Ka Set
THE INSTITUTE OF BANKERS, BANGLADESH (IBB)
Banking Diploma Examination, July, 2016
DAIBB
Management of Financial Institutions (MFl)

Time-3 hours
Full marks-100
Pass marks- 50

[N.B. The figures in the right margin indicate full marks. Answer any five questions.]
                                                                                                                                                                                                                                                                             Marks
1 (a) Give an overview of the present situation of Banking sector of Bangladesh.
b) Discuss on 'the role of Central Bank is perfect' as a regulatory body.
c) Does Bangladesh need more banks? Justify your arguments. 5

2. (a) What do you mean by AD ratio? 5
(b)  How its changes impact bank's Liquidity and assets management portfolios
(c) What is meant by interest rate spread? 5

3 (a) Explain components of CAMELS Rating.                           8
(b) How CAMELS Rating helps to measure financial soundness of a bank?
(c) What is Stress Testing? 4

4(a) What are the causes of nonperforming loans?                      l0
(b/ What are the impacts of bad loan. on banks profitability?       5
(c) Explain the impact of classified loans on interest rates of banks       5
and financial institutions.

5 (a) What do you mean by Islamic Banking? 5
(b) What are the deposits and loan components of  islamic Banking? . l0
(c) Why AD Ratio is different for Islamic Banks? 5

(6 (a) State the main services provided by Agent Banking.                             6
(b) What do you mean by e-commerce? 6
(c) What do you mean by interoperatibility of Mobile Financial Services? What might be its benefits?

[Please turn over]


7 (a) what are the credit risk mitigation techniques of a Financial Institution?
(b) How profitability irnpacts banks' capital account
(c) What are the main sources of fund of financial institutions?

8 (a) Discuss the main features of BASEL III.
(b) Write the importance of loan securitization.
(c) Discuss loan classification and its provisioning.

9 (a) what are the major financial statements prepared by a commercial bank? Describe the purposes of preparing each statement.
(b) Define money laundering and its steps.
(c) Describe :

(i) IP and PEPS;
(ii) KYC and KYE;
(iii) EDDI
(iv) Beneficiary Owners.

10. Write short notes (any eight):-                20
(a) Crypto currency;
(b) NPSB;
(c) Off-shore Banking
(d) SMS Banking;
(e) Trade Base Money Laundering
(f) Insurable interest;
(g) Market Risk; 
(h) Shell Bank
(i)Collateral Security:
(j) Core Capital;
(k) BFIU;
(l) Option.



[ibb-diploma.blogspot.com] 
The institute of Bankers, Bangladesh (IBB) published lecture plan for the subject Management of Financial Institutions (MFI) under the coaching class of Exam December 2018. Lecture plan of Management of Financial Institutions (MFI) is given below:


The Institute of Banker’s, Bangladesh (IBB)
Management of Financial Institutions (MFI)
DAIBB Program


General Information:

  • Course Title : Management of Financial Institutions (MFI)
  • Course Code : MFI-604
  • Class Schedule : From 6:30 PM to 8:30 PM
  • Course Teacher :Md. NurulHoque
MBA, DAIBB(IBB), MBM (UK), BCS (Edu)
Deputy General Manager, Sonali Bank Limited
Part time Teacher:EMBA(DU),IBB(BB),&East Westuniversity


  • Text Book: Fundamentals of Financial Institutions Management- 5th Edition. International Students Version - Cornett M. and Anthony Saunders.

  • Reference Book : 1) Lecture Sheet 2) Core Risk Management Guideline of BB 3) The Economics of Money, Banking and Financial Markets by Harper Collins

  • Course Objectives : 
Focus on nature of financial institutions and it’s importance and services; Financial service industry and financial markets; Risk of the balance sheet; Credit and portfolio of assets; Liability and liquidity management; Risk: measurement and management; Off balance sheet risk; Other risks and bank performance measurement; Development of understanding on ALM; Managing sources of fund and capital management under BASEL framework; Risk identification, Measurement, Mitigation and core risk management. 



Page-2

Lecture Plan

  • Lecture-1-2: Introduction to Financial Institutions:

  • An overview of banks and Non-banks system and their services, impact of Govt. policy and regulation.
  • International sanction; UN, UNSCR,EU,OFAC etc. 
  • Financial statement of financial institution.
  • Financial intermediaries and advantages enjoyed by market participants.
  • NBFIs and it’sServices and use of fund; role of NBFIs in economy. 
  • Various concept of electronic banking.
  • Important role of modern banking,bankers-customers relations; Rights, obligations, lien, banker’s lien and garnishee order, lender vs service provider.
  • Islamic banking and Insurance; nature, role andrequirement.
  • Financial intermediaries and financial spread sheets.
  • Liquidity measurement and management, unhealthy competition & non-performing loan.
  • Financial markets, financial instruments; money market and capital markets; area, operations and role in financial sectors.
  • Recent financial scams and its effects in banking sectors.
  • Recent trend, scenario,problems, new products/services and development in BFIs and NBFIs.
  • Need to know-SME financing ,Green banking, Agent banking& mobile financial services,unitvs branch banking; plastic money, debit and credit card, KYC-KYE, CDD-EDD, IPs, PEPs, CTR, STR, SAR, TP, Walkin customers, PPI, NID, legacy accounts, type of deposit accounts, investment company; types & functions, role of BB, need of more private bank, new interest rate policy, funded & non-funded loan, payment in due course, MICR, 


Page-3

  • Lecture-3-4:Assets Liability Management (ALM) Techniques:

