ASSESSMENT # 6 Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: WHAT ARE THE TYPES OF DEPOSITS ACCEPTED BY A RURAL BANK?
EXPLAIN ONE.

There are four types of deposit operation that rural bank usually accepts or offer. These are demand deposit,

savings account, time deposit, and now account.

A savings account deposit is a type of deposit in which deposits and withdrawals are recorded and

documented using a savings passbook. It is open to anyone who is seven years old or older and does not

have a legal disability other than a minority. There are two kinds under this deposit. First, the regular

savings account where a deposit account under the name of a depositor is under regular circumstances. The

second kind is the special savings account wherein a savings account with special features of a fixed or time

deposit and that of ordinary or regular savings account. It is a higher-yielding deposit than regular savings,

but with the option of withdrawals or pre-termination.

QUESTION #2: WHAT ARE THE REQUIEMENTS TO QUALIFY A RURAL BANK TO ACCEPT
DEMAND DEPOSITS?

Acceptance of a demand deposit by a rural bank requires prior approval of the Monetary Board of the

Bangko Sentral. A rural bank applying the authority to accept demand deposits must meet the following

requirements:

1. Its paid-in capital, including the government counterpart capital, must be at least ₱10 million.

2. It must not have incurred any capital deficiency on any day during the six-month period immediately

preceding the date of application for said authority.

3. It must not have incurred any net deficiency in reserves against deposit liabilities in any week during

the six-month period immediately preceding the filing of said application.

4. It must have had profitable operations during the last three years immediately preceding the filing of

said applications.
ASSESSMENT # 7 Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: WHY IS IT THAT PAWNSHOP IS CONSIDERED AS MICROLENDING?

Pawnshop is considered ass microlending as it offer financial services known as microlending. So, how are

they similar? By definition, microlending is the term that refers to the practice of granting small loans to

people or small businesses that otherwise don't have access to financial opportunities or would not qualify

for a loan. On the other hand, pawnshop is a shop or business who loans money to people who bring

valuable items which they leave with the pawnbroker. With that, pawnshops provide credit to low- and

middle-income households that would not have been available otherwise, and they increase competition in

credit markets by providing an alternative source of credit for those who have been denied bank loans.

QUESTION #2: WHAT ARE THE TWO CHOICES OF REPAYMENT?

1. Return to pay the balance, including the loan amount plus all added fees, before the deadline,

which is usually 1 to 4 months after the initial transaction.

2. Don’t return and the pawnshop keeps your item. Aside from losing your item, there are no other

consequences: no collection action and no effect on your credit report. On average. Though 80%

of all customers do reclaim their items, according to the National Pawnbrokers Association.
ASSESSMENT # 8 Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: STATE THE FUNCTION OF THE BUSINESS OF INSURANCE ACCORDING TO

PROFESSOR VANCE?

Insurance is a conditional contract whereby one party undertakes to indemnify another against loss damage

or liability arising from some specified but contingent event. The function of insurance is to reduce your

company’s exposure to the effects of specific risks. These could include physical assets such as your

premises or equipment being damaged or lost, and illness or death of key personnel.

QUESTION #2: IF YOU WERE TO ASK, AT EARLY AGE, WOULD YOU LIKE TO GET

INSURANCE? WHY OR WHY NOT?

Yes. Life is full of uncertainties. We cannot predict what may happen later, tomorrow or in the future. As

much as possible, it is a great deal to invest in insurance. Insurances offer tons of advantages, and as a young

adult, we must not let that opportunity to pass by. It helps us to live with fewer worries knowing we’ll

receive financial assistance after a disaster or accident, helping you recover faster. When it comes to life

insurance, this could mean that our family doesn’t have to move out of the house or that our future kids can

afford to go to college. For auto insurance, it could mean we have extra cash in hand to help pay for repairs

or a replacement vehicle after an accident. Insurance can help keep us life on track, as much as possible,

after something bad derails it.

ASSESSMENT # 9 Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: WHICH TYPES OF INVESTMENT WOULD YOU PREFER? WHY??

