H1PE305T: FUND MANAGEMENT IN BANKING AND INSURANCE
Course Description: This course intends to provide a basic understanding of the insurance and
banking sector and the funds mechanism in these industries. It encompasses the priority sector
lending practices followed by banks in India, Basel norms governing the operation of banks,
mechanism for management of reserves by commercial banks and deposit and lending practices.
lending practices followed by banks in India, Basel norms governing the operation of banks,
mechanism for management of reserves by commercial banks and deposit and lending practices.
The course also covers the risk management and fund mobilization practices utilized by
insurance industry.
Course Outcomes:
On completion of the course, the student would be able to:
1. Understand the working of fund management in banking and insurance.
2. Analyse various types of liquidity management theories and priority sector lending.
3. Appreciate various dimensions of Basel norms, reserve requirements, loan policies and
bank marketing
4. Appraise the working of insurance industry in India, types of insurance and associated
risk identification and evaluation.
5. Evaluate regulations of IRDA and globalisation of insurance business.
Units Number of
Lectures
Unit-1 Introduction to Fund Management 8
Overview of Fund Management Definition and Importance, Role in Banking
and Insurance
Types of Funds Mutual Funds, Hedge Funds, Pension Funds, Insurance Funds
Financial Markets and Instruments: Financial Markets, Money Market,
Capital Market Financial Instruments: Equities, Bonds, Derivatives, Money
Market Instruments. Nature and Purpose of Primary and Secondary
Reserves; Nature and Functions of Legal and working reserves Cash
Management in Commercial Banks; Factors Influencing Secondary Reserves;
Estimation and Management of Secondary Reserves
Unit-2 8
Commercial Banks: Capital Fund and Liquidity Management
Theories of Liquidity Management; Priorities in the allocation of Bank Funds;
Problems in Resource Allocation in India; Meaning and Functions of Capital
Funds; Standard to Measure Capital Adequacy; Capital Adequacy norms.
BASEL norms.
Unit-3 Investment Strategies: Portfolio Management Asset Allocation, 8
Diversification, Active vs. Passive Management, Fixed Income Strategies:
Duration Management, Credit Analysis ,Equity Strategies Value Investing,
Growth Investing, Index Investing
Management of Bank Deposits and Loans
Characteristics of Commercial Loans; Loan Policy; Evaluating Loan
Application, Credit Information, Credit Analysis and Credit Decision, Priority
Sector Lending Policies in India, Concept of Bank Marketing
Unit IV: Risk Management in Insurance Business 8
Principles of Insurance and Insurance Contracts; Risk Identification and Risk
Evaluation; Risk Management Techniques; Types of Insurance – Personal Life
Insurance, Health Insurance, General Commercial Insurance: Fire, Motor,
Aviation, Engineering, Agriculture and Marine.
Unit V : Fund Mobilization in Insurance Business 8
Role of insurance in commerce and trade; Economics of Insurance Business:
Value Chain Analysis, Insurance Fund Mobilization; Regulation of Insurance
and IRDA; Domestic Economy and Insurance; Globalization of Insurance
Business and Fund Mobilization.
Class Work
Case Studies and Applications
Case Studies in Banking
o Asset-Liability Management
o Investment Banking Strategies
Case Studies in Insurance
o Underwriting and Claims Management
o Insurance Investment Strategies
Global Trends and Future Directions
o Sustainable Investing
o Impact of Economic Cycles on Fund Management
Recommended Textbooks and Resources
"Investment Analysis and Portfolio Management" by Frank K. Reilly and Keith C.
Brown
"Principles of Risk Management and Insurance" by George E. Rejda and Michael
McNamara
Industry Reports and Whitepapers
Regulatory Frameworks and Guidelines from Basel Committee, Solvency II, etc.
