Accounting for Financial Institutions

Course Code: ACT 423

Credit Hour: 3

Course Group: Specialization Course: Accounting

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Part A: Banking and Bank Accounts (Weight 50%)

Evaluation of Banking Institutions and Classification of Banks: Commercial Bank-Investment or Industrial banksExchange Banks-Co-operative banks-Land mortgage banks-Saving banks- Central Banking versus Mixed banking. Introduction to Group banking, chain banking, Unit banking and Branch banking; Investment banking, Merchant banking, Commercial and specialized bank. Central Bank- Definition, features, nature, functions, importance.

Functions and Services of Commercial Bank: Deposits, types of deposits, accounts, types of accounts, collections, types of deposits, agency service, locker service, general banking issues, importance in economic development.

Credit Management Policies and Clearing House System: Demand Deposit as money- Primary and derivative deposits- The Process of Multiple credit Expansion: Monopoly bank, Practical Limit of deposit expansion. Do bank really create credit? Portfolio management: Invest Analysis-Fund Management-Profitability analysis, Competition among banks, credit policy, credit rating system.

Bank Accounts: Banking Company Act 1991, Provisions related to financial accounts and auditing of banks, accounting for banking companies- income statement, financial statements and other stamens used in banks, off-balance sheet items, audit report, power of directors, reserve funds, SLR, CRR, restrictions on loan and advances, IAS 30.

Accounting Standards for Islamic Financial Institutions: Differences between traditional and Islamic financ9ial institutions, principles of Islamic financial institutions, Preparation of Financial Statements under Islamic Banking System, Disclosure of Financial information in Islamic Banking System.

Part B: Non-Banking Financial Institutions (Weight 50%)

Insurance Company: Definition and nature of insurance, Function of Insurance, Nature of Insurance, Types of Insurance, role and importance of insurance, insurance contracts, principles and essentials of insurance contract, Types of Insurance Contract, Present pattern of insurance industry, Jibon Bima Corporation, Sadharan Bima Corporation, Postal Life Insurance, American Life Insurance company, Other private insurance companies.

Life Insurance and Non-Life Insurance: Life insurance contract, kinds of policies and annuities, procedure of effecting life insurance, claims and settlement, premium and premium plans, computation of net single premium, mortality rate, meaning of reserve, calculation of reserve, surplus and its distribution, Definition and subject matters of marine insurance, types of marine insurance policies, marine losses, claims and their settlement, Fire insurance contract, claims and settlements, re-insurance, Group insurance, personal insurance, accident insurance, automobile insurance.

Insurance Accounts: Insurance Act 1938, investment related provisions, loans, management, investigation, preparation of revenue accounts and balance sheet for Life Insurance Company and non-life insurance company, insurance claim settlement, accounting for Islamic Insurance Companies.

Accounting for Lease, Finance and Investment Companies: Bangladesh bank guideline for non-banking financial institutions, financial statements of leasing companies.

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Text Books Insurance:

Principles and Practices: Mishra M. N.

Risk Management, BBR: Habibullah and Ghosh

Advanced Accounting II: Md. Mainuddin Khan

Modern Accountancy Vol. II: Amitabh Mukherjee and Mohammad Hanif

Advanced Financial Accounting: Baker Lembke and King