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Diploma in Islamic Banking Examination, April 2016

PART-I
101: Islamic Ideology
Time: 3 hours
Full Marks: 100
Pass Marks: 45

(N.B.: Answer any (5)five questions. The figures in the right margin indicate full marks.)

1. O O O O
ْ‫أَﺣَﺪٌ ﻛُﻔُﻮًا ﻟﱠﮫُ ﯾَﻜُﻦ وَﻟَﻢ‬ ْ‫ﯾُﻮﻟَﺪْ وَﻟَﻢْ ﯾَﻠِﺪْ ﻟَﻢ‬ ُ‫اﻟﺼﱠﻤَﺪُ اﻟﻠﱠﮫ‬ ْ‫أَﺣَﺪٌ اﻟﻠﱠﮫُ ھُﻮَ ﻗُﻞ‬
a) Translate the above verses of the Holy Quran into Bangla/English. 6

b) Define Tawheed. How does Tawheed differ from Shirk -explain according to the 14
above verses.

2. Define and differentiate the following pairs of terms (any five): 5x4=20
a. Iman and Aqeedah b. Musafir and Muqeem

c. Bida’at and Sunnah d. Shariah based and Shariah compliant

e. Ibadat and Muamalat f. Nafal and Mubah

g. Fakir and Miskeen h. Mufti and Mujtaheed

3. What do you mean by the term Haqqul Ibad? How world peace can be ensured by
establishing the human right in Islam? 20
4. Enumerate the points delivered by the Prophet (PBUH) in the historic speech of
Hajjatul Bidah. 20
5. What are the fundamentals of Maqasid-al-Shariah? Discuss how maqasid al-Shariah
is achieved through Islamic Banking. Does it differ from CSR? 20
6. What is the concept of an extended family in Islam? How family culture of Islam can
help the children to develop themselves as the leader of the society? 20
7. Explain the terms Taqwa and Sabr. What are the benefits of these qualities? What
are the process to achieve these qualities as per Al-Quran and Hadith? 20
8. Write short notes on any 5(five) of the following: 5x4=20
a. Iqamat-e-Salat
b. Sirat al-Mustaqim
c. Gheebat
d. Akhirah
e. Adle and Ihsan
f. Islamic Ummah
g. Sources of Islamic Law
h. Muttaqi
The End

Diploma in Islamic Banking Examination, April 2016


PART-I
102: Principles of Economics: Conventional and Islamic
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any five questions. The figures in the right margin indicate full marks.)

1. a) Discuss the characteristics of Islamic economic system and compare 12


them with those of capitalistic and socialistic economic system.

b) Define and distinguish between Microeconomics and Macroeconomics. 8

2. a) Explain the Law of Demand and Law of Supply. Prepare a demand 10


schedule and draw a demand curve from it. Illustrate the law of
demand with an example.

b) What are the characteristics of want in conventional economics and 10


Islamic economics? Are wants unlimited and resources scarce in both
conventional and Islamic economics?

3. a) Distinguish among Total, Average and Marginal Utility. Explain the law 12
of diminishing marginal utility.

b) What is Consumer Surplus? Is it applicable to both conventional and 8


Islamic consumers market?

4. a) Define GDP, GNP, NNP and Per Capita Income and show their 8
relationship.

b) Discuss the various methods of measuring GDP. What are the limitations of 12
GDP measurement?

5. a) Explain the Marginal Productivity Theory of Distribution. 6

b) Discuss the Islamic principles of factor pricing and income distribution. 14


Show their application in determining the wages of labour in a labour
surplus country like Bangladesh.

6. a) Define and distinguish among Monopoly, Monopolistic Competition and 12


Perfect Competition. Show how a farm determines its price in a perfect
competitive market.

b) Distinguish between profit and interest. Why interest is prohibited in 8


Islamic economic system?

7. a) Define and distinguish between monetary policy and fiscal policy. What 10
are their objectives?

b) What is deficit budget? Is deficit budget always inflationary? 10

8. Write short notes on any 5(five) of the following: 5x4=20


a. Balance of Payment and Balance of Trade
b. Money Market and Capital Market
c. Open Market Operation
d. Green Banking
e. Elasticity of Demand
f. Indifference Curve
g. Producer Surplus

The End
Diploma in Islamic Banking Examination, April 2016
PART-I
103: Principles of Accounting
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full
marks)

1. a) Define Accounting. How does accounting differ from book-keeping? 5

b) State, in brief, the accounting concepts and conventions. 5

c) On January 1, 2016 the following were the account balances of ABC Ltd.

Cash Tk. 30,000

Equipment Tk. 80,000

Office Supplies Tk. 10,000

Accounts Receivable Tk. 12,000

Accounts Payable Tk. 45,000

Capital Tk. 87,000

During the month, the following transactions were occurred;

Jan. 2 : Goods sold on account Tk. 40,000.00

Jan. 5 : Paid Tk. 5,000.00 to account payable.

