NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2021 EXAMINATION

COURSE CODE: BFN 308

CREDIT UNIT: 3

COURSE TITLE: BANKING METHODS AND PROCESSES.

TIME ALLOWED: 3 HOURS

INSTRUCTION: Answer questions one (1) 25marks and any other three (3) 15marks each

Question 1

a) Financial intermediation is the umbrella phrase under which the roles of banking are subsumed. Provide a break down and description of those roles (12 marks)

b) Banks are often classified according to the types of activities they undertake or as to their modus operandi. Nevertheless, their activities still boarder on financial intermediation. List three types of banks, other than commercial banks, and explain how they intermediate.9 marks)

c) List two ways in which banks differ from other financial institutions. (4 marks)

Question 2

(a) To what extent is it true that modern banking techniques and technology have rendered Cheques and negotiable instruments, in general, obsolete and irrelevant? (9marks).

(b) Your customer is traveling for a conference in November this year. The country destination still accepts traveller Cheques. Your bank has offered him 40/60% ratio of TC euro denominated and US$ Visa credit card. He asks you to explain to him this intricate arrangement as well as the advantages of one over the other. Do so in as brief a note as possible. (6 marks)

Question 3

a) Nigeria, like Britain, practice branch banking system while the United States of America practice unit bank system. Assess or critique this position. (9 marks)

b) Nigerian banks are now having bank agents. What or who are bank agents? (3 marks)

c) Do they differ from agent banks? How so, if so? (3 marks).

Question 4

Apart from minting of coins and printing of currency notes, there is no difference between the functions of a central bank and a conventional commercial bank. Do you agree? (15 marks)

Question 5

a) Distinguish between Financial system and banking system. You may use a tabular layout. (9 marks)

b) To what extent is it likely that a universal bank will outperform a conventional commercial bank? (6 marks)