Banking Law and Practice – KASNEB Syllabus



This paper is intended to equip the candidate with the knowledge, skills and attitudes that  will enable him/her to apply banking law and practice in credit management.


A candidate who passes this paper should be able to:

  • Apply regulations and guidelines in the banking sector in credit
  • Assess compliance with licensing requirements for banks
  • Provide relevant information for inspection in  the  context  of  credit  in  banks
  • Evaluate the impact of global financial issues on credit management


Regulation in the banking sector

  • Meaning of banking business
  • The role of regulatory models
  • Regulation models and strategies
  • Regulatory authorities
  • Forms of control
  • Supervision and regulation of banks

The Central Bank

  • Establishment of bank and its legal status legal status
  • Central Bank independence
  • Principal object of the bank
  • Other objects of the bank
  • Monetary policy advisory committee
  • Monetary policy statements
  • Consultations on monetary policy credit
  • Lender of last resort

Licensing of institutions

  • Licensing of institutions
  • Application for licensing
  • Revocation of licence
  • Minimum capital requirement
  • Location of places of business
  • Branches and subsidiary
  • Amalgamations and transfer of assets and liabilities
  • Requirements for    directors, chief executive officers and significant shareholders
  • Prohibited business
  • Basel 11 and 111: Bank Capital adequacy
  • Regulations of large and complex financial institutions

Reserves, dividends, accounts and audit

  • Ratio between core capital and assets
  • Ratio between capital and assets
  • Minimum liquid assets
  • Restrictions on dividends
  • Forms of accounts
  • Accounts to be exhibited
  • Submission of accounts to the central bank
  • Appointment of auditors
  • Change of auditors
  • Auditor’s duty of confidence

Inspection and control of institutions

  • Inspection of institutions
  • Vetting of officials
  • Powers of central bank to advice and direct
  • Powers upon audit or inspection reports
  • Examination and control of groups
  • Powers of central bank to intervene in management
  • Role of central bank in voluntary liquidation
  • Liquidation of institutions by central bank

The bank and credit

  • Different types of bank credit products
  • Credit facilities for different customers and their requirements
  • Different credit facilities for different customer needs
  • Different types of security and the perfection procedures
  • 5c’s, CCCPARTS and PARSER
  • Monitoring and control of credit facilities
  • Recovery procedures

Consumer protection

  • Consumer protection
  • Access to financial services sector
  • Banker/customer relationship and duties
  • Prudent controls
  • Deposit protection fund

Global issues in financial sector financial market issues

  • Protection and control of money laundering
  • Know your customer principle
  • Prevention of terrorism financing

Emerging issues and trends

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