Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Administration (BBA)
Course Objective
:This course provides an overview of the management of basic functions of commercial banks in general and Nepalese banks in particular. It helps to understand different functions carried out by commercial banks and risks associated with bankingindustry.
Course Description
:This course contains an introduction to banking industry in Nepal, risks faced by commercial banks, deposit mobilization, granting credit, cash operation, agency services, trade finance, foreign exchange service, treasury function, financial statements and performance indicators and electronic banking services.
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1.Introduction to Banking Industry in Nepal
- Concept of commercial bank and commercial bank management
- Historical development of commercial bank in Nepal
- Functions of commercial banks
- Organization structure of Nepalese commercial banks
- Role of Internal Audit Department to check up irregular activities
- and Regulatory authority of commercial banks in Nepal.
Unit 2.Risks Faced by Commercial Banks
- Concept of risk
- Types of risks by commercial bank: interest rate risk, market risk, credit risk, off-balance sheet risk, foreign exchange risk, country risk, technology risk, operational risk, market risk, liquidity risk, and insolvency risk
- Interest rate risk: refinancing risk and reinvestment risk, market value risk
- Credit risk: causes of credit risk, firm-specific credit risk and systematic credit risk
- and Technology risk and measures to be taken by Nepalese commercial banks to reduce the technology risk .
Unit 3.Deposit Mobilization
- Meaning and nature of bank’s deposit
- Types of deposit: demand deposit, saving deposit, time deposit, call deposit, and recurrent deposit
- Procedure of account opening
- Know Your Customer (KYC)
- Dormant account and procedures of making the dormant account active
- Procedures of closing account
- Card services: debit card, credit card, prepaid card
- Deposit marketing and customer care services
- Deposit insurance
- and NRB directives on deposit mobilization.
Unit 4.Granting Credit
- Concept and nature of bank credit
- Types of credit: term loan, revolving loan, corporate loan, consumer loan, trust receipt loan
- Credit process
- Credit monitoring and supervision
- Credit recovery
- Credit marketing
- Credit administration
- Collaterals and margin: types and valuation
- Loan classification and loan allowances, Credit risk and its management
- Credit insurance
- and NRB directives on loans.
Unit 5.Cash Operation
- Cash management
- Security of vault
- Cash insurance
- Cash counter
- Roles and responsibilities of cashier
- Clearing system
- Electronic clearing
- and Intra-bank and interbank fund transfer.
Unit 6.Agency Services
- Fund transfer and remittance services
- Utility payment services
- Advisory services
- Standing order from customer
- and check and bill clearing services.
Unit 7.Trade Finance
- Concept, Letter of credit: parties involved in L/C, types, procedures of opening L/C, roles and responsibilities of involved parties
- Export financing: pre-shipment and post- shipment finance
- and foreign currency loan.
Unit 8.Foreign Exchange Service
- Meaning and concept
- convertible and non-convertible currency
- exchange rate system in Nepal
- Roles of Foreign Exchange Dealer Association of Nepal (FEDAN)
- and meaning of Nastro and Vostro accounts.
Unit 9.Treasury Function
- Introduction
- scope of treasury
- Back office and Front office;Asset liability management
- and Roles and responsibilities of asset liability committee (ALCO).
Unit 10.Financial Statements and Performance Indicators
- Structure of statement of financial position
- Structure of profit or loss account
- and Major Performance Indicators of Nepalese Commercial banks.
Unit 11.Electronic Banking Services
- Meaning and concept of e-banking
- Internet banking
- Branchless banking
- Mobile banking
- ABBS
- ATM
- and Opportunities, threats and challenges in the use of financial technology (FinTech).
Suggested Readings:
Rose, P. S. and Hudgins, S. C. Commercial Bank management. New York: McGraw-Hill Irwin. Suresh, P. and Paul, J. Management of Banking and Financial Services. Noida: Pearson India Education Services Pvt. Ltd. Paudel, R. and others Commercial Bank Management. Kathmandu: Asmita Books Publishers & Distributors(P) Ltd. NRB Publications