  • Risk components and Core risk; management techniques ALM objectives.
  • ALM techniques, targets, indicators, strategic and weakness. 
  • Balance sheet analysis- Assets and Liability and equity; off balance sheet liabilities.
  • Assets liability management policies- balance sheet and Cash flow analysis, maturity mismatch, liquidity contingency plan and regulatory compliance.
  • Market risk, capital adequacy under BASEL approach.
  • Compliances of money laundering law and regulations, money laundering Act-2012. FATF recommendations.
  • Off balance sheet portfolio item.
  • Need to know-CCU, CAMLCO, BAMLCO, BFIU, STR, SAR, AML/CFT, KYC, KYE, CTR, STR.
  • Business and market risk: Identification, measurement, mitigation and management of risk.
  • Adjustment of risk and income on investment; Investment decision- capital budgeting, capital rationing, liquidity and AD ratio management, effect on performance of FIs.
  • Loan syndication, borrower selection and deposit mixing,






Page-4


  • Lecture -5-6: Managing Sources of Fund:

  • Fund and Various  sources fund:
  • Balance sheet sources
  • Off balance sheet sources; contract-forward and future, option- call and put option, SWAPS, Securitization and lone sale. 
  • Derivative sources
  • Securitization and loan sale.

  • Management of  capital adequacy under BASEL-1,11&111:

  1. Minimum capital requirement (MCR)
  2. Adequate capital and need for capital adequacy
  3. Core capital 
  4. Supplementary capital
  5. Addl. Supplementary capital 
  6. Capital adequacy as BASEL approach,pillar-1,2&3
  7. Cost of fund and implication of interest rate(single digit).
  8. Credit risk, market risk and operational risk.
  9. Regulatory capital; Tier-1 capital, Tier-2 capital, Tier- 3 capital.
  10. Basel -11 vs Basel-111. 







                                                                                   Page-5

  • Lecture-7-8 :Profitability,Productivityand consumer :

  • Measuring and evaluation of financial performances
  • Financial statement analysis; balance sheet, cash flow, and liquidity analysis.
  •  Reformulating analysis: adjustment and measurement of errors; financial ratio analysis.
  •  Objectives and importance of FSA.
  •  Tools of financial analysis
  •  Financial forecasting
  •  Determine the profitability; profitability ratios-ROA,ROI, ROE,ROS,GPM,OPM and EPS, NIM, NOM, 
  • Ensuring tools; components, importance; CAMELS rating, credit risk grading (CRG), early alert warning by BB, Stress testing, self-assessment and audit.
  • Need to know- Non-performing loan & effect on profitability,
    Lecture; 9-10:Risk management of financial institutions:

  • Risk and uncertainty in BFIs and NBFIs.
  • Core risk; Guideline of Bangladesh bank; Policy guideline and procedural guideline.
  • Risk components.
  • Risk management; Identification, measurement, control, mitigation and monitoring.
  • Evaluation of risk: Financial risk,business risk, management risk, security and relationship risk.

                                                                              Page-6

  • Risk control techniques: CAMELS rating, credit risk Grading, implementation of BASELapproach,fund flow analysis, credit rating and SWOT analysis. 
  • Loan classification and provisioning; nonperforming assets.
  • Liquidity and liability management.
  • Loan portfolio management, selection of business and borrower, sanction, disbursement and monitoring of loan.  
  • Core risk, market risk, operational risk and reputation risk.
  • Need to know- IPs & PEPs, KYC & KYE, CDD& EDD, CTR & STR, Independent testing procedures and self-assessment report.

  • Lecture: 11-12:Islamic banking and  insurance business in Bangladesh:

  • Islamic banking system.
  • Insurance; life, fire and marine insurance.
  • Overview on course and discussion on importance issues for examination.  

 =========0=========

THE INSTITUTE OF BANKERS, BANGLADESH (IBB) 
Banking Diploma Examination, November, 2017 
Management of Financial Institutions (MFI) 
Time------3 hours 
Full marks-100 
Pass marks-50
[N.B.—The figures in the right margin indicate full marks. Answer any five 
questions.]

Marks
1. (a) Please discuss, what will be the impact on the economy if more                                          8 
private banks be allowed in our country.
(b) Do you think the role of central bank is perfect in terms of                                                 8 
controlling NPL in commercial banks?
(c) Explain, Mobile financial service and Agent banking are risk free.                                     4

2. (a) Weakness in credit documentation and proper monitoring creates NPL—Exp lain.          7
    (b) Why financial institutions are concerned with NPL, and liquidity? Discuss.                 5
    (c) Do you agree that strong collateral is the safeguard of your assets? Why face value     8
lending becomes risky? Explain.
3. (a) How Return on Equity (ROE), Return on Assets (ROA) and 10
Earning per Share (EPS) are calculated from different components of financial statements?
    (b) What is Capital Adequacy Ratio (CAR)? Do you think our banks are maintaining CAR 10
        as per Bangladesh Bank requirement?
4. (a) What do you mean by fund management of bank? Explain liquidity management.          8
    (b) Write the difference between set off and lien.                                                                5
(c) What are reasons of non-recovery of loans against securities?                                            7
yn-low it helps protecting customers 
5 (a) What is positive pa
menu?
y
interest from fraudulent Fa
o
agement is important for RTGS
(b) Why proper treasury 7 
participation?
(c) How opening of fake bank
 accounts can be stopped? 6





BANKING DIPLOMA EXAMINATION
Management for Financial Institution Question 2014, 2015, 2016