Unit 1_Types of financial institutions Flashcards
What are the 7 types of financial institutions in Singapore?
The main types of financial institutions established in Singapore are
1) Commercial Banks and Merchant Banks.
2) Finance Companies
3) Asset Management Company
4) Insurance Companies
5) Singapore Exchange (SGX)
6) Central Depository Pte Ltd (CDP)
7) Credit Bureaus
Functions of the Major Financial Institutions
(A) Commercial Banks and Merchant Banks.
Commercial Banks
Commercial banks act as financial intermediaries between depositors and borrowers, and offer a wide range of financial products and services. They may serve personal and corporate clients.
Functions of the Major Financial Institutions
(A) Commercial Banks & Merchant Banks.
Merchant Banks
Merchant banks act as financial intermediaries between depositors and borrowers, and provide a wide range of financial products and services to the business and communities, public institutions, international borrowers and lends. However, they serve mainly corporate clients.
Functions of the Major Financial Institutions
(B) Finance Companies
Finance Companies are financial intermediaries and they mobilize domestic savings for the provision of loans.
They provide services on demand to their customers in the SMEs and the consumer community.
Functions of the Major Financial Institutions
(C) Asset Management Companies
Asset management companies provide unique investment services for their clients. They manage clients’ funds and investment portfolios.
Investment specialists constantly monitor the investment opportunities and markets to help manage the individual investment portfolio professionally.
Functions of the Major Financial Institutions
(D) Insurance Companies
Insurance companies sell insurance products for life’s unexpected challenges. The right coverage can help to protect the insured and family from major financial losses due to death and unexpected events.
There is demand for the products as insurance is essential to financial security.
Functions of the Major Financial Institutions
(D) Insurance Companies
Strings being attached towards. (PPF) (SDIC)
All insurance companies must be participating members of Policy Owners Protection Fund Scheme.
The agency for the scheme is Singapore Deposit Insurance Corporation.
This protects policy owners in the event that a life or general insurer, who is a member, fails.
Functions of the Major Financial Institutions
(D) Insurance Companies
(PPF) scheme
The PPF Scheme now provides 100% protection for the guaranteed benefits of your life insurance policies, subject to specific caps.
Life plans & general insurance.
Functions of the Major Financial Institutions
(D) Insurance Companies
(PPF) scheme LIFE PLANS
For life plans, the aggregate caps are $500,000 for guaranteed sum assured $100,000 for the guaranteed surrender value per life assured per insurer.
Functions of the Major Financial Institutions
(D) Insurance Companies
(PPF) scheme GENERAL INSURANCE
For general insurance, the PPF Scheme provides 100% coverage for those policies covered. There are no caps.
The types of general insurance covered include workmen’s compensation, and personal lines such as motor, travel, property, domestic maid and short-term accident and health plans.
Functions of the Major Financial Institutions
E) Singapore Exchange (SGX
SGX offer a comprehensive and efficient infrastructure for raising capital, and for investors to transact and clear financial products.
As a leading marketplace, they strive to continually innovate and provide their customers with convenient access and quality products.
Functions of the Major Financial Institutions
F) Central Depositoy (Pte) Ltd (CDP
CDP is the clearing and depository house for the Singapore securities market.
It provides integrated and efficient clearing and settlement facilities aimed at reducing risk and improving market efficiency.
Acts as a central nominee, holding securities on behalf of its depositors.
All immobilized certificates are registered in the name of CDP and safe-kept with a custodian bank.
Functions of the Major Financial Institutions
(G) Credit Bureaus
There are 2 credit bureaus in Singapore. Customers may also pay to obtain reports about themselves, but they will not be able to see reports on other individual.
Functions of the Major Financial Institutions
G) Credit Bureaus (2002) (ABS
The first credit bureau, Credit Bureau Singapore was set up in 2002.
Managed by the Association of Banks in Singapore and own by the banks.
`Provide credit reports on named individuals for a fee and credit reports to banks on any named individuals.
Functions of the Major Financial Institutions
(G) Credit Bureaus (2007) DP Credit Bureau
The second credit bureau was set up by DP Credit Bureau in 2007.
Easy-to understand credit reports are available to better understand the person’s credit worthiness. Scores range from 0 to 781 is broken down into four bands, strong, good, fair or weak, to make it easier for consumers to interpret.
