CHAPTER 3: BANKING SERVICES
A Coggle Diagram about CHEQUE
(Preventing Credit Card Fraud
• Potential fraud is a real threat that all consumers face in using
• Credit card fraud can cost you and the credit card issuer huge
• Credit card issuers are always on alert for fraudulent scams
and have taken security measures to protect you against such
• However, you should also take the necessary steps to
minimize the risk of being a victim of fraud.
, a) Safeguard your credit card
- Sign on your credit card
immediately after you receive it.
- Keep your credit card in the same
place in your wallet or purse so
that you will notice immediately if it
is lost or stolen.
- Do not lend your credit card to
- Do not provide your credit card
details, (i.e. card number and
expiration date) to an unknown
party as they may use it to make
purchases via telephone, mail or
- Memories your PIN number and do not write down your PIN
number on the back of the credit card or keep it in your wallet, or
disclose it to anyone.
- Keep the telephone number of your credit card issuer so that you
can immediately report lost/stolen cards, unauthorized
transactions or disclosure of PIN to a third party.
- Make sure you cut your expired credit cards into two when you
get the new one.
and b) Check your credit card
- Check all details on the charge slip before
signing or confirming the transaction.
- Keep all your charge slips and check it against
your credit card statement as soon as you
- Notify your credit card issuer immediately of
any error or possible unauthorized transactions
in relation to your credit card or PIN and
follow-up in writing as soon as possible.
- Destroy all your charge slips before you throw
), Types of Accounts
• Some banking institutions may require fees and charges when
opening the account.
• A savings account enables customers to save or deposit money into
an account and receive certain interest with no stated maturity.
• Interest earned on your balance is normally credited to the account
• The minimum deposit to open an account varies from one
institution to another and can be as low as RM1.
• You can withdraw or deposit money into your saving account
whenever you need.
You can also apply for an ATM card with a specific PIN
• The card allows you to withdraw money from one-branch and
off-branch ATMs of the banking institution as well as perform
various other transactions.
• To keep track of your banking transactions and interest
earned, you can choose to receive either a passbook or a
• You will need to use your passbook for over the counter
transactions. However, some banking institution allow over
the counter transactions with only your ATM card and identity
, Current Account
and A current account is a deposit account available at all banking
institution in Malaysia and can be used for either personal or
• A current account holder is allowed to use cheques as a way
to make payments.
• Different banking institutions have different requirements for
opening a current account. Therefore, it is advisable that you
seek and compare what each bank has to offer before
opening up a current account.
For business owners and professional entities, they must ensure that they
are properly registered with the relevant authorities.
However, a bank has the discretion to accept or decline an application to
open the account
Requirements to open a current account
- You must be physically present at the bank.
- You need an introducer acceptable to the bank. This is to
enable the bank to obtain references on you. Normally, the
introducer is an existing customer or someone known to the
- You need to provide certain identification documents such as
your identity card or driving license to substantiate your
- You need to put an initial deposit as specified by your bank.
As a current account holder, you will be able to make:
- Cheque payments
- Cheque and cash deposit
- Account enquiries
- Funds transfer within the same banking institution
- Bill payments
- Inter-bank transfers (GIRO)
• You will also receive free monthly statements delivered to you.
• These statements will help you keep records of all deposits and
withdrawals that you’ve made and calculate the current balance.
Your responsibilities as an account holder:
- Always keep your account numbers and PINs that
have been issued to you confidential.
- Always keep your account statements in a safe and
- Always destroy or shred cancelled cheques.
- Immediately inform your banking institution of any of
• Any change of address or telephone number
• Loss of cheque or cheque book
• Any discrepancy in your bank statement
), BANKING SERVICES
(TYPE OF BANK
and A bank is to be a business that safeguards,
transfer, exchanges and lends money to firms
Banks provide a multitude of financial services of
many types beyond the traditional practices of
holding deposit and lending money
), Returned Cheques/Rejected Cheques
Your banking institution will decline to pay a cheque which you have
issued due to the following reasons:
- Insufficient funds in your account for clearance.
- Missing signature(s).
- Signature(s) differ from specimen signature.
- Stale cheque (dated 6 months ago).
- Amount in words and figures differ.
- Alteration on the cheque.
- Issuance of a stop payment instruction.
- Account closed or “legally blocked” account
Cheques which have been dishonored will be returned to the
accountholder. The issuer of the cheque will be charged a fee by his
bank to recover part of the administrative cost incurred. 1/11/2016
• If you issue a cheque which h
, *Open Cheque
, A cheque is called ‘open’ when it is possible to
get cash over the counter at the bank.
• The holder of an open cheque can do the
- Receive its payment over the counter at the bank.
- Deposit the cheque in his own account.
- Pass it to someone else by signing on the back of a
Open cheque is subject to risk of theft and it is dangerous to issue
, Crossed Cheque
, This risk of open cheque can be avoided by issuing a
• The payment of such cheque is not made over the counter
at the bank but only credited to the bank account of the
• A cheque can be crossed by drawing two transverse
parallel lines across the cheque, with or without the
writing „Account Payee‟ or „Not Negotiable‟.
