Examination Date: 04/11/2021

AHSANULLAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

School of Business
Program: Bachelor of Business Administration (BBA)
Semester Final Examination: Fall 2020
3rd Year 1st Semester
Course Number: BBA 315
Course Name: Money and Banking
Time: 2 (Two) hours Full Marks: 50

Use single answer script

Instructions:

i. Answer script should be hand written and should be written in A4 white paper. You must
submit the hard copy of this answer script to the Department when the university reopens.
ii. You must write the following information at the top page of each answer script:
Department: Program:
Course no: Course Title:
Examination: Semester (Session):
Student ID: Signature and Date:
iii. Write down Student ID, Course number and put your signature on top of every single page
of the answer script.
iv. Write down page number at the bottom of every page of the answer script.
v. Upload the scan copy of your answer script in PDF format through provided google form at
the respective course site (i.e., google classroom) using institutional email within the
allocated time. Uploading clear and readable scan copy (uncorrupted) is your responsibility
and must cover the full page of your answer script. However, for clear and readable scan copy
of the answer script student should use only one side of a page for answering the questions.
vi. You must avoid plagiarism, maintain academic integrity, and ethics. You are not allowed to
take any help from another individual and if taken so can result in stern disciplinary actions
from the university authority.
vii. Marks allotted are indicated in the right margin.
viii. Necessary charts/tables are attached at the end of the question paper. You may use graph
papers where necessary.
ix. Assume any reasonable data if needed.
x. Symbols and characters have their usual meaning.
xi. Before uploading rename the PDF file as CourseNo_StudentID.pdf
For example, BBA315_180202189.pdf
xii. The answer script (one single pdf file) must be uploaded at designated location in the
provided google form link available in the google classroom.

Page 1 of 4
 There are 6 (Six) questions. Answer any 4 (Four) questions.

1. a) Describe the demand for money in details with examples. 4.0

b) What money does in our daily life? Explain. 5.5
c) ‘Money is not always blessing for the society’. Explain the sentence showing your 3.0
arguments.

2. a) The ‘Fuzi’ Bank Limited is interested to know its current net income after taxes and 4.5
the amount of its retained earnings so that it will be able to reinvest. To find out the
net income, Bank has given you the following revenues and expenses data.

Interest on loans Tk. 99,000

Employee wages, salaries, and benefits Tk. 13,000
Interest earned on government bonds and notes Tk. 29,000
Provision for loan losses Tk. 5,000
Overhead expenses Tk. 3,000
Service charges paid by depositors Tk. 3,000
Security gains/losses Tk. 7,000
Interest paid on federal funds purchased Tk. 5,000
Payment of dividends Tk. 8,000
Interest paid to customers holding time and savings deposits Tk. 40,000
Trust department fees Tk. 3,000

Required:
From the above information calculate the net income after taxes considering tax rate
30% and the retained earnings amount.

b) The latest income and expense items and report of condition items of Sun Moon 8.0
Bank Limited are as shown in the following table:
Gross loans Tk. 300,000 Trading account securities Tk. 2,000
Total noninterest income Tk. 75,000 Other real estate owned Tk. 4,000
Investment securities Tk. 36,000 Goodwill and other Tk. 30,000
intangibles
Common stock Tk. 600,000 Total liabilities Tk. 750,000
Surplus Tk. 15,000 Preferred stock Tk. 300,000
Total equity capital Tk.1,000,000 Nondeposition borrowings Tk. 40,000
Cash and due from banks Tk. 10,000 Bank premises and Tk. 200,000
equipment, net
Miscellaneous assets Tk. 25,000 Total noninterest expenses Tk. 90,000
Bank premises and Tk. 250,000 Net loan Tk. 250,000
equipment, gross
Total interest income Tk. 140,000 Income taxes Tk. 10,000
Total interest expenses Tk. 100,000 Total outstanding shares 10,000

Page 2 of 4
 Required:
Calculate the following items:
i. Net interest income v. Total operating expenses
ii. Net noninterest income vi. EPS
iii. Provision for loan losses vii. Total assets
iv. Pretax net operating income viii. Undivided profit

3. a) Guddi Bank Limited has forecast its several sources and uses of funds over the next 6.0
seven months which are given below:

Time Borrowing Schedule loan Other The quality

deposits from money repayments deposits loan request
Months (Tk.) market (Tk.) (Tk.) (Tk.) (Tk.)
January 25,000 15,000 13,000 18,000 50,000
February 40,000 13,000 15,000 11,000 40,000
March 40,000 5,000 17,000 13,000 70,000
April 30,000 20,000 19,000 12,000 50,000
May 60,000 22,000 16,000 15,000 80,000
June 15,000 5,000 17,000 12,000 55,000
July 35,000 15,000 8,000 10,000 45,000

Required:
Identify which months are likely to result in liquidity deficits and which in liquidity
surpluses by using the sources and uses of funds approach and explain your action
plan.
b) Patron Savings’ Management wants to keep a 85% reserve behind its hot money 6.5
deposit (less 3% legal reserve requirement on time deposit but the saving deposit carry
a 7% percent reserve requirement whereas all checkable deposit carry a 10% reserve
requirement), a 20% liquidity reserve in back of its vulnerable deposits and a 5%
reserve behind its stable fund deposits for the upcoming month of December.

Checkable Saving Time

Fund Type Deposits (Tk.) Deposits (Tk.) Deposits (Tk.)
Hot money funds 220,000 150,000 600,000
Vulnerable funds 300,000 200,000 400,000
Stable funds 180,000 190,000 170,000

Required:
You estimate the total liquidity requirement for the month of December following the
structure of funds method.

Page 3 of 4
4. a) Explain in brief the green banking policy given by Bangladesh Bank in the 1st phase. 4.0
b) As a banker just review the objectives to implement the Green Banking system in your 4.0
Bank.
c) What steps should a lender go through in lending process to finalize a loan situation? 4.5

5. The following information is given below of Rainbow National Bank to identify the 12.5
following requirements:

Particulars Tk.
Interest income 32,500
Interest expense 2,500
Total assets 40,000
Securities losses or gains 1,000
Earning assets 30,000
Total liabilities 30,000
Taxes paid 2,000
Shares of common stock outstanding 5,000
Noninterest income 10,000
Noninterest expense 8,000
Provision for loan losses 1,500

Required:
i. Calculate Net income and ROE.
ii. Suppose total equity will be declined by 5% while all other revenue and
expenses items shown in the table remain unchanged. What will be happened to
Rainbow ROE and ROA?
iii. Suppose total assets will be declined by 5% while all other revenue and expenses
items shown in the table remain unchanged. What will be happened to Rainbow
ROE and ROA?

6. a) Distinguish between Bank and Non-Bank financial Institutions. 2.0

b) Explain the Banking system of Bangladesh in details. 7.0
c) Narrate the advantages & disadvantages of Branch banking system. 3.5

Page 4 of 4