BANKING OPERATIONS

Introduction to Banking Operations Functions

RELATIONSHIP BETWEEN EMPLOYER AND EMPLOYEE

One person agrees to employ another as an employee and that other agrees to serve his employer as an employee. The nature of relationship is contractual. Employer and employee bound by the contract of employment (express & implied) Employers duties : To provide work To pay wages To provide safe working environment Employees duties : To perform the work assigned/entrusted To maintain discipline To maintain utmost honesty To have duty of care towards work and employers property

ROLES

SUPPORT MANAGEMENT AMBASSADOR

RESPONSIBILITIES
Subscribe to good work ethics / habits, philosophy and culture of the Hong Leong Group. Displays loyalty, commitment and passion for job duties. Abide by Managements instructions, policies and guidelines. Complete all assignments / operative duties satisfactorily and in compliance with deadlines. Cooperative in all official matters and in all small group activities. Participates in supports all Group Programmes. Offers constructive suggestions / criticism.

DILIGENT Hardworking & Persevering Tenacious, does not give up easily Knows his limitations, willing to seek assistance and to learn Inquisitive to new ideas, new technologies

HONOUR His word is his bond. Is honest in dealings with customers and with his own people. Two plus two is always four. Always above board in doing business, in building lasting relationships.

KNOWLEDGEABLE Knows his job well, technically skillful Well-informed about current affairs, politics, business trends & developments Hungry for opportunities, not a BirdIn-A-Cage Well-read, eager to learn more

COMMUNICATOR Conveys ideas and directives to others clearly, exactly Communicating is not just passing a message, must ensure that it is understood, receiver is convinced and message is executed A good listener; received, analyses and acts on feedback

UNITY
Team Player Caring & Protective Towards Team Members Able to instill loyalty Alert to opportunities for his own company as well as for others in the Group, Total Group Effort

JOB ROLES OF AN OPERATIONS OFFICER BANKER CUSTOMER RELATIONSHIP TYPES OF CUSTOMER ACCOUNTS UNDERSTANDING DEPOSITS ACCOUNTS (SAVINGS / CURRENT / FIXED / FOREIGN CURRENCY) AND WITHDRAWAL OPERATIONS FRAUD / MONEY LAUNDERING AND MANAGING FRAUD REMITTANCES CLEARING SYSTEMS & PROCESS

BANKER CUSTOMER RELATIONSHIP & BANKING SECRECY

BANKER CUSTOMER RELATIONSHIP

BANKER CUSTOMER RELATIONSHIP

What is it all about ..? Who is the Banker? Who is the Customer? What is their relationship? BANKING SECRECY Termination of the banker-customer relationship

Who is the BANKER ?

Section 2 of the Banking and Financial Institutions Act 1989 (BAFIA) gives the definition of a bank as :A PERSON WHO CARRIES ON BANKING BUSINESS

Person can include Individual, corporation, society, statutory bodies or any other group of persons In BAFIA S. 4, banking business is restricted to public companies which holds a valid licence granted by the Minister of Finance under S.6(4).

Banking Business according to BAFIA S.2 consists of :

Receiving deposits, Paying and collecting cheques Provision of finance, and Or such other business as BNM with the approval of the Minister of Finance may prescribe.

Now that you know what is a bank

WHO IS THE CUSTOMER ? Most important thing to find out is : When is a person considered a CUSTOMER

BANKER CUSTOMER RELATIONSHIP

The relationship is established once an account is opened for the customer. It is of considerable practical importance. Time & dealing is not of the essence. Imposes certain rights, liabilities, duties and responsibilities on each party. Any failure or negligence to comply may create legal issues

MISTAKE AS TO IDENTITY
Opening an account with a false identity may subject to the Banks negligence in collecting cheques for its customers. PREVENTION Comply with procedures & controls in opening of an account Introducer requirement ROC/ROB Searches

NATURE OF BANKCUSTOMER RELATIONSHIP IS

CONTRACTUAL

DUTIES OF BANKER
Receive money, cheques and other instruments for collection. Repayment of whole or part of money upon customers written authority. Honour customers cheques subject to conditions like sufficient funds & no legal prohibition to payment. Maintain secrecy of customers confidential information (A/cs & Affairs). Reasonable notice before closing customer/s account.

DUTIES OF CUSTOMER Exercise reasonable care in drawing cheques so as not to misled the bank or to facilitate forgery. To inform the bank immediately upon discovery of forgery of his cheques.

