Certified Commercial Banker Brochure

Certified Commercial Banker

VS-1038


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Certified Certified Certified Certified Commercial BankerCommercial BankerCommercial BankerCommercial Banker

Certification Code Certification Code Certification Code Certification Code VS-1038

Commercial banking primarily involves providing banking services to individuals, small

businesses and large organizations. Commercial Banking as a career has been growing at a

very fast pace and offers exciting opportunities to learn about business, interaction with

clients and develop business relations. There is a wide range of opportunities in

commercial banking, such as leasing, credit card banking, international finance and trade

credit.

Why should one take this certification?Why should one take this certification?Why should one take this certification?Why should one take this certification?

Vskills Certification in Commercial Banking are for those candidates looking for

opportunities in commercial banking sector catering to wide variety of services such as

leasing, credit card banking, international finance and trade credit. Vskills certification

significantly improves the chances of getting the desired role and is an added knowledge for

the candidate. This certification can be taken by candidates looking for new job

opportunities or promotion or just for skill assessment.

Who will benefit from taking this certification?Who will benefit from taking this certification?Who will benefit from taking this certification?Who will benefit from taking this certification?

Vskills Certification in Commercial Banking is for candidates who are well-prepared and

enthusiastic about entering the field and Job seekers looking to find employment in

Finance department of companies or candidates who wish to improve their skill set and

make their CV stronger. The Certification also assists the existing employees looking for a

better role and proves their employers the value of their skills.

Test DeTest DeTest DeTest Details:tails:tails:tails:

• Duration:Duration:Duration:Duration: 60 minutes

• No. of questions:No. of questions:No. of questions:No. of questions: 50

• Maximum marks:Maximum marks:Maximum marks:Maximum marks: 50, Passing marks: 25 (50%); There is no negative marking in

this module.

Fee Structure:Fee Structure:Fee Structure:Fee Structure:

Rs. 2,000/- (Includes all taxes)


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Companies that hireCompanies that hireCompanies that hireCompanies that hire Vskills Vskills Vskills Vskills Certified Commercial BankerCertified Commercial BankerCertified Commercial BankerCertified Commercial Banker

Vskills Certified Commercial Banker finds employment in big or small companies as a

Credit Analyst, Loan Officer, Branch Manager or Mortgage Banker. Many companies

contact us on a regular basis, and we forward them a list of our certified candidates, and the

candidates are highly in demand.


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Table of ContentTable of ContentTable of ContentTable of Content

1.1.1.1. Trends in BankingTrends in BankingTrends in BankingTrends in Banking 1.1 Global Trends

1.2 Domestic Trends

1.3 Dichotomous Approach in the Banking System

1.4 Holistic Overview

1.5 Autonomy in the Banking System

1.6 Asset Quality

1.7 Currency Convertibility

1.8 Off-shore Banking System

2.2.2.2. Evolution of Commercial Banking SystemEvolution of Commercial Banking SystemEvolution of Commercial Banking SystemEvolution of Commercial Banking System 2.1 Different Financial Systems

2.2 Money Lending System in Ancient India

3.3.3.3. Banking SystemsBanking SystemsBanking SystemsBanking Systems 3.1 Introduction

3.2 Type of Banking Systems

3.3 Universal Banking System

4.4.4.4. Functions of a Commercial BankFunctions of a Commercial BankFunctions of a Commercial BankFunctions of a Commercial Bank 4.1 Nature of Commercial Bank

4.2 Characteristics of Commercial Bank

4.3 Intermediation

4.4 Payment and Settlement System

4.5 Financial Services

5.5.5.5. Scheduled Commercial BankScheduled Commercial BankScheduled Commercial BankScheduled Commercial Bank 5.1 Analysis of Assets and Liabilities

5.2 Capital Adequacy and Risk adjusted Requirement

5.3 Risk Weighted Approach

5.4 Inter Bank Borrowing

5.5 CRR and SLR

5.6 Types of Deposits

5.7 Ownership of Deposits

5.8 Investments in Government and other Securities

5.9 Loans and Advances

5.10 NPA Resolution

5.11 Micro Prudential Norms

5.12 CBSR 1998

5.13 Credit Repression


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6.6.6.6. Banking System and Performance MeasurementBanking System and Performance MeasurementBanking System and Performance MeasurementBanking System and Performance Measurement 6.1 Internal Performance

