December 2021. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question.
QUESTION ONE
1. Explain four main objectives of banking institutions regulations. (8 marks)
2. Suggest six common red-flags that suggests that a loan policy need to be reviewed. (6 marks)
3. Analyse three main responsibilities of lending institutions board risk management committee. (6 marks)
(Total: 20 marks)
QUESTION TWO
1. With reference to non-deposit taking Sacco regulations 2020, highlight six administrative sanctions that can be taken against the Sacco and its officers by the Regulatory Authority. (6 marks)
2. Explain the term “Greenfield micro finance”. (2 marks)
Discuss three stages of new institution creation under greenfield micro finance model. (6 marks)
3. Highlight three main features of Islamic banking. (6 marks)
(Total: 20 marks)
QUESTION THREE
1. Discuss five roles of board audit committee. (5 marks)
2. Examine five basic ethical principles in banking industry. (10 marks)
3. Analyse five shortcomings addressed by Basel III. (5 marks)
(Total: 20 marks)
QUESTION FOUR
1. Explain the internal rating-based model of credit risk measurement. (3 marks)
Outline three main elements of internal rating-based approach. (3 marks)
2. Discuss three main objectives of good governance in cooperative societies. (6 marks)
3. Highlight four components of a credit policy. (8 marks)
(Total: 20 marks)
QUESTION FIVE
1. Analyse five responsibilities of microfinance institutions independent board of directors. (10 marks)
2. Propose four common parameters of credit sensitive transactions. (4 marks)
3. Summarise three characteristics of an efficient credit policy. (6 marks)
(Total: 20 marks)
