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Money and Banking: Course Outline (BBA)

The course is designed to equip students with the comparative knowledge of a financial system and its regulatory framework in Pakistan and in a developed economy.

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Learning Objectives

1) To understand the money and banking functions.

2) To develop skills to analyze and design and efficient business relation with banks.

3) To learn about the decision making process in the field of banking.

4) To learn about the fundamental ideas underlying the preparation of financial instruments.

5) To learn the profession of banking and it’s specialized fields.

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Course Outline

Functions and Roles of the Financial System in the Global Economy

  • Functions of global financial system
  • Types of financial markets
  • Financial markets in Pakistan

Financial Assets, Money, Financial Transactions, and Institutions

  • Characteristics and types of financial assets
  • Lending and borrowing of financial instruments
  • The value of money and inflation
  • Importance of financial institutions
  • Financial intermediaries and other financial institutions

Introduction to Money Market

  • Characteristics of the money market
  • Types of money market securities
  • Pattern of interest rates in the money market
  • Money market instruments by SBP                     

Money Market Instruments               

  • Certificates of Deposit, Eurocurrency Deposits
  • Bankers’ Acceptance, Commercial Papers
  • Federal agency securities
  • Market Participants (dealers)
  • Role of Primary Dealers
  • Role of Government Agencies

The Roles and Services of the Federal Reserve(State Bank of Pakistan)

  • The roles of central bank
  • The goals and channels of central bank
  • How SBP is organized
  • The key focus of central bank monetary policy – interest rate, reserves             

The Tools and Goals of Central Bank Monetary policy

  • Credit control and its types
  • Interest rate targeting
  • Economic goals and the trade-offs
  • Limitations of monetary policy

The Commercial Banking Industry and SBP Regulations   

  • The structure of commercial banking
  • Fund management institutions
  • Mutual funds, life insurance companies, medical insurance companies, pension funds, saving companies
  • Consumer financing                               

Business Borrowing (Capital Markets)

  • Bonds and stock markets
  • IPO's and secondary markets – role of stock exchanges (KSE)
  • Types of corporate stocks
  • Ist, 2nd, and 3rd markets
  • Market efficiency
  • International exposure through ECN's, and NASDAQ                                  

Consumer Lending and Borrowing

  • Consumers as lenders, borrowers
  • Debit and credit cards
  • Factors considered in making consumer loans
  • Buying power, social differences, and the role of consumer financing in Pakistan