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Monday, January 21, 2019

Agency Functions Of Commercial Banks

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Commercial banks serve a number of purposes within an economy. Customers can rely upon it for various services that they require in addition to the main functions of a bank. This is where the agency functions of commercial banks come into play. 

This may include the collection of interest, dividends and cheques. The banker accepts instructions from customers. 

Further functions may include debiting of customer accounts for rent or insurance premiums. The bank will then charge a fee for these services. 

  • Conducting Stock Exchange Transactions- If you are a customer with an interest in treading forex, then your bank can help facilitate the process. You can rely on financial expertise provided by brokers from the bank who will advise you on the best ways to trade which will maximise your funds. 
  • Acting as Executor or Trustee – If one of your family members passes away without a will, their estate can be handled by the bank. As Executor, the bank will ensure that creditors are paid and that assets are protected. 
  • Preservation of Wills of customers– Drawing up a will can be a great way of avoiding unnecessary drama and stress when an estate of a loved one who as passed on distributes assets to those mentioned as beneficiaries. Banks offer this service, often for a small fee. 
  • Electronic Transfer– The digital transformation of the banking sector would be far behind without the existence of the electronic transfer option. This solution has made banking much more convenient and efficient and is arguably one of the most popular agency functions of commercial banks. 
  • Collection of funds on behalf of customers in case of foreign transactions – This service is useful for customers who deal with exports and imports as well as professionals who are paid in foreign currency occasionally. 
  • Issuing of credit cards- based on the creditworthiness of the customer– This is a service that can be highly useful for the bank’s customers who need access to extra cash. Bank customers can rely on their bank rather than having to apply with other financial institutions.

Various Loans And Advances At A Bank

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Andrea is a young single mother of two and is facing a number of financial difficulties. Her salary isn’t increasing at a rate that is fast enough to keep up with the rising cost of living and she has found herself facing a dilemma. She has a medical emergency which she has to finance or else it could leave her children without a parent. The realities that she is dealing with are that she has not established an emergency fund yet and is also putting her younger sibling through school. She has quite a number of financial responsibilities and does not think that she could turn to family members or friends for a loan. She is considering applying for a loan from her bank, but is not sure which one will be ideal for her needs.  

Fortunately for Andrea, banks have a wide array of loans and advances which are designed to meet different needs. 

Overdraft 

This is a fluctuating account and is only allowed for individuals who own a current account. A customer with access to this facility can draw over and above their balance, up to a stipulated limit. The total amount overdrawn cannot exceed the agreed limit however. 

Short Term Loan 

The full loan amount is paid to the debtor at one time. Repayment may be by instalment or it can be at the end of the month when the borrower’s salary is paid into their account. 

Term Loan 

This type of loan is granted for a fixed period of time and is typically for more than three years. It’s repaid in instalments and is usually granted for fixed capital requirements. 

Cash Credit 

A customer can advance money up to a certain limit against an asset that is pledged.

Andrea needs to compare loan offers and decide which one she would be able to afford, taking into account origination fees, interest rates charged and her creditworthiness and affordability. She can speak to a consultant about the various loans and advances at a bank and select the right one for her. 

Various Types Of Banking Deposits

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Dean has managed to save a significant amount of money for his daughter’s high school fees. He has planned to pay a lump sum to her school as soon as she starts, in order to cover the first three years of her schooling career. He is looking for an ideal place to keep the money stored before it comes into use. 

His sister advises him to consider choosing banking deposits so that he avoids the temptation to spend the money on other needs. The various types of banking deposits available give him something to think about. 

Fixed Deposits 

With this type of deposit, the rate of interest paid is unchanging. The money cannot be withdrawn before the tenure ends. Dean would do well to compare the fixed deposits offered by different financial institutions in order to benefit from the best interest rate. 

Savings Account 

While having this account is commendable, for a person interested in earning significant returns, it would not be ideal for Dean. It offers a safe way to store money with interest that keeps up with inflation. Minimum balances may be prescribed and the number of withdrawals may be restricted. 

Money Market Accounts 

This is regarded as a hybrid between a cheque and savings account. Money deposited earns interest. 

Cheque Accounts 

Similar to a savings account, this option lets account owners conduct as many transactions as they want to. They can also withdraw money from the bank or an ATM.  This type of account wouldn’t be ideal for Dean because it would make the money too easily accessible for him and the interest rates would not be so great either. 

What Are The Advantages Of Being Entertained?

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Not too many people consider this, but there is a difference between play and being entertained. As children, many of us spend much of our days playing – lost I our imaginations, creating our own worlds, where we dream. At other times, we play games with rules that are set and learn concepts such as teamwork and effective communication in the process. Play is essentially in a non-stressed frame of mind and is quite imaginative. 

Entertainment, on the other hand, may feature TV, online gaming, theatre, music or comedy. For children, it can be a good way to teach a certain skill or lesson in an exciting and fun way. For parents who may want to broach difficult subjects with their children, entertainment can offer a simple solution. Parents can choose shows that have a lesson and can use that to discuss the topic afterwards. 