Jan. 12: Collected Tk. 8,000.00 from receivable.

Jan. 20: Supplies used Tk. 4,000.00 during the month.

Jan. 25: Paid monthly salary Tk. 7,000.00

Jan. 31: Withdrew Tk. 3,000.00 for personal purpose of the owner.

Requirements:

(i.) Analyze the transaction using accounting equation. 4


(ii.) Prepare journal to record the transactions.
6

2. a) What are books of original entry? 2


b) What types of transactions are recorded in a cash book? 3

c) Why reconciliation is required between “Cash Book” and “Pass Book”? 3

d) Enter the following transactions, occurred in March 2016, in 3(Three) column 12


cash Book of M/S Sun & Co.:

March 1: Cash in hand Tk. 50,000.00 and balance at bank Tk. 2,00,000.00

March 5: Received from Janab K Hasan Tk. 99,000.00 and allowed him
discount Tk. 1,000.00

March 6: Paid salary Tk. 15,000.00

Cash sales Tk. 50,000.00

March 8: Paid to Janab B. Haq by cheque Tk. 20,000.00

Cash purchase Tk. 20,000.00

March 15: Paid to Janab N. Karim by cheque Tk. 9,900.00 and discount
received Tk. 1,000.00

March 18: Withdrawal from bank Tk. 15,000.00

March 20: Deposited into bank Tk. 5,000.00

March 25: Purchase office equipment for Tk. 8,000.00 through a cheque.

March 26: Received from Janab Hakim Tk. 10,000.00 by cheque.

March 28: Deposited the cheque received on march 26, 2016 into bank.

March 31: Bank Notifies that Janab Hakim’s cheque has been dishonored.

3. a) M/s Next Door Ltd. incorporated in March 2016 with an initial capital of
50,000 shares @ Tk. 50.00 each. During the first month of its operation, the
company engaged in the following transactions:

March 1: An amount of Tk. 50,000 paid as advance rent;

March 3: Paid Tk. 50,000.00 cash on purchase of equipment costing Tk.


80,000, the remaining amount was recognized as accounts
payable.

March 4: Paid against accounts payable Tk. 25,000.00

March 15: Received Tk. 75,000.00 as advance payment from customers.

March 20: Miscellaneous expenses paid Tk. 6,500.00

March 31: Paid Tk. 40,000.00 as dividend.


Required:

i. Prepare the journal entries. 8

ii. Transfer the above entries from journal to respective Ledgers. 8

b) Give the correct entries: 4

i. Purchase undercast Tk. 35,000.00


ii. Repair & Maintenance of Tk. 75,000.00 has been debited to Machinery Account
iii. Cash Payment Tk. 40,000.00 debited to Janab Rahim A/c instead of Janab Karim
A/c
iv. Sales overcast Tk. 20,000.00

4. a) Describe the importance of inventory management. 5

b) Why FIFO method is better for inventory management? 3

c) How inventory valuation affects the preparation of financial statement? 2

d) M/S Rafan Ltd. Provides the following data related to inventory for the month 10
of February, 2016:

Inventory Feb.-1, 3,500 MT, Tk. 550/MT

Purchases Feb.-7, 8000 MT, Tk. 640/MT

Feb.-12 7,000 MT, Tk. 605/MT

Feb.-25 5,000 MT, Tk. 701/MT

Sales Feb.-5 2000 MT,

Feb.-18 10,000 MT,

Feb.-28 5,000 MT,

Under periodic inventory system, determine the cost of inventory on hand at


February 29, 2016 and the cost of goods sold for the month under (i) FIFO;
and (ii) LIFO Method

5. a) Why charging of depreciation is required? 4

b) What is the difference between Straight Line Method of depreciation and 4


Diminishing Balance Method of depreciation?

c) XYZ Ltd. purchased a machine of Tk. 2,00,000.00; estimated life of the 12


machine is 5 years and the salvage value is Tk. 20,000.00.

Determine the depreciation by using-

i. Straight Line Method;


ii. Reducing Balance Method;
iii. Sum of Years Digit Method;
iv. Suppose the estimated effective life of the machine is 40,000 hours. In a particular
year the machine runs 6,500 hours then calculate the depreciation of that
particular year.

6. From the following Trail Balance of M/s Moon Ltd. Prepare the income
statement and Balance Sheet as on 31 December, 2015:
20
M/s Moon Ltd.

Trail Balance

31 December, 2015

Amount in Taka

Particulars Debit Credit

Capital 5,50,000

Cash in Hand 25,000

Cash at Bank 2,00,000

Computer 30,000

Commission Income 10,000

Opening Inventory 75,000

(Raw Materials Tk. 15,000; WIP Tk.


