UNIGLOBE COLLEGE (Pokhara University Affiliate)

BNK 621: Bank Operations and Management (2 credits, 36 net hrs)

MBA First Year, Third Trimester

Tentative Course Guideline

…………………………………………………………………………………………………………………

Description of the Course

This course provides an understanding of the nature of commercial banks and its regulatory
environment. It describes about incorporation of a bank and its branches along with bank’s state
of affairs as represented in balance sheet and income statement, and evaluates bank’s
performance using appropriate tools of analysis. It explains how a bank manages capital and
raises deposits as source of funds for its operation.

This course aims to equip students with knowledge and skills necessary to understand the
fundamentals of commercial bank management and acquaint them with tools and methods
available to manage commercial banks. Students should be able to demonstrate adequate
knowledge and skills for managing commercial bank on successful completion of this course.

Enabling objectives:

After completion of all the learning units and requirements the students will be able to:

 Develop general idea of banking operations and management

 Assimilate with products and services offered by modern banks
 Develop clear understanding in the ways the banking firms identify and manage the risks
associated with assets, liabilities, and equity
 Demonstrate knowledge and skills on various issues such as banking chartering process, factors
weighing on new chartering, banking regulation, financial statements, measuring and evaluating
banking performances, managing sources of funds for banks, and banking technology

Basic Text

 Rose, P.S. & Hudgins, S.C. (Ninth Edition): Bank Management and Financial Services,
Tata McGraw – Hill Education

Reference Text

 Peter S. Rose. :Commercial Bank Management, McGraw-Hill, Irwin

  Gup, B.E. & Kolari, J.W.: Commercial Banking, Willey India
 Nepal Rastra Bank: Unified Directives latest version, Nepal Rastra Bank, Kathmandu

Grading

Given the nature of the course and following the University guidelines, assessment plan is as
follows:

a. Project work and presentation (15%)

b. Individual assignments (5%)
c. Case study (5%)
d. Class tests and quizzes (10%)
e. Attendance, class participation and contribution (10%)
f. Midterm examination (15%)
g. Final examination (40%)

The details of each assignment will be provided in the class.

Attendance and Class Participation

Learning anything not only Bank Operations and Management is best practiced by speaking or
writing and by observing other people doing so. Therefore, there are certain skills that you learn
only by participating in the classroom. These opportunities to learn cannot be duplicated outside
the classroom. I expect full participation from everyone. Participation includes sharing ideas
appropriately, asking key questions, presentations, relevant examples and active listening. If you
need to miss the class or need to be late for any reason, please let me know in advance by phone,
email or SMS. Eighty percent class attendance is mandatory for the students to enable them to
appear in the end-term examination. Out of 24 classes, if the student remains absent for 5 classes
or more will be treating as NOT QUALIFIED (NQ) to attend the final examination.
COURSE PLAN

Session
S. No. Course Contents Activities and Assignments Readings
(1.5
Hrs)
Unit 1 An overview of Banks and Their Services 2 1. Presentation on the topic 1. Peter S. Rose
 Meaning and Types of Banks 2. Benton E. G.
 Functions Performed by Commercial Banks & James W.
 Banks and its Competitors K.
 Trends Affecting All Banks 3. Banks and
financial
institutions
act, BAFIA,
NRB
Unit 2 The Impact of Government Policy and Regulation on 2 1. Peter S. Rose
1. Paper pencil based assignment on BAFIA
Banking 2. Benton E. G.
 Reasons to Regulate Banks 2. Quiz 1 & James W.
 Responsibilities of Bank Regulator
K.
 Deregulation of Banking Laws
 The Central Bank and Monetary Policy 3. Unified
 BAFIA and Directives of NRB directive,
NRB
Unit 3 The Organization and Structure of Banks and Their 2 1. Peter S. Rose
1. Presentation on structure of one FI.
Industry
 Organizational Chart for a Typical Bank 2. Peter S. Rose
 The Array of Organizational Structures in Banking and Sylvia C.
 Banking Efficiency and Size Hudgins
 Impact of Organization Type and Size on Bank
Performance
Unit 4 Establishing New Banks, Branches, and Banking 2 1. Peter S. Rose
1. Case Study on Mergers
Technology 2. Peter S. Rose
 Chartering a New Bank 2. Quiz 2 and Sylvia C.
 The Bank Chartering Process Hudgins
 Factors Weighing on the Decision to Seek a New 3. Licensing
Bank Charter policy of
 Banking Technology banks and
financial
institutions,
NRB
Unit 5 The Financial Statements of Banks 3 1. Peter S. Rose
1. Midterm Exam
 The Bank’s Balance Sheets 2. Peter S. Rose
 The Bank’s Income Statements and Sylvia C.
 Other Useful Bank Financial Statements 2. Problems No: 1 to 11 (Ross & Hudgins:
Hudgins
 Off-Balance Sheet Items PP 155 - 159) practice
 NRB Guidelines on Bank’s Financial Statements