In some instances, entertainment can be used to reward good behaviour. Allowing children to enjoy playing games on tablets or smart devices when they have earned the privilege is one way to reinforce good behaviour. 

What are the advantages of being entertained as adults? 

It can be informative – think about all the documentaries that have successfully told historical narratives or acted as social commentary. 

It can have positive effects on mental health studies have shown that listening to live music has good effects on the brain, as “feel-good” chemicals are released, which has a positive impact. 

It can be relaxing – certain forms of entertainment can provide effective relaxation tools, which have a positive effect on wellbeing. 

It can be a good way to improve mood –one of the most well-known advantages of being entertained is that it can uplift mood, which is great for getting through a slump in performance or even reducing anxiety. 

It can enhance our ways of thinking– entertainment can be a great way to educate and inform people about certain ways of life, concepts, narratives or thinking.

New Gaming Technologies In 2019

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The gaming industry is a multi-billion dollar sector. It’s come quite a long way since the days of Tetris and Nintendo consoles. Gaming nowadays is more likely to be mobile. Pixelated graphics are a thing of the past too, as developers use technology to create almost photo-realistic graphics. 

Games are no longer limited to arcade machines or consoles, but can also be accessed via PC, mobile devices and more recently, through virtual reality headsets. 

New gaming technologies in 2019 are set to bring in even more excitement for gamers.  

What gamers can look forward to

Virtual Reality Headsets that can render 3D graphics 

Hardware capabilities currently don’t allow gamers to enjoy hyper-immersive gameplay. Developments in the industry are set to change this, however. This is likely to mean that gamers will be able to enjoy graphics that are very similar to real-life. 

Gaming in the cloud 

The popularity of cloud computing technology has been great for a number of industries. The gaming sector is also going to benefit. Gamers will be able to play a game from any device with an internet connection. This is also going to be great for saving space on devices. Another result of this change will be cheaper games. 

Popularity of handheld consoles 

Propelled by the success of the Nintendo Switch, handheld consoles are set to become highly popular. This has been pegged to appeal to nostalgic gamers of the 80s and 90s, who will also look forward to enjoying gaming without the distraction of other apps.  

Additional Screens for gaming 

For those gamers who would prefer to just have an additional screen to supplement the main one on their device, this will be one of their favourite of new gaming technologies in 2019.

5 Future Car Technologies That Truly Have A Chance

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Developments in the automobile industry through the years have been quite exciting. From manual cars all the way to electric cars – this industry has come a long way. With advances in tech, which has seen the explosion of popularity in smart devices, car manufacturers have also had to work doubly hard to ensure that they keep up.  

Future car technologies will not only be at the discretion of car designers, but will mainly be demand-driven. For instance, as more devices use USB technology, car companies have added ports to the infotainment systems of new car models. The demand for the Connected Cr is set to skyrocket in the near future. 

More future car technologies that truly have a chance: 

Ultra-modern airbags 

Mercedes Benz is reportedly working on new technology that is set to feature ultra-modern airbags in vehicles. Most new cars currently have airbags, which have been proven to provide additional safety and some forms of protection in accidents.  

There have been experiments with airbags that could possibly deploy to help stop a car before a collision. This will depend on the placement and the German car giant is working on making sure that airbags in newer models offer as much safety for drivers as possible. 

The Connected Car 

In recent years there has been a major shift from hardware to software-centric cars. The Connected Car is the future of motoring. Cars of the future could all be connected to the cloud. Car owners could also be able to control devices in their houses from their cars. 

Self-driving cars 

Autonomous vehicles on the roads could become a reality sooner than anticipated. The cars will have tech features like radar and the use of ultrasound to ensure that surroundings are safe. Google has already conducted successful driver-less tests in California. 

Augmented Reality-enabled dashboards 

BMW has begun testing tools that enable a layer-by-layer inspection of machinery. This is thought to be the first step towards AR dashboards, which will feature data appearing on the driver’s windshield. 

Body Panels that store energy 

Car body panels will be used to store energy, which will facilitate faster car charging. Energy will also be harnessed by using solar energy.

What Are The Advantages Of Social Media?

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Of all the developments that have emerged in the last 20 years, social media is possibly the most impactful across a wide range of sectors. While many people generally think of Facebook first when considering social networks, in reality, there are numerous platforms with unique offerings.  

When considering the advantages of social media, it’s important to factor in that it’s often a subjective experience. Despite this, there are some common pros that come from using social media either personally or as a business. 

Brand awareness is much better for a business using social media. If you consider that being on the different platforms makes your brand more visible, then it’s easier to see why it counts in your business’ favour. You can grab the attention of potential customers by appealing to them in effective ways using social media. 

Traditional advertising can be quite expensive, but social media has managed to bypass and make it simpler for brands to advertise their products and services cost-effectively. 

Social media is ideal for boosting website traffic. With the right posts, a brand can entice potential customers to visit their website.  

Easier evaluation is one of the advantages of social media. In business terms, it’s simpler to monitor and track progress of particular campaigns.  

