REVISED SYLLABUS FOR JAIIB

JAIIB Subjects

1) Principles of Banking

2) Accounting & Finance for Bankers

3) Legal Aspects of Banking

Objective: To provide basic knowledge in Banking and Financial

Systems and to help the student in developing an extensive

understanding of all aspects of banking.

Level: At par with Graduation from any University in India.

Question pattern: Objective type

Eligibility: Members of the Institute

PAPER 1- PRINCIPLES OF BANKING

Candidates would be able to acquire an in-depth knowledge of

l the legal and regulatory framework of the Banking system.

l the principles and importance of Credit, documentation, monitoring

and control.

l a broad understanding of other functions associated with banking.

l An insight into marketing of banking services and banking

technology

Module A – Indian Financial System

Introduction to the financial system: ; evolution of financial

systems; recent developments in the INDIAN financial system; market

structure and financial innovation. Role and Functions of banks-

Regulatory provisions/enactments governing banks-RBI Major

functions

Retail banking: Wholesale and international banking: the nature

of wholesale banking; off-balance sheet business; international banking

Financial Services Role and functions of Capital markets -

Regulation thereof /Role and Functions of Mutual Funds-SEBI, AMFI

ETC/Role and Functions of Insurance Companies-IRDA Bancassurance,

Factoring, Securitisation etc

Module B-Functions of banks

Deposits ;

Banker –Customer relation-Know your Customer[KYC] –Different

Deposit Products- -services rendered by Banks –Mandate and Power

of attorney;

Banker’s lien-Right of set off- Garnishee Order-Income Tax Attachment

Order etc.

Payment and collection of Cheque-duties and responsibilities of paying

and collecting banker—protection available to paying and collecting

banker under NI Act-endorsements-forged instruments-bouncing of

cheques and their implications

Opening of accounts for various types of customers-minors-joint account

holders-HUF-firms - companies-trusts- socities-Govet and public bodies

Credit :

Principles of lending-various credit facilities -working capital and term

loans -Credit Appraisal Techniques -Approach to lending; -credit

management – credit monitoring –NPA- Recommendations of various

Committees in the area of Credit-Different types of documents;

Documentation Procedures; Stamping of documents

Priority Sector Lending-sectors-targets-issues/problems-current

guidelines-Bank’s performance-recent developments

New Products & Services –Securitisation, Bancassurance, Mutual Funds

etc.

Module C – Banking Technology

Different approaches to bank mechanisation – Core Banking Solutions

-Stand alone computer systems - Wide area and local area networks -

local processing and batch concepts; on-line systems - Mini computers

and Main Frame networking systems.

Electronic Payment systems - Teller Machines at the Bank Counters -

Cash dispensers - ATMs - Anywhere Anytime Banking - Home banking

(Corporate and personal) - Online enquiry and update facilities - Personal

identification numbers and their use in conjunction with magnetic cards

of both credit and debit cards, smart cards, signature storage and display

by electronic means, cheque truncation, microfiche, note and coin

counting devices.

Electronic funds transfer systems - plain messages (Telex or data

communication) - structured messages (SWIFT, etc...) - RTGS

Information Technology - Current trends - Banknet, RBI net, Datanet,

Nicnet, I-net, Internet, E-mail, etc...-Role and uses of technology

upgradation - Global developments in Banking Technology -

Information Technology in finance and service delivery. Impact of

Technology on Banks - Protecting the confidentiality and secrecy of

data - - effect on customers and service quality-

Audit trails - Rangarajan, Saraf and Shere Committee

Recommendations.

Module D –Support Services –Marketing

MARKETING OF BANKING SERVICES

a) Marketing Management -Meaning, Importance and Functions -

Marketing of Services -

b) Production Planning -Product Research & Development -Test

marketing - Product Life Cycle -Product Modification -New

Product Development - Elimination -Packaging and Branding -

Diversification

c) Pricing -Objectives, Strategies and Methods -Factors Influencing

the Pricing Decisions, Importance of Pricing.

d) Distribution -Factors Influencing -Direct and Indirect Channels -

Physical Distribution -Channel Functions and Services.

e) Promotion -Promotion Mix and Role of Promotion in Marketing -

Marketing Information Systems.

PAPER 2- ACCOUNTING & FINANCE FOR

BANKERS

Objective:

· To introduce the candidates to Basics of Financial Mathematics

and Basics of Accountancy and develop an understanding in the

basic financial concepts

Module A – Basics of Business Mathematics

1. Calculation of simple Interest – Bank Discount-Compound

Interest-Ordinary Annuities – Other Annuities-Amortization and

Sinking Funds.

