Chapter 10
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Chapter 10. Finance and Banking. Introduction. In the commercial world, we seldom use cash in transactions. Different payment methods have been developed since the banking activities become more and more important in the modern society.

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Chapter 10

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Chapter 10 3273073

Chapter 10

Finance

and

Banking


Introduction

Introduction

In the commercial world, we seldom use cash in transactions. Different payment methods have been developed since the banking activities become more and more important in the modern society.


Methods of payment in trade and other transactions

Methods of Payment in Trade and Other Transactions

  • Cheque

  • Cashier order

  • Bank draft

  • Telegraphic transfer

1. Through Commercial Banks:

  • Autopay

    • Standing order

    • Direct debit

    • Letter of credit (L/C)


Methods of payment in trade and other transactions1

Methods of Payment in Trade and Other Transactions

  • Postal remittance service

  • PayThruPost service

2. Through Post Offices:


Methods of payment in trade and other transactions2

Methods of Payment in Trade and Other Transactions

  • Promissory note

  • Bill of exchange

3. Other Methods of Payment :

  • Cash

  • Credit card

  • Debit card

  • Smart card


Components of a cheque

Components of a cheque

Payee’s name

Payt. Amt.

Payt. Date

Drawer’s signature/chop

Cheng Siu Ming

A/C #

Bank code

Chq. stub

chq. #

Branch code


Advantages of using cheques

Advantages of Using Cheques

  • Safety

  • Flexibility

  • Convenience

  • A proof of payment

Can you think of

some disadvantages of

using cheques?


Types of cheques

Types of Cheques

  • Bearer cheque

  • Order cheque

  • Uncrossed cheque / Open cheque

  • Crossed cheque:

    • General crossing

    • Account payee only

    • Not negotiable

    • Not negotiable, account payee only


Chapter 10 3273073

Endorsement

  • Transfer to a third party

  • Types:

    • Blank endorsement

    • Endorsement to order

      Dates of Cheque

  • Post-dated cheque

  • Stale cheque

  • Antedated cheque


Reasons for not honouring a cheque

Reasons for Not Honouring a Cheque

  • Insufficient fund

  • Stale cheque

  • Post-dated cheque

  • No signature

  • Signature not matching the bank record

  • Not countersigned on alteration, etc.

Any other reasons?


Commercial banks and finance companies in hk

Commercial Banks and Finance Companies in HK

  • Deposit-taking institutions:

    • Licensed banks

    • Restricted licence banks

    • Deposit-taking companies

Please give an example for each type of institution.


Chapter 10 3273073

Comparison of

the Financial Institutions

Institution

Comparison

Licensed banks

Restricted licence banks

Deposit-taking companies

1. Name

Bank

Restricted licence bank

Bank

2. Minimum paid-up capital

HK$150M

HK$100M

HK$25M

3. S/A, C/A, T/D account services

All

Only T/D

Only T/D

4. Minimum deposit amount

No restriction

HK$500,000

HK$100,000


Chapter 10 3273073

Comparison of the Financial Institutions

Institution

Comparison

Licensed banks

Restricted licence banks

Deposit-taking companies

5. Min. deposit maturity

No restriction

No restriction

3 months

6. Interest rates

No restriction

7. Licensing authority

Hong Kong Monetary Authority

8. Regulations

Restricted by the Banking Ordinance

9. Supervised and audited by

Hong Kong Monetary Authority


Chapter 10 3273073

<=>

Borrowers

Bridge

Depositors

Services of Commercial Banks

1.Accepting Deposits:

  • Savings account

  • Current account

  • Time deposit account

  • Foreign currency account


Chapter 10 3273073

Services of Commercial Banks

2. Granting Loans:

  • Overdraft

  • Personal loan

  • Business loan

  • Secured loan

  • Trade financing

  • Syndicated loan

I need money!


Chapter 10 3273073

Services of Commercial Banks

  • 3. Remittance Services:

    • Bank draft / Demand draft

    • Telegraphic transfer

  • 4. Other Services:

    • Automatic teller machine (ATM)

    • Money exchange

    • Trustee service

    • Safe deposit box

    • Gift cheque

    • Traveller’s cheque


Chapter 10 3273073

Latest Development of Banking Services

Phonebanking

Investment

consultancy

service

Internet

banking

services

All-in-one

monthly

statements


Chapter 10 3273073

The Position of HK in the International Financial Market

  • Major centre of foreign exchange

  • A strong presence of internationalfinancial institutions

  • The second largest stock market in Asia

  • Good regulatory framework

  • As a window for Mainland China

  • The host of international meetings


Factors contributing to hk s role as a famous financial centre

Factors Contributing to HK’s Role as a Famous Financial Centre

  • Favourable geographical position

  • Regulatory framework

  • Good communication facilities

  • Qualified workers for the financial sector

  • Economic factors


Chapter 10 3273073

END OF THIS CHAPTER

CHEERS


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