RIGHTS OF THE BANKER Rights to commission / service charges Rights to interest Rights to set-off

RIGHTS OF THE CUSTOMER Rights to repayment Rights to draw cheques Rights to interest

CONFIDENTIALITY

Banks must not disclose information concerning accounts or affairs of their customers without express consent / exceptions qualified by Operations of Law

TERMINATION OF CONTRACT The banker-customer relationship may be terminated by : Mutual Consent Unilateral Act Operation of Law

TERMINATION BY CUSTOMER
The customer may close his account at his own free will. This can be done over the bank counter or delivering a written request to the bank

TERMINATION BY CUSTOMER
This is usually due to the Operation of Law. Reasonable notice must be given by the bank to allow the customer to make alternative arrangements.

TERMINATION DUE TO THE OPERATION OF LAW Third Incidence of Bad Cheque Bankrupt / Wound-up customers Death & Mental incapacity of the customer

BANKING SECRECY Section 97(1) of BAFIA

PROHIBITED FROM GIVING, PRODUCING, DIVULGING, REVEALING, PUBLISHING OR OTHERWISE DISCLOSE, TO ANY PERSON, OR MAKE A RECORED FOR ANY PERSON, OF ANY INFORMATION OR DOCUMENT WHATSOEVER RELATING TO THE AFFAIRS OR ACCOUNT OF CUSTOMER. Also applies to persons who have left the employment of a bank and third parties who have information or document which to his knowledge has been disclosed in contravention of BAFIA S.97(1).

BANKING SECRECY Permitted disclosures ~ BAFIA S.99

Where written permission has been given by the customer / personal representatives In cases where the bank takes legal action against a bankrupt / wound-up customer In the course of criminal or civil proceedings Under Federal Law to police on suspects Garnishee order served on banks by court order Customers credit reference for bona fide commercial transactions Authorised in writing by Bank Negara Malaysia Disclosure authorized by BAFIA

ANTI-MONEY LAUNDERING & ANTI-TERRORIST FINANCING

OBJECTIVES
By the end of this presentation, you will be able to : Identify and be aware of the risk and opportunities for money laundering both in conventional and Islamic banking Understand Know Your Customer Policy, Customer Due Diligence Requirements and identify suspicious transactions in line with the latest BNM Circular on Money Laundering and Terrorist Financing Be aware of the Banks legal obligations and yours as an employee under Anti Money Laundering and Anti-Terrorism Financing Act 2001

CONTENTS OF PRESENTATION
Why do I need to know What is Money Laundering Stages of Money Laundering What is Terrorist Financing Anti-Money Laundering and Anti-Terrorist Financing Law & Guidelines Know Your Customer Policy Preventive Measures Taken Reporting Suspicious Transactions Examples of Suspicious Transactions

WHY DO I NEED TO KNOW ABOUT MONEY LAUNDERING?

In todays globalized economy, organized crime groups generate huge sums of money by drug trafficking, illegal arms sales, smuggling and financial crimes (eg. Yakuza and Mafia) This illegally obtained money, however, is of little use to organized crime because it raises suspicions of law enforcement and leaves a trail of incriminating evidence. Criminals who wish to benefit from the proceeds of large scale crime have to disguise their illegal profits without compromising themselves. This process is knows as Money Laundering.

WHY DO I NEED TO KNOW ABOUT MONEY LAUNDERING? Banks have become MAJOR TARGETS in money laundering activities Why? Banks provide a variety of services and instruments ie. ATM machines, travellers cheque, electronic funds transfer, foreign exchange services, etc. that can be used to conceal the source of money

WHAT IS MONEY LAUNDERING?

Money laundering is the process when the identify of illegally obtained money is changed so that it appears to have originated from a legitimate source Why? This is done to avoid prosecution, conviction and confiscation on the part of the criminals

STAGES OF MONEY LAUNDERING

Although money laundering often involves a complex series of transactions made by launderers through banks, it generally includes 3 basic stages :
Placement Layering Integration

PLACEMENT
Placement involves the physical disposal of cash proceeds derived from illegal activities. Objective : To get the illicit cash into the financial system

PLACEMENT METHODS INCLUDE : Breaking down of cash deposits below certain cash transaction reporting thresholds before banking them into designated account (s) Depositing large amounts of cash in less conspicuous small sums directly into designated bank account (s) Using shell companies incorporated in tax haven countries

LAYERING
Layering means creating complex layers of financial transactions to separate the illicit proceeds from their source and disguise the audit trail. Objective : To make detection as difficult as possible by attempting to break the linkage between the criminal and the proceeds of crime.

