PAPER NO: 14 BANKING LAW AND PRACTICE
GENERAL OBJECTIVE
This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to apply banking law and practice in credit management.
LEARNING OUTCOME
A candidate who passes this paper should be able to:
- Apply regulations and guidelines in the banking sector in credit
- Assess compliance with licensing requirements for banks
- Provide relevant information for inspection in the context of credit in banks
- Evaluate the impact of global financial issues on credit management
CONTENT
Regulation in the banking sector
- Meaning of banking business
- The role of regulatory models
- Regulation models and strategies
- Regulatory authorities
- Forms of control
- Supervision and regulation of banks
The Central Bank
- Establishment of bank and its legal status legal status
- Central Bank independence
- Principal object of the bank
- Other objects of the bank
- Monetary policy advisory committee
- Monetary policy statements
- Consultations on monetary policy credit
- Lender of last resort
Licensing of institutions
- Licensing of institutions
- Application for licensing
- Revocation of licence
- Minimum capital requirement
- Location of places of business
- Branches and subsidiary
- Amalgamations and transfer of assets and liabilities
- Requirements for directors, chief executive officers and significant shareholders
- Prohibited business
- Basel 11 and 111: Bank Capital adequacy
- Regulations of large and complex financial institutions
Reserves, dividends, accounts and audit
- Ratio between core capital and assets
- Ratio between capital and assets
- Minimum liquid assets
- Restrictions on dividends
- Forms of accounts
- Accounts to be exhibited
- Submission of accounts to the central bank
- Appointment of auditors
- Change of auditors
- Auditor’s duty of confidence
Inspection and control of institutions
- Inspection of institutions
- Vetting of officials
- Powers of central bank to advice and direct
- Powers upon audit or inspection reports
- Examination and control of groups
- Powers of central bank to intervene in management
- Role of central bank in voluntary liquidation
- Liquidation of institutions by central bank
The bank and credit
- Different types of bank credit products
- Credit facilities for different customers and their requirements
- Different credit facilities for different customer needs
- Different types of security and the perfection procedures
- 5c’s, CCCPARTS and PARSER
- Monitoring and control of credit facilities
- Recovery procedures
Consumer protection
- Consumer protection
- Access to financial services sector
- Banker/customer relationship and duties
- Prudent controls
- Deposit protection fund
Global issues in financial sector financial market issues
- Protection and control of money laundering
- Know your customer principle
- Prevention of terrorism financing
Emerging issues and trends