BANKING PRACTICE AND PROCEDURES (AcFn-332)

COURSE PLAN

INSTITUTION : Mekelle University

College of Business and Economics

Department of Accounting and Finance

CREDIT HOURS : 3 Hrs

PRE-REQUISITE : AcFn-331

INSTRUCTOR (S): Bethlehem Addis (Office No: F-006)

Dr. Suresh Vadde (Office No: K-014)

COURSE DESCRIPTION

This course focuses on concepts, functions, practices, procedures, working and customer service of

various commercial banks with a special emphasis on the commercial banks in Ethiopia. It also throws

light on the recent changes that are suggested to the financial sector in general and commercial banks in

particular by the bank for international settlements.

COURSE OBJECTIVE

The general objective of this course is to equip the students with the concepts, practices, procedures and

the recent development in commercial banking business. This course is designed to have a look at the

role of banking business in the economy and enable the students to become prospective and productive

resources in the financial system in general and Ethiopia in particular.

INSTRUCTIONAL METHODOLOGIES:

The course delivery methodology is designed to be student-centered in order to empower the students

and make them participate and active in the teaching-learning process. Besides, the course assessment is

continuous assessment and having one final examination. The details are as follows:

Lecture session

Individual and group assignments on chapter activities

Group presentations

Quizzes

Final examination

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Attendance:

According to the MU legislation you must attend at least 80% of the 48 hrs (at least 39 hrs) in order to

sit for the final examination.

Other Course Requirements:

All assignments should be submitted on time and all students are mandatory to participate in group

presentation.

Academic Dishonesty: It is hoped that serious offenses such as cheating, plagiarism, etc., will not occur.

Academic dishonesty will be dealt with to the most severe level allowable under university policy.

COURSE OUTLINE

OUTLINE Proposed Time Schedule

CHAPTER 1: Functions and Forms of Money 6 Hrs

Objectives:

After completion of this chapter, you will be able to understand the functions and forms of money, the desirable properties of money, why desirable?, supply of money, the reserve system, the functions of federal reserve, the creation of money and the money supply process.

1.1 The Functions and Forms of Money1.2 The Desirable Properties of Money1.3 Why is Money Valuable?1.4 Supply of Money1.5 The Reserve System1.6 The Functions of Federal Reserve1.7 The Creation of MoneyCHAPTER 2: The Rationale of Financial Institutions 5 Hrs including 3

Hrs group presentations

Objectives:

After completion of this chapter, you will be able to understand the functions of financial system, why do financial intermediaries exist, why financial intermediaries are special?, the evolution of financial institutions, and the history of banking and other financial institutions in Ethiopia.2.1 Functions of Financial System2.2 Why do Financial Intermediaries Exist?2.3 Why Financial Intermediaries are Special?2.4 The Evolution of Financial Institutions2.5 The History of Banking and Other Financial Institutions in EthiopiaIndividual assignment Group Presentation

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OUTLINE Proposed Time Schedule

CHAPTER 3: Banking- An Overview and Basics of Commercial Bank Management

10 Hrs, including 3 Hrs group presentationsObjectives:

After completion of this chapter, you will be able to understand the characteristics of banks, bank money, bank loan, and the basics of commercial bank management: asset management, liability and risk management, the role of bank capital, commercial bank profitability management, and commercial bank lending functions. 3.1 Banking- An Overview 3.1.1 The characteristics of bank 3.1.2 Bank Money 3.1.3 Bank Loan3.2 Commercial Bank Management: An Overview 3.2.1 Asset Management 3.2.2 Liability and Risk Management 3.2.3 The Role of Bank Capital 3.2.4 Commercial Bank Profitability Management 3.2.5 Commercial Bank Lending FunctionsGroup assignment and presentationCHAPTER 4: Functions and Services of Banks

5 HrsObjectives:After completion of this chapter, you will be able to understand the various types of deposit services offered by bank, the requirements and procedures in opening different types accounts, special types of banker’s customers, non-resident transferable Birr account and non-resident foreign currency account, and subsidiary services of a banker.4.1 Types of Deposit Services Offered by Bank4.2 The Requirements and Procedures in Opening Accounts4.3 Special Types of Banker’s Customers4.4 Non-resident Transferable Birr Account and Non-resident Foreign Currency Account4.5 Ancillary or Subsidiary Services of a BankerIndividual assignment

