FIN370 Chapter 4.1 Loan and advances

Which is NOT an example of loan and advances?

• Outport Checked Purchased

• Housing and personal loan

• Current Account

• Overdraft

What is Overdraft?

• A facility provided by the bank to withdraw cash from an ATM

• A facility provided by the bank to deposit cash into the account

• A facility provided by the bank to withdraw more money than is available in the account

• A facility provided by the bank to transfer money to another account

Which is FALSE about overdraft?

• Allows an account holder to withdraw more

  money than they have available in their account

• A long-term solution for covering

  unexpected expenses

• Can be either arranged (pre-approved) or unarranged (not

  pre-approved)

• a type of credit facility provided by a bank or

  financial institution

Interest rates on overdraft financing can be (a)   than other forms of financing.

• higher
• lower

The credit limit for an overdraft is typically determined by the bank based on the

• bank's availability of money

• account holder's money in the bank

• the bank officer's discretion

• the borrower's

  creditworthiness

What is the collateral requirement for Overdraft?

• Collateral is not required

• Collateral in the form of property, stocks, or bonds is required

• Collateral in the form of gold is required

• Collateral in the form of a guarantor is required

What is Outport Cheque Purchased?

• A facility provided by the bank to purchase cheques drawn on a local bank

• A facility provided by the bank to purchase post-dated cheques

• A facility provided by the bank to purchase government cheques

• A facility provided by the bank to purchase cheques drawn on an outstation bank

Which is FALSE about Outport Cheque Purchased?

• The bank must wait for the cheque to be cleared through the other bank

• Is a banking service where a bank purchases

  a cheque drawn on a bank outside of its local area

• purchasing an outport cheque can be seen as a

  way of obtaining or providing short-term credit

MICR Code in cheque stands for?

• Magnetic Ink Character

  Recognition

• Magnetic Ink Code Recognition

• Malaysian Ink Character Recognition

• Magnetic Ink Code Receiver

We can apply for fixed loan to finance the purchase of :-

• Car

• Home

• Consolidating debts

• Funding a small business