LAYERING METHODS INCLUDE :

Electronic fund transfers Using existing customers account where account holder and account user are no longer the same person Using shell companies from tax have countries

INTEGRATION
Integration involves the turning of criminally derived wealth into legitimate funds Objective : To place the laundered funds back into the economy so that they re-enter the financial system appearing as legitimate business funds

INTEGRATION METHODS INCLUDE : Buying assets eg. Land, house, cars Buying existing legitimate businesses eg. Restaurants, supermarkets Investing in share, unit trust, derivatives

OFFENCES UNDER AMLA

The offence of money laundering is defined under Section 4 AMLA as the act of any person who : a) Engages directly or indirectly, in a transaction that involves the proceeds of any unlawful activity ; b) Acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes, uses, removes from or brings into Malaysia proceeds of any unlawful activity; or

TERRORIST FINANCING HOW ARE FUNDS TRANSFERRED?

c) conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of proceeds of any unlawful activity; where : Based on objective factual circumstances, the person knows or has reason to believe that the property are proceeds from any unlawful activity; or The person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property are proceeds from any unlawful activity

PENALTY FOR MONEY LAUNDERING (AMLA) An offender may be liable to a fine not exceeding RM5,000,000 or imprisonment for a term not exceeding 5 years or both, upon conviction

WHAT SHOULD I DO?

Be on the lookout! Follow established procedures when opening accounts for new customers.
You must Know Your Customer (KYC)
NO SHORT CUTS

Do the necessary background checks before starting any new relationship with any customers.
Conduct the necessary Customer Due Diligence checks
NO SHORT CUTS

WHAT SHOULD I DO?

Ask questions when you think there is something wrong. If you are not sure on how to go about this, consult your supervisor/manager/compliance officer. Bear in mind, not all customers are what that they claim to be. Make a report if you are suspicious.

WHAT SHOULD I DO?

Suspicious transaction will often be one which is INCONSISTENT with a customers known, legitimate business or their normal course of business As a staff, you are under a legal obligation to make a report if you believe that the customer is using his account for money laundering or terrorist financing purposes

WHATS NEXT AFTER REPORTING?

Every report filed is CONFIDENTIAL and WILL REMAIN confidential.
S35 AMLA states that a person who disclosed to any other person, when they : know/have reason to suspect that an investigating officer is investigating/about to investigate; OR Know/have reason to suspect that a disclosure was made to an investigating officer, being likely to prejudice investigation PENALTY FOR TIPPING-OFF : RM1 million FINE OR 1 year JAIL OR both

THE BANK WILL BE LIABLE FOR DAMAGES SUFFERED IF AN ACTION IS BROUGHT AGAINST THE BANK FOR INJURY TO THE CUSTOMERS NAME AND REPUTATION

SAVINGS ACCOUNT PRODUCTS

WHAT IS A SAVINGS ACCOUNT

A Savings Account is a deposit account of which the balance earns interest and can be withdrawn on demand or through electronic means such as an automatic teller machine Savings Account is also governed by the guidelines laid out in UPW/GP1. Guidelines on Anti-Money Laundering and Counter Financing of Terrorism, Sectoral Guidelines 1 for Banking and Financial Institutions and the policies spelt out in the Anti-Money Laundering Manual and Know your Customer Policy Manual.

ELIGIBILITY Individuals who have attained the age of 18 years and above (residents and non-residents) Personal Joint Account Registered societies, clubs, associations and non-profit organisations

PERSONAL AND JOINT PERSONAL

Personal The individual must have attained the age of 18. However, exception is given to payroll customers aged between 12 to 18 years old (with valid NRIC/My Kad) and working full time. It is allowed for one or more individuals to be added to the account provided all parties consent to it in writing. The new party(s) to the account must have attained the age of 18 and be properly identified. Instructions on the manner of operating the account must be clearly stated and agreed by all the joint account holders in writing. The constitution of the account will have to be changed from Personal to Joint Personal.

TYPES OF ACCOUNT PERSONAL Operated by one person aged 18 years and above. JOINT ACCOUNT Operated by two or up to a maximum of 4 persons aged 18 years and above

TYPES OF ACCOUNT SOCIETY/ASSOCIATION /CLUB Operated by the committee of the society, association or club

PERSONAL AND JOINT PERSONAL All required documents are to be produced in the original form for verification Photocopies of the originals to be kept for future reference must bear the original sighted notation against which the attending staff is required to date and sign.

