MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS 2013/2014 ACADEMIC YEAR
THIRD YEAR FIRST SEMESTER
SCHOOL OF BUSINESS AND ECONOMICS
BACHELOR OF BUSINESS MANAGEMENT
COURSE CODE: BBM 311
COURSE TITLE: BANKING THEORY AND PRACTICE
DATE:17TH APRIL 2014 TIME: 9.00AM- 12.00PM
INSTRUCTIONS TO CANDIDATES
Question ONE is compulsory
Answer any other THREE questions
This paper consists of 3 printed pages. Please turn over
Question 1 (25mks)
a) Commercial bank is defined as a bank which performs all kinds of banking business and generally finances trade and commerce.” Discuss the functions of commercial bank in Kenya. 10mks
b) What are some of the challenges faced by the commercial banks in Kenya? 5mks
c) Giving examples of each explain the following terms.
i. International banking 4mks
ii. Real asset financing 3mks
iii. Consortium lending 3mks
Question 2 (15mks)
a) What is cheque truncation process? 2mks
b) Explain the functional areas of the central bank of Kenya. 10mks
c) Explain any two major classifications of banks on the basis of domicile. 3mks
Question 3 (15mks)
a) Discuss the three tools used by the central bank of Kenya to implement monetary policy. 10mks
b) Explain method used by commercial banks to fight money laundering in the country. 5mks
Question 4 (15mks)
a) What is Islamic banking? Give and explain any four banking products in Kenya. 10mks
b) What are the advantages of internet banking? 5mks
Question 5
a) Explain any five risk management tools that can be employed by a bank for protection purposes. 6mks
b) Discuss professional ethics in the banking industry. 5mks
c) What are the characteristics of financial systems in developing countries? 4mks