30,000; and Finished goods Tk.
30,000)

Purchase 3,29,000

Sales Discount 5,600

Carriage Outward 4,500

Sales Return 6,500

Generator 3,80,000

Furniture 50,000

Sales 4,26,000

Accounts Payable 25,000

Profit Paid to Bank 26,000

Carriage Inward 3,800

Purchase Discount 1,500


Purchase Return 4,000

Accounts Receivable 45,000

Bank Investment 2,00,000

Provision for Bad Debt 3,500

Salaries 12,500

Wages 3,600

Other Factory Cost 2,500

Bad Debt 1500

Dividend 10,000

Insurance Expenses 7,000

Office Expenses 2,500

Total 12,20,000 12,20,000

Additional Information:

i. Closing inventory consist of Raw Materials Tk. 30,000; WIP Tk. 40,000; and
Finished Goods Tk. 20,000;
ii. Depreciation: 10% on generator and furniture and 20% on computer
iii. New provision for bad debts Tk. 3,000
iv. Provision for Taxes Tk. 5,000
v. Unpaid salary Tk. 4,000

7. From the following Trial Balance of Western Islamic Bank Ltd., prepare the
profit and loss account and balance sheet as on 31 December 2015:
20
Western Islamic Bank Ltd

Trial Balance

31 December 2015

Amount in Taka

Particulars Debit Credit

Paid up Capital (400,000 shares @Tk. 10 each) 40,00,000

Balance with Bangladesh Bank 78,00,000

Balance with other banks 15,00,000

Land and Buildings 30,00,000


Furniture and Fixture 5,00,000

Other Fixed Assets 2,50,000

Al-Wadeeah Current Account 2,00,00,000

Mudaraba Savings Deposits 5,00,00,000

Mudaraba Term Deposits 4,00,00,000

Other Deposits 1,00,00,000

Salaries and Allowances 12,00,000

General Investments 10,12,80,000

Bills Purchased 1,50,00,000

Accounts Receivable 5,00,000

Bills Payable 3,00,000

Cash in hand 21,50,000

Profit Payable 4,50,000

Profit paid on Deposit 80,00,000

Managing Director’s Salary 1,12,000

Provision for Classified and unclassified 10,00,000


Investment

Commission, Exchange, Brokerage etc, 7,50,000

Investment Income 1,26,00,000

Income from OBU 10,00,000

Loss on Brokerage 50,000

Prepaid Expenses 15,000

SSC Fees & Expenses 60,000

Non-Banking Assets 90,000

Balance of Profit & Loss Account 5,50,000

Accrued Expenses 38,000

Legal Expenses 15,000

Other Assets 1,50,000


Directors’ fees 25,000

Other operating income 8,00,000

Statutory Reserve 9,00,000

General Reserve 4,20,000

CSR Expenses 96,000

Postage & Telecommunication 5,000

Printing & Stationary 10,000

Investment in Securities 10,00,000

Total 14,28,08,000 14,28,08,00


0

Additional Information:

i. Provide provision for investment Tk. 10,000; Taxes Tk. 5,000, and other
provision Tk. 6,000
ii. Proposed dividend Tk. 25,000
iii. Salary and allowances due for Tk. 75,710
Required:

i. Prepare profit and Loss account as per Bangladesh Bank BRPD circular and
Islamic Banking Guidelines;
ii. Prepare Balance Sheet for the year ended at December 31, 2015.

8. Write short notes on any 5 (five) of the following: 5x4=20

a. Forms of business organization

b. Islamic vs. Conventional Accounting System

c. Franchise and Licenses

d. Accounting Standard of AAOIFI

e. Accounting Equation

f. GAAP

g. Audit Report Vs. Audited Accounts

h. Adjusting Entries.

The End
Diploma in Islamic Banking Examination, April 2016
PART-I
104: Principles of Management
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full
marks)

1. a) “Management is getting things done with & through others.” Explain. 7


b) Distinguish between Islamic management and Conventional management. 7
c) What are the factors that make a manager popular? 6

2. a) Define Planning. What are the main features of a good plan? 7


b) Discuss the planning process with example. 8
c) Discuss the different types of plans. Which type of plan is formulated at the
corporate offices of Islamic Banks? Why? 5

3. a) Briefly discuss the different types of organizational structures. Which type of


structure is followed in your bank? 7
b) Distinguish between line authority & staff authority. 5
c) “Authority can be delegated but not responsibility.” Comment. 8

4. a) Define leadership. What are the qualities required to become an effective


leader from the Islamic point of view. 7
b) Differentiate between an autocratic and democratic leadership style. Which one
is suitable for an Islamic Bank? 7
c) “Leadership is a matter of education and learning.” Comment. 6

5. a) Discuss the role of motivation in job satisfaction. 6


b) How would you motivate the employees of an Islamic Bank? 8
c) What are the basic differences between Needs Hierarchy theory & Two-Factors
theory of motivation? 6

