financial system

by NOR AZIAH BINTI ABDUL MAJID
Tags: derivatives market, market, money, offshore

financial system:

  • financial institutions
  1. banking system
  2. non-banking financial intermediaries
  • financial market
  1. money & foreign exchange market
  2. capital market
  3. derivatives market
  4. offshore market

commercial banks

  • The commercial banks are the largest and most significant providers of funds in the banking system. The main functions of commercial banks are to provide:
  1. Retail banking services such as the acceptance of deposit, granting of loans and advances, and financial guarantees
  2. Trade financing facilities such as letters of credit, discounting of trade bills, shipping guarantees, trust receipts and Banker’s Acceptances
  3. Treasury services
  4. Cross border payment services
  5. Custody services such as safe deposits and share custody
  • ex:
  1. Affin Bank Berhad
  2. Alliance Bank Malaysia Berhad
  3. AmBank (M) Berhad
  4. Bangkok Bank Berhad
  5. Bank of America Malaysia Berhad
  6. Bank of China (Malaysia) Berhad
  7. Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
  8. CIMB Bank Berhad Citibank Berhad
  9. Deutsche Bank (Malaysia) Berhad
  10. EON Bank Berhad
  11. Hong Leong Bank Berhad
  12. HSBC Bank Malaysia Berhad
  13. Malayan Banking Berhad
  14. OCBC Bank (Malaysia) Berhad
  15. Public Bank Berhad
  16. RHB Bank Berhad Standard Chartered Bank Malaysia Berhad
  17. The Bank of Nova Scotia Berhad
  18. United Overseas Bank (Malaysia) Bhd

different between islamic and conventional banking

Islamic Banking

  1. Functions and operations are based on syariah principles

  2. Promote risk-sharing between provider of capital (investor) and user of funds (entrepreneurs)

  3. Aim at maximizing profit but subject to syariah restrictions

  4. Partners, investor and traders, buyer or seller relationship

  5. Creditor-Debtor relationship

Conventional Banking

  1. Functions and operations are based on fully man made principl

  2. Investor is assured of pre-determined rate of interest

  3. Aim at maximizing profit without any restrictions

  4. Creditor-Debtor relationship

  5. Based on money trading. Money is a medium of exchange and not a commodity, its sale and purchase is prohibited in Islam.

reflection

Posted on 21 May 2018, 1:01 PM

to know what the financial system such as what the function of central bank in country

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Details

bank negara malaysia (central bank)

  • Bank Negara Malaysia (the Central Bank of Malaysia) was established on 26 January 1959, under the Central Bank of Malaya Ordinance 1958. The objectives of BNM are as follows:
  1. To issue currency and keep reserves to safeguard the value of the currency;
  2. To act as a banker and financial adviser to the Government;
  3. To promote monetary stability and a sound financial structure; and
  4. To influence the credit situation to the advantage of Malaysia.
Updated on 21 May 2018, 1:01 PM; 449 page visits from 17 May 2018 to 10 October 2025