Session - 1 - FIN 441 Bank Management Electronic Banking...

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Bank Management & Electronic Banking FIN 441
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2 Session 1 INTRODUCTION
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3 Session 1 : INTRODUCTION A bank is a financial institution that collects society’s surplus cash and provides a part of that as loan with a view to earning profit. A bank is an institution that is registered by central bank and mainly perform the following activities – 1. receive current deposit and give the withdrawal facilities to clients through cheque 2. receive term deposit and pay interest on it 3. perform discounting of notes, approving loans, and invest in government and other credit instruments (continued…) Definition of a Bank
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4 Session 1 : INTRODUCTION (continued…) 4. collect cheque, draft and note, etc. 5. issue draft and cheque 6. act as a trustee in accordance with government permission A bank is a financial intermediary that offers the widest range of financial services – especially credit, savings, and payment services – and performs the widest range of financial functions of any business firm in the economy.
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5 Session 1 : INTRODUCTION Bank and Banker The word “banker” means a person transacting the business of accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, and includes any Post Office Savings Bank. Negotiable Instruments Act – 1881 (Section 3) A banker does the business of banking. A banker and a bank does the same job, i.e. the business of banking
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6 Session 1 : INTRODUCTION PAUSE AND THINK Can leasing and investment companies accept any type of deposits? Can leasing and investment companies be regarded as banking companies?
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7 Session 1 : INTRODUCTION Bank Company According to section – 5 of the Bank Company Act – 1991, a company transacting the business of banking is called a banking company. A manufacturing or trading company will not be deemed to be a bank company even if it does accept deposits (fixed deposits) from the public for financing its manufacturing and trading activities. Leasing or investment companies accepting fixed deposits only are not bank companies. To be a bank company, use of cheques as a mean of withdrawal is a precondition.
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8 Session 1 : INTRODUCTION How many scheduled banks are there in Bangladesh? Are specialized banks scheduled banks? PAUSE AND THINK
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9 Session 1 : INTRODUCTION Scheduled Bank Scheduled bank has been defined by the Bangladesh Bank Order – 1972 – A scheduled bank means a bank for the time being included in the list of banks maintained under sub-clause (1) of clause (2) or Article 37. So, a scheduled bank is the bank which is included in the list of scheduled banks maintained by Central Bank. The scheduled bank must:
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This note was uploaded on 04/22/2011 for the course BBA FIN 441 taught by Professor Dewanmostafiz during the Fall '10 term at BRAC University.

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Session - 1 - FIN 441 Bank Management Electronic Banking...

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