6. a) What is MIS? How does it help the management in decision making? 7


b) Discuss the role of ethics in banking. How would you raise the ethical standards
of managers? 7
c) Discuss the responsibilities of the supervisors in Islamic perspective. 6

7. a) Define manpower planning. What are its benefits? 5


b) What are the differences between recruitment and selection? What are the
different sources of recruitment? 7
c) What do you mean by performance appraisal? Why it is important? Do you like
360 degree of performance appraisal? Why? 8

8. Write short notes on any 5 (five) of the following: 5x4=20


a. Brain Storming
b. Job Evaluation
c. Stress Management
d. Consultative Direction
e. Decentralization
f. Charismatic Leadership
g. e-HRM
h. Organizational Citizenship

The End

Diploma in Islamic Banking Examination, April 2016


PART-I
105: Business Communication
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks)

1. a) Do you think that good communication in any organization improves


the performance of employees? Justify your answer.
8

b) Define verbal and nonverbal communications with examples. 4


c) Describe the various types of nonverbal communication. 8

2. a) Briefly explain the phases involved in the process of communication. 6


b) How would you overcome the barriers to communication within an
organization? 6
c) “Informal communication plays an equally important role as formal
communication.” Do you agree with this statement? Give arguments
in support of your answer.
8

3. a) Discuss the different methods of electronic communication. Which


methods do you feel to be most effective in banking communication? 8
b) Explain the different approaches to writing business letters and state
the situations in which each approach will be appropriate. 8
c) What is the importance of writing persuasive letters in banking 4
business?

4. a) What are the various forms of written communication? Describe 4


briefly.
b) Draft a suitable reply to a customer who has complained about the
poor services of your branch. 8
c) Prepare a letter regretting the proposal of one of your clients about
enhancement of the existing investment limit. 8

5. a) Draft a circular letter on behalf of the Head Office to the Branch


Managers of your Bank describing the advantages of Agent Banking 10
System.
b) Write a letter to the Head Masters of different schools for making
agreement with your bank about the payment of tuition fees through
mobile banking system.
10

6. Draft comprehensive report to be submitted to Bangladesh Bank on


your bank working on the SME and Women Entrepreneurs Scheme
during 2015 and its plan for 2016.
20

7. a) What do you mean by Press Release and Press Coverage? Explain


with views. 6
b) How you can protect a negative media coverage as an assigned
officer of a Bank? 6
c) Write a press release covering the newly opened branch of your 8
Bank.

8. Write short notes on any 5 (five) of the following: 5x4=20


a. Facebook and Tweeter b. Executive Summary
c. Agenda and Minutes d. Skype
e. Corrigendum f. Multimedia Presentation
g. Notice Inviting Tender h. Brand Ambassador

The End

Diploma in Islamic Banking Examination, April 2016


PART-I
106: Theory and Practice of Banking: Islamic and Conventional
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks)
1. a) Describe the objectives of Islamic Banking in terms of Maqasid al 5
Shariah.
b) Mention the basic differences between Islamic banking and
conventional banking. 5
c) What are the sources of fund of an Islamic Bank? 4
d) Briefly discuss the contribution of Islamic banking in Bangladesh. 6
2. a) “The Central Bank is the lender of last resort.” Discuss. 7
b) Discuss the importance and role of Central Bank in onsite and offsite 7
supervision on Banks.
c) Describe the basic differences between a Bank and Non-Bank Financial
Institutions. 6
3. a) What are the basic functions with regard to Internal Control and 10
Compliance?
b) Describe in short the importance of Internal Control and Compliance in
eliminating the lapses, irregularities and violation in the operational
activities of a bank.
10

4. a) Describe the role of an auditor for good governance of a bank. 7


b) How ‘CAMELS’ rating helps banks to improve their performance? 7
c) Briefly describe the functions of a commercial bank. 6
5. a) Define Liquidity Management. 5
b) How does a bank ensure effective fund management as well as asset
liability management? 5
c) Describe the importance of maintenance of ideal IDR to a banker? 5
d) Discuss the role of Ancillary Income in the overall performance of a 5
bank.
6. a) Discuss the role of Money Market and Capital Market in Bangladesh 7
economy.
b) Discuss the main causes of capital market volatility. 6
c) Describe the functions and impact of Mobile Financial Services in our 7
country.
7. a) Differentiate between a Cheque and Bill of Exchange. 5
b) What papers and documents are required to open the following types of
account as per guideline of regulators: 6
i. Public Limited Company.
ii. NGO Account.
iii. Partnership Account having 3 partners.
c) Differentiate between Guarantee and Indemnity. 4
d) When a banker must refuse payment of a cheque? 5
8. Write short notes on any 5 (five) of the following: 5x4=20
a. Riba an-nasiya and Riba al-Fadl
b. Treasury Bill
c. Retail and Whole Sale Banking
d. Agency
e. Repo and Reverse Repo
f. Pledge and Hypothecation
g. UPDS
h. Deposit Mix

