TMV Course in Diploma in Banking & Finance. Paper - 1: PRINCIPLES & PRACTICES OF BANKING

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1 Paper - 1: PRINCIPLES & PRACTICES OF BANKING Unit I (20 Marks) Indian Financial System. Recent developments in the Indian Financial system; market structure and financial innovation. RBI, SEBI, IRDA etc. their major functions, Role and Functions of banks - Regulatory provisions / enactments governing banks, Retail banking: Approach, products, marketing etc., Wholesale Banking; international banking; Role and functions of Capital markets, Role and Functions of Mutual Funds, Role and Functions of Insurance Companies - Bancassurance, Importance of risk management in banks-types of risk impact and management Factoring & Forfaiting, Alliances / mergers / consolidation, ADR / GDR / Off Balance Sheet Items, Participatory Notes, Credit Information Bureau Ltd. Fair Practices for Debt Collection, Basel-II, Banking Codes and Standard Boards. Unit II (20 Marks) Functions of banks Deposits: Banker-Customer relations - Know your Customer (KYC) guidelines-different Deposit Products - services rendered by Banks - Mandate and Power of attorney; Banker s lien right of set off - garnishee order - Income tax attachment order etc. Payment and collection of Cheque - duties and responsibilities of paying and collecting banker-protection available to paying and collecting banker under NI Act - endorsements - forged instruments - bouncing of cheques and their implications. Opening of accounts for various types of customers - minors - joint account holders - HUF - firms - companies - trusts - societies - Govt. and public bodies Importance of AML. Credit: Principles of lending - various credit Products / Facilities - working capital and term loans - Credit Appraisal Techniques - Approach to lending; - credit management - credit monitoring - NPA Management. Different types of documents; Documentation Procedures; Stamping of documents Securities - Different modes of charging - types of collaterals and their characteristics Priority Sector Lending - sectors - targets - issues / problems - recent developments - Financial Inclusion. Agriculture / SMEs / SHGs / SSI / Tiny Sector financing New Products & Services: Factoring, Securitisation, bancassurance, Mutual Funds etc. Credit Cards / Home Loans / Personal Loans / Consumer Loans-Brief outline of procedures and practices.

2 Ancillary Services: Remittances, Safe Deposit lockers etc. Unit III (20 Marks) Banking Technology Electronic Banking- Core Banking -Electronic products Banking Technology - Distribution channels - Teller Machines at the Bank Counters Cash dispensers - ATMs - Anywhere Anytime Banking - Home banking (Corporate and personal) Electronic Payment systems. On line Banking - Online enquiry and update facilities - Personal identification numbers and their use in conjunction with magnetic cards of both credit and debit cards, smart cards, signature storage and display by electronic means, cheque truncation, microfiche, note and coin counting devices. Electronic funds transfer systems - plain messages (Telex or data communication) - structured messages (SWIFT, etc...) - RTGS Information Technology - Current trends - Banknet, RBI net, Datanet, Nicnet, I-net, Internet, E mail, etc...- Role and uses of technology up gradation - Global developments in Banking Technology - Information Technology in finance and service delivery Impact of Technology on Banks - Protecting the confidentiality and secrecy of data - effect on customers and service quality - Computer Audit -Information System Audit. Information System Security and Disaster Management. Unit IV (20 Marks) Support Services - Marketing of Banking Services Products Marketing Management - Meaning, Importance and Functions - Marketing of Services - Product Research & Development - Test marketing of bank products - Product Life Cycle - Product Modification - New Product Development - Packaging and Branding of bank products Diversification - Pricing of bank products and services - Objectives, Strategies and Methods - Factors Influencing the Pricing Decisions, Importance of Pricing. Distribution - Factors Influencing - Direct and Indirect Channels of bank products - Physical Distribution - Channel Functions and Services - Promotion - Promotion Mix and Role of Promotion in Marketing - Marketing Information Systems. Role of DSA / DMA in Bank Marketing Channel Management Selling function in a bank Portfolio and Wealth Management Tele marketing / Mobile Phone banking Recommended Book: Principles & Practices of Banking, IIBF, MacMillan India Ltd.

3 Paper 2: Financial Management Syllabus Unit I (20 Marks) Quantitative Techniques & Financial Mathematics Concept of Time Value of Money Net Present Value Discounted Cash Flow Sampling Methods Presentation of Data Analysis and Interpretation of Sample Data Hypothesis Testing Time Series Analysis Mean Standard Deviation Co-Relation Regression Covariance & Volatility Probability Distribution Confidence Internal Analysis Estimating Parameters of Distribution Bond Valuation Duration Modified Duration Linear Programming Decision Making Simulation Statistical Analysis Using Spread Sheet Unit II (20 Marks) Study of Financial Statements Scope, Functions and Objectives Capital Expenditure Decision and Profitability Study Sources of Finance and Cost of Capital Long Term and Short Term Study of Financial Statements Relationship between items in Balance Sheet and Profit & Loss Accounts Trend Analysis, Comparative Statement Common size Statement Preparation of Projected & Financial Statements Unit III (20 Marks) Ratio Analysis Ratio Analysis Balance Sheet Ratios Current Ratio Liquidity Ratios - Working Capital Ratio Proprietary Ratio Debt Equity Ratio Gross Profit Ratio Operating Ratio - Expenses Ratio - Return on Capital Employed Return on Proprietor s Funds Return on Equity Capital Stock Turnover Ratio Composite Ratios Turnover of Debtor s Ratio Debt Service Coverage Ratio Unit IV (20 Marks) Working Capital and Term Loan Working Capital Concepts and Management Appraisal Techniques Trade Cycle Credit Rating Marginal Costing Break Even Analysis Cash Budget Profit Planning Risk Based Pricing of Products