BLIND PERSON In addition to the normal procedures for opening and operation of the account, the following requirements must be complied with :
A blind person must be accompanied by a close friend or relative of his choice. Their presence is required to minimise the possibility of the blind person making allegations of fraud or negligence against the bank.

EXECUTOR

An executor is a person who has been appointed by will or codicil to administer the estate the testator (the deceased person) and to carry into effect the provisions of the will. The mere naming of a person as executor in a will does not bind him to accept the duty.

ADMINISTOR An administor is appointed by the Court to administer the estate of a deceased person. The Court may appoint one or more administrators.

ASSOCIATION / CLUB / SOCIETY An association / Club / Society is an organisation of people who are interested in a particular activity or belonging to a particular occupation or having the same interest or aim. However, the purpose of the organisation is not for any business of making money.

SCHOOL
Private schools are excluded as they may be registered as a business enterprise and are not allowed to open a savings account. For opening an account, the following documents are required :
Identification documents of the authorised signatories A written letter from the State Education Department giving approval for the school to open an account with the Bank. Minutes of Meeting / Resolution from the school Board of Governors

PRODUCT FEATURE Payable on demand. Operation of the account is by way of Savings Passbook Inter-branch deposits and withdrawals can be performed at all branches Inter-branch transfer of funds between Savings and Current Account Inter-branch transfer of accounts

PRODUCT FEATURE
Easy access to account through branches nationwide, ATMs. A copy of the General Terms & conditions of Accounts Deposits / Islamic Banking Deposits governing deposit accounts must be given to the account holder upon opening the account. Account holder is advised to read and understand the Terms and Conditions.

CHECKING & SEARCHES

CTOS AND BLACKLIST CHECKING Upon keying in the customer ID into the system, the system will automatically conduct a CTOS check and if the ID number matches in the Bankruptcy Listing, the message Customers ID number matches Bankruptcy Listing will be displayed. If the customers name is confirmed blacklisted, the bank should not open the account for the customer.

ACCOUNT OPENING DOCUMENTS

Individual Personal or Joint
Identity card Paspport (non-resident)

Individual Personal or Joint

Certificate of Registration Rules & regulations Resolution passed by the Board of Committee members to open an account with Hong Leong Bank and persons authorised to operate the account Identity card of authorised signatories

DORMANT ACCOUNT Dormant Account is an account that is not operated upon for a period of 12 months A dormant account of 7 years or more, will be transferred to Unclaimed Moneys

CALCULATION OF INTEREST
Saving Account are entitled to interest at the rate determined by the Bank.
Interest is computed and calculated on a daily basis. The system automatically credits the accrued daily interest to the customers account every six monthly i.e. on the 30th June and 31st December of each year or upon closing of the Savings Account. Interest is calculated on the daily balance basis using the following formula : Interest = Principal (P) x Time (T) x Rate (R) P = Balance at the end of each day (lump basis) T = 1 / 365 (daily basis) R = Multi-Tiered Interest Rate

WITHOLDING TAX A withholding tax of 5% is deductible by the Bank upon crediting interest to an individual resident in Malaysia Interest income earned from deposits of up to RM100,000 is exempted from withholding tax. Less 100,000 no withholding tax More 100,000 5% withholding tax on interest

CURRENT ACCOUNT

WHAT IS A CURRENT ACCOUNT? It is an account maintained with a COMMERCIAL BANK on which cheques are drawn and into which money, cheques and other negotiable instruments are deposited.

OTHER NEGOTIABLE INSTRUMENTS Bankers Cheques Money Orders Postal Orders Pension Warrant Demand Drafts

BENEFITS OF ISSUING CHEQUES CURRENT ACCOUNT ALLOWS THE ACCOUNT HOLDER TO ISSUE CHEQUES WHICH IS A VERY CONVENIENT AND SAFE METHOD FOR MAKING PAYMENTS.

PRODUCT FEATURE Cheque book will be issued to the customer. The bank will honour the cheques issued subject to availability of funds in the account. Withdrawal may be by cheque encashment or through ATM Statement of account will be sent monthly

PRODUCT FEATURE
Pay utility bills any time through the ATMS or online services Payment stopped is an authorised instruction to the Banker to stop payment providing details on cheque number, amount, date and payees name On receipt of the instruction, the officer will :
Verify the signature Place date and time of receipt and initial Input instruction into the system. Service charge RM10 will be charged.

