MA0036 - FINANCIAL SYSTEM AND COMMERCIAL BANKING

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ASSIGNMENT

DRIVE	SPRING 2014
PROGRAM	MBADS (SEM 3/SEM 5) MBAFLEX/ MBAN2 (SEM 3) PGDBMN (SEM 1)
SUBJECT CODE & NAME	MA0036 - FINANCIAL SYSTEM AND COMMERCIAL BANKING
BK ID	B1770
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q.1 The Federal Reserve is the central bank of the United States. Its unique structure includes a federal government agency, the Board of Governors, in Washington, D.C., and 12 regional Reserve

Banks. Compare and contrast the organizational structure  and the functions of the Reserve Bank

of India and the Federal Reserve of US.

Ans : Organisational Structure of RBI:

Federal Reserve Bank of India is understood to be the central banking institution in India that has the duty of controlling the financial policy of the Indian government. The organizational Structure of Reserve bank of India can be studied in three different parts.

Firstly, the central board of directors. It is the main committee of the central bank. There are twenty members that constitute the central board of directors.

One governor, who is appointed by the government of

Q.2 Mention the features and types of financial instruments that are offered by  SBI bank.

Ans : Financial instruments  :

A financial instrument is a tradeable asset of any kind; either cash, evidence of an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument.

According to IAS 32 and 39, it is defined as "any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity".

Financial instruments can be categorized by form

Q.3 If you  want to keep a fixed deposit in a bank, is KYC - applicable? Is there any procedure

specified for Customer Identification?

Ans :Explain  the norms of KYC in  opening fixed deposit  :

1. The Bank before opening any deposit account will carry out due diligence as required under Know Your Customer (KYC) guidelines issued by RBI Anti-Money laundering rules and regulations .

2. The account opening forms and other material would be provided to the prospective depositor by the Bank

Q.4 How  and in what way does the  banks cater services  to the HNI.

Ans : HNI :

High net worth individual (HNI) is a classification used by the financial services industry to denote an individual or family with high net worth. The cutoff for this designation is imprecise i.e. some companies use the term to denote individuals with over $100,000 in assets, while other companies use $500,000. Although there is no precise definition of how rich somebody must be to fit into this category, high net worth is generally quoted in terms of liquid assets over a certain figure. The categorization is relevant because high net worth individuals generally qualify for separately managed investment accounts instead of

Q.5 Differentiate Corporate internet banking and Retail internet banking services.

Ans : Corporate internet banking service :

Corporate banking is the area of finance dealing with the sources of funding and the capital structure of corporations and the actions that managers take to increase the value of the firm to the shareholders, as well as the tools and analysis used to allocate financial resources. A goal of corporate finance is to maximize shareholder value. Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.

Investment analysis (or capital budgeting) is

Q. 6 Compare and contrast of any two Bank’s Basel –II disclosures (Tier-I capital, Tier-I ratio, Total

capital, Capital Adequacy Ratio -CAR).

Ans: SBI :

Capital Structure: Quantitative Disclosures (Rs in crores)

(a) Tier-I Capital 85732

• Paid-up Share Capital 635
• Reserves 84123
• Innovative Instruments (only total) 6063
• Other Capital Instruments (only total) 0
• Amt deducted from Tier-I Cap (if any total): 5089

(b) Total amount of Tier-II Capital (Net of deductions from Tier-II  Capital)

37587

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