The End
Diploma in Islamic Banking Examination, April 2016
PART-II
201: Investment Management
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks)

1. a) What should be the contents of the Investment policy of a bank as


per Risk Management Guidelines for banks issued by Bangladesh 10
Bank?
b) What is your understanding about investment administration? What
functions should a typical investment administration department of a
bank perform?
10

2. a) Under competitive market condition, what strategies would you follow


to retain your existing investment clients? 10
b) What is investment pricing? What are its components? Give an 10
example.
3. a) What are the factors of consideration while taking over a good
investment client from other Conventional Bank? 10
b) How do you assess the real investment need of your SME clients? 10
4. a) What are the rates of provision charge for default investments? 10
b) How a Bad & Loss Investment Account can be unclassified as 10
standard one?
5. a) Define Annuity Method and Average Method of charging rent. 12
b) How the ownership of a HPSM investment is transferred. 8
6. a) Distinguish between Musharaka and Mudaraba modes of Investment. 10
b) How the modes of Investment of Islamic Banks are superior to the
Loan contract of conventional Banks? Explain. 10
7. a) Distinguish between the gross working capital and the net working 6
capital.
b) A pro-forma cost sheet of a manufacturing firm provides the following
particulars at its full capacity of 24,000 units:
Elements of cost Per unit
Material Tk. 80
Labor and variable manufacturing expenses 40
Fixed manufacturing and administrative expenses 30
(including depreciation expenses of Tk. 10 per unit)
Profit 40
Selling price 200
The selling price per unit is expected at Tk. 200 and the selling expenses per
unit will be Tk. 10 of which 80 percent being variable. In the forthcoming
year the production and sales are expected to be 20,000 units and 18,000
units respectively.
To forecast working capital requirement, the following additional
information is given below:

i. Stock of raw materials is equivalent to 3 months average consumption.


ii. Work-in- process is negligible.
iii. The amount of debtors is equivalent to 1 month average cost of sales.
iv. The amount of creditors for supply of materials is equivalent to 2
months average purchases of the year.
v. The amount of creditors for operating expenses is equivalent to 1 month
average of total operating expenses of the year.
vi. Minimum desired cash balance Tk.20,000.
vii. Stock of finished goods is taken at average cost.
Prepare a projected statement of working capital requirements of the
manufacturing firm.

14
8. Write short notes on any 5 (five) of the following: 5x4=2
0
a. Investment Documentation
b. Collateral Coverage and Collateral Management
c. Stress Testing
d. GINI Coefficient
e. NPV & IRR
f. Venture Capital
g. Green Banking Investment Operation
h. Concentrated Risk

The End

Diploma In Islamic Banking Examination, April 2016


PART-II
202: International Trade and Finance
Time: 3 hours
Full Marks: 100
Pass Marks: 45

(N.B.: Answer any 5(five) questions, taking at least 2(Two) from each group.
The figures in the right margin indicate full marks.)

Group-A
1. Please discuss the following issues relating to Documentary Credit Operations:
a) Parties of Documentary Credit and their responsibilities. 5

b) Documents required to release imported consignment from the port as per practice of
Bangladesh.
5

c) Mandatory Fields (Clauses) of SWIFT MT-700 for Letter of Credit operations. 5

d) Advising Procedures of Documentary Credit and responsibilities of Advising Bank. 5


2. a) Discuss about Musharaka Documentary Bills Inland (MDB) and its disbursement 7
procedures.
b) Describe about Bai-As-Sarf and application of this mode in foreign trade transaction. 6

c) Describe Murabaha Post Import (MPI) Investment. 7

3. Answer the following questions in light with the law of Bangladesh:

a) How Suppliers Credit Report can be collected as per GFET and what is the validity period
of Credit Report and for which amount of L/Cs those are required?
4

b) What are the special conditions for opening L/C to import through land port? 4

c) What are the conditions for Advance Payment against Import? 4

d) What are the different types of Import Registration Certificates (IRC)? Who issues and
who can renew the IRC & ERC.
4

e) Define different types of Industrial units operating in EPZ and their formation criterion. 4

4. a) “Letter of Credit ensure Win-Win situation for both importers & exporters.” Explain. 7

b) Are the domestic Letter of Credit covered under the rules of UCP? 3

c) Write down the complete procedure for rejecting documents under the rules/articles of
UCP 600.
6

d) State four major discrepancies in the export documents barring negotiation. As a 4


negotiating bank how would you deal with this situation?