Inter-Branch Encashment of Cheques

DEFINITION OF 1ST & 3RD PARTY 1ST PARTY Authorised signatory of the account. 3RD PARTY Any party other than the authorised signatories of the account.

OVERDRAFT FACILITY Account can be overdrawn - Overdraft (against security) Overdraft is a facility granted under a Current Acount whereby the customer is authorised to draw on the account up to an approved limit.

FUNDAMENTAL OF CHEQUES

FUNDAMENTAL OF CHEQUES
Why do we need to learn about cheques? Integral part of banking operations Their collections have legal implications Their payments have legal implications Better equipped to advice customers in the course of our work Understand the duties, rights & liabilities a financial institution in respect of cheques

ESSENTIAL FEATURES OF A CHEQUE

It is an unconditional order In writing Addressed by the customer to the bank Requiring the banker to pay on demand A sum certain in money To the order of a specified person or bearer

PARTIES TO A CHEQUE
PAYEE THE PERSON TO WHOM THE MONEY SHOULD BE PAID

DRAWEE THE BANK WHICH IS AUTHORISED BY THE DRAWER TO PAY THE MONEY

DRAWER THE PERSON WHO

DRAWS THE CHEQUE

IMPORTANCE OF DATE
A cheque must bear a date. In banking practice, a date is valid for 6 months from the date of issuance An undated cheque will normally be returned unpaid with the reason date required. An cheque with an incomplete date i.e. 10 November xxxx will be returned with the reason date incomplete. A cheque presented six months after the date of issue will be returned with the reason stale cheque OR out of date A Cheque presented before the due date would be returned as post-dated

AMOUNT The amount to be paid should be expressed in words and figures If they differ, i.e.
RINGGIT Two Thousand only
RM 200-00

The cheques may be returned with the reasons words and figures differ

PAYEE
A cheque may be made payable to the order of a specified person or to bearer. i.e. Pay Ali Bin Ahmad or bearer i.e. Pay Aminat bte Borhan or bearer If the payee is fictitious or non-existing person, the cheque may be treated as payable to bearer. i.e. Pay Cash or bearer

HOWEVER .. .. The bank is not held liable for debiting an account .. If a person is aware that his signature had been forged and does not inform his banker of the forgery Or, if the customer draws a cheque in such a way as to allow a forgery to occur

TYPE OF CHEQUES

OPEN CHEQUES

CROSSED CHEQUES

BEARER CHEQUE

ORDER CHEQUE

GENERAL CROSSING

SPECIAL CROSSING

BEARER CHEQUE Cheque is made payable to bearer which is expressed so on its face May be paid cash over the counter if its not crossed ORDER CHEQUE Cheque is payable to a named payee with cancellation of the printed word or bearer May be encashed over the counter if it is not crossed and upon proper identification

CROSSINGS Section 76 defines a CROSSING as : An addition to a cheque, made across its face, by means of two parallel transverse lines A CROSSING MERELY RESTRICTS THE PAYMENT OF CASH OVER THE COUNTER

PAYING BANK When examining cheques for payment, the paying banker should pay particular attention to : The customers signature The date on the cheque The amount express in words & in figures Any alterations to the cheque

PAYING BANKS DUTIES

Obligation to honour customers cheques provided that
there is sufficient funds Cheque is properly signed and drawn No legal restrictions to payment death, bankruptcy, mental incapacity or customer, winding-up of limited companies, garnishee orders and injunctions

A Bank must pay or dishonour cheques within statutory or legally recognised time limits

FIXED DEPOSIT

WHAT IS A FIXED DEPOSIT A Fixed Deposit or a Term Deposit as it is sometimes called is a fixed sum of money, placed by the customer for a fixed period of time bearing a fixed rate of interest. A Fixed Deposit is not negotiable or transferable. A Fixed Deposit can be placed by individuals and non-individuals.

WHAT IS A FIXED DEPOSIT ACCOUNT A Fixed Deposit Account is an account under which fixed deposits are placed. A depositor must have opened a Fixed Deposit Account before the placement of fixed deposits. One or more fixed deposits may be place in the Fixed Deposit Account.

