Make Your Online Banking Experience Better Using These 4 Things

Today, online banking offers an efficient and convenient way to help manage finances. In today’s busy world, finding yourself short on time can have a negative impact on your financial situation if you don’t have time to drive to the bank. These concerns are addressed when you bank online which allows you to take care of whatever your banking needs are at pretty much any time that is convenient to you, day or night. Use online services to streamline your banking and make the experience of monitoring your finances an enjoyable one. The following considerations can help you get the most out of your experience:

– Set-up Online Bill Pay. Being able to pay your bills online directly from your banking account is perhaps one of the best perks when you bank online. Take a few minutes to enter the required information for each creditor or company you intend to pay directly from your bank account. After that, paying bills each month will require only a few minutes of your time.

– Follow Safe Internet Banking Practices. Banking online is very secure, but there are practices you can follow to ensure account security. Make sure your account password is “strong” by creating one that includes a combination of characters that won’t be easily figured out. Be sure to log-out after your banking session, especially if you need to conduct your banking on a public computer.

– Connect On-the-Go. Most banks with online bank services also offer mobile apps for your smart phone. Mobile banking extends the perks and advantages of banking online by providing you with quick and easy access to your account while you’re away from your computer.

– Take Advantage of Increased Communication. Signing up for text messaging and email notifications if available increases your level of communication that you have with your bank. Rather than wait for a monthly statement, you can often be notified of payment confirmations and other transactions. Increased communication, notifications and alerts allow you to focus on and enjoy your life, rather than being stressed out about your finances.

Another benefit you will receive when you bank online is the fact that it’s an environmentally responsible action that eliminates a lot of wasted paper and clutter. The advantages of online banking benefit everyone, and when you take full advantage of all the services and perks offered you can easily create a banking experience that’s easy, effective and enjoyable. You will find that using online banking services gives you the opportunity to work with your bank to give you the best overall banking experience possible.

Banking Regulations Play a Vital Role in Getting Banks Back on Track

Initially, banks were known to be in the business of making loans and gathering deposits. They were held in high esteem in the eyes of common man as well as the federal government. Years before the economic meltdown that occurred in 2008, bankers exchanged their slow but steady business in order to obtain financial gains and trading profits at a faster rate. But, with the changing economy, political policies, federal regulations, and banking regulations in the United States, today you find that banks are now in the business of making trades and collecting fees.

Traditional banking plays a vital role in the nation’s economy. Banking used to make the society wealthier over time by collecting idle cash and lending it to borrowers who can engage it in productive work. Though this is risky business plan, considering the smaller foundation of bank capital used to support an enormous structure of deposits and loans, the onset of federal deposit insurance and closer inspection lead to stability for decades until the latest economic meltdown.

Today, being an efficient American banker means living under the thumb of banking regulators who follow banking regulations and demand that you to lend money at significantly low rates of interest, while trying to stay away from making bad loans which would reduce the capital and engage the need of a federal bailout. Bigger banks have greater pressures when handling finances as the risks increase.

For several banks, depositors have become a nuisance, unless its a huge deposit and a reasonable amount of money is charged for it. A responsible banker needs to track their money and hold a part of it in cash in order to meet the withdrawal demands. When you need to lend money, it is quintessential to generate reams of paperwork in order to show it to your seniors. If things go unfavorable for borrowers, you may be accessed for predatory lending.

Today, the post-recession economy in the US is having issues gaining steam. One of the major reasons for this drawback is the anti-lending bias in the banks these days. But, lately, banking regulations and regulators have started to pressure banks to surrender a few of their newer revenue sources. This inspires banks to find new and productive techniques to make money in the short term, but these demands may lead the banks back to practicing their old techniques of managing business for better profitability.

One of the major areas where banks experience restraints in an effort of generating fee revenues is overdrafts. Banking regulations in the United States issued by the Federal Reserve Board in 2009 prevents banks from generating debit card or ATM withdrawal charges. Banks have the right to charge customer fees on the overdraft only with the consent of the customer. Since several individuals are liable for these charges, research reveals around 15 million Americans overdraw their bank accounts more than ten times every year, each time paying overdraft charges ranging from $25 to $35. This enables banks to incur a substantial amount of revenue and growth.

Following banking regulations and federal government’s modifications in these regulations will enable banks to prosper and grow considerably. It ensures depositors and customers financial security which allows a greater number of people to rely on banks to secure their finances.

Bank Secrecy In Cyprus

Banking is one of the most important sectors of the economy since it influences investment and consumption. Confidentiality is a cornerstone element of an effective and efficient bank system. In Cyprus, bank secrecy is regulated by section 29 (1) of the Banking Law (66 (I)/97).

According to the provisions of section 29(1), it is prohibited for any member of administrative and management body, chief executive, director, manager, officer and employee of a bank, who has access to the records of the bank with regards to the account of any individual customer of that bank, to give, divulge, reveal or use for his/her benefit any information concerning the account of this client.

Moreover, section 29 (1) clarifies that members of administrative and management body, chief executives, directors, managers, officers and employees of a bank are not allowed to reveal or use any information regarding the accounts of bank’s clients during their employment and after the termination of their employment relationship with the bank.