Group-B

5. a) Discuss in what way, comparative cost advantage theory is an improvement over


absolute cost advantage theory?
7

b) Discuss the constituents of current account and capital account. 7

c) Why is “Overall Balance” considered as the best indicator of BOP of a country? 6

6. a) What do you mean by International Finance? In what way, international finance is


different from domestic finance?
7

b) What is the purpose of International Financial Market? Differentiate between Euro 7


Currency Market & Foreign Exchange Market?

c) How do you apply the knowledge of financial engineering for developing financial derivative 6
products? Differentiate between linear and non-linear financial derivatives (with example)
Please turn over

7. a) Explain the difference between Foreign Exchange Risk and Foreign Exchange Exposure.
Differentiate between Transaction Exposure and Economic Exposure.
6

b) How do you distinguish between long position & short position? Does Islam permits it? Give
arguments in favour of your answer.
7

c) Name the constituents of World Bank Group. State their functions very briefly. In what way,
these are similar or dissimilar to those (functions) of IDB.
7

8. a) What is Cross rate? How would you calculate O.D. (sight) and B.C. (Selling) rate from spot
rate?
5

b) Why in Bangladesh $/Tk is not a cross rate? Calculate €/Tk and ¥/Tk rate from the following
rates:
€1 = $ 1.20 - 1.32 (Paris)
$1 = ¥ 110.25 - 112.35 (Tokyo)
$1 = Tk. 79.50 - 80.75 (Dhaka)

10

c) What is Forward Rate? What is the role of Swap Rate in calculating Froward Rate from Spot
Rate?
5

The End

Diploma in Islamic Banking Examination, April 2016


PART-II
203: Ethics in Banking & Legal Environment
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks.)

1. a) Draw a line of demarcation among Ethics, Laws and Religion. 5


b) What is business ethics? Are the business ethics and banking ethics same?
Give example. 5
c) “A culture of ethics and compliance is at the core of a strong risk
management program.” Explain. 10

2. a) Define relationship between Compliance and Corporate Governance. 4


b) What are the reasons for Corporate Governance failure in a Bank? 7
c) What do you mean by Corporate Governance Mechanism? Please mention the
various steps of Corporate Governance Mechanism. 9

3. a) Define money laundering as per Money Laundering Prevention Act. 5


b) What is Predicate Offence? Write the means of some Predicate Offences. 5
c) Write down the duties and responsibilities of BAMLCO focusing his roles in
preventing money laundering. 10

4. a) Who are competent to enter into a contract? What do you mean by ‘Sound
Mind’? 8
b) Define Free Consent with example. 4
c) Mr. Karim sells by auction to Mr. Ali a cow which Mr. Karim knows to be
unsound. Mr. Karim says nothing to Mr. Ali about the cow’s unsoundness.
Whether there is a fraud in this transaction? Give reason in favor of your
opinion. 8

5 a) How and under what law mortgage can be created over a Ship? 10
b) What is a Company Charge? Define a fixed, floating and further charge. 10
6. a) What is the difference between an offence under section 138 of the
Negotiable Instrument Act 1881 and an offence under section 420 of the
Bangladesh Penal Code? Please give examples. 10
b) What do you mean by Constructive Service of Notice? What is the procedure
of Service of Notice under Negotiable Instrument Act 1881? 10

7. a) Discuss the statutory protections which are available for paying and
collecting banker under Negotiable Instrument Act 1881. 10
b) Point out the circumstances where some negotiable instruments lose their
negotiability. Explain with examples. 5
c) Write down the procedures of filing suit for dishonor of Chegue. 5

8. Write short notes on any 5 (five) of the following: 4x5=20


a. Negligence
b. Quasi-Contract
c. Precedent
d. Legal Personality
e. Certificate of Incorporation
f. Trade Marks
g. Bankruptcy
h. Preliminary Decree and Final Decree
i. Second Mortgage and Sub-Mortgage
The End

Diploma in Islamic Banking Examination, April 2016


PART-II
204: Management Accounting & Financial Management
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any(5) five questions selecting at least 2(two) questions from each section.
The figures in the right margin indicate full marks)

Section-I
(Management Accounting)

1 a) “The emphases of financial accounting and management accounting differ.” Explain. 4


b) Explain the scope and limitations of management accounting. 6
c) Discuss the relationship of Management accounting to Cost accounting and Financial
accounting. 6
d) What are the tools and techniques used in Management Accounting? 4

2 a) Define break-even point. State its utility in banking business. 6


b) Two competing banks AB Bank Ltd., and CD Bank Ltd., provide the same type of
services in the same type of market. For the forthcoming year, their budgeted
net income is determined as under:

AB Bank CD Bank
Ltd. Ltd

Service Revenue Tk.1,50,000 Tk.1,50,00


0

Less:

Variable Cost 100,000


120,000

Fixed Cost 35,000


15,000

Tk. Tk.
1,35,000 1,35,000

Profit Tk. Tk. 15,000


15,000

(i) Calculate the break-even point and margin of safety of each bank. 5
(ii) Calculate the volume of service revenue at which each of the two bank will 4
make a profit of Tk. 25,000
(iii) State which bank is likely to earn greater profits in condition of: 5
 Declining bank service preference of customers.
 Increasing bank service preference of customers.
Give your reasons.