Unit 6 Measuring and Evaluating Bank Performance 4 1. Peter S. Rose

1. Based on the information given in
 Evaluating a Bank’s Performance
financial statement, calculate following 2. Peter S. Rose
 The Impact of Bank Size on Performance and Sylvia C.
the key ratios and interpret them:
 Size, Location, and Regulatory Bias in Performance
Hudgins
Measurement of Financial Firms A. Debt and assets ratio
 Using Financial Ratios and Other Analytical Tools to
a. Total debt to total assets ratio
Track Bank Performance
b. Total deposits to total assets ratio
c. Total non-deposit borrowings to
total assets ratio
d. Total equity to total assets ratio
e. Total loans and net loans to total
assets ratio
B. Key profitability ratios
a. ROE, its breakdown, and its
implication
b. Net profit margin, its breakdown,
and implication
 c. ROA, its break down, and
implication
2. Problem No. 1 to 12
(Ross & Hudgins: Page No. 195 – 199)
3. Quiz 3
Unit 7 Managing Bank’s Sources of Funds 3 1. Peter S. Rose
1. Describe the deposits and non-deposit
 Managing and Pricing Deposit Services 2. Peter S. Rose
sources of funds
 Managing Non-deposit Liabilities and Other Sources and Sylvia C.
of Bank Funds a. Deposit as a major source of funds Hudgins
 Management of a Bank’s Equity Capital Position for commercial banks (domestic
deposits versus foreign deposits,
interest-bearing deposits versus non-
interest bearing deposits, various
types of domestic deposits)
b. Describe the non-deposit sources of
funds of bank
c. Describe equity capital as source of
funds of bank
2. Students’ class presentation
3. Problem No.: 1, 2, 3, 4, 5, 6, 7, and 8
(Ross & Hudgins: Page No. 411-413)
Problem No.: 1 to 12
(Ross & Hudgins: Page No. 444-446)
Unit 8 The Management of Capital 3 1. Problems of BASEL and calculation 1.Peter S. Rose
 Bank Regulatory Capital of RWA and tier 1 and total capital and Sylvia C.
 BASEL requirements ratio. Hudgins
 NRB Directives on Capital Requirements 2. Quiz 4

Total Sessions including Project work and Presentation 24 CAMELS Analysis

(3 sessions)
A total of 36 hours is required for the completion of the entire course of Bank Operations and
Management but this estimation is tentative. This estimation is inclusive of classroom activities
like individual presentation, role plays, group presentation, case studies, and individual
assignments and so on. Classroom ethics need to be kept intact in terms of stepping up and
stepping down during class participation and avoid side conversations.

Academic Integrity and Plagiarism

I expect you to adhere to the highest standards of integrity. Any academic dishonesty on your
part will result in failing grade. Any material that is used that was originally written or spoken
by someone else must be put in quotation marks and proper citations used.

Useful Web Resources

http://www.nrb.org.np
(Nepal Rastra Bank website covers information such as NRB policies, guidelines, directives,
publication and other statistics, etc.)

http://www.mof.gov.np
(The Ministry of Finance/Nepal website provides the information such as economic survey,
statement of income and expenditures, budget details, etc.)

http://www.adb.org/nepal
(This websites provides database of essential social, economic, and financial indicators relating
to ADB’s developing members)

http://www.bis.org
(It is the website for Bank for International Settlement (BIS) and provides financial statistics
which are unique source of information on various elements of the global system such as the
banking statistics, securities statistics, derivative statistics, foreign exchange statistics, etc.)