7.7.7.7. Capital ManagementCapital ManagementCapital ManagementCapital Management 7.1 Introduction to Bank Capital

7.2 Long Term Debt and Loss Reserves

7.3 Capital Deficiency Correction

7.4 Recapitalization

8.8.8.8. Commercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertainties 8.1 Risk and Transformation Services

8.2 Internationalization of Banking System

8.3 RBI Guidelines for Risk Management

9.9.9.9. Derivatives for Risk ManagementDerivatives for Risk ManagementDerivatives for Risk ManagementDerivatives for Risk Management 9.1 Nature and Type of Derivatives

9.2 Risk Regulation

10.10.10.10. Liquidity Risk ManagementLiquidity Risk ManagementLiquidity Risk ManagementLiquidity Risk Management 10.1 Introduction

10.2 Measuring Liquidity

10.3 Liquidity Management

11.11.11.11. Credit RiskCredit RiskCredit RiskCredit Risk 11.1 Nature of Credit Risk

11.2 Selection and Limitation

11.3 Credit Derivatives

11.4 Bank Lending Services

11.5 Syndicated Loan

11.6 Direct and Export Credit

11.7 Leasing

12.12.12.12. Interest Rate Risks (IRR)Interest Rate Risks (IRR)Interest Rate Risks (IRR)Interest Rate Risks (IRR) 12.1 Net Interest Income

12.2 Future, Option and Swaps

12.3 Forward Rate Swaps and Interest Rate Swaps

13.13.13.13. Investment ManagementInvestment ManagementInvestment ManagementInvestment Management 13.1 Portfolio Behavior of Commercial Banks

13.2 REPO and Reverse REPOs

13.3 Type of Government Securities

13.4 Yield Curve and Yield Measures

13.5 Bond Pricing and price volatility


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14.14.14.14. Foreign Currency DealingForeign Currency DealingForeign Currency DealingForeign Currency Dealing 14.1 Foreign Exchange Market

14.2 Technology and Trading

14.3 Participants in Foreign Exchange Market

14.4 Foreign Exchange Rates and Exchange Quotations

14.5 Ready Exchange Rate and Exchange Rate Points

14.6 Cross Points

14.7 Currency Arbitrage

15.15.15.15. Foreign Currency RiskForeign Currency RiskForeign Currency RiskForeign Currency Risk 15.1 Hedging and Forward Contracts

15.2 Forward Premium and Discounts

15.3 Futures

15.4 Currency Swaps

15.5 Foreign Currency Options

15.6 Option Strategies

15.7 Cross Currency Option Trading in India

16.16.16.16. International BankingInternational BankingInternational BankingInternational Banking 16.1 Introduction

16.2 International Banking Regulation

16.3 International Banking Activities

16.4 Country Risk and Euromoney

16.5 Loan Syndication and Agreement Provisions

16.6 Euro Loan Syndication


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Course OutlineCourse OutlineCourse OutlineCourse Outline

1.1.1.1. Trends in BankingTrends in BankingTrends in BankingTrends in Banking � Demonstrates the global trends in the financial service industry such as

consolidation and convergence of banks, development of financial institutions,

banks, asset management firms and insurance firms.

� Describes the domestic trends prevalent in the financial system and financial

liberalization.

� Explains the dichotomous approach in the banking system consisting of both

formal and informal sector.

� Explains the need for a holistic overview to the banking system to appreciate the

development in response to the need.

� Explains the three tier structure and the micro prudential norms

� Describe the need to have an autonomous central bank to facilitate the setting of

benchmarks, control inflation, asses the changing financial environment and

implementing policies.

� Explains the need to assess the quality of asset and illustrates the activities

performed by Board of Financial Supervision under of aegis of RBI.

� Explains the process of converting currency i.e., the restriction imposed on foreign

exchange transactions or exchange control.

