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Kathmandu University: February-July 2020 Session

The document contains a written assessment for a Financial Markets and Institutions course. It includes 3 questions related to asset-liability management of commercial banks in Nepal, too-big-to-fail banks, and the impact of digital banking technologies in Nepal. Students are instructed to answer the questions in their own words, cite appropriate data and references, and complete the assessment within 2 hours.

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Rubina Aryal
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88 views2 pages

Kathmandu University: February-July 2020 Session

The document contains a written assessment for a Financial Markets and Institutions course. It includes 3 questions related to asset-liability management of commercial banks in Nepal, too-big-to-fail banks, and the impact of digital banking technologies in Nepal. Students are instructed to answer the questions in their own words, cite appropriate data and references, and complete the assessment within 2 hours.

Uploaded by

Rubina Aryal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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KATHMANDU UNIVERSITY

National College
Online Written Assessment
BDFin
(February–July 2020 Session)

SUBJECT : FINS 202- Financial Markets and Institutions TIME : 2 Hrs.


YEAR : II SEMESTER : II
F.M. : 25

Please read the questions carefully and write the answers in your own words. Answers should
not be the copy of any book and text or any other write-ups, but it should be your original
reflection and analysis. Please keep track of the timing so that you will be able to write answer
and send to the given link within the time.

Attempt the following questions.

Q1. As per NRB data for April 12, 2020, total fixed deposits held by commercial banks with a maturity

period of two years or more amounted to Rs237 billion. Term loans, housing loans and hire purchase

loans provided by commercial banks (they have a maturity of more than two years) totalled Rs 943

billion. The housing loans provided by banks total Rs208 billion and have an average repayment period of

about eight years, but the amount of fixed deposits with a maturity of eight years or more is almost

negligible.

In light of the above context, discuss on the ALM situation of commercial banks in Nepal. Also

recommend some measures in line with theory of GAP and Duration GAP in present context of banks and

financial institutions in Nepal. You may use data and statistics with appropriate reference wherever

required. [5+10 marks]


OR

Q2. “The too-big-to-fail problem in banking is the unwillingness of regulators to close a large

troubled bank because of a belief that the short-term costs of a bank failure are too high.”

With reference to theory of adverse selection and moral hazard, present your arguments on

whether these big financial instutions should be allowed to fail or not. You may refer to various

debt crisis to support your arguments. [15 marks]

Q3. An increasing demand for a digital banking experience from millennials and Gen Zers is

transforming how the entire banking industry operates. Consumers' growing desire to access

financial services from digital channels has led to a surge in new banking technologies that are

reconceptualizing the banking industry. On the other hand, the cyber securities and fraud have

posed serious challenges in terms of theft, security and privacy of transactions.

Discuss on how these banking technologies can be used as a measure of socio and economic

change in Nepalese context with regards to these threats and vulnerabilities. [15 marks]

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