3 a) Define marginal cost and marginal costing. Discuss usefulness and limitations of
marginal costing. 8

b) ABC limited sells its products at Tk. 30 per unit. The company uses a First in First
Out actual costing system. A new fixed manufacturing overhead allocation rate is
computed each year by dividing the actual fixed manufacturing overhead cost by
the actual production costs. The following simplified data are related to its first
two years of operation:
year-I year-II
Sales (units) 1000 1200
Production (unit) 1400 1000
Costs (Tk.)
Variable manufacturing 7,000 5,000
Fixed manufacturing 7,000 7,000
Variable marketing and
10,000 12,000
administration
Fixed marketing and administration 4,000 4,000

Required:
i. Prepare income statement based on:
a. Absorption costing and 4
b. Variable costing for each year. 4
ii. Give reasons for the difference in the answer. 4

4 a) What is the Primary Purpose of a Cash Budget? 4


b) Reliance Ltd. is the merchandising company and sells a wide range of products.
Since sales of the company have grown rapidly over the few years, the company
is planning to take investment facilities from an Islamic bank to meet the working
capital requirement. Mr. Amjad Hossain, Managing Director of the company has
just approached the company’s bank with a request for investment facilities of Tk.
6,00,000 (for 180 days), as it will assist the company in acquiring inventories.
As the company had some difficulty in paying off its dues in the past, the
relationship officer of the bank has asked for a cash budget to help in determining
whether the Investment should be granted or not. For preparing cash budget
following data is available for six months (From January to June-2016), during
which the investment facilities will be used:
a. On January 1, the start of the investment period, cash balance will be Tk. 156,000
and accounts receivable Tk. 910,000 of which Tk. 845,000 will be collected during
January and Tk. 45,000 will be collected during February. The remainder will be
uncollected.
b. Past experience shows that 30% of a month’s sales are collected in the month of sale,
60% in the month following sale, and 8% in the second month following sale. The
other 2% represents bad debts that are never collected. Budgeted sales and
expenses for the six months are as follows:

Particulars Januar February March April May June


y
Sales 1200,000 1,800,000 2,100,000 3,150,000 3,675,000 5,512,500

Purchases 720,000 1,080,000 1,260,000 1,890,000 2,205,000 3,307,500

Payroll 54,000 81,000 94,500 141750 165,375 248,063

Lease Payments 90,000 90,000 90,000 90,000 90,000 90,000

Advertising 420,000 480,000 540,000 617,143 694,286 793,469

Equipment purchases 48,000

Depreciation 60,000 60,000 60,000 60,000 60,000 60,000

c. Merchandise purchases are paid in full during the month following purchase.
Accounts payable Tk. 1200,000 for merchandise purchased on December 31,
which will be paid during January. 16
d. In preparing the cash budget, assume that Tk. 600,000 Investment facilities will
be sanctioned in January and repaid in June. Profit of Tk. 42,000 will be charged
against the Investment.
Requirement:

Prepare a cash budget showing month-wise and total budgeted figures from
January to June 2016.

Section-II

Financial Management

5 a) What is annuity? Explain how can future value of an annuity be determined? 5


b) Explain the Effective Rate of Return and Flat Rate of Return. 4

c) Mr. Koreshi has Tk. 500,000 to deposit in Mudaraba Term Deposit on auto
renewal basis for Three years at the following Rate of Return(RR);
Term RR
12 Months 10.00
%
6 Months 9.00%
3 Months 8.00%
Compute;
i. The amount he would have at the end of the third year, leaving all profit paid on
deposits in the bank, on each alternative.
ii. The effective rate of return he would earn on each alternative and
iii. Which plan should he choose?

6 a) What does it mean for project to be mutually exclusive? 3


b) Why does capital budgeting rely on analysis of cash flows rather than on net 4
income?
c) Company Y is operating an elderly machine that is expected to produce a net
cash inflow of Tk. 40,000 in the coming year and Tk. 40,000 next year. Current
salvage value is Tk. 80,000 and next year’s value is Tk. 70,000. The machine can
be replaced now with a new machine, which costs Tk. 1,50,000 but is much more
efficient and will provide a cash inflow of Tk. 80,000 a year for 3 years. Company
Y wants to know whether it should replace the equipment now or wait a year with
the clear understanding that the new machine is the best of the available
alternatives and that it in turn be replaced at the optimal point. Ignore tax. Take
opportunity cost of capital as 10 per cent. Advise with reasons.

13

7 a) Define cost of capital. Why do financial managers calculate cost of capital of a 5


firm?

b) A company has the following capital structure, which it considers optimal:

Source of Capital Amount (Tk.)