4 Paper - 3: LEGAL ASPECTS IN BANKING OPERATIONS Unit I (20 Marks) Regulations and Compliance Provisions of RBI Act 1935,Banking Regulation Act 1949 Banking Companies [Acquisition and transfer of undertakings Act 1970 & 1980] B. Government and RBI s powers - Opening of new banks and branch licensing - Constitution of board of directors and their rights - Banks share holders and their rights - CRR / SLR concepts - Cash / currency management - Winding up - amalgamation and mergers Powers to control advances - selective credit control - monetary and credit policy Audit and Inspection - Supervision and control - board for financial supervision - its scope and role Disclosure of accounts and balance sheets Submission of returns to RBI etc. Corporate Governance Unit II (20 Marks) Legal aspects of banking operations Case laws on responsibility of paying / collecting banker Indemnities / guarantees - scope and application - obligations of a banker - precautions and rights-laws relating to bill finance, LC and Deferred Payments Laws relating to securities - valuation of securities - modes of charging securities - lien, pledge, mortgage, hypothecation etc - registration of firms / companies - creation of charge and satisfaction of charge. Unit III (20 Marks) Banking Related Laws Law of limitation Provisions of Bankers Book Evidence Act Special features of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 TDS, (b) Banking Cash Transaction tax, (c) Service Tax, (d) Asset Reconstruction Companies The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (a) The Consumer Protection Act, 1986, (b) Banking Ombudsman, (c) Lok Adalats (d) Lender s Liability Act Unit IV (20 Marks) Commercial Laws with reference to banking operations Indian Contract Act, 1872 (Indemnity, Guarantee, Bailment, Pledge and Agency etc) The Sale of Goods Act, 1930 (Sale and Agreement to Sell, Definitions, Conditions and Warranties, Express and Implied, Right of unpaid Seller etc) The Companies Act, 1956 Definition, features of company, Types of Companies, Memorandum, Articles of Association, Doctrines of Ultravires, indoor management and constructive notice, membership of company - acquisition - cessation, rights and duties of members and register of members, Prospects and directors.

5 Indian Partnership Act, 1932 Definition and types of partnership, relation of partners to one another - Relation of partners to third parties, Minor admitted to the benefits of Partnership, Dissolution of firm, Effect of non registration. The Transfer of property Act (i) Foreign Exchange Management Act 2000, (ii) Prevention of Money Laundering Act (iii) Right to Information Act, (iv) Information Technology Act. Recommended Book: Legal and Regulatory Aspects

6 Paper - 4: RETAIL BANKING Unit I (15 Marks) Introduction Unit II History and definition, role within the bank operations, Applicability of retailing concepts distinction between Retail and Corporate / Wholesale Banking Retail Products (25 Marks) Retail Products Overview - Customer requirements, Products development process, Liabilities and Assets Products / Description of Liability products, Description of Asset Products, Approval process for retail loans, Credit scoring. Important Asset Products - Home Loans - Eligibility, Purpose, Amounts, Margin, Security, Disbursement, Moratorium, Prepayment issues, Repayments / Collection. Auto / Vehicle Loans - Eligibility, Purpose, Amounts, Margin, Security, Disbursement, Moratorium, Prepayment issues, Repayments / Collection. Personal Loans Eligibility, Purpose, Amounts, Security, Disbursement, Moratorium, Prepayment issues, Repayments / Collection. Educational Loans Eligibility, Purpose, Amounts, Security, Disbursement, Moratorium, Prepayment issues, Repayments. Credit / Debit Cards - Credit Vs Debit Cards, Eligibility, Purpose, Amounts, Margin, Security, Process of using the cards, Billing Cycle, Credit Points. Other Products / Remittances / Funds Transfer Unit III (20 Marks) Marketing / Selling of retail products, MIS and Accounting Retail Strategies; Tie-up with Institutions for Personal loans / Credit cards / Educational loans, with OEMs / Authorised Dealers for Auto / Vehicle loans, and with Builders / Developers for Home loans Delivery Channels - Branch, Extension counters, ATMs, POS, Internet Banking, M-Banking. Selling Process in retail products-direct Selling Agents. Customer Relationship Management - Role and impact of customer relationship management, Stages in customer relationship management process. Regulations and compliance Technology for Retail Banking - Static information, Account opening, basic loan origination data etc. Updated information like income details at different frequencies. Transaction information from disbursement till final settlement of the loan amount. Analytics / Alerts. Accounting entries - Loan process and the relevant accounting including EMI Computation. Unit IV (20 Marks) Other issues related to Retail Banking Securitisation, mortgage based securities. Trends in retailing - New products like Insurance, Demat services, online / Phone Banking, Property services, Investment advisory / Wealth management, Reverse Mortgage - Growth of e-banking, Cross selling opportunities. Recovery of Retail Loans - Defaults, Rescheduling, recovery process. SARAFAESI Act, DRT Act, use of Lok Adalat forum. Recovery Agents - RBI guidelines.

