATE
Applicable to both corporate and individual depositors with aggregate FD amount >RM1. 100K of a RM1. but may be negotiated by depositors.0 million limit.0 million.
5% tax on interest/profit paid to depositor Income Tax Act 1967 : a final tax deducted at source. sole proprietor or partnership Deposit in a single receipt >RM100. Applicable only if 3 criterias are met :
Depositor is a resident individual.000-00 Placement <12 months Tax applicable only to interest/profit paid on deposit sum in excess of 100K
. demand draft. Outward remittance involves the payment of monies as opposed to Inward Remittance which implies receipt of monies. Remittance may be effected by means of a casher’s order / banker’s cheque.REMITTANCE
Remittance is the transfer of money from one place to another. Bank remittance does not involve the physical movement of cash. telegraphic transfer/mail transfer.
The provisions of the Exchange Control Act (ECM) must be complied with for foreign outward remittance.
A local outward remittance would involve the transfer of Malaysian Ringgit to a beneficiary within Malaysia. A foreign outward remittance would entail the transfer of money in foreign currency or Malaysian Ringgit from Malaysia to a payee outside Malaysia. where applicable.
CASHIER’S ORDER /
banks cross the cashier’s order “NOT NEGOTIABLE ACCOUNT PAYEE ONLY”. It is therefore a cheque issued by the bank and is considered to be better than a cheque drawn by an ordinary customer. A cashier’s order must not be drawn payable to bearer as such an instrument would be tantamount to issuing of bank notes which is prohibited under the law. Cashier’s order are only issued in Malaysian Ringgit for the remitting of funds to beneficiaries residing in the same town or area where the issuing bank is in operation. bearing authorised signature(s) of the bank’s officer(s). A cashier’s order is widely used to effect payment especially if personal cheques are not acceptable or cash payment is not advisable. In practice.CASHIER’S ORDER/BANKER’S CHEQUE
A cashier’s order/banker’s cheque is a form of cheque drawn on a bank.
They are a convenient means of payments as a traveller does not have to bother carrying large sums of foreign currencies each time he/she has to travel abroad either for pleasure or for business.
. They are issued in various currencies.TRAVELLER’S CHEQUE
Traveller’s cheques are cheques issued by certain International Banks. Japanese yen. Traveller’s cheque has no life span Traveller’s cheques are easily obtainable from the Malaysian banks by anyone who wishes to travel abroad. for eg. sterling pound. US dollars. Hong Kong dollars and Singapore dollars and in various denominations.
A standing instruction is a service provided by the bank to its customers who want to make regular (or periodic) payments to the same beneficiaries by debiting the customers’ account. The payment must be
To the same beneficiary For the same amount On a regular basis, for eg. Weekly or monthly
This mode of payment is very convenient to customers who have to make regular payments eg. To pay for insurance premiums, loans etc. It is the duty of the customer to ensure that his account has sufficient funds for the bank to effect payment on the due date. Failure to do so may compel the bank to cancel the instructions. The bank executes the Standing Instruction by effecting the payments by cashiers order, demand draft, telegraphic transfer or credit the relevant beneficiary’s account as instructed, under advise to the customer
BANKER’S CHEQUE & DEMAND DRAFT
At the same time. it reassures the payee that it is good for payment A Banker’s Cheque is crossed “NOT NEGOTIABLE A/C PAYEE ONLY” It is generally considered GOOD FOR PAYMENT as it is drawn on a bank and therefore ability to obtain funds is assured
Banker’s cheque is used for payments within the same locality and is widely used where personal cheques are not accepted or cash payment is not advisable.
Foreign Demand Draft is a Payment Order issued by a bank in Foreign Currencies drawn on its overseas branches or Correspondent / Agent Bank.
Local Demand Draft is a bill of exchange or Payment Order issued by a bank in Ringgit Malaysia drawn on its branches or Correspondent / Agent Bank located in different clearing zones within the country.
system automatically transfer the funds to Head Office on 31 December each year
.UNCLAIMED MONEYS Classification
BC/DD is classified as UNCLAIMED if not presented for payment after 12 months from the date of issuance If remain unpaid.
. remitting Bank must inquire from the applicant on purpose of the remittance for recording in the Balance of Payment system in compliance with ECM Guidelines.TELEGRAPHIC TRANSFER (TT)
A TT is an advice of payment from the Remitting Bank either locally (within Malaysia) or overseas through cable/ telex/telephone/facsimile/Rentas/ SWIFT authorising the Paying Bank to pay to the beneficiary a sum of money. TTs are goverened by the Exchange Control Malaysia (ECM) Act 1953 for fund transfers between Residents & Non-Residents.
PARTIES INVOLVED IN A TELEGRAPHIC TRANSFER TRANSACTION
ORDERING CUSTOMER (REMITTER)
BENEFICIARY CUSTOMER (PAYEE)
UNDERSTANDING THE TERMS USED IN A SWIFT MESSAGE
Sender The Institution that sends out the funds Receiver The Institution that receives the funds Remitter The ordering Customer Beneficiary The payee or beneficiary Customer
FOREIGN CURRENCY NOTES
FOREIGN CURRENCY NOTES (FCN) Foreign Currency Notes refers to the legal tender of a country outside Malaysia The bank may sell / purchase FCN to / from members of the public in exchange for Malaysian Ringgit The sale / purchase of FCN is permitted to the list of currency notes quoted at the bank’s Daily Exchange
FCN QUOTED AT THE CURRENCY NOTES COUNTER
AUD BND EUR GBP HKD IDR JPY PHP SGD USD AUSTRALIAN DOLLAR BRUNEI DOLLAR EURO STERLING POUND HONG KONG DOLLAR INDONESIAN RUPIAH JAPANESE YEN PHILIPPINE PESO SINGAPORE DOLLAR US DOLLAR
soiled & / or mutilated Foreign Currency Notes Purchase to be kept within permissible limits Purchase in excess of permissible limits from known customers is allowed subject to Branch Manager’s approval & branch is capable of re-selling the FCN.
.PURCHASE OF FOREIGN CURRENCY NOTES
Do not accept Foreign Coins and defaced.
Cheques drawn on Domicile customers through clearing by other banks known as inward clearing cheques.00pm. the system will auto credit customers’ account during “batch run” on the next working day (for local clearing). If the cheque is dishonoured. it will be returned on the 2nd day by 2. When it is good for payment.CLEARING
Clearing is a process where cheques deposited by customers drawn on the drawee bank is send back to the drawee bank through BNM for inter bank settlement Cheques sent for clearing is called outward clearing cheques.
Labuan. Negeri Sembilan and Perak SPICK – PP Penang. Pahang. Sabah & Sarawak
. Perak. Terengganu. Kedah. Perlis SPICK – JB Johor NON-SPICK Kelantan.CLEARING REGION
SPICK – KL Wilayah Persekutuan. Selangor.
Outward Clearing is the clearing of cheques deposited by Domicile customers.
BNM SPICK KL
DOMICILE BANK DRAWEE BANKS
. These cheques may be drawn on other banks in the same locality or outstation.
DOMICILE BANK DRAWEE BANKS
.INWARD RETURNED CHEQUE
Dishonoured cheques which have been cleared earlier to DRAWEE BANKS but are now returned to customers.
BNM SPICK .
Inward Clearing is the clearing of cheques presented by other banks through the Clearing House for the debit of our customers’ accounts.
BNM ORTC SPICK-KL
.OUTWARD RETURNED CHEQUE
Domicile customers cheques which have been presented through Inward Clearing for the debit of our customer’s accounts but subsequently returned for reasons such as insufficient funds or technical errors.