17 Questions
What types of deposits do depository institutions accept?
Savings, current, and time deposits
Which of the following is NOT considered a depository institution?
Investment banks
What type of bank is considered the biggest in terms of assets, loan portfolio, and revenue?
Universal bank
Under which law are banks authorized to operate in the Philippines and regulated by the BSP?
General Banking Law of 2000
Which bank classification has the widest scope of banking activities authorized by the BSP?
Universal bank
What additional activities can a universal bank perform apart from ordinary banking services?
Perform underwriting activities
What is the main function of a commercial bank?
Accepting deposits and providing commercial loans
What types of deposits do savings and loan associations typically accept?
Savings, current, and time deposits
Which of the following institutions is NOT classified as a depository institution?
Investment houses
What is the main function of savings and loan associations as described in the text?
Accepting deposits from individuals and corporate entities
In terms of banking activities, what distinguishes a savings and loan association from a commercial bank?
Accepting different types of deposits
Which of the following institutions is typically authorized to involve in underwriting activities?
Universal banks
What distinguishes trust companies from savings and loan associations?
Engaging in underwriting activities
Which type of bank typically has the most number of branches nationwide and abroad?
Universal bank
Which depository institution is known for its focus on providing commercial loans?
Banks
What additional activity is a universal bank authorized to engage in according to the text?
Engage in underwriting activities
Which type of bank is known for offering investment products in addition to regular banking services?
Universal banks
Study Notes
Types of Financial Institutions
- Savings and Loan Association: accumulates savings of members and stockholders, uses them for loans or investments in productive enterprises.
- Trust Company: acts as a fiduciary agent or trustee on behalf of individuals or corporate entities, manages and administers property for a fee.
- Credit Union: a financial depository institution controlled and operated by its members, extends credit to members, offers competitive interest rates, and promotes thrift.
- Thrift Bank: accumulates and invests savings of depositors, provides working capital to businesses, and offers diversified financial services to individuals and small and medium enterprises.
Rural and Cooperative Banks
- Rural Banks: privately owned and managed, provides basic financial services to people in rural areas, targets farmers who need financial help in agriculture.
- Cooperative Banks: organized and owned by cooperatives or a federation of cooperatives, provides financial services to people in rural areas.
Islamic Bank
- Aims to promote and accelerate socio-economic development of the Autonomous Region of Muslim Mindanao.
- Performs banking, financing, and investment operations based on Islamic concept of banking.
- Establishes and participates in agricultural, commercial, and industrial ventures.
Key Features
- Islamic Bank: subject to the basic principles and rulings of Islamic Sharia Law.
- Trust Company: performs custodial tasks such as asset management, ownership registration, stock transfer, and custodial arrangement.
- Credit Unions: have limited banking services compared to universal banks.
- Thrift Banks: include savings and mortgage banks, private development banks, and microfinance thrift banks.
- Rural and Cooperative Banks: target markets are farmers who need financial help in agriculture.
Explore the principles of Islamic Sharia Law governing all business dealings of an Islamic Bank, the functions of a savings and loan association, and the role of trust companies in the financial sector.
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