1.Introduction to branch banking:
o Branch – importance and role in commercial banking
o Branch staff – roles and responsibilities
o Historical background of branch and commercial banking in Pakistan
2. Services and Products
o Types of accounts
o Account services
o Categories of customers- legal entities of customer types
o Conventional banking products
o Concept of retail banking
o Loan products in retail banking
o Remittances
o Lockers
3. Banker’s Role
o Banker – Customer deposit banking relationship Definition of the term “Customer”
Definition of the term “Banker” Functions of the “Banker”
The special nature of the Banker – Customer Relationship Special features of the contractual relationship
Obligations of bankers and customers
Rights of the banker in relation to operation of customer accounts Business activities of commercial banks as envisaged by the law Termination of the relationship
Circumstances permitting termination of the relationship
Obligations of bankers before and upon terminating the relationship
o Banker’s Duty of Confidentiality; Fiduciary Responsibility – Legal and Practical Aspects The meaning of bank’s secrecy
Commercial and ethical aspects
Relation to customers’ interest and stakeholders
Within the branch secrecy and out of the branch secrecy Common law duty of confidentiality
Statutory duty of confidentiality
Legal implications of breach of statutory duty The general rule (no disclosure)
o Exceptions to the general rule (permitted disclosure) Banker’s reference
Disclosure to personal representative of deceased customer Interbank disclosure on suspended/cancelled credit cards
Disclosure by local subsidiary bank to local parent bank
4. Account relationship establishment – Legal and Operational Aspects
o Solicited and walk-in customer types – the difference between the two
o Establishing customer credentials – the need for KYC and KYC regulations
o Obtaining introduction – who are the preferred introducers
o Obtaining bank references – need for informal inquiries
o Essential legal documentation for opening current and deposit accounts of the various legal entities
o Authorized signatories for business entity accounts
o Appointment of authorized signatories in limited liability entities and valid evidence thereof
o Handling of issues arising out of Mandate
Power of attorney
Appropriation of payment Clayton’s case
Bank’s obligation of maintaining secrecy
i. Bank’s right of set off
ii. Bank’s right of lien
o Handling of customer’s account upon customer’s Minor
Death Lunacy
Insolvency
5. Negotiable Instruments and Endorsements
o Essential elements of Negotiable Instruments
o Types of Negotiable Instruments Bills of Exchange
Promissory Note Cheque
1. Parties to a cheque
2. Basic attributes of a cheque
3. Distinction between a cheque and a bill
4. Responsibilities of collecting banker
5. Responsibilities of paying bank
6. Payment in due course
7. Payment of cheques
a) Procedure for payment of cheques and transfer payments against written instructions
b) Cheque scrutiny – critical features of a cheque
c) Errors that render the cheque invalid for payment
d) Signature verification
e) Conditions and procedure for returning (dishonoring) cheques
f) Application of the pertinent reason for return of a cheque
g) Legal implications of wrongful dishonor of cheques and need for prior customer inter-face
8. Crossing
9. Clearing Services
a) Clearing services offered by banks
b) Role of SBP in clearing
c) NIFT’s role in clearing system
o Endorsements
Classification
Principles of endorsement
Specimen of endorsements made by different type of payees Liability of endorser
o Collection Services
Inward/outward collection
Local and foreign collection (clean)
Correspondent bank as a settlement network Concepts of nostro and vostro account
6. Payment methods
o Bankers Cheques: Pay Orders
o Secured and guaranteed means of payment
o Procedure for issue of pay orders and accounting treatment
o Risk mitigation measures Demand Drafts
o Procedure for issue of demand drafts and accounting treatment
o The role of agency arrangements
o Legal position of the paying office
o Risk mitigation measures
o Local correspondent arrangements
o Foreign payment arrangements – Correspondent banking and risk aspects Correspondent banking arrangements with banks
o Outward Foreign Collections
Definition of a “Clean Foreign Bill” Selecting the collecting bank
Lodgment of cheques and bills in outward collection
Legal obligations of the collecting office – with reference to laws on re-claiming payments against defective cheques
o Dealing in Travelers’ Cheques
What are Travelers’ cheques (TC)?
7. Control policies and compliance- KYC and AML
• Internal control and compliance in banking operations
Compliance as a collective responsibility
o Why necessary
o As an obligation and ethical duty
o Role of management in inculcating the sense of responsibility
o Overall significance of compliance
o Critical Areas of Compliance
Account opening and subsequent relationship management Observance of safeguards against money laundering
Internal safety and security
Internal and regulatory reporting
o Money Laundering
Definition of Money Laundering
Circumstances and conditions that encourage Money Laundering Early warning signals
State Bank of Pakistan regulations on AML
o Fraud & forgery
8. Cash Management
o Maintenance of cash at branch level
o Limits of cash assigned by head office and insurance limit
o Surrender of surplus cash to head office
o Requisition of cash in case of shortage
o Sorting, soiled notes etc
9. Alternate delivery channels
o ATM
o E-Banking / Internet banking
o Mobile banking / SMS banking
o Phone banking
