Course Catalogue

Module Code and Title:   FIN307 Banking Concepts and Practice

Programme:                          Bachelor of Commerce

Credit:                                    12

Module Tutor:                       Tirtha Raj Puri, Gagan Mongar, Ritu Barna Adhikari, Kabita Chhetri

Module Coordinator:            Kabita Chhetri

  

General objective: This module aims to provide basic knowledge and understanding to the students on fundamental of banking concept and practices, and apply them to business and financial decision making. The students develop the skill of how to manage various risks in the banking sector. Lastly, the module also helps the students to successfully apply the knowledge of cashless banking in the real life.

 

Learning outcomes – On completion of the module, students will be able to:

  1. Link banking and its concepts to business decision, planning and operation.
  2. Apply the concepts of deposit and credit in monitoring and evaluation of business.
  3. Apply marketing of banking services as banking technology changes.
  4. Comprehend the consequences of change in monetary policy in Bhutan.
  5. Evaluate the performance of the banking system of Bhutan.
  6. Assess the importance and the roles played by customers in the banking sector.
  7. Assess risks in the operation of a bank and determine appropriate management responses.                                 

Teaching and Learning Approaches:

Approach

Hours per week

Total credit hours

Lecture and case studies

3

45

Tutorials and group work

1

15

Independent study

4

60

Total

120

Assessment Approach:

  1. Analytic Assignment: Portion of Final Mark: 10%

Each student will do an individual written assignment of 750-1000 words. The assignment shall be a critical analysis of the commercial banking systems in Bhutan or abroad, monetary policies, and analysis of change in monetary policy on the Bhutanese economy. The assignments will be evaluated based on the following criteria;

4%         Content relevancy and appropriateness.

4%         Reaching reasonable conclusions using appropriate factors while doing the analysis.

2%         Overall effectiveness of the writing style- use of proper academic style

 

  1. Case Study Analysis: Portion of Final Mark: 20%

In groups of 4 members, each group will be required to present two case analyses on the banking system, the role of Central Banks and the relationship between Central Bank and Commercial Banks. Each case study is worth 10%. The maximum time duration for the presentation is 10 minutes, followed by question and answer session for 5 minutes.

1%       Introduction to the concept.

2%       Identifying the factors that needs to be taken into consideration.

3%       Importance & impact of these factors on the decisions made by the corporation which are related to banking sector.

2%       Conclusion based on the analysis done.

2%       Individual Question and Answer based on the presentation.

  1. Quizzes: Portion of Final Mark: 10%

Each student will complete two short written individual quizzes of 30 min duration each, covering 2 weeks of subject matter. Each quiz worth 5% will be fact-based in-class quizzes to evaluate their knowledge of significance of money, and emerging trends in banking.

  1. Midterm Examination: Portion of Final Mark: 20%

Students will take a written exam of 2 hours duration covering topics up to the mid-point of the semester.

  1. Semester-End Examination: Portion of Final Marks: 40%

The module will have a semester-end exam for 2 hours covering the entire syllabus. The question will be divided into two parts – Part A (carrying 40% of the exam weightage) will be mostly of short answer including objective questions. Part-B (carrying almost 60% of the exam weightage) will be mostly of essay type or an extended response to the given question. This part of the question requires students to apply, analyse, and evaluate or construct knowledge and skills. Cases will also be used to test the levels of knowledge.

Areas of assignments

Quantity

Weighting

A.    Analytic  Assignment

1

10%

B.    Case Study Analysis

2

20%

C.   Quiz

2

10%

D.   Midterm Examination

 

20%

Total Continuous Assessment (CA)

 

60%

Semester-End Examination (SE)

 

40%

Pre-Requisites: None

Subject matter:

  1. Introduction to money and banking
    • An overview
    • Functions and significance of money
    • Demand and supply of money-concepts and approaches
    • Quantity Theory and Money
    • Inflation and its control 
  1. Classification of banks
    • Commercial banks
    • Industrial banks
    • Development banks
    • Agricultural banks
    • Savings banks
    • Exchange banks
    • Central banks
  1. Systems of banking
    • Systems of banking-
      • Mixed
      • Branch
      • Unit
      • Group
      • Chain
    • RMA
      • Organizations setup
      • Functions
    • Important activities of financial institutions licensed as banks according to Article 24 of the Act Financial Services Act of Bhutan, 2011.
    • Methods of credit control and credit creation
    • Balance sheet of a bank
  1. Structure and characteristics of banking systems
    • Banking system in Bhutan
    • Bhutanese capital market
    • Listing of Banks in the stock exchange
    • Bhutanese monetary policy
  1. Banking in Bhutan
    • Commercial banking in Bhutan
    • Procedure for setting a commercial bank in Bhutan
    • Impact of bankruptcy and its consequences
    • Banking services and challenges
    • Factors influencing banking in Bhutan: interest rate, inflation and currency
  1. Emerging trends of IT in banking
    • Sources and uses of funds in banks
    • Value chain analysis in banking industry
    • Emerging trends in banking
    • Universal banking
    • Project financing
    • Merchant banking
    • e-banking
    • Debit cards
    • Credit cards
    • ATMs
  1. Commercial banks and customer relationship
    • Definition of customer to commercial banks
    • Features of contractual customer relationship
    • Customer orientation
    • Rights of customer
    • Rights of a banker
    • Protection for collecting and paying bankers under the Negotiable Instruments Act
    • Banking ombudsman and scheme and consumer forums
    • Improved facilities for CRM in banking

 Managing risks

    • Mismatch between assets and liabilities
    • Liquidity risks
    • SLR, CRR, Repo rate and reverse repo rate
    • Credit risks
    • Political risks
    • RMA, the lender of last resort for banks
    • Circumstances leading to revocation of license by RMA.

 

Reading List:

  1. Essential Reading
    • Sundaram, K.P. M. & Varshney, P.N. (2008). Banking law, Theory and Practice. Sultan Chand Co 2-New Delhi.
    • Gomez, C. (2011). Banking and Finance: Theory, Law and Practice. PHI Learning Pvt. Ltd.
    • Course pack made by G.T. Bakyaraj

 

  1. Additional Reading
    • RMA’s Prudential Regulation for banking, insurance, capital market, FSA etc.
    • Vaish, M.C. (2007). Money, Banking and International Trade. New Age International Pvt. Ltd.-New Delhi.

 

Date: July, 2017
Royal Thimphu College