7 Recommended Book: Retail Banking by IIBF, MacMillan India Ltd.

8 Paper - 5: CORPORATE BANKING Unit I (25 Marks) Corporate Banking and Finance Unit II Corporate Banking : Meaning and importance, various services provided viz., Cash Management, Salary Payment, Debt Management, Factoring and Forfaiting, Trusteeship, Custodial services, Business advisory, Off shore services, Trade services, Forex Management, etc. Corporate Deposits: Importance of Institutional deposits vis-a-vis retail deposits Corporate Finance: Working capital finance, Fund and Non fund based limits and Import- Export finance. Corporate Debt Restructuring. Investment Banking (25 Marks) Unit III Meaning and scope of Investment Banking, Evolution, overview of current state of Investment Banking in India. Merchant Banking : Advisory services for equity / debt issues, Management, placement and distribution of equity / debt. Mergers and Acquisitions, Divestitures : Identification, Structuring, Negotiation and Execution, arranging finances etc. Corporate advisory services: Capital restructuring, Project advisory, Private equity and Venture capital, Loan Syndication etc. Project and Infrastructure Finance (30 Marks) Characteristics of Project Finance - Technology selection, Assessment of technical collaborator - Market Analysis : International competitiveness and SWOT analysis Assessing the project cost - Means of financing projects - Estimation of project cash flows - Use of free and equity cash flow valuation for assessing projects - Financial Analysis : Breakeven point analysis, Decision tree, Scenario analysis and Internal Rate of Return, Sensitivity analysis Common risks in projects - Risk mitigation methodologies in projects - Securitisation as a tool for risk mitigation - Project planning - Network techniques for project implementation - Disbursement, supervision and follow up of project by lender Infrastructure financing cash flow deal agreement with parties involved - SPV - Monitoring and follow-up of the project Recommended Book: Corporate Banking, IIBF, MacMillan India Ltd.

9 Paper 6: CO-OPERATIVE BANKING Unit I (20 Marks) Principles and Laws of co-operative Banking Law and rules relating to Co-op Banks Principles of Co-operation - brief overview of structure of co-operative credit institutions - Membership Legal aspects of banking operations - Banking related laws - Provisions of Bankers Book Evidence Act - Special features of Recovery of Debts Due to Banks and Financial Institutions Act, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002-The Consumer Protection Act, Banking Ombudsman Unit II (20 Marks) Co-operative Banking Operations Deposits, Credit & Investment Management -Different Deposit Products - Deposit Policy Credit Management Loans and advances - Priority sector lending - MSME financing - Personal Finance- Banker - Customer relations - Garnishee orders and Attachment orders, Bankers' right of lien, set-off and appropriation - Indemnities and Bank Guarantees; Loan Policy - Management of NPA Investment Management - CRR / SLR Management - Financial Markets - guidelines of RBI / NABARD in regard to investment - Money Market - Call money - Repos and Reverse Repos - Foreign Exchange Market - Debt market - Bancassurance - Meaning and Scope of Investment Policy Unit III (20 Marks) Technology & Risk Management Technology in Banking - Electronic Payment systems / core banking solutions - Electronic funds transfer systems - RTGS Risk Management - Exposure limits-asset Liability Management - Capital Adequacy - Basel-II - Profit and Profitability - Approach of Banks to profitability Effects of NPA on profitability - A Profitability Model Unit IV: (20 Marks) Supervisory and Regulatory Aspects Banking Regulation Act (As applicable to Co-op. Banks) - Role of R.B.I. Supervision and control - Branch licensing-inspection / audit-statutory / Reserve requirements R.B.I. guidelines on Deposits, Advance, Priority sector lending, Weaker section lending, Control Returns - Recommendations of Marathe Committee, Madhav Rao Committee and Vaidyanathan committee - Role of Directors and Corporate Governance Best Practices - Management Information System. Recommended Book: Cooperative Banking, IIBF, MacMillan India Ltd.

10 Paper 7: Clerical Cadre Bank Exam Total Marks 250 The syllabus is as mentioned below: Sr. No. Name of Tests (Objective) No. of Questions Maximum Marks Duration 1 Reasoning English Language Numerical Ability minutes 4 General Awareness (with special reference to banking industry) 5 Computer Knowledge Total Penalty for Wrong Answers: For each question for which a wrong answer has been given by the candidate one fourth or 0.25 of the marks assigned to that question will be deducted as penalty to arrive at corrected score. Books n References: There are several publications on IBPS CWE Clerk Exams. The appropriate one will be chosen.