Nevertheless, following the paragraph 29(2) of Law 66(I)/97, bank secrecy does not apply to some particular cases. An outstanding example of lifting bank secrecy is for public interest reasons.

Precisely, the bank secrecy is revoked if:

  • the customer or his/her personal representatives gives or give his/her or their written consent for this particular purpose;
  • the customer is declared bankrupt or in case the customer is a company, the company is being wound up;
  • legal proceedings are instituted between the bank and the customer or his/her guarantor, regarding the customer’s account;
  • the information is given to the police under the provisions of any law or to a public officer who is duly authorised under that law to access that information or to a court during the investigation process or prosecution of a criminal offence under any such law;
  • the bank has been served with a garnishee order attaching money to the account of the customer;
  • the information is required in the course of his/her duties by a colleague in the employment of the same bank or its holding company or the subsidiary of the bank or its holding company or an auditor or legal representative of the bank;
  • the information is required to assess the creditworthiness of a customer in connection with or relating to a bona fide commercial transaction or a prospective commercial transaction so long as the information required is of a general nature and is not related to the details of a customer’s account;
  • the provision of the information is necessary for reasons of public interest or for the protection of the interests of the bank.
  • the provision of information facilitates the operation of subsections 41(3) and 41(4);
  • the information is given according to section 74 of the Covered Bond Law;
  • the information is provided to the Cooperative Central Bank by a Cooperative Credit Institution connected with it under the section 25A;
  • the information is provided to a system or data exchange mechanism of credit institutions under this Law and directives issued according to Article 41(6);

Confidentiality consists an essential element of the bank-customer relationship. Confidence and credibility are the bases of an effective and efficient banking system. Cyprus legal system protects bank secrecy through the provisions of the Banking Law. In addition to this, breach of bank secrecy and confidentiality lead to substantial penalties. Furthermore, the same level of confidentiality applies to the relationship between the Central Bank of Cyprus and banking institutions operating in the Republic of Cyprus.

How to Confirm an Internet Banking Company is Legitimate

When you set up your first internet banking account, you may have reservations about it. After all, anyone could set up a website, claim to be a bank, and fraudulently take your money. There are some precautions you can take to be sure your online bank is a legitimate one.

Start by going to the bank’s website. There, you can get the information the bank gives you about their banking credentials. The bank’s official name should be listed. There may be articles describing the history of the bank, including their internet banking history.

There should be an address where the headquarters can be found. There will be a base of operations somewhere, even if it is a virtual bank internet banking operation. If they are on the up-and-up, they will not be hesitant to tell you about their FDIC coverage.

It is easy to check a bank’s FDIC insurance. If you see the words “FDIC Insured” or “Member FDIC” or the FDIC logo, you might be on the right track. However, it is wise to go a step further. Go to the source to find out if the internet banking company is really affiliated with the federal insurer.

The FDIC has its own data base that includes all of the banking institutions, including internet banking companies that are covered by FDIC insurance. Just go to their “Bank Find” site to find out if your bank is one of them. You can start your search with the name of the bank or its address.

If your internet banking company is on that list, the FDIC will provide you with a whole list of helpful information. You will learn when the bank became insured, and the number on its insurance certificate. You will find out the location(s) of your bank and its official name. You will find out what government entity regulates that bank.

If your internet banking company does not appear on the list, it is time to go directly to the FDIC. They will be concerned with the legitimacy and safety of that bank. It is probably not wise to put your money in an uninsured bank. At that point, it is better to look for another internet banking operation.

Once you do sign up with an online bank, be cautious about how you use their internet banking website. Some unscrupulous people will use the internet to get your banking information. They will do this when you log onto your bank’s website.

The trick these dishonest people use is to set up a website that looks like your bank’s website. They have a URL that is very similar to your bank’s URL. Then, they sit back and wait for you or others to make a mistake typing in your bank’s URL that will get you to them.

From there, the fraudster will track all the information you type into the opening page. They will be able to get your user name, your password, and any other information you type. The best way to make sure you are dealing with your legitimate bank is by being very careful when typing in their site address.

If you are to trust your internet banking company, you must take precautions to assure yourself that it is a respectable business. Once you do that, you can bank with ease.

Lawyer’s Guide to Bank & Mortgage Fraud For the White Collar Criminal Defense Attorney

White collar crimes are serious offenses in South Carolina (SC) and throughout the United States (US). A white collar bank fraud or mortgage fraud criminal conviction can have life altering consequences for those defendants convicted of the same. If a client is under investigation for, or has been indicted or otherwise charged with, the white collar crime of bank fraud or mortgage fraud, a practitioner should be familiar with the basics of bank fraud and mortgage fraud jurisprudence.

The Federal Bank Fraud Statute, 18 U.S.C. 1344, generally provides that whoever knowingly executes, or attempts to execute, a scheme or artifice to defraud a financial institution or to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises, shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

While the two subsections of 18 U.S.C. 1344 proscribe slightly different conduct, a person may commit bank fraud by violating either subsection. Courts have ruled that the two subsections of 18 U.S.C. 1344 are in the disjunctive, so that an individual may commit bank fraud under the first provision by defrauding a financial institution without making the false or fraudulent representations required by the second provision.

