FIN360 Individual Assignment PDF PDF

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UNIVERSITI TEKNOLOGI MARA MELAKA CAMPUS ALOR GAJAHFACULTY OF BUSINESS STUDIES AND MANAGEMENTDIPLOMA IN BANKING (BA119)LEGALS ASPECT AND ETHICS IN BANKING (FIN360)INDIVIDUAL ASSESSMENT:THE IMPLICATION OF COVID- 19 PANDEMIC ON BANKING OPERATIONSPREPARED BY:NURUL ATIKA BINTI ANUARCLASS:MBA1195GPREPARED...

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UNIVERSITI TEKNOLOGI MARA MELAKA CAMPUS ALOR GAJAH FACULTY OF BUSINESS STUDIES AND MANAGEMENT DIPLOMA IN BANKING (BA119)

LEGALS ASPECT AND ETHICS IN BANKING (FIN360) INDIVIDUAL ASSESSMENT: THE IMPLICATION OF COVID-19 PANDEMIC ON BANKING OPERATIONS PREPARED BY: NURUL ATIKA BINTI ANUAR CLASS: MBA1195G PREPARED TO: MR. NGAU DUO SENG DATE OF SUBMISSION: 15TH January, 2021

ACKNOWLEDGEMENT In preparation for my assignment, I had to take the help and guidance of some respected persons, who deserve my deepest gratitude. As the completion of this assignment gave me much pleasure, I would like to shout out to my Legal Aspect and Ethics in Banking, Mr. Ngau Duo Seng, Course Instructor, at University Teknologi Mara Kampus Alor Gajah, Melaka for giving me a good guideline for assignment throughout numerous consultations and never forget to remind his students about this assignment. Then, I also to thanks my classmates and friends who always together help exchange ideas and I also want to thank my parents who never forget to keep praying for me and always give us a lot of motivation. I hope this assignment is complete and meets the marking criteria as well. Thank you

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TABLE OF CONTENT NO.

CONTENT

PAGE

1.

Acknowledgement

2

2.

Table of Content

3

3.

Introduction

4

4.

Implication of Covid-19

5-6

5.

Solution and Strategies

7-8

6.

Conclusion

9

7.

References

10

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INTRODUCTION Covid-19 has made generous vulnerability and high instability in worldwide capital business sectors. Although the greatest impact still cannot seem to be resolved, the antagonistic effect is probably going to proceed because of the effect of the disease. The banks are at the cutting edge of the monetary disturbance set off by this pandemic. National banks, huge general banks, little and medium-sized provincial banks, fintech, and challenger banks all face unrivalled incredible obstructions and dangers. They additionally find a way to profit their staff and customers and keep on improving the monetary framework. This will not be a simple street ahead. The Government of Malaysia is set up to take the weight and to take preventive measures to keep up it in an intense period. The Movement Control Order (MCO) was then authorized to abridge the flare-up. During the MCO, there are a few hindrances that bank advertising has experienced, and these worries have big affected the banks

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IMPLICATION OF COVID-19 ON BANKING AND CAPITAL MARKETS The main issue looked at by banks about advertising is that banks experience issues in selling their items and offering types of assistance to clients. Coronavirus causes monetary plunges and lower (GDP) development. This will diminish the interest in banking items. During the MCO, banks need to guarantee social separating measure and other standard working methods (SOP), thus the bank offices are compelled to close incidentally, or most of the branches will work with restricted counter administrations and lessen working hours. For instance, Maybank, Bank Islam, Hong Leong Bank, Citibank, HSBC Bank abbreviate the working time, work from 9.30 am to 3.00 pm during the MCO time frame. Since the Malaysian Government does not urge residents to go outside during the flare-up of COVID-19, subsequently, individuals do not dare or do not have any desire to go to banks. Clients who must choose between limited options and should go to bank offices to apply for advances, pull out cash from Amanah Saham Bumiputera (ASB), pull out cash from checks, or pull-out cash from Bantuan Prihatin Nasional (BPN) will be unable to get administrations due to the restricted working time and the clients need to follow SOP also. Besides, banks additionally not used to make advanced applications accessible online before this. By and large, banks experience issues arriving at their clients and give items and administrations to the clients during MCO. Next, the second issue is that due to this unforeseen issue, Bank Negara Malaysia (BNM) has aggressively cut down the interest rate, resulting in the banks’ interest income is affected. Lowering interest rates may be good for the borrowers, but it is in the opposite way when it comes to banks. If the interest rate is low, banks will lose deposits because the lowinterest rate is not attractive for people to deposit their money in a bank’s saving accounts. Apart from that, BNM also announced that automatic loan deferment for 6 months is made to all individual and small and medium enterprises (SMEs) borrowers who meet the criteria to reduce their burden on paying loans during this difficult time. Banks may have a big chance to suffer from credit risk or counterparty risk and liquidity problems because the borrowers are supposed to pay back the interest or principal of the loan on the specific date that agreed earlier before MCO. This causes banks to run out of cash to pay for the costs. These two issues may lead to decreasing in banks’ revenue and profitability during the outbreak of COVID-19.

