financial system and principles of credit - Institute of Bankers Malaysia

GENERAL INFORMATION
Introduction
Developed by IBBM in consultation with senior
credit practitioners, the Certified Credit Professional
(CCP) is a specialist professional certification
that demonstrates achievement of the minimum
professional standard of core competency for
credit personnel in the banking and finance
industry.
Objectives
To gain and develop skills-enabling knowledge
pertaining to the:
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roles and functions of credit in the Malaysian
financial system;
regulation and guidelines governing lending in
Malaysia;
principles of lending and the associated risks;
types of borrowers, securities and credit
support; and
credit process specific to either consumer or
business lending.
Syllabus Structure
Common:
Financial System and Principles of Credit
Specialisation (your choice for either
one):
- Consumer Credit; or
- Business Credit.
Professional Credential
There are two awards: CCP (Consumer) and
CCP (Business) for the respective specialisation.
Assessment Structure
• Multiple-choice questions (MCQs) for the
common and respective specialist syllabus;
• Case study(ies) that encompass the complete
content areas from the common and
respective specialist syllabus.
Eligibility
The CCP qualification is open to all individual
members of IBBM. There is no other entry
requirement.
Preparation for Examinations
Candidates prepare for the examinations through
self-study using the study materials provided by
IBBM upon first registration of examination.
However, candidates are strongly encouraged to
attend related credit training programmes
conducted either by IBBM or their respective
financial institutions to enhance the knowledge
acquired from their self-study effort. (Kindly
contact our Continuing Professional Development
Department for further details on the training
programmes.)
Time Limit
A candidate will be given up to a maximum of 60
months (5 years) from the date of registration of the
first examination sitting, to complete the required
papers under the respective specialisation.
If a candidate fails to obtain an award within the
stipulated duration, all accumulated passes will be
nullified and the candidate will need to start afresh
with another cycle of validity period.
Frequency of Examinations
Examinations for all five papers will be held twice a
year. The examination schedule will be published in
IBBM's newsletter and website.
Examination Centres
• Kuala Lumpur
• Penang
• Kota Bharu
• Johor Bahru
• Kota Kinabalu
• Kuching
The examination format information is on Page 5 of
this brochure.
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SYLLABUS
FINANCIAL SYSTEM AND PRINCIPLES OF CREDIT
1. The Malaysian Financial System
1.1 The banking system
1.2 Functions and responsibilities of banking
system – monetary and non-monetary
institutions
1.3 Functions and responsibilities of
non-bank financial intermediaries
1.4 Other institutions and bodies
2. Credit and Economic Growth
2.1 Introduction and definition of credit
2.2 Role of credit in economic growth
2.3 Credit and money supply
2.4 Credit and inflation
2.5 Credit and stability of financial institutions
2.6 Credit crunch and its consequences
3. Banking and Financial Institutions
Act (BAFIA) 1989
3.1 Provisions relevant to credit under BAFIA
1989
4. Bank Negara Malaysia Guidelines
4.1 Knowledge of procedures, limitations
and restrictions of activities involved
in processing and approval of credit,
and monitoring implementation of credit
5. Exchange Control Notices
5.1 Knowledge of restrictions as provided
for in the various ECMs in relation to
extension of credit facilities
6. Foreign Investment Committee
Guidelines
6.1 Objectives and rationale for FIC
guidelines
6.2 Guidelines on purchase of properties
by foreigners/non-residents/foreign
interests – residential, commercial,
factories & land
6.3 Implications of contravention
7. Principles of Lending
7.1 What is credit
7.2 The credit process cycle
7.3 Fundamental credit principles
7.4 Fundamental credit risk management
principles
8. Types of Risks and Risk Mitigation
8.1 Credit risk
8.2 Market risk
8.3 Operational risk
8.4 Funding risk
9. Types of Borrowers
9.1 Personal
9.2 Sole proprietorship
9.3 Partnership
9.4 Company
9.5 Co-operative
9.6 Society
9.7 Government corporation and agency
10. Basic Credit Factors
10.1 5Cs of credit: character, capacity,
capital, conditions and collateral
10.2 Other credit factors
11. Securities
11.1 Types and forms of securities
11.2 Secured and unsecured lending
11.3 Features and attributes of a good
security
11.4 Security instruments
11.5 Principal and subsidiary instruments
11.6 Stamping
12. Credit Support
12.1 Guarantees
12.2 Indemnity
12.3 Insurance policies
12.4 Undertakings
12.5 Statutory declarations
13. Pricing
13.1 Types of credit
13.2 Considerations in loan pricing
13.3 Methods of loan pricing
13.4 Cost of funds
13.5 BLR computation
13.6 Basis of interest computation
13.7 Other charges
14. Islamic Banking
14.1 Islamic banking principles
14.2 Differences between conventional and
Islamic banking systems
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SYLLABUS
CONSUMER CREDIT
1. Scope of Consumer Credit
1.1 What is consumer credit
1.2 Consumer credit products
1.3 Consumer credit process
2. Marketing and Sales of Consumer
Credit
2.1 Role of marketing
2.2 Characteristics of today's consumer
borrowers
2.3 Principles of selling
2.4 Cross-selling opportunities in credit
3. Credit Origination
3.1 Required information
3.2 Various sources of credit information
4. Credit Verification
4.1 The verification process
4.2 Techniques for spotting irregularities
5. Credit Evaluation
5.1 The 5Cs approach
5.2 The CAMPARI model
5.3 The credit scoring approach
6. Security and Support
6.1 Land
6.2 Fixed deposit
6.3 Shares
6.4 Unit trust
6.5 Support documents
7. Loan Disbursement
7.1 Covenants in lending
7.2 Pre-disbursement
7.3 Post-disbursement
8. Loan Monitoring
8.1 Identification of warning signs
