NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JULY 2018 EXAMINATION

COURSE CODE:      BFN308                                                          CREDIT UNIT:   3                   

COURSE TITLE:     BANKING METHODS AND PROCESSES

TIME ALLOWED:   3 HOURS      

Instructions:

1. Attempt question number one (1) and any other three (3).

(1a).     Explain the concept of Banking.                                                                    (5 marks)

(1b)     Discuss the primary and secondary functions of commercial banks in a developing economy like Nigeria.                                                                                      (10 marks)

(1c)      Distinguish between banks and traditional money lenders in respect of the   followings;

• Entity
• Activity
• Clients
• Security
• Process of recovery           (10 marks)

2a.       Explain the traditional and monetary functions of central banks.                 (15 marks)

3.         In a recent staff retreat by a medium sized consulting firm, the Managing Director suggests the use of cheque in its transaction as an internal control measure. However, the Finance Manager prefers the use of cash.

Required to:

1. Discuss three reasons for the managing director.     (7.5 marks)
2. Explain three reasons for the finance manager choice of cash in payment for goods and services.    (7.5 marks)

4.         As a branch manager of ABC  PLC bank, discuss the various control measures available to you in ensuring that individual staff discharges their functions within approved limits and in accordance with banks operational rules.                                            (15 marks)

5.         You have been appointed as the Head, credit of Topmost Bank Ltd, state the basic principles of bank lending you would adopt when drafting credit policy of the bank.       (15 marks)

6.         The secret behind any successful banking business is to distribute available resources between the various forms of assets in such a way as to get a sound balance between liquidity and profitability. Following this principle, how would you as a banker ensure your bank has enough income to pay wages and make return to shareholders at all times?          (15 marks)