2. Bonds-Calculation of YTM-Duration-Bond Pricing-Premium and

Discount

3. Capital Budgeting – Discounted cash flow-net present value-pay

back methods

4. Depreciation-different types-methods of calculation

Module B

1 Definition & Scope and Accounting Standards

Nature and purpose of accounting; historical perspectives – Origins

of accounting principles- accounting standards and its definition

and Scope.

2 Basic Accountancy Procedures

Concepts of accountancy – entity going concern – double entry

systems, Principles of conservatism – revenue recognition and

realization – accrual and cash basis.

3 Maintenance of Cash/ Subsidiary books and Ledger

Record keeping basics –account categories – debit and credit

concepts – account and columnar accounting mechanics –

journalizing – writing cash books

Module C

1 Bank reconciliation statement – Trial Balance – Adjusting and

Closing entries.

2 Capital & Revenue Expenditure/Depreciation/Inventory Valuation/

Bill of Exchange / Consignment Joint Venture

3 Special accounts – Leasing and Hire-Purchase Company accounts

– Accounts of Non-Trading Concerns – Receipts and Payments.

Module D

Balance Sheet Structure – accounts – categories –Assets, Liabilities

and Net Worth Components./Partnership accounts – partner’s fixed

capital accounts – Current accounts – loan accounts – treatment of

intangibles like goodwill – admission / retirement / death of partner –

sleeping/ quasi and Limited partnership./Company accounts –

Partnership vs. Limited Liability Company accounts – classes of Share

Capital – issue/ forfeiture of Shares – non-voting shares – issue of Bonus

Shares

Preparation of Final Accounts – Final Accounts of Banking Companies-

Accounting in a computerised environment-methods-proceduressecurity-

rectification

PAPER 3-LEGAL ASPECTS OF BANKING

OPERATIONS

Objectives:

The candidates would be able to acquire knowledge in

l the legal & regulatory framework of the banking system

l and the various laws and enactments affecting day to day banking

operations

Module A- Regulations and Compliance:

The questions in this section will be with reference to legal issues and

problems

A. Provisions of RBI Act 1935 ,Banking Regulation Act 1949

Banking Companies [Acquisition and transfer of undertakings

Act 1970 & 1980]

B. Government and RBI’s powers

-Opening of new banks and branch licensing

-Constitution of board of directors and their rights

-Banks share holders and their rights

-CRR/SLR concepts

-Cash/currency management

- winding up- amalgamation and mergers

- powers to control advances- selective credit control –

monetary and credit policy

- Audit and Inspection

- supervision and control-board for financial supervision-its

scope and role

- disclosure of accounts and balance sheets

- submission of returns to RBI etc

2 Module B- Legal aspects of banking operations

Case laws on responsibility of paying /collecting banker

Indemnities/guarantees-scope and application-obligations of a

banker-pre cautions and rights—laws relating to bill finance, LC and

Deferred Payment Guarantees-Laws relating to securities-valuation of

securities-modes of charging securities-lien, pledge, mortgage,

hypothecation etc-registration of firms/companies-creation of charge

and satisfaction of charge

3 Module C- Banking related laws

Provisions of Bankers Book Evidence Act

Special features of Recovery of Debts Due to Banks and Financial

Institutions Act, 1993

The Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002

The Consumer Protection Act, 1986 Definition, Consumer Protection

Councils Chapter II (Sections 4-8) Consumer Disputes Redressal

Agencies (Sections 9-15) District Forums, State Commission and

National Commission, their powers etc

Banking Ombudsman

4 Module D – Commercial Laws with reference to banking

operations

Indian Contract Act, 1872 Chapters VII, IX and X: (Indemnity,

Guarantee, Bailment, Pledge and Agency)

The sale of Goods Act, 1930 (Sale and Agreement to Sell, Definitions,

Conditions and Warranties, Express and Implied, Right of unpaid Seller)

The Companies Act, 1956 Definition, features of company, Types of

Companies, Memorandum, Articles of Association, Doctrines of

Ultravires, indoor management and constructive notice, membership

of company - acquisition-cessation, rights and duties of members and

register of members. Prospects and directors.

Indian Partnership Act, 1932 Definition and types of partnership, relation

of partners to one another -Relation of partners to third parties (Section

18 to 29) Minor admitted to the benefits of Partnership (Section 30)

Dissolution of firm (Section 39 to 45) Effect of non-registration (Section

69) Transfer of property act FEMA 2000.