The importance of banking is paramount in an economy. There is a clear distinction between conventional and Islamic banking. Conventional banks are charging interest through lending and accepting the deposit for interest. But interest (Riba) is strictly forbidden in Islam as evident in this verse “And because of their charging riba while they were prohibited from it.” (Quran, An-Nisaa 4:161). So Muslims established their own Riba free financial institutions separately to the conventional banking system.
Islamic and conventional banks can learn from each other. In the field of technology, Islamic banks can learn from conventional banks in the most advanced industrialised countries that may facilitate their entry to these markets. Conventional banks can learn from the Islamic banks concerning staff and client motivation, as well as in staff-client relationships that are heart of Islamic banking. In other words, there can be technology transfer one way, but human value transfer in the opposite direction. They of course compete with each other but not usually by the pricing of their services.
2.4 MAJOR DIFFERENCES BETWEEN SCHEDULED COMMERCIAL BANK AND CO-OPERATIVE: Both commercial and cooperative banks in India are scheduled banks and perform similar functions such as deposit banking and advances. However they have certain differences in their structure and supervision. - Commercial banks are owned by share-holders and cooperative banks by members of cooperative societies. - Both are controlled by Banking Regulation Act 1949. However co-operative banks are likewise secured under the Co-operative Act, 1912 and Banking Laws Act, 1965.
As the financial institutions play such an important role in the economy that they are also called financial intermediaries. As the financial institutions play such an important role in the economy that they are also called financial intermediaries. Banks are the financial intermediaries that accept deposits and make loans. These are the Commercial Banks, Savings and Loan Associations, Mutual Savings banks and credit unions. Insurance Companies, Finance Companies, Pension funds, mutual funds and investment banks are also formed from the growth of banks.
c. Banks: The individuals and firms approach banks to exchange the currency and the banks deal other banks which has foreign exchange departments on behalf of its customers. Banks apply and get the approval to act as an authorised dealer for foreign exchange. The two important tiers of foreign exchange are that one transaction between customers and banks and the other one is the transactions between banks. The inter bank transactions helps to meet the demands of foreign exchange customers and also reap the gains of foreign exchange rates. Generally inter banks does not take any help of the intermediaries but the banks deal through the foreign exchange brokers.
CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF STUDY The banking sector is still the primary form of financial intermediation in the Asian and Pacific region. It is the largest conduit for the recruitment of domestic savings. Hence, it becomes the main source of external capital to firms and the key player in the payment system. Apart from their financial intermediation role, banks have been shown the contribution to the general economic stability. This was prevalent during the Asian financial crisis when economy was adversely affected by the then-weak banking sector.
Investment banking: The main role of the investment bank is to help companies and governments raise capital on capital markets, either through the issue of securities (otherwise known as shares) or debt. Their main business involves the issuance of new debt as well as providing business consulting services on mergers and acquisitions and other types restructuring of enterprises (Casu, Girardone, and Molyneux,
Is there a difference between the two organizations – IMF and World Bank? From a layperson’s perspective, there may not seem much of a difference between the functioning of the two, considering how the two names appear together almost always. For a common man, IMF and World Bank are two organizations that lend money to the government of a nation. But YES, there is a difference between the functioning of the IMF and the World Bank.
Upon analyzing and assessing their immediate surroundings, the banking groups recognize the following important factors that would impact on their competitiveness. THREAT OF RIVALRY AMONG EXISTING BANKS • Too many players in the industry; Each banking group has to contend with 7 other domestic banking groups and 30 other banking intermediaries both local and foreign, comprising 19 Commercial, 8 Islamic, and 3 Investment banks. (Appendix1 shows a complete list of banks in Malaysia). • Malaysian banking system is highly regulated/controlled by BNM and banking products are basically of similar/almost-identical nature. The tangible differentiation between competing banks is therefore minimal, as they have similar capability to market/sell their products, thus creating a very intense competition amongst all the players.
Commercial bank act as an underwriter of financial transactions by lending their reputation and credibility to that transactions. On the other hand investment companies offered individuals a professionally managed portfolios of securities .These entities underwrites securities on behalf of their qualified clients. It can purchase through a package product like mutual funds. In specialized government institutions, the Central Bank of the Philippines is a definite example.This institution maintains price stability of the country and control the efficient and effective payment settlement system .In brokerage firms and insurance companies, they offered services like securities, mortgages, loans, credit cards and check