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The third issue looked at by bank showcasing is with respect to the advancement of bank brands. Generally, banks advance items, for example, Master cards, bank credits, venture, or protection through promoting boards along the expressway, in papers, or imprinted in handouts, flags, and flyers. These sorts of advancements are not working any longer during the MCO because the public authority authorizes decides that request, Malaysian residents, to remain at home, and individuals are not permitted to traverse states, so individuals occasionally go out. Hence, conventional kinds of advancements cannot assist managers an account with arriving at clients successfully. The fourth issue looked by bank showcasing is with respect to put appropriation channels. As per S. Zanganeh et al (2013), place incorporates all the exercises that banks give items and administrations to clients. During MCO, the actual spot where banks work and offer types of assistance in the bank offices likewise not perform very much contrasted with the days of yore. The limitation of development and mass get together set by the public authority prompts helpless commitment among banks and their clients.

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SOLUTION AND STATEGIES Covid-19 truly brings huge effect on the economy of the world. In any event, when the COVID19 emergency closes, the monetary emergency will at present stay for a while. It tends to be said that Covid-19 is a major test to monetary organizations. Consequently, banks should begin to reposition and rebuild now to adjust to the current circumstance. There are a few techniques that can be or as of now been finished by banks to advance their administrations and bank brands. To fix the above-mentioned issue, banks have agreed to partner in the future with different smartphone applications, such as online shopping apps, food delivery apps or even gaming apps. Malaysians are being kept at home during the MCO. To relieve their boredom, there are numerous people who are willing to start new routines. People do online shopping, for example. Banks have realized that they have a tremendous ability to offer their services by partnering with mobile applications. For example, Maybank has partnered with the GoEat app, where consumers can get free delivery if they use the Maybank QRPay or Maybank2u app to pay for food in the GoEat app. As to working with internet shopping applications, RHB Bank is working with Shopee where clients purchase dealers at any rate RM150 from Shopee on Friday utilizing RHB charge cards, clients are qualified for RM18 vouchers. Aside from that, Bank Islam likewise works together with Shopee in dispatching a program called "Raya with Shopee" during MCO and Hari Raya simultaneously. If Bank Islam cardholders spend at least RM100 to buy stock from Shopee, they may get a discount of RM12. There is additionally another reason behind it, which is that banks advance their Master cards while working with portable applications. As everybody knows, financing costs go down during this troublesome circumstance. At the point when loan fees are low, individuals will in general acquire more cash, which brings about expanded buying power. Subsequently, banks will accept this open door to empower and advance advances and charge cards to clients while working with versatile applications. Aside from that, a few banks likewise give individual credit applications on the web during the lockdown.

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During the episode of COVID-19 and MCO, BNM encourages individuals to utilize webbased banking or electronic channels, so that individuals do not have to go on a superfluous outing to bank offices. Because of this explanation, online media can be broadly utilized as a conveyance channel for banks during this period. Online media like Youtube, Facebook, Instagram, and Twitter are utilized by banks to arrive at their clients and draw in with clients viably. One of the online media stages that are stressed here is Instagram. Instagram is generally utilized by adolescents these days. Facebook is a typical stage utilized by practically all banks, yet Instagram is seldom utilized by banks. Although, Instagram is not famous for banking, there are a few banks that will at present utilize it effectively. For instance, Bank Rakyat, Maybank, and Bank Islam advance their items and bank marks on Instagram effectively to the more youthful clients and drawing in with them, particularly during this brutal period.

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CONCLUSION It is significant that monetary establishments ought to react very well today with respect to the quick and abrupt changes brought about by Coronavirus as their reactions and activities today will prompt incredible impact for their bank brands later. Nonetheless, one pivotal point that banks ought not fail to remember is that the expansion in utilization of on the web and web-based media is acceptable, yet it will likewise prompt an expansion in digital danger. Programmers are all over and there is a high danger where the programmers may break into the financial framework or call the clients to get clients' scrambled information like recognizable data and other financial subtleties. Consequently, banks ought to be cautious in this issue to check cybercrime during MCO. Clients ought to likewise mindful of this issue and help banks and the public authority also by following the guidance of Cyber Security Malaysia (MyCert) to diminish the digital danger during the MCO time frame.

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REFERENCES Deloitte (2020). COVID-19 potential implications for the banking and capital markets sector. See: https://www2.deloitte.com/cn/en/pages/financial-services/articles/banking-and-capital-marketsimpact-covid-19.html Global banking M&A outlook H2 (2020). Covid-19 impact on the banking sector. See: https://home.kpmg/xx/en/home/insights/2020/07/covid-19-impact-on-banking-m-and-a-2020.html Victoria

Duff.

(2020).

The

Disadvantages

of

Low

Interest

rate.

See:

https://smallbusiness.chron.com/disadvantages-low-interest-rate-78529.html The Straits Times. (21 Mar 2020). Coronavirus: Malaysia to deploy troops to ensure stay home order followed as death toll rises. See: https://www.straitstimes.com/asia/se-asia/coronavirus-malaysiagets-tough-on-stay-home-order-with-troops-set-to-be-deployed-as New Straits Times. (26 Mar 2020). 10 ways Malaysians spend their time under the MCO. See: https://www.nst.com.my/news/nation/2020/03/578321/10-ways-malaysians-spend-their-timeunder-mco

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