Entrance Exams
Govt. Exams
When advances grow faster than deposits, it creates a liquidity mismatch. The bank may struggle to fund its loan portfolio, potentially violating LDR and LCR norms.
The LCR under Basel III requires banks to maintain high-quality liquid assets sufficient to survive at least 30 days of stressed cash outflows.
A decline in the Asset Quality Ratio indicates a higher proportion of non-standard assets (NPAs), meaning the percentage of problem loans has increased.
An increase in LDR from 78% to 85% indicates the bank is lending a higher proportion of its deposits, suggesting more aggressive lending strategy. Optimal LDR is typically 78-80%.
An ICR of 8.5x means earnings are 8.5 times the interest obligations, indicating strong capacity to service debt. ICR > 2.5x is generally considered healthy; 8.5x is excellent.
Market share increase = 9.8% - 8.5% = 1.3%. Value increase = 1.3% of ₹50,00,000 = ₹6,500 crores
ROE = (Net Profit / Equity Capital) × 100. Therefore, Net Profit = (18 × 5,000) / 100 = ₹900 crores
The RBI's Digital Rupee (CBDC) aims to offer a digital alternative for payments and settlements while maintaining physical currency circulation. It enhances payment efficiency and financial security.
The IBC, 2016 is a comprehensive legislation applicable to individuals and corporates. It mandates a resolution within 180 days (extendable to 270 days) through a structured process involving creditors, including banks.
A Cost-to-Income ratio of 42% is considered healthy (lower is better). Ratios above 50% indicate inefficiency. This suggests the bank is controlling costs well relative to its income.