The criminal law elements of a violation of Section One of the Federal Bank Fraud Statute which must be contained in an indictment and must be proved by the government beyond a reasonable doubt are as follows:

(1) The defendant knowingly executed or attempted to execute a scheme or artifice to defraud;
(2) The defendant did defraud or attempt to defraud the financial institution;
(3) The defendant used a material misrepresentation or concealment of a material fact as part of the scheme or attempted scheme;
(4) The financial institution was insured or chartered by the federal government.

Federal courts have reversed bank fraud convictions for failure of the indictment to allege the element of a material misrepresentation of fact.

The criminal law elements of a bank fraud violation of Section Two of Federal Bank Fraud Statute which must be contained in an indictment and must be proved by the government beyond a reasonable doubt are as follows:

(1) The defendant knowingly executed or attempted to execute a scheme or artifice to obtain the money (or other property) owned by, or under the custody or control of, a financial institution;
(2) The defendant used materially false or fraudulent pretenses, representations, or promises in the execution or attempted execution of the scheme;
(3) The financial institution was insured or chartered by the federal government.

The Supreme Court has defined a matter as “material” if a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question. The Second Circuit Court of Appeals has defined a material misrepresentation as one capable of influencing a bank’s actions. While the issue of materiality used to be considered a legal question, federal courts have now ruled that materiality is a question which must be submitted to the jury and not decided by the judge.

With regard to the Federal Bank Fraud Statute, a “financial institution” includes an FDIC insured depository bank institution, a federally insured credit union, a federal home loan bank or a member, a Farm Credit Bank, a small business investment company, and a Federal Reserve bank.

The government is not required to prove an actual loss to the financial institution so long as there is evidence that the defendant intended to expose the institution to such a loss.

The term “scheme or artifice to defraud” includes a scheme or artifice to deprive another of the intangible right of honest services, and the phrase has been broadly construed by the courts. It generally requires that the defendant act with the specific intent to deceive or cheat a bank for the purpose of getting financial gain for one’s self or causing financial loss to the bank. The term ‘scheme to defraud,’ however, is not capable of precise definition. Fraud instead is measured in a particular case by determining whether the scheme demonstrated a departure from fundamental honesty, moral uprightness, or fair play and candid dealings in the general life of the community.”). Depending on how a bank fraud is charged in an indictment, a scheme involving checks may or may not constitute a bank fraud. United States v. Brandon, 298 F.3d 307 (4th Cir. 2002) (stolen and forged checks constituted bank fraud); United States v. Celesia, 945 F.2d 756 (4th Cir. 1991) (check kiting scheme constituted bank fraud); United States v. Orr, 932 F.2d 330 (4th. Cir. 1991) (check cashed on insufficient funds account did not constitute bank fraud).

An attempt or conspiracy to commit bank fraud is subject to the same criminal penalties as the substantive bank fraud. 18 U.S.C. 1349 provides as follows: Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.

The statute of limitations for a federal bank fraud case is 10 years.

There are a number of other federal statutes prohibiting fraud against banks or other similar financial institutions, including, but not necessarily limited to, the following: 18 U.S.C. 1004 Certification of checks; 18 U.S.C. 1005 Bank entries, reports and transactions; 18 U.S.C. 1006 Federal credit institution entries, reports and transactions; 18 U.S.C. 1007 Federal Deposit Insurance Corporation transactions; 18 U.S.C. 1013 Farm loan bonds and credit bank debentures; 18 U.S.C. 1014 Loan and credit applications, renewals, discounts and crop insurance; 18 U.S.C. 1029 Fraud and related activity in connection with access devices; and, 18 U.S.C. 1032 Concealment of assets from conservator, receiver, or liquidating agent of financial institution.

Sentencing regarding federal bank fraud violations is generally governed by the statutory factors set forth in 18 U.S.C. 3553(a), and Section 2B1.1 of the United States Sentencing Guidelines, which are now considered advisory and not mandatory. The statutory factors a federal court must consider in imposing a sentence are the nature and circumstances of the offense and the history and characteristics of the defendant, the need for the sentence imposed to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense, the need to afford adequate deterrence to criminal conduct, the need to protect the public from further crimes of the defendant, the need to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner, the kinds of sentences available, the sentence recommended by the Sentencing Guidelines and any applicable guidelines or policy statement therein, the need to avoid sentence disparities, and the need for restitution. Generally, Section 2B1.1 of the Sentencing Guidelines, bank fraud sentences are tied to the amount of money lost, or the intended loss, pursuant to the bank fraud scheme. Usually, the more money which is lost in a bank fraud scheme, the longer the sentence of imprisonment.

There is a South Carolina bank fraud statute which parallels the federal statute. South Carolina prohibits bank fraud, which is a Class E felony with a penalty of up to ten years imprisonment and/or up to a $10,000 fine. S.C. Code Section 34-3-110 provides as follows: (A) A person knowingly may not execute, or attempt to execute, a scheme or artifice to: (1) defraud a federally chartered or insured financial institution; or (2) obtain monies, funds, credits, assets, securities, or other property owned by or under the custody or control of a federally chartered or insured financial institution by means of false or fraudulent pretenses, representations, or promises. (B) A person who violates the provisions of subsection (A) is guilty of a felony and, upon conviction, must be fined not more than ten thousand dollars or imprisoned for not more than five years, or both.

