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Bank Accounts Bank Accounts Agenda Main duties of a bank Types of bank Types of Accounts Interest calculations Bank charges Main Duties of a Bank Handle customers business in a safe and professional manner Honour customers’ cheques

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Presentation Transcript
bank accounts agenda
Bank AccountsAgenda
  • Main duties of a bank
  • Types of bank
  • Types of Accounts
  • Interest calculations
  • Bank charges
main duties of a bank
Main Duties of a Bank
  • Handle customers business in a safe and professional manner
  • Honour customers’ cheques
  • Comply with any express (written) instruction from the customer
  • Maintain secrecy about customers’ affairs
  • Give reasonable notice to close an account
main duties of a bank4
Main Duties of a Bank
  • Provide balance of account on request
  • Receive customers money and cheques and credit to the correct account
  • Repay money on demand in banking hours
  • Advise customers immediately of any improper event affecting the account
  • Exercise proper care and skill when performing all its duties.
types of banks
Types of Banks
  • Global banks

- full range of services

- international capability

  • Commercial banks

- wide range of services

- limited international capability

  • Investment banks

- arranging, originating and distributing debt

and equity issues and advice

  • Savings banks

- taking deposits and making loans

types of accounts
Types of Accounts
  • Current account
  • Deposit/savings account
  • Composite account
  • Money market deposit
  • Overdraft
  • Loan accounts
  • Resident and Non-resident accounts
resident non resident some countries differentiate
Resident Non- Resident Some countries differentiate

So maybe

  • Restrictions as to type of accounts or services available (China)
  • Different fee structures (France)
  • Movement of funds overseas or between R/NR maybe subject to Central Bank reporting (Germany)
  • Prior approval may be needed for movements
bank accounts services to control float
Bank Accounts/ServicesTo control Float
  • Lockbox
  • Intervention accounts
  • Remote disbursement
  • Controlled disbursement
  • Direct collections

- Negotiation

- Collection

bank accounts9
Bank Accounts
  • So why are they important?

- paying and receiving funds

- safe keeping

- earning interest

  • Considerations?

- cost

- how many

- location

- who with

slide10
Working out the interest due for September

Ledger Value Debits Credits Cleared Number

Date Date Balance of days

30.8.06 1.9.06 700 700 Cr 7

8.9.06 8.9.06 1,500 200 600 Dr 1

9.9.06 9.9.06 500 1,100 Dr 3

10.9.06 12.9.06 100 1,000 Dr 2

14.9.06 14.9.06 250 45 1,205 Dr 7

21.9.06 21.9.06 400 1,605 Dr 10

interest calculations 2
Interest calculations 2

No credit interest

Debit interest at 6%

Work out the ‘debit decimals’

1 day @ 600 = 600

3 days @ 1,100 = 3,300

2 days @ 1,000 = 2,000

7 days @ 1,205 = 8,435

10 days @ 1,605 = 16,050

Total 30,385

Interest charge = 30,385 x 6.0 = 4.99

365

bank charges
Bank Charges
  • Bankers are human and need to live but….

- The Cash manager needs to control

bank charges

  • Factors affecting fees

- Balances maintained

- Turnover

- Volume

- Additional services

bank charges control
Bank ChargesControl

Understand charging method

- no ‘free’ services but there are hidden

charges

- avoid turnover charges and ‘ad valorem’

- go for fixed or per item charge

- identify most important items and focus on

them

- check interest rates used and calculations

- check commission charges

bank charges control14
Bank chargesControl
  • Review payment types and submission methods

- maximise use of automated low-cost

payment methods

- repetitive ‘wires’ cheaper than free form

- straight through processing, STP. Deliver to

the bank fully formatted

- look for economies of scale

- challenge unspecified supplementary charges

- beware long commitments and index linked uplifts

bank charges control15
Bank Charges Control
  • Review existing arrangements

- cheques paid in promptly?

- more efficient way of receiving funds?

- courier?

- payment procedures?

- put out to tender, RFI/RFP

  • Better cash management

- Netting, Pooling, Cash concentration.