ADDIS ABABA UNIVERSITY SCHOOL

OF COMMERCE
DEPARTMENT OF ACCOUNTING &
FINANCE
Course Information
Course Number AcFn2113
Course Title Bank Practice and
Procedures
Degree Program BA Degree in Accounting
and Finance
Module M11. Financial
Institutions
1
Module
 At the end of this course students will be
able to;
 Understand those different services
provided by banks for their customers
 Understand what basic will be performed by
Central Bank
 Know the responsibility of the bank
personnel which serves a bank in different
Course
position
Objecti
 Understand how to manage the ASSET &
ves &
LIABILITY of the bank
Compe
 Enhance the knowledge about the function
tences
of the bank to the society
to be
 Differentiate the BALANCE SHEET of the
Acquir
bank form from other firms
ed
 Identify items should be included in a LOAN
2
  This course is designed to
quaint students with the
basic principles, procedures,
and practice of banks, with
special emphasis on
Ethiopian banking sector.
 Topics include industry
structure and competition,
regulation, types of deposit
Course and pricing methods,
lending practice and
Descri procedure, bank
ption performance measurement,
the management of asset 3
COURSE CONTENTS
1. An Overview of Banks and their
Function
1.1. Introduction
1.2. Meaning of Banking
1.3. Types and Functions of Banks
1.4. Banking Services and Issues in 21st Century
2. Ethiopian Banking Sector
2.1. Organization and Structure of Ethiopian
Banking Industry
2.1.1. Banks
2.1.2. Microfinance Institutions
2.1.3. Saving and Credit Associations
2.2. Classification and Functions of Banks in
Ethiopia 4
3. Ethiopian Banks’ Sources of Funds
3.1. Types of deposit and Pricing of deposits
3.2. Opening and Closing of Accounts
3.3. Payment Methods from Accounts (Checks,
Letters, Bank Transfers, ATM, Mobile Banking, E-
banking, and etc.)
3.4. Inter-Bank Loans
3.5. Regulations on Investments by Banks
4. Ethiopian Banks’ Lending Procedures
4.1. Types and Characteristics of Loans
4.2. Regulations on Lending 
4.3. Credit Analyses and Loan Pricing 
4.4. Follow-up and Supervision
4.5. Foreclosure and Treatment of Non-
performing Loans
5. Asset-Liability Management Techniques
5.1. Managing Interest- Sensitive and Duration Gaps
5.2. Managing operating risk, interest rate risk, liquidity risk,
and credit risk
5.3. Determinants of choice of investments
5.4. Managing Investment Portfolios
5.5. Managing Liquidity and Reserves

6. Financial Statements and Bank

Performance Evaluation
6.1. Financial Statements of Ethiopian Banks
6.2. Measuring and Evaluating Performance of
Ethiopian Banks

6
Teaching & Learning The teaching and learning methodology include lecturing,
Methods/strategy discussions, problem solving, and analysis. Take-home
assignment will be given at the end of each chapter for
submission within a week. Solution to the assignments will
be given once assignments are collected. Cases with local
relevance will also be given for each chapter for group of
students to present in a class room. The full and active
participation of students is highly encouraged.

Assessment/Evaluation

Test 1 Test 2 Assignment Final Total

15% 15% 20% 50% 100%

  He/she will come to the class regularly on
time and deliver the lecture in a well-
Roles of organized manner.
 Besides, at the end of each class he/she
the
gives reading assignment for the next class.
Instruct  He/she will make sure that proper
or assessments is given.
 He/she is also responsible to give feedback
for each assessment.
Roles of The success of this course depends on the
the students’ individual and collective
contribution to the class discussions.
student
 Students are expected to participate
s
voluntarily, or will be called upon, to
contribute to set exercises and
problems.
 Students are also expected to read the
assigned readings and prepare the cases 8
 Text Book:
 Peter S. Rose and Sylvia C. Hudgins. Bank
Management & Financial Services. 7th
edition, McGraw-Hill Irwin.
 Shelagh Heffernan. Modern Banking in
Theory and Practice. John Wiley & Sons
(Latest Edition)
Text References:
and  Gardiner, M.J. ; and Mills, D.L., Managing
Financial Institutions 3rd. Edition The
Refer Dryden Press (1994) - USA
 Graddy, D.B.; Spencer, A.H.; and Brunsen,
ence W.H., Commercial Banking and The

Books Financial Services Industry, Prentice Hall

Virginia (USA) 1985
 Graddy, D.B.; and Spencer, A.H.,
Managing Commercial Banks, Prentice
9
Grading System
The grading system for the courses of the program will
be fixed scale as presented below:
Raw Mark Corresponding Corresponding Remark
interval- fixed number Letter grade
100% grade
[90, 100] 4.0 A+
[83, 90) 4.0 A
[80, 83) 3.75 A-
[75, 80) 3.5 B+
[68, 75) 3.0 B
[65, 68) 2.75 B-
[60, 65) 2.5 C+
[50, 60) 2.0 C
[45,50) 1.75 C-
[40, 45) 1.0 D
[30, 40) 0 Fx
[0, 30) 0 F
10