The criminal law elements of a bank fraud in violation of South Carolina Code Section 34-3-110 which must be contained in an indictment and must be proved by the government beyond a reasonable doubt are as follows: The defendant knowingly executes or attempt to execute a scheme or artifice to defraud; or to obtain by false or fraudulent pretenses or promises assets or other property owned by or under the control of a federally chartered or insured financial institution.

A white collar criminal defense attorney must have an understanding of the basics of the federal and South Carolina bank fraud statutes and case law precedents in order to adequately represent clients who have been charged with bank fraud violations.

© 2010 Joseph P. Griffith, Jr.

How I Setup My Business Bank Accounts

Breaking down the process into small individual tasks

The small tasks involved in starting a new business can often times add up to become a seemingly overwhelming process when looked at in their entirety. It is important to remember that most of these tasks really are small, and looking at them as such makes things seem a lot easier. In this article I will focus on what I looked at in my situation in order to setup my business banking accounts.

Prior to setting up my banking accounts

To get to this point I had to complete a series of other small tasks in order to have everything ready for setting up my business banking accounts. This included setting up my business address, completing my limited liability company paperwork and receiving my LLC paperwork back from my state’s secretary of state office, and applying for and receiving my Federal Employer Identification Number from the IRS.

Since at this point in my business creation I do not have any real income being generated, I needed to keep all my initial expenses as low as possible. In this case it means finding a business banking structure that will not have excessive fees and preferably have no fees at all. The last thing I want right now is to spend money setting up my business on things like recurring unnecessary banking fees.

What I needed in a business banking account

I started out with a little research using the internet on what was required to setup business banking accounts. There is quite a lot of information available which can be easily found, so I will just document my steps in the decisions I made for my particular setup. There were a few things besides low monthly fees that I wanted from by business banking account.

1. A local convenient branch location

2. A national chain with many locations

3. A good on-line banking service

4. The ability to add on a multitude of business services down the road

5. Low or no recurring monthly business banking service charges

A convenient branch location

The good news is that I was able to find all of these things in my community. I needed a local convenient branch location because I do not want to have to travel all over the place to perform my banking tasks. This is a matter of time-management for me, and in the past I have chosen poorly with personal bank accounts because I thought I would do most everything on-line and not really need something close or more convenient. While I do perform most of my personal banking on-line, I still find myself wishing I had chosen a closer bank when there are times I needed to physically go to the bank. Depending on the types of deposits I will need to make, I envision myself needing to physically go to my business bank in the future much more than I need to for my personal banking needs.

A national chain with many locations

I wanted to choose a national bank with many branch offices because if I decide to personally relocate or setup a business in another location, the chances of having a local branch of the same bank is much more likely with a larger national financial institution. This would mean I would be able to keep the existing accounts with the same bank and not have the hassle of starting over with new accounts at a different bank in order to maintain the same convenience of having a close branch location.

A good on-line banking service

Having a very good on-line banking service is definitely one of the major considerations I had in choosing my bank. In today’s day and age, I want and expect very good on-line banking services including on-line bill pay, statements, account funding transfers, consolidation of all accounts into a centralized site for easy viewing, and most importantly built in functionality to download my accounts easily into financial software such as Quicken or Quickbooks.

The ability to add on a multitude of business services down the road

The ability to add additional business banking services or having a business bank which is easily scalable was also a consideration I had concerning the bank I would choose. This is an area which was not the highest priority at this time because I figured that if the bank I chose met the other qualifications then they would also have the ability to easily scale my business accounts to meet the needs of my business down the road. Merchant services and other business financial services would be some of the things I envision needing in the future.

Low or no recurring monthly business banking service charges

Last on my list would be one of the most important considerations I was having at this point early in my business setup. Low or no recurring monthly business banking service charges with the need to only maintain a low balance in my business banking accounts is a must at this time. I would not be opening my accounts with a lot of money, and I did not want what money I was depositing into my accounts to be eaten away at by service fees. I needed an account that would allow me to have a low minimum balance at the same time avoiding as many fees as I could. Many banks have accounts with no minimum balance requirements and no monthly fees for personal banking accounts, but this is usually not the case with many business banking accounts.

So how did I do?

I ended up opening a business banking account with Chase Bank. They had a convenient branch location close to my home and right across the street from my business UPS Store mailbox, which incidentally is my official business address at this point (See my article on Getting My Business Address.) They met my listed criteria for convenience, and also are a well recognized national financial institution with many branch offices throughout the nation. This means the likelihood of finding another branch close to me if I chose to relocate is much greater. They have a very rich on-line banking service that met all of my requirements for on-line banking abilities, and easily integrated with my Quicken software. They offered many business financial services which were available to me, but at this time I do not require them. It is nice to know I can get these services in the future with them. Most importantly, they were able to structure my accounts so that I do not have any monthly service fees or minimum balance requirements, NONE!

How did I avoid fees?

