Institute of Rural Management Anand (IRMA)

PGDM (RM) – 41 (2020-22)

Academic Year 2021-22

Term IV
Title of the Course: Commercial Banking & Risk Credit: 1.5
Management
Name of the Faculty: Prof. Rakesh Arrawatia
Email ID: rarrawatia@irma.ac.in Contact No.: 9099132321

COURSE DESCRIPTION:
Functioning of economy and markets heavily relies on banking and financial institutions (FIs). Banks and
FIs play a crucial and integral role in running the economy with subject to the strict regulations. Banks are
at the heart of any economy’s financial system. They play crucial roles in channelizing funds to the
borrowers, and protecting and managing our savings. However, in today’s world banking industry and its
commercial activities cannot be compartmented from other ‘non-banking financial institutions’.

COURSE OBJECTIVES:
The growing linkage between finance, and IT and IT enabled services has fostered the development of
financial products and their transaction. The integration of economies across the world in the
globalization era raises the importance to study commercial banking.

LEARNING OUTCOME:
The course is intended to deliver the following learning outcomes;
1. Understanding the origin of banking system and the basic tenets of commercial banking.
2. Recognizing the issues of regulatory compliances.
3. To know the mechanism and implementation of asset liability management.
4. To understand the assessment and management of risk, portfolio investment and liquidity
positions.
5. To demonstrate the social responsibilities in business context.

COURSE REQUISITES: NIL

PEDAGOGY / TEACHING METHODOLOGY: NIL

EVALUATION:
Component *Weightage %
Class Participation 05 %

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 Quiz 25%
Individual Assignment NIL
Group Assignment NIL
Take Home Assignment NIL
Research Article Review/Discussion NIL
Project Report Submission 20%
Mid Term NIL
End Term 50%
TOTAL 100
*No single component should have a weightage of more than 50 percent of evaluation in a 1.5-
credit course and more than 35 percent in a 3-credit course.

DETAILS/INSTRUCTIONS FOR EVALUATION:

Students will be evaluated on the basis of quizzes, end term, final project presentation and submission,
and class participation.

TEXT BOOKS:
• Peter Rose and Sylvia Hudgins, Bank Management and Financial Services, 9th Edition, Mc Graw
Hill

ADDITIONAL BOOKS / READINGS: <write NIL, if none, do not delete>

• A. Saunders, Financial Institutions Management: A Risk Management Approach, 10th Edition,
Mc Graw Hill.
• Padmalatha Suresh and Justin Paul, Management of Banking and Financial Services, 4th Edition,
Pearson.

SCHEDULE OF SESSIONS:

Session 1:
Origin of banking, Theory of Banking, Why do Banks exist & Economics of Banking.
Reading(s)
1. Article: Note on Banking Industry and Economics of retail banking
2. Chapter- 1 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and Financial
Services, 9th Edition, Mc Graw Hill.

Session 2:
The Organization and Structure of Banks, and Role of Regulation and Central Bank.
Readings
1. Article: Manipulating BASEL-III , Too Big To Fail Problem and Anatomy of Bank Failure and
Impact of Deregulated Savings Bank Interest Rate
2. Chapter-2&3 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and

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 Financial Services, 9th Edition, Mc Graw Hill.

Session 3:
Financial Statement and Financial Performance of Banks and Problem Solving
Readings
1. Chapter - 5&6 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management
and Financial Services, 9th Edition, Mc Graw Hill.
2. Case 1: Canara Bank Turnaround, Ivey Publishing
3. Case 2: IndusInd Bank: Residual Income Valuation

Session 4 and 5:
Asset Liability Management and Problem Solving
Readings
1. Chapter - 7 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and
Financial Services, 9th Edition, Mc Graw Hill.
2. Case: Banc One Corp: Asset Liability Management, HBS

Session 6:
Risk Management in Banks-Financial Futures, Options, Swaps, and Other Hedging Tools and
Problem Solving
Readings
1. Article: Commercial Bank Risk Management: An Analysis of the Process
2. Chapter - 8 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and
Financial Services, 9th Edition, Mc Graw Hill.
3. Case: JP Morgan Risk Management during Financial Crises, HBS

Session 7:
Risk Management in Banks-Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit
Derivatives Problem Solving
Readings
1. Chapter - 9 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and
Financial Services, 9th Edition, Mc Graw Hill.

Session 8:
Capital Management for Banks and Problem Solving
Readings
1. Chapter - 9 from the Text Book, Peter Rose and Sylvia Hudgins, Bank Management and
Financial Services, 9th Edition, Mc Graw Hill.
2. Case : United Bank of India: Present Fiasco and Future Plans

Session 9 and 10:

Presentation and Recap

IMPORTANT GUIDELINES: NIL

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PARTICIPANTS ROLES & RESPONSIBILITIES: NIL
HOW DOES THIS COURSE IS RELEVANT TO IRMA’S MISSION:
Banks and FIs play a crucial and integral role in running the economy, including the rural economy, along
with the strict regulations. Banks are at the heart of any economy’s financial system and include the rural
financial institutions.

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