Govt. Exams
Entrance Exams
SLR = 18% of total liabilities. If Government securities (SLR compliance) = ₹45,000 crores, then Total Liabilities = ₹45,000 / 0.18 = ₹2,50,000 crores. Tests understanding of RBI regulations and ratio calculations relevant to banking exams.
Basel III minimums: CET1 6.5%, Tier 1 8.5%, Overall CAR 10.5%. Bank J has CET1 9.5%, Tier 1 11.8%, CAR 15.2% - exceeding all minimums and compliant with conservation buffers.
RBI's regulatory instruments in descending order of mandate: Directions (mandatory), Notifications (legal), Circulars (operational guidance), Guidelines (advisory). Directions are most binding.
NIS = Rate earned on assets - Rate paid on deposits. Narrowing suggests the yield curve compressed, reducing the difference between lending and deposit rates, a typical scenario in monetary tightening.
ROE = Net Profit / Shareholders' Equity. A decrease in ROE despite profit increase suggests equity capital increased (through capital infusion or retained earnings), diluting the ROE metric.
With 16% CAR (closer to Basel III minimum), and planned lending increase, the bank's capital adequacy becomes the binding constraint for expansion
Required SLR = 18% × ₹10,00,000 = ₹1,80,000 crore. Actual = ₹1,95,000 crore. Surplus = ₹1,95,000 - ₹1,80,000 = ₹15,000 crore
Under RBI's PCA framework, SCBs with CAR below 8.5% (along with other indicators) trigger supervisory action and corrective measures
When assets grow faster (12%) than NII (8%), it indicates NIM is compressing as the bank is earning lower interest on incremental assets
Higher CAR for a segment indicates higher risk weights assigned. Commercial Advances at 18.5% CAR carries highest risk weighting under Basel III norms