They had a program where I could open a business classic checking account which would normally have fees unless I maintained an account balance that was more than I would have been maintaining. I could avoid the fees by applying for a business credit card account and linking it to my business checking account. As long as I made at least one transaction a month on the business credit card account then I would not have any business checking account fees. I know the question many will be asking. What about the business credit card fees? Well I made sure the business credit card did not have any annual fees or other hidden fees also. It did not. Believe me I asked many times. There were also other benefits to having a business credit card which initially I did not place as much value on. These benefits included establishing a credit rating for my business which was independent of my personal credit history. This is important because in the future, the business may one day be able to obtain loans without personal liability of the loans by me for the business. Another benefit of having a business credit card is better protection for on-line purchases and fraud when using a credit card versus using a debit card on-line.

Making sure I have at least one transaction a month on my business credit card was easy enough. I simply set-up my internet hosting provider to use my business credit card for the monthly hosting fee of the business. This ensures that even if I choose to use my checking account checks or debit card, which was also free of fees, I will always have at least one charge on the credit card to meet the bank’s requirements for waving all of my business accounts’ service charges. Not a bad deal in my opinion.

What paperwork did I need to setup my accounts?

First I have to say the customer service for setting up my business banking accounts was top notch! I just walked in to the branch office without any appointment and a representative from the business banking department met with me immediately. I made it clear from the beginning that I was small-time when it came to my business at this point. They still treated me like I was a larger business. They took the time to explain everything and answered my many questions. I was approved on the spot for a business credit card with a very nice limit. I plan to never even carry a balance on the card, but it was nice to see I qualified for a respectable line of business credit.

All I needed to set-up my accounts were my personal identification, the employer identification number I received from the IRS, the certificate of filing from the Office of the Secretary of State from my state, and my LLC operating agreement. All of these documents, except for the personal identification of course, were part of the LLC package I received when I filed for my LLC using LegalZoom.com. Everything was in order and I had everything with me to complete the task without having to make any additional trips to the bank for further documentation.

Conclusion

By breaking down the tasks involved in setting up a business, you can decrease the seemingly complicated event by making it merely a series of small uncomplicated steps. In this step of setting up my business banking accounts, I knew what I wanted to accomplish and what I needed before I ever walked into a bank. By having my paperwork in order and by doing a little homework before hand, I was able to complete this task without it being a headache or a frustrating event.

Which Factors Determine the Profitability and Liquidity of Banks?

• INTRODUCTION:
A commercial bank is a business entity that deals in banking with a view to make profits. Every commercial bank aims to make profits in such a way that it does not compromise on its objective of liquidity, which is vital for its own security and safety.

• Meaning:
Since a commercial bank has to make profits in such a way that its liquidity remains intact, it diversifies its funds into various assets. A well – diversified and balanced asset portfolio ensures its sound and successful working. Various factors play an important role in determining the profitability and liquidity of commercial banks. These factors are taken into consideration while creating the asset portfolio of the banks.

• EXPLANATION:
A) FACTORS AFFECTING THE PROFITABILITY OF COMMERCIAL BANKS:

1) Amount of working funds:
Funds deployed by a bank in profitable assets are the working funds of the bank. Profitability of a business is directly proportionate to the amount of working funds deployed by the bank.

2) Cost of funds:
Cost of funds are the expenses incurred on obtaining funds from various sources in the form of share capital, reserves, deposits, and borrowings. Thus, it generally refers to interest expenses. Lower the cost of funds, higher the profitability.

3) Yield on funds;
The funds raised by the bank through various sources are deployed in various assets. These assets yield income in the form of interest. So, higher the interest, greater the profitability.

4) Spread:
Spread is defined as the difference between the interest received (interest income ) and the interest paid (interest expense ). Higher spread indicates more efficient financial intermediate and higher net income. Thus, higher spread leads to higher profitability.

5) Operating Costs:
Operating costs are the expenses incurred in the functioning of the bank Excluding cost of funds, all other expenses are operating costs. Lower operating costs give rise to greater profitability of the banks.

6) Risk cost:
This cost is associated to the probable annual loss on assets. They include provisions made towards bad debts and doubtful debts. Lower risk costs increase the profitability of banks.

7) Non – interest income:
It is the income derived from non – financial assets and services It includes commission & brokerage on rencittance facility, rent of locker facility, fees for underwriting and financial guarantees, etc. This income adds to the profitability of banks.

8) Level of technology:
Use of upgraded technology normally leads to decline in the operating costs of banks. This improves the profitability of banks.

9) Level of Non – performing assets (NPAs):
The profitability of a bank is inversely related to the level of NPAs. Hence, over the years, the NPAs of commercial banks have greatly declined.

10) Level of competition:
Increase in competition generally leads to higher operating costs. This leads to lower profitability.

B ) FACTORS DETERMINING THE LIQUIDITY OF COMMERCIAL BANKS:

1) STATUTORY REQUIREMENTS:
The extent of liquid reserves held by banks depends on the statutory requirements of the Central Bank (i.e. the RBI) According to RBI, commercial banks have to maintain a certain CRR(cash Reserve Ratio ) and SLR (statutory liquid ratio) Higher CRR and SLR result in lower liquidity.

