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1. BRIEF BIOGRAPHY OF DR. MOHAMMED
MIZANUR RAHMAN
 BBA and MBA from University of Chittagong
 PhD from Huazhong University of Science and
Technology, P.R. China
 Got HUST Academic Excellent award for
outstanding research paper, and PhD with the
tenure of 2 years and 9 month

2. COURSE NAME: BANK
MANAGEMENT

3. COURSE DESCRIPTIONS
 This course has a somewhat more practical
orientation than many other courses in the business
program, focusing as it does on the microeconomic
problems of financial management of banking firms.
This does not mean, however, that the course is devoid
of theoretical interest. The course builds on theories
and models covered elsewhere in the program;
particularly those detailed in the course of Banking
and Finance. It also raises some new theoretical
problems for consideration, many of them concerned
with the way we need to conceptualize the banking
firm.

4. COURSE OBJECTIVES
 This course examines the role and importance of
bank financial management to the modern bank.
It teaches the basic models of financial
management taught by University Economics
Departments and Business Schools, which were
constructed from the experience of mature
capitalist economies. The course discusses the
various trends shaping banking markets, such as
institutionalization, securitization, globalization
and concentration.

5. STUDENT LEARNING
OUTCOMES
 After the completion of the course, students will
be able
 To understand the banking firm in the context of
a changing financial services industry.
 To analyze the performance of the banking firms.
 To examine bank capital and capital structure,
and to consider the question of the adequate
regulation of the banking sector to ensure its
safety, to preserve bank liquidity and prevent
bank failures.

6. AN OVERVIEW OF THE CHANGING
FINICIAL-SERVICES SECTOR

7. DEFINE BANK
 Bank is a financial intermediary, that accepts
deposits and makes loans
 A financial intermediary accepting deposits &
granting loans; offers the widest menu of services
of any financial institutions.
 Depository institutions offerings checking
accounts or commercial loans but not both are
called Nonbank banks financial institutions or
“Thrift Institutions”.

8. EXPERT OPINIONS ABOUT THE
BANK

9. CONT.
 “A dealer in debts – his own & of other people”.
Geoffrey Crowther
 “A bank as an institution whose debts (bank
deposits) are widely accepted in settlement of
other people’s debts to each other”.
R.S. Sayers
 “No person or body, corporate or otherwise, can be
a banker who does not (i) take deposit accounts,
(ii) take current accounts, (iii) issue & pay
cheques, & (iv) collect cheques, crossed &
uncrossed, for his customers”.
Sir John Paget

10. DEFINITION OF BANK (CONTINUED)
Definition in terms of –
Services
Economic Function
Legal Existence

11. SERVICE AND MANUFACTURING
ORGANIZATION
Service
Manufacturing

12. ECONOMIC FUNCTION –
FLOW OF FUNDS
 Bank’s Margin/Cost of financial intermediation = Interest
received from borrower – Interest paid to the depositors
 Deposits Borrows
 Pay Interest Receive Interest
Surplus
Unit/Deposit
ors/ Savers
Bank
Deficit Unit/
Borrowers/Us
ers

13. LEGAL EXISTENCE
“A bank as any institution that could
qualify for deposit insurance
administered by the Federal Deposit
Insurance Corporation (FDIC)”

14. THE SERVICES BANKS OFFER
PUBLIC
A. Services Banks Have Offered
Throughout History:
1. Carrying out currency exchange.
2. Discounting commercial notes & making
business loans.
3. Offering savings deposits.
4. Safekeeping of valuables & certification of
value.
5. Supporting government activities with
credit.
6. Offering checking accounts (Demand
deposits).
7. Offering trust services (managing financial
affairs/property, trustee for wills)

15. THE SERVICES BANKS OFFER
PUBLIC----CONT.
B. Services Banks have Developed More
Recently:
1. Granting Consumer Loans.
2. Financial Advising.
3. Cash Management.
4. Offering Equipment Leasing.
5. Making Venture Capital Loans.
6. Selling Insurance.
7. Selling Retirement Plans
8. Security Brokerage.
9. Offering Mutual Funds & Annuities.
10. Offering Merchant Banking Services.

16. THE SERVICES BANKS OFFER
PUBLIC----CONT.
C. Recent Trends Affecting All Banks:
1. Service Proliferation.
2. Rising Competition.
3. Deregulation.
4. Rising Funding Costs.
5. An Increasingly Interest-Sensitive mix of
Funds.
6. A Technological revolution.
7. Consolidation & geographical Expansion.
8. Globalization of banking.
9. Increased risk of failure.