WHAT IS A FIXED DEPOSIT RECEIPT? A Fixed Deposit Receipt (FDR) is an acknowledgement of and represents each placement of fixed deposit

IDENTIFICATION REQUIREMENTS
The original of any of the following documents is acceptable for identification purpose :
National Registration Identity Card (NRIC) / My Kad; or Passport; or Kad Pengenalan Angkatan Tentera (BAT C 10); or Surat Pengenalan Sementara Angkatan Tentera (BAT C 10A); or Kad Kuasa Polis Di Raja Malaysia; or JPN.KP09 Dokumen Pengenalan Sementara JPN.KP11 Dokumen Pengenalan Sementara Kerana Kehilangan Kad Pengenalan This document is valid only if the document bears the following phrase and is supported by other forms of identification such as driving licence and passport. URUSAN RASMI Adalah disahkan bahawa gambar, cap-cap ibu jari dan butir-butir pemegang resit JPN.KP11 ini adalah betul.

IDENTIFICATION REQUIREMENTS
Where the phrase is not there, the document must be verified by National Registration Department / Jabatan Pendaftaran Negara (JPN) and such verification is declared by way of a chop and against which is signed by a JPN officer. KPPK 09 Dokumen Pengenalan Sementara (Temporary Documents of Identity Pending Issuance of a GMPC MyKad) KPPK 11 Resit Laporan Kehilangan Kad Pengenalan

IDENTIFICATION REQUIREMENTS
KPPK 09 and KPPK 11 are valid only if the document bears the following phrase : PENUKARAN KE GMPC Where the phrase is not there, the document must be verified by the National Registration Department / Jabatan Pendaftaran Negara (JPN) and such verification is declared on the reverse of the document by way of a chop and against which is signed by a JPN officer. If any of the abovementioned identification documents is produced and yet it is not satisfactory for purpose of identification, other documents such as driving licence, should be requested. If there is further doubt, the transaction should be declined.

TERMS OF DEPOSIT
MINIMUM AMOUNT
The minimum amount for deposit is RM5,000 for 1 month fixed The minimum amount for deposit is RM500 for 2 month

INTEREST RATE
The interest rates for 1 to 12 months must be displayed prominently at the bank premises Branches shall accept deposit for these tenures at theses whereby the announced rates are applicable.

TERMS OF DEPOSIT
Terms Placement of fixed deposits shall be for periods of 1 month and thereof up to a period of 60 months. Effective Date The effective date is dependent on the mode of placement. Backdating A fixed deposit may be backdated for a a maximum 29 calendar days

TERMS OF DEPOSIT Backdating is only allowed under the following circumstances :

Placements made via ATM Placements made during prolonged offline, backdating dependent on the mode of placement Delays / oversight by branch toa ct on depositors instruction Errors made by branch when processing placements as wrong amount or tenure

TERMS OF DEPOSIT
Maturity
Calendar month is the basis for determining the maturity date Examples :
Tenure/Period (Months 1 3 12 1 1 12 12 1 Effective Date of Placement 15/01/2000 15/01/2000 15/01/2000 31/01/2000 31/03/2000 28/02/2000 29/02/2000 29/02/2000 Maturity Date 15/02/2000 15/04/2000 15/01/2001 29/02/2000 30/04/2000 28/01/2001 28/02/2001 29/03/2000 Subsequent Maturity Date 15/03/2000 15/07/2000 15/01/2002 31/03/2000 31/05/2000 28/02/2002 28/02/2002 29/04/2000

WHO MAY OPEN A FD?

Individuals Trust Clubs, Societies, Associations Sole Proprietorship Partnership Limited Company Schools Government/Para government bodies Other not-for-profit organizations

ACCOUNT OPENING REQUIREMENTS Personal Accounts Identity Card, Passport, Temporary Identity Card, Military/Police Identity Card Joint Accounts As Above Sole Proprietor Account Certificate of Registration Partnership Account All partners to sign specimen card. Mode of operations must be clear. Society, Associations
Certificate of Registration Rules and Regulations of the said body Committee Resolutions

ACCOUNT OPENING REQUIREMENTS

Companies Certificate of Incorporation Memorandum and Articles of Association Copy of Resolution or Minutes of Meeting stating that a Fixed Deposit be opened at the said bank and branch Staff Account As with personal or joint account

MODES OF PLACEMENT Cash; Cash Cheque Transfer from A/C over counter ATM (Some banks) Telegraphic Transfer/IBG Bankers Cheque House/Local Cheque Outstation Cheque/FC/MO/PO Mixed Placement except for ATM

INTEREST/PROFIT PAYMENT 1 12 months : paid at maturity > 15 months : paid 6-monthly (called interim interest), last payment based on the balance of no. of months to maturity

INTEREST/PROFIT CALCULATION P X R/100 X T/365 P = Principal Sum R = Interest rate quoted/profit rate declared T = Tenure/period from date of deposit to maturity, excluding maturity date (no. of days per annum)
NOTE Interest/Profit is rounded up to 2 decimal points, eg. 29.178 will become 29.18

UNCLAIMED ACCOUNTS
All FDs are on auto renewal not operated via placement or withdrawal will turn unclaimed after the 7th year and will be transferred to the unclaimed balances account. System will generate notices to inform customers to decide on the unclaimed balances one month before they turn unclaimed On 31 December each year, the unclaimed balances are transferred to Head Office account by preparing the Advise of Credit and UMA-3 Form (New) to CAD/Head Office for onward transmission to Jabatan Akaun Negara.

