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  • 20 Marks

PBL – OCT 2022 – L3 – Q7 – Legal Mortgage over Leasehold Interest

Outline key considerations for taking a legal mortgage over leasehold property and steps to perfect it for a sole proprietorship loan.

Amoasi Enterprise is a sole proprietorship owned and controlled by John Amoasi. The business is engaged in the supply of chips and stones for building projects. John Amoasi has applied for a loan of GHC 500,000 for the purchase of a used tipper truck. He shows you an Indenture covering his Leasehold interest in a property located a Winneba valued GHC 1,000,000.00.

(a) What key consideration would you have in mind in taking a legal mortgage over a leasehold interest? [8 Marks]

(b) Outline the steps which you would take to acquire a legal mortgage over the property in such a manner that the bank’s interest is absolutely protected. [12 Marks]

[Total marks:20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q6 – Alternative Securities for Construction Loans and Lender Remedies

Identify alternative security for a construction loan where traditional assets are unsuitable, and outline steps to perfect it; list key remedies under the Borrowers and Lenders Act 2020 for borrower default.

(a) Your key customer BBA Construction Ltd. is engaged in a contract for the construction of a 200 kilometer road in the Central Region. He has completed over 60 % of the project and has certified works of GHC 800,000 to be paid. He is applying for working capital loan of GHC 500,000 to purchase materials for the project.

He has no security to offer save the assets of the company which comprise a one storey office building and the road construction equipment. Your managing director is not enthused about taking a fixed and floating charge over the assets of the company as they are subject to rapid wear and tear. The key person Mr. Aras also does not have any personal landed property to offer.

From the above, identify what alternative security may be available in the circumstances and how you would proceed to take the security to ensure that the bank’s interest is protected. [16 Marks]

(b) You have been asked to deliver a lecture on the remedies of a lender in the event of a borrower defaulting in the servicing of a facility. Mention the four key remedies provided under the Borrowers and Lenders Act (2020) Act 1052. [4 Marks]

[Total marks:20]

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  • 20 Marks

POB – LP OCT 2022 – L3 – Q4 – Collecting Bank Duties and Protections in Cheque Collection

A bank collects a stolen cheque for a fraudulent customer, opens an account after clearance, allows withdrawal, and faces a lawsuit from the drawer; questions cover definition of collecting bank, duties, statutory protections, common law defences, and applicability of protection.

As a new Manager at the Edubiase branch of your bank, in the course of your work, your branch has collected a cheque for the account of a customer who turned out not to be the true owner of the cheque. Your Operations Manager did not open the account straightaway but for reasons unknown to you, he told the customer Timothy Ankrah that the bank would not open the account immediately but would only open the account if the cheque of GHC 500,000 the prospective account holder presented was cleared. After the cheque had cleared, your Operations Manager proceeded to open the account and the very next day, Timothy withdrew an amount of GHC 400,000.00 which he claimed was for the purchase of a car.

It transpires that the cheque had been stolen and Timothy was only an impersonator. Timothy is nowhere to be found.

The drawer of the cheque Mr. Banson has sued the bank for refund of the monies he has lost.

(a) What is a collecting bank? [2 Marks]

(b) Mention three duties of a collecting bank. [3 Marks]

(c) Mention and explain the statutory protection available to a collecting bank that collects a cheque for a party who is not the true owner of the cheque? [9 Marks] (d) What are the common law defences available to a collecting bank? [4 Marks]

(e) Will the bank be able to avail itself of the statutory protection? [2 Marks]

[Total marks:20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q3 – Company Objects Amendment and Cheque Handling Policies

Legal principles for advising on amending company objects for new business ventures and handling a cheque payable to a related company for crediting to a personal account.

State the legal principles you would take into consideration in resolving the following legal matters that have come to your attention.

(a) Mr. Nkumsah is majority shareholder and Chairman of the Board of Directors of Nkumsah Trading Ltd, which has an account with you for the past twenty years. The company issued debentures secured by a floating charge over the company’s assets three years ago. Mr. Nkumsah has 60% shares in the company and is also the sole signatory of the account. Nkumsah Trading Ltd. was established with a registered constitution with the objects of importing medical equipment and ancillary materials. He has applied for a loan of GHC 400,000 for the importation of baby pampers as he claims baby pampers move faster than medical equipment. In appraising the facility, your attention is drawn to the fact that since the company has incorporated with registered objects the company must amend the constitution to enable the company to undertake the new venture. In your discussion with him he asks you of advice of how he could amend the objects of the company’s constitution to enable him to enter into the new venture. He also asks you

what legal difficulties may arise if he engaged in business outside the established objects of the company. [10 Marks]

(b) Secondly Mr. Nkumsah has a cheque payable to a sister company Jamsah Ltd., in which he has shareholding of 50%. His lifelong friend owns the remaining 50%. You advise him that it is a company policy not to credit a cheque payable to a company into a personal account of a director or employee of that company. He argues with you and tells you that since he is the one of the key shareholders he has the right to do so as it is an internal arrangement for him to undertake a specified transaction for the company. [10 Marks]

[Total marks: 20]

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  • 20 Marks

PBL – OCT 2022 – L3 – Q2 – Banker-Customer Confidentiality and Law Enforcement Demands

Scenario involving police demanding customer account information; identify duty of confidentiality, its exceptions, and how to handle the situation.