� Describes the need for setting up off-shore banking system preface to convertibility

on capital account

2.2.2.2. Evolution of Commercial Banking SystemEvolution of Commercial Banking SystemEvolution of Commercial Banking SystemEvolution of Commercial Banking System � Explains different financial systems - Market and Bank Oriented Financial Systems

� Explains the money lending system followed in Ancient India

� Types of Money Lenders and indigenous bankers

3.3.3.3. Banking SystemsBanking SystemsBanking SystemsBanking Systems � Brief introduction about the evolution of the banking system in India

� Describes type of banking system and comparison between their operations

� Explains the working and functionalities of Branch Banking

� Illustrates the factors affecting Banking Systems

� Explains the concept of Retail Banking and Wholesale Banking and their practices

� Explains the reason for gap between Regulated and Wholesale deposit rates

� Explains the concept of banking marketisation.

� Elaborates the concept of Universal Banking in Germany, UK and India.

4.4.4.4. Functions of a Commercial BankFunctions of a Commercial BankFunctions of a Commercial BankFunctions of a Commercial Bank � Describes the nature and characteristics of Commercial Bank

� Explains the functions of Commercial Bank


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� Describes the role of Financial Intermediaries to provide intermediary services

such as brokerage and asset transformation.

� Describes the differences between trading activities and commercial banking

� Explains the need of payment and settlement system for improving the conduct of

monitory policy in the economy.

� Explains other financial services that a commercial bank provides – securities

related services, advice on managing the portfolio or investment counseling.

5.5.5.5. Scheduled Commercial BankScheduled Commercial BankScheduled Commercial BankScheduled Commercial Bank � Banking Regulation Act, 1949

� Analyses the assets and Liabilities of commercial banks

� Explains the functions of Bank Capital

� Describes the financial risks involved and need for capital adequacy in the financial

system

� Describes the prescribed capital standards to be followed by commercial banks and

focus on adjusting the risks faced by the entire banking industry on account of the

density of relations amongst banks.

� Classifies the capital of banks, explains the funded risk assets, funded risk assets,

off-balance sheet items and norms as prescribed to maintain minimum capital

funds.

� Explains the Risk Weighted Approach followed to strengthen the banking system

by addition to equity.

� Explains the concept of Inter Bank Borrowing, functions of Call Money Market

and explains the collateralized borrowing and lending obligation

� Describes the relation between Money Market and Foreign Exchange Market

� Explains the concept of CRR and SLR on inter-bank deposits

� Explains different types of deposits – Term and Fixed Deposits

� Describes Ownership of Deposits

� Illustrate different type of assets of commercial banks

� Identify Investments in Government and other Securities

� Explains the accounting standards for investment, illustrate Investment Fluctuation

reserve, maturity classification of investments in Government Securities

� Explains the process of Retail Banking, growth in housing finance and describes

risky loans (also called non-performing assets) as an indicator.

� Describes NPA Resolution and Moral Hazards

� Classification of assets

� Describes Micro Prudential Norms and its elements – income recognition, asset

classification, provision for loans & advances and capital adequacy.

� Illustrates on Committee Banking Sector Reform (CBSR) 1998

� Describes valuation of all investment on mark to market basis to facilitate the

development of a healthy secondary market

� Explains the concept of Credit Repression

6.6.6.6. Banking System and Performance MeasurementBanking System and Performance MeasurementBanking System and Performance MeasurementBanking System and Performance Measurement � Explains the need and importance of strengthening the financial system


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� Describes the system and methods used in banks, structural issues being faced and

integration of financial markets

� Explains the legal and legislative framework as recommended the amendment to

RBI and Banking Regulation act.

� Describes the need for evaluation of bank performance – Internal and external

performance.

� Illustrates the planning process of the bank and personnel development

� Explains Income Statement, Financial Ratios, Profit Ratios, Asset Quality

Management, Non-Performing Assets, Liquidity Ratios and evaluating operational

efficiency.

7.7.7.7. Capital ManagementCapital ManagementCapital ManagementCapital Management � Introduction to Bank Capital

� Explain Long Term Debt and Loss Reserves

� Explains the corrective actions to be taken at the time of capital deficiency such as

change in asset, change in dividend payout ratio, employee stock ownership, change

in profitability and addressing capital issues

� Explains the concept of Recapitalization and merger among banks

� Explains the process of crisis management and recommendation

� Describes restructuring, process of addressing both systematic & Macro level issues

and policies for orderly restructuring.