There is no such thing that can be called bad investment. It all matters on how you decide and plan to invest

with. Personally, I would rather to invest on property or real estate investment. The benefits of investing in

real estate are numerous. With well-chosen assets, we can enjoy predictable cash flow, as well as we can

take advantage of numerous tax breaks and deductions that can save money at tax time. We can deduct the

reasonable costs of owning, operating, and managing a property. Another advantage of real estate is that we

can leverage our investment, force our appreciation, and most important is that, with real estate, we can feel

secure financially. Despite all the benefits of investing in real estate, there are drawbacks. Still, real estate is

a distinct asset class that is simple to understand and can improve an investor's risk-return profile.
ASSESSMENT # 10 Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: WHAT ARE THE OBJECTIVES AND PURPOSE OF THE CREDIT COOPERATIVES?

The broad objectives of a credit cooperative are to increase the income and purchasing power of the

members, to stimulate capital formation through systematic and continuous savings for development

activities, and to institutionalize cooperative as an instrument for improving the social and economic

conditions of the members. To carry out the primary objectives of the credit cooperatives, the following are

undertaken:

1. Mobilize the small, scattered resources of the members for capital formation.

2. Develop the habit of thrift among its members for capital build-up.

3. Provide loans to its members at reasonable rates of interest.

4. Provide members with information and develop their skills in financial management.

5. Cooperate actively with other cooperatives horizontally and vertically.

6. Provide for the social growth and economic independence of its members.

QUESTION #2: WHY ARE THE MEMBERS OF THE COOPERATIVES POWERFUL?

Being a member of cooperatives doesn’t make you powerful overnight. It was a product of hard work,

patience and long-term self-investment. Before becoming a member, you need to reach or be qualifying for

their requirements. What makes the member of cooperatives powerful and successful is because of their

perseverance. They only reap what they sow. Members of cooperatives have the responsibility to finance

their own cooperative. They also have the responsibility to study well the financial policies presented to

them by the board before approving them.

FINAL EXAM Banking and Financial Institutions

NAME: Tarucan, Jourdanette G.

QUESTION #1: HOW DOES A TRUE COOPERATIVE HELP THE POOR?

A cooperative had a new cooperative development program introduced to encourage the formation and growth of

cooperatives as a tool for increasing the poor's income and purchasing power. When you join the cooperative, you

gain an economic advantage. You may be able to borrow money at a lower interest rate. If you are a member who

owns a business, you can increase your profits by eliminating a middleman. Autonomous cooperatives reach out to the

most vulnerable members of the community, providing opportunities for growth and basic infrastructure that large

corporations totally ignore. areas, particularly those considered rural, are wracked by crippling poverty Cooperatives

are usually stationed here. Cooperatives provide jobs, financial assistance, and other services, and they help to

alleviate poverty in the community.

QUESTION #2: WHERE ARE THE FUNDS OF CREDIT COOPERATIVES POSSIBLY COME FROM? DISCUSS

EACH.

The funds of the credit cooperative should be provided by the members themselves through an organized and planned

savings program. The credit cooperative has its sources of finance the following:

1. Share capital – this is the credit cooperative's permanent working capital for lending operations. Each member

must subscribe for at least five shares, which can be paid in lump sum or in regular installments.

2. Deposits – it comes in two kinds: savings and time. These deposits yield reasonable returns. The credit

cooperative instills the habit of thrift through systematic savings and prudent use of excess funds deposited as

time or savings deposits.

3. Reserves – it states that at least 10% of the credit cooperative's annual income must be set aside as a general

reserve fund to be accumulated for the cooperative's stability.

4. Revolving capital – it states that a credit cooperative may use a scheme to generate capital by deferring

payment of interest on capital and patronage refund for a period of up to five years.

5. Loan capital – it needed to resort here if internal funds were insufficient. The credit union seeks loans from

financial or banking institutions.

6. Subsidies, grants and donations – the credit cooperative is authorized by law to accept subsidies, grants and

donations from local and foreign sources to the rules promulgated by the Cooperative Development Authority.