2) Banking Habits of the people:
The nature of the economy has an impact on the banking habits of the people. In developing countries, cheque transactions are confined to business. Individuals depend more on cash transactions Hence, the need for liquidity is comparatively higher.

3) Monetary transactions:
The number and magnitude of monetary transactions determine the liquidity of banks. Higher monetary transaction lead to higher liquidity.

4) Nature of Money market:
In case of fully developed money markets, banks buy and sell securities easily. Therefore, liquidity requirement is lower.

5) Structure of Banking system:
Branch banking system requires lower liquidity since cash reserves can be centralized in the head office. Unit Banking System requires higher degree of liquidity.

6) Number and size of Deposits:
The number and sized of deposits influence the liquidity of banks. Increase in the number & size of deposits will require higher liquidity.

7) Nature of Deposits:
Deposits trade with the banks are of various types like time deposits, demand deposits, short – term deposits, etc. larger demand deposits /short – term deposits need higher liquidity

8) Liquidity Policies of other banks:
Various banks may function in the same area So, liquidity policies of other banks also have an impact on the liquidity of a bank to build goodwill among depositors.

• CONCLUSION:
THUS, various factors determine the liquidity and profitability of commercial banks. So, these factors are taken into consideration while creating the asset portfolio of commercial banks. These factors influence the reconciliation of profitability and liquidity that leads to a sound and successful banking system.

How to Open an Offshore Bank Account As an American

With the world in chaos and bankrupt governments everywhere dreaming up new schemes to get their hands on your hard-earned money, more and more people are looking offshore for a place to move some of their assets.

I don’t encourage you to sit around and wait for some three-letter agency to swoop in a decide to dip into your retirement funds or bump up your tax rates or devalue your money by firing up the printing press. In a connected world, opportunities out of your home country are everywhere, and to make the most of your money and your freedom, you should explore those options.

There’s nothing illegal about having an offshore bank account. At least for now. While Hollywood has created a scene where those who bank out of the country are briefcase-carrying criminals or guys in Tommy Bahama shirts flying prop planes onto tiny island landing strips, nothing could be further from the truth. Your government doesn’t want you to move money to another country because it makes it more difficult for them to tax.

When I said it’s not illegal “for now”, I mean that you can never tell when things will get so bad that any loose change that can be grabbed to prop up a failing country will be grabbed without a second thought. The debacle in Cyprus has shown us just how desperate things could become. Sure, the EU can spin it as a tax on the Russian mob, but you know the government will always make up an excuse for their dirty deeds.

As an American, you’re at a disadvantage thanks to FATCA – the Foreign Account Tax Compliance Act. Washington wants you to believe that the only people keeping their money offshore are rogues and scoundrels. Never mind the six million Americans living and working in other countries. As such, they’ve imposed a draconian set of rules on foreign banks, basically making them as well as their sovereign governments a bunch of tattletales for the IRS. Some banks have given up on Americans altogether. But there is still hope.

First, put out of your mind the idea that “offshore” means somewhere where you can sit on a shore. Islands with crystal blue waters are not high on my list of offshore jurisdictions. If you’re an America, anywhere out of the United States is an offshore jurisdiction. Think Hong Kong, Singapore, Chile, and so on. While it is also associated with offshore banking, Switzerland is no longer available to Americans, thanks to IRS crackdowns there that have led most banks to shun US citizens.

Second, know that the days of numbered bank accounts and intense secrecy are over. Just ask the millionaires who got turned over to the US government. There are several short forms you will need to fill out each year, one with your tax return, another sent in separately. If you’re a US citizen or resident, you must declare any accounts – or combination of accounts – with a value of at least $10,000 at any time during a calendar year.

Third, focus on your goals. Once you’ve moved beyond the cliches and propaganda about offshore bank accounts, you can focus on what you really want. No, you’re not going to be able to hide a bunch of money from the tax authorities. Yes, you will have to pay tax at home on any interest you earn. But while your account won’t be a secret to your home government, you will have separation from them. Some bureaucrat with a fat finger won’t be able to freeze your account with one keystroke. It will be harder for an ambulance chaser to get at. And while you will have to pay tax in the US on interest earned, that interest rate could be double, triple, or even fifteen times higher than what you’re earning now.

Determine what you’re looking for in a bank account. Do you want a simple place to store savings away from the grubby hands of your local government? Do you want to hold part of your money in a different currency or currencies to diminish your sovereign risk? Do you want to earn a higher interest rate or benefit from appreciation of a foreign currency? Or do you want sophisticated wealth management tools and private bank service?

Fourth, once you know what you’re looking for, find the right environment for you. The good news is that most of the goals above can be had with just about any offshore account. Just having a portion of your assets out of your home country gives you more freedom. If the government here goes Argentina on you and imposes capital controls, you’ll have a nest egg you can access somewhere else. Any good offshore bank will give you a debit card to access your cash, as well.

Unlike in the United States, most foreign banks offer accounts in a multitude of currencies. Think the Australian dollar will go up thanks to a resources boom? No problem; you can hold it in your account. With most banks, you can swap out to another currency later if you change your mind. You can often times hold multiple currencies in the same account at once.

