Fundamentals of Banking & Finance (Exam Preparation)

Description

The course contains the important questions & answers from the following topics...

MODULE 1: Evolution of Banking

1.1 Origin, Meaning and Definition of 'Bank'

1.2 Evolution of banking- Europe, USA & Asia

MODULE 2: Functions of Bank

2.1 Primary functions:

A)Accepting deposits: Demand deposits: Current and Savings; No Frills Account, Time deposits-Recurring and Fixed deposits, Flexi Deposits (Auto Sweep)

B)Granting Loans and Advances- Term Loan, Short term credit, Overdraft, Cash Credit, Purchasing, Discounting of bills,

2.2 Secondary functions:

A)Agency Functions- Payment and Collection of Cheques, Bills and Promissory notes, Execution of standing instructions, Acting as a Trustee, Executor.

B) General Utility Functions: Safe Custody, Safe deposit vaults, Remittances of funds, Pension Payments.

MODULE 3: Procedure for opening and operating of deposit account

3.1 Procedure for Opening of Deposit Account: Know Your Customer- Needs and Norms (KYC Norms), Application form, Introduction, Proof of residence, Specimen signature and Nomination: Their Importance

3.2 Procedure for Operating Deposit Account: Pay-in-slips, Withdrawal slips, Issue of pass book, (Current Savings or Recurring deposits), Issue of Cheque book, Issue of fixed deposit receipt, Premature encashment of fixed deposits and loan against fixed deposit. Recurring deposits: Premature encashment and loan against recurring deposit.

3.3 a) Closure of accounts) Transfer of accounts to other branches/Banks

3.4 Types of account holders) Individual account holders- Single or joint, Illiterate, Minor, Married woman, Non resident accounts b) Institutional account holders- Sole proprietorship, Partnership firm, Joint stock company, Hindu undivided family, Clubs, Associations and Societies and Trusts.

MODULE 4: Methods of Remittances

4.1 Demand drafts, bankers' Cheques and Truncated

Cheques

4.2 Mail transfer and Telegraphic transfer.

4.3 Electronic Funds Transfer- RTGS, NEFT and SWIFT

MODULE 5: Lending principles, Credit Creation and Balance Sheet of a bank

5.1 Safety, Liquidity, Profitability, Diversification of risks Conflict between liquidity and profitability

5.2 Multiple Credit Creation: Process and Limitations

5.3 Balance sheet of a commercial bank.

MODULE 6: Negotiable Instruments

6.1 Definition, meaning and characteristics of Promissory note, Bill of Exchange and Cheques

6.2 Types of Cheques- Bearer, Order and Crossed

6.3 Types of Crossing- General and Special.

Banking fundamentals refer to the concepts and principles relating to the practice of banking. Banking is an industry that deals with credit facilities, storage for cash, investments, and other financial transactions. The banking industry is one of the key drivers of most economies because it channels funds to borrowers with productive investments.

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