2ND TIER FD INTEREST RATE

Applicable to both corporate and individual depositors with aggregate FD amount >RM1.0 million.
The tenure of the placement is 1-12 months Applies only on amount that exceeds RM1.0 million limit, eg. 100K of a RM1.1 million placement Normally lower than board rate Rate determined by Treasury Division Need not be displayed at branch premises Interest rates for deposit with tenure >12 months need not be announced, but may be negotiated by depositors.

WITHHOLDING TAX
5% tax on interest/profit paid to depositor Income Tax Act 1967 : a final tax deducted at source. Applicable only if 3 criterias are met :
Depositor is a resident individual, sole proprietor or partnership Deposit in a single receipt >RM100,000-00 Placement <12 months Tax applicable only to interest/profit paid on deposit sum in excess of 100K

REMITTANCES

REMITTANCE
Remittance is the transfer of money from one place to another. Bank remittance does not involve the physical movement of cash. Remittance may be effected by means of a cashers order / bankers cheque, demand draft, telegraphic transfer/mail transfer. Outward remittance involves the payment of monies as opposed to Inward Remittance which implies receipt of monies.

REMITTANCE
A local outward remittance would involve the transfer of Malaysian Ringgit to a beneficiary within Malaysia. A foreign outward remittance would entail the transfer of money in foreign currency or Malaysian Ringgit from Malaysia to a payee outside Malaysia. The provisions of the Exchange Control Act (ECM) must be complied with for foreign outward remittance, where applicable.

CASHIERS ORDER /
BANKERS CHEQUE

CASHIERS ORDER/BANKERS CHEQUE

A cashiers order/bankers cheque is a form of cheque drawn on a bank, bearing authorised signature(s) of the banks officer(s). It is therefore a cheque issued by the bank and is considered to be better than a cheque drawn by an ordinary customer. Cashiers order are only issued in Malaysian Ringgit for the remitting of funds to beneficiaries residing in the same town or area where the issuing bank is in operation. A cashiers order must not be drawn payable to bearer as such an instrument would be tantamount to issuing of bank notes which is prohibited under the law. In practice, banks cross the cashiers order NOT NEGOTIABLE ACCOUNT PAYEE ONLY. A cashiers order is widely used to effect payment especially if personal cheques are not acceptable or cash payment is not advisable.

TRAVELLERS CHEQUE
Travellers cheques are cheques issued by certain International Banks. They are issued in various currencies, for eg. US dollars, sterling pound, Japanese yen, Hong Kong dollars and Singapore dollars and in various denominations. Travellers cheque has no life span Travellers cheques are easily obtainable from the Malaysian banks by anyone who wishes to travel abroad. They are a convenient means of payments as a traveller does not have to bother carrying large sums of foreign currencies each time he/she has to travel abroad either for pleasure or for business.

STANDING INSTRUCTIONS
A standing instruction is a service provided by the bank to its customers who want to make regular (or periodic) payments to the same beneficiaries by debiting the customers account. The payment must be
To the same beneficiary For the same amount On a regular basis, for eg. Weekly or monthly

STANDING INSTRUCTIONS
This mode of payment is very convenient to customers who have to make regular payments eg. To pay for insurance premiums, loans etc. It is the duty of the customer to ensure that his account has sufficient funds for the bank to effect payment on the due date. Failure to do so may compel the bank to cancel the instructions. The bank executes the Standing Instruction by effecting the payments by cashiers order, demand draft, telegraphic transfer or credit the relevant beneficiarys account as instructed, under advise to the customer

BANKERS CHEQUE & DEMAND DRAFT

BANKERS CHEQUE
Bankers cheque is used for payments within the same locality and is widely used where personal cheques are not accepted or cash payment is not advisable. At the same time, it reassures the payee that it is good for payment A Bankers Cheque is crossed NOT NEGOTIABLE A/C PAYEE ONLY It is generally considered GOOD FOR PAYMENT as it is drawn on a bank and therefore ability to obtain funds is assured

DEMAND DRAFT
Local Demand Draft is a bill of exchange or Payment Order issued by a bank in Ringgit Malaysia drawn on its branches or Correspondent / Agent Bank located in different clearing zones within the country. Foreign Demand Draft is a Payment Order issued by a bank in Foreign Currencies drawn on its overseas branches or Correspondent / Agent Bank.