8.8.8.8. Commercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertaintiesCommercial Banking Risk and uncertainties � Explains the nature of risk and need for risk management

� Describes Risk Transformation Services such as Risk Management, Source of Risk,

Credit Analysis, Bank Marketisation and liability management.

� Explains the concept of rollover loans and flexi rates

� Explains the concept of Banking Internationalization to facilitate Asset-Liability

Management.

� Illustrates the overall and types risks of a bank – Credit Risk, Interest Rate Risk,

Liquidity Risk, Operational Risk and Foreign Exchange Risk.

� Explains the Treasury Functions and techniques to monitor risks.

� Explains the RBI Guidelines for Risk Management

9.9.9.9. Derivatives for Risk ManagementDerivatives for Risk ManagementDerivatives for Risk ManagementDerivatives for Risk Management � Describes the nature, type and characteristics of derivatives

� Explains different categories of risk associated with derivates and risk regulation.

10.10.10.10. Managing Managing Managing Managing Liquidity Risk Liquidity Risk Liquidity Risk Liquidity Risk � Explains the concept of liquidity risk and ability to meet anticipated and contingent

cash needs

� Elaborates various sources of liquidity and collateralized lending facility

� Explains the process and need for liquidity measurement

� Explains the various theories of Liquidity Management including Commercial Loan

Theory, Shiftability Theory, Anticipated Income Theory and liability Management

theory


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11.11.11.11. Managing Managing Managing Managing Credit RiskCredit RiskCredit RiskCredit Risk � Explains nature of credit risk

� Explains the principles in credit risk management – selection, limitation and

diversification

� Explains the method of reducing credit risk

� Explains the relation between credit risk and asset liability management

� Explains the importance of credit derivatives as a means of evaluating and

transferring credit risk

� Explains the uses of credit derivatives, types of credit derivatives, credit spread

options and credit linked notes

� Explains different type of bank lending services for infrastructure projects, advances

against shares and debentures, bridge loans, loan against working capital etc

� Explains loans against cash credit and features of loan system

� Explains the procedure of loan syndication, process of syndication and syndication

documents

� Illustrates the terms and condition of term loans

� Explains the concept of direct and export Credit

� Explains the process of leasing and describes the type of leases – Sales and lease

back, operating lease and Financial/ capital lease

� Explains the concept of housing finance

12.12.12.12. Managing Interest Rate RiskManaging Interest Rate RiskManaging Interest Rate RiskManaging Interest Rate Risk (IRR)(IRR)(IRR)(IRR) � Explains the concept of Net Interest Income to determine the profitability of banks

� Explain derivative instrument that allows banks to alter interest rate exposure i.e.,

Future, Option and Swaps

� Explain the Types of Interest rate swaps and their uses

� Illustrates forward rate agreement and interest rate swaps

13.13.13.13. Investment ManagementInvestment ManagementInvestment ManagementInvestment Management � Explains the portfolio behavior of commercial banks by accommodation principle,

profit maximizing principle and stock adjustment principle

� Explains REPO and reverse REPOs as a tool to manage the liquidity and maximize

bank returns

� Explains different type of Government securities

� Explains the different type of investment risks and security specific risk

� Explains the concept and behavior of yield curve and measures to evaluate yield

� Explains the various measures of bond price volatility

14.14.14.14. Foreign Currency DealingForeign Currency DealingForeign Currency DealingForeign Currency Dealing � Describes Foreign Exchange Market and Euro-dollar market

� Explains the purpose and organization of foreign exchange markets

� Describes the impact of technology on trading

� Explains the relationship between exchange and money markets

� Participants in Foreign Exchange Market – Commercial Banks, Traders and

Investors, Dealers and Brokers, Investment Banks, Central Banks and Arbitrageurs

� Explains the concept of foreign exchange rates and exchange quotations


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� Explains the functioning of Ready Exchange Rate and Exchange Rate Points such

as spot exchange rates, forward exchange rates and calculations

� Explains the concept of cross rates and spot contracts

� Explains the concept of currency arbitrage and their type - two point currency

arbitrage and triangular arbitrage

15.15.15.15. Foreign Currency RiskForeign Currency RiskForeign Currency RiskForeign Currency Risk � Defines exchange risk

