Final: 20 copies on paper 24-8-2015
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Commerce)
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Course: Banking Law & Practice (5420)
Level: Associate Degree in Commerce
Semester: Autumn 2015
Total Marks: 100
Pass Marks: 50
ASSIGNMENT No. 1
(Units: 1–4)
Note: You are required to attempt all questions if you are unable to understand any
question of assignment, do seek help from your concerned tutor. But keep in
mind that tutors are not supposed to solve the assignment questions for you.
Q. 1 What do you know about the banks? Discuss in detail the types of banks in
Pakistan.
(20)
Q. 2 Suppose, you are running a small business and want to open a bank account for
keeping your extra cash in it. Visit any nearby bank and describe in detail the
different types of bank accounts opened in the Pakistani banks.
(20)
Q. 3 Discuss in detail the classification of banking customers. What are the guidelines
for banks to deal with the customers?
(20)
Q. 4 What are the Development Finance Institutions (DFIs)? Explain in detail the
functions and types of Development Finance Institutions (DFIs) in Pakistan. (20)
Q. 5 Differentiate between the functions of the World Bank and the International
Monetary Fund (IMF).
(20)
ASSIGNMENT No. 2
Total Marks: 100
(Units: 5–9)
Pass Marks: 50
Q. 1 What is the international monetary system? Discuss the role of foreign exchange in
the Pakistan’s financial markets.
(20)
Q. 2 What are the different types of loans available to the businesses in Pakistan from the
commercial banks?
(20)
Q. 3 As a bank manager, what factors you will consider while granting approval to a
loan application? Discuss these principles of sound lending practices in detail. (20)
Q. 4 What are the negotiable instruments? Explain in detail the features of negotiable
instruments (cheque, promissory notes and bill of exchange).
(20)
Q. 5 What is the agricultural financing? Discuss in detail the importance of agricultural
financing in Pakistan.
(20)
COURSE OUTLINE
BANKING LAW AND PRACTICE (5420)
UNIT 1 INTRODUCTION TO BANKING IN THE WORLD AND PAKISTAN
Meaning and origin of Banking in the World
Brief history of banking in Pakistan
Types of banks, nature, scope and their functions
Types of banking services available
UNIT 2 TYPES OF ACCOUNTS
Types of bank accounts such as current, PLS, call, short notice deposits and
fixed deposit accounts, royalty accounts, departmental accounts
Importance and mobilization of deposits in banking system
Importance of introduction and issuance of cheque books and loose cheques
Instructions and rules relating to maintaining accounts, balancing ledgers,
statement of accounts, pass book, specimen signature
UNIT 3 BANKING CUSTOMERS
Individual, Joint minor, partnership firms, societies, trustees, liquidators,
custodian of enemy property, Joint stock companies, associations.
Precautions required on opening of various types of account of various
customers. Steps required to be taken on death insanity, liquidation and
insolvency.
Instructions relating to dealing with various banking instruments: cheques,
bills of exchange, promissory notes, pay orders, drafts, telegraph transfers,
mail transfers, letter of authority, traveller cheques etc.
UNIT 4 DEVELOPMENT FINANCIAL INSTITUTIONS
History of development financial institutions (International and National)
Types of financial services available in Pakistan through Development
Financial Institutions
Sources of funds for development financial institutions
Role of International Institutions in Development Financing, such as:(a)
International Monetary Fund (IMF)
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(b)
(c)
(d)
(e)
(f)
World Bank
International Development Association (IDA)
International Finance Corporation (IFC)
The Islamic Development Bank (IDB)
Asian Development Bank (ADB)
UNIT 5 FOREIGN EXCHANGE TRANSACTIONS IN BANKING
Historical review of International monetary systems (Euro-dollar currency,
petro-dollar, SDRs etc.)
Foreign exchange market and capital market
Mechanism of foreign exchange
Exchange control in Pakistan
Types of letter of credits
Procedure/rules regarding obtaining of import license on consumer's behalf
Handing of export documents presented for collection or negotiated under
letter of credit
Issuance and payment of inward and outward foreign drafts, mail transfers,
telegraphic transfers
Trade policy of Pakistan
UNIT 6 FINANCING MECHANISM IN COMMERCIAL BANKING
Types of loans and advances in Commercial Banking such as over-draft,
cash credit, fixed loans, bridge financing, debenture financing, discounting
and purchase of bills, working capital loans, seasonal advance, financing of
import and export, agricultural credits, IDA credit, project financing etc.
Types of charges such as pledge mortgages, hypothecation, fixed charges,
floating charges and their respective documentation.
Types of securities and their evaluation such as stocks and shares, life
insurance policies, immovable property and machinery, product and goods
guarantees, unquoted shares.
Procedure of credit assessment and credit proposal scrutiny.
Sanctioning procedure and completion of formalities prior to disbursement
applicable in commercial banks.
Procedure for managing monitoring, control and recovery of loans and
advances.
Principles of good/sound lending
UNIT 7 BANKING LAWS IN PAKISTAN
Law of contract in Pakistan
Law of negotiable instruments in Pakistan
Law of sales of goods with special reference to its impact on banking
Companies ordinance 1984 with special reference to its impact on Pakistan
banks
Banking companies ordinance 1962
Banks Nationalization Ordinance 1974
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UNIT 8 PROJECT PLANNING: DEVELOPMENT, IMPLEMENTATION AND
MONITORING IN DEVELOPMENT FINANCIAL INSTITUTIONS
Project Planning Techniques
Preparation of Project pre-feasibility/profiles
Project Evaluation Techniques
Project sanctioning procedures
Project implementation and supervision techniques
Project monitoring
UNIT 9 AGRICULTURAL AND COOPERATING FINANCING
The nature, scope and importance of agricultural and co-operative financing
in Pakistan
Important institutional and non-institutional sources of agricultural and cooperative financing in Pakistan, and their institutional framework.
Techniques of assessing agricultural financing requests
Supervised credit and lending procedures, and credit to agrobased
industries
Recovery procedures in agricultural and co-operative financing
BOOKS RECOMMENDED:
1.
Asrar H. Siddiqui, Practice and Law of Banking in Pakistan, Royal Book Company,
Karachi.
2.
George H. Hempe. Donad G. Simonson and Alan B. Coleman, Bank Management,
John willey and sons Canada.
3.
Journals of institute of Bankers in Pakistan.
4.
Khawaja Amjad Saeed, Financial Institution in Pakistan, Operational and procedural
Aspects, Royal Book Company, Karachi, 85.
5.
Muhammad Fahim, Principles and Practice of General Banking in Pakistan.
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