In Andorra, for instance, you can actually write checks in any currency the banks offers. If you need that kind of flexibility, Andorra is a great place to bank. It’s also one of the most stable jurisdictions in the world, with liquidity and capital ratios that blow away the US or most other “safe” banking jurisdictions. Banks are locally run by banking families that provide personalized service.

Because offshore banks offer multiple currencies to bank in, you can also choose your interest rate. While rates in the US are near zero, making savers suffer, rates in Australia and New Zealand are much higher. The governments there didn’t play the race-to-the-bottom game that their western counterparts did. Banks both in Australia, and those offering Australian dollar deposits, routinely offer near 5% interest rates on savings – even short-term savings – at a time when you’re lucky to get 0.75% in an online account in the US. If you want to branch out to an emerging destination like Mongolia, you can earn up to 15% on your money.

If you like the stability of the US dollar but want higher interest, places like Georgia, a small but economically robust emerging nation in the Caucasuses offers as high as 7-8% interest on medium-term deposits not in their local currency, but in US dollars. Georgia is one of the twenty most economically free countries in the world (the US is tenth) and not a bad place to earn some extra interest.

Fifth, consider the risks. Americans are used to $250,000 in deposit insurance from the FDIC. Some countries, like Mongolia, don’t offer such insurance at all. Others have lower limits, or don’t insure deposits in certain currencies. For the most part, countries around the world have enacted deposit insurance plans of some type to keep peoples’ money safe. But it’s up to you to do the research on each jurisdiction and each bank and determine where you’re most comfortable.

Keep in mind that the FDIC, for example, has less than the equivalent of 0.5% of all bank deposits in its fund. To me, that’s not very safe when you consider how thinly capitalized US banks are. While local banks in Hong Kong and Andorra have very conservative lending practices and high liquidity ratios, US banks get money from the Federal Reserve and go right out and loan it indiscriminately and then come running to the government when things go bust.

The FDIC may pay out if your bank goes bust, but consider the decline in the US dollar over the last few years and over the last decade. The dollar just isn’t what it once was. If the US banking sector had another run of bank failures like it did in the recent recession, you’d see more “Too Big to Fail” type nonsense, and as a result, more money printing to pay off depositors. So you might get your money, but it wouldn’t be worth as much.

Of course, deposit insurance wasn’t of much use in Cyprus, where the European Union basically forced the country to dip into bank accounts – first for 7 to 10%, then for much more – to keep from going bankrupt. Tens of thousands of dollars of your money could have been wiped away in an instant, with no way to get it out as the government kept banks closed until they could figure out just how much of your money to steal.

The good news is that having an offshore bank account isn’t shady, scary or difficult to open. In some cases, you can open one with a couple hundred dollars or even less. In some cases, you have to visit the country, which could be easy if you live near the Canadian border, for instance, or are taking a vacation sometime soon. There are, however, banks in Norway, Gibraltar, the Channel Islands (UK), and elsewhere where you don’t need to visit to open your account. You can do it all through the mail.

When you realize all of the things going on in the world today, you just might wonder why you didn’t look into getting a bank account out of the country earlier.

Offshore Banking – Fiction Vs Fact

FICTION: Offshore banking can’t be that good because they can’t really pay the high interest rates they offer. If they could really pay those rates then U.S. banks would try to be competitive and have the same interest rates.

FACT: Examine closely the financial statements of any U.S. Bank. You will see that their “gross” profits against customer deposits can range from 25% to 40% — but — they have laws written in stone to limit the interest amount they can pay customers on their deposits. The U.S. banks place their earnings into unnecessary frills and non-productive expenditures like fancy buildings etc., while offshore banking facilities don’t do this and share their profits with their customers.

FICTION: Offshore banking isn’t regulated, so you are at risk of losing all money deposited with them.

FACT: The truth is that every country in the free world has regulations, rules and laws governing financial institutions and banks. Those regulations, rules, and laws, however, are much less restrictive than the “protectionist” U.S. banking regulations, rules, and laws and allow the offshore banking industry better opportunity to earn much greater profits for their investors and depositors.

FICTION: Offshore banking facilities are not insured by the F.D.I.C.

FACT: Some of the banks are but not that many. If they are, they must comply with the same protectionist banking regulations and rules as all the other F.D.I.C. insured banks. But, the majority of offshore banking facilities are insured; one way or another.

Depositor insurance programs similar to the F.D.I.C. program have been established in some countries, so that the banks in those countries have their deposits insured. Independent insurance companies insure the deposits of offshore banking facilities in other countries AND unlike the F.D.I.C., insure 100% of the banks deposits; not just those under $100,000. (By the way, some of the banks in the U.S. insure their deposits with independent insurance companies and many banks in the U.S. are not F.D.I.C. insured)

Offshore banking is “self-insured” for the most part which means those banks have a liquidity factor equal to 100% (or more) of the deposits on the books. Those banks have $1 (or more) in liquid assets for every $1 held on deposit. Therefore, there is no bank run because they can cover any depositor demand.

Self-insured offshore banking is actually more secure than F.D.I.C. insured U.S. banking. Why? Because the F.D.I.C. insured U.S. banks are permitted to maintain a liquidity factor equivalent to approximately 10 percent of their public deposits. (Is it any wonder why more U.S. banks fail each year than in any other country?)

