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2-22. BA-FM 24P(2018)-A (LEC) Banking and Financial Institution > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

An institution authorized by a a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions and provide other financial services to its customers

A

bank

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2
Q

business activity of accepting and safeguarding money owned by individuals or instituions and lending them out to earn profit

A

banking

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3
Q

Essential elements of Banking

A
  • Accept Deposit
  • Pay interest
  • Clear checks - PCHC
  • Make loans
  • Act as intermediary in financial transactions
  • Provide other financial services
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4
Q

Classification of Banks

A
  1. Universal bank
  2. Commercial Bank
  3. Thrift Bank
  4. Rural nd Cooperative Bank
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5
Q

expanded commercial banks and has the same powers as a commercial bank

A

Universal Bank

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6
Q

Required Capitalization of Universal Bank

A

Php 4.95 B

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7
Q

Having the powers of a thrift bank such as accept drafts letters of credit, promissory notes, discount, bills of exchange & other evidences of debt, accept or create demand deposits, receive types of deposits & deposit substitutes, buy and sell forex, gold, silver bullion.

A

Commercial Banks

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8
Q

Acquire marketable bond, and other debt securities, extend credit.

A

Commercial Banks

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9
Q

Required capitalization of commercial banks

A

Php 2.4 Billion

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10
Q

Power to accept savings & time deposits such as correspondent with other financial insititutions and as a collection agent for government(issue mortgages, engages in real estate transactions and extend credit).

A

Thrift Bank

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11
Q

May also maintain checking accounts such as depository for government entities and LGU’s

A

Thrift Bank

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12
Q

Required Capitalization of thrift bank

A

Php 325M

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13
Q

Their role is to promote and expand the rural economy in an orderly and effective manner by providing people in the rural communities with basic financial services.

A

Rural and Cooperative bank

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14
Q

help farmers through the stages of production, from buying seedlings to marketing of their produce

A

Rural Bank

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15
Q

are privately owned and managed

A

Rural Banks

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16
Q

Are organized owned by cooperatives or federation if cooperative

A

Cooperative banks

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17
Q

Required capitalization of rural banks

A

Php 100M

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18
Q

Required capitalization of cooperative banks

A

Php 10M

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19
Q

Provide policy directions in the areas of money, banking, and credit

A

BSP

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20
Q

It shall have supervision over the banks and exercise such regulatory powers as provided in this act and other pertinent laws over the operations of finance and non-finance companies performing quasi-banking functions, hereafter referred to as quasi-banks and institutions and institutions performing similar functions.

A

BSP

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21
Q

Primary objective is to maintain price stability conducive to a balanced and sustainable economic growth. I

A

BSP

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22
Q

It shall also promote and maintain monetary stability and convertibility of the peso.

A

BSP

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23
Q

Functions of BSP

A
  1. Liquidity Management
  2. Currency Issue
  3. Lender of Last Resort
  4. Financial Supervision
  5. Management of Foreign Currency Resources
  6. Determination of FOREX Rate Policy
  7. Banker, finanical advisor, and official depository of the Philippine Governmen and GOCC
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24
Q

Implemented through ____________________ as the central monitoring and implementing council for money laundering as prescribed by the act as a criminal offense, prescribed penalties for such crimes committed.

A

Anti Money Laundering Council

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25
Q

Is the process of concealing the existence, illegal source or application of income derived from criminal activities and subsequently disgusing the source of income to make it appear legitimate or changing the form or moving the funds to a place where they are not likely to attract attention.

A

Money Laundering

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26
Q

Was assigned to Sept 29, 2001 and effect on Oct. 17, 2001.

