Q.11
Hard
If a bank's Net Interest Margin (NIM) increased from 2.8% to 3.2% year-on-year, which factors are most likely responsible?
A
Decrease in lending rates and increase in deposit rates
B
Increase in lending rates and decrease in deposit rates
C
Both rates increased equally
D
Change in asset composition only
Correct Answer:
B. Increase in lending rates and decrease in deposit rates
Explanation:
NIM improves when lending rates increase (higher interest income) or deposit rates decrease (lower interest expense), or both. This widens the spread.
Q.12
Hard
In 2024, the RBI introduced new guidelines for Cyber Risk Management. Banks must allocate what minimum percentage of IT budget for cybersecurity?
Explanation:
RBI guidelines recommend banks allocate at least 10% of their IT budget for cybersecurity measures and infrastructure resilience.
Q.13
Hard
Which of the following is a characteristic of Tier 1 capital under Basel III that distinguishes it from Tier 2 capital?
A
It has a predetermined maturity date
B
It can be written down to absorb losses before other capital
C
It carries a coupon payment obligation
D
It can be subordinated to customer deposits
Correct Answer:
B. It can be written down to absorb losses before other capital
Explanation:
Tier 1 capital (Common Equity Tier 1 and Additional Tier 1) can absorb losses and is the highest quality capital. Tier 2 capital may have maturity dates and subordination features.
Q.14
Hard
According to RBI's 2024 guidelines, what is the primary objective of implementing the Unincorporated Non-Banking Financial Company (UNBFC) framework?
A
To increase bank lending capacity
B
To regulate and supervise informal lending and financial services
C
To promote cryptocurrency adoption
D
To replace commercial banking operations
Correct Answer:
B. To regulate and supervise informal lending and financial services
Explanation:
The UNBFC framework aims to bring informal financial service providers under regulatory oversight to protect consumers and ensure financial stability.
Q.15
Hard
Under the RBI's Integrated Ombudsman Scheme 2021, what is the maximum compensation limit for customer grievances?
A
₹10 lakh
B
₹20 lakh
C
₹5 lakh
D
₹1 lakh
Correct Answer:
A. ₹10 lakh
Explanation:
RBI's Integrated Ombudsman Scheme 2021 provides a maximum compensation limit of ₹10 lakh for customer grievances.
Q.16
Hard
Under Basel III regulations (2024 update), if a bank's RWA is ₹80,000 crore and CET1 is ₹4,200 crore, is it compliant with minimum CET1 requirement?
A
Yes, CET1 ratio is 5.25%
B
No, CET1 ratio is 4.2%
C
Yes, CET1 ratio is 4.5%
D
Cannot determine without Tier 2 data
Correct Answer:
A. Yes, CET1 ratio is 5.25%
Explanation:
CET1 Ratio = (4,200 / 80,000) × 100 = 5.25%, which exceeds the 4.5% minimum. Bank is compliant.
Q.17
Hard
Under Basel III, if a bank's Common Equity Tier 1 (CET1) requirement is 5.5% and it maintains 7.5%, what is the buffer?
A
1.5%
B
2.0%
C
2.5%
D
3.0%
Explanation:
Buffer = Maintained CET1 - Required CET1 = 7.5% - 5.5% = 2.0%
Q.18
Hard
Bank T's credit growth is 18% YoY while sector average is 12%. If Bank T's advances were ₹50,000 crore last year, what are they now?
A
₹58,000 crore
B
₹59,000 crore
C
₹59,500 crore
D
₹60,000 crore
Correct Answer:
B. ₹59,000 crore
Explanation:
Current Advances = 50,000 × 1.18 = ₹59,000 crore
Q.19
Hard
Bank U has a stressed assets ratio of 3.2% and PCR of 65%. What percentage of stressed assets are not covered by provisions?
A
1.12%
B
1.15%
C
1.20%
D
1.25%
Explanation:
Uncovered = 3.2% × (1 - 0.65) = 3.2% × 0.35 = 1.12%
Q.20
Hard
Bank V's annualized growth rate for Q1-Q3 FY2024-25 is: Q1: 9%, Q2: 11%, Q3: 13%. What is the average quarterly growth?
A
10.5%
B
10.8%
C
11.0%
D
11.2%
Explanation:
Average = (9 + 11 + 13) / 3 = 33 / 3 = 11.0%