Which kind of bank would you feel more safe having your money in? An offshore banking institution which as one dollar in cash for every dollar on deposit, or a U.S. bank which as ten cents in cash for every dollar that shows up on the deposit statement they give their clients?

FICTION: Offshore banking isn’t as big or strong as U.S. banking.

FACT: Of the strongest and largest big banks in the world (in assets), one bank ONLY is located in the United States:

Here are the safest offshore banks in the world, according to a ranking done in 2007 after examining their total assets in US dollars. This ranking is compiled from balance sheet information included on AllBanks.org

1 UBS AG Switzerland 2 Barclays UK 3 The Royal Bank of Scotland Group UK 4 Deutsche Bank AG Germany 5 BNP Paribas SA France 6 The Bank of Tokyo-Mitsubishi UFJ Ltd Japan 7 ABN AMRO Holding NV Netherlands 8 Societe Generale France 9 Credit Agricole SA France 10 Bank of America NA USA

2008/2009 UPDATE AFTER THE FINANCIAL COLLAPSE OF 2008

Germany’s largest bank, Deutsche Bank AG, reported a fourth quarter loss of about $6.3 billion. A year earlier, the bank posted a profit of about $1.3 billion (1 billion euros), Bloomberg reported.

Royal Bank of Scotland is expected to post losses of as high as £1.7 billion.

Bucking the trend is a bank not even on the list above and that bank is Standard Chartered bank which is expecting to post profits of 1.3 billion pounds. I have a contact who can help you open an account at this bank for your company if you desire to do so. The account would be in Hong Kong.

Another bank I know about is rated AAA by an independent rating service and if you are not from the U.S. or if you are from the U.S. and have a foreign LLC or IBC to open the account with then you can deposit $15,000 and get involved in their borrow low and deposit high program which has earned depositors as much as 100% per year on their deposit. It is easy to open an account there.

FICTION: Offshore banking must not be very good, or more facilities would advertise their services in newspapers and magazines in the U.S.

FACT: Offshore banking in general is restricted by law from advertising in magazines, newspapers, radio and on T.V. unless they come under the same protectionist rules and regulations that are placed upon U.S. banks. Knowing that, you should be cautious about doing business with any offshore banking facility that publicly advertises in the U.S. media. Because you can be very sure that they have sold-out to the U.S. banking establishment and that establishment will end up selling you out to those who make the rules.

FICTION: Offshore banking is only for the wealthy.

FACT: About 25 years ago, that may have been true. But I know of about three offshore banking facilities that will allow you to open an account for as little as $500. One of these is in the Asia, another in Europe, and another in Latin America.

FICTION: Opening an account at an offshore banking facility is too difficult, and it is very difficult to get a withdrawal when you need it.

FACT: Opening an account at an offshore banking facility is easy because you just follow the instructions they give to you. Getting your money out only requires a request that you fax or email with an attachment included.

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IT Jobs In Bank

Banks have become the most sought out places to work in with banks expanding not only in the form of increased number of branches, but also in the shape of increased financial services. It is found that with the evolution and development of e-commerce, banks have largely embraced the IT sector with more jobs that play an important role in the effective organizational functioning. IT qualification gives you the opportunity to work in a globally developing banking industry, with even routine transactions like cash withdrawal, deposits, drafts and overall checking being done with the computer enabled technology.

It is worthwhile to note that it is the employment of IT graduates that has helped banks to significantly contribute towards net banking facilities and IT infrastructure that is necessary for growth and development. A graduate in IT; computer science, hardware and software management has made it possible to get competent persons with excellent troubleshooting skills and with a good understanding of internet and intranet operations. It is IT personnel that are specialized to also handle electronic peripherals.

It is again significant to note that banking jobs offer lucrative packages, with some offering attractive medical, leave concession, leave travel and other dental, retirement and pension packages. In addition benefits in terms of loans without interest/very low interests also form attractive benefit packages. The IT jobs in banks are many and it is significant to note that with globalization and development of IT services the scope for IT graduates in banks is going to increase by leaps and bounds.

Technology is something that banks have to embrace and make an integral part; it is technology that helps banks to establish their superiority over other banks and also helps them to bring out quality services and products. An IT graduate with a sound knowledge of hardware and software technology can be easily utilized both as a fresher and experienced job aspirant.

They could be utilized as IT specialists to perform managerial tasks and also provide the technical expertise and assistance for those using these services. These IT specialists also perform the job of making sure to avoid illicit IT usage and also scan them for potential threats both in the hardware and software usage. Further they could become IT managers and be responsible for the administration of the bank’s intranet connections, telephones, VoIP systems and the bank’s local and wide area networks and ensure their proper working. IT managers train the bank employees to use the banking software system and also take care of the systems being updated for efficiency.

The next important job that has been developed by the introduction of IT into banking is Internet banking manager. These specialized people are responsible for ensuring the smooth functioning of the bank products and services that are sold on the internet. These managers also ensure that the e-banking services of the bank are properly developed and implemented. Managers that look into internet banking take care to ensure that the customer’s queries are answered and problems solved to their satisfaction; these managers are assisted in their work by a team of other professionals.

These are some of the important IT jobs in banks that ensure their smooth functioning.