You enter your office as Retail Manager this morning to find commotion at the front desk of your branch. As you enter you see three persons in police uniforms claiming to be from the National Investigations Bureau (NIB). They claim they have got wind that one Mr. Mahama Obeng who is under investigation for drug trafficking has an account with your branch where he has lodged his ill-gotten gains. They are demanding that your Operations Manager produce the information immediately or he would be hauled to the NIB for impeding an investigation.

(a) What rule of law do you require to resolve this problem? [2 Marks]

(b) Discuss the four (4) exceptions to the duty a bank owes its customers identified in (a) [8 Marks]
(c) How would you deal with the situation that is before you?[10 Marks]

[Total marks: 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q8 – Remedies to Fraud in International Contracts

State five remedies to fraud in international contracts based on a copper blister fraud case.

During the summer of 2020, Geneva-based Mercuria Energy Group said it had been the victim of cargo fraud following its purchase of 10,000 tons of copper blister. When the cargoes started arriving in China, it found containers full of painted stones instead. The bizarre case happened despite security and inspection controls. About 6,000 tons were loaded for shipment in more than 300 containers on eight vessels. But before its journey from a port near Istanbul, the copper was switched with paving stones, spray-painted to resemble the semi-refined metal. Once the vessels were at sea, Mercuria paid $36m over five installments. The fraud wasn’t discovered until the ships began arriving in the Chinese port of Lianyungang. Mercuria, one of the five-biggest energy traders in the world, is seeking redress in Turkish and UK courts against the copper supplier, Bietsan Bakir. Turkish police have taken a number of people into custody in relation to the fake copper scheme. “Suspects have been taken under custody who are thought to be involved in the various parts of this organised crime against Mercuria,” the company said in a statement while thanking the Istanbul Financial Crimes Department.

Note: All parties in all commercial transactions should be aware of the potential for fraud. In some cases, those parties you negotiate with may not even be aware of the liability they pose. The above fraud case gained global attention through social media on March 9, 2021.

REQUIRED

State five (5) remedies to fraud in international contracts.

[Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q7 – Role of Banks in International Trade

List the roles of banks in international trade in bullet points for SMEs under AfCFTA.

The African Continental Free Trade Area (AfCFTA) is organizing training programs to grow the Small and Medium-sized Enterprises (SMEs) and most importantly to deepen their understanding on international trade and how they can take advantage of the banking system for efficient operation and expansion of their businesses. As Head of Trade Finance of your bank, you have been engaged as a resource person by (AfCFTA) to take Chief Operating Officers of these SMEs on the following topic: “The Role of Banks in International Trade”

REQUIRED:

List these roles (in bullet points only) under the various roles for one mark each.

Note: Long and detailed descriptions are not required.

[Total marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q6 – Issuing Bank’s Undertaking under UCP 600 Article 7

State the issuing bank's undertaking as per UCP 600 Article 7 a (i-v), b, and c.

State the “Issuing Bank’s Undertaking” as enshrined in Article 7 a (i – v), b and c when it issues a credit on behalf of its customer under the current International Chamber of Commerce (ICC) Publication in respect of Uniform Customs and Practice for Documentary Credit – UCP 600.

[Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q5 – D/A Collections and Buyer Protection

Explain D/A terms, expected instructions on collection order, address suggestion on refusing non-spec goods, and ways for drawee protection in D/A collections.

Mr. Bob Ferguson, senior director of your customer, Adelaide Ltd is negotiating for the first time with suppliers abroad to purchase some outwear garments, which are at present unobtainable in the UK. The terms of payment which the sellers have suggested are a 90 days’ sight draft D/A with presentation through a UK bank. You understand that the presentation will be subject to Uniform Rules for Collections (and the shipping terms are to be CFR UK port). Your customer believes that he will have the opportunity of examining the goods when they are received in the UK and that, if they are not in accordance with specification, he can refuse the goods and will not be liable to pay the sellers, since all charges will be against the goods.

