BANKING AND FINANCE Course Code: MIB 410 Credit Units: 04

Course Objective Provide institutional features of financial systems. Identify key issues and problems arising in banking and finance. Introduce the key economic concepts required to analyse these key issues and problems. Illustrate how these economic principles can be applied to address the key issues identified. Learning Outcomes At the end of this course the students should be able to: Discuss why financial systems exist, and how they are structured Explain why the relative importance of financial intermediaries and financial markets is different around the world, and How bank-based systems differ from market-based systems Explain why banks need regulation, and Illustrate the key reasons for and against the Regulation of banking systems Discuss the main types of risks faced by banks, and use the main techniques employed by banks to manage their risks Session Plan Module 1: Specialized products, Current Issues, and Future trends in Banking Session 1: CURRENT ISSUES AND FUTURE CHALLENGES New Challenges Financial Regulation and Intermediaries Evolution of Indian Banking Session 2: MONETARY POLICY IMPLICATIONS FOR BANK MANAGEMENT Macroeconomic Policies Money Supply and Monetary Policy Money Multiplier Measures of Money Supply CRR, SLR, REPOS Maintenance Requirements

Session 3: BANKS FINANCIAL STATEMENTS Why are banks financial statements different? Balance Sheets Income Statements Profitability Analysis Assessing Banks Performance - CAMEL Session 4: Specialized Products and Trustee Function Evaluate specialized products offered by banks Describe the trustee function of a bank Session 5: Technology in Banking Basic Concepts E-payments Plastic Money and E-Money Session 6: Technology in Banking Security Issues in E-Banking Session 7: Case Discussion Citibank's e-Business Strategy for Global Corporate Banking (2008) A HBS Case Study Module 2: Asset Liability Management in Banks and Capital Management and Profit Planning Session 8: Banks Balance Sheet Banks Balance Sheet - Components of Assets / Liabilities and their Management Session 9: Liquidity Management Liquidity Management, Interest Rate Risk, Interest Rate Management factors affecting interest rates - Management of exchange risk Session 10: Asset-Liability Management ALM Implementation-RBI Guidelines

Session 11: Case Discussion Banc One Corp.: Asset and Liability Management A HBS Case Study Session 12: Prudential Norms/ Profit and Profitability Prudential Norms - Capital Adequacy - Basel II-Asset Classification provisioning Profit and Profitability-Historical Perspective of the Approach of Banks to profitability Session 13: Non-Performing Assets Effects of NPA on profitability-A profitability Model -Share holders value maximization Session 14: Case Discussion Deloitte Recommends Client Selection to Regency Bank A HBS Case Discussion Module 3: International Banking Prerequisite for understanding Module 3: Asset Liability Management in Banks and Capital Management and Profit Planning Session 15: Factors Determining Exchange Rates Factors determining exchange rates - national / international, political and economic Session 16: Facilities to Exporters Various facilities to Exporters and Importers including forfaiting and factoring Session 17: Correspondent Banking Correspondent Banking - Bank Accounts - NOSTRO and VOSTRO accounts SWIFT, CHIPS, CHAPS, FEDWIRE., NRI accounts- Indian rupee and Foreign Currency account Session 18: Exim Bank Role of Exim Bank - Role of RBI and Exchange Control - Regulations of India Session 19: Case Discussion YES BANK: Mainstreaming Development into Indian Banking A HBS Case Study

Session 20: FEDAI & ECGC Role of FEDAI and FEDAI rules, Risk in Foreign Trade

Role of ECGC, Types of insurance and guarantee covers of ECGC Session 21: Mid Term Evaluation Class Test Module 4: Foundation of Finance Session 22: Factors Influencing Income Evaluate factors that influence income, Determine the financial resources needed to satisfy values and goals for a given time period Session 23: Financial Plan Evaluate the use of a financial plan in reaching goals, Session 24: Financial Plan Examine the importance of re-evaluating financial plans as income and financial needs change throughout the life cycle Session 25: Consumer Reporting Agencies Explain the role of consumer reporting agencies

Session 26: Credit Scores Determine factors that influence credit scores Session 27: Credit Reporting Describe wise uses of credit, Session 28: Credit Reporting Analyze the Fair Credit Reporting Act and its effect on credit reporting Module 5: Business Finance Prerequisite for understanding Module 4: Foundation of Finance Session 29: Accounting, Economics, Finance Describe how accounting, economics, and finance are related

Session 30: Business Ownership

Compare the advantages and disadvantages of the three forms of business ownership

Session 31: Business Ownership Examine the financial needs of various types of businesses, Session 32: Financial Needs of a Business Explore the financial needs of a business at the different stages of its development Session 33: Financial Needs of a Business Examine the impact of economic cycles on the financial needs of business Module 6: Financial Systems Session 34: Financial Systems Role of financial systems (role of households, government, and firms in terms of savings and investments), Session 35: Financial Systems Financial intermediaries, securities and markets, Taxonomy of financial institutions Session 36: Financial Claims Nature of financial claims (debt versus equity, bonds and notes, fixed and floating interest rates, common and preferred stocks) Session 37: Structure of financial markets Structure of financial markets (direct and indirect finance, dealers and brokers, banks, mutual funds, pension funds, and insurance companies) Session 38: Comparative Financial Systems Comparative Financial Systems: Bank based systems against marketbased systems Session 39: Legal Aspects Legal aspects Session 40: Concluding session: A Summary Reference: - Banking and Finance, IIBF (Macmillan Publishers India)