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Associate
Banking Diploma — Option Subject Lending and International Business |
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| Objective | ||
| 1. | To enable the student demonstrate his/her understand of the techniques of good credit assessment with particular emphasis on evaluating the risks associated with lending to personal customers, smaller and middle market business customers. | |
| 2. | To enable students demonstrate the ways in which international trade is undertaken, settled and financed. | |
| SYLLABUS CONTENTS | ||
| Module I: LENDING: (This section should account for 70% of the studies in this subject) | ||
| 1. | Canons of good lending | |
| 2. |
Analysis, interpretation of financial statements and decision making for
a lending proposition - using; - balance sheets - profit and loss statements - cash flow statements - budgets and cash flow forecasts. |
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| 3. |
Lending requirements for different types of businesses such as: - retailing - other service industries - wholesaling - manufacturing - farming - building - franchising - ‘professionals’ - e.g. doctors, dentists, solicitors, accountants, etc. (This list is not exhaustive). |
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| 4. |
Securities - Overview on features of a good security and types. - Kind of security that would be appropriate and its conditions. (including interest rates and fees) |
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| 5. | Advances to personal customers, including house mortgages, bridging loans and probate advances. | |
MODULE
2: INTERNATIONAL BUSINESS OPERATIONS (This section should account for
30% of the studies in this subject) |
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| 1. | Inter-Bank
Nostro and Loro/Vostro Accounts The accounting methods used by banks to make transfer of funds to banks in other countries. Operation of nostro and loro accounts. |
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| 2. | Remittance
and Receipt of Funds Advantages and disadvantages of various ways of transferring funds between individuals and in different countries. SWIFT: speed of operation. |
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| 3. |
Rate of Exchange Factors affecting foreign exchange rates. System and procedures for buying and selling foreign currency. |
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| 4. | International Trade for Exporters and Importers | |
| (a) | Meaning of international trade its risks and problems: | |
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advantages and disadvantages of settlement in foreign currencies, factors
which affect the movement of rates exchange risks e.g. forward contracts. - Commercial terms (icoterms) and documents used in foreign trade - international payment systems and electronic banking services - cheques, drafts, mail & telegraphic transfers, SWIFT, credit cards and giro - collection of cheques and bills of exchange - clean and documentary - the main types of documentary letters of credit their requirements and operation |
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| (b) | Financial
Services from Banks and other Sources - documentary letters of credit as means of obtaining finance - the different types of short - export finance, including overdrafts and loans, taking to account security and recourse - Pre-shipment finance by banks - negotiating and discounting of foreign/domestic cheques and bills of exchange - acceptance credit accounts - other services including; bank guarantees, bond, forfeiting, factoring, LIFFE. |
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| (c) |
Trade promotion assistance/advice from banks and other sources: Through overseas representation, including agents and distributors international franchising and licensing operations in general terms only, International services from banks, letter of introduction, sources of information/advice, using correspondent banks status reports, economic conditions entry to overseas markets etc. |
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THE EXAMINATION |
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