Required

a) Write brief notes on the terms of payment mentioned above; [4 marks]

b) Indicate the instructions you would expect to see on the collection order; [8 marks]

c) What would say to the suggestion by Mr. Bob Ferguson that, if goods were not in accordance with specification, the company could refuse to take up and pay for them? [6 marks]

d) How can the drawee obtain a measure of protection with D/A collections? [2 marks] [Total Marks 20]

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  • 20 Marks

ITF – OCT 2022 – L3 – Q4 – Back-to-Back Credits for Import Financing and Cash Flow

Describe back-to-back credits to protect the customer and assist cash flow, assess appropriateness for German supplier in Euros, and suggest a compromise for compliance.

Builders Merchants Ltd, customers of your bank, supply the building construction industry with a wide range of building materials and products. Their Financial Director, Mr. Kwame Annoh, calls to see you to discuss a CIF contract, which has been signed, to supply a range of fittings and building materials to an overseas buyer. During the conversation you discover that all the goods will be bought from overseas and that all the suppliers are insisting upon secured methods of payment. The Financial Director asks you to suggest a method by which his company can be fully protected, since cash flow considerations are causing some concerns at the present time. The overseas CIF contract is expressed in sterling but one supplier based in Germany, is insisting upon being paid in Euros.

Required

a) A brief description of basic instrument which would be appropriate in answering the needs of the Builders Merchants Ltd. Indicate why your suggestion will cater for your customer by assisting them to overcome their cash flow difficulties and why it will also give some comfort to their potential suppliers. [12 marks]

b) State briefly whether the method described by you in (a) is or is not, appropriate to the contract with the German supplier. Give reasons for your answer. [2 marks]

c) A compromise that you would consider arranging for Builders Merchants Ltd. which would assist them in complying with the request of the German supplier, bearing in mind that the German company requires security of payment.

[6 marks] [Total Marks 20]

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  • 20 Marks

BSIM – APR 2023 – L3 – Q3 – Challenges and Measures for Mobile App in Microfinance

Describe technology challenges for a microfinance app and measures to boost patronage

DigiCash Ltd a new microfinance company has developed a unique mobile application (App) that enables customers to register, make deposits, and withdrawals. The App is also used to grant small loans to customers and for the collection of loan repayments. The company has also installed a toll-free hotline that enables customers to make enquiries and for various forms of customer services. Thus, customers do not need to visit the offices of DigiCash. The owner and Chief Executive Officer (CEO) of the business, Joe Maxwell, and other executives can remotely log into the systems to monitor operational activities and track employeee performance. The App is also used for internal communication, meetings, and various forms of collaboration since the App has a direct interface with the firm’s accounting and HR systems. The employees use the App as the main medium for exchanging both corporate and personal files. The CEO is concerned that customers and other service providers may not patronize the App. He is also concerned about security risks.

a. Describe five (5) technology-related challenges that DigiCash Ltd is likely to encounter with the introduction of the App. [10 Marks]

b. Discuss five (5) measures that the company can implement to improve patronage of App and DigiCash’s services. [10 Marks] [Total: 20 Marks]

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  • 20 Marks

BSIM – APR 2023 – L3 – Q2 – Internet of Things in Banking

Describe IoT features, two use cases in banking, and associated challenges

a) Describe the main features of Internet of Things (IOT) technology. [10 Marks

b) Describe two use cases of IOT technology in modern banking activities and operations, and discuss the major challenges associated with the adoption and use of IOT technology in banking. [10 Marks

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  • 20 Marks

BSIM – APR 2023 – L3 – Q1 – Strategic Use of Internet in Banking

Discuss five key ways banks use the Internet strategically in their processes and operations to overcome challenges.

The Internet is arguably a tool that offers many benefits to business organisations. Research has shown that effective use of the Internet in various banking processes can enable banks to overcome business challenges. Discuss five (5) key ways in which banks are strategically adopting (or using) the Internet in their processes and operations.

[20 Marks

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  • 20 Marks

BORMPTM – APR 2023 – L3 – Q6 – Banking Supervision Monitoring, Reports, FIC Functions

Explain on-site and off-site monitoring by BoG, list five reports for off-site, and describe FIC functions in AML

a) The Banking Supervision Department regularly monitors the financial performance and operations of banks in order to ensure they are operating soundly and following rules and regulations. They do this through onsite and offsite monitoring of the banks. Explain on – site and off – site monitoring of banks by the department. [5 marks]

b) List and explain five (5) reports your bank would likely submit to the Banking Supervision Department for Offsite monitoring. [5 marks]

c) What are the functions performed by the Financial Intelligence Centre (FIC) in the fight against money laundering in Ghana? [10 marks]

[Total: 20 marks]

