COMMERCIAL BANKING Credit Units: 03

Course Objectives
The aim of this course is to give the student an overview of banking industry and prepare him for various roles in the
banking sector.

Course Contents

Module I: Principles Of Banking
Retail Banking, Savings and Current Accounts, Loan Products, Plastic Money, Wholesale Banking, Off Balance
Sheet Business, International Banking, Correspondent Banking, NOSTRO and VOSTRO accounts- SWIFT,
CHIPS, CHAPS, FEDWIRE., Documentary Letter of Credit, NRI Accounts, Remittances and Clearing,

Module II: Regulatory Framework
Negotiable Instruments Act, Banking Regulation Act, Reserve Bank of India Act, RBIs Monetary and Credit Policy

Module III: Treasury Management
Instruments in Treasury Market, Development of new financial products, control and supervision of Treasury
management; linkage of domestic operations with foreign operations, Asset Liability Management, Banks Balance
Sheet- Components of Assets/Liabilities and their management, Liquidity Management, Interest Rate Management,
RBI Guidelines on Asset Liability Management; Stock options; debt instruments; bond portfolio strategy; risk
control and hedging instruments, Investments Treasury bills Money markets instruments such as CDs, CPs,
IBPs; Refinance and rediscounting facilities

Module IV: Credit
Principles of Lending, Working Capital and Term Loans, Financing SME/MSME, Microfinance, Credit Appraisal
Techniques, Credit Rating, Default Probabilities, Credit Spreads, Credit Migration, Credit Monitoring,
Documentation Procedures, NPA, Laws relating to securities-valuation of securities-modes of charging securities-
lien,pledge, mortgage, hypothecation etc, The Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act

Examination Scheme

Components CPA TP Q/S A ME EE
Weightage (%) 5 5 5 5 10 70

References

Varshney, P.N., 2010, Banking Law and Practise, S Chand and Sons
Radhakrishnan, T.S.; 2005, Principals of Banking; Macmillan
Mishra, R.K.; Banking Sector Reforms and Agricultural Finance; Sonali Publications
Padhy Kishore C; Padhy Manoranjan; 2011; Banking Future; Dominant Publishers and Distributors