A

RA 9160 (The Anti-Money Laundering Act of 2001)

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27
Q

Was signed into law and effect on March 23, 2003

A

RA 9194 (An Act Amending RA no. 9160)

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28
Q

Salient Features

A
  • criminalizes Money Laundering
  • Creates a finanical intelligence unit
  • imposes requirements on customer identification record keeping and reporting of covered and suspecious transactions
  • Relaxes strict bank deposits secrecy laws
  • Provides for bank inquiry and freezes paste petition / seizure / forfeiture / recovery of duty money / property
  • provides for international cooperation
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29
Q

Unlawful activities inculdes

A
  • Kidnap for ransom
  • Drug related offenses inculding trafficking
  • Graft and corruption
  • plunder
  • Robbery
  • Illegal Gambling
  • Piracy in high seas
  • qualified Theft
  • Swindling
  • Smuggling
  • Hijacking arson and murder
  • Violation of the securities and regulations act
  • Felonies
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30
Q

Purposes in the prevention on Money Laundering

A
  • Customer identification and due diligence
  • Record -keeping
  • Reporting of covered and suspicious transaction
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31
Q

A government agency responsible for the registration licensing, regulations and supervision of corporation and partnerships organized in the PH, including foreign corporations licensed to engage in business or to establish branch offices in the PH

A

SEC

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32
Q

Four Functions of SEC

A
  1. Capital market development & regulations
  2. Company registration and monitoring
  3. Enforcement
  4. Support services
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33
Q

It is a government agency task to protect depositors through the insurance on deposit which will be paid in the event of bank closure. It also helps in the promotion of a sound and stable banking system and foster public confidence in the banking system.

A

PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC)

34
Q

Promote the growth and finanical stability of insurance companies

A

Insurance Commission (IC)

35
Q

Professionalize insurance services and develop insurance consciousness among the general populize

A

Insurance Commission

36
Q

Establish sound national insurance market; Safeguard the rights and interest of the insuring people.

A

Insurance Commisiion

37
Q

Oranizational hierarchy & structure

A
  • Board of Directors
  • President
  • Controller
  • Treasury
  • marketing
38
Q

Guardians of the bank policies

A

Internal:
- Internal Audit
- Risk Mgt. Unit
- Compliance Officer

External:
- External Auditor
- Regulatory Bodies
- BIP circular members
-

39
Q

Conducts operations and financial audit

A

Internal Audit

40
Q

Measures, monitors, and control risk exposure

A

Risk Management Unit

41
Q

Oversees, coordinates compliance with gov’t regulations

A

Compliance Officer

42
Q

Other departments of the banks

A
  1. Accounting Department
  2. Human Resource Department
  3. Treeasury
  4. Systems and Procedure
  5. Information Technology
  6. International Remittance Department
  7. Corporate Security
  8. Retail Banking Group
  9. Institutional Banking Group
43
Q

Traditional Products of Bank

A
  1. Savings Account
  2. Current Account/ Checking Account / Demand Deposit
  3. Time Deposit
44
Q

A deposit account held at a bank or other finanical institution that provides principal security and a modest interest rate.

A

Savings Account

45
Q

are considered one of the most liauid investments outside of demand accounts and cash

A

Savings account

46
Q

Evidenced by a passbook or automated card

A

Savings Account

47
Q

It is a low cost account like a savings account also a very liquid account

A

Current Account

48
Q

Withdrawal can be drawn through an issuance of a check

A

Current Account

49
Q

Usually used by businessmen because of the conscience that come along with the account

A

Current Account

50
Q

Problems associated with checks

A
  1. Drawn against insufficient funds (DAIF)
  2. Drawn against uncleared Deposit (DAUD)
  3. Words and figures differs
  4. Post dated
  5. Stale dated
  6. Signature differs
  7. Cross checks
  8. Second endorsed checks
51
Q

The movement of a check from the depository institution at which it was deposited back to the institution on which it was written; the movement of funds in the opposite direction and the correspondence credit and debit to the involved accounts.

A

Check Clearing process

52
Q

The process in which a bank collects the funds on a check deposit from the issuing institution.