Better customer interaction is another benefit. Rather than having to sit on a call waiting to speak to a customer care agent from a company, social media has made it much more efficient by cutting the middle man out.  By posting on a brand’s social media pages or tagging them with a complaint, this has made the process much more time-efficient and effective in terms of resolutions. 

Increased brand loyalty is one of the pros of social media use. Whether you have a small or an established brand, using social media can go a long way towards finding ways to converse with your audience that keeps them interested in what you have offer. 

6 Major Events To Look Forward To In 2019

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Royal Baby Birth 

Although the British Royals have kept mum on the due date, the news of the latest Royal baby still has people buzzing with excitement worldwide. Since the nuptials of Prince Harry and US actress Meghan Markle in June 2018, the world’s eyes have maintained a constant zoom on their every move. When the Duchess of Sussex began wearing coats and loose-fitting clothing, the rumours began swirling – and they were right. Soon after, while on Tour in Australia, the Palace released an official statement from the excited parents-to-be about expecting their first child. This is undoubtedly the highest trending of major events to look forward to in 2019. 

Women’s FIFA World Cup 

Taking place in June and July 2019, the FIFA Women’s World Cup will be in France. Coincidentally, in the men’s version, the French team won the latest accolade. 52 matches will be played overall, with countries such as Chile, Jamaica and Scotland set to make their debut. 

Disney Classics Take Over Cinemas 

Most of us have probably seen all the funny memes about Beyonce taking over everything that she touches. This time around the artist is part of a star-studded cast that provided voice-talents to the animation classic “The Lion King” remake. Set to hit theatres in July 2019, this is one of the events to look forward to in 2019. 

Beyonce isn’t the only one with a takeover strategy in 2019, with Disney releasing Aladdin (starring Will Smith as the genie) and Dumbo too. 

Farewell Tours by Musicians 

Sir Elton John and The Spice Girls are just some of the names that will be embarking on a tour to bid die-hard fans goodbye.  

Miseducation of Lauryn Hill 20 Year Celebration Tour 

While others are saying goodbye in their tours, others like Ms Hill and The Backstreet Boys are going on tour to celebrate milestone albums. The now classic “Miseducation of Lauryn Hill” turned 20 years old in 2018. Hill is on a world tour to celebrate with fans. 

Orange is the New Black 7th and final season and possible spinoff 

It’s goodbye to “Dandelion,” “Crazy Eyes,” “Taystee,” “Black Cindy” and the rest of the ladies from Litchfield Correctional Facility for now. As 2019 rings in the final season of the smash hit Netflix series, there have also been rumours of a spinoff coming soon.

What To Expect In The Future Of Social Media

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With developments every day, social media is set to expand in numerous ways. The days of Facebook being the dominant social network are long gone. With the likes of Pinterest, Snapchat, Twitter and Instagram taking a piece of the pie, social media users have multiple options at their disposal. 

The developments can be quite difficult to keep up with – as each social network platform aims to out-do the next.  

Here’s what to expect in the future of social media: 

A Facebook study found that people look at videos five times longer than static content. Digital marketers have to find ways of incorporating more video content into their campaigns and should expect more such changes in the future of social media. Posts must be shorter in order to reach engagement targets.  

Posts with images get two times more engagement. The platform is also making it harder to reach followers organically. This is one of the reasons that it is slowly transforming into a paid marketing platform. 

On the positive side, Facebook Watch will change the game for video creators, facilitating the discovery of brands. The success of Jada Pinkett-Smith’s “Red Table Talk” has significantly contributed towards making the platform more popular. 

Instagram is set to become a firm favourite for companies and advertisers. It’s going to have quite a bit of competition from Pinterest, which also aims to target the same market. The difference is that it will be encouraging purchases. More video content is also being used on the platform. 

LinkedIn Ads are set to become more impactful with the launch of video ads. 

Younger users are fleeing to more private sites, which are easily accessible via mobile. 

What does 80% loan to value mean?

Loan Ratio Calculation

The loan to value ratio is utilised by financiers to assess risk. It’s essentially the loan figure, in comparison to the value of the property or car, expressed in percentage form.

80% loan to value is used as a threshold to determine the amount of risk for financial lenders. 80% or less is considered to be reasonable. It may even enable borrowers with poor credit scores to qualify for finance.

As a loan applicant, you are in a better position if you have invested a lot in the transaction. If you are able to allay fears of default, this is better.

To benefit from the best interest rates, keep in mind that 80% and less is the winning formula. So if a bank is loaning you less than 80% of the loan amount, this represents a lower risk to them.

Friends Lyric and Violet are doing research into which of them is more likely to be approved for a bond.

For Lyric, applying for a R800 000 loan and making a down payment of R200 000 puts him in a much more favourable position than his friend Violet who only has R20 000 to offer.  She is likely to pay a higher interest rate because of the high risk that the financier will be taking on her low deposit.

Lyric will have exceeded the 80% loan to value.

If a loan applicant has a poor credit record but has a large deposit amount, they are in a better position to be considered for approval. The bank will consider the applicant a lower risk because they will have offset the risk by paying a deposit.

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