� Explains the concept of Hedging and Forward Contracts

� Explains the concept of transactional exposure, translation exposure, economic

exposure and their impact

� Describes the technique to cover exchange risk

� Explains the concept of hedging with forward contract – Hedging a long position

and short position

� Explains the concept of forward premium and discounts

� Describes the money market alternative and its comparison with forward contract

� Explains concept of Futures – Hedging with Futures, Trading of futures, Types of

Traders, Contract Characteristics, Prices and Daily Settlement and determining

gains/losses

� Explains the concept of currency swaps, uses and growth of swaps, pricing of swaps,

swap transactions

� Defines foreign currency options and its features

� Explains the concept of hedging with options and basic option strategies such as

buying a call, buying a put, selling a call and selling a put

� Explains the techniques of pricing currency options and the role of Foreign

Exchange Rate Volatility, Spot Rate, Expiration Time and Interest Rate Differential

� Explains the concept of Cross Currency Option Trading in India

� RBI Guidelines for currency option trading in India

16.16.16.16. International BankingInternational BankingInternational BankingInternational Banking � Introduction, origin and development of international banking

� Defines the International Banking Regulation

� Explains the activities of International Banks such as bankers acceptance, CP and

CD

� Illustrates loan syndication and loan agreement provisions

� Defines guidelines for Euro Loan Syndication projects in India


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Sample QuestionsSample QuestionsSample QuestionsSample Questions

1. 1. 1. 1. Which of thWhich of thWhich of thWhich of the following ought to be the core objective of a monetary policy? e following ought to be the core objective of a monetary policy? e following ought to be the core objective of a monetary policy? e following ought to be the core objective of a monetary policy?

A. Stability in employment

B. Price stability

C. Money supply

D. Growth in employment

2. 2. 2. 2. The RBI is assigned the role of performing supervisory functions by virtue of the The RBI is assigned the role of performing supervisory functions by virtue of the The RBI is assigned the role of performing supervisory functions by virtue of the The RBI is assigned the role of performing supervisory functions by virtue of the

powers conferred powers conferred powers conferred powers conferred by the RBI Act, 1934. Which one of the following is not included by the RBI Act, 1934. Which one of the following is not included by the RBI Act, 1934. Which one of the following is not included by the RBI Act, 1934. Which one of the following is not included

under the RBI Act, 1934?under the RBI Act, 1934?under the RBI Act, 1934?under the RBI Act, 1934?

A. Inspection of banks

B. Issues related to furnishing credit information from the commercial banks

C. Power of RBI to impose penalties

D. Definition of NBFCs

3. Wh3. Wh3. Wh3. Which of the following is not true with regard to the impact of NPAs on banks?ich of the following is not true with regard to the impact of NPAs on banks?ich of the following is not true with regard to the impact of NPAs on banks?ich of the following is not true with regard to the impact of NPAs on banks?

A. Erode current profits

B. Diminution in the value of loan assets

C. Reduction in interest income

D. Limit recycling of funds

4444. . . . A loan that is structured and supported specifiA loan that is structured and supported specifiA loan that is structured and supported specifiA loan that is structured and supported specifically by the operation and cally by the operation and cally by the operation and cally by the operation and

performance of a specific business or enterprise is called aperformance of a specific business or enterprise is called aperformance of a specific business or enterprise is called aperformance of a specific business or enterprise is called a _____________._____________._____________._____________.

A. Commercial loan

B. Personal loan

C. Educational loan

D. Overdraft

5555. . . . Which country by their policy statement, though often referring to price stabilWhich country by their policy statement, though often referring to price stabilWhich country by their policy statement, though often referring to price stabilWhich country by their policy statement, though often referring to price stability, ity, ity, ity,

attaches importance to controlling inflation?attaches importance to controlling inflation?attaches importance to controlling inflation?attaches importance to controlling inflation?

A. USA

B. Germany

C. Canada

D. Australia

Answers:Answers:Answers:Answers: 1 (B1 (B1 (B1 (B), 2 (A), 3 (), 2 (A), 3 (), 2 (A), 3 (), 2 (A), 3 (BBBB), 4 (), 4 (), 4 (), 4 (AAAA), 5 (), 5 (), 5 (), 5 (AAAA))))


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Certified Commercial Banker Brochure

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