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  • 20 Marks

BORMPTM – APR 2023 – L3 – Q5 – Maturity and Asset Transformation, Cashless Products, Loan Classification

Explain maturity and asset transformations in banking, identify five cashless products, and list loan classification categories per Act 930.

a) The financial intermediation role performed by banks results in the banks engaging in ‘maturity transformation’ and ‘asset transformation’. Explain the concepts of maturity and asset transformations. [10 marks]

b) Ghana’s economy is gradually drifting away from cash – based transactions to a cashless economy with the introduction of various digital payment channels in recent times. Identify five (5) major products that support the cashless system. [5 marks]

c) Section 75 of the Banks and Specialized Deposit – Taking Institutions Act, 2016, Act 930 requires banks to classify their advances into five categories to determine the level of provisions required. Identify and list the various categories in the order as stipulated by the Act. [5 marks]

[Total: 20 marks]

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  • 20 Marks

BORMPTM – APRIL 2023 – L3 – Q4 – Bank Balance Sheet Items, Digital Payment Channels, Products

Identify and explain five items each on assets and liabilities sides of a bank's balance sheet; explain five benefits and challenges of digital payment channels in Ghana; mention five products driving digital payments.

a) Identify and explain five (5) items each contained on the assets and liabilities sides of a bank’s balance sheet.

[5 marks]

b) Digital channels of payment in Ghana are gradually replacing the cash-based methods of payment. Explain five (5) benefits and challenges of the digital channels of payment.

[10 marks]

c) Mention five (5) products that support and drive the digital channels of payment in Ghana.

[5 marks]

[Total: 20 marks]

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  • 20 Marks

BO – April 2023 – L3 – Q3 – Liquidity Risk, Repurchase Agreements, and Government Bonds

Identify five sources of liquidity risk and management ways for shortfalls; explain repurchase agreements and five eligible securities in Ghana; describe Ghana domestic bonds vs. Eurobonds post-DDEP.

a) One very important risk the treasury of a bank manages daily is. liquidity risk. Identify five major sources of liquidity risk for your bank and suggest ways your treasurer should take to manage liquidity shortfalls in their daily operations?

as marks

b). Explain in detail what a repurchase agreement is and identify five eligible securities that can be used for this purpose in Ghana.

[10 marks]

c) The domestic debt exchange program of government has ended and the replacement of old bonds with the new bonds has taken effect. Explain briefly what a government of Ghana domestic bond is and how it differs from government of Ghana Eurobond.

[5 marks]

[Total: 30 marks]

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  • 20 Marks

BO – April 2023 – L3 – Q2 – Securitization, Funds Transfer Pricing, and Net Open Position

Explain securitization and its benefits, describe funds transfer pricing in ALM, and detail net open position including long/short positions from a balance sheet view.

a) One strategy that companies adopt to manage their cashflows is Securitization. Briefly explain the concept of Securitization. [5 marks]

b) What benefits do companies derive from undertaking securitization transactions? [10 marks]

c) Briefly explain the concept of Funds Transfer Pricing in the ALM process. [5 marks]

d) Section 41 of the Banks and Specialized Deposit-Taking Institutions Act 2016, Act 930 requires banks to maintain a Net Open Position as may be prescribed by the Bank of Ghana.

i) Explain Net Open Position from the balance sheet perspective. [5 marks]

ii) Explain Long and Short positions with respect to Net Open Position and explain the expectations of holders of these positions. [5 marks]

[Total: 30 marks]

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  • 20 Marks

BO – APRIL 2023 – L3 – Q1 – Functions of Asset-Liability Committee (ALCO)

Identify and explain five functions of the bank's Asset-Liability Committee (ALCO) for ensuring short-term and long-term viability.

a) Your bank’s Asset Liability Committee (ALCO) is a very important committee that ensures the sustainability and viability of the bank both in the short-term and long term. Identify and explain five functions performed by this committee in your bank. [15 marks]

b) Gap analysis is used in Asset and Liability management to measure interest rate risk in a bank’s balance sheet. Explain the phrase ‘Positive Gap’. How is a positive gap affected by rising interest rates? [7.5 marks]

c) Interest rate swaps are often used to manage interest rate risk of an organization. Briefly explain interest rate swaps and the expectation of a buyer of this risk hedging instrument. [7.5 marks]

[Total: 30 marks]

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  • 20 Marks

POB-LAW-AND-PRACTICE – APRIL 2024 – LEVEL III – Q7 – Clauses in Security Charge Form for Corporate Securities

Discuss five key clauses typically found in a security charge form for corporate securities in banking practice.

Discuss five (5) clauses that you would find in a security charge form for corporate securities.

[Total: 20 marks]

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