A

Check Clearing process

53
Q

involves the bank in which the check was deposited mailing the check to the issuing bank, the issuing bank then credits the deposit bank the funds on the check, assuming the check writer had the funds in his/her account.

A

Check Clearing Process

54
Q

Is an interest-bearing bank deposit that has a specified date of maturity

A

Time Deposit

55
Q

Usually evidenced through a certificate of time deposit

A

Time Deposit

56
Q

Interest computed

A

Interest = principal x rate x time/360 subject to 20% withholding tax

57
Q

Non-traditional products

A
  1. Government Securities
    - Treasury Bill
    - Fixed rate treasury notes (FXTN)
    - Retail Treasury Bonds (RTB)
    - Zero Coupon Notes
  2. Bond Issued by GOCC
  3. Philippine Corporate Issues
  4. Euro Bonds
58
Q

Short-term debts, issued at a discount

A

T-Bills

59
Q

Longer term, semi-annual coupon payment

A

Fixed Rate Treasury Notes

60
Q

Similar to FXTN except they are designed for small investors , quarterly coupon payments

A

Retail Treasury Bonds

61
Q

Similar to T-bill longer than one year, discount

A

Zero coupon notes

62
Q

Dominated in a currency different from the issuer’s country and issued in ternational market

A

EURO bonds

63
Q

A fiduciary relationship or argument whereby a person or financial institutions (TRUSTEE) is appointed by a second party (TRUSTOR) to handle, administer and manage funds and/or properties with an equal obligation for the benefit of another (beneficiary)

A

Trust

64
Q

Trustor; Trustee

A

debtor; Creditor

65
Q

To get the best deal for the client with the due consideration of the capital

A

Trust

66
Q

To return the depositors money with agreed interest on agreed maturity dates

A

Bank

67
Q

The interest is fixed or guaranteed income

A

Trust

68
Q

In investment, Investee has knowledge

A

TRUST

69
Q

In investment, depositors are not aware where funds will be used

A

bank

70
Q

What documentation is supported in Trust companies

A

Trust agreement

71
Q

What documentation is supported in Bank

A

Passbook, CTD

72
Q

What are trust ransactions

A
  1. BSP
  2. Unit Trust Investment Fund
  3. ESCROW
  4. Retirement Plans
  5. Investment Mgt. Account
  6. Directed Investment Mgt. Account
  7. Mutual Funds
73
Q

A written instrument whereby a bank as ________ agent acts as mediator to two parties involved in business transactions

A

ESCROW

74
Q

A plan getting aside money to be spent after retirment

A

retirement plans

75
Q

Under this arrangement, you can create a portfolio by choosing from among several available investment outlets that banks offer daily.

A

Investment Managment Account

76
Q

These investment outlets may be in the form of government securities, investment grade Corporate bonds and promissory notes or time deposits

A

Investment management Account

77
Q

Is an arrangement wherein the bank (investment mgr) invest funds in varies Peso and USD denominated securities through direct matching of an investor’s investment preference with available securities.

A

Directed Investment Management Account

78
Q

An investment vehicle that is made up of a prol of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

A

Mutual Funds

79
Q

Are operated by _______________, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors.

A

Mutual Funds; Money Managers

80
Q

A ________________ portfolio is structured and maintained to match the invest. objectives stated in this prospectus.

A

Mutual Funds

81
Q

Other bank products

A
  1. Credit cards
  2. Cash Mgt. Solutions
  3. Debit Card
  4. Loans
  5. Guarantees
  6. Consumer Loan
82
Q

Bank Services

A
  1. Manager’s Checks
  2. Demand Draft
  3. Gift Checks
  4. Cashiers Checks
    5.Night Depository
  5. Safety Deposit Box (SDB)
  6. Deposit Pick Up (DPU)
  7. Telegraphic Transfer (TT)

2-22. BA-FM 24P(2018)-A (LEC) Banking and Financial Institution (9 decks)

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