Where is the Objective Portion ?

 Institute of Banker Pakistan (IBP) publishes old papers on their website after a few weeks of the exams. If you have noticed they usually omit objective portion of the paper.There could be various reasons for that.

Objectives are about 40 to 50% portion of the exam and your results depends a lot on this section. No doubt, to score high in objective portion you have to go through in detail from the course outline. And the reason might be that there is not much variety available with IBP to put new questions every time therefore, they preserve the old objective questions to use them again the next papers. Thus, they don't publish that part of the paper. But if that's the reason it doesn't sounds very positive. I think they should publish them along with the subjective part so the examinees can get an idea that what types of fill in the blanks and true false questions they would face in the paper. And the people who are preparing those exams should be more creative in producing new objective type questions to test the examinees of IBP.

Or, they might want to save trees, because when we take print-out of that objective part, they consume more paper sheets :-P ...... aaaahh !! Just a random thought I got :-)

Anyways, if anyone have the papers which still got the objective part, please email me and also if you have enough good memory that you remember some questions, please do share with us.

Knowledge increases when shared !

Good Luck ! 

What is difference between commercial and consumer loans?

What is difference between commercial and consumer loans? this question was asked by an examinee along with other questions. Beside replying to her I am sharing my thoughts here on my blog so others can also benefit.


Commercial Loans are for business purposes. Usually given to companies to meet their various business needs. There are many types of such loan depending upon the requirement of the business. 


Whereas, 


Consumer loans are those loans which are required by a person for their personal needs. 


If a car loan(finance or lease) is obtained by a company/individual for commercial purposes it is a commercial finance where as if the same kind of car loan is availed by a an individual who would use that car for his personal needs and would not gonna earn rent from that car that is considered a consumer loan. 


Hence, we can say that consumer loans would not become a source of earning for the borrower, however, commercial loans might help him earning more profits. 


Some examples are as follows,


Commercial Loans,
Running Finance, Cash Finance, Term Finance, Export Finance, FATR, FAPC II etc


Consumer Loans, 
Credit Cards, Personal Finance, Car Finance, Mortgage Finance

One Month Left in Exams ! Crash Prep begins !

Now almost one month left for the preparation of JAIBP spring 2011 exams. You can find the schedule here : http://www.ibp.org.pk/Schedule.aspx

Now those examinees who are still trying to start preparation, I should say that its time for do or die. As they say its never too late, therefore, they should start some crash preparation. For that it is recommended that they get all the past papers of Institute of Bankers Pakistan and solve them one by one. This would now only help them studying the main topics through the questions, but they would also get familiar with the pattern of the paper. Although you never know when IBP changes the pattern of their exams and when they change the proportion of subjective questions and objective questions. But as its a crash preparation time therefore, it is obvious to take risk.

Now, its impossible to prepare in detail thus, solving old papers will do work for those who are yet thinking to start preparing. When you are solving past papers of IBP try to go through the whole topic for which questions were asked. This would help you cover the whole topic and your selective study would be effective. Its best that you have internet facility for finding answers to the questions, and some reference books for authentic sources.
Technology has made it very easy to search for the answers of the questions. I have also uploaded books on this blog and you can download them as reference books. I hope that would help you a lot in preparing for Junior Associateship of Institute of Bankers Pakistan (JAIBP) , and also for Associateship of Institute of Bankers Pakistan (AIBP). But sometimes there are questions which can only be answered after you have obtained considerable experience in the field of banking. For such questions, you have to consult to any banker around, ask some mentors of IBP, or you can ask me and I would try to answer that question.

Wish you all the very best for upcoming exams.

A teacher of mine mentioned this quote a lot during his lectures, "More Sweat in peace, less blood in war."

Plan and Prepare !

JAIBP Exam Spring 2011

Dear examinees ! there are only two months left in the spring 2011 exams and its the time when you should stop warming up and be ready for a final sprint !

Thumbs up for those who were regularly going through the whole syllabus beside their busy banking schedule (if working). Now is the time to complete the syllabus outline and start solving the past papers of JAIBP. Those who are still figuring out that whether they should take the exam or not, even they have sent their registration and exam fee, I recommend that they should go for the exams. (Kaam to kabhi khatam nahi ho ga !! )

 Usually people who work in banks get very less time in the evening to study for their exams.Because, now a days the banking has become so demanding and competition is so severe that we have to spend almost extra two to three hours beside our regular working hours. This shrinks the time which we could utilize in preparing for our exams. I suggest that next two months would be very beneficial if utilized effectively. Two to three hours daily would be fine for preparation. You would be lucky if you get electricity available during the coming months. Therefore, also prepare for that.

So ! wake up at nights, use the lunch breaks, marathon sessions on weekend, alone or in groups, at home or at some Institute of Bankers Pakistan class room; where ever you are, no matter what circumstances, You can surely go through it ! just plan and prepare.

All the best !

Some Oldie Goldie Tips !

