Introduction
In the commercial world, we seldom use
cash in transactions. Different payment
methods have been developed since the
banking activities become more and more
important in the modern society.
Methods of Payment in
Trade and Other
Transactions
1. Through Commercial Banks:
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•
•
•
Cheque
Cashier order
Bank draft
Telegraphic
transfer
• Autopay
– Standing order
– Direct debit
– Letter of credit
(L/C)
Methods of Payment in
Trade and Other
Transactions
2. Through Post Offices:
• Postal remittance service
• PayThruPost service
Methods of Payment in
Trade and Other
Transactions
3. Other Methods of Payment :
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•
•
•
•
•
Cash
Credit card
Debit card
Smart card
Promissory note
Bill of exchange
Components of a
cheque
Payee’s
name
Payt.
Amt.
Payt.
Date
Drawer’s
signature/chop
Cheng Siu Ming
Chq. stub
A/C #
Bank code
chq. #
Branch code
Advantages of Using
Cheques
Safety
Flexibility
Convenience
A proof of payment
Types of Cheques
Bearer cheque
Order cheque
Uncrossed cheque / Open cheque
Crossed cheque:

General crossing
 Account payee only
 Not negotiable
 Not negotiable, account payee only
Endorsement
– Transfer to a third party
– Types:
 Blank endorsement
 Endorsement to order
Dates of Cheque
– Post-dated cheque
– Stale cheque
– Antedated cheque
Reasons for
Not Honouring a
Cheque
•
•
•
•
•
•
Insufficient fund
Stale cheque
Post-dated cheque
No signature
Signature not matching the bank record
Not countersigned on alteration, etc.
Commercial Banks and
Finance Companies in
HK
• Deposit-taking institutions:
– Licensed banks
– Restricted licence banks
– Deposit-taking companies
Comparison of
the Financial Institutions
Institution
Licensed banks
Restricted
licence banks
Deposit-taking
companies
Bank
Restricted
licence bank
Bank
2. Minimum
paid-up capital
HK$150M
HK$100M
HK$25M
3. S/A, C/A, T/D
account
services
All
Only T/D
Only T/D
4. Minimum
deposit amount
No restriction
HK$500,000
HK$100,000
Comparison
1. Name
Comparison of the
Financial Institutions
Institution
Comparison
5. Min. deposit
maturity
6. Interest rates
7. Licensing
authority
8. Regulations
9. Supervised
and audited by
Licensed
banks
Restricted
licence banks
Deposit-taking
companies
No restriction
No restriction
3 months
No restriction
Hong Kong Monetary Authority
Restricted by the Banking Ordinance
Hong Kong Monetary Authority
Services of Commercial
Banks
1. Accepting Deposits:
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Savings account
Current account
Time deposit account
Foreign currency account
Services of Commercial
Banks
2. Granting Loans:
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–
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Overdraft
Personal loan
Business loan
Secured loan
Trade financing
Syndicated loan
Services of Commercial
Banks
3. Remittance Services:
– Bank draft / Demand draft
– Telegraphic transfer
4. Other Services:
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–
–
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Automatic teller machine (ATM)
Money exchange
Trustee service
Safe deposit box
Gift cheque
Traveller’s cheque
Latest Development of
Banking Services
Phonebanking
All-in-one
monthly
statements
Investment
consultancy
service
Internet
banking
services
The Position of HK in the
International Financial
Market
• Major centre of foreign exchange
• A strong presence of international financial
institutions
• The second largest stock market in Asia
• Good regulatory framework
• As a window for Mainland China
• The host of international meetings
Factors Contributing to
HK’s Role as
a Famous Financial Centre
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•
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Favourable geographical position
Regulatory framework
Good communication facilities
Qualified workers for the financial sector
Economic factors
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Finance and Banking