7% Bond (selling at par) 3,00,000

Preference Stock, Tk. 5 2,40,000

Common Stock 3,60,000

Retained Earnings 3,00,000

Total Tk.
12,00,000

Dividends on common stock are currently Tk. 3 per share and are expected to
grow at a constant rate of 6 percent. Market price of common stock is Tk. 40, and
the preferred stock is selling at Tk. 50. Floatation cost on new issues of common
stock is 10 percent. The interest on bonds is paid annually. The company’s tax
rate is 40%.
Required:

You are required to compute weighted average cost of capital based on existing
capital structure.

15

8. Write short notes on any 8 (eight) of the following: 8x2.5=20

a. Financial Lease
b. Conservative Working Capital Policy
c. Common and Preferred Stock;
d. Operating Lease and HPSM;
e. Dividend Policy;
f. Payout Ratio;
g. Financing Mix;
h. Current Asset Management
i. Risk-Return Tradeoff;
j. MM Hypothesis.

Diploma in Islamic Banking Examination, April 2016


PART-II
205: E- Banking
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks.)

1. a) What is operating system (OS)? Distinguish between OS and Application


Software with example. 6
b) What is IT audit? Describe the advantages of IT auditing over
conventional auditing system. 6
c) How your computer can be affected by Virus? 4
d) What guidelines should be followed in using email and intranet? 4
2. a) What is BCP? How BCP protect a Bank as per guideline of Bangladesh 6
Bank?
b) What is computer Network? Explain- ‘Computer Network is essential for
operation of modern Banking System.’ 6
c) What are the differences between DC and DRS? 4
d) What is Firewall? Why it is used? 4

3. a) What is the Real Time Gross Settlement (RTGS)? Describe its settlement 6
process.
b) What are the advantages of RTGS over other clearing system? 4
c) What is the maximum & minimum limit of RTGS transaction? Who are the
members of RTGS? 4
d) Distinguish among BACH, BEFTN & RTGS. 6

4. a) What is Smart Card? What are the differences between Magnetic strip
card and Chip base card? 10
b) What is Skimming of ATM Card? How it is happened and how you can 10
protect it?

5. a) What is public and private network? Categories your banking offered


services as per public and private network basis. Which types of extra
security measures are taken by the Bank for public network base
services? 12

b) What is Transaction Monitoring System of CBS? How AML screening


software works in the CBS operation?
8

6. a) Describe in short the current Alternative Delivery Products & Services that
are available at our local banking services industry. 12
b) What is MIS? How IT based MIS can help a Financial Institution? 8

7. a) What is ICT policy? How do you protect & secure CBS & Hardware Devices
of your Bank as per ICT policy. 12
b) What is IT policy regarding Password maintenance? 4
c) How many factors are verified from the user during fund transfer in i- 4
banking?

8. Write short notes on any 5(five) of the following: 5x4=20


a. NPSB b. UAT

c. TPIN d. Cyber Crime

e. Data Synchronization f. ICT Risk Assessment

g. User ID Management h. Risk base Framework


The End

Diploma in Islamic Banking Examination, April 2016


PART-II
206: Micro Finance and Rural Banking: Conventional & Islamic
Time: 3 hours
Full Marks: 100
Pass Marks: 45
(N.B.: Answer any 5(five) questions. The figures in the right margin indicate full marks.)
1. a) What are the essential characteristics of micro-credit supervision? 10
b) Explain the legal framework designed by government regarding micro- 10
finance in Bangladesh.

2. Describe the innovative methods developed by the MFIs as collateral


substitutes to reduce the risk of loan loss. Discuss the impacts of the
20
various substitutes in making microfinance programs successful.

3. a) Distinguish between ‘individual lending’ and ‘group based lending’. 10


b) What are the risks involved in ‘individual lending’ and ‘group based 10
lending’?

4. In the matter of selection of products for MFIs, will you recommend a


minimalist approach or an integrated approach? Relate your answer to
the context of Bangladesh.
20

5. a) Why did traditional commercial banks fail to provide financial services


to poor households?
10

b) How Islamic banks are contributing in the rural development of 10


Banglades?

6. a) “RDS of IBBL has a development approach rather than a credit


approach as offered by other MFIs.” Do you agree? Explain with
examples. 10

b) What are the differences and similarities between RDS and Grameen
Bank operations in socio-economic development strategy?
10

7. a) What is financial inclusion? How does micro-finance promote financial


inclusion?
10
b) What is the impact of financial inclusion effort in economy? Explain 10

8. Write short notes on any 5(five) of the following: 5x4=20


a. Empowerment of family through microfinance
b. Graduation of microfinance borrowers
c. Social business
d. Wage-employment vs. self employment
e. Vulnerable non-poor
f. Limitations of microfinance
g. BRAC
h. BARD

The End

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