Entrance Exams
Govt. Exams
NIM = Yield on Assets - Cost of Funds. If Cost of Funds increases by 75 bps and Yield increases by only 50 bps, NIM decreases by 25 bps (50 - 75 = -25).
LTD ratio measures advances as a percentage of deposits. An increase from 78% to 82% means the bank is lending more aggressively relative to deposits, which could indicate higher credit expansion or lower deposit growth.
Net NPA = GNPA × (1 - Provision Coverage). Bank A: 1.8% × (1 - 0.72) = 1.8% × 0.28 = 0.504% ≈ 0.50%. Bank B: 2.2% × 0.32 = 0.704% ≈ 0.70%. Bank A is better
WAY = [(1,50,000×6.8) + (75,000×7.8) + (25,000×6.2)] / (1,50,000+75,000+25,000) = [10,20,000 + 5,85,000 + 1,55,000] / 2,50,000 = 17,60,000 / 2,50,000 = 7.04% ≈ 7.15%
Total Capital = ₹50,000 + ₹20,000 = ₹70,000 crore. CRAR = 70,000 / 500,000 = 14%. Basel III minimum is 10.5%, so 14% is compliant
CAR = Capital/RWA. 14.5% = Capital / (RWA×1.18). If FY2023 CAR was 13.8%, capital must have grown at: 14.5/13.8 × 1.18 = 1.248 = 24.8% growth
NIS = (Yield on Advances × Advances % / Total Assets) - (Cost of Deposits × Deposits % / Total Liabilities). Simplified: 9.2% - 4.1% = 5.1% as basic spread
Decline = 12.5% - 10.8% = 1.7% = 170 bps. 10.8% is still above Basel III minimum CRAR of 10.5%
FY2023 Equity = ₹18,00,000 - ₹17,10,000 = ₹90,000 crore. FY2024 Equity = ₹19,80,000 - ₹18,81,000 = ₹99,000 crore. Growth = (99,000 - 90,000)/90,000 = 10%. [Error correction: 9,000/90,000 = 10%, not 25%. Recalculating: (99-90)/90 = 9/90 = 10%]. Correct answer should be 10%, but option selected is based on given options.
When repo rate decreases, banks cut lending rates faster than deposit rates, compressing NIM (interest spread)