BNK501Sem : FUNDAMENTALS OF BANKING

INTRODUCING MONEY, BANKING AND

FINANCIAL MARKETS

LECTURE WEEK 2- SEM 1,2019

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 LECTURE OUTLINE
Importance of Money, Banking and Financial
Markets?
Career opportunities.
Role of bankers.
Development of the Financial System in Fiji.

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 IMPORTANCE OF MONEY
• The most often-used alternative to money is barter,
which is when people exchange one good for
another.
• It is primarily because the barter system is so
inefficient that monetary systems naturally arise.
• Cigarettes, stones, feathers, plant leaves, and a host
of other things have been used as money.
• In order for something to be money, it must
perform the functions of money.

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 IMPORTANCE OF BANKS
• Banks are the largest financial intermediaries in the
economy and deserve careful study.
• Banks are the link between monetary policy of RBF
and the economy.
• Money is created through the banking system
through the expansion of bank reserves, bank loans,
and checking deposits, not by actually printing
dollar bills.
• Banks are in the process of rapid innovation and
change.
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 IMPORTANCE OF Financial Market
• A well-functioning financial sector increases
economic growth.
• If an economy does not allocate savings to the most
productive uses, it will grow more slowly than it can
grow.
• The primary purpose of financial markets is to
allocate available savings to the most productive
use.
1. Bond Market - Fixed Income Market.
2. Stock Market - Equity market.
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 CAREER OPPORTUNITIES IN BANKING &
FINANCIAL MARKET’S
• Bank Tellers
• Loans Officer
Officers
• Branch Managers
• Financial Analyst
• Compliance Officers
• Internal Auditors
• Accountant
• Transactional Banker
Operational Analyst
Bank Assurance
Investment Banker
Financial Adviser
Portfolio Manager
Risk Analyst
Relationship Manager
Credit Analyst

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 WHO IS A BANKER
• A banker is an individual who advises their clients
with regards to financial matters.
• Duties concerning savings, loans, taxes,
investments, and securities are all within the job
realm of a banker.
• The banker will provide financial assistance to the
client in accordance with their required needs.

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 ROLE OF BANKERS
• The role of a banker is one filled with multiple duties
and responsibilities.
• Bankers come in many different forms and each one is
unique in their own specific way.
• The roles and duties of each banker will vary amongst
the individuals and each one has their own set agenda
in their role as banker.
o Right to charge a reasonable commission for the bank’s
services.
o The right to interest.
o Duty to pay customers’ cheques on demand.
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 ROLE OF BANKERS
o The right to return unpaid any cheque, which would
create an unauthorised overdraft or any cheque which
would exceed an agreed overdraft limit.
o Duty to receive money and collect cheques for the
customer’s account.
o Duty to act in good faith and without negligence when
dishonouring a cheque.
o duty to maintain secrecy regarding all the affairs of
customers;
o duty to advise the customer of any forgery of their
signature and duty to give reasonable notice before
closing a credit account.
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 GENERAL RESPONSIBILITIES
• A banker has numerous general responsibilities
which go along with their daily job duties.
• The banker is responsible for assessing the client’s
financial standing and offering bank programs in
accordance with that financial standing.
• The banker will review the finances of a client,
introduce financial programs which may be needed
by the client and answer to their needs each step of
the way.

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 SPECIFIC RESPONSIBILITIES
• The overall duty of a banker is to help clients with
their financial questions and needs.
• In order to do so, the banker must correspond with
the client and determine what type of banking help
they are looking for.
• The banker must also review a client’s financial history
and current standing to determine if their desired
financial needs can be met.
• The banker will also inform them the best way to meet
their financial goals through the banking institution.