• When a cheque bears across its face two parallel
transverse lines, the cheque is said to be crossed.
• The lines are usually drawn on the left-hand top corner of
t is the collecting bank which has to ensure that the
proceeds are credited to the account of payee only
and no other.
• If the collecting banker allows the proceeds of the
cheque so crossed to be credited to any other
account, he may be held guilty of negligence in the
event of an action for wrongful conversion of funds
being brought against him.
, Bearer Cheque
, A cheque which is payable to any person who
presents it for payment at the bank counter is called
• A bearer cheque can be transferred by mere
delivery and requires no endorsement
, Order Cheque
, An order cheque is one which is payable to a
• In such a cheque, the word „bearer‟ may be cut out
or cancelled and the word „order‟ may be written.
• The payee can transfer an order cheque to
someone else by signing his or her name behind
, Parts of Cheque
, A cheque shall contain:
- place of issue
- cheque number
- account number MICR (Magnetic Ink Character
- date of issue
- amount of currency
- signature of the drawer
• A cheque is generally valid for six months after the
date of issue unless otherwise indicated, but this
varies depending on where the cheque is drawn.
, Actions you should take to ensure security
You too have a role in ensuring the safety of Internet Banking transactions.
Some of the recommended actions that you, as a bank customer, should
- Do not reveal your Login ID and Password or PIN
• Keep your Login ID and password or PIN confidential.
• Memorise it and do not write it down anywhere.
• Change your password or PIN regularly and avoid using easy-to-guess
passwords such as names or birthdays. Ideally, your password should
be a combination of characters (uppercase and lowercase) and
• Check your transaction history details and statements regularly to make
sure that there are no unauthorised transactions on your accounts or
additions to the list of registered payees .
• If you suspect any unauthorised use of your accounts or that someone
else may know your password or PIN, you should change your
password or PIN immediately and notify your banking institution .
• Do not store your Login ID and Password or PIN on the computer . 1/11/2016
Actions you should take to ensure
- Check for the right and secure website
• Before doing any online transactions or sending personal
information, make sure that you are in the correct website.
• You should also ensure that you are in a “secure” website by
checking the Universal Resource Locators (URLs) to ensure
that it begins with “https” and look for a display of a closed
padlock symbol on the status bar of your browser.
• Always enter the URL of the website directly into the web
browser. You should avoid being re-directed to the website, or
hyperlink to it from a website that may not be as secure .
Actions you should take to ensure
- Protect your personal computer from hackers, viruses
and malicious programs
• Install a personal firewall and a reputable anti-virus program
to protect your personal computer from virus attacks or
malicious programs such as “Trojan Horse”.
• You should also ensure that the anti-virus program is up-todate
and runs at all times.
• Always keep your operating system and web browser up-todate
with the latest security patches, in order to protect
against weaknesses or vulnerabilities.
Actions you should take to ensure
- Be careful when downloading software
• When you receive a program or an attachment, you should
always check it with an updated anti-virus program to ensure that
it does not contain any virus that could attack your personal
• Never download any file or software from sites or sources, which
you are not familiar with or click on hyperlinks sent to you by
strangers. Opening such a file could expose your system to a
computer virus that could hijack your personal information,
including your password or PIN.
- Do not leave your computer unattended when logged in
• You should log off from the Internet Banking site when you leave
your computer unattended, even if it is for a short while.
Actions you should take to ensure
- Always remember to log-off
It is important that you log-off when you have completed your banking
You should clear the memory cache and transaction history after logging
out from the website to remove your account information. This would
avoid incidents of the stored information being retrieved by unwanted
- Other measures
• You should not send any personal information particularly your password or
PIN via ordinary e-mail
• Do not have other browser windows open while you are banking online
• You should avoid using shared or public personal computers to conduct your
Internet Banking transactions
• You are also advised to disable the “file and printer sharing” feature on your
, It is important to know the elements of a cheque since a duly
completed and signed cheque acts as an authority to the drawee
bank to withdraw from the account for payment to the payee.
- Name of banking institution which is also called the “drawee
bank” or paying bank.
- “Account Payee Only” crossing is a directive to the collecting
banking institution to pay into the account of the payee.
- Payee is the person to whom the cheque is to be made.
Ensure that the name of the person is correctly spelt and
written close to the words “Pay To”. Draw a line on the space
after the payee‟s name to avoid alteration.
- Date of the cheque. To be able to receive payment, the
date must be the current date. The date must be written
in DDMMYY format.
- The person who holds and presents the cheque at
the banking institution. It is advisable to cross out “or
bearer” to avoid any stolen cheque from being paid out.
- The payment amount written in words. The same
value will be written in the box beside it. Ensure that the
amount in words and figures are written close to the
words “Ringgit Malaysia” and “RM” printed out in the
cheque. Do not leave any gap by drawing a line after
them. Make sure that the amount in words and figures
tally, otherwise the bank will return the cheque.
