Financial institution

Definition :

Entity that Receive deposits and Make loans and provide Financial services and the difference between
interest on borrower and interest on lender is bank profit .

Categories :

1. Depository
Accepts deposit and stores them

- Credit unions
- Retail and commercial bank
- Saving institution
- Central bank

2. Non-Depository
Isn’t allowed to accept demand deposit

- Insurance company
- Pension funds
- Finance Company
- Non bank Financial institution (NBFI)
-

Roles performed :

1. Regulation of Monetary Supply

2. Investment advice
3. Bank services
4. Capital Formation
5. Insurance services
6. Act As a Government agent for Economic growth.

Importance :

- Act As intermediat Between both lender and borrower

- Making loans
- Creating Money
- Transmitting Monetary policy
Advantages :

- Employment Generation
- Provide Funds
- Infrastructure promotion
- Good Credit creation
- Help in Economy development

Disadvantages :

- Complex processes
- High Fees
- Limited access
- Criteria
- Customer service and systematic issues

Banking services :

- Individual Bank ( retail , consumer Household segment ) :

• Checking account , Saving account, dr , Cr cards , insurance services , Wealth

management

• Customer Segment :
- Prime ( From 0 k )
- Plus ( From 200 k )
- Wealth (From 1 M )
- Private ( From 20 M )

- Digital banking :
E- statements , Text alert , Transfer

- Business banking
Loan , merchant services , treasury services

- Loans
Personal Loan , Auto Loans , Home Loan , business Loan
CIB Services :
- Saving and checking accounts
- Current accounts
- Cr cards Time deposits
- Certificate
- Loans

Risks Facing Fin. Institution :

- Credit risk
- Operational risk
- Liquidity risk
- Market risk
- Reputation risk

Liabilities of individual Bank:

- 1. Accounts :
•Why : safety , A means of identification between the bank and the customer , Accessibility ,
interest on Account , provide Liquidity .

• Documents :
Valid National ID , Income proof , Signing Banking Form ( KYC , Dr card Form , Account opening
Form )

• Types :
- Saving Accounts :
Available for individual only
Have Interest
No minimum Age
Solutions ( Savers , Everyday Savers , bedaya , Care , joint , senior citizen , Minor )

- Current Accounts :
Available for individual and corporate
Available check book
Min. Age 21
Solutions ( classic current , senior citizens , joint )
 - 2. Certificate of deposit ( CDs)
- Must open Account
- Individual and business bank customer
- Eligible for secured Facilities
- Interest More than TDs and can be fixed or floating ir cumulative
- Medium and long interest
- Term 3 , 5 , 7 , 10 Years

- 3. Time deposit :
- Must open Account
- Individual and business bank customer
- Eligible for secured Facilities
- Interest+ liquidity
- Short / medium interest
- Term 1 week – 2 Years
- Interest less than CDs and fixed

- 4. Mutual fund :
Type of financial tool made up of a pool of money collected From many investors to invest in securities
like Stock , Bond , Money market

- Why :
Diversification
Professional Management
Liquidity
High return

- CIB Funds :
General features :
- Open ended Funds
- EGP currency
- The name of fund is not an indication for type of its investment

Type of investment:
- Low risk ( safe ) :
Osoul and thabaat fund
- Medium risk :
Hemaya and Takamol fund
- High risk :
Islamic and Aman Islamic fund
Assets :
- Customer age Star from 21
- Customer pay fees and interest
- I-score check is a must

1. Loans :
- Personal :
• Why : amount starting from 5000 : 3 M up to 8 Years and can ve secured or unsecured

- Car finance:
• Why : zero down payment

- Mortgage :
• why : special interest rate , Repayment period up.to 20 years , loan amount starting from
120,000 to 5 M , Unsecured loan only

2. Overdraft ( OD line ) :
• why : Easy access , Backup plan , No installment, interest upon utilization

• Brograms :
- Secured Overdraft ( SOD)
- Revolving Overdraft ( ROD)
- Unsecured Overdraft ( UOD)

3. Credit Cards
- Debit
- Credit
- Prepaid

Financial inclusion:
Mean that individuals and businesses have access to useful and affordable financial products
and services that meet their needs with high Quality and low cost
• Target segments :
- Youth ( 16 : 35 )
- Women
- Farmer
- People with special needs
- Entrepreneur

• impact on :

- Individual:
- Improve the standard of living
- The ability to save

- Socity :
- Improve the Economy

- Bank :
- Increase No. Of base like customer

• Strategic Pillars :
- Consumer protection and Empowerment
- Financial literacy
- Building a proper infrastructure
- Simplified on boarding process
- Increasing degital services
- Geographic Expansion
- Encourage Entrepreneurship and Start up by powering non Financial services

• CIB ‘s Role :

- Create The value proposition

- Tailoring product ( Smart Wallet , Meeza , bedaya )
- Expand Presence ( Aman , Fawry )
- Financial literacy