A bank's Asset Quality Ratio improved from 94.2% in FY2023 to 96.8% in FY2024. If FY2023 advances were ₹4,50,000 crore, what was the approximate amount of standard assets?
A₹4,23,900 crore
B₹4,33,800 crore
C₹4,43,500 crore
D₹4,51,200 crore
Correct Answer:
A. ₹4,23,900 crore
Explanation:
Standard assets = Asset Quality Ratio × Total Advances = 94.2% × ₹4,50,000 crore = ₹4,23,900 crore
Examine the data: Bank X's Cost-to-Income Ratio decreased from 48% (FY2023) to 44% (FY2024). If operating expenses in FY2024 are ₹8,800 crore, what is the estimated operating income?
A bank's advances grew by 15% year-on-year while deposits grew by 12% in FY2024. If the Loan-to-Deposit (LTD) ratio was 78% in FY2023, what is the approximate LTD ratio in FY2024?
Study the quarterly performance: Q1 profit: ₹5,600 crore, Q2 profit: ₹6,160 crore, Q3 profit: ₹6,776 crore, Q4 profit: ₹7,454 crore. What is the total annual profit and approximate quarterly growth rate?
A scheduled commercial bank reports: Tier-1 Capital: ₹50,000 crore, Tier-2 Capital: ₹20,000 crore, RWA: ₹500,000 crore. Calculate the Total Capital Ratio and determine compliance status.
A12% CRAR, compliant with Basel III
B14% CRAR, compliant with Basel III
C15% CRAR, non-compliant
D10% CRAR, below Basel III minimum
Correct Answer:
B. 14% CRAR, compliant with Basel III
Explanation:
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
If a bank's Cost of Funds increased by 75 basis points while the Yield on Assets increased by 50 basis points, what is the likely impact on Net Interest Margin (NIM)?
ANIM will increase by 25 basis points
BNIM will decrease by 25 basis points
CNIM will remain unchanged
DNIM will increase by 75 basis points
Correct Answer:
B. NIM will decrease by 25 basis points
Explanation:
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).
A scheduled commercial bank's Priority Sector Lending (PSL) target for FY2024-25 is 40% of adjusted net bank credit. The bank achieved 38% in Q3. What is the regulatory implication?
AThe bank has exceeded the target and will receive incentives
BThe bank is non-compliant and faces penalty
CThe bank must reach 40% by end of FY2024-25 or face penalties
DThe bank is fully compliant as Q3 performance is final
Correct Answer:
C. The bank must reach 40% by end of FY2024-25 or face penalties
Explanation:
PSL compliance is measured at the end of the financial year. Banks must maintain 40% PSL by March 31. Non-compliance attracts penalties equal to shortfall amount at repo rate + 50 bps.
Analyze the data: A bank's CASA ratio decreased from 42% in Q2 to 39% in Q3. What regulatory and operational concern does this raise?
AThe bank's liquidity position has improved
BThe bank is relying more on expensive term deposits, impacting NIM
CThe bank's Capital Adequacy Ratio will increase
DThe bank's advance portfolio has become riskier
Correct Answer:
B. The bank is relying more on expensive term deposits, impacting NIM
Explanation:
CASA (Current Account & Saving Account) ratio declining means lower proportion of low-cost deposits. The bank must fund advances with more expensive term deposits, which increases Cost of Funds and compresses NIM.
A bank's Gross NPA increased from ₹18,500 crore in FY2023 to ₹22,300 crore in FY2024, while total advances grew from ₹2,10,000 crore to ₹2,35,000 crore. What is the change in Gross NPA ratio?
AIncreased from 8.81% to 9.49%
BDecreased from 8.81% to 9.49%
CIncreased from 8.33% to 9.05%
DRemained constant at 8.81%
Correct Answer:
A. Increased from 8.81% to 9.49%
Explanation:
Gross NPA Ratio FY2023 = (18,500/2,10,000) × 100 = 8.81%. FY2024 = (22,300/2,35,000) × 100 = 9.49%. The ratio increased despite advances growth, indicating asset quality deterioration.
