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

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 CHAPTER 1: Functions and Forms of Money 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 Money 1.2 The Desirable Properties of Money 1.3 Why is Money Valuable? 1.4 Supply of Money 1.5 The Reserve System 1.6 The Functions of Federal Reserve 1.7 The Creation of Money CHAPTER 2: The Rationale of Financial Institutions 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 System 2.2 Why do Financial Intermediaries Exist? 2.3 Why Financial Intermediaries are Special? 2.4 The Evolution of Financial Institutions 2.5 The History of Banking and Other Financial Institutions in Ethiopia Individual assignment Group Presentation Proposed Time Schedule 6 Hrs

5 Hrs including 3 Hrs group presentations

Proposed Time Schedule 10 Hrs, including 3 CHAPTER 3: Banking- An Overview and Basics of Hrs group Commercial Bank Management presentations Objectives: 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 Loan 3.2 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 Functions Group assignment and presentation CHAPTER 4: Functions and Services of Banks 5 Hrs Objectives: 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 bankers customers, non-resident transferable Birr account and nonresident foreign currency account, and subsidiary services of a banker. 4.1 Types of Deposit Services Offered by Bank 4.2 The Requirements and Procedures in Opening Accounts 4.3 Special Types of Bankers Customers 4.4 Non-resident Transferable Birr Account and Non-resident Foreign Currency Account 4.5 Ancillary or Subsidiary Services of a Banker Individual assignment 8 Hrs, including 3 CHAPTER 5: The Banking Business and Other Activities Hrs group Objectives: presentations After completion of this chapter, you will be able to know and understand the definition of banking business, the main characteristic of 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 Business 5.2 Characteristics of Banking Business 5.3 The Requirements for the Definition of a Customer 3

OUTLINE

OUTLINE 5.4 The Relationship between a Banker and a Customer 5.5 The Traditional and New Services of a Banker 5.6 Rights and Obligations of a banker and a Customer Individual assignment Group Presentation CHAPTER 6: Negotiable Instruments Objectives: 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 Instruments 6.3 Distinction between Order and bearer Instruments 6.4 Rules for Negotiation 6.5 Liability of Parties to a Bill in the Event of Dishonor 6.6 Comparison of a Cheque with a Bill of Exchange 6.7 Types of Crossings Applicable to Cheques 6.8 Duties of Banks and their Customers Group assignment CHAPTER 7: Central Banking Objectives: After completion of this chapter, you will be able to understand the emergence 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 Banks 7.2 The Modern Role of Central Banking 7.3 Bank Supervision-Capital Adequacy and Regulation 7.4 Methods of Ongoing Supervision. Individual assignment

Proposed Time Schedule

10 Hrs

5 Hrs

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 edition,Columbia University, 1998 of Money, Banking, Financial Markets, 5th

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 Group Presentation . Quizzes ... Final Examination .. Total 15% 10% 25% 50% 100%

SCALE A AB+ B B[85 100] [80 85] [75 80] [65 75] [61.25 65] C+ [57.5 61.25] C [50 57.5] C- [46.25 50] D+ [42.5 46.25] D [35 42.5] F [0 35]