8.2 Proactive prevention
9. Loan Collection and Recovery
9.1 Collection process
9.2 Recovery process
10. Consumer Credit Products
10.1 Property financing
10.2 Investment financing
10.3 Consumption credit
10.4 Hire-purchase and leasing
10.5 Islamic consumer financing
An understanding of the following areas is
required for each consumer credit product
under items 10.1 – 10.4:
(a) Features, benefits and related risks
(b) Terms and conditions
(c) Specific regulations (if any)
(d) Application of credit considerations
(e) Supervision and control
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BUSINESS CREDIT
1. Scope of Credit Evaluation
1.1 Purpose and structure; facts, qualitative,
quantitative and ways-out analysis
2. Types of Financing
2.1 Working capital, capital expenditure,
bridging, infrastructure, transactional
and seasonal financing
3. Qualitative Risk Analysis
3.1 Types of borrowers
3.2 Understanding the business cycle
3.3 Types of credit risk
3.4 Business strategies and the corporate plan
3.5 Product life cycle
3.6 Using SWOT analysis as a credit tool
4. Quantitative Risk Analysis
4.1 General accounting principles
4.2 Balance sheet
4.3 Profit and loss statement
4.4 Cash flow statement
4.5 Financial analysis techniques
4.6 Limitation of financial and cash flow
statements
4.7 Qualitative aspects of financial analysis
5. Loan Structuring
5.1 Objectives and process of credit
facilities structuring
5.2 Types of credit facilities
5.3 Determining business funding
requirements
5.4 Security & support
5.5 Covenants in lending
5.6 Conditions precedent
5.7 Pricing of loans
6. Loan Monitoring
6.1 Managing the loan portfolio
6.2 Identification of warning signs
6.3 Early symptoms of financial distress
6.4 Causes of credit deterioration and
remedies

EXAMINATION ENROLMENT
Examination Enrolment
Only current IBBM individual members are eligible
to enrol for the examinations.
Candidates are required to submit their
examination entries according to the enrolment
schedule as published in IBBM's website at
www.ibbm.org.my/qualifications/exam-info/.
Examination Fee
New Candidate
: RM250 per examination
paper
Referral Candidate : RM200 per examination
paper
Attendance and Results Notice
Attendance Notices will be despatched
to candidates two weeks before each
examination sitting.
Examination results will be issued in writing
by post approximately:
- 3 weeks after the Paper 1,2 or 3
examinations.
- 12 weeks after the Paper 4 or 5
examinations.
Examination Entries
Changes
No changes in a candidate's entry details for an
examination will be accepted after the closing
date. Candidates must ensure that their details are
correct before submission to the Institute for
examination registration.
Withdrawal
Deferment
Deferment of examinations must be made in
writing and submitted to IBBM before the
examination registration closing date.
Transfer
If a candidate is unable to attend an examination
because of illness, his entry may be transferred to
the immediate next sitting for that examination. A
written application must be submitted together
with medical documents and a transfer fee of
RM100 per paper, not later than two weeks after
the examination.
Candidates can request to either defer or transfer
their examination entry only once to the
immediate next sitting.
Important Notes to Candidates
The decision of the Institute's Education
Committee on all examination results is final. All
appeals will NOT be considered and IBBM will
not enter into any correspondence regarding
review of examination results.
Any candidate found guilty of misconduct or
contravention of examination instructions will
be liable to disciplinary action and may be
disqualified from future examination sittings
and removed from IBBM's membership register
for life.
The candidate's employer will also be notified
of his/her misconduct or contravention of the
examination instructions.
Candidates are advised to read IBBM's
newsletter and check IBBM's website for
updates to the examination syllabus and study
materials, changes to the examination dates,
rules, and procedures.
Withdrawal from the examinations must be made
in writing and submitted to IBBM before the
examination registration closing date.
DISCLAIMER
• IBBM reserves the right to amend a member's examination status to take cognizance of any changes or revision in the examination
structure and syllabus.
• In the event that IBBM is unable to hold any of its scheduled examinations or that a candidate's answer sheet is lost or destroyed, for
reasons beyond its control, IBBM's liability shall be limited to a refund of the examination fees paid.
• The information contained in this brochure is correct at the time of compilation. The Institute reserves the right to make alterations
without notice to the material contained and described in this brochure.
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CCP EXAMINATION FORMAT
PAPER 1
Financial System and Principles of Credit
50 MCQs, 1 1 /2-hour exam, pass mark: 80%
PAPER 2
Consumer Credit
50 MCQs, 1 1 /2-hour exam,
pass mark: 80%
Paper 1 must be attempted
at the first sitting of the
examination. If a candidate fails
to pass Paper 1, he/she MUST
include Paper 1 as one of the
papers to be examined in
subsequent sitting(s).
PAPER 3
Business Credit
50 MCQs, 1 1 /2-hour exam,
pass mark: 80%
PAPER 4
Applied Consumer Credit
4 or 5 caselets, 3-hour exam,
pass mark:
60% for a compulsory
section and
60% for the whole paper
Pre-requisites for Papers 4 and 5:
For Paper 4: Must have passed
Papers 1 & 2.
For paper 5: Must have passed
Papers 1 & 3.
Caselets / Case study
encompass the complete
content areas from the
common and respective
specialist syllabus.
PAPER 5
Applied Business Credit
1 case study, 6-hour exam,
pass mark: 60%
AWARD
CCP (Consumer)
AWARD
CCP (Business)
September 2004
Institut Bank-Bank Malaysia (35880-P)
Wisma IBI, 5 Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur
Tel: 03-20938803 Fax: 03-20952322
Web site: www.ibbm.org.my E-mail: qualifications@ibbm.org.my
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