UNCLAIMED MONEYS Classification

BC/DD is classified as UNCLAIMED if not presented for payment after 12 months from the date of issuance If remain unpaid, system automatically transfer the funds to Head Office on 31 December each year

TELEGRAPHIC TRANSFER

TELEGRAPHIC TRANSFER (TT)

A TT is an advice of payment from the Remitting Bank either locally (within Malaysia) or overseas through cable/ telex/telephone/facsimile/Rentas/ SWIFT authorising the Paying Bank to pay to the beneficiary a sum of money. TTs are goverened by the Exchange Control Malaysia (ECM) Act 1953 for fund transfers between Residents & Non-Residents. Where applicable, remitting Bank must inquire from the applicant on purpose of the remittance for recording in the Balance of Payment system in compliance with ECM Guidelines.

PARTIES INVOLVED IN A TELEGRAPHIC TRANSFER TRANSACTION

ORDERING CUSTOMER (REMITTER)

SENDER RECEIVER

BENEFICIARY CUSTOMER (PAYEE)

UNDERSTANDING THE TERMS USED IN A SWIFT MESSAGE

Sender The Institution that sends out the funds Receiver The Institution that receives the funds Remitter The ordering Customer Beneficiary The payee or beneficiary Customer

FOREIGN CURRENCY NOTES

FOREIGN CURRENCY NOTES (FCN) Foreign Currency Notes refers to the legal tender of a country outside Malaysia The bank may sell / purchase FCN to / from members of the public in exchange for Malaysian Ringgit The sale / purchase of FCN is permitted to the list of currency notes quoted at the banks Daily Exchange

FCN QUOTED AT THE CURRENCY NOTES COUNTER

AUD BND EUR GBP HKD IDR JPY PHP SGD USD AUSTRALIAN DOLLAR BRUNEI DOLLAR EURO STERLING POUND HONG KONG DOLLAR INDONESIAN RUPIAH JAPANESE YEN PHILIPPINE PESO SINGAPORE DOLLAR US DOLLAR

PURCHASE OF FOREIGN CURRENCY NOTES

Do not accept Foreign Coins and defaced, soiled & / or mutilated Foreign Currency Notes Purchase to be kept within permissible limits Purchase in excess of permissible limits from known customers is allowed subject to Branch Managers approval & branch is capable of re-selling the FCN.

CLEARING
Clearing is a process where cheques deposited by customers drawn on the drawee bank is send back to the drawee bank through BNM for inter bank settlement Cheques sent for clearing is called outward clearing cheques. When it is good for payment, the system will auto credit customers account during batch run on the next working day (for local clearing). If the cheque is dishonoured, it will be returned on the 2nd day by 2.00pm. Cheques drawn on Domicile customers through clearing by other banks known as inward clearing cheques.

CLEARING REGION
SPICK KL Wilayah Persekutuan, Selangor, Perak, Pahang, Negeri Sembilan and Perak SPICK PP Penang, Kedah, Perlis SPICK JB Johor NON-SPICK Kelantan, Terengganu, Labuan, Sabah & Sarawak

OUTWARD CLEARING
Outward Clearing is the clearing of cheques deposited by Domicile customers. These cheques may be drawn on other banks in the same locality or outstation.

BNM SPICK KL

DOMICILE BANK DRAWEE BANKS

INWARD RETURNED CHEQUE

Dishonoured cheques which have been cleared earlier to DRAWEE BANKS but are now returned to customers.

BNM SPICK - KL

IRTC
DOMICILE BANK DRAWEE BANKS

INWARD CLEARING
Inward Clearing is the clearing of cheques presented by other banks through the Clearing House for the debit of our customers accounts.
BNM SPICK-KL

DOMICILE BANK

DRAWEE BANKS

OUTWARD RETURNED CHEQUE

Domicile customers cheques which have been presented through Inward Clearing for the debit of our customers accounts but subsequently returned for reasons such as insufficient funds or technical errors.
BNM ORTC SPICK-KL

DOMICILE BANK

DRAWEE BANKS