Management of Financial Institutions (MFI)

FINANCIAL INSTITUTION BASICS

1. (a) What is financial institutions and what are the different types of financial institutions?
(b) Define financial institutions and explain its functions.
c) What are the processes for measuring and evaluating the performance of a financial institution?
Discuss in brief.

5. a) What is an insurance company? What are the various types of insurance companies? Define
each of with example.
b) Mention the sources of revenue and areas of expenses for a bank and an insurance company.
c) Discuss the various core principles of insurance companies on which they operate.

2. a)Explain different types of services provided by a bank.

b) Explain the concept of mobile banking.
c) Explain the concept of mobile financial services. Discuss the various services offered by it.

6. a) What is an investment company and what are the different types of investment companies?
Explain.
b) What is an investment bank? Explain how investment banks take part in share issuance and
underwriting of a company?
c) What do you mean by mutual funds? Discuss the different aspects of mutual funds.

3. a) What are the principal money market and capital market instruments available to the banks
in Bangladesh?
(b) How does Bangladesh Bank regulate the money supply through Bank rate policy and open
Market Operation?
LOAN
1. a) Describe the functions of credit administration department of a bank?
b) Discuss the important aspects that should be considered by a banker while financing an
industrial project.
c) Discuss the principles of sound lending.

7. a) Explain spread and burden with example.

b) How banks can avoid borrowings from money market at a very high interest rate? Explain your
answer.
RISK
1. a) Explain different types of risk faced by a financial institution. Explain interest rate risk with
example.
b) Discuss risk management process for a financial institution.

2. a) Define loan sale and explain different types of loan sales.

b) Discuss the different types of loan sale contracts.
c) Why banks and other financial institutions sale loan?
3. What does securitization of loan mean? Explain importance of securitization of loan.
4. Discuss the market value of capital considering the increase and decrease in the value of loan.
COMMERCIAL BANK, DIPOSITORY INSTITUTIONS, NBFI, FINANCIAL INTERMEDIARY, INSURANCE
COMPANY, INVESTMENT COMPANY
1. a) What is commercial bank and what are the functions of commercial bank?
b) What are the sources of funds of commercial bank and what are the regulations imposed on
commercial banks?
c) Explain the importance of liquidity of a commercial bank.
2. a) Define depository institution and explain its different types.
b) Explain the sources of funds of a depository institution.
3. a) What is meant by non-banking financial institutions and what are its different types?
b) What are the sources and uses of funds of NBFI?
c) Discuss the differences between bank and no-bank financial institution (NBFI).
4. a) What is financial intermediary and what are the advantages enjoyed by market participants
from this?
b) Why is the financial intermediary necessary?

2. a) Define credit risk. What are the three steps in the credit risk management process?
b) What is meant by reputational risk? What types of losses can be induced in a bank due to
reputational risk?
c) What is meant by market risks and what are the ways to mitigate it? Briefly describe the
sources of operational risks.
d) How can a financial institution face loss from reputational risk? Do you think that keeping
adequate reserves act as a guard against the problem of large deposit outflow of a bank?
LIQUIDITY AND PROFITABILITY, CAMELS RATING
1. a) Why is a financial institution concerned with liquidity?
b) Explain the forces of demand for and supply of liquidity.
c) What is meant by liquidity management and what are its different strategies?
2. a) Define CAMELS rating and write down the composite ratings of this.
b) How are the various risk of commercial banks judged through CAMELS rating?
ASSETS AND LIABILITIES
1. a) What is meant by assets-liability management of a financial institution?
(b) Discuss rate sensitive assets and rate sensitive liabilities with example.
(c) Explain repricing model with example.
2. a) What are the rationales of liquidity and liability management?
b) Explain liability structure.
c) Explain different types of liabilities dealt with the financial institution with example.
d) What is the core liability of a commercial bank? How can a commercial bank face from large
deposit withdrawal and large loan commitments?

3. a) Is liability management and capital adequacy management crucial for the smooth functioning
of a financial institution? Discuss briefly.
(b) What is duration? Calculate the duration of a 5-Year Eurobond 10 with 8% coupon and 12%
Yield. AS101
c) What are the differences between market value and book value of capital?
BASEL -II
1. a) Point out the major guidelines of Bangladesh Banks management of capital of BASEL II.
b) What are the components of Tier-1 and Tier-3 capital according to Basel Accord?
c) Discuss the purpose of market discipline in relation with accounting disclosures under revised
Regulatory Capital Framework for banks in line with BASEL II.
2. a) What is minimum capital and liquidity requirement for a non-bank financial institution?
b) What are the justifications of maintaining adequate capital?
c) Define different capital requirement.
d) In the event of bank failures, can adequate capital really contribute to prevent it? Explain in
brief the tools available for managing credit risk.
3. Discuss the impact Government Policy on financial statement of financial institutions.
SHORT NOTES
Write short notes on any five of the following:
i.
Investment banking
ii.
Bangladesh Automated Clearing House(BACH)
iii.
Stress testing for banks
iv.
Core capital
v.
National Payment System of Bangladesh (NPSB)
vi.
Stages of money laundering
vii.
Annual Agricultural Credit Policy