17. CONSIDERATIONS WHILE
CHOOSING A BANK
1. Features
2. Services
3. Fees
4. ATMs

18. CONSIDERATIONS WHILE
CHOOSING A BANK…CONT.
1. Features
 Interest Rate (Annual percentage yield)
 Convenience
 FDIC membership
 Size
 Minimum deposit
 Limitations
 Availability of Funds

19. CONSIDERATIONS WHILE
CHOOSING A BANK…..CONT.
 Direct deposit
 ATMs
 banking by telephone (what can
you do over the phone, and
when?)
 online banking
 credit cards
 debit cards
 overdraft protection
 canceled checks (included with
monthly statements?)
 loans and mortgages
 stock and mutual fund trading
 retirement planning services
 small business services
access to international money
markets
copies of previous monthly
statements
deposit slips and other slips
phone support
talking to a teller in person
debit card fees
traveler's checks
loan application processing
safe deposit box rental
stop payment
wire transfer
money order

20. CONSIDERATIONS WHILE
CHOOSING A BANK…CONT.
3. Fees
 Maintenance fees
 Low-balance penalty
 ATM surcharges, "Foreign" ATM fees
 Returned check
 Bounced check
 Overdraft Protection
 Check printing
 Per-check charges
 Cancelled check return fees
 Closed account

21. CONSIDERATIONS WHILE
CHOOSING A BANK…CONT.
4. ATMs
Once you have an account, balance your checkbook
on a regular basis, to make sure that the bank
hasn't made any errors and so that you know how
much you have in your account. Also understand
every fee you are charged, and complain about any
that you don't agree with. Take a look at any
inserts that accompany your monthly statement,
because banks are required to disclose any fee
changes, and that's where you'll find out about
them.

22. LEADING COMPETITORS WITH
BANKS
 Saving Associations: An association organized to hold savings of
members and to invest chiefly in mortgage loans.
 Credit Unions: A not-for-profit financial institution that accepts deposits,
make loans, and provides a wide array of other financial services and
products.
 Fringe Banks: Fringe banking is payday loan shops, pawn shops, and any
other financial institution that charges much higher-than-average rates of interest
on their services
 Money Market Funds: A money market fund is a type of mutual fund that
has relatively low risks compared to other mutual funds and most other
investments and historically has had lower returns
 Mutual Funds: A mutual fund is a company that pools money from many
investors and invests the money in securities such as stocks, bonds, and short-
term debt.
 Hedge Funds: A hedge fund is a pool of money that takes both short
and long positions, buys and sells equities, initiates arbitrage, and
trades bonds, currencies, convertible securities, commodities and
derivative products to generate returns at reduced risk.

23. LEADING COMPETITORS WITH
BANKS..CONT..….
 Security Brokers and dealers: A broker is any person engaged
in the business of buying or selling securities for the account of others. A
dealer is any person engaged in the business of buying or selling
securities, but for their own account.
 Investment Banks: An investment bank is a financial services
company that acts as an intermediary in large and complex financial
transactions.
 Finance Companies: A company whose business and primary
function is to make loans to individuals, while not receiving deposits like
a bank.
 Financial Holding Companies: A financial holding company is
a bank holding company that can offer non-banking financial services.
Services that FHCs can offer include insurance underwriting,
securities dealing, merchant banking, securities underwriting, and
investment advisory services.
 Life and Property/casualty insurance companies:

24. TYPES OF BANKS
 Commercial Banks: Commercial banks are licensed
financial institutions that provide banking solutions to their
clients—individuals, small businesses, and medium-sized firms
 Money Center Banks: A money center bank is similar in
structure to a standard bank; however, it's borrowing, and
lending activities are with governments, large corporations,
and regular banks. These types of financial institutions (or
designated branches of these institutions) generally do not
borrow from or lend to consumers.
 Community Banks: A community bank is a depository or
lending institution that primarily serves businesses and
individuals in a small geographic area
 Saving Banks: A bank organized to hold funds of
individual depositors in interest-bearing accounts and to make
long-term investments
 Cooperative Banks:

25. TYPES OF BANKS…CONT….
 Cooperative Banks: Co-operative banks are often
regulated under both banking and cooperative legislation. They
provide services such as savings and loans to non-members as well
as to members, and some participate in the wholesale markets for
bonds, money and even equities.
 Mortgage Banks: A mortgage bank is a bank specializing in
mortgage loans. It can be involved in originating or servicing
mortgage loans, or both. The banks loan their own capital to
borrowers and either collect payments in installments along with
a certain rate of interest or sell their loans in the secondary
market
 Investment Banks:
 Merchant Banks: Merchant banks are non-depository
financial institutions that specialize in international trade

26. TYPES OF BANKS
 International Banks: International banking, also known as foreign or
offshore banking, offers financial services across geopolitical borders
 Wholesale Banks: Wholesale banking refers to banking services sold to
large clients, such as other banks, other financial institutions, government
agencies, large corporations, and real estate developers. It is the opposite of
retail banking, which focuses on individual clients and small businesses.
 Retail Banks:
 Affiliated Banks: An affiliate bank is one that is only partially owned,
but not controlled by its foreign parent. Both subsidiary and affiliate
banks operate under the banking laws of the country in which they are
incorporated. Both subsidiary banks and affiliate banks are allowed to
engage in security underwriting.
 Security Underwriting: the process by which investment banks raise
investment capital from buyers on behalf of corporations and
governments by issuing securities (such as stocks or bonds).
 Virtual Banks: Online banking
 Fringe Banks: Fringe banking is payday loan shops, pawn shops, and
any other financial institution that charges much higher-than-average
rates of interest on their services.

27. ARE BANKS DYING?
 Weakening of the central bank’s ability to
control the growth of the money supply &
achieve the nation’s economic goals.
 Damage those customers, mainly small
businesses & families, who rely most
heavily on banks for loans & other
financial services.
 Make banking services less conveniently
available to customers as bank offices are
consolidated & closed.