INDIAN INSTITUTE OF MANAGEMENT NAGPUR

POST GRADUATE PROGRAM IN MANAGEMENT

2018-19 TERM V

BANKING, FINANCIAL MARKETS AND SYSTEMS

Course Instructor: Balachandran R

Course introduction

Banks are an important part of the financial system. An understanding of banking and financial markets is
a pre requisite for a successful manager in the corporate world. Managers irrespective of their functional
area would find that their path crosses that of banks at some point in their career. In depth knowledge of
banking practices and financial markets would help PGP students planning a career in this sector as well
as aspirants of other career streams.

Course objectives

The course would provide breadth of knowledge in various aspects of banking i.e. retail,
wholesale/corporate banking, trade finance, treasury and wealth management. Branch banking
operations and core banking systems would be covered. Digital channels would be emphasized. Latest
innovations like Blockchain would be part of the scope. The structure of a bank’s balance sheet, and the
regulatory/legal environment in which banks operate would be discussed. Finally, the most trending topic
in banking, the genesis and possible resolution mechanisms for non-performing loans including the
Insolvency and Bankruptcy Code would be addressed. Participants of the course will learn through case
studies the nature of frauds and scams plaguing the banking sector and how to avoid falling prey to them.
Anti-money laundering/KYC norms would be discussed.

Ultimately, banks borrow money from depositors and lend it to borrowers, which is the most basic
function of a bank. The course will seek to demystify banking and help participants to acquire banking
skills in a simple and intuitive way through real life scenarios. Perspectives will be offered from global
banking practices compared to India.

Overview of financial markets, including government securities markets, money markets, foreign
exchange markets, securitization and syndication, key players, exchanges, systems would be part of the
scope.

Pedagogy

A mix of pre read, class room interactions, group projects and extensive usage of case studies. Hands on
experience for interest calculation using spread sheets. XL based simulation of a bank’s balance sheet.
Textbooks for reference

“Management of Banking and Financial Services” 3rd edition by Padmalatha Suresh and Justin Paul

“Financial Markets and Institutions” 6th edition by Fredric Mishkin and Stanley Eakins

Evaluation scheme

Evaluation component Type(Individual/ Weightage

Group) %
Group Project submission (Report-10%, Group 20
Presentation-10%)
Quizzes(2,both mandatory, 20% each) Individual 40
End term exam Individual 40

Project Submission

The project work will be executed through a team. The team will prepare a credit proposal for a
corporate borrower. Further inputs will be shared during the course.
Session wise course outline
Sessi Topics covered Case(if any) Pre class reading
on
Num
ber
1 Demystifying https://rbi.org.in/scripts/PublicationReportDetails.aspx?UrlP
banking, age=&ID=713
banking Executive Summary
industry
structure in
India
2 Banking Recent https://rbi.org.in/scripts/FAQView.aspx?Id=63
operations. cases of
money https://rbidocs.rbi.org.in/rdocs/notification/PDFs/42AM69D
KYC, Anti laundering 4F812CC124178937DFD5CFD37FE7E.PDF
money post
laundering- demonetizat
concepts and ion
case studies
3 Deposit taking https://www.sbi.co.in/portal/web/personal-banking/term-
function, deposits
Overview of https://www.sbi.co.in/portal/web/personal-
lending banking/personal-finance
products- https://www.hdfcbank.com/personal/products/accounts-
overdraft, and-deposits/deposits
personal loans, https://www.hdfcbank.com/personal/products/loans
mortgage
loans, loan
against
property, auto
loans, student
loans, loan
against
securities
4 Trade finance LC’s,guarant https://www.occ.treas.gov/publications/publications-by-
ees,factorin type/comptrollers-handbook/trade-finance-services/pub-ch-
g,supply trade-finance.pdf
chain
financing
5 Corporate loan Credit http://www.tatasteel.com/media/3669/integrated-report-
life cycle, from appraisal of and-annual-accounts-2016-17.pdf
cradle to grave a real life
I corporate
borrower
6 Corporate loan https://rbidocs.rbi.org.in/rdocs/notification/PDFs/101MC16
life cycle, from B68A0EDCA9434CBC239741F5267329.PDF
 cradle to grave
II Case studies
Corporate involving
malfeasance willful
case studies defaults
7 Overview of http://www.fimmda.org/modules/content/?p=1015
financial
markets I
8 Overview of https://www.ccilindia.com/CBLO/Pages/Introduction.aspx
financial
markets II
Syndication
and
securitization
markets
9 Retail loan https://rcasprod.kotak.com/personal-
appraisal, loan?source=website&banner=HmePg-WS-loginbox-PL-
documentation genric
and security,
loan disbursal
and repayment

Wealth
management
10 Core banking Demonstrati https://www.icicibank.com/calculators/home-loan-emi-
systems- on of calculator.html
interest interest
calculation, calculation
accounting using spread
entries basics sheets
11 Structure of a XL based https://www.federalbank.co.in/documents/10180/8800650
bank's balance Simulation /Annual+Report+2016.pdf/5aff8e17-0b26-45eb-aa78-
sheet of a bank’s 48ada28c7993
balance
sheet
12 Risk Basel http://www.bis.org/publ/bcbs189.pdf
Management standards (page 12-19)
for bank
regulation
13 Regulatory and https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RBIB1405
legal 20012.pdf
environment https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/BANKI15
122014.pdf
Central banks
Monetary
policy
 14 Digital and https://www.edgeverve.com/wp-
other channels content/uploads/2017/03/corporate-banking-digital-world.pdf
15 Innovations https://hbr.org/2017/01/the-truth-about-blockchain
and recent
trends in
banking
16 Project
presentation
by groups
17 Project
presentation
by groups

About the instructor:

Balachandran R has completed his full time PGP from IIM Calcutta (1987-89). His 27 + year career has
been primarily with Standard Chartered Bank in Corporate and Investment Banking and Infosys Finacle in
Banking Product Management. Since leaving the corporate world, he is now a columnist for Economic
Times on fixed income investing, monetary policy, banking and financial markets, and has contributed to
Business Standard, Business Line and Business Today as well. He is keenly looking forward to sharing his
practical knowledge in banking and financial markets acquired through travelling and working on
assignments with financial institutions in many regions including India, United States, Latin America and
Middle East. He has been teaching at the IIM’s at Calcutta, Trichy and Udaipur.