This article is just a continuation of the previous article that I published yesterday. If you have not read it yet, you can visit my account and read my other articles. I hope you learn something from it!
Now, let’s get back to the forum!
Question #9: Accepting gifts, fees, and commissions or any other remuneration in connection with the approval of the loan and other credit accommodation from banks is a highly prohibited transaction to Bank board of Directors, Officers, and Employees. Explain.
Accepting gifts, fees, commission, or any other remuneration from a client is highly prohibited. Aside from it is unethical, it will also affect the bank’s integrity. When you are working in a bank, it is natural to secure other people’s money, accepting any kind of remuneration is like a bribe for an extra service.
Question #10: Discuss the purposes of the examination and supervision of banks by the Monetary Board.
The aim of the examination is to determine if banks are doing their business in compliance with the laws of the banking industry and the laws of the central bank and other government agencies. Any wrongdoing by the banks will lead to their imminent suspension or, at least, the supervisory agencies' reprimand. Another objective is to determine how financial the bank is. The examiners should determine that the bank has checked its own properties, that property titles are fine, that the properties are priced accurately on the accounts and that they are of acceptable quality. However, such an examination does not mean a full investigation and, thus, examiners cannot be held responsible for the quality of the books and documents or of the banks' published statements. To provide remedies or explanations for those procedures, the examination is all about finding unsound and dangerous procedures. Thus, the examination achieves the goal of ensuring discipline on the part of the banks. It does not, though, go through the more extreme topics of fraud and embezzlement.
Question #11: Discuss the programming controls to have an effective audit and control system in banking institutions.
(1) Embezzlement- Theft or misappropriation of funds put into or belonging to one's employer under one's trust. Where the employee is responsible for taking care of the finances of someone else yet deliberately uses the money for an unwanted reason.
(2) Peculation- This relates to embezzlement, misappropriation, defalcation, misconduct, burglary, assault, thievery, coercion, deception or stealing of one's money or assets. An individual who is identified with any of these is referred to as a speculator.
(3) Examination- This happens to ensure that the activities of every bank are secure and effective. External monitoring comes from government departments and is not associated with the administration of the bank in any way. Interior monitoring, on the other hand, are carried out by people within the administration of the bank. Bank officers and employees are kept on their toes by regular monitoring and occasional trips, to make sure their banks are in order.
(1) Gambling- The practice of playing a game that allows you the opportunity to win a greater sum of money or other prizes whether you lose money or valuable stuff.
(2) Pride and Envy- Some people believe that if anyone performs better than they do, they'll be frustrated to the extent they want more, then they'll do some bad things to get what they want.
(3) Keeping Beyond One’s Income- Because of their desires, people waste their money above their incomes because they want to keep up with their wealthier peers, which causes them to do bad things.
(4) Unsound Salary Policies- When the employer has not offered what the employee deserves to earn because of the employer's irresponsibility. Workers appear to do bad things when the income that they earn is not enough for the service they perform.
(5) Poor Employee Relations- They will become a threat to the organization because the employee feels unsafe or they feel worse because of how their superiors treat them.
(6) Immorality- People are often challenged by temptation that can force them to do bad stuffs. People who work in a bank are mostly tempted by the money they handle every day that certain employees lead them to do sinful things.
(1) Condensed Bank Statement. This is generally provided for publication or submitted to depositors and shareholders as a way of presenting them with an ability to analyze the financial status of their individual bank. The pace of publication would focus on the criteria of the supervisory and regulatory agencies. Stockholders shall send reports annually, either in writing or orally.
(2) Real Bank Statement. This statement is generally made in a more detailed manner and is prepared by regulatory and supervisory agencies. It is also the basis for the preparation of additional papers. In addition, bank management is appropriately directed and will thus behave accordingly as it is aware of the specifics of banking operations.
(3) Annual Reports. This is generally in the shape of a brochure. Such a publication shall be made open to the general public as a form of publicity. Although there is no uniform or structured reporting structure, such records do provide "focal points" in the development of the bank. The addition of a new building, the creation of divisions and the like can be emphasized in the brochure by means of "write-ups" or pictorial reporting. The income statement, as well as the reconciliation of the capital account of the bank, can also be included.
The bank statement helps to underscore the status of the bank on some occasions. It would also be a smart idea to analyze and attempt and grasp its contents. Although there is no clear and quick guideline on accuracy and reporting patterns, most bank accounts contain assets and liabilities. It indicates whether the bank is liable for the money of the account holder. Bank statements are a wonderful way to help clients manage their assets. They will help clients monitor their accounts, detect mistakes, and understand spending trends.
Bank liability is the other side of the bank statement. Bank liabilities are the obligations acquired by the bank. If bank clients deposit money into a bank account, savings account, or deposit certificate, the bank deems these deposits to be liabilities.
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