- Name of the account holder which is also called the
- Your signature as the drawer of the cheque. You should
ensure that your signature does not extend into the amount
- Cheque ID.
- Serial number of the cheque. Each cheque has a different
number for identification purposes.
- Bank code*.
- Branch code*.
- Your current account number.
- Transaction code.
- Amount field.
*Some banking institutions may print the bank and branch code at the
top right corner above the date box.
, The Do’s when Using Cheque
- Do write clearly and always use permanent ink pens such as a
- Do make sure your account has sufficient funds before issuing
- Do make sure there are no amendments on the face of the
cheque as banks will reject them.
- Do always end with the word “only” after writing the amount
payable on the cheque.
- Do ensure that no cheque is removed without your
knowledge and spoiled cheques are completely disposed of.
- Do keep your cheques in a safe place and never leave signed
or unsigned cheques unguarded.
- Do regularly take stock of unused cheques and conduct
reconciliation of cheques paid with your bank statement.
- Do immediately report your case to your bank , if there are
missing cheques in your cheque book.
, The Don’ts when Using Cheque
- Don‟t sign any blank cheque or issue a
blank cheque as payment.
- Don‟t fold, pin or staple written cheques.
- Don‟t use laser printer, felt tip pen,
erasable pen or pencil or other printing
techniques that can be easily erased and
written over, to write your cheque details.
- Don‟t write below the MICR (Magnetic
Ink Character Recognition) field of the
cheque. This will affect clearing of your
cheque if you do so.
- Don‟t issue payments in foreign
currency using RM denominated
, A cheque is a Bill of Exchange drawn on a specified banker
and not expressed to be payable otherwise than on demand.
• Three (3) parties to a cheque:
i) the issuer of a cheque (account holder)is called the
ii) The person directed to pay (paying bank) is the
iii) The person named in the instrument, to whom or to
whose order the money is, by the instrument directed, to
be paid, is called the „payee‟. Also called the
• A cheque must be in writing and duly (properly) signed by
• It contains an unconditional order.
It is issued on a specified banker only.
• The amount specified is always certain and must be
clearly mentioned both in figures and words.
• The payee is always certain.
• It is always payable on demand.
• The cheque must bear a date, otherwise it is invalid and
shall not be honoured by the bank.
, Closure of a Current Account
An account can be closed under the following circumstances:
- On accountholder's request - accountholder must provide
a written request and return any unused cheque leaves for
- On discretion of the bank - your bank may close your
account if you regularly issue dishonoured cheques or if
your account is inactive (dormant account).
In such cases, the account will only be closed after sufficient
notices have been given in writing to the accountholder.
A notification letter will also be sent to the accountholder once
the account is closed.
, Inactive Account
• Where there has been no transaction (either a withdrawal or
deposit) in the account for a period of seven years, the account
will be classified as unclaimed moneys.
• Under the Unclaimed Moneys Act (1965), such funds will be
transferred to the Registrar of Unclaimed Moneys.
• Prior to the funds being transferred, banks will send notices
requesting the customer to reactivate or close the account.
• The owner of the unclaimed moneys may recover the moneys
from the Registrar either in person or in writing.
, 1.5 Credit Cards
• A credit card is a convenient payment mode as it can be
readily used for making purchases at merchant outlets.
• However, if you do not use your credit card carefully or settle
your monthly statements on time, you may owe more than you
can repay and find yourself having financial problems.
, What Is A Credit Card And How It
• A credit card is a payment instrument that enables you to
make purchases of goods and payment for services
instead of using cash.
• You can use t
, 1.6 Internet Banking
• Internet Banking allows you to manage your finances from
home, work or from just about anywhere in the world.
• Internet banking provides a fast and convenient way of
performing common banking transactions on the Internet.
• Currently, only banking institutions licensed under the Banking
and Financial Institutions Act 1989 and the Islamic Banking Act
1983 are allowed to offer Internet Banking services in
, What Is Needed To Do Internet
Internet Banking does not require special software or access to a
private network, but is conducted through the Internet.
If you have a computer with Internet access, a modem and telephone
line, an Internet browser and have registered for an Internet Banking
service with your banking institution, then you can conduct Internet
Banking from virtually anywhere in the world.
It is also recommended that you install a personal firewall and
regularly update your virus protection software.
You can apply for Internet Banking facilities if you have an account with
a banking institution that offers Internet Banking services. Details on
the application procedures are available on the banking institutions'
, Banking Services Available Online
Depending on the banking institution, the main services offered
through Internet Banking allows you to:
- Check your balances and statements online.
- Submit applications for new accounts, credit cards or loans
- Place fixed deposits.
- Transfer funds between accounts (own and third party).
- Pay bills, credit cards, loans and insurance premiums.
- Check the status of your cheques.
- Request for stop cheque payments.
- Apply for Bank Drafts and Telegraphic Transfers.
- Some additional services offered include interest rates calculator
as well as foreign currency converters.
- Create, change and cancel standing orders.
- Request for cheque books and statements.
and Elements of a Cheque