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Infinity Business School Course: Management of Commercial Banking PGPFM Trimester V Prof.

Abhijit Roy Mobile: 09810817716 e-mail: royabh@gmail.com Course Background Commercial banks continue to remain the primary financial intermediaries of the Indian financial system. During the last decade and half, seminal changes have been witnessed in the Indian economy as well as the Indian banking sector. While the Indian Government and business look at banks for supplying credit requirements for industry, trade and agriculture, individuals look at banks for their savings requirements as well as consumer and housing loans. Banks are also an important component of the monetary system. Objectives The course is designed to enable the participants: To obtain an overview of the Indian banking industry To understand basic principles of banking company operations To get an understanding of standard banking products To understand basic concepts in risk management in banks

Pedagogy The course is planned to be conducted through class room lectures, students presentations and case analysis. Evaluation Grading will be based on Case Discussion/ Class Participation: Quizzes: Final examination (closed book): Team project: 10% 30% 40% 20%

Examination will mainly be of short answer type questions to test your understanding of the concepts and your ability to apply them. Several quizzes will be held and all of them will be considered for the grades. For the team project as well as regular class room work, including case preparations, I suggest that you form teams of around 4 members on a voluntary basis. Class attendance is crucial as class discussions may deviate from the textbook. You are liable to be tested on the material in the text book, class notes as well as what is covered in the class discussions.

For the team project report, may I request that extensive downloading from the net without editing or understanding is not resorted to. A word limit could be discussed in class. In addition, each team would be asked to make an oral presentation in class not exceeding twenty minutes including 5 minutes for Q & A. Grading will be based on presentation and writing as well as substance of analysis. Providing a bibliography is essential. We shall discuss this issue in class in greater detail.

Session Plan and Contents Session 1,2,3,4 Topic An Overview of the Banking Sector in India Laws relating to Banking Principal Issues Policy Environment Commercial Bank Survey Banking Sector Reforms The Interaction of Monetary & Fiscal Policy Strengths and Weaknesses of the Indian Banking Sector The Business of Banking The Balance Sheet: Assets & Liabilities Shareholders Equity Capital Adequacy Norms Incomes and Expenses Bank Profitability Case: Axis Bank Market Risks Credit Risks Operating Risks Objectives of Asset/Liability Management, Asset/ Liability Management Strategies: Spread Management, Gap Management, Interest Sensitivity Analysis, Hedging Instruments Liquidity Risks RBI Guidelines Case: State Bank of Hyderabad An Introduction to Primary and Secondary Securities Market The Debt Market Money Market Instruments Market Conditions and Investment Portfolio Management Case Study Prudential Norms Income Recognition and Asset Classification Methods for Financing Working Capital Requirements

5.6

Financial Performance of Banks

Introduction to Risk Management in Banks Asset Liability Management

8,9,10

11,12, 13

Bank Investment Instruments An Introduction to Treasury Management in Banks

14,15

Credit Risk Management

16,17, 18

Loan Products of Banks Priority Sector Advances

19,20

Management of NonPerforming Assets (NPAs) Capital Adequacy Issues

21,22

Credit Rating Methods Term Financing by Indian Banks Case Studies The Warning Signs Prudential Norms on Income Recognition Provisioning Issues Securitisation Act Developments in Basel I, II and III Calculation of capital requirements An Introduction to Stress Tests Case: Axis Bank

23-24

Project Presentations

Text Book Management of Banking and Financial Services: Justin Paul & Padmalatha Suresh, Pearson Education Reference Books Commercial Banking: The Management of Risk: Benton E. Gup & James E. Kolari, Wiley India Banking Theory and Practice: K.C.Shekhar & L.Shekhar, Vikas Publishing Risk Management in Banks: S Singh & Yogesh Singh, Excel Books Supplementary Readings RBI Annual Reports RBI Circulars Select Readings