CHAPTER 5: The Banking Business and Other Activities 8 Hrs, including 3 Hrs group presentations

Objectives:

After completion of this chapter, you will be able to know and understand the definition of banking business, the main characteristicof banking business, the requirements for the definition of a customer, the relationship between a banker and a customer, the traditional and new services of a banker as a base for the determination of the relationship between the banker and the customer and the rights and obligations of a banker and a customer.5.1 Definition of Banking Business5.2 Characteristics of Banking Business

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OUTLINE Proposed Time Schedule

5.3 The Requirements for the Definition of a Customer5.4 The Relationship between a Banker and a Customer5.5 The Traditional and New Services of a Banker 5.6 Rights and Obligations of a banker and a CustomerIndividual assignment Group Presentation

CHAPTER 6: Negotiable Instruments 10 HrsObjectives:

After completion of this chapter, you will be able to understand the definition of negotiable instrument and the various types, characteristics and uses of negotiable instruments, distinction between order and bearer instruments, rules for negotiation, liability of parties to a bill in the event of dishonor, comparison of a cheque with a bill of exchange, the different types of crossings applicable to cheques, and the duties of banks and their customers.

6.1 Definition of Negotiable Instrument 6.2 Types, Characteristics and Uses of Negotiable Instruments6.3 Distinction between Order and bearer Instruments6.4 Rules for Negotiation

6.5 Liability of Parties to a Bill in the Event of Dishonor6.6 Comparison of a Cheque with a Bill of Exchange6.7 Types of Crossings Applicable to Cheques6.8 Duties of Banks and their CustomersGroup assignment

CHAPTER 7: Central Banking

5 HrsObjectives:

After completion of this chapter, you will be able to understand theemergence of central banks, the modern role of central banking, bank supervision-capital adequacy and regulation and methods of ongoing Supervision. 7.1 The Emergence of Central Banks7.2 The Modern Role of Central Banking7.3 Bank Supervision-Capital Adequacy and Regulation7.4 Methods of Ongoing Supervision.Individual assignment

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References

Lawrence S. Ritter, William L. Silber and Gregory F. Udell, Principles of Money, Banking, and Financial Markets, 10th Edition, Addison Wesley Longnan, Inc., 2000.

Mishkin Frederic S.,The Economics of Money, Banking, Financial Markets, 5th

edition,Columbia University, 1998

Gary Smith, Money, Banking, and Financial Intermediation, D.C. Heath and Company, Lexington, Massachusetts Toronto, 1991

Geoffrey Lipscombe & Keith Pond, The Business of Banking, an Introduction to the Modern Financial Services Industry, 4th edition, Financial World Publishing, 2002

J Milnes Holden, The law and Practice of Banking, Volume-1, Pitman Publishing Limited, London, 1978.

K.C. Shekhar, Banking Theory and Practice, 1st edition, Vikas Publishing House Pvt., Ltd., 1990.

Lawrence S. Ritter, William L. Silber and Gregory F. Udell, Principles of Money, Banking, and Financial Markets, 9th Edition, Addison Wesley Longnan, Inc., 1997.

Miller and VanHose, Money, Banking, and Financial Markets, Southwester/Thomson, 2001.

S.Scott MacDonald and Timothy W.Koch, Management of Banking, 6th edition, Cengage Learning India Private Limited, 2006.

Seccheti, Stephen G. ,Money, Banking and Financial Markets, Business & Economics, 2006

E.V. Bowden, Money, Banking and The Financial System, West Publishing Company, 1989

CONTINUOUS ASSESSMENT

Assignment ………………………………………………… 15% Group Presentation …………………………………………. 10% Quizzes ……………………………….…………………….. 25% Final Examination ………………………………………….. 50%

Total ………………………………………… 100%

SCALE

A [85 – 100] C+ [57.5 – 61.25]A- [80 – 85] C [50 – 57.5]B+ [75 – 80] C- [46.25 – 50]B [65 – 75] D+ [42.5 – 46.25]B- [61.25 – 65] D [35 – 42.5]

F [0 – 35]

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