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Paper 1 � Principles & Practices of Banking
Objective :
The candidates would be able to acquire knowledge in the following :
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Various functions associated with banking.
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Practice and procedures relating to deposit and credit, documentation, monitoring and control.
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An insight into marketing of banking services and banking technology.
Module A : Indian Financial System
1. Recent developments in the Indian Financial System; market structure and Financial Innovation. RBI, SEBI, IRDA etc. their major functions.
2. Role and Functions of Banks � Regulatory provisions / enactments governing Banks, Retail Banking : Approach, Products, Marketing etc.,
3. Wholesale Banking; International Banking, Role and Functions of Capital Markets, Role and Functions of Mutual Funds, Role and Functions of Insurance Companies � Bancassurance.
4. Importance of Risk Management in Bankstypes of Risk � Impact and Management Factoring & Forfeiting, Alliances / mergers / consolidation.
5. ADR / GDR / Off Balance Sheet Items, Participatory Notes, Credit Information Bureau Ltd., Fair Practices for Debt Collection, Basel � II, Banking Codes and Standard Boards.
Module B : Functions of Banks
I. Deposits :
1. Banker � Customer relations � Know your Customer ( KYC ) guidelines � Different Deposit Products � services rendered by Banks � Mandate and Power of Attorney;
2. Banker's lien � right of set off � garnishee order � Income tax attachment order etc.
3. 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.
4. Opening of accounts for various types of customers � minors � joint account holders � HUF -
firms � companies � trusts � societies � Govt. and public bodies Importance of AML.
II. 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.
III. 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. Ancillary Services : Remittances, Safe Deposit lockers etc.
Module C : 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.
Module D : 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.
