SESSION 3

Assignment
Introduction to ProBanker

Introduction to ProBanker
ProBanker simulates a banking environment where managers are
expected to make a range of decisions to acquire the best
combination of deposits and long-term capital and distribute them
in the form of loans and investments.
The impact of competition and regulation are both integrated into the
simulation creating a challenging environment for participants to
make carefully coordinated decisions if they wish to maximize the
value of the institution.
Playing the simulation while learning the principles and tools to
manage financial institutions provides for a richer learning
experience.

ProBanker
Main inputs for the game

Set reserve requirements and purchase and sell government bonds.

Set interest rates for retail, installment and mortgage rate loans.
Set interest rates for CDs, passbook accounts and long-term deposits.
Purchase and sell federal funds.
Set provision for loan losses and corporate loan standards.
Pay dividends, sell and repurchase shares.

Autobank
ProBanker offers two modes; Autosim and Competitive.
In Autosim mode, participants play against the computer to help them
understand the role and impact of each variable in isolation on the overall
bank performance.
In Competitive mode participants play against other teams in a simulated
banking market.
There are 34 decisions to be made each quarter; many remain the same
and are carried over to next quarter; while some are left blank.
Make sure to save the decisions. Each team member can overwrite and
save decisions. Simulation uses the last saved decisions.

Decisions
Quantities to Choose
Decisions
Quantities to Choose
1. Initial Reserve Allocation
2. Federal Funds Sold
3. Federal Funds Purchased
4. 90-day CDs to issue
5. 180-day CDs to issue
6. 360-day CDs to issue
7. New 8-Qtr Bonds to Purchase
8. Bonds to sell, due start of T+2
9. Bonds to sell, due start of T+3
10. Bonds to sell, due start of T+4
11. Bonds to sell, due start of T+5
12. Bonds to sell, due start of T+6
13. Bonds to sell, due start of T+7
14. Bonds to sell, due start of T+8

Description
Decisions # 1 through # 14 are entered in
thousands of rupees. So if you wish to
issue 100 million of new, 360-day CDs,
enter 100,000.

Decisions - Quantities to Choose

Example: PNB
Decisions

Quantities Chosen

1. Initial Reserve Allocation

966705 lakhsRs. (Pg.112) ( Annual Report,

2014-15)

2. Federal Funds Sold

5521.58 crores(Pg.130)

3. Federal Funds Purchased

4. 90-day CDs to issue

1% of Banks total liability (Pg.147)

5. 180-day CDs to issue

6. 360-day CDs to issue
7. Bonds purchased
8. Bonds sold

1479722 lakhs Rs. (Pg.113)

Decisions - Quantities to Choose

Example: PNB
Decisions

Quantities Chosen
296361.92 crores(Pg.136) {Total assets to bank in corporate banking}

9 . Fixed Rate Corporate Loans

Fixed + Floating (not given separately)

1 0. Floating Rate Corporate Spread

11Installment Loans
41603.5 crorers.(Residential) Pg.128 (2014-15)
12. Mortgage Loans
Total CDs : 1% of Banks total liability (Pg.147)
13. Retail CDs
1 50 1 99 6 6 l ak h r s . P g . 112( 2 01 4 - 1 5)
1 4. P a s sb o o k Sa ving s
138755 lakhsrs. Pg.114 (2014-15)
15. IRAs

16. RetailDemand Deposits

3358080 lakhs rupeesPg.112 (2014-15)

(not listed eparately)

17. Corporate Demand Deposits

Decisions
Rates to Choose
Rates to Choose
15. Fixed rate Corporate Loans
16. Floating Rate Loan Spread
17. Installment Loans
18. Mortgage Loans
19. Retail CDs
20. Passbook Savings
21. IRAs
22. Retail Demand Deposits
23. Corporate Demand Deposits

Description
Decisions #15 #23 are the interest rates
you charge on loans or pay on deposits.
Enter 7% as 7.5).

Decisions - Advertising
Advertising
24. Ads, Installment Loans
25. Ads, Mortgage Loans
26. Ads, Retail Demand Deposits
27. Ads, Corporate Demand
Deposits
28 . Ads, Retail CDs
29. Ads, Passbook Savings
30. Ads, IRAs

Description
Decisions #24 - #30 are the quarterly
advertising budgets you wish to direct at
each of the indicated account types.
Remember that the decisions are
expressed in thousand rupees. So enter
"fifty thousand" as 50.

Decisions - Advertising
Example: PNB
Decisions

Advertising expenditure

1 8 . Ads, Installment Loans

1 9 . Ads, Mortgage Loans

20. Ads, Retail Demand Deposits

2 1 . Ads, Corporate Demand Deposits

22 .Ads, Retail CDs

23. Ads, Passbook Savings

24. Ads, IRAs

Total Ads 3617 lakhs (Pg.117)

Not listed separately(2014-15)

Decisions Miscellaneous
Miscellaneous
31. Number of Shares to sell

Adjustment to equity capital account. To issue new shares,

enter a positive number. To repurchase shares from the
market, enter a negative number.

32. Provision for Loan losses

The amount, in thousand rupees, that you wish to add to

your bank's Loan Loss Allowance account. This entry
reduces your reported net income.

33. Corporate Loan Standard

In making Fixed Rate and Floating Rate corporate loans, you

can choose to have a high credit standard (indicated by a
decision of +1), an average standard (decision of 0), or a low
credit standard (-1).

34. Total Dividends

The value, in thousands of dollars, of dividends you wish to

pay to all outstanding shares. (This is not a dividend per
share).

Decisions Miscellaneous
Example: PNB
Miscellaneous
31. Number of Shares to sell

32. Provision for Loan losses

33. Corporate Loan Standard

34. Total Dividends

Total No. of shares(31.03.2015) : 1810470746(Stock split

on 19.12.2014); Total No. of shares(31.03.2014) :
355946370
(Pg.140)
Adjustment to equity capital account. positive number
indicates issued new shares.[ If repurchased shares from
the market, negative number]

279011 lakhs rs. Provision towards standard

assets(2014-15) Pg.112
The amount, added to bank's Loan Loss Allowance
account. This entry reduces reported net income.
Fitchs Credit Rating :bb
PNB's Viability Rating. These Ratings measure
theintrinsic creditworthinessof a financial
institution (FI), and reflect Fitchs opinion on the
likelihood that the entity will fail.
42.05 croresPg.180 (2014-15)
The value of dividends paid to all outstanding shares.
(This is not a dividend per share.)