A few days back when I went in the room of my Boss to get signatures on a credit report of a borrower I got some tips from them which I want to share with you guys. Its not a tip which would help you pass your Institute of Bankers Pakistan (IBP) exam, but might interest you for your professional life as a banker.

The credit report was required by a bank about our customer, as required by the other bank I mentioned the type of facilities we were providing to the client. But, I nowhere mentioned the amount of facility on the letter I wrote. I briefed my manager that the bank didn't ask the amount of facilities therefore I didn't mentioned that.

Being in good mood he appriciated that and told that in old times when there were no CIB reports they use to disclose the information in the following manner.

If a customer is availing a facility of Running Finance amounting Rs. 300000 . Then while disclosing the amount I should write that the client is availing a facility in six figures. This would give them the idea that how much big amount of facility they are availing. Similarly, if the client is provided with a facility amounting Rs. 3000,000 then I could write that he is availing facility in seven figures.

As this tips was much effective before the availability of eCIB report. Now its kinda obsolete. I found it interesting thats why sharing with you guys! Hope you liked this old practice of banking.

IBP - Past Papers

A few days back Institute of Bankers Pakistan gave a new look to their website www.ibp.org.pk . The site gives a nice decent impression. But the sections are not much changed. We hope that they would introduce some new sections on their website. While going through the past papers (http://www.ibp.org.pk/previuos_exams.aspx), I noticed that the past papers available were only of 2010. So first of all, if you have the past papers then please share them with me !

During my experience of JAIBP exams I noticed that pattern of exams sometimes changes abruptly and there are sudden changes in the style of the papers. So this means that very much old papers might not help more in getting idea about the exams. Also, the papers available on the website of IBP do not contain the objective portion which is a very important section. Usually 40 to 50% of paper is objective which requires a thorough study in order to fully complete it. This gives an idea that we should get the idea of pattern from last two papers and should not go back further.

But....

"Picture abhi baki hai meray dost "

Much old papers might not help in pattern but they contain topics which are important from examiner's point of view. You can prepare a list of important topics by going through the old papers, especially when you have started late for you JAIBP preparation. I myself used the technique to solve the old papers to prepare for the exams. Some detail study two months before the exams and then solving papers one month before the exams. The topic which was discussed again and again, I read that thoroughly and even the short questions can give you some idea about the topics and helps in brainstorming your banking knowledge.

So start collecting those papers which are not available on the website of Institute of Bankers Pakistan anymore. It would help you in exams ultimately  !

Pakistan : Affected by Circular Debt !

Some good reads on the topic, I strongly agree with the last para :

from : http://www.finance30.com/forum/topics/circular-debt

Permalink Reply by Sachidanand (Sacha) Singh on December 4, 2009 at 2:15am

It is easier to explain with an example. Suppose A owes 100 to B, B owes 100 to C and C owes 100 to A then we have a classic circular debt case. It will make the balance sheets of all 3 (i.e. A, B and C) unnecessarily weaker than what they are (both assets and liabilities higher by 100).

I have been reading about circular debt problem in Pakistan's power sector for over a year. However, I could not really understand it. I think Pak ministers are using circular debt as a euphemism for the government's inability to pay the promised subsidies to power producers / distributors.

The way it unfolds is, power producers sell power to distributors who are unable to collect full payment from power users, naturally distributors are unable to make full payment to producers, who fail to make full payments to fuel suppliers. Fuel suppliers stop supplying fuel (furnace oil etc) which leads to lower production and consequent widespread load shedding. Government says the load shedding is due to circular debt! I find the circle incomplete.

Reply by Sachidanand (Sacha) Singh on March 2, 2010 at 1:54am

I am not fully acquainted with all the facts. As I have said earlier, to me it does not appear to be circular debt as the circle is incomplete. My knowledge is based on published reports available to me in Mumbai.

Suppose, the circle is indeed complete. In that case, handing over cheque to one party and expecting to receive it back from the last one down the chain would be naive. A more robust mechanism would be to nominate a commercial bank as a central agency (temporary - for this purpose only) that would examine all the links and after assuring itself of the circularity, will open special current accounts for this purpose only.

All claims and liabilities forming part of the circular debt problems will get assigned / novated in favour of the central agency, who will credit / debit the special accounts accordingly. If the claims are properly identified (that they do indeed constitute a circular debt problem) all special accounts will have zero balance at the end of the day, with all claims satisfied.

You might have noticed, what I am suggesting is a typical stock exchange clearing house arrangement. These clearing houses consider the claims and liabilities of scores of brokers and after canceling out circular claims determine net liabilities / claims of each broker.

It appears simplistic, it indeed is; but if we have real circular debt issue, I think it should be an effective and inexpensive way of tackling it.

I, however, feel you do not have a circular debt problem. The problem seems to be the one we have in India - power theft, inefficient (corrupt) distribution companies and non payment of power charges by many of those consumers who are not stealing. Tackling it, like in India, will require political grit.