Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Business Management (BBM)
Course Description
:This course contains an introduction to banking industry in Nepal , risk s in banking business , deposit mobilization, bank credit management , cash operation, agency services, tra de finance, bank and customer relationship and electronic banking services.
Course Objective
:This course provides an overview of commercial banking operations in general and Nepalese perspective. It also helps to understand different functions carried out by c ommercial banks and risks associated with banking industry. Course Description This course contains an introduction to banking industry in Nepal , risk s in banking business , deposit mobilization, bank credit management , cash operation, agency services, tra de finance, bank and customer relationship 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
- Meaning and necessity of bank and financial institutions
- An overview of Nepalese financial system
- Distinguish between banking and other business
- Concept of commercial bank and commercial bank management
- Historical development of commercial bank in Nepal
- Functions of commercial banks
- Regulatory authority of commercial banks in Nepal.
Unit 2. Risks in Banking Business
- Concept of risk
- Types of risk s 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. Bank Credit Management
- Concept and nature of bank credit
- Types of credit: term loan, revolving loan, corporate loan, consumer loan, trust receipt loan
- Credit process
- Credit mon itoring and supervision
- Credit recovery
- Credit marketing
- Credit administration
- Collaterals and margin: types and v aluation
- 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 r emittance 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. Bank and Customer Relationship
- Legal nature of bank customer relationship , trustee-beneficiary, agent principal, debtor – creditor
- Special type of customer (Individual, Corporate, Government, NGO, INGO etc.)
- Anti-Money Laundering and Know Your Customer (KYC).
Unit 9. 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. Thapa R. B. and Rawal, D. Principles and practices of Nepalese Banking. Kathmandu: Buddha Academic Enterprises Paudel, R. and others Commercial Bank Management. Kathmandu: Asmita Books Publishers & Distributors(P) Ltd. NRB Act , Rules and Regulation and Publication. Bank and Financial Institution Act, and Company Act.