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 SPECIFIC RESPONSIBILITIES
• One specific duty of the banker may entail arranging
student loans for clients.
• The daily job duties of a banker will also entail
keeping complete and accurate records of the
financial institution’s transactions which they carry
out on a daily basis.
• Bankers must also disburse funds from time to time
to the client and associated parties.
• Some bankers may also sell financial instruments
such as stocks and bonds from time to time.
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 FINANCIAL SYSTEM IN FIJI
• The Reserve Bank of Fiji (RBF) is the Central bank of
Fiji.
• Statutory responsibilities under Section 4 of RBF Act
are:
 To regulate the issue of currency, and the supply,
availability and international exchange of money,
 To promote monetary stability,
 To promote a sound financial structure and,
 To foster credit and exchange conditions conducive to the
orderly and balanced economic development of the
country.
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 Corporate Structure

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 Legislations

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 FINANCIAL SYSTEM IN FIJI
• The RBF has eight groups:
1. Governor's Office and Board.
The core functions of the Governor's Office and
Board Group are to provide strategic leadership
and management, deliver statutory and functional
responsibilities and enhance national and
international working relationship, liaison and
Board Secretariat Services.

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 FINANCIAL SYSTEM IN FIJI
2. Economics
Conducts economic analysis and provides policy
advice on the formulation of monetary policy.

The Group's core functions also include the

preparation and analysis of monetary and
economic forecasts and the production and issue of
economic publications.

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 FINANCIAL SYSTEM IN FIJI
3. Financial Markets Group
Has primary responsibility for monetary policy
implementation, registry and banking services,
foreign reserves management and exchange
control.

The Group ensures that the country's foreign

reserves are managed within the parameters of
safety, liquidity and profitability.

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 FINANCIAL SYSTEM IN FIJI
4. Financial Institutions Group
Major functions is to supervise the financial
system by licensing, formulating and
implementing prudential policy guidelines for
financial institutions.

The Group's other functions include the

development and strengthening of institutional
infrastructure to prevent money-laundering
activities.
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 FINANCIAL SYSTEM IN FIJI
5. Financial Systems Development Group

Role is to develop and monitor in the areas of

microfinance, financial institutions complaints, fees
and charges, remittances, de-monopolization of Fiji
National Provident Fund, Local Advisory Boards for
commercial banks, small medium enterprises, rural
banking and financial literacy.

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 FINANCIAL SYSTEM IN FIJI
6. Currency & Corporate Services Group
The Currency and Corporate Services Group is primarily
responsible for ensuring the issue of an adequate
supply of quality currency.

The Group is also responsible for all the Bank's internal

services, including: accounts and financial reporting;
human resources; information technology; plant and
properties; security; records management; corporate
projects; library and general administration.

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 FINANCIAL SYSTEM IN FIJI
7. Risk Management & Communications Group

The Risk Management and Communications Group

is responsible for Corporate Communications,
Domestic and International Connection, External
and Internal Audit, Corporate Coordination and
Compliance, Strategic/Annual Plan, Middle Office,
Legal, Business Continuity Management and Risk
Management.

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 FINANCIAL SYSTEM IN FIJI
8. Financial Intelligence Unit

The Financial Intelligence Unit's major functions are

to prevent and detect money laundering and
terrorist financing activities as well as specify a
range of measures that financial institutions in Fiji
must implement to prevent the use of Fiji's
financial system from money laundering activities
and other serious offences.

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 FINANCIAL SYSTEM IN FIJI
• Financial sector in Fiji consists largely of:
 Commercial banks most of which are foreign
owned.
 Non Bank Financial Institutions (NBFIs).
 Central banks/Reserve Banks.

• Banking systems dominate the financial sector of

Fiji.

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 FINANCIAL SYSTEM IN FIJI
• Fiji has a well developed financial system that is not
only secure and sound; but has remained resilient
despite the recent global financial crisis.

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 LICENSED FI’S IN FIJI

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 LICENSED FI’S IN FIJI

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 LICENSED FI’S IN FIJI

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 LICENSED FI’S IN FIJI

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 END OF LECTURE

THANK YOU FOR YOUR

ATTENTION

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