Risks facing by the Financial Institutions . Part-2

Name  the  financial  statements  prepared  by  a  bank.

The  financial  statement  has  prepared  by  a  bank  are  listed  in  4  categories:

1.  Balance  Sheet:

It  presents  the  financial  position  at  a  given  date  by-
 Assets
  Liabilities
  Equity.

2.  Income  Statement:

It represents  the  company's  financial  performance  in terms  of  net  profit  or  loss  that  composed Income - Expense.

3.  Cash  Flow  Statement: 

It  presents  the  movement  in  cash  and  bank  balances by
  Operating  Activities
  Investing  Activities
  Financing  Activities.

4.  Statement  of  Retained Earnings: 

It  presents  the  movement  in  owners' equity  that  derived  by-
  Net  Profit  or  loss
  Share  capital  issued  or  repaid
  Dividend  payments
  Gains  or  losses  recognized  directly  in  equity
 Effects of a change or correction in accounting policy or error.

Describe  the  functions  of  Credit  Administration  Department  of  a bank.

A  typical  credit  administration  unit  performs  following  functions:

1.  Documentation: 

To guarantee that all security documentation conforms to the terms of approbation and is enforceable

2.  Disbursement: 

To control office distributions strictly when all terms and states of approbation have been met, and all security documentation is set up.

3.  Credit  Monitoring: 

Stay informed concerning borrowers' consistence with credit terms, recognizing early indications of anomaly, leading occasional valuation of guarantee and checking convenient reimbursements.

4.  Custodial  Duties: 

Capacity of security reports ought to be brought together. Proper protection scope ought to be kept up on resources promised as guarantee.

5.  To  maintain  control  over  all  security  documentation

6.  Compliance  monitoring: 

To screen borrower's consistence with pledges and concurred terms and conditions, and general checking of record behaviour /execution.

What  are  the  principal  money  market  and  capital  market instruments  available  to  the  banks  in  Bangladesh?

The  financial  market  in  Bangladesh  is  mainly  of  following  types :

1.  Money  Market: 

The  instruments  that  are  generally  traded  in  the  money market  constitute:  

a)  treasury  bills

b)  short-term  bonds  of  govt.  &  central  bank  

c)  negotiable  certificates  of  deposits

d)  bankers  acceptances  

e)  commercial  papers   -  bills  of  exchange   -  promissory  notes -  mutual  funds

2.  Capital  Market: 

The  instruments  that  are  generally  traded  in  the  capital market  for  medium  and  long  term  and,  in  cases  such  as  equities,  for unspecified  periods  are  constitute:  

a)  long-term  government  securities 

b)  corporate  bonds

c)  stocks

d)  municipal  bonds  issued  by  state  and  local  government  units e) mortgages.

What  are  the  sources  &  uses  of  funds  of  depository  financial institution ?

Deposits  and  others  funding  sources,  depository  institutions  both  make  direct loans  to  various  entities  and  invest  in  securities.  Income  is  derived  from  2 sources-
 i) income generated from the loans .
 ii) fee income.

What  are  the  sources  &  uses  of  funds  of  a  non-bank financial institution ?

Sources  of  funds  of  NBFIs:

1.  Capital,  reserves  and  profit

2.  Currency

3.  Demand  deposits

4.  Other  deposits :

a.  Banking  and  financial  institutions

b.  Public  sector

c.  Private  sector

d.  Foreign.

5.  Borrowings.

6.  Funds  from  other  financial  institutions :

a.  Domestic

b.  Foreign.

7.  Insurance,  provident  and  pension  funds.

8.  Other  liabilities Uses  of  funds  of  NBFIs:

i.  Currency

ii.  Deposits  with  other  financial  institutions:

a.  Domestic

b.  Foreign

iii.  Loans  and  advances:

a.  Banking  and  financial  institutions

b.  Public  sector

c.  Private  sector

d.  Foreign

iv.  Securities: 

a.  Treasury  bills

b.  Commercial  bills

c.  Malaysian  Government  Securities  (MGS)

d.  Corporate o  Private  Debt  Securities  (PDS) o  Equities

e.  Foreign

f.  Others.

v.  Gold  and  forex  reserves

vi. Other assets.

Risks facing by the Financial Institutions . Part-1

Risks facing by the Financial Institutions . Part-2

Risks facing by the Financial Institutions . Part-3

Risks facing by the Financial Institutions . Part-4